[G.R. No. 93833. September 28, 1995.

SOCORRO D. RAMIREZ, petitioner, vs. HONORABLE COURT

OF APPEALS and ESTER S. GARCIA, respondent. cdll

E. Voltaire Garcia for petitioner.

Cesar V . Chavez for private respondent.

SYLLABUS

1. STATUTORY CONSTRUCTION; WHERE THE LANGUAGE OF A

STATUTE IS CLEAR AND UNAMBIGUOUS; RULE. — Legislative intent is
determined principally from the language of a statute. Where the language of a
statute is clear and unambiguous, the law is applied according to its express terms,
and interpretation would be resorted to only where a literal interpretation would be
either impossible or absurd or would lead to an injustice.
2. CRIMINAL LAW; ANTI-WIRE TAPPING LAW (R.A. 4200); MAKES NO
DISTINCTION AS TO WHETHER THE PARTY SOUGHT TO BE PENALIZED
OUGHT TO BE A PARTY OTHER THAN OR DIFFERENT FROM THOSE
INVOLVED IN THE PRIVATE COMMUNICATION. — Section 1 of R.A.
4200 entitled, "An Act to Prohibit and Penalize Wire Tapping and Other Related
Violations of Private Communication and Other Purposes," clearly and
unequivocally makes it illegal for any person, not authorized by all the parties to
any private communication to secretly record such communication by means of a
tape recorder. The law makes no distinction as to whether the party sought to be
penalized by the statute ought to be a party other than or different from those
involved in the private communication. The statute's intent to penalize all persons
unauthorized to make such recording is underscored by the use of the qualifier
"any." Consequently, as respondent Court of Appeals correctly concluded, "even
a (person) privy to a communication who records his private conversation with
another without the knowledge of the latter (will) qualify as a violator" under this
provision of R.A. 4200.
3. ID.; ID.; NATURE OF CONVERSATION, IMMATERIAL TO A VIOLATION
THEREOF. — The nature of the conversation is immaterial to a violation of the
statute. The substance of the same need not be specifically alleged in the
information. What R.A. 4200 penalizes are the acts of
secretly overhearing, intercepting or recording private communications by means
of the devices enumerated therein. The mere allegation that an individual made a
secret recording of a private communication by means of a tape recorder would
suffice to constitute an offense under Section 1 of R.A. 4200. As the Solicitor
General pointed out in his COMMENT before the respondent court: "Nowhere (in
the said law) is it required that before one can be regarded as a violator, the nature
of the conversation, as well as its communication to a third person should be
professed."
4. ID.; ID.; "PRIVATE COMMUNICATION"; SCOPE. — Petitioner's
contention that the phrase "private communication" in Section 1 of R.A. 4200 does
not include "private conversations" narrows the ordinary meaning of the word
"communication" to a point of absurdity. The word communicate comes from the
Latin word communicare, meaning "to share or to impart." In its ordinary
signification, communication connotes the act of sharing or imparting, as in
a conversation, or signifies the "process by which meaning or thoughts are shared
between individuals through a common system of symbols (as language signs or
gestures)." These definitions are broad enough to include verbal or non-verbal,
written or expressive communications of "meanings or thoughts" which are likely
to include the emotionally-charged exchange, on February 22, 1988, between
petitioner and private respondent, in the privacy of the latter's office. Any doubts
about the legislative body's meaning of the phrase "private communication" are,
furthermore, put to rest by the fact that the terms "conversation" and
"communication" were interchangeably used by Senator Tañada in his Explanatory
Note to the bill, quoted below: "It has been said that innocent people have nothing
to fear from their conversations being overheard. But this statement ignores the
usual nature of conversations as well as the undeniable fact that most, if not all,
civilized people have some aspects of their lives they do not wish to expose.
Free conversations are often characterized by exaggerations, obscenity,
agreeable falsehoods, and the expression of anti-social desires of views not
intended to be taken seriously. The right to the privacy of communication, among
others, has expressly been assured by our Constitution. Needless to state here,
the framers of our Constitution must have recognized the nature
of conversations between individuals and the significance of man's spiritual nature,
of his feelings and of his intellect. They must have known that part of the pleasures
and satisfactions of life are to be found in the unaudited, and free exchange
of communication between individuals — free from every unjustifiable intrusion by
whatever means." LexLibris

DECISION

KAPUNAN, J : p

A civil case for damages was filed by petitioner Socorro D. Ramirez in

the Regional Trial Court of Quezon City alleging that the private respondent,
Ester S. Garcia, in a confrontation in the latter's office, allegedly vexed,
insulted and humiliated her in a "hostile and furious mood" and in a manner
offensive to petitioner's dignity and personality," contrary to morals, good
customs and public policy." 1
In support of her claim, petitioner produced a verbatim transcript of the
event and sought moral damages, attorney's fees and other expenses of
litigation in the amount of P610,000.00, in addition to costs, interests and
other reliefs awardable at the trial court's discretion. The transcript on which
the civil case was based was culled from a tape recording of the confrontation
made by petitioner. 2 The transcript reads as follows:
Plaintiff Soccoro D. Ramirez (Chuchi)
Good afternoon Ma'am.
Defendant Ester S. Garcia (ESG)
Ano ba ang nangyari sa 'yo, nakalimot ka na kung paano ka
napunta rito, porke member ka na, magsumbong ka kung ano ang
gagawin ko sa iyo.
CHUCHI
Kasi, naka duty ako noon.
ESG
Tapos iniwan no. (Sic)
CHUCHI
 Hindi ma'am, pero ilan beses na nila akong binalikan, sabing
ganoon.
ESG
Ito and (sic) masasabi ko sa 'yo, ayaw kung (sic) mag explain ka,
kasi hanggang, 10:00 p.m., kinabukasan hindi ka na pumasok.
Ngayon ako ang babalik sa 'yo, nag-aaply ka sa States, nag-aapply
ka sa review mo, kung kakailanganin ang certification mo,
kalimutan mo na kasi hindi ka sa akin makakahingi.
CHUCHI
Hindi Ma'am. Kasi ang ano ko talaga noon i-cocontinue ko up to
10:00 p.m.
ESG
Bastos ka, nakalimutan mo na kung paano ka pumasok dito sa
hotel. Magsumbong ka sa Union kung gusto mo. Nakalimutan mo
na kung paano ka nakapasok dito "Do you think that on your own
makakapasok ka kung hindi ako. Panunumbyoyan na kita
(Sinusumbatan na kita).
CHUCHI
Itutuloy ko na Ma'am sana ang duty ko.
ESG
Kaso ilang beses na akong binabalikan doon ng mga no (sic) ko.
ESG
Nakalimutan mo na ba kung paano ka pumasok sa hotel, kung on
your own merit alam ko naman kung gaano ka "ka bobo" mo.
Marami ang nag-aaply alam kong hindi ka papasa.
CHUCHI
Kukuha kami ng exam noon.
ESG
Oo, pero hindi ka papasa.
CHUCHI
Eh, bakit ako ang nakuha ni Dr. Tamayo.
ESG
Kukunin ka kasi ako.
CHUCHI
Eh, di sana —
ESG
Huwag mong ipagmalaki na may utak ka kasi wala kang utak.
Akala mo ba makukuha ka dito kung hindi ako.
CHUCHI
Mag-eexplain ako.
ESG
Huwag na, hindi ako mag-papa-explain sa 'yo, makaalala ka kung
paano ka puma-rito. "Putang-ina" sasabi-sabihin mo kamag-anak
ng nanay at tatay mo ang mga magulang ko.
ESG
Wala na akong pakialam, dahil nandito ka sa loob, nasa labas ka
puwede ka ng hindi pumasok, okey yan nasaloob ka umalis ka
doon.
 CHUCHI
Kasi M'am, binabalikan ako ng mga taga Union.
ESG
Nandiyan na rin ako, pero huwag mong kalimutan na hindi ka
makakapasok kung hindi ako. Kung hindi mo kinikilala yan okey
lang sa akin, dahil tapos ka na.
CHUCHI
Ina-ano ko ma'am na utang na loob.
ESG
Huwag na lang, hindi mo utang na loob, kasi kung baga sa no,
nilapastanganan mo ako.
CHUCHI
Paano kita nilapastanganan?
ESG
Mabuti pa lumabas ka na. Hindi na ako makikipagusap sa 'yo.
Lumabas ka na. Magsumbong ka. 3
As a result of petitioner's recording of the event and alleging that the said
act of secretly taping the confrontation was illegal, private respondent filed a
criminal case before the Regional Trial Court of Pasay City for violation of Republic
Act 4200, entitled "An Act to prohibit and penalize wire tapping and other related
violations of private communication, and other purposes." An information charging
petitioner of violation of the said Act, dated October 6, 1988 is quoted herewith:
INFORMATION
The Undersigned Assistant City Fiscal Accuses Socorro D.
Ramirez of Violation of Republic Act No. 4200, committed as follows:
That on or about the 22nd day of February, 1988, in Pasay City, Metro
Manila, Philippines, and within the jurisdiction of this honorable court, the above-
named accused, Socorro D. Ramirez not being authorized by Ester S. Garcia to
record the latter's conversation with said accused, did then and there wilfully,
unlawfully and feloniously, with the use of a tape recorder secretly record the said
conversation and thereafter communicate in writing the contents of the said
recording to other person.
Contrary to Law.
Pasay City, Metro Manila, September 16, 1988.
MARIANO M. CUNETA
Asst. City Fiscal
Upon arraignment, in lieu of a plea, petitioner filed a Motion to Quash
the Information on the ground that the facts charged do not constitute an
offense, particularly a violation of R.A. 4200. In an order May 3, 1989, the trial
court granted the Motion to Quash, agreeing with petitioner that 1) the facts
charged do not constitute an offense under R.A. 4200; and that 2) the
violation punished by R.A. 4200 refers to the taping of a communication by a
person other than a participant to the communication. 4
From the trial court's Order, the private respondent filed a Petition for
Review on Certiorari with this Court, which forthwith referred the case to the
Court of Appeals in a Resolution (by the First Division) of June 19, 1989. cdtai
 On February 9, 1990, respondent Court of Appeals promulgated its
assailed Decision declaring the trial court's order of May 3, 1989 null and void,
and holding that:
"[T]he allegations sufficiently constitute an offense punishable
under Section 1 of R.A. 4200. In thus quashing the information based on
the ground that the facts alleged do not constitute an offense, the
respondent judge acted in grave abuse of discretion correctible
by certiorari." 5
Consequently, on February 21, 1990, petitioner filed a Motion for
Reconsideration which respondent Court of Appeals denied in its
Resolution 6 dated June 19, 1990. Hence, the instant petition.
Petitioner vigorously argues, as her "main and principal issue" 7 that the
applicable provision of Republic Act 4200 does not apply to the taping of a
private conversation by one of the parties to the conversation. She contends
that the provision merely refers to the unauthorized taping of a private
conversation by a party other than those involved in the communication. 8 In
relation to this, petitioner avers that the substance or content of the
conversation must be alleged in the Information, otherwise the facts charged
would not constitute a violation of R.A. 4200. 9 Finally, petitioner argues
that R.A. 4200penalizes the taping of a "private communication," not a
"private conversation" and that consequently, her act of secretly taping her
conversation with private respondent was not illegal under the said act. 10
We disagree. prLL

First, legislative intent is determined principally from the language of a

statute. Where the language of a statute is clear and unambiguous, the law is
applied according to its express terms, and interpretation would be resorted to
only where a literal interpretation would be either impossible 11 or absurd or
would lead to an injustice. 12
Section 1 of R.A. 4200 entitled, "An Act to Prohibit and Penalize Wire
Tapping and Other Related Violations of Private Communication and Other
Purposes," provides:
SECTION 1. It shall be unlawful for any person, not being
authorized by all the parties to any private communication or spoken word,
to tap any wire or cable, or by using any other device or arrangement, to
secretly overhear, intercept, or record such communication or spoken
word by using a device commonly known as a dictaphone or dictagraph
or detectaphone or walkie-talkie or tape recorder, or however otherwise
described.
The aforestated provision clearly and unequivocally makes it illegal
for any person, not authorized by all the parties to any private communication
to secretly record such communication by means of a tape recorder. The law
makes no distinction as to whether the party sought to be penalized by the
statute ought to be a party other than or different from those involved in the
private communication. The statute's intent to penalize all persons
unauthorized to make such recording is underscored by the use of the
qualifier "any." Consequently, as respondent Court of Appeals correctly
concluded, "even a (person) privy to a communication who records his private
conversation with another without the knowledge of the latter (will) qualify as a
violator" 13 under this provision of R.A. 4200.
A perusal of the Senate Congressional Records, moreover, supports
the respondent court's conclusion that in enacting R.A. 4200 our lawmakers
indeed contemplated to make illegal, unauthorized tape recording of private
conversations or communications taken either by the parties themselves or by
third persons. Thus:
xxx xxx xxx
Senator Tañada:
The qualified only 'overhear.'
Senator Padilla:
So that when it is intercepted or recorded, the element of secrecy would
not appear to be material. Now, suppose, Your Honor, the recording is not
made by all the parties but by some parties and involved not criminal
cases that would be mentioned under Section 3 but would cover, for
example civil cases or special proceedings whereby a recording is made
not necessarily by all the parties but perhaps by some in an effort to show
the intent of the parties because the actuation of the parties prior,
simultaneous even subsequent to the contract or the act may be indicative
of their intention. Suppose there is such a recording, would you say, Your
Honor, that the intention is to cover it within the purview of this bill or
outside?
Senator Tañada:
That is covered by the purview of this bill, Your Honor.
Senator Padilla:
Even if the record should be used not in the prosecution of offense
but as evidence to be used in Civil Cases or special proceedings?
Senator Tañada:
That is right. This is a complete ban on tape recorded
conversations taken without the authorization of all the parties.
Senator Padilla:
Now, would that be reasonable, Your Honor?
Senator Tañada:
I believe it is reasonable because it is not sporting to record the
observation of one without his knowing it and then using it against
him. It is not fair, it is not sportsmanlike. If the purpose; Your honor,
is to record the intention of the parties. I believe that all the parties
should know that the observations are being recorded.
Senator Padilla:
This might reduce the utility of recorders.
Senator Tañada:
Well no. For example, I was to say that in meetings of the board of
directors where a tape recording is taken, there is no objection to
this if all the parties know. It is but fair that the people whose
remarks and observations are being made should know that these
are being recorded.
Senator Padilla:
Now, I can understand.
Senator Tañada:
That is why when we take statements of persons, we say: "Please
be informed that whatever you say here may be used against you."
That is fairness and that is what we demand. Now, in spite of that
warning, he makes damaging statements against his own interest,
well, he cannot complain any more. But if you are going to take a
recording of the observations and remarks of a person without him
 knowing that it is being taped or recorded, without him knowing that
what is being recorded may be used against him, I think it is unfair.
xxx xxx xxx
(Congressional Record, Vol. III, No. 31, p. 584, March 12, 1964)
Senator Diokno:
Do you understand, Mr. Senator, that under Section 1 of the bill as
now worded, if a party secretly records a public speech, he would
be penalized under Section 1? Because the speech is public, but
the recording is done secretly.
Senator Tañada:
Well, that particular aspect is not contemplated by the bill. It is the
communication between one person and another person — not
between a speaker and a public.
xxx xxx xxx
(Congressional Record, Vol. III. No. 33, p. 626, March 12, 1964)
xxx xxx xxx
The unambiguity of the express words of the provision, taken together
with the above-quoted deliberations from the Congressional Record, therefore
plainly supports the view held by the respondent court that the provision
seeks to penalize even those privy to the private communications. Where the
law makes no distinctions, one does not distinguish. cdlex

Second, the nature of the conversation is immaterial to a violation of the

statute. The substance of the same need not be specifically alleged in the
information. What R.A. 4200 penalizes are the acts of
secretly overhearing, intercepting or recording private communications by
means of the devices enumerated therein. The mere allegation that an
individual made a secret recording of a private communication by means of a
tape recorder would suffice to constitute an offense under Section 1 of R.A.
4200. As the Solicitor General pointed out in his COMMENT before the
respondent court: "Nowhere (in the said law) is it required that before one can
be regarded as a violator, the nature of the conversation, as well as its
communication to a third person should be professed."14
Finally, petitioner's contention that the phrase "private communication"
in Section 1 of R.A. 4200 does not include "private conversations" narrows the
ordinary meaning of the word "communication" to a point of absurdity. The
word communicate comes from the latin word communicare, meaning "to
share or to impart." In its ordinary signification, communication connotes the
act of sharing or imparting, as in a conversation, 15 or signifies the "process by
which meanings or thoughts are shared between individuals through a
common system of symbols (as language signs or gestures)." 16 These
definitions are broad enough to include verbal or non-verbal, written or
expressive communications of "meanings or thoughts" which are likely to
include the emotionally-charged exchange, on February 22, 1988, between
petitioner and private respondent, in the privacy of the latter's office. Any
doubts about the legislative body's meaning of the phrase "private
communication" are, furthermore, put to rest by the fact that the terms
"conversation" and "communication" were interchangeably used by Senator
Tañada in his Explanatory Note to the bill quoted below:
"It has been said that innocent people have nothing to fear from
their conversations being overheard. But this statement ignores the usual
nature of conversations as well as the undeniable fact that most, if not all,
civilized people have some aspects of their lives they do not wish to
 expose. Free conversations are often characterized by exaggerations,
obscenity, agreeable falsehoods, and the expression of anti-social desires
of views not intended to be taken seriously. The right to the privacy of
communication, among others, has expressly been assured by our
Constitution. Needless to state here, the framers of our Constitution must
have recognized the nature of conversations between individuals and the
significance of man's spiritual nature, of his feelings and of his intellect.
They must have known that part of the pleasures and satisfactions of life
are to be found in the unaudited, and free exchange
of communication between individuals — free from every unjustifiable
intrusion by whatever means." 17
In Gaanan vs. Intermediate Appellate Court, 18 a case which dealt with
the issue of telephone wiretapping, we held that the use of a telephone
extension for the purpose of overhearing a private conversation without
authorization did not violate R.A. 4200 because a telephone extension devise
was neither among those devises enumerated in Section 1 of the law nor was
it similar to those "device(s) or arrangement(s)" enumerated
therein," 19 following the principle that "penal statutes must be construed
strictly in favor of the accused." 20 The instant case turns on a different note,
because the applicable facts and circumstances pointing to a violation of R.A.
4200 suffer from no ambiguity, and the statute itself explicitly mentions the
unauthorized "recording" of private communications with the use of tape-
recorders as among the acts punishable. cdtai

WHEREFORE, because the law, as applied to the case at bench is

clear and unambiguous and leaves us with no discretion, the instant petition is
hereby DENIED. The decision appealed from is AFFIRMED. Costs against
petitioner.
SO ORDERED.
Padilla, Davide, Jr. and Bellosillo, JJ., concur.
Hermosisima, Jr., J., is on official leave.
(Ramirez v. Court of Appeals, G.R. No. 93833, [September 28, 1995], 318 PHIL
|||

701-713)

[G.R. No. 19190. November 29, 1922.]

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-
appellee, vs. VENANCIO CONCEPCION, defendant-appellant.
Recaredo Ma. Calvo for appellant.
Attorney-General Villa-Real for appellee.

SYLLABUS

1. BANKS AND BANKING; "CREDIT AND LOAN." DEFINED AND

DISTINGUISHED. — The "credit" of an individual means his ability to borrow
money by virtue of the confidence or trust reposed by a lender that he will pay
what he may promise. A "loan" means the delivery by one party and the receipt
by the other party of a given sum of money, upon an agreement, expresses or
implied, to repay the sum loaned, with or without interest. The concession of a
 "credit" necessarily involves the granting of "loans" up to the limit of the amount
fixed in the "credit."
2. ID.' "LOAN" AND "DISCOUNT" DISTINGUISHED. — To discount a
paper is a mode of loaning money, with these distinctions: (1) In a discount,
interest is deducted in advanced, while in a loan, interest is taken at the
expiration of a credit; (2) a discount is always on double-name paper; a loan is
generally on single name paper.
3. STATUTES; INTERPRETATION AND CONSTRUCTION; IN
GENERAL. — In the interpretation and construction of statutes, the primary rule
is to ascertain and give effect to the intention of the Legislature.
4. ID.; ID.; SECTION 35 OF ACT NO. 2747; PROHIBITION AGAINST
INDIRECT LOANS. — The purpose of the Legislature in enacting section 35 of
Act No. 2747 was to erect a wall of safety against temptation for a director of
the Philippine National Bank. The prohibition against indirect loans is a
recognition of the familiar maxim that no man may serve two masters — that
where personal interest clashes with fidelity to duty the latter almost always
suffers.
5. ID.; ID.; ID. — A loan to a partnership of which the wife of a director is
a member falls within the prohibition in section 35 of Act No. 2747 against
indirect loans.
6. ID., ID.; ID.; PROHIBITION ON CORPORATION. — When the
corporation itself is forbidden to do an act, the prohibition extends to the board
of directors, and to each director separately and individually.
7. ID.; REPEAL; EFFECT UPON VIOLATIONS OF THE OLD LAW. —
Where an Act of the Legislature which penalizes an offense repeals a former
Act which penalized the same offense, such repeal does not have the effect of
thereafter depriving the courts of jurisdiction to try, convict, and sentence
offenders charged with violations of the old law.
8. CRIMINAL LAW; ACT NO. 2747; GOOD FAITH AS A DEFENSE —
Under section 35 of Act No. 2747, criminal intent is not necessarily material.
The doing of the inhibited act, inhibited on account of public policy and public
interest, constitutes the crime.
9. ID.; ID.; ID.; — The law will not allow private profit from a trust, and will
not listen to any proof of honest intent.

DECISION

MALCOLM, J : p

By telegrams and a letter of confirmation to the manager of the Aparri

branch of the Philippine National Bank, Venancio Conception, President of the
Philippine National Bank, between April 10, 1919, and May 7, 1919,
authorized an extension of credit in favor of "Puno y Conception, S. en C." in
the amount of P300,000. This special authorization was essential in view of
the memorandum order of President Conception dated May 17, 1918, limiting
the discretional power of the local manager at Aparri, Cagayan, to grant loans
and discount negotiable documents to P5,000, which, in certain cases, could
be increased to P10,000. Pursuant to this authorization, credit aggregating
P300,000, was granted the firm of "Puno y Conception, S. en C.," the only
security required consisting of six demand notes. The notes, together with the
interest, were taken up and paid by July 17, 1919.
"Puno y Concepcion, S. en C." was a copartnership capitalized at
P100,000. Anacleto Concepcion contributed P5,000; Clara Vda. de
Concepcion, P5,000; Miguel S. Concepcion, P20,000; Clemente Puno,
P20,000; and Rosario San Agustin, "casada con. Gral. Venancio
Concepcion," P50,000. Member Miguel S. Conception was the administrator
of the company.
On the facts recounted, Venancio Concepcion, as President of the
Philippine National Bank and as member of the board of directors of this bank,
was charged in the Court of First Instance of Cagayan with a violation of
section 35 of Act No. 2747. He was found guilty by the Honorable Enrique V
Filamor, Judge of First Instance, and was sentenced to imprisonment for one
year and six months, to pay a fine of P3,000, with subsidiary imprisonment in
case of insolvency, and the costs.
Section 35 of Act No. 2747, effective on February 20, 1918, just
mentioned, to which reference must hereafter repeatedly be made, reads as
follows: "The National Bank shall not, directly or indirectly, grant loans to any
of the members of the board of directors of the bank nor to agents of the
branch banks." Section 49 of the same Act provides: "Any person who shall
violate any of the provisions of this Act shall be punished by a fine not to
exceed ten thousand pesos, or by imprisonment not to exceed five years, or
by both such fine and imprisonment." These two sections were in effect in
1919 when the alleged unlawful acts took place, but were repealed by Act No.
2938, approved on January 30, 1921.
Counsel for the defense assign ten errors as having been committed by
the trial court. These errors they have argued adroitly and exhaustively in their
printed brief, and again in oral argument. Attorney-General Villa-Real, in an
exceptionally accurate and comprehensive brief, answers the propositions of
appellant one by one.
The questions presented are reduced to their simplest elements in the
opinion which follows:
I. Was the granting of a credit of P300,000 to the copartnership "Puno y
Concepcion, S. en C." by Venacio Concepcion, President of the Philippine
National Bank, a "loan" within the meaning of section 35 of Act No. 2747?
Counsel argue that the documents of record do not prove that the
authority to make a loan was given, but only show the concession of a credit.
In this statement of fact, counsel is correct, for the exhibits in question speak
of a "credito" (credit) and not of a "prestamo" (loan).
The "credit" of an individual means his ability to borrow money by virtue
of the confidence or trust reposed by a lender that he will pay what he may
promise. (Donnell vs. Jones [1848], 13 Ala., 490; Bouvier's Law Dictionary.) A
"loan" means the delivery by one party and the receipt by the other party of a
given sum of money, upon an agreement, express or implied, to repay the
sum of money, upon an agreement, express or implied, to repay the sum
loaned, with or without interest. (Payne vs. Gardiner [1864], 29 N.Y., 146,
167.) The concession of a "credit" necessarily involves the granting of "loans"
up to the limit of the amount fixed in the "credit."
II. Was the granting of a credit of P300,000 to the copartnership "Puno
y Conception, S. en C.," by Venancio Conception, President of the Philippine
National Bank, a "loan" or a "discount."
 In a letter dated August 7, 1916, H. Parker Willis, then President of the
National Bank, inquired of the Insular Auditor whether section 37 of Act No.
2612 was intended to apply to discounts as well as to loans. The ruling of the
Acting Insular Auditor, dated August 11, 1916, was to placed no restriction
upon discount transactions. It be becomes material, therefore, to discover the
distinction between a "loan" and a "discount," and to ascertain if the instant
transaction comes under the first or the latter denomination.
Discounts are favored by bankers because of their liquid nature,
growing, as they do, out of an actual, live transaction. But in its last analysis,
to discount a paper is only a mode of loaning money, with, however, these
distinctions: (1) In a discount, interest is deducted in advance, while in a loan,
interest is taken at the expiration of a credit; (2) a discount is always on
double-name paper; a loan is generally on single-name paper.
Conceding, without deciding, that, as ruled by the Insular Auditor, the
law covers loans and not discounts, yet the conclusion is inevitable that the
demand notes signed by the firm "Puno y Concepcion, S. en C." were not
discount paper but were mere evidences of indebtedness, because (1)
interest was not deducted from the face of the notes, but was paid when the
notes fell due; and (2) they were single-name and not double-name paper.
The facts of the instant case having relation to this phase of the
argument are not essentially different from the facts in the Binalbagan Estate
case. Just as there it was declared that the operations constituted a loan and
not a discount, so should we here lay down the same ruling.
III. Was the granting of a credit of P300,000 to the copartnership, "Puno
y Concepcion, S. en C." by Venancio Concepcion, President of the Philippine
National Bank, an "indirect loan" within the meaning of section 35 of Act No.
2747?
Counsel argue that a loan to the partnership "Puno y Concepcion, S. en
C." was not an "indirect loan." In this connection, it should be recalled that the
wife of the defendant held one-half of the capital of this partnership.
In the interpretation and construction of statutes, the primary rule is to
ascertain and give effect to the intention of the Legislature. In this instance,
the purpose of the Legislature is plainly to erect a wall of safety against
temptation for a director of the bank. The prohibition against indirect loans is a
recognition of the familiar maxim that no man may serve two masters — that
where personal interest clashes with fidelity to duty the latter almost always
suffers. If, therefore, it is shown that the husband is financially interested in
the success or failure of his wife's business venture, a loan to a partnership of
which the wife of a director is a member, falls within the prohibition.
Various provisions of the Civil Code serve to establish the familiar
relationship called a conjugal partnership. (Articles 1315, 1393, 1401, 1408,
and 1412 can be specially noted.) A loan, therefore, to a partnership of which
the wife of a director of a bank is a member, is an indirect loan to such
director.
That it was the intention of the Legislature to prohibit exactly such an
occurrence is shown by the acknowledged fact that in this instance the
defendant was tempted to mingle his personal and family affairs with his
official duties, and to permit the loan of P300,000 to a partnership of no
established reputation and without asking for collateral security.
In the case of Lester and Wife vs. Howard bank ([1870], 33 Md., 558; 3
Am. Rep., 211), the Supreme Court of Maryland said:
 "What then was the purpose of the law when it declared that no
director or officer should borrow of the bank, and "if any director,' etc.,
'shall be convicted,' etc., 'of directly or indirectly violating this section he
shall be punished by fine imprisonment?" We say to protect the
stockholders, depositors and creditors of the bank, against the temptation
to which the directors and officers might be exposed, and the power which
as such they must necessarily possess in the control and management of
the bank, and the legislature unwilling to rely upon the implied
understanding that in assuming this relation they would not acquire any
interest hostile or adverse to the most exact and faithful discharge of duty,
declared in express terms that they should not borrow, etc., of the bank."
In the case of People vs. Knapp ([1912], 206 N.Y., 373), relied upon in
the Binalbagan Estate decision, it was said:
"We are of opinion the statute forbade the loan to his
copartnership firm as well as to himself directly. The loan was made
indirectly to him through his firm."
IV. Could Venancio Concepcion, President of the Philippine National
Bank, be convicted of a violation of section 35 of Act No. 2747 in relation with
section 49 of the same Act, when these portions of Act No. 2747 were
repealed by Act No. 2938, prior to the filing of the information and the
rendition of the judgment?
As noted along toward the beginning of this opinion, section 49 of Act
No. 2747, in relation to section 35 of the same Act, provides a punishment for
any person who shall violate any of the provisions of the Act. It is contended,
however, by the appellant, that the repeal of these sections of Act No. 2747
by Act No. 2747 by Act No. 2938 has served to take away the basis for
criminal prosecution.
This same question has been previously submitted and has received an
answer adverse to such contention in the cases of United States vs. Cuna
([1908], 12 Phil., 241); People vs. Concepcion ([1922], 43 Phil., 653); and Ong
Chang Wing and Kwong Fok vs. United States ([1910], 218 U.S., 272; 40
Phil., 1046). In other words, it has been the holding, and it must again be the
holding, that where an Act of the Legislature which penalizes an offense, such
repeal does not have the effect of thereafter depriving the courts of jurisdiction
to try, convict, and sentence offenders charged with violations of the old law.
V. Was the granting of a credit of P300,000 to the copartnership "Puno
y Concepcion, S. en C." by Venancio Concepcion, President of the Philippine
national Bank, in violation of section 35 of Act No. 2747, penalized by this
law?
Counsel argue that since the prohibition contained in section 35 of Act
No. 2747 is on the bank, and since section 49 of said Act provides a
punishment not on the bank when it violates any provision of the law, but on a
person violating any provision of the law, but on a person violating any
provision of the same, and imposing imprisonment as part of the penalty, the
prohibition, contained in said 35 is without penal sanction.
The answer is that when the corporation itself is forbidden to do an act,
the prohibition extends to the board of directors, and to each director
separately and individually. (People vs. Concepcion, supra.)
VI. Does the alleged good faith of Venancio Concepcion, President of
the Philippine National Bank, in extending the credit of P300,000 to the
copartnership "Puno y Concepcion, S. en C." constitute a legal defense?
 Counsel argue that if defendant committed the acts of which he was
convicted, it was because he was misled by rulings coming from the Insular
Auditor. It is furthermore stated that since the loans made to the copartnership
"Puno y Concepcion, S. en C." have been paid, no loss has been suffered by
the Philippine National Bank.
Neither argument, even if conceded to be true, is conclusive. Under the
statute which the defendant has violated, criminal intent is not necessarily
material. The doing of the inhabited act, inhibited on account of public policy
and public interest, constitutes the crime. And, in this instance, as previously
demonstrated, the acts of the President of the Philippine National Bank do not
fall within the purview of the rulings have controlling effect.
Morse, in his work, Banks and Banking, section 125, says:
"It is fraud for directors to secure by means of their trust, any
advantage not common to the other stockholders. The law will not allow
private profit from a trust, and will not listen to any proof of honest
intent."
JUDGMENT
On a review of the evidence of record, with reference to the decision of
the trial court, and the errors assigned by the appellant, and with reference to
previous decisions of this court on the same subject, we are irresistibly led to
the conclusion that no reversible error was committed in the trial of this case,
and that the defendant has been proved guilty beyond a reasonable doubt of
the crime charged in the information. The penalty imposed by the trial judge
falls within the limits of the punitive provisions of the law.
Judgment is affirmed, with the costs of this instance against the
appellant. So ordered.
Araullo, C.J., Johnson, Street, Avanceña, Villamor, Ostrand,
Johns, and Romualdez, JJ., concur.
(People v. Concepcion, G.R. No. 19190, [November 29, 1922], 44 PHIL 126-
|||

134)

[G.R. No. 82511. March 3, 1992.]

GLOBE-MACKAY CABLE AND RADIO

CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS
COMMISSION and IMELDA SALAZAR, respondents.

Castillo, Laman, Tan & Pantaleon for petitioner.

Gerardo S. Mansalon for private respondent.

SYLLABUS

1. LABOR AND SOCIAL LEGISLATION; LABOR CODE;

EMPLOYMENT; PREVENTIVE SUSPENSION, REMEDIAL RECOURSE OF
EMPLOYER PENDING INVESTIGATION OF ALLEGED MISCONDUCT OF
EMPLOYEE. — The investigative findings of Mr. Maramara, which pointed to
Delfin Saldivar's acts in conflict with his position as technical operations
manager, necessitated immediate and decisive action on any employee closely
associated with Saldivar. The suspension of Salazar was further impelled by
the discovery of the missing Fedders airconditioning unit inside the apartment
private respondent shared with Saldivar. Under such circumstances, preventive
suspension was the proper remedial recourse available to the company
pending Salazar's investigation. By itself, preventive suspension does not
signify that the company has adjudged the employee guilty of the charges she
was asked to answer and explain. Such disciplinary measure is resorted to for
the protection of the company's property pending investigation of any alleged
malfeasance or misfeasance committed by the employee.
2. ID.; ID.; ID.; EMPLOYEE ILLEGALLY DISMISSED ENTITLED TO
REINSTATEMENT AND SEPARATION. — To go back to the instant case,
there being no evidence to show an authorized, much less a legal, cause for
the dismissal of private respondent, she had every right, not only to be entitled
to reinstatement, but as well, to full backwages.
3. ID.; ID.; ID.; ID.; PURPOSES. — The intendment of the law in
prescribing the twin remedies of reinstatement and payment of backwages is,
in the former, to restore the dismissed employee to her status before she lost
her job, for the dictionary meaning of the word "reinstate" is "to restore to a
state, condition, position, etc. from which one had been removed" and in the
latter, to give her back the income lost during the period of unemployment. Both
remedies, looking to the past, would perforce make her "whole."
4. ID.; ID.; ID.; ILLEGAL DISMISSAL; REINSTATEMENT; GROUNDS
FOR DENIAL. — Over time, the following reasons have been advanced by the
Court for denying reinstatement under the facts of the case and the law
applicable thereto; that reinstatement can no longer be effected in view of the
long passage of time (22 years of litigation) or because of the realities of the
situation; or that it would be "inimical to the employer's interest;" or that
reinstatement may no longer be feasible; or, that it will not serve the best
interests of the parties involved; or that the company would be prejudiced by
the workers' continued employment; or that it will not serve any prudent purpose
as when supervening facts have transpired which make execution on that score
unjust or inequitable or, to an increasing extent, due to the resultant atmosphere
of "antipathy and antagonism" or "strained relations" or "irretrievable
estrangement" between the employer and the employee.
5. ID.; ID.; ID.; BACKWAGES AND SEPARATION PAY AWARDED
WHERE REINSTATEMENT CAN NOT BE EFFECTED. — In lieu of
reinstatement, the Court has variously ordered the payment of backwages and
separation pay or solely separation pay.
6. STATUTORY CONSTRUCTION AND INTERPRETATION; WHERE
THE STATUTE IS CLEAR AND FREE FROM AMBIGUITY, IT MUST BE
GIVEN ITS LITERAL MEANING. — The wording of the Labor Code is clear and
unambiguous: "An employee who is 'unjustly dismissed from work shall be
entitled to reinstatement . . . and to his full backwages . . . " Under the principles
of statutory construction, if a statute is clear, plain and free from ambiguity, it
must be given its literal meaning and applied without attempted interpretation.
This plain-meaning rule or verba legis derived from the maxim index animi
sermo est (speech is the index of intention) rests on the valid presumption that
the words employed by the legislature in a statute correctly express its intent or
will and preclude the court from construing it differently. The legislature is
presumed to know the meaning of the words, to have used words advisedly,
and to have expressed its intent by the use of such words as are found in the
 statute. Verba legis non est recedendum, or from the words of a statute there
should be no departure. Neither does the provision admit of any qualification.
7. LABOR AND SOCIAL LEGISLATION; LABOR CODE;
EMPLOYMENT; REINSTATEMENT; NOT APPROPRIATE IN THE
PRESENCE OF STRAINED RELATIONS BETWEEN EMPLOYER AND
EMPLOYEE; QUALIFICATION. — If in the wisdom of the Court, there may be
a ground or grounds for non-application of Article 279 of the Labor Code,this
should be by way of exception, such as when the reinstatement may be
inadmissible due to ensuing strained relations between the employer and the
employee. In such cases, it should be proved that the employee concerned
occupies a position where he enjoys the trust and confidence of his employer;
and that it is likely that if reinstated, an atmosphere of antipathy and antagonism
may be generated as to adversely affect the efficiency and productivity of the
employee concerned.
8. ID.; ID.; ID.; ID.; ID.; ID.; CASE AT BAR. — The principle of "strained
relations" cannot be applied indiscriminately. Otherwise, reinstatement can
never be possible simply because some hostility is invariably engendered
between the parties as a result of litigation. That is human nature. Besides, no
strained relations should arise from a valid and legal act of asserting one's right;
otherwise an employee who shall assert his right could be easily separated from
the service, by merely paying his separation pay on the pretext that his
relationship with his employer had already become strained. Here, it has not
been proved that the position of private respondent as systems analyst is one
that may be characterized as a position of trust and confidence such that if
reinstated, it may well lead to strained relations between employer and
employee. Hence, this does not constitute an exception to the general rule
mandating reinstatement for an employee who has been unlawfully dismissed.
In the instant case, petitioner has predicated its dismissal of Salazar on loss of
confidence. As we have held countless times, while loss of confidence or
breach of trust is a valid ground for termination, it must rest on some basis
which must be convincingly established. An employee may not be dismissed
on mere presumptions and suppositions.
9. ID.; ID.; ID.; WITHOUT LEGAL GROUND, ILLEGAL; EMPLOYEE
ENTITLED TO REINSTATEMENT AND BACKWAGES. — It is also worth
emphasizing that the Maramara report came out after Saldivar had already
resigned from GMCR on May 31, 1984. Since Saldivar did not have the
opportunity to refute management's findings, the report remained obviously
one-sided. Since the main evidence obtained by petitioner dealt principally on
the alleged culpability of Saldivar, without his having bad a chance to voice his
side in view of his prior resignation, stringent examination should have been
carried out to ascertain whether or not there existed independent legal grounds
to hold Salazar answerable as well and, thereby, justify her dismissal. Finding
none, from the records, we find her to have been unlawfully dismissed.
Petitioner GMRC is ordered to REINSTATE private respondent Imelda Salazar
and to pay her backwages equivalent to her salary for a period of two (2) years
only.

DECISION

ROMERO, J : p
 For private respondent Imelda L. Salazar, it would seem that her close
association with Delfin Saldivar would mean the loss of her job. In May 1982,
private respondent was employed by Globe-Mackay Cable and Radio
Corporation (GMCR) as general systems analyst. Also employed by petitioner
as manager for technical operations' support was Delfin Saldivar with whom
private respondent was allegedly very close.
Sometime in 1984, petitioner GMCR, prompted by reports that company
equipment and spare parts worth thousands of dollars under the custody of
Saldivar were missing, caused the investigation of the latter's activities. The
report dated September 25, 1984 prepared by the company's internal auditor,
Mr. Agustin Maramara, indicated that Saldivar had entered into a partnership
styled Concave Commercial and Industrial Company with Richard A. Yambao,
owner and manager of Elecon Engineering Services (Elecon), a supplier of
petitioner often recommended by Saldivar. The report also disclosed that
Saldivar had taken petitioner's missing Fedders airconditioning unit for his own
personal use without authorization and also connived with Yambao to defraud
petitioner of its property. The airconditioner was recovered only after petitioner
GMCR filed an action for replevin against Saldivar. 1
It likewise appeared in the course of Maramara's investigation that
Imelda Salazar violated company regulations by involving herself in
transactions conflicting with the company's interests. Evidence showed that she
signed as a witness to the articles of partnership between Yambao and
Saldivar. It also appeared that she had full knowledge of the loss and
whereabouts of the Fedders airconditioner but failed to inform her employer.
Consequently, in a letter dated October 8, 1984, petitioner company
placed private respondent Salazar under preventive suspension for one (1)
month, effective October 9, 1984, thus giving her thirty (30) days within which
to explain her side. But instead of submitting an explanation, three (3) days later
or on October 12, 1984, private respondent filed a complaint against petitioner
for illegal suspension, which she subsequently amended to include illegal
dismissal, vacation and sick leave benefits, 13th month pay and damages, after
petitioner notified her in writing that effective November 8,1984, she was
considered dismissed "in view of (her) inability to refute and disprove these
findings." 2
After due hearing, the Labor Arbiter in a decision dated July 16, 1985,
ordered petitioner company to reinstate private respondent to her former or
equivalent position and to pay her full backwages and other benefits she would
have received were it not for the illegal dismissal. Petitioner was also ordered
to pay private respondent moral damages of P50,000.00. 3
On appeal, public respondent National Labor Relations Commission in
the questioned resolution dated December 29, 1987 affirmed the aforesaid
decision with respect to the reinstatement of private respondent but limited the
backwages to a period of two (2) years and deleted the award for moral
damages. 4
Hence, this petition assailing the Labor Tribunal for having committed
grave abuse of discretion in holding that the suspension and subsequent
dismissal of private respondent were illegal and in ordering her reinstatement
with two (2) years' backwages. cdll

On the matter of preventive suspension, we find for petitioner GMCR.

The investigative findings of Mr. Maramara, which pointed to Delfin
Saldivar's acts in conflict with his position as technical operations manager,
necessitated immediate and decisive action on any employee closely
associated with Saldivar. The suspension of Salazar was further impelled by
the discovery of the missing Fedders airconditioning unit inside the apartment
private respondent shared with Saldivar. Under such circumstances, preventive
suspension was the proper remedial recourse available to the company
pending Salazar's investigation. By itself, preventive suspension does not
signify that the company has adjudged the employee guilty of the charges she
was asked to answer and explain. Such disciplinary measure is resorted to for
the protection of the company's property pending investigation of any alleged
malfeasance or misfeasance committed by the employee. 5
Thus, it is not correct to conclude that petitioner GMCR had violated
Salazar's right to due process when she was promptly suspended. If at all, the
fault lay with private respondent when she ignored petitioner's memorandum of
October 8, 1984 "giving her ample opportunity to present (her) side to the
Management." Instead, she went directly to the Labor Department and filed her
complaint for illegal suspension without giving her employer a chance to
evaluate her side of the controversy.
But while we agree with the propriety of Salazar's preventive suspension,
we hold that her eventual separation from employment was not for cause.
What is the remedy in law to rectify an unlawful dismissal so as to "make
whole" the victim who has not merely lost her job which, under settled
jurisprudence, is a property right of which a person is not to be deprived without
due process, but also the compensation that should have accrued to her during
the period when she was unemployed ? prLL

Art. 279 of the Labor Code, as amended, provides:

"Security of Tenure. — In cases of regular employment, the employer shall
not terminate the services of an employee except for a just cause or when
authorized by this Title. An employee who is unjustly dismissed from work
shall be entitled to reinstatement without loss of seniority rights and other
privileges and to his full backwages, inclusive of allowances, and to his
other benefits or their monetary equivalent computed from the time his
compensation was withheld from him up to the time of his actual
reinstatement" 6 (Emphasis supplied).
Corollary thereto are the following provisions of the Implementing Rules
and Regulations of the Labor Code:
"Sec. 2. Security of Tenure. — In cases of regular employment, the
employer shall not terminate the services of an employee except for a just
cause as provided in the Labor Code or when authorized by existing laws.
Sec. 3. Reinstatement. — An employee who is unjustly dismissed from
work shall be entitled to reinstatement without loss of seniority rights and
to backwages."' 7 (Emphasis supplied)
Before proceeding any further, it must be recalled that the present
Constitution has gone further than the 1973 Charter in guaranteeing vital social
and economic rights to marginalized groups of society, including labor. Given
the pro-poor orientation of several articulate Commissioners of the
Constitutional Commission of 1986, it was not surprising that a whole new
Article emerged on Social Justice and Human Rights designed, among other
things, to "protect and enhance the right of all the people to human dignity,
reduce social, economic and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common
good." 8
 Proof of the priority accorded to labor is that it leads the other areas of
concern in the Article on Social Justice, viz., Labor ranks ahead of such topics
as Agrarian and Natural Resources Reform, Urban Land Reform and Housing,
Health, Women, Role and Rights of People's Organizations and Human
Rights. 9
The opening paragraphs on Labor state:
"The State shall afford full protection to labor, local and overseas,
organized and unorganized, and promote full employment and equality of
employment opportunities for all. It shall guarantee the rights of all
workers to self-organization, collective bargaining and negotiations, and
peaceful concerted activities, including the right to strike in accordance
with law. They shall be entitled to security of tenure, humane conditions
of work, and a living wage. They shall also participate in policy and
decision-making processes affecting their rights and benefits as may be
provided by law." 10 (Emphasis mine)
Compare this with the sole provision on Labor in the 1973
Constitution under the Article on Declaration of principles and State Policies
that provides:
"Sec. 9. The State shall afford protection to labor, promote full
employment and equality in employment, ensure equal work opportunities
regardless of sex, race, or creed, and regulate the relations between
workers and employers. The State shall ensure the rights of workers to
self-organization, collective bargaining, security of tenure, and just and
humane conditions of work. The State may provide for compulsory
arbitration." 11
To be sure, both Charters recognize "security of tenure" as one of the
rights of labor which the State is mandated to protect. But there is no gainsaying
the fact that the intent of the framers of thepresent Constitution was to give
primacy to the rights of labor and afford the sector "full protection," at least
greater protection than heretofore accorded them, regardless of the
geographical location of the workers and whether they are organized or not. LLjur

It was then CONCOM Commissioner, now Justice Hilario G. Davide, Jr.,

who substantially contributed to the present formulation of the protection to
labor provision and proposed that the same be incorporated in the Article on
Social Justice and not just in the Article on Declaration of Principles and State
Policies "in the light of the special importance that we are giving now to social
justice and the necessity of emphasizing the scope and role of social justice in
national development." 12
If we have taken pains to delve into the background of the labor
provisions in our Constitution and the Labor Code, it is but to stress that the
right of an employee not to be dismissed from his job except for a just or
authorized cause provided by law has assumed greater importance under
the 1987 Constitution with the singular prominence labor enjoys under the
article on Social Justice. And this transcendent policy has been translated into
law in the Labor Code. Under its terms, where a case of unlawful or
unauthorized dismissal has been proved by the aggrieved employee, or on the
other hand, the employer whose duty it is to prove the lawfulness or justness of
his act of dismissal has failed to do so, then the remedies provided in Article
279 should find application. Consonant with this liberalized stance vis-a-vis
labor, the legislature even went further by enacting Republic Act No.
6715 which took effect on March 2, 1989 that amended said Article to remove
any possible ambiguity that jurisprudence may have generated which watered
down the constitutional intent to grant to labor "full protection." 13
 To go back to the instant case, there being no evidence to show an
authorized, much less a legal, cause for the dismissal of private respondent,
she had every right, not only to be entitled to reinstatement, but as well, to full
backwages. 14
The intendment of the law in prescribing the twin remedies of
reinstatement and payment of backwages is, in the former, to restore the
dismissed employee to her status before she lost her job, for the dictionary
meaning of the word "reinstate" is "to restore to a state, condition, position, etc.
from which one had been removed" 15 and in the latter, to give her back the
income lost during the period of unemployment. Both remedies, looking to the
past, would perforce make her "whole."
Sadly, the avowed intent of the law has at times been thwarted when
reinstatement has not been forthcoming and the hapless dismissed employee
finds himself on the outside looking in. LLphil

Over time, the following reasons have been advanced by the Court for
denying reinstatement under the facts of the case and the law applicable
thereto; that reinstatement can no longer be effected in view of the long
passage of time (22 years of litigation) or because of the realities of the
situation; 16 or that it would be "inimical to the employer's interest;" 17 or that
reinstatement may no longer be feasible;18 or, that it will not serve the best
interests of the parties involved; 19 or that the company would be prejudiced by
the workers' continued employment; 20 or that it will not serve any prudent
purpose as when supervening facts have transpired which make execution on
that score unjust or inequitable 21 or, to an increasing extent, due to the
resultant atmosphere of "antipathy and antagonism" or "strained relations" or
"irretrievable estrangement" between the employer and the employee. 22 In lieu
of reinstatement, the Court has variously ordered the payment of backwages
and separation pay 23 or solely separation pay. 24
In the case at bar, the law is on the side of private respondent. In the first
place, the wording of the Labor Code is clear and unambiguous: "An employee
who is 'unjustly dismissed from work shall be entitled to reinstatement . . . and
to his full backwages . . . " 25 Under the principles of statutory construction, if a
statute is clear, plain and free from ambiguity, it must be given its literal meaning
and applied without attempted interpretation. This plain-meaning rule or verba
legis derived from the maxim index animi sermo est (speech is the index of
intention) rests on the valid presumption that the words employed by the
legislature in a statute correctly express its intent or will and preclude the court
from construing it differently. 26 The legislature is presumed to know the
meaning of the words, to have used words advisedly, and to have expressed
its intent by the use of such words as are found in the statute. 27 Verba legis
non est recedendum, or from the words of a statute there should be no
departure. Neither does the provision admit of any qualification. If in the wisdom
of the Court, there may be a ground or grounds for non- application of the
above-cited provision, this should be by way of exception, such as when the
reinstatement may be inadmissible due to ensuing strained relations between
the employer and the employee.
In such cases, it should be proved that the employee concerned occupies
a position where he enjoys the trust and confidence of his employer; and that it
is likely that if reinstated, an atmosphere of antipathy and antagonism may be
generated as to adversely affect the efficiency and productivity of the employee
concerned.
 A few examples will suffice to illustrate the Court's application of the
above principle: where the employee is a Vice-President for Marketing and as
such, enjoys the full trust and confidence of top management; 28 or is the
Officer-In-Charge of the extension office of the bank where he works; 29 or is
an organizer of a union who was in a position to sabotage the union's efforts to
organize the workers in commercial and industrial establishments; 30 or is a
warehouseman of a non-profit organization whose primary purpose is to
facilitate and maximize voluntary gifts by foreign individuals and organizations
to the Philippines; 31 or is a manager of its Energy Equipment Sales. 32
Obviously, the principle of "strained relations" cannot be applied
indiscriminately. Otherwise, reinstatement can never be possible simply
because some hostility is invariably engendered between the parties as a result
of litigation. That is human nature. 33
Besides, no strained relations should arise from a valid and legal act of
asserting one's right; otherwise an employee who shall assert his right could be
easily separated from the service, by merely paying his separation pay on the
pretext that his relationship with his employer had already become strained. 34
Here, it has not been proved that the position of private respondent as
systems analyst is one that may be characterized as a position of trust and
confidence such that if reinstated, it may well lead to strained relations between
employer and employee. Hence, this does not constitute an exception to the
general rule mandating reinstatement for an employee who has been unlawfully
dismissed. cdll

On the other hand, has she betrayed any confidence reposed in her by
engaging in transactions that may have created conflict of interest situations?
Petitioner GMCR points out that as a matter of company policy, it prohibits its
employees from involving themselves with any company that has business
dealings with GMCR. Consequently, when private respondent Salazar signed
as a witness to the partnership papers of Concave (a supplier of Ultra which in
turn is also a supplier of GMCR), she was deemed to have placed herself in an
untenable position as far as petitioner was concerned.
However, on close scrutiny, we agree with public respondent that such a
circumstance did not create a conflict of interests situation. As a system analyst,
Salazar was very far removed from operations involving the procurement of
supplies. Salazar's duties revolved around the development of systems and
analysis of designs on a continuing basis. In other words, Salazar did not
occupy a position of trust relative to the approval and purchase of supplies and
company assets.
In the instant case, petitioner has predicated its dismissal of Salazar on
loss of confidence. As we have held countless times, while loss of confidence
or breach of trust is a valid ground for termination, it must rest on some basis
which must be convincingly established. 35 An employee may not be dismissed
on mere presumptions and suppositions. Petitioner's allegation that since
Salazar and Saldivar lived together in the same apartment, it "presumed
reasonably that complainant's sympathy would be with Saldivar" and its
averment that Saldivar's investigation although unverified, was probably true,
do not pass this Court's test. 36 While we should not condone the acts of
disloyalty of an employee, neither should we dismiss him on the basis of
suspicion derived from speculative inferences.
To rely on the Maramara report as a basis for Salazar's dismissal would
be most iniquitous because the bulk of the findings centered principally on her
friend's alleged thievery and anomalous transactions as technical operations'
 support manager. Said report merely insinuated that in view of Salazar's special
relationship with Saldivar, Salazar might have had direct knowledge of
Saldivar's questionable activities. Direct evidence implicating private
respondent is wanting from the records.
It is also worth emphasizing that the Maramara report came out after
Saldivar had already resigned from GMCR on May 31, 1984. Since Saldivar did
not have the opportunity to refute management's findings, the report remained
obviously one-sided. Since the main evidence obtained by petitioner dealt
principally on the alleged culpability of Saldivar, without his having bad a
chance to voice his side in view of his prior resignation, stringent examination
should have been carried out to ascertain whether or not there existed
independent legal grounds to hold Salazar answerable as well and, thereby,
justify her dismissal. Finding none, from the records, we find her to have been
unlawfully dismissed. cdll

WHEREFORE, the assailed resolution of public respondent National

Labor Relations Commission dated December 29, 1987 is hereby AFFIRMED.
Petitioner GMCR is ordered to REINSTATE private respondent Imelda Salazar
and to pay her backwages equivalent to her salary for a period of two (2) years
only. This decision is immediately executory.
SO ORDERED.
(Globe-Mackay Cable and Radio Corp. v. National Labor Relations
|||

Commission, G.R. No. 82511, [March 3, 1992], 283 PHIL 649-664)

[G.R. No. 109445. November 7, 1994.]

FELICITO BASBACIO, petitioner, vs. OFFICE OF THE

SECRETARY DEPARTMENT OF JUSTICE, FRANKLIN DRILON
in his capacity as Secretary of Justice, respondent.

DECISION

MENDOZA, J : p

This case presents for determination the scope of the State's liability under
Rep. Act No. 7309, which among other things provides compensation for persons
who are unjustly accused, convicted and imprisoned but on appeal are acquitted and
ordered released. LLphil

Petitioner Felicito Basbacio and his son-in-law, Wilfredo Balderrama, were

convicted of frustrated murder and of two counts of frustrated murder for the killing
of Federico Boyon and the wounding of the latter's wife Florida and his son Tirso, at
Palo, Calanuga, Rapu-Rapu, Albay, on the night of June 26, 1988. The motive for the
killing was apparently a land dispute between the Boyons and petitioner. Petitioner
and his son-in-law were sentenced to imprisonment and ordered immediately detained
after their bonds had been cancelled.
Petitioner and his son-in-law appealed. Only petitioner's appeal proceeded to
judgment, however, as the appeal of the other accused was dismissed for failure to file
his brief.
On June 22, 1992 the Court of Appeals rendered a decision acquitting
petitioner on the ground that the prosecution failed to prove conspiracy between him
and his son-in-law. He had been pointed to by a daughter of Federico Boyon as the
companion of Balderrama when the latter barged into their hut and without warning
started shooting, but the appellate court ruled that because petitioner did nothing
more, petitioner's presence at the scene of the crime was insufficient to show
conspiracy.
Based on his acquittal, petitioner filed a claim under Rep. Act No. 7309, sec.
3(a), which provides for the payment of compensation to "any person who was
unjustly accused, convicted, imprisoned but subsequently released by virtue of a
judgment of acquittal." 1 The claim was filed with the Board of Claims of the
Department of Justice, but the claim was denied on the ground that while petitioner's
presence at the scene of the killing was not sufficient to find him guilty beyond
reasonable doubt, yet, considering that there was bad blood between him and the
deceased as a result of a land dispute and the fact that the convicted murderer is his
son-in-law, there was basis for finding that he was "probably guilty." LibLex

On appeal, respondent Secretary of Justice affirmed the Board's ruling. Said

the Secretary of Justice in his resolution dated March 11, 1993:

It is believed therefore that the phrase "any person . . . unjustly accused,

convicted and imprisoned" in Section 3(a) of R.A. No. 7309 refers to an
individual who was wrongly accused and imprisoned for a crime he did not
commit, thereby making him "a victim of unjust imprisonment." In the instant
case, however, Claimant/Appellant cannot be deemed such a victim since a
reading of the decision of his acquittal shows that his exculpation is not based on
his innocence, but upon, in effect, a finding of reasonable doubt.

Petitioner brought this petition for review on certiorari. Neither Rule 45 nor
Rep. Act No. 7309, however, provides for review by certiorari of the decisions of the
Secretary of Justice. Nonetheless, in view of the importance of the question tendered,
the Court resolved to treat the petition as a special civil action for certiorari under
Rule 65.
Petitioner questions the basis of the respondent's ruling that to be able to
recover under sec. 3(a) of the law the claimant must on appeal be found to be innocent
of the crimes of which he was convicted in the trial court. Through counsel he
contends that the language of sec. 3(a) is clear and does not call for interpretation. The
"mere fact that the claimant was imprisoned for a crime which he was subsequently
acquitted of is already unjust in itself," he contends. To deny his claim because he was
not declared innocent would be to say that his imprisonment for two years while his
appeal was pending was justified. Petitioner argues that there is only one requirement
for conviction in criminal cases and that is proof beyond reasonable doubt. If the
prosecution fails to present such proof, the presumption that the accused is innocent
stands and, therefore, there is no reason for requiring that he be declared innocent of
the crime before he can recover compensation for his imprisonment.
Petitioner's contention has no merit. It would require that every time an
accused is acquitted on appeal he must be given compensation on the theory that he
was "unjustly convicted" by the trial court. Such a reading of sec. 3(a) is contrary to
petitioner's professed canon of construction that when the language of the statute is
clear it should be given its natural meaning. It leaves out of the provision in question
the qualifying word "unjustly" so that the provision would simply read: "The
following may file claims for compensation before the Board: (a) any person who was
accused, convicted, imprisoned but subsequently released by virtue of a judgment of
acquittal."
But sec. 3(a) requires that the claimant be "unjustly accused, convicted [and]
imprisoned." The fact that his conviction is reversed and the accused is acquitted is
not itself proof that the previous conviction was "unjust." An accused may be
acquitted for a number of reasons and his conviction by the trial court may, for any of
these reasons, be set aside. For example, he may be acquitted not because he is
innocent of the crime charged but because of reasonable doubt, in which case he may
be found civilly liable to the complainant, because while the evidence against him
does not satisfy the quantum of proof required for conviction, it may nonetheless be
sufficient to sustain a civil action for damages. 2 In one case the accused, an alien,
was acquitted of statutory rape with homicide because of doubt as to the ages of the
offended parties who consented to have sex with him. Nonetheless the accused was
ordered to pay moral and exemplary damages and ordered deported. 3 In such a case
to pay the accused compensation for having been "unjustly convicted" by the trial
court would be utterly inconsistent with his liability to the complainant. Yet to follow
petitioner's theory such an accused would be entitled to compensation under sec. 3(a).
cdphil

The truth is that the presumption of innocence has never been intended as
evidence of innocence of the accused but only to shift the burden of proof that he is
guilty to the prosecution. If "accusation is not synonymous with guilt," 4 so is the
presumption of innocence not a proof thereof. It is one thing to say that the accused is
presumed to be innocent in order to place on the prosecution the burden of proving
beyond reasonable doubt that the accused is guilty. It is quite another thing to say that
he is innocent and if he is convicted that he has been "unjustly convicted." As this
Court held in a case:

Though we are acquitting the appellant for the crime of rape with homicide, we
emphasize that we are not ruling that he is innocent or blameless. It is only the
constitutional presumption of innocence and the failure of the prosecution to build
an airtight case for conviction which saved him, not that the facts of unlawful
conduct do not exist. 5

To say then that an accused has been "unjustly convicted" has to do with the
manner of his conviction rather than with his innocence. An accused may on appeal
be acquitted because he did not commit the crime, but that does not necessarily mean
that he is entitled to compensation for having been the victim of an "unjust
conviction." If his conviction was due to an error in the appreciation of the evidence
the conviction while erroneous is not unjust. That is why it is not, on the other hand,
correct to say as does respondent, that under the law liability for compensation
depends entirely on the innocence of the accused.
The phrase "unjustly convicted" has the same meaning as "knowingly
rendering an unjust judgment" in art. 204 of the Revised Penal Code. What this Court
held in In re Rafael C. Climaco 6 applies:

In order that a judge may be held liable for knowingly rendering an

unjust judgment, it must be shown beyond doubt that the judgment is unjust
as it is contrary to law or is not supported by the evidence, and the same was
made with conscious and deliberate intent to do an injustice. . . .

To hold a judge liable for the rendition of manifestly unjust judgment

by reason of inexcusable negligence or ignorance, it must be shown,
 according to Groizard, that although he has acted without malice, he failed
to observe in the performance of his duty, that diligence, prudence and care
which the law is entitled to exact in the rendering of any public service.
Negligence and ignorance are inexcusable if they imply a manifest injustice
which cannot be explained by a reasonable interpretation. Inexcusable
mistake only exists in the legal concept when it implies a manifest injustice,
that is to say, such injustice which cannot be explained by a reasonable
interpretation, even though there is a misunderstanding or error of the law
applied, yet in the contrary it results, logically and reasonably, and in a very
clear and indisputable manner, in the notorious violation of the legal precept.

Indeed, sec. 3(a) does not refer solely to an unjust conviction as a result of
which the accused is unjustly imprisoned, but, in addition, to an unjust accusation.
The accused must have been "unjustly accused, in consequence of which he is
unjustly convicted and then imprisoned. It is important to note this because if from its
inception the prosecution of the accused has been wrongful, his conviction by the
court is, in all probability, also wrongful. Conversely, if the prosecution is not
malicious any conviction even though based on less than the required quantum of
proof in criminal cases may be erroneous but not necessarily unjust.
The reason is that under Rule 112, sec. 4, the question for the prosecutor in
filing a case in court is not whether the accused is guilty beyond reasonable doubt but
only whether "there is reasonable ground to believe that a crime has been committed
and the accused is probably guilty thereof." Hence, an accusation which is based on
"probable guilt" is not an unjust accusation and a conviction based on such degree of
proof is not necessarily an unjust judgment but only an erroneous one. The remedy
for such error is appeal.
In the case at bar there is absolutely no evidence to show that petitioner's
conviction by the trial court was wrongful or that it was the product of malice or gross
ignorance or gross negligence. To the contrary, the court had reason to believe that
petitioner and his coaccused were in league, because petitioner is the father-in-law of
Wilfredo Balderrama and it was petitioner who bore the victim a grudge because of a
land dispute. Not only that. Petitioner and his coaccused arrived together in the hut of
the victims and forced their way into it.
The Court of Appeals ruled there was no conspiracy only because there was no
proof that he did or say anything on the occasion. Said the appellate court. cdll

Both eyewitness testimonies fail to show the appellant Felicito Basbacio

to have committed any act at all. Both fail to show Felicito Basbacio as having
said anything at all. Both fail to show Felicito Basbacio as having committed
anything in furtherance of a conspiracy to commit the crimes charged against the
defendants. It seems to be a frail and flimsy basis on which to conclude that
conspiracy existed between actual killer Wilfredo Balderrama and Felicito
Basbacio to commit murder and two frustrated murders on that night of June 26,
1988. It may be asked: where was the coming together of the two defendants to
an agreement to commit the crimes of murder and frustrated murder on two
counts? Where was Basbacio's contribution to the commission of the said crimes?
Basbacio was — as the record shows — nothing but part of the dark shadows of
that night. . . .

One may take issue with this ruling because precisely conspiracy may be
shown by concert of action and other circumstances. Why was petitioner with his son-
in-law? Why did they apparently flee together? And what about the fact that there was
bad blood between petitioner and the victim Federico Boyon? These questions may no
longer be passed upon in view of the acquittal of petitioner but they are relevant in
evaluating his claim that he had been unjustly accused, convicted and imprisoned
 before he was released because of his acquittal on appeal. We hold that in view of
these circumstances respondent Secretary of Justice and the Board of Claims did not
commit a grave abuse of its discretion in disallowing petitioner's claim for
compensation under Rep. Act No. 7309.
WHEREFORE, the petition is DISMISSED.
SO ORDERED.

Narvasa, C.J., Padilla, Bidin, Regalado, Davide, Jr., Romero, Bellosillo, Melo,
Quiason, Puno, Vitug and Kapunan, JJ., concur.

Feliciano, J., is on leave.

Footnotes

1. The statute in pertinent parts provide:

Sec. 3. Who may File Claims. — The following may file claims for compensation
before the Board:

a) any person who was unjustly accused, convicted, imprisoned but subsequently
released by virtue of a judgment of acquittal;

b) any person who was unjustly detained and released without being charged;

c) any victim of arbitrary or illegal detention by the authorities as defined in the

Revised Penal Code under a final judgment of the court; and

d) any person who is a victim of violent crimes. For purposes of this Act, violent crimes
shall include rape and shall likewise refer to offenses committed with malice which
resulted in death or serious physical and/or psychological injuries, permanent
incapacity or disability, insanity, abortion, serious trauma, or committed with torture,
cruelty or barbarity.

Sec. 4. Award Ceiling. — For victims of unjust imprisonment or detention, the

compensation shall be based on the number of months of imprisonment or detention
and every fraction thereof shall be considered one month: Provided, however, That in
no case shall such compensation exceed One thousand pesos (P1,000.00) per month.

In all other cases, the maximum amount for which the Board may approve a claim shall
not exceed Ten thousand pesos (P10,000.00) or the amount necessary to reimburse the
claimant the expenses incurred for hospitalization, medical treatment, loss of wage, loss
of support or other expenses directly related to the injury, whichever is lower. This is
without prejudice to the right of the claimant to seek other remedies under existing
laws.

2. The Civil Code provides in art. 29: "When the accused in a criminal prosecution is acquitted
on the ground that his guilt has not been proved beyond reasonable doubt, a civil action
for damages for the same act or omission may be instituted. Such action requires only a
preponderance of evidence. Upon motion of the defendant, the court may require the
plaintiff to file a bond to answer for damages in case the complaint should be found to
be malicious.

"If in a criminal case the judgment of acquittal is based upon reasonable doubt, the
court shall so declare. In the absence of any declaration to that effect, it may be inferred
from the text of the decision whether or not the acquittal is due to that ground."
 3. People v. Ritter, 194 SCRA 690 (1991).

4. People v. Dramayo, 42 SCRA 59, 64 (1971).

5. Supra note 3 at 722.

6. 55 SCRA 107, 119 (1974).

||| (Basbacio v. Drilon, G.R. No. 109445, [November 7, 1994], 308 PHIL 5-12)

[G.R. No. 94723. August 21, 1997.]

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr.,

father and Natural Guardian, and Spouses FEDERICO N.
SALVACION, JR., and EVELINA E. SALVACION, petitioners, vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING
CORPORATION and GREG BARTELLI y NORTHCOTT,
respondents.

Erlinda S. Carolino for petitioners.

Del Rosario Lim Devera Vigilia & Panganiban for China Banking Corporation.

SYNOPSIS

Greg Bartelli, an American tourist, coaxed and lured petitioner Karen Salvacion,
then 12 years old to go with him to his apartment. Therein, Greg detained Karen for four
days and raped her several times. After policemen and people living nearby rescued Karen,
Greg was arrested and detained at the Makati Municipal Jail. A case for Serious Illegal
Detention and four counts of rape charges were filed against Greg Bartelli. A Civil Case
for damages with preliminary attachment was also filed against him. On the scheduled day
of hearing for Bartelli's petition for bail the latter escaped from jail, thereby causing all
criminal cases filed against him to be archived pending his arrest. Meanwhile, the issuance
of the writ of preliminary attachment was granted for the petitioners and the writ was
issued. However, China Banking Corporation failed to honor Notice of Garnishment served
by the Deputy Sheriff of Makati. China Banking Corporation invoked Section 113 of the
Central Bank Circular No. 960 to the effect that the dollar deposits of defendant Greg
Bartelli are exempt from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body whatsoever.
Meanwhile, the trial court granted petitioner's motion for leave to serve summons by
publication in the civil case. Summons was published. Bartelli failed to file his answer to
the complaint and was declared in default. After hearing ex-parte, the court rendered
judgment in favor of petitioner. Pursuant to an Order granting leave to publish notice of
decision, said notice was published in the Manila Bulletin. After the lapse of fifteen (15)
days from the date of the last publication of the notice of judgment and the decision of the
trial court had become final, petitioners tried to execute on Bartelli's dollar deposit with
China Banking Corporation. Likewise, the bank invoked Section 113 of the Central Bank
Circular No. 960. Thus, petitioner seek relief from the Supreme Court.

According to the Supreme Court, petitioner deserved the damages awarded to her
by the court. This Court has no original and exclusive jurisdiction over a petition for
declaratory relief; however, exceptions to the rule have been recognized. Thus, where the
petition has far-reaching implications and raises questions that should be resolved, it may
be treated as one for mandamus. The application of the law depends on the extent of its
justice. Eventually, if the Court rule that the questioned Section 113 of the Central Bank
Circular No. 960 which exempt from attachment, garnishment, or an order or process of
any court, legislative body, government agency or any administrative body whatsoever, is
applicable to a foreign transient, injustice would result especially to a citizen aggrieved by
a foreign guest like accused Bartelli. This would negate Article 10 of the New Civil Code,
which provides that "in case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to prevail. The provisions of
Section 113 of CB Circular No. 960 and PD No. 1246 insofar as it amends Section 8 of
R.A. No. 6426 were held to be inapplicable to the case because of its peculiar
circumstances. Respondents were required to comply with the writ of execution issued in
Civil Case No. 89-3214 and to release to the petitioners the dollar deposits of Greg Bartelli
in such amount as would satisfy the judgment. caDTSE

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; INSTANT PETITION FOR

DECLARATORY RELIEF TREATED AS A PETITION FOR MANDAMUS; THE
SUPREME COURT HAS NO ORIGINAL AND EXCLUSIVE JURISDICTION OVER
A PETITION FOR DECLARATORY RELIEF. — Petitioner deserves to receive the
damages awarded to her by the court. But this petition for declaratory relief can only be
entertained and treated as a petition for mandamus to require respondents to honor and
comply with the writ of execution in Civil Case No. 89-3214. This Court has no original
and exclusive jurisdiction over a petition for declaratory relief. However, exceptions to this
rule have been recognized. Thus, where the petition has far-reaching implications and
raises questions that should be resolved, it may be treated as one for mandamus.

2. COMMERCIAL LAW; SECTION 113 OF CENTRAL BANK CIRCULAR NO.

960, PROVIDING THAT FOREIGN CURRENCY DEPOSITS SHALL BE EXEMPT
FROM ATTACHMENT, GARNISHMENT OR ANY OTHER ORDER OF ANY
COURT OR ANY GOVERNMENT AGENCY OR BODY; HELD INAPPLICABLE TO
THIS CASE BECAUSE OF ITS PECULIAR CIRCUMSTANCES. — The application of
the law depends on the extent of its justice. Eventually, if we rule that the questioned
Section 113 of Central Bank Circular No. 960 which exempts from attachment,
garnishment, or any other order or process of any court, legislative body, government
agency or any administrative body whatsoever, is applicable to a foreign transient, injustice
would result specially to a citizen aggrieved by a foreign guest like accused Greg Bartelli.
This would negate Article 10 of the New Civil Code which provides that "in case of doubt
in the interpretation or application of laws, it is presumed that the lawmaking body intended
right and justice to prevail. "Ninguno non deue enriquecerse tortizeramente con dano de
otro." Simply stated, when the statute is silent or ambiguous, this is one of those
fundamental solutions that would respond to the vehement urge of conscience. (Padilla vs.
Padilla, 74 Phil. 377). It would be unthinkable, that the questioned Section 113 of Central
Bank No. 960 would be used as a device by accused Greg Bartelli for wrongdoing, and in
so doing, acquitting the guilty at the expense of the innocent. Call it what it may — but is
there no conflict of legal policy here? Dollar against Peso? Upholding the final and
executory judgment of the lower court against the Central Bank Circular protecting the
foreign depositor? Shielding or protecting the dollar deposit of a transient alien depositor
against injustice to a national and victim of a crime? This situation calls for fairness against
legal tyranny. We definitely cannot have both ways and rest in the belief that we have
served the ends of justice. IN VIEW WHEREOF, the provisions of Section 113 of CB
Circular No. 960 and PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426 are
hereby held to be INAPPLICABLE to this case because of its peculiar circumstances.
Respondents are hereby REQUIRED to COMPLY with the writ of execution issued in
Civil Case No. 89-3214, "Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch
CXLIV, RTC Makati and to RELEASE to petitioners the dollar deposit of respondent Greg
Bartelli y Northcott in such amount as would satisfy the judgment. DCHaTc

DECISION

TORRES, JR., J : p

In our predisposition to discover the "original intent" of a statute, courts become the
unfeeling pillars of the status quo. Little do we realize that statutes or even constitutions
are bundles of compromises thrown our way by their framers. Unless we exercise vigilance,
the statute may already be out of tune and irrelevant to our day.

The petition is for declaratory relief. It prays for the following reliefs:

a.) Immediately upon the filing of this petition, an Order be issued

restraining the respondents from applying and enforcing Section 113 of Central
Bank Circular No. 960; prcd

b.) After hearing, judgment be rendered:

1.) Declaring the respective rights and duties of petitioners and

respondents;

2.) Adjudging Section 113 of Central Bank Circular No. 960 as contrary
to the provisions of the Constitution, hence void; because its provision that
"Foreign currency deposits shall be exempt from attachment, garnishment, or any
other order or process of any court, legislative body, government agency or any
administrative body whatsoever"

i.) has taken away the right of petitioners to have the bank deposit
of defendant Greg Bartelli y Northcott garnished to satisfy the judgment
rendered in petitioners' favor in violation of substantive due process
guaranteed by the Constitution;

ii.) has given foreign currency depositors an undue favor or a class

privilege in violation of the equal protection clause of the Constitution;

iii.) has provided a safe haven for criminals like the herein
respondent Greg Bartelli y Northcott since criminals could escape civil
liability for their wrongful acts by merely converting their money to a
foreign currency and depositing it in a foreign currency deposit account
with an authorized bank.

The antecedent facts:

 On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and
lured petitioner Karen Salvacion, then 12 years old to go with him to his apartment.
Therein, Greg Bartelli detained Karen Salvacion for four days, or up to February 7,
1989 and was able to rape the child once on February 4, and three times each day on
February 5, 6, and 7, 1989. On February 7, 1989, after policemen and people living
nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati
Municipal Jail. The policemen recovered from Bartelli the following items: 1.) Dollar
Check No. 368, Control No. 021000678-1166111303, US 3,903.20; 2.) COCOBANK
Bank Book No. 104-108758-8 (Peso Acct.); 3.) Dollar Account — China Banking
Corp., US$/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money (P234.00)
cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in seducing the
complainant.

On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed against
Greg Bartelli, Criminal Case No. 801 for Serious Illegal Detention and Criminal Cases
Nos. 802, 803, 804 and 805 for four (4) counts of Rape. On the same day, petitioners filed
with the Regional Trial Court of Makati Civil Case No. 89-3214 for damages with
preliminary attachment against Greg Bartelli. On February 24, 1989, the day there was a
scheduled hearing for Bartelli's petition for bail the latter escaped from jail.

On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte Motion for the
Issuance of Warrant of Arrest and Hold Departure Order. Pending the arrest of the accused
Greg Bartelli y Northcott, the criminal cases were archived in an Order dated February 28,
1989.

Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February
22, 1989 granting the application of herein petitioners, for the issuance of the writ of
preliminary attachment. After petitioners gave Bond No. JCL (4) 1981 by FGU Insurance
Corporation in the amount of 100,000.00, a Writ of Preliminary Attachment was issued by
the trial court on February 28, 1989.

On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on

China Banking Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of
Makati, China Banking Corporation invoked Republic Act No. 1405 as its answer to the
notice of garnishment served on it. On March 15, 1989, Deputy Sheriff of Makati Armando
De Guzman sent his reply to China Banking Corporation saying that the garnishment did
not violate the secrecy of bank deposits since the disclosure is merely incidental to a
garnishment properly and legally made by virtue of a court order which has placed the
subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff of Makati,
China Banking Corporation, in a letter dated March 20, 1989, invoked Section 113 of
Central Bank Circular No. 960 to the effect that the dollar deposits of defendant Greg
Bartelli are exempt from attachment, garnishment, or any other order or process of any
court, legislative body, government agency or any administrative body, whatsoever,

This prompted the counsel for petitioners to make an inquiry with the Central Bank
in a letter dated April 25, 1989 on whether Section 113 of CB Circular No. 960 has any
exception or whether said section has been repealed or amended since said section has
rendered nugatory the substantive right of the plaintiff to have the claim sought to be
enforced by the civil action secured by way of the writ of preliminary attachment as granted
to the plaintiff under Rule 57 of the Revised Rules of Court. The Central Bank responded
as follows:

"May 26, 1989

 "Ms. Erlinda S. Carolino
12 Pres. Osmeña Avenue
South Admiral Village
Parañaque, Metro Manila

Dear Ms. Carolino:

"This is in reply to your letter dated April 25, 1989 regarding your inquiry
on Section 113, CB Circular No. 960 (1983).

"The cited provision is absolute in application. It does not admit of any

exception, nor has the same been repealed nor amended.

"The purpose of the law is to encourage dollar accounts within the

country's banking system which would help in the development of the economy.
There is no intention to render futile the basic rights of a person as was suggested
in your subject letter. The law may be harsh as some perceive it, but it is still the
law. Compliance is, therefore, enjoined.

"Very truly yours,

(SGD) AGAPITO S. FAJARDO

Director" 1

Meanwhile, on April 10, 1989, the trial court granted petitioner's motion for leave
to serve summons by publication in the Civil Case No. 89-3214 entitled "Karen Salvacion,
et al. vs. Greg Bartelli y Northcott." Summons with the complaint was published in the
Manila Times once a week for three consecutive weeks. Greg Bartelli failed to file his
answer to the complaint and was declared in default on August 7, 1989. After hearing the
case ex-parte, the court rendered judgment in favor of petitioners on March 29, 1990, the
dispositive portion of which reads:

"WHEREFORE, judgment is hereby rendered in favor of plaintiffs and

against defendant, ordering the latter:

"1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as

moral damages;

"2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr., and
Evelina E. Salvacion the amount of P150,000.00 each or a total of P300,000.00
for both of them;

"3. To pay plaintiffs exemplary damages of P100,000.00; and

"4. To pay attorney's fees in an amount equivalent to 25% of the total

amount of damages herein awarded; llcd

"5. To pay litigation expenses of P10,000.00; plus

"6. Costs of the Suit.

"SO ORDERED."

The heinous acts of respondent Greg Bartelli which gave rise to the award were
related in graphic detail by the trial court in its decision as follows:
 "The defendant in this case was originally detained in the municipal jail
of Makati but was able to escape therefrom on February 24, 1989 as per report of
the Jail Warden of Makati to the Presiding Judge, Honorable Manuel M. Cosico
of the Regional Trial Court of Makati, Branch 136, where he was charged with
four counts of Rape and Serious Illegal Detention (Crim. Cases Nos. 802 to 805).
Accordingly, upon motion of plaintiffs, through counsel, summons was served
upon defendant by publication in the Manila Times, a newspaper of general
circulation as attested by the Advertising Manager of the Metro Media Times,
Inc., the publisher of the said newspaper. Defendant, however, failed to file his
answer to the complaint despite the lapse of the period of sixty (60) days from the
last publication; hence, upon motion of the plaintiffs, through counsel, defendant
was declared in default and plaintiffs were authorized to present their evidence ex
parte.

"In support of the complaint, plaintiffs presented as witnesses the minor

Karen E. Salvacion, her father, Federico N. Salvacion, Jr., a certain Joseph
Aguilar and a certain Liberato Madulio, who gave the following testimony:

"Karen took her first year high school in St. Mary's Academy in Pasay
City but has recently transferred to Arellano University for her second year.

"In the afternoon of February 4, 1989, Karen was at the Plaza Fair Makati
Cinema, Square, with her friend Edna Tangile whiling away her free time. At
about 3:30 p.m. while she was finishing her snack on a concrete bench in front of
Plaza Fair, an American approached her. She was then alone because Edna
Tangile had already left, and she was about to go home. (TSN, Aug. 15, 1989, pp.
2 to 5)

"The American asked her name and introduced himself as Greg Bartelli.
He sat beside her when he talked to her. He said he was a Math teacher and told
her that he has a sister who is a nurse in New York. His sister allegedly has a
daughter who is about Karen's age and who was with him in his house along
Kalayaan Avenue. (TSN, Aug. 15, 1989, pp. 4-5)

"The American asked Karen what was her favorite subject and she told
him it's Pilipino. He then invited her to go with him to his house where she could
teach Pilipino to his niece. He even gave her a stuffed toy to persuade her to teach
his niece. (Id., pp. 5-6)

"They walked from Plaza Fair along Pasong Tamo, turning right to reach
the defendant's house along Kalayaan Avenue. (Id., p. 6)

"When they reached the apartment house, Karen noticed that defendant's
alleged niece was not outside the house but defendant told her maybe his niece
was inside. When Karen did not see the alleged niece inside the house, defendant
told her maybe his niece was upstairs, and invited Karen to go upstairs. (Id., p. 7)

"Upon entering the bedroom defendant suddenly locked the door. Karen
became nervous because his niece was not there. Defendant got a piece of cotton
cord and tied Karen's hands with it, and then he undressed her. Karen cried for
help but defendant strangled her. He took a packing tape and he covered her
mouth with it and he circled it around her head. (Id., p. 7)

"Then, defendant suddenly pushed Karen towards the bed which was just
near the door. He tied her feet and hands spread apart to the bed posts. He knelt
in front of her and inserted his finger in her sex organ. She felt severe pain. She
tried to shout but no sound could come out because there were tapes on her mouth.
When defendant withdraw his finger it was full of blood and Karen felt more pain
after the withdrawal of the finger. (Id., p. 8)
 "He then got a Johnson's Baby Oil and he applied it to his sex organ as
well as to her sex organ. After that he forced his sex organ into her but he was not
able to do so. While he was doing it, Karen found it difficult to breathe and she
perspired a lot while feeling severe pain. She merely presumed that he was able
to inset his sex organ a little, because she could not see. Karen could not recall
how long the defendant was in that position. (Id. pp. 8-9)

"After that, he stood up and went to the bathroom to wash. He also told
Karen to take a shower and he untied her hands. Karen could only hear the sound
of the water while the defendant, she presumed, was in the bathroom washing his
sex organ. When she took a shower more blood came out from her. In the
meantime, defendant changed the mattress because it was full of blood. After the
shower, Karen was allowed by defendant to sleep. She fell asleep because she got
tired crying. The incident happened at about 4:00 p.m. Karen has no way of
determining the exact time because defendant removed her watch. Defendant did
not care to giver her food before she went to sleep. Karen woke up at about 8:00
o'clock the following morning. (Id., pp. 9-10)

"The following day, February 5, 1989, a Sunday, after a breakfast of

biscuit and coke at about 8:30 to 9:00 a.m. defendant raped Karen while she was
still bleeding. For lunch, they also took biscuit and coke. She was raped for the
second time at about 12:00 to 2:00 p.m. In the evening, they had rice for dinner
which defendant had stored downstairs; it was he who cooked the rice that is why
it looks like "lugaw". For the third time, Karen was raped again during the night.
During those three times defendant succeeded in inserting his sex organ but she
could not say whether the organ was inserted wholly.

"Karen did not see any firearm or any bladed weapon. The defendant did
not tie her hands and feet nor put a tape on her mouth anymore but she did not
cry for help for fear that she might be killed; besides, all the windows and doors
were closed. And even if she shouted for help, nobody would hear her. She was
so afraid that if somebody would hear her and would be able to call the police, it
was still possible that as she was still inside the house, defendant might kill her.
Besides, the defendant did not leave that Sunday, ruling out her chance to call for
help. At nighttime he slept with her again. (TSN, Aug. 15, 1989, pp. 12-14)

"On February 6, 1989, Monday, Karen was raped three times, once in the
morning for thirty minutes after a breakfast of biscuits; again in the afternoon;
and again in the evening. At first, Karen did not know that there was a window
because everything was covered by a carpet, until defendant opened the window
for around fifteen minutes or less to let some air in, and she found that the window
was covered by styrofoam and plywood. After that, he again closed the window
with a hammer and he put the styrofoam, plywood, and carpet back. (Id., pp. 14-
15)

"That Monday evening, Karen had a chance to call for help, although
defendant left but kept the door closed. She went to the bathroom and saw a small
window covered by styrofoam and she also spotted a small hole. She stepped on
the bowl and she cried for help through the hole. She cried: 'Maawa na po kayo
sa akin. Tulungan n'yo akong makalabas dito. Kinidnap ako! Somebody heard
her. It was a woman, probably a neighbor, but she got angry and said she was
'istorbo'. Karen pleaded for help and the woman told her to sleep and she will call
the police. She finally fell asleep but no policeman came. (TSN, Aug. 15, 1989,
pp. 15-16)

"She woke up at 6:00 o'clock the following morning, and she saw
defendant in bed, this time sleeping. She waited for him to wake up. When he
woke up, he again got some food but he always kept the door locked. As usual,
she was merely fed with biscuit and coke. On that day, February 7, 1989, she was
again raped three times. The first at about 6:30 to 7:00 a.m., the second at about
8:30 - 9:00, and the third was after lunch at 12:00 noon. After he had raped her
for the second time he left but only for a short while. Upon his return, he caught
her shouting for help but he did not understand what she was shouting about.
After she was raped the third time, he left the house. (TSN, Aug. 15, 1989, pp.
16-17) She again went to the bathroom and shouted for help. After shouting for
about five minutes, she heard many voices. The voices were asking for her name
and she gave her name as Karen Salvacion. After a while, she heard a voice of a
woman saying they will just call the police. They were also telling her to change
her clothes. She went from the bathroom to the room but she did not change her
clothes being afraid that should the neighbors call for the police and the defendant
see her in different clothes, he might kill her. At that time she was wearing a T-
shirt of the American because the latter washed her dress. (Id., p. 16) cdll

"Afterwards, defendant arrived and he opened the door. He asked her if

she had asked for help because there were many policemen outside and she denied
it. He told her to change her clothes, and she did change to the one she was
wearing on Saturday. He instructed her to tell the police that she left home and
willingly; then he went downstairs but he locked the door. She could hear people
conversing but she could not understand what they were saying. (Id., p. 19)

"When she heard the voices of many people who were conversing
downstairs, she knocked repeatedly at the door as hard as she could. She heard
somebody going upstairs and when the door was opened, she saw a policeman.
The policemen asked her name and the reason why she was there. She told him
she was kidnapped. Downstairs, he saw about five policemen in uniform and the
defendant was talking to them. 'Nakikipag-areglo po sa mga pulis,' Karen added.
"The policeman told him to just explain at the precinct. (Id., p. 20)

They went out of the house and she saw some of her neighbors in front of
the house. They rode the car of a certain person she called Kuya Boy together
with defendant, the policeman, and two of her neighbors whom she called Kuya
Bong Lacson and one Ate Nita. They were brought to sub-Station I and there she
was investigated by a policeman. At about 2:00 a.m., her father arrived, followed
by her mother together with some of their neighbors. Then they were brought to
the second floor of the police headquarters. (Id., p. 21)

"At the headquarters, she was asked several questions by the investigator.
The written statement she gave to the police was marked as Exhibit A. Then they
proceeded to the National Bureau of Investigation together with the investigator
and her parents. At the NBI, a doctor, a medico-legal officer, examined her
private parts. It was already 3:00 in the early morning of the following day when
they reached the NBI. (TSN, Aug. 15, 1989, p. 22) The findings of the medico-
legal officer has been marked as Exhibit B.

"She was studying at the St. Mary's Academy in Pasay City at the time of
the incident but she subsequently transferred to Apolinario Mabini, Arellano
University, situated along Taft Avenue, because she was ashamed to be the
subject of conversation in the school. She first applied for transfer to Jose Abad
Santos, Arellano University along Taft Avenue near the Light Rail Transit Station
but she was denied admission after she told the school the true reason for her
transfer. The reason for their denial was that they might be implicated in the case.
(TSN, Aug. 15, 1989, p. 46)

xxx xxx xxx

"After the incident, Karen has changed a lot. She does not play with her
brother and sister anymore, and she is always in a state of shock; she has been
absent-minded and is ashamed even to go out of the house. (TSN, Sept. 12, 1989,
 p. 10) She appears to be restless or sad. (Id., p. 11)The father prays for
P500,000.00 moral damages for Karen for this shocking experience which
probably, she would always recall until she reaches old age, and he is not sure if
she could ever recover from this experience." (TSN, Sept. 24, 1989, pp. 10-11)

Pursuant to an Order granting leave to publish notice of decision, said notice was
published in the Manila Bulletin once a week for three consecutive weeks. After the lapse
of fifteen (15) days from the date of the last publication of the notice of judgment and the
decision of the trial court had become final, petitioners tried to execute on Bartelli's dollar
deposit with China Banking Corporation. Likewise, the bank invoked Section 113 of
Central Bank Circular No. 960.

Thus, petitioners decided to seek relief from this Court.

The issues raised and the arguments articulated by the parties boil down to two:

May this Court entertain the instant petition despite the fact that original jurisdiction
in petitions for declaratory relief rests with the lower court? Should Section 113 of Central
Bank Circular No. 960 and Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise
known as the Foreign Currency Deposit Act be made applicable to a foreign transient?

Petitioners aver as heretofore stated that Section 113 of Central Bank Circular No.
960 providing that "Foreign currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any court, legislative body, government
agency or any administrative body whatsoever." should be adjudged as unconstitutional on
the grounds that: 1.) it has taken away the right of petitioners to have the bank deposit of
defendant Greg Bartelli y Northcott garnished to satisfy the judgment rendered in
petitioners' favor in violation of substantive due process guaranteed by the Constitution;
2.) it has given foreign currency depositors an undue favor or a class privilege in violation
of the equal protection clause of the Constitution; 3.) it has provided a safe haven for
criminals like the herein respondent Greg Bartelli y Northcott since criminals could escape
civil liability for their wrongful acts by merely converting their money to a foreign currency
and depositing it in a foreign currency deposit account with an authorized bank and 4.) The
Monetary Board, in issuing Section 113 of Central Bank Circular No. 960 has exceeded its
delegated quasi-legislative power when it took away: a.) the plaintiff's substantive right to
have the claim sought to be enforced by the civil action secured by way of the writ of
preliminary attachment as granted by Rule 57 of the Revised Rules of Court; b.) the
plaintiff's substantive right to have the judgment credit satisfied by way of the writ of
execution out of the bank deposit of the judgment debtor as granted to the judgment creditor
by Rule 39 of the Revised Rules of Court, which is beyond its power to do so.

On the other hand, respondent Central bank, in its Comment alleges that the
Monetary Board in issuing Section 113 of CB Circular No. 960 did not exceed its power
or authority because the subject Section is copied verbatim from a portion of R.A. No. 6426
as amended by P.D. 1246. Hence, it was not the Monetary Board that grants exemption
from attachment or garnishment to foreign currency deposits, but the law (R.A. 6426 as
amended) itself; that it does not violate the substantive due process guaranteed by the
Constitution because a.) it was based on a law; b.) the law seems to be reasonable; c.) it is
enforced according to regular methods of procedure; and d.) it applies to all members of a
class.

Expanding, the Central Bank said; that one reason for exempting the foreign
currency deposits from attachment, garnishment or any other order or process of any court,
is to assure the development and speedy growth of the Foreign Currency Deposit System
and the Offshore Banking System in the Philippines; that another reason is to encourage
the inflow of foreign currency deposits into the banking institutions thereby placing such
institutions more in a position to properly channel the same to loans and investments in the
Philippines, thus directly contributing to the economic development of the country; that
the subject section is being enforced according to the regular methods of procedure; and
that it applies to all foreign currency deposits made by any person and therefore does not
violate the equal protection clause of the Constitution.

Respondent Central Bank further avers that the questioned provision is needed to
promote the public interest and the general welfare; that the State cannot just stand idly by
while a considerable segment of the society suffers from economic distress; that the State
had to take some measures to encourage economic development; and that in so doing
persons and property may be subjected to some kinds of restraints or burdens to secure the
general welfare or public interest. Respondent Central Bank also alleges that Rule 39 and
Rule 57 of the Revised Rules of Court provide that some properties are exempted from
execution/attachment especially provided by law and R.A. No. 6426 as amended is such a
law, in that it specifically provides, among others, that foreign currency deposits shall be
exempted from attachment, garnishment, or any other order or process of any court,
legislative body, government agency or any administrative body whatsoever. cdta

For its part, respondent China Banking Corporation, aside from giving reasons
similar to that of respondent Central Bank, also stated that respondent China Bank is not
unmindful of the inhuman sufferings experienced by the minor Karen E. Salvacion from
the breastly hands of Greg Bartelli; that it is only too willing to release the dollar deposit
of Bartelli which may perhaps partly mitigate the sufferings petitioners has undergone; but
it is restrained from doing so in view of R.A. No. 6426 and Section 113 of Central Bank
Circular NO. 960; and that despite the harsh effect of these laws on petitioners, CBC has
no other alternative but to follow the same.

This Court finds the petition to be partly meritorious.

Petitioner deserves to receive the damages awarded to her by the court. But this
petitioner for declaratory relief can only be entertained and treated as a petition for
mandamus to require respondents to honor and comply with the writ of execution in Civil
Case No. 89-3214.

This Court has no original and exclusive jurisdiction over a petition for declaratory
relief. 2 However, exceptions to this rule have been recognized. Thus, where the petition
has far-reaching implications and raises questions that should be resolved, it may be treated
as one for mandamus. 3

Here is a child, a 12-year old girl, who in her belief that all Americans are good, and
in her gesture of kindness by teaching his alleged niece the Filipino language requested by
the American, trustingly went with said stranger to his apartment, and that she was raped
by said American tourist Greg Bartelli. Not once, but ten times. She was detained therein
for four (4) days. This American tourist was able to escape from the jail and avoid
punishment. On the other hand, the child, having received a favorable judgment in the Civil
Case for damages in the amount of more than P1,000,000.00, which amount could alleviate
the humiliation, anxiety, and besmirched reputation she had suffered and may continue to
suffer for a long, long time; and knowing that this person who had wronged her has the
money, could not, however get the award of damages because of this unreasonable law.
This questioned law, therefore makes futile the favorable judgment and award of damages
that she and her parents fully deserve. As stated by the trial court in its decision.

"Indeed, after hearing the testimony of Karen, the Court believes that it
was undoubtedly a shocking and traumatic experience she had undergone which
 could haunt her mind for a long, long time, the mere recall of which could make
her feel so humiliated, as in fact she had been actually humiliated once when she
was refused admission at the Abad Santos High School, Arellano University,
where she sought to transfer from another school, simply because the school
authorities of the said High School learned about what happened to her and
allegedly feared that they might be implicated in the case.

xxx xxx xxx

The reason for imposing exemplary or corrective damages is due to the

wanton and bestial manner defendant had committed the acts of rape during a
period of serious illegal detention of his hapless victim, the minor Karen
Salvacion whose only fault was in her being so naive and credulous to believe
easily that defendant, an American national, could not have such a bestial desire
on her nor capable of committing such a heinous crime. Being only 12 years old
when that unfortunate incident happened, she has never heard of an old Filipino
adage that in every forest there is a snake, . . ." 4

If Karen's sad fate had happened to anybody's own kin, it would be difficult for him
to fathom how the incentive for foreign currency deposit could be more important that his
child's rights to said award of damages; in this case, the victim's claim for damages from
this alien who had the gall to wrong a child of tender years of a country where he is a mere
visitor. This further illustrates the flaw in the questioned provisions.

It is worth mentioning that R.A. No. 6426 was enacted in 1983 or at a time when
the country's economy was in a shambles; when foreign investments were minimal and
presumably, this was the reason why said statute was enacted. But the realities of the
present times show that the country has recovered economically; and even if not, the
questioned law still denies those entitled to due process of law for being unreasonable and
oppressive. The intention of the questioned law may be good when enacted. The law failed
to anticipate the iniquitous effects producing outright injustice and inequality such as the
case before us.

It has thus been said that —

"But I also know, 5 that laws and institutions must go hand in hand with
the progress of the human mind. As that becomes more developed, more
enlightened, as new discoveries are made, new truths are disclosed and manners
and opinions change with the change of circumstances, institutions must advance
also, and keep pace with the times . . . We might as well require a man to wear
still the coat which fitted him when a boy, as civilized society to remain ever
under the regimen of their barbarous ancestors."

In his Comment, the Solicitor General correctly opined, thus:

"The present petition has far-reaching implications on the right of a

national to obtain redress for a wrong committed by an alien who takes refuge
under a law and regulation promulgated for a purpose which does not contemplate
the application thereof envisaged by the alien. More specifically, the petition
raises the question whether the protection against attachment, garnishment or
other court process accorded to foreign currency deposits by PD No. 1246 and
CB Circular No. 960 applies when the deposit does not come from a lender or
investor but from a mere transient or tourist who is not expected to maintain the
deposit in the bank for long.

"The resolution of this question is important for the protection of nationals

who are victimized in the forum by foreigners who are merely passing through.
 xxx xxx xxx

". . . Respondents China Banking Corporation and Central Bank of the

Philippines refused to honor the writ of execution issued in Civil Case No. 89-
3214 on the strength of the following provision of Central Bank Circular No. 960:

'Sec. 113. Exemption from attachment. — Foreign currency

deposits shall be exempt from attachment, garnishment, or any other order
or process of any court, legislative body, government agency or any
administrative body whatsoever.'

"Central Bank Circular No. 960 was issued pursuant to Section 7

of Republic Act No. 6426:

'Sec. 7. Rules and Regulations. — The Monetary Board of the

Central Bank shall promulgate such rules and regulations as may be
necessary to carry out the provisions of this Act which shall take effect
after the publication of such rules and regulations in the Official Gazette
and in a newspaper of national circulation for at least once a week for
three consecutive weeks. In case the Central Bank promulgates new rules
and regulations decreasing the rights of depositors, the rules and
regulations at the time the deposit was made shall govern.'

"The aforecited Section 113 was copied from Section 8 of

Republic Act No. 6426, as amended by P.D. 1246, thus:

'Sec. 8. Secrecy of Foreign Currency Deposits. — All foreign

currency deposits authorized under this Act, as amended by Presidential
Decree No. 1035, as well as foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby declared as and considered of
an absolutely confidential nature and, except upon the written permission
of the depositor, in no instance shall such foreign currency deposits be
examined, inquired or looked into by any person, government official,
bureau or office whether judicial or administrative or legislative or any
other entity whether public or private: Provided, however, that said
foreign currency deposits shall be exempt from attachment, garnishment,
or any other order a process of any court, legislative body, government
agency or any administrative body whatsoever,' prll

"The purpose of PD 1246 in according protection against attachment,

garnishment and other court process to foreign currency deposits is stated in its
whereases, viz:

'WHEREAS, under Republic Act No. 6426, as amended by Presidential

Decree No. 1035, certain Philippine banking institutions and branches of foreign
banks are authorized to accept deposits in foreign currency;

'WHEREAS, under the provisions of Presidential Decree No. 1034

authorizing the establishment of an offshore banking system in the Philippines,
offshore banking units are also authorized to receive foreign currency deposits in
certain cases;

'WHEREAS, in order to assure the development and speedy growth of the

Foreign Currency Deposit System and the Offshore Banking System in the
Philippines, certain incentives were provided for under the two Systems such as
confidentiality of deposits subject to certain exceptions and tax exemptions on
the interest income of depositors who are nonresidents and are not engaged in
trade or business in the Philippines;
 'WHEREAS, making absolute the protective cloak of confidentiality over
such foreign currency deposits, exempting such deposits from tax, and
guaranteeing the vested rights of depositors would better encourage the inflow of
foreign currency deposits into the banking institutions authorized to accept such
deposits in the Philippines thereby placing such institutions more in a position to
properly channel the same to loans and investments in the Philippines, thus
directly contributing to the economic development of the country;'

"Thus, one of the principal purposes of the protection accorded to foreign

currency deposits is 'to assure the development and speedy growth of the Foreign
Currency Deposit system and the Offshore Banking in the Philippines' (3rd
Whereas).

"The Offshore Banking System was established by PD. No. 1034. In turn,
the purposes of PD No. 1034 are as follows:

'WHEREAS, conditions conductive to the establishment of an offshore

banking system, such as political stability, a growing economy and adequate
communication facilities, among others, exist in the Philippines;

'WHEREAS, it is in the interest of developing countries to have as wide

access as possible to the sources of capital funds for economic development;

'WHEREAS, an offshore banking system based in the Philippines will be

advantageous and beneficial to the country by increasing our links with foreign
lenders, facilitating the flow of desired investments into the Philippines, creating
employment opportunities and expertise in international finance, and contributing
to the national development effort.

'WHEREAS, the geographical location, physical and human resources,

and other positive factors provide the Philippines with the clear potential to
develop as another financial center in Asia;'

"On the other hand, the Foreign Currency Deposit system was created by
PD No. 1035. Its purposes are as follows:

'WHEREAS, the establishment of an offshore banking system in the

Philippines has been authorized under a separate decree;

'WHEREAS, a number of local commercial banks, as depository bank

under the Foreign Currency Deposit Act (RA No. 6426), have the resources and
managerial competence to more actively engage in foreign exchange transactions
and participate in the grant of foreign currency loans to resident corporations and
firms;

'WHEREAS, it is timely to expand the foreign currency lending authority

of the said depository banks under RA 6426 and apply to their transactions the
same taxes as would be applicable to transaction of the proposed offshore banking
units;'

"It is evident from the above [Whereas clauses] that the Offshore Banking
System and the Foreign Currency Deposit System were designed to draw deposits
from foreign lenders and investors (Vide second Whereas of PD No. 1034; third
Whereas of PD No. 1035). It is these deposits that are induced by the two laws
and given protection and incentives by them.

"Obviously, the foreign currency deposit made by a transient or a tourist

is not the kind of deposit encouraged by PD Nos. 1034 and 1035 and given
incentives and protection by said laws because such depositors stays only for a
 few days in the country and, therefore, will maintain his deposit in the bank only
for a short time.

"Respondent Greg Bartelli, as stated, is just a tourist or a transient. He

deposited his dollars with respondent China Banking Corporation only for
safekeeping during his temporary stay in the Philippines.

"For the reasons stated above, the Solicitor General thus submits that the
dollar deposit of respondent Greg Bartelli is not entitled to the protection of
Section 113 of Central Bank Circular No. 960 and P.D. No. 1246 against
attachment, garnishment or other court processes." 6

In fine, the application of the law depends on the extent of its justice. Eventually, if
we rule that the questioned Section 113 of Central Bank Circular No. 960 which exempts
from attachment, garnishment, or any other order or process of any court, legislative body,
government agency or any administrative body whatsoever, is applicable to a foreign
transient, injustice would result specially to a citizen aggrieved by a foreign guest like
accused Greg Bartelli. This would negate Article 10 of the New Civil Code which provides
that "in case of doubt in the interpretation or application of laws, it is presumed that the
lawmaking body intended right and justice to prevail. "Ninguno non deue enriquecerse
tortizeramente con dano de otro." Simply stated, when the statute is silent or ambiguous,
this is one of those fundamental solutions that would respond to the vehement urge of
conscience. (Padilla vs. Padilla, 74 Phil. 377).

It would be unthinkable, that the questioned Section 113 of Central Bank No. 960
would be used as a device by accused Greg Bartelli for wrongdoing, and in so doing,
acquitting the guilty at the expense of the innocent.

Call it what it may — but is there no conflict of legal policy here? Dollar against
Peso? Upholding the final and executory judgment of the lower court against the Central
Bank Circular protecting the foreign depositor? Shielding or protecting the dollar deposit
of a transient alien depositor against injustice to a national and victim of a crime? This
situation calls for fairness against legal tyranny.

We definitely cannot have both ways and rest in the belief that we have served the
ends of justice.

IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and
PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426 are hereby held to be
INAPPLICABLE to this case because of its peculiar circumstances. Respondents are
hereby REQUIRED to COMPLY with the writ of execution issued in Civil Case No. 89-
3214, "Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC
Makati and to RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y
Northcott in such amount as would satisfy the judgment. cdll

SO ORDERED.

Narvasa, C .J ., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Vitug,

Kapunan, Francisco and Panganiban, JJ ., concur.

Padilla, J ., took no part.

Mendoza and Hermosisima, Jr., JJ ., are on leave.

 Footnotes

1.Annex "R", Petition.

2.Alliance of Government Workers (AGW) v. Ministry of Labor and Employment, 124 SCRA 1.

3.Nationalista Party vs. Angelo Bautista, 85 Phil. 101; Aquino vs. Comelec, 62 SCRA 275;
and Alliance of Government Workers vs. Minister of Labor and Employment, supra.

4.Decision, Regional Trial Court, Civil Case No. 89-3214, pp. 9 & 12; Rollo, pp. 66-69.

5.Thomas Jefferson, Democracy, ed. Saul K. Padover. (New York, Penguin, 1946) p. 171.

6.Comment of the Solicitor General, Rollo, pp. 128-129; 135-136.

(Salvacion v. Central Bank of the Philippines, G.R. No. 94723, [August 21, 1997], 343
|||

PHIL 539-560)

[G.R. No. 78687. January 31, 1989.]

ELENA SALENILLAS AND BERNARDINO SALENILLAS,

petitioners, vs. HONORABLE COURT OF APPEALS AND
HONORABLE RAYMUNDO SEVA, JUDGE OF BRANCH 38 OF
THE REGIONAL TRIAL COURT OF CAMARINES NORTE AND
WILLIAM GUERRA, respondents.

Jose L. Lapak for petitioners.

Jose T. Atienza for private respondent.

SYLLABUS

1. CIVIL LAW; PUBLIC LAND ACT; SECTION 119; PERSONS WITH RIGHT TO
REPURCHASE, "LEGAL HEIRS" NOT DISTINGUISHED. — From the foregoing
legal provision, it is explicit that only three classes of persons are bestowed the right to
repurchase - the applicant-patentee, his widow, or other legal heirs. Consequently, the
contention of the private respondent sustained by the respondent appellate court that the
petitioners do not belong to any of those classes of repurchasers because they acquired
the property not through inheritance but by sale, has no legal basis. The petitioners-
spouses are the daughter and son-in-law of the Encisos, patentees of the contested
property. At the very least, petitioner Elena Salenillas, being a child of the Encisos, is a
"legal heir" of the latter. As such, and even on this score alone, she may therefore validly
repurchase. This must be so because Section 119 of the Public Land Act, in speaking of
"legal heirs," makes no distinction. Ubi lex non distinguit nec nos distinguere debemos.

2. ID.; ID.; ID.; PURPOSE. — To indorse the distinction made by the private respondent
and the appellate court would be to contravene the very purpose of Section 119 of the
Public Land Act which is to give the homesteader or patentee every chance to preserve
for himself and his family the land that the State had gratuitously given him as a reward
for his labor in clearing and cultivating it.

3. REMEDIAL LAW; JUDGMENT; REDEMPTION PRICE; PAYMENT OF

PURCHASE PRICE WITH INTEREST PLUS ASSESSMENT AND TAXES. — As
regards the redemption price, applying Sec. 30 of Rule 39 of the Revised Rules of Court,
the petitioners should reimburse the private respondent the amount of the purchase price
at the public auction plus interest at the rate of one per centum per month up to
November 17, 1983, together with the amounts of assessments and taxes on the property
that the private respondent might have paid after purchase and interest on the last named
amount at the same rate as that on the purchase price.

DECISION

SARMIENTO, J : p

This petition for review on certiorari which seeks the reversal and setting aside of the
decision 1 of the Court of Appeals 2 dismissing the petition for certiorari against Judge
Raymundo Seva of the Regional Trial Court of Camarines Norte and the private
respondent, William Guerra, involves a pure question of law, i.e., the coverage and
application of Section 119 of Commonwealth Act No. 141, as amended, known otherwise
as the Public Land Act.

The facts are undisputed.

The property subject matter of the case was formerly covered by Original Certificate of
Title No. P-1248, issued by virtue of Free Patent Application No. 192765, in favor of the
spouses, Florencia H. de Enciso and Miguel Enciso. The said original certificate of title
was inscribed in the Registration Book for the Province of Camarines Norte on December
10, 1961. On February 28, 1970, the patentees, the Enciso spouses, by an Absolute Deed
of Sale, sold the property in favor of the petitioners, the spouses Elena Salenillas and
Bernardino Salenillas for a consideration of P900.00. Petitioner Elena Salenillas is a
daughter of the Encisos. As a result of the aforementioned sale, Transfer Certificate of
Title No. T-8104 of the Register of Deeds of Camarines Norte was issued in the name of
the Salenillas, cancelling Original Certificate of Title No. P-1248. On June 30, 1971, the
petitioners mortgaged the property now covered by T.C.T. No. T-8104 with the Rural
Bank of Daet, Inc. The mortgage was subsequently released on November 22, 1973 after
the petitioners paid the amount of P1,000.00. Later, or on December 4, 1975, the
petitioners again mortgaged the property, this time in favor of the Philippine National
Bank Branch, Daet, Camarines Norte as security for a loan of P2,500.00.

For failure of the petitioners to pay their loan, extrajudicial foreclosure proceeding,
pursuant to Act No. 3135, was instituted by the Philippine National Bank against the
mortgage and the property was sold at a public auction held on February 27, 1981. The
private respondent, William Guerra, emerged as the highest bidder in the said public
auction and as a result thereof a "Certificate of Sale" was issued to him by the Ex-Officio
Provincial Sheriff of Camarines Norte. Ultimately, on July 12, 1983, a "Sheriffs Final
Deed" was executed in favor of the private respondent. prLL

On August 17, 1983, the Philippine National Bank filed with the Regional Trial Court of
Camarines Norte at Daet, a motion for a writ of possession. The public respondent, Judge
Raymundo Seva of the trial court, acting on the motion, issued on September 22, 1983 an
order for the issuance of a writ of possession in favor of the private respondent. When the
deputy sheriff of Camarines Norte however, attempted on November 17, 1983, to place
the property in the possession of the private respondent, the petitioners refused to vacate
and surrender the possession of the same and instead offered to repurchase it under
Section 119 of the Public Land Act. On August 15, 1984, another motion, this time for
the issuance of an alias writ of possession was filed by the private respondent with the
trial court. The petitioners, on August 31, 1984, opposed the private respondents' motion
and instead made a formal offer to repurchase the property. Notwithstanding the
petitioners' opposition and formal offer, the trial court judge on October 12, 1984 issued
the alias writ of possession prayed for the private respondent. The petitioners moved for a
reconsideration of the order but their motion was denied.

Undeterred by their initial setback, the petitioners elevated the case to the respondent
Court of Appeals by way of a petition for certiorari claiming that the respondent trial
court judge acted with grave abuse of discretion in issuing the order dated October 12,
1984 granting the writ of possession, and the order dated October 22, 1984, denying their
motion for reconsideration.

In a resolution dated January 23, 1985, the respondent appellate court gave due course to
the petition; required the parties to submit simultaneous memoranda in support to their
respective positions; and restrained the trial court and the private respondent from
executing, implementing or otherwise giving effect to the assailed writ of possession until
further orders from the court. 3 However, in a decision promulgated on September 17,
1986, the respondent Court of Appeals dismissed the case for lack of merit. According to
the appellate court:

It must be noted that when the original owner, Florencia H. Enciso whose title,
OCT No. P-1248, was issued on August 9, 1961, executed a deed of absolute
sale on February 28, 1970 of the property covered by said title to spouses Elena
Salenillas and Bernardino Salenillas, the five year period to repurchase the
property provided for in Section 119 of Commonwealth Act No. 141 as
amended could have already started. From this fact alone, the petition should
have been dismissed. However, granting that the transfer from parent to child
for a nominal sum may not be the "conveyance" contemplated by the law. We
will rule on the issue raised by the petitioners. 4

xxx xxx xxx

Applying the case of Monge, et al. vs. Angeles, et al., 5 purchase under Section 119 of the
Public Land Act had already prescribed. The point of reckoning, ruled the respondent
court in consonance with Monge, is from the date the petitioners mortgaged the property
on December 4, 1973. Thus, when the petitioners made their formal offer to repurchase
on August 31, 1984, the period had clearly expired.

In an effort to still overturn the decision, the petitioners moved for reconsideration. Their
motion apparently went for naught because on May 7, 1987, the respondent appellate
court resolved to deny the same. Hence, this petition.

Before us, the petitioners maintain that contrary to the rulings of the courts below, their
right to repurchase within five years under Section 119 of the Public Land Act has not yet
prescribed. To support their contention, the petitioners cite the cases of Paras vs. Court of
Appeals 6 and Manuel vs. Philippine National Bank, et al. 7

On the other side, the private respondent, in support of the appellate court's decision,
states that the sale of the contested property by the patentees to the petitioners
disqualified the latter from being legal heirs vis-a-vis the said property. As such, they (the
petitioners) no longer enjoy the right granted to heirs under the provisions of Section 119
of the Public Land Act. 8

In fine, what need be determined and resolved here are: whether or not the petitioners
have the right to repurchase the contested property under Section 119 of the Public Land
Act; and assuming the answer to the question is in the affirmative, whether or not their
right to repurchase had already prescribed. llcd

We rule for the petitioners. They are granted by the law the right to repurchase their
property and their right to do so subsists.

Section 119 of the Public Land Act, as amended, provides in full:

Sec. 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his
widow, or legal heirs within a period of five years from the date of the
conveyance.

From the foregoing legal provision, it is explicit that only three classes of persons are
bestowed the right to repurchase - the applicant-patentee, his widow, or other legal
heirs. Consequently, the contention of the private respondent sustained by the
respondent appellate court that the petitioners do not belong to any of those classes of
repurchasers because they acquired the property not through inheritance but by sale,
has no legal basis. The petitioners-spouses are the daughter and son-in-law of the
Encisos, patentees of the contested property. At the very least, petitioner Elena
Salenillas, being a child of the Encisos, is a "legal heir" of the latter. As such, and
even on this score alone, she may therefore validly repurchase. This must be so
because Section 119 of the Public Land Act, in speaking of "legal heirs," makes no
distinction. Ubi lex non distinguit nec nos distinguere debemos.

Moreover, to indorse the distinction made by the private respondent and the appellate
court would be to contravene the very purpose of Section 119 of the Public Land Act
which is to give the homesteader or patentee every chance to preserve for himself and his
family the land that the State had gratuitously given him as a reward for his labor in
clearing and cultivating it. 9 Considering that petitioner Salenillas is a daughter of the
spouses Florencia H. Enciso and Miguel Enciso, there is no gainsaying that allowing her
(Elena) and her husband to repurchase the property would be more in keeping with the
spirit of the law. We have time and again said that between two statutory interpretations,
that which better serves the purpose of the law should prevail.

Guided by the same purpose of the law, and proceeding to the other issue here raised, we
rule that the five-year period for the petitioners to repurchase their property had not yet
prescribed.

The case of Monge, et al. vs. Angeles, et al., 10 cited as authority by the respondent Court
of Appeals is inapplicable to the present controversy. The facts obtaining there are
substantially different from those in this case. In Monge, the conveyance involved was a
pacto de retro sale and not a foreclosure sale. More importantly, the question raised there
was whether the five-year period provided for in Section 119 "should be counted from
the date of the sale even if the same is with an option to repurchase or from the date the
ownership of the land has become consolidated in favor of the purchaser because of the
homesteader's failure to redeem it. 11 It is therefore understandable why the Court ruled
there as it did. A sale on pacto de retro immediately vests title, ownership, and, generally
possession over the property on the vendee a retro, subject only to the right of the vendor
a retro to repurchase within the stipulated period. It is an absolute sale with a resolutory
condition.

The cases 12 pointed to by the petitioner in support of their position, on the other hand,
present facts that are quite identical to those in the case at bar. Both cases involved
properties the titles over which were obtained either through homestead or free patent.
These properties were mortgaged to a bank as collateral for loans, and, upon failure of the
owners to pay their indebtedness, the mortgages were foreclosed. In both instances, the
Court ruled that the five-year period to repurchase a homestead sold at public auction or
foreclosure sale under Act 3135 begins on the day after the expiration of the period of
redemption when the deed of absolute sale is executed thereby formally transferring the
property to the purchaser, and not otherwise. Taking into account that the mortgage was
foreclosed and the mortgaged property sold at a public auction to the private respondent
on February 27, 1981, with the "Sheriff's Final Deed" issued on July 12, 1983, the two
offers of the petitioners to repurchase — the first on November 17, 1983, and the second,
formally, on August 31, 1984 — were both made within the prescribed five-year period.

Now, as regards the redemption price, applying Sec. 30 of Rule 39 of the Revised Rules
of Court, the petitioners should reimburse the private respondent the amount of the
purchase price at the public auction plus interest at the rate of one per centum per month
up to November 17, 1983, together with the amounts of assessments and taxes on the
property that the private respondent might have paid after purchase and interest on the
last named amount at the same rate as that on the purchase price. 13

WHEREFORE, the petition is GRANTED. The Decision dated September 17, 1986, and
the Resolution dated May 7, 1987 of the Court of Appeals, and the Orders dated
September 22, 1983, October 12, 1984, and October 22, 1984 of the Regional Trial Court
of Daet, Camarines Norte, are hereby REVERSED and SET ASIDE, and another one
ENTERED directing the private respondent to reconvey the subject property and to
execute the corresponding deed of reconveyance therefor in favor of the petitioners upon
the return to him by the latter of the purchase price and the amounts, if any, of
assessments or taxes he paid plus interest of one (1%) per centum per month on both
amounts up to November 17, 1983.

No costs.

SO ORDERED.

Melencio-Herrera (Chairman), Paras, Padilla and Regalado, JJ., concur.

||| (Salenillas v. Court of Appeals, G.R. No. 78687, [January 31, 1989], 251 PHIL 764-772)
 [G.R. No. 88979. February 7, 1992.]

LYDIA O. CHUA, petitioner, vs. THE CIVIL SERVICE

COMMISSION, THE NATIONAL IRRIGATION
ADMINISTRATION, THE DEPARTMENT OF BUDGET AND
MANAGEMENT, respondent.

SYLLABUS

1. POLITICAL LAW; STATUTES; REPUBLIC ACT NO. 6683-EARLY

RETIREMENT LAW; ITS COVERAGE AND OBJECTIVE. — Pursuant to the policy
of streamlining and trimming the bureaucracy, Republic Act No. 6683 was approved
on 2 December 1988 providing for benefits for early retirement and voluntary
separation from the government service as well as for involuntary separation due to
reorganization. Deemed qualified to avail of its benefits are those enumerated in Sec. 2
of the Act, as follows: "Sec. 2. Coverage. — This Act shall cover all appointive officials
and employees of the National Government, including government-owned or controlled
corporations with original charters, as well as the personnel of all local government
units. The benefits authorized under this Act shall apply to all regular, temporary, casual
and emergency employees, regardless of age, who have rendered at least a total of two
(2) consecutive years of government service as of the date of separation. Uniformed
personnel of the Armed Forces of the Philippines including those of the PC-INP are
excluded from the coverage of this Act." Republic Act No. 6683 seeks to cover and
benefits regular, temporary, casual and emergency employees who have rendered at
least a total of two (2) consecutive years of government service. The objective of the
Early Retirement or Voluntary Separation Law is to trim the bureaucracy, hence,
vacated positions are deemed abolished upon early/voluntary retirement of their
occupants.
2. ID.; CIVIL SERVICE; CHARACTERIZATION OF CAREER AND NON-
CAREER SERVICE. — The Administrative Code of 1987 characterizes the Career
Service as: "(1) Open Career positions for appointment to which prior qualification in
an appropriate examination is required; (2) Closed Career positions which are scientific,
or highly technical in nature; these include the faculty and academic staff of state
colleges and universities, and scientific and technical positions in scientific or research
institutions which shall establish and maintain their own merit systems; (3) Positions in
the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau
Director, Assistant Bureau Director, Regional Director, Assistant Regional Director,
Chief of Department Service and other officers of equivalent rank as may be identified
by the Career Executive Service Board, all of whom are appointed by the President. (4)
Career officers, other than those in the Career Executive Service, who are appointed by
the President, such as the Foreign Service Officers in the Department of Foreign
Affairs; (5) Commission officers and enlisted men of the Armed Forces which shall
maintain a separate merit system;(6) Personnel of government-owned or controlled
corporations, whether performing governmental or proprietary functions, who do not
fall under the non-career service; and (7) Permanent laborers, whether skilled, semi-
skilled, or unskilled." The Non-Career Service, on the other hand, is characterized by:
". . . (1) entrace on bases other than those of the usual tests of merit and fitness utilized
for the career service; and (2) tenure which is limited to a period specified by law, or
which is coterminous with that of the appointing authority or subject to his pleasure, or
which is limited to the duration of a particular project for which purpose employment
was made." Included in the non-career service are: 1. elective officials and their
personal or confidential staff; 2. secretaries and other officials of Cabinet rank who hold
their positions at the pleasure of the President and their personal confidential staff(s);
3. Chairman and Members of Commissions and boards with fixed terms of office and
their personal or confidential staff; 4. contractual personnel or those whose employment
in the government is in accordance with a special contract to undertake a specific work
or job requiring special or technical skills not available in the employing agency, to be
accomplished within a specific period, which in no case shall exceed one year and
performs or accomplishes the specific work or job, under his own responsibility with a
minimum of direction and supervision from the hiring agency; 5. emergency and
seasonal personnel." There is another type of non-career employee: "Casual — where
and when employment is not permanent but occasional, unpredictable, sporadic and
brief in nature (Caro v. Rilloroza, 102 Phil. 70; Manuel v. P.P. Gocheco Lumber Co.,
96 Phil. 945)".
3. ID.; ID.; CAREER SERVICE; CLASSIFICATION OF GOVERNMENT
EMPLOYEES' APPOINTMENT STATUS. — The appointment status of government
employees in the career service is classified as follows: 1. permanent — one issued to
a person who has met the requirements of the position to which appointment is made,
in accordance with the provisions of the Civil Service Act and the Rules and Standards
promulgated in pursuance thereof; 2. temporary — In the absence of appropriate
eligibles and it becomes necessary in the public interest to fill a vacancy, a temporary
appointment shall be issued to a person who meets all the requirements for the position
to which he is being appointed except the appropriate civil service eligibility: Provided,
That such temporary appointment shall not exceed twelve months, but the appointee
may be replaced sooner if a qualified civil service eligible becomes available.
4. ID.; ID.; EMPLOYMENT STATUS OF PERSONNEL HIRED UNDER
FOREIGN-ASSISTED PROJECTS, CONSIDERED COTERMINOUS. — The
employment status of personnel hired under foreign assisted projects is considered co-
terminous, that is, they are considered employees for the duration of the project or until
the completion or cessation of said project (CSC Memorandum Circular No. 39, S.
1990, 27 June 1990).
5. ID.; ID.; TENURIAL EMPLOYEES. — What substantial differences exist,
if any, between casual, emergency, seasonal, project, co-terminous or contractual
personnel? All are tenurial employees with no fixed term, non-career, and temporary.
6. ID.; ID.; CO-TERMINOUS EMPLOYEES; ALSO COVERED BY EARLY
RETIREMENT LAW. — CSC Memorandum Circular No. 11, series of 1991 (5 April
1991) characterizes the status of a co-terminous employee — "(3) Co-terminous status
shall be issued to a person whose entrance in the service is characterized by
confidentiality by the appointing authority or that which is subject to his pleasure or co-
existent with his tenure." A co-terminous employee is a non-career civil servant, like
casual and emergency employees. We see no solid reason why the latter are extended
benefits under the Early Retirement Law but the former are not. Co-terminous or project
personnel, on the other hand, who have rendered years of continuous service should be
included in the coverage of the Early Retirement Law, as long as they file their
application prior to the expiration of their term, and as long as they comply with CSC
regulations promulgated for such purpose. After all, co-terminous personnel are also
obligated to the government for GSIS contributions, medicare and income tax
payments, with the general disadvantage of transience.
7. ID.; ID.; NON-PROJECT REGULAR AND PERMANENT EMPLOYEES.
— The case of Fegurin, et al. v. NLRC, et al., comes to mind where, workers belonging
to a work pool, hired and re-hired continuously from one project to another were
considered non-project-regular and permanent employees. Petitioner Lydia Chua was
hired and re-hired in four (4) successive projects during a span of fifteen (15) years.
Although no proof of the existence of a work pool can be assumed, her service record
cannot be disregarded.
 8. ID.; STATUTORY CONSTRUCTION; LEGAL MAXIMS; EXPRESSIO
UNIUS EST EXCLUSIO ALTERIUS AND CASUS OMISSUS PRO OMISSO
HABENDUS EST; CONSTRUED. — Specifically excluded from the benefits are
uniformed personnel of the AFP including those of the PC-INP. It can be argued that,
expressio unius est exclusio alterius. The legislature would not have made a specific
enumeration in a statute had not the intention been to restrict its meaning and confine
its terms and benefits to those expressly mentioned or casus omissus pro omisso
habendus est — A person, object or thing omitted from an enumeration must be held
to have been omitted intentionally.
9. ID.; ID.; DOCTRINE OF NECESSARY IMPLICATION; APPLICABLE IN
CASE AT BAR. — The maxim of expressio unius est exclusio alterius should not be
the applicable maxim in this case but the doctrine of necessary implication which holds
that: "No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular situation. What
is thought, at the time of enactment, to be an all-embracing legislation may be
inadequate to provide for the unfolding events of the future. So-called gaps in the law
develop as the law is enforced. One of the rules of statutory construction used to fill in
the gap is the doctrine of necessary implication. The doctrine states that what is implied
in a statute is as much a part thereof as that which is expressed. Every statute is
understood, by implication, to contain all such provisions as may be necessary to
effectuate its object and purpose, or to make effective rights, powers, privileges or
jurisdiction which it grants, including all such collateral and subsidiary consequences
as may be fairly and logically inferred from its terms. Ex necessitate legis. And every
statutory grant of power, right or privilege is deemed to include all incidental power,
right or privilege. This is so because the greater includes the lesser, expressed in the
maxim, in eo plus sit, simper inest et minus."
10. ID.; CONSTITUTIONAL LAW; EQUAL PROTECTION CLAUSE;
APPLICABILITY THEREOF. — Art. III, Sec. 1 of the 1987 Constitution guarantees:
"No person shall be deprived of life, liberty, or property without due process of law,
nor shall any person be denied the equal protection of the laws." ". . . In Felwa vs. Salas,
L-26511, Oct. 29, 1966, We ruled that the equal protection clause applies only to
persons or things identically situated and does not bar a reasonable classification of the
subject of legislation, and a classification is reasonable where (1) it is based on
substantial distinctions which make real differences; (2) these are germane to the
purpose of the law; (3) the classification applies not only to present conditions but also
to future conditions which are substantially identical to those of the present; (4) the
classification applies only to those who belong to the same class."
11. LABOR LAW; REGULAR EMPLOYEE; DEFINED UNDER LABOR
CODE; NO EQUIVALENT DEFINITION IN P.D. NO. 807 AND
ADMINISTRATIVE CODE OF 1987. — Who are regular employees? The Labor
Code in Art. 280 (P.D. No. 492, as amended) deems an employment regular where the
employee has been engaged to perform activities which are usually necessary or
desirable in the usual business or trade of the employer. No equivalent definition can
be found in P.D. No. 807 (promulgated on 6 October 1975, which superseded the Civil
Service Act of 1965 — R.A. No. 2260) or in the Administrative Code of 1987
(Executive Order No. 292 promulgated on 25 July 1987).

DECISION

PADILLA, J : p
 Pursuant to the policy of streamlining and trimming the bureaucracy, Republic
Act No. 6683 was approved on 2 December 1988 providing for benefits for early
retirement and voluntary separation from the government service as well as for
involuntary separation due to reorganization. Deemed qualified to avail of its benefits
are those enumerated in Sec. 2 of the Act, as follows:

"Sec. 2. Coverage. — This Act shall cover all appointive officials and employees
of the National Government, including government-owned or controlled
corporations with original charters, as well as the personnel of all local
government units. The benefits authorized under this Act shall apply to all
regular, temporary, casual and emergency employees, regardless of age, who
have rendered at least a total of two (2) consecutive years of government service
as of the date of separation. Uniformed personnel of the Armed Forces of the
Philippines including those of the PC-INP are excluded from the coverage of this
Act."

Petitioner Lydia Chua believing that she is qualified to avail of the benefits of
the program, filed an application on 30 January 1989 with respondent National
Irrigation Administration (NIA) which, however, denied the same; instead, she was
offered separation benefits equivalent to one half (1/2) month basic pay for every years
of service commencing from 1980. A recourse by petitioner to the Civil Service
Commission yielded negative results. 1 Her letter for reconsideration dated 25 April
1989 pleaded thus:

xxx xxx xxx

"With due respect, I think the interpretation of the Honorable Commissioner of

RA 6683 does not conform with the beneficent purpose of the law. The law
merely requires that a government employee whether regular, temporary,
emergency, or casual, should have two consecutive years of government service
in order to be entitled to its benefits. I more than meet the requirement. Persons
who are not entitled are consultants, experts and contractual(s). As to the budget
needed, the law provides that the Department of Budget and Management will
shoulder a certain portion of the benefits to be alloted to government corporations.
Moreover, personnel of these NIA special projects are entitled to the regular
benefits, such (sic) leaves, compulsory retirement and the like. There is no reason
why we should not be entitled to RA 6683.

xxx xxx xxx" 2

Denying the plea for reconsideration, the Civil Service Commission (CSC)
emphasized:

"xxx xxx xxx

We regret to inform you that your request cannot be granted. The provision of Section 3.1 of Joint
DBM-CSC Circular Letter No. 89-1 does not only require an applicant to have two years of
satisfactory service on the date of separation/retirement but further requires said applicant to be on
a casual, emergency, temporary or regular employment status as of December 2, 1988, the date of
enactment of R.A. 6683. The law does not contemplate contractual employees in the coverage. cdrep

Inasmuch as your employment as of December 31, 1988, the date of your separation from the
service, is co-terminus with the NIA project which is contractual in nature, this Commission shall
sustain its original decision.

xxx xxx xxx" 3

 In view of such denial, petitioner is before this Court by way of a special civil
action for certiorari, insisting that she is entitled to the benefits granted under Republic
Act No. 6683. Her arguments:

"It is submitted that R.A. 6683, as well as Section 3.1 of the Joint DMB-CSC
Circular Letter No. 89-1 requires an applicant to be on a casual, emergency,
temporary or regular employment status. Likewise, the provisions of Section 23
(sic) of the Joint DBM-CSC Circular Letter No. 88-1, implementing guidelines
of R.A. No. 6683, provides that:

'2.3 Excluded from the benefits under R.A. No. 6683 are the
following:

a) Experts and Consultants hired by agencies for a limited period

to perform specific activities or services with a definite expected output:
i.e. membership in Task Force, Part-Time, Consultant/Employees.

b) Uniformed personnel of the Armed Forces of the Philippines

including those of the Philippine Constabulary and Integrated National
Police (PC-INP).

c) Appointive officials and employees who retire or elect to be

separated from the service for optional retirement with gratuity under
R.A. No. 1616, 4968 or with pension under R.A. No. 186, as amended by
R.A. No. 6680 or P.D. No. 1146, as amended, or vice-versa.

d) Officials and employees who retired voluntarily prior to the

enactment of this law and have received the corresponding benefits of that
retirement/separation. dctai

e) Officials and employees with pending cases punishable by

mandatory separation from the service under existing civil service laws,
rules and regulations; provided that if such officials and employees apply
in writing within the prescriptive period for the availment of the benefits
herein authorized, shall be allowed only if acquitted or cleared of all
charges and their application accepted and approved by the head of office
concerned.'

Based on the above exclusions, herein petitioner does not belong to any one of
them. Ms. Chua is a full time employee of NIA entitled to all the regular benefits
provided for by the Civil Service Commission. She held a permanent status as
Personnel Assistant A, a position which belongs to the Administrative Service. .
. . If casuals and emergency employees were given the benefit of R.A. 6683 with
more reason that this petitioner who was holding a permanent status as Personnel
Assistant A and has rendered almost 15 years of faithful, continuous service in
the government should be similarly rewarded by the beneficient (sic) purpose of
the law." 4

The NIA and the Civil Service Commission reiterate in their comment
petitioner's exclusion from the benefits of Republic Act No. 6683, because:
1. Petitioner's employment is co-terminus with the project per appointment
papers kept by the Administrative Service in the head office of NIA (the service record
was issued by the Watershed Management and Erosion Control Project (WMECP),
Pantabangan, Nueva Ecija). The project, funded by the World Bank, was completed as
of 31 December 1988, after which petitioner's position became functus officio.
2. Petitioner is not a regular and career employee of NIA — her position is not
included in its regular plantilla. She belongs to the non-career service (Sec. 6, P.D. No.
807) which is inherently short-lived, temporary and transient; on the other hand,
retirement presupposes employment for a long period. The most that a non-career
personnel can expect upon the expiration of his employment is financial assistance.
Petitioner is not even qualified to retire under the GSIS law. LibLex

3. Assuming arguendo that petitioner's appointment is permanent, security of

tenure is available only for the term of office (i.e. duration of project).
4. The objective of Republic Act No. 6683 is not really to grant separation or
retirement benefits but reorganization 5 to streamline government functions. The
application of the law must be made consistent with the purpose for which it was
enacted. Thus, as the expressed purpose of the law is to reorganize the government, it
will not have any application to special projects such as the WMECP which exists only
for a short and definite period. This being the nature of special projects, there is no
necessity for offering its personnel early retirement benefits just to induce voluntary
separation as a step to reorganization. In fact, there is even no need of reorganizing the
WMECP considering its short and limited life-span. 6
5. The law applies only to employees of the national government, government-
owned or controlled corporations with original charters and local government units.
Due to the impossibility of reconciling the conflicting interpretations of the
parties, the Court is called upon to define the different classes of employees in the public
sector (i.e. government civil servants).
Who are regular employees? The Labor Code in Art. 280 (P.D. No. 492, as
amended) deems an employment regular where the employee has been engaged to
perform activities which are usually necessary or desirable in the usual business or trade
of the employer. No equivalent definition can be found in P.D. No. 807 (promulgated
on 6 October 1975, which superseded the Civil Service Act of 1965 — R.A. No. 2260)
or in the Administrative Code of 1987 (Executive Order No. 292 promulgated on 25
July 1987). The Early Retirement Law itself (Rep. Act No. 6683) merely includes such
class of employees (regular employees) in its coverage, unmindful that no such specie
is employed in the public sector.
The appointment status of government employees in the career service is
classified as follows: cdrep

1. permanent — one issued to a person who has met the requirements of the
position to which appointment is made, in accordance with the provisions of the Civil
Service Act and the Rules and Standards promulgated in pursuance thereof; 7
2. temporary — In the absence of appropriate eligibles and it becomes necessary
in the public interest to fill a vacancy, a temporary appointment shall be issued to a
person who meets all the requirements for the position to which he is being appointed
except the appropriate civil service eligibility: Provided, That such temporary
appointment shall not exceed twelve months, but the appointee may be replaced sooner
if a qualified civil service eligible becomes available. 8

The Administrative Code of 1987 characterizes the Career Service as:

"(1) Open Career positions for appointment to which prior qualification in an

appropriate examination is required;

(2) Closed Career positions which are scientific, or highly technical in nature;
these include the faculty and academic staff of state colleges and universities, and
scientific and technical positions in scientific or research institutions which shall
establish and maintain their own merit systems;
 (3) Positions in the Career Executive Service; namely, Undersecretary, Assistant
Secretary, Bureau Director, Assistant Bureau Director, Regional Director,
Assistant Regional Director, Chief of Department Service and other officers of
equivalent rank as may be identified by the Career Executive Service Board, all
of whom are appointed by the President.

(4) Career officers, other than those in the Career Executive Service, who are
appointed by the President, such as the Foreign Service Officers in the
Department of Foreign Affairs; LLpr

(5) Commission officers and enlisted men of the Armed Forces which shall
maintain a separate merit system;

(6) Personnel of government-owned or controlled corporations, whether

performing governmental or proprietary functions, who do not fall under the non-
career service; and

(7) Permanent laborers, whether skilled, semi-skilled, or unskilled." 9

The Non-Career Service, on the other hand, is characterized by:

". . . (1) entrace on bases other than those of the usual tests of merit and fitness
utilized for the career service; and (2) tenure which is limited to a period specified
by law, or which is coterminous with that of the appointing authority or subject
to his pleasure, or which is limited to the duration of a particular project for which
purpose employment was made."

Included in the non-career service are:

1. elective officials and their personal or confidential staff;

2. secretaries and other officials of Cabinet rank who hold their positions at the
pleasure of the President and their personal confidential staff(s);

3. Chairman and Members of Commissions and boards with fixed terms of office
and their personal or confidential staff;

4. contractual personnel or those whose employment in the government is in

accordance with a special contract to undertake a specific work or job requiring
special or technical skills not available in the employing agency, to be
accomplished within a specific period, which in no case shall exceed one year
and performs or accomplishes the specific work or job, under his own
responsibility with a minimum of direction and supervision from the hiring
agency.

5. emergency and seasonal personnel." 10

There is another type of non-career employee:

"Casual — where and when employment is not permanent but occasional, unpredictable, sporadic
and brief in nature (Caro v. Rilloroza, 102 Phil. 70; Manuel v. P.P. Gocheco Lumber Co., 96 Phil.
945)".

Consider petitioner's record of service:

"Service with the government commenced on 2 December 1974 designated as a

laborer holding emergency status with the NIA — Upper Pampanga River
Project, R & R Division. 11 From 24 March 1975 to 31 August 1975, she was a
 research aide with temporary status on the same project. On 1 September 1975 to
31 December 1976, she was with the NIA-FES III, R & R Division, then on 1
January 1977 to 31 May 1980, she was with NIA - UPR IIS (Upper Pampanga
River Integrated Irrigation Systems) DRD. On 1 June 1980, she went to NIA-
W.M.E.C.P. (Watershed Management & Erosion Control Project) retaining the
status of temporary employee. While with this project, her designation was
changed to personnel assistant on 5 November 1981, starting 9 July 1982, the
status became permanent until the completion of the project on 31 December
1988. The appointment paper 12 attached to the OSG's comment lists her status
as co-terminus with the Project."cdphil

The employment status of personnel hired under foreign — assisted projects is

considered co-terminous, that is, they are considered employees for the duration of the
project or until the completion or cessation of said project (CSC Memorandum Circular
No. 39, S. 1990, 27 June 1990).
Republic Act No. 6683 seeks to cover and benefits regular, temporary, casual
and emergency employees who have rendered at least a total of two (2) consecutive
years of government service.
Resolution No. 87-104 of the CSC, 21 April 1987, provides:

"WHEREAS, pursuant to Executive Order No. 966 dated June 22, 1984, the Civil
Service Commission is charged with the function of determining creditable
services for retiring officers and employees of the national government;

WHEREAS, Section 4 (b) of the same Executive Order No. 966 provides that all
previous services by an officer/employee pursuant to a duly approved
appointment to a position in the Civil Service are considered creditable services,
while Section 6 (a) thereof states that services rendered on contractual,
emergency or casual status are non-creditable services;

WHEREAS, there is a need to clarify the aforesaid provisions inasmuch as some

contractual, emergency or casual employment are covered by contracts or
appointments duly approved by the Commission.

NOW, therefore, the Commission resolved that services rendered on contractual,

emergency or casual status, irrespective of the mode or manner of payment
therefor shall be considered as creditable for retirement purposes subject to the
following conditions: (underscoring provided).

'1. These services are supported by approved appointments, official

records and/or other competent evidence. Parties/agencies
concerned shall submit the necessary proof of said services;

2. Said services are on full time basis and rendered prior to June 22, 1984,
the effectivity date of Executive Order No. 966; and

3. The services for the three (3) years period prior to retirement are
continuous and fulfill the service requirement for retirement."

What substantial differences exist, if any, between casual, emergency, seasonal,

project, co-terminous or contractual personnel? All are tenurial employees with no
fixed term, non-career, and temporary. The 12 May 1989 CSC letter of denial 13
characterized herein petitioner's employment as co-terminous with the NIA project
which in turn was contractual in nature. The OSG says petitioner's status is co-
terminous with the Project. CSC Memorandum Circular No. 11, series of 1991 (5 April
1991) characterizes the status of a co-terminous employee —
 "(3) Co-terminous status shall be issued to a person whose entrance in the service
is characterized by confidentiality by the appointing authority or that which is
subject to his pleasure or co-existent with his tenure.

The foregoing status (co-terminous) may be further classified into the following:

'a) co-terminous with the project — when the appointment is co-

existent with the duration of a particular project for which purpose
employment was made or subject to the availability of funds for the same;

b) co-terminous with the appointing authority — when

appointment is co-existent with the tenure of the appointing authority.

c) co-terminous with the incumbent — when appointment is co-

existent with the appointee, in that after the resignation, separation or
termination of the services of the incumbent the position shall be deemed
automatically abolished; and

d) co-terminous with a specific period, e.g. 'co-terminous for a

period of 3 years' — the appointment is for a specific period and upon
expiration thereof, the position is deemed abolished.'

It is stressed, however, that in the last two classification (c) and (d), what is termed
co-terminous is the position, and not the appointee-employee. Further, in (c) the
security of tenure of the appointee is guaranteed during his incumbency; in (d)
the security of tenure is limited to a specific period."

A co-terminous employee is a non-career civil servant, like casual and

emergency employees. We see no solid reason why the latter are extended benefits
under the Early Retirement Law but the former are not. It will be noted that Rep. Act
No. 6683 expressly extends its benefits for early retirement to regular, temporary,
casual and emergency employees. But specifically excluded from the benefits are
uniformed personnel of the AFP including those of the PC-INP. It can be argued that,
expressio unius est exclusio alterius. The legislature would not have made a specific
enumeration in a statute had not the intention been to restrict its meaning and confine
its terms and benefits to those expressly mentioned 14 or casus omissus pro omisso
habendus est — A person, object or thing omitted from an enumeration must be held
to have been omitted intentionally. 15 Yet adherence to these legal maxims can result
in incongruities and in a violation of the equal protection clause of the Constitution. Cdpr

The case of Fegurin, et al. v. NLRC, et al., 16 comes to mind where, workers
belonging to a work pool, hired and re-hired continuously from one project to another
were considered non-project-regular and permanent employees.
Petitioner Lydia Chua was hired and re-hired in four (4) successive projects
during a span of fifteen (15) years. Although no proof of the existence of a work pool
can be assumed, her service record cannot be disregarded.
Art. III, Sec. 1 of the 1987 Constitution guarantees: "No person shall be deprived
of life, liberty, or property without due process of law, nor shall any person be denied
the equal protection of the laws."

". . . In Felwa vs. Salas, L-26511, Oct. 29, 1966, We ruled that the equal protection
clause applies only to persons or things identically situated and does not bar a
reasonable classification of the subject of legislation, and a classification is
reasonable where (1) it is based on substantial distinctions which make real
differences; (2) these are germane to the purpose of the law; (3) the classification
applies not only to present conditions but also to future conditions which are
 substantially identical to those of the present; (4) the classification applies only
to those who belong to the same class." 17

Applying the criteria set forth above, the Early Retirement Law would violate
the equal protection clause were we to sustain respondents' submission that the benefits
of said law are to be denied a class of government employees who are similarly situated
as those covered by said law. The maxim of Expressio unius est exclusio alterius should
not be the applicable maxim in this case but the doctrine of necessary implication which
holds that:

"No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular situation.
What is thought, at the time of enactment, to be an all-embracing legislation may
be inadequate to provide for the unfolding events of the future. So-called gaps in
the law develop as the law is enforced. One of the rules of statutory construction
used to fill in the gap is the doctrine of necessary implication. The doctrine states
that what is implied in a statute is as much a part thereof as that which is
expressed. Every statute is understood, by implication, to contain all such
provisions as may be necessary to effectuate its object and purpose, or to make
effective rights, powers, privileges or jurisdiction which it grants, including all
such collateral and subsidiary consequences as may be fairly and logically
inferred from its terms. Ex necessitate legis. And every statutory grant of power,
right or privilege is deemed to include all incidental power, right or privilege.
This is so because the greater includes the lesser, expressed in the maxim, in eo
plus sit, simper inest et minus." 18

During the sponsorship speech of Congressman Dragon (re: Early Retirement

Law), in response to Congressman Dimaporo's interpellation on coverage of state
university employees who are extended appointments for one (1) year, renewable for
two (2) or three (3) years, 19 he explained:

"This Bill covers only those who would like to go on early retirement and
voluntary separation. It is irrespective of the actual status or nature of the
appointment one received, but if he opts to retire under this, then he is covered."

It will be noted that, presently pending in Congress, is House Bill No. 33399 (a
proposal to extend the scope of the Early Retirement Law). Its wording supports the
submission that Rep. Act No. 6683 indeed overlooked a qualified group of civil
servants, Sec. 3 of said House bill, on coverage of early retirement, would provide: cdll

"Sec. 3. Coverage. — It will cover all employees of the national government,

including government-owned or controlled corporations, as well as the personnel
of all local government units. The benefits authorized under this Act shall apply
to all regular, temporary, casual, emergency and contractual employees,
regardless of age, who have rendered at least a total of two (2) consecutive years
government service as of the date of separation. The term 'contractual employees'
as used in this Act does not include experts and consultants hired by agencies for
a limited period to perform specific activities or services with definite expected
output.

"Uniformed personnel of the Armed Forces of the Philippines, including those of

the PC-INP are excluded from the coverage of this Act." (emphasis supplied).

The objective of the Early Retirement or Voluntary Separation Law is to trim

the bureaucracy, hence, vacated positions are deemed abolished upon early/voluntary
retirement of their occupants. Will the inclusion of co-terminous personnel (like the
petitioner) defeat such objective? In their case, upon termination of the project and
 separation of the project personnel from the service, the term of employment is
considered expired, the office functus officio. Casual, temporary and contractual
personnel serve for shorter periods, and yet, they only have to establish two (2) years
of continuous service to qualify. This, incidentally, negates the OSG's argument that
co-terminous or project employment is inherently short-lived, temporary and transient,
whereas, retirement presupposes employment for a long period. Here, violation of the
equal protection clause of the Constitution becomes glaring because casuals are not
even in the plantilla, and yet, they are entitled to the benefits of early retirement. How
can the objective of the Early Retirement Law of trimming the bureaucracy be achieved
by granting early retirement benefits to a group of employees (casuals) without plantilla
positions? There would, in such a case, be no abolition of permanent positions or
streamlining of functions; it would merely be a removal of excess personnel; but the
positions remain, and future appointments can be made thereto.
Co-terminous or project personnel, on the other hand, who have rendered years
of continuous service should be included in the coverage of the Early Retirement Law,
as long as they file their application prior to the expiration of their term, and as long as
they comply with CSC regulations promulgated for such purpose. In this connection,
Memorandum Circular No. 14, Series of 1990 (5 March 1990) implementing Rep. Act
No. 6850, 20 requires, as a condition to qualify for the grant of eligibility, an aggregate
or total of seven (7) years of government service which need not be continuous, in the
career or non-career service, whether appointive, elective, casual, emergency, seasonal,
contractual or co-terminous, including military and police service, as evaluated and
confirmed by the Civil Service Commission. 21 A similar regulation should be
promulgated for the inclusion in Rep. Act No. 6683 of co-terminous personnel who
survive the test of time. This would be in keeping with the coverage of "all social
legislations enacted to promote the physical and mental well-being of public servants."
22 After all, co-terminous personnel are also obligated to the government for GSIS
contributions, medicare and income tax payments, with the general disadvantage of
transience.
In fine, the Court believes, and so holds, that the denial by the respondents NIA
and CSC of petitioner's application for early retirement benefits under Rep. Act No.
6683 is unreasonable, unjustified, and oppressive, as petitioner had filed an application
for voluntary retirement within a reasonable period and she is entitled to the benefits of
said law. While the application was filed after expiration of her term, we can give
allowance for the fact that she originally filed the application on her own without the
assistance of counsel. In the interest of substantial justice, her application must be
granted; after all she served the government not only for two (2) years — the minimum
requirement under the law but for almost fifteen (15) years in four (4) successive
governmental projects. LibLex

WHEREFORE, the petition is GRANTED.

Let this case be remanded to the CSC-NIA for a favorable disposition of
petitioner's application for early retirement benefits under Rep. Act No. 6683, in
accordance with the pronouncements in this decision.
SO ORDERED.
Narvasa, C.J., Melencio-Herrera, Cruz, Paras, Feliciano, Bidin, Griño-Aquino,
Medialdea, Regalado, Davide, Jr., Romero and Nocon, JJ., concur.
Gutierrez, Jr., J ., concurs but only insofar as the rulings are applied to RA 6683
applicants.
(Chua v. Civil Service Commission, G.R. No. 88979, [February 7, 1992], 282 PHIL 970-
|||

990)
 [G.R. No. L-37251. August 31, 1981.]

CITY OF MANILA and CITY TREASURER, petitioners-appellants,

vs. JUDGE AMADOR E. GOMEZ of the Court of First Instance of
Manila and ESSO PHILIPPINES, INC., respondents-appellees.

Vicente P. Valenzuela for petitioner.

Laurea Law Office for respondent.

SYNOPSIS

Esso, Philippines, paid under protest its additional one-half percent realty tax for
the third quarter of 1972 and filed a complaint in the Court of First Instance of Manila
for the recovery of the same, contending that Tax Ordinance No. 7125 of the City of
Manila imposing said additional 1/2% tax pursuant to the 1949 Revised Charter of
Manila which fixed the realty tax at one and a half percent and to the 1968 Special
Education Fund Law which imposed an annual additional tax of one per centum but
definitely fixing three percent as the maximum real property tax, of which one percent
would accrue to the Special Education Fund, is void, because it is not authorized by the
City Charter nor by any law and that the maximum tax fixed in the Special Education
Fund Law refers to a contingency and cannot be construed as an authority to impose an
additional realty tax beyond the 1% fixed by said law. The trial court declared the tax
ordinance void and ordered the City Treasurer of Manila to refund to Esso said tax.
On review by certiorari, the Supreme Court, ruled that the Special Education
Fund Law, as confirmed by the Real Property Tax Code, in prescribing a total realty
tax of three percent impliedly authorizes the augmentation of one-half percent of the
pre-existing one and one-half percent realty tax.
Decision of the trial court reversed.

SYLLABUS

1. ADMINISTRATIVE LAW; TAXATION; REAL PROPERTY TAX;

REVISED CHARTER OF MANILA AND SPECIAL EDUCATION FUND LAW;
AMOUNT FIXED THEREUNDER. — Section 64 of the Revised Charter of Manila,
Republic Act No. 409, which took effect on June 18, 1949, fixes the annual realty tax
as one and one-half percent (1-½%). On the other hand, section 4 of the Special
Education Fund Law, Republic Act No. 5447, which took effect on January 1, 1969,
imposed, "an annual additional tax of one per centum on the assessed value of real
property in addition to the real property tax regularly levied thereon under existing
laws" but "the total real property tax shall not exceed a maximum of three per centum."
2. ID.; ID.; ID.; ID.; RELATION TO PRESIDENTIAL DECREE NO. 464, OR
REAL PROPERTY TAX CODE. — Section 39(2) of the Real Property Tax Code,
Presidential Decree No. 464, which took effect on June 1, 1974, provides that a city
council may, by ordinance, impose a realty tax "of not less than one-half of one percent
but not more than two percent of the assessed value of real property." Section 41 of the
said Code reaffirms the one percent tax on real property for the Special Education Fund
in addition to the basic two percent realty tax.
3. STATUTORY CONSTRUCTION; DOCTRINE OF IMPLICATION;
DEFINITION. — The doctrine of implications means that "that which is plainly
 implied in the language of a statute is as much a part of it as that which is expressed"
(In re McCulloch Dick, 35 Phil. 41, 45, 50; 82 C.J.S. 632; 73 Am Jur 2nd 404). cdasia

4. ID.; ID.; REAL PROPERTY TAX LAWS CONSTRUED; TAX

ORDINANCE NO. 7125 VALID THEREUNDER; CASE AT BAR. — While the 1949
Revised Charter of Manila fixed the realty tax at one and a half percent, on the other
hand, the 1968 Special Education Fund Law definitively fixed three percent as the
maximum real property tax of which one percent would accrue to the Special Education
Fund, the obvious implication is that an additional one-half percent tax could be
imposed by municipal corporations. Inferentially, that law fixed at two percent the
realty tax that would accrue to a city or municipality and the doctrine of implications in
statutory construction sustains the City of Manila's contention that the additional one-
half percent realty tax imposed by Ordinance No. 7125 effective beginning the third
quarter of 1972 is sanctioned by the provision in section 4 of the Special Education
Fund Law that "the total real property tax shall not exceed a maximum of three per
centum." The fact that the 1974 Real Property Tax Code specifically fixes the real
property tax of two percent confirms the prior intention of the law maker to impose two
percent as the realty tax proper, which was also the avowed intention of the questioned
ordinance.
5. ID.; ID.; ID.; IMPOSITION OF AN ADDITIONAL ONE-HALE PERCENT
REALTY TAX; AUTHORITY UNDER THE SPECIAL EDUCATION FUND LAW,
AN UNAVOIDABLE INFERENCE. — Although it appears to be a specious or
reasonable contention that the Special Education Fund Law refers to a contingency
where the application of the additional one percent realty tax would have the effect of
raising the total realty tax to more than three percent and that it cannot be construed as
an authority to impose an additional realty tax beyond the one percent fixed by the said
law, but the fact remains that the city charter fixed the realty tax at 1-1/2% and the later
law, the Special Education Fund Law provides for three percent as the maximum realty
tax of which one percent would be earmarked for the education fund, the unavoidable
inference is that the later law authorized the imposition of an additional one-half percent
realty tax since the contingency referred to by the complaining taxpayer would not arise
in the City of Manila. As repeatedly observed, section 4 of the Special Education Fund
Law, as confirmed by the Real Property Tax Code in prescribing a total realty tax of
three percent impliedly authorizes the augmentation by one-half percent of the pre-
existing one and one-half percent realty tax.
6. CONSTITUTIONAL LAW; MUNICIPAL CORPORATIONS; POWER TO
IMPOSE A REALTY TAX SHOULD BE EXPRESSED; PRINCIPLE NOT
APPLICABLE TO CASE AT BAR. — While it is true, that the power of a municipal
corporation to levy a tax should be expressly granted and should not be merely inferred,
the power to impose a realty tax is not controverted in this case but what is disputed is
the amount thereof , whether one and one-half percent only or two percent. (See Sec. 2
of Republic Act No. 2264)

DECISION

AQUINO, J : p

This case is about the legality of the additional one-half percent (1/2%) realty
tax imposed by the City of Manila.
Section 64 of the Revised Charter of Manila, Republic Act No. 409, which took
effect on June 18, 1949, fixes the annual realty tax at one and one-half percent (1-1/2%).
prLL
 On the other hand, section 4 of the Special Education Fund Law, Republic Act
No. 5447, which took effect on January 1, 1969, imposed "an annual additional tax of
one per centum on the assessed value of real property in addition to the real property
tax regularly levied thereon under existing laws" but "the total real property tax shall
not exceed a maximum of three per centum."
That maximum limit gave the municipal board of Manila the idea of fixing the
realty tax at three percent. So, by means of Ordinance No. 7125, approved by the city
mayor on December 26, 1971 and effective beginning the third quarter of 1972, the
board imposed an additional one-half percent realty tax. The ordinance reads:

"SECTION 1. An additional annual realty tax of one-half percent (1/2%),

or in short a total of three percent (3%) realty tax (1-1/2% pursuant to the Revised
Charter of Manila; 1% per Republic Act No. 5447; and 1/2% per this Ordinance)
on the assessed value . . . is hereby levied and imposed."

Esso Philippines, Inc. paid under protest the sum of P16,092.69 as additional
one-half percent realty tax for the third quarter of 1972 on its land and machineries
located in Manila.
On November 9, 1972, Esso filed a complaint in the Court of First Instance of
Manila for the recovery of the said amount. It contended that the additional one-half
percent tax is void because it is not authorized by the city charter nor by any law (Civil
Case No. 88827).
After hearing, the trial court declared the tax ordinance void and ordered the city
treasurer of Manila to refund to Esso the said tax. The City of Manila and its treasurer
appealed to this Court under Republic Act No. 5440 (which superseded Rule 42 of the
Rules of Court).
The only issue is the validity of the tax ordinance or the legality of the additional
one-half percent realty tax. LLpr

The petitioners in their manifestation of March 17, 1981 averred that the said tax
ordinance is still in force; that Ordinance No. 7566, which was enacted on September
10, 1974, imposed a two percent tax on commercial real properties (like the real
properties of Esso) and that the two percent tax plus the one percent tax under the
Special Education Fund Law gives a total of three percent realty tax on commercial
properties.
Esso Philippines, Inc., now Petrophil Corporation, in its manifestation of March
2, 1981, revealed that up to this time it has been paying the additional one-half percent
tax and that from 1975 to 1980 it paid the total sum of P4,206,240.71 as three percent
tax on its real properties.
In this connection, it is relevant to note that section 39(2) of the Real Property
Tax Code, Presidential Decree No. 464, which took effect on June 1, 1974, provides
that a city council may, by ordinance, impose a realty tax "of not less than one-half of
one percent but not more than two percent of the assessed value of real property".
Section 41 of the said Code reaffirms the one percent tax on real property for the
Special Education Fund in addition to the basic two percent realty tax.
So, there is no question now that the additional one-half percent realty tax is
valid under the Real Property Tax Code. What is in controversy is the legality of the
additional one-half percent realty tax for the two-year period from the third quarter of
1972 up to the second quarter of 1974. cdphil

We hold that the doctrine of implications in statutory construction sustains the

City of Manila's contention that the additional one-half percent realty tax is sanctioned
 by the provision in section 4 of the Special Education Fund Law that "the total real
property tax shall not exceed a maximum of three per centum."
The doctrine of implications means that " which is plainly implied in the
language of a statute is as much a part of it as that which is expressed" (In re McCulloch
Dick, 38 Phil. 41, 45, 90; 82 C.J.S. 632; 73 Am Jur 2nd 404).
While the 1949 Revised Charter of Manila fixed the realty tax at one and a half
percent, on the other hand, the 1968 Special Education Fund Law definitively fixed
three percent as the maximum real property tax of which one percent would accrue to
the Special Education Fund.
The obvious implication is that an additional one-half percent tax could be
imposed by municipal corporations. Inferentially, that law fixed at two percent the
realty tax that would accrue to a city or municipality.
And the fact that the 1974 Real Property Tax Code specifically fixes the real
property tax at two percent confirms the prior intention of the lawmaker to impose two
percent as the realty tax proper. That was also the avowed intention of the questioned
ordinance.
In invalidating the ordinance, the trial court upheld the view of Esso Philippines,
Inc. that the Special Education Fund Law refers to a contingency where the application
of the additional one percent realty tax would have the effect of raising the total realty
tax to more than three percent and that it cannot be construed as an authority to impose
an additional realty tax beyond the one percent fixed by the said law.
At first glance, that appears to be a specious or reasonable contention. But the
fact remains that the city charter fixed the realty tax at 1-1/2% and the later law, the
Special Education Fund Law, provides for three percent as the maximum realty tax of
which one percent would be earmarked for the education fund. cdphil

The unavoidable inference is that the later law authorized the imposition of an
additional one-half percent realty tax since the contingency referred to by the
complaining taxpayer would not arise in the City of Manila.
It is true, as contended by the taxpayer, that the power of a municipal corporation
to levy a tax should be expressly granted and should not be merely inferred. But in this
case, the power to impose a realty tax is not controverted. What is disputed is the
amount thereof, whether one and one half percent only or two percent. (See sec. 2 of
Rep. Act No. 2264.).
As repeatedly observed, section 4 of the Special Education Fund Law, as
confirmed by the Real Property Tax Code, in prescribing a total realty tax of three
percent impliedly authorizes the augmentation by one-half percent of the pre-existing
one and one-half percent realty tax.
WHEREFORE, the decision of the trial court is reversed and set aside. The
complaint of Esso Philippines, Inc. for recovery of the realty tax paid under protest is
dismissed. cdll

No costs.
SO ORDERED.
Barredo, Concepcion, Jr., Fernandez and De Castro, JJ ., concur.
Abad Santos, J ., is on leave.
Fernandez, J ., was designated to sit in the Second Division.

||| (City of Manila v. Gomez, G.R. No. L-37251, [August 31, 1981], 194 PHIL 90-97)
 [G.R. No. 96663. August 10, 1999.]

PEPSI-COLA PRODUCTS PHILIPPINES, INC., petitioner, vs.

HONORABLE SECRETARY OF LABOR, MED-ARBITER
NAPOLEON V. FERNANDO & PEPSI-COLA SUPERVISORY
EMPLOYEES ORGANIZATION-UOEF, respondents.

[G.R. No. 103300. August 10, 1999.]

PEPSI COLA PRODUCTS PHILIPPINES, petitioner, vs. OFFICE OF

THE SECRETARY DEPARTMENT OF LABOR AND HON.
CELENIO N. DAING, in his capacity as Med-Arbiter Labor Regional
Office No. X, Cagayan de Oro City, CAGAYAN DE ORO PEPSI
COLA SUPERVISORS UNION (UOEF), respondents.

Fernandez Zarsadia and Associates for Pepsi-Cola Products Phil. Inc.

The Solicitor General for respondents.

Fermento P. Dablo and Gregorio G. Borja for Cagayan de Oro Pepsi-Cola

Supervisors Union.

SYNOPSIS

The Pepsi-Cola Employees Organization-UOEF (Union) filed a petition for

certification election with the Med-Arbiter seeking to be the exclusive bargaining agent of
supervisors of Pepsi-Cola Philippines, Inc. (PEPSI). The Med-Arbiter granted the Petition,
with the explicit statement that it was an affiliate of Union de Obreros Estivadores de
Filipinas (federation)' together with two (2) rank and file unions, Pepsi-Cola Labor Unity
(PCLU) and Pepsi-Cola Employees Union of the Philippines (PEUP). Pepsi filed with the
Bureau of Labor Relations a petition to Set Aside, Cancel and/or Revoke Charter
Affiliation of the Union on the ground that (a) members of the Union were managers, and
(b) a supervisors' union can not affiliate with a federation whose members include the rank
and file union of the same company. Pepsi presented a motion to re-open the case since it
was not furnished with a copy of the Petition for Certification Election. Pepsi filed a Notice
of Appeal and Memorandum of Appeal with the Secretary of Labor, questioning the setting
of the certification election on the said date and five days after. Pepsi found its way to this
Court via the present petition for certiorari.

The Court dismissed the case for failure to sufficiently show that the questioned
judgment was tainted with grave abuse of discretion. The Court found merit in the
submission of the Office of the Solicitor General that the designation should be reconciled
with the actual job description of the subject employees. The mere fact that an employee
was designated manager does not necessarily make him one. Otherwise, there would be an
absurd situation where one can be given the title just to be deprived of the right to be a
member of a union. The petitions under consideration were dismissed; however, Credit and
Collection Managers and Accounting Managers were highly confidential employees not
eligible for membership in a supervisors' union.

SYLLABUS
 1. REMEDIAL LAW; ACTIONS; DISMISSAL OF CASES; MOOT AND
ACADEMIC, AS A GROUND; WHEN PROPER; CASE AT BAR. — In a long line of
cases (Narciso Nakpil, et al. vs. Hon. Crisanto Aragon, et al., G.R. No. L-24087, January
22, 1980, 95 SCRA 85; Toribio vs. Bidin, et al., G.R. No. L-37960, February 28, 1980, 96
SCRA 361; Gumaua vs. Espino, G.R. No. L-36188-37586, February 29, 1980, 96 SCRA
402), the Court dismissed the petition for being moot and academic. In the case of F.C.
Fisher vs. Yangco Steamship Co., March 31, 1915, the Court held: "It is unnecessary,
however to indulge in academic discussion of a moot question. . . The action would have
been dismissed at any time on a showing of the facts as they were. The question left for the
court was a moot one. Its Resolution would have been useless. Its judgment would have
been impossible of execution . . ." However, in the case of University of San Agustin, Inc.,
et al. vs. Court of Appeals, et al., 230 SCRA 761, 770, the court resolved the case, ruling
that "even if a case were moot and academic, a statement of the governing principle is
appropriate in the resolution of dismissal for the guidance not only of the parties but of
others similarly situated. . ."

2. LABOR AND SOCIAL LEGISLATION; LABOR CODE; LABOR

ORGANIZATION; NATIONAL LABOR FEDERATION OF UNIONS; LOCAL UNION
OF SUPERVISORS MAY NOT JOIN UNION OF RANK AND FILE EMPLOYEES;
RATIONALE. — In Atlas Lithographic Services, Inc. vs. Laguesma, 205 SCRA 12, [1992]
decided by the Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano, Bidin,
Romero and now Chief Justice Davide, Jr., as members it was ratiocinated: ". . . Thus, if
the intent of the law is to avoid a situation where supervisors would merge with the rank-
and-file or where the supervisors' labor organization would represent conflicting interests,
then a local supervisors' union should not be allowed to affiliate with the national federation
of union of rank-and-file employees where that federation actively participates in union
activity in the company. . . The prohibition against a supervisors' union joining a local
union of rank and file is replete with jurisprudence. The Court emphasizes that the
limitation is not confined to a case of supervisors' wanting to join a rank-and-file union.
The prohibition extends to a supervisors' local union applying for membership in a national
federation the members of which include local unions of rank and file employees. The
intent of the law is clear especially where, as in this case at bar, the supervisors will be co-
mingling with those employees whom they directly supervise in their own bargaining unit."

3. ID.; ID.; ID.; CONFIDENTIAL EMPLOYEES; WHEN DISQUALIFIED TO

JOIN LABOR UNION OF RANK AND FILE EMPLOYEES; RATIONALE. — As
regards the issue of whether or not confidential employees can join the labor union of the
rank and file, what was held in the case of National Association of Trade Unions (NATU)
— Republic Planters Bank Supervisors Chapter vs. Hon. R. D. Torres, et al., G.R. No.
93468, December 29, 1994, applies to this case. Citing Bulletin Publishing Corporation vs.
Sanchez, 144 SCRA 628, 635; Golden Farms vs. NLRC, 175 SCRA 471, and Pier 8
Arrastre and Stevedoring Services, Inc. vs. Hon. Nieves Roldan-Confessor, et al., G.R. No.
110854, February 14, 1995, the Court ruled: ". . . A confidential employee is one entrusted
with confidence on delicate matters, or with the custody, handling, or care and protection
of the employer's property. While Art. 245 of the Labor Code singles out managerial
employee as ineligible to join, assist or form any labor organization, under the doctrine of
necessary implication, confidential employees are similarly disqualified. This doctrine
states that what is implied in a statute is as much a part thereof as that which is expressed,
as elucidated in several case; the latest of which is Chua vs. Civil Service Commission
where we said: No statute can be enacted that can provide all the details involved in its
application. There is always an omission that may not meet a particular situation. What is
thought, at the time of the enactment, to be an all embracing legislation maybe inadequate
to provide for the unfolding events of the future. So-called gaps in the law develop as the
law is enforced One of the rules of statutory construction used to fill in the gap is the
doctrine of necessary implication . . . Every statute is understood, by implication, to contain
all such provisions as may be necessary to effectuate its object and purpose, or to make
effective rights, powers, privileges or jurisdiction which it grants, including all such
collateral and subsidiary consequences as may be fairly and logically inferred from its
terms. Ex necessitate legis . . . In applying the doctrine of necessary implication, we took
into consideration the rationale behind the disqualification of managerial employees
expressed in Bulletin Publishing Corporation vs. Sanchez, thus ". . . if these managerial
employees would belong to or be affiliated with a Union, the latter might not be assured of
their loyalty to the Union in view of evident conflict of interests. The Union can also
become company — dominated with the presence of managerial employees in Union
membership." Stated differently, in the collective bargaining process, managerial
employees are supposed to be on the side of the employer, to act as its representatives, and
to see to it that its interest are well protected. The employer is not assured of such protection
if these employees themselves are union members. Collective bargaining in such a situation
can become one-sided. It is the same reason that impelled this Court to consider the position
of confidential employees as included in the disqualification found in Art. 245 as if the
disqualification of confidential employees were written in the provision. If confidential
employees could unionize in order to bargain for advantages for themselves, then they
could be governed by their own motives rather than the interest of the employers.
Moreover, unionization of confidential employees for the purpose of collective bargaining
would mean the extension of the law to persons or individuals who are supposed to act "in
the interest of" the employers. It is not farfetched that in the course of collective bargaining,
they might jeopardize that interest which they are duty bound to protect. Along the same
line of reasoning we held in Golden Farms, Inc. vs. Ferrer-Calleja reiterated in Philips
Industrial Development, Inc., NLRC, that "confidential employees such as accounting
personnel, radio and telegraph operators who, having access to confidential information,
may become the source of undue advantage. Said employee(s) may act as spy or spies of
either party to a collective bargaining agreement." cTEICD

4. ID.; ID.; ID.; MEMBERSHIP IS DETERMINED BY THE NATURE OF

FUNCTIONS AND NOT BY THE NOMENCLATURE OF THE JOB GIVEN. —
Designation should be reconciled with the actual job description of subject employees. A
careful scrutiny of their job description indicates that they don't lay down company
policies. Theirs is not a final determination of the company policies since they have to
report to their respective superior. The mere fact that an employee is designated manager
does not necessarily make him one. Otherwise, there would be an absurd situation where
one can be given the title just to be deprived of the right to be a member of a union. In the
case of National Steel Corporation vs. Laguesma, G.R. No. 103743, January 29, 1996, it
was stressed that: "What is essential is the nature of the employee's function and not the
nomenclature or title given to the job which determines whether the employee has rank and
file or managerial status, or whether he is a supervisory employee."

5. ID.; ID.; CERTIFICATION ELECTIONS; WHEN TECHNICAL RULES OF

EVIDENCE DO NOT APPLY. — Anent the issue of whether or not the Petition to
cancel/revoke registration is a prejudicial question to the petition for certification election,
the following ruling in the case of Association of the Court of Appeals Employees (ACAS)
vs. Hon. Pura Ferrer-Calleja, in her capacity as Director, Bureau of Labor Relations, et
al.; 203 SCRA 597, 598, [1991], is in point, to wit: . . . It is a well-settled rule that "a
certification proceedings is not a litigation in the sense that the term is ordinarily
understood, but an investigation of a non-adversarial and fact finding character."
(Associated Labor Union (ALU) vs. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine
Telegraph and Telephone Corporation vs. NLRC, 183 SCRA 451 [1990]). Thus, the
technical rules of evidence do not apply if the decision to grant it proceeds from an
examination of the sufficiency of the petition as well as a careful look into the arguments
contained in the position papers and other documents. At any rate, the Court applies the
established rule correctly followed by the public respondent that an order to hold a
certification election is proper despite the pendency of the petition for cancellation of the
registration certificate of the respondent union. The rationale for this is that at the time the
respondent union filed its petition, it still had the legal personality to perform such act
absent an order directing the cancellation. . ."

DECISION

PURISIMA, J : p

These are petitions for certiorari relating to three (3) cases filed with the Med-
Arbiter, to wit: MED ARB ROX Case No. R100-9101-RU-002 for Certification Election
filed by Pepsi Cola Supervisors Union-UOEF (Union), MED ARB Case No. R1000-9102-
RU-008, Re: Petition to Set Aside, Cancel and/or Revoke the Charter Affiliation of the
Union, and MED-ARB ROX Case No. R1000-9104-RU-012, for Cancellation of
Registration Certificate No. 11492-LC in favor of the Union. cdll

G.R. No. 96663

The facts that matter can be culled as follows:

Sometime in June 1990, the Pepsi-Cola Employees Organization-UOEF (Union)

filed a petition for certification election with the Med-Arbiter seeking to be the exclusive
bargaining agent of supervisors of Pepsi-Cola Philippines, Inc. (PEPSI).

On July 12, 1990, the Med-Arbiter granted the Petition, with the explicit statement
that it was an affiliate of Union de Obreros Estivadores de Filipinas (federation) together
with two (2) rank and file unions, Pepsi-Cola Labor Unity (PCLU) and Pepsi-Cola
Employees Union of the Philippines (PEUP). cda

On July 23, 1990, PEPSI filed with the Bureau of Labor Relations a petition to Set
Aside, Cancel and/or Revoke Charter Affiliation of the Union, entitled PCPPI v. PCEU-
UOEF and docketed as Case No. 725-90, on the grounds that (a) the members of the Union
were managers and (b) a supervisors' union can not affiliate with a federation whose
members include the rank and file union of the same company.

On August 29, 1990, PEPSI presented a motion to re-open the case since it was not
furnished with a copy of the Petition for Certification Election.

On September 4, 1990, PEPSI submitted its position paper to the BLR in Case No.
725-90.

On September 21, 1990, PEPSI received summons to appear at the pre-trial

conference set on September 25, 1990 but which the hearing officer rescheduled on
October 21, 1990. cdrep

On October 12, 1990, PEPSI filed a Notice of Appeal and Memorandum of Appeal
with the Secretary of Labor, questioning the setting of the certification election on the said
date and five (5) days after. It also presented an urgent Ex-Parte Motion to Suspend the
Certification Election, which motion was granted on October 18, 1990.
 On November 12, 1990, the Secretary of Labor denied the appeal and Motion for
Reconsideration. Even as the Petition to Cancel, Revoke and Suspend Union Charter
Certificate was pending before the BLR, PEPSI found its way to this Court via the present
petition for certiorari.

On February 6, 1991, the Court granted the prayer for temporary restraining order
and/or preliminary injunction.

The pivot of inquiry here is: whether or not a supervisors' union can affiliate with
the same Federation of which two (2) rank and file unions are likewise members, without
violating Article 245 of the Labor Code (PD 442), as amended, by Republic Act 6715,
which provides: llcd

"ARTICLE 245. Ineligibility of managerial employees to join any labor

organization; right of supervisory employees. — Managerial employees are not
eligible to join, assist or form any labor organization. Supervisory employees
shall not be eligible for membership in a labor organization of the rank-and-file
employees but may join, assist or form separate labor organizations of their own."

In its Comment dated March 19, 1991, the Federation argued that:

"The pertinent portion of Article 245 of the Labor Code states that:
"Supervisory employees shall not be eligible for membership in a labor
organization of the rank and file employees but may join, assist or form separate
labor organization of their own."

This provision of law does not prohibit a local union composed of

supervisory employees from being affiliated to a federation which has local
unions with rank-and-file members as affiliates. LLjur

xxx xxx xxx

. . . the Petition to Cancel, Revoke or Set Aside the Charter Certificate of

the private respondent is anchored on the alleged ground that certain managerial
employees are included as members thereof. The grounds for the cancellation of
the registration certificate of a labor organization are provided in Section 7 of
Rule II, Book V of the Omnibus Rules Implementing the Labor Code, and the
inclusion of managerial employees is not one of the grounds. . . . (in this case, the
private respondent herein) remains to be a legitimate labor organization." 1

On April 8, 1991, the Secretary of Labor and Employment, through the Office of
the Solicitor General, sent in a Comment, alleging inter alia, that:

". . . under Article 259 of the New Labor Code, only orders of the Med-
Arbiter can be appealed through the Secretary of Labor and only on the ground
that the rules and regulations for the conduct of the certification election have
been violated. The Order of the Representation Officer is "interlocutory" and not
appealable. . . .

. . . until and unless there is a final order cancelling its certificate of

registration or charter certificate, a labor organization remains to be a legitimate
labor organization entitled to exercise all the rights and duties accorded to it by
the Labor Code including the right to be certified as a bargaining representative.
... LLjur

. . . Public respondent cannot be deemed to have committed grave abuse

of discretion with respect to an issue that was never presented before it for
resolution. . . .
Article 245 of the New Labor
Code does not preclude the
supervisor's union and the
rank-and-file union from
being affiliated with the
same federation.

xxx xxx xxx

A federation of local union is not the labor organization referred to in

Article 245 but only becomes entitled to all the rights enjoyed by the labor
organization (at the company level) when it has complied with the registration
requirements found in Articles 234 and 237. Hence, what is prohibited by Article
245 is membership of supervisory employees in a labor union (at the company
level) of the rank and file. . . .

. . . In other words, the affiliation of the supervisory employee's union

with the same federation with which the rank and file employees union is
affiliated did not make the supervisory employees members of the rank and file
employee's union and vice versa." 2 . . .

PEPSI, in its Reply dated May 7, 1991, asserted: LLpr

"It is our humble contention that a final determination of the Petition to

Set-Aside, Cancel, Revoke Charter Union Affiliation should first be disposed of
before granting the Petition for the Conduct of Certification Election. To allow
the conduct of the certification election to proceed would make any decision
arrived at by the Bureau of Labor Relations useless inasmuch as the same would
necessarily be rendered moot and academic." 3

On June 7, 1991, petitioner again filed a Supplemental Reply stressing:

"It is likewise stressed that officials of both the PCLU and PEUP are top
ranking officers of UOEF, the federation of supervisors' union, to wit:

POSITION IN RANK AND FILE UNION POSITION IN

FEDERATION

1. Rogelio de la Cruz PCLU-President General Vice President

2. Felix Gatela PEUP-President General Treasurer

3. Carlito Epino PCLU Board Member Educational Research Director

xxx xxx xxx

The respondent supervisory union could do indirectly what it could not do

directly as the simple expedient of affiliating with UOEF would negate the
manifest intent and letter of the law that supervisory employees can only "join,
assist or form separate labor organizations of their own" and cannot "be eligible
for membership in a labor organization of the rank and file employees." 4 cdrep

On August 6, 1991, the Secretary of Labor and Employment filed a Rejoinder,

claiming thus:

". . . an employer has no legal standing to question the validity of a

certification election.
 . . . For this reason, the Supreme Court has consistently held that, as a rule,
a certification election is the sole and exclusive concern of the employees and that
the employer is definitely an intruder or a mere bystander (Consolidated Farms
vs. Noriel, L-47752, July 31, 1978, 84 SCRA 469; Filipino Metals Corporation
vs. Ople, L-43861, September 4, 1981, 107 SCRA 211; Trade Unions of the
Philippines and Allied Services (TUPAS) vs. Trajano No. L-61153, January 17,
1983, 120 SCRA 64).

xxx xxx xxx

In Adamson & Adamson, Inc. vs. CIR No. L-35120, January 31, 1984,
127 SCRA 268, the Supreme Court (then dealing with the interpretation of
Section 3 of the Industrial Peace Act, from which Section 245 of the Labor Code
was derived) grappled with the issue in the case at bar. It held that,

'There is nothing in the provisions of the Industrial Peace Act

which provides that a duly registered local union affiliating with a national
union or federation loses its legal personality, or its independence.' dctai

xxx xxx xxx

However, there is absolutely nothing in the Labor Code that prohibits a

federation from representing or exercising influence over its affiliates. On the
contrary, this is precisely the reason why federations are formed and are allowed
by law to exist." 5

On November 8, 1991, the Union also filed a Rejoinder.

On December 9, 1991, the Court resolved to DISMISS the case for "failure to
sufficiently show that the questioned judgment is tainted with grave abuse of discretion."

In a Resolution dated March 2, 1992, the Second Division of the Court resolved to
grant the motion for reconsideration interposed on January 28, 1992.

G.R. No. 103300

What are assailed in this case is Med-Arbiter Order dated May 23, 1991 and the
Decision and Order of the Secretary of Labor and Employment, dated October 4, 1991 and
December 12, 1991, respectively. cda

The decretal portion of the Med-Arbiter Order under attack, reads:

"WHEREFORE, premises considered, an order is hereby issued:

1. Dismissing MED ARB ROX CASE NO. R1000-919104-RU-012 and

R1000-9102-RU-008 for lack of merit; and

2. Ordering the conduct of a Certification Election to be participated by

and among the supervisory workers of the respondent company, Pepsi-Cola
Products Philippines, Inc. at its plant at Tin-ao, Cagayan de Oro City, including
all the satellite warehouse within the territorial coverage and control of the
Cagayan de Oro Pepsi-Cola Plant. The choices are as follows:

1. Cagayan de Oro Pepsi-Cola Supervisors Union (U.O.E.P.)

2. No union
 The parties are directed to attend a pre-election conference on June 10,
1991, 2:30 p.m. at the Regional Office to determine the qualification of the voters
and to thresh out the mechanics of the election. Respondent/employer is directed
to submit five (5) copies of the names of the rank and file workers taken from the
payroll on October 1-31, 1991, alphabetically arranged (sic) indicating their
names and positions and dates of employment and to bring the aforementioned
payroll during the pre-election conference for verification purposes." 6 . . . prLL

The supervisory employees of the Union are:

POSITION

1. Felipe Valdehueza Route Manager

2. Gerberto Vertudazo C & C Manager

3. Paul Mendoza Sales Service Department Manager

4. Gilberto Emano, Jr. Route Manager

5. Jaime Huliganga Chief Checker

6. Elias Edgama, Sr. Accounting Manager

7. Romanico Ramos Route Manager

8. Raul Yacapin Route Manager

9. Jovenal Albaque Route Manager

10. Fulvio Narciso Route Manager

11. Apolinario Opiniano Route Manager

12. Alfredo Panas Route Manager

13. Simplicio Nelie Route Manager

14. Arthur Rodriguez Route Manager

15. Marco Ilano Warehouse Operations Manager and

16. Deodoro Ramos Maintenance Manager

On June 6, 1991, PEPSI appealed the said Order to the Secretary of Labor and
Employment on the ground of grave abuse of discretion, docketed as Case No. OS-A-232-
91.

On October 4, 1991, the Secretary modified the appealed decision, ruling thus:

"WHEREFORE, the Order of the Med-Arbiter dated 23 May 1991 is

hereby modified to the effect that MED ARB ROX Case No. R1000-9104-RU-
012 and R1000-9102-RU-008 are hereby referred to the Office of the Regional
Director which has jurisdiction over these cases. The call for certification election
among the supervisory workers of the Pepsi-Cola Products Philippines, Inc. at its
plant at Tin-ao, Cagayan de Oro City is hereby sustained." 7 prcd
 On October 19, 1991, PEPSI presented a motion for reconsideration of the aforesaid
Order but the same was denied on December 12, 1991.

Meanwhile, the BLR issued Registration Certificate No. 11492-LC in favor of the
Union. Dissatisfied therewith, PEPSI brought the instant petition for certiorari, contending
that:

"PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF

DISCRETION IN RULING THAT PRIVATE RESPONDENT'S OFFICERS
AND MEMBERS ARE NOT MANAGERIAL EMPLOYEES;

PRIVATE RESPONDENT IS PROHIBITED FROM AFFILIATING

ITSELF WITH A FEDERATION ALREADY AFFILIATED WITH THE
RANK AND FILE UNION; cdll

PUBLIC RESPONDENT COMMITTED GRAVE OF (SIC) ABUSE OF

DISCRETION IN RULING THAT THE INSTITUTION OF A PETITION FOR
CANCELLATION OF UNION REGISTRATION DOES NOT CONSTITUTE
A PREJUDICIAL QUESTION TO A PETITION CERTIFICATION
ELECTION." 8

The petitions must fail for want of merit.

At the outset, it must be stressed that on September 1, 1992, there was a Resolution
of the Union withdrawing from the Federation, to wit:

"BE IT RESOLVED, as it is hereby RESOLVED, that this UNION

WITHDRAW, as it hereby WITHDRAWS its affiliation from the Union de
Obreros Estivadores de Filipinas, and at the same time, give our thanks to the said
federation for its help and guidance rendered to this Union in the past." 9prLL

The issue in G.R. No. 96663, whether or not the supervisors union can be affiliated
with a Federation with two (2) rank and file unions directly under the supervision of the
former, has thus become moot and academic in view of the Union's withdrawal from the
federation.

In a long line of cases (Narciso Nakpil, et al., vs. Hon. Crisanto Aragon, et al., G.R.
No. L-24087, January 22, 1980, 95 SCRA 85; Toribio v. Bidin, et al., G.R. No. L-37960,
February 28, 1980, 96 SCRA 361; Gumaua v. Espino, G.R. No. L-36188-37586 February
29, 1980, 96 SCRA 402), the Court dismissed the petition for being moot and academic. In
the case of F.C. Fisher v. Yangco Steamship Co., March 31, 1915, the Court held:

"It is unnecessary, however to indulge in academic discussion of a moot

question. . . .

. . . The action would have been dismissed at any time on a showing of

the facts as they were. The question left for the court was a moot one. Its
Resolution would have been useless. Its judgment would have been impossible
of execution . . . ."
dctai

However, in the case of University of San Agustin, Inc., et al. vs. Court of Appeals,
et al., the court resolved the case, ruling that "even if a case were moot and academic, a
statement of the governing principle is appropriate in the resolution of dismissal for the
guidance not only of the parties but of others similarly situated. . . ." 10
 In Atlas Lithographic Services, Inc. v. Laguesma, 205 SCRA 12, [1992] decided by
the Third Division with J. Gutierrez, Jr., as ponente and JJ. Feliciano, Bidin, Romero and
now Chief Justice Davide, Jr., as members it was ratiocinated:

"xxx xxx xxx

Thus, if the intent of the law is to avoid a situation where supervisors

would merge with the rank-and-file or where the supervisors' labor organization
would represent conflicting interests, then a local supervisors' union should not
be allowed to affiliate with the national federation of union of rank-and-file
employees where that federation actively participates in union activity in the
company. LLjur

xxx xxx xxx

The prohibition against a supervisors' union joining a local union of rank

and file is replete with jurisprudence. The Court emphasizes that the limitation is
not confined to a case of supervisors' wanting to join a rank-and-file union. The
prohibition extends to a supervisors' local union applying for membership in a
national federation the members of which include local unions of rank and file
employees. The intent of the law is clear especially where, as in this case at bar,
the supervisors will be co-mingling with those employees whom they directly
supervise in their own bargaining unit."

Anent the issue of whether or not the Petition to cancel/revoke registration is a

prejudicial question to the petition for certification election, the following ruling in the case
of Association of the Court of Appeals Employees (ACAE) vs. Hon. Pura Ferrer-Calleja,
in her capacity as Director, Bureau of Labor Relations et. al., 203 SCRA 597, 598, [1991],
is in point, to wit:

. . . It is a well-settled rule that "a certification proceedings is not a

litigation in the sense that the term is ordinarily understood, but an investigation
of a non-adversarial and fact finding character." (Associated Labor Unions (ALU)
v. Ferrer-Calleja, 179 SCRA 127 [1989]; Philippine Telegraph and Telephone
Corporation v. NLRC, 183 SCRA 451 [1990]. Thus, the technical rules of
evidence do not apply if the decision to grant it proceeds from an examination of
the sufficiency of the petition as well as a careful look into the arguments
contained in the position papers and other documents. llcd

"At any rate, the Court applies the established rule correctly followed by
the public respondent that an order to hold a certification election is proper despite
the pendency of the petition for cancellation of the registration certificate of the
respondent union. The rationale for this is that at the time the respondent union
filed its petition, it still had the legal personality to perform such act absent an
order directing the cancellation.

xxx xxx xxx"

As regards the issue of whether or not confidential employees can join the labor
union of the rank and file, what was held in the case of National Association of Trade
Unions (NATU) — Republic Planters Bank Supervisors Chapter vs. Hon. R. D. Torres, et
al., G.R. No. 93468, December 29, 1994, applies to this case. Citing Bulletin Publishing
Corporation vs. Sanchez, 144 SCRA 628, 635, Golden Farms vs. NLRC, 175 SCRA 471,
and Pier 8 Arrastre and Stevedoring Services, Inc. vs. Hon. Nieves Roldan-Confessor et
al., G.R. No. 110854, February 14, 1995, the Court ruled:

". . . A confidential employee is one entrusted with confidence on delicate matters, or with
the custody, handling, or care and protection of the employer's property. While Art. 245 of the
Labor Code singles out managerial employee as ineligible to join, assist or form any labor
organization, under the doctrine of necessary implication, confidential employees are similarly
disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that
which is expressed, as elucidated in several case; the latest of which is Chua v. Civil Service
Commission where we said: llcd

No statute can be enacted that can provide all the details involved
in its application. There is always an omission that may not meet a
particular situation. What is thought, at the time of the enactment, to be
an all embracing legislation maybe inadequate to provide for the
unfolding events of the future. So-called gaps in the law develop as the
law is enforced. One of the rules of statutory construction used to fill in
the gap is the doctrine of necessary implication . . ., Every statute is
understood, by implication, to contain all such provisions as may be
necessary to effectuate its object and purpose, or to make effective rights,
powers, privileges or jurisdiction which it grants, including all such
collateral and subsidiary consequences as may be fairly and logically
inferred from its terms. Ex necessitate legis . . .

In applying the doctrine of necessary implication, we took into

consideration the rationale behind the disqualification of managerial employees
expressed in Bulletin Publishing Corporation v. Sanchez, thus " . . . if these
managerial employees would belong to or be affiliated with a Union, the latter
might not be assured of their loyalty to the Union in view of evident conflict of
interests. The Union can also become company — dominated with the presence
of managerial employees in Union membership." Stated differently, in the
collective bargaining process, managerial employees are supposed to be on the
side of the employer, to act as its representatives, and to see to it that its interest
are well protected. The employer is not assured of such protection if these
employees themselves are union members. Collective bargaining in such a
situation can become one-sided. It is the same reason that impelled this Court to
consider the position of confidential employees as included in the disqualification
found in Art. 245 as if the disqualification of confidential employees were written
in the provision. If confidential employees could unionize in order to bargain for
advantages for themselves, then they could be governed by their own motives
rather than the interest of the employers. Moreover, unionization of confidential
employees for the purpose of collective bargaining would mean the extension of
the law to persons or individuals who are supposed to act "in the interest of" the
employers. It is not farfetched that in the course of collective bargaining, they
might jeopardize that interest which they are duty bound to protect. Along the
same line of reasoning we held in Golden Farms, Inc. vs. Ferrer-Calleja
reiterated in Philips Industrial Development, Inc., NLRC, that "confidential
employees such as accounting personnel, radio and telegraph operators who,
having access to confidential information, may become the source of undue
advantage. Said employee(s) may act as spy or spies of either party to a collective
bargaining agreement." LibLex

The Court finds merit in the submission of the OSG that Route Managers, Chief
Checkers and Warehouse Operations Managers are supervisors while Credit & Collection
Managers and Accounting Managers are highly confidential employees. Designation
should be reconciled with the actual job description of subject employees. A careful
scrutiny of their job description indicates that they don't lay down company policies. Theirs
is not a final determination of the company policies since they have to report to their
respective superior. The mere fact that an employee is designated manager does not
necessarily make him one. Otherwise, there would be an absurd situation where one can
be given the title just to be deprived of the right to be a member of a union. In the case of
National Steel Corporation v. Laguesma, G.R. No. 103743, January 29, 1996, it was
stressed that:

"What is essential is the nature of the employee's function and not the
nomenclature or title given to the job which determines whether the employee
has rank and file or managerial status, or whether he is a supervisory employee."

WHEREFORE, the petitions under consideration are DISMISSED but subject

Decision, dated October 4, 1991, of the Secretary of Labor and Employment is MODIFIED
in that Credit and Collection Managers and Accounting Managers are highly confidential
employees not eligible for membership in a supervisors' union. No pronouncement as to
costs. cdll

SO ORDERED.

Melo, Vitug and Gonzaga-Reyes, JJ., concur.

Panganiban, J., concurs in the result.

(Pepsi-Cola Products Philippines, Inc. v. Secretary of Labor, G.R. Nos. 96663 & 103300,
|||

[August 10, 1999], 371 PHIL 30-47)

[G.R. No. L-14129. July 31, 1962.]

PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs.

GUILLERMO MANANTAN, defendant-appellee.

Solicitor General for plaintiff-appellant.

Padilla Law Office for defendant-appellee.

SYLLABUS

1. ELECTIONEERING; OFFICERS PROHIBITED FROM ENGAGING IN

POLITICS; JUSTICES OF THE PEACE. — A justice of the peace is included among
 the officers enjoined from active political participation by Section 54 of the Revised
Election Code. There was no need of including justices of the peace in the enumeration
in said Section 54 because the Legislature had availed itself of the more generic and
broader term "judge."
2. ID.; ID.; TERM "JUDGE" CONSTRUED. — The term "judge" not modified
by any word or phrase, is intended to comprehend all kinds of judges, like judges of the
courts of First Instance, judges of the courts of Agrarian Relations, judges of the courts
of Industrial Relations, and justices of the peace.
3. STATUTORY CONSTRUCTION; RULE OF "CASUS OMISUS" WHEN
APPLICABLE. — The rule of "casus omisus pro omisso habendus est" can operate and
apply only if and when the omission has been clearly established. In the case at bar, the
Legislature did not exclude or omit justices of the peace from the enumeration of
officers precluded from engaging in partisan political activities. Rather, they were
merely called by another term - "judge." The rule, therefore, has no applicability to the
instant case.
4. ID.; PENAL STATUTES; RUIN OF STRICT CONSTRUCTION. — The
rule that penal statutes are given strict construction is not the only factor controlling the
interpretation of such laws, instead, the rule merely serves as an additional, single factor
to be considered as an aid in determining the meaning of penal laws. (3 Sutherland
Statutory Construction, p. 56). The court may consider the spirit and reason of a statute,
as in this particular instance where a literal meaning would lead to absurdity,
contradiction, injustice, or would defeat the clear purpose of the lawmaker (Crawford
Interpretation of Laws, Sec. 78, p. 294).
5. ID.; ID.; RULE OF EXCLUSION. — Where a statute appears on its phase to
limit the operation of its provisions to particular persons or things by enumerating them,
but no reason exist why other persons or things not so enumerated should not have been
included and manifest injustice will follow by not so including them, the maxim
expresio unius est exclusio, alterius, should not be invoked. (Blevins vs. Mullally, 135
p. 307, 22 CAL. A pp. 519).
6. DOUBLE JEOPARDY; FAILURE OF DEFENDANT TO RAISE ISSUE;
WAIVER OF DEFENSE. — As defendant neither raised the issue of double jeopardy
by way of resisting the appeal of the state, nor argued in his brief the said plea, he is
deemed to have waived this defense.

DECISION

REGALA, J : p

This is an appeal of the Solicitor General from the order of the Court of First
Instance of Pangasinan dismissing the information against the defendant.
The records show that the statement of the case and of the facts, as recited in the
brief of plaintiff-appellant, is complete and accurate. The same is, consequently, here
adopted, to wit:

"In an information filed by the Provincial Fiscal of Pangasinan in the

Court of First Instance of that Province, defendant Guillermo Manantan was
charged with a violation of Section 54 of the Revised Election Code. A
preliminary investigation conducted by said court resulted in the finding of a
probable cause that the crime charged was committed by the defendant.
Thereafter, the trial started upon defendant's plea of not guilty, the defense
moved to dismiss the information on the ground that as justice of the peace, the
 defendant is not one of the officers enumerated in Section 54 of the Revised
Election Code. The lower court denied the motion to dismiss, holding that a
justice of the peace is within the purview of Section 54. A second motion was
filed by defense counsel who cited in support thereof the decision of the Court
of Appeals in People vs. Macaraeg, (C.A.-G.R. No. 15613-R, 54 Off. Gaz., pp.
1873-76) where it was held that a justice of the peace is excluded from the
prohibition of Section 54 of the Revised Election Code. Acting on this second
motion to dismiss, the answer of the prosecution, the reply of the defense, and
the opposition of the prosecution, the lower court dismissed the information
against the accused upon the authority of the ruling in the case cited by the
defense."

Both parties are submitting this case upon the determination of this single
question of law: Is a justice of the peace included in the prohibition of Section 54 of the
Revised Election Code?
Section 54 of the said Code reads:

"No justice, judge, fiscal, treasurer, or assessor of any province, no

officer or employee of the Army, no member of the national, provincial, city,
municipal or rural police force, and no classified civil service officer or
employee shall aid any candidate, or exert any influence in any manner in any
election or take part therein, except to vote, if entitled thereto, or to preserve
public peace, if he is a peace officer."

Defendant-appellee argues that a justice of the peace is not comprehended

among the officers enumerated in Section 54 of the Revised Election Code. He submits
that the aforecited section was taken from Section 449 of the Revised Administrative
Code, which provided the following:

"SEC. 449. Persons prohibited from influencing elections. — No judge

of the First Instance, justice of the peace, or treasurer, fiscal or assessor of any
province and no officer or employee of the Philippine Constabulary, or any
Bureau or employee of the classified civil service, shall aid any candidate or
exert influence in any manner in any election or take part therein otherwise than
exercising the right to vote."

When, therefore, Section 54 of the Revised Election Code omitted the words "justice
of the peace," the omission revealed the intention of the Legislature to exclude justice
of the peace from its operation.
The above argument overlooks one fundamental fact. It is to be noted that under
Section 449 of the Revised Administrative Code, the word "judge" was modified or
qualified by the phrase "of First Instance," while under Section 54 of the Revised
Election Code, no such modifications exists. In other words, justices of the peace were
expressly included in Section 449 of the Revised Administrative Code because the
kinds of judges therein were specified, i.e., judge of the First Instance and justice of the
peace. In Section 54, however, there was no necessity anymore to include justice of the
peace in the enumeration because the legislature had availed itself of the more generic
and broader term, "judge." It was a term not modified by any word or phrase and was
intended to comprehend all kinds of judges, like judges of the courts of First Instance,
judges of the courts of Agrarian Relations, judges of the courts of Industrial Relations,
and justices of the peace.
It is a well known fact that a justice of the peace is sometimes addressed as
"judge" in this jurisdiction. It is because a justice of the peace is indeed a judge. A
"judge" is a public officer, who, by virtue of his office, is clothed with judicial authority
(U.S. vs. Clark 25 Fed. Case. 441, 442). According to Bouvier, Law Dictionary, "a
judge is a public officer lawfully appointed to decide litigated questions according to
law. In its most extensive sense the term includes all officers appointed to decide
litigated questions while acting in that capacity, including justice of the peace, and even
jurors, it is said, who are judges of facts."
A review of the history of the Revised Election Code will help to justify and
clarify the above conclusion.
The first election law in the Philippines was Act No. 1582 enacted by the
Philippine Commission in 1907, and which was later amended by Act Nos. 1669, 1709,
1726 and 1768. (Of these 4 amendments, however, only Act No. 1709 has a relation to
the discussion of the instant case as shall be shown later.) Act No. 1582, with its
subsequent 4 amendments were later on incorporated in Chapter 18 of the
Administrative Code. Under the Philippine Legislature, several amendments were
made through the passage of Act Nos. 2310, 3336 and 3387. (Again, of these last 3
amendments, only Act No. 3387 has pertinence to the case at bar as shall be seen later.)
During the time of the Commonwealth, the National Assembly passed Commonwealth
Act No. 233 and later on enacted Commonwealth Act No. 357, which was the law
enforced until June 21, 1947, when the Revised Election Code was approved. Included
as its basic provisions are the provisions of Commonwealth Acts Nos. 233, 357, 605,
666, 657. The present Code was further amended by Republic Acts Nos. 599, 867, 2242
and again, during the session of Congress in 1960, amended by Rep. Acts Nos. 3036
and 3038. In the history of our election law, the following should be noted:
Under Act 1582, Section 29, it was provided:

"No public officer shall offer himself as a candidate for elections, nor
shall he be eligible during the time that he holds said public office to election at
any municipal, provincial or Assembly election, except for reelection to the
position which he may be holding, and no judge of the First Instance, justice of
the peace, provincial fiscal, or officer or employee of the Philippine
Constabulary or of the Bureau of Education shall aid any candidate or influence
in any manner or take part in any municipal, provincial, or Assembly election
under the penalty of being deprived of his office and being disqualified to hold
any public office whatsoever for a term of 5 years: Provided, however, that the
foregoing provisions shall not be construed to deprive any person otherwise
qualified of the right to vote at any election. (Enacted January 9, 1907; Took
effect on January 15, 1907.)

Then, in Act 1709, Sec. 6, it was likewise provided:

". . . No judge of the First Instance, justice of the peace, provincial fiscal
or officer or employee of the Bureau of Constabulary or of the Bureau of
Constabulary or of the Bureau of Education shall aid any candidate or influence
in any manner or take part in any municipal, provincial or Assembly election.
Any person violating the provisions of this section shall be deprived of his
office or employment and shall be disqualified to hold any public office or
employment whatever for a term of 5 years. Provided, however, that the
foregoing provisions shall not be construed to deprive any person otherwise
qualified or the right to vote at any election. (Enacted on August 31, 1907; Took
effect on September 15, 1907.)

Again, when the existing election laws were incorporated in the Administrative
Code on March 10, 1917, the provisions in question read:

"SEC. 449. Persons prohibited from influencing elections. — No judge

of the First Instance, justice of the peace, or treasurer, fiscal or assessor of any
 province and no officer or employee of the Philippine Constabulary, or any
Bureau or employee of the classified civil service, shall aid any candidate or
exert influence in any manner in any election or take part therein otherwise than
exercising the right to vote. (Emphasis supplied)

After the Administrative Code, the next pertinent legislation was Act No. 3387.
This Act reads:

"SEC. 2636. Officers and employees meddling with the election. — Any
judge of the First Instance, justice of the peace, treasurer, fiscal or assessor of
any province, any officer or employee of the Philippine Constabulary or of the
police of any municipality, or any officer or employee of any Bureau or the
classified civil service, who aids any candidate or violated in any manner the
provisions of this section or takes part in any election otherwise by exercising
the right to vote, shall be punished by a fine of not less than P100.00 nor more
than P2,000.00, or by imprisonment for not less than 2 months nor more than 2
years, and in all cases by disqualification from public office and deprivation of
the right of suffrage for a period of 5 years." (Approved, December 3, 1927.)
(Emphasis supplied.)

Subsequently, however, Commonwealth Act No. 357 was enacted on August

22, 1938. This law provided in Section 48:

"SEC. 48. Active intervention of public officers and employees. — No

justice, judge, fiscal, treasurer or assessor of any province, no officer or
employee of the Army, the Constabulary of the National, provincial, municipal
or rural police, and no classified civil service officer or employee shall aid any
candidate, nor exert influence in any manner in any election nor take part
therein, except to vote, if entitled thereto, or to preserve public peace, if he is a
peace officer."

The last law was the legislation from which Section 54 of the Revised Election
Code was taken.
It will thus be observed from the foregoing narration of the legislative
development or history of Section 54 of the Revised Election Code that the first
omission of the word "justice of the peace" was effected in Section 48 of
Commonwealth Act No. 357 and not in the present Code as averred by defendant-
appellee. Note carefully, however, that in the two instances when the words "justice of
the peace" were omitted (in Com. Act No. 357 and Rep. Act No. 180), the word "judge"
which preceded in the enumeration did not carry the qualification "of the First
Instance." In other words, whenever the word "judge" was qualified by the phrase "of
the First Instance," the words "justice of the peace" would follow; however, if the law
simply said "judge," the words "justice of the peace" were omitted.
The above-mentioned pattern of congressional phraseology would seem to
justify the conclusion that when the legislature omitted the words "justice of the peace"
in Rep. Act No. 180, it did not intend to exempt the said officer from its operation.
Rather, it had considered the said officer as already comprehended in the broader term
"judge".
It is unfortunate and regrettable that the last World War had destroyed
congressional records which might have offered some explanation of the discussion of
Com. Act No. 357, which legislation, as indicated above, had eliminated for the first
time the word "justice of the peace." Having been completely destroyed, all efforts to
seek deeper and additional clarifications form these records proved futile. Nevertheless,
the conclusions drawn from the historical background of Rep. Act No. 180 is
sufficiently borne out by reason and equity.
 Defendant further argues that he cannot possibly be among the officers
enumerated in Section 54 inasmuch as under the said section, the word "judge" is
modified or qualified by the phrase "of any province." The last mentioned phrase,
defendant submits, cannot then refer to a justice of the peace since the latter is not an
officer of a province but of a municipality.
Defendant's argument in that respect is too strained. If it is true that the phrase
"of any province" necessarily removes justices of the peace from the enumeration for
the reason that they are municipal and not provincial officials, then the same thing may
be said of the Justices of the Supreme Court and of the Court of Appeals. They are
national officials. Yet, can there be any doubt that Justices of the Supreme Court and
of the Court of Appeals are not included in the prohibition? The more sensible and
logical interpretation of the said phrase is that it qualifies fiscals, treasurers and
assessors who are generally known as provincial officers.
The rule of "casus omisus pro omisso habendus est" is likewise invoked by the
defendant-appellee. Under the said rule, a person, object or thing omitted from an
enumeration must be held to have been omitted intentionally. If that rule is applicable
to the present, then indeed, justices of the peace must be held to have been intentionally
and deliberately exempted from the operation of Section 54 of the Revised Election
Code.
The rule has no applicability to the case at bar. The maxim "casus omisus" can
operate and apply only if and when the omission has been clearly established. In the
case under consideration, it has already been shown that the legislature did not exclude
or omit justices of the peace from the enumeration of officers precluded from engaging
in partisan political activities. Rather, they were merely called by another term. In the
new law, or Section 54 of the Revised Election Code, justices of the peace were just
called "judges."
In insisting on the application of the rule of "casus omisus" to this case,
defendant-appellee cites authorities to the effect that the said rule, being restrictive in
nature, has more particular application to statutes that should be strictly construed. It is
pointed out that Section 54 must be strictly construed against the government since
proceedings under it are criminal in nature and the jurisprudence is settled that penal
statutes should be strictly interpreted against the state.
Amplifying on the above argument regarding strict interpretation of penal
statutes, defendant asserts that the spirit of fair play and due process demand such strict
construction in order to give "Fair warning of what the law intends to do, if a certain
line is passed, in language that the common world will understand." (Justice Holmes,
in McBoyle vs. U.S. 283, U.S. 25, L. Ed, 816)
The application of the rule of "casus omisus" does not proceed from the mere
fact that a case is criminal in nature, but rather from a reasonable certainty that a
particular person, object or thing has been omitted from a legislative enumeration. In
the present case, and for reasons already mentioned, there has been no such omission.
There has only been a substitution of terms.
The rule that penal statutes are given a strict construction is not the only factor
controlling the interpretation of such laws; instead, the rule merely serves as an
additional, single factor to be considered as an aid in determining the meaning of penal
laws. This has been recognized time and again by decisions of various courts. (3
Sutherland, Statutory Construction, p. 56.) Thus, cases will frequently be found
enunciating the principle that the intent of the legislature will govern (U.S. vs. Corbet,
215, U.S. 233). It is to be noted that a strict construction should not be permitted to
defeat the policy and purposes of the statute (Ash Sheep Co. vs. U.S. 252 U.S. 159).
The court may consider the spirit and reason of a statute, as in this particular instance,
where a literal meaning would lead to absurdity, contradiction, injustice, or would
defeat the clear purpose of the law makers (Crawford, Interpretation of Laws, Sec. 78,
p. 294). A Federal District court in the U.S. has well said:

"The strict construction of a criminal statute does not mean such

construction of it as to deprive it of the meaning intended. Penal statutes must
be construed in the sense which best harmonizes with their intent and purpose."
(U.S. vs. Betteridge, 43 F. Supp. 53, 56, cited in 3 Sutherland Statutory
Construction 56.)

As well stated by the Supreme Court of the United States, the language of
criminal statutes, frequently, has been narrowed where the letter includes situations
inconsistent with the legislative plan (U.S. vs. Katz, 271 U.S. 354; See also Ernest
Brunchan, Interpretation of the Written Law [1915] 25 Yale L.J. 129.)
Another reason in support of the conclusion reached herein is the fact that the
purpose of the statute is to enlarge the officers within its purview. Justices of the
Supreme Court, the Court of Appeals, and various judges, such as the judges of the
Court of Industrial Relations, judges of the Court of Agrarian Relations, etc., who were
not included in the prohibition under the old statute, are now within its encompass. If
such were the evident purpose, can the Legislature intend to eliminate the justice of the
peace within its orbit? Certainly not, this point is fully explained in the brief of the
Solicitor General, to wit:

"On the other hand, when the legislature eliminated the phrases "Judge
of the First Instance" and "justice of the peace", found in Section 449 of the
Revised Administrative Code, and used "judge" in lieu thereof, the obvious
intention was to include in the scope of the term not just one class of judge but
all judges, whether of first instance, justices of the peace or special courts, such
as judges of the Court of Industrial Relations." . . .

"The weakest link in our judicial system is the justice of the peace court,
and to so construe the law as to allow a judge thereof to engage in partisan
political activities would weaken rather than strengthen the judiciary. On the
other hand, there are cogent reasons found in the Revised Election Code itself
why justices of the peace should be prohibited from electioneering. Along with
justices of the appellate courts and judges of the Courts of First Instance, they
are given authority and jurisdiction over certain election cases (See Secs. 103,
104, 117-123). Justices of the peace are authorized to hear and decide inclusion
and exclusion cases and if they are permitted to campaign for candidates for an
elective office the impartiality of their decisions in election cases would be open
to serious doubt. We do not believe that the legislature had, in Section 54 of the
Revised Election Code, intended to create such an unfortunate situation." (pp. 7-
8, Appellant's Brief.)

Another factor which fortifies the conclusion reached herein is the fact that even
the administrative or executive department has regarded justices of the peace within the
purview of Section 54 of the Revised Election Code.
In Traquilino O. Calo, Jr. vs. The Executive Secretary, the Secretary of Justice,
etc. (G. R. No. L-12601), this Court did not give due course to the petition for certiorari
and prohibition with preliminary injunction against the respondents, for not setting
aside, among others, Administrative Order No. 237, dated March 31, 1957, of the
President of the Philippines, dismissing the petitioner as justice of the peace of Carmen,
Agusan. It is worthy of note that one of the causes of the separation of the petitioner
was the fact that he was found guilty in engaging in electioneering, contrary to the
provisions of the Election Code.
 Defendant-appellee calls the attention of this Court to House Bill No. 2676,
which was filed on January 25, 1955. In that proposed legislation, under Section 56,
justices of the peace are already expressly included among the officers enjoined from
active political participation. The argument is that with the filing of the said House Bill,
Congress impliedly acknowledged that existing laws do not prohibit justices of the
peace from partisan political activities.
The argument is unacceptable. To begin with, House Bill No. 2676 was a
proposed amendment to Republic Act No. 180 as a whole and not merely to section 54
of said Rep. Act No. 180. In other words, House Bill No. 2676 was a proposed re-
codification of the existing election laws at the time that it was filed. Besides, the
proposed amendment, until it has become a law, cannot be considered to contain or
manifest any legislative intent. If the motives, opinions, and the reasons expressed by
the individual members of the legislature, even in debates, cannot be properly taken
into consideration in ascertaining the meaning of a statute (Crawford, Statutory
Construction, Sec. 213, pp. 375-376), fortiori what weight can we give to mere draft of
a bill.
On law, reason and public policy, defendant-appellee's contention that justice of
the peace are not covered by the injunction of Section 54 must be rejected. To accept it
is to render ineffective a policy so clearly and emphatically laid down by the legislature.
Our law-making body has consistently prohibited justices of the peace from
participating in partisan politics. They were prohibited under the old Election Law since
1907 (Act No. 1582 and Act No. 1709). Likewise, they were so enjoined by the Revised
Administrative Code. Another law which expressed the prohibition to them was Act
No. 3387, and later, Com. Act No. 357.
Lastly, it is observed that both the Court of Appeals and the trial court applied
the rule of "expressio unius, est exclusio alterius" in arriving at the conclusion that
justices of the peace are not covered by Section 54. Said the Court of Appeals:
"Anyway, guided by the rule of exclusion, otherwise known as expresio unius est
exclusio alterius, it would not be beyond reason to infer that there was an intention of
omitting the term "justice of the peace from Section 54 of the Revised Election Code. .
. ."
The rule has no application. If the legislature had intended to exclude a justice
of the peace from the purview of Section 54, neither the trial court nor the Court of
Appeals has given the reason for the exclusion. Indeed, there appears no reason for the
alleged change. Hence, the rule of expresio unius est exclusio alterius has been
erroneously applied (Appellant's Brief, p. 6.)

"Where a statue appears on its face to limit the operation of its

provisions to particular persons or things by enumerating them, but no reason
exists why other persons or things not so enumerated should not have been
included, and manifest injustice will follow by not so including them, the
maxim expresio unius est exclusio alterius, should not be invoked." (Blevins vs.
Mullally, 135 p. 307, 22 Cal. App. 519.)

FOR THE ABOVE REASONS, the order of dismissal entered by the trial court
should be set aside and this case is remanded for trial on the merits.
Bengzon, C. J., Bautista Angelo, Labrador, Concepcion, Barrera and
Makalintal, JJ., concur.
Padilla and Dizon, JJ., took no part.
Reyes, J.B.L., J., is on leave.
||| (People v. Manantan, G.R. No. L-14129, [July 31, 1962], 115 PHIL 657-671)
 [G.R. No. L-33140. October 23, 1978.]

J. M. TUASON & CO., INC., JOSE M. TUASON, NICASIO A. TUASON,

TERESA TUASON, petitioners, vs. HON. HERMINIO C. MARIANO,
Presiding Judge of the Court of First Instance of Rizal, MANUELA
AQUAL, Spouses JOSE M. CORDOVA and SATURNINA C.
CORDOVA, respondents.

Sison Law Office and Senensio O. Ortile for petitioners.

Hill & Associates Law Office for respondents Aquials.

Antonio E. Pesigan for respondents Cordovas.

SYNOPSIS

Plaintiffs prayed that they be declared the owners of a parcel of land which they
claimed was acquired by their father by means of a Spanish title issued to him on May
10, 1977. They alleged that the land had been fraudulently included in OCT No. 735 of
the Registry of Deeds of Rizal. To support their action, they cited the 1965 decision of
the Court of First Instance of Rizal invalidating OCT No. 735. That decision, however,
was reversed by the Supreme Court which reiterated its ruling in previous cases
upholding the validity of OCT No. 735 and the titles derived therefrom. Defendants
move to dismiss on the grounds of lack of jurisdiction, improper venue, prescription,
laches and prior judgment. The trial court denied the motion.
On petition for certiorari, the Supreme Court applying the principle of stare
decisis ruled that OCT No. 735 and the titles derived can no longer be questioned.
Petition granted ordering respondent court to dismiss the case with prejudice.

SYLLABUS

1. ACTIONS; STARE DECISIS; SETTLED ISSUE NO LONGER SUBJECT

TO RELITIGATION. — Under the principle of stare decisis et non quieta movere
(follow past precedents and do not disturb what has been settled), an action to declare
null and void an original certificate of title cannot be maintained where the issues raised
therein, namely the supposed irregularities in the land registration proceeding, which
led to the issuance of the decree upon which said title was issued, are the same issues
in earlier cases upholding the validity of the title. "It is against public policy that matters
already decided on the merits be relitigated again and again, consuming the court's time
and energies at the expense of other litigants: Interest rei publicae ut finis sit litium."

DECISION

AQUINO, J : p

This is another litigation regarding the validity of the much controverted

Original Certificate of Title No. 735 covering the Santa Mesa and Diliman Estates of
the Tuason mayorazgo or Entail with areas of 877 (879) and 1,625 hectares,
respectively (Barretto vs. Tuason, 50 Phil. 888; Benin case, infra).
 On October 1, 1965, Manuela Aquial and Maria Aquial filed a complaint in
forma pauperis in the Court of First Instance of Rizal, Pasig Branch X, wherein they
prayed that they be declared the owners of a parcel of land located at Balara, Marikina,
Rizal (now Quezon City) and bounded on the north by Sapang Mapalad, on the south
by the land of Eladio Tiburcio, on the east by Sapang Kolotkolotan, and on the west by
Sapang Kuliat. The land, which has an area of three hundred eighty-three quiñones, was
allegedly acquired by their father by means of a Spanish title issued to him on May 10,
1877 (Civil Case No. 8943).
They alleged that sometime in 1960, or after J. M. Tuason & Co., Inc. had
illegally entered upon that land, they discovered that it had been fraudulently or
erroneously included in OCT No. 735 of the Registry of Deeds of Rizal and that it was
registered in the names of defendants Mariano, Teresa, Juan, Demetrio and Augusto,
all surnamed Tuason, pursuant to a decree issued on July 6, 1914 in Case No. 7681 of
the Court of Land Registration.
They further alleged that transfer certificates of title, derived from OCT No. 735,
were issued to defendants J. M. Tuason & Co., Inc., University of the Philippines and
National Waterworks and Sewerage Authority (Nawasa) which leased a portion of its
land to defendant Capitol Golf Club.
Plaintiffs Aquial prayed that OCT No. 735 and the titles derived therefrom be
declared void due to certain irregularities in the land registration proceeding. They
asked for damages.
Defendant J. M. Tuason & Co., Inc. filed a motion to dismiss on the grounds of
lack of jurisdiction, improper venue, prescription, laches and prior judgment. The
plaintiffs opposed that motion. The lower court denied it. The grounds of the motion to
dismiss were pleaded as affirmative defenses in the answer of defendants Tuason and
J. M. Tuason & Co., Inc. They insisted that a preliminary hearing be held on those
defenses. LLphil

On January 25, 1967, the spouses Jose M. Cordova and Saturnina C. Cordova,
who had bought eleven hectares of the disputed land from the plaintiffs, were allowed
to intervene in the case.
On September 5, 1970, the lower court issued an order requiring the parties the
Register of Deeds of Rizal to produce in court on October 16, 1970 OCT No. 735 and
certain transfer certificates of title derived from that first or basic title. Later, the court
required the production in court of the plan of the land covered by OCT No. 735
allegedly for the purpose of determining whether the lands claimed by the plaintiffs and
the intervenors are included therein.
On February 11, 1971, the Tuason and J. M. Tuason & Co., Inc. filed the instant
civil actions of certiorari and prohibition praying, inter alia, that the trial court be
ordered to dismiss the complaint and enjoined from proceeding in the said case. After
the petitioners had filed the proper bond, a writ of preliminary injunction was issued.
Respondents Aquial and Cordova answered the petition. The parties, except the
Aquials, filed memoranda in lieu of oral argument.
The issue is whether OCT No. 735 and the titles derived therefrom can be
questioned at this late hour by respondents Aquial and Cordova. The supposed
irregularities in the land registration proceeding, which led to the issuance of the decree
upon which OCT. No. 735 was based, are the same issues raised in Civil Cases Nos.
3621, 3622 and 3623 of the lower court. The 1965 decision of Judge Eulogio Mencias
in those cases, invalidating OCT No. 735, is annexed to the complaint of the Aquials.
It is cited by them to support their action and it might have encouraged them to ventilate
their action in court.
 On appeal to this Court, that decision was reversed and the validity of OCT No.
735 and the titles derived therefrom was once more upheld. (Benin vs. Tuason, L-
26127, Alcantara vs. Tuason, L-26128 and Pili vs. Tuason, L-26129, all decided on
June 28, 1974, 57 SCRA 531).
The ruling in the Benin, Alcantara and Pili cases was applied in Mara, Inc. vs.
Estrella, L-40511, July 25, 1975, 65 SCRA 471. That ruling is simply a reiteration or
confirmation of the holding in the following cases directly or incidentally sustaining
OCT No. 735: Bank of the P. I. vs. Acuña, 59 Phil. 183; Tiburcio vs. PHHC, 106 Phil.
477; Galvez and Tiburcio vs. Tuason y de la Paz, 119 Phil. 612; Alcantara vs. Tuason,
92 Phil. 796; Santiago vs. J. M. Tuason & Co., Inc., 110 Phil. 16; J. M. Tuason & Co.,
Inc. vs. Bolaños, 95 Phil. 106; J. M. Tuason & Co., Inc. vs. Santiago, 99 Phil. 615; J.
M. Tuason & Co., Inc. vs. De Guzman, 99 Phil. 281; J. M. Tuason & Co., Inc. vs.
Aguirre, 117 Phil. 110; J. M. Tuason & Co., Inc. vs. Macalindong, 116 Phil. 1227; J.
M. Tuason & Co., Inc. vs. Magdangal, 114 Phil. 42; Varsity Hills, Inc. vs. Navarro, L-
30889, February 29, 1972, 43 SCRA 503, and People's Homesite and Housing
Corporation vs. Mencias, L-24114, August 16, 1967, 20 SCRA 1031.
Considering the governing principle of stare decisis et non quieta movere
(follow past precedents and do not disturb what has been settled) it becomes evident
that respondents Aquial and Cordova cannot maintain their action in Civil Case No.
8943 without eroding the long settled holding of the courts that OCT No. 735 is valid
and no longer open to attack. prLL

"It is against public policy that matters already decided on the merits be
relitigated again and again, consuming the courts' time and energies et the expense of
other litigants: Interest rei publicae ut finis sit litium." (Varsity Hills, Inc. vs. Navarro,
supra).
Finding the petition for certiorari and prohibition to be meritorious, the trial court
is directed to dismiss Civil Case No. 8943 with prejudice and without costs. No costs.
SO ORDERED
Barredo (Actg. Chairman) Antonio, Concepcion Jr., and Santos, JJ., concur.
Fernando, J., took no part.
(J. M. Tuason & Co., Inc. v. Mariano, G.R. No. L-33140, [October 23, 1978], 175 PHIL
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125-129)