ARIS (PHIL.) INC.

, petitioner, x x x           x x x          x x x
vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER FELIPE Section 17. Transitory provision. — Appeals filed on or after March 21, 1989, but
GARDUQUE III, LEODEGARIO DE GUZMAN, LILIA PEREZ, ROBERTO prior to the effectivity of these Interim Rules must conform to the requirements as
BESTAMONTE, AIDA OPENA, REYNALDO TORIADO, APOLINARIO GAGAHINA, herein set forth or as may be directed by the Commission.
RUFINO DE CASTRO, FLORDELIZA RAYOS DEL SOL, STEVE SANCHO, ESTER
CAIRO, MARIETA MAGALAD, and MARY B. NADALA, respondents.
The antecedent facts and proceedings which gave rise to this petition are not disputed:
DAVIDE, JR., J.:
On 11 April 1988, private respondents, who were employees of petitioner, aggrieved by
management's failure to attend to their complaints concerning their working surroundings
Petitioner assails the constitutionality of the amendment introduced by Section 12 of which had become detrimental and hazardous, requested for a grievance conference. As
Republic Act No. 6715 to Article 223 of the Labor Code of the Philippines (PD No. 442, as none was arranged, and believing that their appeal would be fruitless, they grouped
amended) allowing execution pending appeal of the reinstatement aspect of a decision of a together after the end of their work that day with other employees and marched directly to
labor arbiter reinstating a dismissed or separated employee and of Section 2 of the NLRC the management's office to protest its long silence and inaction on their complaints.
Interim Rules on Appeals under R.A. No. 6715 implementing the same. It also questions
the validity of the Transitory Provision (Section 17) of the said Interim Rules.
On 12 April 1988, the management issued a memorandum to each of the private
respondents, who were identified by the petitioner's supervisors as the most active
The challenged portion of Section 12 of Republic Act No. 6715, which took effect on 21 participants in the rally requiring them to explain why they should not be terminated from
March 1989, reads as follows: the service for their conduct. Despite their explanation, private respondents were
dismissed for violation of company rules and regulations, more specifically of the
SEC 12. Article 223 of the same code is amended to read as follows: provisions on security and public order and on inciting or participating in illegal strikes or
concerted actions.
ART. 223. Appeal.
Private respondents lost no time in filing a complaint for illegal dismissal against petitioner
x x x           x x x          x x x and Mr. Gavino Bayan with the regional office of the NLRC at the National Capital Region,
Manila, which was docketed therein as NLRC-NCR-00-0401630-88.

In any event, the decision of the Labor Arbiter reinstating a dismissed or

separated employee, in so far as the reinstatement aspect is concerned, shall After due trial, Labor Arbiter Felipe Garduque III handed down on 22 June 1989 a decision'
immediately be executory, even pending appeal. The employee shall either be the dispositive portion of which reads:
admitted back to work under the same terms and conditions prevailing prior to his
dismissal or separation or, at the option of the employer, merely reinstated in the ACCORDINGLY, respondent Aris (Phils.), Inc. is hereby ordered to reinstate
payroll. The posting of a bond by the employer shall not stay the execution for within ten (10) days from receipt hereof, herein complainants Leodegario de
reinstatement provided therein. Guzman, Rufino de Castro, Lilia M. Perez, Marieta Magalad, Flordeliza Rayos
del Sol, Reynaldo Toriado, Roberto Besmonte, Apolinario Gagahina, Aidam (sic)
This is a new paragraph ingrafted into the Article. Opena, Steve C. Sancho Ester Cairo, and Mary B. Nadala to their former
respective positions or any substantial equivalent positions if already filled up,
without loss of seniority right and privileges but with limited backwages of six (6)
Sections 2 and 17 of the "NLRC Interim Rules On Appeals Under R.A. No. 6715, months except complainant Leodegario de Guzman.
Amending the Labor Code", which the National Labor Relations Commission (NLRC)
promulgated on 8 August 1989, provide as follows:
All other claims and prayers are hereby denied for lack of merit.

Section 2. Order of Reinstatement and Effect of Bond. — In so far as the

reinstatement aspect is concerned, the decision of the Labor Arbiter reinstating a SO ORDERED.
dismissed or separated employee shall immediately be executory even pending
appeal. The employee shall either be admitted back to work under the same On 19 July 1989, complainants (herein private respondents) filed a Motion For Issuance of
terms and conditions prevailing prior to his dismissal or separation, or, at the a Writ of Execution2 pursuant to the above-quoted Section 12 of R.A. No. 6715.
option of the employer, merely be reinstated in the payroll.
On 21 July 1989, petitioner filed its Appeal.3
The posting of a bond by the employer shall not stay the execution for
reinstatement. On 26 July 1989, the complainants, except Flor Rayos del Sol, filed a Partial Appeal.4
On 10 August 1989, complainant Flor Rayos del Sol filed a Partial Appeal.5 Respondent NLRC, through the Office of the Solicitor General, filed its Comment on 20
November 1989.13 Meeting squarely the issues raised by petitioner, it submits that the
On 29 August 1989, petitioner filed an Opposition 6 to the motion for execution alleging that provision concerning the mandatory and automatic reinstatement of an employee whose
Section 12 of R.A. No. 6715 on execution pending appeal cannot be applied retroactively dismissal is found unjustified by the labor arbiter is a valid exercise of the police power of
to cases pending at the time of its effectivity because it does not expressly provide that it the state and the contested provision "is then a police legislation."
shall be given retroactive effect7 and to give retroactive effect to Section 12 thereof to
pending cases would not only result in the imposition of an additional obligation on As regards the retroactive application thereof, it maintains that being merely procedural in
petitioner but would also dilute its right to appeal since it would be burdened with the nature, it can apply to cases pending at the time of its effectivity on the theory that no one
consequences of reinstatement without the benefit of a final judgment. In their Reply 8 filed can claim a vested right in a rule of procedure. Moreover, such a law is compatible with the
on 1 September 1989, complainants argued that R.A. No. 6715 is not sought to be given constitutional provision on protection to labor.
retroactive effect in this case since the decision to be executed pursuant to it was rendered
after the effectivity of the Act. The said law took effect on 21 March 1989, while the On 11 December 1989, private respondents filed a Manifestation14 informing the Court that
decision was rendered on 22 June 1989. they are adopting the Comment filed by the Solicitor General and stressing that petitioner
failed to comply with the requisites for a valid petition for certiorari under Rule 65 of the
Petitioner submitted a Rejoinder to the Reply on 5 September 1989.9 Rules of Court.

On 5 October 1989, the Labor Arbiter issued an Order granting the motion for execution On 20 December 1989, petitioner filed a Rejoinder15 to the Comment of the Solicitor
and the issuance of a partial writ of execution10 as far as reinstatement of herein General.
complainants is concerned in consonance with the provision of Section 2 of the rules
particularly the last sentence thereof. In the resolution of 11 January 1990,16 We considered the Comments as respondents'
Answers, gave due course to the petition, and directed that the case be calendared for
In this Order, the Labor Arbiter also made reference to Section 17 of the NLRC Interim deliberation.
Rules in this wise:
In urging Us to declare as unconstitutional that portion of Section 223 of the Labor Code
Since Section 17 of the said rules made mention of appeals filed on or after introduced by Section 12 of R.A. No. 6715, as well as the implementing provision covered
March 21, 1989, but prior to the effectivity of these interim rules which must by Section 2 of the NLRC Interim Rules, allowing immediate execution, even pending
conform with the requirements as therein set forth (Section 9) or as may be appeal, of the reinstatement aspect of a decision of a labor arbiter reinstating a dismissed
directed by the Commission, it obviously treats of decisions of Labor Arbiters or separated employee, petitioner submits that said portion violates the due process clause
before March 21,1989. With more reason these interim rules be made to apply to of the Constitution in that it is oppressive and unreasonable. It argues that a reinstatement
the instant case since the decision hereof (sic) was rendered thereafter.11 pending appeal negates the right of the employer to self-protection for it has been ruled
that an employer cannot be compelled to continue in employment an employee guilty of
Unable to accept the above Order, petitioner filed the instant petition on 26 October acts inimical to the interest of the employer; the right of an employer to dismiss is
198912 raising the issues adverted to in the introductory portion of this decision under the consistent with the legal truism that the law, in protecting the rights of the laborer,
following assignment of errors: authorizes neither the oppression nor the destruction of the employer. For, social justice
should be implemented not through mistaken sympathy for or misplaced antipathy against
any group, but even-handedly and fairly.17
A. THE LABOR ARBITER A QUO AND THE NLRC, IN ORDERING THE
REINSTATEMENT OF THE PRIVATE RESPONDENTS PENDING APPEAL
AND IN PROVIDING FOR SECTION 2 OF THE INTERIM RULES, To clinch its case, petitioner tries to demonstrate the oppressiveness of reinstatement
RESPECTIVELY, ACTED WITHOUT AND IN EXCESS OF JURISDICTION pending appeal by portraying the following consequences: (a) the employer would be
SINCE THE BASIS FOR SAID ORDER AND INTERIM RULE, i.e., SECTION 12 compelled to hire additional employees or adjust the duties of other employees simply to
OF R.A. 6715 IS VIOLATIVE OF THE CONSTITUTIONAL GUARANTY OF DUE have someone watch over the reinstated employee to prevent the commission of further
PROCESS IT BEING OPPRESSIVE AND UNREASONABLE. acts prejudicial to the employer, (b) reinstatement of an undeserving, if not undesirable,
employee may demoralize the rank and file, and (c) it may encourage and embolden not
only the reinstated employees but also other employees to commit similar, if not graver
B. GRANTING ARGUENDO THAT THE PROVISION IN(SIC) REINSTATEMENT infractions.
PENDING APPEAL IS VALID, NONETHELESS, THE LABOR ARBITER A QUO
AND THE NLRC STILL ACTED IN EXCESS AND WITHOUT JURISDICTION IN
RETROACTIVELY APPLYING SAID PROVISION TO PENDING LABOR These rationalizations and portrayals are misplaced and are purely conjectural which,
CASES. unfortunately, proceed from a misunderstanding of the nature and scope of the relief of
execution pending appeal.

In Our resolution of 7 March 1989, We required the respondents to comment on the

petition.
Execution pending appeal is interlinked with the right to appeal. One cannot be divorced reason to withhold it in cases of decisions reinstating dismissed or separated employees.
from the other. The latter may be availed of by the losing party or a party who is not In such cases, the poor employees had been deprived of their only source of livelihood,
satisfied with a judgment, while the former may be applied for by the prevailing party during their only means of support for their family their very lifeblood. To Us, this special
the pendency of the appeal. The right to appeal, however, is not a constitutional, natural or circumstance is far better than any other which a judge, in his sound discretion, may
inherent right. It is a statutory privilege of statutory origin18 and, therefore, available only if determine. In short, with respect to decisions reinstating employees, the law itself has
granted or provided by statute. The law may then validly provide limitations or determined a sufficiently overwhelming reason for its execution pending appeal.
qualifications thereto or relief to the prevailing party in the event an appeal is interposed by
the losing party. Execution pending appeal is one such relief long recognized in this The validity of the questioned law is not only supported and sustained by the foregoing
jurisdiction. The Revised Rules of Court allows execution pending appeal and the grant considerations. As contended by the Solicitor General, it is a valid exercise of the police
thereof is left to the discretion of the court upon good reasons to be stated in a special power of the State. Certainly, if the right of an employer to freely discharge his employees
order.19 is subject to regulation by the State, basically in the exercise of its permanent police power
on the theory that the preservation of the lives of the citizens is a basic duty of the State,
Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the Labor Code that is more vital than the preservation of corporate profits. 23 Then, by and pursuant to the
already allowed execution of decisions of the NLRC pending their appeal to the Secretary same power, the State may authorize an immediate implementation, pending appeal, of a
of Labor and Employment. decision reinstating a dismissed or separated employee since that saving act is designed
to stop, although temporarily since the appeal may be decided in favor of the appellant, a
In authorizing execution pending appeal of the reinstatement aspect of a decision of the continuing threat or danger to the survival or even the life of the dismissed or separated
Labor Arbiter reinstating a dismissed or separated employee, the law itself has laid down a employee and its family.
compassionate policy which, once more, vivifies and enhances the provisions of the 1987
Constitution on labor and the working-man. The charge then that the challenged law as well as the implementing rule are
unconstitutional is absolutely baseless.1âwphi1 Laws are presumed constitutional.24 To
These provisions are the quintessence of the aspirations of the workingman for recognition justify nullification of a law, there must be a clear and unequivocal breach of the
of his role in the social and economic life of the nation, for the protection of his rights, and Constitution, not a doubtful and argumentative implication; a law shall not be declared
the promotion of his welfare. Thus, in the Article on Social Justice and Human Rights of the invalid unless the conflict with the constitution is clear beyond reasonable
Constitution,20 which principally directs Congress to give highest priority to the enactment doubt.25 In Parades, et al. vs. Executive Secretary26 We stated:
of measures that protect and enhance the right of all people to human dignity, reduce
social, economic, and political inequalities, and remove cultural inequities by equitably 2. For one thing, it is in accordance with the settled doctrine that between two
diffusing wealth and political power for the common good, the State is mandated to afford possible constructions, one avoiding a finding of unconstitutionality and the other
full protection to labor, local and overseas, organized and unorganized, and promote full yielding such a result, the former is to be preferred. That which will save, not that
employment and equality of employment opportunities for all; to guarantee the rights of all which will destroy, commends itself for acceptance. After all, the basic
workers to self-organization, collective bargaining and negotiations, and peaceful presumption all these years is one of validity. The onerous task of proving
concerted activities, including the right to strike in accordance with law, security of tenure, otherwise is on the party seeking to nullify a statute. It must be proved by clear
human conditions of work, and a living wage, to participate in policy and decision-making and convincing evidence that there is an infringement of a constitutional
processes affecting their rights and benefits as may be provided by law; and to promote provision, save in those cases where the challenged act is void on its face.
the principle of shared responsibility between workers and employers and the preferential Absent such a showing, there can be no finding of unconstitutionality. A doubt,
use of voluntary modes in settling disputes. Incidentally, a study of the Constitutions of even if well-founded, does not suffice. Justice Malcolm's aphorism is apropos: To
various nations readily reveals that it is only our Constitution which devotes a separate doubt is to sustain.27
article on Social Justice and Human Rights. Thus, by no less than its fundamental law, the
Philippines has laid down the strong foundations of a truly just and humane society. This The reason for this:
Article addresses itself to specified areas of concern labor, agrarian and natural resources
reform, urban land reform and housing, health, working women, and people's
organizations and reaches out to the underprivileged sector of society, for which reason ... can be traced to the doctrine of separation of powers which enjoins on each
the President of the Constitutional Commission of 1986, former Associate Justice of this department a proper respect for the acts of the other departments. ... The theory
Court Cecilia Muñoz-Palma, aptly describes this Article as the "heart of the new Charter."21 is that, as the joint act of the legislative and executive authorities, a law is
supposed to have been carefully studied and determined to be constitution
before it was finally enacted. Hence, as long as there is some other basis that
These duties and responsibilities of the State are imposed not so much to express can be used by the courts for its decision, the constitutionality of the challenged
sympathy for the workingman as to forcefully and meaningfully underscore labor as a law will not be touched upon and the case will be decided on other available
primary social and economic force, which the Constitution also expressly affirms With grounds.28
equal intensity.22 Labor is an indispensable partner for the nation's progress and stability.

The issue concerning Section 17 of the NLRC Interim Rules does not deserve a measure
If in ordinary civil actions execution of judgment pending appeal is authorized for reasons of attention. The reference to it in the Order of the Labor Arbiter of 5 October 1989 was
the determination of which is merely left to the discretion of the judge, We find no plausible unnecessary since the procedure of the appeal proper is not involved in this case.
Moreover, the questioned interim rules of the NLRC, promulgated on 8 August 1989, can Manila, Branch 40, the following orders which were assailed by the Mayor of the City of
validly be given retroactive effect. They are procedural or remedial in character, Manila, Hon. Alfredo S. Lim, in said G.R. No. 115044:chanroblesvirtuallawlibrary
promulgated pursuant to the authority vested upon it under Article 218(a) of the Labor
Code of the Philippines, as amended. Settled is the rule that procedural laws may be given a. order dated 28 March 1994 directing Manila mayor Alfredo S. Lim to issue the
retroactive effect.29 There are no vested rights in rules of procedure. 30 A remedial statute permit/license to operate the jai-alai in favor of Associated Development Corporation
may be made applicable to cases pending at the time of its enactment.31 (ADC).cralaw

WHEREFORE, the petition is hereby DISMISSED for lack of merit. Costs against b. order dated 11 April 1994 directing mayor Lim to explain why he should not be cited for
petitioner. contempt for non-compliance with the order dated 28 March 1994.cralaw

SO ORDERED. c. order dated 20 April 1994 reiterating the previous order directing Mayor Lim to
immediately issue the permit/license to Associated Development Corporation (ADC).cralaw

The order dated 28 march 1994 was in turn issued upon motion by ADC for execution of a
final judgment rendered on 9 September 1988 which ordered the Manila Mayor to
immediately issue to ADC the permit/license to operate the jai-alai in Manila, under Manila
Ordinance No. 7065.cralaw

On 13 September 1994, petitioner Guingona (as executive secretary) issued a directive to

then chairman of the Games and Amusements Board (GAB) Francisco R. Sumulong, Jr. to
hold in abeyance the grant of authority, or if any had been issued, to withdraw such grant
of authority, to Associated Development Corporation to operate the jai-alai in the City of
Manila, until the following legal questions are properly resolved:chanroblesvirtuallawlibrary

"1. Whether P.D. 771 which revoked all existing Jai-Alai franchisers issued by local
governments as of 20 August 1975 is unconstitutional.cralaw

HON. ALFREDO S. LIM, in his capacity as Mayor of Manila, and the City of Manila, 2. Assuming that the City of Manila had the power on 7 September 1971 to issue a Jai-Alai
Petitioners, v. HON. FELIPE G. PACQUING, as Judge, branch 40, Regional Trial franchise to Associated Development Corporation, whether the franchise granted is valied
Court of Manila and ASSOCIATED CORPORATION, Respondents. considering that the franchise has no duration, and appears to be granted in
perpetuity.cralaw
[G.R. No. 117263 January 27, 1995.
3. Whether the City of Manila had the power to issue a Jai-Alai franchise to Associated
Development Corporation on 7 September 1971 in view of executive Order No. 392 dated
TEOFISTO GUINGONA, JR. and DOMINADOR R. CEPEDA, Petitioners, v. HON. 1 January 1951 which transferred from local governments to the Games and Amusements
VETINO REYES and ASSOCIATED DEVELOPMENT CORPORATION, Respondents. Board the power to regulate Jai-Alai." 1

DECISION On 15 September 1994, respondent Associated Development Corporation (ADC) filed a

petition for prohibition, mandamus, injunction and damages with prayer for temporary
PADILLA, J.: restraining order and/or writ of preliminary injunction in the Regional Trial Court of Manila
against petitioner Guingona and then GAB chairman Sumulong, docketed as Civil Case
No. 94-71656, seeking to prevent GAB from withdrawing the provisional authority that had
These two (2) cases which are inter-related actually involve simple issues. if these issues earlier been granted to ADC. On the same day, the RTC of Manila, Branch 4, through
have apparently become complicated, it is not by reason of their nature because of the presiding Judge Vetino Reyes, issued a temporary restraining order enjoining the GAB
events and dramatis personae involved.cralaw from withdrawing ADC's provisional authority. This temporary restraining order was
converted into a writ of preliminary injunction upon ADC's posting of a bond in the amount
The petition in G.R. No. 115044 was dismissed by the First Division of this Court on 01 of P2,000,000.00. 2
September 1994 based on a finding that there was "no abuse of discretion, much less lack
of or excess of jurisdiction, on the part of respondent judge [Pacquing]", in issuing the Subsequently, also in G.R. No. 115044, the Republic of the Philippines, through the
questioned orders. Judge Pacquing had earlier issued in Civil Case No. 88-45660, RTC of Games and Amusements Board, filed a "Motion for Intervention; for Leave to File a Motion
for reconsideration in Intervention; and to Refer the case to the Court En Banc" and later a On the propriety of intervention by the Republic, however, it will be recalled that this Court
"Motion for Leave to File Supplemental Motion for Reconsideration-in-Intervention and to in Director of Lands v. Court of Appeals (93 SCRA 238) allowed intervention even beyond
Admit Attached Supplemental Motion for Reconsideration-in-Intervention".cralaw the period prescribed in Section 2 Rule 12 of the Rules of Court. The Court ruled in said
case that a denial of the motions for intervention would "lead the Court to commit an act of
In an En Banc Resolution dated 20 September 1994, this Court referred G.R. No. 115044 injustice to the movants, to their successor-in-interest and to all purchasers for value and in
to the Court En Banc and required the respondents therein to comment on the good faith and thereby open the door to fraud, falsehood and misrepresentation, should
aforementioned motions.cralaw intervenors' claim be proven to be true."

Meanwhile, Judge Reyes on 19 October 1994 issued another order, this time, granting In the present case, the resulting injustice and injury, should the national government's
ADC a writ of preliminary mandatory injunction against Guingona and GAB to compel them allegations be proven correct, are manifest, since the latter has squarely questioned the
to issue in favor of ADC the authority to operate jai-alai.cralaw very existence of a valid franchise to maintain and operate the jai-alai (which is a gambling
operation) in favor of ADC. As will be more extensively discussed later, the national
government contends that Manila Ordinance No. 7065 which purported to grant to ADC a
Guingona, as executive secretary, and Dominador Cepeda, Jr. as the new GAB chairman, franchise to conduct jai-alai operations is void and ultra vires since Republic Act No. 954,
then filed the petition in G.R. No. 117263 assailing the abovementioned orders of approved on 20 June 1953, or very much earlier than said Ordinance No. 7065, the latter
respondent Judge Vetino Reyes.cralaw approved 7 September 1971, in Section 4 thereof, requires a legislative franchise, not a
municipal franchise, for the operation of jai-alai. Additionally, the national government
On 25 October 1994, in G.R. No. 117263, this Court granted petitioner's motion for leave argues that even assuming, arguendo, that the abovementioned ordinance is valid, ADC's
to file supplemental petition and to admit attached supplemental petition with urgent prayer franchise was nonetheless effectively revoked by Presidential Decree No. 771, issued on
for restraining order. The Court further required respondents to file their comment on the 20 August 1975, Sec. 3 of which expressly revoked all existing franchises and permits to
petition and supplemental petition with urgent prayer for restraining order. The Court operate all forms of gambling facilities (including the jai-alai) issued by local
likewise set the case and all incidents thereof for hearing on 10 November 1994.cralaw governments.cralaw

At the hearing on 10 November 1994, the issues to be resolved were formulated by the On the other hand, ADC's position is that Ordinance No. 7065 was validly enacted by the
Court as follows:chanroblesvirtuallawlibrary City of Manila pursuant to its delegated powers under it charter, Republic Act No. 409.
ADC also squarely assails the constitutionality of PD No. 771 as violative of the equal
protection and non-impairment clauses of the Constitution. In this connection, counsel for
1. whether or not intervention by the Republic of the Philippines at this stage of the ADC contends that this Court should really rule on the validity of PD No. 771 to be able to
proceedings is proper; determine whether ADC continues to possess a valid franchise.cralaw

2. assuming such intervention is proper, whether or not the Associated Development It will undoubtedly be a grave injustice to both parties in this case if this Court were to shirk
Corporation has a valid and subsisting franchise to maintain and operate the jai-alai; from ruling on the issue of constitutionality of PD No. 771. Such issue has, in our view,
become the very lis mota in resolving the present controversy, in view of ADC's insistence
3. whether or not there was grave abuse of discretion committed by respondent Judge that it was granted a valid and legal franchise by Ordinance No. 7065 to operate the jai-
Reyes in issuing the aforementioned temporary restraining order (later writ of preliminary alai.cralaw
injunction); and
The time-honored doctrine is that all laws (PD No. 771 included) are presumed valid and
4. whether or not there was grave abuse of discretion committed by respondent Judge constitutional until or unless otherwise ruled by this Court. Not only this; Article XVIII
Reyes in issuing the aforementioned writ of preliminary mandatory injunction.cralaw Section 3 of the Constitution states:chanroblesvirtuallawlibrary

On the issue of the propriety of the intervention by the Republic of the Philippines, a
question was raised during the hearing on 10 November 1994 as to whether intervention in
G.R. No. 115044 was the proper remedy for the national government to take in questioning "Sec. 3. All existing laws, decrees, executive orders, proclamations, letters of instructions
the existence of a valid ADC franchise to operate the jai-alai or whether a separate action and other executive issuances not inconsistent with this Constitution shall remain operative
for quo warranto under Section 2, Rule 66 of the Rules of Court was the proper until amended, repealed or revoked."
remedy.cralaw
There is nothing on record to show or even suggest that PD No. 771 has been repealed,
We need not belabor this issue since counsel for respondent ADC agreed to the altered or amended by any subsequent law or presidential issuance (when the executive
suggestion that this Court once and for all settle all substantive issues raised by the parties still exercised legislative powers).cralaw
in these cases. Moreover, this Court can consider the petition filed in G.R. No. 117263 as
one for quo warranto which is within the original jurisdiction of the Court under section 5(1),
Article VIII of the Constitution. 3
Neither can it be tenably stated that the issue of the continued existence of ADC's event, or maintain or use a totalizator or other device, method or system to bet or gamble
franchise by reason of the unconstitutionality of PD No. 771 was settled in G.R. No. on any basque pelota game or event outside the place, enclosure, or fronton where the
115044, for the decision of the Court's First Division in said case, aside from not being basque pelota game is held." (Emphasis supplied).cralaw
final, cannot have the effect of nullifying PD No. 771 as unconstitutional, since only the
Court En Banc has that power under Article VIII, Section 4(2) of the Constitution. 4 4. On 07 September 1971, however, the Municipal Board of Manila nonetheless passed
Ordinance No. 7065 entitled "An Ordinance Authorizing the Mayor To Allow And Permit
And on the question of whether or not the government is estopped from contesting ADC's The Associated Development Corporation To Establish, Maintain And Operate A Jai-Alai In
possession of a valid franchise, the well-settled rule is that the State cannot be put in The City Of Manila, Under Certain Terms And Conditions And For Other Purposes."
estoppel by the mistakes or errors, if any, of its officials or agents (Republic v. Intermediate
Appellate Court, 209 SCRA 90) 5. On 20 August 1975, Presidential Decree No. 771 was issued by then President Marcos.
The decree, entitled "Revoking All Powers and Authority of Local Government(s) To Grant
Consequently, in the light of the foregoing expostulation, we conclude that the republic (in Franchise, License or Permit And Regulate Wagers Or Betting By The Public On Horse
contra distinction to the City of Manila) may be allowed to intervene in G.R. No. 115044. And Dog Races, Jai-Alai Or Basque Pelota, And Other Forms Of Gambling", in Section 3
The Republic is intervening in G.R. No. 115044 in the exercise, not of its business or thereof, expressly revoked all existing franchises and permits issued by local
proprietary functions, but in the exercise of its governmental functions to protect public governments.cralaw
morals and promote the general welfare.cralaw
6. On 16 October 1975, Presidential Decree No. 810, entitled "An Act granting The
II. Anent the question of whether ADC has a valid franchise to operate the Jai-Alai de Philippine Jai-Alai And Amusement Corporation A Franchise To Operate, Construct And
Manila, a statement of the pertinent laws is in order.cralaw Maintain A Fronton For Basque Pelota And Similar Games of Skill In THE Greater Manila
Area," was promulgated.cralaw
1. The Charter of the City of Manila was enacted by Congress on 18 June 1949. Section
18 thereof provides:chanroblesvirtuallawlibrary 7. On 08 May 1987, then President Aquino, by virtue of Article XVIII, Section 6, of the
Constitution, which allowed the incumbent legislative powers until the first Congress was
"Section 18. Legislative Powers. - The Municipal Board shall have the following legislative convened, issued Executive Order No. 169 expressly repealing PD 810 and revoking and
powers:chanroblesvirtuallawlibrary cancelling the franchise granted to the Philippine Jai-Alai and Amusement
Corporation.cralaw

xxx xxx xxx

Petitioners in G.R. No. 117263 argue that Republic Act No. 954 effectively removed the
power of the Municipal Board of Manila to grant franchises for gambling operations. It is
(jj) To tax, license, permit and regulate wagers or betting by the public on boxing, sipa, argued that the term "legislative franchise" in Rep. Act No. 954 is used to refer to
bowling, billiards, pools, horse and dog races, cockpits, jai-alai, roller or ice-skating on any franchises issued by Congress.cralaw
sporting or athletic contests, as well as grant exclusive rights to establishments for this
purpose, notwithstanding any existing law to the contrary."
On the other hand, ADC contends that Republic Act N. 409 (Manila Chapter) gives
legislative powers to the Municipal Board to grant franchises, and since Republic Act No.
2. On 1 January 1951, Executive Order No. 392 was issued transferring the authority to 954 does not specifically qualify the word "legislative" as referring exclusively to Congress,
regulate jai-alais from local government to the Games and Amusements Board then Rep. Act No. 954 did not remove the power of the Municipal Board under Section
(GAB).cralaw 18(jj) of Republic Act No. 409 and consequently it was within the power of the City of
Manila to allow ADC to operate the jai-alai in the City of Manila.cralaw
3. On 20 June 1953, Congress enacted Republic Act No. 954, entitled "An Act to Prohibit
With Horse Races and Basque Pelota Games (Jai-Alai), And To Prescribe Penalties For On this point, the government counter-argues that the term "legislative powers" is used in
Its Violation". The provisions of Republic Act No. 954 relating to jai-alai are as Rep. Act No. 409 merely to distinguish the powers under Section 18 of the law from the
follows:chanroblesvirtuallawlibrary other powers of the Municipal Board, but that the term "legislative franchise" in Rep. Act
No. 954 refers to a franchise granted solely by Congress.cralaw
"Sec. 4. No person, or group of persons other than the operator or maintainer of a fronton
with legislative franchise to conduct basque pelota games (Jai-alai), shall offer, to take or Further, the government argues that Executive Order No. 392 dated 01 January 1951
arrange bets on any basque pelota game or event, or maintain or use a totalizator or other transferred even the power to regulate Jai-Alai from the local governments to the Games
device, method or system to bet or gamble on any basque pelota game or event." and Amusements Board (GAB), a national government agency.cralaw
(underscoring supplied).cralaw

"Sec. 5. No person, operator or maintainer of a fronton with legislative franchise to conduct

basque pelota games shall offer, take, or arrange bets on any basque pelota game or
It is worthy of note that neither of the authorities relied upon by ADC to support its alleged From the ruling in Vera, it would be logical to conclude that, if ADC's arguments were to
possession of a valid franchise, namely the Charter of the City of Manila (Rep. Act No. prevail, this Court would likewise declare Section 18(jj) of the Revised Charter of Manila
409) and Manila Ordinance No. 7065 uses the word "franchise". Rep. Act No. 409 unconstitutional for the power it would delegate to the Municipal Board of Manila would
empowers the Municipal Board of Manila to "tax, license, permit and regulate wagers or give the latter the absolute and unlimited discretion to render the penal code provisions on
betting" and to "grant exclusive rights to establishments", while Ordinance No. 7065 gambling inapplicable or inoperative to persons or entities issued permits to operate
authorized the Manila City Mayor to "allow and permit" ADC to operate jai-alai facilities in gambling establishments in the City of Manila.cralaw
the City of Manila.cralaw
We need not go to this extent, however, since the rule is that laws must be presumed valid,
It is clear from the foregoing that Congress did not delegate to the City of Manila the power constitutional and in harmony with other laws. Thus, the relevant provisions of Rep. Acts
"to franchise" wagers or betting, including the jai-alai, but retained for itself such power "to Nos. 409 and 954 and Ordinance No. 7065 should be taken together and it should then be
franchise". What Congress delegated to the City of Manila in Rep. Act No. 409, with clear that the legislative powers of the Municipal Board should be understood to be
respect to wagers or betting, was the power to "license, permit, or regulate" which regulatory in nature and that Republic Act No. 954 should be understood to refer to
therefore means that a license or permit issued by the City of Manila to operate a wager or congressional franchises, as a necessity for the operation of jai-alai.cralaw
betting activity, such as the jai-alai where bets are accepted, would not amount to
something meaningful UNLESS the holder of the permit or license was also FRANCHISED We need not, however, again belabor this issue further since the task at hand which will
by the national government to so operate. Moreover, even this power to license, permit, or ultimately, and with finality, decide the issues in this case is to determine whether PD No.
regulate wagers or betting on jai-alai was removed from local governments, including the 771 validly revoked ADC's franchise to operate the jai-alai, assuming (without conceding)
City of Manila, and transferred to the GAB on 1 January 1951 by Executive Order No. 392. that it indeed possessed such franchise under Ordinance No. 7065.cralaw
The net result is that the authority to grant franchises for the operation of jai-alai frontons is
in Congress, while the regulatory function is vested in the GAB.cralaw
ADC argues that PD No. 771 is unconstitutional for being violative of the equal protection
and non-impairment provisions of the Constitution. On the other hand, the government
In relation, therefore, to the facts of this case, since ADC has no franchise from Congress contends that PD No. 771 is a valid exercise of the inherent police power of the
to operate the jai-alai, it may not so operate even if its has a license or permit from the City State.cralaw
Mayor to operate the jai-alai in the City of Manila.cralaw

The police power has been described as the least limitable of the inherent powers of the
It cannot be overlooked, in this connection, that the Revised Penal Code punishes State. It is based on the ancient doctrine - salus populi est suprema lex (the welfare of the
gambling and betting under Articles 195 to 199 thereof. Gambling is thus generally people is the supreme law.) In the early case of Rubi v. Provincial Board of Mindoro (39
prohibited by law, unless another law is enacted by Congress expressly exempting or Phil. 660), this Court through Mr. Justice George A. Malcolm stated
excluding certain forms of gambling from the reach of criminal law. Among these form the thus:chanroblesvirtuallawlibrary
reach of criminal law. Among these forms of gambling allowed by special law are the horse
races authorized by Republic Acts Nos. 309 and 983 and gambling casinos authorized
under Presidential Decree No. 1869.cralaw "The police power of the State . . . is a power co-extensive with self-protection, and is not
inaptly termed the "law of overruling necessity." It may be said to be that inherent and
plenary power in the State which enables it to prohibit all things hurtful to the comfort,
While jai-alai as a sport is not illegal per se, the accepting of bets or wagers on the results safety and welfare of society. Carried onward by the current of legislation, the judiciary
of jai-alai games is undoubtedly gambling and, therefore, a criminal offense punishable rarely attempts to dam the onrushing power of legislative discretion, provided the purposes
under Articles 195-199 of the Revised Penal Code, unless it is shown that a later or special of the law do not go beyond the great principles that mean security for the public welfare or
law had been passed allowing it. ADC has not shown any such special law.cralaw do not arbitrarily interfere with the right of the individual."

In the matter of PD No. 771, the purpose of the law is clearly stated in the "whereas
clause" as follows:chanroblesvirtuallawlibrary
Republic Act No. 409 (the Revised Charter of the City of Manila) which was enacted by
Congress on 18 June 1949 gave the Municipal Board certain delegated legislative powers "WHEREAS, it has been reported that in spite of the current drive of our law enforcement
under Section 18. A perusal of the powers enumerated under Section 18 shows that these agencies against vices and illegal gambling, these social ills are still prevalent in many
powers are basically regulatory in nature. 5 The regulatory nature of these powers finds areas of the country;
support not only in the plain words of the enumerations under Section 28 but also in this
Court's ruling in People v. Vera (65 Phil. 56).cralaw

In Vera, this Court declared that a law which gives the Provincial Board the discretion to
determine whether or not a law of general application (such as, the Probation law-Act No. "WHEREAS, there is need to consolidate all the efforts of the government to eradicate and
4221) would or would not be operative within the province, is unconstitutional for being an minimize vices and other forms of social ills in pursuance of the social and economic
undue delegation of legislative power.cralaw development program under the new society;
 national government subsequent to the enactment of PD No. 771; thus, the allegations
abovementioned (of preference to a select group) are based on conjectures, speculations
"WHEREAS, in order to effectively control and regulate wagers or betting by the public on and imagined biases which do not warrant the consideration of this Court.cralaw
horse and dog races, jai-alai and other forms of gambling there is a necessity to transfer
the issuance of permit and/or franchise from local government to the National On the other hand, it is noteworthy that while then president Aquino issued Executive
Government." Order No. 169 revoking PD No. 810 (which granted a franchise to a Marcos-crony to
operate the jai-alai), she did not scrap or repeal PD No. 771 which had revoked all
franchises to operate jai-alais issued by local governments, thereby re-affirming the
government policy that franchises to operate jai-alais are for the national government (not
local governments) to consider and approve.cralaw
It cannot be argued that the control and regulation of gambling do not promote public
morals and welfare. Gambling is essentially antagonistic and self-reliance. It breeds
indolence and erodes the value of good, honest and hard work. It is, as very aptly stated On the alleged violation of the non-impairment and equal protection clauses of the
by PD No. 771, a vice and a social ill which government must minimize (if not eradicate) in Constitution, it should be remembered that a franchise is not in the strict sense a simple
pursuit of social and economic development.cralaw contract but rather it is more importantly, a mere privilege specially in matters which are
within the government's power to regulate and even prohibit through the exercise of the
police power. Thus, a gambling franchise is always subject to the exercise of police power
In Magtajas v. Pryce Properties Corporation (20 July 1994, G.R. No. 111097), this Court for the public welfare.cralaw
stated thru Mr. Justice Isagani A. Cruz:chanroblesvirtuallawlibrary
In RCPI v. NTC (150 SCRA 450), we held that:chanroblesvirtuallawlibrary
"In the exercise of its own discretion, the legislative power may prohibit gambling
altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and "A franchise started out as a 'royal privilege or (a) branch of the King's prerogative,
monte but permits lotteries, cockfighting and horse-racing. In making such choices, subsisting in the hands of a subject.' This definition was given by Finch, adopted by
Congress has consulted its own wisdom, which this Court has no authority to review, much Blackstone, and accepted by every authority since . . . Today, a franchise being merely a
less reverse. Well has it been said that courts do not sit to resolve the merits of conflicting privilege emanating from the sovereign power of the state and owing its existence to a
theories. That is the prerogative of the political departments. It is settled that questions grant, is subject to regulation by the state itself by virtue of its police power through its
regarding wisdom, morality and practicability of statutes are not addressed to the judiciary administrative agencies."
but may be resolved only by the executive and legislative departments, to which the
function belongs in our scheme of government." (Emphasis supplied) There is a stronger reason for holding ADC's permit to be a mere privilege because jai-alai,
when played for bets, is pure and simple gambling. To analogize a gambling franchise for
Talks regarding the supposed vanishing line between right and privilege in American the operation of a public utility, such as public transportation company, is to trivialize the
constitutional law has no relevance in the context of these cases since the reference there great historic origin of this branch of royal privilege.cralaw
is to economic regulations. On the other hand, jai-alai is not a mere economic activity
which the law seeks to regulate. It is essentially gambling and whether it should be As earlier noted, ADC has not alleged ever applying for a franchise under the provisions of
permitted and, if so, under what conditions are questions primarily for the lawmaking PD No. 771. And yet, the purpose of PD No. 771 is quite clear from its provisions, i.e., to
authority to determine, talking into account national and local interests. Here, it is the police give to the national government the exclusive power to grant gambling franchises. Thus, all
power of the State that is paramount.cralaw franchises then existing were revoked but were made subject to reissuance by the national
government upon compliance by the applicant with government-set qualifications and
requirements.cralaw

ADC questions the motive for the issuance of PD Nos. 771. Clearly, however, this Court There was no violation by PD No. 771 of the equal protection clause since the decree
cannot look into allegations that PD No. 771 was enacted to benefit a select group which revoked all franchises issued by local governments without qualification or exception. ADC
was later given authority to operate the jai-alai under PD No. 810. The examination of cannot allege violation of the equal protection clause simply because it was the only one
legislative motivation is generally prohibited. (Palmer v. Thompson, 403 U.S. 217, 29 L. affected by the decree, for as correctly pointed out by the government, ADC was not
Ed. 2d 438 [1971] per Black, J.) There is, the first place, absolute lack of evidence to singled out when all jai-alai franchises were revoked. Besides, it is too late in the day for
support ADC's allegation of improper motivation in the issuance of PD No. 771. In the ADC to seek redress for alleged violation of its constitutional rights for it could have raised
second place, as already averred, this Court cannot go behind the expressed and these issues as early as 1975, almost twenty 920) years ago.cralaw
proclaimed purposes of PD No. 771, which are reasonable and even laudable.cralaw
Finally, we do not agree that Section 3 of PD No. 771 and the requirement of a legislative
It should also be remembered that PD No. 771 provides that the national government can franchise in Republic Act No. 954 are "riders" to the two 92) laws and are violative of the
subsequently grant franchises "upon proper application and verification of the qualifications rule that laws should embrace one subject which shall be expressed in the title, as argued
of the applicant." ADC has not alleged that it filed an application for a franchise with the by ADC. In Cordero v. Cabatuando (6 SCRA 418), this Court ruled that the requirement
under the constitution that all laws should embrace only one subject which shall be of bouncing checks, is being challenged in this petition for certiorari, for being
expressed in the title is sufficiently met if the title is comprehensive enough reasonably to violative of the due process clause, the right to bail and the provision against
include the general object which the statute seeks to effect, without expressing each and cruel, degrading or inhuman punishment enshrined under the
every end and means necessary or convenient for the accomplishing of the Constitution.chanrob1es virtua1 1aw 1ibrary
objective.cralaw
The antecedents of this case, as gathered from the parties’ pleadings and
III documentary proofs, follow.

On the issue of whether or not there was grave abuse of discretion committed by In December 1991, petitioner spouses issued to private respondent two
respondent Judge Reyes in issuing the temporary restraining order (later converted to a postdated checks, namely, Metrobank check no. 464728 dated January 15,
writ of preliminary injunction) and the writ of preliminary mandatory injunction, we hold and 1992 in the amount of P365,750 and Metrobank check no. 464743 dated
rule there was.cralaw January 22, 1992 in the amount of P429,000. Check no. 464728 was
dishonored upon presentment for having been drawn against insufficient funds
while check no. 464743 was not presented for payment upon request of
Section 3, Rule 58 of the rules of Court provides for the grounds for the issuance of a
petitioners who promised to replace the dishonored check.
preliminary injunction. While ADC could allege these grounds, respondent judge should
have taken judicial notice of Republic Act No. 954 and PD 771, under Section 1 rule 129 of
the Rules of court. These laws negate the existence of any legal right on the part of ADC to When petitioners reneged on their promise to cover the amount of check no.
the reliefs it sought so as to justify the issuance of a writ of preliminary injunction. since PD 464728, the private respondent filed a complaint-affidavit before the Office of
No. 771 and Republic Act No. 954 are presumed valid and constitutional until ruled the City Prosecutor of Quezon City charging petitioner spouses with the crime
otherwise by the Supreme Court after due hearing, ADC was not entitled to the writs of estafa under Article 315, par. 2 (d) of the Revised Penal Code, as amended
issued and consequently there was grave abuse of discretion in issuing them.cralaw by PD 818.

WHEREFORE, for the foregoing reasons, judgment is hereby On February 16, 2001, the City Prosecutor issued a resolution finding probable
rendered:chanroblesvirtuallawlibrary cause against petitioners and recommending the filing of an information for
estafa with no bail recommended. On the same day, an information for the
crime of estafa was filed with Branch 217 of the Regional Trial Court of Quezon
1. allowing the Republic of the Philippines to intervene in G.R. No. 115044.cralaw City against petitioners. The case was docketed as Criminal Case No. Q-01-
101574. Thereafter, the trial court issued a warrant for the arrest of herein
2. declaring Presidential Decree No. 771 valid and constitutional.cralaw petitioners, thus:chanrob1es virtual 1aw library

3. declaring that respondent Associated Development corporation (ADC) does not possess It appearing on the face of the information and from supporting affidavit of the
the required congressional franchise to operate and conduct the jai-alai under Republic Act complaining witness and its annexes that probable cause exists, that the crime
No. 954 and Presidential Decree No. 771.cralaw charged was committed and accused is probably guilty thereof, let a warrant
for the arrest of the accused be issued.
4. setting aside the writs of preliminary injunction and preliminary mandatory injunction
issued by respondent Judge Vetino Reyes in civil Case No. 94-71656.cralaw No Bail Recommended.

SO ORDERED. 1
SO ORDERED.cralaw
On July 18, 2001, petitioners filed an "Urgent Motion to Quash Information and
JOVENCIO LIM and TERESITA LIM, Petitioners, v. THE PEOPLE OF THE Warrant of Arrest" which was denied by the trial court. Likewise, petitioners’
PHILIPPINES, THE REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH motion for bail filed on July 24, 2001 was denied by the trial court on the same
217, THE CITY PROSECUTOR OF QUEZON CITY, AND WILSON day. Petitioner Jovencio Lim was arrested by virtue of the warrant of arrest
CHAM, Respondents. issued by the trial court and was detained at the Quezon City Jail. However,
petitioner Teresita Lim remained at large.
DECISION
CORONA, J.: On August 22, 2001, petitioners filed the instant petition for certiorari imputing
grave abuse of discretion on the part of the lower court and the Office of the
City Prosecutor of Quezon City, arguing that PD 818 violates the constitutional
The constitutionality of PD 818, a decree which amended Article 315 of the provisions on due process, bail and imposition of cruel, degrading or inhuman
Revised Penal Code by increasing the penalties for estafa committed by means punishment.
In a resolution dated February 26, 2002, this Court granted the petition of 200 pesos but does not exceed 6,000 pesos; and
Jovencio Lim to post bail pursuant to Department of Justice Circular No. 74
dated November 6, 2001 which amended the 2000 Bail Bond Guide involving 4th. By prision mayor in its minimum period, if such amount does not exceed
estafa under Article 315, par. 2 (d), and qualified theft. Said Circular 200 pesos.
specifically provides as follows:chanrob1es virtual 1aw library
Petitioners contend that, inasmuch as the amount of the subject check is
x          x          x P365,750, they can be penalized with reclusion perpetua or 30 years of
imprisonment. This penalty, according to petitioners, is too severe and
disproportionate to the crime they committed and infringes on the express
3) Where the amount of fraud is P32,000.00 or over in which the imposable mandate of Article III, Section 19 of the Constitution which prohibits the
penalty is reclusion temporal to reclusion perpetua, bail shall be based on infliction of cruel, degrading and inhuman punishment.
reclusion temporal maximum, pursuant to Par. 2 (a) of the 2000 Bail Bond
Guide, multiplied by P2,000.00, plus an additional of P2,000.00 for every Settled is the rule that a punishment authorized by statute is not cruel,
P10,000.00 in excess of P22,000.00; Provided, however, that the total amount degrading or disproportionate to the nature of the offense unless it is flagrantly
of bail shall not exceed P60,000.00. and plainly oppressive and wholly disproportionate to the nature of the offense
as to shock the moral sense of the community. It takes more than merely
In view of the aforementioned resolution, the matter concerning bail shall no being harsh, excessive, out of proportion or severe for a penalty to be
longer be discussed. Thus, this decision will focus on whether or not PD 818 obnoxious to the Constitution. 2 Based on this principle, the Court has
violates Sections 1 and 19 of Article III of the Constitution, which respectively consistently overruled contentions of the defense that the penalty of fine or
provide:chanrob1es virtual 1aw library imprisonment authorized by the statute involved is cruel and degrading.

Section 1. No person shall be deprived of life, liberty or property without due In People v. Tongko, 3 this Court held that the prohibition against cruel and
process of law, nor shall any person be denied the equal protection of the laws. unusual punishment is generally aimed at the form or character of the
punishment rather than its severity in respect of its duration or amount, and
x          x          x applies to punishments which never existed in America or which public
sentiment regards as cruel or obsolete. This refers, for instance, to those
inflicted at the whipping post or in the pillory, to burning at the stake, breaking
Section 19 (1) Excessive fines shall not be imposed, nor cruel, degrading or on the wheel, disemboweling and the like. The fact that the penalty is severe
inhuman punishment inflicted. . . . provides insufficient basis to declare a law unconstitutional and does not, by
that circumstance alone, make it cruel and inhuman.
We shall deal first with the issue of whether PD 818 was enacted in
contravention of Section 19 of Article III of the Constitution. In this regard, the Petitioners also argue that while PD 818 increased the imposable penalties for
impugned provision of PD 818 reads as follows:chanrob1es virtual 1aw library estafa committed under Article 315, par. 2 (d) of the Revised Penal Code, it did
not increase the amounts corresponding to the said new penalties. Thus, the
SECTION 1. Any person who shall defraud another by means of false pretenses original amounts provided for in the Revised Penal Code have remained the
or fraudulent acts as defined in paragraph 2(d) of Article 315 of the Revised same notwithstanding that they have become negligible and insignificant
Penal Code, as amended by Republic Act No. 4885, shall punished compared to the present value of the peso.
by:chanrob1es virtual 1aw library
This argument is without merit. The primary purpose of PD 818 is emphatically
1st. The penalty of reclusion temporal if the amount of the fraud is over 12,000 and categorically stated in the following:chanrob1es virtual 1aw library
pesos but does not exceed 22,000 pesos, and if such amount exceeds the later
sum, the penalty provided in this paragraph shall be imposed in its maximum WHEREAS, reports received of late indicate an upsurge of estafa (swindling)
period, adding one year for each additional 10,000 pesos but the total penalty cases committed by means of bouncing checks;
which may be imposed shall in no case exceed thirty years. In such cases, and
in connection with the accessory penalties which may be imposed under the WHEREAS, if not checked at once, these criminal acts would erode the people’s
Revised Penal Code, the penalty shall be termed reclusion perpetua; confidence in the use of negotiable instruments as a medium of commercial
transaction and consequently result in the retardation of trade and commerce
2nd. The penalty of prision mayor in its maximum period, if the amount of the and the undermining of the banking system of the country;
fraud is over 6,000 pesos but does not exceed 12,000 pesos.
WHEREAS, it is vitally necessary to arrest and curb the rise in this kind of
3rd. The penalty of prision mayor in its medium period, if such amount is over estafa cases by increasing the existing penalties provided therefor.
Clearly, the increase in the penalty, far from being cruel and degrading, was In our predisposition to discover the "original intent" of a statute, courts
motivated by a laudable purpose, namely, to effectuate the repression of an become the unfeeling pillars of the status quo. Ligle do we realize that statutes
evil that undermines the country’s commercial and economic growth, and to or even constitutions are bundles of compromises thrown our way by their
serve as a necessary precaution to deter people from issuing bouncing checks.
framers. Unless we exercise vigilance, the statute may already be out of tune
The fact that PD 818 did not increase the amounts corresponding to the new
penalties only proves that the amount is immaterial and inconsequential. What and irrelevant to our day.
the law sought to avert was the proliferation of estafa cases committed by
means of bouncing checks. Taking into account the salutary purpose for which The petition is for declaratory relief. It prays for the following reliefs:
said law was decreed, we conclude that PD 818 does not violate Section 19 of
Article III of the Constitution. a.) Immediately upon the filing of this petition, an Order be issued restraining
the respondents from applying and enforcing Section 113 of Central Bank
Moreover, when a law is questioned before the Court, the presumption is in Circular No. 960;
favor of its constitutionality. To justify its nullification, there must be a clear
and unmistakable breach of the Constitution, not a doubtful and argumentative b.) After hearing, judgment be rendered:
one. 4 The burden of proving the invalidity of a law rests on those who
challenge it. In this case, petitioners failed to present clear and convincing 1.) Declaring the respective rights and duties of petitioners and respondents;
proof to defeat the presumption of constitutionality of PD 818.
2.) Adjudging Section 113 of Central Bank Circular No. 960 as contrary to the
With respect to the issue of whether PD 818 infringes on Section 1 of Article III
of the Constitution, petitioners claim that PD 818 is violative of the due process provisions of the Constitution, hence void; because its provision that "Foreign
clause of the Constitution as it was not published in the Official Gazette. This currency deposits shall be exempt from attachment, garnishment, or any other
claim is incorrect and must be rejected. Publication, being an indispensable order or process of any court, legislative body, government agency or any
part of due process, is imperative to the validity of laws, presidential decrees administrative body whatsoever
and executive orders. 5 PD 818 was published in the Official Gazette on
December 1, 1975. 6 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
With the foregoing considerations in mind, this Court upholds the
in petitioners' favor in violation of substantive due process guaranteed by the
constitutionality of PD 818.chanrob1es virtua1 1aw 1ibrary
Constitution;
WHEREFORE, the petition is hereby DISMISSED.
ii.) has given foreign currency depositors an undue favor or a class privilege in
SO ORDERED. 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.

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr., father The antecedent facts:
and Natural Guardian, and Spouses FEDERICO N. SALVACION, JR., and
EVELINA E. SALVACION, petitioners, 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
vs. 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
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION three times each day on February 5, 6, and 7, 1989. On February 7, 1989,
and GREG BARTELLI y NORTHCOTT, respondents. after policemen and people living nearby, rescued Karen, Greg Bartelli was
arrested and detained at the Makati Municipal Jail. The policemen recovered
TORRES, JR., J.:
from Bartelli the following items: 1.) Dollar Check No. 368, Control No.
021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104- writ of preliminary attachment as granted to the plaintiff under Rule 57 of the
108758-8 (Peso Acct.); 3.) Dollar Account — China Banking Corp., Revised Rules of Court. The Central Bank responded as follows:
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 May 26, 1989
the complainant.
Ms. Erlinda S. Carolino
On February 16, 1989, Makati Investigating Fiscal Edwin G. Condaya filed
against Greg Bartelli, Criminal Case No. 801 for Serious Illegal Detention and 12 Pres. Osmena Avenue
Criminal Cases Nos. 802, 803, 804, and 805 for four (4) counts of Rape. On
South Admiral Village
the same day, petitioners filed with the Regional Trial Court of Makati Civil
Case No. 89-3214 for damages with preliminary attachment against Greg
Paranaque, Metro Manila
Bartelli. On February 24, 1989, the day there was a scheduled hearing for
Bartelli's petition for bail the latter escaped from jail. Dear Ms. Carolino:

On February 28, 1989, the court granted the fiscal's Urgent Ex-Parte Motion for This is in reply to your letter dated April 25, 1989 regarding your inquiry on
the Issuance of Warrant of Arrest and Hold Departure Order. Pending the Section 113, CB Circular No. 960 (1983).
arrest of the accused Greg Bartelli y Northcott, the criminal cases were
archived in an Order dated February 28, 1989. The cited provision is absolute in application. It does not admit of any
exception, nor has the same been repealed nor amended.
Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated
February 22, 1989 granting the application of herein petitioners, for the The purpose of the law is to encourage dollar accounts within the country's
issuance of the writ of preliminary attachment. After petitioners gave Bond No. banking system which would help in the development of the economy. There is
JCL (4) 1981 by FGU Insurance Corporation in the amount of P100,000.00, a no intention to render futile the basic rights of a person as was suggested in
Writ of Preliminary Attachment was issued by the trial court on February 28, your subject letter. The law may be harsh as some perceive it, but it is still the
1989. law. Compliance is, therefore, enjoined.

On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Very truly yours,
Garnishment on China Banking Corporation. In a letter dated March 13, 1989
to the Deputy Sheriff of Makati, China Banking Corporation invoked Republic (SGD) AGAPITO S. FAJARDO
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 Director1
Banking Corporation saying that the garnishment did not violate the secrecy of
Meanwhile, on April 10, 1989, the trial court granted petitioners' motion for
bank deposits since the disclosure is merely incidental to a garnishment
leave to serve summons by publication in the Civil Case No. 89-3214 entitled
properly and legally made by virtue of a court order which has placed the
"Karen Salvacion, et al. vs. Greg Bartelli y Northcott." Summons with the
subject deposits in custodia legis. In answer to this letter of the Deputy Sheriff
complaint was a published in the Manila Times once a week for three
of Makati, China Banking Corporation, in a letter dated March 20, 1989,
consecutive weeks. Greg Bartelli failed to file his answer to the complaint and
invoked Section 113 of Central Bank Circular No. 960 to the effect that the
was declared in default on August 7, 1989. After hearing the case ex-parte, the
dollar deposits or defendant Greg Bartelli are exempt from attachment,
court rendered judgment in favor of petitioners on March 29, 1990, the
garnishment, or any other order or process of any court, legislative body,
dispositive portion of which reads:
government agency or any administrative body, whatsoever.
WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against
This prompted the counsel for petitioners to make an inquiry with the Central
defendant, ordering the latter:
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
1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as moral
since said section has rendered nugatory the substantive right of the plaintiff to
damages;
have the claim sought to be enforced by the civil action secured by way of the
2. To pay her parents, plaintiffs spouses Federico N. Salvacion, Jr., and Evelina The American asked her name and introduced himself as Greg Bartelli. He sat
E. Salvacion the amount of P150,000.00 each or a total of P300,000.00 for beside her when he talked to her. He said he was a Math teacher and told her
both of them; 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
3. To pay plaintiffs exemplary damages of P100,000.00; and Kalayaan Avenue. (TSN, Aug. 15, 1989, pp. 4-5)

4. To pay attorney's fees in an amount equivalent to 25% of the total amount The American asked Karen what was her favorite subject and she told him it's
of damages herein awarded; 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
5. To pay litigation expenses of P10,000.00; plus his niece. (Id., pp. 5-6)

6. Costs of the suit. They walked from Plaza Fair along Pasong Tamo, turning right to reach the
defendant's house along Kalayaan Avenue. (Id., p. 6)
SO ORDERED.
When they reached the apartment house, Karen noticed that defendant's
The heinous acts of respondent Greg Bartelli which gave rise to the award were
alleged niece was not outside the house but defendant told her maybe his
related in graphic detail by the trial court in its decision as follows:
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
The defendant in this case was originally detained in the municipal jail of
upstairs. (Id., p. 7)
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
Upon entering the bedroom defendant suddenly locked the door. Karen
of the Regional Trial Court of Makati, Branch 136, where he was charged with
became nervous because his niece was not there. Defendant got a piece of
four counts of Rape and Serious Illegal Detention (Crim. Cases Nos. 802 to
cotton cord and tied Karen's hands with it, and then he undressed her. Karen
805). Accordingly, upon motion of plaintiffs, through counsel, summons was
cried for help but defendant strangled her. He took a packing tape and he
served upon defendant by publication in the Manila Times, a newspaper of
covered her mouth with it and he circled it around her head. (Id., p. 7)
general circulation as attested by the Advertising Manager of the Metro Media
Times, Inc., the publisher of the said newspaper. Defendant, however, failed to Then, defendant suddenly pushed Karen towards the bed which was just near
file his answer to the complaint despite the lapse of the period of sixty (60) the door. He tied her feet and hands spread apart to the bed posts. He knelt in
days from the last publication; hence, upon motion of the plaintiffs, through front of her and inserted his finger in her sex organ. She felt severe pain. She
counsel, defendant was declared in default and plaintiffs were authorized to tried to shout but no sound could come out because there were tapes on her
present their evidence ex parte. mouth. When defendant withdrew his finger it was full of blood and Karen felt
more pain after the withdrawal of the finger. (Id., p. 8)
In support of the complaint, plaintiffs presented as witnesses the minor Karen
E. Salvacion, her father, Federico N. Salvacion, Jr., a certain Joseph Aguilar He then got a Johnson's Baby Oil and he applied it to his sex organ as well as
and a certain Liberato Madulio, who gave the following testimony: 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
Karen took her first year high school in St. Mary's Academy in Pasay City but
perspired a lot while feeling severe pain. She merely presumed that he was
has recently transferred to Arellano University for her second year.
able to insert 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)
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
After that, he stood up and went to the bathroom to wash. He also told Karen
about 3:30 p.m. while she was finishing her snack on a concrete bench in front
to take a shower and he untied her hands. Karen could only hear the sound of
of Plaza Fair, an American approached her. She was then alone because Edna
the water while the defendant, she presumed, was in the bathroom washing
Tangile had already left, and she was about to go home. (TSN, Aug. 15, 1989,
his sex organ. When she took a shower more blood came out from her. In the
pp. 2 to 5)
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 had no merely fed with biscuit and coke. On that day, February 7, 1989, she was
way of determining the exact time because defendant removed her watch. again raped three times. The first at about 6:30 to 7:00 a.m., the second at
Defendant did not care to give her food before she went to sleep. Karen woke about 8:30 — 9:00, and the third was after lunch at 12:00 noon. After he had
up at about 8:00 o'clock the following morning. (Id., pp. 9-10) 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
The following day, February 5, 1989, a Sunday, after a breakfast of biscuit and was shouting about. After she was raped the third time, he left the house.
coke at about 8:30 to 9:00 a.m. defendant raped Karen while she was still (TSN, Aug. 15, 1989, pp. 16-17) She again went to the bathroom and shouted
bleeding. For lunch, they also took biscuit and coke. She was raped for the for help. After shouting for about five minutes, she heard many voices. The
second time at about 12:00 to 2:00 p.m. In the evening, they had rice for voices were asking for her name and she gave her name as Karen Salvacion.
dinner which defendant had stored downstairs; it was he who cooked the rice After a while, she heard a voice of a woman saying they will just call the police.
that is why it looks like "lugaw". For the third time, Karen was raped again They were also telling her to change her clothes. She went from the bathroom
during the night. During those three times defendant succeeded in inserting his to the room but she did not change her clothes being afraid that should the
sex organ but she could not say whether the organ was inserted wholly. 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
Karen did not see any firearm or any bladed weapon. The defendant did not tie the latter washed her dress. (Id., p. 16)
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 Afterwards, defendant arrived and he opened the door. He asked her if she had
were closed. And even if she shouted for help, nobody would hear her. She asked for help because there were many policemen outside and she denied it.
was so afraid that if somebody would hear her and would be able to call the He told her to change her clothes, and she did change to the one she was
police, it was still possible that as she was still inside the house, defendant wearing on Saturday. He instructed her to tell the police that she left home and
might kill her. Besides, the defendant did not leave that Sunday, ruling out her willingly; then he went downstairs but he locked the door. She could hear
chance to call for help. At nighttime he slept with her again. (TSN, Aug. 15, people conversing but she could not understand what they were saying. (Id.,
1989, pp. 12-14) p. 19)

On February 6, 1989, Monday, Karen was raped three times, once in the When she heard the voices of many people who were conversing downstairs,
morning for thirty minutes after a breakfast of biscuits; again in the afternoon; she knocked repeatedly at the door as hard as she could. She heard somebody
and again in the evening. At first, Karen did not know that there was a window going upstairs and when the door was opened, she saw a policeman. The
because everything was covered by a carpet, until defendant opened the policeman asked her name and the reason why she was there. She told him
window for around fifteen minutes or less to let some air in, and she found that she was kidnapped. Downstairs, he saw about five policemen in uniform and
the window was covered by styrofoam and plywood. After that, he again closed the defendant was talking to them. "Nakikipag-areglo po sa mga pulis," Karen
the window with a hammer and he put the styrofoam, plywood, and carpet added. "The policeman told him to just explain at the precinct. (Id., p. 20)
back. (Id., pp. 14-15)
They went out of the house and she saw some of her neighbors in front of the
That Monday evening, Karen had a chance to call for help, although defendant house. They rode the car of a certain person she called Kuya Boy together with
left but kept the door closed. She went to the bathroom and saw a small defendant, the policeman, and two of her neighbors whom she called Kuya
window covered by styrofoam and she also spotted a small hole. She stepped Bong Lacson and one Ate Nita. They were brought to Sub-Station I and there
on the bowl and she cried for help through the hole. She cried: "Maawa no po she was investigated by a policeman. At about 2:00 a.m., her father arrived,
kayo so akin. Tulungan n'yo akong makalabas dito. Kinidnap ako!" Somebody followed by her mother together with some of their neighbors. Then they were
heard her. It was a woman, probably a neighbor, but she got angry and said brought to the second floor of the police headquarters. (Id., p. 21)
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, At the headquarters, she was asked several questions by the investigator. The
Aug. 15, 1989, pp. 15-16 written statement she gave to the police was marked as Exhibit A. Then they
proceeded to the National Bureau of Investigation together with the
She woke up at 6:00 o'clock the following morning, and she saw defendant in investigator and her parents. At the NBI, a doctor, a medico-legal officer,
bed, this time sleeping. She waited for him to wake up. When he woke up, he examined her private parts. It was already 3:00 in the early morning of the
again got some food but he always kept the door locked. As usual, she was
following day when they reached the NBI. (TSN, Aug. 15, 1989, p. 22) The should be adjudged as unconstitutional on the grounds that: 1.) it has taken
findings of the medico-legal officer has been marked as Exhibit B. away the right of petitioners to have the bank deposit of defendant Greg
Bartelli y Northcott garnished to satisfy the judgment rendered in petitioners'
She was studying at the St. Mary's Academy in Pasay City at the time of the favor in violation of substantive due process guaranteed by the Constitution;
incident but she subsequently transferred to Apolinario Mabini, Arellano 2.) it has given foreign currency depositors an undue favor or a class privilege
University, situated along Taft Avenue, because she was ashamed to be the in violation of the equal protection clause of the Constitution; 3.) it has
subject of conversation in the school. She first applied for transfer to Jose Abad provided a safe haven for criminals like the herein respondent Greg Bartelli y
Santos, Arellano University along Taft Avenue near the Light Rail Transit Northcott since criminals could escape civil liability for their wrongful acts by
Station but she was denied admission after she told the school the true reason merely converting their money to a foreign currency and depositing it in a
for her transfer. The reason for their denial was that they might be implicated foreign currency deposit account with an authorized bank; and 4.) The
in the case. (TSN, Aug. 15, 1989, p. 46) 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
xxx xxx xxx plaintiffs 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
After the incident, Karen has changed a lot. She does not play with her brother
57 of the Revised Rules of Court; b.) the plaintiffs substantive right to have the
and sister anymore, and she is always in a state of shock; she has been
judgment credit satisfied by way of the writ of execution out of the bank
absent-minded and is ashamed even to go out of the house. (TSN, Sept. 12,
deposit of the judgment debtor as granted to the judgment creditor by Rule 39
1989, p. 10) She appears to be restless or sad, (Id., p. 11) The father prays
of the Revised Rules of Court, which is beyond its power to do so.
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 On the other hand, respondent Central Bank, in its Comment alleges that the
if she could ever recover from this experience. (TSN, Sept. 24, 1989, pp. 10- Monetary Board in issuing Section 113 of CB Circular No. 960 did not exceed
11) 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
Pursuant to an Order granting leave to publish notice of decision, said notice
Monetary Board that grants exemption from attachment or garnishment to
was published in the Manila Bulletin once a week for three consecutive weeks.
foreign currency deposits, but the law (R.A. 6426 as amended) itself; that it
After the lapse of fifteen (15) days from the date of the last publication of the
does not violate the substantive due process guaranteed by the Constitution
notice of judgment and the decision of the trial court had become final,
because a.) it was based on a law; b.) the law seems to be reasonable; c.) it is
petitioners tried to execute on Bartelli's dollar deposit with China Banking
enforced according to regular methods of procedure; and d.) it applies to all
Corporation. Likewise, the bank invoked Section 113 of Central Bank Circular
members of a class.
No. 960.
Expanding, the Central Bank said; that one reason for exempting the foreign
Thus, petitioners decided to seek relief from this Court.
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
The issues raised and the arguments articulated by the parties boil down to
Currency Deposit System and the Offshore Banking System in the Philippines;
two:
that another reason is to encourage the inflow of foreign currency deposits into
May this Court entertain the instant petition despite the fact that original the banking institutions thereby placing such institutions more in a position to
jurisdiction in petitions for declaratory relief rests with the lower court? Should properly channel the same to loans and investments in the Philippines, thus
Section 113 of Central Bank Circular No. 960 and Section 8 of R.A. 6426, as directly contributing to the economic development of the country; that the
amended by P.D. 1246, otherwise known as the Foreign Currency Deposit Act subject section is being enforced according to the regular methods of
be made applicable to a foreign transient? 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
Petitioners aver as heretofore stated that Section 113 of Central Bank Circular Constitution.
No. 960 providing that "Foreign currency deposits shall be exempt from
attachment, garnishment, or any other order or process of any court, Respondent Central Bank further avers that the questioned provision is needed
legislative body, government agency or any administrative body whatsoever." 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 therefore makes futile the favorable judgment and award of damages that she
economic distress; that the State had to take some measures to encourage and her parents fully deserve. As stated by the trial court in its decision,
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 Indeed, after hearing the testimony of Karen, the Court believes that it was
or public interest. Respondent Central Bank also alleges that Rule 39 and Rule undoubtedly a shocking and traumatic experience she had undergone which
57 of the Revised Rules of Court provide that some properties are exempted could haunt her mind for a long, long time, the mere recall of which could
from execution/attachment especially provided by law and R.A. No. 6426 as make her feel so humiliated, as in fact she had been actually humiliated once
amended is such a law, in that it specifically provides, among others, that when she was refused admission at the Abad Santos High School, Arellano
foreign currency deposits shall be exempted from attachment, garnishment, or University, where she sought to transfer from another school, simply because
any other order or process of any court, legislative body, government agency the school authorities of the said High School learned about what happened to
or any administrative body whatsoever. her and allegedly feared that they might be implicated in the case.=

For its part, respondent China Banking Corporation, aside from giving reasons xxx xxx xxx
similar to that of respondent Central Bank, also stated that respondent China
Bank is not unmindful of the inhuman sufferings experienced by the minor The reason for imposing exemplary or corrective damages is due to the wanton
Karen E. Salvacion from the beastly hands of Greg Bartelli; that it is only too and bestial manner defendant had committed the acts of rape during a period
willing to release the dollar deposit of Bartelli which may perhaps partly of serious illegal detention of his hapless victim, the minor Karen Salvacion
mitigate the sufferings petitioner has undergone; but it is restrained from whose only fault was in her being so naive and credulous to believe easily that
doing so in view of R.A. No. 6426 and Section 113 of Central Bank Circular No. defendant, an American national, could not have such a bestial desire on her
960; and that despite the harsh effect of these laws on petitioners, CBC has no nor capable of committing such a heinous crime. Being only 12 years old when
other alternative but to follow the same. that unfortunate incident happened, she has never heard of an old Filipino
adage that in every forest there is a
This Court finds the petition to be partly meritorious.
snake, . . . .4
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 If Karen's sad fate had happened to anybody's own kin, it would be difficult for
petition for mandamus to require respondents to honor and comply with the him to fathom how the incentive for foreign currency deposit could be more
writ of execution in Civil Case No. 89-3214. important than 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
This Court has no original and exclusive jurisdiction over a petition for tender years of a country where he is a mere visitor. This further illustrates the
declaratory relief.2 However, exceptions to this rule have been recognized. flaw in the questioned provisions.
Thus, where the petition has far-reaching implications and raises questions
that should be resolved, it may be treated as one for mandamus.3 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
Here is a child, a 12-year old girl, who in her belief that all Americans are good were minimal and presumably, this was the reason why said statute was
and in her gesture of kindness by teaching his alleged niece the Filipino enacted. But the realities of the present times show that the country has
language as requested by the American, trustingly went with said stranger to recovered economically; and even if not, the questioned law still denies those
his apartment, and there she was raped by said American tourist Greg Bartelli. entitled to due process of law for being unreasonable and oppressive. The
Not once, but ten times. She was detained therein for four (4) days. This intention of the questioned law may be good when enacted. The law failed to
American tourist was able to escape from the jail and avoid punishment. On anticipate the iniquitous effects producing outright injustice and inequality such
the other hand, the child, having received a favorable judgment in the Civil as the case before us.
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 It has thus been said that —
suffered and may continue to suffer for a long, long time; and knowing that
But I also know,5 that laws and institutions must go hand in hand with the
this person who had wronged her has the money, could not, however get the
progress of the human mind. As that becomes more developed, more
award of damages because of this unreasonable law. This questioned law,
enlightened, as new discoveries are made, new truths are disclosed and The aforecited Section 113 was copied from Section 8 of Republic Act NO.
manners and opinions change with the change of circumstances, institutions 6426, as amended by P.D. 1246, thus:
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 Sec. 8. Secrecy of Foreign Currency Deposits. — All foreign currency deposits
remain ever under the regimen of their barbarous ancestors. authorized under this Act, as amended by Presidential Decree No. 1035, as
well as foreign currency deposits authorized under Presidential Decree No.
In his Comment, the Solicitor General correctly opined, thus: 1034, are hereby declared as and considered of an absolutely confidential
nature and, except upon the written permission of the depositor, in no instance
The present petition has far-reaching implications on the right of a national to shall such foreign currency deposits be examined, inquired or looked into by
obtain redress for a wrong committed by an alien who takes refuge under a any person, government official, bureau or office whether judicial or
law and regulation promulgated for a purpose which does not contemplate the administrative or legislative or any other entity whether public or private:
application thereof envisaged by the alien. More specifically, the petition raises Provided, however, that said foreign currency deposits shall be exempt from
the question whether the protection against attachment, garnishment or other attachment, garnishment, or any other order or process of any court,
court process accorded to foreign currency deposits by PD No. 1246 and CB legislative body, government agency or any administrative body whatsoever.
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 purpose of PD 1246 in according protection against attachment,
the deposit in the bank for long. garnishment and other court process to foreign currency deposits is stated in
its whereases, viz.:
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. WHEREAS, under Republic Act No. 6426, as amended by Presidential Decree
No. 1035, certain Philippine banking institutions and branches of foreign banks
xxx xxx xxx are authorized to accept deposits in foreign currency;

. . . Respondents China Banking Corporation and Central Bank of the WHEREAS, under the provisions of Presidential Decree No. 1034 authorizing
Philippines refused to honor the writ of execution issued in Civil Case No. 89- the establishment of an offshore banking system in the Philippines, offshore
3214 on the strength of the following provision of Central Bank Circular No. banking units are also authorized to receive foreign currency deposits in certain
960: cases;

Sec. 113. Exemption from attachment. — Foreign currency deposits shall be WHEREAS, in order to assure the development and speedy growth of the
exempt from attachment, garnishment, or any other order or process of any Foreign Currency Deposit System and the Offshore Banking System in the
court, legislative body, government agency or any administrative body Philippines, certain incentives were provided for under the two Systems such
whatsoever. as confidentiality of deposits subject to certain exceptions and tax exemptions
on the interest income of depositors who are nonresidents and are not engaged
Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act in trade or business in the Philippines;
No. 6426:

WHEREAS, making absolute the protective cloak of confidentiality over such

Sec. 7. Rules and Regulations. The Monetary Board of the Central Bank shall foreign currency deposits, exempting such deposits from tax, and guaranteeing
promulgate such rules and regulations as may be necessary to carry out the the vested rights of depositors would better encourage the inflow of foreign
provisions of this Act which shall take effect after the publication of such rules currency deposits into the banking institutions authorized to accept such
and regulations in the Official Gazette and in a newspaper of national deposits in the Philippines thereby placing such institutions more in a position
circulation for at least once a week for three consecutive weeks. In case the to properly channel the same to loans and investments in the Philippines, thus
Central Bank promulgates new rules and regulations decreasing the rights of directly contributing to the economic development of the country;
depositors, the rules and regulations at the time the deposit was made shall
govern.
Thus, one of the principal purposes of the protection accorded to foreign Obviously, the foreign currency deposit made by a transient or a tourist is not
currency deposits is "to assure the development and speedy growth of the the kind of deposit encouraged by PD Nos. 1034 and 1035 and given incentives
Foreign Currency Deposit system and the Offshore Banking in the Philippines" and protection by said laws because such depositor stays only for a few days in
(3rd Whereas). the country and, therefore, will maintain his deposit in the bank only for a
short time.
The Offshore Banking System was established by PD No. 1034. In turn, the
purposes of PD No. 1034 are as follows: Respondent Greg Bartelli, as stated, is just a tourist or a transient. He
deposited his dollars with respondent China Banking Corporation only for
WHEREAS, conditions conducive to the establishment of an offshore banking safekeeping during his temporary stay in the Philippines.
system, such as political stability, a growing economy and adequate
communication facilities, among others, exist 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
WHEREAS, it is in the interest of developing countries to have as wide access 113 of Central Bank Circular No. 960 and PD No. 1246 against attachment,
as possible to the sources of capital funds for economic development; garnishment or other court processes.6

WHEREAS, an offshore banking system based in the Philippines will be In fine, the application of the law depends on the extent of its justice.
advantageous and beneficial to the country by increasing our links with foreign Eventually, if we rule that the questioned Section 113 of Central Bank Circular
lenders, facilitating the flow of desired investments into the Philippines, No. 960 which exempts from attachment, garnishment, or any other order or
creating employment opportunities and expertise in international finance, and process of any court, legislative body, government agency or any
contributing to the national development effort. administrative body whatsoever, is applicable to a foreign transient, injustice
would result especially to a citizen aggrieved by a foreign guest like accused
WHEREAS, the geographical location, physical and human resources, and other Greg Bartelli. This would negate Article 10 of the New Civil Code which
positive factors provide the Philippines with the clear potential to develop as provides that "in case of doubt in the interpretation or application of laws, it is
another financial center in Asia; presumed that the lawmaking body intended right and justice to prevail.
"Ninguno non deue enriquecerse tortizeramente con dano de otro." Simply
On the other hand, the Foreign Currency Deposit system was created by PD.
stated, when the statute is silent or ambiguous, this is one of those
No. 1035. Its purposes are as follows:
fundamental solutions that would respond to the vehement urge of conscience.
(Padilla vs. Padilla, 74 Phil. 377).
WHEREAS, the establishment of an offshore banking system in the Philippines
has been authorized under a separate decree;
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
WHEREAS, a number of local commercial banks, as depository bank under the
so doing, acquitting the guilty at the expense of the innocent.
Foreign Currency Deposit Act (RA No. 6426), have the resources and
managerial competence to more actively engage in foreign exchange
Call it what it may — but is there no conflict of legal policy here? Dollar against
transactions and participate in the grant of foreign currency loans to resident
Peso? Upholding the final and executory judgment of the lower court against
corporations and firms;
the Central Bank Circular protecting the foreign depositor? Shielding or
protecting the dollar deposit of a transient alien depositor against injustice to a
WHEREAS, it is timely to expand the foreign currency lending authority of the
national and victim of a crime? This situation calls for fairness against legal
said depository banks under RA 6426 and apply to their transactions the same
tyranny.
taxes as would be applicable to transaction of the proposed offshore banking
units;
We definitely cannot have both ways and rest in the belief that we have served
the ends of justice.
It is evident from the above [Whereas clauses] that the Offshore Banking
System and the Foreign Currency Deposit System were designed to draw
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and
deposits from foreign lenders and investors (Vide second Whereas of PD No.
PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426 are hereby held
1034; third Whereas of PD No. 1035). It is these deposits that are induced by
to be INAPPLICABLE to this case because of its peculiar circumstances.
the two laws and given protection and incentives by them.
Respondents are hereby REQUIRED to COMPLY with the writ of execution CRUZ, J.:
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 The question is sometimes asked, in serious inquiry or in curious conjecture,
dollar deposit of respondent Greg Bartelli y Northcott in such amount as would whether we are a court of law or a court of justice. Do we apply the law even if
satisfy the judgment. it is unjust or do we administer justice even against the law? Thus queried, we
do not equivocate. The answer is that we do neither because we are a court
SO ORDERED. both of law and of justice. We apply the law with justice for that is our mission
and purpose in the scheme of our Republic. This case is an illustration.

Five brothers and sisters inherited in equal pro indiviso shares a parcel of land
registered in 'the name of their deceased parents under OCT No. 10977 of the
Registry of Deeds of Tarlac. 1

On March 15, 1963, one of them, Celestino Padua, transferred his undivided
share of the herein petitioners for the sum of P550.00 by way of absolute sale.
2 One year later, on April 22, 1964, Eustaquia Padua, his sister, sold her own
share to the same vendees, in an instrument denominated "Con Pacto de Retro
Sale," for the sum of P 440.00. 3

By virtue of such agreements, the petitioners occupied, after the said sales, an
area corresponding to two-fifths of the said lot, representing the portions sold
to them. The vendees subsequently enclosed the same with a fence. In 1975,
with their consent, their son Eduardo Alonzo and his wife built a semi-concrete
house on a part of the enclosed area.4

On February 25, 1976, Mariano Padua, one of the five coheirs, sought to
redeem the area sold to the spouses Alonzo, but his complaint was dismissed
when it appeared that he was an American citizen .5 On May 27, 1977,
however, Tecla Padua, another co-heir, filed her own complaint invoking the
same right of redemption claimed by her brother. 6

The trial court * also dismiss this complaint, now on the ground that the right
had lapsed, not having been exercised within thirty days from notice of the
sales in 1963 and 1964. Although there was no written notice, it was held that
actual knowledge of the sales by the co-heirs satisfied the requirement of the
law. 7
G.R. No. 72873 May 28, 1987
In truth, such actual notice as acquired by the co-heirs cannot be plausibly
CARLOS ALONZO and CASIMIRA ALONZO, petitioners,
denied. The other co-heirs, including Tecla Padua, lived on the same lot, which
vs.
consisted of only 604 square meters, including the portions sold to the
INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.
petitioners . 8 Eustaquia herself, who had sold her portion, was staying in the
Perpetuo L.B. Alonzo for petitioners.
same house with her sister Tecla, who later claimed redemption petition. 9
Moreover, the petitioners and the private respondents were close friends and
Luis R. Reyes for private respondent.
neighbors whose children went to school together. 10
It is highly improbable that the other co-heirs were unaware of the sales and As "it is thus apparent that the Philippine legislature in Article 1623 deliberately
that they thought, as they alleged, that the area occupied by the petitioners selected a particular method of giving notice, and that notice must be deemed
had merely been mortgaged by Celestino and Eustaquia. In the circumstances exclusive," the Court held that notice given by the vendees and not the vendor
just narrated, it was impossible for Tecla not to know that the area occupied by would not toll the running of the 30-day period.
the petitioners had been purchased by them from the other. co-heirs.
Especially significant was the erection thereon of the permanent semi-concrete The petition before us appears to be an illustration of the Holmes dictum that
structure by the petitioners' son, which was done without objection on her part "hard cases make bad laws" as the petitioners obviously cannot argue against
or of any of the other co-heirs. the fact that there was really no written notice given by the vendors to their
co-heirs. Strictly applied and interpreted, Article 1088 can lead to only one
The only real question in this case, therefore, is the correct interpretation and conclusion, to wit, that in view of such deficiency, the 30 day period for
application of the pertinent law as invoked, interestingly enough, by both the redemption had not begun to run, much less expired in 1977.
petitioners and the private respondents. This is Article 1088 of the Civil Code,
providing as follows: But as has also been aptly observed, we test a law by its results; and likewise,
we may add, by its purposes. It is a cardinal rule that, in seeking the meaning
Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before of the law, the first concern of the judge should be to discover in its provisions
the partition, any or all of the co-heirs may be subrogated to the rights of the the in tent of the lawmaker. Unquestionably, the law should never be
purchaser by reimbursing him for the price of the sale, provided they do so interpreted in such a way as to cause injustice as this is never within the
within the period of one month from the time they were notified in writing of legislative intent. An indispensable part of that intent, in fact, for we presume
the sale by the vendor. the good motives of the legislature, is to render justice.

In reversing the trial court, the respondent court ** declared that the notice Thus, we interpret and apply the law not independently of but in consonance
required by the said article was written notice and that actual notice would not with justice. Law and justice are inseparable, and we must keep them so. To
suffice as a substitute. Citing the same case of De Conejero v. Court of Appeals be sure, there are some laws that, while generally valid, may seem arbitrary
11 applied by the trial court, the respondent court held that that decision, when applied in a particular case because of its peculiar circumstances. In such
interpreting a like rule in Article 1623, stressed the need for written notice a situation, we are not bound, because only of our nature and functions, to
although no particular form was required. apply them just the same, in slavish obedience to their language. What we do
instead is find a balance between the word and the will, that justice may be
Thus, according to Justice J.B.L. Reyes, who was the ponente of the Court, done even as the law is obeyed.
furnishing the co-heirs with a copy of the deed of sale of the property subject
to redemption would satisfy the requirement for written notice. "So long, As judges, we are not automatons. We do not and must not unfeelingly apply
therefore, as the latter (i.e., the redemptioner) is informed in writing of the the law as it is worded, yielding like robots to the literal command without
sale and the particulars thereof," he declared, "the thirty days for redemption regard to its cause and consequence. "Courts are apt to err by sticking too
start running. " closely to the words of a law," so we are warned, by Justice Holmes again,
"where these words import a policy that goes beyond them." 13 While we
In the earlier decision of Butte v. UY, 12 " the Court, speaking through the admittedly may not legislate, we nevertheless have the power to interpret the
same learned jurist, emphasized that the written notice should be given by the law in such a way as to reflect the will of the legislature. While we may not
vendor and not the vendees, conformably to a similar requirement under read into the law a purpose that is not there, we nevertheless have the right to
Article 1623, reading as follows: read out of it the reason for its enactment. In doing so, we defer not to "the
letter that killeth" but to "the spirit that vivifieth," to give effect to the law
Art. 1623. The right of legal pre-emption or redemption shall not be exercised maker's will.
except within thirty days from the notice in writing by the prospective vendor,
or by the vendors, as the case may be. The deed of sale shall not be recorded The spirit, rather than the letter of a statute determines its construction,
in the Registry of Property, unless accompanied by an affidavit of the vendor hence, a statute must be read according to its spirit or intent. For what is
that he has given written notice thereof to all possible redemptioners. within the spirit is within the letter but although it is not within the letter
thereof, and that which is within the letter but not within the spirit is not within
The right of redemption of co-owners excludes that of the adjoining owners. the statute. Stated differently, a thing which is within the intent of the
lawmaker is as much within the statute as if within the letter; and a thing The following doctrine is also worth noting:
which is within the letter of the statute is not within the statute unless within
the intent of the lawmakers. 14 While the general rule is, that to charge a party with laches in the assertion of
an alleged right it is essential that he should have knowledge of the facts upon
In requiring written notice, Article 1088 seeks to ensure that the redemptioner which he bases his claim, yet if the circumstances were such as should have
is properly notified of the sale and to indicate the date of such notice as the induced inquiry, and the means of ascertaining the truth were readily available
starting time of the 30-day period of redemption. Considering the shortness of upon inquiry, but the party neglects to make it, he will be chargeable with
the period, it is really necessary, as a general rule, to pinpoint the precise date laches, the same as if he had known the facts. 15
it is supposed to begin, to obviate any problem of alleged delays, sometimes
consisting of only a day or two. It was the perfectly natural thing for the co-heirs to wonder why the spouses
Alonzo, who were not among them, should enclose a portion of the inherited
The instant case presents no such problem because the right of redemption lot and build thereon a house of strong materials. This definitely was not the
was invoked not days but years after the sales were made in 1963 and 1964. act of a temporary possessor or a mere mortgagee. This certainly looked like
The complaint was filed by Tecla Padua in 1977, thirteen years after the first an act of ownership. Yet, given this unseemly situation, none of the co-heirs
sale and fourteen years after the second sale. The delay invoked by the saw fit to object or at least inquire, to ascertain the facts, which were readily
petitioners extends to more than a decade, assuming of course that there was available. It took all of thirteen years before one of them chose to claim the
a valid notice that tolled the running of the period of redemption. right of redemption, but then it was already too late.

Was there a valid notice? Granting that the law requires the notice to be We realize that in arriving at our conclusion today, we are deviating from the
written, would such notice be necessary in this case? Assuming there was a strict letter of the law, which the respondent court understandably applied
valid notice although it was not in writing. would there be any question that pursuant to existing jurisprudence. The said court acted properly as it had no
the 30-day period for redemption had expired long before the complaint was competence to reverse the doctrines laid down by this Court in the above-cited
filed in 1977? cases. In fact, and this should be clearly stressed, we ourselves are not
abandoning the De Conejero and Buttle doctrines. What we are doing simply is
In the face of the established facts, we cannot accept the private respondents' adopting an exception to the general rule, in view of the peculiar circumstances
pretense that they were unaware of the sales made by their brother and sister of this case.
in 1963 and 1964. By requiring written proof of such notice, we would be
closing our eyes to the obvious truth in favor of their palpably false claim of The co-heirs in this case were undeniably informed of the sales although no
ignorance, thus exalting the letter of the law over its purpose. The purpose is notice in writing was given them. And there is no doubt either that the 30-day
clear enough: to make sure that the redemptioners are duly notified. We are period began and ended during the 14 years between the sales in question and
satisfied that in this case the other brothers and sisters were actually informed, the filing of the complaint for redemption in 1977, without the co-heirs
although not in writing, of the sales made in 1963 and 1964, and that such exercising their right of redemption. These are the justifications for this
notice was sufficient. exception.

Now, when did the 30-day period of redemption begin?

While we do not here declare that this period started from the dates of such More than twenty centuries ago, Justinian defined justice "as the constant and
sales in 1963 and 1964, we do say that sometime between those years and perpetual wish to render every one his due." 16 That wish continues to
1976, when the first complaint for redemption was filed, the other co-heirs motivate this Court when it assesses the facts and the law in every case
were actually informed of the sale and that thereafter the 30-day period brought to it for decision. Justice is always an essential ingredient of its
started running and ultimately expired. This could have happened any time decisions. Thus when the facts warrants, we interpret the law in a way that will
during the interval of thirteen years, when none of the co-heirs made a move render justice, presuming that it was the intention of the lawmaker, to begin
to redeem the properties sold. By 1977, in other words, when Tecla Padua filed with, that the law be dispensed with justice. So we have done in this case.
her complaint, the right of redemption had already been extinguished because
the period for its exercise had already expired.
WHEREFORE, the petition is granted. The decision of the respondent court is This is a petition for certiorari under Rule 64 of the Revised Rules of Court
REVERSED and that of the trial court is reinstated, without any pronouncement seeking to reverse and set aside the December 29, 2011 Decision1 of the
as to costs. It is so ordered. Commission on Audit (COA) and the April 4, 2014 Resolution 2 of the COA En
Bane which affirmed the October 28, 2010 Decision 3 of the COA Regional Office
No.  IX (COA Regional Office) regarding Notices of Disallowances (NDs).

Isabela Water District (ISAWAD) is a government owned and controlled

corporation (GOCC) created pursuant to the provisions of Presidential Decree
(P.D.) No. 198, or the "Provincial Water Utilities Act of 1973" (PWUA), as
amended by Republic Act (R.A.) No. 9286.4 Aleli G. Almadovar (petitioner) is
the General Manager (GM) of ISAWAD.5

On January 25, 2007, Catalino S. Genel (Genel), Audit Team Leader for
ISAWAD, Isabela City, issued the following NDs for ISAWAD's various
payments:6chanroblesvirtuallawlibrary

ND No. Particulars Amount

2006-001 Payment of salary increase for the GM, ISAWAD,

(2005)7 from P20,823.00 to P35,574-00 per month, from P73,755.00
August to December, 2005, without legal basis.

2006- Payment of legal retainer's fee at P4,000.00 per

002(2005)8 month for the period from of January to December
2005 without proper authority from the Office of P48,000.00
the Government Corporate Counsel (OGCC) and
the written concurrence of the COA.

2006- Payment of honorarium to OGCC Lawyer without

003(2005)9 express authority from the OGCC, and proof of P24,000.00
service rendered to the ISAWAD

2006- Payment of Representation and Transportation

004(2005)10 Allowances (RATA) to the GM, ISAWAD over and
above the authorized rate of the Department of
P6,000.00
Budget and Management (DBM) under Corporate
Budget Circular (CBC) No. 18 and National Budget
Circular (NBC) No. 498
cralawlawlibrary

G.R. No. 213330, November 16, 2015 On April 26, 2007, petitioner filed an appeal with the Regional Cluster Director,
Cluster Ill-Public Utilities, Corporation Government Sector, which was indorsed
to the COA Regional Office. Petitioner insisted that the increase in her salary
ALELI C. ALMADOVAR, GENERAL MANAGER ISAWAD, ISABELA CITY,
and her RATA was in accordance with R.A. No. 9286, or the law which
BASILAN PROVINCE, Petitioner, v. CHAIRPERSON MA. GRACIA M.
amended the PWUA.11
PULIDO-TAN, COMMISSION ON AUDIT, Respondent.
Petitioner further claimed that the engagement of a private counsel, Atty.
DECISION Quirino Esguerra Jr. (Atty. Esguerra), and the designation of OGCC lawyer,
Atty. Fortunato G. Operario Jr. (Atty. Operario), were in accordance with the
MENDOZA, J.: procedure set forth by law. Consequently, the payments made to them were
appropriate.12
 thereby impliedly repealing R.A. No. 6758; that her salary was within the scale
The COA Regional Office Ruling provided by the Office of the Philippine Association of Water Districts, Inc.; and
that she need not refund the alleged overpaid RATA because she acted in good
On October 28, 2010, the COA Regional Office rendered a decision affirming faith as she stopped claiming the same after the NDs were issued. 15
with modification the assailed NDs. It explained that the compensation of the
GMs of local water districts (LWDs) was still subject to the provisions of R.A. Petitioner also claims that the payments to Atty. Esguerra from January to
No. 6758, or the Salary Standardization Law (SSL). Thus, it found that the October 2005 were valid because the OGCC concurred with the retainership
increase in petitioner's salary was improper as it ran afoul with the provisions contract for one year effective from November 1, 2004. She faults the COA for
of R.A. No. 6758. It also agreed that the disallowance of petitioner's RATA was belatedly acting upon the request for conformity. Likewise, petitioner posits
correct because it exceeded the allowable RATA for her position pursuant to that the written concurrence of the COA only applies to the engagement or
CBC No. 18,13 dated April 1, 2005, and NBC No. 498,14 dated November 14, hiring of a private lawyer and not the renewal of the retainership. She argues
2000. that the retainership of Atty. Esguerra had been effected on a yearly basis
starting November 1, 2003, which necessarily follows that subsequent renewal
The COA Regional Office also agreed that the payment of honoraria to Atty. should be in November of the succeeding year.16
Operario had no basis because it constituted an unnecessary and excessive
expenditure. The disallowed amount in ND No. 2006-002(2005), was reduced Petitioner also faults the OGCC for the delay in issuing the necessary authority
from P48,000.00 to P40,000.00 because Atty. Esguerra's services from for Atty. Operario, baring that as early as 2004 the board of directors of
November to December 2005 were covered by a retainership contract duly ISAWAD already requested from the OGCC the necessary authority, but it was
approved by the OGCC and with the written concurrence of the COA. given only on July 11, 2006. She avers that denying the lawyers the
remuneration for their services will be tantamount to unjust enrichment. 17
The case was automatically elevated for review to the COA pursuant to Section
7, Rule V of the 2009 Revised Rules of Procedures of the COA. Citing Mendoza v. COA18 (Mendoza), petitioner claims that she acted in good
faith in making all the disbursements and, therefore, she should not be made
The COA Ruling to refund them because they were given under an honest belief that the
payees were entitled to the said remunerations and these were in consideration
On December 29, 2011, the COA rendered the assailed decision affirming the for their services rendered. Petitioner likewise prays for the issuance of a Writ
ruling of the COA Regional Office. It stressed that before a private lawyer may of Preliminary Injunction and/or TRO because she stands to suffer grave
be hired by the GOCC, the written conformity of the OGCC and the written injustice and great irreparable injury.
concurrence of the COA must first be secured -which also applied in cases of
contract renewal. The COA ruled that the payments to Atty. Esguerra from In its Comment,19 dated July 28, 2014, the COA countered that LWDs were
January to October 2005 were improper because his services were retained covered by R.A. No. 6758 or the SSL. R.A. No. 9286 did not expressly repeal it,
without the necessary conformity and concurrence of both the OGCC and the and an implied repeal, as claimed by petitioner, was disfavored by law.
COA. Only the retainership contract for a period of one year effective on
November 1, 2005 was with the conformity and concurrence of both the OGCC The COA also contended that the renewal of retainership contracts required the
and the COA. written concurrence of the COA. It is also insisted that the payments of
honorarium made to Atty. Operario were improper because at the time he
Aggrieved, petitioner moved for reconsideration of the decision but her motion rendered his services, the OGCC had yet to issue any authority. It noted that
was denied by the COA En Banc in its assailed resolution, dated April 4, 2014. the OGCC approval and the COA concurrence were required to ensure that
there was basis for the engagement of a private lawyer.
Hence, this present petition.
The COA argued that petitioner could not claim good faith because the case
cited by her, allowing the defense of good faith, was premised on the fact that
ISSUES
there was no prior case or rule that settled the applicability of R.A. No. 6758 to
LWDs. Finally, the COA opined that petitioner failed to state factual allegations
1] Whether or not the disbursements under the NDs were improper.
to support the issuance of a writ of Preliminary Injunction and/or TRO.
2] In the event the disbursements were improper, whether or not
In her Reply,20 dated March 13, 2015, petitioner merely reiterated her previous
petitioner liable to refund the same.
arguments.

Petitioner insists that her salary increase was proper because LWDs were
The Court's Ruling
exempt from the coverage of the SSL as Section 23 of R.A. No. 9286, a later
law, empowered the board of directors of LWDs to fix the salary of its GM,
 has full discretion in fixing the salary of the GM, but it is always subject to the
R.A. No. 6758 covers local water districts limits under the SSL, unless the charter of the LWD exempts it from the
coverage of the said law.
The increase in the salary of the petitioner was correctly disallowed because it
contravened the provisions of the SSL. In Mendoza,21 the Court ruled that the Engagements ofAtty. Esguerra
salaries of GMs of LWDs were subject to the provision of the SSL, to and Atty. Operario were unauthorized
wit:chanRoblesvirtualLawlibrary
COA Circular No. 95-011, dated December 4, 1995, provides that in the event
that the need for the legal services of a private lawyer cannot be avoided or is
The Salary Standardization Law applies to all government positions, including
justified under extraordinary or exceptional circumstances, the written
those in government-owned or controlled corporations, without
conformity and acquiescence of the OGCC and the written concurrence of the
qualification. The exception to this rule is when the government-owned
COA shall first be secured. The failure to secure the written concurrence makes
or controlled corporation's charter specifically exempts the corporation
the engagement of the private lawyer or law firm unauthorized. 24
from the coverage of the Salary Standardization Law. xxx
In the case at bench, petitioner does not deny that there was no written
We are not convinced that Section 23 of Presidential Decree No. 198,
concurrence from the COA when Atty. Esguerra, a private lawyer, rendered
as amended, or any of its provisions, exempts water utilities from the
legal services from January to October 2005. She, instead, argues that it is not
coverage of the Salary Standardization Law. In statutes subsequent to
mandatory to secure the written concurrence of COA because it only applies to
Republic Act No. 6758, Congress consistently provided not only for the power
the hiring or employment of a lawyer and not the renewal of a retainership
to fix compensation but also the agency's or corporation's exemption from the
contract. Further, petitioner blames the COA because it belatedly acted on the
Salary Standardization Law. If Congress had intended to exempt water utilities
request of ISAWAD for a written concurrence.
from the coverage of the Salary Standardization Law and other laws on
compensation and position classification, it could have expressly provided in
The arguments of petitioner fail to persuade.
Presidential Decree No. 198 an exemption clause similar to those provided in
the respective charters of the Philippine Postal Corporation, Trade Investment
ISAWAD first engaged Atty. Esguerra under a retainership contract 25 for a
and Development Corporation, Land Bank of the Philippines, Social Security
period of one year effective November 1, 2003, with the written concurrence of
System, Small Business Guarantee and Finance Corporation, Government
the OGCC and the COA. The following year, another retainership contract 26 was
Service Insurance System, Development Bank of the Philippines, Home
executed, effective one year from November 1, 2004, with the concurrence of
Guaranty Corporation, and the Philippine Deposit Insurance Corporation.
the OGCC but not the COA. Again, in the following year, a retainership
contract27 was executed for another one year effective on November 1, 2005,
Congress could have amended Section 23 of Presidential Decree No. 198 to
with the written concurrence of both the OGCC and the COA.
expressly provide that the compensation of a general manager is exempted
from the Salary Standardization Law. However, Congress did not. Section 23
ISAWAD engaged Atty. Esguerra under a general retainer for a specific length
was amended to emphasize that the general manager "shall not be removed
of time, which was regularly renewed after its termination. Each renewal
from office, except for cause and after due process."
constituted the hiring of Atty. Esguerra because after the lapse of one year, the
engagement was terminated; and each renewal for another one-year term
This does not mean that water utilities cannot fix the compensation of
required the written conformity of the COA.
their respective general managers. Section 23 of Presidential Decree No.
198 clearly provides that a water utility's board of directors has the power to
Petitioner likewise faults the COA for failing to act on time on the request for
define the duties and fix the compensation of a general manager. However,
concurrence. This, however, is a bare assertion as petitioner failed to provide
the compensation fixed must be in accordance with the position
any document showing that a request for the COA's written concurrence was
classification system under the Salary Standardization Law. xxx22
even made. Petitioner only presented the OGCC's written approval, 28 dated
September 5, 2005, of the retainership contract effective November 1, 2004.
[Emphases Supplied]cralawlawlibrary
The letter significantly reminded ISAWAD to seek the conformity of the COA -
which it failed to do.
Petitioner claims that R.A. No. 9286, being a later law, repealed the SSL. The
Court, however, notes that R.A. No. 9286 did not expressly repeal the SSL.
With regard to Atty. Operario, Executive Order (E.O.) No. 878, series of 1983,
Neither did R.A. No. 9286 impliedly repeal the SSL because repeal by
allows any member of the OGCC's legal staff to be designated in a concurrent
implication is not favored by law and is only resorted to in case of irreconcilable
capacity to act as a corporate officer of the GOCC being serviced by the OGCC
inconsistency and repugnancy between the new law and the old law. 23 As
when the exigency of the service so requires, provided that the Government
clearly pointed out in Mendoza, there is no irreconcilable inconsistency between
Corporate Counsel approves the designation.
R.A. No. 9286 and the SSL. It is conceded though that the board of directors
Petitioner admits that it was only on July 11, 2006 that the authority of Atty. No basis for the issuance of a writ of injunction
Operaria to render services for ISAWAD was issued. Obviously, he had no
authority to provide legal services to ISAWAD prior to the approval of the In Calawag v. University of the Philippines Visayas,30 the Court ruled that the
OGCC. Consequently, Atty. Operario was not entitled to the honorarium given right sought to be protected must not be doubtful in order for an injunctive
for the alleged services he had rendered. relief to be issued, to wit:chanRoblesvirtualLawlibrary

Petitioner cannot argue that disallowing the payments made to Atty. Esguerra
To be entitled to a writ of preliminary injunction, xxx the petitioners must
and Atty. Operario is tantamount to unjust enrichment. In The Law Firm of
establish the following requisites: (a) the invasion of the right sought to be
Laguesma Magsalin Consulta and Gastardo v. COA,29 the Court,
protected is material and substantial; (b) the right of the complainant is clear
notwithstanding the fact that actual services had been rendered, upheld the
and unmistakable; and (c) there is an urgent and permanent necessity for the
disallowance of payment made to a law firm, which was unauthorized to act in
writ to prevent serious damage, xxx When the complainant's right is thus
behalf of a GOCC, for failure to secure the COA's concurrence. In the case at
doubtful or disputed, he does not have a clear legal right and,
bench, there is no unjust enrichment because the NDs directed the responsible
therefore, the issuance of injunctive relief is improper.
officers of ISAWAD, who made the disbursements (including petitioner), and
not the lawyers engaged, to make the refund.
[Emphasis supplied]
cralawlawlibrary
Refund not necessary if the
disbursements were made
Here, petitioner failed to show sufficient reasons to justify the issuance of the
in good faith
injunctive relief. It has been thoroughly discussed that the disbursements were
without legal basis as they either were in excess of the limits provided for by
In Mendoza, the Court excused the erring officials therein from refunding the
law or were issued without authority.
amounts subject of the ND, to wit:chanRoblesvirtualLawlibrary
WHEREFORE, the December 29, 2011 Decision of the Commission on Audit
The salaries petitioner Mendoza received were fixed by the Talisay Water is AFFIRMED with MODIFICATION in that petitioner be absolved from
District's board of directors pursuant to Section 23 of the Presidential Decree refunding the amount paid in the increase of her salary.
No. 198. Petitioner Mendoza had no hand in fixing the amount of compensation
he received. Moreover, at the time petitioner Mendoza received the disputed SO ORDERED.chanroblesvirtuallawlibrary
amount in 2005 and 2006, there was no jurisprudence yet ruling that water
utilities are not exempted from the Salary Standardization Law.

Pursuant to de Jesus v. Commission on Audit, petitioner Mendoza received the

disallowed salaries in good faith. He need not refund the disallowed
amount.cralawlawlibrary

In this case, the Court is of the view that the payment of the erroneous
increase in petitioner's salary was nonetheless made in good faith. The
increase was computed in accordance with the scale provided by the Office of
the Philippine Association of Water Districts, Inc., which also made an
erroneous opinion that R.A. No. 9286 repealed the SSL. Further, at the time
the disbursement was made, no categorical pronouncement, similar
to Mendoza, that the LWDs are subject to the provisions of the SSL, had been
issued. [G.R. No. 103982. December 11, 1992.]
Good faith, however, cannot be appreciated in petitioner's other
disbursements. Petitioner knowingly approved the payments to Atty. Esguerra ANTONIO A. MECANO, Petitioner, v. COMMISSION ON
and Atty. Operaria in spite of the lack of the necessary approval by the AUDIT, Respondent.
government offices concerned. Further, petitioner's failure to claim her
excessive RATA after the NDs were issued does not evince good faith because, DECISION
at that time, CBC No. 18 and NBC No. 498 already provided for the allowable
RATA to be given to GMs of LWDs.

CAMPOS, JR., J.:
 Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion
No. 73, S. 1991 2 dated April 26, 1991 of then Secretary of Justice Franklin M.
Antonio A. Mecano, through a petition for certiorari, seeks to nullify the Drilon (Secretary Drilon, for brevity) stating that "the issuance of the
decision of the Commission on Audit (COA, for brevity) embodied in its 7th Administrative Code did not operate to repeal or abrogate in its entirety the
Indorsement, dated January 16, 1992, denying his claim for reimbursement Revised Administrative Code, including the particular Section 699 of the
under Section 699 of the Revised Administrative Code (RAC), as amended, in latter."cralaw virtua1aw library
the total amount of P40,831.00.
On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew
Petitioner is a Director II of the National Bureau of Investigation (NBI). He was Mecano’s claim to then Undersecretary Bello for favorable consideration. Under
hospitalized for cholecystitis from March 26, 1990 to April 7, 1990, on account a 6th Indorsement, dated July 2, 1991, Secretary Drilon forwarded petitioner’s
of which he incurred medical and hospitalization expenses, the total amount of claim to the COA Chairman, recommending payment of the same. COA
which he is claiming from the COA. Chairman Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992,
however denied petitioner’s claim on the ground that Section 699 of the RAC
On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim has been repealed by the Administrative Code of 1987, solely for the reason
(Director Lim, for brevity), he requested reimbursement for his expenses on that the same section was not restated nor re-enacted in the Administrative
the ground that he is entitled to the benefits under Section 699 1 of the RAC, Code of 1987. He commented, however, that the claim may be filed with the
the pertinent provisions of which read:jgc:chanrobles.com.ph Employees’ Compensation Commission, considering that the illness of Director
Mecano occurred after the effectivity of the Administrative Code of 1987.
"SECTION 699. Allowances in case of injury, death, or sickness incurred in
performance of duty. — When a person in the service of the national Eventually, petitioner’s claim was returned by Undersecretary of Justice
government or in the service of the government of a province, city, Eduardo Montenegro to Director Lim under a 9th Indorsement dated February
municipality or municipal district is so injured in the performance of duty as 7, 1992, with the advice that petitioner "elevate the matter to the Supreme
thereby to receive some actual physical hurt or wound, the proper Head of Court if he so desires."cralaw virtua1aw library
Department may direct that absence during any period of disability thereby
occasioned shall be on full pay, though not more than six months, and in such On the sole issue of whether or not the Administrative Code of 1987 repealed
case he may in his discretion also authorize the payment of the medical or abrogated Section 699 of the RAC, this petition was brought for the
attendance, necessary transportation, subsistence and hospital fees of the consideration of this Court.chanrobles virtual lawlibrary
injured person. Absence in the case contemplated shall be charged first against
vacation leave, if any there be. Petitioner anchors his claim on Section 699 of the RAC, as amended, and on
the aforementioned Opinion No. 73, S. 1991 of Secretary Drilon. He further
maintains that in the event that a claim is filed with the Employees’
x          x          x Compensation Commission, as suggested by respondent, he would still not be
barred from filing a claim under the subject section. Thus, the resolution of
whether or not there was a repeal of the Revised Administrative Code of 1917
"In case of sickness caused by or connected directly with the performance of would decide the fate of petitioner’s claim for reimbursement.
some act in the line of duty, the Department head may in his discretion
authorize the payment of the necessary hospital fees." chanrobles The COA, on the other hand, strongly maintains that the enactment of the
virtualawlibrary chanrobles.com:chanrobles.com.ph Administrative Code of 1987 (Exec. Order No. 292) operated to revoke or
supplant in its entirety the Revised Administrative Code of 1917. The COA
Director Lim then forwarded petitioner’s claim, in a 1st Indorsement dated claims that from the "whereas" clauses of the new Administrative Code, it can
June 22, 1990, to the Secretary of Justice, along with the comment, bearing be gleaned that it was the intent of the legislature to repeal the old Code.
the same date, of Gerarda Galang, Chief, LED of the NBI, "recommending Moreover, the COA questions the applicability of the aforesaid opinion of the
favorable action thereof." Finding petitioner’s illness to be service -connected, Secretary of Justice in deciding the matter. Lastly, the COA contends that
the Committee on Physical Examination of the Department of Justice favorably employment-related sickness, injury or death is adequately covered by the
recommended the payment of petitioner’s claim. Employees’ Compensation Program under P.D. 626, such that to allow
simultaneous recovery of benefits under both laws on account of the same
However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th contingency would be unfair and unjust to the government.
Indorsement dated November 21, 1990, returned petitioner’s claim to Director
Lim, having considered the statements of the Chairman of the COA in its 5th The question of whether a particular law has been repealed or not by a
Indorsement dated 19 September 1990, to the effect that the RAC being relied subsequent law is a matter of legislative intent. The lawmakers may expressly
upon was repealed by the Administrative Code of 1987. repeal a law by incorporating therein a repealing provision which expressly and
specifically cites the particular law or laws, and portions thereof, that are
intended to be repealed. 3 A declaration in a statute, usually in its repealing military reservations, claims for sickness benefits under Section 699, and still
clause, that a particular and specific law, identified by its number or title, is others.
repealed is an express repeal; all others are implied repeals. 4
Moreover, the COA failed to demonstrate that the provisions of the two Codes
In the case of the two Administrative Codes in question, the ascertainment of on the matter of the subject claim are in an irreconcilable conflict. In fact,
whether or not it was the intent of the legislature to supplant the old Code with there can be no such conflict because the provision on sickness benefits of the
the new Code partly depends on the scrutiny of the repealing clause of the new nature being claimed by petitioner has not been restated in the Administrative
Code. This provision is found in Section 27, Book VII (Final Provisions) of the Code of 1987. However, the COA would have Us consider that the fact that
Administrative Code of 1987 which reads:jgc:chanrobles.com.ph Section 699 was not restated in the Administrative Code of 1987 meant that
the same section had been repealed. It further maintained that to allow the
"SECTION 27. Repealing Clause. — All laws, decrees, orders, rules and particular provisions not restated in the new Code to continue in force argues
regulations, or portions thereof, inconsistent with this Code are hereby against the Code itself. The COA anchored this argument on the whereas
repealed or modified accordingly."cralaw virtua1aw library clause of the 1987 Code, which states:jgc:chanrobles.com.ph

The question that should be asked is: What is the nature of this repealing "WHEREAS, the effectiveness of the Government will be enhanced by a new
clause? It is certainly not an express repealing clause because it fails to Administrative Code which incorporates in a unified document the major
identify or designate the act or acts that are intended to be repealed. 5 Rather, structural, functional and procedural principles and rules of governance; and
it is an example of a general repealing provision, as stated in Opinion No. 73,
S. 1991. It is a clause which predicates the intended repeal under the condition x       x       x"
that a substantial conflict must be found in existing and prior acts. The failure
to add a specific repealing clause indicates that the intent was not to repeal It argues, in effect, that what is contemplated is only one Code — the
any existing law, unless an irreconcilable inconsistency and repugnancy exist in Administrative Code of 1987. This contention is untenable.
the terms of the new and old laws. 6 This latter situation falls under the
category of an implied repeal. The fact that a later enactment may relate to the same subject matter as that
of an earlier statute is not of itself sufficient to cause an implied repeal of the
Repeal by implication proceeds on the premise that where a statute of later prior act, since the new statute may merely be cumulative or a continuation of
date clearly reveals an intention on the part of the legislature to abrogate a the old one. 12 What is necessary is a manifest indication of legislative purpose
prior act on the subject, that intention must be given effect. 7 Hence, before to repeal. 13
there can be a repeal, there must be a clear showing on the part of the
lawmaker that the intent in enacting the new law was to abrogate the old one. We come now to the second category of repeal — the enactment of a statute
The intention to repeal must be clear and manifest; 8 otherwise, at least, as a revising or codifying the former laws on the whole subject matter. This is only
general rule, the later act is to be construed as a continuation of, and not a possible if this revised statute or code was intended to cover the whole subject
substitute for, the first act and will continue so far as the two acts are the to be a complete and perfect system in itself. It is the rule that a subsequent
same from the time of the first enactment. 9 statute is deemed to repeal a prior law if the former revises the whole subject
matter of the former statute. 14 When both intent and scope clearly evince the
There are two categories of repeal by implication. The first is where provisions idea of a repeal, then all parts and provisions of the prior act that are omitted
in the two acts on the same subject matter are in an irreconcilable conflict, The from the revised act are deemed repealed. 15 Furthermore, before there can
later act to the extent of the conflict constitutes an implied repeal of the earlier be an implied repeal under this category, it must be the clear intent of the
one. The second is if the later act covers the whole subject of the earlier one legislature that the later act be the substitute to the prior act. 16
and is clearly intended as a substitute, it will operate to repeal the earlier law.
10 According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears
clear is the intent to cover only those aspects of government that pertain to
Implied repeal by irreconcilable inconsistency takes place when the two administration, organization and procedure, understandably because of the
statutes cover the same subject matter; they are so clearly inconsistent and many changes that transpired in the government structure since the enactment
incompatible with each other that they cannot be reconciled or harmonized; of the RAC decades of years ago. The COA challenges the weight that this
and both cannot be given effect, that is, that one law cannot he enforced opinion carries in the determination of this controversy inasmuch as the body
without nullifying the other. 11cralawnad which had been entrusted with the implementation of this particular provision
has already rendered its decision. The COA relied on the rule in administrative
Comparing the two Codes, it is apparent that the new Code does not cover nor law enunciated in the case of Sison v. Pangramuyen 17 that in the absence of
attempt to cover the entire subject matter of the old Code. There are several palpable error or grave abuse of discretion, the Court would be loathe to
matters treated in the old Code which are not found in the new Code, such as substitute its own judgment for that of the administrative agency entrusted
the provisions on notaries public, the leave law, the public bonding law, with the enforcement and implementation of the law. This will not hold water.
This principle is subject to limitations. Administrative decisions may be
reviewed by the courts upon a showing that the decision is vitiated by fraud,
imposition or mistake. 18 It has been held that Opinions of the Secretary and Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula,
Undersecretary of Justice are material in the construction of statutes in pari Cabanatuan City who won during the last regular barangay election in 1994. A
materia. 19 petition for his recall as Punong Barangay was filed by the registered voters of
the barangay. Acting on the petition for recall, public respondent Commission
Lastly, it is a well-settled rule of statutory construction that repeals of statutes on Elections (COMELEC) resolved to approve the petition, scheduled the
by implication are not favored. 20 The presumption is against inconsistency petition signing on October 14, 1995, and set the recall election on November
and repugnancy for the legislature is presumed to know the existing laws on 13, 1995.1 At least 29.30% of the registered voters signed the petition, well
the subject and not to have enacted inconsistent or conflicting statutes. 21 above the 25% requirement provided by law. The COMELEC, however,
deferred the recall election in view of petitioner’s opposition. On December 6,
This Court, in a case, explains the principle in detail as follows: "Repeals by 1995, the COMELEC set anew the recall election, this time on December 16,
implication are not favored, and will not be decreed unless it is manifest that 1995. To prevent the holding of the recall election, petitioner filed before the
the legislature so intended. As laws are presumed to be passed with Regional Trial Court of Cabanatuan City a petition for injunction, docketed as
deliberation with full knowledge of all existing ones on the subject, it is but SP Civil Action No. 2254-AF, with the trial court issuing a temporary restraining
reasonable to conclude that in passing a statute it was not intended to interfere order. After conducting a summary hearing, the trial court lifted the restraining
with or abrogate any former law relating to some matter, unless the order, dismissed the petition and required petitioner and his counsel to explain
repugnancy between the two is not only irreconcilable, but also clear and why they should not be cited for contempt for misrepresenting that the
convincing, and flowing necessarily from the language used, unless the later barangay recall election was without COMELEC approval. 2
act fully embraces the subject matter of the earlier, or unless the reason for
the earlier act is beyond peradventure renewed. Hence, every effort must be In a resolution dated January 5, 1996, the COMELEC, for the third time, re-
used to make all acts stand and if, by any reasonable construction, they can be scheduled the recall election on January 13, 1996; hence, the instant petition
reconciled, the later act will not operate as a repeal of the earlier. 22 for certiorari with urgent prayer for injunction. On January 12, 1996, the Court
issued a temporary restraining order and required the Office of the Solicitor
Regarding respondent’s contention that recovery under this subject section General, in behalf of public respondent, to comment on the petition. In view of
shall bar the recovery of benefits under the Employees’ Compensation the Office of the Solicitor General’s manifestation maintaining an opinion
Program, the same cannot be upheld. The second sentence of Article 173, adverse to that of the COMELEC, the latter through its law department filed the
Chapter II, Title II (dealing on Employees’ Compensation and State Insurance required comment. Petitioner thereafter filed a reply. 3
Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly
provides that "the payment of compensation under this Title shall not bar the Petitioner’s argument is simple and to the point. Citing Section 74 (b) of
recovery of benefits as provided for in Section 669 of the Revised Republic Act No. 7160, otherwise known as the Local Government Code, which
Administrative Code xxx whose benefits are administered by the system states that "no recall shall take place within one (1) year from the date of the
(meaning SSS or GSIS) or by other agencies of the government."cralaw official’s assumption to office or one (1) year immediately preceding a regular
virtua1aw library local election", petitioner insists that the scheduled January 13, 1996 recall
election is now barred as the Sangguniang Kabataan (SK) election was set by
WHEREFORE, premises considered, the Court resolves to GRANT the petition; Republic Act No. 7808 on the first Monday of May 1996, and every three years
respondent is, hereby ordered to give due course to petitioner’s claim for thereafter. In support thereof, petitioner cites Associated Labor Union v.
benefits. No costs. Letrondo-Montejo, 237 SCRA 621, where the Court considered the SK election
as a regular local election. Petitioner maintains that as the SK election is a
SO ORDERED . regular local election, hence no recall election can be had for barely four
months separate the SK election from the recall election. We do not agree.
[G.R. No. 123169. November 4, 1996.]
The subject provision of the Local Government Code
DANILO E. PARAS, Petitioner, v. COMMISSION ON provides:jgc:chanrobles.com.ph
ELECTIONS, Respondent.
"SEC. 74. Limitations on Recall. — (a) Any elective local official may be the
subject of a recall election only once during his term of office for loss of
RESOLUTION confidence

(b) No recall shall take place within one (1) year from the date of the official’s
FRANCISCO, J.: assumption to office or one (1) year immediately preceding a regular local
election."cralaw virtua1aw library against the conduct of recall election one year immediately preceding the
regular local election. The proscription is due to the proximity of the next
[Emphasis added.] regular election for the office of the local elective official concerned. The
electorate could choose the official’s replacement in the said election who
It is a rule in statutory construction that every part of the statute must be certainly has a longer tenure in office than a successor elected through a recall
interpreted with reference to the context, i.e., that every part of the statute election. It would, therefore, be more in keeping with the intent of the recall
must be considered together with the other parts, and kept subservient to the provision of the Code to construe regular local election as one referring to an
general intent of the whole enactment. 4 The evident intent of Section 74 is to election where the office held by the local elective official sought to be recalled
subject an elective local official to recall election once during his term of office. will be contested and be filled by the electorate.chanroblesvirtual|awlibrary
Paragraph (b) construed together with paragraph (a) merely designates the
period when such elective local official may be subject of a recall election, that Nevertheless, recall at this time is no longer possible because of the limitation
is, during the second year of his term of office. Thus, subscribing to petitioner’s stated under Section 74 (b) of the Code considering that the next regular
interpretation of the phrase regular local election to include the SK election will election involving the barangay office concerned is barely seven (7) months
unduly circumscribe the novel provision of the Local Government Code on away, the same having been scheduled on May 1997. 9
recall, a mode of removal of public officers by initiation of the people before
the end of his term. And if the SK election which is set by R.A. No. 7808 to be ACCORDINGLY, the petition is hereby dismissed for having become moot and
held every three years from May 1996 were to be deemed within the purview academic. The temporary restraining order issued by the Court on January 12,
of the phrase "regular local election", as erroneously insisted by petitioner, 1996, enjoining the recall election should be as it is hereby made permanent.
then no recall election can be conducted rendering inutile the recall provision of
the Local Government Code.chanroblesvirtuallawlibrary
SO ORDERED .
In the interpretation of a statute, the Court should start with the assumption
that the legislature intended to enact an effective law, and the legislature is
not presumed to have done a vain thing in the enactment of a statute. 5 An
interpretation should, if possible, be avoided under which a statute or provision
being construed is defeated, or as otherwise expressed, nullified, destroyed,
emasculated, repealed, explained away, or rendered insignificant, meaningless,
inoperative or nugatory. 6

It is likewise a basic precept in statutory construction that a statute should be

interpreted in harmony with the Constitution. 7 Thus, the interpretation of
Section 74 of the Local Government Code, specifically paragraph (b) thereof,
should not be in conflict with the Constitutional mandate of Section 3 of Article
X of the Constitution to “enact a local government code which shall provide for
a more responsive and accountable local government structure instituted
through a system of decentralization with effective mechanisms of recall,
initiative, and referendum . . ."cralaw virtua1aw library

Moreover, petitioner’s too literal interpretation of the law leads to absurdity

which we cannot countenance. Thus, in a case, the Court made the following
admonition:jgc:chanrobles.com.ph

"We admonish against a too-literal reading of the law as this is apt to constrict
rather than fulfill its purpose and defeat the intention of its authors. That
intention is usually found not in ‘the letter that killeth but in the spirit that
G.R. Nos. L-28502-03 April 18, 1989
vivifieth’ . . ." 8

The spirit, rather than the letter of a law determines its construction; hence, a COMMISSIONER OF INTERNAL REVENUE, petitioner,
statute, as in this case, must be read according to its spirit and intent. vs.
ESSO STANDARD EASTERN, INC. and THE COURT OF TAX
Finally, recall election is potentially disruptive of the normal working of the APPEALS, respondents.
local government unit necessitating additional expenses, hence the prohibition
 second installment of income tax for 1959. On July 10, 1964 ..
(the Commissioner) claimed that for 1960, .. ESSO underpaid
NARVASA, J.: its income tax by P367,994.00. However, instead of deducting
from P367,994.00 the tax credit of P221,033.00 which .. (the
Commissioner) had already admitted was due .. ESSO .. (the
In two (2) cases appealed to it 1 by the private respondent, hereafter simply Commissioner) still insists in collecting the interest on the full
referred to as ESSO, the Court of Tax Appeals rendered judgment 2 sustaining amount of P367,994.00 for the period April 18, 1961 to April
the decisions of the Commissioner of Internal Revenue excepted to, save "the 18,1964 when the Government had already in its hands the
refund-claim .. in the amount of P39,787.94 as overpaid interest which it sum of P221,033.00 of .. ESSOs money even before the
ordered refunded to ESSO latter's income tax for 1960 was due and payable. If the
imposition of interest does not amount to a penalty but merely
Reversal of this decision is sought by the Commissioner by a petition for review a just compensation to the State for the delay in paying the
on certiorari filed with this Court. He ascribes to the Tax Court one sole error: tax, and for the concomitant use by the taxpayer of funds that
"of applying the tax credit for overpayment of the 1959 income tax of .. ESSO, rightfully should be in the Government's hand (Castro v.
granted by the petitioner (Commissioner), to .. (ESSO's) basic 1960 deficiency Collector, G.R. No. L-1274, Dec. 28, 1962), the collection of
income tax liability x x and imposing the 1-1/2% monthly interests  3 only on the interest on the full amount of P367,994.00 without
the remaining balance thereof in the sum of P146,961.00" 4 (instead of the full deducting first the tax credit of P221,033.00, which has long
amount of the 1960 deficiency liability in the amount of P367,994.00). been in the hands of the Government, becomes erroneous,
Reversal of the same judgment of the Court of Tax Appeals is also sought by illegal and arbitrary.
ESSO in its own appeal (docketed as G.R. Nos. L28508-09); but in the brief
filed by it in this case, it indicates that it will not press its appeal in the event .. (ESSO) could hardly be charged of delinquency in paying
that "the instant petition for review be denied and that judgment be rendered P221,033.00 out of the deficiency income tax of P367,994.00,
affirming the decision of the Court of Tax Appeals." for which the State should be compensated by the payment of
interest, because the said amount of P221,033.00 was already
The facts are simple enough and are quite quickly recounted. ESSO overpaid in the coffers of the Government. Neither could .. ESSO be
its 1959 income tax by P221,033.00. It was accordingly granted a tax credit in charged for the concomitant use of funds that rightfully belong
this amount by the Comissioner on August 5,1964. However, ESSOs payment to the Government because as early as July 15, 1960, it was
of its income tax for 1960 was found to be short by P367,994.00. So, on July the Government that was using .. ESSOs funds of
10, 1964, the Commissioner wrote to ESSO demanding payment of the P221,033.00. In the circumstances, we find it unfair and
deficiency tax, together with interest thereon for the period from April 18,1961 unjust for .. (the Commissioner) to exact the interest on the
to April 18,1964. On August 10, 1964, ESSO paid under protest the amount said sum of P221,033.00 which, after all, was paid to and
alleged to be due, including the interest as reckoned by the Commissioner. It received by the Government even before the incidence of the
protested the computation of interest, contending it was more than that deficiency income tax of P367,994.00. (Itogon-Suyoc Mines,
properly due. It claimed that it should not have been required to pay interest Inc. v. Commissioner, C.T.A. Case No. 1327, Sept. 30,1965).
on the total amount of the deficiency tax, P367,994.00, but only on the On the contrary, the Government should be the first to blaze
amount of P146,961.00—representing the difference between said deficiency, the trail and set the example of fairness and honest dealing in
P367,994.00, and ESSOs earlier overpayment of P221,033.00 (for which it had the administration of tax laws.
been granted a tax credit). ESSO thus asked for a refund.
Accordingly, we hold that the tax credit of P221,033.00 for
The Internal Revenue Commissioner denied the claim for refund. ESSO 1959 should first be deducted from the basic deficiency tax of
appealed to the Court of Tax Appeals. As aforestated. that Court ordered P367,994.00 for 1960 and the resulting difference of
payment to ESSO of its "refund-claim x x in the amount of P39,787.94 as P146,961.00 would be subject to the 18% interest prescribed
overpaid interest. Hence, this appeal by the Commissioner. The CTA justified by Section 51 (d) of the Revenue Code. According to the
its award of the refund as follows: prayer of ..(ESSO) .. (the Commissioner) is hereby ordered to
refund to .. (ESSO) the amount of P39,787.94 as overpaid
interest in the settlement of its 1960 income tax liability.
... In the letter of August 5, 1964, .. (the Commissioner)
admitted that .. ESSO had overpaid its 1959 income tax by However, as the collection of the tax was not attended with
arbitrariness because .. (ESSO) itself followed x x (the
P221,033.00. Accordingly .. (the Commissioner) granted to ..
ESSO a tax credit of P221,033.00. In short, the said sum of Commissioner's) manner of computing the tax in paying the
sum of P213,189.93 on August 10, 1964, the prayer of ..
P221,033.00 of ESSO's money was in the Government's hands
at the latest on July 15, 1960 when it ESSO paid in full its (ESSO) that it be granted the legal rate of interest on its
 overpayment of P39,787.94 from August 10, 1964 to the time obligation to return money mistakenly paid arises from the moment that
it is actually refunded is denied. (See Collector of Internal payment is made, and not from the time that the payee admits the obligation
Revenue v. Binalbagan Estate, Inc., G.R. No. 1,12752, Jan. to reimburse. The obligation of the payee to reimburse an amount paid to him
30, 1965). results from the mistake, not from the payee's confession of the mistake or
recognition of the obligation to reimburse. In other words, since the amount of
The Commissioner's position is that income taxes are determined and paid on P221,033.00 belonging to ESSO was already in the hands of the Government
an annual basis, and that such determination and payment of annual taxes are as of July, 1960, although the latter had no right whatever to the amount and
separate and independent transactions; and that a tax credit could not be so indeed was bound to return it to ESSO, it was neither legally nor logically
considered until it has been finally approved and the taxpayer duly notified possible for ESSO thereafter to be considered a debtor of the Government in
thereof. Since in this case, he argues, the tax credit of P221,033.00 was that amount of P221,033.00; and whatever other obligation ESSO might
approved only on August 5, 1964, it could not be availed of in reduction of subsequently incur in favor of the Government would have to be reduced by
ESSOs earlier tax deficiency for the year 1960; as of that year, 1960, there that sum, in respect of which no interest could be charged. To interpret the
was as yet no tax credit to speak of, which would reduce the deficiency tax words of the statute in such a manner as to subvert these truisms simply can
liability for 1960. In support of his position, the Commissioner invokes the not and should not be countenanced. "Nothing is better settled than that courts
provisions of Section 51 of the Tax Code pertinently reading as follows: are not to give words a meaning which would lead to absurd or unreasonable
consequences. That is a principle that goes back to In re Allen (2 Phil. 630)
decided on October 29, 1903, where it was held that a literal interpretation is
(c) Definition of deficiency. As used in this Chapter in respect to be rejected if it would be unjust or lead to absurd results." 6 "Statutes
of tax imposed by this Title, the term 'deficiency' means: should receive a sensible construction, such as will give effect to the legislative
intention and so as to avoid an unjust or absurd conclusion." 7
(1) The amount by which the tax imposed by this Title
exceeds the amount shown as the tax by the taxpayer upon WHEREFORE, the petition for review is DENIED, and the Decision of the Court
his return; but the amount so shown on the return shall first of Tax Appeals dated October 28, 1967 subject of the petition is AFFIRMED,
be increased by the amounts previously assessed (or collected without pronouncement as to costs.
without assessment) as a deficiency, and decreased by the
amount previously abated credited, returned, or otherwise in
respect of such tax; ..

xxx xxx xxx

(d) Interest on deficiency. — Interest upon the amount

determined as deficiency shall be assessed at the same time
as the deficiency and shall be paid upon notice and demand
from the Commissioner of Internal Revenue; and shall be
collected as a part of the tax, at the rate of six per centum per
annum from the date prescribed for the payment of the tax
(or, if the tax is paid in installments, from the date prescribed
for the payment of the first installment) to the date the
deficiency is assessed; Provided, That the amount that may be
collected as interest on deficiency shall in no case exceed the
amount corresponding to a period of three years, the present
provision regarding prescription to the contrary
G.R. No. 112170 April 10, 1996
notwithstanding.

CESARIO URSUA, petitioner,
The fact is that, as respondent Court of Tax Appeals has stressed, as early as
vs.
July 15, 1960, the Government already had in its hands the sum of
COURT OF APPEALS AND PEOPLE OF THE PHILIPPINES, respondents.
P221,033.00 representing excess payment. Having been paid and received by
mistake, as petitioner Commissioner subsequently acknowledged, that sum
unquestionably belonged to ESSO, and the Government had the obligation to  
return it to ESSO That acknowledgment of the erroneous payment came some
four (4) years afterwards in nowise negates or detracts from its actuality. The
BELLOSILLO, J.:p presented to show the registered name of accused which according to him was
a condition sine qua non for the validity of his conviction.
This is a petition for review of the decision of the Court of Appeals which
affirmed the conviction of petitioner by the Regional Trial Court of Davao City The trial court rejected his contentions and found him guilty of violating Sec. 1
for violation of Sec. 1 of C.A. No. 142, as amended by R.A. No. 6085, of C.A. No. 142 as amended by R.A. No. 6085. He was sentenced to suffer a
otherwise known as "An Act to Regulate the Use of Aliases". 1 prison term of one (1) year and one (1) day of prision correccional minimum
as minimum, to four (4) years of  prision correccional medium as maximum,
Petitioner Cesario Ursua was a Community Environment and Natural Resources with all the accessory penalties provided for by law, and to pay a fine of
Officer assigned in Kidapawan, Cotabato. On 9 May 1989 the Provincial P4,000.00 plus costs.
Governor of Cotabato requested the Office of the Ombudsman in Manila to
conduct an investigation on a complaint for bribery, dishonesty, abuse of Petitioner appealed to the Court of Appeals.
authority and giving of unwarranted benefits by petitioner and other officials of
the Department of Environment and Natural Resources. The complaint was On 31 May 1993 the Court of Appeals affirmed the conviction of petitioner but
initiated by the Sangguniang Panlalawigan of Cotabato through a resolution modified the penalty by imposing an indeterminate term of one (1) year as
advising the Governor to report the involvement of petitioner and others in the minimum to three (3) years as maximum and a fine of P5,000.00.
illegal cutting of mahogany trees and hauling of illegally-cut logs in the area. 2

Petitioner now comes to us for review of his conviction as he reasserts his

On 1 August 1989 Atty. Francis Palmones, counsel for petitioner, wrote the innocence. He contends that he has not violated C.A. No. 142 as amended by
Office of the Ombudsman in Davao City requesting that he be furnished copy of R.A. No. 6085 as he never used any alias name; neither is "Oscar Perez"
the complaint against petitioner. Atty. Palmones then asked his client Ursua to his alias. An alias, according to him, is a term which connotes the habitual use
take his letter-request to the Office of the Ombudsman because his law firm's of another name by which a person is also known. He claims that he has never
messenger, Oscar Perez, had to attend to some personal matters. Before been known as "Oscar Perez" and that he only used such name on one
proceeding to the Office of the Ombudsman petitioner talked to Oscar Perez occasion and it was with the express consent of Oscar Perez himself. It is his
and told him that he was reluctant to personally ask for the document since he position that an essential requirement for a conviction under C.A. No. 142 as
was one of the respondents before the Ombudsman. However, Perez advised amended by R.A. No. 6085 has not been complied with when the prosecution
him not to worry as he could just sign his (Perez) name if ever he would be failed to prove that his supposed alias was different from his registered name
required to acknowledge receipt of the complaint. 3 in the Registry of Births. He further argues that the Court of Appeals erred in
not considering the defense theory that he was charged under the wrong law. 5
When petitioner arrived at the Office of the Ombudsman in Davao City he was
instructed by the security officer to register in the visitors' logbook. Instead of Time and again we have decreed that statutes are to be construed in the light
writing down his name petitioner wrote the name "Oscar Perez" after which he of the purposes to be achieved and the evils sought to be remedied. Thus in
was told to proceed to the Administrative Division for the copy of the complaint construing a statute the reason for its enactment should be kept in mind and
he needed. He handed the letter of Atty. Palmones to the Chief of the the statute should be construed with reference to the intended scope and
Administrative Division, Ms. Loida Kahulugan, who then gave him a copy of the purpose.6 The court may consider the spirit and reason of the statute, where a
complaint, receipt of which he acknowledged by writing the name "Oscar literal meaning would lead to absurdity, contradiction, injustice, or would
Perez."4 defeat the clear purpose of the lawmakers.7

Before petitioner could leave the premises he was greeted by an acquaintance, For a clear understanding of the purpose of C.A. No. 142 as amended, which
Josefa Amparo, who also worked in the same office. They conversed for a while was allegedly violated by petitioner, and the surrounding circumstances under
then he left. When Loida learned that the person who introduced himself as which the law was enacted, the pertinent provisions thereof, its amendments
"Oscar Perez" was actually petitioner Cesario Ursua, a customer of Josefa and related statutes are herein cited. C.A. No. 142, which was approved on 7
Amparo in her gasoline station, Loida reported the matter to the Deputy November 1936, and before its amendment by R.A. No. 6085, is entitled  An
Ombudsman who recommended that petitioner be accordingly charged. Act to Regulate the Use of Aliases. It provides as follows:

On 18 December 1990, after the prosecution had completed the presentation Sec. 1. Except as a pseudonym for literary purposes, no
of its evidence, petitioner without leave of court filed a demurrer to evidence person shall use any name different from the one with which
alleging that the failure of the prosecution to prove that his supposed alias was he was christened or by which he has been known since his
different from his registered name in the local civil registry was fatal to its childhood, or such substitute name as may have been
cause. Petitioner argued that no document from the local civil registry was
 authorized by a competent court. The name shall comprise the The objective and purpose of C.A. No. 142 have their origin and basis in Act
patronymic name and one or two surnames. No. 3883, An Act to Regulate the Use in Business Transactions of Names other
than True Names, Prescribing the Duties of the Director of the Bureau of
Sec. 2. Any person desiring to use an alias or aliases shall Commerce and Industry in its Enforcement, Providing Penalties for Violations
apply for authority therefor in proceedings like those legally thereof, and for other purposes, which was approved on 14 November 1931
provided to obtain judicial authority for a change of name. and amended by Act No. 4147, approved on 28 November 1934. 8 The pertinent
Separate proceedings shall be had for each alias, and each provisions of Act No. 3883 as amended follow —
new petition shall set forth the original name and
the alias or aliases for the use of which judicial authority has Sec. 1. It shall be unlawful for any person to use or sign, on
been, obtained, specifying the proceedings and the date on any written or printed receipt including receipt for tax or
which such authority was granted. Judicial authorities for the business or any written or printed contract not verified by a
use of aliases shall be recorded in the proper civil notary public or on any written or printed evidence of any
register . . . . agreement or business transactions, any name used in
connection with his business other than his true name, or
The above law was subsequently amended by R.A. No. 6085, approved on 4 keep conspicuously exhibited in plain view in or at the place
August 1969. As amended, C.A. No. 142 now reads: where his business is conducted, if he is engaged in a
business, any sign announcing a firm name or business name
or style without first registering such other name, or such firm
Sec. 1. Except as a pseudonym solely for literary, cinema, name, or business name or style in the Bureau of Commerce
television, radio or other entertainment purposes and in together with his true name and that of any other person
athletic events where the use of pseudonym is a normally having a joint or common interest with him in such contract,
accepted practice, no person shall use any name different agreement, business transaction, or business . . . .
from the one with which he was registered at birth in the
office of the local civil registry or with which he was baptized
for the first time, or in case of all alien, with which he was For a bit of history, the enactment of C.A. No. 142 as amended was made
registered in the bureau of immigration upon entry; or such primarily to curb the common practice among the Chinese of adopting scores
substitute name as may have been authorized by a competent of different names and aliases which created tremendous confusion in the field
court: Provided, That persons whose births have not been of trade. Such a practice almost bordered on the crime of using fictitious
registered in any local civil registry and who have not been names which for obvious reasons could not be successfully maintained against
baptized, have one year from the approval of this act within the Chinese who, rightly or wrongly, claimed they possessed a thousand and
which to register their names in the civil registry of their one names. C.A. No. 142 thus penalized the act of using an alias name, unless
residence. The name shall comprise the patronymic name and such alias was duly authorized by proper judicial proceedings and recorded in
one or two surnames. the civil register.9

Sec. 2. Any person desiring to use an alias shall apply for In Yu Kheng Chiau v. Republic 10 the Court had occasion to explain the
authority therefor in proceedings like those legally provided to meaning, concept and ill effects of the use of an alias within the purview of
obtain judicial authority for a change of name and no person C.A. No. 142 when we ruled —
shall be allowed to secure such judicial authority for more
than one alias. The petition for an alias shall set forth the There can hardly be any doubt that petitioner's use
person's baptismal and family name and the name recorded in of alias "Kheng Chiau Young" in addition to his real name "Yu
the civil registry, if different, his immigrant's name, if an alien, Cheng Chiau" would add to more confusion. That he is known
and his pseudonym, if he has such names other than his in his business, as manager of the Robert Reid, Inc., by the
original or real name, specifying the reason or reasons for the former name, is not sufficient reason to allow him its use.
desired alias. The judicial authority for the use of alias, the After all, petitioner admitted that he is known to his associates
Christian name and the alien immigrant's name shall be by both names. In fact, the Anselmo Trinidad, Inc., of which
recorded in the proper local civil registry, and no person shall he is a customer, knows him by his real name. Neither would
use any name or names other than his original or real name the fact that he had encountered certain difficulties in his
unless the same is or are duly recorded in the proper local civil transactions with government offices which required him to
registry. explain why he bore two names, justify the grant of his
petition, for petitioner could easily avoid said difficulties by
 simply using and sticking only to his real name "Yu Kheng records hence open to inspection and examination by anyone under the proper
Chiau." circumstances.

The fact that petitioner intends to reside permanently in the While the act of petitioner may be covered by other provisions of law, such
Philippines, as shown by his having filed a petition for does not constitute an offense within the concept of C.A. No. 142 as amended
naturalization in Branch V of the above-mentioned court, under which he is prosecuted. The confusion and fraud in business transactions
argues the more against the grant of his petition, because if which the anti-alias law and its related statutes seek to prevent are not present
naturalized as a Filipino citizen, there would then be no here as the circumstances are peculiar and distinct from those contemplated by
necessity for his further using said alias, as it would be the legislature in enacting C.A. No. 142 as amended. There exists a valid
contrary to the usual Filipino way and practice of using only presumption that undesirable consequences were never intended by a
one name in ordinary as well as business transactions. And, as legislative measure and that a construction of which the statute is fairly
the lower court correctly observed, if he believes (after he is susceptible is favored, which will avoid all objectionable, mischievous,
naturalized) that it would be better for him to write his name indefensible, wrongful, evil and injurious consequences. 12 Moreover, as C.A.
following the Occidental method, "he can easily file a petition No. 142 is a penal statute, it should be construed strictly against the State and
for change of name, so that in lieu of the name "Yu Kheng in favor of the accused. 13 The reason for this principle is the tenderness of the
Chian," he can, abandoning the same, ask for authority to law for the rights of individuals and the object is to establish a certain rule by
adopt the name Kheng Chiau Young." conformity to which mankind would be safe, and the discretion of the court
limited. 14 Indeed, our mind cannot rest easy on the proposition that petitioner
All things considered, we are of the opinion and so hold, that should be convicted on a law that does not clearly penalize the act done by
petitioner has not shown satisfactory proper and reasonable him.
grounds under the aforequoted provisions of Commonwealth
Act No. 142 and the Rules of Court, to warrant the grant of his WHEREFORE, the questioned decision of the Court of Appeals affirming that of
petition for the use of an alias name. the Regional Trial Court of Davao City is REVERSED and SET ASIDE and
petitioner CESARIO URSUA is ACQUITTED of the crime charged.
Clearly therefore an alias is a name or names used by a person or intended to
be used by him publicly and habitually usually in business transactions in SO ORDERED.
addition to his real name by which he is registered at birth or baptized the first
time or substitute name authorized by a competent authority. A man's name is
simply the sound or sounds by which he is commonly designated by his fellows
and by which they distinguish him but sometimes a man is known by several
different names and these are known as aliases. 11 Hence, the use of a
fictitious name or a different name belonging to another person in a single
instance without any sign or indication that the user intends to be known by
this name in addition to his real name from that day forth does not fall within
the prohibition contained in C.A. No. 142 as amended. This is so in the case at
bench.

It is not disputed that petitioner introduced himself in the Office of the

Ombudsman as "Oscar Perez," which was the name of the messenger of his
lawyer who should have brought the letter to that office in the first place
instead of petitioner. He did so while merely serving the request of his lawyer
to obtain a copy of the complaint in which petitioner was a respondent. There
is no question then that "Oscar Perez" is not an alias name of petitioner. There
is no evidence showing that he had used or was intending to use that name as
his second name in addition to his real name. The use of the name "Oscar
Perez" was made by petitioner in an isolated transaction where he was not
even legally required to expose his real identity. For, even if he had identified
himself properly at the Office of the Ombudsman, petitioner would still be able
to get a copy of the complaint as a matter of right, and the Office of the
Ombudsman could not refuse him because the complaint was part of public