Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-63915 April 24, 1985

LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners, vs.HON. JUAN C. TUVERA, in his capacity as Executive Assistant to the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President , MELQUIADES P. DE LA CRUZ, in his capacity as Director, Malacañang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of Printing, respondents.

ESCOLIN, J.:

Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article IV of the 1973 Philippine Constitution, 1 as well as the principle that laws to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of implementation and administrative orders.

Specifically, the publication of the following presidential issuances is sought:

a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286, 298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445, 447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731, 733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165, 1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-1840, 1842-1847.

b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161, 173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309, 312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440, 444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611, 612, 615, 641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-1178,1180-1278.

c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.

d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535, 1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754, 1762, 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826, 1829, 1831-1832, 1835-1836,

1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866, 1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-2028, 2030-2044, 2046-2145, 2147-2161, 2163-2244.

e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507, 509-510, 522, 524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.

f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95, 107, 120, 122, 123.

g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.

The respondents, through the Solicitor General, would have this case dismissed outright on the ground that petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged non-publication of the presidential issuances in question 2 said petitioners are without the requisite legal personality to institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning of Section 3, Rule 65 of the Rules of Court, which we quote:

SEC. 3. Petition for Mandamus.—When any tribunal, corporation, board or person unlawfully neglects the performance of an act which the law specifically enjoins as a duty resulting from an office, trust, or station, or unlawfully excludes another from the use a rd enjoyment of a right or office to which such other is entitled, and there is no other plain, speedy and adequate remedy in the ordinary course of law, the person aggrieved thereby may file a verified petition in the proper court alleging the facts with certainty and praying that judgment be rendered commanding the defendant, immediately or at some other specified time, to do the act required to be done to Protect the rights of the petitioner, and to pay the damages sustained by the petitioner by reason of the wrongful acts of the defendant.

Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its object is to compel the performance of a public duty, they need not show any specific interest for their petition to be given due course.

The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor General, 3 this Court held that while the general rule is that "a writ of mandamus would be granted to a private individual only in those cases where he has some private or particular interest to be subserved, or some particular right to be protected, independent of that which he holds with the public at large," and "it is for the public officers exclusively to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless, "when the question is one of public right and the object of the mandamus is to procure the enforcement of a public duty, the people are regarded as the real party in interest and the relator at whose instigation the proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to show that he is a citizen and as such interested in the execution of the laws [High, Extraordinary Legal Remedies, 3rd ed., sec. 431].

Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the mandamus proceedings brought to compel the Governor General to call a special election for the position of municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:

We are therefore of the opinion that the weight of authority supports the proposition that the relator is a proper party to proceedings of this character when a public right is sought to be enforced. If the general rule in America were otherwise, we think that it would not be applicable to the case at bar for the reason 'that it is always dangerous to apply a general rule to a particular case without keeping in mind the reason for the rule, because, if under the particular circumstances the reason for the rule does not exist, the rule itself is not applicable and reliance upon the rule may well lead to error'

No reason exists in the case at bar for applying the general rule insisted upon by counsel for the respondent. The circumstances which surround this case are different from those in the United States, inasmuch as if the relator is not a proper party to these proceedings no other person could be, as we have seen that it is not the duty of the law officer of the Government to appear and represent the people in cases of this character.

The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case apply squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public right recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute this proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering that the Solicitor General, the government officer generally empowered to represent the people, has entered his appearance for respondents in this case.

Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since the presidential issuances in question contain special provisions as to the date they are to take effect, publication in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on Article 2 of the Civil Code:

Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, ...

The interpretation given by respondent is in accord with this Court's construction of said article. In a long line of decisions, 4 this Court has ruled that publication in the Official Gazette is necessary in those cases where the legislation itself does not provide for its effectivity date-for then the date of publication is material for determining its date of effectivity, which is the fifteenth day following its publication-but not when the law itself provides for the date when it goes into effect.

Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the fact of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is easily reached that said Article 2 does not preclude the requirement of publication in the Official Gazette, even if the law itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows:

Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and resolutions of a public nature of the, Congress of the Philippines; [2] all executive and administrative orders and proclamations, except such as have no general applicability; [3] decisions or abstracts of decisions of the Supreme Court and the Court of Appeals as may be deemed by said courts of sufficient importance to be so published; [4] such documents or classes of documents as may be required so to be published by law; and [5] such documents or classes of documents as the

President of the Philippines shall determine from time to time to have general applicability and legal effect, or which he may authorize so to be published. ...

The clear object of the above-quoted provision is to give the general public adequate notice of the various laws which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a constructive one.

Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital significance that at this time when the people have bestowed upon the President a power heretofore enjoyed solely by the legislature. While the people are kept abreast by the mass media of the debates and deliberations in the Batasan Pambansa—and for the diligent ones, ready access to the legislative records—no such publicity accompanies the law-making process of the President. Thus, without publication, the people have no means of knowing what presidential decrees have actually been promulgated, much less a definite way of informing themselves of the specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno en uso de su potestad. 5

The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official Gazette ... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty must be enforced if the Constitutional right of the people to be informed on matters of public concern is to be given substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such listing, to our mind, leaves respondents with no discretion whatsoever as to what must be included or excluded from such publication.

The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by law. Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise impose a burden or. the people, such as tax and revenue measures, fall within this category. Other presidential issuances which apply only to particular persons or class of persons such as administrative and executive orders need not be published on the assumption that they have been circularized to all concerned. 6

It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability" is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC 7:

In a time of proliferating decrees, orders and letters of instructions which all form part of the law of the land, the requirement of due process and the Rule of Law demand that the Official Gazette as the official government repository promulgate and publish the texts of all such decrees, orders and instructions so that the people may know where to obtain their official and specific contents.

The Court therefore declares that presidential issuances of general application, which have not been published, shall have no force and effect. Some members of the Court, quite apprehensive about the possible unsettling effect this decision might have on acts done in reliance of the validity of those presidential decrees which were published only during the pendency of this petition, have put the question as to whether the Court's declaration of invalidity apply to P.D.s which had been enforced or implemented prior to their publication. The answer is all too familiar. In similar situations in the

past this Court had taken the pragmatic and realistic course set forth in Chicot County Drainage District vs. Baxter Bank 8 to wit:

The courts below have proceeded on the theory that the Act of Congress, having been found to be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S. 425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that such broad statements as to the effect of a determination of unconstitutionality must be taken with qualifications. The actual existence of a statute, prior to such a determination, is an operative fact and may have consequences which cannot justly be ignored. The past cannot always be erased by a new judicial declaration. The effect of the subsequent ruling as to invalidity may have to be considered in various aspects-with respect to particular conduct, private and official. Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application, demand examination. These questions are among the most difficult of those which have engaged the attention of courts, state and federal and it is manifest from numerous decisions that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.

Consistently with the above principle, this Court in Rutter vs. Esteban 9 sustained the right of a party under the Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this Court.

Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official Gazette is "an operative fact which may have consequences which cannot be justly ignored. The past cannot always be erased by a new judicial declaration ... that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified."

From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought by petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive, 1278, and 1937 to 1939, inclusive, have not been so published. 10 Neither the subject matters nor the texts of these PDs can be ascertained since no copies thereof are available. But whatever their subject matter may be, it is undisputed that none of these unpublished PDs has ever been implemented or enforced by the government. InPesigan vs. Angeles, 11 the Court, through Justice Ramon Aquino, ruled that "publication is necessary to apprise the public of the contents of [penal] regulations and make the said penalties binding on the persons affected thereby. " The cogency of this holding is apparently recognized by respondent officials considering the manifestation in their comment that "the government, as a matter of policy, refrains from prosecuting violations of criminal laws until the same shall have been published in the Official Gazette or in some other publication, even though some criminal laws provide that they shall take effect immediately.

WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential issuances which are of general application, and unless so published, they shall have no binding force and effect.

SO ORDERED.

Relova, J., concurs.

Aquino, J., took no part.

Concepcion, Jr., J., is on leave.

Separate Opinions

FERNANDO, C.J., concurring (with qualification):

There is on the whole acceptance on my part of the views expressed in the ably written opinion of Justice Escolin. I am unable, however, to concur insofar as it would unqualifiedly impose the requirement of publication in the Official Gazette for unpublished "presidential issuances" to have binding force and effect.

I shall explain why.

1. It is of course true that without the requisite publication, a due process question would arise if made to apply adversely to a party who is not even aware of the existence of any legislative or executive act having the force and effect of law. My point is that such publication required need not be confined to the Official Gazette. From the pragmatic standpoint, there is an advantage to be gained. It conduces to certainty. That is too be admitted. It does not follow, however, that failure to do so would in all cases and under all circumstances result in a statute, presidential decree or any other executive act of the same category being bereft of any binding force and effect. To so hold would, for me, raise a constitutional question. Such a pronouncement would lend itself to the interpretation that such a legislative or presidential act is bereft of the attribute of effectivity unless published in the Official Gazette. There is no such requirement in the Constitution as Justice Plana so aptly pointed out. It is true that what is decided now applies only to past "presidential issuances". Nonetheless, this clarification is, to my mind, needed to avoid any possible misconception as to what is required for any statute or presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion of Justice Plana. Its first paragraph sets forth what to me is the constitutional doctrine applicable to this case. Thus: "The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said though that the guarantee of due process requires notice of laws to affected Parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. 1 I am likewise in agreement with its closing paragraph: "In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette. 2

3. It suffices, as was stated by Judge Learned Hand, that law as the command of the government "must be ascertainable in some form if it is to be enforced at all. 3 It would indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if it is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure once published therein there is the ascertainable mode of determining the exact date of its effectivity. Still for me that does not dispose of the question of what is the jural effect of past presidential decrees or executive acts not so published. For prior thereto, it could be that parties aware of their existence could have conducted themselves in accordance with their provisions. If no legal consequences could attach due to lack of publication in the Official Gazette, then serious problems could arise. Previous transactions based on such "Presidential Issuances" could be open to question. Matters deemed settled could still be inquired into. I am not prepared to hold that such an effect is contemplated by our decision. Where

such presidential decree or executive act is made the basis of a criminal prosecution, then, of course, its ex post facto character becomes evident. 5 In civil cases though, retroactivity as such is not conclusive on the due process aspect. There must still be a showing of arbitrariness. Moreover, where the challenged presidential decree or executive act was issued under the police power, the non-impairment clause of the Constitution may not always be successfully invoked. There must still be that process of balancing to determine whether or not it could in such a case be tainted by infirmity. 6 In traditional terminology, there could arise then a question of unconstitutional application. That is as far as it goes.

4. Let me make therefore that my qualified concurrence goes no further than to affirm that publication is essential to the effectivity of a legislative or executive act of a general application. I am not in agreement with the view that such publication must be in the Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as to laws taking effect after fifteen days following the completion of their publication in the Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover, the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does not and cannot have the juridical force of a constitutional command. A later legislative or executive act which has the force and effect of law can legally provide for a different rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin that presidential decrees and executive acts not thus previously published in the Official Gazette would be devoid of any legal character. That would be, in my opinion, to go too far. It may be fraught, as earlier noted, with undesirable consequences. I find myself therefore unable to yield assent to such a pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay concur in this separate opinion.

Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

 

TEEHANKEE, J., concurring:

I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme. Justice Herrera. The Rule of Law connotes a body of norms and laws published and ascertainable and of equal application to all similarly circumstances and not subject to arbitrary change but only under certain set procedures. The Court has consistently stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity to be informed must be afforded to the people who are commanded to obey before they can be punished for its violation, 1 citing the settled principle based on due process enunciated in earlier cases that "before the public is bound by its contents, especially its penal provisions, a law, regulation or circular must first be published and the people officially and specially informed of said contents and its penalties.

Without official publication in the Official Gazette as required by Article 2 of the Civil Code and the Revised Administrative Code, there would be no basis nor justification for the corollary rule of Article 3 of the Civil Code (based on constructive notice that the provisions of the law are ascertainable from the public and official repository where they are duly published) that "Ignorance of the law excuses no one from compliance therewith.

Respondents' contention based on a misreading of Article 2 of the Civil Code that "only laws which are silent as to their effectivity [date] need be published in the Official Gazette for their effectivity" is

manifestly untenable. The plain text and meaning of the Civil Code is that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, " i.e. a different effectivity date is provided by the law itself. This proviso perforce refers to a law that has been duly published pursuant to the basic constitutional requirements of due process. The best example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall take effect [only] one year [not 15 days] after such publication. 2 To sustain respondents' misreading that "most laws or decrees specify the date of their effectivity and for this reason, publication in the Official Gazette is not necessary for their effectivity 3 would be to nullify and render nugatory the Civil Code's indispensable and essential requirement of prior publication in the Official Gazette by the simple expedient of providing for immediate effectivity or an earlier effectivity date in the law itself before the completion of 15 days following its publication which is the period generally fixed by the Civil Code for its proper dissemination.

 MELENCIO-HERRERA, J., concurring:

I agree. There cannot be any question but that even if a decree provides for a date of effectivity, it has to be published. What I would like to state in connection with that proposition is that when a date of effectivity is mentioned in the decree but the decree becomes effective only fifteen (15) days after its publication in the Official Gazette, it will not mean that the decree can have retroactive effect to the date of effectivity mentioned in the decree itself. There should be no retroactivity if the retroactivity will run counter to constitutional rights or shall destroy vested rights.

 PLANA, J., concurring (with qualification):

The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. * It may be said though that the guarantee of due process requires notice of laws to affected parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. Neither is the publication of laws in the Official Gazetterequired by any statute as a prerequisite for their effectivity, if said laws already provide for their effectivity date.

Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided " Two things may be said of this provision: Firstly, it obviously does not apply to a law with a built-in provision as to when it will take effect. Secondly, it clearly recognizes that each law may provide not only a different period for reckoning its effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall be published elsewhere than in the Official Gazette.

Commonwealth Act No. 638, in my opinion, does not support the proposition that for their effectivity, laws must be published in the Official Gazette. The said law is simply "An Act to Provide for the Uniform Publication and Distribution of the Official Gazette." Conformably therewith, it authorizes the publication of the Official Gazette, determines its frequency, provides for its sale and distribution, and defines the authority of the Director of Printing in relation thereto. It also enumerates what shall be published in the Official Gazette, among them, "important legislative acts and resolutions of a public nature of the Congress of the Philippines" and "all executive and administrative orders and proclamations, except such as have no general applicability." It is noteworthy that not all legislative acts are required to be published in the Official Gazette but only "important" ones "of a public nature." Moreover, the said law does not provide that publication in the Official Gazette is essential for the effectivity of laws. This is as it should be, for all statutes are equal and stand on the same footing. A law, especially an earlier one of general application such as Commonwealth Act No. 638, cannot nullify or restrict the operation of a subsequent statute that has

a provision of its own as to when and how it will take effect. Only a higher law, which is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette.

Cuevas and Alampay, JJ., concur.

 GUTIERREZ, Jr., J., concurring:

I concur insofar as publication is necessary but reserve my vote as to the necessity of such publication being in the Official Gazette.

 DE LA FUENTE, J., concurring:

I concur insofar as the opinion declares the unpublished decrees and issuances of a public nature or general applicability ineffective, until due publication thereof.

Separate Opinions

FERNANDO, C.J., concurring (with qualification):

There is on the whole acceptance on my part of the views expressed in the ably written opinion of Justice Escolin. I am unable, however, to concur insofar as it would unqualifiedly impose the requirement of publication in the Official Gazette for unpublished "presidential issuances" to have binding force and effect.

I shall explain why.

1. It is of course true that without the requisite publication, a due process question would arise if made to apply adversely to a party who is not even aware of the existence of any legislative or executive act having the force and effect of law. My point is that such publication required need not be confined to the Official Gazette. From the pragmatic standpoint, there is an advantage to be gained. It conduces to certainty. That is too be admitted. It does not follow, however, that failure to do so would in all cases and under all circumstances result in a statute, presidential decree or any other executive act of the same category being bereft of any binding force and effect. To so hold would, for me, raise a constitutional question. Such a pronouncement would lend itself to the interpretation that such a legislative or presidential act is bereft of the attribute of effectivity unless published in the Official Gazette. There is no such requirement in the Constitution as Justice Plana so aptly pointed out. It is true that what is decided now applies only to past "presidential issuances". Nonetheless, this clarification is, to my mind, needed to avoid any possible misconception as to what is required for any statute or presidential act to be impressed with binding force or effectivity.

2. It is quite understandable then why I concur in the separate opinion of Justice Plana. Its first paragraph sets forth what to me is the constitutional doctrine applicable to this case. Thus: "The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. It may be said though that the guarantee of due process requires notice of laws to affected Parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. 1 I am

likewise in agreement with its closing paragraph: "In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette. 2

3. It suffices, as was stated by Judge Learned Hand, that law as the command of the government "must be ascertainable in some form if it is to be enforced at all. 3 It would indeed be to reduce it to the level of mere futility, as pointed out by Justice Cardozo, "if it is unknown and unknowable. 4 Publication, to repeat, is thus essential. What I am not prepared to subscribe to is the doctrine that it must be in the Official Gazette. To be sure once published therein there is the ascertainable mode of determining the exact date of its effectivity. Still for me that does not dispose of the question of what is the jural effect of past presidential decrees or executive acts not so published. For prior thereto, it could be that parties aware of their existence could have conducted themselves in accordance with their provisions. If no legal consequences could attach due to lack of publication in the Official Gazette, then serious problems could arise. Previous transactions based on such "Presidential Issuances" could be open to question. Matters deemed settled could still be inquired into. I am not prepared to hold that such an effect is contemplated by our decision. Where such presidential decree or executive act is made the basis of a criminal prosecution, then, of course, its ex post facto character becomes evident. 5 In civil cases though, retroactivity as such is not conclusive on the due process aspect. There must still be a showing of arbitrariness. Moreover, where the challenged presidential decree or executive act was issued under the police power, the non-impairment clause of the Constitution may not always be successfully invoked. There must still be that process of balancing to determine whether or not it could in such a case be tainted by infirmity. 6 In traditional terminology, there could arise then a question of unconstitutional application. That is as far as it goes.

4. Let me make therefore that my qualified concurrence goes no further than to affirm that publication is essential to the effectivity of a legislative or executive act of a general application. I am not in agreement with the view that such publication must be in the Official Gazette. The Civil Code itself in its Article 2 expressly recognizes that the rule as to laws taking effect after fifteen days following the completion of their publication in the Official Gazette is subject to this exception, "unless it is otherwise provided." Moreover, the Civil Code is itself only a legislative enactment, Republic Act No. 386. It does not and cannot have the juridical force of a constitutional command. A later legislative or executive act which has the force and effect of law can legally provide for a different rule.

5. Nor can I agree with the rather sweeping conclusion in the opinion of Justice Escolin that presidential decrees and executive acts not thus previously published in the Official Gazette would be devoid of any legal character. That would be, in my opinion, to go too far. It may be fraught, as earlier noted, with undesirable consequences. I find myself therefore unable to yield assent to such a pronouncement.

I am authorized to state that Justices Makasiar, Abad Santos, Cuevas, and Alampay concur in this separate opinion.

Makasiar, Abad Santos, Cuevas and Alampay, JJ., concur.

 TEEHANKEE, J., concurring:

I concur with the main opinion of Mr. Justice Escolin and the concurring opinion of Mme. Justice Herrera. The Rule of Law connotes a body of norms and laws published and ascertainable and of equal application to all similarly circumstances and not subject to arbitrary change but only under

certain set procedures. The Court has consistently stressed that "it is an elementary rule of fair play and justice that a reasonable opportunity to be informed must be afforded to the people who are commanded to obey before they can be punished for its violation, 1 citing the settled principle based on due process enunciated in earlier cases that "before the public is bound by its contents, especially its penal provisions, a law, regulation or circular must first be published and the people officially and specially informed of said contents and its penalties.

Without official publication in the Official Gazette as required by Article 2 of the Civil Code and the Revised Administrative Code, there would be no basis nor justification for the corollary rule of Article 3 of the Civil Code (based on constructive notice that the provisions of the law are ascertainable from the public and official repository where they are duly published) that "Ignorance of the law excuses no one from compliance therewith.

Respondents' contention based on a misreading of Article 2 of the Civil Code that "only laws which are silent as to their effectivity [date] need be published in the Official Gazette for their effectivity" is manifestly untenable. The plain text and meaning of the Civil Code is that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided, " i.e. a different effectivity date is provided by the law itself. This proviso perforce refers to a law that has been duly published pursuant to the basic constitutional requirements of due process. The best example of this is the Civil Code itself: the same Article 2 provides otherwise that it "shall take effect [only] one year [not 15 days] after such publication. 2 To sustain respondents' misreading that "most laws or decrees specify the date of their effectivity and for this reason, publication in the Official Gazette is not necessary for their effectivity 3 would be to nullify and render nugatory the Civil Code's indispensable and essential requirement of prior publication in the Official Gazette by the simple expedient of providing for immediate effectivity or an earlier effectivity date in the law itself before the completion of 15 days following its publication which is the period generally fixed by the Civil Code for its proper dissemination.

 MELENCIO-HERRERA, J., concurring:

I agree. There cannot be any question but that even if a decree provides for a date of effectivity, it has to be published. What I would like to state in connection with that proposition is that when a date of effectivity is mentioned in the decree but the decree becomes effective only fifteen (15) days after its publication in the Official Gazette, it will not mean that the decree can have retroactive effect to the date of effectivity mentioned in the decree itself. There should be no retroactivity if the retroactivity will run counter to constitutional rights or shall destroy vested rights.

 PLANA, J., concurring (with qualification):

The Philippine Constitution does not require the publication of laws as a prerequisite for their effectivity, unlike some Constitutions elsewhere. * It may be said though that the guarantee of due process requires notice of laws to affected parties before they can be bound thereby; but such notice is not necessarily by publication in the Official Gazette. The due process clause is not that precise. Neither is the publication of laws in the Official Gazetterequired by any statute as a prerequisite for their effectivity, if said laws already provide for their effectivity date.

Article 2 of the Civil Code provides that "laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided " Two things may be said of this provision: Firstly, it obviously does not apply to a law with a built-in provision as to when it will take effect. Secondly, it clearly recognizes that each law may provide not only a different period for reckoning its effectivity date but also a different mode of notice. Thus, a law may prescribe that it shall be published elsewhere than in the Official Gazette.

Commonwealth Act No. 638, in my opinion, does not support the proposition that for their effectivity, laws must be published in the Official Gazette. The said law is simply "An Act to Provide for the Uniform Publication and Distribution of the Official Gazette." Conformably therewith, it authorizes the publication of the Official Gazette, determines its frequency, provides for its sale and distribution, and defines the authority of the Director of Printing in relation thereto. It also enumerates what shall be published in the Official Gazette, among them, "important legislative acts and resolutions of a public nature of the Congress of the Philippines" and "all executive and administrative orders and proclamations, except such as have no general applicability." It is noteworthy that not all legislative acts are required to be published in the Official Gazette but only "important" ones "of a public nature." Moreover, the said law does not provide that publication in the Official Gazette is essential for the effectivity of laws. This is as it should be, for all statutes are equal and stand on the same footing. A law, especially an earlier one of general application such as Commonwealth Act No. 638, cannot nullify or restrict the operation of a subsequent statute that has a provision of its own as to when and how it will take effect. Only a higher law, which is the Constitution, can assume that role.

In fine, I concur in the majority decision to the extent that it requires notice before laws become effective, for no person should be bound by a law without notice. This is elementary fairness. However, I beg to disagree insofar as it holds that such notice shall be by publication in the Official Gazette.

Cuevas and Alampay, JJ., concur.

 GUTIERREZ, Jr., J., concurring:

I concur insofar as publication is necessary but reserve my vote as to the necessity of such publication being in the Official Gazette.

 DE LA FUENTE, J., concurring:

I concur insofar as the opinion declares the unpublished decrees and issuances of a public nature or general applicability ineffective, until due publication thereof.

Footnotes

1 Section 6. The right of the people to information on matters of public concern shag be recognized, access to official records, and to documents and papers pertaining to official acts, transactions, or decisions, shag be afforded the citizens subject to such limitation as may be provided by law.2 Anti-Chinese League vs. Felix, 77 Phil. 1012; Costas vs. Aidanese, 45 Phil. 345; Almario vs. City Mayor, 16 SCRA 151;Parting vs. San Jose Petroleum, 18 SCRA 924; Dumlao vs. Comelec, 95 SCRA 392.3 16 Phil. 366, 378.4 Camacho vs. Court of Industrial Relations, 80 Phil 848; Mejia vs. Balolong, 81 Phil. 486; Republic of the Philippines vs. Encamacion, 87 Phil. 843; Philippine Blooming Mills, Inc. vs. Social Security System, 17 SCRA 1077; Askay vs. Cosalan, 46 Phil. 179.5 1 Manresa, Codigo Civil 7th Ed., p. 146.6 People vs. Que Po Lay, 94 Phil. 640; Balbuena et al. vs. Secretary of Education, et al., 110 Phil. 150.7 82 SCRA 30, dissenting opinion.8 308 U.S. 371, 374.

9 93 Phil.. 68,.10 The report was prepared by the Clerk of Court after Acting Director Florendo S. Pablo Jr. of the Government Printing Office, failed to respond to her letter-request regarding the respective dates of publication in the Official Gazette of the presidential issuances listed therein. No report has been submitted by the Clerk of Court as to the publication or non-publication of other presidential issuances.11 129 SCRA 174.Fernando, CJ.:1 Separate Opinion of Justice Plana, first paragraph. He mentioned in tills connection Article 7, Sec. 21 of the Wisconsin Constitution and State ex rel. White v. Grand Superior Ct., 71 ALR 1354, citing the Constitution of Indiana, U.S.A2 Ibid, closing paragraph.3 Learned Hand, The Spirit of Liberty 104 (1960).4 Cardozo, The Growth of the Law, 3 (1924).5 Cf. Nunez v. Sandiganbayan, G.R. No. 50581-50617, January 30, 1982, 111 SCRA 433.6 Cf. Alalayan v. National Power Corporation, L-24396, July 29, 1968, 24 SCRA 172.Teehankee, J.:1 People vs. de Dios, G.R. No. 11003, Aug. 3l, 1959, per the late Chief Justice Paras.2 Notes in brackets supplied.3 Respondents: comment, pp. 14-15.Plana, J.:* See e.g., Wisconsin Constitution, Art. 7, Sec. 21: "The legislature shall provide publication of all statute laws ... and no general law shall be in force until published." See also S ate ex rel. White vs. Grand Superior Ct., 71 ALR 1354, citing Constitution of Indiana, U.S.A.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 46623 December 7, 1939

MARCIAL KASILAG, petitioner, vs.RAFAELA RODRIGUEZ, URBANO ROQUE, SEVERO MAPILISAN and IGNACIO DEL ROSARIO, respondents.

Luis M. Kasilag for petitioner.Fortunato de Leon for respondents.

 IMPERIAL, J.:

This is an appeal taken by the defendant-petitioner from the decision of the Court of Appeals which modified that rendered by the court of First Instance of Bataan in civil case No. 1504 of said court and held: that the contract Exhibit "1" is entirely null and void and without effect; that the plaintiffs-respondents, then appellants, are the owners of the disputed land, with its improvements, in common ownership with their brother Gavino Rodriguez, hence, they are entitled to the possession thereof; that the defendant-petitioner should yield possession of the land in their favor, with all the improvements thereon and free from any lien; that the plaintiffs-respondents jointly and severally pay to the defendant-petitioner the sum of P1,000 with interest at 6 percent per annum from the date of the decision; and absolved the plaintiffs-respondents from the cross-complaint relative to the value of the improvements claimed by the defendant-petitioner. The appealed decision also ordered the registrar of deeds of Bataan to cancel certificate of title No. 325, in the name of the deceased Emiliana Ambrosio and to issue in lieu thereof another certificate of title in favor of the plaintiffs-respondents and their brother Gavino Rodriguez, as undivided owners in equal parts, free of all liens and incumbrances except those expressly provided by law, without special pronouncement as to the costs.

The respondents, children and heirs of the deceased Emiliana Ambrosio, commenced the aforesaid civil case to the end that they recover from the petitioner the possession of the land and its improvements granted by way of homestead to Emiliana Ambrosio under patent No. 16074 issued on January 11, 1931, with certificate of title No. 325 issued by the registrar of deeds of Bataan on June 27, 1931 in her favor, under section 122 of Act No. 496, which land was surveyed and identified in the cadastre of the municipality of Limay, Province of Bataan, as lot No. 285; that the petitioner pay to them the sum of P650 being the approximate value of the fruits which he received from the land; that the petitioner sign all the necessary documents to transfer the land and its possession to the respondents; that he petitioner be restrained, during the pendency of the case, from conveying or encumbering the land and its improvements; that the registrar of deeds of Bataan cancel certificate of title No. 325 and issue in lieu thereof another in favor of the respondents, and that the petitioner pay the costs of suit.

The petitioner denied in his answer all the material allegations of the complaint and by way of special defense alleged that he was in possession of the land and that he was receiving the fruits thereof by virtue of a mortgage contract, entered into between him and the deceased Emiliana Ambrosio on May 16, 1932, which was duly ratified by a notary public; and in counterclaim asked that the respondents pay him the sum of P1,000 with 12 per cent interest per annum which the deceased

owed him and that, should the respondents be declared to have a better right to the possession of the land, that they be sentenced to pay him the sum of P5,000 as value of all the improvements which he introduced upon the land. lawphil.net

On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner executed the following public deed:

"This agreement, made and entered into this 16th day of May, 1932, by and between Emiliana Ambrosio, Filipino, of legal age, widow and resident of Limay, Bataan, P.L., hereinafter called the party of the first part, and Marcial Kasilag, Filipino, of legal age, married to Asuncion Roces, and resident at 312 Perdigon Street, Manila, P.L., hereinafter called party of the second part.

WITNESSETH: That the parties hereto hereby covenant and agree to and with each other as follows:

ARTICLE I. That the party of the first part is the absolute registered owner of a parcel of land in the barrio of Alngan, municipality of Limay, Province of Bataan, her title thereto being evidenced by homestead certificate of title No. 325 issued by the Bureau of Lands on June 11, 1931, said land being lot No. 285 of the Limay Cadastre, General Land Registration Office Cadastral Record No. 1054, bounded and described as follows:

Beginning at point marked 1 on plan E-57394, N. 84º 32' W. 614.82 m. from B.B.M. No. 3, thence N. 66º 35' E. 307.15 m. to point "2"; S. 5º 07' W. to point "5"; S.6º 10' E. 104.26 m. to point "4"; S. 82º 17' W. to point "5"; S. 28º 53' W. 72.26 m. to point "6"; N. 71º 09' W. to point "7"; N. 1º 42' E. 173.72 m. to point 1, point of beginning, "Containing an area of 6.7540 hectares. "Points 1,2,6 and 7, B.L.; points 3,4 and 5, stakes; points 4, 5 and 6 on bank of Alangan River. "Bounded on the North, by property claimed by Maria Ambrosio; on the East, by Road; on the South, by Alangan River and property claimed by Maxima de la Cruz; and on the West, by property claimed by Jose del Rosario. "Bearing true. Declination 0º 51' E. "Surveyed under authority of sections 12-22, Act No. 2874 and in accordance with existing regulations of the Bureau of Lands, by Mamerto Jacinto, public land surveyor, on July 8, 1927 and approved on February 25, 1931.

ARTICLE II. That the improvements on the above described land consist of the following:

Four (4) mango trees, fruit bearing: one hundred ten (110) hills of bamboo trees; one (1) tamarind and six (6) boñga trees.

ARTICLE III. That the assessed value of the land is P940 and the assessed value of the improvements is P860, as evidenced by tax declaration No. 3531 of the municipality of Limay, Bataan.

ARTICLE IV. That for and in consideration of the sum of one thousand pesos (P1,000) Philippine currency, paid by the party of second part to the party of the first part, receipt whereof is hereby acknowledged, the party of the first part hereby encumbers and hypothecates, by way of mortgage, only the improvements described in Articles II and III hereof, of which improvements the party of the first part is the absolute owner.

ARTICLE V. That the condition of said mortgage is such that if the party of the first part shall well and truly pay, or cause to paid to the party of the second part, his heirs, assigns, or executors, on or before the 16th day of November, 1936, or four and one-half (4½) years after date of the execution of this instrument, the aforesaid sum of one thousand pesos (P1,000) with interest at 12 per cent per annum, then said mortgage shall be and become

null and void; otherwise the same shall be and shall remain in full force and effect, and subject to foreclosure in the manner and form provided by law for the amount due thereunder, with costs and also attorney's fees in the event of such foreclosure. lawphil.net

ARTICLE VI. That the party of the first part shall pay all taxes and assessments which are or may become due on the above described land and improvements during the term of this agreement.

ARTICLE VII. That within thirty (30) days after date of execution of this agreement, the party of the first part shall file a motion before the Court of First Instance at Balanga, Bataan, P. I., requesting cancellation of Homestead Certificate of Title No. 325 referred to in Article I hereof and the issuance, in lieu thereof, of a certificate of title under the provisions of Land Registration Act No. 496, as amended by Act 3901.

ARTICLE III. It if further agreed that if upon the expiration of the period of time (4½) years stipulated in this mortgage, the mortgagor should fail to redeem this mortgage, she would execute a deed of absolute sale of the property herein described for the same amount as this mortgage, including all unpaid interests at the rate of 12 per cent per annum, in favor of the mortgagee.

ARTICLE IX. That in the event the contemplated motion under Article VII hereof is not approved by the Court, the foregoing contract of sale shall automatically become null and void, and the mortgage stipulated under Article IV and V shall remain in full force and effect.

In testimony whereof, the parties hereto have hereunto set their hands the day and year first herein before written.

(Sgd.) MARCIAL KASILAG

(Sgd.) EMILIANA AMBROSIO

Signed in the presence of:

(Sgd.) ILLEGIBLE

(Sgd.) GAVINO RODRIGUEZ.

PHILIPPINE ISLANDS } ss.BALANGA, BATAAN } ss.

Before me this day personally appeared Emiliana Ambrosio without cedula by reason of her sex, to me known and known to me to be the person who signed the foregoing instrument, and acknowledged to me that she executed the same as her free and voluntary act and deed.

I hereby certify that this instrument consists of three (3) pages including this page of the acknowledgment and that each page thereof is signed by the parties to the instrument and the witnesses in their presence and in the presence of each other, and that the land treated in this instrument consists of only one parcel.

In witness whereof I have hereunto set my hand and affixed my notarial seal, this 16th day of May, 1932.

(Sgd.) NICOLAS NAVARRONotary Public

My commission expires December 31, 1933.

Doc. No. 178 Page 36 of my register Book No. IV

One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana Ambrosio was unable to pay the stipulated interests as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. By virtue of this verbal contract, the petitioner entered upon the possession of the land, gathered the products thereof, did not collect the interest on the loan, introduced improvements upon the land valued at P5,000, according to him and on May 22, 1934 the tax declaration was transferred in his name and on March 6, 1936 the assessed value of the land was increased from P1,020 to P2,180.

After an analysis of the conditions of Exhibit "1" the Court of Appeals came to the conclusion and so held that the contract entered into by and between the parties, set out in the said public deed, was one of absolute purchase and sale of the land and its improvements. And upon this ruling it held null and void and without legal effect the entire Exhibit 1 as well as the subsequent verbal contract entered into between the parties, ordering, however, the respondents to pay to the petitioner, jointly and severally, the loan of P1,000 with legal interest at 6 per cent per annum from the date of the decision. In this first assignment of error the petitioner contends that the Court of Appeals violated the law in holding that Exhibit 1 is an absolute deed of sale of the land and its improvements and that it is void and without any legal effect.

The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting parties should always prevail because their will has the force of law between them. Article 1281 of the Civil Code consecrates this rule and provides, that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed; and if the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail. The contract set out in Exhibit 1 should be interpreted in accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses. The words used by the contracting parties in Exhibit 1 clearly show that they intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired as homestead, the parties having moreover, agreed upon the pacts and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the improvements on the land acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated interest thereon. In clause V the parties stipulated that Emiliana Ambrosio was to pay, within four and a half years, or until November 16, 1936, the debt with interest thereon, in which event the mortgage would not have any effect; in clause VI the parties agreed that the tax on the land and its improvements, during the existence of the mortgage, should be paid by the owner of the land; in clause VII it was covenanted that within thirty days from the date of the contract, the owner of the land would file a motion in the Court of First Instance of Bataan

asking that certificate of title No. 325 be cancelled and that in lieu thereof another be issued under the provisions of the Land Registration Act No. 496, as amended by Act No. 3901; in clause VIII the parties agreed that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of four years and a half, she would execute an absolute deed of sale of the land in favor of the mortgagee, the petitioner, for the same amount of the loan of P1,000 including unpaid interest; and in clause IX it was stipulated that in case the motion to be presented under clause VII should be disapproved by the Court of First Instance of Bataan, the contract of sale would automatically become void and the mortgage would subsist in all its force.

Another fundamental rule in the interpretation of contracts, not less important than those indicated, is to the effect that the terms, clauses and conditions contrary to law, morals and public order should be separated from the valid and legal contract and when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties. Manresa, commenting on article 1255 of the Civil Code and stating the rule of separation just mentioned, gives his views as follows:

On the supposition that the various pacts, clauses or conditions are valid, no difficulty is presented; but should they be void, the question is as to what extent they may produce the nullity of the principal obligation. Under the view that such features of the obligation are added to it and do not go to its essence, a criterion based upon the stability of juridical relations should tend to consider the nullity as confined to the clause or pact suffering therefrom, except in case where the latter, by an established connection or by manifest intention of the parties, is inseparable from the principal obligation, and is a condition, juridically speaking, of that the nullity of which it would also occasion. (Manresa, Commentaries on the Civil Code, Volume 8, p. 575.)

The same view prevails in the Anglo-American law, as condensed in the following words:

Where an agreement founded on a legal consideration contains several promises, or a promise to do several things, and a part only of the things to be done are illegal, the promises which can be separated, or the promise, so far as it can be separated, from the illegality, may be valid. The rule is that a lawful promise made for a lawful consideration is not invalid merely because an unlawful promise was made at the same time and for the same consideration, and this rule applies, although the invalidity is due to violation of a statutory provision, unless the statute expressly or by necessary implication declares the entire contract void. . . . (13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray, 239 U.S., 583; 60 Law ed., 451; U.S. v. Mora, 97 U.S., 413, 24 Law. ed., 1017; U.S. v. Hodson, 10 Wall, 395; 19 Law ed. 937; Gelpcke v. Dubuque, 1 Wall. 175, 17 Law ed., 520; U.S. v. Bradly, 10 Pet. 343, 9 Law. ed., 448; Borland v. Prindle, 144 Fed 713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284; Northern Pac. R. Co. v. U.S., 15 Ct. Cl., 428.)

Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we stated that the principal contract is that of loan and the accessory that of mortgage of the improvements upon the land acquired as a homestead. There is no question that the first of these contract is valid as it is not against the law. The second, or the mortgage of the improvements, is expressly authorized by section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, reading:

SEC. 116. Except in favor of the Government or any of its branches, units or institutions, or legally constituted banking corporations, lands acquired under the free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the

expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations.

It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of four and a half years, by paying the loan together with interest, she would execute in favor of the petitioner an absolute deed of sale of the land for P1,000, including the interest stipulated and owing. The stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. These pacts made by the parties independently were calculated to alter the mortgage a contract clearly entered into, converting the latter into a contract of antichresis. (Article 1881 of the Civil Code.) The contract of antichresis, being a real encumbrance burdening the land, is illegal and void because it is legal and valid.

The foregoing considerations bring us to the conclusion that the first assignment of error is well-founded and that error was committed in holding that the contract entered into between the parties was one of absolute sale of the land and its improvements and that Exhibit 1 is null and void. In the second assignment of error the petitioner contends that the Court of Appeals erred in holding that he is guilty of violating the Public Land Act because he entered into the contract, Exhibit 1. The assigned error is vague and not specific. If it attempts to show that the said document is valid in its entirety, it is not well-founded because we have already said that certain pacts thereof are illegal because they are prohibited by section 116 of Act No. 2874, as amended.

In the third assignment of error the petitioner insists that his testimony, as to the verbal agreement entered into between him and Emiliana Ambrosio, should have been accepted by the Court of Appeals; and in the fourth and last assignment of error the same petitioner contends that the Court of Appeals erred in holding that he acted in bad faith in taking possession of the land and in taking advantage of the fruits thereof, resulting in the denial of his right to be reimbursed for the value of the improvements introduced by him.

We have seen that subsequent to the execution of the contract, Exhibit 1, the parties entered into another verbal contract whereby the petitioner was authorized to take possession of the land, to receive the fruits thereof and to introduce improvements thereon, provided that he would renounce the payment of stipulated interest and he would assume payment of the land tax. The possession by the petitioner and his receipt of the fruits of the land, considered as integral elements of the contract of antichresis, are illegal and void agreements because, as already stated, the contract of antichresis is a lien and such is expressly prohibited by section 116 of Act No. 2874, as amended. The Court of Appeals held that the petitioner acted in bad faith in taking possession of the land because he knew that the contract he made with Emiliana Ambrosio was an absolute deed of sale and, further, that the latter could not sell the land because it is prohibited by section 116. The Civil Code does not expressly define what is meant by bad faith, but section 433 provides that "Every person who is unaware of any flaw in his title, or in the manner of its acquisition, by which it is invalidated, shall be deemed a possessor in good faith"; and provides further, that "Possessors aware of such flaw are deemed possessors in bad faith". Article 1950 of the same Code, covered by Chapter II relative to prescription of ownership and other real rights, provides, in turn, that "Good faith on the part of the possessor consists in his belief that the person from whom he received the thing was the owner of the same, and could transmit the title thereto." We do not have before us a case of prescription of ownership, hence, the last article is not squarely in point. In resume, it may be stated that a person is deemed a possessor in bad faith when he knows that there is a flaw in his title or in the manner of its acquisition, by which it is invalidated.

Borrowing the language of Article 433, the question to be answered is whether the petitioner should be deemed a possessor in good faith because he was unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated. It will be noted that ignorance of the flaw is the keynote of the rule. From the facts found established by the Court of Appeals we can neither deduce nor presume that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the prohibition contained in section 116. This being the case, the question is whether good faith may be premised upon ignorance of the laws. Manresa, commenting on article 434 in connection with the preceding article, sustains the affirmative. He says:

"We do not believe that in real life there are not many cases of good faith founded upon an error of law. When the acquisition appears in a public document, the capacity of the parties has already been passed upon by competent authority, and even established by appeals taken from final judgments and administrative remedies against the qualification of registrars, and the possibility of error is remote under such circumstances; but, unfortunately, private documents and even verbal agreements far exceed public documents in number, and while no one should be ignorant of the law, the truth is that even we who are called upon to know and apply it fall into error not infrequently. However, a clear, manifest, and truly unexcusable ignorance is one thing, to which undoubtedly refers article 2, and another and different thing is possible and excusable error arising from complex legal principles and from the interpretation of conflicting doctrines.

But even ignorance of the law may be based upon an error of fact, or better still, ignorance of a fact is possible as to the capacity to transmit and as to the intervention of certain persons, compliance with certain formalities and appreciation of certain acts, and an error of law is possible in the interpretation of doubtful doctrines. (Manresa, Commentaries on the Spanish Civil Code. Volume IV, pp. 100, 101 and 102.)

According to this author, gross and inexcusable ignorance of law may not be the basis of good faith, but possible, excusable ignorance may be such basis. It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith. We do not give much importance to the change of the tax declaration, which consisted in making the petitioner appear as the owner of the land, because such an act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the petitioner, to about which we have stated that the petitioner's ignorance of the law is possible and excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land and enjoying its fruits.

The petitioner being a possessor in good faith within the meaning of article 433 of the Civil Code and having introduced the improvements upon the land as such, the provisions of article 361 of the same Code are applicable; wherefore, the respondents are entitled to have the improvements and plants upon indemnifying the petitioner the value thereof which we fix at P3,000, as appraised by the trial court; or the respondents may elect to compel the petitioner to have the land by paying its market value to be fixed by the court of origin.

The respondents also prayed in their complaint that the petitioner be compelled to pay them the sum of P650, being the approximate value of the fruits obtained by the petitioner from the land. The Court of Appeals affirmed the judgment of the trial court denying the claim or indemnity for damages, being of the same opinion as the trial court that the respondents may elect to compel the petitioner to have

the land. The Court of Appeals affirmed the judgment of the trial court that the respondents have not established such damages. Under the verbal contract between the petitioner and the deceased Emiliana Ambrosio, during the latter's lifetime, the former would take possession of the land and would receive the fruits of the mortgaged improvements on condition that he would no longer collect the stipulated interest and that he would attend to the payment of the land tax. This agreement, at bottom, is tantamount to the stipulation that the petitioner should apply the value of the fruits of the land to the payment of stipulated interest on the loan of P1,000 which is, in turn, another of the elements characterizing the contract of antichresis under article 1881 of the Civil Code. It was not possible for the parties to stipulate further that the value of the fruits be also applied to the payment of the capital, because the truth was that nothing remained after paying the interest at 12% per annum. This interest, at the rate fixed, amounted to P120 per annum, whereas the market value of the fruits obtainable from the land hardly reached said amount in view of the fact that the assessed value of said improvements was, according to the decision, P860. To this should be added the fact that, under the verbal agreement, from the value of the fruits had to be taken a certain amount to pay the annual land tax. We mention these data here to show that the petitioner is also not bound to render an accounting of the value of the fruits of the mortgaged improvements for the reason stated that said value hardly covers the interest earned by the secured indebtednes.

For all the foregoing considerations, the appealed decision is reversed, and we hereby adjudge: (1) that the contract of mortgage of the improvements, set out in Exhibit 1, is valid and binding; (2) that the contract of antichresis agreed upon verbally by the parties is a real incumbrance which burdens the land and, as such, is a null and without effect; (3) that the petitioner is a possessor in good faith; (4) that the respondents may elect to have the improvements introduced by the petitioner by paying the latter the value thereof, P3,000, or to compel the petitioner to buy and have the land where the improvements or plants are found, by paying them its market value to be filed by the court of origin, upon hearing the parties; (5) that the respondents have a right to the possession of the land and to enjoy the mortgaged improvements; and (6) that the respondents may redeem the mortgage of the improvements by paying to the petitioner within three months the amount of P1,000, without interest, as that stipulated is set off by the value of the fruits of the mortgaged improvements which petitioner received, and in default thereof the petitioner may ask for the public sale of said improvements for the purpose of applying the proceeds thereof to the payment of his said credit. Without special pronouncement as to the costs in all instances. So ordered.

Diaz, J., concur.

Separate Opinions

 VILLA-REAL, J., concurring and dissenting:

According to the contract entered into May 16, 1932, between Emiliana Ambrosio, in life, and the petitioner Marcial Kasilag, the first, in consideration of the sum of P1,000 given to her by the second, constituted a mortgage on the improvements only of the land which she acquired by way of homestead. The improvements which she mortgaged consisted of four fruit bearing mango trees, one hundred ten hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, the assessed value of which was P660. The condition of the loan were that if the mortgagor should pay the mortgage on November 16, 1936, that is, four and a half years after the execution of the deed, said sum of P1,000 with interest thereon at 12% per annum, the aforesaid mortgage would become null and void, otherwise it would remain in full force and effect and would b subject to foreclosure in the manner provided by law; that the mortgagor would pay all the land tax on the land and its improvements during the duration of the contract; and that if after the expiration of the said period of four and a half years the mortgagor should fail to redeem the mortgage, she would execute in favor

of the mortgage an absolute deed of sale of the property described in the contract for the same sum of P1,000 plus interest due and unpaid at the rate of 12 per cent per annum.

The principal rule in the interpretation of contracts is that "If the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed. If the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail" (article 1281, Civil Cod). "In order to judge as to the intention of the contracting parties, attention must be paid principally to their conduct at the time of making the contract and subsequently thereto." (Article 1282.)

Now, then what is the true nature of the contract entered into between the parties by virtue of the deed of sale executed by them on May 16, 1932? The Court of Appeals held that it is an absolute deed of sale of a land with a homestead certificate of title, under the guise of a loan secured by a mortgage upon its improvements in order to go around the prohibition contained in section 116 of Act No. 2874, as amended by section 23 of Act No. 3517.

Closely examined, the only clauses of the contract which may lead to the conclusion that it is one of the sale are those which state that if at the expiration of the period of four years and a half the mortgagor should fail to pay the amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum, she would execute in favor of the mortgagee a deed of absolute sale of the land whose improvements were mortgaged for the amount of the loan and the interest owing. It will be seen that the sale would not be made until after the lapse of four and a half years from the execution of the deed, if the mortgagor should fail or should not wish to redeem the mortgaged improvements. Consequently, the obligation contracted by said mortgagor was no more than a conditional promise to sell. Now, then, is this a promise to sell valid? Like any other onerous, consensual and mutually binding contract, that of promise to sell requires for its legal existence and validity the concurrence of consent, consideration and subject-matter. The contract before us dos not show what is the cause or consideration for such promise to sell. Assuming that it was the economic impotence of the mortgagor to redeem the mortgaged improvements, before she could be compelled to comply with her obligation to sell, there is need to wait until she should fail of funds or to abandonment. The cause will come into being only upon the happening of said event after the four and half years and only then will the said contract of promise to sell have juridical existence. The P1,000 and its interest, should the mortgagor fail to redeem the improvements upon the maturity of the indebtedness, would be the consideration of the sale; because the promise to sell is a contract different and distinct from that of sale and each requires a consideration for its existence and validity.

The terms of the contract are clear and explicit and do not leave room for doubt that the intention of the contracting parties was to constitute a mortgage on the improvements of the land in litigation to secure the payment of the loan for P1,000, within interest thereon at 12 per cent per annum. It cannot be said that this contract is simulated because the assessed value of the improvements is P860 only. It is well known that rural properties are valued for assessment purposes not less than half of their market value. The true value of the said improvements may therefore be P1,720, and the mortgagee may have considered that adequate. Moreover, the petitioner could not have the property whose improvements were mortgaged to him the property whose improvements were mortgaged to him even should the mortgagor default in the payment of interest. He could only have the mortgaged improvements in case of foreclosure should he bid therefor at the sale. Neither could the mortgagor sell the same property to the mortgagee, even after the expiration of five years from the issuance of the homestead certificate of title, for then the sale would be in satisfaction of an obligation contracted during the five years, which is prohibited by the oft-mentioned section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. The fact that after one year the contracting parties had novated the contract of loan secured by a mortgagee, converting the same into a contract of anti-chresis because of the mortgagor's failure to pay the accrued interest, does not show that they

intended to enter into a contract of sale, because the conversion in this case of the contract of loan secured by a mortgage into one of antichresis was accidental, due to the mortgagor's default in the payment of unpaid interest for the first year. if the parties' intention from the beginning had been to sell the property, the mortgagee would have immediately entered upon the possession of the land instead of waiting until after the expiration of one year. The transfer of the Torrens certificate of title to the homestead by the original owner to the mortgagee in 1934 was only a consequence of the conversion of the mortgage loan into an anti-chretic loan, the parties having such a transfer. The setting off of the interest on the debt against the fruits of the property given in antichresis finds authority in article 1885 of the of the Civil Code. There is, therefore, no ambiguity in the terms of the contract warranting the search outside its four corners for the true intention of the contracting parties other than that of entering into a contract of loan secured by the said improvements. If the true intention of the contracting parties, as clearly gathered from the terms of the contract, was to enter into a contract, was to enter into a contract of loan secured by a mortgage upon the improvements, although they should convert it into a contract of antichresis after one year and although after the maturity of the loan with interest they may wish to convert it into one of absolute sale — both conversions being illegal and, hence, void, — 8 the original intention of entering into a contract of loan secured by a mortgagee upon the improvements would prevail, the said contract of loan being the only one legal and valid, and the petitioner having acted in good faith in making it.

The verbal contract of antichresis, entered into by the petitioner Marcial Kasilag and Emiliana Ambrosio, being null and void ab initio and without any legal effect because it is in violation of the express prohibition of section 116 of Act No. 2874 as amended by section 23 of Act No. 3517, (article 4 of the Civil Code), the contracting parties should restore to each other the things which have been the subject-matter of the contract, together with their fruits, and the price paid therefor, together with interest, pursuant to Article 1303 of the same Code. Marcial Kasilag, therefore, should return to Emiliana Ambrosio or to her heirs the possession of the homestead and the improvements thereon with its fruits, and Emiliana Ambrosio or her heirs should pay him the sum of P1,000, being the amount of the loan, plus interest due and unpaid.

As to the improvements introduced upon the land by the petitioner, having done so with the knowledge and consent of its owner Emiliana Ambrosio, the former acted in good faith, and under article 361 of the Civil Code, the owner of the land may have the said improvements upon paying the indemnity provided in articles 453 and 454, or may compel the said Marcial Kasilag, who introduced the said improvements, to pay the price of the land. If the herein respondents, as heirs of Emiliana Ambrosio, do not wish or are unable to pay for said improvements, and Marcial Kasilag does not wish or is unable to pay the land, said petitioner would lose his right of intention over the same (Bernardo vs. Batalan, 37 Off. G., No. 74, p. 1382), provided that he may remove the improvements which he had introduced in good faith.

In view of the foregoing, I concur in the majority opinion except insofar as it holds that the interest is set off against the fruits of the mortgaged improvements, because as a result of the nullity of the contract of antichresis the petitioner should return to the respondents the products of the mortgaged improvements, and the latter should pay to the petitioner the amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum from the date of the contract until fully paid.

LAUREL, J., concurring in the result:

On August 27, 1918, Emiliana Ambrosio put in a homestead application for lot No. 285 of the Limay cadastre, Province of Bataan. After complying with the requisite legal formalities, she obtained therefor homestead patent No. 16074, the same having been recorded in the Registry of Deeds of Bataan on Juner 26, 1931. On May 16, 1932, she entered with the herein petitioner, Marcial Kasilag, into a contract, Exhibit 1, inserted in the foregoing majority opinion.

Sometime in 1933, or a year after the execution of the aforequoted and land taxes, whereupon, the mortgage, Marcial Kasilag, and the mortgagor, Emiliana Ambrosio, verbally agreed that the former would pay the land taxes and waive the unpaid interest, enter into the possession of the property in question, introducing improvements thereon, and thereafter be reimbursed for the value of such improvements. Under this verbal pact, Kasilag went into possession of the property, planted it with the fruit trees allegedly valued at P5,000, and on May 22, 1934, declared the same for taxation purposes. In 1934 the original homesteader, Emiliana Rodriguez, Severo Mapilisan, Ignacio del Rosario and Gavino Rodriguez.

On May 16, 1936, the said heirs, with the exception Gavino Rodriguez who testified for the defendant, sued Marcial Kasilag in the Court of First Instance of Bataan to recover the possession of the aforesaid property belonging to their mother. For answer, the defendant put in as was in good faith with the knowledge and tolerance of the plaintiffs, a counterclaim for P1,000 representing the loan to the deceased homesteader with stipulated interest there on, and a recoupment for P5,000 allegedly the value of the improvements he had introduced upon the land. On the issues thus joined, the trial court gave judgment for the defendant couched in the following language:

Resuming all that has been said above, the court find and declares that the deed of combined mortgage and sale executed by Emiliana Ambrosio in favor of the defendant Marcial Kasilag and dated May 16, 1932, is null and void as a contract for a future conveyance or sale of the homestead, but valid as an equitable mortgage on the improvements for the sum of P1,000; and that the possession of the homestead by the defendant Marcial Kasilag by virtue of said contract or by virtue of any other agreement is null and void, but that the making of the improvements thereon by him, which the court finds to be valued at P3,000, by virtue of the verbal agreement entered into after the executing of the original instrument of mortgage, was in good faith, entitling the said Marcial Kasilag to be reimbursed of their actual value, the above-mentioned amount. Wherefore, let judgment be entered declaring that the plaintiffs are entitled to the possession as owners of the homestead subject of the present suit, lot No. 285 of the Limay cadastral survey, subject to an encumbrance of the improvements for the sum of P1,000 in favor of the defendant, ordering the defendant deliver unto the plaintiffs in turn to pay unto the defendant jointly and severally, as heirs of their deceased mother Rafaela Rodriguez the sum of P3,000, value of the improvements introduced on said homestead by defendant. Let there be no pronouncement as to costs." On appeal by the plaintiffs, the Third Division of the Court of Appeals reached a different result and modified the judgment of the trial court as follows:

Wherefore, the appealed judgment is hereby modified by declaring that the contract, Exhibit "1", is entirely null and void; that the plaintiffs and appellants are the owners of the lot in question together with all the improvements thereon in common with their brother, Gavino Rodriguez, and are, therefore, entitled to the possession thereof; ordering the defendant and appellee to vacate and deliver the possession of the aforementioned plaintiffs and appellants free from any encumbrance; requiring latter, however, to pay jointly and severally to the said appellee the sum of P1,000 with the interest thereon at the rate of 6 per cent per annum from and including the date this decision becomes final; and absolving the said plaintiffs and appellants from the cross-complaint with respect to the value of the improvements claimed by the appellee.

It is further ordered that the register of deeds of Bataan cancel the certificate of title No. 325 in the name of the deceased, Emiliana Ambrosio, and issue in lieu thereof anew certificate of title in favor of the herein plaintiffs and appellants and their brother, Gavino Rodriguez, as owners pro indiviso and in equal shares free from any lien or encumbrance except those expressly provided by law.

Without special pronouncement as to the costs.

The case is before us on petition for certiorari which was given due course, filed by defendant-appellee, Marcial Kasilag, now petitioner, against plaintiffs-appellants, Rafaela Rodriguez and others, now respondents. The burden of petitioner's case is condensed in the following assignments of error:

The Honorable Court of Appeals erred:

I. In having interpreted that document Exhibit "1" is an absolute sale and declared it entirely null and void, and in not having interpreted and declared that it is a deed of combined mortgage and future sale which, if void as a contract for future conveyance of the homestead in question is, however, valid as an equitable mortgage on the improvements thereof for the sum of P1,000 loaned by petitioner Marcial Kasilag to the homestead owner Emiliana Ambrosio.

II. In holding that the petitioner was guilty of the violation of the public land law for having entered into said contract Exhibit "1".

III. In not giving probative value to the uncontradicted testimony of the petitioner Marcial Kasilag that he was expressly authorized by the homestead owner Emiliana Ambrosio to introduction by him of improvements therein by virtue of the verbal agreement entered into after the execution of the original instrument of mortgage was in good faith, entitling him to reimbursed of the actual value of improvements he introduced.

Boiled down to the fundamentals, there are only two propositions which stands to be resolved in this appeal: (1) What is the legal nature of the agreement, Exhibit 1, entered into by and between the parties? and (2) Is Marcial Kasilag guilty of bad faith in entering upon the possession of the homestead, paying the land tax and introducing improvements thereon?

The numerous adjudications in controversies of this nature will show that each case must be decided in the light of the attendant circumstances and the situation of the parties which, upon the whole, mark its character. However, for the purpose of ascertaining the manner and extent to which persons have intended to be found by their written agreements, the safe criterion, the time honored test, is their contention which is intimately woven into the instrument itself. It is true that resort to extrinsic evidence is imperative when the contract is ambiguos and is susceptible of divergent interpretations; nevertheless, the primary obligation of the courts is to discover the intention of the contracting parties, as it is expressed by the language of the document itself. We are not authorized to make a contract for the parties.

In the trial court as in the Court of Appeals, the discussion centered on the nature and validity of the document, Exhibit 1. This is the correct approach. The Court of Appeals, however, rejected the conclusion of the trial court that it is an absolute deed of sale which is null and void in its entirely because it is banned by section 116, as amended of the Public land Act. The ruling is now assailed by the petitioner. I share petitioner's view that the deed is not what it was construed to be by the Court of Appeals.

From Article I to III thereof is a description of the homestead and the improvements existing thereon. By its Article IV the homesteader, Emiliana Ambrosio, "encumbers and hipothecates, by way of mortgage, only the improvements described in Articles II and III" under the conditions set out in Articles V, VI and VII. Its closing Articles VIII and IX, particularly relied upon by the Court of Appeals, speak, not of a present deed of absolute sale, but of one to be executed "upon the expiration of the

period of time (4½ years) stipulated in the mortgage" if "the mortgagor should fail to redeem this mortgage". In other words, the redemption of the mortgage by the payment of the loan may bring about the frustration of contemplated sale, hence, to hold unqualifiedly that the whole of Exhibit 1, or even a part thereof, is an absolute deed of sale would be to do violence to the terms of the document it self.

Still other tokens drive home the same conviction. The intimation by the Court of Appeals that the petitioner "know, therefore, that the land subject of the patent could not be alienated by express prohibition of law," is an argument that the petitioner could not have brazenly disregarded the law by intending Exhibit 1 to be an absolute deed of sale. Its further observation that "the stipulation under article VIII of the contract, Exhibit '1' . . . clearly indicates that there was nothing left to be done except the execution of the deed of absolute sale," is a concession that no such sale has yet been executed. Finally it will be recalled that under Article VII of Exhibit 1, "within thirty (30) days after date of execution of this agreement the party of the first part shall file a motion before the Court of First Instance of Balanga, Bataan, P.I., requesting cancellation of homestead certificate of title No. 325 referred to in Article 1 hereof and the issuance, in lieu thereof, of a certificate of title under the provisions of Land Registration Act 496, as amended by Act 3901." And by its Article IX it provides "That in the event the contemplated motion under Article VII hereof is not approved by the Court, the foregoing contract of sale shall automatically become null and void." (Underlining is mine.) We have nothing in the record to show that the required motion was filed within thirty days or thereafter, by Emiliana Ambrosio in life, or by her successors-in-interest after her death. Indeed, Homestead Certificate of Title No. 325, sought to be substituted by another through the said motion, still stands. It is, evident, therefore, that the projected sale has and may never come into being, because under Article IX of Exhibit 1, it became automatically null and void. This view, incidentally, precludes further consideration of the validity or invalidity of the sale clause of Exhibit 1, as it will purely academic to dwell upon the nature and effect of a contract that has passed out of existence in the contemplation of the parties.

Having reached the conclusion, upon its plain language and unequivocal import, that Exhibit 1 is essentially and fundamentally a mortgage upon the improvements found on the questioned homestead, with a conditional clause for the future sale of said homestead and improvements which has become a "dead twig" still attached to a living tree because the condition has never been performed, I would, under Articles 1281 and 1283 of the Civil Code, be otherwise content in resting our decision of this aspect of the case on this interpretation. But I do not propose to so limit my inquiry in view of the fact that the Court of Appeals points to contemporaneous and subsequent circumstances, beyond the four corners of the document, Exhibit 1, allegedly revelatory of petitioner's concealed but evident intention to circumvent the law. I may state, at the outset, that these circumstances are fairly susceptible of legitimate explanations. The appealed decision could not conceive of a man, of petitioner's intelligence, who "would accept improvements valued at only P860 as security for the payment of a larger amount of P1,000." But we are concerned with an assessed valuation which is not always nor even frequently the value that it can command in the market. To ignore this is to live in monastic seclusion. The appealed decision would imply from the fact that petitioner subsequently paid the land taxes and from the further fact that Emiliana never paid stipulated interest on the one thousand-peso loan, that Exhibit 1 was meant to vest absolute title irretrievably in the petitioner. It could hardly be supposed at the time of the execution of Exhibit 1 that the homesteader would fail to make these payments, nor does it seem just to draw from these circumstances, induced by Emiliana's own neglect, deductions unfavorable to the petitioner. That the petitioner went upon the possession of the questioned property is not proof that he was even already the would-be owner thereof, for as elsewhere stated, the said possession came practically at the suggestion of or at least with the consent of Emiliana Ambrosio as a result of her failure to live up to her part of the bargain. Finally, the Court of Appeals asked: "If the real purpose was to mortgage the improvements only as specified in article IV of the contract, why is it that in article VIII thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be required to

execute a de of absolute sale of the property described therein for the same amount of the mortgage in favor of the grantee, and not of" the improvements only'?" The precaution which the petitioner took to have the sale clause of Exhibit I so phrased that the said sale would not be affected until after the expiration of the five-year period prohibited by law, at which time the alienation of the homestead would then have been perfectly legitimate, may not be without significance to show petitioner's respect for and intention to be on the side of the law. The very mention of the word "sale" in the document in question argues against any attempt at concealment, for if the said document was intended as a cover and cloak of an illegal alienation, then the reference to the contract of sale therein was illtimed and foolhardy.

The question next at hand is whether or not the mortgage constituted upon the improvement's of the homestead is valid. It is, under express provisions of section 116 of the Public Land Act, before and after its amendment, reading pertinently that "the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations." I find no occasion to dispute this legislative policy however mistaken it may be. It is sufficient to observe that what the law permits may be done. Upon the other hand, I find no occasion to test the legality of the sale provisions of Exhibit 1, as I have heretofore said, this question is, in my opinion, moot. Moreover, the petitioner, technically, is barred from raising this question, as he did not appeal from and, therefore, abided by the decision of the trial court which outlawed this sale clause as violative of the provisions of section 116 of the Public Land Act. This part of the decision of the trial court was affirmed by the Court of Appeals when the latter struck down Exhibit 1 in its entirety and, even now, petitioner does not complain against the destruction of Exhibit 1 with respect to its sale clause. In other words, counsel for petitioner concedes all along that the said sale clause may be properly legislated out. As the mortgage provisions of Exhibit 1 are independent of and severable from the rest thereof, the same are perfectly enforceable. Where a part of the contract is perfectly valid and separable from the rest, the valid portion should not be avoided. (Ollendorf vs. Abrahamson, 38 Phil., 585.)

The question yet to be answered is whether the petitioner's possession of the question homestead was in good faith so as to entitle him to reimbursement for improvements introduced upon the land. The basis of petitioner's possession was a verbal agreement with the original homesteader whereby, for failure of the latter to comply with her obligations to pay land taxes and stipulated interest on the loan, the former assumed the said obligations for the privilege of going into possession of the property, introducing improvements thereon, and thereafter being reimbursed for the value of such improvements. The petitioner did enter upon such possession, planted the land to fruit trees valued at P5,000, according to him, and P3,000, according to the trial judge. It should be stated, in passing, that the Court of Appeals was unable to belie this verbal agreement, although it was of the opinion "that the trial court erred in giving probative value to the testimony of the appellee with reference to the alleged verbal agreement". Its reason for the opinion is not because the testimony is untrue, but because even if it were true, "it only tends to corroborate the allegation that he acted in bad faith when he took possession of the property and made improvements thereon, because then he knew full well that the homestead owner could not enter into an agreement involving the future final and absolute alienation of the homestead in his favor." As the said opinion and the reason back of it does not involve a question of strict fact, it is in our power to inquire into its soundness. The weakness of the argument lies, first, in its, (a) inconsistency and (b) in the misconception of the legal principle involved: inconsistency, because it considers entry of possession, payment of land tax as facts tending to show the real character of the transaction and as evidencing bad faith on the part of the petitioner, but at the same time it improperly rejects the verbal agreement by which such facts are established. It is clear that we cannot directly reject the verbal agreement between the parties in so fat as it is favorable to the petitioner. The misconception proceeds from the erroneous legal conclusion that, upon the facts, the good faith is attributable to the petitioner alone and that Ambrosio was not to be blamed for the prohibited alienation of the homestead, as I shall presently proceed to discuss.

In holding that the petitioner was a possessor in bad faith, the decision sought to be reviewed first laid down the premise that such possession is banned by law at least for five years from the issuance of patent (section 116, Public Land Act), assumed that the petitioner had knowledge of such law, and then drew the conclusion that the petitioner was aware of the illegality of his possession. We think that the assumption and conclusion are precipitate. As observed in the foregoing majority opinion-citing Manresa-knowledge of a legal provision does not necessarily mean knowledge of its true meaning and scope, or of the interpretation which the courts may place upon it. In this particular case, what section 116 of the Public Land Act prohibits is the "incumbrance or alienation" of land acquired thereunder within the period prescribed therein. We may concede, as assumed by the appealed decision, that the petitioner was cognizant of said section 116, but this is not saying that petitioner knew that his possession came under the phrase "incumbrance or alienation" prohibited by law, and that the petitioner, therefore, knew that his possession was illegal. The import of the phrase "incumbrance or alienation" is a subject upon which "men of reason may reasonably differ," in the same way that we ourselves have differed in the deliberation of this case. It is not correct to assume that the petitioner had knowledge of the illegality of his possession. The contrary assumption, namely, that petitioner had no idea of such illegality, would have been more in accord with the experience of everyday, for petitioner would not have invested money and labor in the land and assumed obligations incumbent upon the homesteader if he had even the least suspicion that all his efforts would count for nothing and would in the end entangle him in a mild scandal. As possession in bad faith does not necessarily mean possession illegal under the law, it being necessary that the possessor be aware of such illegality, it follows that the petitioner's possession of the homestead of the respondents was in good faith. (Art. 433, Civil Code.) "Good faith is always presumed, and the burden of proving bad faith on the part of the possessor rests upon the person alleging it" (article 434, Civil Code.) As a bona fide possessor, and it being unquestioned that the improvements introduced by him upon the land redounded to its benefit, the petitioner is by law entitled to be paid for the value of such improvements in the amount of P3,000, as found by the trial judge. "Useful expenditures shall be paid the possessor in good faith with the same right of retention, the person who has defeated him in his possession having the option of refunding the amount of such expenditures or paying him the increase in value which the thing has acquired by reason thereof." ( Article 453, 2nd par., Civil Code). The reimbursement in this particular case is the more in order in view of the express undertaking of respondent's predecessor-in-interest to pay therefor.

Even the equities of the case militate against the respondents and in favor of the petitioner. There is a concession that the petitioner's possession was neither imposed upon nor wrested from the homesteader; on the contrary, it came about by virtue of a mutual agreement whereby the said homesteader and the herein respondents were spared the burden of paying for land taxes and stipulated interest and extended the benefit of having their land improved on condition that they pay the value of such improvements upon redeeming the land. We also have uncontradicted fact that P400 of the one thousand-peso loan were given to the herein respondents and the balance kept by their mother. They may not reap and retain these benefits at the same time repudiate and go back upon contractual obligations solemnly entered into.

But let grant that the contract, Exhibit 1, is one of absolute sale, as found by the Court of Appeals, what then? As the land could not be alienated for five years from the date of the issuance of the patent, the sale was illegal and void because it was entered into in violation of section 116 of the Public Land Act, as amended. By whom was the law violated? Certainly, not by Kasilag alone but by Ambrosio as well. Both are presumed to know the law, and we cannot justly charge Kasilag alone with that knowledge on the alleged reason that Kasilag is rich and Ambrosio is poor. Neither can we proceed on the bare assumption that because Exhibit 1 was written in English it was prepared by Kasilag as if he were the only English-speaking person in the Province of Bataan where the document was executed. Are we already living in the midst of a communistic society that we shall have to incline invariably the balance in favor of a litigant who happens to be well-to-do, regardless

of the merits of the case? And to this end, shall we, by a series of assumptions and deductions, impute to a party malice aforethought dishonesty and bad faith, in entering into a transaction made in the open sun, publicly recorded and whose effectiveness was even conditioned by the approval of a court of justice? If so, then I dare say that we have not profited by the admonition of Aristotle in his Metaphysics centuries ago that "justice is a virtue of the soul which discards party, friendship and sentiment and is therefore always represented as blind." There is a charm in rhetoric but its value in cool judicial reasoning is nil.

And if — as we are confidently told — we should relax the legal principle with reference to Ambrosio, because she was "poor and ignorant," I am reluctant to believe that she was ignorant of the condition against the alienation inserted in all homestead patents, and my knowledge of the Public Land Law, of the activities of the Department and bureau charged with the administration of public lands, gives me just the contrary impression. Every homestead patent contains that condition. Circulars and instructions and general information have been issued in pursuance with law. (Sec. 5, Act No. 2874; see also sec. 5, Comonwealth Act No. 141.) I must presume that the Government and its officials charged with the administration of public lands have complied with the law and their duties in this connection, and I cannot believe that Ambrosio, when she alienated the property, was unaware of the legal prohibition. Under the circumstances, then, it is reasonable to conclude that on the hypothesis that the document, Exhibit 1, was a contract of absolute sale between Kasilag and Ambrosio, both of them were guilty of infraction of the law. If this is correct, what is the legal situation of the parties?

Justinian, who, by his Corpus Juris Civiles, still speaks through practically all the civil codes of Continental Europe, considers both as having acted in good faith. "Realmente," bluntly observes Manresa, "si los dos que se encuentran en lucha sobre la propiedad han provocado el conflicto por su voluntad; a ciencia y paciencia del dueno del suelo, ante cuya vista las obras se han ejecutado, y con conciencia, por parte del que edifica o planta, de que el terreno no es suyo, no hay razon alguna que abone derecho preferente en favor de ninguno de los dos; deben, por tanto, tratarse como si los dos hubiesen obrado de buena fe; la mala fe del uno extingue y neutraliza, en justa reciprocidad, la del otro." (Manresa, Codigo Civil segunda edicion Tomo III pag. 203.) Article 364 of our Civil Code then comes into play. "Where there has been bad faith, not only on the part of the person who built, sewed, or planted on another's land, but also on the part of the owner of the latter, the rights of both shall be the same as if they had acted in good faith. Bad faith on the part of the owner is deemed to exist whenever the act has been done in his presence, with his knowledge and tolerance, and without opposition on his part." ( Article 364, Civil Code; see also arts. 1303, 1306 ibid.) The codal section is evidently based upon the vulnerable maxim of equity that one who comes into equity must come with clean hands. A court which seeks to enforce on the part of the defendant uprightness, fairness, and conscientiousness also insists that, if relief is to be granted, it must be to a plaintiff whose conduct is not inconsistent with the standards he seeks to have applied to his adversary.

Fundamenta justitiae sunt, ut ne cui noceatur, deinde ut communi serviatur. I therefore concur in the result.

CONCEPCION, J., dissenting:

In view of the findings of fact of the Court of Appeals, which are final according to law, I dissent from the majority opinion as to the legal denomination of the contract really entered into by the petitioners and the now deceased Emiliana Ambrosio.

The facts according to the decision of the Court of Appeals are as follows:

On August 27, 1918, the deceased Emiliana Ambrosio applied for the land in question as a homestead, now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were issued in favor of the applicant on June 11, 1931 which were recorded on June 26, 1931 in the office of registrar of deeds in accordance with the provisions of section 122 of Act 496.

"On or about May 16, 1932, the homestead owner, Emiliana Ambrosio offered to sell the property to the defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that it was a homestead patent and knew, therefore, that the land subject of the patent could not be alienated by express prohibition of law, so he devised a means by which the proposed sale might not appear in any document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit '1', purporting to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; 110 hills of bamboo trees, 1 tamarind, and 6 boñga trees, with the assessed value of P860, in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee, Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the condition being that if she would fail to redeem the alleged mortgage at the expiration of the stipulated period, she would execute a deed of absolute sale of the property therein described for the same amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and assessment which might become due on the land and improvements during the term of the agreement and that within thirty days after the date of the execution thereof she should file a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325 above referred to and the issuance in lieu thereof a certificate of title under the provisions of the Land Registration Act 496, as amended by Act 3901.

The lot in question was originally declared for land tax purposes in the name of the homestead (owner) Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180.

Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since the execution of the contract.

The evidence further discloses that the appellant entered upon the actual possession of the land and had been holding the same up to the present time, having planted various kinds of fruit trees valued according to him at P5,000, and collected the products thereof for his own exclusive benefit.

Relying upon the foregoing facts, the majority contends that the contract executed by the parties was one of mortgage, as per Exhibit 1, with a promise to sell the land in question. I cannot hold to these rulings of the majority, because the nature of the contract of mortgage is inconsistent with the idea that the creditor should immediately enter upon a possession of the mortgaged land; that he should pay the land tax; that he should accept as security something whose values does not cover the amount of the loan sought to be secured, for in this case the supposed loan was P1,000, and what were mortgaged were only the improvements consisting of 4 mango trees, 110 hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, assessed at P860.

I believe that the contract which the parties intended to execute is a promise to sell the land, for which reason Ambrosio retained the right of ownership of the land and its improvements while the

deed of the promised sale had not been executed. Under the terms of the deed Exhibit 1, Kasilag could not be considered the owner of the land, nor could he execute any act promised upon the assumption of ownership, nor could he alienate the same as he had no title to it. But the parties, in consideration of the fact that Kasilag paid in advance the price of the land and assumed the obligation to pay the tax thereon, which Ambrosio could not pay, agreed that Kasilag may enter upon the enjoyment of the land until the promise to sell is converted in fact into an absolute sale by the execution of the corresponding deed by Ambrosio. It was stipulated, however, that if the sale is not approved by the Court, Kasilag would collect the amount of P1,000 paid him as a mortgage credit, with all the interest due and payable.

Under these circumstances, the conclusion of law that Kasilag acted in bad faith is not supported by the established facts.

Wherefore, the plaintiffs are bound to comply with the contract as heirs of Ambrosio, by executing in favor of Kasilag the deed of sale of the land, but should the sale, for any reason, be not approved, Kasilag may collect the amount of P1,000 with all the interest thereon, and may execute the judgment obtained by him upon the land and all its improvements, deducting, however, in his favor the value of the improvements which he introduced upon the land in good faith.

In view of the foregoing, I am of the opinion that the decision of the Court of Appeals should be reversed and that another should be entered against the respondents, requiring them to execute the deed of sale of the land in favor of the petitioner, provided that if the sale, for any reason, be not approved by the court, the petitioner may execute his credit upon the land and all its improvements, after deducting the value of the improvements introduced by him upon the land.

MORAN, J., dissenting:

According to section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, "lands acquired under the free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period."

About June 11, 1931, homestead patent No. 16074 was issued to Emiliana Ambrosio, now deceased. On May 16, 1932 Emiliana Ambrosio offered the sale of the said homestead to the herein petitioner, Marcial Kasilag, and in view of the above-quoted legal prohibition, the parties executed the document Exhibit 1, copied in the majority decision. The heirs of Emiliana Ambrosio filed a complaint for the annulment of the contract in the Court of First Instance of Bataan, and from the judgment rendered by said court an appeal was taken to the Court of Appeals, which held that the true contract between the parties is one of absolute sale, wherefore, it is null and void under the already cited legal prohibition. Marcial Kasilag comes to this court on certiorari, and this court reverses the decision of the Court of Appeals.

The only question is as to the true contract between the parties at the time of the execution of the deed Exhibit 1; Kasilag contends that the contract is that set out in the document Exhibit 1, that is, a mortgage of the improvements of the homestead to secure a loan of one thousand pesos given to Emiliana Ambrosio; and the latter's heirs, in turn, contend that the contract is one of the absolute sale of the homestead, wherefore, it is null and void. The findings of the Court of Appeals are as follows:

The pertinent facts as disclosed by the evidence of record are as follows:

On August 27, 1918 the deceased, Emiliana Ambrosio, applied for the land in question as a homestead, not known as Lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were issued in favor of the applicant on June 11, 1931 which were recorded on June 26, 1931 in the office of the register of deeds in accordance with the provisions of Section 122 of Act No. 496.

On or about May 16, 1932, the homestead owner Emiliana Ambrosio offered to sell the property to the defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that it was a homestead patent and knew, therefore, that the land subject of the patent could not be alienated by express prohibition of law, so he devised means by which the proposed sale might not appear in any document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit 1, purporting to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; one hundred ten hills of bamboo trees, one thousand and six boñga trees, with the assessed value of P860, in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the condition being that if she failed to redeem the alleged mortgage at the expiration of the stipulated period, she would execute a deed of absolute sale of the property therein described for the same amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and assessment which might become due on the land and improvements during the term of the agreement and that within thirty days after the date of the execution thereof she should file a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325 above referred to and the issuance in lieu thereof of a certificate of title under the provisions of the Land Registration Act No. 496, as amended by Act No. 3901.

The lot in question was originally declared for land tax purposes in the name of the homestead owner, Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180.

Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since the execution of the contract.

The evidence further discloses that the appellee entered upon the actual possession of the land and had been holding the same up to the present time, having planted various kinds of fruit trees valued according to him at P5,000, and collected the products thereof for his own exclusive benefit.

Construing the contract, Exhibit 1, in the light of all the foregoing facts and circumstances under which it was executed in relation to the subsequent acts of the contracting parties, we are led to the inescapable conclusion that their real intention was to execute an agreement of absolute sale of the homestead together with the improvements thereon. The stipulation concerning an alleged mortgage in the instrument is a mere devise to circumvent the law which expressly prohibits the alienation or encumbrance of the homestead during the period of five years from the date of the issuance of the homestead patent. (Sec. 116 of Act No. 2874 as amended by Act No. 3517.)

It is inconceivable, and, therefore, we refuse to believe that the appellee, Marcial Kasilag, being an intelligent man far above the average, would accept improvements valued at only P860 as security for the payment of a larger amount of P1,000, the alleged loan. We entertain no doubt that at the time the execution of the contract, Exhibit 1, the appellee knew that the homestead owner, Emiliana Ambrosio, a poor ignorant woman, was badly in need of money and that she was determined to dispose of and alienate definitely her homestead, as evidenced by the fact testified to by Gavino Rodriguez as witness for the said appellee that she actually offered to sell the land to the latter. He also knew that she would not be able to pay back to him such a large amount with interest of 12 per cent per annum because she had no other income except what she would derive from the homestead. Under such circumstances, there is reason to believe that she was no longer concerned with the form in which the contract would be drawn, as long as could obtain the amount of P1,000 which was agreeable to her as the price of the homestead she offered to sell to the appellee. This conclusion is supported in part by the subsequent action of Emiliana in not paying any interest on the alleged loan of P1,000 or the land taxes thereon since the execution of the contract and by the action of the appellee in declaring the land for tax purposes in his own name as owner thereof, notwithstanding that he had no interest in the land, as he alleged, except in the improvements only.

The contract of absolute sale was consummated, because the grantor, Emiliana, received full payment of the purchase price disguised as a loan of P1,000 and placed the grantee, Marcial Kasilag, in absolute possession and control of the land conveyed to him with all the improvements thereon. The stipulation under article VIII of the contract, Exhibit I, to the effect that the grantor would execute a deed of absolute sale of the property herein described for the said amount of this mortgage including all unpaid interest at the rate of 12 per cent per annum in favor of the mortgagee', clearly indicates that there was nothing left to be done except the execution of the deed of absolute sale, which is merely a matter of form in contracts of this nature, which was postponed until after the expiration of four and a half years because by that time the period of five years within which the property could not be alienated nor encumbered in any way, as provided by section 116 of Act No. 2874 as amended by Act No. 3517, supra, would have already expired. If the real purpose was to mortgage the improvements only as specified in article VIII thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be required to execute a deed of absolute sale of the property described therein for the same amount of the mortgage in favor of the grantee, and not of 'the improvements only'? It is clear, therefore, that the real contract under Exhibit 1, was one of absolute sale and not a mortgage with future sale.

In other words, although the document Exhibit 1 states that it is a mortgage of the improvements, with a stipulation regarding a future sale of the land in case of failure to comply with the mortgage obligations, in reality the true contract between the parties is one of absolute sale in the light of the circumstances of the case, among them the following:

First, Emiliana Ambrosio offered the sale, not the mortgage, of her homestead to Marcial Kasilag, and it is a fact found established by the Court of Appeals that she was agreeable to the sum of one thousand pesos as the price of the sale offered by her. If this is so, it is unlikely that Kasilag would refuse the offer of sale of the homestead and would accept in lieu thereof a simple mortgage of the improvements, for the same sum of one thousand pesos;

Second. In the deed it is stipulated that, if at the expiration of the period of four and a half years, the debtor should fail to redeem the mortgage, she would execute in favor of the creditor, Marcial Kasilag, a deed of absolute sale not only of the mortgaged improvements but also of the land for the same amount of the loan of one thousand pesos. This magic conversion of the mortgage of the

improvements into an absolute sale of the land at the expiration of four and a half years and without any additional consideration can only mean that the two contracts are one and the same thing, and that the first has been availed of to go around the legal prohibition. The scheme is very obvious, and to make any attempt to reconcile it with good faith is simply to fall into it.

The mortgage of the improvements could not have been intended because the supposed loan which it guaranteed was the same price of the stipulated sale to be later executed, and further because Kasilag knew, according to the findings of fact of the Court of Appeals, that Emiliana Ambrosio was a poor and ignorant woman who was not in a position to return to one thousand pesos;

Third. Kasilag had always considered the contract as one of sale of the land and not as a mortgage of the improvements, because he put the tax declaration of the land in his name, paid the corresponding land tax, took possession of the land, received the fruits thereof for his exclusive use, and introduced thereon permanent improvements, one of them being a summer house, all of which were valued at about five thousand pesos. It is not an attribute of a contract of mortgage that the creditor should take possession of the mortgaged property, or that he should pay the taxes thereon. Kasilag would not spend five thousand pesos for permanent improvements if he knew that his possession was precarious.

Fourth. In the document it is stipulated that the debtor would pay interest, but she did not pay any, and the alleged mortgage was not foreclosed thereby, which shows that the stipulation was nothing but a ruse.

Fifth. The deed Exhibit 1 was drawn by Kasilag, because it is in English, and the other party is a poor and ignorant woman, wherefore, all doubts and uncertainties arising therefrom should be resolved against Kasilag. It is to noted that in this document are phrases indicative of the real contract between the parties. For instance: in clause IV the word paid and not loaned is used in referring to the loan of one thousand pesos; and clause IX of the document states "the foregoing contract of sale."

Under all these circumstances, the irresistible conclusion is that the real contract between the parties is an absolute sale, and that the contract of mortgage was made to appear in the document Exhibit 1 for the sole purpose of defeating the legal prohibition. Nevertheless, the majority of this Court, brushing aside the findings of fact made by the Court of Appeals without stating its reasons therefor, holds as to the document Exhibit 1, that "as the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses." I have already shown in speaking of the second circumstance, that the context itself of the document Exhibit 1 discloses strong tokens that the contract between the parties was one of the sale and not of mortgage. Moreover, the rule relied upon by the majority is only applicable in the absence of any allegation that the document does not express the real contract between the parties. Under section 285, No. 1, of Act No. 190, a document, however clear its conditions may be, may and should be rejected when it is alleged and shown by evidence aliunde that it does not express the true intent of the parties. We have often considered as document, by its terms a contract of absolute sale, as one of mortgage because it has been so alleged and established by convincing oral evidence. (Cuyugan vs. Santos, 34 Phil., 100; Villa vs. Santiago, 38 Phil., 157; Laureano vs. Kilayco, 34 Phil., 148; Cuyugan vs. Santos, 39 Phil., 970; Rodriguez vs. Pamintuan, 37 Phil., 876; see also Manalovs. Gueco, 42 Phil., 925; Gatmaitan vs. Nepumuceno, 42 Phil., 295.)

The majority decision does not only pass over the findings of fact made by the Court of Appeals, but further, gives weight to certain facts which said court finds not to have been established. For instance, we have the following passages the majority decision:

One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. . . . .

. . . This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. . . . .

These two paragraphs state as an established fact the supposed verbal contract between the parties which Kasilag tried to prove by his testimony. However, the Court of Appeals expressly held: "We believe, however, that the trial court erred in giving probative value to the testimony of the appellee (Marcial Kasilag) with reference to the alleged verbal agreement with the deceased, Emiliana Ambrosio, and based thereon the conclusion that the appellee acted in good faith," (Words in parenthesis are mine.)

Rule 47, paragraph (b), of our Rules, provides expressly that in appeals to this court on certiorari, "only questions of law may be raised and must be distinctly set forth." And we have held in various decisions that in passing upon the legal conclusions of the Court of Appeals, we shall abide by the findings of fact of said court.

I, moreover, find certain ambiguities in the majority decision, for while it states on the one hand that the verbal contract had for its purpose the "alteration of the mortgage contract clearly entered into, converting the latter into a contract of antichresis," (underscoring mine) thereby implying that the mortgage contract was abandoned by the parties and ceased to exist, in the dispositive part of its decision, the majority holds that the mortgage of the improvements is valid and binding, and gives to the respondents the right to "redeem the mortgage of the improvements by paying to the petitioner within three months the amount of P1,000 . . . ." It, therefore, requires compliance with a contract that has ceased to exist.

While on the one hand the majority states that the aforesaid verbal contract is one of antichresis and that it is void, on the other hand, it gives force thereto by holding that the interest on the loan of one thousand pesos is sufficiently "set off by the value of the fruits of the mortgaged improvements which the petitioner received." And, furthermore, why should the interest be set off against the fruits of the improvements only and not against those of the entire land? And if the verbal contract of antichresis is void, why is Kasilag not required to render an accounting of the fruits of the land received by him which may exceed the total amount of interest, taxes and even the principal itself?

The majority states that Kasilag, in taking possessions of the homestead, receiving its fruits and introducing improvements thereon, did so under the void contract of antichresis, and did so in good faith as he was excusably unaware of the legal provision which prohibits the incumbrance of the homestead within the period of five years. Whether Kasilag was aware or unaware of the legal prohibition is again a factual question resolved by the Court of Appeals as follows: "the appellee ( Marcial Kasilag) was also aware of these provisions which were incorporated in the homestead patent shown to him at the beginning of the transaction" (Words in parenthesis are mine). I do not understand how we can disturb this factual finding.

I found, moreover, that in the majority decision it is ordered that, if the heirs of Emiliana Ambrosio cannot pay the value of the permanent improvements introduced by Marcial Kasilag, the latter may

have the homestead by paying to them its price in the market. The improvements were appraised by the trial court at three thousand pesos, and as the heirs of Emiliana Ambrosio probably inherited nothing from the latter but poverty, they will eventually be unable to pay the said amount and, in the last analysis, will lose the homestead of their mother. The practical effect, therefore, of the majority decision is that the heirs of Emiliana Ambrosio will be deprived of the homestead by virtue of a void antichretic obligation contracted by her within the period of five years from the granting of the homestead. And this, at least, is in violation of the spirit of section 116 of the Homestead Act.

I have other reasons which I need not set out to bring this dissent to a close. But before I conclude, I should like to state that the Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. Moreover, a man with a home and a means of subsistence is a lover of peace and order and will profess affection for his country, whereas one without a home and in penury is not only a social parasite but also a dangerous element in the social order. The Homestead Act at once aims at the promotion of wholesome and happy citizenship and the wiping out of the germs of social discontent found everywhere.

Considering the social and economic ends of the Homestead Act, the courts should exercise supreme care and strict vigilance towards faithful compliance with all its benign provisions and against the defeat, directly or indirectly, of its highly commendable purposes. And it is my firm conviction that where, as in the present case, a rich and clever man attempts to wrest a homestead granted to a poor and ignorant woman, the slightest tokens of illegality should be enough to move the courts to apply the strong arm of the law.

I dissent from the majority decision and vote for the affirmance of the decision of the Court of Appeals.

AVANCEÑA, C.J., dissenting:

I concur in this dissenting opinion of Justice Moran.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

 

A.M. No. MTJ-92-706 March 29, 1995

LUPO ALMODIEL ATIENZA, complainant, vs.JUDGE FRANCISCO F. BRILLANTES, JR., Metropolitan Trial Court, Branch 28, Manila, respondent.

 QUIASON, J.:

This is a complaint by Lupo A. Atienza for Gross Immorality and Appearance of Impropriety against Judge Francisco Brillantes, Jr., Presiding Judge of the Metropolitan Trial Court, Branch 20, Manila.

Complainant alleges that he has two children with Yolanda De Castro, who are living together at No. 34 Galaxy Street, Bel-Air Subdivision, Makati, Metro Manila. He stays in said house, which he purchased in 1987, whenever he is in Manila.

In December 1991, upon opening the door to his bedroom, he saw respondent sleeping on his (complainant's) bed. Upon inquiry, he was told by the houseboy that respondent had been cohabiting with De Castro. Complainant did not bother to wake up respondent and instead left the house after giving instructions to his houseboy to take care of his children.

Thereafter, respondent prevented him from visiting his children and even alienated the affection of his children for him.

Complainant claims that respondent is married to one Zenaida Ongkiko with whom he has five children, as appearing in his 1986 and 1991 sworn statements of assets and liabilities. Furthermore, he alleges that respondent caused his arrest on January 13, 1992, after he had a heated argument with De Castro inside the latter's office.

For his part, respondent alleges that complainant was not married to De Castro and that the filing of the administrative action was related to complainant's claim on the Bel-Air residence, which was disputed by De Castro.

Respondent denies that he caused complainant's arrest and claims that he was even a witness to the withdrawal of the complaint for Grave Slander filed by De Castro against complainant. According to him, it was the sister of De Castro who called the police to arrest complainant.

Respondent also denies having been married to Ongkiko, although he admits having five children with her. He alleges that while he and Ongkiko went through a marriage ceremony before a Nueva Ecija town mayor on April 25, 1965, the same was not a valid marriage for lack of a marriage license. Upon the request of the parents of Ongkiko, respondent went through another marriage ceremony with her in Manila on June 5, 1965. Again, neither party applied for a marriage license.

Ongkiko abandoned respondent 17 years ago, leaving their children to his care and custody as a single parent.

Respondent claims that when he married De Castro in civil rites in Los Angeles, California on December 4, 1991, he believed, in all good faith and for all legal intents and purposes, that he was single because his first marriage was solemnized without a license.

Under the Family Code, there must be a judicial declaration of the nullity of a previous marriage before a party thereto can enter into a second marriage. Article 40 of said Code provides:

The absolute nullity of a previous marriage may be invoked for the purposes of remarriage on the basis solely of a final judgment declaring such previous marriage void.

Respondent argues that the provision of Article 40 of the Family Code does not apply to him considering that his first marriage took place in 1965 and was governed by the Civil Code of the Philippines; while the second marriage took place in 1991 and governed by the Family Code.

Article 40 is applicable to remarriages entered into after the effectivity of the Family Code on August 3, 1988 regardless of the date of the first marriage. Besides, under Article 256 of the Family Code, said Article is given "retroactive effect insofar as it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or other laws." This is particularly true with Article 40, which is a rule of procedure. Respondent has not shown any vested right that was impaired by the application of Article 40 to his case.

The fact that procedural statutes may somehow affect the litigants' rights may not preclude their retroactive application to pending actions. The retroactive application of procedural laws is not violative of any right of a person who may feel that he is adversely affected (Gregorio v. Court of Appeals, 26 SCRA 229 [1968]). The reason is that as a general rule no vested right may attach to, nor arise from, procedural laws (Billones v. Court of Industrial Relations, 14 SCRA 674 [1965]).

Respondent is the last person allowed to invoke good faith. He made a mockery of the institution of marriage and employed deceit to be able to cohabit with a woman, who beget him five children.

Respondent passed the Bar examinations in 1962 and was admitted to the practice of law in 1963. At the time he went through the two marriage ceremonies with Ongkiko, he was already a lawyer. Yet, he never secured any marriage license. Any law student would know that a marriage license is necessary before one can get married. Respondent was given an opportunity to correct the flaw in his first marriage when he and Ongkiko were married for the second time. His failure to secure a marriage license on these two occasions betrays his sinister motives and bad faith.

It is evident that respondent failed to meet the standard of moral fitness for membership in the legal profession.

While the deceit employed by respondent existed prior to his appointment as a Metropolitan Trial Judge, his immoral and illegal act of cohabiting with De Castro began and continued when he was already in the judiciary.

The Code of Judicial Ethics mandates that the conduct of a judge must be free of a whiff of impropriety, not only with respect to his performance of his judicial duties but also as to his behavior as a private individual. There is no duality of morality. A public figure is also judged by his private life.

A judge, in order to promote public confidence in the integrity and impartiality of the judiciary, must behave with propriety at all times, in the performance of his judicial duties and in his everyday life. These are judicial guideposts too self-evident to be overlooked. No position exacts a greater demand on moral righteousness and uprightness of an individual than a seat in the judiciary (Imbing v. Tiongzon, 229 SCRA 690 [1994]).

WHEREFORE, respondent is DISMISSED from the service with forfeiture of all leave and retirement benefits and with prejudice to reappointment in any branch, instrumentality, or agency of the government, including government-owned and controlled corporations. This decision is immediately executory.

SO ORDERED.

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

FIRST DIVISION

[G.R. No. 112193. March 13, 1996]

JOSE E. ARUEGO, JR., SIMEONA SAN JUAN ARUEGO, MA. IMMACULADA T. ALANON, ROBERTO A. TORRES, CRISTINA A. TORRES, JUSTO JOSE TORRES and AGUSTIN

TORRES, petitioners, vs. THE HON. COURT OF APPEALS, THIRTEENTH DIVISION and ANTONIA ARUEGO,respondents.

D E C I S I O N

HERMOSISIMA, JR., J.:

On March 7, 1983, a Complaint[1] for Compulsory Recognition and Enforcement of Successional Rights was filed before Branch 30 of the Regional Trial Court of Manila by the minors, private respondent Antonia F. Aruego and her alleged sister Evelyn F. Aruego, represented by their mother and natural guardian, Luz M. Fabian. Named defendants therein were Jose E. Aruego, Jr. and the five (5) minor children of the deceased Gloria A. Torres, represented by their father and natural guardian, Justo P. Torres, Jr., now the petitioners herein.

In essence, the complaint avers that the late Jose M. Aruego, Sr., a married man, had an amorous relationship with Luz M. Fabian sometime in 1959 until his death on March 30, 1982. Out of this relationship were born Antonia F. Aruego and Evelyn F. Aruego on October 5, 1962 and September 3, 1963, respectively. The complaint prayed for an Order praying that herein private respondent and Evelyn be declared the illegitimate children of the deceased Jose M. Aruego, Sr; that herein petitioners be compelled to recognize and acknowledge them as the compulsory heirs of the deceased Jose M. Aruego; that their share and participation in the estate of their deceased father be determined and ordered delivered to them.

The main basis of the action for compulsory recognition is their alleged “open and continuous possession of the status of illegitimate children” as stated in paragraphs 6 and 7 of the Complaint, to wit:

“6. The plaintiffs’ father, Jose M. Aruego, acknowledged and recognized the herein plaintiffs as his children verbally among plaintiffs’ and their mother’s family friends, as well as by myriad different paternal ways, including but not limited to the following:

(a)   Regular support and educational expenses;

(b)   Allowance to use his surname;

(c)   Payment of maternal bills;

(d)   Payment of baptismal expenses and attendance therein;

(e)   Taking them to restaurants and department stores on occasions of family rejoicing;

(f)    Attendance to school problems of plaintiffs;

(g)   Calling and allowing plaintiffs to his office every now and then;

(h)   Introducing them as such children to family friends.

7. The plaintiffs are thus, in continuous possession of the status of (illegitimate) children of the deceased Jose M. Aruego who showered them, with the continuous and clear manifestations of paternal care and affection as above outlined.”[2]

Petitioners denied all these allegations.

After trial, the lower court rendered judgment, dated June 15, 1992, the dispositive portion of which reads:

“WHEREFORE, judgment is rendered -

1.   Declaring Antonia Aruego as illegitimate daughter of Jose Aruego and Luz Fabian;

2.   Evelyn Fabian is not an illegitimate daughter of Jose Aruego with Luz Fabian;

3.   Declaring that the estate of deceased Jose Aruego are the following:

x x x         x x x    x x x

4.   Antonia Aruego is entitled to a share equal to ½ portion of share of the legitimate children of Jose Aruego;

5.   Defendants are hereby ordered to recognize Antonia Aruego as the illegitimate daughter of Jose Aruego with Luz Fabian;

6.   Defendants are hereby ordered to deliver to Antonia Aruego (her) share in the estate of Jose Aruego, Sr.;

7.   Defendants to play (sic) plaintiff’s (Antonia Aruego) counsel the sum of P10,000.00 as atty.’s fee;

8.   Cost against the defendants.”[3]

Herein petitioners filed a Motion for Partial Reconsideration of the decision alleging loss of jurisdiction on the part of the trial court over the complaint by virtue of the passage of Executive Order No. 209 (as amended by Executive Order No. 227), otherwise known as the Family Code of the Philippines which took effect on August 3, 1988. This motion was denied by the lower court in the Order, dated January 14, 1993.

Petitioners interposed an appeal but the lower court refused to give it due course on the ground that it was filed out of time.

A Petition for Prohibition and Certiorari with prayer for a Writ of Preliminary Injunction was filed by herein petitioners before respondent Court of Appeals, the petition was dismissed for lack of merit in a decision promulgated on August 31, 1993. A Motion for Reconsideration when filed was denied by the respondent court in a minute resolution, dated October 13, 1993.

Hence, this Petition for Review on Certiorari under Rule 45 alleging the following grounds:

A

RESPONDENT COURT HAD DECIDED A QUESTION OF SUBSTANCE IN A WAY NOT IN ACCORD WITH THE LAW AND IS DIRECTLY CONTRADICTORY TO THE APPLICABLE DECISION ALREADY ISSUED BY THIS HONORABLE COURT.

B

RESPONDENT COURT ERRED IN HOLDING THAT THE PETITION FILED BY PETITIONERS BEFORE IT DOES NOT INVOLVE A QUESTION OF JURISDICTION.

C

RESPONDENT COURT HAD CLEARLY ERRED IN RULING THAT THERE IS NO PERCEPTIBLE DIFFERENCE BETWEEN THE CIVIL CODE PROVISION AND THOSE OF THE FAMILY CODE ANENT THE TIME AN ACTION FOR COMPULSORY RECOGNITION MAY BE MADE AND THAT THERE IS NO DIFFERENCE UNDER THE CIVIL CODE FROM THAT OF THE FAMILY CODE CONCERNING THE REQUIREMENT THAT AN ACTION FOR COMPULSORY RECOGNITION ON THE GROUND OF CONTINUOUS POSSESSION OF THE STATUS OF AN ILLEGITIMATE CHILD SHOULD BE FILED DURING THE LIFETIME OF THE PUTATIVE PARENT, IN UTTER DISREGARD OF THE RULING OF THIS HONORABLE COURT IN THE UYGUANGCO CASE THAT THE CIVIL CODE PROVISION HAD BEEN SUPERSEDED, OR AT LEAST MODIFIED BY THE CORRESPONDING ARTICLES IN THE FAMILY CODE.

D

RESPONDENT COURT ERRED IN DISMISSING PETITIONERS’ PETITION FOR PROHIBITION AND IN HOLDING THAT PETITIONERS REMEDY IS THAT OF AN APPEAL WHICH ALLEGEDLY HAD ALREADY BEEN LOST.[4]

Private respondent’s action for compulsory recognition as an illegitimate child was brought under Book I, Title VIII of the Civil Code on PERSONS, specifically Article 285 thereof, which states the manner by which illegitimate children may prove their filiation, to wit:

“Art. 285. The action for the recognition of natural children may be brought only during the lifetime of the presumed parents, except in the following cases:

(1) If the father or mother died during the minority of the child, in which case the latter may file the action before the expiration of four years from the attainment of his majority; x x x.”

Petitioners, on the other hand, submit that with the advent of the New Family Code on August 3, 1988, the trial court lost jurisdiction over the complaint of private respondent on the ground of prescription, considering that under Article 175, paragraph 2, in relation to Article 172 of the New Family Code, it is provided that an action for compulsory recognition of illegitimate filiation, if based on the “open and continuous possession of the status of an illegitimate child,” must be brought during the lifetime of the alleged parent without any exception, otherwise the action will be barred by prescription. The law cited reads:

“Article 172. The filiation of legitimate children is established by any of the following:

(1)     The record of birth appearing in the civil register or a final judgment; or

(2)     An admission of legitimate filiation in a public document or a private handwritten instrument and signed by the parent concerned.

In the absence of the foregoing evidence, the legitimate filiation shall be proved by:

(1)     The open and continuous possession of the status of a legitimate child; or

(2)     Any other means allowed by the Rules of Court and special laws.”

“Article 175. Illegitimate children may establish their illegitimate filiation in the same way and on the same evidence as legitimate children.

The action must be brought within the same period specified in Article 173 [during the lifetime of the child], except when the action is based on the second paragraph of Article 172, in which case the action may be brought during the lifetime of the alleged parent.”

In the case at bench, petitioners point out that, since the complaint of private respondent and her alleged sister was filed on March 7, 1983, or almost one (1) year after the death of their presumed father on March 30, 1982, the action has clearly prescribed under the new rule as provided in the Family Code. Petitioners, further, maintain that even if the action was filed prior to the effectivity of the Family Code, this new law must be applied to the instant case pursuant to Article 256 of the Family Code which provides:

“This Code shall have retroactive effect insofar as it does not prejudice or impair vested or acquired rights in accordance with the Civil Code or other laws.”

The basic question that must be resolved in this case, therefore, appears to be: Should the provisions of the Family Code be applied in the instant case? As a corollary Will the application of the Family Code in this case prejudice or impair any vested right of the private respondent such that it should not be given retroactive effect in this particular case?

The phrase “vested or acquired rights” under Article 256, is not defined by the Family Code. “The Committee did not define what is meant by a ‘vested or acquired right,’ thus leaving it to the courts to determine what it means as each particular issue is submitted to them. It is difficult to provide the answer for each and every question that may arise in the future.”[5]

In Tayag vs. Court of Appeals,[6] a case which involves a similar complaint denominated as “Claim for Inheritance” but treated by this court as one to compel recognition as an illegitimate child brought prior to the effectivity of the Family Code by the mother of the minor child, and based also on the “open and continuous possession of the status of an illegitimate child,” we had occasion to rule that:

“Under the circumstances obtaining in the case at bar, we hold that the right of action of the minor child has been vested by the filing of the complaint in court under the regime of the Civil Code and prior to the effectivity of the Family Code. We herein adopt our ruling in the recent case of Republic of the Philippines vs. Court of Appeals, et. al.[7] where we held that the fact of filing of the petition already vested in the petitioner her right to file it and to have the same proceed to final adjudication in accordance with the law in force at the time, and such right can no longer be prejudiced or impaired by the enactment of a new law.

xxx    xxx      xxx

Accordingly, Article 175 of the Family Code finds no proper application to the instant case since it will ineluctably affect adversely a right of private respondent and, consequentially, of the minor child she represents, both of which have been vested with the filing of the complaint in court. The trial court is, therefore, correct in applying the provisions of Article 285 of the Civil Code and in holding that private respondent’s cause of action has not yet prescribed.”

Tayag applies four-square with the case at bench. The action brought by private respondent Antonia Aruego for compulsory recognition and enforcement of successional rights which was filed prior to the advent of the Family Code, must be governed by Article 285 of the Civil Code and not by Article 175, paragraph 2 of the Family Code. The present law cannot be given retroactive effect

insofar as the instant case is concerned, as its application will prejudice the vested right of private respondent to have her case decided under Article 285 of the Civil Code. The right was vested to her by the fact that she filed her action under the regime of the Civil Code. Prescinding from this, the conclusion then ought to be that the action was not yet barred, notwithstanding the fact that it was brought when the putative father was already deceased, since private respondent was then still a minor when it was filed, an exception to the general rule provided under Article 285 of the Civil Code. Hence, the trial court, which acquired jurisdiction over the case by the filing of the complaint, never lost jurisdiction over the same despite the passage of E.O. No. 209, also known as the Family Code of the Philippines.

Our ruling herein reinforces the principle that the jurisdiction of a court, whether in criminal or civil cases, once attached cannot be ousted by subsequent happenings or events, although of a character which would have prevented jurisdiction from attaching in the first instance, and it retains jurisdiction until it finally disposes of the case.[8]

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals dated August 31, 1993 and its Resolution dated October 13, 1993 are hereby AFFIRMED.

SO ORDERED.

Padilla, Bellosillo, and Kapunan, JJ., concur.Vitug, J., also believes that the Court of Appeals did not err in holding that the petition before it

did not involve a question of jurisdiction and cannot thus be a substitute for a lost appeal.

[1] Docketed as Civil Case No. 83-16093.[2] Rollo, p. 45.[3] Rollo, pp. 10-11.[4] Rollo, p. 55.[5] Sempio-Diy, Alicia V., Handbook on the Family Code of the Philippines, 1988 ed., p. 325.[6] 209 SCRA 665 [1992].[7] 205 SCRA 356 [1992].[8] Regalado, Florenz D., Remedial Law Compendium, Volume One, Fifth Revised Edition, p.9, citing Ramos, et al. v. Central Bank, L-29352, October 4, 1971; Dioquino v. Cruz, et al., L-38579, September 9, 1982; Republic v.Pielago, et al., G.R. No. 72218, July 21, 1986.

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION 

G.R. No. 69162 February 21, 1992

BANK OF THE PHILIPPINE ISLANDS, petitioner, vs.THE INTERMEDIATE APPELLATE COURT and the SPOUSES ARTHUR CANLAS and VIVIENE CANLAS,respondents.

Leonen, Ramirez & Associates for petitioner.

L. Emmanuel B. Canilao for private respondents.

 GRIÑO-AQUINO, J.:

In a decision dated September 3, 1984, the Intermediate Appellate Court (now Court of Appeals) in AC-G.R. CV No. 69178 entitled, "Arthur A. Canlas, et al., Plaintiff-Appellees vs. Commercial Bank and Trust Company of the Philippines, Defendant-Appellant," reduced to P105,000 the P465,000 damage-award of the trial court to the private respondents for an error of a bank teller which resulted in the dishonor of two small checks which the private respondents had issued against their joint current account. This petition for review of that decision was filed by the Bank.

The respondent spouses, Arthur and Vivienne Canlas, opened a joint current account No. 210-520-73 on April 25, 1977 in the Quezon City branch of the Commercial Bank and Trust Company of the Philippines (CBTC) with an initial deposit of P2,250. Prior thereto, Arthur Canlas had an existing separate personal checking account No. 210-442-41 in the same branch.

When the respondent spouses opened their joint current account, the "new accounts" teller of the bank pulled out from the bank's files the old and existing signature card of respondent Arthur Canlas for Current Account No. 210-442-41 for use as I D and reference. By mistake, she placed the old personal account number of Arthur Canlas on the deposit slip for the new joint checking account of the spouses so that the initial deposit of P2,250 for the joint checking account was miscredited to Arthur's personal account (p. 9, Rollo). The spouses subsequently deposited other amounts in their joint account.

However, when respondent Vivienne Canlas issued a check for Pl,639.89 in April 1977 and another check for P1,160.00 on June 1, 1977, one of the checks was dishonored by the bank for insufficient funds and a penalty of P20 was deducted from the account in both instances. In view of the overdrawings, the bank tried to call up the spouses at the telephone number which they had given in their application form, but the bank could not contact them because they actually reside in Porac, Pampanga. The city address and telephone number which they gave to the bank belonged to Mrs. Canlas' parents.

On December 15, 1977, the private respondents filed a complaint for damages against CBTC in the Court of First Instance of Pampanga (p. 113, Rollo).

On February 27, 1978, the bank filed a motion to dismiss the complaint for improper venue. The motion was denied.

During the pendency of the case, the Bank of the Philippine Islands (BPI) and CBTC were merged. As the surviving corporation under the merger agreement and under Section 80 (5) of the Corporation Code of the Philippines, BPI took over the prosecution and defense of any pending claims, actions or proceedings by and against CBTC.

On May 5, 1981, the Regional Trial Court of Pampanga rendered a decision against BPI, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered sentencing defendant to pay the plaintiff the following:

1. P 5,000.00 as actual damages;

2. P 150,000.00 for plaintiff Arthur Canlas and P150,000.00 for plaintiff Vivienne S. Canlas representing moral damages;

3. P 150.000.00 as exemplary damages;

4. P 10,000.00 as attorney's fees; and

5. Costs. (p. 36, Rollo).

On appeal, the Intermediate Appellate Court deleted the actual damages and reduced the other awards. The dispositive portion of its decision reads:

WHEREFORE, the judgment appealed from is hereby modified as follows:

1. The award of P50,000.00 in actual damages is herewith deleted.

2. Moral damages of P50,000.00 is awarded to plaintiffs-appellees Arthur Canlas and Vivienne S. Canlas, not P50,000.00 each.

3. Exemplary damages is likewise reduced to the sum of P50,000.00 and attorney's fees to P5,000.00.

Costs against the defendants appellant. (p. 40, Rollo.)

Petitioner filed this petition for review alleging that the appellate court erred in holding that:

1. The venue of the case had been properly laid at Pampanga in the light of private respondents' earlier declaration that Quezon City is their true residence.

2. The petitioner was guilty of gross negligence in the handling of private respondents' bank account.

3. Private respondents are entitled to the moral and exemplary damages and attorney's fees adjudged by the respondent appellate court.

On the question of venue raised by petitioner, it is evident that personal actions may be instituted in the Court of First Instance (now Regional Trial Court) of the province where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff (Section 2[b], Rule 4 of the Rules of Court). In this case, there was ample proof that the residence of the plaintiffs is B. Sacan, Porac, Pampanga (p. 117, Rollo). The city address of Mrs. Canlas' parents was placed by the private respondents in their application for a joint checking account, at the suggestion of the new accounts teller, presumably to facilitate mailing of the bank statements and communicating with the private respondents in case any problems should arise involving the account. No waiver of their provincial residence for purposes of determining the venue of an action against the bank may be inferred from the so-called "misrepresentation" of their true residence.

The appellate court based its award of moral and exemplary damages, and attorney's fees on its finding that the mistake committed by the new accounts teller of the petitioner constituted "serious" negligence (p. 38, Rollo). Said court further stressed that it cannot absolve the petitioner from liability for damages to the private respondents, even on the assumption of an honest mistake on its part, because of the embarrassment that even an honest mistake can cause its depositors (p. 31, Rollo).

There is no merit in petitioner's argument that it should not be considered negligent, much less held liable for damages on account of the inadvertence of its bank employee for Article 1173 of the Civil Code only requires it to exercise the diligence of a good father of family.

In Simex International (Manila), Inc. vs. Court of Appeals (183 SCRA 360, 367), this Court stressed the fiduciary nature of the relationship between a bank and its depositors and the extent of diligence expected of it in handling the accounts entrusted to its care.

In every case, the depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the depositor can dispose of as he sees fit, confident that the bank will deliver it as and to whomever he directs. A blunder on the part of the bank, such as the dishonor of a check without good reason, can cause the depositor not a little embarrassment if not also financial loss and perhaps even civil and criminal litigation.

The point is that as a business affected with public interest and because of the nature of its functions, the bank is under obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their relationship. . . .

The bank is not expected to be infallible but, as correctly observed by respondent Appellate Court, in this instance, it must bear the blame for not discovering the mistake of its teller despite the established procedure requiring the papers and bank books to pass through a battery of bank personnel whose duty it is to check and countercheck them for possible errors. Apparently, the officials and employees tasked to do that did not perform their duties with due care, as may be gathered from the testimony of the bank's lone witness, Antonio Enciso, who casually declared that "the approving officer does not have to see the account numbers and all those things.Those are very petty things for the approving manager to look into" (p. 78, Record on Appeal). Unfortunately, it was a "petty thing," like the incorrect account number that the bank teller wrote on the initial deposit slip for the newly-opened joint current account of the Canlas spouses, that sparked this half-a-million-peso damage suit against the bank.

While the bank's negligence may not have been attended with malice and bad faith, nevertheless, it caused serious anxiety, embarrassment and humiliation to the private respondents for which they are entitled to recover reasonable moral damages (American Express International, Inc. vs. IAC, 167 SCRA 209). The award of reasonable attorney's fees is proper for the private respondents were compelled to litigate to protect their interest (Art. 2208, Civil Code). However, the absence of malice and bad faith renders the award of exemplary damages improper (Globe Mackay Cable and Radio Corp. vs. Court of Appeals, 176 SCRA 778).

WHEREFORE, the petition for review is granted. The appealed decision is MODIFIED by deleting the award of exemplary damages to the private respondents. In all other respects, the decision of the Intermediate Appellate Court, now Court of Appeals, is AFFIRMED. No costs.

SO ORDERED.

Narvasa, C.J., Cruz and Medialdea, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. L-30061 February 27, 1974

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellees, vs.JOSE JABINAL Y CARMEN, defendant-appellant.

Office of the Solicitor General Felix V. Makasiar and Solicitor Antonio M. Martinez for plaintiff-appellee.

Pedro Panganiban y Tolentino for defendant-appellant.

 ANTONIO, J.:p

Appeal from the judgment of the Municipal Court of Batangas (provincial capital), Batangas, in Criminal Case No. 889, finding the accused guilty of the crime of Illegal Possession of Firearm and Ammunition and sentencing him to suffer an indeterminate penalty ranging from one (1) year and one (1) day to two (2) years imprisonment, with the accessories provided by law, which raises in issue the validity of his conviction based on a retroactive application of Our ruling in People v. Mapa. 1

The complaint filed against the accused reads:

That on or about 9:00 o'clock, p.m., the 5th day of September, 1964, in the poblacion, Municipality of Batangas, Province of Batangas, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a person not authorized by law, did then and there wilfully, unlawfully and feloniously keep in his possession, custody and direct control a revolver Cal. .22, RG8 German Made with one (1) live ammunition and four (4) empty shells without first securing the necessary permit or license to possess the same.

At the arraignment on September 11, 1964, the accused entered a plea of not guilty, after which trial was accordingly held.

The accused admitted that on September 5, 1964, he was in possession of the revolver and the ammunition described in the complaint, without the requisite license or permit. He, however, claimed to be entitled to exoneration because, although he had no license or permit, he had an appointment as Secret Agent from the Provincial Governor of Batangas and an appointment as Confidential Agent from the PC Provincial Commander, and the said appointments expressly carried with them the authority to possess and carry the firearm in question.

Indeed, the accused had appointments from the above-mentioned officials as claimed by him. His appointment from Governor Feliciano Leviste, dated December 10, 1962, reads:

Reposing special trust and confidence in your civic spirit, and trusting that you will be an effective agent in the detection of crimes and in the preservation of peace and order in the province of Batangas, especially with respect to the suppression of trafficking in explosives, jueteng, illegal cockfighting, cattle rustling, robbery and the detection of unlicensed firearms, you are hereby appointed a SECRET AGENT of the undersigned, the appointment to take effect immediately, or as soon as you have qualified for the position. As such Secret Agent, your duties shall be those generally of a peace officer and particularly to help in the preservation of peace and order in this province and to make reports thereon to me once or twice a month. It should be clearly understood that any abuse of authority on your part shall be considered sufficient ground for the automatic cancellation of your appointment and immediate separation from the service. In accordance with the decision of the Supreme Court in G.R. No. L-12088 dated December 23, 1959, you will have the right to bear a firearm, particularly described below, for use in connection with the performance of your duties.

By virtue hereof, you may qualify and enter upon the performance of your duties by taking your oath of office and filing the original thereof with us.

Very truly yours,

(Sgd.) FELICIANO LEVISTEProvincial Governor

FIREARM AUTHORIZED TO CARRY:

Kind: — ROHM-Revolver

Make: — German

SN: — 64

Cal:— .22

On March 15, 1964, the accused was also appointed by the PC Provincial Commander of Batangas as Confidential Agent with duties to furnish information regarding smuggling activities, wanted persons, loose firearms, subversives and other similar subjects that might affect the peace and order condition in Batangas province, and in connection with these duties he was temporarily authorized to possess a ROHM revolver, Cal. .22 RG-8 SN-64, for his personal protection while in the performance of his duties.

The accused contended before the court a quo that in view of his above-mentioned appointments as Secret Agent and Confidential Agent, with authority to possess the firearm subject matter of the prosecution, he was entitled to acquittal on the basis of the Supreme Court's decision in People vs. Macarandang 2 and People vs. Lucero. 3 The trial court, while conceding on the basis of the evidence of record the accused had really been appointed Secret Agent and Confidential Agent by the Provincial Governor and the PC Provincial Commander of Batangas, respectively, with authority to possess and carry the firearm described in the complaint, nevertheless held the accused in its decision dated December 27, 1968, criminally liable for illegal possession of a firearm and ammunition on the ground that the rulings of the Supreme Court in the cases of Macarandang and Lucero were reversed and abandoned in People vs. Mapa, supra. The court

considered as mitigating circumstances the appointments of the accused as Secret Agent and Confidential Agent.

Let us advert to Our decisions in People v. Macarandang, supra, People v. Lucero, supra, and People v. Mapa, supra. In Macarandang, We reversed the trial court's judgment of conviction against the accused because it was shown that at the time he was found to possess a certain firearm and ammunition without license or permit, he had an appointment from the Provincial Governor as Secret Agent to assist in the maintenance of peace and order and in the detection of crimes, with authority to hold and carry the said firearm and ammunition. We therefore held that while it is true that the Governor has no authority to issue any firearm license or permit, nevertheless, section 879 of the Revised Administrative Code provides that "peace officers" are exempted from the requirements relating to the issuance of license to possess firearms; and Macarandang's appointment as Secret Agent to assist in the maintenance of peace and order and detection of crimes, sufficiently placed him in the category of a "peace officer" equivalent even to a member of the municipal police who under section 879 of the Revised Administrative Code are exempted from the requirements relating to the issuance of license to possess firearms. In Lucero, We held that under the circumstances of the case, the granting of the temporary use of the firearm to the accused was a necessary means to carry out the lawful purpose of the batallion commander to effect the capture of a Huk leader. In Mapa, expressly abandoning the doctrine in Macarandang, and by implication, that in Lucero, We sustained the judgment of conviction on the following ground:

The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to ... possess any firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or intended to be used in the manufacture of firearms, parts of firearms, or ammunition." (Sec. 878, as amended by Republic Act No. 4, Revised Administrative Code.) The next section provides that "firearms and ammunition regularly and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine Constabulary, guards in the employment of the Bureau of Prisons, municipal police, provincial governors, lieutenant governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of provincial prisoners and jails," are not covered "when such firearms are in possession of such officials and public servants for use in the performance of their official duties." (Sec. 879, Revised Administrative Code.)

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. ... .

It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962, and Confidential Agent by the Provincial Commander in 1964, the prevailing doctrine on the matter was that laid down by Us in People v. Macarandang (1959) and People v. Lucero (1958). Our decision in People v. Mapa reversing the aforesaid doctrine came only in 1967. The sole question in this appeal is: Should appellant be acquitted on the basis of Our rulings in Macarandang and Lucero, or should his conviction stand in view of the complete reversal of the Macarandang and Lucero doctrine in Mapa? The Solicitor General is of the first view, and he accordingly recommends reversal of the appealed judgment.

Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the reason why under Article 8 of the New Civil Code "Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system ... ." The interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that law originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that law thus construed intends to effectuate. The settled rule supported by numerous

authorities is a restatement of legal maxim "legis interpretatio legis vim obtinet" — the interpretation placed upon the written law by a competent court has the force of law. The doctrine laid down in Lucero andMacarandang was part of the jurisprudence, hence of the law, of the land, at the time appellant was found in possession of the firearm in question and when he arraigned by the trial court. It is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. This is especially true in the construction and application of criminal laws, where it is necessary that the punishability of an act be reasonably foreseen for the guidance of society.

It follows, therefore, that considering that appellant conferred his appointments as Secret Agent and Confidential Agent and authorized to possess a firearm pursuant to the prevailing doctrine enunciated in Macarandang andLucero, under which no criminal liability would attach to his possession of said firearm in spite of the absence of a license and permit therefor, appellant must be absolved. Certainly, appellant may not be punished for an act which at the time it was done was held not to be punishable.

WHEREFORE, the judgment appealed from is hereby reversed, and appellant is acquitted, with costs de oficio.

Zaldivar (Chairman), Barredo, Fernandez and Aquino, JJ., concur.

Fernando, J., took no part.

 Footnotes

1 L-22301, August 30, 1967, 20 SCRA 1164.2 106 Phil. (1959), 713.3 103 Phil. (1958), 500.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-5691 December 27, 1910

S. D. MARTINEZ and his wife, CARMEN ONG DE MARTINEZ, plaintiffs-appellees, vs.WILLIAM VAN BUSKIRK, defendant-appellant.

Lionel D. Hargis for appellant.Sanz and Oppisso for appellee.

 MORELAND, J.:

The facts found by the trial court are undisputed by either party in this case. They are —

That on the 11th day of September, 1908, the plaintiff, Carmen Ong de Martinez, was riding in a carromata on Calle Real, district of Ermita, city of Manila, P.I., along the left-hand side of the street as she was going, when a delivery wagon belonging to the defendant used for the purpose of transportation of fodder by the defendant, and to which was attached a pair of horses, came along the street in the opposite direction to that the in which said plaintiff was proceeding, and that thereupon the driver of the said plaintiff's carromata, observing that the delivery wagon of the defendant was coming at great speed, crowded close to the sidewalk on the left-hand side of the street and stopped, in order to give defendant's delivery wagon an opportunity to pass by, but that instead of passing by the defendant's wagon and horses ran into the carromata occupied by said plaintiff with her child and overturned it, severely wounding said plaintiff by making a serious cut upon her head, and also injuring the carromata itself and the harness upon the horse which was drawing it.

These facts are not dispute, but the defendant presented evidence to the effect that the cochero, who was driving his delivery wagon at the time the accident occurred, was a good servant and was considered a safe and reliable cochero; that the delivery wagon had sent to deliver some forage at Paco Livery Stable on Calle Herran, and that for the purpose of delivery thereof the cochero driving the team as defendant's employee tied the driving lines of the horses to the front end of the delivery wagon and then went back inside of the wagon for the purpose of unloading the forage to be delivered; that while unloading the forage and in the act of carrying some of it out, another vehicle drove by, the driver of which cracked a whip and made some other noises, which frightened the horses attached to the delivery wagon and they ran away, and the driver was thrown from the inside of the wagon out through the rear upon the ground and was unable to stop the horses; that the horses then ran up and on which street they came into collision with the carromata in which the plaintiff, Carmen Ong de Martinez, was riding.

The defendant himself was not with the vehicle on the day in question.

Upon these facts the court below found the defendant guilty of negligence and gave judgment against him for P442.50, with interest thereon at the rate of 6 per cent per annum from the 17th day of October, 1908, and for the costs of the action. The case is before us on an appeal from that judgment.

There is no general law of negligence in the Philippine Islands except that embodied in the Civil Code. The provisions of that code pertinent to this case are —

Art. 1902. A person who by an act or omission causes damage to another when there is fault or negligence shall be obliged to repair the damage so done.

Art. 1903. The obligation imposed by preceding article is demandable, not only for personal acts and omissions, but also for those of the persons for whom they should be responsible.

The father, and on his death or incapacity the mother, is liable for the damages caused by the minors who live with them.

Guardians are liable for the damages caused by minors or incapacitated persons who are under their authority and live with them.

Owners of directors of an establishment or enterprise are equally liable for the damages caused by the employees in the service of the branches in which the latter may be employed or on account of their duties.

The State is liable in this sense when it acts through a special agent, but not when the damages should have been caused by the official to whom properly it pertained to do the act performed, in which case the provisions of the preceding article shall be applicable.

Finally, masters or directors of arts and trades are liable for the damages caused by their pupils or apprentices while they are under their custody.

The liability referred to in this article shall cease when the persons mentioned therein prove that they employed all the diligence of a good father of a family to avoid the damage.

Passing the question whether or not an employer who has furnished a gentle and tractable team and a trusty and capable driver is, under the last paragraph of the above provisions, liable for the negligence of such driver in handling the team, we are of the opinion that the judgment must be reversed upon the ground that the evidence does not disclose that the cochero was negligent.

While the law relating to negligence in this jurisdiction may possibly be some what different from that in Anglo-Saxon countries, a question we do not now discuss, the rules under which the fact of negligence is determined are, nevertheless, generally the same. That is to say, while the law designating the person responsible for a negligent act may not be the same here as in many jurisdictions, the law determining what is a negligent act is the same here, generally speaking, as elsewhere. (Supreme court of Spain, 4 December, 1903; 16 May, 1893; 27 June, 1894; 9 April, 1896; 14 March, 1901; 2 March, 1904; 7 February, 1905; 16 June, 1905; 23 June, 1905; 13 April, 1903; 7 March, 1902; 12 June, 1900; 2 March, 1907; 18 March, 1898; 3 June, 1901.)

It appears from the undisputed evidence that the horses which caused the damage were gentle and tractable; that the cochero was experienced and capable; that he had driven one of the horses several years and the other five or six months; that he had been in the habit, during all that time, of

leaving them in the condition in which they were left on the day of the accident; that they had never run away up to that time and there had been, therefore, no accident due to such practice; that to leave the horses and assist in unloading the merchandise in the manner described on the day of the accident was the custom of all cochero who delivered merchandise of the character of that which was being delivered by the cochero of the defendant on the day in question, which custom was sanctioned by their employers.

In our judgment, the cochero of the defendant was not negligent in leaving the horses in the manner described by the evidence in this case, either under Spanish or American jurisprudence. (Lynch vs. Nurdin, 1 Q. B., 422; Rumsey vs. Nelson, 58 Vt., 590; Drake vs. Mount, 33 N. J. L., 442; Hoboken Land and Improvement Co. vs. Lally, 48 N. J. L., 604; Wasmer vs. D. L. & W. R. R. Co., 80 N. Y., 212.) lawphi1.net

In the case of Hayman vs. Hewitt (Peake N. P. Cas., pt. 2, p. 170), Lord Kenyon said:

He was performing his duty while removing the goods into the house, and, if every person who suffered a cart to remain in the street while he took goods out of it was obliged to employ another to look after the horses, it would be impossible for the business of the metropolis to go on.

In the case of Griggs vs. Fleckenstein (14 Minn., 81), the court said:

The degree of care required of the plaintiff, or those in charged of his horse, at the time of the injury, is that which would be exercised by a person of ordinary care and prudence under like circumstances. It can not be said that the fact of leaving the horse unhitched is in itself negligence. Whether it is negligence to leave a horse unhitched must be depend upon the disposition of the horse; whether he was under the observation and control of some person all the time, and many other circumstances; and is a question to be determined by the jury from the facts of each case.

In the case of Belles vs. Kellner (67 N. J. L., 255), it was held that it was error on the part of the trial court to refuse to charge that "it is not negligence for the driver of a quite, gentle horse to leave him unhitched and otherwise unattended on the side of a public highways while the driver is upon the sidewalk loading goods on the wagon." The said court closed its opinion with these words:

There was evidence which could have fully justified the jury in finding that the horse was quite and gentle, and that the driver was upon the sidewalk loading goods on the wagon, at time of the alleged injury, and that the horse had been used for years in that way without accident. The refusal of the trial court to charge as requested left the jury free to find was verdict against the defendant, although the jury was convinced that these facts were proven. lawphil.net

In the case of Southworth vs. Ry. Co. (105 Mass., 342), it was held:

That evidence that a servant, whom traders employed to deliver goods, upon stopping with his horse and wagon to deliver a parcel at a house from fifty to a hundred rods from a railroad crossing, left the horse unfastened for four or five minutes while he was in the house, knowing that it was not afraid of cars, and having used it for three or four months without ever hitching it or knowing it to start, is not conclusive, as a matter of law, of a want of due care on his part.

The duty, a violation of which is claimed to be negligence in the respect in question, is to exercise reasonable care and prudence. Where reasonable care is employed in doing an act not itself illegal or inherently likely to produce damage to others, there will be no liability, although damage in fact ensues. (Milwaukee Ry. Co. vs. Arms, 91 U. S., 489; Parrott vs. Wells, 15 Wall., 524; Brown vs. Kendall, 6 Cushing, 292; Jackson Architectural Iron Works vs.Hurlbut, 158 N. Y., 34 Westerfield vs. Levis, 43 La. An., 63; Niosi vs. Empire Steam Laundry, 117 Cal., 257.)

The act of defendant's driver in leaving the horses in the manner proved was not unreasonable or imprudent. Acts the performance of which has not proved destructive or injurious and which have, therefore, been acquiesced in by society for so long a time that they have ripened into custom, can not be held to be themselves unreasonable or imprudent. Indeed the very reason why they have been permitted by society is that they beneficial rather than prejudicial. itc-alf Accidents sometimes happen and injuries result from the most ordinary acts of life. But such are not their natural or customary results. To hold that, because such an act once resulted in accident or injury, the actor is necessarily negligent, is to go far. The fact that the doctrine of res ipsa loquitur is sometimes successfully invoked in such a case, does not in any sense militate against the reasoning presented. That maxim at most only creates a prima facie case, and that only in the absence of proof of the circumstances under which the act complained of was performed. It is something invoked in favor of the plaintiff before defendant's case showing the conditions and circumstances under which the injury occurred, the creative reason for the doctrine of res ipsa loquitur disappears. This is demonstrated by the case of Inland and Seaboard Costing Co. vs. Tolson (139 U.S., 551), where the court said (p. 554):

. . . The whole effect of the instruction in question, as applied to the case before the jury, was that if the steamboat, on a calm day and in smooth water, was thrown with such force against a wharf properly built, as to tear up some of the planks of the flooring, this would be prima facie evidence of negligence on the part of the defendant's agent in making the landing, unless upon the whole evidence in the case this prima facieevidence was rebutted. As such damage to a wharf is not ordinarily done by a steamboat under control of her officers and carefully managed by them, evidence that such damage was done in this case was prima facie, and, if unexplained, sufficient evidence of negligence on their part, and the jury might properly be so instructed.

There was presented in this case, and by the plaintiffs themselves, not only the fact of the runway and the accident resulting therefrom, but also the conditions under which the runaway occurred. Those conditions showing of themselves that the defendant's cochero was not negligent in the management of the horse, the prima faciecase in plaintiffs' favor, if any, was destroyed as soon as made.

It is a matter of common knowledge as well as proof that it is the universal practice of merchants to deliver merchandise of the kind of that being delivered at the time of the injury, in the manner in which that was then being delivered; and that it is the universal practice to leave the horses in the manner in which they were left at the time of the accident. This is the custom in all cities. It has not been productive of accidents or injuries. The public, finding itself unprejudiced by such practice, has acquiesced for years without objection. Ought the public now, through the courts, without prior objection or notice, to be permitted to reverse the practice of decades and thereby make culpable and guilty one who had every reason and assurance to believe that he was acting under the sanction of the strongest of all civil forces, the custom of a people? We think not.

The judgement is reversed, without special finding as to costs. So ordered.

Arellano, C. J., Mapa, Johnson, Carson and Trent, JJ., concur.

Separate Opinions

TORRES, J., dissenting:

I am of the opinion that the judgment should be affirmed.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. L-50654 November 6, 1989

RUDY GLEO ARMIGOS, petitioner, vs.COURT OF APPEALS, CRISTITO MATA, and JUDGE L. D. CARPIO, in his capacity as Judge of the Court of First Instance of Davao del Sur, Branch V, respondents.

David W. Natividad for petitioner.

Calamba, Garcia, Geralde & Calamba Law Offices for respondents.

 PADILLA, J.:

Review on certiorari of the decisio * of the Court of Appeals, which dismissed the petition filed and docketed therein as CA-G.R. No. SP-07192-R, entitled: "Rudy Gleo Armigos, petitioner, versus Judge L.D. Carpio, respondent," and the resolution denying the motion for reconsideration of said decision.

The undisputed facts are as follows:

The private respondent, Cristito Mata, filed a complaint against the herein petitioner with the Municipal Court of Digos, Davao del Sur, docketed as Civil Case No. 971, for the collection of damages and attorney's fees. After trial, judgment was rendered in favor of the private respondent and against the herein petitioner. A copy of the decision was received by the petitioner on 8 June 1977, and the following day, 9 June 1977, he filed a notice of appeal with the said municipal court, and on 24 June 1977, he completed the other requirements for the perfection of an appeal, including the filing of an appeal bond and the payment of the appellate court docket fee. However, when the case was elevated to the Court of First Instance of Davao del Sur (Branch V) for the consideration of the appeal, the presiding judge thereof ruled that the appeal was filed beyond the reglementary period; consequently, he dismissed the appeal.

Whereupon, the petitioner filed a petition for certiorari, mandamus with preliminary injunction with the Court of Appeals, claiming that from 8 June 1977, when he received a copy of the decision of the municipal court, to 24 June 1977, when he perfected his appeal, only fifteen (15) days had elapsed so that the decision of the Court of First Instance of Davao del Sur, dismissing his appeal for having been filed beyond the reglementary period, is erroneous and contrary to law. The petitioner contended that the computation of the period to appeal should commence on the hour he received copy of the decision, so that the first of the 1 5-day period comprising 24 hours is from 4:00 o'clock p.m. of 9 June 1977 to 4:00 o'clock p.m. of 10 June 1977 and the last day, from 4:00 o'clock p.m. of 23 June 1977 to 4:00 o'clock p.m. of 24 June 1977.

The Court of Appeals, however, rejected the novel interpretation suggested as it would result in many confusing situations and many unreliable testimonies as to the time a copy of a decision, order or pleading is received, and cited the case of Republic of the Philippines vs. Encarnacion, 1 where this Court held that when a law was to be effective upon approval by the President and the President

signed the same on 16 June 1950, the law should be considered to have taken effect not on the exact hour when the President signed the same on 16 June 1950 but from the very first minute or hour of said day of 16 June 1950.

The petitioner filed a motion for reconsideration of the appellate court's decision, but his motion was denied in a resolution promulgated on 7 December 1978.

Hence, the present recourse.

We find no merit in the petition. The rule stated in Article 13 of the Civil Code to the effect that "In computing a period, the first day shall be excluded, and the last day included" is similar, but not Identical to Section 4 of the Code of Civil Procedure which provided that "Unless otherwise specially provided, the time within which an act is required by law to be done shall be computed by excluding the first day and including the last; and if the last be Sunday or a legal holiday it shall be excluded", as well as the old Rule 28 of the Rules of Court which stated that "In computing any period of time prescribed or allowed by the Rules of Court, by order of a court, or by any other applicable statute, the day of the act, event or default after which the designated period of time begins to run is not to be included. The last day of the period so computed is to be included, unless it is a Sunday or a legal holiday, in which event the time shall run until the end of the next day which is neither a Sunday or a legal holiday." In applying this rule, the Court considered the day as synonymous with the date and we find no cogent reason to adopt a different view.

Besides, human memory on dates or days is frail and unless the day is an extraordinary one for a person, there is no reasonable certainty of its correctness. What more for the exact hour when a pleading, order or decision is received by a party?

Petitioner's suggestion, however, may find application in appeals in habeas corpus cases where the law requires that such appeals should be made within 48 hours from notice of judgment. 2

While it is true that rules of procedure are to be interpreted liberally so that the real matter in dispute may be submitted to the judgment of the court, and that the trial court is vested with discretion to allow or admit an appeal filed out of time, this discretion is not unconditional. There must be justifiable reason to warrant such action, since the perfection of an appeal in the manner and within the period laid down by law is not only mandatory but jurisdictional, and in the absence of any justifying circumstance, the court has no jurisdiction to approve or admit an appeal filed out of time. 3 In the instant case, the petitioner failed to prove, or even claim, that his failure to appeal on time was due to fraud, accident, mistake or excusable negligence.

WHEREFORE, the petition is DENIED. With costs against the petitioner.

SO ORDERED.

Melencio-Herrera (Chairperson), Sarmiento and Regalado, JJ., concur.

Paras, J., took no part.

Footnotes* Penned by Justice Edgardo L. Paras, with Justices Ramon G. Gaviola Jr., and B.S. de la Fuente, concurring.1 87 Phil. 845.2 Rule 41, Sec. 18, Rules of Court.3 Trans-Philippines, Inc. vs. Court of Appeals, G.R. No. L-42184, July 28, 1977 SCRA 154, 161.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-29131             August 27, 1969

NATIONAL MARKETING CORPORATION, plaintiff-appellant, vs.MIGUEL D. TECSON, ET AL., defendants, MIGUEL D. TECSON, defendant-appellee, THE INSURANCE COMMISSIONER, petitioner.

Government Corporate Counsel Leopoldo M. Abellera and Trial Atty. Antonio M. Brillantes for plaintiff-appellant.Antonio T. Lacdan for defendant-appellee.Office of the Solicitor General for petitioner.

CONCEPCION, C.J.:

          This appeal has been certified to us by the Court of Appeals only one question of law being involved therein.

          On November 14, 1955, the Court of First Instance of Manila rendered judgment, in Civil Case No. 20520 thereof, entitled "Price Stabilization Corporation vs. Miguel D. Tecson and Alto Surety and Insurance Co., Inc.," the dispositive part of which reads as follows:

          For the foregoing consideration, the Court decides this case:

          (a) Ordering the defendants Miguel D. Tecson and Alto Surety Insurance Co., Inc. to pay jointly and severally plaintiff PRATRA the sum of P7,200.00 plus 7% interest from May 25, 1960 until the amount is fully paid, plus P500.00 for attorney's fees, and plus costs;

          (b) ordering defendant Miguel D. Tecson to indemnify his co-defendant Alto Surety & Insurance Co., Inc. on the cross-claim for all the amounts it would be made to pay in this decision, in case defendant Alto Surety & Insurance Co., Inc. pay the amount adjudged to plaintiff in this decision. From the date of such payment defendant Miguel D. Tecson would pay the Alto Surety & Insurance Co., Inc., interest at 12% per annum until Miguel D. Tecson has fully reimbursed plaintiff of the said amount.

          Copy of this decision was, on November 21, 1955, served upon the defendants in said case. On December 21, 1965, the National Marketing Corporation, as successor to all the properties, assets, rights, and choses in action of the Price Stabilization Corporation, as plaintiff in that case and judgment creditor therein, filed, with the same court, a complaint, docketed as Civil Case No. 63701 thereof, against the same defendants, for the revival of the judgment rendered in said Case No. 20520. Defendant Miguel D. Tecson moved to dismiss said complaint, upon the ground of lack of jurisdiction over the subject matter thereof and prescription of action. Acting upon the motion and plaintiff's opposition thereto, said Court issued, on February 14, 1966, an order reading:

          Defendant Miguel Tecson seeks the dismissal of the complaint on the ground of lack of jurisdiction and prescription. As for lack of jurisdiction, as the amount involved is less than P10,000 as actually these proceedings are a revival of a decision issued by this same court, the matter of jurisdiction must be admitted. But as for prescription. Plaintiffs admit the decision of this Court became final on December 21, 1955. This case was filed exactly on December 21, 1965 — but more than ten years have passed a year is a period of 365 days (Art. 13, CCP). Plaintiff forgot that 1960, 1964 were both leap years so that when this present case was filed it was filed two days too late.

          The complaint insofar as Miguel Tecson is concerned is, therefore, dismissed as having prescribed. 1äwphï1.ñët

          The National Marketing Corporation appealed from such order to the Court of Appeals, which, on March 20, 1969t certified the case to this Court, upon the ground that the only question therein raised is one of law, namely, whether or not the present action for the revival of a judgment is barred by the statute of limitations.

          Pursuant to Art. 1144(3) of our Civil Code, an action upon a judgment "must be brought within ten years from the time the right of action accrues," which, in the language of Art. 1152 of the same Code, "commences from the time the judgment sought to be revived has become final." This, in turn, took place on December 21, 1955, or thirty (30) days from notice of the judgment — which was received by the defendants herein on November 21, 1955 — no appeal having been taken therefrom. 1 The issue is thus confined to the date on which ten (10) years from December 21, 1955 expired.

          Plaintiff-appellant alleges that it was December 21, 1965, but appellee Tecson maintains otherwise, because "when the laws speak of years ... it shall be understood that years are of three hundred sixty-five days each" — according to Art. 13 of our Civil Code — and, 1960 and 1964 being leap years, the month of February in both had 29 days, so that ten (10) years of 365 days each, or an aggregate of 3,650 days, from December 21, 1955, expired on December 19, 1965. The lower court accepted this view in its appealed order of dismissal.

          Plaintiff-appellant insists that the same "is erroneous, because a year means a calendar year (Statutory Construction, Interpretation of Laws, by Crawford, p. 383) and since what is being computed here is the number of years, a calendar year should be used as the basis of computation. There is no question that when it is not a leap year, December 21 to December 21 of the following year is one year. If the extra day in a leap year is not a day of the year, because it is the 366th day, then to what year does it belong? Certainly, it must belong to the year where it falls and, therefore, that the 366 days constitute one year." 2

          The very conclusion thus reached by appellant shows that its theory contravenes the explicit provision of Art. 13 of the Civil Code of the Philippines, limiting the connotation of each "year" — as the term is used in our laws — to 365 days. Indeed, prior to the approval of the Civil Code of Spain, the Supreme Court thereof had held, on March 30, 1887, that, when the law spoke of months, it meant a "natural" month or "solar" month, in the absence of express provision to the contrary. Such provision was incorporated into the Civil Code of Spain, subsequently promulgated. Hence, the same Supreme Court declared 3 that, pursuant to Art. 7 of said Code, "whenever months ... are referred to in the law, it shall be understood that the months are of 30 days," not the "natural," or "solar" or "calendar" months, unless they are "designated by name," in which case "they shall be computed by the actual number of days they have. This concept was later, modified in the Philippines, by Section 13 of the Revised Administrative Code, Pursuant to which, "month shall be understood to refer to a calendar month." 4 In the language of this Court, in People vs. Del

Rosario, 5 with the approval of the Civil Code of the Philippines (Republic Act 386) ... we have reverted to the provisions of the Spanish Civil Code in accordance with which a month is to be considered as the regular 30-day month ... and not the solar or civil month," with the particularity that, whereas the Spanish Code merely mentioned "months, days or nights," ours has added thereto the term "years" and explicitly ordains that "it shall be understood that years are of three hundred sixty-five days."

          Although some members of the Court are inclined to think that this legislation is not realistic, for failure to conform with ordinary experience or practice, the theory of plaintiff-appellant herein cannot be upheld without ignoring, if not nullifying, Art. 13 of our Civil Code, and reviving Section 13 of the Revised Administrative Code, thereby engaging in judicial legislation, and, in effect, repealing an act of Congress. If public interest demands a reversion to the policy embodied in the Revised Administrative Code, this may be done through legislative process, not by judicial decree.

          WHEREFORE, the order appealed from should be as it is hereby affirmed, without costs. It is so ordered.

Dizon, Makalintal, Sanchez, Castro, Fernando, Capistrano, Teehankee and Barredo, JJ., concur.Reyes, J.B.L., and Zaldivar, JJ., are on leave.

Footnotes1Sec. 1, Rule 39, in relation to Sec. 3, Rule 31, Rules of Court.2Emphasis ours.3Decision of April 6, 1895.4Guzman v. Lichauco, 42 Phil. 292; Gutierrez v. Carpio, 53 Phil. 334, 335-336.597 Phil. 70-71.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 915            August 1, 1902

THE UNITED STATES, complainant-appellant, vs.AMBROSIO TIQUI, defendant-appellee.

Office of the Solicitor-General Araneta, for appellant.Simplicio del Rosario, for private prosecutor.Basilio R. Mapa, for appellee.

ARELLANO, C.J.:

The final judgment in this case having been pronounced on the 31st day of March last, the complaining witness, on the 5th day of April, gave notice of appeal. The appeal was allowed. Counsel for the accused now moves the court to dismiss the appeal on the ground that it was taken on the sixteen day after the promulgation of the sentence, fifteen days being the term assigned by article 47 of the law.

The question arising is whether the fifteen days are to be counted from the very day of the publication of the judgment.

In a doubtful case the law will be interpreted in the light of its underlying principles. The law in question is based upon the American legislation, and the local legislation in force prior to its promulgation, which, by section 1 thereof, is declared to be continued in force in so far as not in conflict with its provisions.

Under the American system, in computing time the first day is excluded and the last day included, it not being necessary to cite authority in support of this proposition, inasmuch as the same doctrine has been established in the special legislation of the Philippines, as may be seen in article 4 and 76 of the Code of Civil Procedure now in force. No rule was more uniform in the law as formerly and as still enforced in these Islands, as may be seen in the Codes of Criminal and Civil Procedure, as well as in the Code of Commerce and the Civil Code. Article 1130 of the Civil Code establishes as a principle that "when the term of an obligation is fixed by days to be counted from a specified one, such day shall be excluded from the computation, which shall begin on the following day." It not being demonstrated that article 47 of General Orders, No. 58, upon the subject of criminal procedure has intentionally departed from these precedents, it must be construed harmoniously with the other law, both substantive and adjective, which is wholly uniform on this subject. The reason why the first day is excluded is undoubtedly because the appellant is given fifteen days in which to appeal, and as Paragraph I, article 7 of the Civil Code provides that a day shall always be understood to consist of twenty-four hours, it follows that the period allowed would not be fifteen complete days were the day in question — that is, the day of the publication of the judgment — to be included in the computation.

The motion is therefore overruled, with costs. So ordered.

Torres, Cooper, Willard, and Ladd, JJ., concur.Ladd, J., did not sit in this case.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-6889             August 26, 1915

JOAQUIN IBAÑEZ DE ALCOA Y PALET, ET AL., plaintiffs-appellants, vs.THE HONGKONG and SHANGHAI BANKING CORPORATION, ET AL., defendants-appellants.

Alfredo Chicote for plaintiffs.Haussermann, Cohn and Fisher for defendants.

TRENT, J.:

A motion for rehearing has been made in this case. It is urged that our decision1 overlooks the fact that the plaintiff children are citizens of this country and, hence, governed by the laws thereof. Without determining the political status of the plaintiffs, we have at some length endeavored to show that, clothing them with Philippine citizenship, the present law of guardianship, as contained in our Code of Civil Procedure, does not apply to them by reason of the saying provisions of section 581. The concurring opinion assumes their Spanish citizenship and, hence, their amenability to the laws of Spain. We might add that the admirable briefs of counsel for the defendant bank contain lengthy and strong arguments to the effect that these children are not citizens of the Philippine Islands, but citizens of Spain. If this be true, then it may be that this case ought to be decided in accordance with the provisions of the Spanish Civil Code, as stated in the concurring opinion. We purposely avoided a discussion of the political status of the plaintiffs, basing our decision entirely upon the existing laws of these Islands, as we understand them.

It is urged that the emancipation of the plaintiffs could not have been validly made for the reason that it was not recorded in a public document. This point was raised in the briefs and has been already answered in our decision.

It is next urged that the mortgage is invalid as to the plaintiffs because the mother's interest as a partner of the firm were directly opposed to the children's interest. Article 165 of the Civil Code is quoted in support of this contention. This article is clearly limited by its own words to children "not emancipated." Article 317 confers full capacity upon an emancipated child to control his person and property with the limitations stated. One of these is the encumbrance of his real property, which may not be done without the consent of the parent or, in his or her absence, of the tutor. The resolutions of the Direccion General de los Registos (Nov. 4, 1896; Jan. 7, 1907; and Jan. 30, 1911) distinctly hold that a formally emancipated child may participate in the division of an inheritance with the parent's consent, even when the latter is also interested. Certainly, the division of an undivided inheritance between the parent and the emancipated child is strong a case of conflicting interests as is the case at bar. Manresa endeavors to apply article 165 to article 317 by analogy, and cites the resolution of November 19, 1898, in support of this contention. That case, however, was not one of formal emancipation, but of emancipation by marriage, and the land court expressly held that it was governed by articles 315 and 59 of the Civil Code and not by article 317. The case of November 14, 1896, one of formal emancipation and cited above, was expressly distinguished in the resolution of November 19, 1898, upon which Manresa relies. For that matter, article 165 is nowhere cited or discussed in the last mentioned resolution. We do not feel authorized to add to those limitations

upon the capacity of a formally emancipated child in view of the decisions of the highest authorities on the point to which we have referred above.

It is urged, lastly, that the mortgage contract is void as to the plaintiffs by reason of a lack of consideration. It is asserted that they executed the mortgage under the impression that they were partners in the firm of Aldecoa & Co., when, as decided by a final judgment of the Court of First Instance, they were not such partners. Article 1276 of the Civil Code provides:

A statement of a false consideration in contracts shall render them void, unless it be proven that they were based on another real and licit one.

By the same judgment which released the plaintiffs from their obligations as partners of the firm, they were declared creditors of that firm. Here was a valid and subsisting consideration for the mortgage; the creditors' desire to preserve the firm intact in the hope of recovering from it in due course their total credits. It seems clear that it was the object of the mother and the plaintiff children to thus save the business, and it matters little that the plaintiffs were creditors and not partners.

We see no reason for disturbing the decision heretofore rendered. Motion denied. So ordered.

Arellano, C.J., Torres and Araullo, JJ., concur.

Footnotes

130 Phil. Rep., 228.

EN BANC

[G. R. No. 2935. March 23, 1909.]

THE GOVERNMENT OF THE PHILIPPINE ISLANDS, Plaintiff-Appellee, vs. GEORGE I. FRANK,Defendant-Appellant.

D E C I S I O N

JOHNSON, J.:

Judgment was rendered in the lower court on the 5th day of September, 1905. the Defendantappealed. On the 12th day of October, 1905, the Appellant filed his printed bill of exceptions with the clerk of the Supreme Court. On the 5th day of December, 1905, the Appellant filed his brief with the clerk of the Supreme Court. On the 19th day of January, 1906, the Attorney-General filed his brief in said cause. Nothing further was done in said cause until on about the 30th day of January, 1909, when the respective parties were requested by this court to prosecute the appeal under penalty of having the same dismissed for failure so to do; whereupon the Appellant, by petition, had the cause placed upon the calendar and the same was heard on the 2d day of February, 1909.

The facts from the record appear to be as follows: cha

First. That on or about the 17th day of April, 1903, in the city of Chicago, in the State of Illinois, in the United States, the Defendant, through a representative of the Insular Government of the Philippine Islands, entered into a contract for a period of two years with the Plaintiff, by which the Defendant was to receive a salary of 1,200 dollars per year as a stenographer in the service of the said Plaintiff, and in addition thereto was to be paid in advance the expenses incurred in traveling from the said city of Chicago to Manila, and one-half salary during said period of travel.

Second. Said contract contained a provision that in case of a violation of its terms on the part of the Defendant, he should become liable to the Plaintiff for the amount expended by the Government by way of expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such period.

Third. The Defendant entered upon the performance of his contract upon the 30th day of April, 1903, and was paid half-salary from the date until June 4, 1903, the date of his arrival in the Philippine Islands.

Fourth. That on the 11th day of February, 1904, the Defendant left the service of the Plaintiff and refused to make a further compliance with the terms of the contract.

Fifth. On the 3d day of December, 1904, the Plaintiff commenced an action in the Court of

First Instance of the city of Manila to recover from the Defendant the sum of 269. 23 dollars, which amount the Plaintiff claimed had been paid to the Defendant as expenses incurred in traveling from Chicago to Manila, and as half-salary for the period consumed in travel.

Sixth. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should constitute a part of said contract.

To the complaint of the Plaintiff the Defendant filed a general denial and a special defense, alleging in his special defense that the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had thereby materially altered the said contract, and also that he was a minor at the time the contract was entered into and was therefore not responsible under the law.

To the special defense of the Defendant the Plaintiff filed a demurrer, which demurrer the court sustained.

Upon the issue thus presented, and after hearing the evidence adduced during the trial of the cause, the lower court rendered a judgment against the Defendant and in favor of the Plaintiff for the sum of 265. 90 dollars. The lower court found that at the time the Defendant quit the service of the Plaintiff there was due him from the said Plaintiff the sum of 3. 33 dollars, leaving a balance due the Plaintiff in the sum of 265. 90 dollars. From this judgment the Defendant appealed and made the following assignments of error: chanrobles virtualawlibrary

1. The court erred in sustaining Plaintiff’s demurrer to Defendant’s special defenses.

2. The court erred in rendering judgment against the Defendant on the facts.

With reference to the above assignments of error, it may be said that the mere fact that the legislative department of the Government of the Philippine Islands had amended said Acts No. 80 and No. 224 by Acts No. 643 and No. 1040 did not have the effect of changing the terms of the contract made between the Plaintiff and the Defendant. The legislative department of the Government is expressly prohibited by section 5 of the Act of Congress of 1902 from altering or changing the terms of a contract. The right which the Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any respect by the fact that said laws had been amended. These acts, constituting the terms of the contract, still constituted a part of said contract and were enforceable in favor of the Defendant.

The Defendant alleged in his special defense that he was a minor and therefore the contract could not be enforced against him. The record discloses that, at the time the contract was entered into in the State of Illinois, he was an adult under the laws of that State and had full authority to contract. The Plaintiff [the Defendant] claims that, by reason of the fact that, under that laws of the Philippine Islands at the time the contract was made, made persons in said Islands did not reach their majority until they had attained the age of 23 years, he was not liable under said contract, contending that the laws of the Philippine Islands governed. It is not disputed — upon the contrary the fact is admitted — that at the time and place of the making of the contract in question the Defendant had full capacity to make the same. No rule is better settled in law than that matters bearing upon the execution, interpretation and validity of a contract are determined b the law of the place where the contract is made. (Scudder vs. Union National Bank, 91 U. S., 406.) cralaw Matters connected with its performance are regulated by the law prevailing at the place of performance. Matters respecting a remedy, such as the bringing of suit, admissibility of evidence, and statutes of limitations,

depend upon the law of the place where the suit is brought. (Idem.) cralaw

The Defendant’s claim that he was an adult when he left Chicago but was a minor when he arrived at Manila; that he was an adult a the time he made the contract but was a minor at the time the Plaintiff attempted to enforce the contract, more than a year later, is not tenable.

Our conclusions with reference to the first above assignment of error are, therefore.

First. That the amendments to Acts No. 80 and No. 224 in no way affected the terms of the contract in question; and

Second. The Plaintiff [Defendant] being fully qualified to enter into the contract at the place and time the contract was made, he cannot plead infancy as a defense at the place where the contract is being enforced.

We believe that the above conclusions also dispose of the second assignment of error.

For the reasons above stated, the judgment of the lower court is affirmed, with costs.

Arellano, C.J., Torres, Mapa, Carson and Willard, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-16749             January 31, 1963

IN THE MATTER OF THE TESTATE ESTATE OF EDWARD E. CHRISTENSEN, DECEASED. ADOLFO C. AZNAR, Executor and LUCY CHRISTENSEN, Heir of the deceased, Executor and Heir-appellees, vs.HELEN CHRISTENSEN GARCIA, oppositor-appellant.

M. R. Sotelo for executor and heir-appellees.Leopoldo M. Abellera and Jovito Salonga for oppositor-appellant.

LABRADOR, J.:

This is an appeal from a decision of the Court of First Instance of Davao, Hon. Vicente N. Cusi, Jr., presiding, in Special Proceeding No. 622 of said court, dated September 14, 1949, approving among things the final accounts of the executor, directing the executor to reimburse Maria Lucy Christensen the amount of P3,600 paid by her to Helen Christensen Garcia as her legacy, and declaring Maria Lucy Christensen entitled to the residue of the property to be enjoyed during her lifetime, and in case of death without issue, one-half of said residue to be payable to Mrs. Carrie Louise C. Borton, etc., in accordance with the provisions of the will of the testator Edward E. Christensen. The will was executed in Manila on March 5, 1951 and contains the following provisions:

3. I declare ... that I have but ONE (1) child, named MARIA LUCY CHRISTENSEN (now Mrs. Bernard Daney), who was born in the Philippines about twenty-eight years ago, and who is now residing at No. 665 Rodger Young Village, Los Angeles, California, U.S.A.

4. I further declare that I now have no living ascendants, and no descendants except my above named daughter, MARIA LUCY CHRISTENSEN DANEY.

x x x           x x x           x x x

7. I give, devise and bequeath unto MARIA HELEN CHRISTENSEN, now married to Eduardo Garcia, about eighteen years of age and who, notwithstanding the fact that she was baptized Christensen, is not in any way related to me, nor has she been at any time adopted by me, and who, from all information I have now resides in Egpit, Digos, Davao, Philippines, the sum of THREE THOUSAND SIX HUNDRED PESOS (P3,600.00), Philippine Currency the same to be deposited in trust for the said Maria Helen Christensen with the Davao Branch of the Philippine National Bank, and paid to her at the rate of One Hundred Pesos

(P100.00), Philippine Currency per month until the principal thereof as well as any interest which may have accrued thereon, is exhausted..

x x x           x x x           x x x

12. I hereby give, devise and bequeath, unto my well-beloved daughter, the said MARIA LUCY CHRISTENSEN DANEY (Mrs. Bernard Daney), now residing as aforesaid at No. 665 Rodger Young Village, Los Angeles, California, U.S.A., all the income from the rest, remainder, and residue of my property and estate, real, personal and/or mixed, of whatsoever kind or character, and wheresoever situated, of which I may be possessed at my death and which may have come to me from any source whatsoever, during her lifetime: ....

It is in accordance with the above-quoted provisions that the executor in his final account and project of partition ratified the payment of only P3,600 to Helen Christensen Garcia and proposed that the residue of the estate be transferred to his daughter, Maria Lucy Christensen.

Opposition to the approval of the project of partition was filed by Helen Christensen Garcia, insofar as it deprives her (Helen) of her legitime as an acknowledged natural child, she having been declared by Us in G.R. Nos. L-11483-84 an acknowledged natural child of the deceased Edward E. Christensen. The legal grounds of opposition are (a) that the distribution should be governed by the laws of the Philippines, and (b) that said order of distribution is contrary thereto insofar as it denies to Helen Christensen, one of two acknowledged natural children, one-half of the estate in full ownership. In amplification of the above grounds it was alleged that the law that should govern the estate of the deceased Christensen should not be the internal law of California alone, but the entire law thereof because several foreign elements are involved, that the forum is the Philippines and even if the case were decided in California, Section 946 of the California Civil Code, which requires that the domicile of the decedent should apply, should be applicable. It was also alleged that Maria Helen Christensen having been declared an acknowledged natural child of the decedent, she is deemed for all purposes legitimate from the time of her birth.

The court below ruled that as Edward E. Christensen was a citizen of the United States and of the State of California at the time of his death, the successional rights and intrinsic validity of the provisions in his will are to be governed by the law of California, in accordance with which a testator has the right to dispose of his property in the way he desires, because the right of absolute dominion over his property is sacred and inviolable (In re McDaniel's Estate, 77 Cal. Appl. 2d 877, 176 P. 2d 952, and In re Kaufman, 117 Cal. 286, 49 Pac. 192, cited in page 179, Record on Appeal). Oppositor Maria Helen Christensen, through counsel, filed various motions for reconsideration, but these were denied. Hence, this appeal.

The most important assignments of error are as follows:

I

THE LOWER COURT ERRED IN IGNORING THE DECISION OF THE HONORABLE SUPREME COURT THAT HELEN IS THE ACKNOWLEDGED NATURAL CHILD OF EDWARD E. CHRISTENSEN AND, CONSEQUENTLY, IN DEPRIVING HER OF HER JUST SHARE IN THE INHERITANCE.

II

THE LOWER COURT ERRED IN ENTIRELY IGNORING AND/OR FAILING TO RECOGNIZE THE EXISTENCE OF SEVERAL FACTORS, ELEMENTS AND CIRCUMSTANCES CALLING FOR THE APPLICATION OF INTERNAL LAW.

III

THE LOWER COURT ERRED IN FAILING TO RECOGNIZE THAT UNDER INTERNATIONAL LAW, PARTICULARLY UNDER THE RENVOI DOCTRINE, THE INTRINSIC VALIDITY OF THE TESTAMENTARY DISPOSITION OF THE DISTRIBUTION OF THE ESTATE OF THE DECEASED EDWARD E. CHRISTENSEN SHOULD BE GOVERNED BY THE LAWS OF THE PHILIPPINES.

IV

THE LOWER COURT ERRED IN NOT DECLARING THAT THE SCHEDULE OF DISTRIBUTION SUBMITTED BY THE EXECUTOR IS CONTRARY TO THE PHILIPPINE LAWS.

V

THE LOWER COURT ERRED IN NOT DECLARING THAT UNDER THE PHILIPPINE LAWS HELEN CHRISTENSEN GARCIA IS ENTITLED TO ONE-HALF (1/2) OF THE ESTATE IN FULL OWNERSHIP.

There is no question that Edward E. Christensen was a citizen of the United States and of the State of California at the time of his death. But there is also no question that at the time of his death he was domiciled in the Philippines, as witness the following facts admitted by the executor himself in appellee's brief:

In the proceedings for admission of the will to probate, the facts of record show that the deceased Edward E. Christensen was born on November 29, 1875 in New York City, N.Y., U.S.A.; his first arrival in the Philippines, as an appointed school teacher, was on July 1, 1901, on board the U.S. Army Transport "Sheridan" with Port of Embarkation as the City of San Francisco, in the State of California, U.S.A. He stayed in the Philippines until 1904.

In December, 1904, Mr. Christensen returned to the United States and stayed there for the following nine years until 1913, during which time he resided in, and was teaching school in Sacramento, California.

Mr. Christensen's next arrival in the Philippines was in July of the year 1913. However, in 1928, he again departed the Philippines for the United States and came back here the following year, 1929. Some nine years later, in 1938, he again returned to his own country, and came back to the Philippines the following year, 1939.

Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and approved by this Honorable Court, without prejudice to the parties adducing other evidence to prove their case not covered by this stipulation of facts. 1äwphï1.ñët

Being an American citizen, Mr. Christensen was interned by the Japanese Military Forces in the Philippines during World War II. Upon liberation, in April 1945, he left for the United States but returned to the Philippines in December, 1945. Appellees Collective Exhibits "6", CFI Davao, Sp. Proc. 622, as Exhibits "AA", "BB" and "CC-Daney"; Exhs. "MM", "MM-l", "MM-2-Daney" and p. 473, t.s.n., July 21, 1953.)

In April, 1951, Edward E. Christensen returned once more to California shortly after the making of his last will and testament (now in question herein) which he executed at his lawyers' offices in Manila on March 5, 1951. He died at the St. Luke's Hospital in the City of Manila on April 30, 1953. (pp. 2-3)

In arriving at the conclusion that the domicile of the deceased is the Philippines, we are persuaded by the fact that he was born in New York, migrated to California and resided there for nine years, and since he came to the Philippines in 1913 he returned to California very rarely and only for short visits (perhaps to relatives), and considering that he appears never to have owned or acquired a home or properties in that state, which would indicate that he would ultimately abandon the Philippines and make home in the State of California.

Sec. 16. Residence is a term used with many shades of meaning from mere temporary presence to the most permanent abode. Generally, however, it is used to denote something more than mere physical presence. (Goodrich on Conflict of Laws, p. 29)

As to his citizenship, however, We find that the citizenship that he acquired in California when he resided in Sacramento, California from 1904 to 1913, was never lost by his stay in the Philippines, for the latter was a territory of the United States (not a state) until 1946 and the deceased appears to have considered himself as a citizen of California by the fact that when he executed his will in 1951 he declared that he was a citizen of that State; so that he appears never to have intended to abandon his California citizenship by acquiring another. This conclusion is in accordance with the following principle expounded by Goodrich in his Conflict of Laws.

The terms "'residence" and "domicile" might well be taken to mean the same thing, a place of permanent abode. But domicile, as has been shown, has acquired a technical meaning. Thus one may be domiciled in a place where he has never been. And he may reside in a place where he has no domicile. The man with two homes, between which he divides his time, certainly resides in each one, while living in it. But if he went on business which would require his presence for several weeks or months, he might properly be said to have sufficient connection with the place to be called a resident. It is clear, however, that, if he treated his settlement as continuing only for the particular business in hand, not giving up his former "home," he could not be a domiciled New Yorker. Acquisition of a domicile of choice requires the exercise of intention as well as physical presence. "Residence simply requires bodily presence of an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one's domicile." Residence, however, is a term used with many shades of meaning, from the merest temporary presence to the most permanent abode, and it is not safe to insist that any one use et the only proper one. (Goodrich, p. 29)

The law that governs the validity of his testamentary dispositions is defined in Article 16 of the Civil Code of the Philippines, which is as follows:

ART. 16. Real property as well as personal property is subject to the law of the country where it is situated.

However, intestate and testamentary successions, both with respect to the order of succession and to the amount of successional rights and to the intrinsic validity of testamentary provisions, shall be regulated by the national law of the person whose succession is under consideration, whatever may be the nature of the property and regardless of the country where said property may be found.

The application of this article in the case at bar requires the determination of the meaning of the term "national law" is used therein.

There is no single American law governing the validity of testamentary provisions in the United States, each state of the Union having its own private law applicable to its citizens only and in force only within the state. The "national law" indicated in Article 16 of the Civil Code above quoted can not, therefore, possibly mean or apply to any general American law. So it can refer to no other than the private law of the State of California.

The next question is: What is the law in California governing the disposition of personal property? The decision of the court below, sustains the contention of the executor-appellee that under the California Probate Code, a testator may dispose of his property by will in the form and manner he desires, citing the case of Estate of McDaniel, 77 Cal. Appl. 2d 877, 176 P. 2d 952. But appellant invokes the provisions of Article 946 of the Civil Code of California, which is as follows:

If there is no law to the contrary, in the place where personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile.

The existence of this provision is alleged in appellant's opposition and is not denied. We have checked it in the California Civil Code and it is there. Appellee, on the other hand, relies on the case cited in the decision and testified to by a witness. (Only the case of Kaufman is correctly cited.) It is argued on executor's behalf that as the deceased Christensen was a citizen of the State of California, the internal law thereof, which is that given in the abovecited case, should govern the determination of the validity of the testamentary provisions of Christensen's will, such law being in force in the State of California of which Christensen was a citizen. Appellant, on the other hand, insists that Article 946 should be applicable, and in accordance therewith and following the doctrine of therenvoi, the question of the validity of the testamentary provision in question should be referred back to the law of the decedent's domicile, which is the Philippines.

The theory of doctrine of renvoi has been defined by various authors, thus:

The problem has been stated in this way: "When the Conflict of Laws rule of the forum refers a jural matter to a foreign law for decision, is the reference to the purely internal rules of law of the foreign system; i.e., to the totality of the foreign law minus its Conflict of Laws rules?"

On logic, the solution is not an easy one. The Michigan court chose to accept the renvoi, that is, applied the Conflict of Laws rule of Illinois which referred the matter back to Michigan law. But once having determined the the Conflict of Laws principle is the rule looked to, it is difficult to see why the reference back should not have been to Michigan Conflict of Laws. This would have resulted in the "endless chain of references" which has so often been criticized be legal writers. The opponents of the renvoi would have looked merely to the internal law of Illinois, thus rejecting the renvoi or the reference back. Yet there seems no compelling logical reason why the original reference should be the internal law rather than to the Conflict of Laws rule. It is true that such a solution avoids going on a merry-go-round, but those who have accepted the renvoi theory avoid this inextricabilis circulas by getting off at the second reference and at that point applying internal law. Perhaps the opponents of the renvoi are a bit more consistent for they look always to internal law as the rule of reference.

Strangely enough, both the advocates for and the objectors to the renvoi plead that greater uniformity will result from adoption of their respective views. And still more strange is the fact that the only way to achieve uniformity in this choice-of-law problem is if in the dispute the

two states whose laws form the legal basis of the litigation disagree as to whether the renvoi should be accepted. If both reject, or both accept the doctrine, the result of the litigation will vary with the choice of the forum. In the case stated above, had the Michigan court rejected the renvoi, judgment would have been against the woman; if the suit had been brought in the Illinois courts, and they too rejected the renvoi, judgment would be for the woman. The same result would happen, though the courts would switch with respect to which would hold liability, if both courts accepted the renvoi.

The Restatement accepts the renvoi theory in two instances: where the title to land is in question, and where the validity of a decree of divorce is challenged. In these cases the Conflict of Laws rule of the situs of the land, or the domicile of the parties in the divorce case, is applied by the forum, but any further reference goes only to the internal law. Thus, a person's title to land, recognized by the situs, will be recognized by every court; and every divorce, valid by the domicile of the parties, will be valid everywhere. (Goodrich, Conflict of Laws, Sec. 7, pp. 13-14.)

X, a citizen of Massachusetts, dies intestate, domiciled in France, leaving movable property in Massachusetts, England, and France. The question arises as to how this property is to be distributed among X's next of kin.

Assume (1) that this question arises in a Massachusetts court. There the rule of the conflict of laws as to intestate succession to movables calls for an application of the law of the deceased's last domicile. Since by hypothesis X's last domicile was France, the natural thing for the Massachusetts court to do would be to turn to French statute of distributions, or whatever corresponds thereto in French law, and decree a distribution accordingly. An examination of French law, however, would show that if a French court were called upon to determine how this property should be distributed, it would refer the distribution to the national law of the deceased, thus applying the Massachusetts statute of distributions. So on the surface of things the Massachusetts court has open to it alternative course of action: (a) either to apply the French law is to intestate succession, or (b) to resolve itself into a French court and apply the Massachusetts statute of distributions, on the assumption that this is what a French court would do. If it accepts the so-called renvoidoctrine, it will follow the latter course, thus applying its own law.

This is one type of renvoi. A jural matter is presented which the conflict-of-laws rule of the forum refers to a foreign law, the conflict-of-laws rule of which, in turn, refers the matter back again to the law of the forum. This is renvoi in the narrower sense. The German term for this judicial process is 'Ruckverweisung.'" (Harvard Law Review, Vol. 31, pp. 523-571.)

After a decision has been arrived at that a foreign law is to be resorted to as governing a particular case, the further question may arise: Are the rules as to the conflict of laws contained in such foreign law also to be resorted to? This is a question which, while it has been considered by the courts in but a few instances, has been the subject of frequent discussion by textwriters and essayists; and the doctrine involved has been descriptively designated by them as the "Renvoyer" to send back, or the "Ruchversweisung", or the "Weiterverweisung", since an affirmative answer to the question postulated and the operation of the adoption of the foreign law in toto would in many cases result in returning the main controversy to be decided according to the law of the forum. ... (16 C.J.S. 872.)

Another theory, known as the "doctrine of renvoi", has been advanced. The theory of the doctrine of renvoiis that the court of the forum, in determining the question before it, must take into account the whole law of the other jurisdiction, but also its rules as to conflict of

laws, and then apply the law to the actual question which the rules of the other jurisdiction prescribe. This may be the law of the forum. The doctrine of therenvoi has generally been repudiated by the American authorities. (2 Am. Jur. 296)

The scope of the theory of renvoi has also been defined and the reasons for its application in a country explained by Prof. Lorenzen in an article in the Yale Law Journal, Vol. 27, 1917-1918, pp. 529-531. The pertinent parts of the article are quoted herein below:

The recognition of the renvoi theory implies that the rules of the conflict of laws are to be understood as incorporating not only the ordinary or internal law of the foreign state or country, but its rules of the conflict of laws as well. According to this theory 'the law of a country' means the whole of its law.

x x x           x x x           x x x

Von Bar presented his views at the meeting of the Institute of International Law, at Neuchatel, in 1900, in the form of the following theses:

(1) Every court shall observe the law of its country as regards the application of foreign laws.

(2) Provided that no express provision to the contrary exists, the court shall respect:

(a) The provisions of a foreign law which disclaims the right to bind its nationals abroad as regards their personal statute, and desires that said personal statute shall be determined by the law of the domicile, or even by the law of the place where the act in question occurred.

(b) The decision of two or more foreign systems of law, provided it be certain that one of them is necessarily competent, which agree in attributing the determination of a question to the same system of law.

x x x           x x x           x x x

If, for example, the English law directs its judge to distribute the personal estate of an Englishman who has died domiciled in Belgium in accordance with the law of his domicile, he must first inquire whether the law of Belgium would distribute personal property upon death in accordance with the law of domicile, and if he finds that the Belgian law would make the distribution in accordance with the law of nationality — that is the English law — he must accept this reference back to his own law.

We note that Article 946 of the California Civil Code is its conflict of laws rule, while the rule applied in In re Kaufman, Supra, its internal law. If the law on succession and the conflict of laws rules of California are to be enforced jointly, each in its own intended and appropriate sphere, the principle cited In re Kaufman should apply to citizens living in the State, but Article 946 should apply to such of its citizens as are not domiciled in California but in other jurisdictions. The rule laid down of resorting to the law of the domicile in the determination of matters with foreign element involved is in accord with the general principle of American law that the domiciliary law should govern in most matters or rights which follow the person of the owner.

When a man dies leaving personal property in one or more states, and leaves a will directing the manner of distribution of the property, the law of the state where he was domiciled at the

time of his death will be looked to in deciding legal questions about the will, almost as completely as the law of situs is consulted in questions about the devise of land. It is logical that, since the domiciliary rules control devolution of the personal estate in case of intestate succession, the same rules should determine the validity of an attempted testamentary dispostion of the property. Here, also, it is not that the domiciliary has effect beyond the borders of the domiciliary state. The rules of the domicile are recognized as controlling by the Conflict of Laws rules at the situs property, and the reason for the recognition as in the case of intestate succession, is the general convenience of the doctrine. The New York court has said on the point: 'The general principle that a dispostiton of a personal property, valid at the domicile of the owner, is valid anywhere, is one of the universal application. It had its origin in that international comity which was one of the first fruits of civilization, and it this age, when business intercourse and the process of accumulating property take but little notice of boundary lines, the practical wisdom and justice of the rule is more apparent than ever. (Goodrich, Conflict of Laws, Sec. 164, pp. 442-443.)

Appellees argue that what Article 16 of the Civil Code of the Philippines pointed out as the national law is the internal law of California. But as above explained the laws of California have prescribed two sets of laws for its citizens, one for residents therein and another for those domiciled in other jurisdictions. Reason demands that We should enforce the California internal law prescribed for its citizens residing therein, and enforce the conflict of laws rules for the citizens domiciled abroad. If we must enforce the law of California as in comity we are bound to go, as so declared in Article 16 of our Civil Code, then we must enforce the law of California in accordance with the express mandate thereof and as above explained, i.e., apply the internal law for residents therein, and its conflict-of-laws rule for those domiciled abroad.

It is argued on appellees' behalf that the clause "if there is no law to the contrary in the place where the property is situated" in Sec. 946 of the California Civil Code refers to Article 16 of the Civil Code of the Philippines and that the law to the contrary in the Philippines is the provision in said Article 16 that the national law of the deceased should govern. This contention can not be sustained. As explained in the various authorities cited above the national law mentioned in Article 16 of our Civil Code is the law on conflict of laws in the California Civil Code, i.e., Article 946, which authorizes the reference or return of the question to the law of the testator's domicile. The conflict of laws rule in California, Article 946, Civil Code, precisely refers back the case, when a decedent is not domiciled in California, to the law of his domicile, the Philippines in the case at bar. The court of the domicile can not and should not refer the case back to California; such action would leave the issue incapable of determination because the case will then be like a football, tossed back and forth between the two states, between the country of which the decedent was a citizen and the country of his domicile. The Philippine court must apply its own law as directed in the conflict of laws rule of the state of the decedent, if the question has to be decided, especially as the application of the internal law of California provides no legitime for children while the Philippine law, Arts. 887(4) and 894, Civil Code of the Philippines, makes natural children legally acknowledged forced heirs of the parent recognizing them.

The Philippine cases (In re Estate of Johnson, 39 Phil. 156; Riera vs. Palmaroli, 40 Phil. 105; Miciano vs. Brimo, 50 Phil. 867; Babcock Templeton vs. Rider Babcock, 52 Phil. 130; and Gibbs vs. Government, 59 Phil. 293.) cited by appellees to support the decision can not possibly apply in the case at bar, for two important reasons, i.e., the subject in each case does not appear to be a citizen of a state in the United States but with domicile in the Philippines, and it does not appear in each case that there exists in the state of which the subject is a citizen, a law similar to or identical with Art. 946 of the California Civil Code.

We therefore find that as the domicile of the deceased Christensen, a citizen of California, is the Philippines, the validity of the provisions of his will depriving his acknowledged natural child, the appellant, should be governed by the Philippine Law, the domicile, pursuant to Art. 946 of the Civil Code of California, not by the internal law of California..

WHEREFORE, the decision appealed from is hereby reversed and the case returned to the lower court with instructions that the partition be made as the Philippine law on succession provides. Judgment reversed, with costs against appellees.

Padilla, Bautista Angelo, Concepcion, Reyes, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.Bengzon, C.J., took no part.

epublic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-14628             September 30, 1960

FRANCISCO HERMOSISIMA, petitioner, vs.THE HON. COURT OF APPEALS, ET AL., respondents.

Regino Hermosisima for petitioner.F.P. Gabriel, Jr. for respondents.

CONCEPCION, J.:

          An appeal by certiorari, taken by petitioner Francisco Hermosisima, from a decision of Court of Appeals modifying that of the Court of First Instance of Cebu.

          On October 4, 1954, Soledad Cagigas, hereinafter referred to as complaint, filed with said of her child, Chris Hermosisima, as natural child and moral damages for alleged breach of promise. Petitioner admitted the paternity of child and expressed willingness to support the latter, but denied having ever promised to marry the complainant. Upon her motion, said court ordered petitioner, on October 27, 1954, to pay, by way of alimony pendente lite, P50.00 a month, which was, on February 16, 1955, reduced to P30.00 a month. In due course, later on, said court rendered a decision the dispositive part of which reads:

          WHEREFORE, judgment is hereby rendered, declaring the child, Chris Hermosisima, as the natural daughter of defendant, and confirming the order pendente lite, ordering defendant to pay to the said child, through plaintiff, the sum of thirty pesos (P30.00), payable on or before the fifth day of every month sentencing defendant to pay to plaintiff the sum of FOUR THOUSAND FIVE HUNDRED PESOS (P4,500.00) for actual and compensatory damages; the sum of FIVE THOUSAND PESOS (P5,000.00) as moral damages; and the further sum of FIVE HUNDRED PESOS (P500.00) as attorney's fees for plaintiff, with costs against defendant.

          On appeal taken by petitioner, the Court of Appeals affirmed this decision, except as to the actual and compensatory damages and the moral damages, which were increased to P5,614.25 and P7,000.00, respectively.

          The main issue before us is whether moral damages are recoverable, under our laws, for breach of promise to marry. The pertinent facts are:

          Complainant Soledad Cagigas, was born in July 1917. Since 1950, Soledad then a teacher in the Sibonga Provincial High School in Cebu, and petitioner, who was almost ten (10) years younger than she, used to go around together and were regarded as engaged, although he had made no promise of marriage prior thereto. In 1951, she gave up teaching and became a life insurance underwriter in the City of Cebu, where intimacy developed among her and the petitioner, since one evening in 1953, when after coming from the movies, they had sexual intercourse in his cabin on board M/V "Escaño," to which he was then attached as apprentice pilot. In February 1954, Soledad advised petitioner that she was in the family way, whereupon he promised to marry her. Their child, Chris Hermosisima, was born on June 17, 1954, in a private maternity and clinic. However, subsequently, or on July 24, 1954, defendant married one Romanita Perez. Hence, the present action, which was commenced on or about October 4, 1954.

          Referring now to the issue above referred to, it will be noted that the Civil Code of Spain permitted the recovery of damages for breach to marry. Article 43 and 44 of said Code provides:

          ART. 43. A mutual promise of marriage shall not give rise to an obligation to contract marriage. No court shall entertain any complaint by which the enforcement of such promise is sought.

          ART. 44. If the promise has been in a public or private instrument by an adult, or by a minor with the concurrence of the person whose consent is necessary for the celebration of the marriage, or if the banns have been published, the one who without just cause refuses to marry shall be obliged to reimburse the other for the expenses which he or she may have incurred by reason of the promised marriage.

          The action for reimbursement of expenses to which the foregoing article refers must be brought within one year, computed from the day of the refusal to celebrate the marriage.

          Inasmuch as these articles were never in force in the Philippines, this Court ruled in De Jesus vs. Syquia (58 Phil., 866), that "the action for breach of promises to marry has no standing in the civil law, apart from the right to recover money or property advanced . . . upon the faith of such promise". The Code Commission charged with the drafting of the Proposed Civil Code of the Philippines deem it best, however, to change the law thereon. We quote from the report of the Code Commission on said Proposed Civil Code:

          Articles 43 and 44 the Civil Code of 1889 refer to the promise of marriage. But these articles are not enforced in the Philippines. The subject is regulated in the Proposed Civil Code not only as to the aspect treated of in said articles but also in other particulars. It is advisable to furnish legislative solutions to some questions that might arise relative to betrothal. Among the provisions proposed are: That authorizing the adjudication of moral damages, in case of breach of promise of marriage, and that creating liability for causing a marriage engagement to be broken.1awphîl.nèt

          Accordingly, the following provisions were inserted in said Proposed Civil Code, under Chapter I, Title III, Book I thereof:

Art. 56. A mutual promise to marry may be made expressly or impliedly.

Art. 57. An engagement to be married must be agreed directly by the future spouses.

Art. 58. A contract for a future marriage cannot, without the consent of the parent or guardian, be entered into by a male between the ages of sixteen and twenty years or by a female between the ages of sixteen and eighteen years. Without such consent of the parents or guardian, the engagement to marry cannot be the basis of a civil action for damages in case of breach of the promise.

Art. 59. A promise to marry when made by a female under the age of fourteen years is not civilly actionable, even though approved by the parent or guardian.

Art. 60. In cases referred to in the proceeding articles, the criminal and civil responsibility of a male for seduction shall not be affected.

Art. 61. No action for specific performance of a mutual promise to marry may be brought.

Art. 62. An action for breach of promise to marry may be brought by the aggrieved party even though a minor without the assistance of his parent or guardian. Should the minor refuse to bring suit, the parent or guardian may institute the action.

Art. 63. Damages for breach of promise to marry shall include not only material and pecuniary losses but also compensation for mental and moral suffering.

Art. 64. Any person, other than a rival, the parents, guardians and grandparents, of the affianced parties, who cause a marriage engagement to be broken shall be liable for damages, both material and moral, to the engaged person who is rejected.

Art. 65. In case of breach of promise to marry, the party breaking the engagement shall be obliged to return what he or she has received from the other as gift on account of the promise of the marriage.

          These article were, however, eliminated in Congress. The reason therefor are set forth in the report of the corresponding Senate Committee, from which we quote:

          The elimination of this Chapter is proposed. That breach of promise to marry is not actionable has been definitely decide in the case of De Jesus vs. Syquia, 58 Phil., 866. The history of breach of promise suit in the United States and in England has shown that no other action lends itself more readily to abuse by designing women and unscrupulous men. It is this experience which has led to the abolition of the rights of action in the so-called Balm suit in many of the American States.

          See statutes of:

Florida 1945 — pp. 1342 — 1344Maryland 1945 — pp. 1759 — 1762Nevada 1943 — p. 75Maine 1941 — pp. 140 — 141New Hampshire 1941 — p. 223California 1939 — p. 1245Massachusetts 1938 — p. 326Indiana 1936 — p. 1009Michigan 1935 — p. 201New York 1935Pennsylvania p. 450

          The Commission perhaps though that it has followed the more progression trend in legislation when it provided for breach of promise to marry suits. But it is clear that the creation of such causes of action at a time when so many States, in consequence of years of experience are doing away with them, may well prove to be a step in the wrong direction. (Congressional Record, Vol. IV, No. 79, Thursday, May 19, 1949, p. 2352.)

          The views thus expressed were accepted by both houses of Congress. In the light of the clear and manifest intent of our law making body not to sanction actions for breach of promise to marry, the award of moral damages made by the lower courts is, accordingly, untenable. The Court of Appeals said award:

          Moreover, it appearing that because of defendant-appellant's seduction power, plaintiff-appellee, overwhelmed by her love for him finally yielded to his sexual desires in spite of her age and self-control, she being a woman after all, we hold that said defendant-appellant is liable for seduction and, therefore, moral damages may be recovered from him under the provision of Article 2219, paragraph 3, of the new Civil Code.

          Apart from the fact that the general tenor of said Article 2219, particularly the paragraphs preceding and those following the one cited by the Court of Appeals, and the language used in said paragraph strongly indicates that the "seduction" therein contemplated is the crime punished as such in Article as such in Article 337 and 338 of the Revised Penal Code, which admittedly does not exist in the present case, we find ourselves unable to say that petitioner is morally guilty of seduction, not only because he is approximately ten (10) years younger than the complainant — who around thirty-six (36) years of age, and as highly enlightened as a former high school teacher and a life insurance agent are supposed to be — when she became intimate with petitioner, then a mere apprentice pilot, but, also, because, the court of first instance found that, complainant "surrendered herself" to petitioner because, "overwhelmed by her love" for him, she "wanted to bind" "by having a fruit of their engagement even before they had the benefit of clergy."

          The court of first instance sentenced petitioner to pay the following: (1) a monthly pension of P30.00 for the support of the child: (2) P4,500, representing the income that complainant had allegedly failed to earn during her pregnancy and shortly after the birth of the child, as actual and compensation damages; (3) P5,000, as moral damages; and (4) P500.00, as attorney's fees. The Court of Appeals added to the second item the sum of P1,114.25 — consisting of P144.20, for hospitalization and medical attendance, in connection with the parturiation, and the balance representing expenses incurred to support the child — and increased the moral damages to P7,000.00.

          With the elimination of this award for damages, the decision of the Court of Appeals is hereby affirmed, therefore, in all other respects, without special pronouncement as to cost in this instance. It is so ordered.

Paras, C.J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Gutierrez David, Paredes and Dizon, JJ., concur.

Republic of the Philippines

SUPREME COURTManila

SECOND DIVISION

 

G.R. No. 85464 October 3, 1991

DAVID P. LLORENTE, petitioner, vs.THE SANDIGANBAYAN (THIRD DIVISION), and PEOPLE OF THE PHILIPPINES, respondents.

Padilla Law Office for petitioner.

 

SAMIENTO, J.:p

The petitioner questions the Decision of the Sandiganbayan * holding him civilly liable in spite of an acquittal. The facts are not disputed:

Atty. Llorente was employed in the PCA, a public corporation (Sec. 1, PD 1468) from 1975 to August 31, 1986, when he resigned. He occupied the positions of Assistant Corporate Secretary for a year, then Corporate Legal Counsel until November 2, 1981, and, finally, Deputy Administrator for Administrative Services, Finance Services, Legal Affairs Departments. ...

As a result of a massive reorganization in 1981, hundreds of PCA employees resigned effective October 31, 1981. Among them were Mr. Curio, Mrs. Perez, Mr. Azucena, and Mrs. Javier (TSN, Oct. 22/87, p. 2; Exhs. M-2, N-1, and O-1). They were all required to apply for PCA clearances in support of their gratuity benefits (Exhs. C, M-2, N-1, and 0-1). Condition (a) of the clearance provided:

The clearance shall be signed by the PCA officers concemed only when there is no item appearing under "PENDING ACCOUNTABILITY" or after every item previously entered thereunder is fully settled. Settlement thereof shall be written in RED ink. (Exhs. D or D-1 and 1-B)

After the clearance was signed by the PCA officers concerned, it was to be approved, first, by Atty. Llorente, in the case of a rank-and-file employee, or by Col. Duefias, the acting administrator, in the case of an officer, and then by Atty. Rodriguez, the corporate auditor ...

Notwithstanding Condition (a) just quoted, the clearances of Mrs Perez and Mr. Azucena both dated October 30, 1981, were favorably acted upon by the CPA officers concerned, including Mrs. Sotto, acting for the accounting division, even if the clearances showed they had pending accountabilities to the GSIS and the UCPB, and subsequently approved by Attys. Llorente and Rodriguez (Exhs. M and N). Thereafter, the vouchers for their gratuity benefits, also indicating their outstanding obligations were approved, among others, by Atty Llorente, and their gratuity benefits released to them after deducting those accountabilities. ...

The clearanceof Mrs. Javier of the same date of October 30, 1991 was also signed by all PCA officers concerned, including Mrs. Sotto even though the former had unsettled obligations noted thereon, viz'SIS loan — P5,387.00 and UCPB car loan P19,705.00, or a total of P25,092.00, and later on approveed by Col. Dueñas, Mrs Javier being an officer, and Atty. Rodriguez "Exh. (O)". Similariv the, voucher of Mrs Javier for her gratuity benefits likewise recited her accountabilities of P25,092.00 plus P92.000.00, which was handwritten. Both accounts were deducted from her gratuity benefits, and the balance released to her on November 16, 1981. The voucher passed post-audit by Atty. Rodriguez on December 1, 1981 (Exhs. L, L-1, L-2, and L-3).

The said P92,000.00 was the disallowed portion of the cash advances received by Mr. Curio in connection with his duties as "super cargo" in the distribution of seed nuts throughout the country. He received them through and in the name of Mrs. Javier from the UCPB. When the amount was disallowed, the UCPB withheld from the PCA certain receivables; the latter, in turn, deducted the same amount from the gratuity benefits of Mrs. Javier, she being primarily liable therefor (Exhs, L, L-1, L-2, and L-3), At the time of the deduction, the additional liquidation papers had already been submitted and were in process. Just in case she would not be successful in having the entire amount wiped out, she requested Mr. Curio, who admittedly received it, to execute, as he did, an affidavit dated November 26, 1981, in which he assumed whatever portion thereof might not be allowed ...

The clearance of Mr. Curio dated November 4,1981, (Exh. D or D-1) likewise favorably passed all officers concerned, including Mrs. Sotto, the latter signing despite the notation handwritten on December 8, 1981, that Mr. Curio had pending accountabilities, namely: GSIS loan — 2,193.74, 201 accounts receivable — P3,897.75, and UCPB loan — P3,623.49, or a total of P10,714.78. However, when the clearance was submitted to Atty. Llorente for approval, he refused to approve it. For this reason, the clearance was held up in his office and did not reach Atty. Rodriguez, ...

The reason given by Atty. Llorente was that when the clearance was presented to him on December 8, 1981, he was already aware of the affidavit dated November 26, 1981, in which Mr. Curio assumed to pay any residual liability for the disallowed cash advances, which at the time, December 8, 1981, stood at P92,000.00 (Exhs. 2 and 2-A). Moreover, Mr. Curio had other pending obligations noted on his clearance totalling Pl0,714.98 (Exh. 1-a). To justify his stand, Atty. Llorente invoked Condition

(a) of the clearance (Exhs. D and I-B), which, he said, was "very stringent" and could not be interpreted in any other way ...

On December 1, 1982, Mr. Curio brought the matter of his unapproved clearance to Col. Dueñas (Exh. G), who referred it to the Legal Department, which was under Atty. Llorente as Deputy Administrator for legal affairs. After follow-up in that department, Mr. Curio received the answer of Col. Dueñas dated February 11, 1983, saying that the clearance was being withheld until the former settled his alleged accountability for P92,000.00 reduced already to P56,000.00 (Exh. I). Mr. Curio elevated the matter to the Chairman of the PCA Board, who indorsed it to Col. Dueñas, who, in turn, sent it to the Legal Department. This time the latter, through its Manager, Manuel F. Pastor, Jr., first cousin of Atty. Llorente, submitted a formal report under date of August 14, 1986, to the PCA Chairman, justifying the action taken by Atty. Llorente and Col. Dueñas (Exh. 12). The PCA Chairman did not respond in writing, but advised Mr. Curio to wait for the resolution of the Tanodbayan with which he (Mr. Curio) had filed this case initially against Atty. Llorente and, later on, against Col. Duerias also. On August 31, 1986, Atty. Llorente resigned from the PCA; the clearance, however, could not be issued because, according to the PCA Corporate Legal Counsel, Arthur J. Liquate, the PCA did not want to preempt the Tanodbayan. On November 12, 1986, the latter decided to institlite this case in court ...

Nine days thereafter, or on November 21, 1986, Mr. Curio accomplished another clearance, which no longer imposed Condition (a) of his earlier clearance (Exh. E). The new clearance was approved, even if he still had pending accountabilities, totalling P10,714.78 that had remained unsettled since December 1981. His voucher was also approved, and his gratuity benefits paid to him in the middle of December 1986, after deducting those obligations (Exh. F). Nothing was mentioned anymore about the disallowed cash advances of P92,000.00, which had been reduced to P55,000.00 ...

Between December 1981 and December 1986, Mr. Curio failed to get gainful employment; as a result, his family literally went hungry, In 1981, he applied for work with the Philippine Cotton Authority, but was refused, because he could not present his PCA clearance. The same thing happened when he sought employment with the Philippine Fish Marketing Administration in January 1982. In both prospective employers, the item applied for was P2,500.00 a month. At that time, he was only about 45 years old and still competitive in the job market. But in 1986, being already past 50 years, he could no longer be hired permanently, there being a regulation to that effect. His present employment with the Philippine Ports Authority, which started on March 16, 1987, was casual for that reason. Had his gratuity benefits been paid in 1981, he would have received a bigger amount, considering that since then interest had accrued and the foreign exchange rate of the peso to the dollar had gone up ... 1

On December 10, 1986, an Information for violation of Section 3(c) of the Anti-Graft and Corrupt Practices Act was filed against the petitioner:

That on or about December 8, 1981 and/or subsequent thereto, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, accused David Pastor Llorente, Deputy Administrator for the Philippine Coconut Authority (PCA), and as such was empowered among others to approve clearances of employees thereat, taking advantage of his position, through evident bad faith, did then and there, wilfully and unlawfully refuse to issue a certificate of clearance to Herminigildo M. Curio, an

employee thereat, who was forced to resign as a result of the abolition of his item pursuant to the 1981 reorganization of the PCA, resulting in his deprivation to receive his gratuity benefits amounting to P29,854.90, and to secure employment with other offices to his damage and prejudice, and that of the public service.

CONTRARY TO LAW.

Manila, Philippines, December 10, 1986. 2

As indicated at the outset, the Sandiganbayan acquitted the petitioner in the absence of any evidence that he acted in bad faith. 3 The Sandiganbayan cited three considerations that precluded bad faith:

First, when Atty. Llorente withheld favorable action on the clearance on and after December 8, 1981, there was still the possibility, remote though it was when viewed after the fact, that the accountability, which Mrs. Javier was primarily liable therefor and which was fully settled by deduction from her gratuity benefits on November 16, 1981 (Exhs. L, L-1, L-2, and L-3), would be reinstated and charged directly to Mr. Curio, for the latter executed on November 26, 1981, an affidavit assuming responsibility for the obligation to the extent of the amount finally disallowed, and the affidavit was on December 8, 1981, already pending consideration by the PCA management (Exhs. 2 and 2-A).

Second, Atty. Llorente was appointed Deputy Administrator for administrative services, finance services, and legal affairs departments only on November 2,1981 (TSN, March 9/87, p. 3). Being new in his job, it was but natural that he was zealous in the performance of his functions — in fact, overzealous in the protection of the PCA interests, even if that protection was not necessary, as the P92,000.00 accountability had already been paid (See Exh. 12, 4th paragraph).

Finally, Atty. Llorente was officiously, though incidentally, taking care also of the interest of Mrs. Javier who, justice and equity demanded, should not be made to shoulder the P92,000.00 unliquidated cash advances, for the reason that it was Mr. Curio who admittedly spent them or who, at the very least, should be able to get reimbursement of what she paid, totally or partially, from his gratuity benefits (See Exh. 5, pp. 2-3 ). 4

The Sandiganbayan, as we also indicated earlier, took the petitioner to task civilly, and ordered him to pay "compensatory damages" in the sum of P90,000.00. According to the Sandiganbayan, the petitioner was guilty nonetheless of abuse of right under Article 19 of the Civil Code and as a public officer, he was liable for damages suffered by the aggrieved party (under Article 27).

The petitioner claims that the Sandiganbayan's Decision is erroneous even if the Sandiganbayan acquitted him therein, because he was never in bad faith as indeed found by the Sandiganbayan.

Under the 1985 Rules of Criminal Procedure, amending Rules 110 through 127 of the Rules of Court, the judgment of the court shall include, in case of acquittal, and unless there is a clear showing that the act from which the civil liability might arise did not exist, "a finding on the civil liability of the accused in favor of the offended party." 5 The rule is based on the provisions of substantive law, 6 that if acquittal proceeds from reasonable doubt, a civil action, lies nonetheless.

The challenged judgment found that the petitioner, in refusing to issue a certificate of clearance in favor of the private offended party, Herminigildo Curio, did not act with "evident bad faith," one of the elements of Section 3(e) of Republic Act No. 3819. 7 We agree with tile judgment, insofar as it found lack of evident bad faith by the petitioner, for the reasons cited therein basicallv, because the petitioner was acting within the bounds of law in refusing to clear Curio although "[t]he practice was that the clearance was nevertheless approved, and then the amount of the unsettled obligation was deducted from the gratuity benefits of the employee." 8

We also agree with the Sandiganbaya (although the Sandiganbayan did not say it) that although the petitioner did not act with evident bad faith, he acted with bad faith nevertheless, for which he should respond for damages.

The records show that the office practice indeed in the Philippine Coconut Authority was to clear the employee (retiree) and deduct his accountabilities from his gratuity benefits. There seems to be no debate about the existence of this practice (the petitioner admitted it later on) and in fact, he cleared three employees on the condition that their obligations should be deducted from their benefits. 9 We quote:

Confronted with these evidence (sic), Atty. Llorente conceded, albeit grudgingly, the existence of the practice by the accounting division of not complying with Condition (a). He, however, claimed that he learned of the practice only during the trial of the case and that he must have inadvertently approved the clearances of Mrs. Perez, Mr. Azucena, and possibly others who were similarly situated (TSN, March 9/88,pp. 4-5). This the evidence belies. First, he himself testified that when the clearance of Mr. Curio was presented to him in December 1981, it already bore the signature of Mrs. Sotto of the accounting division and the notation set opposite her name about the outstanding accountabilities of Mr. Curio; but he (Atty. Llorente) significantly did not ask her why she signed the clearance (TSN, Nov. 24/87, pp. 24-25). Second, in that month, Atty. Llorente approved Mrs. Perez's and Mr. Azucena's vouchers showing that hey has pending obligations to the GSIS and the UCPB, which were being deducted from their gratuity benefits. Attached to those vouchers were the clearances as supporting documents (Exhs. M-2 and N-1; TSN, Dec. 7/87, pp. 13,23). And third, in the same month, Atty. Llorente was already aware of the cae of Mrs. Javier whose clearance and voucher were, according to him, preciselywithheld because of her unsettled accountability for the cash advances of P92,000.00, but here later on given due course; and her gratuity benefits released on November 16, 1981, minus that amount (TSN, Nov. 24/87, pp. 31-32; Exhs. L, L-1, L-2 and L-3).

The cash advances of P92,000.00 were the primary obligation of Mrs. Javier, since they were secured through her and in her name from the UCPB. That was why they were charged to and deducted from, her gratuity benefits. Consequently, as early as that date and in so far as the PCA and the UCPB were concerned, the accountability was already fully paid. The assumption of residual liability by Mr. Curio for the cash advances on November 26, 1981, was a matter between him and Mrs. Javier (Exhs. 2 and 2-A). 10

The general rule is that this Court is bound by the findings of fact of the Sandiganbayan. 11

As we said, the acts of the petitioner were legal (that is, pursuant to procedures), as he insists in this petition, yet it does not follow, as we said, that his acts were done in good faith. For emphasis, he had no valid reason to "go legal" all of a sudden with respect to Mr. Curio, since he had cleared three employees who, as the Sandiganbayan found, "were all similarly circumstanced in that they all

had pending obligations when, their clearances were filed for consideration, warranting similar official action." 12

The Court is convinced that the petitioner had unjustly discriminated against Mr. Curio.

It is no defense that the petitioner was motivated by no ill-will (a grudge, according to the Sandiganbayan), since the facts speak for themselves. It is no defense either that he was, after all, complying merely with legal procedures since, as we indicated, he was not as strict with respect to the three retiring other employees. There can be no other logical conclusion that he was acting unfairly, no more, no less, to Mr. Curio.

It is the essence of Article 19 of the Civil Code, under which the petitioner was made to pay damages, together with Article 27, that the performance of duty be done with justice and good faith. In the case of Velayo vs. Shell Co. of the Philippines, 13 we held the defendant liable under Article 19 for disposing of its propertv — a perfectly legal act — in order to escape the reach of a creditor. In two fairly more recent cases, Sevilla vs. Court of Appeals 14and Valenzuela vs. Court of Appeals, 15 we held that a principal is liable under Article 19 in terminating the agency — again, a legal act — when terminating the agency would deprive the agent of his legitimate business.

We believe that the petitioner is liable under Article 19.

The Court finds the award of P90,000.00 to be justified bv Article 2202 of the Civil Code, which holds the defendant liable for all "natural and probable" damages. Hennenegildo Cunct presented evidence that as a consequence of the petitioner's refusal to clear him, he failed to land a job at the Philippine Cotton Authority and Philippine First Marketing Authority. He also testified that a job in either office would have earned him salary of P2,500.00 a month, or P150,000.00 in five years. Deducting his probable expenses of reasonably about P1,000.00 a month or P60,000.00 in five years, the petitioner owes him a total actual damages of P90,000.00

WHEREFORE, premises considered, the Petition is DENIED. No pronouncement as to costs.

IT IS SO ORDERED.

Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur.

 

# Footnotes

1 Rollo, 62-66.

2 Id., 49-50.

3 In the case ofmejorada vs. Sandiganbayan, Nos. 57065-72, June 30, 1987, 151 SCRA 399, the Court cited three elements making up violations of Section 3(e) of the Anti-Graft Law: "First, that the accused must be a public officer charged with the duty of granting licenses or permits or other concessions. Petitioner contends that inasmuch as he is not charged with the duty of granting licenses, permits or other concessions, then he is not the officer contemplated by Section 3(e).

Section 3 cited above enumerates in eleven subsections the corrupt practices of any public officers declared unlawful. Its reference to "any public officer" is without distinction or qualification and it specifies the acts declared unlawful. We agree with the view adopted by the Solicitor General that the last sentence of paragraph (e) is intended to make clear the inclusion of officers and employees of offices or government corporations which, under the ordinary concept of "public officers" may not come within the term. It is a strained construction of the provision to read it as applying exclusively to public officers charged with the duty of granting licenses or permits or other concessions.

The first element, therefore, of Section 3(c) is that the accused must be a public officer. This, the informations did not fail to allege.

Second, that such public officer caused undue injury to any party, including the Government, or gave any private party unwarranted benefits, advantage or preference in the discharge of his official administrative or judicial functions.

Petitioner denies that there was injury or damage caused the Goveniment because the payments were allegedly made on the basis of a document solely made by the Highway District Engineer to which petitioner had no hand in preparing. The fact, however, is that the government suffered undue injury as a result of the petitioner's having inflated the true claims of complainants which became the basis of the report submitted by the Highway District Engineer to the Regional Director of the Department of Highways and which eventually became the basis of payment. His contention that he had no participation is belied by the fact that as a right-of-way-agent, his duty was precisely to negotiate with property owners who are affected by highway constructions for the purpose of compensating them.

On the part of the complainants, the injury caused to them consists in their being divested of a large proportion of their claims and receiving payment in an amount even lower than the actual damage they incurred. They were deprived of the just compensation to which they are entitled.

Third, the injury to any party, or giving any private party any unwarranted benefits, advantage or preference was done through manifest partiality, evident bad faith or gross inexcusable negligence." (Supra, 405-406.)

4 Rollo, Id.,. 72.5 RULES OF COURT, Rule 120, sec. 2.6 CIVIL CODE, art. 29.7 See Mejorada vs. Sandiganbayan, supra.8 Rollo, Id., 53,9 Id., 70,71,75.10 Id., 70-71.11 Castillo vs. Sandiganbayan, Nos. 52352-57, June 20, 1987, 151 SCRA 425.12 Rollo, Id., 71.13 120 Phil. 187 (1956).14 Nos. L-41182-83, April 15, 1988,160 SCRA 171.15 5G.R. No. 83122, October 19, 1990, 190 SCRA 1.