STATCON BASIC GUIDELINES IN THE CONSTRUCTION AND INTERPRETATION OF LAWS A. How is the legislative intent be ascertained?

G.R. No. 93833 September 28, 1995 SOCORRO D. RAMIREZ, petitioner, vs. HONORABLE COURT OF APPEALS, and ESTER S. GARCIA, respondents. A civil case damages was filed by petitioner Socorro D. Ramirez in the Regional Trial Court of Quezon City alleging that the private respondent, Ester S. Garcia, in a confrontation in the latter's office, allegedly vexed, insulted and humiliated her in a "hostile and furious mood" and in a manner offensive to petitioner's dignity and personality," contrary to morals, good customs and public policy." 1

In support of her claim, petitioner produced a verbatim transcript of the event and sought moral damages, attorney's fees and other expenses of litigation in the amount of P610,000.00, in addition to costs, interests and other reliefs awardable at the trial court's discretion. The transcript on which the civil case was based was culled from a tape recording of the confrontation made by petitioner. 2 The transcript reads as follows: Plaintiff Soccoro D. Ramirez (Chuchi)—Good Afternoon M'am. Defendant Ester S. Garcia (ESG)—Ano ba ang nangyari sa 'yo, nakalimot ka na kung paano ka napunta rito, porke member ka na, magsumbong ka kung ano ang gagawin ko sa 'yo. CHUCHI —Kasi, naka duty ako noon. ESG—Tapos iniwan no. (Sic) CHUCHI —Hindi m'am, pero ilan beses na nila akong binalikan, sabing ganoon — ESG—Ito and (sic) masasabi ko sa 'yo, ayaw kung (sic) mag explain ka, kasi hanggang 10:00 p.m., kinabukasan hindi ka na pumasok. Ngayon ako ang babalik sa 'yo, nag-aaply ka sa States, nag-aaply ka sa review mo, kung kakailanganin ang certification mo, kalimutan mo na kasi hindi ka sa akin makakahingi. CHUCHI—Hindi M'am. Kasi ang ano ko talaga noon i-cocontinue ko up to 10:00 p.m. ESG—Bastos ka, nakalimutan mo na kung paano ka pumasok dito sa hotel. Magsumbong ka sa Union kung gusto mo. Nakalimutan mo na kung paano ka nakapasok dito "Do you think that on your own makakapasok ka kung hindi ako. Panunumbyoyan na kita (Sinusumbatan na kita). CHUCHI —Itutuloy ko na M'am sana ang duty ko. ESG—Kaso ilang beses na akong binabalikan doon ng mga no (sic) ko. ESG—Nakalimutan mo na ba kung paano ka pumasok sa hotel, kung on your own merit alam ko naman kung gaano ka "ka bobo" mo. Marami ang nag-aaply alam kong hindi ka papasa. CHUCHI —Kumuha kami ng exam noon. ESG—Oo, pero hindi ka papasa. CHUCHI —Eh, bakit ako ang nakuha ni Dr. Tamayo ESG—Kukunin ka kasi ako. CHUCHI —Eh, di sana — ESG—Huwag mong ipagmalaki na may utak ka kasi wala kang utak. Akala mo ba makukuha ka dito kung hindi ako. CHUCHI —Mag-eexplain ako. ESG—Huwag na, hindi ako mag-papa-explain sa 'yo, makaalala ka kung paano ka puma-rito. "Putang-ina" sasabi-sabihin mo kamag-anak ng nanay at tatay mo ang mga magulang ko. ESG—Wala na akong pakialam, dahil nandito ka sa loob, nasa labas ka puwede ka ng hindi pumasok, okey yan nasaloob ka umalis ka doon. CHUCHI —Kasi M'am, binbalikan ako ng mga taga Union. ESG—Nandiyan na rin ako, pero huwag mong kalimutan na hindi ka makakapasok kung hindi ako. Kung hindi mo kinikilala yan okey lang sa akin, dahil tapos ka na. CHUCHI —Ina-ano ko m'am na utang na loob. ESG—Huwag na lang, hindi mo utang na loob, kasi kung baga sa no, nilapastangan mo ako. CHUCHI —Paano kita nilapastanganan? ESG—Mabuti pa lumabas ka na. Hindi na ako makikipagusap sa 'yo. Lumabas ka na. Magsumbong ka. 3

As a result of petitioner's recording of the event and alleging that the said act of secretly taping the confrontation was illegal, private respondent filed a criminal case before the Regional Trial Court of Pasay City for violation of Republic Act 4200, entitled "An Act to prohibit and penalize wire tapping and other related violations of private communication, and other purposes." An information charging petitioner of violation of the said Act, dated October 6, 1988 is quoted herewith:

INFORMATION The Undersigned Assistant City Fiscal Accuses Socorro D. Ramirez of Violation of Republic Act No. 4200, committed as follows: That on or about the 22nd day of February, 1988, in Pasay City Metro Manila, Philippines, and within the

jurisdiction of this honorable court, the above-named accused, Socorro D. Ramirez not being authorized by Ester S. Garcia to record the latter's conversation with said accused, did then and there willfully, unlawfully and feloniously, with the use of a tape recorder secretly record the said conversation and thereafter communicate in writing the contents of the said recording to another person. Contrary to law. Pasay City, Metro Manila, September 16, 1988.

MARIANO M. CUNETA Asst. City Fiscal

Upon arraignment, in lieu of a plea, petitioner filed a Motion to Quash the Information on the ground that the facts charged do not constitute an offense, particularly a violation of R.A. 4200. In an order May 3, 1989, the trial court granted the Motion to Quash, agreeing with petitioner that 1) the facts charged do not constitute an offense under R.A. 4200; and that 2) the violation punished by R.A. 4200 refers to a the taping of a communication by a person other than a participant to the communication. 4

From the trial court's Order, the private respondent filed a Petition for Review on Certiorari with this Court, which forthwith referred the case to the Court of Appeals in a Resolution (by the First Division) of June 19, 1989. On February 9, 1990, respondent Court of Appeals promulgated its assailed Decision declaring the trial court's order of May 3, 1989 null and void, and holding that: [T]he allegations sufficiently constitute an offense punishable under Section 1 of R.A. 4200. In thus quashing the information based on the ground that the facts alleged do not constitute an offense, the respondent judge acted in grave abuse of discretion correctable by certiorari. 5

Consequently, on February 21, 1990, petitioner filed a Motion for Reconsideration which respondent Court of Appeals denied in its Resolution 6 dated June 19, 1990. Hence, the instant petition. Petitioner vigorously argues, as her "main and principal issue" 7 that the applicable provision of Republic Act 4200 does not apply to the taping of a private conversation by one of the parties to the conversation. She contends that the provision merely refers to the unauthorized taping of a private conversation by a party other than those involved in the communication. 8 In relation to this, petitioner avers that the substance or content of the conversation must be alleged in the Information, otherwise the facts charged would not constitute a violation of R.A. 4200. 9 Finally, petitioner argues that R.A. 4200 penalizes the taping of a "private communication," not a "private conversation" and that consequently, her act of secretly taping her conversation with private respondent was not illegal under the said act. 10

We disagree. First, legislative intent is determined principally from the language of a statute. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation would be resorted to only where a literal interpretation would be either impossible 11 or absurd or would lead to an injustice. 12

Section 1 of R.A. 4200 entitled, " An Act to Prohibit and Penalized Wiretapping and Other Related Violations of Private Communication and Other Purposes," provides: Sec. 1. It shall be unlawful for any person, not being authorized by all the parties to any private communication or spoken word, to tap any wire or cable, or by using any other device or arrangement, to secretly overhear, intercept, or record such communication or spoken word by using a device commonly known as a dictaphone or dictagraph or detectaphone or walkie-talkie or tape recorder, or however otherwise described. The aforestated provision clearly and unequivocally makes it illegal for any person, not authorized by all the parties to any private communication to secretly record such communication by means of a tape recorder. The law makes no distinction as to whether the party sought to be penalized by the statute ought to be a party other than or different from those involved in the private communication. The statute's intent to penalize all persons unauthorized to make such recording is underscored by the use of the qualifier "any". Consequently, as respondent Court of Appeals correctly concluded, "even a (person) privy to a communication who records his private conversation with another without the knowledge of the latter (will) qualify as a violator" 13 under this provision of R.A. 4200. A perusal of the Senate Congressional Records, moreover, supports the respondent court's conclusion that in enacting R.A. 4200 our lawmakers indeed contemplated to make illegal, unauthorized tape recording of private conversations or communications taken either by the parties themselves or by third persons. Thus:

xxx xxx xxx Senator Tañada: That qualified only "overhear". Senator Padilla: So that when it is intercepted or recorded, the element of secrecy would not appear to be material. Now, suppose, Your Honor, the recording is not made by all the parties but by some parties and involved not criminal cases that would be mentioned under section 3 but would cover, for example civil cases or special proceedings whereby a recording is made not necessarily by all the parties but perhaps by some in an effort to show the intent of the parties because the actuation of the parties prior, simultaneous even subsequent to the contract or the act may be indicative of their intention. Suppose there is such a recording, would you say, Your Honor, that the intention is to cover it within the purview of this bill or outside? Senator Tañada: That is covered by the purview of this bill, Your Honor.

Senator Padilla: Even if the record should be used not in the prosecution of offense but as evidence to be used in Civil Cases or special proceedings? Senator Tañada: That is right. This is a complete ban on tape recorded conversations taken without the authorization of all the parties. Senator Padilla: Now, would that be reasonable, your Honor? Senator Tañada: I believe it is reasonable because it is not sporting to record the observation of one without his knowing it and then using it against him. It is not fair, it is not sportsmanlike. If the purpose; Your honor, is to record the intention of the parties. I believe that all the parties should know that the observations are being recorded. Senator Padilla: This might reduce the utility of recorders. Senator Tañada: Well no. For example, I was to say that in meetings of the board of directors where a tape recording is taken, there is no objection to this if all the parties know. It is but fair that the people whose remarks and observations are being made should know that the observations are being recorded. Senator Padilla: Now, I can understand. Senator Tañada: That is why when we take statements of persons, we say: "Please be informed that whatever you say here may be used against you." That is fairness and that is what we demand. Now, in spite of that warning, he makes damaging statements against his own interest, well, he cannot complain any more. But if you are going to take a recording of the observations and remarks of a person without him knowing that it is being taped or recorded, without him knowing that what is being recorded may be used against him, I think it is unfair.

xxx xxx xxx (Congressional Record, Vol. III, No. 31, p. 584, March 12, 1964) Senator Diokno: Do you understand, Mr. Senator, that under Section 1 of the bill as now worded, if a party secretly records a public speech, he would be penalized under Section 1? Because the speech is public, but the recording is done secretly. Senator Tañada: Well, that particular aspect is not contemplated by the bill. It is the communication between one person and another person — not between a speaker and a public.

xxx xxx xxx (Congressional Record, Vol. III, No. 33, p. 626, March 12, 1964)

xxx xxx xxx The unambiguity of the express words of the provision, taken together with the above-quoted deliberations from the Congressional Record, therefore plainly supports the view held by the respondent court that the provision seeks to penalize even those privy to the private communications. Where the law makes no distinctions, one does not distinguish. Second, the nature of the conversations is immaterial to a violation of the statute. The substance of the same need not be specifically alleged in the information. What R.A. 4200 penalizes are the acts of secretly overhearing, intercepting or recording private communications by means of the devices enumerated therein. The mere allegation that an individual made a secret recording of a private communication by means of a tape recorder would suffice to constitute an offense under Section 1 of R.A. 4200. As the Solicitor General pointed out in his COMMENT before the respondent court: "Nowhere (in the said law) is it required that before one can be regarded as a violator, the nature of the conversation, as well as its communication to a third person should be professed." 14

Finally, petitioner's contention that the phrase "private communication" in Section 1 of R.A. 4200 does not include "private conversations" narrows the ordinary meaning of the word "communication" to a point of absurdity. The word communicate comes from the latin word communicare, meaning "to share or to impart." In its ordinary signification, communication connotes the act of sharing or imparting signification, communication connotes the act of sharing or imparting, as in a conversation, 15 or signifies the "process by which meanings or thoughts are shared between individuals through a common system of symbols (as language signs or gestures)" 16 These definitions are broad enough to include verbal or nonverbal, written or expressive communications of "meanings or thoughts" which are likely to include the emotionally-charged exchange, on February 22, 1988, between petitioner and private respondent, in the privacy of the latter's office. Any doubts about the legislative body's meaning of the phrase "private communication" are, furthermore, put to rest by the fact that the terms "conversation" and "communication" were interchangeably used by Senator Tañada in his Explanatory Note to the bill quoted below: It has been said that innocent people have nothing to fear from their conversations being overheard. But this statement ignores the usual nature of conversations as well the undeniable fact that most, if not all, civilized people have some aspects of their lives they do not wish to expose. Free conversations are often characterized by exaggerations, obscenity, agreeable falsehoods, and the expression of anti-social desires of views not intended to be taken seriously. The right to the privacy of communication, among others, has expressly been assured by our Constitution. Needless to state here, the framers of our Constitution must have recognized the nature of conversations between individuals and the significance of man's spiritual nature, of his feelings and of his intellect. They must have known that part of the pleasures and satisfactions of life are to be found in the unaudited, and free exchange of communication between individuals — free from every unjustifiable intrusion by whatever means. 17

In Gaanan vs. Intermediate Appellate Court, 18 a case which dealt with the issue of telephone wiretapping, we held that the use of a telephone extension for the purpose of overhearing a private conversation without authorization did not violate R.A. 4200 because a telephone extension device was neither among those "device(s) or arrangement(s)" enumerated therein, 19 following the principle that "penal statutes must be construed strictly in favor of the accused." 20 The instant case turns on a different note, because the applicable facts and circumstances pointing to a violation of R.A. 4200 suffer from no ambiguity, and the statute itself explicitly mentions the unauthorized "recording" of private communications with the use of tape-recorders as among the acts punishable. WHEREFORE, because the law, as applied to the case at bench is clear and unambiguous and leaves us with no discretion, the instant petition is hereby DENIED. The decision appealed from is AFFIRMED. Costs against petitioner. SO ORDERED.

G.R. No. 186571 August 11, 2010 GERBERT R. CORPUZ, Petitioner, vs. DAISYLYN TIROL STO. TOMAS and The SOLICITOR GENERAL, Respondents. Before the Court is a direct appeal from the decision of the Regional Trial Court (RTC) of Laoag City, Branch 11, elevated via a petition for review on certiorari under Rule 45 of the Rules of Court (present petition). Petitioner Gerbert R. Corpuz was a former Filipino citizen who acquired Canadian citizenship through naturalization on November 29, 2000.3 On January 18, 2005, Gerbert married respondent Daisylyn T. Sto. Tomas, a Filipina, in Pasig City.4 Due to work and other professional commitments, Gerbert left for Canada soon after the wedding. He returned to the Philippines sometime in April 2005 to surprise Daisylyn, but was shocked to discover that his wife was having an affair with another man. Hurt and disappointed, Gerbert returned to Canada and filed a petition for divorce. The Superior Court of Justice, Windsor, Ontario, Canada granted Gerbert’s petition for divorce on December 8, 2005. The divorce decree took effect a month later, on January 8, 2006.5

Two years after the divorce, Gerbert has moved on and has found another Filipina to love. Desirous of marrying his new Filipina fiancée in the Philippines, Gerbert went to the Pasig City Civil Registry Office and registered the Canadian divorce decree on his and Daisylyn’s marriage certificate. Despite the registration of the divorce decree, an official of the National Statistics Office (NSO) informed Gerbert that the marriage between him and Daisylyn still subsists under Philippine law; to be enforceable, the foreign divorce decree must first be judicially recognized by a competent Philippine court, pursuant to NSO Circular No. 4, series of 1982.6

Accordingly, Gerbert filed a petition for judicial recognition of foreign divorce and/or declaration of marriage as dissolved (petition) with the RTC. Although summoned, Daisylyn did not file any responsive pleading but submitted instead a notarized letter/manifestation to the trial court. She offered no opposition to Gerbert’s petition and, in fact, alleged her desire to file a similar case herself but was prevented by financial and personal circumstances. She, thus, requested that she be considered as a party-in-interest with a similar prayer to Gerbert’s. In its October 30, 2008 decision,7 the RTC denied Gerbert’s petition. The RTC concluded that Gerbert was not the proper party to institute the action for judicial recognition of the foreign divorce decree as he is a naturalized Canadian citizen. It ruled that only the Filipino spouse can avail of the remedy, under the second paragraph of Article 26 of the Family Code,8 in order for him or her to be able to remarry under Philippine law.9 Article 26 of the Family Code reads: Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law. This conclusion, the RTC stated, is consistent with the legislative intent behind the enactment of the second paragraph of Article 26 of the Family Code, as determined by the Court in Republic v. Orbecido III;10 the provision was enacted to "avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse."11

THE PETITION From the RTC’s ruling, Gerbert filed the present petition.

Gerbert asserts that his petition before the RTC is essentially for declaratory relief, similar to that filed in Orbecido; he, thus, similarly asks for a determination of his rights under the second paragraph of Article 26 of the Family Code. Taking into account the rationale behind the second paragraph of Article 26 of the Family Code, he contends that the provision applies as well to the benefit of the alien spouse. He claims that the RTC ruling unduly stretched the doctrine in Orbecido by limiting the standing to file the petition only to the Filipino spouse – an interpretation he claims to be contrary to the essence of the second paragraph of Article 26 of the Family Code. He considers himself as a proper party, vested with sufficient legal interest, to institute the case, as there is a possibility that he might be prosecuted for bigamy if he marries his Filipina fiancée in the Philippines since two marriage certificates,

involving him, would be on file with the Civil Registry Office. The Office of the Solicitor General and Daisylyn, in their respective Comments,14 both support Gerbert’s position. Essentially, the petition raises the issue of whether the second paragraph of Article 26 of the Family Code extends to aliens the right to petition a court of this jurisdiction for the recognition of a foreign divorce decree.

THE COURT’S RULING The alien spouse can claim no right under the second paragraph of Article 26 of the Family Code as the substantive right it establishes is in favor of the Filipino spouse The resolution of the issue requires a review of the legislative history and intent behind the second paragraph of Article 26 of the Family Code. The Family Code recognizes only two types of defective marriages – void and voidablemarriages. In both cases, the basis for the judicial declaration of absolute nullity or annulment of the marriage exists before or at the time of the marriage. Divorce, on the other hand, contemplates the dissolution of the lawful union for cause arising after the marriage.17 Our family laws do not recognize absolute divorce between Filipino citizens.

Recognizing the reality that divorce is a possibility in marriages between a Filipino and an alien, President Corazon C. Aquino, in the exercise of her legislative powers under the Freedom Constitution, enacted Executive Order No. (EO) 227, amending Article 26 of the Family Code to its present wording, as follows: Art. 26. All marriages solemnized outside the Philippines, in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall likewise have capacity to remarry under Philippine law. Through the second paragraph of Article 26 of the Family Code, EO 227 effectively incorporated into the law this Court’s holding in Van Dorn v. Romillo, Jr. and Pilapil v. Ibay-Somera. In both cases, the Court refused to acknowledge the alien spouse’s assertion of marital rights after a foreign court’s divorce decree between the alien and the Filipino. The Court, thus, recognized that the foreign divorce had already severed the marital bond between the spouses. The Court reasoned in Van Dorn v. Romillo that: To maintain x x x that, under our laws, [the Filipino spouse] has to be considered still married to [the alien spouse] and still subject to a wife's obligations x x x cannot be just. [The Filipino spouse] should not be obliged to live together with, observe respect and fidelity, and render support to [the alien spouse]. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should not be discriminated against in her own country if the ends of justice are to be served.

As the RTC correctly stated, the provision was included in the law "to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse."23 The legislative intent is for the benefit of the Filipino spouse, by clarifying his or her marital status, settling the doubts created by the divorce decree. Essentially, the second paragraph of Article 26 of the Family Code provided the Filipino spouse a substantive right to have his or her marriage to the alien spouse considered as dissolved, capacitating him or her to remarry. Without the second paragraph of Article 26 of the Family Code, the judicial recognition of the foreign decree of divorce, whether in a proceeding instituted precisely for that purpose or as a related issue in another proceeding, would be of no significance to the Filipino spouse since our laws do not recognize divorce as a mode of severing the marital bond; Article 17 of the Civil Code provides that the policy against absolute divorces cannot be subverted by judgments promulgated in a foreign country. The inclusion of the second paragraph in Article 26 of the Family Code provides the direct exception to this rule and serves as basis for recognizing the dissolution of the marriage between the Filipino spouse and his or her alien spouse. Additionally, an action based on the second paragraph of Article 26 of the Family Code is not limited to the recognition of the foreign divorce decree. If the court finds that the decree capacitated the alien spouse to remarry, the courts can declare that the Filipino spouse is likewise capacitated to contract another marriage. No court in this jurisdiction, however, can make a similar declaration for the alien spouse (other than that already established by the decree), whose status and legal capacity are generally governed by his national law.

Given the rationale and intent behind the enactment, and the purpose of the second paragraph of Article 26 of the Family Code, the RTC was correct in limiting the applicability of the provision for the benefit of the Filipino spouse. In other words, only the Filipino spouse can invoke the second paragraph of Article 26 of the Family Code; the alien spouse can claim no right under this provision. The foreign divorce decree is presumptive evidence of a right that clothes the party with legal interest to petition for its recognition in this jurisdiction We qualify our above conclusion – i.e., that the second paragraph of Article 26 of the Family Code bestows no rights in favor of aliens – with the complementary statement that this conclusion is not sufficient basis to dismiss Gerbert’s petition before the RTC. In other words, the unavailability of the second paragraph of Article 26 of the Family Code to aliens does not necessarily strip Gerbert of legal interest to petition the RTC for the recognition of his foreign divorce decree. The foreign divorce decree itself, after its authenticity and conformity with the alien’s national law have been duly proven according to our rules of evidence, serves as a presumptive evidence of right in

favor of Gerbert, pursuant to Section 48, Rule 39 of the Rules of Court which provides for the effect of foreign judgments. This Section states: SEC. 48. Effect of foreign judgments or final orders.—The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows: (a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title of the thing; and (b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title. In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact. To our mind, direct involvement or being the subject of the foreign judgment is sufficient to clothe a party with the requisite interest to institute an action before our courts for the recognition of the foreign judgment. In a divorce situation, we have declared, no less, that the divorce obtained by an alien abroad may be recognized in the Philippines, provided the divorce is valid according to his or her national law.

The starting point in any recognition of a foreign divorce judgment is the acknowledgment that our courts do not take judicial notice of foreign judgments and laws. Justice Herrera explained that, as a rule, "no sovereign is bound to give effect within its dominion to a judgment rendered by a tribunal of another country." This means that the foreign judgment and its authenticity must be proven as facts under our rules on evidence, together with the alien’s applicable national law to show the effect of the judgment on the alien himself or herself. The recognition may be made in an action instituted specifically for the purpose or in another action where a party invokes the foreign decree as an integral aspect of his claim or defense. In Gerbert’s case, since both the foreign divorce decree and the national law of the alien, recognizing his or her capacity to obtain a divorce, purport to be official acts of a sovereign authority, Section 24, Rule 132 of the Rules of Court comes into play. This Section requires proof, either by (1) official publications or (2) copies attested by the officer having legal custody of the documents. If the copies of official records are not kept in the Philippines, these must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office. The records show that Gerbert attached to his petition a copy of the divorce decree, as well as the required certificates proving its authenticity,30 but failed to include a copy of the Canadian law on divorce. Under this situation, we can, at this point, simply dismiss the petition for insufficiency of supporting evidence, unless we deem it more appropriate to remand the case to the RTC to determine whether the divorce decree is consistent with the Canadian divorce law. We deem it more appropriate to take this latter course of action, given the Article 26 interests that will be served and the Filipina wife’s (Daisylyn’s) obvious conformity with the petition. A remand, at the same time, will allow other interested parties to oppose the foreign judgment and overcome a petitioner’s presumptive evidence of a right by proving want of jurisdiction, want of notice to a party, collusion, fraud, or clear mistake of law or fact. Needless to state, every precaution must be taken to ensure conformity with our laws before a recognition is made, as the foreign judgment, once recognized, shall have the effect of res judicatabetween the parties, as provided in Section 48, Rule 39 of the Rules of Court.

In fact, more than the principle of comity that is served by the practice of reciprocal recognition of foreign judgments between nations, the res judicata effect of the foreign judgments of divorce serves as the deeper basis for extending judicial recognition and for considering the alien spouse bound by its terms. This same effect, as discussed above, will not obtain for the Filipino spouse were it not for the substantive rule that the second paragraph of Article 26 of the Family Code provides. Considerations beyond the recognition of the foreign divorce decree As a matter of "housekeeping" concern, we note that the Pasig City Civil Registry Office has already recorded the divorce decree on Gerbert and Daisylyn’s marriage certificate based on the mere presentation of the decree. We consider the recording to be legally improper; hence, the need to draw attention of the bench and the bar to what had been done. Article 407 of the Civil Code states that "[a]cts, events and judicial decrees concerning the civil status of persons shall be recorded in the civil register." The law requires the entry in the civil registry of judicial decrees that produce legal consequences touching upon a person’s legal capacity and status, i.e., those affecting "all his personal qualities and relations, more or less permanent in nature, not ordinarily terminable at his own will, such as his being legitimate or illegitimate, or his being married or not."

A judgment of divorce is a judicial decree, although a foreign one, affecting a person’s legal capacity and status that must be recorded. In fact, Act No. 3753 or the Law on Registry of Civil Status specifically requires the registration of divorce decrees in the civil registry: Sec. 1. Civil Register. – A civil register is established for recording the civil status of persons, in which shall be entered: (a) births;

(b) deaths; (c) marriages; (d) annulments of marriages; (e) divorces; (f) legitimations; (g) adoptions; (h) acknowledgment of natural children; (i) naturalization; and (j) changes of name.

x x x x Sec. 4. Civil Register Books. — The local registrars shall keep and preserve in their offices the following books, in which they shall, respectively make the proper entries concerning the civil status of persons: (1) Birth and death register; (2) Marriage register, in which shall be entered not only the marriages solemnized but also divorces and dissolved marriages. (3) Legitimation, acknowledgment, adoption, change of name and naturalization register. But while the law requires the entry of the divorce decree in the civil registry, the law and the submission of the decree by themselves do not ipso facto authorize the decree’s registration. The law should be read in relation with the requirement of a judicial recognition of the foreign judgment before it can be given res judicata effect. In the context of the present case, no judicial order as yet exists recognizing the foreign divorce decree. Thus, the Pasig City Civil Registry Office acted totally out of turn and without authority of law when it annotated the Canadian divorce decree on Gerbert and Daisylyn’s marriage certificate, on the strength alone of the foreign decree presented by Gerbert. Evidently, the Pasig City Civil Registry Office was aware of the requirement of a court recognition, as it cited NSO Circular No. 4, series of 1982,36 and Department of Justice Opinion No. 181, series of 198237 – both of which required a final order from a competent Philippine court before a foreign judgment, dissolving a marriage, can be registered in the civil registry, but it, nonetheless, allowed the registration of the decree. For being contrary to law, the registration of the foreign divorce decree without the requisite judicial recognition is patently void and cannot produce any legal effect. Another point we wish to draw attention to is that the recognition that the RTC may extend to the Canadian divorce decree does not, by itself, authorize the cancellation of the entry in the civil registry. A petition for recognition of a foreign judgment is not the proper proceeding, contemplated under the Rules of Court, for the cancellation of entries in the civil registry. Article 412 of the Civil Code declares that "no entry in a civil register shall be changed or corrected, without judicial order." The Rules of Court supplements Article 412 of the Civil Code by specifically providing for a special remedial proceeding by which entries in the civil registry may be judicially cancelled or corrected. Rule 108 of the Rules of Court sets in detail the jurisdictional and procedural requirements that must be complied with before a judgment, authorizing the cancellation or correction, may be annotated in the civil registry. It also requires, among others, that the verified petition must be filed with the RTC of the province where the corresponding civil registry is located;38 that the civil registrar and all persons who have or claim any interest must be made parties to the proceedings;39 and that the time and place for hearing must be published in a newspaper of general circulation.40 As these basic jurisdictional requirements have not been met in the present case, we cannot consider the petition Gerbert filed with the RTC as one filed under Rule 108 of the Rules of Court. We hasten to point out, however, that this ruling should not be construed as requiring two separate proceedings for the registration of a foreign divorce decree in the civil registry – one for recognition of the foreign decree and another specifically for cancellation of the entry under Rule 108 of the Rules of Court. The recognition of the foreign divorce decree may be made in a Rule 108 proceeding itself, as the object of special proceedings (such as that in Rule 108 of the Rules of Court) is precisely to establish the status or right of a party or a particular fact. Moreover, Rule 108 of the Rules of Court can serve as the appropriate adversarial proceeding by which the applicability of the foreign judgment can be measured and tested in terms of jurisdictional infirmities, want of notice to the party, collusion, fraud, or clear mistake of law or fact. WHEREFORE, we GRANT the petition for review on certiorari, and REVERSE the October 30, 2008 decision of the Regional Trial Court of Laoag City, Branch 11, as well as its February 17, 2009 order. We order the REMAND of the case to the trial court for further proceedings in accordance with our ruling above. Let a copy of this Decision be furnished the Civil Registrar General. No costs. SO ORDERED.

G.R. No. 133743 February 6, 2007 EDGAR SAN LUIS, Petitioner, vs. FELICIDAD SAN LUIS, Respondent. x ---------------------------------------------------- x G.R. No. 134029 February 6, 2007 RODOLFO SAN LUIS, Petitioner, vs. FELICIDAD SAGALONGOS alias FELICIDAD SAN LUIS, Respondent. Before us are consolidated petitions for review assailing the February 4, 1998 Decision of the Court of Appeals in CA-G.R. CV No. 52647, which reversed and set aside the September 12, 1995 and January 31, 1996 Resolutions of the Regional Trial Court of Makati City, Branch 134 in SP. Proc. No. M-3708; and its May 15, 1998 Resolution denying petitioners’ motion for reconsideration. The instant case involves the settlement of the estate of Felicisimo T. San Luis (Felicisimo), who was the former governor of the Province of Laguna. During his lifetime, Felicisimo contracted three marriages. His first marriage was with Virginia Sulit on March 17, 1942 out of which were born six children, namely: Rodolfo, Mila, Edgar, Linda, Emilita and Manuel. On August 11, 1963, Virginia predeceased Felicisimo. Five years later, on May 1, 1968, Felicisimo married Merry Lee Corwin, with whom he had a son, Tobias. However, on October 15, 1971, Merry Lee, an American citizen, filed a Complaint for Divorce before the Family Court of the First Circuit, State of Hawaii, United States of America (U.S.A.), which issued a Decree Granting Absolute Divorce and Awarding Child Custody on December 14, 1973.

On June 20, 1974, Felicisimo married respondent Felicidad San Luis, then surnamed Sagalongos, before Rev. Fr. William Meyer, Minister of the United Presbyterian at Wilshire Boulevard, Los Angeles, California, U.S.A. He had no children with respondent but lived with her for 18 years from the time of their marriage up to his death on December 18, 1992. Thereafter, respondent sought the dissolution of their conjugal partnership assets and the settlement of Felicisimo’s estate. On December 17, 1993, she filed a petition for letters of administration before the Regional Trial Court of Makati City, docketed as SP. Proc. No. M-3708 which was raffled to Branch 146 thereof. Respondent alleged that she is the widow of Felicisimo; that, at the time of his death, the decedent was residing at 100 San Juanico Street, New Alabang Village, Alabang, Metro Manila; that the decedent’s surviving heirs are respondent as legal spouse, his six children by his first marriage, and son by his second marriage; that the decedent left real properties, both conjugal and exclusive, valued at P30,304,178.00 more or less; that the decedent does not have any unpaid debts. Respondent prayed that the conjugal partnership assets be liquidated and that letters of administration be issued to her. On February 4, 1994, petitioner Rodolfo San Luis, one of the children of Felicisimo by his first marriage, filed a motion to dismiss on the grounds of improper venue and failure to state a cause of action. Rodolfo claimed that the petition for letters of administration should have been filed in the Province of Laguna because this was Felicisimo’s place of residence prior to his death. He further claimed that respondent has no legal personality to file the petition because she was only a mistress of Felicisimo since the latter, at the time of his death, was still legally married to Merry Lee. On February 15, 1994, Linda invoked the same grounds and joined her brother Rodolfo in seeking the dismissal of the petition. On February 28, 1994, the trial court issued an Order denying the two motions to dismiss. Unaware of the denial of the motions to dismiss, respondent filed on March 5, 1994 her opposition thereto. She submitted documentary evidence showing that while Felicisimo exercised the powers of his public office in Laguna, he regularly went home to their house in New Alabang Village, Alabang, Metro Manila which they bought sometime in 1982. Further, she presented the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii to prove that the marriage of Felicisimo to Merry Lee had already been dissolved. Thus, she claimed that Felicisimo had the legal capacity to marry her by virtue of paragraph 2, Article 26 of the Family Code and the doctrine laid down in Van Dorn v. Romillo, Jr.

Thereafter, Linda, Rodolfo and herein petitioner Edgar San Luis, separately filed motions for reconsideration from the Order denying their motions to dismiss. They asserted that paragraph 2, Article 26 of the Family Code cannot be given retroactive effect to validate respondent’s bigamous marriage with Felicisimo because this would impair vested rights in derogation of Article 256 of the Family Code. On April 21, 1994, Mila, another daughter of Felicisimo from his first marriage, filed a motion to disqualify Acting Presiding Judge Anthony E. Santos from hearing the case. On October 24, 1994, the trial court issued an Order denying the motions for reconsideration. It ruled that respondent, as widow of the decedent, possessed the legal standing to file the petition and that venue was properly laid. Meanwhile, the motion for disqualification was deemed moot and academic because then Acting Presiding Judge Santos was substituted by Judge Salvador S. Tensuan pending the resolution of said motion.

Mila filed a motion for inhibition against Judge Tensuan on November 16, 1994. On even date, Edgar also filed a motion for reconsideration from the Order denying their motion for reconsideration arguing that it does not state the facts and law on which it was based. On November 25, 1994, Judge Tensuan issued an Order granting the motion for inhibition. The case was re-raffled to Branch 134 presided by Judge Paul T. Arcangel. On April 24, 1995, the trial court required the parties to submit their respective position papers on the twin issues of venue and legal capacity of respondent to file the petition. On May 5, 1995, Edgar manifested that he is adopting the arguments and evidence set forth in his previous motion for reconsideration as his position paper. Respondent and Rodolfo filed their position papers on June 14, and June 20, 1995, respectively. On September 12, 1995, the trial court dismissed the petition for letters of administration. It held that, at the time of his death, Felicisimo was the duly elected governor and a resident of the Province of Laguna. Hence, the petition should have been filed in Sta. Cruz, Laguna and not in Makati City. It also ruled that respondent was without legal capacity to file the petition for letters of administration because her marriage with Felicisimo was bigamous, thus, void ab initio. It found that the decree of absolute divorce dissolving Felicisimo’s marriage to Merry Lee was not valid in the Philippines and did not bind Felicisimo who was a Filipino citizen. It also ruled that paragraph 2, Article 26 of the Family Code cannot be retroactively applied because it would impair the vested rights of Felicisimo’s legitimate children. Respondent moved for reconsideration and for the disqualification of Judge Arcangel but said motions were denied.

Respondent appealed to the Court of Appeals which reversed and set aside the orders of the trial court in its assailed Decision dated February 4, 1998, the dispositive portion of which states: WHEREFORE, the Orders dated September 12, 1995 and January 31, 1996 are hereby REVERSED and SET ASIDE; the Orders dated February 28 and October 24, 1994 are REINSTATED; and the records of the case is REMANDED to the trial court for further proceedings.

The appellate court ruled that under Section 1, Rule 73 of the Rules of Court, the term "place of residence" of the decedent, for purposes of fixing the venue of the settlement of his estate, refers to the personal, actual or physical habitation, or actual residence or place of abode of a person as distinguished from legal residence or domicile. It noted that although Felicisimo discharged his functions as governor in Laguna, he actually resided in Alabang, Muntinlupa. Thus, the petition for letters of administration was properly filed in Makati City. The Court of Appeals also held that Felicisimo had legal capacity to marry respondent by virtue of paragraph 2, Article 26 of the Family Code and the rulings in Van Dorn v. Romillo, Jr. and Pilapil v. Ibay-Somera. It found that the marriage between Felicisimo and Merry Lee was validly dissolved by virtue of the decree of absolute divorce issued by the Family Court of the First Circuit, State of Hawaii. As a result, under paragraph 2, Article 26, Felicisimo was capacitated to contract a subsequent marriage with respondent. Thus – With the well-known rule – express mandate of paragraph 2, Article 26, of the Family Code of the Philippines, the doctrines in Van Dorn, Pilapil, and the reason and philosophy behind the enactment of E.O. No. 227, — there is no justifiable reason to sustain the individual view — sweeping statement — of Judge Archangel, that "Article 26, par. 2 of the Family Code, contravenes the basic policy of our state against divorce in any form whatsoever." Indeed, courts cannot deny what the law grants. All that the courts should do is to give force and effect to the express mandate of the law. The foreign divorce having been obtained by the Foreigner on December 14, 1992, the Filipino divorcee, "shall x x x have capacity to remarry under Philippine laws". For this reason, the marriage between the deceased and petitioner should not be denominated as "a bigamous marriage. Therefore, under Article 130 of the Family Code, the petitioner as the surviving spouse can institute the judicial proceeding for the settlement of the estate of the deceased. x x x

Edgar, Linda, and Rodolfo filed separate motions for reconsideration which were denied by the Court of Appeals. On July 2, 1998, Edgar appealed to this Court via the instant petition for review on certiorari. Rodolfo later filed a manifestation and motion to adopt the said petition which was granted.

In the instant consolidated petitions, Edgar and Rodolfo insist that the venue of the subject petition for letters of administration was improperly laid because at the time of his death, Felicisimo was a resident of Sta. Cruz, Laguna. They contend that pursuant to our rulings in Nuval v. Guray and Romualdez v. RTC, Br. 7, Tacloban City, "residence" is synonymous with "domicile" which denotes a fixed permanent residence to which when absent, one intends to return. They claim that a person can only have one domicile at any given time. Since Felicisimo never changed his domicile, the petition for letters of administration should have been filed in Sta. Cruz, Laguna. Petitioners also contend that respondent’s marriage to Felicisimo was void and bigamous because it was performed during the subsistence of the latter’s marriage to Merry Lee. They argue that paragraph 2, Article 26 cannot be retroactively applied because it would impair vested rights and ratify the void bigamous marriage. As such, respondent cannot be considered the surviving wife of Felicisimo; hence, she has no legal capacity to file the petition for letters of administration. The issues for resolution: (1) whether venue was properly laid, and (2) whether respondent has legal capacity to file the subject petition for letters of administration. The petition lacks merit.

Under Section 1, Rule 73 of the Rules of Court, the petition for letters of administration of the estate of Felicisimo should be filed in the Regional Trial Court of the province "in which he resides at the time of his death." In the case of Garcia Fule v. Court of Appeals, we laid down the doctrinal rule for determining the residence – as contradistinguished from domicile – of the decedent for purposes of fixing the venue of the settlement of his estate: [T]he term "resides" connotes ex vi termini "actual residence" as distinguished from "legal residence or domicile." This term "resides," like the terms "residing" and "residence," is elastic and should be interpreted in the light of the object or purpose of the statute or rule in which it is employed. In the application of venue statutes and rules – Section 1, Rule 73 of the Revised Rules of Court is of such nature – residence rather than domicile is the significant factor. Even where the statute uses the word "domicile" still it is construed as meaning residence and not domiciled in the technical sense. Some cases make a distinction between the terms "residence" and "domicile" but as generally used in statutes fixing venue, the terms are synonymous, and convey the same meaning as the term "inhabitant." In other words, "resides" should be viewed or understood in its popular sense, meaning, the personal, actual or physical habitation of a person, actual residence or place of abode. It signifies physical presence in a place and actual stay thereat. In this popular sense, the term means merely residence, that is, personal residence, not legal residence or domicile. Residence simply requires bodily presence as an inhabitant in a given place, while domicile requires bodily presence in that place and also an intention to make it one’s domicile. No particular length of time of residence is required though; however, the residence must be more than temporary. (Emphasis supplied) It is incorrect for petitioners to argue that "residence," for purposes of fixing the venue of the settlement of the estate of Felicisimo, is synonymous with "domicile." The rulings in Nuval and Romualdez are inapplicable to the instant case because they involve election cases. Needless to say, there is a distinction between "residence" for purposes of election laws and "residence" for purposes of fixing the venue of actions. In election cases, "residence" and "domicile" are treated as synonymous terms, that is, the fixed permanent residence to which when absent, one has the intention of returning. However, for purposes of fixing venue under the Rules of Court, the "residence" of a person is his personal, actual or physical habitation, or actual residence or place of abode, which may not necessarily be his legal residence or domicile provided he resides therein with continuity and consistency. Hence, it is possible that a person may have his residence in one place and domicile in another. In the instant case, while petitioners established that Felicisimo was domiciled in Sta. Cruz, Laguna, respondent proved that he also maintained a residence in Alabang, Muntinlupa from 1982 up to the time of his death. Respondent submitted in evidence the Deed of Absolute Sale dated January 5, 1983 showing that the deceased purchased the aforesaid property. She also presented billing statements from the Philippine Heart Center and Chinese General Hospital for the period August to December 1992 indicating the address of Felicisimo at "100 San Juanico, Ayala Alabang, Muntinlupa." Respondent also presented proof of membership of the deceased in the Ayala Alabang Village Association and Ayala Country Club, Inc., letter-envelopes from 1988 to 1990 sent by the deceased’s children to him at his Alabang address, and the deceased’s calling cards stating that his home/city address is at "100 San Juanico, Ayala Alabang Village, Muntinlupa" while his office/provincial address is in "Provincial Capitol, Sta. Cruz, Laguna." From the foregoing, we find that Felicisimo was a resident of Alabang, Muntinlupa for purposes of fixing the venue of the settlement of his estate. Consequently, the subject petition for letters of administration was validly filed in the Regional Trial Court which has territorial jurisdiction over Alabang, Muntinlupa. The subject petition was filed on December 17, 1993. At that time, Muntinlupa was still a municipality and the branches of the Regional Trial Court of the National Capital Judicial Region which had territorial jurisdiction over Muntinlupa were then seated in Makati City as per Supreme Court Administrative Order No. 3. Thus, the subject petition was validly filed before the Regional Trial Court of Makati City. Anent the issue of respondent Felicidad’s legal personality to file the petition for letters of administration, we must first resolve the issue of whether a Filipino who is divorced by his alien spouse abroad may validly remarry under the Civil Code, considering that Felicidad’s marriage to Felicisimo was solemnized on June 20, 1974, or before the Family Code took effect on August 3, 1988. In resolving this issue, we need not retroactively apply the provisions of the Family Code, particularly Art. 26, par. (2) considering that there is sufficient jurisprudential basis allowing us to rule in the affirmative. The case of Van Dorn v. Romillo, Jr. involved a marriage between a foreigner and his Filipino wife, which marriage was subsequently dissolved through a divorce obtained abroad by the latter. Claiming that the divorce was not valid under Philippine law, the alien spouse alleged that his interest in the properties from their conjugal partnership should be protected. The Court, however, recognized the validity of the divorce and held that the alien spouse had no interest in the properties acquired by the Filipino wife after the divorce. Thus: In this case, the divorce in Nevada released private respondent from the marriage from the standards of American law, under which divorce dissolves the marriage. As stated by the Federal Supreme Court of the United States in Atherton vs. Atherton, 45 L. Ed. 794, 799: "The purpose and effect of a decree of divorce from the bond of matrimony by a competent jurisdiction are to change the existing status or domestic relation of husband and wife, and to free them both from the bond. The marriage tie, when thus severed as to one party, ceases to bind either. A husband without a wife, or a wife without

a husband, is unknown to the law. When the law provides, in the nature of a penalty, that the guilty party shall not marry again, that party, as well as the other, is still absolutely freed from the bond of the former marriage." Thus, pursuant to his national law, private respondent is no longer the husband of petitioner. He would have no standing to sue in the case below as petitioner’s husband entitled to exercise control over conjugal assets. As he is bound by the Decision of his own country’s Court, which validly exercised jurisdiction over him, and whose decision he does not repudiate, he is estopped by his own representation before said Court from asserting his right over the alleged conjugal property.

As to the effect of the divorce on the Filipino wife, the Court ruled that she should no longer be considered married to the alien spouse. Further, she should not be required to perform her marital duties and obligations. It held: To maintain, as private respondent does, that, under our laws, petitioner has to be considered still married to private respondent and still subject to a wife's obligations under Article 109, et. seq. of the Civil Code cannot be just. Petitioner should not be obliged to live together with, observe respect and fidelity, and render support to private respondent. The latter should not continue to be one of her heirs with possible rights to conjugal property. She should not be discriminated against in her own country if the ends of justice are to be served. (Emphasis added) This principle was thereafter applied in Pilapil v. Ibay-Somera where the Court recognized the validity of a divorce obtained abroad. In the said case, it was held that the alien spouse is not a proper party in filing the adultery suit against his Filipino wife. The Court stated that "the severance of the marital bond had the effect of dissociating the former spouses from each other, hence the actuations of one would not affect or cast obloquy on the other."

Likewise, in Quita v. Court of Appeals, the Court stated that where a Filipino is divorced by his naturalized foreign spouse, the ruling in Van Dorn applies. Although decided on December 22, 1998, the divorce in the said case was obtained in 1954 when the Civil Code provisions were still in effect. The significance of the Van Dorn case to the development of limited recognition of divorce in the Philippines cannot be denied. The ruling has long been interpreted as severing marital ties between parties in a mixed marriage and capacitating the Filipino spouse to remarry as a necessary consequence of upholding the validity of a divorce obtained abroad by the alien spouse. In his treatise, Dr. Arturo M. Tolentino cited Van Dorn stating that "if the foreigner obtains a valid foreign divorce, the Filipino spouse shall have capacity to remarry under Philippine law." In Garcia v. Recio, the Court likewise cited the aforementioned case in relation to Article 26.

In the recent case of Republic v. Orbecido III, the historical background and legislative intent behind paragraph 2, Article 26 of the Family Code were discussed, to wit:

Brief Historical Background On July 6, 1987, then President Corazon Aquino signed into law Executive Order No. 209, otherwise known as the "Family Code," which took effect on August 3, 1988. Article 26 thereof states: All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35, 37, and 38. On July 17, 1987, shortly after the signing of the original Family Code, Executive Order No. 227 was likewise signed into law, amending Articles 26, 36, and 39 of the Family Code. A second paragraph was added to Article 26. As so amended, it now provides: ART. 26. All marriages solemnized outside the Philippines in accordance with the laws in force in the country where they were solemnized, and valid there as such, shall also be valid in this country, except those prohibited under Articles 35(1), (4), (5) and (6), 36, 37 and 38. Where a marriage between a Filipino citizen and a foreigner is validly celebrated and a divorce is thereafter validly obtained abroad by the alien spouse capacitating him or her to remarry, the Filipino spouse shall have capacity to remarry under Philippine law. (Emphasis supplied) x x x x Legislative Intent Records of the proceedings of the Family Code deliberations showed that the intent of Paragraph 2 of Article 26, according to Judge Alicia Sempio-Diy, a member of the Civil Code Revision Committee, is to avoid the absurd situation where the Filipino spouse remains married to the alien spouse who, after obtaining a divorce, is no longer married to the Filipino spouse. Interestingly, Paragraph 2 of Article 26 traces its origin to the 1985 case of Van Dorn v. Romillo, Jr. The Van Dorn case involved a marriage between a Filipino citizen and a foreigner. The Court held therein that a divorce decree validly obtained by the alien spouse is valid in the Philippines, and consequently, the Filipino spouse is capacitated to remarry under Philippine law. (Emphasis added) As such, the Van Dorn case is sufficient basis in resolving a situation where a divorce is validly obtained abroad by the alien spouse. With the enactment of the Family Code and paragraph 2, Article 26 thereof, our lawmakers codified the law already established through judicial precedent.1awphi1.net Indeed, when the object of a marriage is defeated by rendering its continuance intolerable to one of the parties and productive of no possible good to the community, relief in some way should be obtainable. Marriage, being a mutual and shared commitment between two parties, cannot possibly be productive of any good to the society

where one is considered released from the marital bond while the other remains bound to it. Such is the state of affairs where the alien spouse obtains a valid divorce abroad against the Filipino spouse, as in this case. Petitioners cite Articles 15 and 17 of the Civil Code in stating that the divorce is void under Philippine law insofar as Filipinos are concerned. However, in light of this Court’s rulings in the cases discussed above, the Filipino spouse should not be discriminated against in his own country if the ends of justice are to be served. In Alonzo v. Intermediate Appellate Court, the Court stated: But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render justice. Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, in slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed. As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where these words import a policy that goes beyond them." x x x x More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render every one his due." That wish continues to motivate this Court when it assesses the facts and the law in every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus when the facts warrants, we interpret the law in a way that will render justice, presuming that it was the intention of the lawmaker, to begin with, that the law be dispensed with justice.

Applying the above doctrine in the instant case, the divorce decree allegedly obtained by Merry Lee which absolutely allowed Felicisimo to remarry, would have vested Felicidad with the legal personality to file the present petition as Felicisimo’s surviving spouse. However, the records show that there is insufficient evidence to prove the validity of the divorce obtained by Merry Lee as well as the marriage of respondent and Felicisimo under the laws of the U.S.A. In Garcia v. Recio, the Court laid down the specific guidelines for pleading and proving foreign law and divorce judgments. It held that presentation solely of the divorce decree is insufficient and that proof of its authenticity and due execution must be presented. Under Sections 24 and 25 of Rule 132, a writing or document may be proven as a public or official record of a foreign country by either (1) an official publication or (2) a copy thereof attested by the officer having legal custody of the document. If the record is not kept in the Philippines, such copy must be (a) accompanied by a certificate issued by the proper diplomatic or consular officer in the Philippine foreign service stationed in the foreign country in which the record is kept and (b) authenticated by the seal of his office.

With regard to respondent’s marriage to Felicisimo allegedly solemnized in California, U.S.A., she submitted photocopies of the Marriage Certificate and the annotated text of the Family Law Act of California which purportedly show that their marriage was done in accordance with the said law. As stated in Garcia, however, the Court cannot take judicial notice of foreign laws as they must be alleged and proved.

Therefore, this case should be remanded to the trial court for further reception of evidence on the divorce decree obtained by Merry Lee and the marriage of respondent and Felicisimo. Even assuming that Felicisimo was not capacitated to marry respondent in 1974, nevertheless, we find that the latter has the legal personality to file the subject petition for letters of administration, as she may be considered the co-owner of Felicisimo as regards the properties that were acquired through their joint efforts during their cohabitation. Section 6, Rule 78 of the Rules of Court states that letters of administration may be granted to the surviving spouse of the decedent. However, Section 2, Rule 79 thereof also provides in part: SEC. 2. Contents of petition for letters of administration. – A petition for letters of administration must be filed by an interested person and must show, as far as known to the petitioner: x x x. An "interested person" has been defined as one who would be benefited by the estate, such as an heir, or one who has a claim against the estate, such as a creditor. The interest must be material and direct, and not merely indirect or contingent.

In the instant case, respondent would qualify as an interested person who has a direct interest in the estate of Felicisimo by virtue of their cohabitation, the existence of which was not denied by petitioners. If she proves the validity of the divorce and Felicisimo’s capacity to remarry, but fails to prove that her marriage with him was validly performed under the laws of the U.S.A., then she may be considered as a co-owner under Article 144 of the Civil Code. This provision governs the property relations between parties who live together as husband and wife without

the benefit of marriage, or their marriage is void from the beginning. It provides that the property acquired by either or both of them through their work or industry or their wages and salaries shall be governed by the rules on co-ownership. In a co-ownership, it is not necessary that the property be acquired through their joint labor, efforts and industry. Any property acquired during the union is prima facie presumed to have been obtained through their joint efforts. Hence, the portions belonging to the co-owners shall be presumed equal, unless the contrary is proven.

Meanwhile, if respondent fails to prove the validity of both the divorce and the marriage, the applicable provision would be Article 148 of the Family Code which has filled the hiatus in Article 144 of the Civil Code by expressly regulating the property relations of couples living together as husband and wife but are incapacitated to marry. In Saguid v. Court of Appeals, we held that even if the cohabitation or the acquisition of property occurred before the Family Code took effect, Article 148 governs.The Court described the property regime under this provision as follows: The regime of limited co-ownership of property governing the union of parties who are not legally capacitated to marry each other, but who nonetheless live together as husband and wife, applies to properties acquired during said cohabitation in proportion to their respective contributions. Co-ownership will only be up to the extent of the proven actual contribution of money, property or industry. Absent proof of the extent thereof, their contributions and corresponding shares shall be presumed to be equal. x x x x In the cases of Agapay v. Palang, and Tumlos v. Fernandez, which involved the issue of co-ownership of properties acquired by the parties to a bigamous marriage and an adulterous relationship, respectively, we ruled that proof of actual contribution in the acquisition of the property is essential. x x x As in other civil cases, the burden of proof rests upon the party who, as determined by the pleadings or the nature of the case, asserts an affirmative issue. Contentions must be proved by competent evidence and reliance must be had on the strength of the party’s own evidence and not upon the weakness of the opponent’s defense. x x x

In view of the foregoing, we find that respondent’s legal capacity to file the subject petition for letters of administration may arise from her status as the surviving wife of Felicisimo or as his co-owner under Article 144 of the Civil Code or Article 148 of the Family Code. WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals reinstating and affirming the February 28, 1994 Order of the Regional Trial Court which denied petitioners’ motion to dismiss and it's October 24, 1994 Order which dismissed petitioner's’ motion for reconsideration is AFFIRMED. Let this case be REMANDED to the trial court for further proceedings. SO ORDERED. ---------------------------------------------------------------------------------------------------------------------------------------------------------------- B. DUTY OF THE COURTS TO CONSTRUE AND INTERPRET THE LAW B1. When the law speaks in clear and categorical language, there is no room for interpretation, vacillation, or equivocation language, there is only room for application

G.R. No. 102858 July 28, 1997 THE DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS and TEODORO ABISTADO, substituted by MARGARITA, MARISSA, MARIBEL, ARNOLD and MARY ANN, all surnamed ABISTO, respondents. Is newspaper publication of the notice of initial hearing in an original land registration case mandatory or directory?

Statement of the Case The Court of Appeals ruled that it was merely procedural and that the failure to cause such publication did not deprive the trial court of its authority to grant the application. But the Solicitor General disagreed and thus filed this petition to set aside the Decision 1 promulgated on July 3, 1991 and the subsequent Resolution 2 promulgated on November 19, 1991 by Respondent Court of Appeals 3 in CA-G.R. CV No. 23719. The dispositive portion of the challenged Decision reads: 4

WHEREFORE, premises considered, the judgment of dismissal appealed from is hereby set aside, and a new one entered confirming the registration and title of applicant, Teodoro Abistado, Filipino, a resident of Barangay 7, Poblacion Mamburao, Occidental Mindoro, now deceased and substituted by Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado, represented by their aunt, Miss Josefa Abistado, Filipinos, residents of Poblacion Mamburao, Occidental Mindoro, to the parcel of land covered under MSI (IV-A-8) 315-D located in Poblacion Mamburao, Occidental Mindoro. The oppositions filed by the Republic of the Philippines and private oppositor are hereby dismissed for want of evidence.

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

The Facts On December 8, 1986, Private Respondent Teodoro Abistado filed a petition for original registration of his title over 648 square meters of land under Presidential Decree (PD) No. 1529. 5 The application was docketed as Land Registration Case (LRC) No. 86 and assigned to Branch 44 of the Regional Trial Court of Mamburao, Occidental Mindoro. 6 However, during the pendency of his petition, applicant died. Hence, his heirs — Margarita, Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado — represented by their aunt Josefa Abistado, who was appointed their guardian ad litem, were substituted as applicants. The land registration court in its decision dated June 13, 1989 dismissed the petition "for want of jurisdiction." However, it found that the applicants through their predecessors-in-interest had been in open, continuous, exclusive and peaceful possession of the subject land since 1938. In dismissing the petition, the trial court reasoned: 7

. . . However, the Court noted that applicants failed to comply with the provisions of Section 23 (1) of PD 1529, requiring the Applicants to publish the notice of Initial Hearing (Exh. "E") in a newspaper of general circulation in the Philippines. Exhibit "E" was only published in the Official Gazette (Exhibits "F" and "G"). Consequently, the Court is of the well considered view that it has not legally acquired jurisdiction over the instant application for want of compliance with the mandatory provision requiring publication of the notice of initial hearing in a newspaper of general circulation. The trial court also cited Ministry of Justice Opinion No. 48, Series of 1982, which in its pertinent portion provides: 8

It bears emphasis that the publication requirement under Section 23 [of PD 1529] has a twofold purpose; the first, which is mentioned in the provision of the afore quoted provision refers to publication in the Official Gazette, and is jurisdictional; while the second, which is mentioned in the opening clause of the same paragraph, refers to publication not only in the Official Gazette but also in a newspaper of general circulation, and is procedural. Neither one nor the other is dispensable. As to the first, publication in the Official Gazette is indispensably necessary because without it, the court would be powerless to assume jurisdiction over a particular land registration case. As to the second, publication of the notice of initial hearing also in a newspaper of general circulation is indispensably necessary as a requirement of procedural due process; otherwise, any decision that the court may promulgate in the case would be legally infirm. Unsatisfied, private respondents appealed to Respondent Court of Appeals which, as earlier explained, set aside the decision of the trial court and ordered the registration of the title in the name of Teodoro Abistado. The subsequent motion for reconsideration was denied in the challenged CA Resolution dated November 19, 1991. The Director of Lands represented by the Solicitor General thus elevated this recourse to us. This Court notes that the petitioner's counsel anchored his petition on Rule 65. This is an error. His remedy should be based on Rule 45 because he is appealing a final disposition of the Court of Appeals. Hence, we shall treat his petition as one for review under Rule 45, and not for certiorari under Rule 65. 9

The Issue Petitioner alleges that Respondent Court of Appeals committed "grave abuse of discretion" 10 in holding — . . . that publication of the petition for registration of title in LRC Case No. 86 need not be published in a newspaper of general circulation, and in not dismissing LRC Case No. 86 for want of such publication. Petitioner points out that under Section 23 of PD 1529, the notice of initial hearing shall be "published both in the Official Gazette and in a newspaper of general circulation." According to petitioner, publication in the Official Gazette is "necessary to confer jurisdiction upon the trial court, and . . . in . . . a newspaper of general circulation to comply with the notice requirement of due process." 11

Private respondents, on the other hand, contend that failure to comply with the requirement of publication in a newspaper of general circulation is a mere "procedural defect." They add that publication in the Official Gazette is sufficient to confer jurisdiction. 12

In reversing the decision of the trial court, Respondent Court of Appeals ruled: 13

. . . although the requirement of publication in the Official Gazette and in a newspaper of general circulation is couched in mandatory terms, it cannot be gainsaid that the law also mandates with equal force that publication in the Official Gazette shall be sufficient to confer jurisdiction upon the court. Further, Respondent Court found that the oppositors were afforded the opportunity "to explain matters fully and present their side." Thus, it justified its disposition in this wise: 14

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

The Court's Ruling We find for petitioner.

Newspaper Publication Mandatory

The pertinent part of Section 23 of Presidential Decree No. 1529 requiring publication of the notice of initial hearing reads as follows: Sec. 23. Notice of initial hearing, publication, etc. — The court shall, within five days from filing of the application, issue an order setting the date and hour of the initial hearing which shall not be earlier than forty-five days nor later than ninety days from the date of the order. The public shall be given notice of initial hearing of the application for land registration by means of (1) publication; (2) mailing; and (3) posting. 1. By publication. — Upon receipt of the order of the court setting the time for initial hearing, the Commissioner of Land Registration shall cause a notice of initial hearing to be published once in the Official Gazette and once in a newspaper of general circulation in the Philippines: Provided, however, that the publication in the Official Gazette shall be sufficient to confer jurisdiction upon the court. Said notice shall be addressed to all persons appearing to have an interest in the land involved including the adjoining owners so far as known, and "to all whom it may concern." Said notice shall also require all persons concerned to appear in court at a certain date and time to show cause why the prayer of said application shall not be granted.

xxx xxx xxx Admittedly, the above provision provides in clear and categorical terms that publication in the Official Gazette suffices to confer jurisdiction upon the land registration court. However, the question boils down to whether, absent any publication in a newspaper of general circulation, the land registration court can validly confirm and register the title of private respondents. We answer this query in the negative. This answer is impelled by the demands of statutory construction and the due process rationale behind the publication requirement. The law used the term "shall" in prescribing the work to be done by the Commissioner of Land Registration upon the latter's receipt of the court order setting the time for initial hearing. The said word denotes an imperative and thus indicates the mandatory character of a statute.15 While concededly such literal mandate is not an absolute rule in statutory construction, as its import ultimately depends upon its context in the entire provision, we hold that in the present case the term must be understood in its normal mandatory meaning. In Republic vs. Marasigan,16 the Court through Mr. Justice Hilario G. Davide, Jr. held that Section 23 of PD 1529 requires notice of the initial hearing by means of (1) publication, (2) mailing and (3) posting, all of which must be complied with. "If the intention of the law were otherwise, said section would not have stressed in detail the requirements of mailing of notices to all persons named in the petition who, per Section 15 of the Decree, include owners of adjoining properties, and occupants of the land." Indeed, if mailing of notices is essential, then by parity of reasoning, publication in a newspaper of general circulation is likewise imperative since the law included such requirement in its detailed provision. It should be noted further that land registration is a proceeding in rem. 17 Being in rem, such proceeding requires constructive seizure of the land as against all persons, including the state, who have rights to or interests in the property. An in rem proceeding is validated essentially through publication. This being so, the process must strictly be complied with. Otherwise, persons who may be interested or whose rights may be adversely affected would be barred from contesting an application which they had no knowledge of. As has been ruled, a party as an owner seeking the inscription of realty in the land registration court must prove by satisfactory and conclusive evidence not only his ownership thereof but the identity of the same, for he is in the same situation as one who institutes an action for recovery of realty. 18 He must prove his title against the whole world. This task, which rests upon the applicant, can best be achieved when all persons concerned — nay, "the whole world" — who have rights to or interests in the subject property are notified and effectively invited to come to court and show cause why the application should not be granted. The elementary norms of due process require that before the claimed property is taken from concerned parties and registered in the name of the applicant, said parties must be given notice and opportunity to oppose. It may be asked why publication in a newspaper of general circulation should be deemed mandatory when the law already requires notice by publication in the Official Gazette as well as by mailing and posting, all of which have already been complied with in the case at hand. The reason is due process and the reality that the Official Gazette is not as widely read and circulated as newspapers and is oftentimes delayed in its circulation, such that the notices published therein may not reach the interested parties on time, if at all. Additionally, such parties may not be owners of neighboring properties, and may in fact not own any other real estate. In sum, the all-encompassing in rem nature of land registration cases, the consequences of default orders issued against the whole world and the objective of disseminating the notice in as wide a manner as possible demand a mandatory construction of the requirements for publication, mailing and posting. Admittedly, there was failure to comply with the explicit publication requirement of the law. Private respondents did not proffer any excuse; even if they had, it would not have mattered because the statute itself allows no excuses. Indelibly, this Court has no authority to dispense with such mandatory requirement. The law is unambiguous and its rationale clear. Time and again, this Court has declared that where the law speaks in clear and categorical language, there is no room for interpretation, vacillation or equivocation; there is room only for

application. 19 There is no alternative. Thus, the application for land registration filed by private respondents must be dismissed without prejudice to reapplication in the future, after all the legal requisites shall have been duly complied with. WHEREFORE, the petition is GRANTED and the assailed Decision and Resolution are REVERSED and SET ASIDE. The application of private respondent for land registration is DISMISSED without prejudice. No costs. SO ORDERED. ----------------------------------------------------------------------------------------------------------------------------------------------------------------- B2. When the law is clear, it is not susceptible of interpretation. It must be applied regardless of who may be affected, even if the law may be harsh and erroneous.

G.R. No. 84240 March 25, 1992 OLIVIA S. PASCUAL and HERMES S. PASCUAL, petitioners, vs. ESPERANZA C. PASCUAL-BAUTISTA, MANUEL C. PASCUAL, JOSE C. PASCUAL, SUSANA C. PASCUAL-BAUTISTA, ERLINDA C. PASCUAL, WENCESLAO C. PASCUAL, JR., INTESTATE ESTATE OF ELEUTERIO T. PASCUAL, AVELINO PASCUAL, ISOCELES PASCUAL, LEIDA PASCUAL-MARTINES, VIRGINIA PASCUAL-NER, NONA PASCUAL-FERNANDO, OCTAVIO PASCUAL, GERANAIA PASCUAL-DUBERT, and THE HONORABLE PRESIDING JUDGE MANUEL S. PADOLINA of Br. 162, RTC, Pasig, Metro Manila, respondents. This is a petition for review on certiorari which seeks to reverse and set aside: (a) the decision of the Court of Appeals 1 dated April 29, 1988 in CA-G.R. SP. No. 14010 entitled "Olivia S. Pascual and Hermes S. Pascual v. Esperanza C. Pascual-Bautista, Manuel C. Pascual, Jose Pascual, Susana C. Pascual-Bautista, Erlinda C. Pascual, Wenceslao C. Pascual, Jr., et al." which dismissed the petition and in effect affirmed the decision of the trial court and (b) the resolution dated July 14, 1988 denying petitioners' motion for reconsideration. The undisputed facts of the case are as follows: Petitioners Olivia and Hermes both surnamed Pascual are the acknowledged natural children of the late Eligio Pascual, the latter being the full blood brother of the decedent Don Andres Pascual (Rollo, petition, p. 17). Don Andres Pascual died intestate on October 12, 1973 without any issue, legitimate, acknowledged natural, adopted or spurious children and was survived by the following: (a) Adela Soldevilla de Pascual, surviving spouses; (b) Children of Wenceslao Pascual, Sr., a brother of the full blood of the deceased, to wit: Esperanza C. Pascual-Bautista Manuel C. Pascual Jose C. Pascual Susana C. Pascual-Bautista Erlinda C. Pascual Wenceslao C. Pascual, Jr. (c) Children of Pedro-Bautista, brother of the half blood of the deceased, to wit: Avelino Pascual Isoceles Pascual Loida Pascual-Martinez Virginia Pascual-Ner Nona Pascual-Fernando Octavio Pascual Geranaia Pascual-Dubert; (d) Acknowledged natural children of Eligio Pascual, brother of the full blood of the deceased, to wit: Olivia S. Pascual Hermes S. Pascual (e) Intestate of Eleuterio T. Pascual, a brother of the half blood of the deceased and represented by the following: Dominga M. Pascual Mamerta P. Fugoso Abraham S. Sarmiento, III Regina Sarmiento-Macaibay Eleuterio P. Sarmiento Domiga P. San Diego Nelia P. Marquez Silvestre M. Pascual Eleuterio M. Pascual (Rollo, pp. 46-47)

Adela Soldevilla de Pascual, the surviving spouse of the late Don Andres Pascual, filed with the Regional Trial Court (RTC), Branch 162 (CFI of Rizal, Br. XXIII), a Special Proceeding, Case No. 7554, for administration of the intestate estate of her late husband (Rollo, p. 47). On December 18, 1973, Adela soldevilla de Pascual filed a Supplemental Petition to the Petition for letters of Administration, where she expressly stated that Olivia Pascual and Hermes Pascual, are among the heirs of Don Andres Pascual (Rollo, pp. 99-101). On February 27, 1974, again Adela Soldevilla de Pascual executed an affidavit, to the effect that of her own knowledge, Eligio Pascual is the younger full blood brother of her late husband Don Andres Pascual, to belie the statement made by the oppositors, that they were are not among the known heirs of the deceased Don Andres Pascual (Rollo, p. 102). On October 16, 1985, all the above-mentioned heirs entered into a COMPROMISE AGREEMENT, over the vehement objections of the herein petitioners Olivia S. Pascual and Hermes S. Pascual, although paragraph V of such compromise agreement provides, to wit: This Compromise Agreement shall be without prejudice to the continuation of the above-entitled proceedings until the final determination thereof by the court, or by another compromise agreement, as regards the claims of Olivia Pascual and Hermes Pascual as legal heirs of the deceased, Don Andres Pascual. (Rollo, p. 108) The said Compromise Agreement had been entered into despite the Manifestation/Motion of the petitioners Olivia Pascual and Hermes Pascual, manifesting their hereditary rights in the intestate estate of Don Andres Pascual, their uncle (Rollo, pp. 111-112). On September 30, 1987, petitioners filed their Motion to Reiterate Hereditary Rights (Rollo, pp. 113-114) and the Memorandum in Support of Motion to reiterate Hereditary Rights (Rollo, pp. 116-130). On December 18, 1987, the Regional Trial Court, presided over by Judge Manuel S. Padolina issued an order, the dispositive portion of which reads: WHEREFORE, premises considered, this Court resolves as it is hereby resolved to Deny this motion reiterating the hereditary rights of Olivia and Hermes Pascual (Rollo, p. 136). On January 13, 1988, petitioners filed their motion for reconsideration (Rollo, pp. 515-526). and such motion was denied. Petitioner appealed their case to the Court of Appeals docketed as CA-G.R. No. 14010 (Rollo, p. 15.). On Aril 29, 1988, the respondent Court of Appeals rendered its decision the decision the dispositive part of which reads: WHEREFORE, the petition is DISMISSED. Costs against the petitioners. SO ORDERED. (Rollo, p. 38) Petitioners filed their motion for reconsideration of said decision and on July 14, 1988, the Court of Appeals issued its resolution denying the motion for reconsideration (Rollo, p. 42). Hence, this petition for review on certiorari. After all the requirements had been filed, the case was given due course. The main issue to be resolved in the case at bar is whether or not Article 992 of the Civil Code of the Philippines, can be interpreted to exclude recognized natural children from the inheritance of the deceased. Petitioners contend that they do not fall squarely within the purview of Article 992 of the Civil Code of the Philippines, can be interpreted to exclude recognized and of the doctrine laid down in Diaz v. IAC (150 SCRA 645 [1987]) because being acknowledged natural children, their illegitimacy is not due to the subsistence of a prior marriage when such children were under conception (Rollo, p. 418). Otherwise stated they say the term "illegitimate" children as provided in Article 992 must be strictly construed to refer only to spurious children (Rollo, p. 419). On the other hand, private respondents maintain that herein petitioners are within the prohibition of Article 992 of the Civil Code and the doctrine laid down in Diaz v. IAC is applicable to them. The petition is devoid of merit. Pertinent thereto, Article 992 of the civil Code, provides: An illegitimate child has no right to inherit ab intestato from the legitimate children and relatives of his father or mother; nor shall such children or relatives inherit in the same manner from the illegitimate child. The issue in the case at bar, had already been laid to rest in Diaz v. IAC, supra, where this Court ruled that: Article 992 of the Civil Code provides a barrier or iron curtain in that it prohibits absolutely a succession ab intestato between the illegitimate child and the legitimate children and relatives of the father or mother of said legitimate child. They may have a natural tie of blood, but this is not recognized by law for the purposes of Article 992. Between the legitimate family and illegitimate family there is presumed to be an intervening antagonism and incompatibility. The illegitimate child is disgracefully looked down upon by the legitimate family; the family is in turn hated by the illegitimate child; the latter considers the privileged condition of the former, and the resources of which it is thereby deprived; the former, in turn, sees in the illegitimate child nothing but the product of sin, palpable evidence of a blemish broken in life; the law does no more than recognize this truth, by avoiding further grounds of resentment. Eligio Pascual is a legitimate child but petitioners are his illegitimate children.

Applying the above doctrine to the case at bar, respondent IAC did not err in holding that petitioners herein cannot represent their father Eligio Pascual in the succession of the latter to the intestate estate of the decedent Andres Pascual, full blood brother of their father. In their memorandum, petitioners insisted that Article 992 in the light of Articles 902 and 989 of the Civil Code allows them (Olivia and Hermes) to represent Eligio Pascual in the intestate estate of Don Andres Pascual. On motion for reconsideration of the decision in Diaz v. IAC, this Court further elucidated the successional rights of illegitimate children, which squarely answers the questions raised by the petitioner on this point. The Court held: Article 902, 989, and 990 clearly speaks of successional rights of illegitimate children, which rights are transmitted to their descendants upon their death. The descendants (of these illegitimate children) who may inherit by virtue of the right of representation may be legitimate or illegitimate. In whatever manner, one should not overlook the fact that the persons to be represented are themselves illegitimate. The three named provisions are very clear on this matter. The right of representation is not available to illegitimate descendants of legitimate children in the inheritance of a legitimate grandparent. It may be argued, as done by petitioners, that the illegitimate descendant of a legitimate child is entitled to represent by virtue of the provisions of Article 982, which provides that "the grandchildren and other descendants shall inherit by right of representation." Such a conclusion is erroneous. It would allow intestate succession by an illegitimate child to the legitimate parent of his father or mother, a situation which would set at naught the provisions of Article 992. Article 982 is inapplicable to the instant case because Article 992 prohibits absolutely a succession ab intestato between the illegitimate child and the legitimate children and relatives of the father or mother. It may not be amiss to state Article 982 is the general rule and Article 992 the exception. The rules laid down in Article 982 that "grandchildren and other descendants shall inherit by right of representation" and in Article 902 that the rights of illegitimate children . . . are transmitted upon their death to their descendants, whether legitimate or illegitimate are subject to the limitation prescribed by Article 992 to the end that an illegitimate child has no right to inherit ab intestato from the legitimate children and relatives of his father or mother. (Amicus Curiae's Opinion by former Justice Minister Ricardo C. Puno, p. 12). Diaz v. Intermediate Appellate Court, 182 SCRA 427; pp. 431-432; [1990]). Verily, the interpretation of the law desired by the petitioner may be more humane but it is also an elementary rule in statutory construction that when the words and phrases of the statute are clear and unequivocal, their meaning must be determined from the language employed and the statute must be taken to mean exactly what is says. (Baranda v. Gustilo, 165 SCRA 758-759 [1988]). The courts may not speculate as to the probable intent of the legislature apart from the words (Aparri v. CA, 127 SCRA 233 [1984]). When the law is clear, it is not susceptible of interpretation. It must be applied regardless of who may be affected, even if the law may be harsh or onerous. (Nepomuceno, et al. v. FC, 110 Phil. 42). And even granting that exceptions may be conceded, the same as a general rule, should be strictly but reasonably construed; they extend only so far as their language fairly warrants, and all doubts should be resolved in favor of the general provisions rather than the exception. Thus, where a general rule is established by statute, the court will not curtail the former nor add to the latter by implication (Samson v. C.A., 145 SCRA 654 [1986]). Clearly the term "illegitimate" refers to both natural and spurious. Finally under Article 176 of the Family Code, all illegitimate children are generally placed under one category, which undoubtedly settles the issue as to whether or not acknowledged natural children should be treated differently, in the negative. It may be said that the law may be harsh but that is the law (DURA LEX SED LEX). PREMISES CONSIDERED, the petition is DISMISSED for lack of merit and the assailed decision of the respondent Court of Appeals dated April 29, 1988 is AFFIRMED. SO ORDERED. ---------------------------------------------------------------------------------------------------------------------------------------------------------------- B3. The first and fundamental duty of the courts is to apply the law.

G.R. No. L-22301 August 30, 1967 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. MARIO MAPA Y MAPULONG, defendant-appellant. Francisco P. Cabigao for defendant-appellant. Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General F. R. Rosete and Solicitor O. C. Hernandez for plaintiff-appellee. FERNANDO, J.: The sole question in this appeal from a judgment of conviction by the lower court is whether or not the appointment to and holding of the position of a secret agent to the provincial governor would constitute a sufficient defense to a prosecution for the crime of illegal possession of firearm and ammunition. We hold that it does not.

The accused in this case was indicted for the above offense in an information dated August 14, 1962 reading as follows: "The undersized accuses MARIO MAPA Y MAPULONG of a violation of Section 878 in connection with Section 2692 of the Revised Administrative Code, as amended by Commonwealth Act No. 56 and as further amended by Republic Act No. 4, committed as follows: That on or about the 13th day of August, 1962, in the City of Manila, Philippines, the said accused did then and there wilfully and unlawfully have in his possession and under his custody and control one home-made revolver (Paltik), Cal. 22, without serial number, with six (6) rounds of ammunition, without first having secured the necessary license or permit therefor from the corresponding authorities. Contrary to law." When the case was called for hearing on September 3, 1963, the lower court at the outset asked the counsel for the accused: "May counsel stipulate that the accused was found in possession of the gun involved in this case, that he has neither a permit or license to possess the same and that we can submit the same on a question of law whether or not an agent of the governor can hold a firearm without a permit issued by the Philippine Constabulary." After counsel sought from the fiscal an assurance that he would not question the authenticity of his exhibits, the understanding being that only a question of law would be submitted for decision, he explicitly specified such question to be "whether or not a secret agent is not required to get a license for his firearm." Upon the lower court stating that the fiscal should examine the document so that he could pass on their authenticity, the fiscal asked the following question: "Does the accused admit that this pistol cal. 22 revolver with six rounds of ammunition mentioned in the information was found in his possession on August 13, 1962, in the City of Manila without first having secured the necessary license or permit thereof from the corresponding authority?" The accused, now the appellant, answered categorically: "Yes, Your Honor." Upon which, the lower court made a statement: "The accused admits, Yes, and his counsel Atty. Cabigao also affirms that the accused admits." Forthwith, the fiscal announced that he was "willing to submit the same for decision." Counsel for the accused on his part presented four (4) exhibits consisting of his appointment "as secret agent of the Hon. Feliciano Leviste," then Governor of Batangas, dated June 2, 1962;1 another document likewise issued by Gov. Leviste also addressed to the accused directing him to proceed to Manila, Pasay and Quezon City on a confidential mission;2 the oath of office of the accused as such secret agent,3 a certificate dated March 11, 1963, to the effect that the accused "is a secret agent" of Gov. Leviste.4 Counsel for the accused then stated that with the presentation of the above exhibits he was "willing to submit the case on the question of whether or not a secret agent duly appointed and qualified as such of the provincial governor is exempt from the requirement of having a license of firearm." The exhibits were admitted and the parties were given time to file their respective memoranda.1äwphï1.ñët Thereafter on November 27, 1963, the lower court rendered a decision convicting the accused "of the crime of illegal possession of firearms and sentenced to an indeterminate penalty of from one year and one day to two years and to pay the costs. The firearm and ammunition confiscated from him are forfeited in favor of the Government." The only question being one of law, the appeal was taken to this Court. The decision must be affirmed. 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."5 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."6

The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. Our task is equally clear. The first and fundamental duty of courts is to apply the law. "Construction and interpretation come only after it has been demonstrated that application is impossible or inadequate without them."7 The conviction of the accused must stand. It cannot be set aside. Accused however would rely on People v. Macarandang,8 where a secret agent was acquitted on appeal on the assumption that the appointment "of the accused as a secret agent to assist in the maintenance of peace and order campaigns and detection of crimes, sufficiently put him within the category of a "peace officer" equivalent even to a member of the municipal police expressly covered by section 879." Such reliance is misplaced. It is not within the power of this Court to set aside the clear and explicit mandate of a statutory provision. To the extent therefore that this decision conflicts with what was held in People v. Macarandang, it no longer speaks with authority. Wherefore, the judgment appealed from is affirmed. ----------------------------------------------------------------------------------------------------------------------------------------------------------------- B4. The duty of the courts is to apply the law disregarding their feeling of sympathy or pity for the accused.

G.R. No. 116719 January 18, 1996 PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs.

PATRICIO AMIGO alias "BEBOT", accused-appellant. Initially, Patricio Amigo was charged with frustrated murder in an Information reading as follows: The undersigned accuses the above-named accused of the crime of FRUSTRATED MURDER, under Art. 248, in relation to Art. 5 of the Revised Penal Code, committed as follows: That on or about December 29, 1989, in the City of Davao, Philippines, and within the jurisdiction of this Honorable Court, the above-mentioned accused, armed with a knife, with treachery and evident premeditation and with intent to kill wilfully, unlawfully and feloniously attacked, assaulted and stab with said weapon one Benito Ng Suy, thereby inflicting injuries upon the latter, the following injuries, to wit: MULTIPLE STAB WOUNDS-LEFT ARM, LEFT CHEST, ABDOMEN AND LEFT THIGH WITH PENETRATION TO LEFT PLEURAL CAVITY, DIAPHRAGM STOMACH, DUODENUM, PANCREAS AND MID TRANSVERSE COLON. thus performing all the acts of execution which should have produced the crime of murder as a consequence but nevertheless, did not produce it by reason of causes independent of his will, that is, because of the timely and able medical assistance immediately rendered to the said Benito Ng Suy.

(p. 1, Rollo.) to which he pleaded not guilty. Subsequently, due to the death of the victim, an amended Information was filed charging now the crime of murder, to wit: That on or about December 29, 1989, in the City of Davao, Philippines, and within the jurisdiction of this Honorable Court, the above-mentioned accused, armed with a knife, with treachery and evident premeditation and with intent to kill wilfully, unlawfully and feloniously attacked, assaulted and stabbed with said weapon one Benito Ng Suy, thereby inflicting upon the latter multiple wounds which caused his death and the consequent loss and damage to the heirs of the victim.

(p. 3, Rollo.) After trial on the merits, the court a quo rendered a decision, disposing: WHEREFORE, finding the accused Patricio Amigo guilty beyond reasonable doubt of the crime of MURDER punishable under Art. 248 of the Revised Penal Code, with no modifying circumstance present, the accused is hereby sentenced to the penalty of reclusion perpetua, which is the medium period of the penalty of reclusion temporal in its maximum to death and to pay the cost; to indemnify the offended party the amount of P93,214.70 as actual damages and P50,000.00 as compensatory damages and P50,000.00 as moral damages.

(p. 32, Rollo.) Reversal thereof is now sought, with accused-appellant arguing that error was committed by the trial court in imposing or meting out the penalty of reclusion perpetua against him despite the fact that Sec. 19 (1), Article III of the 1987 Constitution was already in effect when the offense was committed. The facts of the case, as briefly summarized in the brief submitted by the Office of the Solicitor General and as borne out by the evidence, are as follows: On December 29, 1989, at around 1:00 P.M., after having spent half-day at their store, located at No. 166-A, Ramon Magsaysay Avenue, Davao City, Benito Ng Suy was driving their gray Ford Fiera back home, situated at the back of Car Asia, Bajada, Davao City. With him during that time were his daughters, Jocelyn Ng Suy and a younger one together with his two year old son, who were all seated at the front seat beside him while a five year old boy was also seated at the back of the said vehicle. (TSN, April 29, 1991, pp. 3-5; TSN, March 31, 1992) On their way home and while traversing the National Highway of Bajada, Davao City, an orange Toyota Tamaraw driven by one Virgilio Abogada, suddenly made a left turn in front of the Regional Hospital, Bajada, Davao City, without noticing the Ford Fiera coming from the opposite direction. This Tamaraw was heading for Sterlyn Kitchenette, which was situated at the comer of the said hospital. (TSN, April 29, 1991, p. 4; TSN, March 31, 1992, pp. 3 and 13) With Virgilio was Patricio Amigo alias Bebot, a vulcanizer at Lingling's vulcanizing shop owned and operated by a certain Galadua. He was also seated at the right front seat beside Virgilio. Due to the unexpected veer made by Virgilio, an accidental head on collision occurred between the Fiera and the Tamaraw, causing a slight damaged to the right bumper of the latter. (TSN, March 31, 1992, p. 4) Right after the collision, Benito immediately alighted from the driver's seat and confronted Virgilio Abogada who also went down from his vehicle. (TSN, April 29, 1991, p. 5) Benito, who was a big man with a loud voice told Virgilio, "You were not looking," to which Virgilio retorted, I did not see you". (TSN, April 29, 1991, p. 16) While the two drivers were having this verbal confrontation, Patricio who was merely a passenger of Virgilio also alighted from the front seat of the Tamaraw and instantaneously approached Benito and advised the latter to leave since it was merely a small and minor accident. (TSN, April 29, 1991, pp. 16-18) A bit irritated with the actuation exhibit by Patricio, Benito rebuked the former and told him not to interfere, since he had nothing to do with the accident. (ibid. p. 7)

Irked by the comment made by Benito, Patricio sarcastically asked; "You are Chinese, is it you?" With a ready answer Benito said; "Yes, I am a Chinese and why?" Patricio in turn replied; So, you are a Chinese, wait for a while," then left. (ibid. pp. 7 and 19) Immediately thereafter, Benito ordered Jocelyn to call a policeman, but after a lapse of about one minute, Patricio returned and arrogantly approached Benito, asking the latter once again, "You are a Chinese, is it not?" To this Benito calmly responded in the affirmative. (ibid. pp. 7, 19-20) Upon hearing the response, Patricio mumbled "Ah, so you are a Chinese," and suddenly took a five inch knife from his waist and simultaneously stabbed Benito hitting him twice on the chest. (Ibid. p. 20) After being hit, Benito wounded and sensing that his life was in peril, tried to evade his assailant by pushing Patricio away and run around the Tamaraw but Patricio wielding the same knife and not content with the injuries he had already inflicted, still chased Benito and upon overtaking the latter embraced him and thrusted his knife on the victim several times, the last of which hit Benito on the left side of his body. (ibid. pp. 8, 10, 22) It was at this juncture that Jocelyn who was still inside the Ford Fiera, pleading for mercy to spare her father tried to get out of the vehicle but it was very unfortunate that she could not open its door. (Ibid. p. 10) Knowing that Patricio was really determined to kill her father by refusing to heed her pleas, Joselyn shouted for help, since there were already several people around witnessing that fatal incident, but to her consternation nobody lifted a single finger to help them. (ibid. pp. 6, 10, 18, 21-22) Only after her father lay seated on the floor of their Ford Fiera after being hit on the left side of his body that she was able to open the door of the said vehicle. (Ibid. p 12) After this precise moment, her younger sister, upon seeing their father bathing with his own blood, embraced him, causing Patricio to cease from his ferocious assault and noticing the presence of several people, he fled. (Ibid. p. 22) Thereafter, an enraged Jocelyn chased him, but since the assailant ran faster than her, she was not able to overtake him, thus, she instead decided to go back to where her father was and carried him inside the Tamaraw who bumped them and consequently brought him to San Pedro Hospital where he was attended to at the Emergency Room. (ibid. p 13) While at the Emergency Room, Benito who was on a very critical condition, due to multiple (13) stabbed wounds, was operated by Dr. Rolando Chiu. After the operation, he was subsequently brought to the ICU and stayed there for three (3) weeks. (July 12, 1991, pp. 3 and 4) In a last ditch effort to save his life, having only 10 to 20 percent survival, Benito was airlifted to Manila and was directly confined at the Chinese General Hospital. After three (3) weeks of confinement, Benito expired. CAUSE OF DEATH — SEPSIS (an overwhelming infection). This means that the infection has already circulated in the blood all over the body. (ibid. pp. 6-7)

(pp. 59-65, Rollo.) Accused-appellant contends that under the 1987 Constitution and prior to the promulgation of Republic Act No. 7659, the death penalty had been abolished and hence, the penalty that should have been imposed for the crime of murder committed by accused-appellant without the attendance of any modifying circumstances, should be reclusion temporal in its medium period or 17 years, 4 months and 1 day, to 20 years of reclusion temporal. Reasons out accused-appellant: . . . Since the death penalty (or capital punishment) is not impossible when the stabbing and killing happened, the computation of the penalty should be regarded from reclusion perpetua down and not from death penalty. Indeed, the appropriate penalty is deducible from reclusion perpetua down to reclusion temporal in its medium period. Hence, there being no modifying circumstances present (p. 5 Decision, ibid.), the correct penalty should be in the medium period (Art. 64, par. 1, Revised Penal Code) which is 17 years, 4 months and 1 day to 20 years of reclusion temporal.

(p. 10, Appellant's Brief, ff. p. 50, Rollo.) The question raised by accused-appellant was settled by this Court in People vs. Muñoz (170 SCRA 107 [1989]) thusly: In People vs. Gavarra, Justice Pedro L. Yap declared for the Court that "in view of the abolition of the death penalty under Section 19, Article III of the 1987 Constitution, the penalty that may be imposed for murder is reclusion temporal in its maximum period to reclusion perpetua," thereby eliminating death as the original maximum period. Later, without categorically saying so, the Court, through Justice Ameurfina A. Melencio-Herrera in People vs. Masangkay and through Justice Andres R. Narvasa in People vs. Atencio, divided the modified penalty into three new periods, the limits of which were specified by Justice Edgardo L. Paras in People vs. Intino, as follows: the lower half of reclusion temporal maximum as the minimum; the upper half of reclusion temporal maximum as the medium; and reclusion perpetua as the maximum. The Court has reconsidered the above cases and, after extended discussion, come to the conclusion that the doctrine announced therein does not reflect the intention of the framers as embodied in Article III, Section 19(1) of the Constitution. This conclusion is not unanimous, to be sure. Indeed, there is much to be said of the opposite view, which was in fact shared by many of those now voting for its reversal. The majority of the Court, however, is of the belief that the original interpretation should be restored as the more acceptable reading of the constitutional provision in question.

The advocates of the Masangkay ruling argue that the Constitution abolished the death penalty and thereby limited the penalty for murder to the remaining periods, to wit, the minimum and the medium. These should now be divided into three new periods in keeping with the three-grade scheme intended by the legislature. Those who disagree feel that Article III, Section 19(1) merely prohibits the imposition of the death penalty and has not, by reducing it to reclusion perpetua, also correspondingly reduced the remaining penalties. These should be maintained intact. A reading of Section 19(1) of Article III will readily show that here is really nothing therein which expressly declares the abolition of the death penalty. The provision merely says that the death penalty shall not be imposed unless for compelling reasons involving heinous crimes the Congress hereafter provides for it and, if already imposed, shall be reduced to reclusion perpetua. The language, while rather awkward, is still plain enough. And it is a settled rule of legal hermeneutics that if the language under consideration is plain, it is neither necessary nor permissible to resort to extrinsic aids, like the records of the constitutional convention, for its interpretation.

xxx xxx xxx The question as we see it is not whether the framers intended to abolish the death penalty or merely to prevent its imposition. Whatever the intention was, what we should determine is whether or not they also meant to require a corresponding modification in the other periods as a result of the prohibition against the death penalty. It is definite that such a requirement, if there really was one, is not at all expressed in Article III, Section 19(1) of the Constitution or indicated therein by at least clear and unmistakable implication. It would have been so easy, assuming such intention, to state it categorically and plainly, leaving no doubts as to its meaning. One searches in vain for such a statement, express or even implied. The writer of this opinion makes the personal observation that this might be still another instance where the framers meant one thing and said another or — strangely, considering their loquacity elsewhere — did not say enough. The original ruling as applied in the Gavarra, Masangkay, Atencio and Intino cases represented the unanimous thinking of the Court as it was then constituted. All but two members at that time still sit on the Court today. If we have seen fit to take a second look at the doctrine on which we were all agreed before, it is not because of a change in the composition of this body. It is virtually the same Court that is changing its mind after reflecting on the question again in the light of new perspectives. And well it might, and can, for the tenets it lays down are not immutable. The decisions of this Court are not petrified rules grown rigid once pronounced but vital, growing things subject to change as all life is. While we are told that the trodden path is best, this should not prevent us from opening a fresh trial or exploring the other side or testing a new idea in a spirit of continuing inquiry. Accordingly, with the hope that "as judges, (we) will be equal to (our) tasks," whatever that means, we hereby reverse the current doctrine providing for three new periods for the penalty for murder as reduced by the Constitution. Instead, we return to our original interpretation and hold that Article III, Section 19(1) does not change the periods of the penalty prescribed by Article 248 of the Revised Penal Code except only insofar as it prohibits the imposition of the death penalty and reduces it to reclusion perpetua. The range of the medium and minimum penalties remains unchanged. The Court realizes that this interpretation may lead to certain inequities that would not have arisen under Article 248 of the Revised Penal Code before its modification. Thus, a person originally subject to the death penalty and another who committed the murder without the attendance of any modifying circumstance will now be both punishable with the same medium period although the former is concededly more guilty than the latter. True enough. But that is the will not of this Court but of the Constitution. That is a question of wisdom, not construction. Of some relevance perhaps is the parable in the Bible of the workman who was paid the stipulated daily wage of one penny although he had worked longer than others hired later in the day also paid the same amount. When he complained because he felt unjustly treated by the hoe jurisdiction of the court over the person. An appearance may be madt agree with me for a penny? The problem in any event is addressed not to this Court but to the Congress. Penalties are prescribed by statute and are essentially and exclusively legislative. As judges, we can only interpret and apply them and have no authority to modify them or revise their range as determined exclusively by the legislature. We should not encroach on this prerogative of the lawmaking body. Coming back to the case at bar, we find that there being no generic aggravating or mitigating circumstance attending the commission of the offenses, the applicable sentence is the medium period of the penalty prescribed by Article 248 of the Revised Penal Code which, conformably to the new doctrine here adopted and announced, is still reclusion perpetua. This is the penalty we imposed on all the accused-appellants for each of the three murders they have committed in conspiracy with the others. The award of civil indemnity for the heirs of each of the victims is affirmed but the amount thereof is hereby increased to P30,000.00 in line with the present policy.

(at pp. 120-125.) The above ruling was reiterated in People vs. Parominog (203 SCRA 673 [1991]) and in People vs. De la Cruz (216 SCRA 476 [1992]). Finally, accused-appellant claims that the penalty of reclusion perpetua is too cruel and harsh a penalty and pleads for sympathy. Courts are not the forum to plead for sympathy. The duty of courts is to apply the law, disregarding

their feeling of sympathy or pity for an accused. DURA LEX SED LEX. The remedy is elsewhere — clemency from the executive or an amendment of the law by the legislative, but surely, at this point, this Court can but apply the law. WHEREFORE, the appealed decision is hereby AFFIRMED. SO ORDERED. C. What do yo mean by the Plain Meaning Rule or the Verba Legis?

G.R. No. 82511 March 3, 1992 GLOBE-MACKAY CABLE AND RADIO CORPORATION, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and IMELDA SALAZAR, respondents. For private respondent Imelda L. Salazar, it would seem that her close association with Delfin Saldivar would mean the loss of her job. In May 1982, private respondent was employed by Globe-Mackay Cable and Radio Corporation (GMCR) as general systems analyst. Also employed by petitioner as manager for technical operations' support was Delfin Saldivar with whom private respondent was allegedly very close. Sometime in 1984, petitioner GMCR, prompted by reports that company equipment and spare parts worth thousands of dollars under the custody of Saldivar were missing, caused the investigation of the latter's activities. The report dated September 25, 1984 prepared by the company's internal auditor, Mr. Agustin Maramara, indicated that Saldivar had entered into a partnership styled Concave Commercial and Industrial Company with Richard A. Yambao, owner and manager of Elecon Engineering Services (Elecon), a supplier of petitioner often recommended by Saldivar. The report also disclosed that Saldivar had taken petitioner's missing Fedders air conditioning unit for his own personal use without authorization and also connived with Yambao to defraud petitioner of its property. The airconditioner was recovered only after petitioner GMCR filed an action for replevin against Saldivar. 1

It likewise appeared in the course of Maramara's investigation that Imelda Salazar violated company regulations by involving herself in transactions conflicting with the company's interests. Evidence showed that she signed as a witness to the articles of partnership between Yambao and Saldivar. It also appeared that she had full knowledge of the loss and whereabouts of the Fedders air conditioner but failed to inform her employer. Consequently, in a letter dated October 8, 1984, petitioner company placed private respondent Salazar under preventive suspension for one (1) month, effective October 9, 1984, thus giving her thirty (30) days within which to, explain her side. But instead of submitting an explanations three (3) days later or on October 12, 1984 private respondent filed a complaint against petitioner for illegal suspension, which she subsequently amended to include illegal dismissal, vacation and sick leave benefits, 13th month pay and damages, after petitioner notified her in writing that effective November 8, 1984, she was considered dismissed "in view of (her) inability to refute and disprove these findings. 2

After due hearing, the Labor Arbiter in a decision dated July 16, 1985, ordered petitioner company to reinstate private respondent to her former or equivalent position and to pay her full backwages and other benefits she would have received were it not for the illegal dismissal. Petitioner was also ordered to pay private respondent moral damages of P50,000.00. 3

On appeal, public respondent National Labor Relations, Commission in the questioned resolution dated December 29, 1987 affirmed the aforesaid decision with respect to the reinstatement of private respondent but limited the backwages to a period of two (2) years and deleted the award for moral damages. 4

Hence, this petition assailing the Labor Tribunal for having committed grave abuse of discretion in holding that the suspension and subsequent dismissal of private respondent were illegal and in ordering her reinstatement with two (2) years' backwages. On the matter of preventive suspension, we find for petitioner GMCR. The investigative findings of Mr. Maramara, which pointed to Delfin Saldivar's acts in conflict with his position as technical operations manager, necessitated immediate and decisive action on any employee closely, associated with Saldivar. The suspension of Salazar was further impelled by the discovery of the missing Fedders air conditioning unit inside the apartment private respondent shared with Saldivar. Under such circumstances, preventive suspension was the proper remedial recourse available to the company pending Salazar's investigation. By itself, preventive suspension does, not signify that the company has adjudged the employee guilty of the charges she was asked to answer and explain. Such disciplinary measure is resorted to for the protection of the company's property pending investigation any alleged malfeasance or misfeasance committed by the employee. 5

Thus, it is not correct to conclude that petitioner GMCR had violated Salazar's right to due process when she was promptly suspended. If at all, the fault, lay with private respondent when she ignored petitioner's memorandum of October 8, 1984 "giving her ample opportunity to present (her) side to the Management." Instead, she went directly to the Labor Department and filed her complaint for illegal suspension without giving her employer a chance to evaluate her side of the controversy. But while we agree with the propriety of Salazar's preventive suspension, we hold that her eventual separation from employment was not for cause.

What is the remedy in law to rectify an unlawful dismissal so as to "make whole" the victim who has not merely lost her job which, under settled Jurisprudence, is a property right of which a person is not to be deprived without due process, but also the compensation that should have accrued to her during the period when she was unemployed? Art. 279 of the Labor Code, as amended, provides: Security of Tenure. — In cases of regular employment, the employer shall not terminate the services of an employee except for a just cause or when authorized by this Title. An employee who is unjustly dismissed from work shall be entitled to reinstatement without loss of seniority rights and other privileges and to his full backwages, inclusive of allowances, and to his other benefits or their monetary equivalent computed from the time his compensation was withheld from him up to the time of his actual reinstatement. 6 (Emphasis supplied) Corollary thereto are the following provisions of the Implementing Rules and Regulations of the Labor Code: Sec. 2. Security of Tenure. — In cases of regular employments, the employer shall not terminate the services of an employee except for a just cause as provided in the Labor Code or when authorized by existing laws. Sec. 3. Reinstatement. — An employee who is unjustly dismissed from work shall by entitled to reinstatement without loss of seniority rights and to backwages." 7 (Emphasis supplied) Before proceeding any furthers, it needs must be recalled that the present Constitution has gone further than the 1973 Charter in guaranteeing vital social and economic rights to marginalized groups of society, including labor. Given the pro-poor orientation of several articulate Commissioners of the Constitutional Commission of 1986, it was not surprising that a whole new Article emerged on Social Justice and Human Rights designed, among other things, to "protect and enhance the right of all the people to human dignity, reduce social, economic and political inequalities, and remove cultural inequities by equitably diffusing wealth and political power for the common good." 8 Proof of the priority accorded to labor is that it leads the other areas of concern in the Article on Social Justice, viz., Labor ranks ahead of such topics as Agrarian and Natural Resources Reform, Urban Land Reform and Housing, Health, Women, Role and Rights of People's Organizations and Human Rights. 9

The opening paragraphs on Labor states The State shall afford full protection to labor, local and overseas, organized and unorganized, and promote full employment and equality of employment opportunities for all. It shall guarantee the rights of all workers to self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the right to strike in accordance with law. They shall be entitled to security of tenure, humane conditions of work, and a living wage. They shall also participate in policy and decision-making processes affecting their rights and benefits is may be provided by law. 10 (Emphasis supplied) Compare this with the sole.provision on Labor in the 1973 Constitution under the Article and Declaration of Principles and State Policies that provides: Sec. 9. The state shall afford protection to labor, promote full employment and equality in employment, ensure equal work opportunities regardless of sex, race, or creed, and regulate the relations between workers and employers. The State shall ensure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. The State may provide for compulsory arbitration. 11

To be sure, both Charters recognize "security of tenure" as one of the rights of labor which the State is mandated to protect. But there is no gainsaying the fact that the intent of the framers of the present Constitution was to give primacy to the rights of labor and afford the sector "full protection," at least greater protection than heretofore accorded them, regardless of the geographical location of the workers and whether they are organized or not. It was then CONCOM Commissioner, now Justice Hilario G. Davide, Jr., who substantially contributed to the present formulation of the protection to labor provision and proposed that the same be incorporated in the Article on Social Justice and not just in the Article on Declaration of Principles and State Policies "in the light of the special importance that we are giving now to social justice and the necessity of emphasizing the scope and role of social justice in national development." 12

If we have taken pains to delve into the background of the labor provisions in our Constitution and the Labor Code, it is but to stress that the right of an employee not to be dismissed from his job except for a just or authorized cause provided by law has assumed greater importance under the 1987 Constitution with the singular prominence labor enjoys under the article on Social Justice. And this transcendent policy has been translated into law in the Labor Code. Under its terms, where a case of unlawful or unauthorized dismissal has been proved by the aggrieved employee, or on the other hand, the employer whose duty it is to prove the lawfulness or justness of his act of dismissal has failed to do so, then the remedies provided in Article 279 should find, application. Consonant with this liberalized stance vis-a-vis labor, the legislature even went further by enacting Republic Act No. 6715 which took effect on March 2, 1989 that amended said Article to remove any possible ambiguity that jurisprudence may have generated which watered down the constitutional intent to grant to labor "full protection." 13

To go back to the instant case, there being no evidence to show an authorized, much less a legal, cause for the dismissal of private respondent, she had every right, not only to be entitled to reinstatement, but ay well, to full backwages." 14

The intendment of the law in prescribing the twin remedies of reinstatement and payment of backwages is, in the former, to restore the dismissed employee to her status before she lost her job, for the dictionary meaning of the word "reinstate" is "to restore to a state, conditione positions etc. from which one had been removed"15 and in the

latter, to give her back the income lost during the period of unemployment. Both remedies, looking to the past, would perforce make her "whole." Sadly, the avowed intent of the law has at times been thwarted when reinstatement has not been forthcoming and the hapless dismissed employee finds himself on the outside looking in. Over time, the following reasons have been advanced by the Court for denying reinstatement under the facts of the case and the law applicable thereto; that reinstatement can no longer be effected in view of the long passage of time (22 years of litigation) or because of the realities of the situation; 16 or that it would be "inimical to the employer's interest; " 17 or that reinstatement may no longer be feasible; 18 or, that it will not serve the best interests of the parties involved; 19 or that the company would be prejudiced by the workers' continued employment; 20 or that it will not serve any prudent purpose as when supervening facts have transpired which make execution on that score unjust or inequitable 21 or, to an increasing extent, due to the resultant atmosphere of "antipathy and antagonism" or "strained relations" or "irretrievable estrangement" between the employer and the employee. 22

In lieu of reinstatement, the Court has variously ordered the payment of backwages and separation pay 23 or solely separation pay. 24

In the case at bar, the law is on the side of private respondent. In the first place the wording of the Labor Code is clear and unambiguous: "An employee who is unjustly dismissed from work shall be entitled to reinstatement. . . . and to his full backwages. . . ." 25 Under the principles of statutory construction, if a statute is clears plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This plain-meaning rule or verba legis derived from the maxim index animi sermo est (speech is the index of intention) rests on the valid presumption that the words employed by, the legislature in a statute correctly express its intent or will and preclude the court from construing it differently. 26 The legislature is presumed to know the meaning of the words, to:have used words advisedly, and to have expressed its intent by the use of such words as are found in the statute. 27 Verba legis non est recedendum, or from the words of a statute there should be no departure. Neither does the provision admit of any qualification. If in the wisdom of the Court, there may be a ground or grounds for non-application of the above-cited provision, this should be by way of exception, such as when the reinstatement may be inadmissible due to ensuing strained relations between the employer and the employee. In such cases, it should be proved that the employee concerned occupies a position where he enjoys the trust and confidence of his employer; and that it is likely that if reinstated, an atmosphere of antipathy and antagonism may be generated as to adversely affect the efficiency and productivity of the employee concerned. A few examples, will suffice to illustrate the Court's application of the above principles: where the employee is a Vice-President for Marketing and as such, enjoys the full trust and confidence of top management; 28 or is the Officer-In-Charge of the extension office of the bank where he works; 29 or is an organizer of a union who was in a position to sabotage the union's efforts to organize the workers in commercial and industrial establishments; 30 or is a warehouseman of a non-profit organization whose primary purpose is to facilitate and maximize voluntary gifts. by foreign individuals and organizations to the Philippines; 31 or is a manager of its Energy Equipment Sales. 32

Obviously, the principle of "strained relations" cannot be applied indiscriminately. Otherwise reinstatement can never be possible simply because some hostility is invariably engendered between the parties as a result of litigation. That is human nature. 33

Besides, no strained relations should arise from a valid and legal act of asserting one's right; otherwise an employee who shall assert his right could be easily separated from the service, by merely paying his separation pay on the pretext that his relationship with his employer had already become strained. 34

Here, it has not been proved that the position of private respondent as systems analyst is one that may be characterized as a position of trust and confidence such that if reinstated, it may well lead to strained relations between employer and employee. Hence, this does not constitute an exception to the general rule mandating reinstatement for an employee who has been unlawfully dismissed. On the other hand, has she betrayed any confidence reposed in her by engaging in transactions that may have created conflict of interest situations? Petitioner GMCR points out that as a matter of company policy, it prohibits its employees from involving themselves with any company that has business dealings with GMCR. Consequently, when private respondent Salazar signed as a witness to the partnership papers of Concave (a supplier of Ultra which in turn is also a supplier of GMCR), she was deemed to have placed. herself in an untenable position as far as petitioner was concerned. However, on close scrutiny, we agree with public respondent that such a circumstance did not create a conflict of interests situation. As a systems analyst, Salazar was very far removed from operations involving the procurement of supplies. Salazar's duties revolved around the development of systems and analysis of designs on a continuing basis. In other words, Salazar did not occupy a position of trust relative to the approval and purchase of supplies and company assets. In the instant case, petitioner has predicated its dismissal of Salazar on loss of confidence. As we have held countless times, while loss of confidence or breach of trust is a valid ground for terminations it must rest an some basis which must be convincingly established. 35 An employee who not be dismissed on mere presumptions and suppositions. Petitioner's allegation that since Salazar and Saldivar lived together in the same apartment, it

"presumed reasonably that complainant's sympathy would be with Saldivar" and its averment that Saldivar's investigation although unverified, was probably true, do not pass this Court's test. 36 While we should not condone the acts of disloyalty of an employee, neither should we dismiss him on the basis of suspicion derived from speculative inferences. To rely on the Maramara report as a basis for Salazar's dismissal would be most inequitous because the bulk of the findings centered principally oh her friend's alleged thievery and anomalous transactions as technical operations' support manager. Said report merely insinuated that in view of Salazar's special relationship with Saldivar, Salazar might have had direct knowledge of Saldivar's questionable activities. Direct evidence implicating private respondent is wanting from the records. It is also worth emphasizing that the Maramara report came out after Saldivar had already resigned from GMCR on May 31, 1984. Since Saldivar did not have the opportunity to refute management's findings, the report remained obviously one-sided. Since the main evidence obtained by petitioner dealt principally on the alleged culpability of Saldivar, without his having had a chance to voice his side in view of his prior resignation, stringent examination should have been carried out to ascertain whether or not there existed independent legal grounds to hold Salatar answerable as well and, thereby, justify her dismissal. Finding none, from the records, we find her to have been unlawfully dismissed. WHEREFORE, the assailed resolution of public respondent National Labor Relations Commission dated December 29, 1987 is hereby AFFIRMED. Petitioner GMCR is ordered to REINSTATE private respondent Imelda Salazar and to pay her backwages equivalent to her salary for a period of two (2) years only. This decision is immediately executory. SO ORDERED.

G.R. No. 109445 November 7, 1994 FELICITO BASBACIO, petitioner, vs. OFFICE OF THE SECRETARY, DEPARTMENT OF JUSTICE, FRANKLIN DRILON in his capacity as Secretary of Justice, respondent. Amparita S. Sta. Maria for petitioner. MENDOZA, J.: This case presents for determination the scope of the State's liability under Rep. Act No. 7309, which among other things provides compensation for persons who are unjustly accused, convicted and imprisoned but on appeal are acquitted and ordered released. Petitioner Felicito Basbacio and his son-in-law, Wilfredo Balderrama, were convicted of frustrated murder and of two counts of frustrated murder for the killing of Federico Boyon and the wounding of the latter's wife Florida and his son Tirso, at Palo, Calanuga, Rapu-Rapu, Albay, on the night of June 26, 1988. The motive for the killing was apparently a land dispute between the Boyons and petitioner. Petitioner and his son-in-law were sentenced to imprisonment and ordered immediately detained after their bonds had been cancelled. Petitioner and his son-in-law appealed. Only petitioner's appeal proceeded to judgment, however, as the appeal of the other accused was dismissed for failure to file his brief. On June 22, 1992 the Court of Appeals rendered a decision acquitting petitioner on the ground that the prosecution failed to prove conspiracy between him and his son-in-law. He had been pointed to by a daughter of Federico Boyon as the companion of Balderrama when the latter barged into their hut and without warning started shooting, but the appellate court ruled that because petitioner did nothing more, petitioner's presence at the scene of the crime was insufficient to show conspiracy. Based on his acquittal, petitioner filed a claim under Rep. Act No. 7309, sec. 3(a), which provides for the payment of compensation to "any person who was unjustly accused, convicted, imprisoned but subsequently released by virtue of a judgment of acquittal." 1 The claim was filed with the Board of Claims of the Department of Justice, but the claim was denied on the ground that while petitioner's presence at the scene of the killing was not sufficient to find him guilty beyond reasonable doubt, yet, considering that there was bad blood between him and the deceased as a result of a land dispute and the fact that the convicted murderer is his son-in-law, there was basis for finding that he was "probably guilty." On appeal, respondent Secretary of Justice affirmed the Board's ruling. Said the Secretary of Justice in his resolution dated March 11, 1993: It is believed therefore that the phrase "any person . . . unjustly accused, convicted and imprisoned" in Section 3(a) of R.A. No. 7309 refers to an individual who was wrongly accused and imprisoned for a crime he did not commit, thereby making him "a victim of unjust imprisonment." In the instant case, however, Claimant/Appellant cannot be deemed such a victim since a reading of the decision of his acquittal shows that his exculpation is not based on his innocence, but upon, in effect, a finding of reasonable doubt.

Petitioner brought this petition for review on certiorari. Neither Rule 45 nor Rep. Act No. 7309, however, provides for review by certiorari of the decisions of the Secretary of Justice. Nonetheless, in view of the importance of the question tendered, the Court resolved to treat the petition as a special civil action for certiorari under Rule 65. Petitioner questions the basis of the respondent's ruling that to be able to recover under sec. 3(a) of the law the claimant must on appeal be found to be innocent of the crimes of which he was convicted in the trial court. Through counsel he contends that the language of sec. 3(a) is clear and does not call for interpretation. The "mere fact that the claimant was imprisoned for a crime which he was subsequently acquitted of is already unjust in itself," he contends. To deny his claim because he was not declared innocent would be to say that his imprisonment for two years while his appeal was pending was justified. Petitioner argues that there is only one requirement for conviction in criminal cases and that is proof beyond reasonable doubt. If the prosecution fails to present such proof, the presumption that the accused is innocent stands and, therefore, there is no reason for requiring that he be declared innocent of the crime before he can recover compensation for his imprisonment. Petitioner's contention has no merit. It would require that every time an accused is acquitted on appeal he must be given compensation on the theory that he was "unjustly convicted" by the trial court. Such a reading of sec. 3(a) is contrary to petitioner's professed canon of construction that when the language of the statute is clear it should be given its natural meaning. It leaves out of the provision in question the qualifying word "unjustly" so that the provision would simply read: "The following may file claims for compensation before the Board: (a) any person who was accused, convicted, imprisoned but subsequently released by virtue of a judgment of acquittal." But sec. 3(a) requires that the claimant be "unjustly accused, convicted [and] imprisoned." The fact that his conviction is reversed and the accused is acquitted is not itself proof that the previous conviction was "unjust." An accused may be acquitted for a number of reasons and his conviction by the trial court may, for any of these reasons, be set aside. For example, he may be acquitted not because he is innocent of the crime charged but because of reasonable doubt, in which case he may be found civilly liable to the complainant, because while the evidence against him does not satisfy the quantum of proof required for conviction, it may nonetheless be sufficient to sustain a civil action for damages. 2 In one case the accused, an alien, was acquitted of statutory rape with homicide because of doubt as to the ages of the offended parties who consented to have sex with him. Nonetheless the accused was ordered to pay moral and exemplary damages and ordered deported.3 In such a case to pay the accused compensation for having been "unjustly convicted" by the trial court would be utterly inconsistent with his liability to the complainant. Yet to follow petitioner's theory such an accused would be entitled to compensation under sec. 3(a). The truth is that the presumption of innocence has never been intended as evidence of innocence of the accused but only to shift the burden of proof that he is guilty to the prosecution. If "accusation is not synonymous with guilt," 4 so is the presumption of innocence not a proof thereof. It is one thing to say that the accused is presumed to be innocent in order to place on the prosecution the burden of proving beyond reasonable doubt that the accused is guilty. It is quite another thing to say that he is innocent and if he is convicted that he has been "unjustly convicted." As this Court held in a case: Though we are acquitting the appellant for the crime of rape with homicide, we emphasize that we are not ruling that he is innocent or blameless. It is only the constitutional presumption of innocence and the failure of the prosecution to build an airtight case for conviction which saved him, not that the facts of unlawful conduct do not exist. 5

To say then that an accused has been "unjustly convicted" has to do with the manner of his conviction rather than with his innocence. An accused may on appeal be acquitted because he did not commit the crime, but that does not necessarily mean that he is entitled to compensation for having been the victim of an "unjust conviction." If his conviction was due to an error in the appreciation of the evidence the conviction while erroneous is not unjust. That is why it is not, on the other hand, correct to say as does respondent, that under the law liability for compensation depends entirely on the innocence of the accused. The phrase "unjustly convicted" has the same meaning as "knowingly rendering an unjust judgment" in art. 204 of the Revised Penal Code. What this Court held in In re Rafael C. Climaco 6 applies: In order that a judge may be held liable for knowingly rendering an unjust judgment, it must be shown beyond doubt that the judgment is unjust as it is contrary to law or is not supported by the evidence, and the same was made with conscious and deliberate intent to do an injustice . . . . To hold a judge liable for the rendition of manifestly unjust judgment by reason of inexcusable negligence or ignorance, it must be shown, according to Groizard, that although he has acted without malice, he failed to observe in the performance of his duty, that diligence, prudence and care which the law is entitled to exact in the rendering of any public service. Negligence and ignorance are inexcusable if they imply a manifest injustice which cannot be explained by a reasonable interpretation. Inexcusable mistake only exists in the legal concept when it implies a manifest injustice, that is to say, such injustice which cannot be explained by a reasonable interpretation, even though there is a misunderstanding or error of the law applied, yet in the contrary it results, logically and reasonably, and in a very clear and indisputable manner, in the notorious violation of the legal precept. Indeed, sec. 3(a) does not refer solely to an unjust conviction as a result of which the accused is unjustly imprisoned, but, in addition, to an unjust accusation. The accused must have been "unjustly accused, in

consequence of which he is unjustly convicted and then imprisoned. It is important to note this because if from its inception the prosecution of the accused has been wrongful, his conviction by the court is, in all probability, also wrongful. Conversely, if the prosecution is not malicious any conviction even though based on less than the required quantum of proof in criminal cases may be erroneous but not necessarily unjust. The reason is that under Rule 112, sec. 4, the question for the prosecutor in filing a case in court is not whether the accused is guilty beyond reasonable doubt but only whether "there is reasonable ground to believe that a crime has been committed and the accused is probably guilty thereof." Hence, an accusation which is based on "probable guilt" is not an unjust accusation and a conviction based on such degree of proof is not necessarily an unjust judgment but only an erroneous one. The remedy for such error is appeal. In the case at bar there is absolutely no evidence to show that petitioner's conviction by the trial court was wrongful or that it was the product of malice or gross ignorance or gross negligence. To the contrary, the court had reason to believe that petitioner and his co-accused were in league, because petitioner is the father-in-law of Wilfredo Balderrama and it was petitioner who bore the victim a grudge because of a land dispute. Not only that. Petitioner and his co accused arrived together in the hut of the victims and forced their way into it. The Court of Appeals ruled there was no conspiracy only because there was no proof that he did or say anything on the occasion. Said the appellate court. Both eyewitness testimonies fail to show the appellant Felicito Basbacio to have committed any act at all. Both fail to show Felicito Basbacio as having said anything at all. Both fail to show Felicito Basbacio as having committed anything in furtherance of a conspiracy to commit the crimes charged against the defendants. It seems to be a frail and flimsy basis on which to conclude that conspiracy existed between actual killer Wilfredo Balderrama and Felicito Basbacio to commit murder and two frustrated murders on that night of June 26, 1988. It may be asked: where was the coming together of the two defendants to an agreement to commit the crimes of murder and frustrated murder on two counts? Where was Basbacio's contribution to the commission of the said crimes? Basbacio was — as the record shows — nothing but part of the dark shadows of that night. . . . One may take issue with this ruling because precisely conspiracy may be shown by concert of action and other circumstances. Why was petitioner with his son-in-law? Why did they apparently flee together? And what about the fact that there was bad blood between petitioner and the victim Federico Boyon? These questions may no longer be passed upon in view of the acquittal of petitioner but they are relevant in evaluating his claim that he had been unjustly accused, convicted and imprisoned before he was released because of his acquittal on appeal. We hold that in view of these circumstances respondent Secretary of Justice and the Board of Claims did not commit a grave abuse of its discretion in disallowing petitioner's claim for compensation under Rep. Act No. 7309. WHEREFORE, the petition is DISMISSED. SO ORDERED. ---------------------------------------------------------------------------------------------------------------------------------------------------------------- Cynthia S. Bolos, Petitioner, - versus - Danilo T. Bolos,Respondent. G.R. No. 186400 This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking a review of the December 10, 2008 Decision[1] of the Court of Appeals (CA) in an original action for certiorari under Rule 65 entitled Danilo T. Bolos v. Hon. Lorifel Lacap Pahimna and Cynthia S. Bolos, docketed as CA-G.R. SP. No. 97872, reversing the January 16, 2007 Order of the Regional Trial Court of Pasig City, Branch 69 (RTC), declaring its decision pronouncing the nullity of marriage between petitioner and respondent final and executory. On July 10, 2003, petitioner Cynthia Bolos (Cynthia) filed a petition for the declaration of nullity of her marriage to respondent Danilo Bolos (Danilo) under Article 36 of the Family Code, docketed as JDRC No. 6211. After trial on the merits, the RTC granted the petition for annulment in a Decision, dated August 2, 2006, with the following disposition: WHEREFORE, judgment is hereby rendered declaring the marriage between petitioner CYNTHIA S. BOLOS and respondent DANILO T. BOLOS celebrated on February 14, 1980 as null and void ab initio on the ground of psychological incapacity on the part of both petitioner and respondent under Article 36 of the Family Code with all the legal consequences provided by law. Furnish the Local Civil Registrar of San Juan as well as the National Statistics Office (NSO) copy of this decision. SO ORDERED.[2]

A copy of said decision was received by Danilo on August 25, 2006. He timely filed the Notice of Appeal on September 11, 2006. In an order dated September 19, 2006, the RTC denied due course to the appeal for Danilos failure to file the required motion for reconsideration or new trial, in violation of Section 20 of the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages. On November 23, 2006, a motion to reconsider the denial of Danilos appeal was likewise denied. On January 16, 2007, the RTC issued the order declaring its August 2, 2006 decision final and executory and granting the Motion for Entry of Judgment filed by Cynthia. Not in conformity, Danilo filed with the CA a petition for certiorari under Rule 65 seeking to annul the orders of the RTC as they were rendered with grave abuse of discretion amounting to lack or in excess of jurisdiction, to wit: 1) the September 19, 2006 Order which denied due course to Danilos appeal; 2) the November 23, 2006 Order which denied the motion to reconsider the September 19, 2006 Order; and 3) the January 16, 2007 Order which declared the August 2, 2006 decision as final and executory. Danilo also prayed that he be declared psychologically capacitated to render the essential marital obligations to Cynthia, who should be declared guilty of abandoning him, the family home and their children. As earlier stated, the CA granted the petition and reversed and set aside the assailed orders of the RTC. The appellate court stated that the requirement of a motion for reconsideration as a prerequisite to appeal under A.M. No. 02-11-10-SC did not apply in this case as the marriage between Cynthia and Danilo was solemnized on February 14, 1980 before the Family Code took effect. It relied on the ruling of this Court in Enrico v. Heirs of Sps. Medinaceli[3] to the effect that the coverage [of A.M. No. 02-11-10-SC] extends only to those marriages entered into during the effectivity of the Family Code which took effect on August 3, 1988. Cynthia sought reconsideration of the ruling by filing her Manifestation with Motion for Extension of Time to File Motion for Reconsideration and Motion for Partial Reconsideration [of the Honorable Courts Decision dated December 10, 2008]. The CA, however, in its February 11, 2009 Resolution,[4] denied the motion for extension of time considering that the 15-day reglementary period to file a motion for reconsideration is non-extendible, pursuant to Section 2, Rule 40, 1997 Rules on Civil Procedure citing Habaluyas v. Japson, 142 SCRA 208. The motion for partial reconsideration was likewise denied. Hence, Cynthia interposes the present petition via Rule 45 of the Rules of Court raising the following

I S S U E S I

THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE QUESTIONED DECISION DATED DECEMBER 10, 2008 CONSIDERING THAT: A. THE PRONOUNCEMENT OF THE HONORABLE COURT IN ENRICO V. SPS. MEDINACELI IS NOT APPLICABLE TO THE INSTANT CASE CONSIDERING THAT THE FACTS AND THE ISSUE THEREIN ARE NOT SIMILAR TO THE INSTANT CASE. B. ASSUMING ARGUENDO THAT THE PRONOUNCEMENT OF THE HONORABLE COURT IS APLLICABLE TO THE INSTANT CASE, ITS RULING IN ENRICO V. SPS. MEDINACELI IS PATENTLY ERRONEOUS BECAUSE THE PHRASE UNDER THE FAMILY CODE IN A.M. NO. 02-11-10-SC PERTAINS TO THE WORD PETITIONS RATHER THAN TO THE WORD MARRIAGES. C. FROM THE FOREGOING, A.M. NO. 02-11-10-SC ENTITLED RULE ON DECLARATION OF ABSOLUTE NULLITY OF VOID MARRIAGES AND ANNULMENT OF VOIDABLE MARRIAGES IS APPLICABLE TO MARRIAGES SOLEMNIZED BEFORE THE EFFECTIVITY OF THE FAMILY CODE. HENCE, A MOTION FOR RECONSIDERATION IS A PRECONDITION FOR AN APPEAL BY HEREIN RESPONDENT. D. CONSIDERING THAT HEREIN RESPONDENT REFUSED TO COMPLY WITH A PRECONDITION FOR APPEAL, A RELAXATION OF THE RULES ON APPEAL IS NOT PROPER IN HIS CASE.

II THE COURT OF APPEALS GRAVELY ERRED IN ISSUING THE QUESTIONED RESOLUTION DATED FEBRUARY 11, 2009 CONSIDERING THE FOREGOING AND THE FACTUAL CIRCUMSTANCES OF THIS CASE.

III

THE TENETS OF JUSTICE AND FAIR PLAY, THE NOVELTY AND IMPORTANCE OF THE ISSUE AND THE SPECIAL CIRCUMSTANCES IN THIS CASE JUSTIFY AND WARRANT A LIBERAL VIEW OF THE RULES IN FAVOR OF THE PETITIONER. MOREOVER, THE INSTANT PETITION IS MERITORIOUS AND NOT INTENDED FOR DELAY.[5] From the arguments advanced by Cynthia, the principal question to be resolved is whether or not A.M. No. 02-11-10-SC entitled Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages, is applicable to the case at bench. Petitioner argues that A.M. No. 02-11-10-SC is also applicable to marriages solemnized before the effectivity of the Family Code. According to Cynthia, the CA erroneously anchored its decision to an obiter dictum in the aforecited Enrico case, which did not even involve a marriage solemnized before the effectivity of the Family Code. She added that, even assuming arguendo that the pronouncement in the said case constituted a decision on its merits, still the same cannot be applied because of the substantial disparity in the factual milieu of the Enrico case from this case. In the said case, both the marriages sought to be declared null were solemnized, and the action for declaration of nullity was filed, after the effectivity of both the Family Code in 1988 and of A.M. No. 02-11-10-SC in 2003. In this case, the marriage was solemnized before the effectivity of the Family Code and A.M. No. 02-11-10-SC while the action was filed and decided after the effectivity of both. Danilo, in his Comment,[6] counters that A.M. No. 02-11-10-SC is not applicable because his marriage with Cynthia was solemnized on February 14, 1980, years before its effectivity. He further stresses the meritorious nature of his appeal from the decision of the RTC declaring their marriage as null and void due to his purported psychological incapacity and citing the mere failure of the parties who were supposedly remiss, but not incapacitated, to render marital obligations as required under Article 36 of the Family Code. The Court finds the petition devoid of merit. Petitioner insists that A.M. No. 02-11-10-SC governs this case. Her stance is unavailing. The Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages as contained in A.M. No. 02-11-10-SC which the Court promulgated on March 15, 2003, is explicit in its scope. Section 1 of the Rule, in fact, reads: Section 1. Scope This Rule shall govern petitions for declaration of absolute nullity of void marriages and annulment of voidable marriages under the Family Code of the Philippines. The Rules of Court shall apply suppletorily. The categorical language of A.M. No. 02-11-10-SC leaves no room for doubt. The coverage extends only to those marriages entered into during the effectivity of the Family Code which took effect on August 3, 1988.[7] The rule sets a demarcation line between marriages covered by the Family Code and those solemnized under the Civil Code.[8] The Court finds Itself unable to subscribe to petitioners interpretation that the phrase under the Family Code in A.M. No. 02-11-10-SC refers to the word petitions rather than to the word marriages. A cardinal rule in statutory construction is that when the law is clear and free from any doubt or ambiguity, there is no room for construction or interpretation. There is only room for application.[9] As the statute is clear, plain, and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This is what is known as the plain-meaning rule or verba legis. It is expressed in the maxim, index animi sermo, or speech is the index of intention. Furthermore, there is the maxim verba legis non est recedendum, or from the words of a statute there should be no departure.[10] There is no basis for petitioners assertion either that the tenets of substantial justice, the novelty and importance of the issue and the meritorious nature of this case warrant a relaxation of the Rules in her favor. Time and again the Court has stressed that the rules of procedure must be faithfully complied with and should not be discarded with the mere expediency of claiming substantial merit.[11] As a corollary, rules prescribing the time for doing specific acts or for taking certain proceedings are considered absolutely indispensable to prevent needless delays and to orderly and promptly discharge judicial business. By their very nature, these rules are regarded as mandatory.[12] The appellate court was correct in denying petitioners motion for extension of time to file a motion for reconsideration considering that the reglementary period for filing the said motion for reconsideration is non-extendible. As pronounced in Apex Mining Co., Inc. v. Commissioner of Internal Revenue, [13]

The rule is and has been that the period for filing a motion for reconsideration is non-extendible. The Court has made this clear as early as 1986 in Habaluyas Enterprises vs. Japzon. Since then, the Court has consistently and strictly adhered thereto. Given the above, we rule without hesitation that the appellate courts denial of petitioners motion for reconsideration is justified, precisely because petitioners earlier motion for extension of time did not suspend/toll the running of the 15-day reglementary period for filing a motion for reconsideration. Under the circumstances, the CA decision has already attained finality when petitioner filed its motion for reconsideration. It follows that the same decision was already beyond the review jurisdiction of this Court. In fine, the CA committed no reversible error in setting aside the RTC decision which denied due course to respondents appeal and denying petitioners motion for extension of time to file a motion for reconsideration. Appeal is an essential part of our judicial system. Its purpose is to bring up for review a final judgment of the lower court. The courts should, thus, proceed with caution so as not to deprive a party of his right to appeal.[14] In the recent case of Almelor v. RTC of Las Pinas City, Br. 254,[15] the Court reiterated: While the right to appeal is a statutory, not a natural right, nonetheless it is an essential part of our judicial system and courts should proceed with caution so as not to deprive a party of the right to appeal, but rather, ensure that every party-litigant has the amplest opportunity for the proper and just disposition of his cause, free from the constraints of technicalities. In the case at bench, the respondent should be given the fullest opportunity to establish the merits of his appeal considering that what is at stake is the sacrosanct institution of marriage. No less than the 1987 Constitution recognizes marriage as an inviolable social institution. This constitutional policy is echoed in our Family Code. Article 1 thereof emphasizes its permanence and inviolability, thus: Article 1. Marriage is a special contract of permanent union between a man and a woman entered into in accordance with law for the establishment of conjugal and family life. It is the foundation of the family and an inviolable social institution whose nature, consequences, and incidents are governed by law and not subject to stipulation, except that marriage settlements may fix the property relations during the marriage within the limits provided by this Code. This Court is not unmindful of the constitutional policy to protect and strengthen the family as the basic autonomous social institution and marriage as the foundation of the family.[16] Our family law is based on the policy that marriage is not a mere contract, but a social institution in which the State is vitally interested. The State finds no stronger anchor than on good, solid and happy families. The break up of families weakens our social and moral fabric and, hence, their preservation is not the concern alone of the family members.[17] WHEREFORE, the petition is DENIED. SO ORDERED. ---------------------------------------------------------------------------------------------------------------------------------------------------------------- D. Statute as a whole

G.R. No. 143867 August 22, 2001 PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC., petitioner, vs. CITY OF DAVAO and ADELAIDA B. BARCELONA, in her capacity as the City Treasurer of Davao, respondents. This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure of the resolution, 1 dated June 23, 2000, of the Regional Trial Court, Branch 13, Davao City, affirming the tax assessment of petitioner and the denial of its claim for tax refund by the City Treasurer of Davao. The facts are as follows: On January 1999, petitioner Philippine Long Distance Telephone Co., Inc. (PLDT) applied for a Mayor's Permit to operate its Davao Metro Exchange. Respondent City of Davao withheld action on the application pending payment by petitioner of the local franchise tax in the amount of P3,681,985.72 for the first to the fourth quarter of 1999. 2 In a letter dated May 31, 1999, 3 petitioner protested the assessment of the local franchise tax and requested a refund of the franchise tax paid by it for the year 1997 and the first to the third quarters of 1998. Petitioner contended that it was exempt from the payment of franchise tax based on an opinion of the Bureau of Local Government Finance (BLGF), dated June 2, 1998, which reads as follows: PLDT: Section 12 of RA 7082 provides as follows: "SECTION 12. The grantee, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings, and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter

may be required by law to pay. In addition thereto, the grantee, its successors or assigns shall pay a franchise tax equivalent to three percent (3%) of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or assigns, and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof . . ." It appears that RA 7082 further amending Act No. 3436 which granted to PLDT a franchise to install, operate and maintain a telephone system throughout the Philippine Islands was approved on August 3, 1991. Section 12 of said franchise, likewise, contains the "in lieu of all taxes" proviso. In this connection, Section 23 of RA 7925, quoted hereunder, which was approved on March 1, 1995, provides for the equality of treatment in the telecommunications industry: "SECTION 23. Equality of Treatment in the Telecommunications Industry. — Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously granted telecommunications franchise and shall be accorded immediately and unconditionally to the grantees of such franchises: Provided, however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise." (Italics supplied.) On the basis of the aforequoted Section 23 of RA 7925, PLDT as a telecommunications franchise holder becomes automatically covered by the tax exemption provisions of RA 7925, which took effect on March 16, 1995. Accordingly, PLDT shall be exempt from the payment of franchise and business taxes imposable by LGUs under Sections 137 and 143 (sic), respectively, of the LGC, upon the effectivity of RA 7925 on March 16, 1995. However, PLDT shall be liable to pay the franchise and business taxes on its gross receipts realized from January 1, 1992 up to March 15, 1995, during which period PLDT was not enjoying the "most favored clause" proviso of RA 7025 (sic).4

In a letter dated September 27, 1999, respondent Adelaida B. Barcelona, City Treasurer of Davao, denied the protest and claim for tax refund of petitioner,5 citing the legal opinion of the City Legal Officer of Davao and Art. 10, §1 of Ordinance No. 230, Series of 1991, as amended by Ordinance No. 519, Series of 1992, which provides: Notwithstanding any exemption granted by any law or other special law, there is hereby imposed a tax on businesses enjoying a franchise, at a rate of Seventy-five percent (75%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the income or receipts realized within the territorial jurisdiction of Davao City.6

Petitioner received respondent City Treasurer's order of denial on October 1, 1999. On November 3, 1999, it filed a petition in the Regional Trial Court of Davao seeking a reversal of respondent City Treasurer's denial of petitioner's protest and the refund of the franchise tax paid by it for the year 1998 in the amount of P2,580,829.23. The petition was filed pursuant to §§195 and 196 of the Local Government Code (R.A. No. 7160). No claim for refund of franchise taxes paid in 1997 was made as the same had already prescribed under §196 of the LGC, which provides that claims for the refund of taxes paid under it must be made within two (2) years from the date of payment of such taxes.7

The trial court denied petitioner's appeal and affirmed the City Treasurer's decision. It ruled that the LGC withdrew all tax exemptions previously enjoyed by all persons and authorized local government units to impose a tax on businesses enjoying a franchise notwithstanding the grant of tax exemption to them. The trial court likewise denied petitioner's claim for exemption under R.A. No. 7925 for the following reasons: (1) it is clear from the wording of §193 of the Local Government Code that Congress did not intend to exempt any franchise holder from the payment of local franchise and business taxes; (2) the opinion of the Executive Director of the Bureau of Local Government Finance to the contrary is not binding on respondents; and (3) petitioner failed to present any proof that Globe and Smart were enjoying local franchise and business tax exemptions. Hence, this petition for review based on the following grounds: I. THE LOWER COURT ERRED IN APPLYING SECTION 137 OF THE LOCAL GOVERNMENT CODE, WHICH ALLOWS A CITY TO IMPOSE A FRANCHISE TAX, AND SECTION 193 THEREOF, WHICH PROVIDES FOR WITHDRAWAL OF TAX EXEMPTION PRIVILEGES. II. THE LOWER COURT ERRED IN NOT HOLDING THAT UNDER PETITIONER'S FRANCHISE, AS IMPLICITLY AMENDED AND EXPANDED BY SECTION 23 OF REPUBLIC ACT NO. 7925 (PUBLIC TELECOMMUNICATIONS POLICY ACT), TAKING INTO ACCOUNT THE FRANCHISES OF GLOBE TELECOM, INC. AND SMART COMMUNICATIONS, INC., WHICH WERE ENACTED SUBSEQUENT TO THE LOCAL GOVERNMENT CODE, NO FRANCHISE AND BUSINESS TAXES MAY BE IMPOSED ON PETITIONER BY RESPONDENT CITY. III. THE LOWER COURT ERRED IN NOT GIVING WEIGHT TO THE RULING OF THE BUREAU OF LOCAL GOVERNMENT FINANCE THAT PETITIONER IS EXEMPT FROM THE PAYMENT OF FRANCHISE AND BUSINESS TAXES, AMONG OTHERS, IMPOSABLE BY LOCAL GOVERNMENT UNITS UNDER THE LOCAL GOVERNMENT CODE. First. The LGC, which took effect on January 1, 1992, provides: SECTION 137. Franchise Tax. — Notwithstanding any exemption granted by any law or other special law, the province may impose a tax on businesses enjoying a franchise, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction.

In the case of a newly started business, the tax shall not exceed one-twentieth (1/20) of one percent (1%) of the capital investment. In the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or any fraction thereof, as provided herein.8

SECTION 193. Withdrawal of Tax Exemption Privileges. — Unless otherwise provided in this Code, tax exemptions or incentives granted to, or presently enjoyed by all persons, whether natural or juridical, including government-owned or -controlled corporations, except local water districts, cooperatives duly registered under R.A. 6938, non-stock and non-profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this Code. The trial court held that, under these provisions, all exemptions granted to all persons, whether natural and juridical, including those which in the future might be granted, are withdrawn unless the law granting the exemption expressly states that the exemption also applies to local taxes. We disagree. Sec. 137 does not state that it covers future exemptions. In Philippine Airlines, Inc. v. Edu,9 where a provision of the Tax Code enacted on June 27, 1968 (R.A. 5431) withdrew the exemption enjoyed by PAL, it was held that a subsequent amendment of PAL's franchise, exempting it from all other taxes except that imposed by its franchise, again entitled PAL to exemption from the date of the enactment of such amendment. The Tax Code provision withdrawing the tax exemption was not construed as prohibiting future grants of exemptions from all taxes. Indeed, the grant of taxing powers to local government units under the Constitution and the LGC does not affect the power of Congress to grant exemptions to certain persons, pursuant to a declared national policy. The legal effect of the constitutional grant to local governments simply means that in interpreting statutory provisions on municipal taxing powers, doubts must be resolved in favor of municipal corporations.10

The question, therefore, is whether, after the withdrawal of its exemption by virtue of §137 of the LGC, petitioner has again become entitled to exemption from local franchise tax. Petitioner answers in the affirmative and points to §23 of R.A. No. 7925, in relation to the franchises of Globe Telecom (Globe) and Smart Communications, Inc. (Smart), which allegedly grant the latter exemption from local franchise taxes. To begin with, tax exemptions are highly disfavored. The reason for this was explained by this Court in Asiatic Petroleum Co. v. Llanes,11 in which it was held: . . . Exemptions from taxation are highly disfavored, so much so that they may almost be said to be odious to the law. He who claims an exemption must be able to point to some positive provision of law creating the right. . . As was said by the Supreme Court of Tennessee in Memphis vs. U. & P. Bank (91 Tenn., 546, 550), "The right of taxation is inherent in the State. It is a prerogative essential to the perpetuity of the government; and he who claims an exemption from the common burden must justify his claim by the clearest grant of organic or statute law." Other utterances equally or more emphatic come readily to hand from the highest authority. In Ohio Life Ins. and Trust Co. vs. Debolt (16 Howard, 416), it was said by Chief Justice Taney, that the right of taxation will not be held to have been surrendered, "unless the intention to surrender is manifested by words too plain to be mistaken." In the case of the Delaware Railroad Tax (18 Wallace, 206, 226), the Supreme Court of the United States said that the surrender, when claimed, must be shown by clear, unambiguous language, which will admit of no reasonable construction consistent with the reservation of the power. If a doubt arises as to the intent of the legislature, that doubt must be solved in favor of the State. In Erie Railway Company vs. Commonwealth of Pennsylvania (21 Wallace, 492, 499), Mr. Justice Hunt, speaking of exemptions, observed that a State cannot strip itself of the most essential power of taxation by doubtful words. "It cannot, by ambiguous language, be deprived of this highest attribute of sovereignty." In Tennessee vs. Whitworth (117 U.S., 129, 136), it was said: "In all cases of this kind the question is as to the intent of the legislature, the presumption always being against any surrender of the taxing power." In Farrington vs. Tennessee and County of Shelby (95 U.S., 679, 686), Mr. Justice Swayne said: ". . . When exemption is claimed, it must be shown indubitably to exist. At the outset, every presumption is against it. A well-founded doubt is fatal to the claim. It is only when the terms of the concession are too explicit to admit fairly of any other construction that the proposition can be supported." The tax exemption must be expressed in the statute in clear language that leaves no doubt of the intention of the legislature to grant such exemption. And, even if it is granted, the exemption must be interpreted in strictissimi juris against the taxpayer and liberally in favor of the taxing authority.12

In the present case, petitioner justifies its claim of tax exemption by strained inferences. First, it cites R.A. No. 7925, otherwise known as the Public Telecommunications Policy Act of the Philippines, §23 of which reads: SECTION 23. Equality of Treatment in the Telecommunications Industry. — Any advantage, favor, privilege, exemption, or immunity granted under existing franchises, or may hereafter be granted, shall ipso facto become part of previously granted telecommunications franchises and shall be accorded immediately and unconditionally to the grantees of such franchises: Provided, however, That the foregoing shall neither apply to nor affect provisions of telecommunications franchises concerning territory covered by the franchise, the life span of the franchise, or the type of service authorized by the franchise. Petitioner then claims that Smart and Globe enjoy exemption from the payment of the franchise tax by virtue of their legislative franchises per opinion of the Bureau of Local Government Finance of the Department of Finance. Finally, it argues that because Smart and Globe are exempt from the franchise tax, it follows that it must likewise be

exempt from the tax being collected by the City of Davao because the grant of tax exemption to Smart and Globe ipso facto extended the same exemption to it. The acceptance of petitioner's theory would result in absurd consequences. To illustrate: In its franchise, Globe is required to pay a franchise tax of only one and one-half percentum (1½%) of all gross receipts from its transactions while Smart is required to pay a tax of three percent (3%) on all gross receipts from business transacted. Petitioner's theory would require that, to level the playing field, any "advantage, favor, privilege, exemption, or immunity" granted to Globe must be extended to all telecommunications companies, including Smart. If, later, Congress again grants a franchise to another telecommunications company imposing, say, one percent (1%) franchise tax, then all other telecommunications franchises will have to be adjusted to "level the playing field" so to speak. This could not have been the intent of Congress in enacting §23 of Rep. Act 7925. Petitioner's theory will leave the Government with the burden of having to keep track of all granted telecommunications franchises, lest some companies be treated unequally. It is different if Congress enacts a law specifically granting uniform advantages, favor, privilege, exemption, or immunity to all telecommunications entities. The fact is that the term "exemption" in §23 is too general. A cardinal rule in statutory construction is that legislative intent must be ascertained from a consideration of the statute as a whole and not merely of a particular provision. For, taken in the abstract, a word or phrase might easily convey a meaning which is different from the one actually intended. A general provision may actually have a limited application if read together with other provisions.13 Hence, a consideration of the law itself in its entirety and the proceedings of both Houses of Congress is in order.14

Art. I of Rep. Act No. 7925 contains the general provisions, stating that the Act shall be known as the Public Telecommunications Policy Act of the Philippines, and a definition of terms.15 Art. II provides for its policies and objectives, which is to foster the improvement and expansion of telecommunications services in the country through: (1) the construction of telecommunications infrastructure and interconnection facilities, having in mind the efficient use of the radio frequency spectrum and extension of basic services to areas not yet served; (2) fair, just, and reasonable rates and tariff charges; (3) stable, transparent, and fair administrative processes; (4) reliance on private enterprise for direct provision of telecommunications services; (5) dispersal of ownership of telecommunications entities in compliance with the constitutional mandate to democratize the ownership of public utilities; (6) encouragement of the establishment of interconnection with other countries to provide access to international communications highways and development of a competitive export-oriented domestic telecommunications manufacturing industry; and (7) development of human resources skills and capabilities to sustain the growth and development of telecommunications.16

Art. III provides for its administration. The operational and administrative functions are delegated to the National Telecommunications Commission (NTC), while policy-making, research, and negotiations in international telecommunications matters are left with the Department of Transportation and Communications.17

Art. IV classifies the categories of telecommunications entities as: Local Exchange Operator, Inter-Exchange Carrier, International Carrier, Value-Added Service Provider, Mobile Radio Services, and Radio Paging Services.18 Art. V provides for the use of other services and facilities, such as customer premises equipment, which may be used within the premises of telecommunications subscribers subject only to the requirement that it is type-approved by the NTC, and radio frequency spectrum, the assignment of which shall be subject to periodic review.19

Art. VI, entitled Franchise, Rates and Revenue Determination, provides for the requirement to obtain a franchise from Congress and a Certificate of Public Convenience and Necessity from the NTC before a telecommunications entity can begin its operations. It also provides for the NTC's residual power to regulate the rates or tariffs when ruinous competition results or when a monopoly or a cartel or combination in restraint of free competition exists and the rates or tariffs are distorted or unable to function freely and the public is adversely affected. There is also a provision relating to revenue sharing arrangements between inter-connecting carriers.20

Art. VII provides for the rights of telecommunications users.21

Art. VIII, entitled Telecommunications Development, where §23 is found, provides for public ownership of telecommunications entities, privatization of existing facilities, and the equality of treatment provision.22

Art. IX contains the Final Provisions.23

R.A. No. 7925 is thus a legislative enactment designed to set the national policy on telecommunications and provide the structures to implement it to keep up with the technological advances in the industry and the needs of the public. The thrust of the law is to promote gradually the deregulation of the entry, pricing, and operations of all public telecommunications entities and thus promote a level playing field in the telecommunications industry.24 There is nothing in the language of §23 nor in the proceedings of both the House of Representatives and the Senate in enacting R.A. No. 7925 which shows that it contemplates the grant of tax exemptions to all telecommunications entities, including those whose exemptions had been withdrawn by the LGC. What this Court said in Asiatic Petroleum Co. v. Llanes25 applies mutatis mutandis to this case: "When exemption is claimed, it must be shown indubitably to exist. At the outset, every presumption is against it. A well-founded doubt is fatal to the claim. It is only when the terms of the concession are too explicit to admit fairly of any other construction that the proposition can be supported." In this case, the word "exemption" in §23 of R.A. No. 7925 could contemplate exemption from certain regulatory or reporting requirements, bearing in mind the policy of the law. It is noteworthy that, in holding Smart and Globe exempt from local taxes, the BLGF did not base its opinion on

§23 but on the fact that the franchises granted to them after the effectivity of the LGC exempted them from the payment of local franchise and business taxes. Second. In the case of petitioner, the BLGF opined that §23 of R.A. No. 7925 amended the franchise of petitioner and in effect restored its exemptions from local taxes. Petitioner contends that courts should not set aside conclusions reached by the BLGF because its function is precisely the study of local tax problems and it has necessarily developed an expertise on the subject. To be sure, the BLGF is not an administrative agency whose findings on questions of fact are given weight and deference in the courts. The authorities cited by petitioner pertain to the Court of Tax Appeals,26 a highly specialized court which performs judicial functions as it was created for the review of tax cases.27 In contrast, the BLGF was created merely to provide consultative services and technical assistance to local governments and the general public on local taxation, real property assessment, and other related matters, among others.28 The question raised by petitioner is a legal question, to wit, the interpretation of §23 of R.A. No. 7925. There is, therefore, no basis for claiming expertise for the BLGF that administrative agencies are said to possess in their respective fields. Petitioner likewise argues that the BLGF enjoys the presumption of regularity in the performance of its duty. It does enjoy this presumption, but this has nothing to do with the question in this case. This case does not concern the regularity of performance of the BLGF in the exercise of its duties, but the correctness of its interpretation of a provision of law. In sum, it does not appear that, in approving §23 of R.A. No. 7925, Congress intended it to operate as a blanket tax exemption to all telecommunications entities. Applying the rule of strict construction of laws granting tax exemptions and the rule that doubts should be resolved in favor of municipal corporations in interpreting statutory provisions on municipal taxing powers, we hold that §23 of R.A. No. 7925 cannot be considered as having amended petitioner's franchise so as to entitle it to exemption from the imposition of local franchise taxes. Consequently, we hold that petitioner is liable to pay local franchise taxes in the amount of P3,681,985.72 for the period covering the first to the fourth quarter of 1999 and that it is not entitled to a refund of taxes paid by it for the period covering the first to the third quarter of 1998. WHEREFORE, the petition for review on certiorari is DENIED and the decision of the Regional Trial Court, Branch 13, Davao City is AFFIRMED. SO ORDERED.

G.R. No. 109835 November 22, 1993 JMM PROMOTIONS & MANAGEMENT, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and ULPIANO L. DE LOS SANTOS, respondent. The sole issue submitted in this case is the validity of the order of respondent National Labor Relations Commission dated October 30, 1992, dismissing the petitioner's appeal from a decision of the Philippine Overseas Employment Administration on the ground of failure to post the required appeal bond. 1

The respondent cited the second paragraph of Article 223 of the Labor Code as amended, providing that: In the case of a judgment involving a monetary award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in an amount equivalent to the monetary award in the judgment appealed from. and Rule VI, Section 6 of the new Rules of Procedure of the NLRC, as amended, reading as follows: Sec. 6. Bond — In case the decision of a Labor Arbiter involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission or the Supreme Court in an amount equivalent to the monetary award. The petitioner contends that the NLRC committed grave abuse of discretion in applying these rules to decisions rendered by the POEA. It insists that the appeal bond is not necessary in the case of licensed recruiters for overseas employment because they are already required under Section 4, Rule II, Book II of the POEA Rules not only to pay a license fee of P30,000 but also to post a cash bond of P100,000 and a surety bond of P50,000, thus: Upon approval of the application, the applicant shall pay a license fee of P30,000. It shall also post a cash bond of P100,000 and surety bond of P50,000 from a bonding company acceptable to the Administration and duly accredited by the Insurance Commission. The bonds shall answer for all valid and legal claims arising from violations of the conditions for the grant and use of the license, and/or accreditation and contracts of employment. The bonds shall likewise guarantee compliance with the provisions of the Code and its implementing rules and regulations relating to recruitment and placement, the Rules of the Administration and relevant issuances of the Department and all liabilities which the Administration may impose. The surety bonds shall include the condition that the notice to the principal is notice to the surety and that any judgment against the principal in connection with matters falling under POEA's jurisdiction shall be binding and conclusive on the surety. The surety bonds shall be co-terminus with the validity period of license. (Emphasis supplied)

In addition, the petitioner claims it has placed in escrow the sum of P200,000 with the Philippine National Bank in compliance with Section 17, Rule II, Book II of the same Rule, "to primarily answer for valid and legal claims of recruited workers as a result of recruitment violations or money claims." Required to comment, the Solicitor General sustains the appeal bond requirement but suggest that the rules cited by the NLRC are applicable only to decisions of the Labor Arbiters and not of the POEA. Appeals from decisions of the POEA, he says, are governed by the following provisions of Rule V, Book VII of the POEA Rules: Sec. 5. Requisites for Perfection of Appeal. The appeal shall be filed within the reglementary period as provided in Section 1 of this Rule; shall be under oath with proof of payment of the required appeal fee and the posting of a cash or surety bond as provided in Section 6 of this Rule; shall be accompanied by a memorandum of appeal which shall state the grounds relied upon and the arguments in support thereof; the relief prayed for; and a statement of the date when the appellant received the appealed decision and/or award and proof of service on the other party of such appeal. A mere notice of appeal without complying with the other requisites aforestated shall not stop the running of the period for perfecting an appeal. Sec. 6. Bond. In case the decision of the Administration involves a monetary award, an appeal by the employer shall be perfected only upon the posting of a cash or surety bond issued by a reputable bonding company duly accredited by the Commission in an amount equivalent to the monetary award. (Emphasis supplied) The question is, having posted the total bond of P150,000 and placed in escrow the amount of P200,000 as required by the POEA Rules, was the petitioner still required to post an appeal bond to perfect its appeal from a decision of the POEA to the NLRC? It was. The POEA Rules are clear. A reading thereof readily shows that in addition to the cash and surety bonds and the escrow money, an appeal bond in an amount equivalent to the monetary award is required to perfect an appeal from a decision of the POEA. Obviously, the appeal bond is intended to further insure the payment of the monetary award in favor of the employee if it is eventually affirmed on appeal to the NLRC. It is true that the cash and surety bonds and the money placed in escrow are supposed to guarantee the payment of all valid and legal claims against the employer, but these claims are not limited to monetary awards to employees whose contracts of employment have been violated. The POEA can go against these bonds also for violations by the recruiter of the conditions of its license, the provisions of the Labor Code and its implementing rules, E.O. 247 (reorganizing POEA) and the POEA Rules, as well as the settlement of other liabilities the recruiter may incur. As for the escrow agreement, it was presumably intended to provide for a standing fund, as it were, to be used only as a last resort and not to be reduced with the enforcement against it of every claim of recruited workers that may be adjudged against the employer. This amount may not even be enough to cover such claims and, even if it could initially, may eventually be exhausted after satisfying other subsequent claims. As it happens, the decision sought to be appealed grants a monetary award of about P170,000 to the dismissed employee, the herein private respondent. The standby guarantees required by the POEA Rules would be depleted if this award were to be enforced not against the appeal bond but against the bonds and the escrow money, making them inadequate for the satisfaction of the other obligations the recruiter may incur. Indeed, it is possible for the monetary award in favor of the employee to exceed the amount of P350,000, which is the sum of the bonds and escrow money required of the recruiter. It is true that these standby guarantees are not imposed on local employers, as the petitioner observes, but there is a simple explanation for this distinction. Overseas recruiters are subject to more stringent requirement because of the special risks to which our workers abroad are subjected by their foreign employers, against whom there is usually no direct or effective recourse. The overseas recruiter is solidarily liable with a foreign employer. The bonds and the escrow money are intended to insure more care on the part of the local agent in its choice of the foreign principal to whom our overseas workers are to be sent. It is a principle of legal hermeneutics that in interpreting a statute (or a set of rules as in this case), care should be taken that every part thereof be given effect, on the theory that it was enacted as an integrated measure and not as a hodge-podge of conflicting provisions. Ut res magis valeat quam pereat. 2 Under the petitioner's interpretation, the appeal bond required by Section 6 of the aforementioned POEA Rule should be disregarded because of the earlier bonds and escrow money it has posted. The petitioner would in effect nullify Section 6 as a superfluity but we do not see any such redundancy; on the contrary, we find that Section 6 complements Section 4 and Section 17. The rule is that a construction that would render a provision inoperative should be avoided; instead, apparently inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious whole. Accordingly, we hold that in addition to the monetary obligations of the overseas recruiter prescribed in Section 4, Rule II, Book II of the POEA Rules and the escrow agreement under Section 17 of the same Rule, it is necessary to post the appeal bond required under Section 6, Rule V, Book VII of the POEA Rules, as a condition for perfecting an appeal from a decision of the POEA.

Every intendment of the law must be interpreted in favor of the working class, conformably to the mandate of the Constitution. By sustaining rather than annulling the appeal bond as a further protection to the claimant employee, this Court affirms once again its commitment to the interest of labor. WHEREFORE, the petition is DISMISSED, with costs against the petitioner. It is so ordered.

G.R. No. 75222 July 18, 1991 RADIOLA-TOSHIBA PHILIPPINES, INC., through its assignee-in-insolvency VICENTE J. CUNA, petitioner, vs. THE INTERMEDIATE APPELLATE COURT, HON. LEONARDO I. CRUZ, as Judge of the Regional Trial Court of Angeles City, Branch No. LVI, EMILIO C. PATINO, as assignee-in-insolvency of CARLOS and TERESITA GATMAYTAN, SHERIFF OF ANGELES CITY, REGISTER OF DEEDS OF ANGELES CITY, SANYO MARKETING CORPORATION, S & T ENTERPRISES INC., REFRIGERATION INDUSTRIES INC., and DELTA MOTOR CORPORATION, respondents. This is a petition for certiorari of the March 31, 1986 Decision of the then Intermediate Appellate Court * in A.C-G.R. SP No. 04160 entitled "Radiola-Toshiba Philippines, Inc. vs. Hon. Leonardo I. Cruz, et al." denying the petition for certiorari and mandamus; and its Resolution of July 1, 1986 denying the motion for reconsideration. The antecedent facts of this case, as found by the then Intermediate Appellate Court, are as follows: On July 2, 1980, three creditors filed a petition for the involuntary insolvency of Carlos Gatmaytan and Teresita Gatmaytan, the private respondents herein, the case docketed as Special Proceeding No. 1548 of the then Court of First Instance (now Regional Trial Court) of Pampanga and Angeles City. On July 9, 1980, the respondent court issued an order taking cognizance of the said petition and stating inter alia that: . . . the Court forbids the payment of any debts, and the delivery of any property owning and belonging to said respondents-debtors from other persons, or, to any other persons for the use and benefit of the same respondents-debtors and/or the transfer of any property by and for the said respondents-debtors to another, upon petitioners' putting up a bond by way of certified and reputable sureties. (Annex 1, Comment). Counsel for the petitioners-creditors informed respondent sheriff Angeles City of the aforesaid order (Annex 2, Ibid) and on March 26, 1981, also communicated with counsel for the petitioner herein regarding same order, apprising the latter that "the personal and real property which have been levied upon and/or attached should be preserved till the final determination of the petition aforementioned." (Annex 3, Ibid). On April 12, 1983, petitioners-creditors filed second urgent motion for issuance of insolvency order and resolution of the case, alleging among other things, that in November, 1982, they filed an urgent motion to issue insolvency order; on December 2, 1982, they presented a motion to prohibit the city sheriff of Angeles City from disposing the personal and real properties of the insolvent debtors, Carlos Gatmaytan and Teresita Gatmaytan; on January 18, 1983, they (sic) appealed in the Bulletin Today issue of even date a news item to the effect that Radiola-Toshiba Phil. Inc. has already shut down its factory, sometime in March 1983, through their representative, they caused to be investigated the real properties in the names of Carlos Gatmaytan and Teresita Gatmaytan and they were surprised to find out that some of the aforesaid properties were already transferred to Radiola-Toshiba Phil. Inc.; and that in view of such development, it is their submission that without an insolvency order and a resolution of the case which was ripe for resolution as early as March 3, 1982, the rights and interest of petitioners-creditors would be injured and jeopardized. (Annex "C"). On April 15, 1983, petitioner filed an opposition to the said motion vis-a-vis the prayer that the insolvency order (which has not been rendered yet by the court) be annotated on the transfer certificates of title already issued in its name (Annex "D"). On April 22, 1983, judgment was rendered declaring the insolvency of respondents-debtors Carlos Gatmaytan and Teresita Gatmaytan. On April 28, 1983, petitioner filed a supplemental opposition to the same second urgent motion and motion to direct respondent sheriff to issue a final certificate of sale for the properties covered by TCT Nos. 18905 and 40430 in its favor (Annex "E"). On February 3, 1984, acting upon petitioner's motion claiming that ownership of certain real properties of the insolvents had passed to it by virtue of foreclosure proceedings conducted in Civil Case No. 35946 of the former Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, which properties were not redeemed within the period of redemption, respondent court issued an order disposing, thus: WHEREFORE, the Court hereby, confirms the election of Mr. Emilio C. Patino, as assignee of all the registered claimants in this case, and, in consequence thereof, the said assignee is hereby directed to post a bond in the amount of P30,000.00 and to take his oath thereafter so as to be able to perform his duties and discharge his functions, as such. The Court, likewise, sets the meeting of all the creditors with the attendance, of course, of the assignee, on March 9, 1984, at 8:30., as by that time the proposals, which the respective representatives of the parties-claimants desire to clear with their principals, shall have already been reported.

The assignee shall see to it that the properties of the insolvents which are now in the actual or constructive custody and management of the receiver previously appointed by the Court on petitioners' and claimants' proposals be placed under this actual or constructive custody and management, such as he is able to do so, as the Court hereby dissolves the receivership previously authorized, it having become a superfluity. (Annex "F"). On May 18, 1984, the Regional Trial Court, Branch CLII, Pasig, Metro Manila, in Civil Case No. 35946, issued an order directing respondent Sheriff of Angeles City, or whoever is acting in his behalf, to issue within seven (7) days from notice thereof a final deed of sale over the two (2) parcels of land covered by Transfer Certificates of Titles Nos. 18905 and 40430 in favor of petitioner. (Annex "G"). In said Civil Case No. 35946, a case for collection of sum of money covering the proceeds of television sets and other appliances, the then Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, issued a writ of preliminary attachment on February 15, 1980 upon application of the petitioner, as plaintiff, which put up a bond of P350,000.00. On March 4, 1980, 3:00 P.M., levy on attachment was done in favor of petitioner on the real properties registered in the names of spouses Carlos Gatmaytan and Teresita Gatmaytan under TCT Nos. 18905 and 40430 of the Registry of Deeds of Angeles City, per Entry No. 7216 on said titles. (Annex "A" and "B"). On December 10, 1980, a decision was rendered in favor of petitioner, ordering private respondents and their co-defendant Peoples Appliance Center, Inc. to pay petitioner, jointly and severally, the sum of P721,825.91 plus interest thereon of 14% per annum from October 12, 1979 until fully paid; P20,000.00, for and attorney's fees; and the costs of suit (Annex "5", Comment). After the said decision in the aforementioned Civil Case No. 35946 became final and executory, a writ of execution for the satisfaction thereof issued on March 18, 1981; and on May 4, 1981, respondent sheriff of Angeles City sold at auction sale the attached properties covered by TCT Nos. 18905 and 40430, to petitioner as the highest bidder, and the certificate of sale was accordingly issued in its favor. On September 21, 1982, the court ordered the consolidation of ownership of petitioner over said properties; but respondent sheriff of Angeles City refused to issue a final certificate of sale in favor of petitioner. On May 30, 1984, petitioner's-creditors interposed their opposition, stating among other things, that subject motion is improper and premature because it treats of matters foreign to the insolvency proceedings; and premature, for the reason that the properties covered by TCT Nos. 18905 and 40430-Angeles City were brought to the jurisdiction of the insolvency court for the determination of the assets of the insolvents available for distribution to the approved credits/liabilities of the insolvents. Petitioner's-creditors theorized that the insolvency court is devoid of jurisdiction to grant the motion referring to matters involved in a case pending before a coordinate court in another jurisdiction (Annex "l"). Prior thereto or on July 13, 1984, to be precise, respondent court came out with its assailed extended order with the following decretal portion: WHEREFORE, and also for the reason stated in the afore quoted order issued in pursuance of a similar motion of the movant, the Court denies, as it is hereby denied the motion of Radiola-Toshiba, dated May 28, 1984 and directs the latter to participate in the supposed meeting of all the creditors/claimants presided by the duly elected assignee. (Annex "J"). On September 8, 1984, herein petitioner Radiola-Toshiba Philippines, Inc. (RTPI, for short) filed a petition for certiorari and mandamus with respondent Intermediate Appellate Court. The then Intermediate Appellate Court, in a Decision promulgated on March 31, 1986, denied petitioner's aforesaid petition. On April 19, 1986, petitioner filed a motion for reconsideration, but the same was denied in a Resolution dated July 1, 1986. Hence, the instant petition. Herein petitioner raised two issues — 1. WHETHER OR NOT CERTIORARI IS A REMEDY DESIGNATED FOR THE CORRECTION OF ERRORS OF JURISDICTION ONLY; and 2. WHETHER OR NOT THE REFUSAL OF THE COURTS TO ENFORCE THE LIEN OF PETITIONER ARISING FROM A LEVY OF ATTACHMENT NOT MADE WITHIN ONE MONTH NEXT PRECEDING THE COMMENCEMENT OF THE INSOLVENCY PROCEEDING IS GRAVE ABUSE OF DISCRETION. The main issue in this case is whether or not the levy on attachment in favor of the petitioner is dissolved by the insolvency proceedings against respondent spouses commenced four months after said attachment. On this issue, Section 32 of the Insolvency Law (Act No. 1956, as amended), provides: Sec. 32 — As soon as an assignee is elected or appointed and qualified, the clerk of the court shall, by an instrument under his hand and seal of the court, assign and convey to the assignee all the real and personal property, estate, and effects of the debtor with all his deeds, books, and papers relating thereto, and such assignment shall relate back to the commencement of the proceedings in insolvency, and shall relate back to the acts upon the adjudication was founded, and by operation of law shall vest the title to all such property, estate, and effects in the assignee, although the same is then attached on mesne process, as the property of the debtor. Such assignment shall operate to vest in the assignee all of the estate of the insolvent debtor not exempt by law from execution. It shall dissolve any attachment levied within one month next preceding the commencement of the insolvency proceedings and vacate and set aside any judgment entered in any action commenced within thirty days immediately prior to the commencement of insolvency proceedings and shall set aside any judgment entered by

default or consent of the debtor within thirty days immediately prior to the commencement of the insolvency proceedings. (Emphasis supplied) Relative thereto, the findings of the then Intermediate Appellate Court are undisputed that the levy on attachment against the subject properties of the Gatmaytans, issued by the then Court of First Instance of Pasig in Civil Case No. 35946, was on March 4, 1980 while the insolvency proceeding in the then Court of First Instance of Angeles City, Special Proceeding No. 1548, was commenced only on July 2, 1980, or more than four (4) months after the issuance of the said attachment. Under the circumstances, petitioner contends that its lien on the subject properties overrode the insolvency proceeding and was not dissolved thereby. Private respondents, on the other hand, relying on Section 79 of the said law, which reads: Sec. 79. When an attachment has been made and is not dissolved before the commencement of proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim upon which the attachment suit was commenced is proved against the estate of the debtor, the plaintiff may prove the legal costs and disbursements of the suit, and of the keeping of the property, and the amount thereof shall be a preferred debt. and the fact that petitioner and its counsel have full knowledge of the proceedings in the insolvent case, argue that the subsequent Certificate of Sale on August 3, 1981, issued in favor of petitioner over the subject properties, was issued in bad faith, in violation of the law and is not equitable for the creditors of the insolvent debtors; and pursuant to the above quoted Section 79, petitioner should not be entitled to the transfer of the subject properties in its name. Petitioner's contention is impressed with merit. The provision of the above-quoted Section 32, of the Insolvency Law is very clear — that attachments dissolved are those levied within one (1) month next preceding the commencement of the insolvency proceedings and judgments vacated and set aside are judgments entered in any action, including judgment entered by default or consent of the debtor, where the action was filed within thirty (30) days immediately prior to the commencement of the insolvency proceedings. In short, there is a cut off period — one (1) month in attachment cases and thirty (30) days in judgments entered in actions commenced prior to the insolvency proceedings. Section 79, on the other hand, relied upon by private respondents, provides for the right of the plaintiff if the attachment is not dissolved before the commencement of proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim upon which the attachment suit was commenced is proved against the estate of the debtor. Therefore, there is no conflict between the two provisions. But even granting that such conflict exists, it may be stated that in construing a statute, courts should adopt a construction that will give effect to every part of a statute, if at all possible. This rule is expressed in the maxim, ut maqis valeat quam pereat or that construction is to be sought which gives effect to the whole of the statute — its every word. Hence, where a statute is susceptible of more than one interpretation, the court should adopt such reasonable and beneficial construction as will render the provision thereof operative and effective and harmonious with each other (Javellana vs. Tayo, 6 SCRA 1042 [1962]; Statutory Construction by Ruben E. Agpalo, p. 182). Neither can the sheriff's sale in execution of the judgment in favor of the petitioner be considered as a fraudulent transfer or preference by the insolvent debtors, which constitute a violation of Sec. 70 of the Insolvency Law. In the case of Velayo vs. Shell Co. of the Philippines (100 Phil. 187, [1956]), this Court ruled that Sections 32 and 70 contemplate only acts and transactions occurring within 30 days prior to the commencement of the proceedings in insolvency and, consequently, all other acts outside of the 30-day period cannot possibly be considered as coming within the orbit of their operation. Finally, petitioner correctly argued that the properties in question were never placed under the jurisdiction of respondent insolvency court so as to be made available for the payment of claim filed against the Gatmaytans in the insolvency proceedings. Hence, the denial by respondent insolvency court to give due course to the attachment and execution of Civil Case No. 35946 of the CFI of Rizal constitutes a freezing of the disposition of subject properties by the former which were not within its jurisdiction; undeniably, a grave abuse of discretion amounting to want of jurisdiction, correctable by certiorari. WHEREFORE, the March 31, 1986 decision of the then Intermediate Appellate Court is hereby Reversed and SET ASIDE. The attachment and execution sale in Civil Case No. 35946 of the former CFI of Rizal are given due course and petitioner's ownership of subject properties covered by TCT Nos. 18905 and 40430 is ordered consolidated. SO ORDERED.

G.R. No. 111722 May 27, 1997 ALPHA INVESTIGATION AND SECURITY AGENCY, INC. (AISA), petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, THIRD DIVISION, and WILLIAM GALIMBA, NESTOR LOLOQUISEN, NESTOR IBUYAT, CARLITO CASTRO, JOSE PERDIDO, FELIPE TOLENTINO, LEONARDO IBUYAT, FELINO CULANNAY RONIE NINO, ROMAN NALUNDASAN, JAIME FONTANILLA, WILFRED BUTAY, JOSE ACIO, EDISON VALDEZ, CRESENCIO AGRES, RODRIGO LUIS, MARIO SUGUI, BENEDICTO SUGUI, ROGER RAMBAUD, respondents.

May the principal of a security service agreement be held jointly and severally liable with the contractor for non-payment of the minimum wage? The facts are undisputed. Petitioner Alpha Investigation and Agency, Inc. (AISA) is a private corporation engaged in the business of providing security services to its clients, one of whom is the Don Mariano Marcos State University (DMMSU). Private respondents were hired as security guards by AISA. on February 16, 1990. Five months later, 43 security guards filed before the Regional Office of the Department of Labor and Employment (DOLE) a complaint against AISA for non-compliance with the current minimum wage order. After 24 of the original complainants filed a motion for the exclusion from the case, the remaining 19 security guards filed their individual amended complaints impleading DMMSU as party-respondent. Private respondents have been receiving a monthly salary of P900.00 although the security service agreement between AISA and DMMSU 1 provided a monthly pay of P1,200.00 for each security guard. AISA made representations with DMMSU for an increase in the contract rates of the security guards to enable them to pay the mandated minimum wage rates without compromising its administrative and operational expenses. DMMSU, however, replied that, being a government corporation, it cannot grant said request due to budgetary constraints. On August 17, 1992, Labor Arbiter Emiliano T. de Asis rendered a decision, the dispositive portion of which reads as follows: RESPONSIVE TO THE FOREGOING, judgment is hereby rendered: a) Ordering the respondent Alpha Investigation and Security Agency and Mariano Marcos State University to pay each complainant the amount of FORTY ONE THOUSAND FOUR HUNDRED FIFTY NINE PESOS AND FIFTY ONE CENTAVOS (P41,459.51) representing salary differential for the period from February 16 September 30, 1991, or the total amount of P787,730.69 as follows: 1. Nestor Loloquisen P41,459.51 2. Nestor Ibuyat 41,459.51 3. Jose Acio 41,459.51 4. Cresencio Agres 41,459.51 5. Wilfred Butay 41,459.51 6. Carlito Castro 41,459.51 7. Federico Calunnay 41,459.51 8. Jaime Fontanilla 41,459.51 9. William Galimba 41,459.51 10. Leonardo Ibuyat 41,459.51 11. Rodrigo Luis 41,459.51 12. Roman Nalundasan 41,459.51 13. Ronnie Nino 41,459.51 14. Jose Perdido 41,459.51 15. Roger Rambaud 41,459.51 16. Benedicto Sugui 41,459.51 17. Mario Sugui 41,459.51 18. Felipe Tolentino 41,459.51 19. Edison Valdez 41,459.51

————— P787,730.69

b) Dismissing the claims for 13th month pay for failure to substantiate the same. c) Claims of complainants who filed their motion for reconsideration are hereby dismissed. SO ORDERED. 2

AISA and DMMSU interposed separate appeals. The NLRC, on May 7, 1993, rendered a decision affirming the solidary liability of AISA and DMMSU and remanding the records of the case to the arbitration branch of origin for computation of the salary differentials awarded by the Labor Arbiter. Only AISA filed a motion for reconsideration, which was denied by the NLRC on July 1, 1993, for lack of merit. The judgment against DMMSU, finding it jointly and severally liable with AISA for the payment of increase in wages, became final and executory after it failed to file a petition for certiorari with this Court within a reasonable time. "Although Rule 65 does not specify any period for the filing of a petition for certiorari and mandamus, it must, nevertheless, be filed within a reasonable time. In certiorari cases, the definitive rule now is that such reasonable time is within three months from the commission of the complained act." 3

In this petition, AISA alleges that payment of the wage increases under the current minimum wage order should be borne exclusively by DMMSU, pursuant to Section 6 of Republic Act 6727 (RA 6727) 4 which reads as follows: Sec. 6. — In the case of contracts for construction projects and for security, janitorial and similar services, the prescribed increases in the wage rates of the workers shall be borne by the principals or clients of the construction/service contractors and the contract shall be deemed amended accordingly. In the event, however,

that the principal or client fails to pay the prescribed wage rates, the construction/service contractor shall be jointly and severally liable with his principal or client. It further contends that Articles 106, 107 and 109 of the Labor Code generally refer to the failure of the contractor or sub-contractor to pay wages in accordance with the Labor Code with a mandate that failure to pay such wages would make the employer and contractor jointly and severally liable for such payment. AISA insists that the matter involved in the case at bar hinges on wage differentials or wage increases, as prescribed in the aforequoted Section 6 of RA 6727, and not wages in general, as provided by the Labor Code. This interpretation is not acceptable. It is a cardinal rule in statutory construction that in interpreting the meaning and scope of a term used in the law, a careful review of the whole law involved, as well as the intendment of the law, must be made. 5 In fact, legislative intent must be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular provision alone. 6

AISA's solidary liability for the amounts due the security guards finds support in Articles 106, 107 and 109 of the Labor Code, to wit: Art. 106. Contractor or Sub-Contractor. Whenever an employer enters into a contract with another person for the performance of the former's work, the employees of the contractor and of the latter's sub-contractor, if any, shall be paid in accordance with the provisions of this code. In the event that the contractor or sub-contractor fails to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally liable with his contractor or sub-contractor to such employees to the extent of the work performed under the contract, in the same manner and extent that he is liable to employees directly employed by him. . . . Art. 107. Indirect employer. The provisions of the immediately preceding Article shall likewise apply to any person, partnership, association or corporation which, not being an employer, contracts with an independent contractor for the performance of any work, task, job or project. Art. 109. Solidary Liability. The provisions of existing laws to the contrary notwithstanding, every employer or indirect employer shall be held responsible with his contractor or sub-contractor for any violation of any provision of this Code. For purposes of determining the extent of their civil liability under the Chapter, they shall be considered as direct employers. The joint and several liability of the contractor and the principal is mandated by the Labor Code to ensure compliance with its provisions, including the statutory minimum wage. 7 The contractor is made liable by virtue of his status as direct employer, while the principal becomes the indirect employer of the former's employees for the purpose of paying their wages in the event of failure of the contractor to pay them. This gives the workers ample protection consonant with the labor and social justice provisions of the 1987 Constitution. 8

In the case at bar, it is not disputed that private respondents are the employees of AISA. Neither is there any question that they were assigned to guard the premises of DMMSU pursuant to the latter's security service agreement with AISA and that these two entities paid their wage increases. It is to be borne in mind that wage orders, being statutory and mandatory, cannot be waived. AISA cannot escape liability since the law provides for the joint and solidary liability of the principal and the contractor to protect the laborers. 9 Thus, the Court held in the case of Eagle Security v. NLRC: 10

The solidary liability of PTSI and EAGLE, however, does not preclude the right of reimbursement from his co-debtor by the one who paid (See Article 1217, Civil Code). It is with respect to this right of reimbursement that petitioners can find support in the aforecited contractual stipulation and Wage Order provision. The Wage Orders are explicit that payment of the increases are "to be borne" by the principal or client. "To be borne", however, does not mean that the principal, PTSI in this case, would directly pay the security guards the wage and allowance increases because there is no privity of contract between them. The security guards' contractual relationship is with their immediate employer, EAGLE. As an employer, EAGLE is tasked, among others, with the payment of their wages. (See Article VII Sec. 3 of the Contract for Security Services, supra and Bautista v. Inciong, G.R. No. 52824, March 16, 1988, 158 SCRA 556). Premises considered, the security guards' immediate recourse for the payment of the increases is with their direct employer, EAGLE. However, in order for the security agency to comply with the new wage and allowance rates it has to pay the security guards, the Wage Order made specific provision to amend existing contracts for security services by allowing the adjustments of the consideration paid by the principal to the security agency concerned. What the Wage Orders require, therefore, is the amendment of the contract as to the consideration to cover the service contractor's payment of the increases mandated. In the end, therefore, ultimate liability for the payment of the increases rests with the principal. (Emphasis supplied). Section 6 of RA 6727 merely provides that in case of wage increases resulting in a salary differential, the liability of the principal and contractor shall be joint and several. The same liability attaches under Articles 106, 107 and 109 of the Labor Code, which refer to the prevailing standard minimum wage. The Court finds that the NLRC acted correctly in holding petitioner jointly and severally liable with DMMSU for the payment of the wage increases to private respondents. Accordingly, no grave abuse of discretion may be attributed to the NLRC in arriving at the impugned decision.

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit and the assailed resolution is AFFIRMED. Costs against petitioner. SO ORDERED. ----------------------------------------------------------------------------------------------------------------------------------------------------------------- E. Spirit and Purpose of the Law

G.R. No. 104712 May 6, 1992 MANUEL T. DE GUIA, in his capacity as Councilor of the Municipality of Parañaque, Metro Manila, petitioner, vs. HON. COMMISSION ON ELECTIONS, respondent. This is a petition for certiorari and prohibition assailing the validity and the enforcement by respondent Commission on Elections (COMELEC) of its RESOLUTION NO. 2313, adopting rules and guidelines in the apportionment, by district, of the number of elective members of the Sangguniang Panlalawigan in provinces with only one (1) legislative district and the Sangguniang Bayan of municipalities in the Metro Manila Area for the preparation of the Project of District Apportionment by the Provincial Election Supervisors and Election Registrars (Annex "A", Petition), RESOLUTION NO. 2379, approving the Project of District Apportionment submitted pursuant to Resolution No. 2313 (Annex "B", Petition), and RESOLUTION UND. 92-010 holding that pars. (a), (b) and (c), and the first sentence of par. (d), all of Sec. 3, R.A. 7166, apply to the May 11, 1992 elections (Annex "C", Petition). Petitioner Manuel T. De Guia is an incumbent Member of the Sangguniang Bayan of the Municipality of Parañaque, Metro Manila, having been elected in the January 1988 local elections. He prays, more particularly, for reversal of the position of respondent insofar as it affects the municipality of Parañaque and all the other municipalities in the Metro Manila Area. He claims that the second proviso of par. (c), Sec. 3 of R.A. 7166, which requires the apportionment into districts of said municipalities does not specify when the members of their Sangguniang Bayan will be elected by district. He would consequently lean on par. (d) of Sec. 3, which immediately succeeds par. (c), to support his view that the elected members of these municipalities mentioned in par. (c) should continue to be elected at large in the May 11, 1992 elections. Paragraph (d) states that "[F]or purposes of the regular elections on May 11, 1992, elective members of the Sangguniang Panlunsod and Sangguniang Bayan shall be elected at large in accordance with existing laws. However, beginning with the regular elections in 1995, they shall be elected by district." Petitioner therefore insists that the elected members of the Sangguniang Bayan of Parañaque fall under this category so that they should continue to be elected at large until the 1995 regular elections. Before addressing the crux of the controversy, the Court observes that petitioner does not allege that he is running for reelection, much less, that he is prejudiced by the election, by district, in Parañaque. As such, he does not appear to have a locus standi, a standing in law, personal or substantial interest. 1 He does not also allege any legal right that has been violated by respondent. If for this alone, petitioner does not appear to have any cause of action. However, considering the importance of the issue involved, concerning as it does the political exercise of qualified voters affected by the apportionment, and petitioner alleging abuse of discretion and violation of the Constitution by respondent, We resolve to brush aside the question of procedural infirmity, even as We perceive the petition to be one of declaratory relief. We so held similarly through Mr. Justice Edgardo L. Paras in Osmeña v. Commission on Elections. 2

Now on the meat of the dispute. On November 18, 1991, Congress passed R.A. 7166, signed into law by the President on November 26, 1991. It is "An Act Providing for Synchronized National and Local Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and for Other Purposes." At issue in this case is the proper interpretation of Sec. 3 thereof which provides: Sec. 3. Elections of Members of the Sangguniang Panlalawigan, Sangguniang Panlungsod and Sangguniang Bayan. — The elective members of the Sangguniang Panlalawigan, Sangguniang Panlungsod and Sangguniang Bayan shall be elected as follows: (a) For provinces with two (2) or more legislative districts, the elective members of the Sangguniang Panlalawigan shall be elected by legislative districts . . . (b) For provinces with only one (1) legislative district, the Commission shall divide them into two (2) districts for purposes of electing the members of the Sangguniang Panlalawigan . . . (c) The number and election of elective members of the Sangguniang Panlungsod and Sangguniang Bayan in the Metro Manila Area, City of Cebu, City of Davao and any other city with two (2) or more legislative districts shall continue to be governed by the provisions of Sections 2 and 3 of Republic Act No. 6636 . . . Provided, further, That, the Commission shall divide each of the municipalities in Metro Manila Area into two (2) districts by barangay for purposes of representation in the Sangguniang Bayan . . . . and,

(d) For purposes of the regular elections on May 11, 1992, elective members of the Sangguniang Panlungsod and Sangguniang Bayan shall be elected at large in accordance with existing laws. However, beginning with the regular elections in 1995, they shall be elected by district . . . . On November 20, 1991, respondent COMELEC, invoking authority of the Constitution, the Omnibus Election Code, R.A. 6636, R.A. 6646 and R.A. 7166, 3 issued Resolution No. 2313 and the subsequent resolutions in question. On February 20, 1992, in view of the perceived ambiguity in the meaning of par. (d), particularly in relation to par. (c), Sec. 3, R.A. 7166, petitioner filed with COMELEC a Motion for Clarification of its Resolution No. 2313 inquiring whether the members of the Sangguniang Bayan of Parañaque and the other municipalities of Metro Manila enumerated therein, which are all single-district municipalities, would be elected by district in May 11, 1992 or in the 1995 regular elections. Meanwhile, on March 3, 1992 COMELEC issued Resolution No. 2379 approving the guidelines submitted by the Provincial Election Supervisors and Municipal Election Registrars concerned pursuant to Resolution No. 2313, and stating therein its purpose in recommending to Congress the districting/apportionment of Sangguniang Panlungsod and Sangguniang Bayan seats, i.e., to reduce the number of candidates to be voted for in the May 11, 1992 synchronized elections. In this Project of Apportionment, Parañaque together with the other twelve (12) municipalities in the Metro Manila Area was divided into two (2) districts with six (6) elective councilors for each district. On March 10, 1992, COMELEC resolved petitioner's Motion for Clarification by interpreting Sec. 3, R.A. 7166, to mean that the election of elective members of the Sangguniang Bayan, by district, of the thirteen (13) municipalities in the Metro Manila Area shall apply in the May 11, 1992 elections (Resolution UND. 92-010, prom. March 10, 1992). Petitioner says that he received copy of Resolution UND. 92-010 on March 13, 1992. On April 7, 1992, apparently not satisfied with this third Resolution of COMELEC, petitioner filed the instant petition asserting that under par. (d), Sec. 3 of R.A. 7166 the elective members of the Sangguniang Panlungsod and the Sangguniang Bayan, for purposes of the May 11, 1992 regular elections, shall be elected at large in accordance with existing laws. He would include in this class of sanggunian members to be elected at large those of the municipality of Parañaque. Petitioner therefore imputes grave abuse of discretion to COMELEC in promulgating Resolution No. 2313, Resolution No. 2379 and Resolution UND. 92-010 which clarifies, contrary to his view, that the district apportionment of the municipalities in the Metro Manila Area is applicable to the May 11, 1992 regular elections. We have carefully examined pars. (a), (b), (c) and (d) of Sec. 3, R.A. 7166, and its precursor bills on synchronized elections, Senate Bill No. 1861 and House Bill No. 34811, and We realize the web of confusion generated by the seeming abstruseness in the language of the law. Some framers of the law were even fazed at the empirical implications of some of its provisions, particularly Sec. 3 thereof, and they admitted in fact that said provisions were susceptible of varied interpretations, as borne by the sponsorship and explanatory speeches now spread in the Journals of Congress. Hence, We can understand why petitioner would interpret Sec. 3 as he would. But if we pursue his course, we may conclude in absurdity because then there would have been no reason for R.A. 7166 to single out the single-district provinces referred to in par. (b), and the municipalities in the Metro Manila Area mentioned in the second proviso of par. (c), to be apportioned at once into two (2) districts each if the members of their respective sanggunian after all would still be elected at large as they were in the 1988 elections. No law is ever enacted that is intended to be meaningless, much less inutile. We must therefore, as far as we can, divine its meaning, its significance, its reason for being. As it has oft been held, the key to open the door to what the legislature intended which is vaguely expressed in the language of a statute is its purpose or the reason which induced it to enact the statute. If the statute needs construction, as it does in the present case, the most dominant in that process is the purpose of the act. 4 Statutes should be construed in the light of the object to be achieved and the evil or mischief to be suppressed, 5 and they should be given such construction as will advance the object, suppress the mischief, and secure the benefits intended. 6 A construction should be rejected that gives to the language used in a statute a meaning that does not accomplish the purpose for which the statute was enacted, and that tends to defeat the ends which are sought to be attained by the enactment. 7

The reason for the promulgation of R.A. 7166 is shown in the explanatory note of Senate Bill No. 1861 which states in part: This bill proposes to set the national and local elections for May 11, 1992, and provide for the necessary implementing details. It also endorses reforms and measures to ensure the conduct of free, orderly, honest, peaceful and credible elections. Specifically, it seeks to: (1) Reduce the number of positions to be voted for by providing therein that the members of the Sangguniang Panlalawigan, Sangguniang Panlungsod and Sangguniang Bayan be elected not at large, but by district . . . . That respondent COMELEC is cognizant of this legislative intent of R.A. 7166 is reflected in the "WHEREAS" clauses constituting the preamble to Resolution No. 2379. Thus — WHEREAS, the Commission on Elections, in order to reduce the number of candidates to be voted for in the May 11, 1992 synchronized elections recommended, among others, to the Congress of the Philippines, the districting/apportionment of sangguniang panlungsod and sangguniang bayan seats;

WHEREAS, the Congress of the Philippines passed Republic Act 7166, and approved by the President of the Philippines on November 26, 1991, adopting among others, the recommendation of the Commission on Elections aforestated; WHEREAS, pursuant to, and in implementation of Republic Act 7166, particularly Section 3 thereof, the Commission promulgated Resolution No. 2313, directing the Provincial Election Supervisors and Election Registrars concerned to submit, after consultation, public hearings, and consensus-taking with the different sectors in the community, the Project of District Apportionment of single legislative-district provinces and municipalities in the Metro Manila area; WHEREAS, the established criteria/guidelines in the determination of the district apportionment are as follows: a. compactness, contiguity and adjacentness of territory; b. apportionment shall be based on the 1990 census of population; c. no municipality, in the case of provinces, and no barangay, in the case of cities and municipalities, shall be fragmented or apportioned into different districts. This avowed policy of having sanggunian members elected by district is also manifest from the four corners of Sec. 3 of R.A. 7166. 8 Thus, a careful analysis of the provisions of Sec. 3 shows that the purpose of districting/apportionment of the sanggunian seats is to reduce the number of positions to be voted for in the May 11, 1992, synchronized elections and ensure the efficiency of electoral process. Considering that the single-district provinces and the municipalities in the Metro Manila Area, which are all single-districts, and under pars. (b) and (c) have already been apportioned into two (2) districts, they will henceforth be electing the members of their Sangguniang Panlalawigan and Sangguniang Bayan by district in the coming May 11, 1992, elections, although under par. (d), the single-district cities and all the municipalities outside the Metro Manila Area which are all likewise single-districts, will have to continue electing at large the members of their Sangguniang Panlungsod and Sangguniang Bayan as they have yet to be apportioned. But beginning the regular elections of 1995, they will all have to be elected by district. By then, COMELEC would have had enough time to apportion the single-district cities and the municipalities outside the Metro Manila Area. As they now stand in relation to the districting/apportionment of local government units for purposes of election under Sec. 3 of R.A. 7166, it is clear that: (1) for provinces with two (2) or more legislative districts contemplated in par. (a), they shall continue to be elected by district; (2) for provinces with single legislative districts, as they have already been apportioned into two (2) districts each under par. (b), they shall henceforth be elected likewise by district; (3) for cities with two (2) or more legislative districts, e.g., the cities of Manila, Cebu and Davao, they shall also continue to be elected by district under the first part of par. (c); and (4) for the thirteen (13) municipalities in the Metro Manila Area, which have already been apportioned into two (2) districts each under the second proviso of par. (c), they shall likewise be elected by district in the regular elections of May 11, 1992. Then, that should leave us the Sangguniang Panlungsod of the single-district cities and the Sangguniang Bayan of the municipalities outside Metro Manila, which remain single-districts not having been ordered apportioned under Sec. 3 of R.A. 7166. They will have to continue to be elected at large in the May 11, 1992, elections, although starting 1995 they shall all be elected by district to effect the full implementation of the letter and spirit of R.A. 7166. That is the true import of par. (d). Consequently, as We view it, where he stands, petitioner must fall. WHEREFORE, finding no abuse of discretion, much less grave, on the part of respondent, and for lack of merit, the instant petition is DISMISSED. No costs. SO ORDERED.

G.R. No. 78687 January 31, 1989 ELENA SALENILLAS AND BERNARDINO SALENILLAS, petitioners, vs. HONORABLE COURT OF APPEALS and HONORABLE RAYMUNDO SEVA, JUDGE OF BRANCH 38 OF THE REGIONAL TRIAL COURT OF CAMARINES NORTE and WILLIAM GUERRA, respondents. Jose L. Lapak for petitioners. Jose T. Atienza for private respondent. SARMIENTO, J.: This petition for review on certiorari which seeks the reversal and setting aside of the decision 1 of the Court of Appeals 2 dismissing the petition for certiorari against Judge Raymundo Seva of the Regional Trial Court of Camarines Norte and the private respondent, William Guerra, involves a pure question of law i.e., the coverage and application of Section 119 of Commonwealth Act No. 141, as amended, known otherwise as the Public Land Act. The facts are undisputed. The property subject matter of the case was formerly covered by Original Certificate of Title No. P-1248, issued by virtue of Free Patent Application No. 192765, in favor of the spouses, Florencia H. de Enciso and Miguel Enciso. The said original certificate of title was inscribed in the Registration Book for the Province of Camarines Norte on December 10, 1961. On February 28, 1970, the patentees, the Enciso spouses, by an Absolute Deed of Sale, sold the property in favor of the petitioners, the spouses Elena Salenillas and Bernardino Salenillas for a consideration of P900.00. Petitioner Elena Salenillas is a daughter of the Encisos. As a result of the aforementioned sale, Transfer Certificate of Title No. T-8104 of the Register of Deeds of Camarines Norte was issued in the name of the Salenillas,

cancelling Original Certificate of Title No. P-1248. On June 30, 1971, the petitioners mortgaged the property now covered by T.C.T. No. T-8104 with the Rural Bank of Daet, Inc. The mortgage was subsequently released on November 22, 1973 after the petitioners paid the amount of P1,000.00. Later, or on December 4, 1975, the petitioners again mortgaged the property, this time in favor of the Philippine National Bank Branch, Daet, Camarines Norte as security for a loan of P2,500.00. For failure of the petitioners to pay their loan, extrajudicial foreclosure proceeding, pursuant to Act No. 3135, was instituted by the Philippine National Bank against the mortgage and the property was sold at a public auction held on February 27, 1981. The private respondent, William Guerra, emerged as the highest bidder in the said public auction and as a result thereof a "Certificate of Sale" was issued to him by the Ex Officio Provincial Sheriff of Camarines Norte. Ultimately, on July 12, 1983, a "Sheriff's Final Deed" was executed in favor of the private respondent. On August 17,1983, the Philippine National Bank filed with the Regional Trial Court of Camarines Norte at Daet, a motion for a writ of possession. The public respondent, Judge Raymundo Seva of the trial court, acting on the motion, issued on September 22, 1983 an order for the issuance of a writ of possession in favor of the private respondent. When the deputy sheriff of Camarines Norte however, attempted on November 17, 1983, to place the property in the possession of the private respondent, the petitioners refused to vacate and surrender the possession of the same and instead offered to repurchase it under Section 119 of the Public Land Act. On August 15, 1984, another motion, this time for the issuance of an alias writ of possession was filed by the private respondent with the trial court. The petitioners, on August 31, 1984, opposed the private respondents' motion and instead made a formal offer to repurchase the property. Notwithstanding the petitioners' opposition and formal offer, the trial court judge on October 12, 1984 issued the alias writ of possession prayed for the private respondent. The petitioners moved for a reconsideration of the order but their motion was denied. Undeterred by their initial setback, the petitioners elevated the case to the respondent Court of Appeals by way of a petition for certiorari claiming that the respondent trial court judge acted with grave abuse of discretion in issuing the order dated October 12, 1984 granting the writ of possession, and the order dated October 22, 1984, denying their motion for reconsider consideration. In a resolution dated January 23, 1985, the respondent appellate court gave due course to the petition; required the parties to submit simultaneous memoranda in support to their respective positions; and restrained the trial court and the private respondent from executing, implementing or otherwise giving effect to the assailed writ of possession until further orders from the court. 3 However, in a decision promulgated on September 17, 1986, the respondent Court of Appeals dismissed the case for lack of merit. According to the appellate court: It must be noted that when the original owner, Florencia H. Enciso whose title, OCT No. P-1248, was issued on August 9, 1961, executed a deed of absolute sale on February 28, 1970 of the property covered by said title to spouses Elena Salenillas and Bernardino Salenillas, the five year period to repurchase the property provided for in Section 119 of Commonwealth Act No. 141 as amended could have already started. Prom this fact alone, the petition should have been dismissed. However, granting that the transfer from parent to child for a nominal sum may not be the "conveyance" contemplated by the law. We will rule on the issue raised by the petitioners. 4

xxx xxx xxx Applying the case of Monge, et al. vs. Angeles, et al., 5 the appellate court went on to hold that the five-year period of the petitioners to repurchase under Section 119 of the Public Land Act had already prescribed. The point of reckoning, ruled the respondent court in consonance with Monge is from the date the petitioners mortgaged the property on December 4, 1973. Thus, when the petitioners made their formal offer to repurchase on August 31, 1984, the period had clearly expired. In an effort to still overturn the decision, the petitioners moved for reconsideration. Their motion apparently went for naught because on May 7, 1987, the respondent appellate court resolved to deny the same. Hence, this petition. Before us, the petitioners maintain that contrary to the rulings of the courts below, their right to repurchase within five years under Section 119 of the Public Land Act has not yet prescribed. To support their contention, the petitioners cite the cases of Paras vs. Court of Appeals 6 and Manuel vs. Philippine National Bank, et al. 7

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

In fine, what need be determined and resolved here are: whether or not the petitioners have the right to repurchase the contested property under Section 119 of the Public Land Act; and assuming the answer to the question is in the affirmative, whether or not their right to repurchase had already prescribed. We rule for the petitioners. They are granted by the law the right to repurchase their property and their right to do so subsists. Section 119 of the Public Land Act, as amended, provides in full: Sec. 119.Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs within a period of five years from the date of the conveyance.

From the foregoing legal provision, it is explicit that only three classes of persons are bestowed the right to repurchase — the applicant-patentee, his widow, or other legal heirs. Consequently, the contention of the private respondent sustained by the respondent appellate court that the petitioners do not belong to any of those classes of repurchasers because they acquired the property not through inheritance but by sale, has no legal basis. The petitioners-spouses are the daughter and son-in-law of the Encisos, patentees of the contested property. At the very least, petitioner Elena Salenillas, being a child of the Encisos, is a "legal heir" of the latter. As such, and even on this score alone, she may therefore validly repurchase. This must be so because Section 119 of the Public Land Act, in speaking of "legal heirs," makes no distinction. Ubi lex non distinguit nec nos distinguere debemos. Moreover, to indorse the distinction made by the private respondent and the appellate court would be to contravene the very purpose of Section 119 of the Public Land Act which is to give the homesteader or patentee every chance to preserve for himself and his family the land that the State had gratuitously given him as a reward for his labor in clearing and cultivating it. 9 Considering that petitioner Salenillas is a daughter of the spouses Florencia H. Enciso and Miguel Enciso, there is no gainsaying that allowing her (Elena) and her husband to repurchase the property would be more in keeping with the spirit of the law. We have time and again said that between two statutory interpretations, that which better serves the purpose of the law should prevail. Guided by the same purpose of the law, and proceeding to the other issue here raised, we rule that the five-year period for the petitioners to repurchase their property had not yet prescribed. The case of Monge et al. vs. Angeles, et al., 10 cited as authority by the respondent Court of Appeals is inapplicable to the present controversy. The facts obtaining there are substantially different from those in this case. In Monge the conveyance involved was a pacto de retro sale and not a foreclosure sale. More importantly, the question raised there was whether the five-year period provided for in Section 119 "should be counted from the date of the sale even if the same is with an option to repurchase or from the date the ownership of the land has become consolidated in favor of the purchaser because of the homesteader's failure to redeem it. 11 It is therefore understandable why the Court ruled there as it did. A sale on pacto de retro immediately vests title, ownership, and, generally possession over the property on the vendee a retro, subject only to the right of the vendor a retro to repurchase within the stipulated period. It is an absolute sale with a resolutory condition. The cases 12 pointed to by the petitioner in support of their position, on the other hand, present facts that are quite identical to those in the case at bar. Both cases involved properties the titles over which were obtained either through homestead or free patent. These properties were mortgaged to a bank as collateral for loans, and, upon failure of the owners to pay their indebtedness, the mortgages were foreclosed. In both instances, the Court ruled that the five-year period to. repurchase a homestead sold at public auction or foreclosure sale under Act 3135 begins on the day after the expiration of the period of redemption when the deed of absolute sale is executed thereby formally transferring the property to the purchaser, and not otherwise. Taking into account that the mortgage was foreclosed and the mortgaged property sold at a public auction to the private respondent on February 27, 1981, with the "Sheriff's Final Deed" issued on July 12, 1983, the two offers of the petitioners to repurchase the first on November 17, 1983, and the second, formally, on August 31, 1984 were both made within the prescribed five-year period. Now, as regards the redemption price, applying Sec. 30 of Rule 39 of the Revised Rules of Court, the petitioners should reimburse the private respondent the amount of the purchase price at the public auction plus interest at the rate of one per centum per month up to November 17, 1983, together with the amounts of assessments and taxes on the property that the private respondent might have paid after purchase and interest on the last named amount at the same rate as that on the purchase price. 13

WHEREFORE, the petition is GRANTED. The Decision dated September 17, 1986, and the Resolution dated May 7, 1987 of the Court of Appeals, and the Orders dated September 22, 1983, October 12, 1984, and October 22, 1984 of the Regional Trial Court of Daet, Camarines Norte, are hereby REVERSED and SET ASIDE, and another one ENTERED directing the private respondent to reconvey the subject property and to execute the corresponding deed of reconveyance therefor in favor of the petitioners upon the return to him by the latter of the purchase price and the amounts, if any, of assessments or taxes he paid plus interest of one (1%) per centum per month on both amounts up to November 17, 1983. No costs. SO ORDERED. ---------------------------------------------------------------------------------------------------------------------------------------------------------------- G.R. No. 182722 DUMAGUETE CATHEDRAL CREDIT COOPERATIVE -versus- COMMISSIONER OF INTERNAL REVENUE The clashing interests of the State and the taxpayers are again pitted against each other. Two basic principles, the States inherent power of taxation and its declared policy of fostering the creation and growth of cooperatives come into play. However, the one that embodies the spirit of the law and the true intent of the legislature prevails.

This Petition for Review on Certiorari under Section 11 of Republic Act (RA) No. 9282,[1] in relation to Rule 45 of the Rules of Court, seeks to set aside the December 18, 2007 Decision[2] of the Court of Tax Appeals (CTA), ordering petitioner to pay deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, pursuant to Section 24(B)(1) of the National Internal Revenue Code of 1997 (NIRC), as well as the delinquency interest of 20% per annum under Section 249(C) of the same Code. It also assails the April 11, 2008 Resolution[3] denying petitioners Motion for Reconsideration. Factual Antecedents Petitioner Dumaguete Cathedral Credit Cooperative (DCCCO) is a credit cooperative duly registered with and regulated by the Cooperative Development Authority (CDA).[4] It was established on February 17, 1968[5] with the following objectives and purposes: (1) to increase the income and purchasing power of the members; (2) to pool the resources of the members by encouraging savings and promoting thrift to mobilize capital formation for development activities; and (3) to extend loans to members for provident and productive purposes.[6] It has the power (1) to draw, make, accept, endorse, guarantee, execute, and issue promissory notes, mortgages, bills of exchange, drafts, warrants, certificates and all kinds of obligations and instruments in connection with and in furtherance of its business operations; and (2) to issue bonds, debentures, and other obligations; to contract indebtedness; and to secure the same with a mortgage or deed of trust, or pledge or lien on any or all of its real and personal properties.[7] On November 27, 2001, the Bureau of Internal Revenue (BIR) Operations Group Deputy Commissioner, Lilian B. Hefti, issued Letters of Authority Nos. 63222 and 63223, authorizing BIR Officers Tomas Rambuyon and Tarcisio Cubillan of Revenue Region No. 12, Bacolod City, to examine petitioners books of accounts and other accounting records for all internal revenue taxes for the taxable years 1999 and 2000.[8] Proceedings before the BIR Regional Office On June 26, 2002, petitioner received two Pre-Assessment Notices for deficiency withholding taxes for taxable years 1999 and 2000 which were protested by petitioner on July 23, 2002.[9] Thereafter, on October 16, 2002, petitioner received two other Pre-Assessment Notices for deficiency withholding taxes also for taxable years 1999 and 2000.[10] The deficiency withholding taxes cover the payments of the honorarium of the Board of Directors, security and janitorial services, legal and professional fees, and interest on savings and time deposits of its members. On October 22, 2002, petitioner informed BIR Regional Director Sonia L. Flores that it would only pay the deficiency withholding taxes corresponding to the honorarium of the Board of Directors, security and janitorial services, legal and professional fees for the year 1999 in the amount of P87,977.86, excluding penalties and interest.[11] In another letter dated November 8, 2002, petitioner also informed the BIR Assistant Regional Director, Rogelio B. Zambarrano, that it would pay the withholding taxes due on the honorarium and per diems of the Board of Directors, security and janitorial services, commissions and legal & professional fees for the year 2000 in the amount of P119,889.37, excluding penalties and interest, and that it would avail of the Voluntary Assessment and Abatement Program (VAAP) of the BIR under Revenue Regulations No. 17-2002.[12] On November 29, 2002, petitioner availed of the VAAP and paid the amounts of P105,574.62 and P143,867.24[13] corresponding to the withholding taxes on the payments for the compensation, honorarium of the Board of Directors, security and janitorial services, and legal and professional services, for the years 1999 and 2000, respectively. On April 24, 2003, petitioner received from the BIR Regional Director, Sonia L. Flores, Letters of Demand Nos. 00027-2003 and 00026-2003, with attached Transcripts of Assessment and Audit Results/Assessment Notices, ordering petitioner to pay the deficiency withholding taxes, inclusive of penalties, for the years 1999 and 2000 in the amounts of P1,489,065.30 and P1,462,644.90, respectively.[14] Proceedings before the Commissioner of Internal Revenue On May 9, 2003, petitioner protested the Letters of Demand and Assessment Notices with the Commissioner of Internal Revenue (CIR).[15] However, the latter failed to act on the protest within the prescribed 180-day period. Hence, on December 3, 2003, petitioner filed a Petition for Review before the CTA, docketed as C.T.A. Case No. 6827.[16] Proceedings before the CTA First Division

The case was raffled to the First Division of the CTA which rendered its Decision on February 6, 2007, disposing of the case in this wise: IN VIEW OF ALL THE FOREGOING, the Petition for Review is hereby PARTIALLY GRANTED. Assessment Notice Nos. 00026-2003 and 00027-2003 are hereby MODIFIED and the assessment for deficiency withholding taxes on the honorarium and per diems of petitioners Board of Directors, security and janitorial services, commissions and legal and professional fees are hereby CANCELLED. However, the assessments for deficiency withholding taxes on interests are hereby AFFIRMED. Accordingly, petitioner is ORDERED TO PAY the respondent the respective amounts of P1,280,145.89 and P1,357,881.14 representing deficiency withholding taxes on interests from savings and time deposits of its members for the taxable years 1999 and 2000. In addition, petitioner is ordered to pay the 20% delinquency interest from May 26, 2003 until the amount of deficiency withholding taxes are fully paid pursuant to Section 249 (C) of the Tax Code. SO ORDERED.[17] Dissatisfied, petitioner moved for a partial reconsideration, but it was denied by the First Division in its Resolution dated May 29, 2007.[18] Proceedings before the CTA En Banc On July 3, 2007, petitioner filed a Petition for Review with the CTA En Banc,[19] interposing the lone issue of whether or not petitioner is liable to pay the deficiency withholding taxes on interest from savings and time deposits of its members for taxable years 1999 and 2000, and the consequent delinquency interest of 20% per annum.[20] Finding no reversible error in the Decision dated February 6, 2007 and the Resolution dated May 29, 2007 of the CTA First Division, the CTA En Banc denied the Petition for Review[21] as well as petitioners Motion for Reconsideration.[22] The CTA En Banc held that Section 57 of the NIRC requires the withholding of tax at source. Pursuant thereto, Revenue Regulations No. 2-98 was issued enumerating the income payments subject to final withholding tax, among which is interest from any peso bank deposit and yield, or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements x x x. According to the CTA En Banc, petitioners business falls under the phrase similar arrangements; as such, it should have withheld the corresponding 20% final tax on the interest from the deposits of its members. Issue Hence, the present recourse, where petitioner raises the issue of whether or not it is liable to pay the deficiency withholding taxes on interest from savings and time deposits of its members for the taxable years 1999 and 2000, as well as the delinquency interest of 20% per annum. Petitioners Arguments Petitioner argues that Section 24(B)(1) of the NIRC which reads in part, to wit: SECTION 24. Income Tax Rates. x x x x (B) Rate of Tax on Certain Passive Income:

(1) Interests, Royalties, Prizes, and Other Winnings. A final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest from any currency bank deposit and yield or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements; x x x applies only to banks and not to cooperatives, since the phrase similar arrangements is preceded by terms referring to banking transactions that have deposit peculiarities. Petitioner thus posits that the savings and time

deposits of members of cooperatives are not included in the enumeration, and thus not subject to the 20% final tax. To bolster its position, petitioner cites BIR Ruling No. 551-888[23] and BIR Ruling [DA-591-2006][24] where the BIR ruled that interests from deposits maintained by members of cooperative are not subject to withholding tax under Section 24(B)(1) of the NIRC. Petitioner further contends that pursuant to Article XII, Section 15 of the Constitution[25] and Article 2 of Republic Act No. 6938 (RA 6938) or the Cooperative Code of the Philippines,[26] cooperatives enjoy a preferential tax treatment which exempts their members from the application of Section 24(B)(1) of the NIRC. Respondents Arguments As a counter-argument, respondent invokes the legal maxim Ubi lex non distinguit nec nos distinguere debemos (where the law does not distinguish, the courts should not distinguish). Respondent maintains that Section 24(B)(1) of the NIRC applies to cooperatives as the phrase similar arrangements is not limited to banks, but includes cooperatives that are depositaries of their members. Regarding the exemption relied upon by petitioner, respondent adverts to the jurisprudential rule that tax exemptions are highly disfavored and construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. In this connection, respondent likewise points out that the deficiency tax assessments were issued against petitioner not as a taxpayer but as a withholding agent. Our Ruling The petition has merit. Petitioners invocation of BIR Ruling No. 551-888, reiterated in BIR Ruling [DA-591-2006], is proper. On November 16, 1988, the BIR declared in BIR Ruling No. 551-888 that cooperatives are not required to withhold taxes on interest from savings and time deposits of their members. The pertinent BIR Ruling reads: November 16, 1988 BIR RULING NO. 551-888 24 369-88 551-888 Gentlemen: This refers to your letter dated September 5, 1988 stating that you are a corporation established under P.D. No. 175 and duly registered with the Bureau of Cooperatives Development as full fledged cooperative of good standing with Certificate of Registration No. FF 563-RR dated August 8, 1985; and that one of your objectives is to provide and strengthen cooperative endeavor and extend assistance to members and non-members through credit scheme both in cash and in kind. Based on the foregoing representations, you now request in effect a ruling as to whether or not you are exempt from the following: 1. Payment of sales tax 2. Filing and payment of income tax 3. Withholding taxes from compensation of employees and savings account and time deposits of members. (Underscoring ours) In reply, please be informed that Executive Order No. 93 which took effect on March 10, 1987 withdrew all tax exemptions and preferential privileges e.g., income tax and sales tax, granted to cooperatives under P.D. No. 175 which were previously withdrawn by P.D. No. 1955 effective October 15, 1984 and restored by P.D. No. 2008 effective January 8, 1986. However, implementation of said Executive Order insofar as electric, agricultural, irrigation and waterworks cooperatives are concerned was suspended until June 30, 1987. (Memorandum Order No. 65 dated January 21, 1987 of the President) Accordingly, your tax exemption privilege expired as of June 30, 1987. Such being the case, you are now subject to income and sales taxes. Moreover, under Section 72(a) of the Tax Code, as amended, every employer making payment of wages shall deduct and withhold upon such wages a tax at the rates prescribed by Section 21(a) in relation to section 71, Chapter X, Title II, of the same Code as amended by Batas Pambansa Blg. 135 and implemented by Revenue Regulations No. 6-82 as amended. Accordingly, as an employer you are required to withhold the corresponding tax due from the compensation of your employees. Furthermore, under Section 50(a) of the Tax Code, as amended, the tax imposed or prescribed by Section 21(c) of the same Code on specified items of income shall be withheld by payor-corporation and/or person and paid in the

same manner and subject to the same conditions as provided in Section 51 of the Tax Code, as amended. Such being the case, and since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, you are not the party required to withhold the corresponding tax on the aforesaid savings account and time deposits of your members. (Underscoring ours) Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner The CTA First Division, however, disregarded the above quoted ruling in determining whether petitioner is liable to pay the deficiency withholding taxes on interest from the deposits of its members. It ratiocinated in this wise: This Court does not agree. As correctly pointed out by respondent in his Memorandum, nothing in the above quoted resolution will give the conclusion that savings account and time deposits of members of a cooperative are tax-exempt. What is entirely clear is the opinion of the Commissioner that the proper party to withhold the corresponding taxes on certain specified items of income is the payor-corporation and/or person. In the same way, in the case of interests earned from Philippine currency deposits made in a bank, then it is the bank which is liable to withhold the corresponding taxes considering that the bank is the payor-corporation. Thus, the ruling that a cooperative is not the proper party to withhold the corresponding taxes on the aforementioned accounts is correct. However, this ruling does not hold true if the savings and time deposits are being maintained in the cooperative, for in this case, it is the cooperative which becomes the payor-corporation, a separate entity acting no more than an agent of the government for the collection of taxes, liable to withhold the corresponding taxes on the interests earned. [27] (Underscoring ours) The CTA En Banc affirmed the above-quoted Decision and found petitioners invocation of BIR Ruling No. 551-88 misplaced. According to the CTA En Banc, the BIR Ruling was based on the premise that the savings and time deposits were placed by the members of the cooperative in the bank.[28] Consequently, it ruled that the BIR Ruling does not apply when the deposits are maintained in the cooperative such as the instant case. We disagree. There is nothing in the ruling to suggest that it applies only when deposits are maintained in a bank. Rather, the ruling clearly states, without any qualification, that since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members. This interpretation was reiterated in BIR Ruling [DA-591-2006] dated October 5, 2006, which was issued by Assistant Commissioner James H. Roldan upon the request of the cooperatives for a confirmatory ruling on several issues, among which is the alleged exemption of interest income on members deposit (over and above the share capital holdings) from the 20% final withholding tax. In the said ruling, the BIR opined that: x x x x 3. Exemption of interest income on members deposit (over and above the share capital holdings) from the 20% Final Withholding Tax. The National Internal Revenue Code states that a final tax at the rate of twenty percent (20%) is hereby imposed upon the amount of interest on currency bank deposit and yield or any other monetary benefit from the deposit substitutes and from trust funds and similar arrangement x x x for individuals under Section 24(B)(1) and for domestic corporations under Section 27(D)(1). Considering the members deposits with the cooperatives are not currency bank deposits nor deposit substitutes, Section 24(B)(1) and Section 27(D)(1), therefore, do not apply to members of cooperatives and to deposits of primaries with federations, respectively. It bears stressing that interpretations of administrative agencies in charge of enforcing a law are entitled to great weight and consideration by the courts, unless such interpretations are in a sharp conflict with the governing statute or the Constitution and other laws.[29] In this case, BIR Ruling No. 551-888 and BIR Ruling [DA-591-2006] are in perfect harmony with the Constitution and the laws they seek to implement. Accordingly, the interpretation in BIR Ruling No. 551-888 that cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members, which was reiterated in BIR Ruling [DA-591-2006], applies to the instant case. Members of cooperatives deserve a preferential tax treatment pursuant to RA 6938, as amended by RA 9520.

Given that petitioner is a credit cooperative duly registered with the Cooperative Development Authority (CDA), Section 24(B)(1) of the NIRC must be read together with RA 6938, as amended by RA 9520. Under Article 2 of RA 6938, as amended by RA 9520, it is a declared policy of the State to foster the creation and growth of cooperatives as a practical vehicle for promoting self-reliance and harnessing people power towards the attainment of economic development and social justice. Thus, to encourage the formation of cooperatives and to create an atmosphere conducive to their growth and development, the State extends all forms of assistance to them, one of which is providing cooperatives a preferential tax treatment. The legislative intent to give cooperatives a preferential tax treatment is apparent in Articles 61 and 62 of RA 6938, which read: ART. 61. Tax Treatment of Cooperatives. Duly registered cooperatives under this Code which do not transact any business with non-members or the general public shall not be subject to any government taxes and fees imposed under the Internal Revenue Laws and other tax laws. Cooperatives not falling under this article shall be governed by the succeeding section. ART. 62. Tax and Other Exemptions. Cooperatives transacting business with both members and nonmembers shall not be subject to tax on their transactions to members. Notwithstanding the provision of any law or regulation to the contrary, such cooperatives dealing with nonmembers shall enjoy the following tax exemptions; x x x. This exemption extends to members of cooperatives. It must be emphasized that cooperatives exist for the benefit of their members. In fact, the primary objective of every cooperative is to provide goods and services to its members to enable them to attain increased income, savings, investments, and productivity.[30] Therefore, limiting the application of the tax exemption to cooperatives would go against the very purpose of a credit cooperative. Extending the exemption to members of cooperatives, on the other hand, would be consistent with the intent of the legislature. Thus, although the tax exemption only mentions cooperatives, this should be construed to include the members, pursuant to Article 126 of RA 6938, which provides: ART. 126. Interpretation and Construction. In case of doubt as to the meaning of any provision of this Code or the regulations issued in pursuance thereof, the same shall be resolved liberally in favor of the cooperatives and their members. We need not belabor that what is within the spirit is within the law even if it is not within the letter of the law because the spirit prevails over the letter.[31] Apropos is the ruling in the case of Alonzo v. Intermediate Appellate Court,[32] to wit: But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge should be to discover in its provisions the intent of the lawmaker. Unquestionably, the law should never be interpreted in such a way as to cause injustice as this is never within the legislative intent. An indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render justice. Thus, we interpret and apply the law not independently of but in consonance with justice. Law and justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such a situation, we are not bound, because only of our nature and functions, to apply them just the same, [is] slavish obedience to their language. What we do instead is find a balance between the word and the will, that justice may be done even as the law is obeyed. As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded, yielding like robots to the literal command without regard to its cause and consequence. Courts are apt to err by sticking too closely to the words of a law, so we are warned, by Justice Holmes again, where these words import a policy that goes beyond them. While we admittedly may not legislate, we nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature. While we may not read into the law a purpose that is not there, we nevertheless have the right to read out of it the reason for its enactment. In doing so, we defer not to the letter that killeth but to the spirit that vivifieth, to give effect to the lawmakers will. The spirit, rather than the letter of a statute determines its construction, hence, a statute must be read according to its spirit or intent. For what is within the spirit is within the statute although it is not within the letter thereof, and that which is within the letter but not within the spirit is not within the statute. Stated differently, a thing which is

within the intent of the lawmaker is as much within the statute as if within the letter; and a thing which is within the letter of the statute is not within the statute unless within the intent of the lawmakers. (Underscoring ours) It is also worthy to note that the tax exemption in RA 6938 was retained in RA 9520. The only difference is that Article 61 of RA 9520 (formerly Section 62 of RA 6938) now expressly states that transactions of members with the cooperatives are not subject to any taxes and fees. Thus: ART. 61. Tax and Other Exemptions. Cooperatives transacting business with both members and non-members shall not be subjected to tax on their transactions with members. In relation to this, the transactions of members with the cooperative shall not be subject to any taxes and fees, including but not limited to final taxes on members deposits and documentary tax. Notwithstanding the provisions of any law or regulation to the contrary, such cooperatives dealing with non members shall enjoy the following tax exemptions: (Underscoring ours) x x x x This amendment in Article 61 of RA 9520, specifically providing that members of cooperatives are not subject to final taxes on their deposits, affirms the interpretation of the BIR that Section 24(B)(1) of the NIRC does not apply to cooperatives and confirms that such ruling carries out the legislative intent. Under the principle of legislative approval of administrative interpretation by reenactment, the reenactment of a statute substantially unchanged is persuasive indication of the adoption by Congress of a prior executive construction.[33] Moreover, no less than our Constitution guarantees the protection of cooperatives. Section 15, Article XII of the Constitution considers cooperatives as instruments for social justice and economic development. At the same time, Section 10 of Article II of the Constitution declares that it is a policy of the State to promote social justice in all phases of national development. In relation thereto, Section 2 of Article XIII of the Constitution states that the promotion of social justice shall include the commitment to create economic opportunities based on freedom of initiative and self-reliance. Bearing in mind the foregoing provisions, we find that an interpretation exempting the members of cooperatives from the imposition of the final tax under Section 24(B)(1) of the NIRC is more in keeping with the letter and spirit of our Constitution. All told, we hold that petitioner is not liable to pay the assessed deficiency withholding taxes on interest from the savings and time deposits of its members, as well as the delinquency interest of 20% per annum. In closing, cooperatives, including their members, deserve a preferential tax treatment because of the vital role they play in the attainment of economic development and social justice. Thus, although taxes are the lifeblood of the government, the States power to tax must give way to foster the creation and growth of cooperatives. To borrow the words of Justice Isagani A. Cruz: The power of taxation, while indispensable, is not absolute and may be subordinated to the demands of social justice.[34] WHEREFORE, the Petition is hereby GRANTED. The assailed December 18, 2007 Decision of the Court of Tax Appeals and the April 11, 2008 Resolution are REVERSED and SET ASIDE. Accordingly, the assessments for deficiency withholding taxes on interest from the savings and time deposits of petitioner's members for the taxable years 1999 and 2000 as well as the delinquency interest of 20% per annum are hereby CANCELLED. SO ORDERED. --------------------------------------------------------------------------------------------------------------------------------------------------------------- G.R. No. 93177 August 2, 1991 B/GEN. JOSE COMENDADOR, B/GEN, MARIELO BLANDO, CAPT. DANILO PIZARRO, CAPT. MANUEL ISON, COL. LUISITO SANCHEZ, LTC. ROMELINO GOJO, LTC. ARSENIO TECSON, LTC. RAFAEL GALVEZ, LTC. TIBURCIO FUSILLERO, LTC. ERICSON AURELIO, LTC. JACINTO LIGOT LTC. FRANKLIN BRAWNER, MAJ. ALFREDO OLIVEROS, MAJ. CESAR DE LA PERA, MAJ. LEUVINO VALENCIA, CAPT. FLORENCIO FLORES, CAPT. JAIME JUNIO, CAPT. DANILO LIM, CAPT. ELMER AMON, CAPT. VERGEL NACINO, and LT. JOEY SARROZA, petitioners, vs. GEN. RENATO S. DE VILLA, CHIEF OF STAFF, AFP, THE PTI INVESTIGATING PANEL COMPOSED OF: COL. MANUEL S. MENDIOLA, COL. VIRTUD NORBERTO L. DAGZA MAJ. FELIX V. BALDONADO and MAJ. ESTELITO L. PORNEA and GENERAL COURT-MARTIAL NO. 14 COMPOSED OF: B/GEN. DEMETRIO CAMUA COL. HERMINIO A. MENDOZA, COL. ERNESTO B. YU, COL. ROMEO ODI, COL. WILLY FLORENDO, COL. DIONY A. VENTURA and CAPT. FRANCISCO T. MALLILLIN, respondents. No. 95020 August 2, 1991 B/GEN. DEMETRIO CAMUA, COL. HERMIMO A. MENDOZA, COL. ERNESTO B. YU, COL. ROMEO ODI, COL. WILLY FLORENDO, COL. DIONY A. VENTURA, and CAPT. FRANCISCO T. MALLILLIN, petitioners, vs. HON. MIANO C. ASUNCION, Presiding Judge, Branch 104, REGIONAL TRIAL COURT, Q.C., LTC. JACINTO LIGOT PA., respondents.

No. 96948 August 2, 1991 B/GEN. JOSE COMENDADOR, B/GEN. MARCELO BLANDO, CAPT. DANILO PIZARRO PN, CAPT. MANUEL ISON PN, LTC. ROMELINO GOJO PN (M), LTC. ARSENIO TECSON PA, LTC. RAFAEL GALVEZ PA, LTC. TIBURCIO FUSILLERO PA, LTC. ERICSON AURELIO PA, LTC. JACINTO LIGOT PA, LTC. FRANKLIN BRAWNER PA, MAJ. ALFREDO OLIVEROS PA, MAJ. CESAR DE LA PENA PN (M): MAJ. LEUVINO VALENCIA PA, CAPT. FLORENCIO FLORES PA, CAPT. JAIME JUNIO PA, CAPT. DANILO LIM PA, CAPT. ELMER AMON PAF CAPT. VERGEL NACINO, and LT. JOEY SARROZA, petitioners, vs. B/GEN. DEMETRIO CAMUA COL. HERMINIO A. MENDOZA, COL. ERNESTO B. YU, COL. ROMEO ODI COL. WILLY FLORENDO, COL. DIONY A. VENTURA, and CAPT. FRANCISCO T. MALLILLIN PRESIDENT AND MEMBERS OF GENERAL COURT-MARTIAL NO. 14, respondents. No. 97454 August 2, 1991 AFP CHIEF OF STAFF LT. GEN. RODOLFO BIAZON, DEPUTY CHIEF OF STAFF MAJOR GEN. ALEXANDER AGUIRRE, PNP DIRECTOR GENERAL MAJOR GEN. CESAR NAZARENO and LT. COL. ALBERTO OLARIO, Commanding Officer of the PNP/INP Detention Center/Jail, petitioners, vs. HON. ANTONIO P. SOLANO, Presiding Judge, Regional Trial Court, Quezon City, Branch 86, CAPTAIN REYNALDO S. RAFAEL, 1 LT SERVANDO A. BAOANAN PN(M), 1 LT. WILFREDO JIMENEZ PAF 1 LT. ATANACIO T. MACALAN JR PMM 2LT ELISEO T. RASCO PC, 2LT JONAS CALLEJA PC, 2LT JAIRUS JS GELVEZON III PMM 2LT JOSELITO CABREROS PMM 2LT MEMEL ROJAS PN(M) and 2LT HERMINIO L. CANTACO PC, respondents. Armando M. Marcelo and Rainier L. Madrid for petitioners Luisito Sanchez, Tiburcio Fusillero, Ericson Aurelio, Levino Valencia, Danilo Arnon Vergel Nacino, Florencio Flores, Benigno Junio and Joey Sarroza. Manuel Q. Malvar for Rafael Galvez and Danny Lim. Manuel E. Valenzuela for Arsenio Tecson Mariano R. Santiago for Alfredo Oliveros. Ricardo J.M. Rivera for Manuel Ison. Castillo, Laman, Tan and Pantaleon for Danilo Pizarro. Alfredo Lazaro for Romelino Gojo. Manuel A. Barcelona, Jr. for Jose Comendador. Jonathan B.S. Rebong and Efren C. Carag for Marcelo Blando. Pablito V. Sanidad for Franklin Brawner and Ericson Aurelio. Efren C. Moncupa for All Tecson. M.M. Lazaro & Associates for respondents Ligot and Ison . Baldomero S.P. Gatbonton, Jr. for Jacinto Ligot. Salvador B. Britanico for Cesar de la Pena. Gilbert R.T. Reyes for Danilo Pizarro. Ponce Enrile, Cayetano, Reyes & Manalastas for petitioners in G.R. No. 93177. The Solicitor General for respondents. CRUZ, J.:p These four cases have been consolidated because they involve practically the same parties and related issues arising from the same incident. The petitioners in G.R. Nos. 93177 and 96948 and the private respondents in G.R. Nos. 95020 and 97454 are officers of the Armed Forces of the Philippines facing prosecution for their alleged participation in the failed coup d' etat that took place on December 1 to 9, 1989. The charges against them are violation of Articles of War (AW) 67 (Mutiny), AW 96 (Conduct Unbecoming an Officer and a Gentleman) and AW 94 (Various Crimes) in relation to Article 248 of the Revised Penal Code (Murder). In G.R. No. 93177, which is a petition for certiorari, prohibition and mandamus, they are questioning the conduct of the Pre-Trial Investigation PTI Panel constituted to investigate the charges against them and the creation of the General Court Martial GCM convened to try them. In G.R. No. 96948, the petitioners, besides challenging the legality of GCM No. 14, seek certiorari against its ruling denying them the right to peremptory challenge as granted by Article 18 of Com. Act No. 408. In G.R. No. 95020, the orders of the respondent judge of the Regional Trial Court of Quezon City are assailed on certiorari on the ground that he has no jurisdiction over GCM No. 14 and no authority either to set aside its ruling denying bail to the private respondents. In G.R. No. 97454, certiorari is also sought against the decision of the Regional Trial Court of Quezon City in a petition for habeas corpus directing the release of the private respondents. Jurisdictional objections are likewise raised as in G.R. No. 95020. I

Before the charges were referred to GCM No. 14, a Pre-Trial Investigation PTI Panel had been constituted pursuant to Office Order No. 16 dated January 14, 1990, to investigate the petitioners in G.R. Nos. 93177 and 96948. The PTI Panel issued a uniform subpoena dated January 30, 1990, individually addressed to the petitioners, to wit: You are hereby directed to appear in person before the undersigned Pre-Trial Investigating Officers on 12 Feb 90 9:00 a.m. at Kiangan Hall, Camp Crame Quezon City, then and there to submit your counter-affidavit and the affidavits of your witnesses, if any, in the pre-trial investigation of the charge/charges against you for violence of AWs _______________. DO NOT SUBMIT A MOTION TO DISMISS. Failure to submit the aforementioned counter-affidavits on the date above specified shall be deemed a waiver of your right to submit controverting evidence. On the same date, the petitioners acknowledged receipt of a copy of the charge sheet, sworn statements of witnesses, and death and medical certificates of victims of the rebellion. At the first scheduled hearing, the petitioners challenged the proceedings on various grounds, prompting the PTI Panel to grant them 10 days within which to file their objections in writing This was done through a Motion for Summary Dismissal dated February 21, 1990. In a resolution dated February 27,1990, the PTI Panel denied the motion and gave the petitioners 5 days from notice to submit their respective counter-affidavits and the affidavits of their witnesses. On March 7, 1990, the petitioners verbally moved for reconsideration of the foregoing denial and the PTI Panel gave them 7 days within which to reduce their motion to writing. This was done on March 14,1990. The petitioners now claim that there was no pre-trial investigation of the charges as mandated by Article of War 71, which provides: Art. 71. Charges Action upon. — Charges and specifications must be signed by a person subject to military law, and under the oath either that he has personal knowledge of, or has investigated, the matters set forth therein and that the same are true in fact, to the best of his knowledge and belief. No charge will be referred to a general court-martial for trial until after a thorough and impartial investigation thereof shall have been made. This investigation will include inquiries as to the truth of the matter set forth in said charges, form of charges, and what disposition of the case should be made in the interest of justice and discipline. At such investigation full opportunity shall be given to the accused to cross-examine witnesses against him if they are available and to present anything he may desire in his own behalf, either in defense or mitigation, and the investigating officer shall examine available witnesses requested by the accused. If the charges are forwarded after such investigation, they shall be accompanied by a statement of the substance of the testimony taken on both sides. (Emphasis supplied.) They also allege that the initial hearing of the charges consisted merely of a roll call and that no prosecution witnesses were presented to reaffirm their affidavits. while the motion for summary dismissal was denied, the motion for reconsideration remains unresolved to date and they have not been able to submit their counter-affidavits. At the hearing of May 15, 1990, the petitioners in G.R. No. 96948 manifested that they were exercising their right to raise peremptory challenges against the president and members of GCM No.14. They invoked Article 18 of Com. Act No. 408 for this purpose. GCM No. 14 ruled, however, that peremptory challenges had been discontinued under P.D. No. 39. In G.R. No. 95020, Ltc Jacinto Ligot applied for bail on June 5, 1990, but the application was denied by GCM No.14. He thereupon filed with the Regional Trial Court of Quezon City a petition for certiorari and mandamus with prayer for provisional liberty and a writ of preliminary injunction. After considering the petition and the answer thereto filed by the president and members of GCM No.14, Judge Maximiano C. Asuncion issued an order granting provisional liberty to Ligot. On July 28, 1990, Ligot filed an urgent omnibus motion to enforce the order for his release and to declare in contempt the commanding officer of the PC/INP Jail for disobey 'ng the said order. He later also complained that Generals De Villa and Aguirre had refused to release him "pending final resolution of the appeal to be taken" to this Court. After hearing, the trial court reiterated its order for the provisional liberty of Ligot, as well as of intervenors Ltc Franklin Brawner, Lt/Col. Arsenio Tecson and Maj. Alfredo Oliveros, and later of additional intervenors Ltc Romelino Gojo and Capt. Manuel Ison. On August 22, 1990, the trial court rendered judgment inter alia: (a) Declaring, that Section 13, Article III of the Constitution granting the right to bail to all persons with the defined exception is applicable and covers all military men facing court-martial proceedings. Accordingly, the assailed orders of General Court- Martial No. 14 denying bail to petitioner and intervenors on the mistaken assumption that bail does not apply to military men facing court-martial proceedings on the ground that there is no precedent, are hereby set aside and declared null and void. Respondent General Court-Martial No. 14 is hereby directed to conduct proceedings on the applications of bail of the petitioner, intervenors and which may as well include other persons facing charges before General Court-Martial No. 14.

Pending the proceedings on the applications for bail before General Court-Martial No. 14, this Court reiterates its orders of release on the provisional liberty of petitioner Jacinto Ligot as well as intervenors Franklin Brawner and Arsenio Tecson. On February 18, 1991, the private respondents in G.R. No. 97454 filed with this Court a petition for habeas corpus on the ground that they were being detained in Camp Crame without charges. The petition was referred to the Regional Trial Court of Quezon City, where it was raffled to respondent Judge Antonio P. Solano. Finding after hearing that no formal charges had been filed against the petitioners after more than a year after their arrest, the trial court ordered their release. II The Court has examined the records of this case and rules as follows. It appears that the petitioners in G.R. Nos. 93177 and 96948 were given several opportunities to present their side at the pre-trial investigation, first at the scheduled hearing of February 12, 1990, and then again after the denial of their motion of February 21, 1990, when they were given until March 7, 1990, to submit their counter-affidavits. On that date, they filed instead a verbal motion for reconsideration which they were again asked to submit in writing. This they did on March 13, 1990. The motion was in effect denied when the PTI Panel resolved to recommend that the charges be referred to the General Court Martial for trial. The said petitioners cannot now claim they have been denied due process because the investigation was resolved against them owing to their own failure to submit their counter-affidavits. They had been expressly warned In the subpoena sent them that "failure to submit the aforementioned counter-affidavits on the date above specified shall be deemed a waiver of (their) right to submit controverting evidence." They chose not to heed the warning. As their motions appeared to be dilatory, the PTI Panel was justified in referring the charges to GCM No. 14 without waiting for the petitioners to submit their defense. Due process is satisfied as long as the party is accorded an opportunity to be heard. If it is not availed of, it is deemed waived or forfeited without violation of the Bill of Rights. There was in our view substantial compliance with Article of War 71 by the PTI Panel. Moreover, it is now settled that "even a failure to conduct a pre-trial investigation does not deprive a general court- martial of jurisdiction." We so held in Arula v. Espino, 1 thus: xxx xxx xxx But even a failure to conduct a pre-trial investigation does not deprive a general court-martial of jurisdiction. The better accepted concept of pre-trial investigation is that it is directory, not mandatory, and in no way affects the jurisdiction of a court-martial. In Humphrey v. Smith, 336 U.S. 695, 93 L ed 986 (1949), the Court said: We do not think that the pre-trial investigation procedure by Article 70 (The Philippine counter-part is article of war 71, Commonwealth Act 408) can properly be construed as an indispensable pre-requisite to the exercise of the Army General court martial jurisdiction.. The Article does serve important functions in the administration of court-martial procedures and does provide safeguards to an accused. Its language is clearly such that a defendant could object to trial in the absence of the required investigation. In that event the court-martial could itself postpone trial pending the investigation. And the military reviewing authorities could consider the same contention, reversing a court- martial conviction where failure to comply with Article 70 has substantially injured an accused. But we are not persuaded that Congress intended to make otherwise valid court-martial judgments wholly void because pre-trial investigations fall short of the standards prescribed by Article 70. That Congress has not required analogous pre-trial procedure for Navy court-martial is an indication that the investigatory plan was not intended to be exalted to the jurisdictional level. xxx xxx xxx Shortly after enactment of Article 70 in 1920 the Judge Advocate General of the Army did hold that where there had been no pre-trial investigation, court-martial proceedings were void ab initio. But this holding has been expressly repudiated in later holdings of the Judge Advocate General. This later interpretation has been that the pre-trial requirements of Article 70 are directory, not mandatory, and in no way effect the jurisdiction of a court-martial. The War Department's interpretation was pointedly called to the attention of Congress in 1947 after which Congress amended Article 70 but left unchanged the language here under consideration. compensable pre-requisite to the exercise of Army general court-martial jurisdiction A trial before a general court-martial convened without any pretrial investigation under article of war 71 would of course be altogether irregular but the court-martial might nevertheless have jurisdiction. Significantly, this rule is similar to the one obtaining in criminal procedure in the civil courts to the effect that absence of preliminary investigation does not go into the jurisdiction of the court but merely to the regularity of the proceedings. As to what law should govern the conduct of the preliminary investigation, that issue was resolved more than two years ago in Kapunan v. De Villa, 2 where we declared: The Court finds that, contrary to the contention of petitioners, there was substantial compliance with the requirements of law as provided in the Articles of War and P.D. No. 77, as amended by P.D. No. 911. The amended charge sheets, charging petitioners and their co-respondents with mutiny and conduct unbecoming an officer, were signed by Maj. Antonio Ruiz, a person subject to military law, after he had investigated the matter through an evaluation of the pertinent records, including the reports of respondent AFP Board of Officers, and was convinced

of the truth of the testimonies on record. The charge sheets were sworn to by Maj. Ruiz, the "accuser," in accordance with and in the manner provided under Art. 71 of the Articles of War. Considering that P.D. No. 77, as amended by P.D. No. 911, is only of suppletory application, the fact that the charge sheets were not certified in the manner provided under said decrees, i.e., that the officer administering the oath has personally examined the affiant and that he is satisfied that they voluntarily executed and understood its affidavit, does not invalidate said charge sheets. Thereafter, a "pretrial investigation" was conducted by respondent Maj. Baldonado, wherein, pursuant to P.D. No. 77, as amended by P.D. No. 911, petitioners were subpoenaed and required to file their counter-affidavit. However, instead of doing so, they filed an untitled pleading seeking the dismissal of the charges against them. That petitioners were not able to confront the witnesses against them was their own doing, for they never even asked Maj. Baldonado to subpoena said witnesses so that they may be made to answer clarificatory questions in accordance with P. D, No. 77, as amended by P.D. No. 911. The petitioners also allege that GCM No. 14 has not been constitute in accordance with Article 8 of the Articles of War because General Order No. M-6, which supposedly convened the body, was not signed by Gen. Renato de Villa as Chief of Staff. Article of War No. 8 reads: Art. 8. General Courts-Martial. — The President of the Philippines, the Chief of Staff of the Armed Forces of the Philippines, the Chief of Constabulary and, when empowered by the President, the commanding officer of a major command or task force, the commanding officer of a division, the commanding officer of a military area, the superintendent of the Military Academy, the commanding officer of a separate brigade or body of troops may appoint general courts-martial; but when any such commander is the accuser or the prosecutor of the person or persons to be tried, the court shall be appointed by superior competent authority. ... While it is true that General Order No. M-6 was not signed by Gen. De Villa, there is no doubt that he authorized it because the order itself said it was issued "By Command of General De Villa" and it has not been shown to be spurious. As observed by the Solicitor General, the Summary Disposition Form showed that Gen. De Villa, as Chief of Staff, AFP, actually constituted GCM No. 14 and appointed its president and members. It is significant that General De Villa has not unauthorized or revoked or in any way disowned the said order, as he would certainly have done if his authority had been improperly invoked. On the contrary, as the principal respondent in G.R. No. 93177, he sustained General Order No. M 6 in the Comment field for him and the other respondents by the Solicitor General. Coming now to the right to peremptory challenge, we note that this was originally provided for under Article 18 of Com. Act No. 408 (Articles of War), as amended by Rep. Act No. 242, on June 12, 1948, to wit: Art. 18. Challenges. — Members of general or special courts-martial may be challenged by the accused or the trial judge advocate for cause stated to the court. The court shall determine the relevancy and validity thereof, and shall not receive a challenge to more than one member at a time. Challenges by the trial judge advocate shall ordinarily be presented and decided before those by the accused are offered. Each side shall be entitled to the peremptory challenge, but the law member of the court shall not be challenged except for cause. The history of peremptory challenge was traced in Martelino v. Alejandro, 3 thus: In the early formative years of the infant Philippine Army, after the passage in 1935 of Commonwealth Act No. 1 (otherwise known as the National Defense Act), except for a handful of Philippine Scout officers and graduates of the United States military and naval academies who were on duty with the Philippine Army, there was a complete dearth of officers learned in military law, its aside from the fact that the officer corps of the developing army was numerically made equate for the demands of the strictly military aspects of the national defense program. Because of these considerations it was then felt that peremptory challenges should not in the meanwhile be permitted and that only challenges for cause, in any number, would be allowed. Thus Article 18 of the Articles of War (Commonwealth Act No. 408), as worded on September 14, 1938, the date of the approval of the Act, made no mention or reference to any peremptory challenge by either the trial judge advocate of a court- martial or by the accused. After December 17,1958, when the Manual for Courts-Martial of the Philippine Army became effective, the Judge Advocate General's Service of the Philippine Army conducted a continuing and intensive program of training and education in military law, encompassing the length and breadth of the Philippines. This program was pursued until the outbreak of World War 11 in the Pacific on December 7, 1941. After the formal surrender of Japan to the allies in 1945, the officer corps of the Armed Forces of the Philippines had expanded to a very large number, and a great many of the officers had been indoctrinated in military law. It was in these environmental circumstances that Article of War 18 was amended on June 12,1948 to entitle "each side" to one peremptory challenge, with the sole proviso that "the law member of court shall not be challenged except for cause. On September 27,1972, President Marcos issued General Order No. 8, empowering the Chief of Staff of the Armed Forces to create military tribunals "to try and decide cases of military personnel and such other cases as may be referred to them. On November 7,1972, he promulgated P.D. No. 39 (Governing the Creation, Composition, Jurisdiction, Procedure, and other matters relevant to military Tribunals). This decree disallowed the peremptory challenge, thus: No peremptory challenge shall be allowed. Challenges for cause may be entertained to insure impartiality and good faith. Challenges shall immediately be heard and determined by a majority of the members excluding the

challenged member. A tie vote does not disqualify the challenged member. A successfully challenged member shall be immediately replaced. On June 11, 1978, President Marcos promulgated P.D. No. 1498, or the National Security Code, which was a compilation and codification of decrees, general orders, LOI and policies intended "to meet the continuing threats to the existence, security and stability of the State." The modified rule on challenges under P.D. No. 39 was embodied in this decree. On January 17,1981, President Marcos issued Proc. No. 2045 proclaiming the termination of the state of martial law throughout the Philippines. The proclamation revoked General Order No. 8 and declared the dissolution of the military tribunals created pursuant thereto upon final determination of the cases pending therein. P.D. No. 39 was issued to implement General Order No. 8 and the other general orders mentioned therein. With the termination of martial law and the dissolution of the military tribunals created thereunder, the reason for the existence of P.D. No. 39 ceased automatically. It is a basic canon of statutory construction that when the reason of the law ceases, the law itself ceases. Cessante ratione legis, cessat ipsa lex. This principle is also expressed in the maxim ratio legis est anima: the reason of law is its soul. Applying these rules, we hold that the withdrawal of the right to peremptory challenge in L P.D. No. 39 became ineffective when the apparatus of martial law was dismantled with the issuance of Proclamation No. 2045, As a result, the old rule embodied in Article 18 of Com. Act No. 408 was automatically revived and now again allows the right to peremptory challenge. We do not agree with the respondents in G.R. No. 96948 that the right to peremptory challenge remains withdrawn under P.D. No. 39. To repeat for emphasis, this decree was itself withdrawn when martial law was lifted on January 17, 1981. Indeed, even if not so withdrawn, it could still be considered no longer operative, having been cast out under the new dispensation as, in the words of the Freedom Constitution, one of the "iniquitous vestiges of the previous regime. The military tribunal was one of the most oppressive instruments of martial law. It is curious that the present government should invoke the rules of that discredited body to justify its action against the accused officers. The Court realizes that the recognition of the right to peremptory challenge may be exploited by a respondent in a court-martial trial to delay the proceedings and defer his deserved Punishment. It is hoped that the accused officers in the cases at bar will not be so motivated. At any rate, the wisdom of Com. Act No. 408, in the light of present circumstances, is a matter addressed to the law-makers and not to this Court. The judiciary can only interpret and apply the laws without regard to its own misgivings on their adverse effects. This is a problem only the political departments can resolve. The petitioners in G.R. Nos. 95020 and 97454 question the propriety of the petition for certiorari and mandamus and the petition for habeas corpus filed by the private respondents with the Regional Trial Courts of Quezon City. It is argued that since the private respondents are officers of the Armed Forces accused of violations of the Articles of War, the respondent courts have no authority to order their release and otherwise interfere with the court-martial proceedings. The petitioners further contend that under Sec. 9(3) of BP 1 29, the Court of Appeals is vested with "exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders, or awards of Regional Trial Courts and quasi-judicial agencies, instrumentalities, boards or commissions." Rather irrelevantly, the petitioners also cite the case of Yang v. Court of Appeals 4 where this Court held that "appeals from the Professional Regulation Commission are now exclusively cognizable by the Court of Appeals. It should be noted that the aforecited provision and the case cited refer to ordinary appeals and not to the remedies employed by the accused officers before the respondent courts. In Martelino, we observed as follows: It is true that civil courts as a rule exercise no supervision or correcting power over the proceedings of courts-martial, and that mere errors in their proceedings are not open to consideration. The single inquiry, the test, is jurisdiction. But it is equally true that in the exercise of their undoubted discretion, courts-martial may commit such an abuse of discretion — what in the language of Rule 65 is referred to as "grave abuse of discretion" — as to give rise to a defect in their jurisdiction. This is precisely the point at issue in this action suggested by its nature as one for certiorari and prohibition ... . The Regional Trial Court has concurrent jurisdiction with the Court of Appeals and the Supreme Court over petitions for certiorari, prohibition or mandamus against inferior courts and other bodies and on petitions for habeas corpus and quo warranto. 5 In the absence of a law providing that the decisions, orders and ruling of a court-martial or the Office of the Chief of Staff can be questioned only before the Court of Appeals and the Supreme Court, we hold that the Regional Trial Court can exercise similar jurisdiction. We find that the right to bail invoked by the private respondents in G.R. Nos. 95020 has traditionally not been recognized and is not available in the military, as an exception to the general rule embodied in the Bill of Rights. This much was suggested in Arula, where we observed that "the right to a speedy trial is given more emphasis in the military where the right to bail does not exist. The justification for this exception was well explained by the Solicitor General as follows:

The unique structure of the military should be enough reason to exempt military men from the constitutional coverage on the right to bail. Aside from structural peculiarity, it is vital to note that mutinous soldiers operate within the framework of democratic system, are allowed the fiduciary use of firearms by the government for the discharge of their duties and responsibilities and are paid out of revenues collected from the people. All other insurgent elements carry out their activities outside of and against the existing political system. xxx xxx xxx National security considerations should also impress upon this Honorable Court that release on bail of respondents constitutes a damaging precedent. Imagine a scenario of say 1,000 putschists roaming the streets of the Metropolis on bail, or if the assailed July 25,1990 Order were sustained, on "provisional" bail. The sheer number alone is already discomforting. But, the truly disquieting thought is that they could freely resume their heinous activity which could very well result in the overthrow of duly constituted authorities, including this Honorable Court, and replace the same with a system consonant with their own concept of government and justice. The argument that denial from the military of the right to bail would violate the equal protection clause is not acceptable. This guaranty requires equal treatment only of persons or things similarly situated and does not apply where the subject of the treatment is substantially different from others. The accused officers can complain if they are denied bail and other members of the military are not. But they cannot say they have been discriminated against because they are not allowed the same right that is extended to civilians. On the contention of the private respondents in G.R. No. 97454 that they had not been charged after more than one year from their arrest, our finding is that there was substantial compliance with the requirements of due process and the right to a speedy trial. The petition for habeas corpus was directly filed with this Court on February 18, 1991, and was referred to the Regional Trial Court of Quezon City for raffle, hearing and decision. It was heard on February 26, 1991, by the respondent court, where the petitioners submitted the charge memorandum and specifications against the private respondents dated January 30, 1991. On February 12, 1991, pursuant to Office Order No. 31-91, the PTI panel was created and initial investigation was scheduled on March 12, 1991 at 2:00 p.m. On March 20, 1991, the private respondents received the copies of the charges, charge sheets and specifications and were required to submit their counter-affidavits on or before April 11, 1991. There was indeed a delay of more than one year in the investigation and preparation of the charges against the private respondents. However, this was explained by the Solicitor General thus: ... The AFP Special Investigating Committee was able to complete it pre-charge investigation only after one (1) year because hundreds of officers and thousands of enlisted men were involved in the failed coup. All of them, as well as other witnesses, had to be interviewed or investigated, and these inevitably took months to finish. The pre-charge investigation was rendered doubly difficult by the fact that those involved were dispersed and scattered throughout the Philippines. In some cases, command units, such as the Scout Rangers, have already been disbanded. After the charges were completed, the same still had to pass review and approval by the AFP Chief of Staff. While accepting this explanation, the Court nevertheless must reiterate the following admonition: This Court as protector of the rights of the people, must stress the point that if the participation of petitioner in several coup attempts for which he is confined on orders of Adjutant General Jorge Agcaoili cannot be established and no charges can be filed against him or the existence of a prima facie case warranting trial before a military commission is wanting, it behooves respondent then Major General Rodolfo Biazon (now General) to release petitioner. Respondents must also be reminded that even if a military officer is arrested pursuant to Article 70 of the Articles of War, indefinite confinement is not sanctioned, as Article 71 thereof mandates that immediate steps must be taken to try the person accused or to dismiss the charge and release him. Any officer who is responsible for unnecessary delay in investigating or carrying the case to a final conclusion may even be punished as a court martial may direct. 6

It should be noted, finally, that after the decision was rendered by Judge Solano on February 26, 1991, the government filed a notice of appeal ad cautelam and a motion for reconsideration, the latter was ultimately denied, after hearing, on March 4, 1991. The 48- hour period for appeal under Rule 41, Section 18, of the Rules of Court did not run until after notice of such denial was received by the petitioners on March 12, 1991. Contrary to the private respondents' contention, therefore, the decision had not yet become final and executory when the special civil action in G.R. No. 97454 was filed with this Court on March 12, 1991. III Regarding the propriety of the petitions at bar, it is well to reiterate the following observations of the Court in Arula: The referral of charges to a court-martial involves the exercise of judgment and discretion (AW 71). A petition for certiorari, in order to prosper, must be based on jurisdictional grounds because, as long as the respondent acted with jurisdiction, any error committed by him or it in the exercise thereof will amount to nothing more than an error of judgment which may be reviewed or corrected only by appeal. Even an abuse of discretion is not sufficient by itself to justify the issuance of a writ of certiorari.

As in that case, we find that the respondents in G.R. No. 93177 have not acted with grave abuse of discretion or without or in excess of jurisdiction to justify the intervention of the Court and the reversal of the acts complained of by the petitioners. Such action is indicated, however, in G.R. No. 96948, where we find that the right to peremptory challenge should not have been denied, and in G.R. Nos. 95020 and 97454, where the private respondents should not have been ordered released. ACCORDINGLY, in G.R. No. 93177, the petition is DISMISSED for lack of merit. In G.R. No. 96948, the petition is GRANTED, and the respondents are DIRECTED to allow the petitioners to exercise the right of peremptory challenge under Article 18 of the Articles of War. In G.R. Nos. 95020 and 97454, the petitions are also GRANTED, and the orders of the respondent courts for the release of the private respondents are hereby REVERSED and SET ASIDE. No costs. SO ORDERED. Fernan, C.J., Narvasa, Melencio-Herrera, Gutierrez, Jr., Paras, Feliciano, Gancayco, Padilla, Bidin, Griño-Aquino, Medialdea, Regalado and Davide, Jr., JJ., concur. Separate Opinions SARMIENTO, J., concurring: I concur with the ponencia of my esteemed colleague, Mr. Justice Cruz, but I dissent insofar as he would deny bail to accused military personnel. The Constitution explicitly grants the right to bail to "all persons" before conviction, with the only exception of "those charged with offenses punishable by reclusion perpetua when evidence of guilt is strong." 1 The Charter also states that "[T]he right to bail shall not be impaired even if the writ of habeas corpus is suspended." 2 To deny the military officers here concerned of the right to bail is to circumscribe the inclusive meaning of "all persons" — the coverage of the right. I believe that military officers fall within "persons". The picture conjured up by the Solicitor General of "a scenario of say 1,000 putschists roaming the streets of the Metropolis on bail, or if the assailed July 25, 1990 Order were sustained, on "provisional" bail [t]he sheer number alone is already discomforting . . . but, the truly disquieting thought is that they could freely resume their heinous activity which could very well result in the overthrow of duly constituted authorities, including this Honorable Court, and replace the same with a system consonant with their own concept of government and justice." 3 But would a scenario of 1,000 murderers or drug pushers roaming the streets of the metropolis justify a denial of the right to bail? Would not that dark picture painted by the Solicitor General be reproduced by 1,000 "equally dangerous" elements of society? We gave bail Senator Enrile and General Brawner. I find no reason why the petitioners should not be granted the same right. The majority would point to tradition, supposed to be firmly settled, as an argument to deny bail. I submit, however, that tradition is no argument. First, the Constitution does not say it. Second, we are a government of laws, not tradition. If there are precedents that attest to the contrary, I submit that a reexamination is in order. Separate Opinions SARMIENTO, J., concurring: I concur with the ponencia of my esteemed colleague, Mr. Justice Cruz, but I dissent insofar as he would deny bail to accused military personnel. The Constitution explicitly grants the right to bail to "all persons" before conviction, with the only exception of "those charged with offenses punishable by reclusion perpetua when evidence of guilt is strong." 1 The Charter also states that "[T]he right to bail shall not be impaired even if the writ of habeas corpus is suspended." 2 To deny the military officers here concerned of the right to bail is to circumscribe the inclusive meaning of "all persons" — the coverage of the right. I believe that military officers fall within "persons". The picture conjured up by the Solicitor General of "a scenario of say 1,000 putschists roaming the streets of the Metropolis on bail, or if the assailed July 25, 1990 Order were sustained, on "provisional" bail [t]he sheer number alone is already discomforting . . . but, the truly disquieting thought is that they could freely resume their heinous activity which could very well result in the overthrow of duly constituted authorities, including this Honorable Court, and replace the same with a system consonant with their own concept of government and justice." 3 But would a scenario of 1,000 murderers or drug pushers roaming the streets of the metropolis justify a denial of the right to bail? Would not that dark picture painted by the Solicitor General be reproduced by 1,000 "equally dangerous" elements of society?

We gave bail Senator Enrile and General Brawner. I find no reason why the petitioners should not be granted the same right. The majority would point to tradition, supposed to be firmly settled, as an argument to deny bail. I submit, however, that tradition is no argument. First, the Constitution does not say it. Second, we are a government of laws, not tradition. If there are precedents that attest to the contrary, I submit that a reexamination is in order. ----------------------------------------------------------------------------------------------------------------------------------------------------------------- F. Doctrine of Necessary Implications

G.R. No. 88979 February 7, 1992 LYDIA O. CHUA, petitioner, vs. THE CIVIL SERVICE COMMISSION, THE NATIONAL IRRIGATION ADMINISTRATION and THE DEPARTMENT OF BUDGET AND MANAGEMENT, respondents. PADILLA, J.: Pursuant to the policy of streamlining and trimming the bureaucracy, Republic Act No. 6683 was approved on 2 December 1988 providing for benefits for early retirement and voluntary separation from the government service as well as for involuntary separation due to reorganization. Deemed qualified to avail of its benefits are those enumerated in Sec. 2 of the Act, as follows: Sec. 2. Coverage. — This Act shall cover all appointive officials and employees of the National Government, including government-owned or controlled corporations with original charters, as well as the personnel of all local government units. The benefits authorized under this Act shall apply to all regular, temporary, casual and emergency employees, regardless of age, who have rendered at least a total of two (2) consecutive years of government service as of the date of separation. Uniformed personnel of the Armed Forces of the Philippines including those of the PC-INP are excluded from the coverage of this Act. Petitioner Lydia Chua believing that she is qualified to avail of the benefits of the program, filed an application on 30 January 1989 with respondent National Irrigation Administration (NIA) which, however, denied the same; instead, she was offered separation benefits equivalent to one half (1/2) month basic pay for every year of service commencing from 1980. A recourse by petitioner to the Civil Service Commission yielded negative results. 1 Her letter for reconsideration dated 25 April 1989 pleaded thus:

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

xxx xxx xxx 2

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

We regret to inform you that your request cannot be granted. The provision of Section 3.1 of Joint DBM-CSC Circular Letter No. 89-1 does not only require an applicant to have two years of satisfactory service on the date of separation/retirement but further requires said applicant to be on a casual, emergency, temporary or regular employment status as of December 2, 1988, the date of enactment of R.A. 6683. The law does not contemplate contractual employees in the coverage. Inasmuch as your employment as of December 31, 1988, the date of your separation from the service, is coterminous with the NIA project which is contractual in nature, this Commission shall sustain its original decision.

xxx xxx xxx 3

In view of such denial, petitioner is before this Court by way of a special civil action for certiorari, insisting that she is entitled to the benefits granted under Republic Act No. 6683. Her arguments: It is submitted that R.A. 6683, as well as Section 3.1 of the Joint DBM-CSC Circular Letter No. 89-1 requires an applicant to be on a casual, emergency, temporary or regular employment status. Likewise, the provisions of Section 23 (sic) of the Joint DBM-CSC Circular Letter No. 88-1, implementing guidelines of R.A. No. 6683, provides: "2.3 Excluded from the benefits under R.A. No. 6683 are the following: a) Experts and Consultants hired by agencies for a limited period to perform specific activities or services with a definite expected output: i.e. membership in Task Force, Part-Time, Consultant/Employees. b) Uniformed personnel of the Armed Forces of the Philippines including those of the Philippine Constabulary and Integrated National Police (PC-INP).

c) Appointive officials and employees who retire or elect to be separated from the service for optional retirement with gratuity under R.A. No. 1616, 4968 or with pension under R.A. No. 186, as amended by R.A. No. 6680 or P.D. No. 1146, an amended, or vice- versa. d) Officials and employees who retired voluntarily prior to the enactment of this law and have received the corresponding benefits of that retirement/separation. e) Officials and employees with pending cases punishable by mandatory separation from the service under existing civil service laws, rules and regulations; provided that if such officials and employees apply in writing within the prescriptive period for the availment of the benefits herein authorized, shall be allowed only if acquitted or cleared of all charges and their application accepted and approved by the head of office concerned." Based on the above exclusions, herein petitioner does not belong to any one of them. Ms. Chua is a full time employee of NIA entitled to all the regular benefits provided for by the Civil Service Commission. She held a permanent status as Personnel Assistant A, a position which belongs to the Administrative Service. . . . If casuals and emergency employees were given the benefit of R.A. 6683 with more reason that this petitioner who was holding a permanent status as Personnel Assistant A and has rendered almost 15 years of faithful, continuous service in the government should be similarly rewarded by the beneficient (sic) purpose of the law. 4

The NIA and the Civil Service Commission reiterate in their comment petitioner's exclusion from the benefits of Republic Act No. 6683, because: 1. Petitioner's employment is coterminous with the project per appointment papers kept by the Administrative Service in the head office of NIA (the service record was issued by the Watershed Management and Erosion Control Project (WMECP), Pantabangan, Nueva Ecija). The project, funded by the World Bank, was completed as of 31 December 1988, after which petitioner's position became functus officio. 2. Petitioner is not a regular and career employee of NIA — her position is not included in its regular plantilla. She belongs to the non-career service (Sec. 6, P.D. No. 807) which is inherently short-lived, temporary and transient; on the other hand, retirement presupposes employment for a long period. The most that a non-career personnel can expect upon the expiration of his employment is financial assistance. Petitioner is not even qualified to retire under the GSIS law. 3. Assuming arguendo that petitioner's appointment is permanent, security of tenure is available only for the term of office (i.e., duration of project). 4. The objective of Republic Act No. 6683 is not really to grant separation or retirement benefits but reorganization 5 to streamline government functions. The application of the law must be made consistent with the purpose for which it was enacted. Thus, as the expressed purpose of the law is to reorganize the government, it will not have any application to special projects such as the WMECP which exists only for a short and definite period. This being the nature of special projects, there is no necessity for offering its personnel early retirement benefits just to induce voluntary separation as a step to reorganization. In fact, there is even no need of reorganizing the WMECP considering its short and limited life-span. 6

5. The law applies only to employees of the national government, government-owned or controlled corporations with original charters and local government units. Due to the impossibility of reconciling the conflicting interpretations of the parties, the Court is called upon to define the different classes of employees in the public sector (i.e. government civil servants). Who are regular employees? The Labor Code in Art. 280 (P.D. No. 492, as amended) deems an employment regular where the employee has been engaged to perform activities which are usually necessary or desirable in the usual business or trade of the employer. No equivalent definition can be found in P.D.No. 807 (promulgated on 6 October 1975, which superseded the Civil Service Act of 1965 — R.A. No. 2260) or in the Administrative Code of 1987 (Executive Order No. 292 promulgated on 25 July 1987). The Early Retirement Law itself (Rep. Act No. 6683) merely includes such class of employees (regular employees) in its coverage, unmindful that no such specie is employed in the public sector. The appointment status of government employees in the career service is classified as follows: 1. permanent — one issued to a person who has met the requirements of the position to which appointment is made, in accordance with the provisions of the Civil Service Act and the Rules and Standards promulgated in pursuance thereof; 7

2. temporary — In the absence of appropriate eligibles and it becomes necessary in the public interest to fill a vacancy, a temporary appointment should be issued to a person who meets all the requirements for the position to which he is being appointed except the appropriate civil service eligibility: Provided, That such temporary appointment shall not exceed twelve months, but the appointee may be replaced sooner if a qualified civil service eligible becomes available. 8 The Administrative Code of 1987 characterizes the Career Service as: (1) Open Career positions for appointment to which prior qualification in an appropriate examination is required; (2) Closed Career positions which are scientific, or highly technical in nature; these include the faculty and academic staff of state colleges and universities, and scientific and technical positions in scientific or research institutions which shall establish and maintain their own merit systems;

(3) Positions in the Career Executive Service; namely, Undersecretary, Assistant Secretary, Bureau Director, Assistant Bureau Director, Regional Director, Assistant Regional Director, Chief of Department Service and other officers of equivalent rank as may be identified by the Career Executive Service Board, all of whom are appointed by the President. (4) Career officers, other than those in the Career Executive Service, who are appointed by the President, such as the Foreign Service Officers in the Department of Foreign Affairs; (5) Commission officers and enlisted men of the Armed Forces which shall maintain a separate merit system; (6) Personnel of government-owned or controlled corporations, whether performing governmental or proprietary functions, who do not fall under the non-career service; and (7) Permanent laborers, whether skilled, semi-skilled, or unskilled. 9

The Non-Career Service, on the other hand, is characterized by: . . . (1) entrance on bases other than those of the usual tests of merit and fitness utilized for the career service; and (2) tenure which is limited to a period specified by law, or which is coterminous with that of the appointing authority or subject to his pleasure, or which is limited to the duration of a particular project for which purpose employment was made. Included in the non-career service are: 1. elective officials and their personal or confidential staff; 2. secretaries and other officials of Cabinet rank who hold their positions at the pleasure of the President and their personal confidential staff(s); 3. Chairman and Members of Commissions and boards with fixed terms of office and their personal or confidential staff; 4. contractual personnel or those whose employment in the government is in accordance with a special contract to undertake a specific work or job requiring special or technical skills not available in the employing agency, to be accomplished within a specific period, which in no case shall exceed one year and performs or accomplishes the specific work or job, under his own responsibility with a minimum of direction and supervision from the hiring agency. 5. emergency and seasonal personnel. 10

There is another type of non-career employee: Casual — where and when employment is not permanent but occasional, unpredictable, sporadic and brief in nature (Caro v. Rilloroza, 102 Phil. 70; Manuel v. P.P. Gocheco Lumber Co., 96 Phil. 945) Consider petitioner's record of service: Service with the government commenced on 2 December 1974 designated as a laborer holding emergency status with the NIA — Upper Pampanga River Project, R & R Division. 11 From 24 March 1975 to 31 August 1975, she was a research aide with temporary status on the same project. On 1 September 1975 to 31 December 1976, she was with the NIA-FES III; R & R Division, then on 1 January 1977 to 31 May 1980, she was with NIA — UPR IIS (Upper Pampanga River Integrated Irrigation Systems) DRD. On 1 June 1980, she went to NIA — W.M.E.C.P. (Watershed Management & Erosion Control Project) retaining the status of temporary employee. While with this project, her designation was changed to personnel assistant on 5 November 1981; starting 9 July 1982, the status became permanent until the completion of the project on 31 December 1988. The appointment paper 12 attached to the OSG's comment lists her status as coterminous with the Project. The employment status of personnel hired under foreign — assisted projects is considered coterminous, that is, they are considered employees for the duration of the project or until the completion or cessation of said project (CSC Memorandum Circular No. 39, S. 1990, 27 June 1990). Republic Act No. 6683 seeks to cover and benefits regular, temporary, casual and emergency employees who have rendered at least a total of two (2) consecutive years government service. Resolution No. 87-104 of the CSC, 21 April 1987, provides: WHEREAS, pursuant to Executive Order No. 966 dated June 22, 1984, the Civil Service Commission is charged with the function of determining creditable services for retiring officers and employees of the national government; WHEREAS, Section 4 (b) of the same Executive Order No. 966 provides that all previous services by an officer/employee pursuant to a duly approved appointment to a position in the Civil Service are considered creditable services, while Section 6 (a) thereof states that services rendered on contractual, emergency or casual status are non-creditable services; WHEREAS, there is a need to clarify the aforesaid provisions inasmuch as some contractual, emergency or casual employment are covered by contracts or appointments duly approved by the Commission. NOW, therefore, the Commission resolved that services rendered on contractual, emergency or casual status, irrespective of the mode or manner of payment therefor shall be considered as creditable for retirement purposes subject to the following conditions: (emphasis provided) 1. These services are supported by approved appointments, official records and/or other competent evidence. Parties/agencies concerned shall submit the necessary proof of said services; 2. Said services are on full time basis and rendered prior to June 22, 1984, the effectivity date of Executive Order No. 966; and

3. The services for the three (3) years period prior to retirement are continuous and fulfill the service requirement for retirement. What substantial differences exist, if any, between casual, emergency, seasonal, project, co-terminous or contractual personnel? All are tenurial employees with no fixed term, non-career, and temporary. The 12 May 1989 CSC letter of denial 13 characterized herein petitioner's employment as co-terminous with the NIA project which in turn was contractual in nature. The OSG says petitioner's status is coterminous with the Project. CSC Memorandum Circular No. 11, series of 1991 (5 April 1991) characterizes the status of a co-terminous employee — (3) Co-terminous status shall be issued to a person whose entrance in the service is characterized by confidentiality by the appointing authority or that which is subject to his pleasure or co-existent with his tenure. The foregoing status (coterminous) may be further classified into the following: a) co-terminous with the project — When the appointment is co-existent with the duration of a particular project for which purpose employment was made or subject to the availability of funds for the same; b) co-terminous with the appointing authority — when appointment is co-existent with the tenure of the appointing authority. c) co-terminous with the incumbent — when appointment is co-existent with the appointee, in that after the resignation, separation or termination of the services of the incumbent the position shall be deemed automatically abolished; and d) co-terminous with a specific period, e.g. "co-terminous for a period of 3 years" — the appointment is for a specific period and upon expiration thereof, the position is deemed abolished. It is stressed, however, that in the last two classifications (c) and (d), what is termed co-terminous is the position, and not the appointee-employee. Further, in (c) the security of tenure of the appointee is guaranteed during his incumbency; in (d) the security of tenure is limited to a specific period. A coterminous employee is a non-career civil servant, like casual and emergency employees. We see no solid reason why the latter are extended benefits under the Early Retirement Law but the former are not. It will be noted that Rep. Act No. 6683 expressly extends its benefits for early retirement to regular, temporary, casual and emergency employees. But specifically excluded from the benefits are uniformed personnel of the AFP including those of the PC-INP. It can be argued that, expressio unius est exclusio alterius. The legislature would not have made a specific enumeration in a statute had not the intention been to restrict its meaning and confine its terms and benefits to those expressly mentioned 14 or casus omissus pro omisso habendus est — A person, object or thing omitted from an enumeration must be held to have been omitted intentionally. 15 Yet adherence to these legal maxims can result in incongruities and in a violation of the equal protection clause of the Constitution. The case of Fegurin, et al. v. NLRC, et al., 16 comes to mind where, workers belonging to a work pool, hired and rehired continuously from one project to another were considered non-project-regular and permanent employees. Petitioner Lydia Chua was hired and rehired in four (4) successive projects during a span of fifteen (15) years. Although no proof of the existence of a work pool can be assumed, her service record cannot be disregarded. Art. III, Sec. 1 of the 1987 Constitution guarantees: "No person shall be deprived of life, liberty, or property without due process of law, nor shall any person be denied the equal protection of the laws." . . . In Felwa vs. Salas, L-26511, Oct. 29, 1966, We ruled that the equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the subject of legislation, and a classification is reasonable where (1) it is based on substantial distinctions which make real differences; (2) these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also to future conditions which are substantially identical to those of the present; (4) the classification applies only to those who belong to the same class. 17

Applying the criteria set forth above, the Early Retirement Law would violate the equal protection clause were we to sustain respondent's' submission that the benefits of said law are to be denied a class of government employees who are similarly situated as those covered by said law. The maxim of Expressio unius est exclusio alterius should not be the applicable maxim in this case but the doctrine of necessary implication which holds that: No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication. The doctrine states that what is implied in a statute is as much a part thereof as that which is expressed. Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis. And every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege. This is so because the greater includes the lesser, expressed in the Maxim, in eo plus sit, simper inest et minus. 18

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

This Bill covers only those who would like to go on early retirement and voluntary separation. It is irrespective of the actual status or nature of the appointment one received, but if he opts to retire under this, then he is covered. It will be noted that, presently Pending in Congress, is House Bill No. 33399 (a proposal to extend the scope of the Early Retirement Law). Its wording supports the submission that Rep. Act No. 6683 indeed overlooked a qualified group of civil servants. Sec. 3 of said House bill, on coverage of early retirement, would provide: Sec. 3. Coverage. — It will cover all employees of the national government, including government-owned or controlled corporations, as well as the personnel of all local government units. The benefits authorized under this Act shall apply to all regular, temporary, casual, emergency and contractual employees, regardless of age, who have rendered at least a total of two (2) consecutive years government service as of the date of separation. The term "contractual employees" as used in this Act does not include experts and consultants hired by agencies for a limited period to perform specific activities or services with definite expected output. Uniformed personnel of the Armed Forces of the Philippines, including those of the PC-INP are excluded from the coverage of this Act. (emphasis supplied) The objective of the Early Retirement or Voluntary Separation Law is to trim the bureaucracy, hence, vacated positions are deemed abolished upon early/voluntary retirement of their occupants. Will the inclusion of co-terminous personnel (like the petitioner) defeat such objective? In their case, upon termination of the project and separation of the project personnel from the service, the term of employment is considered expired, the office functus officio. Casual, temporary and contractual personnel serve for shorter periods, and yet, they only have to establish two (2) years of continuous service to qualify. This, incidentally, negates the OSG's argument that coterminous or project employment is inherently short-lived, temporary and transient, whereas, retirement presupposes employment for a long period. Here, violation of the equal protection clause of the Constitution becomes glaring because casuals are not even in the plantilla, and yet, they are entitled to the benefits of early retirement. How can the objective of the Early Retirement Law of trimming the bureaucracy be achieved by granting early retirement benefits to a group of employees (casual) without plantilla positions? There would, in such a case, be no abolition of permanent positions or streamlining of functions; it would merely be a removal of excess personnel; but the positions remain, and future appointments can be made thereto. Coterminous or project personnel, on the other hand, who have rendered years of continuous service should be included in the coverage of the Early Retirement Law, as long as they file their application prior to the expiration of their term, and as long as they comply with CSC regulations promulgated for such purpose. In this connection, Memorandum Circular No. 14, Series of 1990 (5 March 1990) implementing Rep. Act No. 6850, 20 requires, as a condition to qualify for the grant of eligibility, an aggregate or total of seven (7) years of government service which need not be continuous, in the career or non-career service, whether appointive, elective, casual, emergency, seasonal, contractual or coterminous including military and police service, as evaluated and confirmed by the Civil Service Commission. 21 A similar regulation should be promulgated for the inclusion in Rep. Act No. 6683 of co-terminous personnel who survive the test of time. This would be in keeping with the coverage of "all social legislations enacted to promote the physical and mental well-being of public servants" 22 After all, coterminous personnel, are also obligated to the government for GSIS contributions, medicare and income tax payments, with the general disadvantage of transience. In fine, the Court believes, and so holds, that the denial by the respondents NIA and CSC of petitioner's application for early retirement benefits under Rep. Act No. 6683 is unreasonable, unjustified, and oppressive, as petitioner had filed an application for voluntary retirement within a reasonable period and she is entitled to the benefits of said law. While the application was filed after expiration of her term, we can give allowance for the fact that she originally filed the application on her own without the assistance of counsel. In the interest of substantial justice, her application must be granted; after all she served the government not only for two (2) years — the minimum requirement under the law but for almost fifteen (15) years in four (4) successive governmental projects. WHEREFORE, the petition is GRANTED. Let this case be remanded to the CSC-NIA for a favorable disposition of petitioner's application for early retirement benefits under Rep. Act No. 6683, in accordance with the pronouncements in this decision. SO ORDERED.

G.R. No. 93468 December 29, 1994 NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER, petitioner, vs. HON. RUBEN D. TORRES, SECRETARY OF LABOR AND EMPLOYMENT and REPUBLIC PLANTERS BANK, respondents. Filemon G. Tercero for petitioner. The Government Corporate Counsel for Republic Planters Bank. BELLOSILLO, J.:

NATIONAL ASSOCIATION OF TRADE UNIONS (NATU)-REPUBLIC PLANTERS BANK SUPERVISORS CHAPTER seeks nullification of the decision of public respondent Secretary of Labor dated 23 March 1990, which modified the order of Med-Arbiter Manases T. Cruz dated 17 August 1989 as well as his order dated 20 April 1990 denying reconsideration. On 17 March 1989, NATU filed a petition for certification election to determine the exclusive bargaining representative of respondent Bank's employees occupying supervisory positions. On 24 April 1989, the Bank moved to dismiss the petition on the ground that the supposed supervisory employees were actually managerial and/or confidential employees thus ineligible to join, assist or form a union, and that the petition lacked the 20% signatory requirement under the Labor Code. On 17 August 1989, Med-Arbiter Manases T. Cruz granted the petition thus — WHEREFORE, . . . let a certification election be ordered conducted among all the regular employees of the Republic Planters Bank occupying supervisory positions or the equivalent within 20 days from receipt of a copy of this Order. The choice shall be: (1) National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter; and (2) No Union. The payroll three months prior to the filing of this petition shall be utilized in determining the list of eligible voters . . . . 1

Respondent Bank appealed the order to the Secretary of Labor on the main ground that several of the employees sought to be included in the certification election, particularly the Department Managers, Branch Managers/OICs, Cashiers and Controllers were managerial and/or confidential employees and thus ineligible to join, assist or form a union. It presented annexes detailing the job description and duties of the positions in question and affidavits of certain employees. It also invoked provisions of the General Banking Act and the Central Bank Act to show the duties and responsibilities of the bank and its branches. On 23 March 1990, public respondent issued a decision partially granting the appeal, which is now being challenged before us — WHEREFORE, . . . the appeal is hereby partially granted. Accordingly, the Order dated 17 August 1989 is modified to the extent that Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers are declared managerial employees. Perforce, they cannot join the union of supervisors such as Division Chiefs, Accounts Officers, Staff Assistants and OIC's (sic) unless the latter are regular managerial employees . . . . 2

NATU filed a motion for reconsideration but the same was denied on 20 April 1990.3 Hence this recourse assailing public respondent for rendering the decision of 23 March 1990 and the order of 20 April 1990 both with grave abuse of discretion. The crucial issue presented for our resolution is whether the Department Managers, Assistant Managers, Branch Managers/OICs, Cashiers and Controllers of respondent Bank are managerial and/or confidential employees hence ineligible to join or assist the union of petitioner. NATU submits that an analysis of the decision of public respondent readily yields certain flaws that result in erroneous conclusions. Firstly, a branch does not enjoy relative autonomy precisely because it is treated as one unit with the head office and has to comply with uniform policies and guidelines set by the bank itself. It would be absurd if each branch of a particular bank would be adopting and implementing different policies covering multifarious banking transactions. Moreover, respondent Bank's own evidence clearly shows that policies and guidelines covering the various branches are set by the head office. Secondly, there is absolutely no evidence showing that bank policies are laid down through the collective action of the Branch Manager, the Cashier and the Controller. Thirdly, the organizational setup where the Branch Manager exercises control over branch operations, the Controller controls the Accounting Division, and the Cashier controls the Cash Division, is nothing but a proper delineation of duties and responsibilities. This delineation is a Central Bank prescribed internal control measure intended to objectively establish responsibilities among the officers to easily pinpoint culpability in case of error. The "dual control" and "joint custody" aspects mentioned in the decision of public respondent are likewise internal control measures prescribed by the Central Bank. Neither is there evidence showing that subject employees are vested with powers or prerogatives to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The bare allegations in the affidavits of respondent Bank's Executive Assistant to the President 4 and the Senior Manager of the Human Resource Management Department 5 that those powers and prerogatives are inherent in subject positions are self-serving. Their claim cannot be made to prevail upon the actual duties and responsibilities of subject employees. The other evidence of respondent Bank which purports to show that subject employees exercise managerial functions even belies such claim. Insofar as Department Managers and Assistant Managers are concerned, there is absolutely no reason mentioned in the decision why they are managerial employees. Not even respondent Bank in its appeal questioned the inclusion of Assistant Managers among the qualified petitioning employees. Public respondent has deviated from the real issue in this case, which is, the determination of whether subject employees are managerial employees within the contemplation of the Labor Code, as amended by RA 6715; instead, he merely concentrated on the nature, conduct and management of banks conformably with the General Banking Act and the Central Bank Act.

Petitioner concludes that subject employees are not managerial employees but supervisors. Even assuming that they are confidential employees, there is no legal prohibition against confidential employees who are not performing managerial functions to form and join a union. On the other hand, respondent Bank maintains that the Department Managers, Branch Managers, Cashiers and Controllers are inherently possessed of the powers enumerated in Art. 212, par. (m), of the Labor Code. It relies heavily on the affidavits of its Executive Assistant to the President and Senior Manager of the Human Resource Department. The Branch Managers, Cashiers and Controllers are vested not only with policy-making powers necessary to run the affairs of the branch, given the independence and relative autonomy which it enjoys in the pursuit of its goals and objectives, but also with the concomitant disciplinary authority over the employees. The Solicitor General argues that NATU loses sight of the fact that by virtue of the appeal of respondent Bank, the whole case is thrown open for consideration by public respondent. Even errors not assigned in the appeal, such as the exclusion by the Med-Arbiter of Assistant Managers from the managerial employees category, is within his discretion to consider as it is closely related to the errors properly assigned. The fact that Department Managers are managerial employees is borne out by the evidence of petitioner itself. Furthermore, while it assails public respondent's finding that subject employees are managerial employees, petitioner never questioned the fact that said officers also occupy confidential positions and thus remain prohibited from forming or joining any labor organization. Respondent Bank has no legal personality to move for the dismissal of the petition for certification election on the ground that its supervisory employees are in reality managerial employees. An employer has no standing to question the process since this is the sole concern of the workers. The only exception is where the employer itself has to file the petition pursuant to Art. 258 of the Labor Code because of a request to bargain collectively. 6

Public respondent, invoking RA 6715 and the inherent functions of Department Managers, Assistant Managers, Branch Managers, Cashiers and Controllers, held that these officers properly fall within the definition of managerial employees. The ratiocination in his Decision of 23 March 1990 7 is that — Republic Act No. 6715, otherwise known as the Herrera-Veloso Law, restored the right of supervisors to form their own unions while maintaining the proscription on the right to self-organization of managerial employees. Accordingly, the Labor Code, as amended, distinguishes managerial, supervisory and rank-and-file employees thus: Art. 212 (m) — Managerial employee is one who is vested with powers or prerogatives to lay down and execute management policies and/or to hire, transfer, suspend, lay-off, recall, discharge, assign or discipline employees. Supervisory employees are those who, in the interest of the employer, effectively recommend such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment. All employees not falling within any of the above definitions are considered rank-and-file employees (emphasis supplied). At first glance, pursuant to the above-definitions and based on their job descriptions as guideposts, there would seem to be no difficulty in distinguishing a managerial employee from that of a supervisor, or from that of a mere rank-and-file employee. Yet, this task takes on a different dimension when applied to banks, particularly the branches thereof. This is so because unlike ordinary corporations, a bank's organizational operation is governed and regulated by the General Banking Act and the Central Bank Act, both special laws . . . . As pointed out by the respondent, in the banking industry, a branch is the microcosm of a banking institution, uniquely autonomous and self-governing. This relative autonomy of a branch finds legal basis in Section 27 of the General Banking Act, as amended, thus: . . . . The bank shall be responsible for all business conducted in such branches to the same extent and in the same manner as though such business had all been conducted in the head office. For the purpose of this Act, a bank and its branches shall be treated as a unit (emphasis supplied). Conformably with the above, bank policies are laid down and/or executed through the collective action of the Branch Manager, Cashier and Controller at the branch level. The Branch Manager exercises over-all control and supervision over branch operation being on the top of the branch's pyramid structure. However, both the controller and the cashier who are called in banking parlance as "Financial Managers" due to their fiscal functions are given such a share and sphere of responsibility in the operations of the bank. The cashier controls and supervises the cash division while the controller that of the Accounting Division. Likewise, their assigned task is of great significance, without which a bank or branch for that matter cannot operate or function. Through the collective action of these three branch officers operational transactions are carried out like: The two (2)-signature requirement of the manager, on one hand, and that of the controller or cashier on the other hand as required in bank's issuances and releases. This is the so-called "dual control" through check-and-balance as prescribed by the Central Bank, per Section 1166.6, Book I, Manual of Regulations for Banks and Financial Intermediaries. Another is in the joint custody of the branch's cash in vault, accountable forms, collaterals, documents of title, deposit, ledgers and others, among the branch manager and at least two (2) officers of the branch as required under Section 1166.6 of the Manual of Regulations for Banks and Other Financial Intermediaries.

This structural set-up creates a triad of managerial authority among the branch manager, cashier and controller. Hence, no officer of the bank ". . . have (sic) complete authority and responsibility for handling all phases of any transaction from beginning to end without some control or balance from some other part of the organization" (Section 1166.3, Division of Duties and Responsibilities, Ibid). This aspect in the banking system which calls for the division of duties and responsibilities is a clear manifestation of managerial power and authority. No operational transaction at branch level is carried out by the singular act of the Branch Manager but rather through the collective act of the Branch Manager, Cashier/Controller (emphasis supplied). Noteworthy is the "on call client" set up in banks. Under this scheme, the branch manager is tasked with the responsibility of business development and marketing of the bank's services which place him on client call. During such usual physical absences from the branch, the cashier assumes the reins of branch control and administration. On those occasions, the "dual control system" is clearly manifest in the transactions and operations of the branch bank as it will then require the necessary joint action of the controller and the cashier. The grave abuse of discretion committed by public respondent is at once apparent. Art. 212, par. (m), of the Labor Code is explicit. A managerial employee is (a) one who is vested with powers or prerogatives to lay down and execute management policies, or to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees; or (b) one who is vested with both powers or prerogatives. A supervisory employee is different from a managerial employee in the sense that the supervisory employee, in the interest of the employer, effectively recommends such managerial actions, if the exercise of such managerial authority is not routinary in nature but requires the use of independent judgment. Ranged against these definitions and after a thorough examination of the evidence submitted by both parties, we arrive at a contrary conclusion. Branch Managers, Cashiers and Controllers of respondent Bank are not managerial employees but supervisory employees. The finding of public respondent that bank policies are laid down and/or executed through the collective action of these employees is simply erroneous. His discussion on the division of their duties and responsibilities does not logically lead to the conclusion that they are managerial employees, as the term is defined in Art. 212, par. (m). Among the general duties and responsibilities of a Branch Manager is "[t]o discharge his duties and authority with a high sense of responsibility and integrity and shall at all times be guided by prudence like a good father of the family, and sound judgment in accordance with and within the limitations of the policy/policies promulgated by the Board of Directors and implemented by the Management until suspended, superseded, revoked or modified" (par. 5, emphasis supplied). 8 Similarly, the job summary of a Controller states: "Supervises the Accounting Unit of the branch; sees to the compliance by the Branch with established procedures, policies, rules and regulations of the Bank and external supervising authorities; sees to the strict implementation of control procedures (emphasis supplied). 9 The job description of a Cashier does not mention any authority on his part to lay down policies, either. 10 On the basis of the foregoing evidence, it is clear that subject employees do not participate in policy-making but are given approved and established policies to execute and standard practices to observe, 11 leaving little or no discretion at all whether to implement said policies or not. 12 It is the nature of the employee's functions, and not the nomenclature or title given to his job, which determines whether he has rank-and-file, supervisory or managerial status. 13

Moreover, the bare statement in the affidavit of the Executive Assistant to the President of respondent Bank that the Branch Managers, Cashiers and Controllers "formulate and implement the plans, policies and marketing strategies of the branch towards the successful accomplishment of its profit targets and objectives," 14 is contradicted by the following evidence submitted by respondent Bank itself: (a) Memorandum issued by respondent Bank's Assistant Vice President to all Regional Managers and Branch Managers giving them temporary discretionary authority to grant additional interest over the prescribed board rates for both short-term and long-term CTDs subject, however, to specific limitations and guidelines set forth in the same memorandum; 15

(b) Memorandum issued by respondent Bank's Executive Vice President to all Regional Managers and Branch Officers regarding the policy and guidelines on drawing against uncollected deposits (DAUD); 16

(c) Memorandum issued by respondent Bank's President to all Field Offices regarding the guidelines on domestic bills purchased (DBP); 17 and (d) Memorandum issued by the same officer to all Branch Managers regarding lending authority at the branch level and the terms and conditions thereof. 18

As a consequence, the affidavit of the Executive Assistant cannot be given any weight at all. Neither do the Branch Managers, Cashiers and Controllers have the power to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. The Senior Manager of the Human Resource Management Department of respondent Bank, in her affidavit, stated that "the power to hire, fire, suspend, transfer, assign or otherwise impose discipline among subordinates within their respective jurisdictions is lodged with the heads of the various departments, the branch managers and officers-in-charge, the branch cashiers and the branch controllers. Inherent as it is in the aforementioned positions, the authority to hire, fire, suspend, transfer, assign or otherwise discipline employees within their respective domains was deemed unnecessary to be incorporated in their individual job

descriptions; By way of illustration, on August 24, 1989, Mr. Renato A. Tuates, the Officer-in-Charge/Branch Cashier of the Bank's Dumaguete Branch, placed under preventive suspension and thereafter terminated the teller of the same branch . . . . Likewise, on February 22, 1989, Mr. Francis D. Robite, Sr., the Officer-in-Charge of International Department, assigned the cable assistant of the International Department as the concurrent FCDU Accountable Forms Custodian." 19

However, a close scrutiny of the memorandum of Mr. Tuates reveals that he does not have said managerial power because as plainly stated therein, it was issued "upon instruction from Head Office." 20 With regard to the memorandum of Mr. Robite, Sr., it appears that the power he exercised was merely in an isolated instance, taking into account the other evidence submitted by respondent Bank itself showing lack of said power by other Branch Managers/OICs: (a) Memorandum from the Branch Manager for the AVP-Manpower Management Department expressing the opinion that a certain employee, due to habitual absenteeism and tardiness, must be penalized in accordance with respondent Bank's Code of Discipline; and (b) Memorandum from a Branch OIC for the Assistant Vice President recommending a certain employee's promotional adjustment to the present position he occupies. Clearly, those officials or employees possess only recommendatory powers subject to evaluation, review and final action by higher officials. Therefore, the foregoing affidavit cannot bolster the stand of respondent Bank. The positions of Department Managers and Assistant Managers were also declared by public respondent as managerial, without providing any basis therefor. Petitioner asserts that the position of Assistant Manager was not even included in the appeal filed by respondent Bank. While we agree with the Office of the Solicitor General that it is within the discretion of public respondent to consider an unassigned issue that is closely related to an issue properly assigned, still, public respondent's error lies in the fact that his finding has no leg to stand on. Anyway, inasmuch as the entire records are before us, now is the opportunity to discuss this issue. We analyzed the evidence submitted by respondent Bank in support of its claim that Department Managers are managerial employees 21 and concluded that they are not. Like Branch Managers, Cashiers and Controllers, Department Managers do not possess the power to lay down policies nor to hire, transfer, suspend, lay off, recall, discharge, assign or discipline employees. They occupy supervisory positions, charged with the duty among others to "recommend proposals to improve and streamline operations." 22 With respect to Assistant Managers, there is absolutely no evidence submitted to substantiate public respondent's finding that they are managerial employees; understandably so, because this position is not included in the appeal of respondent Bank. As regards the other claim of respondent Bank that Branch Managers/OICs, Cashiers and Controllers are confidential employees, having control, custody and/or access to confidential matters, e.g., the branch's cash position, statements of financial condition, vault combination, cash codes for telegraphic transfers, demand drafts and other negotiable instruments, 23 pursuant to Sec. 1166.4 of the Central Bank Manual regarding joint custody, 24 this claim is not even disputed by petitioner. A confidential employee is one entrusted with confidence on delicate matters, or with the custody, handling, or care and protection of the employer's property. 25 While Art. 245 of the Labor Code singles out managerial employees as ineligible to join, assist or form any labor organization, under the doctrine of necessary implication, confidential employees are similarly disqualified. This doctrine states that what is implied in a statute is as much a part thereof as that which is expressed, as elucidated in several cases26 the latest of which is Chua v. Civil Service Commission 27 where we said: No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding events of the future. So-called gaps in the law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication . . . . Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis . . . . In applying the doctrine of necessary implication, we took into consideration the rationale behind the disqualification of managerial employees expressed in Bulletin Publishing Corporation v. Sanchez, 28 thus: ". . . if these managerial employees would belong to or be affiliated with a Union, the latter might not be assured of their loyalty to the Union in view of evident conflict of interests. The Union can also become company-dominated with the presence of managerial employees in Union membership." Stated differently, in the collective bargaining process, managerial employees are supposed to be on the side of the employer, to act as its representatives, and to see to it that its interests are well protected. The employer is not assured of such protection if these employees themselves are union members. Collective bargaining in such a situation can become one-sided. 29 It is the same reason that impelled this Court to consider the position of confidential employees as included in the disqualification found in Art. 245 as if the disqualification of confidential employees were written in the provision. If confidential employees could unionize in order to bargain for advantages for themselves, then they could be governed by their own motives rather than the interest of the employers. Moreover, unionization of confidential

employees for the purpose of collective bargaining would mean the extension of the law to persons or individuals who are supposed to act "in the interest of" the employers. 30 It is not farfetched that in the course of collective bargaining, they might jeopardize that interest which they are duty-bound to protect. Along the same line of reasoning we held in Golden Farms, Inc. v. Ferrer-Calleja 31 reiterated in Philips Industrial Development, Inc. v. NLRC, 32 that "confidential employees such as accounting personnel, radio and telegraph operators who, having access to confidential information, may become the source of undue advantage. Said employee(s) may act as spy or spies of either party to a collective bargaining agreement." In fine, only the Branch Managers/OICs, Cashiers and Controllers of respondent Bank, being confidential employees, are disqualified from joining or assisting petitioner Union, or joining, assisting or forming any other labor organization. But this ruling should be understood to apply only to the present case based on the evidence of the parties, as well as to those similarly situated. It should not be understood in any way to apply to banks in general. WHEREFORE, the petition is partially GRANTED. The decision of public respondent Secretary of Labor dated 23 March 1990 and his order dated 20 April 1990 are MODIFIED, hereby declaring that only the Branch Managers/OICs, Cashiers and Controllers of respondent Republic Planters Bank are ineligible to join or assist petitioner National Association of Trade Unions (NATU)-Republic Planters Bank Supervisors Chapter, or join, assist or form any other labor organization. SO ORDERED. Davide, Jr., Quiason and Kapunan, JJ., concur.

Separate Opinions PADILLA, J., concurring and dissenting: I concur in the majority opinion's conclusion that respondent Bank's Branch Managers/OICs, Cashiers and Controllers, being confidential employees of the Bank, are disqualified from joining or assisting petitioner labor union or joining, assisting or forming any other labor organization, including a supervisor's union. However, I dissent from its conclusion that respondent Bank's Department Managers and Department Assistant Managers are not disqualified from joining a labor union including a supervisor's' union. My years of experience in the banking industry (perhaps irrelevant to this case) have shown that positions of such Department Heads (Managers) are as confidential, if not more, than the position of Branch Managers. In fact, most of such Department Heads are Vice-Presidents of the Bank, which underscores their status both as managerial employees and confidential personnel of the Bank. It would be incongruous for a Department Manager who, as already stated, is usually a Vice-President, to be a member of the same labor organization as his messenger or supervisory account executives. It would be even more untenable and dangerous for a Department Manager who usually is a Vice-President, being a member of a labor union, to be designated a union representative for purposes of collective bargaining with the management of which he is a part. I think the public respondent is correct in disqualifying from membership in a labor union of supervisors, those who are Department Managers and Assistant Managers. I, therefore, vote for the affirmance in toto of public respondent's decision of 23 March 1990 and order of 20 April 1990. # Separate Opinions PADILLA, J., concurring and dissenting: I concur in the majority opinion's conclusion that respondent Bank's Branch Managers/OICs, Cashiers and Controllers, being confidential employees of the Bank, are disqualified from joining or assisting petitioner labor union or joining, assisting or forming any other labor organization, including a supervisor's union. However, I dissent from its conclusion that respondent Bank's Department Managers and Department Assistant Managers are not disqualified from joining a labor union including a supervisor's' union. My years of experience in the banking industry (perhaps irrelevant to this case) have shown that positions of such Department Heads (Managers) are as confidential, if not more, than the position of Branch Managers. In fact, most of such Department Heads are Vice-Presidents of the Bank, which underscores their status both as managerial employees and confidential personnel of the Bank. It would be incongruous for a Department Manager who, as already stated, is usually a Vice-President, to be a member of the same labor organization as his messenger or supervisory account executives. It would be even more untenable and dangerous for a Department Manager who usually is a Vice-President, being a member of a labor union, to be designated a union representative for purposes of collective bargaining with the management of which he is a part. I think the public respondent is correct in disqualifying from membership in a labor union of supervisors, those who are Department Managers and Assistant Managers. I, therefore, vote for the affirmance in toto of public respondent's decision of 23 March 1990 and order of 20 April 1990. ------------------------------------------------------------------------------------------------------------------------------------------------

G. Casus Omissus

G.R. No. L-14129 August 30, 1962 PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. GUILLERMO MANANTAN, defendant-appellee. Office of the Solicitor General for plaintiff-appellant. Padilla Law Office for defendant-appellee.

R E S O L U T I O N REGALA, J.: This resolution refers to a motion for reconsideration filed by the counsel for defendant-appellee, Guillermo Manantan. Defendant-appellee does not dispute the correctness of this Court's ruling in the main case. He concedes that a justice of the peace is covered by the prohibition of Section 54, Revised Election Code. However, he takes exception to the dispositive portion of this Court's ruling promulgated on July 31, 1962, which reads: For the above reasons, the order of dismissal entered by the trial court should be set aside and this case is remanded for trial on the merits. It is now urged by the defendant-appellee that the ultimate effect of remanding the case to the lower court for trial on the merits is to place him twice in jeopardy of being tried for the same offense. He calls the attention of this Court to the fact that when the charge against him was dismissed by the lower court, jeopardy had already attached to his person. To support his claim, he cites the case of People vs. Labatete, G.R. No. L-12917, April 27, 1960. Defendant-appellee's plea of double jeopardy should be rejected. The accused cannot now invoke the defense of double jeopardy. When the government appealed to this Court the order of dismissal, defendant Manantan could have raised that issue by way of resisting the appeal of the state. Then again, when defendant-appellee filed his brief, he could have argued therein his present plea of double jeopardy. Yet, on neither occasion did he do so. He must, therefore, be deemed to have waived his constitutional right thereunder. This is in accord with this Court's ruling in the cases of People vs. Rosalina Casiano, G.R. No. L-15309, February 16, 1961 and People vs. Pinuila, G.R. No. L-11374, May 30, 1958, hereunder quoted: . . . defendant herein has filed a brief in which she limited herself to a discussion of the merits of the appeal. Thus, she not only failed to question, in her brief, either expressly or impliedly, the right of the prosecution to interpose the present appeal, but also, conceded in effect the existence of such right. She should be deemed, therefore, to have waived her aforementioned constitutional immunity.1äwphï1.ñët It is true that in People vs. Hernandez (49 O.G. 5342), People vs. Ferrer, L-9072 (October 23, 1956), People vs. Bao, L-12102 (September 29, 1959) and People vs. Golez, L-14160, we dismissed the appeal taken by the Government from a decision or order of a lower court, despite defendant's failure to object thereto. However, the defendants in those cases, unlike the defendant herein, did not file any brief. Hence, they had performed no affirmative act from which a waiver could be implied. (People vs. Casiano, supra). In his appeal brief, appellant's counsel does not raise this question of double jeopardy, confining himself as he does, to the discussion of the evidence in the record, contending that the guilt of the appellant has not been proven beyond reasonable doubt. One aspect of this case as regards double jeopardy is that defense may be waived, and, that failure to urge it in the appeal may be regarded as a waiver of said defense of double jeopardy.(People vs. Pinuila, supra). There are other grounds raised by the defendant-appellee in this motion for reconsideration. The Court, however, does not believe that they were well taken. FOR THE ABOVE REASONS, the motion for reconsideration filed in this case, is, as it is hereby, denied. ------------------------------------------------------------------------------------------------------------------------------------------------ H. Stare Decisis

G.R. No. L-33140 October 23, 1978

J. M. TUASON & CO., INC., JOSE M. TUASON, NICASIO A. TUASON, TERESA TUASON, CELSO S. TUASON and SEVERO A. TUASON, petitioners, vs. HON. HERMINIO C. MARIANO, Presiding Judge of the Court of First Instance of Rizal MANUELA AQUIAL, MARIA AQUIAL, Spouses JOSE M. CORDOVA and SATURNINA C. CORDOVA, respondents. Sison Law Office and Senensio O. Ortile for petitioners. Hill & Associates Law Office for respondents Aquials. Antonio E. Pesigan for respondents Cordovas. AQUINO, J.: This is another litigation regarding the validity of the much controverted Original Certificate of Title No. 735 covering the Santa Mesa and D Estates of the Tuason mayorazgo or Entail with areas of 877 (879) and 1,625 hectares, respectively (Barrette vs. Tuason, 50 Phil. 888; Benin case, infra). On October 1, 1965, Manuela Aquial and Maria Aquial filed a complaint in forma pauperis in the Court of First Instance of Rizal Pasig Branch X, wherein they prayed that they be declared the owners of a parcel of land located at Balara, Marikina, Rizal (now Quezon City) and bounded on the north by Sapang Mapalad, on the south by the land of Eladio, Tiburcio on the east by Sapang Kolotkolotan, and on the west by Sapang Kuliat The land, which has an area of three hundred eighty-three quiñones was allegedly acquired by their father by means of a Spanish title issued to him on May 10, 1877 (Civil Case No. 8943). They alleged that sometime in 1960, or after J. M. Tuason & Co., Inc. had illegally entered upon that land, they discovered that it had been fraudulently or erroneously included in OCT No. 735 of the Registry of Deeds of Rizal and that it was registered in the names of defendants Mariano, Teresa, Juan, Demetrio and Augusta all surnamed Tuason pursuant to a decree issued on July 6. 1914 in Case No. 7681 of the Court of Land Registration. They further alleged that transfer certificates of title, derived from OCT No. 735, were issued to defendants J. M. Tuason & Co., Inc., University of the Philippines and National Waterworks and Sewerage Authority (Nawasa) which leased a portion of its land to defendant Capitol Golf Club. Plaintiffs Aquial prayed that OCT No. 735 and the titles derived therefrom be declared void due to certain irregularities in the land registration proceeding. They asked for damages. Defendant J.M. Tuason & Co., Inc. filed a motion to dismiss on the grounds of lack of jurisdiction, improper venue, prescription, laches and prior judgment. The plaintiffs opposed that motion. The lower court denied it. The grounds of the motion to dismiss were pleaded as affirmative defenses in the answer of defendants Tuason and J. M. Tuason & Co., Inc. They insisted that a preliminary hearing be held on those defenses. On January 25, 1967, the spouses Jose M. Cordova and Saturnina C. Cordova, who had bought eleven hectares of the disputed land from the plaintiffs, were allowed to intervene in the case. On September 5, 1970, the lower court issued an order requiring the parties the Register of Deeds of Rizal to produce in court on October 16, 1970 OCT No. 735 and certain transfer certificates of title derived from that first or basic title. Later, the court required the production in court of the plan of the land covered by OCT No. 735 allegedly for the purpose of determining whether the lands claimed by the plaintiffs and the intervenors are included therein. On February 11, 1971, the Tuason and J. M. Tuason & Co., Inc. filed the instant civil actions of certiorari and prohibition praying, inter alia, that the trial court be ordered to dismiss the complaint and enjoined from proceeding in the said case. After the petitioners had filed the proper bond, a writ of preliminary injunction was issued. Respondents Aquial and Cordova answered the petition. The parties, except the Aquials, filed memoranda in lieu of oral argument. The issue is whether OCT No. 735 and the titles derived therefrom can be questioned at this late hour by respondents Aquial and Cordova. The supposed irregularities in the land registration proceeding, which led to the issuance of the decree upon which OCT. No. 735 was based, are the same issues raised in Civil Cases Nos. 3621, 3622 and 3623 of the lower court. The 1965 decision of Judge Eulogio Mencias in those cases, in validating OCT No. 735, is annexed to the complaint of the Aquials. It is cited by them to support their support their action and it might have encouraged them to ventilate their action in court. On appeal to this Court, that decision was reversed and the validity of OCT No. 735 and the titles derived therefrom was once more upheld. (Benin vs. Tuason, L-26127, Alcantara vs. Tuason, L-26128 and Pili vs. Tuason, L-26129, all decided on June 28, 1974, 57 SCRA 531). The ruling in the Benin, Alcantara and Pili cases was applied in Mara, Inc. vs. Estrella, L-40511, July 25, 1975, 65 SCRA 471. That ruling is simply a reiteration or confirmation of the holding in the following cases directly or incidentally sustaining OCT No. 735: Bank of the P. I. vs. Acuña, 59 Phil. 183; Tiburcio vs. PHHC, 106 Phil. 447; Galvez and Tiburcio vs. Tuason y de la Paz, 119 Phil. 612; Alcantara vs. Tuason, 92 Phil. 796; Santiago vs. J. M. Tuason & Co., Inc. 110 Phil. 16; J. M. Tuason & Co., Inc. vs. Bolaños, 95 Phil. 106; J. M. Tuason & Co., Inc. vs. Santiago, 99 Phil. 615; J. M. Tuason & Co., Inc. vs. De Guzman, 99 Phil. 281; J. M. Tuason & Co., Inc. vs. Aguirre, 117 Phil. 110; J. M. Tuason & Co., Inc. vs. Macalindong, 116 Phil. 1227; J. M. Tuason & Co., Inc. vs. Magdangal, 114 Phil. 42; Varsity Hills, Inc. vs.

Navarro, L-30889, February 29, 1972, 43 SCRA 503, and People's Homesite and Housing Corporation vs. Mencias, L-24114, August 16, 1967, 20 SCRA 1031. Considering the governing principle of stare decisis et non quieta movere (follow past precedents and do not disturb what has been settled) it becomes evident that respondents Aquial and Cordova cannot maintain their action in Civil Case No. 8943 without eroding the long settled holding of the courts that OCT No. 735 is valid and no longer open to attack. It is against public policy that matters already decided on the merits be relitigated again and again, consuming the court's time and energies at the expense of other litigants: Interest rei publicae ut finis sit litium." (Varsity Hills, Inc. vs. Navarro, supra). Finding the petition for certiorari and prohibition to be meritorious, the trial court is directed to dismiss Civil Case No. 8943 with prejudice and without costs. No costs. SO ORDERED. -------------------------------------------------------------------------------------------------------------------------------------------------------------- NANCY L. TY, G.R. No. 188302 Petitioner, Present: CARPIO, J., Chairperson BRION, PEREZ, - versus - SERENO, and REYES, JJ. Promulgated: BANCO FILIPINO SAVINGS and MORTGAGE BANK, Respondent. June 27, 2012 x-----------------------------------------------------------------------------------------x

D E C I S I O N BRION, J.: We resolve the petition for review on certiorari,[1] filed by Nancy L. Ty (petitioner), to challenge the March 31, 2009 decision[2] and the June 10, 2009 resolution[3] of the Court of Appeals (CA) in CA-G.R. SP No. 107104. The CA decision dismissed the petitioners petition for certiorari for lack of merit. The CA resolution denied the petitioners subsequent motion for reconsideration.

THE FACTUAL ANTECEDENTS

Sometime in 1979, the Banco Filipino Savings and Mortgage Bank (respondent) wanted to purchase real properties as new branch sites for its expansion program. Since the General Banking Act[4] limits a banks real estate holdings to no more than 50% of its capital assets, the respondents Board of Directors decided to warehouse some of its existing properties and branch sites to allow more flexibility in the opening of branches, and to enable it to acquire new branch sites.[5]

The petitioner, a major stockholder and a director of the respondent, persuaded two other major stockholders, Pedro Aguirre and his brother Tomas Aguirre, to organize and incorporate Tala Realty Services Corporation (Tala Realty) to hold and purchase real properties in trust for the respondent. [6]

Subsequently, Remedios A. Dupasquier prodded her brother Tomas to endorse to her his shares in Tala Realty and she registered them in the name of her controlled corporation, Add International Services, Inc.[7] The petitioner, Remedios, and Pedro controlled Tala Realty through their respective nominees.[8]

In implementing their trust agreement, the respondent sold to Tala Realty some of its properties. Tala Realty simultaneously leased to the respondent the properties for 20 years, renewable for another 20 years at the respondents option with a right of first refusal in the event Tala Realty decides to sell them.[9] However, in August 1992, Tala Realty repudiated the trust, claimed the titles for itself, and demanded payment of rentals, deposits, and goodwill, with a threat to eject the respondent.[10]

Thus, from 1995 to 1996, the respondent filed 17 complaints against Tala Realty, the petitioner, Pedro, Remedios, and their respective nominees for reconveyance of different properties with 17 Regional Trial Courts (RTCs) nationwide, including Civil Case No. 2506-MN before Branch 170 of the RTC of Malabon (Malabon case), subject of the present case.[11]

The petitioner and her co-defendants moved to dismiss the Malabon case for forum shopping and litis pendentia, citing the 16 other civil cases filed in various courts[12] involving the same facts, issues, parties, and reliefs pleaded in the respondents complaint.[13]

The Malabon RTC denied the motion to dismiss,[14] finding no commonality in the 16 other civil cases since they involved different causes of action. The Malabon RTC also denied[15] the subsequent motions for reconsideration and for suspension of proceedings.[16]

After the petitioner and her co-defendants filed their respective answers ad cautelam,[17] the petitioner filed a motion to hold proceedings in abeyance,[18] citing the pendency with this Court of G.R. No. 127611[19] that assailed the denial of their motion to dismiss Civil Case No. 4521 before the Batangas City RTC (Branch 84), and also prayed for a writ of prohibition to order the 17 RTC branches and the three CA divisions, where the same cases were pending, to desist from further proceeding with the trial of the cases. The Malabon RTC granted to hold proceedings in abeyance.[20] When the Malabon RTC denied[21] the respondents motion for reconsideration, the respondent elevated its case to the CA via a Rule 65 petition for certiorari.[22] The CA initially dismissed the petition,[23] but on motion for reconsideration, it modified its ruling, setting aside the RTCs order to hold proceedings in abeyance for mootness, due to this Courts dismissal of G.R. No. 127611 for late filing.[24]

Subsequently, the respondent moved for pre-trial.[25] Tala Realty opposed the motion and filed again a motion to suspend proceedings,[26] citing the pendency with this Court of G.R. No. 132703,[27] a petition for certiorari that assailed the CAs affirmance[28] of the dismissal order of the Iloilo City RTC (Branch 28) in Civil Case No. 22493.[29]

The petitioner filed her separate opposition to the respondents motion for pre-trial and a motion to hold proceedings in abeyance, stating that after the dismissal of G.R. No. 127611, two other similar petitions have been elevated to this Court: (1) G.R. No. 130184,[30] involving the CAs reversal of the dismissal of Civil Case No. Q-95-24830 in the Quezon City RTC (Branch 91), and (2) G.R. No. 132703.[31]

The Malabon RTC granted the motion, and again ordered to hold proceedings in abeyance.[32] Six years later, the Malabon RTC directed the parties counsels to inform it of the status of the pending cases.[33]

In her compliance,[34] the petitioner summarized this Courts rulings in the consolidated cases of G.R. Nos. 130184 and 139166,[35] and in G.R. No. 132703,[36] and reported on the other cases involving the same parties decided by this Court, such as G.R. Nos. 129887,[37] 137980,[38] 132051,[39] 137533,[40] 143263,[41] and 142672,[42] as well as the other related cases decided by this Court, i.e., G.R. Nos. 144700,[43] 147997,[44] 167255,[45] and 144705.[46]

On the other hand, the respondent filed its compliance with motion to revive proceedings,[47] citing the Courts consolidated decision in G.R. Nos. 130184 and 139166,[48] and the decisions in G.R. Nos. 144700,[49] 167255,[50] and 144705,[51] commonly holding that there existed no forum shopping, litis pendentia and res judicata among the respondents reconveyance cases pending in the other courts of justice. In her comment to the respondents motion to revive proceedings,[52] the petitioner argued that the proceedings should not be revived since all the reconveyance cases are grounded on the same theory of implied trust which this Court in G.R. No. 137533[53] found void for being illegal as it was a scheme to circumvent the 50% limitation on real estate holdings under the General Banking Act. Tala Realty, on the other hand, pointed out that it was the courts prerogative to suspend or not its proceedings pending the resolution of issues by another court, in order to avoid multiplicity of suits and prevent vexatious litigations.[54]

THE RTC RULING

In its May 6, 2008 order, the RTC granted the respondents motion to revive proceedings, noting that res judicata is not applicable since there are independent causes of action for each of the properties sought to be recovered.[55]

When the RTC denied[56] the petitioners motion for reconsideration,[57] she elevated her case to the CA via a Rule 65 petition for certiorari, assailing the RTC orders.[58]

THE CA RULING

In its March 31, 2009 decision, the CA affirmed the RTCs orders.[59] It noted that res judicata does not apply since the issue of validity or enforceability of the trust agreement was raised in an ejectment case, not an action involving title or ownership, citing the Courts pronouncement in G.R. No. 144705[60] that G.R. No. 137533[61] does not put to rest all pending litigations involving the issues of ownership between the parties since it involved only an issue of de facto possession. When the CA denied[62] her motion for reconsideration,[63] the petitioner filed the present petition.

THE PETITION The petitioner argues that the CA erred in refusing to apply G.R. No. 137533 under the principle of res judicata by conclusiveness of judgment and stare decisis, and ignoring the November 26, 2007 minute resolution in G.R. No. 177865[64] and the April 7, 2009 consolidated decision in G.R. Nos. 130088, 131469, 155171, 155201, and 166608[65] that reiterated the Court's pronouncement in G.R. No. 137533.

THE CASE FOR THE RESPONDENT

The respondent submits that the petitioner is estopped from amending the issues since she never raised the pendency of the consolidated cases of G.R. Nos. 130088, 131469, 155171, 155201 and 166608 in her CA petition, which was based only on the Court's rulings in G.R. No. 137533 and G.R. No. 177865.

THE ISSUE The core issues boil down to whether the Court's ruling in G.R. No. 137533 applies as stare decisis to the present case.

OUR RULING We grant the petition. The case at bar presents the same issue that the Court already resolved on April 7, 2009 in G.R. Nos. 130088, 131469, 155171, 155201 and 166608, wherein we applied the Court's November 22, 2002 decision in G.R. No. 137533, one of several ejectment cases filed by Tala Realty against the respondent arising from the same trust agreement in the reconveyance case subject of the present petition, that the trust agreement is void and cannot thus be enforced. We quoted therein the Court's ruling in G.R. No. 137533, thus: The Bank alleges that the sale and twenty-year lease of the disputed property were part of a larger implied trust "warehousing agreement." Concomitant with this Court's factual finding that the 20-year contract governs the relations between the parties, we find the Bank's allegation of circumstances surrounding its execution worthy of credence; the Bank and Tala entered into contracts of sale and leaseback of the disputed property and created an implied trust "warehousing agreement" for the reconveyance of the property. In the eyes of the law, however, this implied trust is inexistent and void for being contrary to law.[66]

An implied trust could not have been formed between the Bank and Tala as this Court has held that "where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud."[67]

x x x [T]he bank cannot use the defense of nor seek enforcement of its alleged implied trust with Tala since its purpose was contrary to law. As admitted by the Bank, it "warehoused" its branch site holdings to Tala to enable it to pursue its expansion program and purchase new branch sites including its main branch in Makati, and at the same time avoid the real property holdings limit under Sections 25(a) and 34 of the General Banking Act which it had already reached x x x . Clearly, the Bank was well aware of the limitations on its real estate holdings under the General Banking Act and that its "warehousing agreement" with Tala was a scheme to circumvent the limitation. Thus, the Bank opted not to put the agreement in writing and call a spade a spade, but instead phrased its right to reconveyance of the subject property at any time as a "first preference to buy" at the "same transfer price". This agreement which the Bank

claims to be an implied trust is contrary to law. Thus, while we find the sale and lease of the subject property genuine and binding upon the parties, we cannot enforce the implied trust even assuming the parties intended to create it. In the words of the Court in the Ramos case, "the courts will not assist the payor in achieving his improper purpose by enforcing a resultant trust for him in accordance with the 'clean hands' doctrine." The Bank cannot thus demand reconveyance of the property based on its alleged implied trust relationship with Tala.[68] (italics supplied.) The Bank and Tala are in pari delicto, thus, no affirmative relief should be given to one against the other. The Bank should not be allowed to dispute the sale of its lands to Tala nor should Tala be allowed to further collect rent from the Bank. The clean hands doctrine will not allow the creation or the use of a juridical relation such as a trust to subvert, directly or indirectly, the law. Neither the Bank nor Tala came to court with clean hands; neither will obtain relief from the court as the one who seeks equity and justice must come to court with clean hands.[69] (emphases ours; citation omitted) G.R. No. 137533, as reiterated in G.R. Nos. 130088, 131469, 155171, 155201 and 166608, is binding and applicable to the present case following the salutary doctrine of stare decisis et non quieta movere, which means "to adhere to precedents, and not to unsettle things which are established."[70] Under the doctrine, when this Court has once laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle, and apply it to all future cases, where facts are substantially the same; regardless of whether the parties and property are the same.[71] The doctrine of stare decisis is based upon the legal principle or rule involved and not upon the judgment, which results therefrom. In this particular sense, stare decisis differs from res judicata, which is based upon the judgment.[72]

The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, the Court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is settled. Stare decisis simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that follow if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing considerations, like cases ought to be decided alike. Thus, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same [issue].[73] (italics supplied) It bears stressing that the basic facts of the present case and those of G.R. No. 137533 and G.R. Nos. 130088, 131469, 155171, 155201 and 166608 are the same. Clearly, in light of G.R. No. 137533 and G.R. Nos. 130088, 131469, 155171, 155201 and 166608, which the Court follows as precedents, the present action for reconveyance cannot prosper. It is the Court's duty to apply the previous rulings in G.R. No. 137533 and in G.R. Nos. 130088, 131469, 155171, 155201 and 166608 to the present case. Once a case has been decided one way, any other case involving exactly the same point at issue, as in the present case, should be decided in the same manner.[74]

WHEREFORE, the petition is GRANTED. The assailed decision and resolution of the Court of Appeals in CA-G.R. SP No. 107104 are hereby REVERSED and SET ASIDE. Civil Case No. 2506-MN before Branch 170 of the Regional Trial Court of Malabon, Metro Manila is hereby DISMISSED. SO ORDERED.

G.R. No. 132051 June 25, 2001 TALA REALTY SERVICES CORP., petitioner, vs. BANCO FILIPINO SAVINGS AND MORTGAGE BANK, respondent. SANDOVAL-GUTIERREZ, J.: Stare decisis et non quieta movere. This principle of adherence to precedents has not lost its luster and continues to guide the bench in keeping with the need to maintain stability in the law. The principle finds application to the case now before us. This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assailing the Resolution dated December 23, 1997 of the Court of Appeals in C.A.-G.R. SP No. 44257. Under Republic Act No. 337 (General Banking Act), commercial banks are allowed to invest in real property subject to the limitation that: "Sec. 25. Any commercial bank may purchase, hold and convey real estate for the following purposes:

"(a) such as shall be necessary for its immediate accommodation in the transaction of its business: Provided, however, that the total investment in such real estate and improvements thereof, including bank equipment, shall not exceed fifty percent (50%) of net worth x x x x x x ." (Emphasis Ours) Investments in real estate made by savings and mortgage banks are likewise subject to the same limitation imposed by the aforequoted provision.1

Bound by such limitation, the management of Banco Filipino Savings and Mortgage Bank (Banco Filipino for brevity) devised means to pursue its endeavor to expand its banking operations. To this end, Tala Realty Services Corporation (Tala for brevity) was organized by Banco Filipino's four (4) major stockholders namely, Antonio Tiu, Tomas B. Aguirre, Nancy Lim Ty and Pedro B. Aguirre. Tala and Banco Filipino agreed on this scheme – Tala would acquire the existing branch sites and new branch sites which it would lease out to Banco Filipino. On August 25, 1981, pursuant to their agreement, Banco Filipino sold its eleven (11) branch sites all over the country to Tala. In turn Tala leased those sites to Banco Filipino under contracts of lease executed by both parties on the same day. Years after, dissension between Tala and Banco Filipino arose in connection with their lease contracts resulting in a chain of lawsuits for illegal detainer. Some of these cases are still pending in courts. At present, three of the illegal detainer cases have been passed upon by the Supreme Court. The case at bar, involving Banco Filipino's Iloilo City branch site, is one of those cases for illegal detainer filed by Tala against Banco Filipino based on these grounds: (a) expiration of the period of lease and (b) non-payment of rentals. The facts of the present controversy may be summed up as follows: In its complaint in Civil Case No. 51(95) filed with the Municipal Trial Court (MTC) of Iloilo City on March 29, 1995, Tala alleged that on the basis of a contract of lease executed on August 25, 1981 which provides in part: "1. That the term of this LEASE shall be for a period of eleven (11) years, renewable for another period of nine (9) years at the option of the LESSEE under terms and conditions mutually agreeable to both parties."2, its contract with Banco Filipino expired on August 31, 1992. However, Banco Filipino has continued to occupy the premises even after the expiration of the lease. On June 2, 1993, Tala imposed upon Banco Filipino the following terms and conditions: that the bank should pay P70,050.00 as monthly rental retroactive as of September 1, 1992, with rental escalation of 10% per year; and advance deposit equivalent to rents for four months, plus a goodwill of P500,000.00. Banco Filipino did not comply and in April 1994, it stopped paying rents. In its letter dated April 14, 1994, Tala notified Banco Filipino that the lease contract would no longer be renewed; that it should pay its back rentals, including goodwill, deposit and adjusted rentals in the amount of P2,059, 540.00 and vacate the premises on or before April 30, 1994.3 In its second letter dated May 2, 1994, Tala demanded upon Banco Filipino to pay the rents and vacate the premises.4

In answer to Tala's complaint, Banco Filipino denied having executed the lease contract providing for a term of eleven (11) years; claiming that its contract with Tala is for twenty (20) years, citing the Contract of Lease executed on August 25, 1981 providing: "That the term of this LEASE shall be for a period of twenty (20) years, renewable for another period of twenty (20) years at the option of the LESSEE under terms and conditions mutually agreeable to both parties."5

On July 1, 1996, the MTC rendered judgment holding that the eleven (11)-year lease contract superseded the twenty (20)-year lease contract. Thus, the court ordered the ejectment of Banco Filipino from the premises on these grounds: expiration of the eleven (11)-year lease contract and non-payment of the adjusted rental. Banco Filipino was likewise ordered to pay back rentals in the amount of P79,050.00 corresponding to the period from May 1994 up to the time that it shall have surrendered to Tala possession of the premises.6

On appeal, the Regional Trial Court, Branch 26, Iloilo City affirmed the MTC decision.7

Banco Filipino elevated the RTC decision to the Court of Appeals which affirmed the challenged decision.8

Banco Filipino sought for a reconsideration of the Court of Appeals Decision, invoking in its Supplemental Motion for Reconsideration the Decisions of the same court in two of the other illegal detainer cases initiated by Tala against Banco Filipino, docketed as CA-G.R. SP Nos. 39104 and 40524. In these cases, the Court of Appeals upheld the validity of the lease contract providing for a period of twenty (20) years. Finding Banco Filipino's motions for reconsideration meritorious, the Court of Appeals issued the herein assailed Resolution, thus: "This Court agrees with petitioner that its Decision of August 30, 1996 in CA-G.R. SP No. 39104, having been declared final and executory by no less than the Supreme Court in G.R. No. 127586, now constitutes the law of the case between the parties in the present case. Accordingly, this Court is not at liberty to disregard or abandon the same at will without wreaking havoc on said legal principle. "WHEREFORE, petitioner's motion for reconsideration and supplemental motion for reconsideration are hereby GRANTED. Accordingly, the Court's Decision of August 25, 1997 is hereby SET ASIDE and, in lieu thereof, a new one is rendered REVERSING and SETTING ASIDE the appealed decision and DISMISSING the complaint for ejectment filed against herein petitioner in the Municipal Trial Court of Iloilo City."9

Tala now comes to this Court on the lone ground that:

"The Honorable Court of Appeals erred in considering that principle of 'the law of the case' finds application in the instant case."10

Petitioner Tala contends that its complaint for illegal detainer should not have been dismissed by the Court of Appeals on the basis of its decision in CA-G.R. SP No. 39104. Petitioner claims that this decision is not a precedent. The first in the series of illegal detainer cases filed by Tala against the bank which reached the Supreme Court is CA-G.R. SP No. 39104. This involves the site in Malabon. The Court of Appeals held that Banco Filipino cannot be ejected from the subject premises considering that the twenty (20)-year lease contract has not expired. Tala elevated this Court of Appeals decision to the Supreme Court in G.R. No. 127586. In a Resolution dated March 12, 1997, the Supreme Court dismissed Tala's petition as the "appeal" was not timely perfected, thus: "Considering the manifestation dated January 31, 1997 filed by petitioner that it is no longer pursuing or holding in abeyance recourse to the Supreme Court for reasons stated therein, the Court Resolved to DECLARE THIS CASE TERMINATED and DIRECT the Clerk of Court to INFORM the parties that the judgment sought to be reviewed has become final and executory, no appeal therefrom having been timely perfected."11

We agree with petitioner Tala that the decision of the Court of Appeals in CA-G.R. SP No. 39104 holding that the twenty (20)-year contract of lease governs the contractual relationship between the parties is not a precedent considering that the Supreme Court in G.R. No. 127586 did not decide the case on the merits. The petition was dismissed on mere technicality. It is significant to note, however, that the Supreme Court in G.R. No. 129887,12 through Mr. Justice Sabino R. de Leon, resolved the identical issue raised in the present petition, i.e., whether the period of the lease between the parties is twenty (20) or eleven (11) years, thus: "Second. Petitioner Tala Realty insists that its eleven (11)-year lease contract controls. We agree with the MTC and the RTC, however, that the eleven (11)-year contract is a forgery because (1) Teodoro O. Arcenas, then Executive Vice-President of private respondent Banco Filipino, denied having signed the contract; (2) the records of the notary public who notarized the said contract, Atty. Generoso S. Fulgencio, Jr., do not include the said document; and (3) the said contract was never submitted to the Central Bank as required by the latter's rules and regulations (Rollo, pp. 383-384.). "Clearly, the foregoing circumstances are badges of fraud and simulation that rightly make any court suspicious and wary of imputing any legitimacy and validity to the said lease contract. "Executive Vice-President Arcenas of private respondent Banco Filipino testified that he was responsible for the daily operations of said bank. He denied having signed the eleven (11)-year contract and reasoned that it was not in the interest of Banco Filipino to do so (Rollo, p. 384). The fact was corroborated by Josefina C. Salvador, typist of Banco Filipino's Legal Department, who allegedly witnessed the said contract and whose initials allegedly appear in all the pages thereof. She disowned the said marginal initials (id., p. 385). "The Executive Judge of the RTC supervises a notary public by requiring submission to the Office of the Clerk of Court of his monthly notarial report with copies of acknowledged documents thereto attached. Under this procedure and requirement of the Notarial Law, failure to submit such notarial report and copies of acknowledged documents has dire consequences including the possible revocation of the notary's notarial commission. "The fact that the notary public who notarized petitioner Tala Realty's alleged eleven (11)-year lease contract did not retain a copy thereof for submission to the Office of the Clerk of Court of the proper RTC militates against the use of said document as a basis to uphold petitioner's claim. The said alleged eleven (11)-year lease contract was not submitted to the Central Bank whose strict documentation rules must be complied with by banks to ensure their continued good standing. On the contrary, what was submitted to the Central Bank was the twenty (20)-year lease contract. "Granting arguendo that private respondent Banco Filipino deliberately omitted to submit the eleven (11)-year contract to the Central Bank, we do not consider that fact as violative of the res inter alios acta aliis non nocet (Section 28, Rule 130, Revised Rules of Court provides, viz.: 'Sec. 28. Admission by third party - The rights of a party cannot be prejudiced by an act, declaration or omission of another, except as hereinafter provided.'; Compania General de Tabacos v. Ganson, 13 Phil. 472, 477 [1909]) rule in evidence. Rather, it is an indication of said contract's existence. "It is not the eleven (11)-year lease contract but the twenty (20)-year lease contract which is the real and genuine contract between petitioner Tala Realty and private respondent Banco Filipino. Considering that the twenty (20)-year lease contract is still subsisting and will expire in 2001 yet, Banco Filipino is entitled to the possession of the subject premises for as long as it pays the agreed rental and does not violate the other terms and conditions thereof (Art. 1673, New Civil Code)." (Emphasis supplied) The validity of the twenty (20) year lease contract was further reinforced on June 20, 2000 when the First Division of this Court, this time, speaking through Madame Justice Consuelo Ynares-Santiago, rendered a Decision in G.R. No. 137980, likewise upholding the twenty (20)-year lease contract, thus: "In light of the foregoing recent Decision of this Court (G.R. No. 129887), we have no option but to uphold the twenty-year lease contract over the eleven-year contract presented by petitioner. It is the better practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to that principle and apply it to all future cases where the facts are substantially the same. 'Stare decisis et non quieta movere.'

"That the principle of stare decisis applies in the instant case, even though the subject property is different, may be gleaned from the pronouncement in Negros Navigation Co., Inc. vs. Court of Appeals [G.R. No. 110398, 281 SCRA 534, 542-543 (1997)], to wit— 'Petitioner criticizes the lower court's reliance on the Mecenas case, arguing that although this case arose out of the same incident as that involved in Mecenas, the parties are different and trial was conducted separately. Petitioner contends that the decision in this case should be based on the allegations and defenses pleaded and evidence adduced in it, or, in short, on the record of this case. 'The contention is without merit. What petitioner contends may be true with respect to the merits of the individual claims against petitioner but not as to the cause of the sinking of its ship on April 22, 1980 and its liability for such accident, of which there is only one truth. Otherwise, one would be subscribing to the sophistry: truth on one side of the Pyrenees, falsehood on the other! 'Adherence to the Mecenas case is dictated by this Court's policy of maintaining stability in jurisprudence in accordance with the legal maxim 'stare decisis et non quieta movere' (Follow past precedents and do not disturb what has been settled.) Where, as in this case, the same questions relating to the same event have been put forward by parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to litigate the same issue (J.M. Tuason & Corp. v. Mariano, 85 SCRA 644 [1978]). In Woulfe v. Associated Realties Corporation (130 N.J. Eq. 519, 23 A. 2d 399, 401 [1942]), the Supreme Court of New Jersey held that where substantially similar cases to the pending case were presented and applicable principles declared in prior decisions, the court was bound by the principle of stare decisis. Similarly, in State ex rel. Tollinger v. Gill (75 Ohio App., 62 N.E. 2d 760 [1944]), it was held that under the doctrine of stare decisis a ruling is final even as to parties who are strangers to the original proceeding and not bound by the judgment under the res judicata doctrine. The Philadelphia court expressed itself in this wise: 'Stare decisis simply declares that, for the sake of certainty, a conclusion reached in one case should be applied to those which follow, if the facts are substantially the same, even though the parties may be different' (Heisler v. Thomas Colliery Co., 274 Pa. 448, 452, 118A, 394, 395 [1922]. Manogahela Street Ry, Co. v. Philadelphia Co., 350 Pa 603, 39 A. 2d 909, 916 [1944]; In re Burtt's Estate, 353 Pa. 217, 4 A. 2d 670, 677 [1945]). Thus, in J.M. Tuason v. Mariano, supra, this Court relied on its rulings in other cases involving different parties in sustaining the validity of a land title on the principle of 'stare decisis et non quieta movere.'(underscoring, Ours) "Here, therefore, even if the property subject of the Decision of G.R. No. 129887 is located in Urdaneta, Pangasinan while that in the instant case is located in Davao, we can very well apply the conclusion in G.R. No. 129887 that it is the twenty-year lease contract which is controlling inasmuch as not only are the parties the same, but more importantly, the issue regarding its validity is one and the same and, hence, should no longer be relitigated." Considering the above rulings, we hold that the term of the lease in the present case is also twenty (20) years. Resolving now the issue of whether or not respondent Banco Filipino should be ejected for non-payment of rentals, the First Division of this Court in the same G.R. No. 137980 held: "Coming now to the issue of whether or not respondent should be ejected for non-payment of rentals, we do not agree with the ruling in G.R. No 129887 that since the unpaid rentals demanded by petitioner were based on a new rate which it unilaterally imposed and to which respondent did not agree, there lies no ground for ejectment. In such a case, there could still be ground for ejectment based on non-payment of rentals. The recent case of T & C Development Corporation vs. Court of Appeals13 is instructional on this point. It was there cautioned that— 'The trial court found that private respondent had failed to pay the monthly rental of P1,800.00 from November 1992 to February 16, 1993, despite demands to pay and to vacate the premises made by petitioner. Even if private respondent deposited the rents in arrears in the bank, this fact cannot alter the legal situation of private respondent since the account was opened in private respondent's name. Clearly, there was cause for the ejectment of private respondent. Although the increase in monthly rentals from P700.00 to P1,800.00 was in excess of 20% allowed by B.P. Blg. 877, as amended by R.A. No. 6828, what private respondent could have done was to deposit the original rent of P700.00 either with the judicial authorities or in a bank in the name of, and with notice to, petitioner. As this Court held in Uy v. Court of Appeals (178 SCRA 671, 676 [1989]): 'The records reveal that the new rentals demanded since 1979 (P150.00 per month) exceed that allowed by law so refusal on the part of the lessor to accept was justified. However, what the lessee should have done was to deposit in 1979 the previous rent. This deposit in the Bank was made only in 1984 indicating a delay of more than four years. 'From the foregoing facts, it is clear that the lessor was correct in asking for the ejectment of the delinquent lessee. Moreover, he should be granted not only the current rentals but also all the rentals in arrears. This is so even if the lessor himself did not appeal because as ruled by this Court, there have been instances when substantial justice demands the giving of the proper reliefs.' x x x "While advance rentals appear to have been made to be applied for the payment of rentals due from the eleventh year to the twentieth year of the lease, to wit- '3. That upon the signing and execution of this Contract, the LESSEE shall pay the LESSOR ONE MILLION TWENTY THOUSAND PESOS ONLY (P1,020,000.00) Philippine Currency representing advance rental to be applied on the monthly rental for period from the eleventh to the twentieth year',

"the records show that such advance rental had already been applied for rent on the property for the period of August, 1985 to November, 1989. "Thus, when respondent stopped paying any rent at all beginning April, 1994, it gave petitioner good ground for instituting ejectment proceedings. We reiterate the ruling in T & C Development Corporation, supra, that if ever petitioner took exception to the unilateral or illegal increase in rental rate, it should not have completely stopped paying rent but should have deposited the original rent amount with the judicial authorities or in a bank in the name of, and with notice to, petitioner. This circumstance, i.e., respondent's failure to pay rent at the old rate, does not appear in G.R. No. 129887. Thus, while we are bound by the findings of this Court's Second Division in that case under the principle of stare decisis, the fact that respondent's failure to pay any rentals beginning April 1994, which provided ground for its ejectment from the premises, justifies our departure from the outcome of G.R. No. 129887. In this case, we uphold petitioner's right to eject respondent from the leased premises." It bears stressing that the facts of the instant case and those of G.R. Nos. 129887 and 137980 are substantially the same. The only difference is the site of respondent bank. The opposing parties are likewise the same. Clearly, in light of the Decisions of this Court in G.R. Nos. 129887 and 137980, which we follow as precedents, respondent Banco Filipino may not be ejected on the ground of expiration of the lease. However, since it stopped paying the rents beginning April 1994, its eviction from the premises is justified. WHEREFORE, the petition is GRANTED. The assailed Resolution of the Court of Appeals in CA- G.R. SP No. 44257 is MODIFIED insofar as it denies petitioner Tala's prayer for ejectment of respondent Banco Filipino. Judgment is rendered ordering respondent Banco Filipino to vacate the subject premises and to restore possession thereof to petitioner Tala. Respondent is also ordered to pay Tala the monthly rental of P21,100.00 computed from April 1994 up to the time it vacates the premises.1âwphi1.nêt Costs against respondent. SO ORDERED.