Construction DefinedG.R. No. L-19650             September 29, 1966CALTEX (PHILIPPINES), INC., petitioner-appellee,vs.ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL, respondent-appellant.Office of the Solicitor General for respondent and appellant.Ross, Selph and Carrascoso for petitioner and appellee.CASTRO, J.:In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a promotional scheme calculated to drum up patronage for its oil products. Denominated “Caltex Hooded Pump Contest”, it calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their immediate families excepted, participation is to be open indiscriminately to all “motor vehicle owners and/or licensed drivers”. For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be provided for the deposit of accomplished entry stubs.A three-staged winner selection system is envisioned. At the station level, called “Dealer Contest”, the contestant whose estimate is closest to the actual number of liters dispensed by the hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight with batteries and a screwdriver set for third. The first-prize winner in each station will then be qualified to join in the “Regional Contest” in seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed can from which the first-prize, second-prize and third-prize winners of that region will be drawn. The regional first-prize winners will be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective Caltex dealers, in order to take part in the “National Contest”. The regional second-prize and third-prize winners will receive cash prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be placed inside a sealed can from which the drawing for the final first-prize, second-prize and third-prize winners will be made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of the remaining four participants.Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the transmission of communications relative thereto, representations were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view sections 1954(a), 1982 and 1983 of the Revised Administrative Code, the pertinent provisions of which read as follows:SECTION 1954. Absolutely non-mailable matter. — No matter belonging to any of the following classes, whether sealed as first-class matter or not, shall be imported into the Philippines through the mails, or to be deposited in or carried by the mails of the Philippines, or be delivered to its addressee by any officer or employee of the Bureau of Posts:Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or purporting to convey any information concerning any lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind by means of false or fraudulent pretenses, representations, or promises.“SECTION 1982. Fraud orders.—Upon satisfactory evidence that any person or company is engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promises, the Director of Posts may instruct any postmaster or other officer or employee of the Bureau to return to the person, depositing the same in the mails, with the word “fraudulent” plainly written or stamped upon the outside cover thereof, any mail matter of whatever class mailed by or addressed to such person or company or the representative or agent of such person or company.SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.—The Director of Posts may, upon evidence satisfactory to him that any person or company is engaged in conducting any lottery, gift enterprise or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promise, forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer to said person or company or to the agent of any such person or company, whether such agent is acting as an individual or as a firm, bank, corporation, or association of any kind, and may provide by regulation for the return to the remitters of the sums named in money orders or telegraphic transfers drawn in favor of such person or company or its agent.The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the scheme falls within the purview of the provisions aforesaid and declined to grant the requested clearance. In its counsel’s letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no consideration in the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a “gift enterprise” which is equally banned by the Postal Law, and in his letter of December 10, 1960 not only denied the use of the mails for

purposes of the proposed contest but as well threatened that if the contest was conducted, “a fraud order will have to be issued against it (Caltex) and all its representatives”.Caltex thereupon invoked judicial intervention by filing the present petition for declaratory relief against Postmaster General Enrico Palomar, praying “that judgment be rendered declaring its ‘Caltex Hooded Pump Contest’ not to be violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention of the public”. After issues were joined and upon the respective memoranda of the parties, the trial court rendered judgment as follows:In view of the foregoing considerations, the Court holds that the proposed ‘Caltex Hooded Pump Contest’ announced to be conducted by the petitioner under the rules marked as Annex B of the petitioner does not violate the Postal Law and the respondent has no right to bar the public distribution of said rules by the mails.The respondent appealed.The parties are now before us, arrayed against each other upon two basic issues:  first, whether the petition states a sufficient cause of action for declaratory relief; and second, whether the proposed “Caltex Hooded Pump Contest” violates the Postal Law. We shall take these up in seriatim.1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the remedy at the time it was invoked, declaratory relief is available to any person “whose rights are affected by a statute . . . to determine any question of construction or validity arising under the . . . statute and for a declaration of his rights thereunder” (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs. The Board of Accountancy,  et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades,  et al., G.R. No. L-8964, July 31, 1956). The gravamen of the appellant’s stand being that the petition herein states no sufficient cause of action for declaratory relief, our duty is to assay the factual bases thereof upon the foregoing crucible.As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased patronage for its products. In contrast, the appellant, as the authority charged with the enforcement of the Postal Law, admittedly has the power and the duty to suppress transgressions thereof — particularly thru the issuance of fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code, against legally non-mailable schemes. Obviously pursuing its right aforesaid, the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To forestall possible difficulties in the dissemination of information thereon thru the mails, amongst other media, it was found expedient to request the appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed scheme and accordingly declined the request. A point of difference as to the correct construction to be given to the applicable statute was thus reached. Communications in which the parties expounded on their respective theories were exchanged. The confidence with which the appellee insisted upon its position was matched only by the obstinacy with which the appellant stood his ground. And this impasse was climaxed by the appellant’s open warning to the appellee that if the proposed contest was “conducted, a fraud order will have to be issued against it and all its representatives.”Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee’s insistent assertion of its claim to the use of the mails for its proposed contest, and the challenge thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real — not a mere theoretical — question or issue. The contenders are as real as their interests are substantial. To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to enhance its business. To the appellant, the suppression of the appellee’s proposed contest believed to transgress a law he has sworn to uphold and enforce is an unavoidable duty. With the appellee’s bent to hold the contest and the appellant’s threat to issue a fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo y Sen,  et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that merely the appellee’s “desires are thwarted by its own doubts, or by the fears of others” — which admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case at bar, it was translated into a positive claim of right which is actually contested (III Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350).We cannot hospitably entertain the appellant’s pretense that there is here no question of construction because the said appellant “simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest”, hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the assumption that, if the circumstances here presented, the construction of the legal provisions can be divorced from the matter of their application to the appellee’s contest. This is not feasible. Construction, verily, is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that intention is rendered doubtful, amongst others, by reason of the fact that the given case is not explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the scheme proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the intended meaning of the words used therein. To our mind, this is as much a question of construction or interpretation as any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing more than an advisory opinion the handing down of which is anathema to a declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the battle lines drawn, in a manner of speaking, the propriety — nay, the necessity — of setting the dispute at rest before it accumulates the asperity distemper, animosity, passion and violence of a full-blown battle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it has been cast, would be to force it to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it abandons the contest, it becomes a self-appointed censor, or permits the appellant to put into effect a virtual fiat of previous censorship which is constitutionally unwarranted. As we weigh these considerations in one equation and in the spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (section 1, Rule 1, Revised Rules of Court) — which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights and duties under a law — we can see in the present case any imposition upon our jurisdiction or any futility or prematurity in our intervention.The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he believes that it will not have the final and pacifying function that a declaratory judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this, he obviously overlooks that in this jurisdiction, “Judicial decisions applying or interpreting the law shall form a part of the legal system” (Article 8, Civil Code of the Philippines). In effect, judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to abide thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings that our resolution of this case will terminate the controversy at hand.It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent. In  Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional advertising was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion were conducted, the corporation would be subject to criminal prosecution, it was held that the corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of its sales promotion plan.  In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.In fine, we hold that the appellee has made out a case for declaratory relief.2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny the use of the facilities of the postal service to, any information concerning “any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind”. Upon these words hinges the resolution of the second issue posed in this appeal.Happily, this is not an altogether untrodden judicial path. As early as in 1922, in “El Debate”, Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postal authorities under the abovementioned provisions of the Postal Law, this Court declared that —While countless definitions of lottery have been attempted, the authoritative one for this jurisdiction is that of the United States Supreme Court, in analogous cases having to do with the power of the United States Postmaster General,  viz.: The term “lottery” extends to all schemes for the distribution of prizes by chance, such as policy playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. The three essential elements of a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed scheme to be the subject of contention. Consequently as the appellant himself concedes, the field of inquiry is narrowed down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in the same case just cited, this Court has laid down a definitive yard-stick in the following terms —In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property by chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does condemn as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a prize.Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to participate therein is couched. Thus —No puzzles, no rhymes? You don’t need wrappers, labels or boxtops? You don’t have to buy anything? Simply estimate the actual number of liter the Caltex gas pump with the hood at your favorite Caltex dealer will dispense from — to —, and win valuable prizes . . . .” .Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered, or any value whatsoever be given for the privilege to participate. A prospective contestant has but to go to a Caltex station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing of the winner. Viewed from all

angles or turned inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery. Indeed, even as we head the stern injunction, “look beyond the fair exterior, to the substance, in order to unmask the real element and pernicious tendencies which the law is seeking to prevent” (“El Debate”, Inc. vs. Topacio,  supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous distribution of property by chance.There is no point to the appellant’s insistence that non-Caltex customers who may buy Caltex products simply to win a prize would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value.1awphîl.nètOff-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the sponsor in the way of increased patronage by those who will be encouraged to prefer Caltex products “if only to get the chance to draw a prize by securing entry blanks”. The required element of consideration does not consist of the benefit derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting the enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way of patronage or otherwise, as a result of the drawing; does not supply the element of consideration.  Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W., 2d., 844″ (54 C.J.S., p. 849).Thus enlightened, we join the trial court in declaring that the “Caltex Hooded Pump Contest” proposed by the appellee is not a lottery that may be administratively and adversely dealt with under the Postal Law.But it may be asked: Is it not at least a “gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind”, which is equally prescribed? Incidentally, while the appellant’s brief appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the appellant’s action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice, which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise in which that element is not essential, the determination of whether or not the proposed contest — wanting in consideration as we have found it to be — is a prohibited gift enterprise, cannot be passed over sub silencio.While an all-embracing concept of the term “gift enterprise” is yet to be spelled out in explicit words, there appears to be a consensus among lexicographers and standard authorities that the term is commonly applied to a sporting artifice of under which goods are sold for their market value but by way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached as an inducement to the purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the appellee’s products.Going a step farther, however, and assuming that the appellee’s contest can be encompassed within the broadest sweep that the term “gift enterprise” is capable of being extended, we think that the appellant’s pose will gain no added comfort. As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance, even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally impressive authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D’Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained by the fact that the specific statutory provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms “lottery” and “gift enterprise” are used interchangeably (Bills vs. People, supra); in others, the necessity for the element of consideration or chance has been specifically eliminated by statute. (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation,supra). The lesson that we derive from this state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular phraseology of the applicable statutory provision.Taking this cue, we note that in the Postal Law, the term in question is used in association with the word “lottery”. With the meaning of lottery settled, and consonant to the well-known principle of legal hermeneutics noscitur a sociis — which Opinion 217 aforesaid also relied upon although only insofar as the element of chance is concerned — it is only logical that the term under a construction should be accorded no other meaning than that which is consistent with the nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term “gift enterprise” be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that element of consideration from the “gift enterprise” therein included.This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed matters which on grounds of public policy are declared non-mailable. As applied to lotteries, gift enterprises and similar schemes, justification lies in the recognized necessity to suppress their tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa. Super. 208). Since in gambling it is

inherent that something of value be hazarded for a chance to gain a larger amount, it follows ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been held —Gratuitous distribution of property by lot or chance does not constitute “lottery”, if it is not resorted to as a device to evade the law and no consideration is derived, directly or indirectly, from the party receiving the chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258.” (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).we find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the contest here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof.Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the “Caltex Hooded Pump Contest” as described in the rules submitted by the appellee does not transgress the provisions of the Postal Law.ACCORDINGLY, the judgment appealed from is affirmed. No costs.

ii. Nature and Object of ConstructionG.R. No. L-11176             June 29, 1959THE COLLECTOR OF INTERNAL REVENUE, petitioner, vs.MANILA LODGE NO. 761 OF THE BENEVOLENT & PROTECTIVE ORDER OF ELKS and THE COURT OF TAX APPEALS, respondents.Office of the Solicitor General Ambrosio Padilla and Solicitor Frine C. Zaballero for petitioner.Manuel O. Chan for respondent Lodge.CONCEPCION, J.:This is an appeal taken by the Collector of Internal Revenue from a decision of the Court of Tax Appeals holding that the Manila Lodge No. 761 of the Benevolent & Protective Order of Elks "is not liable for privilege taxes on its sale by retail of liquor and tobacco exclusively to its members and their guests," and reversing and setting aside a decision of said appellant to the contrary, dated November 19, 1953 without special pronouncement as to costs.The uncontested facts are set forth in the decision of said Court, from which we quote:This is an appeal from two decisions of the respondent Collector of Internal Revenue assessing and demanding from the petitioner herein the sums of P1,203.50 and P332.00, respectively representing fixed taxes as retail dealer in liquor, fermented liquor, and tobacco, allegedly due from the petitioner for the period from the 4th quarter of 1946 to 1953 and the period from 1954-1955, pursuant to subsections (i), (k) and (n) of section 193 of the Tax Code, in relation to 178 of the same Code.The petitioner, Manila Lodge No. 761 is admittedly a fraternal, civic, non-stock, non-profit organization duly incorporated under Philippine laws. It owns and operates a clubhouse located at Dewey Boulevard, Manila, wherein it sells at retail, liquor, fermented liquor, cigar and cigarettes only to its members and their guests. B.I.R. agents discovered that the Manila Elks Club had not paid for the period in question the privilege tax for retail liquor dealer (B-4), retail dealer in fermented liquor (B-7), and retail tobacco dealer (B-9-a) prescribed in section 193 of the Tax Code.On November 19, 1953, the Collector of Internal Revenue assessed against and demanded from the petitioner the payment of the sum of P1,203.50 representing fixed taxes, as retail dealer, for the period from its 4th quarter of 1946 to 1953, exclusive of the suggested compromise penalty of P80.00. The petitioner, claiming that it was exempted from the payment of the privilege taxes in question, requested that the said assessment be reviewed by the Conference Staff of the Bureau of Internal Revenue. The Conference Staff, after due hearing, upheld and reiterated the assessment made by the respondent Collector of Internal Revenue. Forthwith, the petitioner appealed to this Court on June 1, 1955.During the pendency of the original petition for review in the above-entitled case, respondent issued another assessment covering fixed taxes for the years 1954 to 1955 in the amount of P332.00, exclusive of the suggested compromise penalty of P50.00. Consequently, petitioner with leave of Court filed a supplemental petition for review which included the latter assessment.Petitioner bases its claim for exemption from the payment of the privilege taxes in question on the grounds that it is not engaged in the business of selling at retail liquor, fermented liquor, and tobacco because the sale of these aforementioned specific goods is made only to members of the club and their guests' on a very limited scale in pursuance only of its general purpose as a fraternal social club, to provide comfort, recreation, and convenience to such members, and merely to provide enough margin to cover operational expenses. (Petitioner's Memo p. 3).Respondent, on the other hand, maintains that persons selling articles subject to specific tax, such as cigars, tobacco, liquor and the like, are subject to the fixed taxes imposed by section 193 of the Tax Code, irrespective of whether or not they made profit, and whether or not they are civic or fraternal clubs selling only to their members and their guests. This contention is based on a ruling promulgated by the Bureau of Internal Revenue made in 1921.Petitioner herein maintains that:1. The respondent Court of Tax Appeals erred in reversing the decision of the petitioner-appellant which held the respondent club liable for fixed taxes.2. The respondent Court of Tax Appeals erred in holding that before respondent club's liability for the privilege taxes imposed by section 193 of the Tax Code attaches it is necessary that it be engaged in the "business" of selling liquor and tobacco.3. The respondent Court of Tax of Appeals erred in holding that a fraternal, civic, non-stock, non-profit organization like the respondent club selling at retail liquor and tobacco only to its members and their guests with just enough margin to cover operational expenses should not be held liable for the fixed taxes incident to the business of selling at retail, liquor and tobacco.4. The respondent Court of Tax Appeals erred in holding that the Administrative construction of the Bureau of Internal Revenue on the matter in question is outside the ambit of, and is inconsistent with, the Revised Administrative Code and Tax Code.This appeal is untenable. In the language of the Court of Tax Appeals:The bone of contention between the two parties herein . . ., lies in the proper interpretation and application of the pertinent provisions of the Tax Code, namely, subsections (i), (k) and (n) of section 193 in relation to section 178 of the Tax Code, which we quote hereunder:Sec. 178. Payment of privilege taxes. — A privilege tax must be paid before any business or occupation hereinafter specified can be lawfully begun or pursued. The tax on business is payable for every separate or distinct establishment or place where the business subject to the tax is conducted; and one occupation or line of business does not become exempt by being conducted with some other occupation or business for which such tax has been paid.The occupation tax must be paid by each individual engaged in a calling subject thereto; the tax on a business by the person, firm, or company conducting the same. (Emphasis supplied.)

SEC. 193. Amount of tax on business. — Fixed taxes on business shall be collected as follows, the amount stated being for the whole year when not otherwise specified:(i) Retail liquor dealers, one hundred pesos.(k) Retail dealers in fermented liquors, fifty pesos.x x x           x x x           x x x(n) Wholesale tobacco dealers, sixty pesos; retail tobacco dealers, sixteen pesos.The aforequoted provisions of the Tax Code are clear and precise. The privilege taxes prescribed in section 193 of the Tax Code in relation to section 178 of the same, are to be imposed or classified therein for "business" purposes. This evident intention of the law becomes more palpable when we take into consideration the facts that the drafters of our Tax Code had grouped the aforequoted provisions of law under one general division of the Tax Code headed as "Title V, Privilege Taxes on Business and occupation.It is not therefore entirely correct to maintain as respondent does, that all person selling articles subject to specific taxes, like liquor and tobacco, should likewise be subject to the fixed taxes imposed by section 193 of the Tax Code. We believe, that in order that these persons should be subjected to the privilege taxes imposed by the aforementioned section of the Tax Code, it is necessary that they be engaged in the "business" of selling liquor and tobacco, otherwise the privilege taxes as a dealer of liquor and tobacco can not attach.At this juncture a definition of the word "business" is in order and we have the following:.The word "business" in its ordinary and common use is employed to designate human efforts which have for their and living or reward; it is not commonly used as descriptive of charitable, religious, educational or social agencies. (Ballantine's Law Dictionary, 1948 Ed. P. 179)Business — "that which busies or engages time, attention or labor as a principal serious concern or interest; any particular occupation or employment habitually engaged in specially for livelihood or gain." (Vol. 1, 1949 Merriam-Webster's New International Dictionary, 2nd Ed. p. 362.)Other definitions of the term "business" as given by judicial pronouncement are found in Volume V, Words and Phrases, page 999 as follows:Business is a word of large signification, and denotes the employment or occupation in which a person is engaged to produce a living. (Citing: Goddard v. Chaffee, 84 Mass (Allen) 395; 79 Am Dec. 769).Business in common speech means habitual or regular occupation that a party is engaged in with a view to winning a livelihood or some gain. (Citing: In re Lemont, 41 p. 2D, 497, 502)An enterprise not conducted as a means of livelihood or for profit does not come within the ordinary meaning of the terms, "business, trade or industry." (Citing City of Rochester vs. Rochester Girl's Home, 194 N.Y.S. 236, 237).The term "business" as used in law imposing a license tax on business, trades, etc. ordinarily means business in the trade or commercial sense only, carried on with a view to profit or livelihood. (Citing: Cuzner vs. California Club 100 p. 868, 867, 155, Cal. 303, 20 L.R.A. N.S. 1095).From the foregoing definitions, it is evident that the plain ordinary meaning of "business" is restricted to activities or affairs where profit is the purpose, or livelihood is the motive. The term "business" being used without any qualification in section 193 of the Tax Code in relation to section 178 of the same, should therefore be construed in its plain and ordinary meaning, restricted to activities for profit or livelihood.With these considerations in mind, we now come to the question of whether or not the Manila Elks Club is engaged in the "business" of selling liquor and tobacco.Respondent, in paragraph 1 of his answer, admits that the petitioner herein, Manila Elks Club is a fraternal, civic, non-stock, non-profit organization. It has been established without contradiction that the Manila Elks Club, in pursuance of its purpose as a fraternal social club, sells on retail at its clubhouse on Dewey Boulevard, liquor, cigars and cigarettes, on a very limited scale, only to its members and their guests, providing just enough margin to cover operational expenses without intention to obtain profit. Such being the case then, the Manila Elks Club cannot be considered as engaged in the "business" of selling liquor and tobacco.Where the corporation handled no money except such as was necessary to cover operational expenses, conducted no business for itself, and engaged in no transactions that contemplated a profit for itself — such corporation is considered not organized for profit under the General Corporation Law. (Read V. Tidewater Coal Exch., 116 A 898, 904, cited in Vol. 34 Words & Phrases, p. 220, defining "profits"; underscoring provided.).The petitioner herein, Manila elks Club, not being engaged in the business of selling at retail liquor and tobacco, cannot therefore be held liable for the privilege taxes required by section 193, subsections (1), (k) and (n). The weight of American authorities enhances the strength of our findings that a fraternal, civic, non-stock, non-profit organization, like the Elks Club, selling at retail liquor and tobacco only to its members and their guests in pursuance with its general purpose as a fraternal social club with just enough margin to cover operational expenses, should not be held liable for the fixed taxes incident to the business of selling at retail, liquor and tobacco.A bonafide social club, which disposes of liquors at its clubhouse to members and their guests at a fixed charge as incident to the general purposes of the organizational is not required to take out a license by Rev. Laws No. 3777-3785, approved March 15, 1905, which provides for a license upon the business of disposing intoxicating liquors; the term business in such statute meaning business in the trade or commercial sense. (State v. university Club, 130 p. 468, 470; 35 Nev. 475; 44 L.R.A., N. S. 1026).A social club, not organized for the purpose of evading the liquor laws, but which furnishes its members with liquors and refreshments without profit to itself, is not a retail liquor dealer, within the statute imposing a license tax on all persons dealing in, selling or disposing of intoxicating liquors by retail. (Barden v. Montan Club, 25 P. 1042, 10 Mont. 330, II L.R.A. 593).

Acts 1881, C. 149, authorizing taxation of liquors dealers, does not include a social club maintaining a library, giving musical entertainments, and furnishing meals for its members, which keeps a small stock of liquor; the members paying for its drink as it is taken, but no profit being made on such sales. (Tennessee Club of Memphis v. Dwyer, 79 Tenn. (11 Lea) 452, 461, 47 Am. Rep. 298.).A social club composed of members who have no proprietary interest in the assets which provides a reading room, restaurant, bar room, library, billiard rooms and sitting rooms for its members, the expenses of which are defrayed by annual dues from each member, and by payments made by the members for food and drinks, is not engaged in the business of a retail liquor dealer, within section 11 of the Louisiana License Tax Laws. (La Ann. 585, 20 L.R.A. 185). Respondent however, insists that the petitioner should pay the privilege tax on the sale at retail of liquor and tobacco because this has been allegedly the practice consistently followed by the Bureau of Internal Revenue since 1921, and because section 1464 of the Revised Administrative Code under which said ruling was then based had been reenacted by the legislature as section 193 of the National Internal Revenue Code. Thus, respondent contends, that the policy of the Bureau of Internal Revenue has therefore gained "approval by legislative reenactments."The alleged administrative practice is founded upon the following ruling rendered in 1921.Clubs selling exclusively to members thereof liquors and other products on which the specific tax is imposedshould pay the privilege tax corresponding to the business engaged in. The fact that such products are sold at cost to the members of the club does not affect the club's liability to tax. (Ruling, Oct. 13, 1921, B.I.R. 105.02; Exh. 3, pp. 66-69. BIR records.)We do not agree with the contention of the respondent. While there is admittedly a ruling on this point in 1921, there is no showing that such has been a long-continued practice. Be that as it may, any such administrative construction must be within the ambit of, and must be consistent with, the Revised Administrative Code and the Tax Code. It is likewise the rule that where the statute is unambiguous, an administrative construction is unwarranted (U.S. vs. Missouri P.R. Co. 278 U. S. 269, 73 L. Ed. 322) and no construction may be made to restrict or enlarge the meaning of an Act. (Blatt vs. U.S.., 305 U.S. 267, 83 L. Ed. 167).An examination of section 1464 of the Revised Administrative Code taken in connection with section 1453 of the same, discloses the fact that aside from the change in rates of taxes to be paid and the arrangement of the classification of business enumerated therein, section 193 of the present Tax Code is a verbatim copy of the aforementioned provisions of the Revised Administrative Code. The policy or principle followed by the said code regarding privileges taxes, i.e. that the privilege taxes are payable only by those persons or entities engaged in the business enumerated in section 1464 of the said Code, has not suffered any change, and the same still obtains under our present Tax Code. In the absence of a showing that the legislative body had been apprised of the aforesaid ruling, what has gained legislative approval thru reenactment is, we believe, the policy behind the above-mentioned provision of the Revised Administrative Code of taxing persons engaged in business and not the alleged practice following the administrative ruling of 1921. We believe that no amount of trenchant adherence to an established practice may justify its continued application where it is clear and manifest that the same is not in consonance with the policy of the legislature as defined by law.It is urged by appellant that emphasis should be placed not on the term "business", but on the phrases "retail liquor dealers", in fermented liquors" and "retail tobacco dealers", appearing in section 193 of the National Internal Revenue Code, which are defined in section 194 thereof as follows:SEC. 194. Words and phrases defined. — In applying the provisions of the preceding section, words and phrases shall be taken in the sense and extension indicated below:x x x           x x x           x x x(i) "Retail liquor dealer" includes every person, except a retail vino dealer, who for himself or on commission sells or offers for sale wine or distilled spirits (other than denatured alcohol) in quantities of five liters or less at any one time and not for sale.x x x           x x x           x x x(k) "Retail dealer in fermented liquors" includes every person, except dealers in tuba, basi, and tapuy, who for himself or on commission sells or offers for sale fermented liquors and quantities of five liters or less at any one time and not for resale.x x x           x x x           x x x(o) "Tobacco dealer" comprehends every person who himself or on commission sells or offers for sale cigars, cigarettes, or manufactured tobacco.Undoubtedly, these definitions must be given all the weight due thereto, in the interpretation of section 193 of the Tax Code. As used therein, the phrases above referred to are, however, part and parcel of the provisions contained, not only in said section 193, but, also, in section 178 and other parts of the Tax Code, all of which must be given effect in their entirety as a harmonious, coordinated and integrated unit, not as a mass of heterogeneous and unrelated if not incongruous terms, clauses and sentences. In other words, the phrases in question should be construed in the light of the context of the whole Tax Code, of which they are integral parts. And when this is done — when we consider that section 193 requires "retail liquor dealers", "retail dealers in fermented liquors" and "retail tobacco dealers" to pay the taxes on business" therein specified; that said section 193 is entitled "Amount of tax on business", that said section 193 merely implements the general provision in section 178, to the effect that "a privilege tax must be paid in before any business or occupation hereinafter specified can be lawfully begun and pursued"; that the term "business" is used in said section 178, six (6) times; and that the aforementioned sections 178, 193 and 194 are part of Title V of the Tax Code, entitled "Privilege taxes on business and occupation" — it becomes crystal clear that the "retail liquor dealers", "retail dealers in fermented liquors" and "retail tobacco dealers" alluded to in said section 193 are those engaged in "business", not fraternal, civic, non-stock, non-profit organizations, like herein respondent, which sells wines, distilled spirits, fermented liquors and tobacco, exclusively to its members and their guests, at such prices as are merely sufficient to cover operational expenses.Petitioner assails the applicability of the decisions relied upon by the Court of Tax Appeals, upon the ground that said decisions refer to the authority to license, and, hence, to the exercise to the police power, not that of taxation which is involved in the case

at bar. However, the distinction made enhances — instead of detracting from — the weight of said decisions as precedents, insofar as the issue herein is concerned. Indeed, the police power is, in general broader and subject to less restrictions than the power to tax. It is not difficult to conceive the advisability, if not, necessity, of requiring a license for some activities undertaken by so-called "clubs", owing to the possibility, if not probability, of use of said name, appellation or denomination, in order to avoid or evade some laws or to camouflage certain ventures, pursuits or enterprises which otherwise would clearly be illegal, immoral or contrary to public policy. Upon the other hand, a tax is a burden and, as such, it will not be deemed imposed upon fraternal, civic, non-profit, non-stock organizations, unless the intent to the contrary is manifest and patent.Wherefore, the appealed decision of the Court of Tax Appeals is hereby affirmed, without special pronouncement as to costs. It is so ordered.Paras, C.J., Bengzon, Padilla, Montemayor, Bautista Angelo, Endencia and Barrera, JJ., concur.

G.R. No. L-29906 January 30, 1976RODOLFO GENERAL and CARMEN GONTANG, petitioners, vs.LEONCIO BARRAMEDA, respondent.Augusto A. Pardalis for petitioners.E.V. Guevarra for respondent. ESGUERRA, J.:Petition for certiorari to review the decision of the Court of Appeals (Second Division) in CA-G.R. No. 38363-R, entitled "Leoncio Barrameda, plaintiff-appellant, vs. Development Bank of the Philippines (Naga Branch, Naga City), Rodolfo General and Carmen Gontang, defendants-appellees," which reversed the decision of the Court of First Instance of Camarines Sur in its Civil Case No. 5697, "dismissing the complaint with costs against plaintiff".Appellate Court's decision has the following dispositive portion:We therefore find that the appealed judgment should be reversed and set aside and another one entered declaring (1) null and void the sale executed on September 3, 1963, by defendant Development Bank of the Philippines in favor of its defendants Rodolfo General and Carmen Gontang, (2) T.C.T. No. 5003 cancelled and (3) the mortgaged property redeemed; and ordering the Clerk of the lower court to deliver the amount of P7,271.22 deposited to defendants Rodolfo General and Carmen Gontang and the Register of Deeds to issue a new Transfer Certificate of Title in the name of plaintiff in lieu of T.C.T. No. 5003 upon payment by him of corresponding fees; with costs against the defendants in both instances.Undisputed facts are:Plaintiff seeks to redeem the land formerly embraced in Transfer Certificate of Title No. 1418, containing an area of 59.4687 hectares, situated in barrio Taban, Minalabac Camarines Sur; to annul any and all contracts affecting said property between the Development Bank of the Philippines (DBP) and Rodolfo General and Carmen Gontang and to recover damages, attorney's fees and costs.The land in dispute was mortgaged by plaintiff to the DBP to secure a loan of P22,000.00. For failure of the mortgagor to pay in full the installments as they fall due, the mortgagee foreclosed extrajudicially pursuant to the provisions of Act 3135. On April 23, 1962, the provincial sheriff conducted an auction sale in which the mortgagee, as the highest bidder, bought the mortgaged property for P7,271.22. On May 13, 1963, the sheriff executed a final deed of sale in favor of the DBP (Exhibit 2) and the DBP executed an affidavit of consolidation of ownership (Exhibit 3). Upon registration of the sale and affidavit on September 2, 1963 (Exhibit 1), TCT No. 1418 in the name of plaintiff was cancelled and TCT No. 5003 issued to the DBP (Exhibit-5) in its stead. On September 3, 1963, defendants Rodolfo General and Carmen Gontang purchased the land from their codefendant. The sale in their favor was annotated on TCT No. 5003 on November 26, 1963 only.Prior to the date last mentioned, or on November 20, 1963, plaintiff offered to redeem the land. In view of the refusal of the DBP to allow the redemption, plaintiff commenced this suit. The original complaint was filed in court on November 23, 1963. On August 12, 1964, plaintiff deposited with the clerk of court the sum of P7,271.22, representing the repurchase price of the land.The trial court held that the one-year period of redemption began to run on April 23, 1962, when the sale at public auction was held, and ended on April 24, 1963; that the plaintiff's offer to redeem on November 20, 1963 and the deposit of the redemption price on August 12, 1964 were made beyond the redemption period; and that defendants Rodolfo General and Carmen Gontang 'are legitimate purchasers for value.Two principal issues raised are:(1) In the interpretation and application of Section 31, Commonwealth Act 459 (Law that created the Agricultural and Industrial Bank, now Development Bank of the Philippines) which provides:The Mortgagor or debtor to the Agricultural and Industrial Bank whose real property was sold at public auction, judicially or extra- judicially, for the full or partial payment of an obligation to said bank shall, within one year from the date of' the auction sale, have the right to redeem the real property ... (Emphasis supplied),shall the period of redemption start from the date of auction sale or the date of the registration of the sale in the register of deeds as the respondent Appellate Court held?(2) Were petitioners under obligation to look beyond what appeared in the certificate of title of their vendor the Development Bank of the Philippines and investigate the validity of its title before they could be classified as purchasers in good faith?Petitioners' principal contentions are: that Section 31 of Commonwealth Act No. 459 which created the Agricultural and Industrial Bank, predecessor of the Rehabilitation Finance Corporation and the Development Bank of the Philippines, clearly provides that the right to redeem the real property sold at public auction judicially or extra-judicially may only be exercised "within one year from the date of the auction sale"; that there is no provision in Commonwealth Act No. 459 expressly stating that the redemption period of one year shall start from the registration of the certificate of sale in the register of deeds; that Sec. 31 of C. A. 459 is a specific provision of law which governs redemption of real property foreclosed by the Agricultural and Industrial Bank (now the Development Bank of the Philippines), and prescribes the redemption period for both judicial and extra-judicial foreclosures of mortgage; that insofar as foreclosures of mortgage by banking and financial institutions are concerned, the period of redemption applicable must be the one prescribed in their respective charters as, in the case at bar, Section 31, C.A. No. 459; that the ruling in the case of Agbulos vs. Alberto, G.R. No. L-17483, July 31, 1962, cited by respondent Appellate Court as a basis for its decision, is not applicable to the case at bar because this Court based its Agbulos ruling on Section 26 (now Sec. 90) of Rule 39 of the Rules of Court, wherein it is not clear when the period of redemption should start (date when execution sale was conducted, or when the certificate of sale was executed by sheriff, or when the certificate of sale was registered in the registry of

deeds), and this Court ruled that as the land involved in that case is registered under the Torrens system, the date of redemption should begin to run from the date of registration, unlike in the case at bar where Section 31 of Commonwealth Act 459 specifically and clearly provides that the running of the redemption period shall start from the date of the auction sale; and that the ruling of this Court in Gonzales vs. P.N.B., 48 Phil. 824, also invoked by respondent Appellate Court as a basis for its decision, is likewise not applicable to the case at bar because the provisions on the matter of the P.N.B. Charter, Act No. 2938, are different from that of Commonwealth Act 459. Section 32 of Act 2938, which is now Section 20 of R.A. No. 1300 (PNB Charter) provides that the mortgagor shall have the right to redeem within one year the sale of the real estate. This is Identical to the provision appearing in Sec. 26, now Sec. 30, Rule 39, Rules of Court, while under Sec. 31 of Commonwealth Act 459, the period of redemption should star, on the date of the auction sale, and the latter provision is applicable specifically and expressly to the case at bar.It is also petitioners' principal argument that the ruling in Metropolitan Insurance Company, substituted by spousesLoreto Z. Marcaida and Miguel de Marcaida vs. Pigtain 101 Phil. 1111, 1115-1116, wherein this Court, in construing Sec. 6 of Act No. 3135, categorically stated that the one year redemption period shall start from the date of sale and not from the report of the sale or the registration of the sale certificate in the office of the Register of Deeds, is more applicable to the present case. The pertinent portion of the decision in the Marcaida case follows:But again the appellants claim that in this particular case, the statutory redemption period of one year should begin from December 17, 1954, when the auction sale was actually recorded in the office of the Register of Deeds of Manila and not from December 15, 1953, when the sale at public auction of the properties in question took place. We find its contention to be also untenable in view of the clear provision of the aforesaid Section 6 of Act No. 3135 to the effect that the right of redemption should be exercised within one year from the date of the sale. It should not be overlooked that the extrajudicial sale in question was for foreclosure of a mortgage and was not by virtue of an ordinary writ of execution in a civil case. ... And since the appeallants had failed to redeem the land in question within the time allowed by Section 6 of Act 3135, the appellee has perfect right to require the cancellation of the attachment lien in question. (Emphasis supplied)Notwithstanding the impressive arguments presented by petitioners, the crucial issue to determine is the choice of what rule to apply in determining the start of the one year redemption period, whether from the date of the auction sale or from that of the registration of the sale with the registry of deeds. In other words it is whether a literal interpretation of the provision of Section 31 of Commonwealth Act 459 — that the period of redemption shall start from the date of the auction sale — shall govern, or whether the words, "auction sale" shall be considered in their ordinary meaning or in the same sense that site is used in the texts of Section 26, now 30, of Rule 39 of the Rules of Court, and Section 26 of Act 2938, now Section 20, R.A. 1300 (Charter of PNB). Stated differently, should the word "sale" used in the above indicated provisions of the Rules of Court and the PNB Charter, under whichWe ruled that the redemption period shall start from the registration of the sale in the registry of deeds be applied to foreclosure sales for the DBP and give to the words auction sale" in its charter the same meaning of "sale" as used in connection with registered land?We are of the view that a correct solution to the foregoing issue must entail not merely trying to determine the meaning of the words auction sale" and "sale" in different legislative enactments, but, more importantly, a determination of the legislative intent which is quite a task to achieve as it depends more on a determination of the purpose and objective of the law in giving mortgagors a period of redemptiom of their foreclosed properties. Mortgagors whose properties are foreclosed and are purchased by the mortgagee as highest bidder at the auction sale are decidedly at a great disadvatage because almost invariably mortgagors forfeit their properties at a great loss as they are purchased at nominal costs by the mortgagee himself who ordinarily bids in no more than his credit or the balance threof at the auction sale. That is the reason why the law gives them a chance to redeem their properties within a fixed period. It cannot be denied that in all foreclosures of mortgages and sale of property pursuan to execution, whether judicial or extrajudicial in nature, under different legislative enactments, a public auction sale is a indispensable pre-requisite to the valid disposal of properties used as collateral for the obligation. So that whether the legislators in different laws used as collateral for the obligation. So that whether the legislators in different laws used the term "sale" or "auction sale" is of no moment, since the presumption is that when they used those words "sale" and "auction sale" interchangeable in different laws they really referred to only one act — the sale at public auction indispensably necessary in the disposition of mortgaged properties and those levied upon to pay civil obligations of their owners.In the case of Ernesto Salazar, et al. vs. Flor De Lis Meneses, et al.,G.R. No. L-15378, promulgated July 31, 1963, this Court stated:The issue decisive of this appeal is the one raised by appellants in their third assignment of error, which is to this effect: that the lower court erred in not holding that the period of redemption in this case, as far as appellants are concerned, started only on May 26, 1956, registered. Should We rule to this effect, it is clear that hen appellants attempted to exercise their right to redeem, as judgment creditors of the deceased mortgagor by judgment subsequent to the extrajudicial foreclosure sale, and when they initiated the present action on October 1, 1956, the period of redemption had not yer expired.We find appellants' contention to be meritorious. In the case of Agbulos vs. Alberto, G.R. No. L-17483, promulgated on July 31, 1962, We held:The property involved in the present case is registered land. It is the law in this jurisdiction that when property brought under the operation of the Land Registration Act sold, the operative act is the registration of the deed of conveyance. The deed of sale does not take effect this a conveyance or bind the land it is registered. (Section 50, Act 496; Tuason vs. Raymundo, 28 Phil. 635; Sikatuna vs. Guevara, 43 Phil. 371; Worcester vs. Ocampo, 34 Phil. 646) (Emphasis supplied)We find no compelling reason to deviate from the aforequoted ruling and not apply the same to the present case. To Us petitioners' main contention that there is a great deal of difference in legislative intent in the use of the words 94 auction sale" in Sec. 31 of Commonwealth Act 459 and the word "sale" in See. 32 of Act 2938, and See. 30 of Rule 39 of the Rules of Court, pales into insignificance in the light of Our stand that those words used interchangeably refer to one thing, and that is the public

auction sale required by law in the disposition of properties foreclosed or levied upon. Our stand in the Salazar case and in those mentioned therein (Garcia vs. Ocampo, G.R. No. L-13029, June 30, 1959; Gonzales et al. vs. Philippine National Bank et al. 48 Phil. 824) is firmly planted on the premise that registration of the deed of conveyance for properties brought under the Torrens System is the operative act to transfer title to the property and registration is also the notice to the whole world that a transaction involving the same had taken place.To affirm the previous stand this Court has taken on the question of when the one year period of redemption should start (from the time of registration of the sale) would better serve the ends of justice and equity especially in this case, since to rule otherwise would result in preventing the respondent-mortgagor from redeeming his 59.4687 hectares of land which was acquired by the Development Bank of the Philippines as the highest bidder at the auction sale for the low price of only P7,271.22 which was simply the unpaid balance of the mortgage debt of P22,000.00 after the respondent-mortgagor had paid the sum of P14,728.78. As it is, affirmance of the Appellate Court's decision would not result in any loss to petitioners since the amount of P7,271.22 they paid to the Bank will be returned to 'them. What further strengthen's Our stand is the fact found by the respondent Appellate Court that respondent Barrameda has always been in possession of the disputed land.IN THE LIGHT OF THE FOREGOING, We find it no longer necessary to determine whether the petitioners are purchasers in good faith of the land involved, since the respondent Barrameda redeemed the mortgaged property within the legal period of redemption and, consequently the sale of the property executed on September 3, 1963, by the Development Bank of the Philippine in favor of the petitioners is null and void.WHEREFORE, the decision of the respondent Appellate Court is affirmed, with costs against petitioners.Teehankee (Chairman), Makasiar, Muñoz Palma and Martin, JJ., affirmed.

G.R. No. L-12727             February 29, 1960MANILA JOCKEY CLUB, INC., petitioner-appellant, vs.GAMES AND AMUSEMENTS BOARD, ET AL., respondents-appellees.PHILIPPINE RACING CLUB, INC., petitioner-intervenor-appellant.Lichauco, Picazo and Agcaoili for appellant.First Assistant Government Corporate Counsel Simeon M. Gopengco and Attorney Pedro L. Bautista for appellee PCSO.Assistant Solicitor General Jose P. Alejandro and Solicitor Pacifico P. de Castro for the other appellees.Cesar S. de Guzman for appellant.BARRERA, J.:This is a petition for declaratory relief filed by petitioner Manila Jockey Club, Inc., in the Court of First Instance Manila (Civil Case No. 31274), in which the Philippine Racing Club, Inc., intervened as party in interest with leave of court, praying that judgment be rendered against respondents Games and Amusements Board (GAB), Philippine Charity Sweepstakes Office (PCSO), and Executive Secretary Fortunato de Leon:(a) Interpreting Republic Acts Nos. 309 and 1502 in such a manner that the 30 Sundays unreserved for charitable institutions and therefore belonging to the private racing clubs under Section 4 of Republic Act No. 309 continue to pertain to said private entities, and that the 6 additional sweepstakes races authorized under Republic Act No. 1502 should be held on 6 of the 12 Saturdays not reserved for any private entity or particular charitable institution under Section 4 of Republic Act No. 309, or on any other day of the week besides Sunday, Saturday and legal holiday;(b) Holding that respondent PCSO does not have the right or power to appropriate or use the race tracks and equipment of petitioner without its consent, nor can respondents compel petitioner to so allow such use of its race tracks and equipment under pain of having its license revoked.Respondents duly filed their respective answers to said petition and the case was heard. After hearing, the court, on July 5, 1957, rendered a decision which, in part, reads:The court does not deem it necessary to rule on the deprivation of property of the petitioner and the intervenor without due process of law, as feared by them, because as they have stated, the Philippine Charity Sweepstakes Office is using their premises and equipment under separate contracts of lease voluntarily and willingly entered into by the parties upon payment of a corresponding rental. There is therefore no deprivation of property without due process of law.Wherefore, the court is of the opinion and so holds that once a month on a Sunday not reserved for the Anti-Tuberculosis Society, the White Cross and other charitable institutions by Section 4 of Republic Act No. 309, the Philippine Charity Sweepstakes Office is authorized to hold one regular sweepstakes draw and races, pursuant to Section 9 of Republic Act No. 1502, thus reducing the number of Sundays which may be alloted to private entities by the Games and Amusements Board. . . .From this judgment, petitioner and intervenor interposed the present appeal.The issue is the proper placement of the six (6) additional racing days given to the Philippine Charity Sweepstakes Office, in virtue of Republic Act No. 1502, approved on June 16, 1956.

The authorized racing days specifically designated and distributed in Section 4 of Republic Act No. 309, the basic law on horse racing in the Philippines, as later amended by Republic Act No. 983, are as follows:

A. Sundays:

(1) For the Philippine Anti-Tuberculosis Society .................. 12 Sundays

(2) For the Philippine Charity Sweepstakes Office (PCSO) . 6 Sundays

(3) For the White Cross, Inc. ............................................. 4 Sundays

(4) For the Grand Derby Race of the Philippine Anti-Tuberculosis Society ........................................................   1 Sunday  

            Total ................................................................ 23 Sundays

(5) For private individuals and entities duly licensed by the GAB, other Sundays not reserved under this Act, as may be determined by the

29 Sundays

GAB ...........................................

or 30 for Leap years            Total for the year .................... 52 Sundays

            or 53 for leap years.

B. Saturdays:

(1) For the Philippine Anti-Tuberculosis Society ..... 12 Saturdays

(2) For the White Cross, Inc. ....................................... 4 Saturdays

(3) For private Individuals and entities duly licensed by GAB and as may be determined by it .................................. 24 Saturdays

(4) For races authorized by the President for charitable, relief, or civic purposes other than the particular charitable institutions named above, all other Saturdays not reserved for the latter .................... 12 Saturdays

            Total ................................................................ 52 Saturdays

C. Legal Holidays: All, except Thursday and Friday of the Holy Week, July 4th and December 30th, have been reserved for private individuals and entities duly licensed by the GAB.As stated, Republic Act No. 1502 increased the sweepstakes draw and races of the PCSO to twelve, but without specifying the days on which they are to be run. To accommodate these additional races, the GAB resolved to reduce the number of Sundays assigned to private individuals and entities by six. Appellants protested, contending that the said increased should be taken from the 12 Saturdays reserved to the President, for charitable, relief, or civic purposes, or should be assigned to any other day of the week besides Sunday, Saturday, and legal holiday.Appellants' contention cannot be sustained. Section 4 Republic Act No. 309, as amended by Republic Act No. 983, by express terms, specifically reserved 23 Sundays and 16 Saturdays for the Philippine Anti-Tuberculosis Society, the White Cross, Inc. and the PCSO, and 12 Saturdays to the President for other charitable, relief, or civic purposes. These days can not be disposed of by the GAB without authority of law. As to the remaining racing days, the law provides:SEC. 4. Racing days.—Private individuals and entities duly licensed by the Commission on Races (now GAB) may hold horse races on Sundays not reserved under this Act, on twenty-four Saturdays as may be determined by the said Commission (GAB), and on legal holidays, except Thursday and Friday of Holy Week, July fourth, commonly known as Independence Day, and December thirtieth, commonly known as Rizal Day.It is clear from the above-quoted provision that appellants have no vested right to the unreserved Sundays, or even to the 24 Saturdays (except, perhaps, on the holidays), because their holding of races on these days is merely permissive, subject to the licensing and determination by the GAB. When, therefore, Republic Act No. 1502 was enacted increasing by six (6) the sweepstakes draw and races, but without specifying the days for holding them, the GAB had no alternative except to make room for the additional races, as it did, form among the only available racing days unreserved by any law — the Sundays on which the private individuals and entities have been permitted to hold their races, subject to licensing and determination by the GAB.It is suggested that the GAB should have chosen any week days or Saturday afternoons. In the first place, week days are out of the question. The law does not authorize the holding of horse races with betting on week days (See Article 198 of the Revised Penal Code). Secondly, sweepstakes races have always been held on Sundays. Besides, it is not possible to hold them on Saturday afternoons as, it is claimed, a whole day is necessary for the mixing of the sweepstakes balls, the drawing of winning sweepstakes numbers, and the running of the sweepstakes races. Be that as it may, since the law has given certain amount of discretion to the GAB in determining and allocating racing days not specifically reserved, and since the court does not find that a grave abuse of this discretion has been committed, there seems to be no reason, legal or otherwise, to set aside the resolution of the GAB.Furthermore, appellants contend that even granting that the six (6) additional sweepstakes races should be run on Sundays, yet if they are held on a club race day, the GAB should only insert them in the club races and not given the whole day to the PCSO, to the exclusion of appellants. In support of this contention, the following quotation from the debate in the House of Representatives before voting on House Bill No. 5732, which became Republic Act No. 1502, is cited:Mr. ABELEDA. If there are no more amendments, I move that we vote on the measure.

Mr. MARCOS. Mr. Speaker, before we proceed to vote on this bill, I want to make it of record that it is the clear intention of the House to increase by two the ten regular and special Sweepstakes races making it all in all, twelve, and that in cases where a sweepstakes race falls in a club race days the Sweepstakes races should be inserted in the club race.Mr. ABELEDA. The gentleman from Ilocos Norte is correct. . . . (t.s.n., Proceedings in House of Representatives, Congress, May 17, 1956; emphasis supplied.)Appellants cite in their briefs a number of authorities sustaining the view that in the interpretation of statutes susceptible of widely differing constructions, legislative debates and explanatory statements by members of the legislature may be resorted to, to throw light on the meaning of the words used in the statutes. Upon the other hand, the appellees, likewise, quote in their briefs other authorities to the effect that statements made by the individual members of the legislature as to the meaning of provisions in the bill subsequently enacted into law, made during the general debate on the bill on the floor of each legislative house, following its presentation by a standing committee, are generally held to be in admissable as an aid in construing the statute. Legislative debates are expressive of the views and motives of individual members and are not safe guides and, hence, may not be resorted to in ascertaining the meaning and purpose of the lawmaking body. It is impossible to determine with certainty what construction was put upon an act by the members of the legislative body that passed the bill, by resorting to the speeches of the members thereof. Those who did not speak, may not have agreed with those who did; and those who spoke, might differ from each other.1

In view of these conflicting authorities, no appreciable reliance can safely be placed on any of them. It is to be noted in the specific case before us, that while Congressmen Marcos and Abeleda were, admittedly, of the view that the additional sweepstakes races may be inserted in the club races, still there is nothing in Republic Act No. 1502, as it was finally enacted, which would indicate that such an understanding on the part of these two members of the Lower House of Congress were received the sanction or conformity of their colleagues, for the law is absolutely devoid of any such indication. This is, therefore, not a case where a doubtful wording is sought to be interpreted; rather, if we adopt appellants' theory, we would be supplying something that does not appear in the statute. It is pertinent to observe here that, as pointed out by one of appellants' own cited authorities,2 in the interpretation of a legal document, especially a statute, unlike in the interpretation of an ordinary written document, it is not enough to obtain information to the intention or meaning of the author or authors, but also to see whether the intention or meaning has been expressed in such a way as to give it legal effect and validity. In short, the purpose of the inquiry, is not only to know what the author meant by the language he used, but also to see that the language used sufficiently expresses that meaning. The legal act, so to speak, is made up of two elements — an internal and an external one; it originates in intention and is perfected by expression. Failure of the latter may defeat the former. The following, taken from 59 Corpus Juris 1017, is in the line with this theory:The intention of the legislature to which effect must be given is that expressed in the statute and the courts will not inquire into the motives which influence the legislature, or individual members, in voting for its passage; nor indeed as to the intention of the draftsman, or the legislature, so far as it has been expressed in the act. So, in ascertaining the meaning of a statute the court will not be governed or influenced by the views or opinions of any or all members of the legislature or its legislative committees or any other persons.Upon the other hand, at the time of the enactment of Republic Act No. 1502 in June, 1956, the long, continuous, and uniform practice was that all sweepstakes draws and races were held on Sundays and during the whole day. With this background, when Congress chose not to specify in express terms how the additional sweepstakes draws and races would be held, it is safe to conclude that it did not intend to disturb the then prevailing situation and practice."On the principle of contemporaneous exposition, common usage and practice under the statute, or a course of conduct indicating a particular undertaking of it, will frequently be of great value in determining its real meaning, especially where the usage has been acquired in by all parties concerned and has extended over a long period of time; . . . (59 C. J. 1023).Likewise, the language of Republic Act No. 1502 in authorizing the increase, clearly speaks of regular sweepstakes draws and races. If the intention of Congress were to authorize additional sweepstakes draws only which could, admittedly, be inserted in the club races, the law would not have included regular races; and since regular sweepstakes races were specifically authorized, and it would be confusing, inconvenient, if not impossible to mix these sweepstakes races with the regular club races all on the same day (and it has never been done before), the conclusion seems inevitable that the additional sweepstakes draws and races were intended to be held on a whole day, separate and apart from the club races.Appellants' contention that to compel them to permit the PCSO to use their premises and equipment against their will would constitute deprivation of property without due process of law, deserves no serious consideration. As the lower court has found, every time the PCSO uses appellants' premises and equipment, they are paid rentals in accordance with the terms of separate contracts of lease existing between them and the PCSO.The decision appealed from, being in consonance with the above findings and considerations of this Court, the same is hereby affirmed, with costs against the appellants. So ordered.Paras, C. J., Bengzon, Labrador, Concepcion, Reyes, J. B. L., Endencia, and Gutierrez David, JJ., concur.

IV. Limitations to Power to ConstrueG.R. No. L-6355-56             August 31, 1953PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees, vs.SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for appellant.Manuel O. Chan for appellees.MONTEMAYOR, J.:This is a joint appeal from the decision of the Court of First Instance of Manila declaring section 13 of Republic Act No. 590 unconstitutional, and ordering the appellant Saturnino David as Collector of Internal Revenue to re-fund to Justice Pastor M. Endencia the sum of P1,744.45, representing the income tax collected on his salary as Associate Justice of the Court of Appeals in 1951, and to Justice Fernando Jugo the amount of P2,345.46, representing the income tax collected on his salary from January 1,1950 to October 19, 1950, as Presiding Justice of the Court of Appeals, and from October 20, 1950 to December 31,1950, as Associate Justice of the Supreme Court, without special pronouncement as to costs.Because of the similarity of the two cases, involving as they do the same question of law, they were jointly submitted for determination in the lower court. Judge Higinio B. Macadaeg presiding, in a rather exhaustive and well considered decision found and held that under the doctrine laid down by this Court in the case of Perfecto vs. Meer, 85 Phil., 552, the collection of income taxes from the salaries of Justice Jugo and Justice Endencia was a diminution of their compensation and therefore was in violation of the Constitution of the Philippines, and so ordered the refund of said taxes.We see no profit and necessity in again discussing and considering the proposition and the arguments pro and cons involved in the case of Perfecto vs. Meer, supra, which are raised, brought up and presented here. In that case, we have held despite the ruling enunciated by the United States Federal Supreme Court in the case of O 'Malley vs. Woodrought 307 U. S., 277, that taxing the salary of a judicial officer in the Philippines is a diminution of such salary and so violates the Constitution. We shall now confine our-selves to a discussion and determination of the remaining question of whether or not Republic Act No. 590, particularly section 13, can justify and legalize the collection of income tax on the salary of judicial officers.According to the brief of the Solicitor General on behalf of appellant Collector of Internal Revenue, our decision in the case of Perfecto vs. Meer, supra, was not received favorably by Congress, because immediately after its promulgation, Congress enacted Republic Act No. 590. To bring home his point, the Solicitor General reproduced what he considers the pertinent discussion in the Lower House of House Bill No. 1127 which became Republic Act No. 590.For purposes of reference, we are reproducing section 9, Article VIII of our Constitution:.SEC. 9. The members of the Supreme Court and all judges of inferior courts shall hold office during good behavior, until they reach the age of seventy years, or become incapacitated to discharge the duties of their office. They shall receive such compensation as may be fixed by law, which shall not be diminished during their continuance in office. Until the Congress shall provide otherwise, the Chief Justice of the Supreme Court shall receive an annual compensation of sixteen thousand pesos, and each Associate Justice, fifteen thousand pesos.As already stated construing and applying the above constitutional provision, we held in the Perfecto case that judicial officers are exempt from the payment of income tax on their salaries, because the collection thereof by the Government was a decrease or diminution of their salaries during their continuance in office, a thing which is expressly prohibited by the Constitution. Thereafter, according to the Solicitor General, because Congress did not favorably receive the decision in the Perfecto case, Congress promulgated Republic Act No. 590, if not to counteract the ruling in that decision, at least now to authorize and legalize the collection of income tax on the salaries of judicial officers. We quote section 13 of Republic Act No. 590:SEC 13. No salary wherever received by any public officer of the Republic of the Philippines shall be considered as exempt from the income tax, payment of which is hereby declared not to be dimunition of his compensation fixed by the Constitution or by law.So we have this situation. The Supreme Court in a decision interpreting the Constitution, particularly section 9, Article VIII, has held that judicial officers are exempt from payment of income tax on their salaries, because the collection thereof was a diminution of such salaries, specifically prohibited by the Constitution. Now comes the Legislature and in section 13, Republic Act No. 590, says that "no salary wherever received by any public officer of the Republic (naturally including a judicial officer) shall be considered as exempt from the income tax," and proceeds to declare that payment of said income tax is not a diminution of his compensation. Can the Legislature validly do this? May the Legislature lawfully declare the collection of income tax on the salary of a public official, specially a judicial officer, not a decrease of his salary, after the Supreme Court has found and decided otherwise? To determine this question, we shall have to go back to the fundamental principles regarding separation of powers.Under our system of constitutional government, the Legislative department is assigned the power to make and enact laws. The Executive department is charged with the execution of carrying out of the provisions of said laws. But the interpretation and application of said laws belong exclusively to the Judicial department. And this authority to interpret and apply the laws extends to the Constitution. Before the courts can determine whether a law is constitutional or not, it will have to interpret and ascertain the meaning not only of said law, but also of the pertinent portion of the Constitution in order to decide whether there is a conflict between the two, because if there is, then the law will have to give way and has to be declared invalid and unconstitutional.Defining and interpreting the law is a judicial function and the legislative branch may not limit or restrict the power granted to the courts by the Constitution. (Bandy vs. Mickelson et al., 44N. W., 2nd 341, 342.)When it is clear that a statute transgresses the authority vested in the legislature by the Constitution, it is the duty of the courts to declare the act unconstitutional because they cannot shrink from it without violating their oaths of office. This duty of the courts to

maintain the Constitution as the fundamental law of the state is imperative and unceasing; and, as Chief Justice Marshall said, whenever a statute is in violation of the fundamental law, the courts must so adjudge and thereby give effect to the Constitution. Any other course would lead to the destruction of the Constitution. Since the question as to the constitutionality of a statute is a judicial matter, the courts will not decline the exercise of jurisdiction upon the suggestion that action might be taken by political agencies in disregard of the judgment of the judicial tribunals. (11 Am. Jur., 714-715.)Under the American system of constitutional government, among the most important functions in trusted to the judiciary are the interpreting of Constitutions and, as a closely connected power, the determination of whether laws and acts of the legislature are or are not contrary to the provisions of the Federal and State Constitutions. (11 Am. Jur., 905.).By legislative fiat as enunciated in section 13, Republic Act NO. 590, Congress says that taxing the salary of a judicial officer is not a decrease of compensation. This is a clear example of interpretation or ascertainment of the meaning of the phrase "which shall not be diminished during their continuance in office," found in section 9, Article VIII of the Constitution, referring to the salaries of judicial officers. This act of interpreting the Constitution or any part thereof by the Legislature is an invasion of the well-defined and established province and jurisdiction of the Judiciary.The rule is recognized elsewhere that the legislature cannot pass any declaratory act, or act declaratory of what the law was before its passage, so as to give it any binding weight with the courts. A legislative definition of a word as used in a statute is not conclusive of its meaning as used elsewhere; otherwise, the legislature would be usurping a judicial function in defining a term. (11 Am. Jur., 914, emphasis supplied)The legislature cannot, upon passing a law which violates a constitutional provision, validate it so as to prevent an attack thereon in the courts, by a declaration that it shall be so construed as not to violate the constitutional inhibition. (11 Am. Jur., 919, emphasis supplied)We have already said that the Legislature under our form of government is assigned the task and the power to make and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic law, the Constitution, which is not within the sphere of the Legislative department. If the Legislature may declare what a law means, or what a specific portion of the Constitution means, especially after the courts have in actual case ascertain its meaning by interpretation and applied it in a decision, this would surely cause confusion and instability in judicial processes and court decisions. Under such a system, a final court determination of a case based on a judicial interpretation of the law of the Constitution may be undermined or even annulled by a subsequent and different interpretation of the law or of the Constitution by the Legislative department. That would be neither wise nor desirable, besides being clearly violative of the fundamental, principles of our constitutional system of government, particularly those governing the separation of powers.So much for the constitutional aspect of the case. Considering the practical side thereof, we believe that the collection of income tax on a salary is an actual and evident diminution thereof. Under the old system where the in-come tax was paid at the end of the year or sometime thereafter, the decrease may not be so apparent and clear. All that the official who had previously received his full salary was called upon to do, was to fulfill his obligation and to exercise his privilege of paying his income tax on his salary. His salary fixed by law was received by him in the amount of said tax comes from his other sources of income, he may not fully realize the fact that his salary had been decreased in the amount of said income tax. But under the present system of withholding the income tax at the source, where the full amount of the income tax corresponding to his salary is computed in advance and divided into equal portions corresponding to the number of pay-days during the year and actually deducted from his salary corresponding to each payday, said official actually does not receive his salary in full, because the income tax is deducted therefrom every payday, that is to say, twice a month. Let us take the case of Justice Endencia. As Associate Justice of the Court of Appeals, his salary is fixed at p12,000 a year, that is to say, he should receive P1,000 a month or P500 every payday, — fifteenth and end of month. In the present case, the amount collected by the Collector of Internal Revenue on said salary is P1,744.45 for one year. Divided by twelve (months) we shall have P145.37 a month. And further dividing it by two paydays will bring it down to P72.685, which is the income tax deducted form the collected on his salary each half month. So, if Justice Endencia's salary as a judicial officer were not exempt from payment of the income tax, instead of receiving P500 every payday, he would be actually receiving P427.31 only, and instead of receiving P12,000 a year, he would be receiving but P10,255.55. Is it not therefor clear that every payday, his salary is actually decreased by P72.685 and every year is decreased by P1,744.45?Reading the discussion in the lower House in connection with House Bill No. 1127, which became Republic Act No. 590, it would seem that one of the main reasons behind the enactment of the law was the feeling among certain legislators that members of the Supreme Court should not enjoy any exemption and that as citizens, out of patriotism and love for their country, they should pay income tax on their salaries. It might be stated in this connection that the exemption is not enjoyed by the members of the Supreme Court alone but also by all judicial officers including Justices of the Court of Appeals and judges of inferior courts. The exemption also extends to other constitutional officers, like the President of the Republic, the Auditor General, the members of the Commission on Elections, and possibly members of the Board of Tax Appeals, commissioners of the Public Service Commission, and judges of the Court of Industrial Relations. Compares to the number of all these officials, that of the Supreme Court Justices is relatively insignificant. There are more than 990 other judicial officers enjoying the exemption, including 15 Justices of the Court of Appeals, about 107 Judges of First Instance, 38 Municipal Judges and about 830 Justices of the Peace. The reason behind the exemption in the Constitution, as interpreted by the United States Federal Supreme Court and this Court, is to preserve the independence of the Judiciary, not only of this High Tribunal but of the other courts, whose present membership number more than 990 judicial officials.The exemption was not primarily intended to benefit judicial officers, but was grounded on public policy. As said by Justice Van Devanter of the United States Supreme Court in the case of Evans vs. Gore (253 U. S., 245):The primary purpose of the prohibition against diminution was not to benefit the judges, but, like the clause in respect of tenure, to attract good and competent men to the bench and to promote that independence of action and judgment which is essential to the maintenance of the guaranties, limitations and pervading principles of the Constitution and to the administration of justice

without respect to person and with equal concern for the poor and the rich. Such being its purpose, it is to be construed, not as a private grant, but as a limitation imposed in the public interest; in other words, not restrictively, but in accord with its spirit and the principle on which it proceeds.Having in mind the limited number of judicial officers in the Philippines enjoying this exemption, especially when the great bulk thereof are justices of the peace, many of them receiving as low as P200 a month, and considering further the other exemptions allowed by the income tax law, such as P3,000 for a married person and P600 for each dependent, the amount of national revenue to be derived from income tax on the salaries of judicial officers, were if not for the constitutional exemption, could not be large or substantial. But even if it were otherwise, it should not affect, much less outweigh the purpose and the considerations that prompted the establishment of the constitutional exemption. In the same case of Evans vs. Gore, supra, the Federal Supreme Court declared "that they (fathers of the Constitution) regarded the independence of the judges as far as greater importance than any revenue that could come from taxing their salaries.When a judicial officer assumed office, he does not exactly ask for exemption from payment of income tax on his salary, as a privilege . It is already attached to his office, provided and secured by the fundamental law, not primarily for his benefit, but based on public interest, to secure and preserve his independence of judicial thought and action. When we come to the members of the Supreme Court, this excemption to them is relatively of short duration. Because of the limited membership in this High Tribunal, eleven, and due to the high standards of experience, practice and training required, one generally enters its portals and comes to join its membership quite late in life, on the aver-age, around his sixtieth year, and being required to retire at seventy, assuming that he does not die or become incapacitated earlier, naturally he is not in a position to receive the benefit of exemption for long. It is rather to the justices of the peace that the exemption can give more benefit. They are relatively more numerous, and because of the meager salary they receive, they can less afford to pay the income tax on it and its diminution by the amount of the income tax if paid would be real, substantial and onerous.Considering exemption in the abstract, there is nothing unusual or abhorrent in it, as long as it is based on public policy or public interest. While all other citizens are subject to arrest when charged with the commission of a crime, members of the Senate and House of Representatives except in cases of treason, felony and breach of the peace are exempt from arrest, during their attendance in the session of the Legislature; and while all other citizens are generally liable for any speech, remark or statement, oral or written, tending to cause the dishonor, discredit or contempt of a natural or juridical person or to blacken the memory of one who is dead, Senators and Congressmen in making such statements during their sessions are extended immunity and exemption.And as to tax exemption, there are not a few citizens who enjoy this exemption. Persons, natural and juridical, are exempt from taxes on their lands, buildings and improvements thereon when used exclusively for educational purposes, even if they derive income therefrom. (Art. VI, Sec. 22 [3].) Holders of government bonds are exempted from the payment of taxes on the income or interest they receive therefrom (sec. 29 (b) [4], National Internal Revenue Code as amended by Republic Act No. 566). Payments or income received by any person residing in the Philippines under the laws of the United States administered by the United States Veterans Administration are exempt from taxation. (Republic Act No. 360). Funds received by officers and enlisted men of the Philippine Army who served in the Armed Forces of the United States, allowances earned by virtue of such services corresponding to the taxable years 1942 to 1945, inclusive, are exempted from income tax. (Republic Act No. 210). The payment of wages and allowances of officers and enlisted men of the Army Forces of the Philippines sent to Korea are also exempted from taxation. (Republic Act No. 35). In other words, for reasons of public policy and public interest, a citizen may justifiably by constitutional provision or statute be exempted from his ordinary obligation of paying taxes on his income. Under the same public policy and perhaps for the same it not higher considerations, the framers of the Constitution deemed it wise and necessary to exempt judicial officers from paying taxes on their salaries so as not to decrease their compensation, thereby insuring the independence of the Judiciary.In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer, supra, to the effect that the collection of income tax on the salary of a judicial officer is a diminution thereof and so violates the Constitution. We further hold that the interpretation and application of the Constitution and of statutes is within the exclusive province and jurisdiction of the Judicial department, and that in enacting a law, the Legislature may not legally provide therein that it be interpreted in such a way that it may not violate a Constitutional prohibition, thereby tying the hands of the courts in their task of later interpreting said statute, specially when the interpretation sought and provided in said statute runs counter to a previous interpretation already given in a case by the highest court of the land.In the views of the foregoing considerations, the decision appealed from is hereby affirmed, with no pronouncement as to costs.Pablo, Bengzon, Padilla, Tuason, Reyes, and Labrador, JJ., concur.

Separate OpinionsBAUTISTA ANGELO, J., concurring:Without expressing any opinion on the doctrine laid down by this Court in the case of Perfecto vs. Meer, G. R. No. L-2314, in view of the part I had in that case as former Solicitor General, I wish however to state that I concur in the opinion of the majority to the effect that section 13, Republic Act No. 590, in so far as it provides that taxing of the salary of a judicial officer shall be considered "not to be a diminution of his compensation fixed by the Constitution or by law", constitutes an invasion of the province and jurisdiction of the judiciary. In this sense, I am of the opinion that said section is null and void, it being a transgression of the fundamental principle underlying the separation of powers.

PARAS, C.J., concurring and dissenting:

I dissent for the same reasons stated in the dissenting opinion of Mr. Justice Ozaeta in Perfecto vs. Meer, 85 Phil., 552, in which I concurred. But I disagree with the majority in ruling that no legislation may provide that it be held valid although against a provision of the Constitution.

G.R. No. L-33052 August 31, 1981ANGEL R. QUIMPO, petitioner, vs.LEONCIO MENDOZA, as Treasurer for the City of Cagayan de Oro, and in his personal capacity, and JUDGE BERNARDO TEVES, as Presiding Judge of Branch IV of the Court of First Instance of Misamis Oriental, respondents. GUERRERO, J.:This is a petition to review on certiorari the decision rendered by the Court of First Instance of Misamis Oriental, Branch IV, dismissing the suit for mandamus and damages filed by herein petitioner Angel R. Quimpo against herein respondent Leoncio Mendoza, as Treasurer of the City of Cagayan de Oro and in his personal capacity.The background facts are stated in the decision of the lower court, thus:Petitioner Angel Quimpo is the owner of a building located in Cagayan de Oro City assessed at P20,000.00 for 1969 under Tax Declaration No. 2102. The realty tax of said building is P400.00 yearly payable in four equal installments, the first installment to be paid on or before March 31. The second installment, on or before June 30; the third installment, on or before September 30; and the last installment, on or before December 31. (Sec. 4, RA 5447).Petitioner paid on time the first three installments amounting to P300.00, but with respect to the last installment of P100.00 which was to be paid on or before December 31, it was only on August 27, 1970 that he tendered the amount of P124.00, which covered, according to his computation, the tax or last installment of P100.00 and the penalty of P24.00 to herein respondent City Treasurer of Cagayan de Oro, who refused the payment insisting that petitioner ought to pay the last installment of P100.00 plus the penalty of P96.00 or a total of P196.00 (Stipulations, pars. 3 & 4) based on and computed according to Section 42 of the City Charter of Cagayan de Oro RA 521) and the Provincial Circular No. 18-64 dated July 17, 1964 of the Secretary of Finance (Exhibit 2 and Stipulations, par. 7).On September 2, 1970 petitioner deposited by way of consignation the above-mentioned amount of P124.00 with the Clerk of Court (Stipulations, par. 5) and instituted the instant action of mandamus, with damages, against herein respondent City Treasurer in his official as well as personal capacity, praying for judgment:1. ORDERING the respondent to accept the payment of taxes for the last installment and the penalty therefor in the amount of ONE HUNDRED TWENTY FOUR (Pl24.00);2. ORDERING the respondent to issue the official receipt for the final payment of the taxes for 1969, and a tax clearance certificate;3. DECLARING the act of the respondent in imposing the penalty on the full amount of the tax even if the late payment was only on the last installment as illegal, unjust, immoral and oppressive;4. ORDERING respondent in his personal capacity, to pay damages in the total amount of TWELVE THOUSAND PESOS (Pl2,000.00), by way of actual moral, exemplary damages, and attorneys fees, and costs;5. ORDERING such just and equitable reliefs and remedies under the premises. 1

The court below sustained the City Treasurer, relying on the main opinion of this Tribunal in the case of Padilla vs. City of Pasay and City Treasurer (L-24039, June 29, 1968, 23 SCRA 1349).The decision under review states:The law imposes only one annual real estate tax (plus the additional tax under RA 5447). This tax is due and payable only once, on or before March 31 of every year. Before the effectivity of RA 5447 the taxpayer was given the option to pay the tax in two installments, the first on or before May 31, and the second on or before October 30th. The payment in two installments was a privilege extended to the taxpayer for his accommodation and convenience. With the imposition of the additional tax of oneper centum on the assessed value of real property in addition to the real property tax regularly levied thereon the amount of the tax shouldered by the taxpayer has practically been doubled, and it is for this reason, to the mind of the Court, that the new law now allows him to pay his real tax in four equal installments instead of only two. There is only one tax, payable in four equal installments on specified dates; not four different taxes, each with a different due date. ... .Accordingly, the Court concludes that the ruling of the Supreme Court in the above-mentioned Padilla case applies squarely to the case at bar. Hence, the tax liability of petitioner is P100.00, corresponding to the unpaid last installment, plus P96.00 computed at 2% of the original tax of P400.00 for every full month of delinquency but not to exceed 24% from April, 1969 to July 1970. 2

The lower court further held that it was without authority to entertain the suit for failure of petitioner to comply with the provisions of the Charter of Cagayan de Oro (Republic Act No. 521) on payment of tax under protest. 3

Against the foregoing judgment, petitioner assigns the following errors:1. Respondent Judge erred when he ruled that under Section 4, R.A. 5447, the installments for the basic and additional real property tax have only one due date but are payable in four equal installments2. Respondent Judge erred in ruling that on the question of the imposition of the tax penalty, said penalty must first be paid under protest before the suit can prosper; and3. Respondent Judge erred in ruling that the error of respondent City Treasurer, if any, arose from an honest interpretation of the law or their meaning, and therefore no damages can be awarded.In resolving the first assignment of error, it is well to set forth the pertinent provisions of law, R.A. 521 (Charter of Cagayan de Oro City), to wit:Section 42. Taxes on real estate. A tax, the rate of which shall not exceed two per centum ad valorem to be determined by the Municipal Board, shall be levied annually on or before the second Monday of January on the assessed value of all real estate in

the city subject to taxation. All taxes on real estate for any year shall be due and payable annually on the first day of June, and from this date such taxes together with all penalties accruing thereto shall constitute a lien on the property subject to such taxation.xxx xxx xxxAt the option of the taxpayer, the tax for any year may be paid in two installments to be fixed annually by the Municipal Board simultaneously with the rate per centum of ad valorem taxation; Provided, That the time limit for the first and second installments shall be set at not later than the thirty first day of May and the thirtieth day of October of each year, respectively.xxx xxx xxxAt the expiration of the time for the payment of the real estate tax without penalty, the taxpayer shall be subject, from the first day of delinquency, to the payment of a penalty at the rate of two per centum for each full month of delinquency that has expired, on the amount of the original tax due, until the tax shall have been paid in full or until the property shall have been forfeited to the city as provided in this Act: Provided, That in no case shall the total penalty exceed twenty-four per centum of the original tax due.xxx xxx xxxOn January 1, 1969, Republic Act No. 5447 took effect, imposing an additional tax on real property and providing,inter alia, that "the pertinent provisions of the corresponding charters of chartered cities to the contrary notwithstanding, the basic and the additional property tax shall be due and payable in four equal installments; the first installment shall be due and payable on or before March 31; the second installment, on or before June 30; the third installment, on or before September 30; and the last installment on or before December 31." 4

Petitioner contends that R.A. 5447 explicitly amended the respective city charters, including R.A. 521, by providing that the real property tax now becomes due in four equal installments and becomes payable in four equal installments; that the term "original tax due" in R.A. 521 is only proper if the tax has one due date and is payable in two or more installments; and, that R.A. 5447, having been enacted after the Padilla case relied upon by respondent court, was obviously intended to cure the harsh but mandatory law as interpreted in said decision.We agree with petitioner that, contrary to the conclusion of the lower court, the aforementioned Padilla case does not apply squarely to the case at bar.In Padilla, the applicable law was Republic Act No. 183, otherwise known as the Charter of the City of Pasay. Therein petitioner Teodoro Padilla paid the first installment of his 1963 real property tax on time but paid his second installment only on December 23, 1963, instead of October 30 of the same year, as required by R.A. 183. This Court held that his delinquency penalty should be based on the amount of the original tax due, and computed from June first 5 when said tax became due and payable. We quote below the pertinent portions of the decision as follows:In appellant's brief, it is submitted that the taxpayer having been given an option to pay his realty tax in two installments and the appellant having paid within the permissible period, the first installment, he could not be considered delinquent insofar as the first half of the realty tax is due. His delinquency should date only from November 1, 1963 by virtue of his failure to pay on October 30 of the same year. For appellant, it is inconclusive "how he can be declared delinquent from June 1, 1963 since the second installment of his real estate tax was not yet due on that date but will have become due and payable only on the thirtieth of October 1963". The decision then, according to appellant, "negates the taxpayer's option to pay his realty tax in two (2) installments as expressly granted" by law and amounted to unwarranty judicial legislation.Appellant's theory is not inherently implausible. Nonetheless, it must yield to the specific language of the law which is controlling. The last sentence of the first paragraph of the controlling legal provision reads thus: "All taxes on real estate for any year shag be due and payable annually on the first day of June and from this date such taxes together with all penalties accruing thereto shall constitute a lien on the property subject to such taxation. Two paragraphs later, the taxpayer is given the option to pay 'in two installments to be fixed annually by the Municipal Board simultaneously with the rate per centum ad valorem taxation:" Provided, That the time limit for the first and second installments shall be set at not later than the thirty-first day of May and the thirtieth day of October of each year, respectively.' Then comes the provision as to the penalty to be imposed in case of delinquency and how to fix the same: At the expiration of the time for the payment of the real estate tax without penalty, the taxpayer shall be subject, from the first day of delinquency, to the payment of a penalty at the rate of two per centum for each fun month of delinquency that has expired, on the amount of the original tax due, until the tax shall have been paid in fun or until the property shall have been forfeited to the city as provided in this ACT: Provided, That in no case shall the total penalty exceed twenty- four per centum of the original tax due.Construed together, the above provisions yield no other conclusion but that the taxes are due and payable 'on the first day of June' from which date 'such taxes together with all penalties accruing thereto shall constitute a lien on the property subject to such taxation. It is true the taxpayer is given the option to pay in two installments with the respective dates for the payment thereof 'at not later than the thirty-first day of May and the thirtieth day of October of each year, respectively.' Then comes the crucial and decisive provision. 'At the expiration of the time for the payment of the real estate tax without penalty, the taxpayer shall be subject, from the first day of delinquency, to the payment of a penalty at the rate of two per centum for each full month of delinquency that has expired, on the amount of the original tax due, until the tax shall have been paid in full or until the property shall have been forfeited to the city ... .The law is specific and mandatory. It calls for application as thus worded. There is no room for interpretation. The penalty is to be based 'on the amount of the original tax due.' The fact that the first installment was made on time does not benefit the taxpayer at all, thereafter the second installment were not paid on time. In effect then, the option thus granted, to pay in two installments, must be strictly complied with, otherwise the operation of the plain statutory command that the tax due and payable on June 1st becomes unavoidable and delinquency is to be computed from such a date.

The aforecited provisions of R.A. 183 (Charter of Pasay City) applied and interpreted in the Padilla case are indeed almost Identical to the corresponding provisions in R.A. 521 (Charter of Cagayan de Oro City), the law applicable to the case at bar. However, the Padilla decision was promulgated on June 29, 1968, or prior to the passage of R.A. 5447 which, as already stated, took effect on January 1, 1969. As the tax penalty in question was imposed on the real estate tax for 1969, the subsequent enactment of R.A. 5447 must be taken into consideration with R.A. 521 and the pronouncements of this Court in the Padilla case.A careful reading of the applicable provisions of R.A. 521 and R.A. 5447 reveals the extent to which the former law was modified or amended by the later statute. While R.A. 521, among others, provides that the real property tax is "due and payable annually on the first day of June", R.A. 5447 declares that the same tax (including the additional tax) "shall be due and payable in four equal installments." In other words, R.A. 521 specifically and expressly provides for one due date for the whole annual real estate tax. R.A. 5447, on the other hand, does not provide for such a specific singular date for the payment of the entire tax, but directly and unmistakably mandates that the tax shall be due and payable in four equal installments spread over the period of whole year, Each installment is due and payable on or before a specified statutory limit. The last installment is due and payable on or before December 31 of each year, hence it is only thereafter, or commencing January 1 of the following year, that delinquency starts as to this final installment. This being so, it only logically follows that the penalty for delinquency should be computed from January 1.The next question now poses itself What is the basis for the computation of the tax penalty in case of delinquency? The sixth paragraph of Section 42, R.A. 521 (supra), provides that the taxpayer is subject to " a penalty at the rate of two per centum for each full month of delinquency that has expired, on the amount of the original tax due ... ." There is no corresponding or amendatory provision in R.A. 5447. This later law does not cover the aspect of penalty in case of delinquency in the payment of the real estate tax. In the absence of such penalty provision, respondent City Treasurer insists that the penalty of 2% be based on the original tax due whereas petitioner maintains that it should be the amount of the installment due and not paid.We rule for the petitioner, following the general rule in the interpretation of tax statutes that such statutes are construed most strongly against the government and in favor of the taxpayer. Moreover, simple logic fairness and reason cannot countenance an exaction or a penalty for an act faithfully done in compliance with the law. Since petitioner is allowed by law to pay his real estate tax in four equal installments due and payable on four specified dates and having paid the first three (3) installments faithfully and religiously, it is manifest injustice, sheer arbitrariness and abuse of power to penalize him for doing so when he fails to pay the fourth end last installment.That it is the legislator's intention to subject the taxpayer to the payment of the penalty of two (2) per centum on the amount of the delinquent tax for each month of delinquency or fraction thereof, is clearly evident in the promulgation of P.D. No. 464 enacting the Real Property Tax Code, Sec. 66 thereof which provides:Sec. 66. Penalty for delinquency. — Failure to pay the real property tax before the expiration of the period for the payment without penalty of the quarterly installments thereof shall subject the taxpayer to the payment of a penalty of two per centum on the amount of the delinquent tax for each month of delinquency or fraction thereof until the delinquent tax shall be fully paid: Provided, That in no case shall the total penalty exceed twenty-four per centum of the delinquent tax. The rate of penalty for tax delinquency fixed herein shall be uniformly applied in all provinces and cities. (emphasis supplied)P.D. 464 was promulgated effective June 1, 1974. Section 66 of the P.D. evidently supplies the omission of a penalty provision in Republic Act 5447. However, since R.A. 5447 amended R.A. 521, the City Charter of Cagayan de Oro City in making the basic and additional property tax to be due and payable in four (4) equal installments, We hold that the penalty provision of R.A. 521, Sec. 42 is deemed modified by implication.Accordingly, petitioner's total liability as of August 27, 1970 when he tendered payment to respondent City Treasurer may be computed as follows: P100.00 (the fourth and last installment) plus P16.00 penalty (8 months of delinquency from January to August, 1970 at two per centum on the amount of the delinquent tax of P100.00) which totals Pl 16.00.As to the second assignment of error, We do not agree with the respondent court that failure of the petitioner to comply with Section 42 and Section 58 (b) of R.A. 521 requiring payment of taxes under protest, rendered the court without authority to entertain the suit. Section 58(b) provides that no court shall entertain any suit assailing the validity of a tax assessed under this Chapter until the taxpayer shall have paid, under protest, the taxed assessed against him ... ." (emphasis supplied.) The phrase "tax assessed" clearly refers to the annual real estate tax imposable on the taxable real property.May the phrase "tax assessed" be interpreted to include not only the tax itself but also all penalties accruing thereto'? The legislative intent is not clear on this point, reading Section 42 to Section 58 of the Act. However, in the case of Collector of Internal Revenue vs. Bautista, G.R. No. L-12250 and L-12259, May 27, 1959, this Court, speaking thru Justice Roberto Concepcion, who later became Chief Justice, held that a surcharge is not a "tax" in itself, and We quote:It will be noted that the surcharge of five per centum (5%) and the interest of one per centum (1 %) a month, referred to in Section 51 (e) are imposed upon the "tax unpaid." Similarly, under said section 72, the "surcharge of fifty per centum (50%) of the amount of" the "deficiency tax," imposable "in case of ... a false or fraudulent return," shall be "added" to the "tax or to the deficiency tax". In other words, the aforementioned surcharge of 50% is not a "tax" in itself, and hence, not subject to the 5% surcharge and to the interest of 1% a month on the "unpaid tax", prescribed in section 51(e). Although, pursuant to section 72, said 50% surcharge "shall be collected at the same time and in the same manner and as part of that tax", the likeness to the tax therein mentioned refers exclusively to the "time" and "manner"-meaning the method-of collection, not to the amount to be collected which is not procedural, but substantive in character."Since a surcharge is in the nature of a penalty, the ruling cited above is aptly applicable in the instant case. Furthermore, the particular circumstances herein cast doubt as to the applicability of Section 58(b), R.A. 521, which must be resolved in favor of the petitioner. We must take into consideration his apparent good faith in relying on the amendatory provisions of R.A. 5447, and the admitted fact that he tendered payment of the last installment of his 1969 realty tax to respondent City Treasurer, together

with the tax penalty in accordance with his computation, though erroneous, before filing this case in court. We likewise take into account the fact that even said respondent Treasurer erred in interpreting the law. It may be added that it could have been more expedient for the latter to have accepted the amount tendered by petitioner in August, 1970, for after all, the tax itself was not in question. As to the balance of the tax penalty, said respondent's recourse would have been Section 43 of R.A. 521 which provides:After a property shall have become delinquent in the payment of taxes and said taxes and the corresponding penalties shall remain unpaid ninety days after payment thereof shall have become due, the city treasurer, or his deputy, if he desires to compel payment through seizure of any personal property of any delinquent person or persons, shall issue a duly authenticated certificate, based on the records of his office, showing the fact of delinquency and the amount of the tax andpenalty due from said delinquent person or persons or from each of them. Such certificate shall be sufficient warrant for the seizure of the personal property belonging to the delinquent person or persons in question not exempt from seizure; and these proceedings may be carried out by the city treasurer, his deputy, or any other officer authorized to carry out legal proceedings. (Emphasis supplied.)Anent the last assigned error, We agree with the conclusion reached by respondent court that petitioner is not entitled to actual, moral or exemplary damages prayed for in his Complaint. It does not appear that herein respondent City Treasurer's actuations or decisions were tainted with bad faith. As this Court held in the case ofCabungcal, et al. vs. Mayor Cordova and Gustilo L-16934, July 31, 1964, 11 SCRA 584), "(a)n erroneous interpretation of the meaning of the provisions of an ordinance (by the City Mayor) does not constitute nor does it amount to bad faith that would entitle an aggrieved party to an award of damages."WHEREFORE, judgment is hereby rendered ordering petitioner to pay to the City Treasurer of Cagayan de Oro City the amount of P116.00 representing full payment of the last installment of P100.00 on the realty tax for the year 1969 and the tax penalty of P16.00 for eight months of his delinquency from January, 1970 to August, 1970; and ordering said City Treasurer to accept the aforesaid payment, issue the official receipt therefor and a tax clearance certificate covering the aforementioned real estate tax and penalty. No costs. Judgment modified.SO ORDERED.Teehankee (Chairman), Makasiar, Fernandez and Melencio- Herrera, JJ., concur.

G.R. No. L-3881             August 31, 1950

EDUARDO DE LOS SANTOS, petitioner, vs.GIL R. MALLARE, LUIS P. TORRES, in his capacity as City Mayor, PANTALEON PIMENTEL, in his capacity as City Treasurer and RAFAEL USON, in his capacity as City Auditor, respondents.

Francisco S. Reyes for petitioner.Office of the Solicitor General Felix Bautista Angelo and Solicitor Augusto Luciano for respondents.Jose P. Laurel and Abelardo Subido as amici curiae.

TUASON, J.:

This is an original action of quo warranto questioning the legality of the appointment of respondent Gil R. Mallare to the office of city engineer for the City of Baguio which the petitioner occupied and claims to be still occupying. The real issue however is the legality of the petitioner's removal from the same office which would be the effect of Mallare's appointment if the same be allowed to stand. It is the petitioner's contention that under the Constitution he can not be removed against his will and without cause. The complaint against the other respondents has to do merely with their recognition of Mallare as the lawful holder of the disputed office and is entirely dependent upon the result of the basic action against the last-mentioned respondent (Mallare).

Stripped of details unessential to the solution of the case, the facts are that Eduardo de los Santos, the petitioner, was appointed City Engineer of Baguio on July 16, 1946, by the President, appointment which was confirmed by the Commission on Appointments on August 6, and on the 23rd of that month, he qualified for and began to exercise the duties and functions of the position. On June 1, 1950, Gil R. Mallare was extended an ad interimappointment by the President to the same position, after which, on June 3, the Undersecretary of the Department of Public Works and Communications directed Santos to report to the Bureau of Public Works for another assignment. Santos refused to vacate the office, and when the City Mayor and the other officials named as Mallare's co-defendants ignored him and paid Mallare the salary corresponding to the position, he commenced these proceedings.

The petitioner rests his case on Article XII of the Constitution, section 4 of which reads: "No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law."

It is admitted in respondents' answer that the City Engineer of Baguio "belongs to the unclassified service." And this Court, in an exhaustive opinion by Mr. Justice Montemayor in the case of Lacson vs. Romero, 47 Off. Gaz., 1778, involving the office of provincial fiscal, ruled that officers or employees in the unclassified as well as those in the classified service are protected by the above-cited provision of the organic law. But there is this difference between the Lacson case and the case at bar: Section 2545 of the Revised Administrative Code, which falls under Chapter 61 entitled "City of Baguio," authorizes the Governor General (now the President) to remove at pleasureany of the officers enumerated therein, one of whom is the city engineer. The first question that presents itself is, is this provision still in force?

Section 2 of Article XVI of the Constitution declares that "All laws of the Philippine Islands shall continue in force until the inauguration of the Commonwealth of the Philippines; thereafter, such laws shall remain operative, unlessinconsistent with this Constitution, until amended, altered, modified, or repealed by the Congress of the Philippines, . . . ."

It seems plain beyond doubt that the provision of section 2545 of the Revised Administrative Code, he (Governor-General now President) may remove at pleasure any of the said appointive officers," is incompatible with the constitutional inhibition that "No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law." The two provisions are mutually repugnant and absolutely irreconcilable. One in express terms permits what the other in similar terms prohibits.

The Constitution leaves it to the Congress to provide for the cause of removal, and it is suggested that the President's pleasure is itself a cause. The phrase "for cause" in connection with the removals of public officers has acquired a well-defined concept. "It means for reasons which the law and sound public policy recognized as sufficient warrant for removal, that is, legal cause, and not merely causes which the appointing power in the exercise of discretion may deem sufficient. It is implied that officers may not be removed at the mere will of those vested with the power of removal, or without any cause. Moreover, the cause must relate to and affect the administration of the office, and must be restricted to something of a substantial nature directly affecting the rights and interests of the public."(43 Am. Jur., 47, 48.)

Reconsideration of the decision in Lacson vs. Romero as far as officers in the unclassified service are concerned is urged. It is contended that only officers and employees in the classified service should be brought within the purview of Article XII of the Constitution.

Section 1 of this article ordains: "A Civil Service embracing all branches and subdivisions of the Government shall be provided by law. Appointments in the Civil Service, except as those which are policy-determining, primarily confidential or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination." The first clause is a definition of the scope of Civil Service, the men and women which section 4 protects. It seems obvious from that definition that the entire Civil Service is contemplated, except positions "which are policy-determining, primarily confidential or highly technical in nature." This theory is confirmed by the enactment of Commonwealth Act No. 177 on November 30, 1936 to implement Article XII of the Constitution. Commonwealth Act No. 177 explains Civil Service almost in the identical words of that article of the organic law. As a contemporaneous construction, this Act affords an index to the meaning of Civil Service as conceived by the framers of the Constitution. "The principle of contemporaneous construction may be applied to the construction given by the legislature to the constitutional provisions dealing with legislative powers and procedure. Though not conclusive, such interpretation is generally conceded as being entitled to great weight." (U.S. vs. Sprague, 282 U.S., 716; 75 L. ed. 640; 51 S. Ct., 220; 71 A.L.R., 1381; Den ex dem. Murray vs.Hoboken Land and Improv. Co., 18 How. [U.S.], 272; 15 L. ed., 372; Clark vs. Boyce, 20 Ariz., 544; 185 P., 136, citing R.C.L.; 11 Am. Jur. 699.) The principle of express mention and implied exclusion may be made use of also to drive home this point.

We are led to the same conclusion by the existing provisions at the time of the adoption of the Constitution. Civil Service as embracing both classes of officers and employees possessed definite legal and statutory meaning when the Constitution was approved. Section 670 of the Revised Administrative Code already provided that "Persons in the Philippine civil service pertain either to the classified service," and went on to say that "The classified service embraces all not expressly declared to be in the unclassified service." Then section 671 described persons in the unclassified service as "officers, other than the provincial treasurers and assistant directors of bureaus or offices, appointed by the President of the Philippines, with the consent of the Commission on Appointments of the National Assembly, and all other officers of the government whose appointments are by law vested in the President of the Philippines alone."

The rules of the construction inform us that the words use in the constitution are to be given the sense they have in common use. (Okanogan Indians vs. United States, 279, U.S., 665; 64 A.L.R., 1434; 73 Law ed., 894.) It has been said that we must look to the history of the times, examine the state of things existing when the Constitution was framed and adopted, (Rhode Islands vs. Massachusetts, 12 Pet., 657; 9 Law ed., 1233), and interpret it in the light of the law then in operation. (Mattox vs. United States, 156, U.S., 237; 39 Law ed., 409.)

Attention is drawn to supposed inconveniences of tying the hands of the appointing power in changing and shifting officers in the unclassified service. "If — it is argued — all important officers and employees of the government falling within the unclassified service as enumerated in section 671 of the Revised Administrative Code as amended by Commonwealth Act No. 177, may not be removed by the President except for cause as provided by law, . . . the President would be seriously crippled in the discharge of the grave duty and responsibility laid upon him by the Constitution to take care that the laws faithfully executed."

Questions of expediency are, of course, beyond the province of the court to take into account in the interpretation of laws or of the Constitution where the language is otherwise clear. But the argument is, we think, unsound even if the case be approached from this angle. It contains its own refutation. The Constitution and the law implementing it afford adequate safeguards against such consequences as have been painted.

The argument proceeds, contrary to its context, on the assumption that removes of civil service officers and employees are absolutely prohibited, which is not the case. The Constitution authorizes removals and only requires that they be for cause. And the occasions for removal would be greatly diminished if the injunction of section 1 of Article XII of the Constitution — that appointments in the civil service shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination — would be adhered of meticulously in the first place.

By far greater mischiefs would be fomented by an unbridled authority to remove. Such license would thwart the very aims of the Constitution which are expounded by Dean Aruego, himself a member of the Constitutional Convention, in the following remarks copied with approval in Lacson vs. Romero, supra:

The adoption of the "merit system" in government service has secured efficiency and social justice. It eliminates the political factor in the selection of civil employees which is the first essential to an efficient personnel system. It insures equality of opportunity to all deserving applicants desirous of a career in the public service. It advocates a new concept of the public office as a career open to all and not the exclusive patrimony of any party or faction to be doled out as a reward for party service.

The "merit system" was adopted only after the nations of the world took cognizance of its merits. Political patronage in the government service was sanctioned in 1879 by the Constitutional right of President of the United States to act alone in the matter of removals. From the time of Andrew Jackson the principle of the "To the victor belongs the spoils' dominated the Federal Government. The system undermined moral values and destroyed administrative efficiency.

Since the establishment of the American Regime in the Philippines we have enjoyed the benefits of the "merit system." The Schurmann Commission advocated in its reports that "the greatest care should be taken in the selection of the officials for administration. They should be men of the highest character and fitness, and partisan politics should be entirely separated from the government." The fifth act passed by the Philippine Commission created a Board of Civil Service. It instituted a system here that was far more radical and thorough than that in the United States. The Governor-General after William Taft adopted the policy of appointing Filipinos in the government regardless of their party affiliation. As the result of these the personnel of the Civil Service had gradually come to be one of which the people of the United States could feel justly proud.

Necessity for Constitutional provision. — The inclusion in the constitution of provisions regarding the "merit system" is a necessity of modern times. As its establishment secures good government the citizens have a right to accept its guarantee as a permanent institution.

Separation, suspension, demotions and transfers. — The "merit system" will be ineffective if no safeguards are placed around the separation and removal of public employees. The Committee's report requires that removals shall be made only for "causes and in the manner provided by law. This means that there should be bona fide reasons and action maybe taken only after the employee shall have been given a fair hearing. This affords the public employees reasonable security of tenure. (II Aruego's Framing of the Constitution, 886, 887, 890.)

As has been seen, three specified classes of positions — policy-determining, primarily confidential and highly technical — are excluded from the merit system and dismissal at pleasure of officers and employees appointed therein is allowed by the Constitution. These positions involved the highest degree of confidence, or are closely bound out with and dependent on other positions to which they are subordinate, or are temporary in nature. It may truly be said that the good of the service itself demands that appointments coming under this category determinable at the will of the officer that makes them.

The office of city engineer is neither primarily confidential, policy-determining, nor highly technical.

Every appointment implies confidence, but much more than ordinary confidence is reposed in the occupant of a position that is primarily confidential. The latter phrase denotes not only confidence in the aptitude of the appointee for the duties of the office but primarily close intimacy which insures freedom of intercourse without embarrassment or freedom from misgivings of betrayals of personal trust or confidential matters of state. Nor is the position of city engineer policy-determining. A city engineer does not formulate a method of action for the government or any its subdivisions. His job is to execute policy, not to make it. With specific reference to the City Engineer of Baguio, his powers and duties are carefully laid down for him be section 2557 of the Revised Administrative Code and are essentially ministerial in character. Finally, the position of city engineer is technical but not highly so. A city engineer is not required nor is he supposed to possess a technical skill or training in the supreme or superior degree, which is the sense in which "highly technical" is, we believe, employed in the Constitution. There are hundreds of technical men in the classified civil service whose technical competence is not lower than that of a city engineer. As a matter of fact, the duties of a city engineer are eminently administrative in character and could very well be discharged by non-technical men possessing executive ability.

Section 10 of Article VIII of the Constitution requires that "All cases involving the constitutionality of a treaty or law shall be heard and decided by the Supreme Court in banc," and warns that "no treaty or law may be declared unconstitutional without the concurrence of two-thirds of all the members of the Court." The question arises as to whether this judgment operates as invalidation of section 2545 of the Revised Administrative Code or a part of it so as to need at least eight votes to make effective. The answer should be in negative.

We are not declaring any part of section 2545 of the Revised Administrative Code unconstitutional. What we declare is that the particular provision thereof which gave the Chief Executive power to remove officers at pleasure has been repealed by the Constitution and ceased to be operative from the time that instrument went into effect. Unconstitutionally, as we understand it, denotes life and vigor, and unconstitutional legislation presupposes posteriority in point of time to the Constitution. It is a statute that "attempts to validate and legalize a course of conduct the effect of which the Constitution specifically forbids (State ex-rel. Mack vs. Guckenberger, 139 Ohio St., 273; 39 NE. [2d], 840.) A law that has been repealed is as good as if it had never been enacted, and can not, in the nature of things, contravene or pretend to contravene constitutional inhibition. So, unlike legislation that is passed in defiance of the Constitution, assertive and menacing, the questioned part of section 2545 of the Revised Administrative Code does not need a positive declaration of nullity by the court to put it out of the way. To all intents and purposes, it is non-existent, outlawed and eliminated from the statute book by the Constitution itself by express mandate before this petitioner was appointed.

Incidentally, the last discussion answers and disposes of the proposition that in accepting appointment under section 2545 of the Revised Administrative Code, the petitioner must be deemed to have accepted the conditions and limitations attached to the appointment. If the clause of section 2545 which authorized the President to remove officers of the City of Baguio at pleasure had been abrogated when petitioner's appointment was issued, the appointee can not presumed to have abided by this condition.

We therefore hold that the petitioner is entitled to remain in office as City Engineer of Baguio with all the emoluments, rights and privileges appurtenant thereto, until he resigns or is removed for cause, and that respondent Mallare's appointment is ineffective in so far as it may adversely affect those emoluments, rights and privileges. Without costs.

Moran, C.J., Ozaeta, Paras, Pablo, and Montemayor, JJ., concur.

Separate Opinions

BENGZON, J., concurring:

I concur in the result solely upon the ground that section 2545 of the Baguio Charter (Administrative Code) empowering the President to remove the City Engineer at pleasure has been impliedly repealed by section 22 of Commonwealth Act No. 177 which expressly provides for the first time (following the mandate of the Constitution),that "no officer or employee in the civil service shall be removed or suspended except for cause as provided by law."

I must decline to go into the matter of alleged conflict with the Constitution, first, because plaintiff is precluded from raising that question (Zandueta vs. De la Costa, 66 Phil., 615); second, because every law is presumed to be constitutional unless eight Justices of this Court are clearly of a contrary opinion,1 and third, because that subject need not be inquired into, except when absolutely necessary for the disposition of the controversy.

REYES, J.:

I concur in this opinion of Mr. Justice Bengzon.

G.R. No. L-3881             August 31, 1950

EDUARDO DE LOS SANTOS, petitioner, vs.GIL R. MALLARE, LUIS P. TORRES, in his capacity as City Mayor, PANTALEON PIMENTEL, in his capacity as City Treasurer and RAFAEL USON, in his capacity as City Auditor, respondents.

Francisco S. Reyes for petitioner.Office of the Solicitor General Felix Bautista Angelo and Solicitor Augusto Luciano for respondents.Jose P. Laurel and Abelardo Subido as amici curiae.

TUASON, J.:

This is an original action of quo warranto questioning the legality of the appointment of respondent Gil R. Mallare to the office of city engineer for the City of Baguio which the petitioner occupied and claims to be still occupying. The real issue however is the legality of the petitioner's removal from the same office which would be the effect of Mallare's appointment if the same be allowed to stand. It is the petitioner's contention that under the Constitution he can not be removed against his will and without cause. The complaint against the other respondents has to do merely with their recognition of Mallare as the lawful holder of the disputed office and is entirely dependent upon the result of the basic action against the last-mentioned respondent (Mallare).

Stripped of details unessential to the solution of the case, the facts are that Eduardo de los Santos, the petitioner, was appointed City Engineer of Baguio on July 16, 1946, by the President, appointment which was confirmed by the Commission on Appointments on August 6, and on the 23rd of that month, he qualified for and began to exercise the duties and functions of the position. On June 1, 1950, Gil R. Mallare was extended an ad interimappointment by the President to the same position, after which, on June 3, the Undersecretary of the Department of Public Works and Communications directed Santos to report to the Bureau of Public Works for another assignment. Santos refused to vacate the office, and when the City Mayor and the other officials named as Mallare's co-defendants ignored him and paid Mallare the salary corresponding to the position, he commenced these proceedings.

The petitioner rests his case on Article XII of the Constitution, section 4 of which reads: "No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law."

It is admitted in respondents' answer that the City Engineer of Baguio "belongs to the unclassified service." And this Court, in an exhaustive opinion by Mr. Justice Montemayor in the case of Lacson vs. Romero, 47 Off. Gaz., 1778, involving the office of provincial fiscal, ruled that officers or employees in the unclassified as well as those in the classified service are protected by the above-cited provision of the organic law. But there is this difference between the Lacson case and the case at bar: Section 2545 of the Revised Administrative Code, which falls under Chapter 61 entitled "City of Baguio," authorizes the Governor General (now the President) to remove at pleasureany of the officers enumerated therein, one of whom is the city engineer. The first question that presents itself is, is this provision still in force?

Section 2 of Article XVI of the Constitution declares that "All laws of the Philippine Islands shall continue in force until the inauguration of the Commonwealth of the Philippines; thereafter, such laws shall remain operative, unlessinconsistent with this Constitution, until amended, altered, modified, or repealed by the Congress of the Philippines, . . . ."

It seems plain beyond doubt that the provision of section 2545 of the Revised Administrative Code, he (Governor-General now President) may remove at pleasure any of the said appointive officers," is incompatible with the constitutional inhibition that "No officer or employee in the Civil Service shall be removed or suspended except for cause as provided by law." The two provisions are mutually repugnant and absolutely irreconcilable. One in express terms permits what the other in similar terms prohibits.

The Constitution leaves it to the Congress to provide for the cause of removal, and it is suggested that the President's pleasure is itself a cause. The phrase "for cause" in connection with the removals of public officers has acquired a well-defined concept. "It means for reasons which the law and sound public policy recognized as sufficient warrant for removal, that is, legal cause, and not merely causes which the appointing power in the exercise of discretion may deem sufficient. It is implied that officers may not be removed at the mere will of those vested with the power of removal, or without any cause. Moreover, the cause must

relate to and affect the administration of the office, and must be restricted to something of a substantial nature directly affecting the rights and interests of the public."(43 Am. Jur., 47, 48.)

Reconsideration of the decision in Lacson vs. Romero as far as officers in the unclassified service are concerned is urged. It is contended that only officers and employees in the classified service should be brought within the purview of Article XII of the Constitution.

Section 1 of this article ordains: "A Civil Service embracing all branches and subdivisions of the Government shall be provided by law. Appointments in the Civil Service, except as those which are policy-determining, primarily confidential or highly technical in nature, shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination." The first clause is a definition of the scope of Civil Service, the men and women which section 4 protects. It seems obvious from that definition that the entire Civil Service is contemplated, except positions "which are policy-determining, primarily confidential or highly technical in nature." This theory is confirmed by the enactment of Commonwealth Act No. 177 on November 30, 1936 to implement Article XII of the Constitution. Commonwealth Act No. 177 explains Civil Service almost in the identical words of that article of the organic law. As a contemporaneous construction, this Act affords an index to the meaning of Civil Service as conceived by the framers of the Constitution. "The principle of contemporaneous construction may be applied to the construction given by the legislature to the constitutional provisions dealing with legislative powers and procedure. Though not conclusive, such interpretation is generally conceded as being entitled to great weight." (U.S. vs. Sprague, 282 U.S., 716; 75 L. ed. 640; 51 S. Ct., 220; 71 A.L.R., 1381; Den ex dem. Murray vs.Hoboken Land and Improv. Co., 18 How. [U.S.], 272; 15 L. ed., 372; Clark vs. Boyce, 20 Ariz., 544; 185 P., 136, citing R.C.L.; 11 Am. Jur. 699.) The principle of express mention and implied exclusion may be made use of also to drive home this point.

We are led to the same conclusion by the existing provisions at the time of the adoption of the Constitution. Civil Service as embracing both classes of officers and employees possessed definite legal and statutory meaning when the Constitution was approved. Section 670 of the Revised Administrative Code already provided that "Persons in the Philippine civil service pertain either to the classified service," and went on to say that "The classified service embraces all not expressly declared to be in the unclassified service." Then section 671 described persons in the unclassified service as "officers, other than the provincial treasurers and assistant directors of bureaus or offices, appointed by the President of the Philippines, with the consent of the Commission on Appointments of the National Assembly, and all other officers of the government whose appointments are by law vested in the President of the Philippines alone."

The rules of the construction inform us that the words use in the constitution are to be given the sense they have in common use. (Okanogan Indians vs. United States, 279, U.S., 665; 64 A.L.R., 1434; 73 Law ed., 894.) It has been said that we must look to the history of the times, examine the state of things existing when the Constitution was framed and adopted, (Rhode Islands vs. Massachusetts, 12 Pet., 657; 9 Law ed., 1233), and interpret it in the light of the law then in operation. (Mattox vs. United States, 156, U.S., 237; 39 Law ed., 409.)

Attention is drawn to supposed inconveniences of tying the hands of the appointing power in changing and shifting officers in the unclassified service. "If — it is argued — all important officers and employees of the government falling within the unclassified service as enumerated in section 671 of the Revised Administrative Code as amended by Commonwealth Act No. 177, may not be removed by the President except for cause as provided by law, . . . the President would be seriously crippled in the discharge of the grave duty and responsibility laid upon him by the Constitution to take care that the laws faithfully executed."

Questions of expediency are, of course, beyond the province of the court to take into account in the interpretation of laws or of the Constitution where the language is otherwise clear. But the argument is, we think, unsound even if the case be approached from this angle. It contains its own refutation. The Constitution and the law implementing it afford adequate safeguards against such consequences as have been painted.

The argument proceeds, contrary to its context, on the assumption that removes of civil service officers and employees are absolutely prohibited, which is not the case. The Constitution authorizes removals and only requires that they be for cause. And the occasions for removal would be greatly diminished if the injunction of section 1 of Article XII of the Constitution — that appointments in the civil service shall be made only according to merit and fitness, to be determined as far as practicable by competitive examination — would be adhered of meticulously in the first place.

By far greater mischiefs would be fomented by an unbridled authority to remove. Such license would thwart the very aims of the Constitution which are expounded by Dean Aruego, himself a member of the Constitutional Convention, in the following remarks copied with approval in Lacson vs. Romero, supra:

The adoption of the "merit system" in government service has secured efficiency and social justice. It eliminates the political factor in the selection of civil employees which is the first essential to an efficient personnel system. It insures equality of opportunity to all deserving applicants desirous of a career in the public service. It advocates a new concept of the public office as a career open to all and not the exclusive patrimony of any party or faction to be doled out as a reward for party service.

The "merit system" was adopted only after the nations of the world took cognizance of its merits. Political patronage in the government service was sanctioned in 1879 by the Constitutional right of President of the United States to act alone in the matter of removals. From the time of Andrew Jackson the principle of the "To the victor belongs the spoils' dominated the Federal Government. The system undermined moral values and destroyed administrative efficiency.

Since the establishment of the American Regime in the Philippines we have enjoyed the benefits of the "merit system." The Schurmann Commission advocated in its reports that "the greatest care should be taken in the selection of the officials for administration. They should be men of the highest character and fitness, and partisan politics should be entirely separated from the government." The fifth act passed by the Philippine Commission created a Board of Civil Service. It instituted a system here that was far more radical and thorough than that in the United States. The Governor-General after William Taft adopted the policy of appointing Filipinos in the government regardless of their party affiliation. As the result of these the personnel of the Civil Service had gradually come to be one of which the people of the United States could feel justly proud.

Necessity for Constitutional provision. — The inclusion in the constitution of provisions regarding the "merit system" is a necessity of modern times. As its establishment secures good government the citizens have a right to accept its guarantee as a permanent institution.

Separation, suspension, demotions and transfers. — The "merit system" will be ineffective if no safeguards are placed around the separation and removal of public employees. The Committee's report requires that removals shall be made only for "causes and in the manner provided by law. This means that there should be bona fide reasons and action maybe taken only after the employee shall have been given a fair hearing. This affords the public employees reasonable security of tenure. (II Aruego's Framing of the Constitution, 886, 887, 890.)

As has been seen, three specified classes of positions — policy-determining, primarily confidential and highly technical — are excluded from the merit system and dismissal at pleasure of officers and employees appointed therein is allowed by the Constitution. These positions involved the highest degree of confidence, or are closely bound out with and dependent on other positions to which they are subordinate, or are temporary in nature. It may truly be said that the good of the service itself demands that appointments coming under this category determinable at the will of the officer that makes them.

The office of city engineer is neither primarily confidential, policy-determining, nor highly technical.

Every appointment implies confidence, but much more than ordinary confidence is reposed in the occupant of a position that is primarily confidential. The latter phrase denotes not only confidence in the aptitude of the appointee for the duties of the office but primarily close intimacy which insures freedom of intercourse without embarrassment or freedom from misgivings of betrayals of personal trust or confidential matters of state. Nor is the position of city engineer policy-determining. A city engineer does not formulate a method of action for the government or any its subdivisions. His job is to execute policy, not to make it. With specific reference to the City Engineer of Baguio, his powers and duties are carefully laid down for him be section 2557 of the Revised Administrative Code and are essentially ministerial in character. Finally, the position of city engineer is technical but not highly so. A city engineer is not required nor is he supposed to possess a technical skill or training in the supreme or superior degree, which is the sense in which "highly technical" is, we believe, employed in the Constitution. There are hundreds of technical men in the classified civil service whose technical competence is not lower than that of a city engineer. As a matter of fact, the duties of a city engineer are eminently administrative in character and could very well be discharged by non-technical men possessing executive ability.

Section 10 of Article VIII of the Constitution requires that "All cases involving the constitutionality of a treaty or law shall be heard and decided by the Supreme Court in banc," and warns that "no treaty or law may be declared unconstitutional without the concurrence of two-thirds of all the members of the Court." The question arises as to whether this judgment operates as

invalidation of section 2545 of the Revised Administrative Code or a part of it so as to need at least eight votes to make effective. The answer should be in negative.

We are not declaring any part of section 2545 of the Revised Administrative Code unconstitutional. What we declare is that the particular provision thereof which gave the Chief Executive power to remove officers at pleasure has been repealed by the Constitution and ceased to be operative from the time that instrument went into effect. Unconstitutionally, as we understand it, denotes life and vigor, and unconstitutional legislation presupposes posteriority in point of time to the Constitution. It is a statute that "attempts to validate and legalize a course of conduct the effect of which the Constitution specifically forbids (State ex-rel. Mack vs. Guckenberger, 139 Ohio St., 273; 39 NE. [2d], 840.) A law that has been repealed is as good as if it had never been enacted, and can not, in the nature of things, contravene or pretend to contravene constitutional inhibition. So, unlike legislation that is passed in defiance of the Constitution, assertive and menacing, the questioned part of section 2545 of the Revised Administrative Code does not need a positive declaration of nullity by the court to put it out of the way. To all intents and purposes, it is non-existent, outlawed and eliminated from the statute book by the Constitution itself by express mandate before this petitioner was appointed.

Incidentally, the last discussion answers and disposes of the proposition that in accepting appointment under section 2545 of the Revised Administrative Code, the petitioner must be deemed to have accepted the conditions and limitations attached to the appointment. If the clause of section 2545 which authorized the President to remove officers of the City of Baguio at pleasure had been abrogated when petitioner's appointment was issued, the appointee can not presumed to have abided by this condition.

We therefore hold that the petitioner is entitled to remain in office as City Engineer of Baguio with all the emoluments, rights and privileges appurtenant thereto, until he resigns or is removed for cause, and that respondent Mallare's appointment is ineffective in so far as it may adversely affect those emoluments, rights and privileges. Without costs.

Moran, C.J., Ozaeta, Paras, Pablo, and Montemayor, JJ., concur.

Separate Opinions

BENGZON, J., concurring:

I concur in the result solely upon the ground that section 2545 of the Baguio Charter (Administrative Code) empowering the President to remove the City Engineer at pleasure has been impliedly repealed by section 22 of Commonwealth Act No. 177 which expressly provides for the first time (following the mandate of the Constitution),that "no officer or employee in the civil service shall be removed or suspended except for cause as provided by law."

I must decline to go into the matter of alleged conflict with the Constitution, first, because plaintiff is precluded from raising that question (Zandueta vs. De la Costa, 66 Phil., 615); second, because every law is presumed to be constitutional unless eight Justices of this Court are clearly of a contrary opinion,1 and third, because that subject need not be inquired into, except when absolutely necessary for the disposition of the controversy.

REYES, J.:

I concur in this opinion of Mr. Justice Bengzon.

G.R. No. L-32613-4PEOPLE OF THE PHILIPPINES, petitioner,vs.HON. SIMEON N. FERRER, in his capacity as Judge of the Court of First Instance of Tarlac, Branch I; FELICIANO CO alias "Leoncio Co" alias "Bob" and NILO S. TAYAG alias "Romy Reyes" alias "Taba", respondents.

Office of the Solicitor General Estelito P. Mendoza and Assistant Solicitor General Hugo E. Gutierrez, Jr. for petitioner.R E S O L U T I O N

Castro, J.:

p

The respondents Feliciano Co and Nilo Tayag separately seek a reconsideration of our decision in this case dated December 27, 1972. The motion for reconsideration filed by Co, being a mere reiteration of arguments previously advanced, need not detain us. It is the motion filed by Tayag that requires detailed consideration.

The burden of Tayag's motion is that knowing membership alone in the Communist Party of the Philippines or in any other subversive organization cannot, consistently with the Constitution, be made the basis of criminal prosecution under the Anti-Subversion Act. He argues that such membership must be coupled with direct participation by the defendant in the illegal activities of the organization. Thus, he seeks the inclusion in the guidelines set forth in our decision of a requirement that in prosecutions under the Act the State must prove that the defendant joined or remained a member of the CPP or of the subversive organization, knowing its subversive character and with specific intent to further its basic objectives as shown by direct participation in the organization's unlawful activities.

1. The respondent Tayag's submission would nullify the legislative policy embodied in the Anti-Subversion Act and frustrate prosecutions under it. On the basis of Congressional findings that the Communist Party of the Philippines is "an organized conspiracy to overthrow the Government of the Republic of the Philippines for the purpose of establishing in the Philippines a totalitarian regime ... under the control and domination of an alien power," 1 the Act provides for the punishment of any person who "knowingly, willfully and by overt acts affiliates himself with, becomes or remains a member of the Communist Party of the Philippines." 2

The Act is thus a conspiracy statute. The gist is the agreement itself rather than action taken pursuant to it. 3 Obviously, to require proof of direct participation of the defendant in the substantive offenses constituting the object of the conspiracy, in addition to proof of agreement, would render ineffectual the conspiracy device in penal law. The law is primarily concerned with conduct and will not intervene as long as the actor withdraws from what lie has planned to do. But where the act or acts in concert with others, the likelihood of a change of heart or of a misreading of his intention is minuscule. He is less likely to desist from the criminal enterprise where others are also involved. On the contrary, the encouragement and moral support of others in conspiracy with him fortifies his perseverance. The resulting collective action toward an anti-social end gives rise to a graver danger to society than individual action toward the same end, and justifies the intervention of the law at an earlier stage. 4

Indeed, section 4 of the Act distinguishes one who only joins or maintains his membership in the CPP or other subversive organization, for whom the penalty provided is arresto mayor, from one who not only does so but as well takes up arms against the Government, for whom the Act provides a heavier penalty, namely, prision mayor to death. The respondent Tayag's thesis would obliterate this distinction. The Court's traditional avoidance of constructions of doubtful constitutionality cannot be turned into an instrument for the evisceration of a plain legislative policy.

2. Moreover, a requirement that the prosecution must prove direct participation by the defendant in the objectives of the conspiracy would run counter to another established principle in the law — that where conspiracy is proved, the act of one is deemed to be the act of all. 5 That is why we referred to criminal conspiracy as a dragnet device for effectively dealing with the growth of organized crime. A contrary requirement would render society powerless to repress widespread criminality NRr52xSBZ.

3. Indeed, as we noted in our decision, the requirement that membership in the CPP or in any other subversive organization be

shown by overt acts was intended no more than to preclude the possibility that conviction may be obtained solely on the basis of incriminating evidence rather than positive acts of the defendant. As Senator Cea explained in the course of the deliberations on the bill: "I have inserted the words "overt acts" because we are punishing membership in the Communist Party. I would like that membership to be proved by overt acts, by positive acts, because it may happen that one's name may appear in the list of membership." 6

Thus, where one is shown to have taken an oath of membership or signed affiliation papers in a subversive organization, knowing its illegal purposes, the requirement of the law is satisfied. Of course where, as it often happens, it cannot be shown that the defendant explicitly or expressly entered into the conspiracy, his agreement may be inferred from circumstances demonstrating concert of action. It is then that the defendant's participation in the illegal activities of the organization would constitute proof of his specific intent 9yrT.

4. But the over-act requirement may also be satisfied by proof of non-criminal and relatively minor acts. 7 Such acts may consist in signing membership papers, paying dues, attending meetings, and the like, which, although in themselves may not be illegal, are nevertheless acts in pursuance of the objectives of the conspiracy. As the U.S. Supreme Court explained in Yates vs. United States: 8

... It is not necessary that an overt act be the substantive crime charged in the indictment as the object of the conspiracy. Nor, indeed, need such an act, taken by itself, even be criminal in character. The function of the overt act in a conspiracy prosecution is simply to manifest "that the conspiracy is at work," and is neither a project still resting solely in the minds of the conspirators nor a fully completed operation no longer in existence.

Indeed, the rationale of the Anti-Subversion Act, like that of the Smith Act involved in Yates, is that the existence of the conspiracy by itself creates the danger to national security. As held in Dennis vs. United States, 9 "the formation ... of such a highly organized conspiracy, with rigidly disciplined members subject to call when the leaders ... felt that the time has come for action, ... disposes of the contention that a conspiracy to advocate, as distinguished from the advocacy itself, cannot be constitutionally restrained because it comprises only the preparation. It is the existence of the conspiracy which creates the danger ... If the ingredients are present, we cannot bind the Government to wait until the catalyst is added." In the case of the CPP and other subversive groups, the danger posed is deemed in the Anti-Subversion Act to be so "clear, present and grave" as to warrant the prosecution of those engaged in the conspiracy.

5. Nor is there a constitutional compulsion that the overt acts of conspiracy be evidenced by direct participation of the defendant in the illegal objectives of the organization. In the first place, there is no reason why one who actively and knowingly works in the ranks of the organization, intending to contribute to the success of its specific illegal activities, should be any more immune from prosecution than one to whom the organization has assigned or entrusted the task of carrying out the substantive criminal acts. In United States vs. Vergara, 10 for instance, it was shown that the defendants organized the Katipunan, a society for the purpose of overthrowing the Government by force, and that in pursuance of the conspiracy the defendants solicited public contributions. No overt acts of insurrection were shown, but the defendants were nevertheless held guilty of conspiracy to overthrow the Government.

In the second place, the requirement of proof of specific intent precisely limits the operation of the statute only to illegal conduct. There need be no apprehension that unless direct participation by the defendant in the illegal activities of the association is shown, the statute may sweep unnecessarily broadly into protected activities, as the association may have both legal and illegal aims. In the case of the Communist Party of the Philippines, this apprehension is without basis, for the very nature of that organization as a conspiracy for the violent overthrow of the Government defines the character of its objectives.

Indeed, as was held in Scales vs. United States, 11 in answer to a similar contention,

If it is said that the mere existence of such an enactment tends to inhibit the exercise of constitutionally protected rights, in that it engenders an unhealthy fear that one may find himself unwittingly embroiled in criminal liability, the answer surely is that the statute provides that a defendant must be proven to have knowledge of the proscribed advocacy before he may be convicted. It is, of course, true that quasi-political parties or other groups that may embrace both legal and illegal aims differ from a technical conspiracy, which is defined by its purpose, so that all knowing association with the conspiracy is a proper subject for criminal proscription as far as the First Amendment liberties are concerned. If there were a similar blanket prohibition of association with a group having both legal and illegal aims, there would indeed be real danger that legitimate political expression or association would be impaired, but the membership clause, as here construed, does not cut deeper into the freedom of association than is

necessary to deal with "the substantive evils that Congress has a right to prevent." Schenk v. United States, 249 U.S. 47, 52. The clause does not make criminal all association with an organization which has been shown to engage in illegal advocacy. There must be clear proof that a defendant "specifically intend[s] to accomplish [the aims of the organization] by resort to violence." Noto v. United States [367 U.S. at 299]. Thus the member for whom the organization is a vehicle for the advancement of legitimate aims and policies does not fall within the ban of the statute; he lacks the requisite specific intent "to bring about the overthrow of the government as speedily as circumstances would permit." Such a person may be foolish, deluded or perhaps merely optimistic, but he is not by this statute made a criminal.'

ACCORDINGLY, the two motions for reconsideration are denied. Our decision of December 27, 1972 is hereby declared final and executory.

Makalintal, C.J., Zaldivar, Barredo, Esguerra, Fernandez and Aquino, JJ., concur aoBZOQk8.

Makasiar, Antonio and Muñoz Palma, JJ., took no part.

Separate Opinions

FERNANDO, J., dissenting:

My dissent from the well-written opinion of Justice Castro in the decision promulgated on December 27, 1972 opened with this paragraph: "It is with regret that I find myself unable to join the rest of my brethren in the decision reached upholding the validity of the Anti-Subversion Act. It is to be admitted that the learned and scholarly opinion of Justice Castro has the impress of conscientious and painstaking scrutiny of the Constitutional issues raised. What is more, the stress in the concluding portion thereof on the basic guidelines that will assure in the trial of those prosecuted under such Act respect for their constitutional rights is to be commended. Nonetheless, my own reading of the decisions cited, interpreting the bill of attainder clause coupled with the fears, perhaps induced by a too-latitudinarian construction of the guarantees of freedom of belief and expression as well as freedom of association as to impermissible inroads to which they may be exposed, compels a different conclusion." 1

It is beyond cavil that the present resolution bears the imprint of lucidity and comprehensiveness, characteristic of the opinions of Justice Castro. I regret however that the basic premise that precluded me from yielding concurrence to the decision is once again a bar to my conformity. There is no need then to repeal what was said by me before. It only remains to be added that the stress on the conspiracy principle in the resolution, to be sure in conformity with sound and settled concepts, does give rise to misgivings as to its too broad a scope. That is why I would like to express briefly my doubts on the matter.

For the purposes of this dissent, I adopt the characterization of Justice Jackson that conspiracy has in it the elements of the "elastic, sprawling and pervasive" resulting at times in "a serious threat to fairness in our administration of justice." 2 His concurring opinion in Krulewitch continues: "The modern crime of conspiracy is so vague that it almost defies definition. Despite certain elementary and essential elements, it also, chameleon-like, takes on a special coloration from each of the many independent offenses on which it may be overlaid. It is always "predominantly mental in composition" because it consists primarily of a meeting of minds and an intent." 3 Its relationship to political offenses was discussed by him in these terms: "The crime comes down to us wrapped in vague but unpleasant connotations. It sounds historical undertones of treachery, secret plotting and violence on a scale that menaces social stability and the security of the state itself. "Privy conspiracy" ranks with sedition and rebellion in the Litany's prayer for deliverance. Conspirational movements do indeed lie back of the political assassination, the coup d'etat, the putsch, the revolution, and seizures of power in modern times, as they have in all history." 4

Along the same line are the comments of Professor Johnson on the dangers of conspiracy to freedom of thought and expression. Thus: "Prosecutions of political dissidents, including labor organizers, Communist Party leaders, and contemporary radicals, typically have been conspiracy prosecutions. The law of conspiracy is intended, after all, to make it easier to impose

criminal punishment on members of groups that plot forbidden activity. Insofar as it accomplishes this end, it unavoidably increases the likelihood that persons will be punished for what they say rather than for what they do or for associating with others who are found culpable. Critics who are alarmed at the resulting threat to freedom of speech and freedom of association typically have proposed new constitutional doctrines derived from the first amendment to curtail the use of conspiracy charges in cases having some "political" element." 5 For Professor Johnson, it does not suffice "to reform conspiracy legislatively by removing its most widely deplored overextensions, or to reform it judicially by engrafting new doctrines derived from the first amendment [freedom of speech and of the press]." 6 He would expunge it from the corpus of the law. "The law of criminal conspiracy is not basically sound. It should be abolished, not reformed." 7

Let there be no misunderstanding. I am not prepared to go that far. It does occur to me, though, that with due recognition of the persuasive character of the resolution from the standpoint of defense against the dangers of subversion as well as the desire of my brethren to give the utmost protection to constitutional rights, under current conditions with the serious problems posed, still I find it difficult to dispel my grave doubts as to Republic Act No. 1700 suffering from the corrosion of constitutional infirmity, as set forth in some detail in my dissent.

Regretfully, I am compelled to do so again.

TEEHANKEE, J., concurring and dissenting:

I concur with the resolution penned for the Court by Mr. Justice Castro insofar as it denies the motion for reconsideration filed by respondent Feliciano Co which on the whole merely reiterates the same arguments previously advanced and dealt with in the Court's decision of December 27, 1972 remanding the case to the court below for trial on the merits.

I dissent from the resolution insofar as it denies the motion for reconsideration of respondent Nilo Tayag praying in essence not for reconsideration but for a clarification of the guidelines on page 32 of the Court's decision (which really forms an integral part of the judgment) so as to incorporate therein the Court's own rationale expressed on pages 15-16 of its decision that the Anti-Subversion Act is not to be construed "as punishing mere membership devoid of any specific intent to further the unlawful goals of the [Communist] Party" since section 4 thereof "requires that membership, to be unlawful, must be shown to have been acquired "knowingly, willfully and by overt acts." The ingredient of specific intent to pursue the unlawful goals of the Party must be shown by "overt acts." This constitutes an element of "membership" distinct from the ingredient of guilty knowledge. The former requires proof of direct participation in the organization's unlawful activities while the latter requires proof of mere adherence to the organization's illegal objectives." 1

1. The writer concurred with the Court's decision of December 27, 1972 on the basis of its ratio decidendirejecting the principal challenge against the validity of the Anti- Subversion Act on the grounds of its amounting to a bill of attainder proscribed by Article III, section 1 (11) of the 1935 Constitution. 2

The decision thus defined and stressed that "a bill of attainder is a legislative act which inflicts punishment without trial. Its essence is the substitution of a legislative for a judicial determination of guilt. The constitutional ban against bills of attainder serves to implement the principle of separation of powers by confining legislatures to rule-making and thereby forestalling legislative usurpation of the judicial function. History in perspective, bills of attainder were employed to suppress unpopular causes and political minorities, and it is against this evil that the constitutional prohibition is directed. The singling out of a definite class, the imposition of the burden on it, and a legislative intent, suffice to stigmatize a statute as a bill of attainder." 3

The decision then summarized the reasons and considerations which impelled respondent court to declare invalid the Anti-Subversion Act as a bill of attainder as follows: "(I)n the case at bar, the Anti-Subversion Act was condemned by the court a quo as a bill of attainder because it "tars and feathers" the Communist Party of the Philippines as a "continuing menace to the freedom and security of the country; its existence, a 'clear, present and grave danger to the security of the Philippines.' " By means of the Act, the trial court said, Congress usurped "the powers of the judge," and assumed 'judicial magistracy by pronouncing the guilt of the CPP without any of the forms or safeguards of judicial trial.' Finally, according to the trial court, 'if the only issue [to be determined] is whether or not the accused is a knowing and voluntary member, the law is still a bill of attainder because it has expressly created a presumption of organization guilt which the accused can never hope to overthrow.' " 4 

The decision rejected respondent court's ratiocination on the following principal grounds:

1. When the Act is viewed in its actual operation, it will be seen that it does not specify the Communist Party of the Philippines or

the members thereof for the purpose of punishment. What it does is simply to declare the Party to be an organized conspiracy for the overthrow of the Government for the purposes of the prohibition, stated in section 4, against membership in the outlawed organization. The term "Communist Party of the Philippines" is used solely for definitional purposes. In fact the Act applies not only to the Communist Party of the Philippines but also to "any other organization having the same purpose and their successors." Its focus is not on individuals but on conduct. 5

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Indeed, were the Anti-Subversion Act a bill of attainder, it would be totally unnecessary to charge Communists in court, as the law alone, without more, would suffice to secure their punishment. But the undeniable fact is that their guilt still has to be judicially established. The Government has yet to prove at the trial that the accused joined the Party knowingly, willfully and by overt acts, and that they joined the Party, knowing its subversive character and with specific intent to further its basic objectives, i.e., to overthrow the existing Government by force, deceit, and other illegal means and place the country under the control and domination of a foreign power.

As to the claim that under the statute organizational guilt is nonetheless imputed despite the requirement of proof of knowing membership in the Party, suffice it to say that is precisely the nature of conspiracy, which has been referred to as a "dragnet device" whereby all who participate in the criminal covenant are liable. The contention would be correct if the statute were construed as punishing mere membership devoid of any specific intent to further the unlawful goals of the Party. But the statute specifically requires that membership must be knowing 6 or active, with specific intent to further the illegal objectives of the Party. That is what section 4 means when it requires that membership, to be unlawful, must be shown to have been acquired "knowingly, willfully and by overt acts." The ingredient of specific intent to pursue the unlawful goals of the Party must be shown by "overt acts." This constitutes an element of "membership" distinct from the ingredient of guilty knowledge. The former requires proof of direct participation in the organization's unlawful activities, while the latter requires proof of mere adherence to the organization's illegal objectives. 7

Respondent Tayag's motion should accordingly be duly granted as a necessary and logical consequence when it prays for the clarification and spelling out of the elements of the crime of joining the Communist Party of the Philippines or any other subversive association (as defined in the Act) "knowingly, willfully and by overt acts" by adding after said phrase the following clarificatory or supplemental phrase:

that is, knowing its subversive character and with specific intent to further its basic (subversive) objective by proof of direct participation in the organization's unlawful activities.

It will be readily noted that the proposed additional phrase simply projects the very thrust of the Court's decision that "(T)he ingredient of specific intent to pursue the unlawful goals of the Party must be shown by "overt acts" " which is "an element of "membership" distinct from the ingredient of guilty knowledge" and "requires proof of direct participation in the organization's unlawful activities." 8

The Court's conclusion and guidelines on page 32 of the decision as thus amended and supplemented, would read as follows:

In conclusion, even as we uphold the validity of the Anti-Subversion Act, we cannot overemphasize the need for prudence and circumspection its enforcement, operating as it does in the sensitive area of freedom of expression and belief. Accordingly, we set the following basic guidelines to be observed in any prosecution under the Act. The Government, in addition to proving such circumstances as may affect liability, must establish the following elements of the crime of joining the Communist Party of the Philippines or any other subversive association:

(1) In the case of subversive organizations other than the Communist Party of the Philippines, (a) that the purpose of the organization is to overthrow the present Government of the Philippines and to establish in this country a totalitarian regime under the domination of a foreign power; (b) that the accused joined such organization; and (c) that he did so knowingly, willfully and by overt acts, that is he did so knowingly, willfully and by over acts, that is, knowing its subversive character and with specific intent to further its basic (subversive) objective by proof of direct participation in the organization's unlawful activities; and

(2) In the case of the Communist Party of the Philippines, (a) that the CPP continues to pursue the objectives which led

Congress in 1957 to declare it to be an organized conspiracy for the overthrow of the Government by illegal means for the purpose of placing the country under the control of a foreign power; (b) that the accused joined the CPP; and (c) that he did so willfully, knowingly and by overt acts, that is, knowing its subversive character and with specific intent to further its basic (subversive) objective by proof of direct participation in the organization's unlawful activities.

(added phrase italicized)

I am constrained, therefore, to dissent from the resolution when it declines to incorporate into its guidelines, as above-proposed to be amended, the very rationale of the decision in saving the Act from the fatal stigma of a bill of attainder that it is not to be construed "as punishing mere membership devoid of any specific intent to further the unlawful goals of the Party" but that "the statute specifically requires that membership, to be unlawful, must be shown to have been acquired 'knowingly, willfully and by overt

acts' " — which distinctive element "requires proof of direct participation in the organization's unlawful activities."

2. Stated in another way, Section 4 of the Anti-Subversion Act is the key section of the Act which together with section 2 defines the elements of the offense made a crime thereunder as follows:

SEC. 2. The Congress hereby declares the Communist Party of the Philippines to be an organized conspiracy to overthrow the Government of the Republic of the Philippines for the purpose of establishing in the Philippines a totalitarian regime and place the Government under the control and domination of an alien power. The said party and any other organization having the same purpose and their successors are hereby declared illegal and outlawed.

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SEC. 4. After the approval of this Act, whoever knowingly, willfully and by overt acts affiliates himself with, becomes or remains a member of the Communist Party of the Philippines and/or its successor or of any subversive association as defined in Section 2 hereof shall be punished by the penalty of arresto mayor and shall be disqualified permanently from holding any public office, appointive and elective, and from exercising the right to vote; in case of a second conviction, the principal penalty shall be prision correccional, and in all subsequent convictions the penalty of prision mayor shall be imposed; and any lien convicted under this Act shall be deported immediately after he shall have served the sentence imposed upon him:

Provided, That if such member is an officer or a ranking leader of the Communist Party of the Philippines or of any subversive association as defined in Section 2 hereof, or if such member takes up arms against the Government, he shall be punished by prision mayor to death with all the accessory penalties provided therefor in the Revised Penal Code:

And provided, finally, That one who conspires with any other person to overthrow the Government of the Republic of the Philippines or the government of any of its political subdivisions by force, violence, deceit, subversion or other illegal means, for the purpose of placing such Government or political subdivision under the control and domination of any alien power, shall be punished by prision correccional to prision mayor with all the accessory penalties provided therefor in the same Code." 9

Thus, whereas apparently section 4 of the Act would make criminal mere membership in the Communist Party of the Philippines regardless of the lack of criminal intent and activity on the part of an accused member, the Court in its decision rejected such a concept of guilt by association and quite emphatically stressed that

"Their [accused members'] guilt still has to be judicially established.

"The Government has yet to prove at the trial that the accused joined the Party knowingly, willfully and by overt acts,

"and that they joined the Party knowing its subversive character and with specific intent to further its basic [subversive] objective, i.e. to overthrow the existing Government by force, deceit and other illegal means and place the country under the control and domination of foreign power.

"The statute is [not to be] construed as punishing mere membership devoid of any specific intent to further the unlawful goals of

the Party.

"But the statute specifically requires that membership must be knowing or active, with specific intent to further the illegal objectives of the Party.

"That is what section 4 means when it requires that membership to be unlawful, must be shown to have been acquired' "knowingly, willfully and by overt acts."

"The ingredient of specific intent to pursue the unlawful goals of the Party must be shown by overt acts — [which] requires proof of direct participation in the organization's unlawful activities." 10

In addition, the Court's decision specified in its guideline 11 that notwithstanding the outlawing of the Communist Party of the Philippines in section 2 of the Act, the prosecution must establish "that the CCP continues to pursue the objectives which led Congress in 1957 to declare it to be an organized conspiracy for the overthrow of the Government by illegal means for the purpose of placing the country under the control of a foreign power" and required that the same illegal objectives be established in the case of subversive organizations other than the Communist Party of the Philippines.

The Court's decision thus hewed in effect to the narrow path of the bare majority decision of the U.S. Supreme Court in Communist Party vs. Subversive Activities Control Board 12 of not outlawing or inflicting legislative punishment on membership in the Communist Party as such but requiring registration for certain prescribed activities subject to judicial review wherein "present activity constitutes an operative element to which the statute attaches legal consequences", as follows:

The Act is not a bill of attainder. It attaches not to specified organizations but to described activities in which an organization may or may not engage. The singling out of an individual for legislatively prescribed punishment constitutes an attainder whether the individual is called by name or described in terms of conduct which, because it is past conduct, operates only as a designation of particular persons... The Subversive Activities Control Act is not of that kind. It requires the registration only of organizations which, after the date of the Act, are found to be under the direction, domination, or control of certain foreign powers and to operate primarily to advance certain objectives. This finding must be made after full administrative hearing, subject to judicial review which opens the record for the reviewing court's determination whether the administrative findings as to fact are supported by the preponderance of the evidence. Present activity constitutes an operative element to which the statute attaches legal consequences, not merely a point of reference for the ascertainment of particular persons ineluctably designated by the legislature. 13 

The Court's decision thus adopted the prevailing view of the U.S. Supreme Court that to escape the fatal stigma of a bill of attainder and vagueness amounting to denial of due process of law, membership in the Communist Party or other subversive organization (the unlawfulness of whose objectives must be judicially established by the prosecution at the trial) must be "active" and "not merely a nominal, passive, inactive or purely technical [membership]." 14 

The Court thus rejected in the writer's view after emphasizing "the need for prudence and circumspection in [the Act's] enforcement, operating as it does in the sensitive area of freedom of expression and belief" the oppressive concept of a blanket pronouncement of guilt by mere association or membership, having in mind what was aptly said in one case that "Those who join an organization but do not share its unlawful purposes and who do not participate in its unlawful activities surely pose no threat, either as citizens or as public employees. Laws such as this which are not restricted in scope to those who join with the "specific intent" to further illegal action impose, in effect, a conclusive presumption that the member shares the unlawful aims of the organization ... It rests on the doctrine of 'guilt by association' which has no place here ... Such a law cannot stand." 15 

By granting respondent Tayag's motion for clarification and spelling out in the guidelines on page 32 of the decision the Court's rationale as discussed hereinabove that the prosecution bears the burden of establishing the "elements of the crime of joining the Communist Party of the Philippines or any other subversive association" by proving that:

a) their purpose is or continues to be the overthrow of the Government by illegal means for the purpose of placing the country under the control of a foreign power;

b) the accused joined the Party or subversive association; and

c) he so joined the Party or subversive association "knowingly, willfully and by overt acts," as required by section 4 of the Act, i.e. knowing its subversive character, willfully with specific intent to further its subversive objectives and by overt acts as an active member by direct participation in the organization's unlawful activities, the Court would be but reiterating and clarifying its guidelines geared against the Act being stigmatized as a bill of attainder that suffers besides from the fatal defects of vagueness. 16 

3. I dissent further from the majority resolution's pronouncement that the Anti-Subversive Act is a "conspiracy statute. The gist is the agreement itself rather than action taken pursuant to it" 17 which leads it to the conclusion that "non-criminal acts" such as "signing membership papers, paying dues, attending meetings and the like, which although in themselves may not be illegal, are nevertheless acts in pursuance of the objectives in the conspiracy" — and that proof of such non-criminal acts may be given to satisfy the overt act requirement of the Act. 18 

This would constrict now the text and significance of the guidelines given on page 32 of the decision. Furthermore, it reads the "conspiracy statute" into the membership provision of section 4 of the Act when the two are completely separate and distinct.

As may be seen from the text of section 4 of the Act, supra, as construed in the Court's decision (at pages 15-16) the first part thereof penalizes "knowing or active membership with specific intent to further the illegal objectives of the Party [or other subversive organization]" after the approval of the Act on June 20, 1957, 19 "knowingly, willfully and by overt acts." The decision specifically noted that "(T)he ingredient of specific intent to pursue the unlawful goals of the Party ... requires proof of direct participation in the organization's unlawful activities." The Act punishes a first conviction with arresto mayor and permanent disqualification from public office and suffrage, a second conviction with prision correccional and all subsequent convictions with prision mayor (which is the same penalty imposed for rebellion (under Article 135 of the Revised Penal Code).

Such construction of the proscribed membership is but consistent with the pronouncement in the Court's resolution (at page 5) that "the requirement of proof of specific intent precisely limits the operation of the statute only to illegal conduct" and to "direct participation by the defendant in the illegal activities of the [subversive] association" and the holding in Scales vs. United States 20 approvingly quoted therein that "the clause does not make criminal all association with an organization which has been shown to engage in illegal advocacy. There must be clear proof that a defendant 'specifically intend/s/ to accomplish [the aims of the organization] by resort to violence.' Noto v. United States [367 U.S. at 299]. Thus the member for whom the organization is a vehicle for the advancement of legitimate aims and policies does not fall within the ban of the statute; he lacks the requisite specific intent "to bring about the overthrow of the government as speedily as circumstances would permit". Such a person may be foolish, deluded or perhaps merely optimistic, but he is not by this statute made a criminal."

The first proviso of the Act however imposes the principal penalty of prision mayor to death upon a "member [who] is an officer or ranking leader of the Communist Party of the Philippines or of any subversive association or if such member takes up arms against the Government." This clearly draws the line that the unlawful activities which an ordinary member must be shown to have participated in to evidence specific intent to further the unlawful goals of the subversive organization in proof of his active (as against mere nominal, inactive or passive) membership, would be those which falls short of taking up arms against the Government H9LG.

The second proviso of the Act constitutes the "conspiracy statute" and furnishes the "dragnet device." But it will be noted from the very text that the proscribed criminal conspiracy does not refer to membership. Rather it provides that one (be he a member or not of the Party or of any other subversive organization) who conspires with any other person to overthrow the Government or any of its political subdivisions by force, violence, deceit, subversion or other illegal means for the purpose of placing such Government or political subdivisions under the control and domination of any alien power shall be meted the penalty of prision correccional to prision mayor.

4. The distinction is best illustrated by the case of Carino vs. People 21 where this Court set aside the petitioner-accused's conviction by the Court of Appeals and by the court of first instance as an accomplish in the crime of rebellion with murders, arsons, robberies and kidnappings simply because he furnished cigarettes and food supplies to a famous Huk and performed certain other acts, when it was not shown that he was a member of the Hukbalahap organization nor could the acts be deemed per se to carry or prove any criminal intent of helping the Huks in committing the crime of insurrection or rebellion nor was he shown to have been engaged in any conspiracy or proposal to commit rebellion. In acquitting the accused, the late Justice Alejo Labrador speaking for a unanimous Court held that:

In the case at bar the appellant did not take up arms against the Government. Neither was he a member of the Hukbalahap organization. The Court of Appeals also found that he did not openly take part in the commission of the crime above defined by any other act without which said crime would not have been committed.

xxx xxx xxx

We cannot agree to the above conclusion of the Court of Appeals that the above-mentioned acts of appellant constitute acts of cooperation in the execution of the act of overthrowing the government. If appellant's acts may be considered an indirect help or aid in the rebellion, which we positively doubt, the same cannot constitute previous or simultaneous acts of uprising or rebellion. In the crime of treason any act of giving comfort or moral aid may be criminal, but such is not the case with rebellion or insurrection where the Code expressly declares that there must be a public uprising and the taking up of arms in rebellion or insurrection. The act of sending or furnishing cigarettes and food supplies to a famous Huk does not prove intention to help him in committing rebellion or insurrection. Neither is the act of having $6,000 changed to Philippine money or in helping Huks to open accounts, by themselves show an intent or desire to participate or help in an uprising or rebellion. Appellant's work was as a public relations officer of the bank of which he was an employee, and the work above indicated performed by him was a part of his functions as an employee of the bank. These acts by themselves do not and cannot carry or prove any criminal intent of helping the Huks in committing the crime of insurrection or rebellion. The law is to the effect that good faith is to be presumed. No presumption of the existence of a criminal intent can arise from the above acts which are in themselves legitimate and legal. Said acts are by law presumed to be innocent acts while the opposite has not been proved.

But granting, for the sake of argument, that appellant had the criminal intent of aiding the communists in their unlawful designs to overthrow the Government, the assistance thus extended by him may not be considered efficacious enough to help in the successful prosecution of the crime of insurrection or rebellion so as to make him an accomplice therein. (People vs. Tamayo, supra.) We, therefore, find that the supposed acts found by the Court of Appeals to have been committed by the appellant do not necessarily and legitimately lead to the conclusion that he performed said acts precisely with the criminal intent of helping in the execution or the carrying out of the rebellion or insurrection.

For the foregoing considerations, we declare that the guilt of appellant as an accomplice in the crime of rebellion or insurrection as charged in the information has not been proved beyond reasonable doubt, his supposed acts not having been shown to be acts of direct cooperation in the execution of the crime, nor have they been induced by a criminal intent, nor were they shown to be sufficiently efficacious to make appellant guilty as accomplice in the crime charged.

5. Finally, it is submitted that the original guidelines of the decision (at page 32) if clarified as prayed for by respondent Tayag rather than constricted by the present resolution would serve but to reiterate the rationale of the decision of December 27, 1972 and would be in consonance with the underlying doctrine of Cariño vs. People, supra, against presumption of the existence of criminal intent. It would furthermore give substance and meaning to the safeguards carefully provided against unjust accusation and harassment in the Act, viz, no prosecution under the Act unless there has first been a proper preliminary investigation with notice, whenever it is possible to give the same to the party concerned, who shall have the right to be represented by counsel, to testify, to have compulsory process for obtaining witnesses in his favor, and to cross-examine witnesses against him," with such investigation to be conducted by the proper court of first instance where the offense is defined and penalized by prision mayor to death; 22 the imposition of prision correccional against any person who knowingly furnishes false evidence in any prosecution under the Act; 23 the prohibition of any conviction for an offense penalized with prision mayor to death under the Act except" on the testimony of at least two witnesses to the same overt act or on confession of the accused in open court;" 24 and the injunction that "Nothing in this Act shall be interpreted as a restriction to freedom of thought, of assembly and of association for purposes not contrary to law as guaranteed by the Constitution." 25 

Separate Opinions

FERNANDO, J., dissenting:

My dissent from the well-written opinion of Justice Castro in the decision promulgated on December 27, 1972 opened with this paragraph: "It is with regret that I find myself unable to join the rest of my brethren in the decision reached upholding the validity

of the Anti-Subversion Act. It is to be admitted that the learned and scholarly opinion of Justice Castro has the impress of conscientious and painstaking scrutiny of the Constitutional issues raised. What is more, the stress in the concluding portion thereof on the basic guidelines that will assure in the trial of those prosecuted under such Act respect for their constitutional rights is to be commended. Nonetheless, my own reading of the decisions cited, interpreting the bill of attainder clause coupled with the fears, perhaps induced by a too-latitudinarian construction of the guarantees of freedom of belief and expression as well as freedom of association as to impermissible inroads to which they may be exposed, compels a different conclusion." 1

It is beyond cavil that the present resolution bears the imprint of lucidity and comprehensiveness, characteristic of the opinions of Justice Castro. I regret however that the basic premise that precluded me from yielding concurrence to the decision is once again a bar to my conformity. There is no need then to repeal what was said by me before. It only remains to be added that the stress on the conspiracy principle in the resolution, to be sure in conformity with sound and settled concepts, does give rise to misgivings as to its too broad a scope. That is why I would like to express briefly my doubts on the matter.

For the purposes of this dissent, I adopt the characterization of Justice Jackson that conspiracy has in it the elements of the "elastic, sprawling and pervasive" resulting at times in "a serious threat to fairness in our administration of justice." 2 His concurring opinion in Krulewitch continues: "The modern crime of conspiracy is so vague that it almost defies definition. Despite certain elementary and essential elements, it also, chameleon-like, takes on a special coloration from each of the many independent offenses on which it may be overlaid. It is always "predominantly mental in composition" because it consists primarily of a meeting of minds and an intent." 3 Its relationship to political offenses was discussed by him in these terms: "The crime comes down to us wrapped in vague but unpleasant connotations. It sounds historical undertones of treachery, secret plotting and violence on a scale that menaces social stability and the security of the state itself. "Privy conspiracy" ranks with sedition and rebellion in the Litany's prayer for deliverance. Conspirational movements do indeed lie back of the political assassination, the coup d'etat, the putsch, the revolution, and seizures of power in modern times, as they have in all history." 4

Along the same line are the comments of Professor Johnson on the dangers of conspiracy to freedom of thought and expression. Thus: "Prosecutions of political dissidents, including labor organizers, Communist Party leaders, and contemporary radicals, typically have been conspiracy prosecutions. The law of conspiracy is intended, after all, to make it easier to impose criminal punishment on members of groups that plot forbidden activity. Insofar as it accomplishes this end, it unavoidably increases the likelihood that persons will be punished for what they say rather than for what they do or for associating with others who are found culpable. Critics who are alarmed at the resulting threat to freedom of speech and freedom of association typically have proposed new constitutional doctrines derived from the first amendment to curtail the use of conspiracy charges in cases having some "political" element." 5 For Professor Johnson, it does not suffice "to reform conspiracy legislatively by removing its most widely deplored overextensions, or to reform it judicially by engrafting new doctrines derived from the first amendment [freedom of speech and of the press]." 6 He would expunge it from the corpus of the law. "The law of criminal conspiracy is not basically sound. It should be abolished, not reformed." 7

Let there be no misunderstanding. I am not prepared to go that far. It does occur to me, though, that with due recognition of the persuasive character of the resolution from the standpoint of defense against the dangers of subversion as well as the desire of my brethren to give the utmost protection to constitutional rights, under current conditions with the serious problems posed, still I find it difficult to dispel my grave doubts as to Republic Act No. 1700 suffering from the corrosion of constitutional infirmity, as set forth in some detail in my dissent.Regretfully, I am compelled to do so again.TEEHANKEE, J., concurring and dissenting:I concur with the resolution penned for the Court by Mr. Justice Castro insofar as it denies the motion for reconsideration filed by respondent Feliciano Co which on the whole merely reiterates the same arguments previously advanced and dealt with in the Court's decision of December 27, 1972 remanding the case to the court below for trial on the merits.I dissent from the resolution insofar as it denies the motion for reconsideration of respondent Nilo Tayag praying in essence not for reconsideration but for a clarification of the guidelines on page 32 of the Court's decision (which really forms an integral part of the judgment) so as to incorporate therein the Court's own rationale expressed on pages 15-16 of its decision that the Anti-Subversion Act is not to be construed "as punishing mere membership devoid of any specific intent to further the unlawful goals of the [Communist] Party" since section 4 thereof "requires that membership, to be unlawful, must be shown to have been acquired "knowingly, willfully and by overt acts." The ingredient of specific intent to pursue the unlawful goals of the Party must be shown by "overt acts." This constitutes an element of "membership" distinct from the ingredient of guilty knowledge. The former requires proof of direct participation in the organization's unlawful activities while the latter requires proof of mere adherence to the organization's illegal objectives." 11. The writer concurred with the Court's decision of December 27, 1972 on the basis of its ratio decidendirejecting the principal

challenge against the validity of the Anti- Subversion Act on the grounds of its amounting to a bill of attainder proscribed by Article III, section 1 (11) of the 1935 Constitution. 2The decision thus defined and stressed that "a bill of attainder is a legislative act which inflicts punishment without trial. Its essence is the substitution of a legislative for a judicial determination of guilt. The constitutional ban against bills of attainder serves to implement the principle of separation of powers by confining legislatures to rule-making and thereby forestalling legislative usurpation of the judicial function. History in perspective, bills of attainder were employed to suppress unpopular causes and political minorities, and it is against this evil that the constitutional prohibition is directed. The singling out of a definite class, the imposition of the burden on it, and a legislative intent, suffice to stigmatize a statute as a bill of attainder." 3The decision then summarized the reasons and considerations which impelled respondent court to declare invalid the Anti-Subversion Act as a bill of attainder as follows: "(I)n the case at bar, the Anti-Subversion Act was condemned by the court a quo as a bill of attainder because it "tars and feathers" the Communist Party of the Philippines as a "continuing menace to the freedom and security of the country; its existence, a 'clear, present and grave danger to the security of the Philippines.' " By means of the Act, the trial court said, Congress usurped "the powers of the judge," and assumed 'judicial magistracy by pronouncing the guilt of the CPP without any of the forms or safeguards of judicial trial.' Finally, according to the trial court, 'if the only issue [to be determined] is whether or not the accused is a knowing and voluntary member, the law is still a bill of attainder because it has expressly created a presumption of organization guilt which the accused can never hope to overthrow.' " 4 The decision rejected respondent court's ratiocination on the following principal grounds:

1. When the Act is viewed in its actual operation, it will be seen that it does not specify the Communist Party of the Philippines or the members thereof for the purpose of punishment. What it does is simply to declare the Party to be an organized conspiracy for the overthrow of the Government for the purposes of the prohibition, stated in section 4, against membership in the outlawed organization. The term "Communist Party of the Philippines" is used solely for definitional purposes. In fact the Act applies not only to the Communist Party of the Philippines but also to "any other organization having the same purpose and their successors." Its focus is not on individuals but on conduct. 5xxx xxx xxxIndeed, were the Anti-Subversion Act a bill of attainder, it would be totally unnecessary to charge Communists in court, as the law alone, without more, would suffice to secure their punishment. But the undeniable fact is that their guilt still has to be judicially established. The Government has yet to prove at the trial that the accused joined the Party knowingly, willfully and by overt acts, and that they joined the Party, knowing its subversive character and with specific intent to further its basic objectives, i.e., to overthrow the existing Government by force, deceit, and other illegal means and place the country under the control and domination of a foreign power.As to the claim that under the statute organizational guilt is nonetheless imputed despite the requirement of proof of knowing membership in the Party, suffice it to say that is precisely the nature of conspiracy, which has been referred to as a "dragnet device" whereby all who participate in the criminal covenant are liable. The contention would be correct if the statute were construed as punishing mere membership devoid of any specific intent to further the unlawful goals of the Party. But the statute specifically requires that membership must be knowing 6 or active, with specific intent to further the illegal objectives of the Party. That is what section 4 means when it requires that membership, to be unlawful, must be shown to have been acquired "knowingly, willfully and by overt acts." The ingredient of specific intent to pursue the unlawful goals of the Party must be shown by "overt acts." This constitutes an element of "membership" distinct from the ingredient of guilty knowledge. The former requires proof of direct participation in the organization's unlawful activities, while the latter requires proof of mere adherence to the organization's illegal objectives. 7

Respondent Tayag's motion should accordingly be duly granted as a necessary and logical consequence when it prays for the clarification and spelling out of the elements of the crime of joining the Communist Party of the Philippines or any other subversive association (as defined in the Act) "knowingly, willfully and by overt acts" by adding after said phrase the following clarificatory or supplemental phrase:

that is, knowing its subversive character and with specific intent to further its basic (subversive) objective by proof of direct participation in the organization's unlawful activities.

It will be readily noted that the proposed additional phrase simply projects the very thrust of the Court's decision that "(T)he ingredient of specific intent to pursue the unlawful goals of the Party must be shown by "overt acts" " which is "an element of

"membership" distinct from the ingredient of guilty knowledge" and "requires proof of direct participation in the organization's unlawful activities." 8The Court's conclusion and guidelines on page 32 of the decision as thus amended and supplemented, would read as follows:

In conclusion, even as we uphold the validity of the Anti-Subversion Act, we cannot overemphasize the need for prudence and circumspection its enforcement, operating as it does in the sensitive area of freedom of expression and belief. Accordingly, we set the following basic guidelines to be observed in any prosecution under the Act. The Government, in addition to proving such circumstances as may affect liability, must establish the following elements of the crime of joining the Communist Party of the Philippines or any other subversive association:(1) In the case of subversive organizations other than the Communist Party of the Philippines, (a) that the purpose of the organization is to overthrow the present Government of the Philippines and to establish in this country a totalitarian regime under the domination of a foreign power; (b) that the accused joined such organization; and (c) that he did so knowingly, willfully and by overt acts, that is he did so knowingly, willfully and by over acts, that is, knowing its subversive character and with specific intent to further its basic (subversive) objective by proof of direct participation in the organization's unlawful activities; and(2) In the case of the Communist Party of the Philippines, (a) that the CPP continues to pursue the objectives which led Congress in 1957 to declare it to be an organized conspiracy for the overthrow of the Government by illegal means for the purpose of placing the country under the control of a foreign power; (b) that the accused joined the CPP; and (c) that he did so willfully, knowingly and by overt acts, that is, knowing its subversive character and with specific intent to further its basic (subversive) objective by proof of direct participation in the organization's unlawful activities.

(added phrase italicized)I am constrained, therefore, to dissent from the resolution when it declines to incorporate into its guidelines, as above-proposed to be amended, the very rationale of the decision in saving the Act from the fatal stigma of a bill of attainder that it is not to be construed "as punishing mere membership devoid of any specific intent to further the unlawful goals of the Party" but that "the statute specifically requires that membership, to be unlawful, must be shown to have been acquired 'knowingly, willfully and by overt acts' " — which distinctive element "requires proof of direct participation in the organization's unlawful activities."2. Stated in another way, Section 4 of the Anti-Subversion Act is the key section of the Act which together with section 2 defines the elements of the offense made a crime thereunder as follows:

SEC. 2. The Congress hereby declares the Communist Party of the Philippines to be an organized conspiracy to overthrow the Government of the Republic of the Philippines for the purpose of establishing in the Philippines a totalitarian regime and place the Government under the control and domination of an alien power. The said party and any other organization having the same purpose and their successors are hereby declared illegal and outlawed.xxx xxx xxxSEC. 4. After the approval of this Act, whoever knowingly, willfully and by overt acts affiliates himself with, becomes or remains a member of the Communist Party of the Philippines and/or its successor or of any subversive association as defined in Section 2 hereof shall be punished by the penalty of arresto mayor and shall be disqualified permanently from holding any public office, appointive and elective, and from exercising the right to vote; in case of a second conviction, the principal penalty shall be prision correccional, and in all subsequent convictions the penalty of prision mayor shall be imposed; and any lien convicted under this Act shall be deported immediately after he shall have served the sentence imposed upon him:Provided, That if such member is an officer or a ranking leader of the Communist Party of the Philippines or of any subversive association as defined in Section 2 hereof, or if such member takes up arms against the Government, he shall be punished by prision mayor to death with all the accessory penalties provided therefor in the Revised Penal Code:And provided, finally, That one who conspires with any other person to overthrow the Government of the Republic of the Philippines or the government of any of its political subdivisions by force, violence, deceit, subversion or other illegal means, for the purpose of placing such Government or political subdivision under the control and domination of any alien power, shall be punished by prision correccional to prision mayor with all the accessory penalties provided therefor in the same Code." 9

Thus, whereas apparently section 4 of the Act would make criminal mere membership in the Communist Party of the Philippines regardless of the lack of criminal intent and activity on the part of an accused member, the Court in its decision rejected such a concept of guilt by association and quite emphatically stressed that

"Their [accused members'] guilt still has to be judicially established."The Government has yet to prove at the trial that the accused joined the Party knowingly, willfully and by overt acts,"and that they joined the Party knowing its subversive character and with specific intent to further its basic [subversive] objective, i.e. to overthrow the existing Government by force, deceit and other illegal means and place the country under the control and domination of foreign power."The statute is [not to be] construed as punishing mere membership devoid of any specific intent to further the unlawful goals of the Party."But the statute specifically requires that membership must be knowing or active, with specific intent to further the illegal objectives of the Party."That is what section 4 means when it requires that membership to be unlawful, must be shown to have been acquired' "knowingly, willfully and by overt acts.""The ingredient of specific intent to pursue the unlawful goals of the Party must be shown by overt acts — [which] requires proof of direct participation in the organization's unlawful activities." 10 In addition, the Court's decision specified in its guideline 11 that notwithstanding the outlawing of the Communist Party of the Philippines in section 2 of the Act, the prosecution must establish "that the CCP continues to pursue the objectives which led Congress in 1957 to declare it to be an organized conspiracy for the overthrow of the Government by illegal means for the purpose of placing the country under the control of a foreign power" and required that the same illegal objectives be established in the case of subversive organizations other than the Communist Party of the Philippines.The Court's decision thus hewed in effect to the narrow path of the bare majority decision of the U.S. Supreme Court in Communist Party vs. Subversive Activities Control Board 12 of not outlawing or inflicting legislative punishment on membership in the Communist Party as such but requiring registration for certain prescribed activities subject to judicial review wherein "present activity constitutes an operative element to which the statute attaches legal consequences", as follows:

The Act is not a bill of attainder. It attaches not to specified organizations but to described activities in which an organization may or may not engage. The singling out of an individual for legislatively prescribed punishment constitutes an attainder whether the individual is called by name or described in terms of conduct which, because it is past conduct, operates only as a designation of particular persons... The Subversive Activities Control Act is not of that kind. It requires the registration only of organizations which, after the date of the Act, are found to be under the direction, domination, or control of certain foreign powers and to operate primarily to advance certain objectives. This finding must be made after full administrative hearing, subject to judicial review which opens the record for the reviewing court's determination whether the administrative findings as to fact are supported by the preponderance of the evidence. Present activity constitutes an operative element to which the statute attaches legal consequences, not merely a point of reference for the ascertainment of particular persons ineluctably designated by the legislature. 13 

The Court's decision thus adopted the prevailing view of the U.S. Supreme Court that to escape the fatal stigma of a bill of attainder and vagueness amounting to denial of due process of law, membership in the Communist Party or other subversive organization (the unlawfulness of whose objectives must be judicially established by the prosecution at the trial) must be "active" and "not merely a nominal, passive, inactive or purely technical [membership]." 14 The Court thus rejected in the writer's view after emphasizing "the need for prudence and circumspection in [the Act's] enforcement, operating as it does in the sensitive area of freedom of expression and belief" the oppressive concept of a blanket pronouncement of guilt by mere association or membership, having in mind what was aptly said in one case that "Those who join an organization but do not share its unlawful purposes and who do not participate in its unlawful activities surely pose no threat, either as citizens or as public employees. Laws such as this which are not restricted in scope to those who join with the "specific intent" to further illegal action impose, in effect, a conclusive presumption that the member shares the unlawful aims of the organization ... It rests on the doctrine of 'guilt by association' which has no place here ... Such a law cannot stand." 15 By granting respondent Tayag's motion for clarification and spelling out in the guidelines on page 32 of the decision the Court's rationale as discussed hereinabove that the prosecution bears the burden of establishing the "elements of the crime of joining the Communist Party of the Philippines or any other subversive association" by proving that:a) their purpose is or continues to be the overthrow of the Government by illegal means for the purpose of placing the country under the control of a foreign power;b) the accused joined the Party or subversive association; andc) he so joined the Party or subversive association "knowingly, willfully and by overt acts," as required by section 4 of the Act, i.e. knowing its subversive character, willfully with specific intent to further its subversive objectives and by overt acts as an active member by direct participation in the organization's unlawful activities, the Court would be but reiterating and clarifying its

guidelines geared against the Act being stigmatized as a bill of attainder that suffers besides from the fatal defects of vagueness. 16 3. I dissent further from the majority resolution's pronouncement that the Anti-Subversive Act is a "conspiracy statute. The gist is the agreement itself rather than action taken pursuant to it" 17 which leads it to the conclusion that "non-criminal acts" such as "signing membership papers, paying dues, attending meetings and the like, which although in themselves may not be illegal, are nevertheless acts in pursuance of the objectives in the conspiracy" — and that proof of such non-criminal acts may be given to satisfy the overt act requirement of the Act. 18 This would constrict now the text and significance of the guidelines given on page 32 of the decision. Furthermore, it reads the "conspiracy statute" into the membership provision of section 4 of the Act when the two are completely separate and distinct.As may be seen from the text of section 4 of the Act, supra, as construed in the Court's decision (at pages 15-16) the first part thereof penalizes "knowing or active membership with specific intent to further the illegal objectives of the Party [or other subversive organization]" after the approval of the Act on June 20, 1957, 19 "knowingly, willfully and by overt acts." The decision specifically noted that "(T)he ingredient of specific intent to pursue the unlawful goals of the Party ... requires proof of direct participation in the organization's unlawful activities." The Act punishes a first conviction with arresto mayor and permanent disqualification from public office and suffrage, a second conviction with prision correccional and all subsequent convictions with prision mayor (which is the same penalty imposed for rebellion (under Article 135 of the Revised Penal Code).Such construction of the proscribed membership is but consistent with the pronouncement in the Court's resolution (at page 5) that "the requirement of proof of specific intent precisely limits the operation of the statute only to illegal conduct" and to "direct participation by the defendant in the illegal activities of the [subversive] association" and the holding in Scales vs. United States 20 approvingly quoted therein that "the clause does not make criminal all association with an organization which has been shown to engage in illegal advocacy. There must be clear proof that a defendant 'specifically intend/s/ to accomplish [the aims of the organization] by resort to violence.' Noto v. United States [367 U.S. at 299]. Thus the member for whom the organization is a vehicle for the advancement of legitimate aims and policies does not fall within the ban of the statute; he lacks the requisite specific intent "to bring about the overthrow of the government as speedily as circumstances would permit". Such a person may be foolish, deluded or perhaps merely optimistic, but he is not by this statute made a criminal."The first proviso of the Act however imposes the principal penalty of prision mayor to death upon a "member [who] is an officer or ranking leader of the Communist Party of the Philippines or of any subversive association or if such member takes up arms against the Government." This clearly draws the line that the unlawful activities which an ordinary member must be shown to have participated in to evidence specific intent to further the unlawful goals of the subversive organization in proof of his active (as against mere nominal, inactive or passive) membership, would be those which falls short of taking up arms against the Government.The second proviso of the Act constitutes the "conspiracy statute" and furnishes the "dragnet device." But it will be noted from the very text that the proscribed criminal conspiracy does not refer to membership. Rather it provides that one (be he a member or not of the Party or of any other subversive organization) who conspires with any other person to overthrow the Government or any of its political subdivisions by force, violence, deceit, subversion or other illegal means for the purpose of placing such Government or political subdivisions under the control and domination of any alien power shall be meted the penalty of prision correccional to prision mayor.4. The distinction is best illustrated by the case of Carino vs. People 21 where this Court set aside the petitioner-accused's conviction by the Court of Appeals and by the court of first instance as an accomplish in the crime of rebellion with murders, arsons, robberies and kidnappings simply because he furnished cigarettes and food supplies to a famous Huk and performed certain other acts, when it was not shown that he was a member of the Hukbalahap organization nor could the acts be deemed per se to carry or prove any criminal intent of helping the Huks in committing the crime of insurrection or rebellion nor was he shown to have been engaged in any conspiracy or proposal to commit rebellion. In acquitting the accused, the late Justice Alejo Labrador speaking for a unanimous Court held that:

In the case at bar the appellant did not take up arms against the Government. Neither was he a member of the Hukbalahap organization. The Court of Appeals also found that he did not openly take part in the commission of the crime above defined by any other act without which said crime would not have been committed sCs9.xxx xxx xxxWe cannot agree to the above conclusion of the Court of Appeals that the above-mentioned acts of appellant constitute acts of cooperation in the execution of the act of overthrowing the government. If appellant's acts may be considered an indirect help or aid in the rebellion, which we positively doubt, the same cannot constitute previous or simultaneous acts of uprising or rebellion. In the crime of treason any act of giving comfort or moral aid may be criminal, but such is not the case with rebellion or insurrection where the Code expressly declares that there must be a public uprising and the taking up of arms in rebellion or insurrection. The act of sending or furnishing cigarettes and food supplies to a famous Huk does not prove intention to help him

in committing rebellion or insurrection. Neither is the act of having $6,000 changed to Philippine money or in helping Huks to open accounts, by themselves show an intent or desire to participate or help in an uprising or rebellion. Appellant's work was as a public relations officer of the bank of which he was an employee, and the work above indicated performed by him was a part of his functions as an employee of the bank. These acts by themselves do not and cannot carry or prove any criminal intent of helping the Huks in committing the crime of insurrection or rebellion. The law is to the effect that good faith is to be presumed. No presumption of the existence of a criminal intent can arise from the above acts which are in themselves legitimate and legal. Said acts are by law presumed to be innocent acts while the opposite has not been proved pvIHO6We.But granting, for the sake of argument, that appellant had the criminal intent of aiding the communists in their unlawful designs to overthrow the Government, the assistance thus extended by him may not be considered efficacious enough to help in the successful prosecution of the crime of insurrection or rebellion so as to make him an accomplice therein. (People vs. Tamayo, supra.) We, therefore, find that the supposed acts found by the Court of Appeals to have been committed by the appellant do not necessarily and legitimately lead to the conclusion that he performed said acts precisely with the criminal intent of helping in the execution or the carrying out of the rebellion or insurrection.For the foregoing considerations, we declare that the guilt of appellant as an accomplice in the crime of rebellion or insurrection as charged in the information has not been proved beyond reasonable doubt, his supposed acts not having been shown to be acts of direct cooperation in the execution of the crime, nor have they been induced by a criminal intent, nor were they shown to be sufficiently efficacious to make appellant guilty as accomplice in the crime charged 8RToUsvMBh.

5. Finally, it is submitted that the original guidelines of the decision (at page 32) if clarified as prayed for by respondent Tayag rather than constricted by the present resolution would serve but to reiterate the rationale of the decision of December 27, 1972 and would be in consonance with the underlying doctrine of Cariño vs. People, supra, against presumption of the existence of criminal intent. It would furthermore give substance and meaning to the safeguards carefully provided against unjust accusation and harassment in the Act, viz, no prosecution under the Act unless there has first been a proper preliminary investigation with notice, whenever it is possible to give the same to the party concerned, who shall have the right to be represented by counsel, to testify, to have compulsory process for obtaining witnesses in his favor, and to cross-examine witnesses against him," with such investigation to be conducted by the proper court of first instance where the offense is defined and penalized by prision mayor to death; 22 the imposition of prision correccional against any person who knowingly furnishes false evidence in any prosecution under the Act; 23 the prohibition of any conviction for an offense penalized with prision mayor to death under the Act except" on the testimony of at least two witnesses to the same overt act or on confession of the accused in open court;" 24 and the injunction that "Nothing in this Act shall be interpreted as a restriction to freedom of thought, of assembly and of association for purposes not contrary to law as guaranteed by the Constitution." 25 

V. Ambiguity, need of

G.R. No. 170735             December 17, 2007

IMMACULADA L. GARCIA, petitioner, vs.SOCIAL SECURITY COMMISSION LEGAL AND COLLECTION, SOCIAL SECURITY SYSTEM, respondents.

D E C I S I O N

CHICO-NAZARIO, J.:

This is petition for review on Certiorari under Rule 45 of the Rules of Court is assailing the 2 June 2005 Decision1and 8 December 2005 Resolution2 both of the Court of Appeals in CA-G.R. SP No. 85923. the appellate court affirmed the --- Order and --- Resolution both of the Social Security Commission (SSC) in SSC Case No. 10048, finding Immaculada L. Garcia (Garcia), the sole surviving director of Impact Corporation, petitioner herein, liable for unremitted, albeit collected, SSS contributions.

Petitioner Immaculada L. Garcia, Eduardo de Leon, Ricardo de Leon, Pacita Fernandez, and Consuelo Villanueva were directors3 of Impact Corporation. The corporation was engaged in the business of manufacturing aluminum tube containers and operated two factories. One was a "slug" foundry-factory located in Cuyapo, Nueva Ecija, while the other was an Extrusion Plant in Cainta, Metro Manila, which processed the "slugs" into aluminum collapsible tubes and similar containers for toothpaste and other related products.

Records show that around 1978, Impact Corporation started encountering financial problems. By 1980, labor unrest besieged the corporation.

In March 1983, Impact Corporation filed with the Securities and Exchange Commission (SEC) a Petition for Suspension of Payments,4 docketed as SEC Case No. 02423, in which it stated that:

[Impact Corporation] has been and still is engaged in the business of manufacturing aluminum tube containers x x x.

x x x x

In brief, it is an on-going, viable, and profitable enterprise.

On 8 May 1985, the union of Impact Corporation filed a Notice of Strike with the Ministry of Labor which was followed by a declaration of strike on 28 July 1985. Subsequently, the Ministry of Labor certified the labor dispute for compulsory arbitration to the National Labor Relations Commission (NLRC) in an Order5 dated 25 August 1985. The Ministry of Labor, in the same Order, noted the inability of Impact Corporation to pay wages, 13th month pay, and SSS remittances due to cash liquidity problems. A portion of the order reads:

On the claims of unpaid wages, unpaid 13th month pay and non-remittance of loan amortization and SSS premiums, we are for directing the company to pay the same to the workers and to remit loan amortizations and SSS premiums previously deducted from their wages to the Social Security System. Such claims were never contested by the company both during the hearing below and in our office. In fact, such claims were admitted by the company although it alleged cash liquidity as the main reason for such non-payment.

WHEREFORE, the dispute at Impact Corporation is hereby certified to the National Labor Relations Commission for compulsory arbitration in accordance with Article 264 (g) of the Labor Code, as amended.

x x x x

The company is directed to pay all the entitled workers unpaid wages, unpaid 13th month pay and to remit to the Social Security System loan amortizations and SSS premiums previously deducted from the wages of the workers.6

On 3 July 1985, the Social Security System (SSS), through its Legal and Collection Division (LCD), filed a case before the SSC for the collection of unremitted SSS premium contributions withheld by Impact Corporation from its employees. The case which impleaded Impact Corporation as respondent was docketed as SSC Case No. 10048.7

Impact Corporation was compulsorily covered by the SSS as an employer effective 15 July 1963 and was assigned Employer I.D. No. 03-2745100-21.

In answer to the allegations raised in SSC Case No. 10048, Impact Corporation, through its then Vice President Ricardo de Leon, explained in a letter dated 18 July 1985 that it had been confronted with strikes in 1984 and layoffs were effected thereafter. It further argued that the P402,988.93 is erroneous. It explained among other things, that its operations had been suspended and that it was waiting for the resolution on its Petition for Suspension of Payments by the SEC under SEC Case No. 2423. Despite due notice, the corporation failed to appear at the hearings. The SSC ordered the investigating team of the SSS to determine if it can still file its claim for unpaid premium contributions against the corporation under the Petition for Suspension of Payments.

In the meantime, the Petition for Suspension of Payments was dismissed which was pending before the SEC in an Order8 dated 12 December 1985. Impact Corporation resumed operations but only for its winding up and dissolution.9 Due to Impact Corporation’s liability and cash flow problems, all of its assets, namely, its machineries, equipment, office furniture and fixtures, were sold to scrap dealers to answer for its arrears in rentals.

On 1 December 1995, the SSS-LCD filed an amended Petition10 in SSC Case No. 10048 wherein the directors of Impact Corporation were directly impleaded as respondents, namely: Eduardo de Leon, Ricardo de Leon,11 Pacita Fernandez, Consuelo Villanueva, and petitioner. The amounts sought to be collected totaled P453,845.78 andP10,856.85 for the periods August 1980 to December 1984 and August 1981 to July 1984, respectively, and the penalties for late remittance at the rate of 3% per month

from the date the contributions fell due until fully paid pursuant to Section 22(a) of the Social Security Law,12 as amended, in the amounts of P49,941.67 andP2,474,662.82.

Period Unremitted Amount Penalties(3% Interest Per Month)

Total

August 1980 to December 1984 P 453,845.78 P49, 941.67 503,787.45

August 1981 to July 1984 P 10,856.85 P2, 474, 662.82 2,485,519.67

Summonses were not served upon Eduardo de Leon, Pacita Fernandez, and Consuelo Villanueva, their whereabouts unknown. They were all later determined to be deceased. On the other hand, due to failure to file his responsive pleading, Ricardo de Leon was declared in default.

Petitioner filed with the SSC a Motion to Dismiss13 on grounds of prescription, lack of cause of action and cessation of business, but the Motion was denied for lack of merit.14 In her Answer with Counterclaim15 dated 20 May 1999, petitioner averred that Impact Corporation had ceased operations in 1980. In her defense, she insisted that she was a mere director without managerial functions, and she ceased to be such in 1982. Even as a stockholder and director of Impact Corporation, petitioner contended that she cannot be made personally liable for the corporate obligations of Impact Corporation since her liability extended only up to the extent of her unpaid subscription, of which she had none since her subscription was already fully paid. The petitioner raised the same arguments in her Position Paper. 16

On 23 January 1998, Ricardo de Leon died following the death, too, of Pacita Fernandez died on 7 February 2000. In an Order dated 11 April 2000, the SSC directed the System to check if Impact Corporation had leviable properties to which the investigating team of respondent SSS manifested that the Impact Corporation had already been dissolved and its assets disposed of.17

In a Resolution dated 28 May 2003, the Social Security Commission ruled in favor of SSS and declared petitioner liable to pay the unremitted contributions and penalties, stating the following:

WHEREFORE, premises considered, this Commission finds, and so holds, that respondents Impact Corporation and/or Immaculada L. Garcia, as director and responsible officer of the said corporation, is liable to pay the SSS the amounts of P442,988.93, representing the unpaid SS contributions of their employees for the period August 1980 to December 1984, not inclusive, and P10,856.85, representing the balance of the unpaid SS contributions in favor of Donato Campos, Jaime Mascarenas, Bonifacio Franco and Romeo Fullon for the period August 1980 to December 1984, not inclusive, as well as the 3% per month penalty imposed thereon for late payment in the amounts of P3,194,548.63 and P78,441.33, respectively, computed as of April 30, 2003. This is without prejudice to the right of the SSS to collect the penalties accruing after April 30, 2003 and to institute other appropriate actions against the respondent corporation and/or its responsible officers.

Should the respondents pay their liability for unpaid SSS contributions within sixty (60) days from receipt of a copy of this Resolution, the 3% per month penalty for late payment thereof shall be deemed condoned pursuant to SSC Res. No. 397-S.97, as amended by SSC Res. Nos. 112-S.98 and 982-S.99, implementing the provision on condonation of penalty under Section 30 of R.A. No. 8282.

In the event the respondents fail to pay their liabilities within the aforestated period, let a writ of execution be issued, pursuant to Section 22 (c) [2] of the SS Law, as amended, for the satisfaction of their liabilities to the SSS.18

Petitioner filed a Motion for Reconsideration19 of the afore-quoted Decision but it was denied for lack of merit in an Order20 dated 4 August 2004, thus:

Nowhere in the questioned Resolution dated May 28, 2003 is it stated that the other directors of the defunct Impact Corporation are absolved from their contribution and penalty liabilities to the SSS. It is certainly farthest from the intention of the petitioner SSS or this Commission to pin the entire liability of Impact Corporation on movant Immaculada L. Garcia, to the exclusion of the directors of the corporation namely: Eduardo de Leon, Ricardo de Leon, Pacita Fernandez and Conzuelo Villanueva, who were all impleaded as parties-respondents in this case.

The case record shows that there was failure of service of summonses upon respondents Eduardo de Leon, Pacita Fernandez and Conzuelo Villanueva, who are all deceased, for the reason that their whereabouts are unknown. Moreover, neither the legal heirs nor the estate of the defaulted respondent Ricardo de Leon were substituted as parties-respondents in this case when he died on January 23, 1998. Needless to state, the Commission did not acquire jurisdiction over the persons or estates of the other directors of Impact Corporation, hence, it could not validly render any pronouncement as to their liabilities in this case.

Furthermore, the movant cannot raise in a motion for reconsideration the defense that she was no longer a director of Impact Corporation in 1982, when she was allegedly eased out by the managing directors of Impact Corporation as purportedly shown in the Deed of Sale and Assignment of Shares of Stock dated January 22, 1982. This defense was neither pleaded in her Motion to Dismiss dated January 17, 1996 nor in her Answer with Counterclaim dated May 18, 1999 and is, thus, deemed waived pursuant to Section 1, Rule 9 of the 1997 Rules of Civil Procedure, which has suppletory application to the Revised Rules of Procedure of the Commission.

Finally, this Commission has already ruled in the Order dated April 27, 1999 that since the original Petition was filed by the SSS on July 3, 1985, and was merely amended on December 1, 1995 to implead the responsible officers of Impact Corporation, without changing its causes of action, the same was instituted well within the 20-year prescriptive period provided under Section 22 (b) of the SS Law, as amended, considering that the contribution delinquency assessment covered the period August 1980 to December 1984.

In view thereof, the instant Motion for Reconsideration is hereby denied for lack of merit.

Petitioner elevated her case to the Court of Appeals via a Petition for Review. Respondent SSS filed its Comment dated 20 January 2005, and petitioner submitted her Reply thereto on 4 April 2005.

The Court of Appeals, applying Section 28(f) of the Social Security Law,21 again ruled against petitioner. It dismissed the petitioner’s Petition in a Decision dated 2 June 2005, the dispositive portion of which reads:

WHEREFORE, premises considered, the petition is DISMISSED for lack of merit. The assailed Resolution dated 28 May 2003 and the Order dated 4 August 2004 of the Social Security Commission are AFFIRMED in toto.22

Aggrieved, petitioner filed a Motion for Reconsideration of the appellate court’s Decision but her Motion was denied in a Resolution dated 8 December 2005.

Hence, the instant Petition in which petitioner insists that the Court of Appeals committed grave error in holding her solely liable for the collected but unremitted SSS premium contributions and the consequent late penalty payments due thereon. Petitioner anchors her Petition on the following arguments:

I. SECTION 28(F) OF THE SSS LAW PROVIDES THAT A MANAGING HEAD, DIRECTOR OR PARTNER IS LIABLE ONLY FOR THE PENALTIES OF THE EMPLOYER CORPORATION AND NOT FOR UNPAID SSS CONTRIBUTIONS OF THE EMPLOYER CORPORATION.

II. UNDER THE SSS LAW, IT IS THE MANAGING HEADS, DIRECTORS OR PARTNERS WHO SHALL BE LIABLE TOGETHER WITH THE CORPORATION. IN THIS CASE, PETITIONER HAS CEASED TO BE A STOCKHOLDER OF IMPACT CORPORATION IN 1982. EVEN WHILE SHE WAS A STOCKHOLDER, SHE NEVER PARTICIPATED IN THE DAILY OPERATIONS OF IMPACT CORPORATION.

III. UNDER SECTION 31 OF THE CORPORATION CODE, ONLY DIRECTORS, TRUSTEES OR OFFICERS WHO PARTICIPATE IN UNLAWFUL ACTS OR ARE GUILTY OF GROSS NEGLIGENCE AND BAD FAITH SHALL BE PERSONALLY LIABLE. OTHERWISE, BEING A MERE STOCKHOLDER, SHE IS LIABLE ONLY TO THE EXTENT OF HER SUBSCRIPTION.

IV. IMPACT CORPORATION SUFFERED IRREVERSIBLE ECONOMIC LOSSES, EVENTS WHICH WERE NEITHER DESIRED NOR CAUSED BY ANY ACT OF THE PETITIONER. THUS, BY REASON OF FORTUITOUS EVENTS, THE PETITIONER SHOULD BE ABSOLVED FROM LIABILITY.

V. RESPONDENT SOCIAL SECURITY SYSTEM FAILED MISERABLY IN EXERTING EFFORTS TO ACQUIRE JURISDICTION OVER THE LEVIABLE ASSETS OF IMPACT CORPORATION, PERSON/S AND/OR ESTATE/S OF THE OTHER DIRECTORS OR OFFICERS OF IMPACT CORPORATION.

VI. THE HONORABLE COMMISSION SERIOUSLY ERRED IN NOT RENDERING A JUDGMENT BY DEFAULT AGAINST THE DIRECTORS UPON WHOM IT ACQUIRED JURISDICTION.

Based on the foregoing, petitioner prays that the Decision dated 2 June 2005 and the Resolution dated 8 December 2005 of the Court of Appeals be reversed and set aside, and a new one be rendered absolving her of any and all liabilities under the Social Security Law.

In sum, the core issue to be resolved in this case is whether or not petitioner, as the only surviving director of Impact Corporation, can be made solely liable for the corporate obligations of Impact Corporation pertaining to unremitted SSS premium contributions and penalties therefore.

As a covered employer under the Social Security Law, it is the obligation of Impact Corporation under the provisions of Sections 18, 19 and 22 thereof, as amended, to deduct from its duly covered employee’s monthly salaries their shares as premium contributions and remit the same to the SSS, together with the employer’s shares of the contributions to the petitioner, for and in their behalf.

From all indications, the corporation has already been dissolved. Respondents are now going after petitioner who is the only surviving director of Impact Corporation.

A cursory review of the alleged grave errors of law committed by the Court of Appeals above reveals there seems to be no dispute as to the assessed liability of Impact Corporation for the unremitted SSS premiums of its employees for the period January 1980 to December 1984.

There is also no dispute as to the fact that the employees’ SSS premium contributions have been deducted from their salaries by Impact Corporation.

Petitioner in assailing the Court of Appeals Decision, distinguishes the penalties from the unremitted or unpaid SSS premium contributions. She points out that although the appellate court is of the opinion that the concerned officers of an employer corporation are liable for the penalties for non-remittance of premiums, it still affirmed the SSC Resolution holding petitioner liable for the unpaid SSS premium contributions in addition to the penalties.

Petitioner avers that under the aforesaid provision, the liability does not include liability for the unremitted SSS premium contributions.

Petitioner’s argument is ridiculous. The interpretation petitioner would like us to adopt finds no support in law or in jurisprudence. While the Court of Appeals Decision provided that Section 28(f) refers to the liabilities pertaining to penalty for the non-remittance of SSS employee contributions, holding that it is distinct from the amount of the supposed SSS remittances, petitioner mistakenly concluded that Section 28(f) is applicable only to penalties and not to the liability of the employer for the unremitted premium contributions. Clearly, a simplistic interpretation of the law is untenable. It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment.23 The liability imposed as contemplated under the foregoing Section 28(f) of the Social Security Law does not preclude the liability for the unremitted amount. Relevant to Section 28(f) is Section 22 of the same law.

SEC. 22. Remittance of Contributions. -- (a) The contributions imposed in the preceding Section shall be remitted to the SSS within the first ten (10) days of each calendar month following the month for which they are applicable or within such time as the Commission may prescribe. Every employer required to deduct and to remit such contributions shall be liable for their payment and if any contribution is not paid to the SSS as herein prescribed, he shall pay besides the contribution a penalty thereon of three percent (3%) per month from the date the contribution falls due until paid. If deemed expedient and advisable by the Commission, the collection and remittance of contributions shall be made quarterly or semi-annually in advance, the contributions payable by the employees to be advanced by their respective employers: Provided, That upon separation of an employee, any contribution so paid in advance but not due shall be credited or refunded to his employer.

Under Section 22(a), every employer is required to deduct and remit such contributions penalty refers to the 3% penalty that automatically attaches to the delayed SSS premium contributions. The spirit, rather than the letter of a law determines construction of a provision of law. 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.24 Nowhere in the provision or in the Decision can it be inferred that the persons liable are absolved from paying the unremitted premium contributions.

Elementary is the rule that when laws or rules are clear, it is incumbent upon the judge to apply them regardless of personal belief or predilections - when the law is unambiguous and unequivocal, application not interpretation thereof is imperative.25 However, where the language of a statute is vague and ambiguous, an interpretation thereof is resorted to. An interpretation thereof is necessary in instances where a literal interpretation would be either impossible or absurd or would lead to an injustice. A law is deemed ambiguous when it is capable of being understood by reasonably well-informed persons in either of two or more senses.26 The fact that a law admits of different interpretations is the best evidence that it is vague and ambiguous.27 In the instant case, petitioner interprets Section 28(f) of the Social Security Law as applicable only to penalties and not to the liability of the employer for the unremitted premium contributions. Respondents present a more logical interpretation that is consistent with the provisions as a whole and with the legislative intent behind the Social Security Law.

This Court cannot be made to accept an interpretation that would defeat the intent of the law and its legislators.28

Petitioner also challenges the finding of the Court of Appeals that under Section 28(f) of the Social Security Law, a mere director or officer of an employer corporation, and not necessarily a "managing" director or officer, can be held liable for the unpaid SSS premium contributions.

Section 28(f) of the Social Security Law provides the following:

(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense.

This Court agrees in petitioner’s observation that the SSS did not even deny nor rebut the claim that petitioner was not the "managing head" of Impact Corporation. However, the Court of Appeals rightly held that petitioner, as a director of Impact Corporation, is among those officers covered by Section 28(f) of the Social Security Law.

Petitioner invokes the rule in statutory construction called ejusdem generic; that is, where general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same kind or class as those specifically mentioned. According to petitioner, to be held liable under Section 28(f) of the Social Security Law, one must be the "managing head," "managing director," or "managing partner." This Court though finds no need to resort to statutory construction. Section 28(f) of the Social Security Law imposes penalty on:

(1) the managing head;

(2) directors; or

(3) partners, for offenses committed by a juridical person

The said provision does not qualify that the director or partner should likewise be a "managing director" or "managing partner."29 The law is clear and unambiguous.

Petitioner nonetheless raises the defense that under Section 31 of the Corporation Code, only directors, trustees or officers who participate in unlawful acts or are guilty of gross negligence and bad faith shall be personally liable, and that being a mere stockholder, she is liable only to the extent of her subscription.

Section 31 of the Corporation Code, stipulating on the liability of directors, trustees, or officers, provides:

SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.

Basic is the rule that a corporation is invested by law with a personality separate and distinct from that of the persons composing it as well as from that of any other legal entity to which it may be related. A corporation is a juridical entity with legal personality separate and distinct from those acting for and in its behalf and, in general, from the people comprising it. Following this, the general rule applied is that obligations incurred by the corporation, acting through its directors, officers and employees, are its sole liabilities.30 A director, officer, and employee of a corporation are generally not held personally liable for obligations incurred by the corporation.

Being a mere fiction of law, however, there are peculiar situations or valid grounds that can exist to warrant the disregard of its independent being and the lifting of the corporate veil. This situation might arise when a corporation is used to evade a just and due obligation or to justify a wrong, to shield or perpetrate fraud, to carry out other similar unjustifiable aims or intentions, or as a subterfuge to commit injustice and so circumvent the law.31 Thus, Section 31 of the Corporation Law provides:

Taking a cue from the above provision, a corporate director, a trustee or an officer, may be held solidarily liable with the corporation in the following instances:

1. When directors and trustees or, in appropriate cases, the officers of a corporation--

(a) vote for or assent to patently unlawful acts of the corporation;

(b) act in bad faith or with gross negligence in directing the corporate affairs;

(c) are guilty of conflict of interest to the prejudice of the corporation, its stockholders or members, and other persons.

2. When a director or officer has consented to the issuance of watered stocks or who, having knowledge thereof, did not forthwith file with the corporate secretary his written objection thereto.

3. When a director, trustee or officer has contractually agreed or stipulated to hold himself personally and solidarily liable with the Corporation.

4. When a director, trustee or officer is made, by specific provision of law, personally liable for his corporate action. 32

The aforesaid provision states:

SEC. 31. Liability of directors, trustees or officers. - Directors or trustees who willfully and knowingly vote for or assent to patently unlawful acts of the corporation or who are guilty of gross negligence or bad faith in directing the affairs of the corporation or acquire any personal or pecuniary interest in conflict with their duty as such directors, or trustees shall be liable jointly and severally for all damages resulting therefrom suffered by the corporation, its stockholders or members and other persons.

The situation of petitioner, as a director of Impact Corporation when said corporation failed to remit the SSS premium contributions falls exactly under the fourth situation. Section 28(f) of the Social Security Law imposes a civil liability for any act or omission pertaining to the violation of the Social Security Law, to wit:

(f) If the act or omission penalized by this Act be committed by an association, partnership, corporation or any other institution, its managing head, directors or partners shall be liable to the penalties provided in this Act for the offense.

In fact, criminal actions for violations of the Social Security Law are also provided under the Revised Penal Code. The Social Security Law provides, in Section 28 thereof, to wit:

(h) Any employer who, after deducting the monthly contributions or loan amortizations from his employees’ compensation, fails to remit the said deductions to the SSS within thirty (30) days from the date they became due shall be presumed to have misappropriated such contributions or loan amortizations and shall suffer the penalties provided in Article Three hundred fifteen of the Revised Penal Code.

(i) Criminal action arising from a violation of the provisions of this Act may be commenced by the SSS or the employee concerned either under this Act or in appropriate cases under the Revised Penal Code: x x x.

Respondents would like this Court to apply another exception to the rule that the persons comprising a corporation are not personally liable for acts done in the performance of their duties.

The Court of Appeals in the appealed Decision stated:

Anent the unpaid SSS contributions of Impact Corporation’s employees, the officers of a corporation are liable in behalf of a corporation, which no longer exists or has ceased operations. Although as a rule, the officers and members of a corporation are not personally liable for acts done in performance of their duties, this rule admits of exception, one of which is when the employer corporation is no longer existing and is unable to satisfy the judgment in favor of the employee, the officers should be held liable for acting on behalf of the corporation. Following the foregoing pronouncement, petitioner, as one of the directors of Impact Corporation, together with the other directors of the defunct corporation, are liable for the unpaid SSS contributions of their employees.33

On the other hand, the SSC, in its Resolution, presented this discussion:

Although as a rule, the officers and members of a corporation are not personally liable for acts done in the performance of their duties, this rule admits of exceptions, one of which is when the employer corporation is no longer existing and is unable to satisfy the judgment in favor of the employee, the officers should be held liable for acting on behalf of the corporation. x x x.34

The rationale cited by respondents in the two preceding paragraphs need not have been applied because the personal liability for the unremitted SSS premium contributions and the late penalty thereof attaches to the petitioner as a director of Impact Corporation during the period the amounts became due and demandable by virtue of a direct provision of law.

Petitioner’s defense that since Impact Corporation suffered irreversible economic losses, and by reason of fortuitous events, she should be absolved from liability, is also untenable. The evidence adduced totally belies this claim. A reference to the copy of the Petition for Suspension of Payments filed by Impact Corporation on 18 March 1983 before the SEC contained an admission that:

"[I]t has been and still is engaged in business" and "has been and still is engaged in the business of manufacturing aluminum tube containers" and "in brief, it is an on-going, viable, and profitable enterprise" which has "sufficient assets" and "actual and potential income-generation capabilities."

The foregoing document negates petitioner’s assertion and supports the contention that during the period involved Impact Corporation was still engaged in business and was an ongoing, viable, profitable enterprise. In fact, the latest SSS form RIA submitted by Impact Corporation is dated 7 May 1984. The assessed SSS premium contributions and penalty are obligations imposed upon Impact Corporation by law, and should have been remitted to the SSS within the first 10 days of each calendar month following the month for which they are applicable or within such time as the SSC prescribes.35

This Court also notes the evident failure on the part of SSS to issue a judgment in default against Ricardo de Leon, who was the vice-president and officer of the corporation, upon his non-filing of a responsive pleading after summons was served on him. As can be gleaned from Section 11 of the SSS Revised Rules of Procedure, the Commissioner is mandated to render a decision either granting or denying the petition. Under the aforesaid provision, if respondent fails to answer within the time prescribed, the Hearing Commissioner may, upon motion of petitioner, or motu proprio, declare respondent in default and proceed to receive petitioner’s evidence ex parteand thereafter recommend to the Commission either the granting or denial of the petition as the evidence may warrant.36

On a final note, this Court sees it proper to quote verbatim respondents’ prefatory statement in their Comment:

The Social Security System is a government agency imbued with a salutary purpose to carry out the policy of the State to establish, develop, promote and perfect a sound and viable tax exempt social security system suitable to the needs of the people throughout the Philippines which shall promote social justice and provide meaningful protection to members and their beneficiaries against the hazards of disability, sickness, maternity, old-age, death and other contingencies resulting in loss of income or financial burden.

The soundness and viability of the funds of the SSS in turn depends on the contributions of its covered employee and employer members, which it invests in order to deliver the basic social benefits and privileges to its members. The entitlement to and amount of benefits and privileges of the covered members are contribution-based. Both the soundness and viability of the funds of the SSS as well as the entitlement and amount of benefits and privileges of its members are adversely affected to a great extent by the non-remittance of the much-needed contributions.37

The sympathy of the law on social security is toward its beneficiaries. This Court will not turn a blind eye on the perpetration of injustice. This Court cannot and will not allow itself to be made an instrument nor be privy to any attempt at the perpetration of injustice.

Following the doctrine laid down in Laguna Transportation Co., Inc. v. Social Security System,38 this Court rules that although a corporation once formed is conferred a juridical personality separate and distinct from the persons comprising it, it is but a legal fiction introduced for purposes of convenience and to subserve the ends of justice. The concept cannot be extended to a point beyond its reasons and policy, and when invoked in support of an end subversive of this policy, will be disregarded by the courts.

WHEREFORE, pursuant to the foregoing, the Decision of the Court of Appeals dated 2 June 2005 in CA-G.R. SP No. 85923 is hereby AFFIRMED WITH FINALITY. Petitioner Immaculada L. Garcia, as sole surviving director of Impact Corporation is hereby ORDERED to pay for the collected and unremitted SSS contributions of Impact Corporation. The case is REMANDED to the SSS for computation of the exact amount and collection thereof.

SO ORDERED.

Ynares-Santiago, Chairperson, Austria-Martinez, Nachura, Reyes, JJ., concur

August 22, 1968

G.R. No. 24116-17CEBU PORTLAND CEMENT COMPANY, plaintiff-appellant,vs.MUNICIPALITY OF NAGA, CEBU, ET AL., defendants-appellees.

Tomas P. Matic, Jr. and Lorenzo R. Mosqueda for plaintiff-appellant.Fernan, Osmeña and Bellaflor for defendants-appellees.

Fernando, J.:

In two separate actions, plaintiff-appellant Cebu Portland Cement Company sought to test the validity of the distraint and thereafter the sale at public auction by the principal defendant-appellee, Municipality of Naga, Cebu, of 100,000 bags of cement for the purpose of satisfying its alleged deficiency in the payment of the municipal license tax for 1960, municipal license tax for 1961 as well as the penalty, all in the total sum of P204,300.00. The lower court rendered a joint decision sustaining the validity of the action taken by defendant-appellee Municipality of Naga. The case is now before us on appeal. We affirm.

According to the appealed decision: "From all the evidence, mostly documentary, adduced during the hearing the following facts have been established. The efforts of the defendant Treasurer to collect from the plaintiff the municipal license tax imposed by Amended Ordinance No. 21. Series of 1959 on cement factories located within the Municipality of Naga, Cebu, have met with rebuff time and again. The demands made on the taxpayer ... have not been entirely successful. Finally, the defendant Treasurer decided on June 26, 1961 to avail of the Civil remedies provided for under Section 2304 of the Revised Administrative Code and gave the plaintiff a period of ten days from receipt thereof within which to settle the account, computed as follows ...: Deficiency Municipal License Tax for 1960 — P80,250.00; Municipal License Tax for 1961 — P90,000.00; and 20% Penalty — P34,050.00, stating in exasperation, "This is our last recourse as we had exhausted all efforts for an amicable solution of our problem." "1

It was further shown: "On July 6, 1961, at 11:00 A.M., the defendant Treasurer notified the Plant Manager of the plaintiff that he was "distraining 100,000 bags of Apo cement in satisfaction of your delinquency in municipal license taxes in the total amount of P204,300.00" ... This notice was received by the acting officer in charge of the plaintiff's plant, Vicente T. Garaygay, according to his own admission. At first, he was not in accord with the said letter, asking the defendant Treasurer for time to study the same, but in the afternoon he [acknowledged the] distraint ..." 2

As was noted in the decision, the defendant Treasurer in turn "signed the receipt for goods, articles or effects seized under authority of Section 2304 of the Revised Administrative Code, certifying that he has constructively distrained on July 6, 1961 from the Cebu Portland Cement Company at its plant at Tina-an, Naga, Cebu, 100,000 bags of Apo cement in tanks, and that "the said articles or goods will be sold at public auction to the highest bidder on July 27, 1961, and the proceeds thereof will be utilized in part satisfaction of the account of the said company in municipal licenses and penalties in the total amount of P204,300.00 due the Municipality of Naga Province of Cebu" ..."3

The lower court likewise found as a fact that on the same day, July 6, 1961, the municipal treasurer posted the notice of sale to the effect that pursuant to the provisions of Section 2305 of the Revised Administrative Code, he would sell at public auction for cash to the highest bidder at the main entrance of the municipal building of the Municipality of Naga, Province of Cebu, Philippines on the 27th day of July, 1961, at 9 o'clock in the morning, the property seized and distrained or levied upon from the Cebu Portland Cement Company in satisfaction of the municipal license taxes and penalties in the amount of P204,300.00, specifying that what was to be sold was 100,000 bags of Apo cement.4 No sale, as thus announced, was held on July 27, 1961. It was likewise stated in the appealed decision that there was stipulation by the parties to this effect: "1. The auction sale took place on January 30, 1962, ..."5

In this appeal from the above joint decision, plaintiff-appellant Cebu Portland Cement Company upholds the view that the distraint of the 100,000 bags of cement as well as the sale at public auction thereafter made ran counter to the law. As earlier noted, we do not see it that way.

1. On the validity of the distraint — In the first two errors assigned, plaintiff-appellant submits as illegal the distraint of 100,000

bags of cement made on July 6, 1961. Its contention is premised on the fact that in the letter of defendant-appellee dated June 26, 1961, requiring plaintiff-appellant to settle its account of P204,300.00, it was given a period of 10 days from receipt within which it could pay, failure to do so being the occasion for the distraint of its property. It is now alleged that the 10-day period of grace was not allowed to lapse, the distraint having taken place on July 6, 1961.

It suffices to answer such a contention by referring to the explicit language of the law. According to the Revised Administrative Code: "The remedy by distraint shall proceed as follows: Upon the failure of the person owing any municipal tax or revenue to pay the same, at the time required, the municipal treasurer may seize and distrain any personal property belonging to such person or any property subject to the tax lien, in sufficient quantity to satisfy the tax or charge in question, together with any increment thereto incident to delinquency, and the expenses of the distraint."6

The clear and explicit language of the law leaves no room for doubt. The municipal treasurer "may seize and distrain any personal property" of the individual or entity subject to the tax upon failure "to pay the same, at the time required ..." There was such a failure on the part of plaintiff-appellant to pay the municipal tax at the time required. The power of the municipal treasurer in accordance with the above provision therefore came into play.

Whatever might have been set forth in the letter of the municipal treasurer could not change or amend the law it has to be enforced as written. That was what the lower court did. What was done then cannot be rightfully looked upon as a failure to abide by what the statutory provision requires. Time and time again, it has been repeatedly declared by this Court that where the law speaks in clear and categorical language, there is no room for interpretation. There is only room for application. That was what occurred in this case.7

2. On the validity of the auction sale — The validity of the auction sale held on January 30, 1962 is challenged in the next two errors assigned as allegedly committed by the lower court. Plaintiff-appellant's argument is predicated on the fact that it was not until January 16, 1962 that it was notified that the public auction sale was to take place on January 29, 1962. It is its view that under the Revised Administrative Code8 the sale of the distrained property cannot take place "less than twenty days after notice to the owner or possessor of the property [distrained] ... and the publication or posting of such notice."

Why such a contention could not prosper is explained clearly by the lower court in the appealed decision. Thus: "With respect to the claim that the auction sale held on January 30, 1962 pursuant to the distraint was null and void for being contrary to law because not more than twenty days have elapsed from the date of notice, it is believed that the defendant Municipality of Naga and Municipal Treasurer of Naga have substantially complied with the requirements provided for by Section 2305 of the Revised Administrative Code. From the time that the plaintiff was first notified of the distraint on July 6, 1961 up to the date of the sale on January 30, 1962, certainly, more than twenty days have elapsed. If the sale did not take place, as advertised, on July 27, 1961, but only on January 30, 1962, it was due to the requests for deferment made by the plaintiff which unduly delayed the proceedings for collection of the tax, and the said taxpayer should not be allowed now to complain that the required period has not yet elapsed when the intention of the tax collector was already well-publicized for many months."9 The reasonableness of the above observation of the lower court cannot be disputed. Under the circumstances, the allegation that there was no observance of the twenty-day period hardly carries conviction.

The point is further made that the auction sale took place not on January 29, 1962, as stated in the notice of sale, but on the next day, January 30, 1962. According to plaintiff-appellant: "On this score alone, the sale ..., was illegal as it was not made on the time stated in the notice." 10

There is no basis to sustain such a plea as the finding of the lower court is otherwise. Thus: "On January 16, 1962, the defendant Treasurer informed Garaygay that he would cause the readvertisement for sale at public auction of the 100,000 bags of Apo cement which were under constructive distraint ... On January 19, 1962, the said defendant issued the corresponding notice of sale, which fixed January 30, 1962, at 10:00 A.M., as the date of sale, posting the said notice in public places and delivering copies thereof to the interested parties in the previous notice, ... Ultimately, the bidding was conducted on that day, January 30, 1962, with the representatives of the Provincial Auditor and Provincial Treasurer present. Only two bidders submitted sealed bids. After the bidding, the defendant-treasurer informed the plaintiff that an award was given to the winning bidder, ..." 11

This being a direct appeal to us, plaintiff-appellant must be deemed to have accepted as conclusive what the lower court found as established by the evidence, only questions of law being brought to us for review. It is the established rule that when a party appeals directly to this Court, he is deemed to have waived the right to dispute any finding of fact made by the court below. 12

WHEREFORE, the decision of the lower court dated 23, 1964, is affirmed in toto. With costs against plaintiff-appellant SbHqJ.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur.

Ambiguous Vs VagueAugust 31, 1988

G.R. No. L-44143THE PEOPLE OF THE PHILIPPINES, plaintiff,vs.EUSEBIO NAZARIO, accused-appellant.

The Solicitor General for plaintiff-appellee.Teofilo Ragodon for accused-appellant.

Sarmiento, J.:

The petitioner was charged with violation of certain municipal ordinances of the municipal council of Pagbilao, in Quezon province. By way of confession and avoidance, the petitioner would admit having committed the acts charged but would claim that the ordinances are unconstitutional, or, assuming their constitutionality, that they do not apply to him in any event.

The facts are not disputed:

This defendant is charged of the crime of Violation of Municipal Ordinance in an information filed by the provincial Fiscal, dated October 9, 1968, as follows:

That in the years 1964, 1965 and 1966, in the Municipality of Pagbilao, Province of Quezon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, being then the owner and operator of a fishpond situated in the barrio of Pinagbayanan, of said municipality, did then and there willfully, unlawfully and feloniously refuse and fail to pay the municipal taxes in the total amount of THREE HUNDRED SIXTY TWO PESOS AND SIXTY TWO CENTAVOS (P362.62), required of him as fishpond operator as provided for under Ordinance No. 4, series of 1955, as amended, inspite of repeated demands made upon him by the Municipal Treasurer of Pagbilao, Quezon, to pay the same.

Contrary to law.

For the prosecution the following witnesses testified in substance as follows;

MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon —

In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused as I worked in his fishpond in 1962 to 1964. The fishpond of Nazario is at Pinagbayanan, Pagbilao, Quezon. I worked in the clearing of the fishpond, the construction of the dikes and the catching of fish 3cFKuohv8.

On cross-examination, this witness declared:

I worked with the accused up to March 1964.

NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of Pinagbayanan, Pagbilao, Quezon —

I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know the accused since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao, Quezon. He still operates the fishpond up to the present and I know this fact as I am the barrio captain of Pinagbayanan mMir.

On cross-examination, this witness declared:

I came to know the accused when he first operated his fishpond since 1959.

On re-direct examination, this witness declared:

I was present during the catching of fish in 1967 and the accused was there.

On re-cross examination, this witness declared:

I do not remember the month in 1962 when the accused caught fish.

RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon, married —

As Municipal Treasurer I am in charge of tax collection. I know the accused even before I was Municipal Treasurer of Pagbilao. I have written the accused a letter asking him to pay his taxes (Exhibit B). Said letter was received by the accused as per registry return receipt, Exhibit B-1. The letter demanded for payment of P362.00, more or less, by way of taxes which he did not pay up to the present. The former Treasurer, Ceferino Caparros, also wrote a letter of demand to the accused (Exhibit C). On June 28, 1967, I sent a letter to the Fishery Commission (Exhibit D), requesting information if accused paid taxes with that office. The Commission sent me a certificate (Exhibits D-1, D-2 & D-3). The accused had a fishpond lease agreement. The taxes unpaid were for the years 1964, 1965 and 1966.

On cross-examination, this witness declared:

I have demanded the taxes for 38.10 hectares.

On question of the court, this witness declared:

What I was collecting from the accused is the fee on fishpond operation, not rental.

The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C, D, D-1, D-2, D-3, E, F, F-1 and the same were admitted by the court, except Exhibits D, D-1, D-2 and D-3 which were not admitted for being immaterial.

For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner and general manager of the ZIP Manufacturing Enterprises and resident of 4801 Old Sta. Mesa, Sampaloc, Manila, declared in substance as follows:

I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at Manila or at San Juan. In 1964, 1965 and 1966, I was living in Manila and my business is in Manila and my family lives at Manila. I never resided at Pagbilao, Quezon. I do not own a house at Pagbilao. I am a lessee of a fishpond located at Pagbilao, Quezon, and I have a lease agreement to that effect with the Philippine Fisheries Commission marked as Exhibit 1. In 1964, 1965 and 1966, the contract of lease, Exhibit 1, was still existing and enforceable. The Ordinances Nos. 4, 15 and 12, series of 1955, 1965 and 1966, were translated into English by the Institute of National Language to better understand the ordinances. There were exchange of letters between me and the Municipal Treasurer of Pagbilao regarding the payment of the taxes on my leased fishpond situated at Pagbilao. There was a letter of demand for the payment of the taxes by the treasurer (Exhibit 3) which I received by mail at my residence at Manila. I answered the letter of demand, Exhibit 3, with Exhibit 3-A. I requested an inspection of my fishpond to determine its condition as it was not then in operation. The Municipal Treasurer Alvarez went there once in 1967 and he found that it was destroyed by the typhoon and there were pictures taken marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of demand, Exhibit 5, and I answered the same (Exhibit 5-A). I copied my reference quoted in Exhibit 5-A from Administrative Order No. 6, Exhibit 6. I received another letter of demand from Tomas Ornedo, Acting Municipal Treasurer of Pagbilao, dated February 16, 1966, Exhibit 7, and I answered the same with the letter marked as Exhibit 7-A, dated February 26, 1966. I received another letter of demand from Treasurer Alvarez of Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In 1964, I went to Treasurer Caparros to ask for an application for license tax and he said none and he told me just to pay my taxes. I did not pay because up to now I do not know whether I am covered by the Ordinance or not. The letters of demand asked me to pay different amounts for taxes for the fishpond. Because under Sec. 2309 of the Revised Administrative Code, municipal taxes lapse if not paid and they are collecting on a lapsed ordinance. Because under the Tax Code, fishermen are exempted from percentage tax and privilege tax. There is no law empowering the municipality to pass ordinance taxing fishpond operators.

The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4-C, 5, 5-A, 6, 6-A, 6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the court.

From their evidence the prosecution would want to show to the court that the accused, as lessee or operator of a fishpond in the municipality of Pagbilao, refused, and still refuses, to pay the municipal taxes for the years 1964, 1965 and 1966, in violation of Municipal Ordinance No. 4, series of 1955, as amended by Municipal Ordinance No. 15, series of 1965, and finally amended by Municipal Ordinance No. 12, series of 1966.

On the other hand, the accused, by his evidence, tends to show to the court that the taxes sought to be collected have already lapsed and that there is no law empowering municipalities to pass ordinances taxing fishpond operators. The defense, by their evidence, tried to show further that, as lessee of a forest land to be converted into a fishpond, he is not covered by said municipal ordinances; and finally that the accused should not be taxed as fishpond operator because there is no fishpond yet being operated by him, considering that the supposed fishpond was under construction during the period covered by the taxes sought to be collected.

Finally, the defendant claims that the ordinance in question is ultra vires as it is outside of the power of the municipal council of Pagbilao, Quezon, to enact; and that the defendant claims that the ordinance in question is ambiguous and uncertain.

There is no question from the evidences presented that the accused is a lessee of a parcel of forest land, with an area of 27.1998 hectares, for fishpond purposes, under Fishpond Lease Agreement No. 1066, entered into by the accused and the government, through the Secretary of Agriculture and Natural Resources on August 21, 1959.

There is no question from the evidences presented that the 27.1998 hectares of land leased by the defendant from the government for fishpond purposes was actually converted into fishpond and used as such, and therefore defendant is an operator of a fishpond within the purview of the ordinance in question. 1 

The trial Court 2 returned a verdict of guilty and disposed as follows:

VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty beyond reasonable doubt of the crime of violation of Municipal Ordinance No. 4, series of 1955, as amended by Ordinance No. 15, series of 1965 and further amended by Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao, Quezon; and hereby sentences him to pay a fine of P50.00, with subsidiary imprisonment in case of insolvency at the rate of P8.00 a day, and to pay the costs of this proceeding.

SO ORDERED. 3

In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that:

I.

THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4, SERIES OF 1955, AS AMENDED BY ORDINANCE NO. 15, SERIES OF 1965, AND AS FURTHER AMENDED BY ORDINANCE NO. 12, SERIES OF 1966, OF THE MUNICIPALITY OF PAGBILAO, QUEZON, IS NULL AND VOID FOR BEING AMBIGUOUS AND UNCERTAIN.

II.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION, AS AMENDED, IS UNCONSTITUTIONAL FOR BEING EX POST FACTO.

III zjme3a.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION COVERS ONLY OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE OWNERSHIP AND NOT TO LESSEES OF PUBLIC LANDS.

IV.

THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED ORDINANCE, EVEN IF VALID, CANNOT BE

ENFORCED BEYOND THE TERRITORIAL LIMITS OF PAGBILAO AND DOES NOT COVER NON-

RESIDENTS. 4

The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15, series of 1965, and Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao. Insofar as pertinent to this appeal, the salient portions thereof are hereinbelow quoted:

Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao, Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of fishpond on part thereof per annum. 5 

xxx xxx xxx

Sec. l (a). For the convenience of those who have or owners or managers of fishponds within the territorial limits of this municipality, the date of payment of municipal tax relative thereto, shall begin after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries. 6 

xxx xxx xxx

Section 1. Any owner or manager of fishponds in places within the territorial limits of Pagbilao shall pay a municipal tax in the amount of P3.00 per hectare or any fraction thereof per annum beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964. 7 

The first objection refers to the ordinances being allegedly "ambiguous and uncertain." 8 The petitioner contends that being a mere lessee of the fishpond, he is not covered since the said ordinances speak of "owner or manager." He likewise maintains that they are vague insofar as they reckon the date of payment: Whereas Ordinance No. 4 provides that parties shall commence payment "after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries." 9 Ordinance No. 12 states that liability for the tax accrues "beginning and taking effect from the year 1964 if the fishpond started operating before the year 1964." 10 

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men "of common intelligence must necessarily guess at its meaning and differ as to its application." 11 It is repugnant to the Constitution in two respects: (1) it violates due process for failure to accord persons, especially the parties targetted by it, fair notice of the conduct to avoid; and (2) it leaves law enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the Government muscle. 

But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving clause or by construction. Thus, in Coates v. City of Cincinnati, 12 the U.S. Supreme Court struck down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk and there conduct themselves in a manner annoying to persons passing by." 13 Clearly, the ordinance imposed no standard at all "because one may never know in advance what 'annoys some people but does not annoy others.' " 14 

Coates highlights what has been referred to as a "perfectly vague" 15 act whose obscurity is evident on its face. It is to be distinguished, however, from legislation couched in imprecise language — but which nonetheless specifies a standard though defectively phrased — in which case, it may be "saved" by proper construction.

It must further be distinguished from statutes that are apparently ambiguous yet fairly applicable to certain types of activities. In that event, such statutes may not be challenged whenever directed against such activities. In Parker v. Levy, 16 a prosecution originally under the U.S. Uniform Code of Military Justice (prohibiting, specifically, "conduct unbecoming an officer and gentleman"), the defendant, an army officer who had urged his men not to go to Vietnam and called the Special Forces trained to fight there thieves and murderers, was not allowed to invoke the void for vagueness doctrine on the premise that accepted military interpretation and practice had provided enough standards, and consequently, a fair notice that his conduct was

impermissible. 

It is interesting that in Gonzales v. Commission on Elections, 17 a divided Court sustained an act of Congress (Republic Act No. 4880 penalizing "the too early nomination of candidates" 18 limiting the election campaign period, and prohibiting "partisan political activities"), amid challenges of vagueness and overbreadth on the ground that the law had included an "enumeration of the acts deemed included in the terms 'election campaign' or 'partisan political activity" 19 that would supply the standards. "As thus limited, the objection that may be raised as to vagueness has been minimized, if not totally set at rest." 20 In his opinion, however, Justice Sanchez would stress that the conduct sought to be prohibited "is not clearly defined at all." 21 "As worded in R.A 4880, prohibited discussion could cover the entire spectrum of expression relating to candidates and political parties." 22 He was unimpressed with the "restrictions" Fernando's opinion had relied on: " 'Simple expressions of opinions and thoughts concerning the election' and expression of 'views on current political problems or issues' leave the reader conjecture, to guesswork, upon the extent of protection offered, be it as to the nature of the utterance ('simple expressions of opinion and thoughts') or the subject of the utterance ('current political problems or issues')." 23 

The Court likewise had occasion to apply the "balancing-of-interests" test, 24 insofar as the statute's ban on early nomination of candidates was concerned: "The rational connection between the prohibition of Section 50-A and its object, the indirect and modest scope of its restriction on the rights of speech and assembly, and the embracing public interest which Congress has found in the moderation of partisan political activity, lead us to the conclusion that the statute may stand consistently with and does not offend the Constitution." 25 In that case, Castro would have the balance achieved in favor of State authority at the "expense" of individual liberties.

In the United States, which had ample impact on Castro's separate opinion, the balancing test finds a close kin, referred to as the "less restrictive alternative " 26 doctrine, under which the court searches for alternatives available to the Government outside of statutory limits, or for "less drastic means" 27 open to the State, that would render the statute unnecessary. In United States v. Robel, 28 legislation was assailed, banning members of the (American) Communist Party from working in any defense facility. The U.S. Supreme Court, in nullifying the statute, held that it impaired the right of association, and that in any case, a screening process was available to the State that would have enabled it to Identify dangerous elements holding defense positions. 29 In that event, the balance would have been struck in favor of individual liberties. 

It should be noted that it is in free expression cases that the result is usually close. It is said, however, that the choice of the courts is usually narrowed where the controversy involves say, economic rights, 30 or as in the Levy case, military affairs, in which less precision in analysis is required and in which the competence of the legislature is presumed. 

In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It is unmistakable from their very provisions that the appellant falls within its coverage. As the actual operator of the fishponds, he comes within the term " manager." He does not deny the fact that he financed the construction of the fishponds, introduced fish fries into the fishponds, and had employed laborers to maintain them. 31 While it appears that it is the National Government which owns them, 32 the Government never shared in the profits they had generated. It is therefore only logical that he shoulders the burden of tax under the said ordinances. 

We agree with the trial court that the ordinances are in the character of revenue measures 33 designed to assist the coffers of the municipality of Pagbilao. And obviously, it cannot be the owner, the Government, on whom liability should attach, for one thing, upon the ancient principle that the Government is immune from taxes and for another, since it is not the Government that had been making money from the venture. 

Suffice it to say that as the actual operator of the fishponds in question, and as the recipient of profits brought about by the business, the appellant is clearly liable for the municipal taxes in question. He cannot say that he did not have a fair notice of such a liability to make such ordinances vague.

Neither are the said ordinances vague as to dates of payment. There is no merit to the claim that "the imposition of tax has to depend upon an uncertain date yet to be determined (three years after the 'approval of the fishpond' by the Bureau of Fisheries, and upon an uncertain event (if the fishpond started operating before 1964), also to be determined by an uncertain individual or individuals." 34 Ordinance No. 15, in making the tax payable "after the lapse of three (3) years starting from the date said fishpond is approved by the Bureau of Fisheries," 35 is unequivocal about the date of payment, and its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and taking effect from the year 1964 if the fishpond started operating before the year 1964 ," 36 does not give rise to any ambiguity. In either case, the dates of payment have been definitely

established. The fact that the appellant has been allegedly uncertain about the reckoning dates — as far as his liability for the years 1964, 1965, and 1966 is concerned — presents a mere problem in computation, but it does not make the ordinances vague. In addition, the same would have been at most a difficult piece of legislation, which is not unfamiliar in this jurisdiction, but hardly a vague law. 

As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in operation prior thereto (Ordinance No. 12), and for new fishponds, three years after their approval by the Bureau of Fisheries (Ordinance No. 15). This is so since the amendatory act (Ordinance No. 12) merely granted amnesty unto old, delinquent fishpond operators. It did not repeal its mother ordinances (Nos. 4 and 15). With respect to new operators, Ordinance No. 15 should still prevail.

To the Court, the ordinances in question set forth enough standards that clarify imagined ambiguities. While such standards are not apparent from the face thereof, they are visible from the intent of the said ordinances.

The next inquiry is whether or not they can be said to be ex post facto measures. The appellant argues that they are: "Amendment No. 12 passed on September 19, 1966, clearly provides that the payment of the imposed tax shall "beginning and taking effect from the year 1964, if the fishpond started operating before the year 1964.' In other words, it penalizes acts or events occurring before its passage, that is to say, 1964 and even prior thereto." 37 

The Court finds no merit in this contention. As the Solicitor General notes, "Municipal Ordinance No. 4 was passed on May 14, 1955. 38 Hence, it cannot be said that the amendment (under Ordinance No. 12) is being made to apply retroactively (to 1964) since the reckoning period is 1955 (date of enactment). Essentially, Ordinances Nos. 12 and 15 are in the nature of curative measures intended to facilitate and enhance the collection of revenues the originally act, Ordinance No. 4, had prescribed. 39 Moreover, the act (of non-payment of the tax), had been, since 1955, made punishable, and it cannot be said that Ordinance No. 12 imposes a retroactive penalty. As we have noted, it operates to grant amnesty to operators who had been delinquent between 1955 and 1964. It does not mete out a penalty, much less, a retrospective one. 

The appellant assails, finally, the power of the municipal council of Pagbilao to tax "public forest land." 40 In Golden Ribbon Lumber Co., Inc. v. City of Butuan 41 we held that local governments' taxing power does not extend to forest products or concessions under Republic Act No. 2264, the Local Autonomy Act then in force. (Republic Act No. 2264 likewise prohibited municipalities from imposing percentage taxes on sales.) 

First of all, the tax in question is not a tax on property, although the rate thereof is based on the area of fishponds ("P3.00 per hectare" 42). Secondly, fishponds are not forest lands, although we have held them to the agricultural lands. 43 By definition, "forest" is "a large tract of land covered with a natural growth of trees and underbush; a large wood." 44 (Accordingly, even if the challenged taxes were directed on the fishponds, they would not have been taxes on forest products.) 

They are, more accurately, privilege taxes on the business of fishpond maintenance. They are not charged against sales, which would have offended the doctrine enshrined by Golden Ribbon Lumber, 45 but rather on occupation, which is allowed under Republic Act No. 2264. 46 They are what have been classified as fixed annual taxes and this is obvious from the ordinances themselves. 

There is, then, no merit in the last objection.

WHEREFORE, the appeal is DISMISSED. Costs against the appellant.

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

Melencio-Herrera, and Regalado, J., took no part WHP2J.

Gancayco, J., is on leave.

G.R. No. 167011             December 11, 2008SPOUSES CARLOS S. ROMUALDEZ and ERLINDA R. ROMUALDEZ, petitioners, vs.COMMISSION ON ELECTIONS and DENNIS GARAY, respondents.R E S O L U T I O NCHICO-NAZARIO, J.:For resolution is the Motion for Reconsideration filed by petitioner Spouses Carlos Romualdez and Erlinda Romualdez on 26 May 2008 from the Decision of this Court dated 30 April 2008, affirming the Resolutions, dated 11 June 2004 and 27 January 2005 of the COMELEC En Banc.We find that petitioner has not raised substantially new grounds to justify the reconsideration sought. Instead, petitioner presents averments that are mere rehashes of arguments already considered by the Court. There is, thus, no cogent reason to warrant a reconsideration of this Court’s Decision.Similarly, we reject the contentions put forth by esteemed colleagues Mr. Justice Dante O. Tinga in his Dissent, dated 2 September 2008, which are also mere reiterations of his earlier dissent against the majority opinion. Mr. Justice Tinga’s incessant assertions proceed from the wrong premise. To be clear, this Court did not intimate that penal statutes are beyond scrutiny. In our Decision, dated 30 April 2008, this Court emphasized the critical limitations by which a criminal statute may be challenged. We drew a lucid boundary between an "on-its-face" invalidation and an "as applied" challenge. Unfortunately, this is a distinction which Mr. Justice Tinga has refused to understand. Let it be underscored that "on-its-face" invalidation of penal statutes, as is sought to be done by petitioners in this case, may not be allowed. Thus, we said:The void-for-vagueness doctrine holds that a law is facially invalid if men of common intelligence must necessarily guess at its meaning and differ as to its application. However, this Court has imposed certain limitations by which a criminal statute, as in the challenged law at bar, may be scrutinized. This Court has declared that facial invalidation or an "on-its-face" invalidation of criminal statutes is not appropriate. We have so enunciated in no uncertain terms in Romualdez v. Sandiganbayan, thus:In sum, the doctrines of strict scrutiny, overbreadth, and vagueness are analytical tools developed for testing "on their faces" statutes in free speech cases or, as they are called in American law, First Amendment cases. They cannot be made to do service when what is involved is a criminal statute. With respect to such statute, the established rule is that 'one to whom application of a statute is constitutional will not be heard to attack the statute on the ground that impliedly it might also be taken as applying to other persons or other situations in which its application might be unconstitutional.' As has been pointed out, 'vagueness challenges in the First Amendment context, like overbreadth challenges typically produce facial invalidation, while statutes found vague as a matter of due process typically are invalidated [only] 'as applied' to a particular defendant.'" (underscoring supplied)"To this date, the Court has not declared any penal law unconstitutional on the ground of ambiguity." While mentioned in passing in some cases, the void-for-vagueness concept has yet to find direct application in our jurisdiction. In Yu Cong Eng v. Trinidad, the Bookkeeping Act was found unconstitutional because it violated the equal protection clause, not because it was vague. Adiong v. Comelec decreed as void a mere Comelec Resolution, not a statute. Finally, Santiago v. Comelec held that a portion of RA 6735 was unconstitutional because of undue delegation of legislative powers, not because of vagueness.Indeed, an "on-its-face" invalidation of criminal statutes would result in a mass acquittal of parties whose cases may not have even reached the courts. Such invalidation would constitute a departure from the usual requirement of "actual case and controversy" and permit decisions to be made in a sterile abstract context having no factual concreteness. In Younger v. Harris, this evil was aptly pointed out by the U.S. Supreme Court in these words:"[T]he task of analyzing a proposed statute, pinpointing its deficiencies, and requiring correction of these deficiencies before the statute is put into effect, is rarely if ever an appropriate task for the judiciary. The combination of the relative remoteness of the controversy, the impact on the legislative process of the relief sought, and above all the speculative and amorphous nature of the required line-by-line analysis of detailed statutes, x x x ordinarily results in a kind of case that is wholly unsatisfactory for deciding constitutional questions, whichever way they might be decided."For this reason, generally disfavored is an on-its-face invalidation of statutes, described as a "manifestly strong medicine" to be employed "sparingly and only as a last resort." In determining the constitutionality of a statute, therefore, its provisions that have allegedly been violated must be examined in the light of the conduct with which the defendant has been charged. (Emphasis supplied.)1

Neither does the listing by Mr. Justice Tinga of what he condemns as offenses under Republic Act No. 8189 convince this Court to overturn its ruling. What is crucial in this case is the rule set in our case books and precedents that a facial challenge is not the proper avenue to challenge the statute under consideration. In our Decision of 30 April 2008, we enunciated that "the opinions of the dissent which seek to bring to the fore the purported ambiguities of a long list of provisions in Republic Act No. 8189 can be deemed as a facial challenge."2On this matter, we held:An appropriate "as applied" challenge in the instant Petition should be limited only to Section 45 (j) in relation to Sections 10 (g) and (j) of Republic Act No. 8189–the provisions upon which petitioners are charged. An expanded examination of the law covering provisions which are alien to petitioners’ case would be antagonistic to the rudiment that for judicial review to be exercised, there must be an existing case or controversy that is appropriate or ripe for determination, and not conjectural or anticipatory.3

In conclusion, I reiterate that the doctrine embodied in Romualdez and Estrada remains good law. The rule established in our jurisdiction is, only statutes on free speech, religious freedom, and other fundamental rights may be facially challenged. Under no case may ordinary penal statutes be subjected to a facial challenge. The rationale is obvious. If a facial challenge to a penal

statute is permitted, the prosecution of crimes maybe hampered. No prosecution would be possible. A strong criticism against employing a facial challenge in the case of penal statutes, if the same is allowed, would effectively go against the grain of the doctrinal requirement of an existing and concrete controversy before judicial power may be appropriately exercised. A facial challenge against a penal statute is, at best, amorphous and speculative. It would, essentially, force the court to consider third parties who are not before it. As I have said in my opposition to the allowance of a facial challenge to attack penal statutes, such a test will impair the State’s ability to deal with crime. If warranted, there would be nothing that can hinder an accused from defeating the State’s power to prosecute on a mere showing that, as applied to third parties, the penal statute is vague or overbroad, notwithstanding that the law is clear as applied to him.As structured, Section 45 enumerates acts deemed election offenses under Republic Act No. 8189. The evident intent of the legislature in including in the catena of election offenses the violation of any of the provisions of Republic Act No. 8189, is to subsume as punishable, not only the commission of proscribed acts, but also the omission of acts enjoined to be observed. On this score, the declared policy of Republic Act No. 8189 is illuminating. The law articulates the policy of the State to systematize the present method of registration in order to establish a clean, complete, permanent and updated list of voters.In People v. Gatchalian, the Court had the occasion to rule on the validity of the provision of the Minimum Wage Law, which in like manner speaks of a willful violation of "any of the provisions of this Act." This Court upheld the assailed law, and in no uncertain terms declared that the provision is all-embracing, and the same must include what is enjoined in the Act which embodies the very fundamental purpose for which the law has been adopted.Finally, as the records would show, petitioners managed to set up an intelligent defense against the informations filed below. By clearly enunciating their defenses against the accusations hurled at them, and denying their commission thereof, petitioners’ allegation of vagueness must necessarily be rejected. Petitioners failed to overcome the heavy presumption of constitutionality in favor of the law. The constitutionality must prevail in the absence of substantial grounds for overthrowing the same.The phraseology in Section 45(j) has been employed by Congress in a number of laws which have not been declared unconstitutional:1) The Cooperative CodeSection 124(4) of Republic Act No. 6938 reads:"Any violation of any provision of this Code for which no penalty is imposed shall be punished by imprisonment of not less than six (6) months nor more than one (1) year and a fine of not less than One Thousand Pesos (P1,000.00) or both at the discretion of the Court."2) The Indigenous Peoples Rights ActSection 72 of Republic Act No. 8371 reads in part:"Any person who commits violation of any of the provisions of this Act, such as, but not limited to …"3) The Retail Trade Liberalization ActSection 12, Republic Act No. 8762, reads:"Any person who would be found guilty of violation of any provisions of this Act shall be punished by imprisonment of not less than six (6) years and one (1) day but not more than eight (8) years, and a fine of at least One Million (P1,000,000.00) but not more than Twenty Million (P20,000,000.00).For reasons so stated, we deny the Motion for Reconsideration.SO ORDERED.MINITA V. CHICO-NAZARIOAssociate Justice

WE CONCUR:

CERTIFICATIONPursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.REYNATO S. PUNOChief Justice