G.R. No.

180636 March 13, 2013

LORENZO T. TANGGA-AN,* Petitioner,

vs.
PIDLIPPINE TRANSMARINE CARRIERS, INC., UNIVERSE TANKSHIP DELAWARE LLC, and
CARLOS C. SALINAS, Respondents.

DECISION

DEL CASTILLO, J.:

This Court's labor pronouncements must be read and applied with utmost care and caution, taking to
mind that in the very heart of the judicial system, labor cases occupy a special place. More than the State
guarantees of protection of labor and security of tenure, labor disputes involve the fundamental survival
of the employees and their families, who depend -upon the former for all the basic necessities in life.

This Petition for Review on Certiorari1 seeks a modification of the November 30, 2006 Decision2 of the
Court of Appeals (CA) in CA-G.R. SP No. 00806. Also assailed is the November 15, 2007
Resolution3 denying petitioner's Motion for Reconsideration.

Factual Antecedents

The facts, as found by the CA, are as follows:

This is a case for illegal dismissal with a claim for the payment of salaries corresponding to the unexpired
term of the contract, damages and attorney’s fees filed by private respondent Lorenzo T. Tangga-an
against the petitioners Philippine Transmarine Carriers, Inc., Universe Tankship Delaware LLC, and Carlos
C. Salinas4 or herein respondents.

In his position paper, Tangga-an alleged that on January 31, 2002, he entered into an overseas
employment contract with Philippine Transmarine Carriers, Inc. (PTC) for and in behalf of its foreign
employer, Universe Tankship Delaware, LLC. Under the employment contract, he was to be employed for
a period of six months as chief engineer of the vessel the S.S. "Kure". He was to be paid a basic salary of
US$5,000.00; vacation leave pay equivalent to 15 days a months [sic] or US$2,500.00 per month and
tonnage bonus in the amount of US$700.00 a month.

On February 11, 2002, Tangga-an was deployed. While performing his assigned task, he noticed that
while they were loading liquid cargo at Cedros, Mexico, the vessel suddenly listed too much at the bow.
At that particular time both the master and the chief mate went on shore leave together, which under
maritime standard was prohibited. To avoid any conflict, he chose to ignore the unbecoming conduct of
the senior officers of the vessel.

On or about March 13, 2002, the vessel berthed at a port in Japan to discharge its cargo. Thereafter, it
sailed to the U.S.A. While the vessel was still at sea, the master required Tangga-an and the rest of the
Filipino Engineer Officers to report to his office where they were informed that they would be repatriated
on account of the delay in the cargo discharging in Japan, which was principally a duty belonging to the
deck officers. He imputed the delay to the non-readiness of the turbo generator and the inoperation of
the boom, since the turbo generator had been prepared and synchronized for 3.5 hours or even before
the vessel arrived in Japan. Moreover, upon checking the boom, they found the same [sic] operational.
Upon verification, they found out that when the vessel berthed in Japan, the cargo hold was not
immediately opened and the deck officers concerned did not prepare the stock. Moreover, while cargo

1
discharging was ongoing, both the master and the chief mate again went on shore leave together at 4:00
in the afternoon and returned to the vessel only after midnight. To save face, they harped on the Engine
Department for their mistake. Tangga-an and the other Engineering Officers were ordered to disembark
from the vessel on April 2, 2002 and thereafter repatriated. Thence, the complaint.

Philippine Transmarine Carriers, Inc., Universe Tankship Delaware LLC, and Carlos C. Salinas on the other
hand, contended that sometime on [sic] March 2002, during a test of the cargo discharging conveyor
system, Tangga-an and his assistant engineers failed to start the generator that supplied power to the
conveyor. They spent 3 hours trying to start the generator but failed. It was only the third assistant
engineer who previously served in the same vessel who was able to turn on the generator. When the
master tried to call the engine room to find out the problem, Tangga-an did not answer and merely hang
[sic] up. The master proceeded to the engine room to find out the problem by [sic] Tangga-an and his
assistant engineers were running around trying to appear busy.

At another time, during a cargo discharging operation requiring the use of a generator system and the
conveyor boom, Tangga-an was nowhere to be found. Apparently, he went on shore leave resulting in a
delay of 2 hours because the machine could not be operated well. Both incidents were recorded in the
official logbook. Due to the delay, protests were filed by the charter [sic].

The master required Tangga-an to submit a written explanation to which he did but blamed the captain
and the chief officer. He failed to explain why he did not personally supervise the operation of the
generator system and the conveyor boom during the cargo discharging operations. His explanation not
having been found satisfactory, respondents decided to terminate Tangga-an’s services. Thus, a notice of
dismissal was issued against Tangga-an. He arrived in the Philippines on April 4, 2002.5

Tangga-an filed a Complaint6 for illegal dismissal with prayer for payment of salaries for the unexpired
portion of his contract, leave pay, exemplary and moral damages, attorney’s fees and interest.

On January 27, 2004, Labor Arbiter Jose G. Gutierrez rendered a Decision 7 finding petitioner to have been
illegally dismissed. The Labor Arbiter noted that in petitioner’s letter to respondent Universe Tankship
Delaware, LLC dated April 1, 20028 he categorically denied any negligence on his part relative to the
delay in the discharge of the cargo while the vessel was berthed in Japan. In view thereof, the Labor
Arbiter opined that an investigation should have been conducted in order to ferret out the truth instead of
dismissing petitioner outright. Consequently, petitioner’s dismissal was illegal for lack of just cause and
for failure to comply with the twin requirements of notice and hearing.9

As regards petitioner’s claim for back salaries, the Labor Arbiter found petitioner entitled not to four
months which is equivalent to the unexpired portion of his contract, but only to three months, inclusive of
vacation leave pay and tonnage bonus (or US$8,200 x 3 months = US$24,600) pursuant to Section 10 of
Republic Act (RA) No. 8042 or The Migrant Workers and Overseas Filipinos Act of 2005.

Regarding petitioner’s claim for damages, the same was denied for failure to prove bad faith on the part
of the respondents. However, attorney’s fees equivalent to 10% of the total back salaries was awarded
because petitioner was constrained to litigate.

The dispositive portion of the Labor Arbiter’s Decision, reads:

WHEREFORE, the foregoing premises considered, judgment is hereby rendered finding Tangga-an
illegally dismissed from his employment and directing the respondent Phil. Transmarine Carriers, Inc. to
pay Tangga-an the amount of US$24,600.00 PLUS US$2,460.00 attorney’s fees or a total aggregate
amount of US Dollars: TWENTY SEVEN THOUSAND SIXTY (US$27,060.00) or its peso equivalent at the
exchange rate prevailing at the time of payment.

2
SO ORDERED.10

Ruling of the National Labor Relations Commission

Respondents appealed to the National Labor Relations Commission (NLRC). They claimed that the Labor
Arbiter committed grave abuse of discretion in finding that petitioner was illegally dismissed; in awarding
unearned vacation leave pay and tonnage bonus when the law and jurisprudence limit recovery to the
employee’s basic salary; and in awarding attorney’s fees despite the absence of proof of bad faith on
their part.

On August 25, 2004, the NLRC issued its Decision,11 the dispositive portion of which reads:

WHEREFORE, the Decision dated January 27, 2004 of the Labor Arbiter is AFFIRMED.

Respondents-appellants’ Memorandum of Appeal, dated 23 March 2004 is DISMISSED for lack of merit.

SO ORDERED.12

The NLRC affirmed the finding of illegal dismissal. It held that no notice of hearing was served upon
petitioner, and no hearing whatsoever was conducted on the charges against him. It ruled that
respondents could not dispense with the twin requirements of notice and hearing, which are essential
elements of procedural due process. For this reason, no valid cause for termination has been shown. The
NLRC likewise found respondents guilty of bad faith in illegally dismissing petitioner’s services.

On the issue covering the award of unearned vacation leave pay and tonnage bonus, the NLRC struck
down respondents’ arguments and held that in illegal dismissal cases, the employee is entitled to all the
salaries, allowances and other benefits or their monetary equivalents from the time his compensation is
withheld from him until he is actually reinstated, in effect citing Article 279 13 of the Labor Code. It held
that vacation leave pay and tonnage bonus are provided in petitioner’s employment contract, which thus
entitles the latter to the same in the event of illegal dismissal.

Finally, on the issue of attorney’s fees, the NLRC held that since respondents were found to be in bad
faith for the illegal dismissal and petitioner was constrained to litigate with counsel, the award of
attorney’s fees is proper.

Respondents moved for reconsideration which was denied by the NLRC in its March 18, 2005
Resolution.14

Ruling of the Court of Appeals

Respondents went up to the CA by Petition for Certiorari, 15 seeking to annul the Decision of the NLRC,
raising essentially the same issues taken up in the NLRC.

On November 30, 2006, the CA rendered the assailed Decision, the dispositive portion of which reads, as
follows:

WHEREFORE, premises considered, the instant petition is PARTIALLY GRANTED. The Decision of public
respondent is MODIFIED in the following manner:

3
 a. Tangga-an is entitled to three (3) months salary representing the unexpired portion of his
contract in the total amount of US$15,000.00 or its peso equivalent at the exchange rate
prevailing at the time of payment;

b. Tangga-an’s placement fee should be reimbursed with 12% interest per annum;

c. The award of attorney’s fees is deleted.

SO ORDERED.16

The CA adhered to the finding of illegal dismissal. But on the subject of monetary awards, the CA
considered only petitioner’s monthly US$5,000.00 basic salary and disregarded his monthly US$2,500.00
vacation leave pay and US$700.00 tonnage bonus. It likewise held that petitioner’s "unexpired portion of
contract" for which he is entitled to back salaries should only be three months pursuant to Section 10 17 of
RA 8042. In addition, petitioner should be paid back his placement fee with interest at the rate of twelve
per cent (12%) per annum.

As to attorney’s fees, the CA did not agree with the NLRC’s finding that bad faith on the part of
respondents was present to justify the award of attorney’s fees. It held that there is nothing from the
facts and proceedings to suggest that respondents acted with dishonesty, moral obliquity or conscious
doing of wrong in terminating petitioner’s services.

Petitioner filed a Motion for (Partial) Reconsideration, 18 which was denied in the assailed November 15,
2007 Resolution. Thus, he filed the instant Petition.

Issues

In this Petition, Tangga-an seeks a modification of the CA Decision and the reinstatement of the
monetary awards as decreed in the Labor Arbiter’s January 27, 2004 Decision, or in the alternative, the
grant of back salaries equivalent to four months which corresponds to the unexpired portion of the
contract, inclusive of vacation leave pay and tonnage bonus, plus 10% thereof as attorney’s fees. 19

Petitioner submits the following issues for resolution:

I. Whether x xx the CA’s issuance of the writ of certiorari reversing the NLRC decision is in
accordance with law;

II. Whether x xx the indemnity provided in Section 10, R. A. 8042 x xx be limited only to the
seafarer’s basic monthly salary or x xx include, based on civil law concept of damages as well as
Labor Code concept of backwages, allowances/benefits or their monetary equivalent as a further
relief to restore the seafarer’s income that was lost by reason of his unlawful dismissal;

III. Whether x xx the indemnity awarded by the CA in petitioner’s favor consisting only of 3
months’ basic salaries conform with the proper interpretation of Section 10 R. A. 8042 and with
the ruling in Skippers Pacific, Inc. v. Mira, et al., G.R. No. 144314, November 21, 2002 and
related cases or is petitioner entitled to at least 4 months salaries being the unexpired portion of
his contract; and

IV. Whether x xx the CA’s disallowance of the award of attorney’s fees, based on the alleged
absence of bad faith on the part of respondent, is in accordance with law or is the attorney’s fees

4
 awarded by the NLRC to petitioner, who was forced to litigate to enforce his rights, justified x x
x.20

Petitioner’s Arguments

Petitioner essentially contends that respondents’ resort to an original Petition for Certiorari in the CA is
erroneous because the issues they raised did not involve questions of jurisdiction but of fact and law. He
adds that the CA Decision went against the factual findings of the labor tribunals which ought to be
binding, given their expertise in matters falling within their jurisdiction.

Petitioner likewise contends that the CA erred in excluding his vacation leave pay and tonnage bonus in
the computation of his back salaries as they form part of his salaries and benefits under his employment
contract with the respondents, a covenant which is deemed to be the law governing their relations. He
adds that under Article 279 of the Labor Code, he is entitled to full backwages inclusive of allowances and
other benefits or their monetary equivalent from the time his compensation was withheld up to the time
he is actually reinstated.

Petitioner accuses the CA of misapplying the doctrine laid down in Skippers Pacific, Inc. v. Skippers
Maritime Services, Ltd.21 He points out that the CA wrongly interpreted and applied what the Court said in
the case, and that the pronouncement therein should have benefited him rather than the respondents.

Petitioner would have the Court reinstate the award of attorney’s fees, on the argument that the
presence of bad faith is not necessary to justify such award. He maintains that the grant of attorney’s
fees in labor cases constitutes an exception to the general requirement that bad faith or malice on the
part of the adverse party must first be proved.

Finally, petitioner prays that this Court reinstate the Labor Arbiter’s monetary awards in his January 27,
2004 Decision or, in the alternative, to grant him full back salaries equivalent to the unexpired portion of
his contract, or four months, plus 10% thereof as attorney’s fees.

Respondents’ Arguments

In seeking affirmance of the assailed CA issuances, respondents basically submit that the CA committed
no reversible error in excluding petitioner’s claims for vacation leave pay, tonnage bonus, and attorney’s
fees. They support and agree with the CA’s reliance upon Skippers Pacific, Inc. v. Skippers Maritime
Services, Ltd.,22 and emphasize that in the absence of bad faith on their part, petitioner may not recover
attorney’s fees.

Our Ruling

The Court grants the Petition.

There remains no issue regarding illegal dismissal. In spite of the consistent finding below that petitioner
was illegally dismissed, respondents did not take issue, which thus renders all pronouncements on the
matter final.

In resolving petitioner’s monetary claims, the CA utterly misinterpreted the Court’s ruling in Skippers
Pacific, Inc. v. Skippers Maritime Services, Ltd., 23 using it to support a view which the latter case precisely
ventured to strike down. In that case, the employee was hired as the vessel’s Master on a six-months
employment contract, but was able to work for only two months, as he was later on illegally dismissed.
The Labor Arbiter, NLRC, and the CA all took the view that the complaining employee was entitled to his

5
salary for the unexpired portion of his contract, but limited to only three months pursuant to Section
1024 of RA 8042. The Court did not agree and hence modified the judgment in said case. It held that,
following the wording of Section 10 and its ruling in Marsaman Manning Agency, Inc. v. National Labor
Relations Commission,25 when the illegally dismissed employee’s employment contract has a term of less
than one year, he/she shall be entitled to recovery of salaries representing the unexpired portion of
his/her employment contract. Indeed, there was nothing even vaguely confusing in the Court’s citation
therein of Marsaman:

In Marsaman Manning Agency, Inc. vs. NLRC, involving Section 10 of Republic Act No. 8042, we held:

We cannot subscribe to the view that private respondent is entitled to three (3) months salary
only.1âwphi1 A plain reading of Sec. 10 clearly reveals that the choice of which amount to award an
illegally dismissed overseas contract worker, i.e., whether his salaries for the unexpired portion of his
employment contract or three (3) months salary for every year of the unexpired term, whichever is less,
comes into play only when the employment contract concerned has a term of at least one (1) year or
more. This is evident from the wording "for every year of the unexpired term" which follows the wording
"salaries x xx for three months." To follow petitioners’ thinking that private respondent is entitled to three
(3) months salary only simply because it is the lesser amount is to completely disregard and overlook
some words used in the statute while giving effect to some. This is contrary to the well-established rule in
legal hermeneutics that in interpreting a statute, care should be taken that every part or word thereof be
given effect since the lawmaking body is presumed to know the meaning of the words employed in the
statute and to have used them advisedly. Ut res magisvaleat quam pereat.

It is not disputed that private respondent’s employment contract in the instant case was for six (6)
months. Hence, we see no reason to disregard the ruling in Marsaman that private respondent should be
paid his salaries for the unexpired portion of his employment contract.26 (Emphases supplied)

At this juncture, the courts, especially the CA, should be reminded to read and apply this Court’s labor
pronouncements with utmost care and caution, taking to mind that in the very heart of the judicial
system, labor cases occupy a special place. More than the State guarantees of protection of labor and
security of tenure, labor disputes involve the fundamental survival of the employees and their families,
who depend upon the former for all the basic necessities in life.

Thus, petitioner must be awarded his salaries corresponding to the unexpired portion of his six-months
employment contract, or equivalent to four months. This includes all his corresponding monthly vacation
leave pay and tonnage bonuses which are expressly provided and guaranteed in his employment contract
as part of his monthly salary and benefit package. These benefits were guaranteed to be paid on a
monthly basis, and were not made contingent. In fact, their monetary equivalent was fixed under the
contract: US$2,500.00 for vacation leave pay and US$700.00 for tonnage bonus each month. Thus,
petitioner is entitled to back salaries of US$32,800 (or US$5,000 + US$2,500 + US$700 = US$8,200 x 4
months). "Article 279 of the Labor Code mandates that an employee’s full backwages shall be inclusive of
allowances and other benefits or their monetary equivalent." 27 As we have time and again held, "it is the
obligation of the employer to pay an illegally dismissed employee or worker the whole amount of the
salaries or wages, plus all other benefits and bonuses and general increases, to which he would have
been normally entitled had he not been dismissed and had not stopped working." 28 This well-defined
principle has likewise been lost on the CA in the consideration of the case.

The CA likewise erred in deleting the award of attorney’s fees on the ground that bad faith may not
readily be attributed to the respondents given the circumstances. The Court’s discussion on the award of
attorney’s fees in Kaisahan at KapatiranngmgaManggagawa at Kawanisa MWC-East Zone Union v. Manila
Water Company, Inc.,29speaking through Justice Brion, is instructive, viz:

6
Article 111 of the Labor Code, as amended, governs the grant of attorney’s fees in labor cases:

‘Art. 111. Attorney’s fees. – (a) In cases of unlawful withholding of wages, the culpable party may be
assessed attorney’s fees equivalent to ten percent of the amount of wages recovered.

(b) It shall be unlawful for any person to demand or accept, in any judicial or administrative proceedings
for the recovery of wages, attorney’s fees which exceed ten percent of the amount of wages recovered.’

Section 8, Rule VIII, Book III of its Implementing Rules also provides, viz.:

‘Section 8.Attorney’s fees. – Attorney’s fees in any judicial or administrative proceedings for the recovery
of wages shall not exceed 10% of the amount awarded. The fees may be deducted from the total
amount due the winning party.’

We explained in PCL Shipping Philippines, Inc. v. National Labor Relations Commission that there are two
commonly accepted concepts of attorney’s fees – the ordinary and extraordinary. In its ordinary concept,
an attorney’s fee is the reasonable compensation paid to a lawyer by his client for the legal services the
former renders; compensation is paid for the cost and/or results of legal services per agreement or as
may be assessed. In its extraordinary concept, attorney’s fees are deemed indemnity for damages
ordered by the court to be paid by the losing party to the winning party. The instances when these may
be awarded are enumerated in Article 2208 of the Civil Code, specifically in its paragraph 7 on actions for
recovery of wages, and is payable not to the lawyer but to the client, unless the client and his lawyer
have agreed that the award shall accrue to the lawyer as additional or part of compensation.

We also held in PCL Shipping that Article 111 of the Labor Code, as amended, contemplates the
extraordinary concept of attorney’s fees and that Article 111 is an exception to the declared policy of
strict construction in the award of attorney’s fees. Although an express finding of facts and law is still
necessary to prove the merit of the award, there need not be any showing that the employer acted
maliciously or in bad faith when it withheld the wages. x xx

We similarly so ruled in RTG Construction, Inc. v. Facto and in Ortiz v. San Miguel Corporation. In RTG
Construction, we specifically stated:

'Settled is the rule that in actions for recovery of wages, or where an employee was forced to litigate and,
thus, incur expenses to protect his rights and interests, a monetary award by way of attorney's fees is
justifiable under Article Ill of the Labor Code; Section 8, Rule VIII, Book III of its Implementing Rules;
and paragraph 7, Article 208 of the Civil Code. The award of attorney's fees is proper, and there need not
be any showing that the employer acted maliciously or in bad faith when it withheld the wages. There
need only be a showing that the lawful wages were not paid accordingly.'

In PCL Shipping, we found the award of attorney's fees due and appropriate since the respondent therein
incurred legal expenses after he was forced to file an action for recovery of his lawful wages and other
benefits to protect his rights. From this perspective and the above precedents, we conclude that the CA
erred in ruling that a finding of the employer's malice or bad faith in withholding wages must precede an
award of attorney's fees under Article Ill of the Labor Code. To reiterate, a plain showing that the lawful
wages were not paid without justification is sufficient.30

In this case, it is already settled that petitioner's employment was illegally terminated. As a result, his
wages as well as allowances were withheld without valid and legal basis. Otherwise stated, he was not
paid his lawful wages without any valid justification. Consequently, he was impelled to litigate to protect
his interests. Thus, pursuant to the above ruling, he is entitled to receive attorney’s fees. An award of
attorney's fees in petitioner’s favor is in order in the amount of US$3, 280 (or US$32, 800 x 10%).

7
WHEREFORE, the Petition is GRANTED. Petitioner Lorenzo T. Tangga-an is hereby declared ENTITLED to
back salaries for the unexpired portion of his contract, inclusive of vacation leave pay and tonnage bonus
which is equivalent to US$32,800 plus US$3,280 as attorney's fees or a total of US$36,080 or its peso
equivalent at the exchange rate prevailing at the time of payment.

SO ORDERED.

MARIANO C. DEL CASTILLO

Associate Justice

8
 G.R. No. L-59154 April 3, 1990

MERIDIAN ASSURANCE CORPORATION, petitioner,

vs.
HON. ABELARDO M. DAYRIT, Judge, CFI, Manila, Br. II, and FIRST WESTERN BANK & TRUST
COMPANY, respondents.

Bito, Lozada, Ortega & Castillo for private respondent.

NARVASA, J.:

The sole issue in this special civil action of certiorari concerns the rate of interest properly imposable in
relation to a judgment for the payment of money: 6%, as provided by Article 2209 of the Civil Code, or
12%, conformably with Central Bank Circular been passed upon and resolved No. 416. The issue has
already by this Court in two (2) earlier cases, 1 and it is in accordance with those precedents that the
case at bar will also be determined.

The petitioner, Meridian Assurance Corporation, was a defendant in Civil Case No. 62317 of the then
Court of First Instance of Manila, entitled "First Western Bank and Trust Company vs. Atlas Timber
Company, et al." The case resulted in a verdict adverse to the defendants, 2 disposing as follows:

WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants, jointly
and severally, for the Sum of $21,933.38 or its equivalent in pesos at the rate of P3.9390 to a
dollar, with interest at the legal rate from the filing of the complaint, and the costs of the suit,
provided, however, that this judgment should not be enforced against the individual partners
before the properties of the partnership have been exhausted.

The Trial Court's judgment was affirmed in toto by the Court of Appeals on October 9, 1980; 3 and the
latter's judgment having in due course become final and executory, the case was reminded to the Court a
quo for execution. Execution was eventually ordered by the Trial Court by Order dated September 8,
1981.

On September 16, 1981, Meridian Assurance Corporation (hereafter, simply Meridian) wrote to the
judgment creditor, First Western Bank & Trust Co. (hereafter, simply First Western), offering to pay the
amount of the judgment with 6% interest per annum and the approved costs of P237.00. The offer was
rejected by First Western, in its letter of September 21, 1981, its view being that the rate of interest
should be 12% per annum, in accordance with Central Bank Circular No. 416 dated July 29, 1974.
Another exchange of letters ensued in which the parties stood firm on the views set out in their first
communications.

Meridian then filed with the Trial Court a motion dated September 30, 1981, manifesting its deposit with
the Court of the amount of P170,061.03 — representing the total of.(1) P86,395.58 (the peso equivalent
at the tune of the principal indebtedness of $21,933.38), (2) P83,428.45 (the interest on the principal
debt at 6% p.a from August 27, 1965 to September 30, 1981) and (3) costs in the sum of P237.00 —
and praying that the deposit be allowed, that it be considered full satisfaction of the judgment, and that
enforcement of the writ of execution be restrained. The motion was denied by Order dated October 15,

9
1981, 4 the Trial. Court opining that Central Bank Circular No. 416 had changed "the legal rate of interest
from 6% to 12% per annum." This ruling the trial Court refused to reconsider, overruling Meridians
motion of October 26, 1981 asking it to do so. Meridian thereupon proceeded to this Court praying for a
writ of certiorari to annul the orders denying its aforementioned motion to deposit, etc. dated September
1981, and to authorize it "to satisfy the amount of the judgment with 6% interest per annum and the
approved costs of P237.00 totalling P170,061.03 . ."

The writ will issue as prayed for. As pointed out in this opinion's opening paragraph, the matter in
question has already been settled in Reformina v. Tomol, Jr. and Philippine Rabbit Bus Lines, Inc. v. Cruz,
supra. 5

The question posed in Reformina was whether or not Circular No. 416 of the Central Bank of the
Philippines 6 — amending Section 1 of the Usury Law (Act No. 2655) by prescribing twelve percent
(12%) per annum as the "rate of interest for the loan, or forbearance of any money, goods, or credits
and the rate allowed in judgments, in the absence of express contract as to such rate of interest" . . —
applied to "all kinds of monetary judgment." Reformina held that the "judgments spoken of and referred
to are (only) judgments in litigations involving loans or forbearance of any money, goods or credits." It
declared 7 that —

. . Any other kind of monetary judgment which has nothing to do with, nor involving loans or
forbearance of any money, goods of credits does not fall within the coverage of the said law
(P.D. No. 116) for it is not within the ambit of the authority granted to the Central Bank. The
Monetary Board may not tread on forbidden grounds. It cannot rewrite other laws. That function
is vested solely with the legislative authority. It is axiomatic in legal hermeneutics that statutes
should be construed as a whole and not as series of disconnected articles and phrases. In the
absence of a clear contrary intention, words and phrases in statutes should not be interpreted in
isolation from one another. A word or phrase in a statute is always used in association with other
words or phrases and its meaning may thus be modified of restricted by the latter.

And, as in Philippine Rabbit Bus Lines, Inc. v. Cruz, supra, there is "no reason to depart or deviate from
that ruling here. It seems quite clear that Section 1-a of Act No. 2655, as amended 8 — which, as
distinguished from sec. 1 of the same will appears to be the actual and operative grant of authority to the
Monetary Board of the Central Bank to prescribe maximum rates of interest where the parties have not
stipulated thereon — in excluding mention of rates allowed in judgments, should, at the least, be
construed as limiting the authority thus granted only to loans or forbearances of money, etc., and to
judgments involving such loans or forbearances.

WHEREFORE, the petition is granted. The Orders promulgated on October 15, 1981 and December 2,
1981 are ANNULLED AND SET ASIDE. The petitioner's deposit with the Trial Court of the amount of
P170,061.03 is declared to constitute full satisfaction of the judgment against it, and the Trial Court is
DIRECTED to cause entry of said full satisfaction of judgment, and declare the case closed and
terminated as far as the petitioner is concerned. No Costs.

SO ORDERED.

10
 G.R. No. 109835 November 22, 1993

JMM PROMOTIONS & MANAGEMENT, INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION and ULPIANO L. DE LOS SANTOS, respondent.

Don P. Porciuncula for petitioner.

EulogioNones, Jr. for private respondent.

CRUZ, J.:

The sole issue submitted in this case is the validity of the order of respondent National Labor Relations
Commission dated October 30, 1992, dismissing the petitioner's appeal from a decision of the Philippine
Overseas Employment Administration on the ground of failure to post the required appeal bond. 1

The respondent cited the second paragraph of Article 223 of the Labor Code as amended, providing that:

In the case of a judgment involving a monetary award, an appeal by the employer may
be perfected only upon the posting of a cash or surety bond issued by a reputable
bonding company duly accredited by the Commission in an amount equivalent to the
monetary award in the judgment appealed from.

and Rule VI, Section 6 of the new Rules of Procedure of the NLRC, as amended, reading as follows:

Sec. 6.Bond — In case the decision of a Labor Arbiter involves a monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or surety bond
issued by a reputable bonding company duly accredited by the Commission or the
Supreme Court in an amount equivalent to the monetary award.

The petitioner contends that the NLRC committed grave abuse of discretion in applying these rules to
decisions rendered by the POEA. It insists that the appeal bond is not necessary in the case of licensed
recruiters for overseas employment because they are already required under Section 4, Rule II, Book II
of the POEA Rules not only to pay a license fee of P30,000 but also to post a cash bond of P100,000 and
a surety bond of P50,000, thus:

Upon approval of the application, the applicant shall pay a license fee of P30,000. It shall
also post a cash bond of P100,000 and surety bond of P50,000 from a bonding company
acceptable to the Administration and duly accredited by the Insurance Commission. The
bonds shall answer for all valid and legal claims arising from violations of the conditions
for the grant and use of the license, and/or accreditation and contracts of employment.
The bonds shall likewise guarantee compliance with the provisions of the Code and its
implementing rules and regulations relating to recruitment and placement, the Rules of
the Administration and relevant issuances of the Department and all liabilities which the
Administration may impose. The surety bonds shall include the condition that the notice
to the principal is notice to the surety and that any judgment against the principal in
connection with matters falling under POEA's jurisdiction shall be binding and conclusive
on the surety. The surety bonds shall be co-terminus with the validity period of license.
(Emphasis supplied)

11
In addition, the petitioner claims it has placed in escrow the sum of P200,000 with the Philippine National
Bank in compliance with Section 17, Rule II, Book II of the same Rule, "to primarily answer for valid and
legal claims of recruited workers as a result of recruitment violations or money claims."

Required to comment, the Solicitor General sustains the appeal bond requirement but suggest that the
rules cited by the NLRC are applicable only to decisions of the Labor Arbiters and not of the POEA.
Appeals from decisions of the POEA, he says, are governed by the following provisions of Rule V, Book
VII of the POEA Rules:

Sec. 5.Requisites for Perfection of Appeal. The appeal shall be filed within the
reglementary period as provided in Section 1 of this Rule; shall be under oath with proof
of payment of the required appeal fee and the posting of a cash or surety bond as
provided in Section 6 of this Rule; shall be accompanied by a memorandum of appeal
which shall state the grounds relied upon and the arguments in support thereof; the
relief prayed for; and a statement of the date when the appellant received the appealed
decision and/or award and proof of service on the other party of such appeal.

A mere notice of appeal without complying with the other requisites aforestated shall not
stop the running of the period for perfecting an appeal.

Sec. 6. Bond. In case the decision of the Administration involves a monetary award, an
appeal by the employer shall be perfected only upon the posting of a cash or surety
bond issued by a reputable bonding company duly accredited by the Commission in an
amount equivalent to the monetary award. (Emphasis supplied)

The question is, having posted the total bond of P150,000 and placed in escrow the amount of P200,000
as required by the POEA Rules, was the petitioner still required to post an appeal bond to perfect its
appeal from a decision of the POEA to the NLRC?

It was.

The POEA Rules are clear. A reading thereof readily shows that in addition to the cash and surety bonds
and the escrow money, an appeal bond in an amount equivalent to the monetary award is required to
perfect an appeal from a decision of the POEA. Obviously, the appeal bond is intended to further insure
the payment of the monetary award in favor of the employee if it is eventually affirmed on appeal to the
NLRC.

It is true that the cash and surety bonds and the money placed in escrow are supposed to guarantee the
payment of all valid and legal claims against the employer, but these claims are not limited to monetary
awards to employees whose contracts of employment have been violated. The POEA can go against
these bonds also for violations by the recruiter of the conditions of its license, the provisions of the Labor
Code and its implementing rules, E.O. 247 (reorganizing POEA) and the POEA Rules, as well as the
settlement of other liabilities the recruiter may incur.

As for the escrow agreement, it was presumably intended to provide for a standing fund, as it were, to
be used only as a last resort and not to be reduced with the enforcement against it of every claim of
recruited workers that may be adjudged against the employer. This amount may not even be enough to
cover such claims and, even if it could initially, may eventually be exhausted after satisfying other
subsequent claims.

As it happens, the decision sought to be appealed grants a monetary award of about P170,000 to the
dismissed employee, the herein private respondent. The standby guarantees required by the POEA Rules

12
would be depleted if this award were to be enforced not against the appeal bond but against the bonds
and the escrow money, making them inadequate for the satisfaction of the other obligations the recruiter
may incur.

Indeed, it is possible for the monetary award in favor of the employee to exceed the amount of
P350,000, which is the sum of the bonds and escrow money required of the recruiter.

It is true that these standby guarantees are not imposed on local employers, as the petitioner observes,
but there is a simple explanation for this distinction. Overseas recruiters are subject to more stringent
requirement because of the special risks to which our workers abroad are subjected by their foreign
employers, against whom there is usually no direct or effective recourse. The overseas recruiter is
solidarily liable with a foreign employer. The bonds and the escrow money are intended to insure more
care on the part of the local agent in its choice of the foreign principal to whom our overseas workers are
to be sent.

It is a principle of legal hermeneutics that in interpreting a statute (or a set of rules as in this case), care
should be taken that every part thereof be given effect, on the theory that it was enacted as an
integrated measure and not as a hodge-podge of conflicting provisions. Ut res magisvaleat quam
pereat. 2 Under the petitioner's interpretation, the appeal bond required by Section 6 of the
aforementioned POEA Rule should be disregarded because of the earlier bonds and escrow money it has
posted. The petitioner would in effect nullify Section 6 as a superfluity but we do not see any such
redundancy; on the contrary, we find that Section 6 complements Section 4 and Section 17. The rule is
that a construction that would render a provision inoperative should be avoided; instead, apparently
inconsistent provisions should be reconciled whenever possible as parts of a coordinated and harmonious
whole.

Accordingly, we hold that in addition to the monetary obligations of the overseas recruiter prescribed in
Section 4, Rule II, Book II of the POEA Rules and the escrow agreement under Section 17 of the same
Rule, it is necessary to post the appeal bond required under Section 6, Rule V, Book VII of the POEA
Rules, as a condition for perfecting an appeal from a decision of the POEA.

Every intendment of the law must be interpreted in favor of the working class, conformably to the
mandate of the Constitution. By sustaining rather than annulling the appeal bond as a further protection
to the claimant employee, this Court affirms once again its commitment to the interest of labor.

WHEREFORE, the petition is DISMISSED, with costs against the petitioner. It is so ordered.

Davide and Quiason, JJ., concur.

13
 G.R. No. 75222 July 18, 1991

RADIOLA-TOSHIBA PHILIPPINES, INC., through its assignee-in-insolvency VICENTE J.

CUNA, petitioner,
vs.
THE INTERMEDIATE APPELLATE COURT, HON. LEONARDO I. CRUZ, as Judge of the Regional
Trial Court of Angeles City, Branch No. LVI, EMILIO C. PATINO, as assignee-in-insolvency of
CARLOS and TERESITA GATMAYTAN, SHERIFF OF ANGELES CITY, REGISTER OF DEEDS OF
ANGELES CITY, SANYO MARKETING CORPORATION, S & T ENTERPRISES INC.,
REFRIGERATION INDUSTRIES INC., and DELTA MOTOR CORPORATION, respondents.

Quisumbing, Torres & Evangelista for petitioner.

Procopio S. Beltran, Jr. for private respondents.

BIDIN, J.:

This is a petition for certiorari of the March 31, 1986 Decision of the then Intermediate Appellate
Court * in A.C-G.R. SP No. 04160 entitled "Radiola-Toshiba Philippines, Inc. vs. Hon. Leonardo I. Cruz, et
al." denying the petition for certiorari and mandamus; and its Resolution of July 1, 1986 denying the
motion for reconsideration.

The antecedent facts of this case, as found by the then Intermediate Appellate Court, are as follows:

On July 2, 1980, three creditors filed a petition for the involuntary insolvency of Carlos
Gatmaytan and TeresitaGatmaytan, the private respondents herein, the case docketed as Special
Proceeding No. 1548 of the then Court of First Instance (now Regional Trial Court) of Pampanga
and Angeles City.

On July 9, 1980, the respondent court issued an order taking cognizance of the said petition and
stating inter alia that:

. . . the Court forbids the payment of any debts, and the delivery of any property owing
and belonging to said respondents-debtors from other persons, or, to any other persons
for the use and benefit of the same respondents-debtors and/or the transfer of any
property by and for the said respondents-debtors to another, upon petitioners' putting up
a bond by way of certified and reputable sureties. (Annex 1, Comment).

Counsel for the petitioners-creditors informed respondent sheriff Angeles City of the aforesaid order
(Annex 2, Ibid) and on March 26, 1981, also communicated with counsel for the petitioner herein
regarding same order, apprising the latter that "the personal and real property which have been levied
upon and/or attached should be preserved till the final determination of the petition aforementioned."
(Annex 3, Ibid).

On April 12, 1983, petitioners-creditors filed second urgent motion for issuance of insolvency order and
resolution of the case, alleging among other things, that in November, 1982, they filed an urgent motion
to issue insolvency order; on December 2, 1982, they presented a motion to prohibit the city sheriff of
Angeles City from disposing the personal and real properties of the insolvent debtors, Carlos Gatmaytan
and TeresitaGatmaytan; on January 18, 1983, they ( sic) appealed in the Bulletin Today issue of even
date a news item to the effect that Radiola-Toshiba Phil. Inc. has already shut down its factory, sometime
in March 1983, through their representative, they caused to be investigated the real properties in the
names of Carlos Gatmaytan and TeresitaGatmaytan and they were surprised to find out that some of the
aforesaid properties were already transferred to Radiola-Toshiba Phil. Inc.; and that in view of such

14
development, it is their submission that without an insolvency order and a resolution of the case which
was ripe for resolution as early as March 3, 1982, the rights and interest of petitioners-creditors would be
injured and jeopardized. (Annex "C").

On April 15, 1983, petitioner filed an opposition to the said motion vis-a-vis the prayer that the insolvency
order (which has not been rendered yet by the court) be annotated on the transfer certificates of title
already issued in its name (Annex "D").

On April 22, 1983, judgment was rendered declaring the insolvency of respondents-debtors Carlos
Gatmaytan and TeresitaGatmaytan.

On April 28, 1983, petitioner filed a supplemental opposition to the same second urgent motion and
motion to direct respondent sheriff to issue a final certificate of sale for the properties covered by TCT
Nos. 18905 and 40430 in its favor (Annex "E").

On February 3, 1984, acting upon petitioner's motion claiming that ownership of certain real properties of
the insolvents had passed to it by virtue of foreclosure proceedings conducted in Civil Case No. 35946 of
the former Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, which properties were not
redeemed within the period of redemption, respondent court issued an order disposing, thus:

WHEREFORE, the Court hereby, confirms the election of Mr. Emilio C. Patino, as assignee of all
the registered claimants in this case, and, in consequence thereof, the said assignee is hereby
directed to post a bond in the amount of P30,000.00 and to take his oath thereafter so as to be
able to perform his duties and discharge his functions, as such.

The Court, likewise, sets the meeting of all the creditors with the attendance, of course, of the
assignee, on March 9, 1984, at 8:30., as by that time the proposals, which the respective
representatives of the parties-claimants desire to clear with their principals, shall have already
been reported.

The assignee shall see to it that the properties of the insolvents which are now in the actual or
constructive custody and management of the receiver previously appointed by the Court on
petitioners' and claimants' proposals be placed under this actual or constructive custody and
management, such as he is able to do so, as the Court hereby dissolves the receivership
previously authorized, it having become a superfluity. (Annex "F").

On May 18, 1984, the Regional Trial Court, Branch CLII, Pasig, Metro Manila, in Civil Case No. 35946,
issued an order directing respondent Sheriff of Angeles City, or whoever is acting in his behalf, to issue
within seven (7) days from notice thereof a final deed of sale over the two (2) parcels of land covered by
Transfer Certificates of Titles Nos. 18905 and 40430 in favor of petitioner. (Annex "G").

In said Civil Case No. 35946, a case for collection of sum of money covering the proceeds of television
sets and other appliances, the then Court of First Instance of Rizal, Branch II, Pasig, Metro Manila, issued
a writ of preliminary attachment on February 15, 1980 upon application of the petitioner, as plaintiff,
which put up a bond of P350,000.00. On March 4, 1980, 3:00 P.M., levy on attachment was done in favor
of petitioner on the real properties registered in the names of spouses Carlos Gatmaytan and
TeresitaGatmaytan under TCT Nos. 18905 and 40430 of the Registry of Deeds of Angeles City, per Entry
No. 7216 on said titles. (Annex "A" and "B").

On December 10, 1980, a decision was rendered in favor of petitioner, ordering private respondents and
their co-defendant Peoples Appliance Center, Inc. to pay petitioner, jointly and severally, the sum of
P721,825.91 plus interest thereon of 14% per annum from October 12, 1979 until fully paid; P20,000.00,

15
for and attorney's fees; and the costs of suit (Annex "5", Comment). After the said decision in the
aforementioned Civil Case No. 35946 became final and executory, a writ of execution for the satisfaction
thereof issued on March 18, 1981; and on May 4, 1981, respondent sheriff of Angeles City sold at auction
sale the attached properties covered by TCT Nos. 18905 and 40430, to petitioner as the highest bidder,
and the certificate of sale was accordingly issued in its favor.

On September 21, 1982, the court ordered the consolidation of ownership of petitioner over said
properties; but respondent sheriff of Angeles City refused to issue a final certificate of sale in favor of
petitioner.

On May 30, 1984, petitioners-creditors interposed their opposition, stating among other things, that
subject motion is improper and premature because it treats of matters foreign to the insolvency
proceedings; and premature, for the reason that the properties covered by TCT Nos. 18905 and 40430-
Angeles City were brought to the jurisdiction of the insolvency court for the determination of the assets
of the insolvents available for distribution to the approved credits/liabilities of the insolvents. Petitioners-
creditors theorized that the insolvency court is devoid of jurisdiction to grant the motion referring to
matters involved in a case pending before a coordinate court in another jurisdiction (Annex "l").

Prior thereto or on July 13, 1984, to be precise, respondent court came out with its assailed extended
order with the following decretal portion:

WHEREFORE, and also for the reason stated in the aforequoted order issued in pursuance of a
similar motion of the movant, the Court denies, as it is hereby denied the motion of Radiola-
Toshiba, dated May 28, 1984 and directs the latter to participate in the supposed meeting of all
the creditors/claimants presided by the duly elected assignee. (Annex "J").

On September 8, 1984, herein petitioner Radiola-Toshiba Philippines, Inc. (RTPI, for short) filed a petition
for certiorari and mandamus with respondent Intermediate Appellate Court.

The then Intermediate Appellate Court, in a Decision promulgated on March 31, 1986, denied petitioner's
aforesaid petition. On April 19, 1986, petitioner filed a motion for reconsideration, but the same was
denied in a Resolution dated July 1, 1986.

Hence, the instant petition. Herein petitioner raised two issues —

1. WHETHER OR NOT CERTIORARI IS A REMEDY DESIGNATED FOR THE CORRECTION OF ERRORS OF

JURISDICTION ONLY; and

2. WHETHER OR NOT THE REFUSAL OF THE COURTS TO ENFORCE THE LIEN OF PETITIONER ARISING
FROM A LEVY OF ATTACHMENT NOT MADE WITHIN ONE MONTH NEXT PRECEDING THE
COMMENCEMENT OF THE INSOLVENCY PROCEEDING IS GRAVE ABUSE OF DISCRETION.

The main issue in this case is whether or not the levy on attachment in favor of the petitioner is dissolved
by the insolvency proceedings against respondent spouses commenced four months after said
attachment.

On this issue, Section 32 of the Insolvency Law (Act No. 1956, as amended), provides:

Sec. 32 — As soon as an assignee is elected or appointed and qualified, the clerk of the court
shall, by an instrument under his hand and seal of the court, assign and convey to the assignee
all the real and personal property, estate, and effects of the debtor with all his deeds, books, and

16
 papers relating thereto, and such assignment shall relate back to the commencement of the
proceedings in insolvency, and shall relate back to the acts upon the adjudication was founded,
and by operation of law shall vest the title to all such property, estate, and effects in the
assignee, although the same is then attached on mesne process, as the property of the debtor.
Such assignment shall operate to vest in the assignee all of the estate of the insolvent debtor not
exempt by law from execution. It shall dissolve any attachment levied within one month next
preceding the commencement of the insolvency proceedings and vacate and set aside any
judgment entered in any action commenced within thirty days immediately prior to the
commencement of insolvency proceedings and shall set aside any judgment entered by default or
consent of the debtor within thirty days immediately prior to the commencement of the
insolvency proceedings. (Emphasis supplied)

Relative thereto, the findings of the then Intermediate Appellate Court are undisputed that the levy on
attachment against the subject properties of the Gatmaytans, issued by the then Court of First Instance
of Pasig in Civil Case No. 35946, was on March 4, 1980 while the insolvency proceeding in the then Court
of First Instance of Angeles City, Special Proceeding No. 1548, was commenced only on July 2, 1980, or
more than four (4) months after the issuance of the said attachment. Under the circumstances, petitioner
contends that its lien on the subject properties overrode the insolvency proceeding and was not dissolved
thereby.

Private respondents, on the other hand, relying on Section 79 of the said law, which reads:

Sec. 79. When an attachment has been made and is not dissolved before the commencement of
proceedings in insolvency, or is dissolved by an undertaking given by the defendant, if the claim
upon which the attachment suit was commenced is proved against the estate of the debtor, the
plaintiff may prove the legal costs and disbursements of the suit, and of the keeping of the
property, and the amount thereof shall be a preferred debt.

and the fact that petitioner and its counsel have full knowledge of the proceedings in the insolvent case,
argue that the subsequent Certificate of Sale on August 3, 1981, issued in favor of petitioner over the
subject properties, was issued in bad faith, in violation of the law and is not equitable for the creditors of
the insolvent debtors; and pursuant to the above quoted Section 79, petitioner should not be entitled to
the transfer of the subject properties in its name.

Petitioner's contention is impressed with merit. 1âwphi1 The provision of the above-quoted Section 32, of
the Insolvency Law is very clear — that attachments dissolved are those levied within one (1) month next
preceding the commencement of the insolvency proceedings and judgments vacated and set aside are
judgments entered in any action, including judgment entered by default or consent of the debtor, where
the action was filed within thirty (30) days immediately prior to the commencement of the insolvency
proceedings. In short, there is a cut off period — one (1) month in attachment cases and thirty (30) days
in judgments entered in actions commenced prior to the insolvency proceedings. Section 79, on the other
hand, relied upon by private respondents, provides for the right of the plaintiff if the attachment is not
dissolved before the commencement of proceedings in insolvency, or is dissolved by an undertaking
given by the defendant, if the claim upon which the attachment suit was commenced is proved against
the estate of the debtor. Therefore, there is no conflict between the two provisions.

But even granting that such conflict exists, it may be stated that in construing a statute, courts should
adopt a construction that will give effect to every part of a statute, if at all possible. This rule is expressed
in the maxim, utmaqisvaleat quam pereat or that construction is to be sought which gives effect to the
whole of the statute — its every word. Hence, where a statute is susceptible of more than one
interpretation, the court should adopt such reasonable and beneficial construction as will render the

17
provision thereof operative and effective and harmonious with each other (Javellana vs. Tayo, 6 SCRA
1042 [1962]; Statutory Construction by Ruben E. Agpalo, p. 182).

Neither can the sheriff's sale in execution of the judgment in favor of the petitioner be considered as a
fraudulent transfer or preference by the insolvent debtors, which constitute a violation of Sec. 70 of the
Insolvency Law. In the case of Velayo vs. Shell Co. of the Philippines (100 Phil. 187, [1956]), this Court
ruled that Sections 32 and 70 contemplate only acts and transactions occurring within 30 days prior to
the commencement of the proceedings in insolvency and, consequently, all other acts outside of the 30-
day period cannot possibly be considered as coming within the orbit of their operation.

Finally, petitioner correctly argued that the properties in question were never placed under the
jurisdiction of respondent insolvency court so as to be made available for the payment of claim filed
against the Gatmaytans in the insolvency proceedings.

Hence, the denial by respondent insolvency court to give due course to the attachment and execution of
Civil Case No. 35946 of the CFI of Rizal constitutes a freezing of the disposition of subject properties by
the former which were not within its jurisdiction; undeniably, a grave abuse of discretion amounting to
want of jurisdiction, correctable by certiorari.

WHEREFORE, the March 31, 1986 decision of the then Intermediate Appellate Court is hereby Reversed
and SET ASIDE. The attachment and execution sale in Civil Case No. 35946 of the former CFI of Rizal are
given due course and petitioner's ownership of subject properties covered by TCT Nos. 18905 and 40430
is ordered consolidated.

SO ORDERED.

18
 G.R. No. L-7482 December 28, 1912

THE UNITED STATES, plaintiff-appellee,

vs.
TEN YU, ET AL., defendants-appellants.

L.M. Southworth, for appellants.

Office of the Solicitor-General Harvey, for appellee.

JOHNSON, J.:

On or about the 11th day of October, 1911, a complaint was presented against said defendants in the
municipal court of the city of Manila accusing them of a violation of section 3 of Ordinance No. 152 of the
city of Manila. They were duly arraigned. After hearing the evidence the Hon. Manuel Camus, judge of
said municipal court, found each of the defendants guilty of the offense charged and sentenced each of
them to pay a fine of P100. From that sentence each of the defendants appealed to the Court of First
Instance of the city of Manila.

The complaint presented against the defendants alleged:

That on or about October 10, 1911, in the city of Manila, Philippine Islands, the said defendants,
at that time and in that place, did willfully and unlawfully visit and were found in and within a
place where opium was smoked and in some way or other used in or upon the human body and
where it was sold, distributed, or where it was disposed of in some way or other, to wit, No. 408
Calle Salazar, Binondo, with infraction of the ordinances of the city of Manila.

To the complaint the defendants presented a demurrer. The demurrer alleged:

I. That the ordinance whereunder this complaint has been presented is and ought to be declared
null and void for the reason that the Municipal Board of the city of Manila neither did nor does
have legal authority to enact it.

II. That the ordinance whereunder this complaint has been presented is unreasonable, for it
punishes the presence of anyone who may visit an opium joint or a place where opium is kept,
sold or smoked, without considering whether said visit has a lawful or unlawful purpose or is with
or without knowledge of the nature of such place.

III. That the ordinance whereunder this complaint has been presented is and ought to be
declared null and void, for it imposes a cruel and excessive punishment upon persons who may
without knowledge or criminal intent violate its provisions.

IV. That the complaint in this case does not contain facts sufficient to constitute a public crime.

After hearing the evidence pro and con, upon the questions presented by said demurrer, the Hon. A.S.
Crossfield, judge, overruled the demurrer, stating that "the grounds of demurrer in this case are identical
with those in case No. 7949, U.S. vs. Chua Ong
et al. 1 I see no reason for changing the conclusion arrived at in that case. The complaint states a cause
of action. The demurrer is overruled."

19
In case No. 7949, U.S. vs. Chua Ong et al., 1 to which the Honorable Judge Crossfield makes reference in
his order overruling the demurrer in the present case, the following, among other things, was given as
the ground for overruling the demurrer:

Counsel contends that by the general law in relation to the use and possession of opium this
provision of the character of Manila has been placed in abeyance. 1awphil.net I am of the opinion
that Act No. 1761 which amended and repealed Act No. 1461 of the Philippine Commission has in
no way affected the charter of Manila. The Municipal Board then had legislative authority which
was conferred upon it, and the authority thus conferred included the making of ordinances
necessary to carry out the powers conferred by the charter, and to fix the penalty within certain
limits, and one of these powers was to provide for the closing of opium joints and to prohibit the
keeping or visiting of places where opium was smoked.

The ordinance in question prohibits places where opium is smoked or dealth in — prohibits opium
joints. The two sections (of the ordinance) are practically the same. The ordinance prohibits the
visiting or being present at a place where opium is smoked or sold, and I am of the opinion that
this is within the power of the board. The fact that the ordinance adds to the visiting, specifically
mentioned in the powers of the board, "or being present at" does not affect the legality of the
prohibition of visiting. ... The fact that the charter provides that no fine shall exceed $100 (P200)
and no imprisonment shall exceed six months, is not exceeded by the statement that either one
of the penalties provided may be imposed by adding thereto that both the fine and imprisonment
may be imposed in the discretion of the court.

With regard to the objection made on the ground that the punishment is cruel and unusual
because it provides for the punishment of innocent persons, I am of the opinion that the
ordinance does not so provide. It must clearly be read and understood in the light of the general
rule with regard to the intention of persons when violating its terms. The person going to a place
where opium was sold without knowledge of the fact would not be visiting it in contemplation of
this ordinance; neither if he had legal business to transact at a place where opium was sold and
visited it for the purpose of transacting his lawful business only and so doing he would not be
visiting a place where opium is sold in contemplation of this ordinance. I am of the opinion that
the grounds of the demurrer are not well taken. The demurrer is overruled.

Immediately following the overruling of the demurrer the said defendants were placed upon trial. After
hearing the evidence the Honorable A.S. Crossfield found that the evidence was insufficient to show that
Dee Ong, Uy Chong, Chit Eng, Co Lo, OngTui Co, GawKee, and Tian Hi were guilty of the crime charged
and dismissed the complaint against them and discharged each one of them from the custody of the law.
The lower court found, however, that the evidence was sufficient to show that Ten Yu, Tin Quac, Lim
Yan, Ong To, Yeng Sing, and Co King were guilty of the crime charged and sentenced each of them to
pay a fine of P100 and each one-thirteenth part of the costs, and in case the fine be not paid, that each
of the sentenced defendants be imprisoned at Bilibid Prison until their respective fines be satisfied at the
rate of P1 per day.

From that sentence the defendants appealed and in this court presented the following assignments of
error:

I. That the ordinance whereunder this information has been filed is and ought to be declared null
and void, for the reason that the Municipal Board of the city of Manila did not have legal
authority to enact said ordinance.

II. That the ordinance whereunder this information has been filed is unreasonable in so far as
section 3 thereof is concerned, for it imposes a penalty upon any person who may visit or be

20
 present in or within any place where opium is smoked, etc., without considering whether or not
said visit was made with a lawful or unlawful object or whether or not said visitor was aware of
the nature of said place.

III. That the ordinance whereunder this information has been filed ought to be declared null and
void for the reason that it imposes a cruel and excessive punishment upon persons who may
without knowledge or criminal intent violate its provisions.

IV. That the information filed in this case does not contain facts sufficient to constitute a public
crime.itc@alf With reference to the first assignment of error above noted, the appellant correctly
states the rule relating to the general powers of municipal corporations. It is, that municipal
corporations have only such powers as are expressly delegated to them and such other powers
as are necessarily implied from such express powers. With this definition of the general powers of
municipal corporations, let us examine the powers which are delegated to the city of Manila with
reference to the particular ordinance in question. Omitting the provisions of the charter relating
to the organization of the city of Manila, we have in section 11 (charter of Manila, Act No. 183)
the power to legislate or the power to enact ordinances or laws expressly conferred. In section
16 we find that the Municipal Board of the city of Manila "shall make such ordinances or
regulations as may be necessary to carry into effect the discharge of the powers and duties
conferred by this Act, and to provide for the peace, order, safety, and general welfare of the city
and its inhabitants; shall fix the penalties for the violation of the ordinances, provided that no fine
shall exceed $100 (P200) and no penalty shall exceed six months for a single offense. The board
shall see that the laws and ordinances are faithfully executed and enforced; and shall have such
further powers and perform such further duties as may be prescribed by law.lawphi1.net

By reference to paragraph (ff) of section 17 (Act No. 183), we find that the Municipal Board of the city of
Manila is empowered, in addition to the powers enumerated in said section 16, "to provide for the closing
of opium joints and to prohibit the keeping or visiting of any place where opium is smoked or sold for the
purpose of smoking."

Assuming to act under the authority conferred in said paragraph ( ff) of section 17, the Municipal Board of
the city of Manila adopted ordinance No. 152, the sections of which relating to the questions under
consideration are as follows:

ORDINANCE NO. 152.

SECTION 1.Opium joints prohibited. — No person shall keep, conduct, or maintain any opium
joint within the city of Manila.

SEC. 2.Places where opium is smoked or dealt in prohibited. — No person shall keep, conduct, or
maintain any place where opium in any form, or any of its derivatives or compounds, is either
smoked or otherwise used in or upon the human body, or is unlawfully sold, given away, or
otherwise disposed of.

SEC. 3.Visiting places where opium is smoked or dealt in is prohibited. — No person shall visit or
be present at or in any place where opium, or any of its derivatives or compounds, is smoked or
otherwise used in or upon the human body, or unlawfully sold, given away, or otherwise
disposed of.

x xx x xx x xx

21
 SEC. 5 Penalty. — Any person violating any of the provisions of this ordinance shall, upon
conviction, be punished by a fine of not less than one hundred pesos nor more than two hundred
pesos, or by imprisonment for not less than one month nor more than six months, or both such
fine and imprisonment in the discretion of the court.

By referring to section 3 of said ordinance and comparing the same with paragraph ( ff), we find an
express provision of the charter of the city of Manila, conferring what appears to be full and ample power
upon the municipal board for the adoption of said ordinance. It would be difficult to find an ordinance
which is more nearly within the express powers conferred upon a municipal board than that in the
present case for the adoption of said Ordinance No. 152. In our opinion, the Municipal Board of the city
of Manila had full authority to adopt said ordinance and the same is also in accordance with the general
spirit and policy of the laws of the state relating to the use of opium.

With reference to the second assignment of error, the appellant alleges that it is unreasonable, in that
section 3 imposes a penalty upon any person who may visit the places described in said ordinance. The
appellant attempts to make it appear that any person, even though lawfully visiting the places described
in said ordinance, might be punished. We think this interpretation of said ordinance is not justified. It will
be noted that the complaint charges that the defendants "unlawfully visited, etc." This allegation the
defendants may prove, if the fact exists, that they visited the place described in the complaint lawfully
and not in violation of the provisions nor the spirit of said ordinance.

Ordinances of the class under consideration are not at all uncommon. Many cities have ordinances
prohibiting people from visiting houses of ill fame; children from visiting saloons where alcoholic liquors
are sold, and many others of a similar class. In the case of State vs. Botkin (71 Iowa, 87) the facts are
very similar to those in the present case. In that case an ordinance of the city of Des Moines of the State
of Iowa provided that "any person who should be found in or frequenting any disorderly house shall be
subject to a fine." Under that ordinance the defendant (Botkin) was arrested, arraigned and convicted of
a violation of the same in the municipal court of said city. He applied for the writ of habeas corpus in the
courts of the State, upon the ground that he was being unlawfully restrained of his liberty, by reason of
the sentence under said ordinance, alleging that the ordinance was void. The court of first instance (the
district court) granted the writ of habeas corpus upon the ground that the ordinance was void and illegal.
From that conclusion an appeal was taken to the supreme court of the State of Iowa, where the decision
of the court of first instance was reversed, the court holding that the city had full authority to adopt said
ordinance and that the sentence of the municipal court was valid, and ordered the defendant returned to
the custody of the city authorities for the enforcement of the decision of said municipal court. The district
court in that case (State vs. Botkin) held that the ordinance was void for the reason that it failed to
prescribe that, to render one guilty of the offense prohibited, he shall be unlawfully in the house and
that, under the language of the ordinance, one found in a disorderly house is guilty, though he be there
for a lawful or innocent purpose.

The supreme court, in passing upon that part of the decision of the lower court, said:

This decision [position] of the court below is clearly unsound, and in violation of the familiar rules
of the construction and interpretation of statutes. The subject matter, effect and consequences,
and the reason and spirit of a statute must be considered, as well as its words, in interpreting
and construing it. A statute, intending to prohibit an offense, will, under these rules, never be
applied to an innocent [and] lawful act. The offense is prohibited and not the lawful act. Hence, if
an act is done which is prohibited by the words of the statute, it may be shown to be lawfully or
innocently done. ... The court below thought that, as the ordinance imposes upon the accused
the burden of showing his lawful presence in a disorderly house, it is void; but it is competent for
the legislature to prescribe that an offense may be presumed from an act done. The ordinance in
question, as we have seen, is intended to forbid unlawful presence in a disorderly house and is to

22
 be so interpreted. The presence should be charged in the information as unlawful. As a defense,
the person charged may show that he was lawfully or innocently in the house. These rules are of
constant application in the administration of the criminal law. (Introduction to Blackstone's
Commentaries, by Judge Cooley, sec. 2, pp. 59-62. Ex Parte Johnson, 73 Cal., 228.)

In the present case we have the express provision of the charter of the city of Manila (Act No. 183, sec.
17, par. (ff) conferring upon said city the right to adopt the ordinance in question (152). The punishment
imposed by said ordinance is also within the express power of said city, as defined by its charter.

In our opinion the contention that the ordinance in question is unreasonable is not tenable.

Courts are slow to pronounce statutes invalid or void. The question of the validity of every statute is first
determined by the legislative department of the government itself, and the courts should resolve every
presumption in favor of its validity. Courts are not justified in adjudging statutes in valid, in the face of
the conclusion of the legislature, when the question of its validity is at all doubtful. The courts must
assume that the validity of the statute was fully considered by the legislature when adopted. Courts will
not presume a statute invalid unless it clearly appears that it falls within some of the inhibitions of the
fundamental laws of the state. The wisdom or advisability of a particular statute is not a question for the
courts to determine — that is a question for the legislature to determine. The courts may or may not
agree with the legislature upon the wisdom or necessity of the law. Their disagreement, however,
furnishes no basis for pronouncing a statute illegal. If the particular statute is within the constitutional
power of the legislature to enact, whether the courts agree or not in the wisdom of its enactment, is a
matter of no concern. Upon the other hand, however, if the statute covers subjects not authorized by the
fundamental laws of the land or its constitution, then the courts are not only authorized but are justified
in pronouncing the same illegal and void, no matter how wise or beneficent such legislation may seem to
be.

Courts are not justified in measuring their opinion with the opinion of the legislative department of the
government, as expressed in statutes, upon questions of the wisdom, justice or advisability of a particular
law.

In exercising the higher authority conferred upon the courts to pronounce valid or invalid a particular
statute, they are only the administrators of the public will, as expressed in the fundamental laws of the
land. If an act of the legislature is held illegal, it is not because the judges have any control over the
legislative power, but because the act is forbidden by the fundamental laws of the land and because the
will of the people, as declared by such fundamental laws, is paramount and must obeyed, even by the
legislature. In pronouncing a statute illegal, the courts are simply interpreting the meaning, force and
application of the fundamental laws of the state. (Lindsay et al. vs. Commissioners, 2 Bay (S.C.), 61;
State Board of Health vs. City of Greenville, 98 N.E. Reporter (Ohio, April 2, 1912), 1019.Dissenting
opinion of the late Justice Harlan, Standard Oil Company vs. U.S., 211 U.S., 1.)

We find no occasion for modifying or reversing the sentence of the lower court based upon the second
assignment of error.

What we have said with reference to the second assignment of error, we believe fully answers the third.

With reference to the fourth assignment of error, we are of the opinion that the facts stated in the
complaint are sufficient, if true, to show that the defendants are guilty of the crime charged.

While we have discussed at length each of the assignments of error made by the appellants,
nevertheless, the only question, in fact, presented by the appeal under the law, in the first instance, is
whether or not the ordinance under which the defendants were sentenced is legal. Having concluded that

23
said ordinance is legal and within the express powers of the Municipal Board to enact, the appeal must be
dismissed, with costs in this instance against the appellants in equal parts.

It is therefore ordered and decreed, hereby, that the appeal be dismissed and that the cause be
remanded to the lower court for the execution of the sentence heretofore rendered.

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

24
 G.R. No. 90501 August 5, 1991

ARIS (PHIL.) INC., petitioner,

vs.
NATIONAL LABOR RELATIONS COMMISSION, LABOR ARBITER FELIPE GARDUQUE III,
LEODEGARIO DE GUZMAN, LILIA PEREZ, ROBERTO BESTAMONTE, AIDA OPENA, REYNALDO
TORIADO, APOLINARIO GAGAHINA, RUFINO DE CASTRO, FLORDELIZA RAYOS DEL SOL,
STEVE SANCHO, ESTER CAIRO, MARIETA MAGALAD, and MARY B. NADALA, respondents.

Cesar C. Cruz & Partners for petitioner.

ZosimoMorillo for respondent Rayosdel Sol.

Banzuela, Flores, Miralles, Raneses, Sy& Associates for private respondents.

DAVIDE, JR., J.:

Petitioner assails the constitutionality of the amendment introduced by Section 12 of Republic Act No.
6715 to Article 223 of the Labor Code of the Philippines (PD No. 442, as amended) allowing execution
pending appeal of the reinstatement aspect of a decision of a labor arbiter reinstating a dismissed or
separated employee and of Section 2 of the NLRC Interim Rules on Appeals under R.A. No. 6715
implementing the same. It also questions the validity of the Transitory Provision (Section 17) of the said
Interim Rules.

The challenged portion of Section 12 of Republic Act No. 6715, which took effect on 21 March 1989,
reads as follows:

SEC 12. Article 223 of the same code is amended to read as follows:

ART. 223. Appeal.

x xx x xx x xx

In any event, the decision of the Labor Arbiter reinstating a dismissed or separated employee, in
so far as the reinstatement aspect is concerned, shall immediately be executory, even pending
appeal. The employee shall either be admitted back to work under the same terms and
conditions prevailing prior to his dismissal or separation or, at the option of the employer, merely
reinstated in the payroll. The posting of a bond by the employer shall not stay the execution for
reinstatement provided therein.

This is a new paragraph ingrafted into the Article.

Sections 2 and 17 of the "NLRC Interim Rules On Appeals Under R.A. No. 6715, Amending the Labor
Code", which the National Labor Relations Commission (NLRC) promulgated on 8 August 1989, provide as
follows:

Section 2.Order of Reinstatement and Effect of Bond . — In so far as the reinstatement aspect is
concerned, the decision of the Labor Arbiter reinstating a dismissed or separated employee shall
immediately be executory even pending appeal. The employee shall either be admitted back to
work under the same terms and conditions prevailing prior to his dismissal or separation, or, at
the option of the employer, merely be reinstated in the payroll.

25
 The posting of a bond by the employer shall not stay the execution for reinstatement.

x xx x xx x xx

Section 17.Transitory provision. — Appeals filed on or after March 21, 1989, but prior to the
effectivity of these Interim Rules must conform to the requirements as herein set forth or as may
be directed by the Commission.

The antecedent facts and proceedings which gave rise to this petition are not disputed:

On 11 April 1988, private respondents, who were employees of petitioner, aggrieved by management's
failure to attend to their complaints concerning their working surroundings which had become detrimental
and hazardous, requested for a grievance conference. As none was arranged, and believing that their
appeal would be fruitless, they grouped together after the end of their work that day with other
employees and marched directly to the management's office to protest its long silence and inaction on
their complaints.

On 12 April 1988, the management issued a memorandum to each of the private respondents, who were
identified by the petitioner's supervisors as the most active participants in the rally requiring them to
explain why they should not be terminated from the service for their conduct. Despite their explanation,
private respondents were dismissed for violation of company rules and regulations, more specifically of
the provisions on security and public order and on inciting or participating in illegal strikes or concerted
actions.

Private respondents lost no time in filing a complaint for illegal dismissal against petitioner and Mr.
Gavino Bayan with the regional office of the NLRC at the National Capital Region, Manila, which was
docketed therein as NLRC-NCR-00-0401630-88.

After due trial, Labor Arbiter Felipe Garduque III handed down on 22 June 1989 a decision' the
dispositive portion of which reads:

ACCORDINGLY, respondent Aris (Phils.), Inc. is hereby ordered to reinstate within ten (10) days
from receipt hereof, herein complainants Leodegario de Guzman, Rufino de Castro, Lilia M. Perez,
MarietaMagalad, FlordelizaRayos del Sol, Reynaldo Toriado, Roberto Besmonte,
ApolinarioGagahina, Aidam (sic) Opena, Steve C. Sancho Ester Cairo, and Mary B. Nadala to their
former respective positions or any substantial equivalent positions if already filled up, without
loss of seniority right and privileges but with limited backwages of six (6) months except
complainant Leodegario de Guzman.

All other claims and prayers are hereby denied for lack of merit.

SO ORDERED.

On 19 July 1989, complainants (herein private respondents) filed a Motion For Issuance of a Writ of
Execution2pursuant to the above-quoted Section 12 of R.A. No. 6715.

On 21 July 1989, petitioner filed its Appeal.3

On 26 July 1989, the complainants, except FlorRayosdel Sol, filed a Partial Appeal. 4
On 10 August 1989, complainant FlorRayosdel Sol filed a Partial Appeal.5

26
On 29 August 1989, petitioner filed an Opposition 6 to the motion for execution alleging that Section 12 of
R.A. No. 6715 on execution pending appeal cannot be applied retroactively to cases pending at the time
of its effectivity because it does not expressly provide that it shall be given retroactive effect 7 and to give
retroactive effect to Section 12 thereof to pending cases would not only result in the imposition of an
additional obligation on petitioner but would also dilute its right to appeal since it would be burdened with
the consequences of reinstatement without the benefit of a final judgment. In their Reply 8 filed on 1
September 1989, complainants argued that R.A. No. 6715 is not sought to be given retroactive effect in
this case since the decision to be executed pursuant to it was rendered after the effectivity of the Act.
The said law took effect on 21 March 1989, while the decision was rendered on 22 June 1989.

Petitioner submitted a Rejoinder to the Reply on 5 September 1989. 9

On 5 October 1989, the Labor Arbiter issued an Order granting the motion for execution and the issuance
of a partial writ of execution10 as far as reinstatement of herein complainants is concerned in consonance
with the provision of Section 2 of the rules particularly the last sentence thereof.

In this Order, the Labor Arbiter also made reference to Section 17 of the NLRC Interim Rules in this wise:

Since Section 17 of the said rules made mention of appeals filed on or after March 21, 1989, but
prior to the effectivity of these interim rules which must conform with the requirements as
therein set forth (Section 9) or as may be directed by the Commission, it obviously treats of
decisions of Labor Arbiters before March 21,1989. With more reason these interim rules be made
to apply to the instant case since the decision hereof (sic) was rendered thereafter. 11

Unable to accept the above Order, petitioner filed the instant petition on 26 October 1989 12 raising the
issues adverted to in the introductory portion of this decision under the following assignment of errors:

A. THE LABOR ARBITER A QUO AND THE NLRC, IN ORDERING THE REINSTATEMENT OF THE
PRIVATE RESPONDENTS PENDING APPEAL AND IN PROVIDING FOR SECTION 2 OF THE
INTERIM RULES, RESPECTIVELY, ACTED WITHOUT AND IN EXCESS OF JURISDICTION SINCE
THE BASIS FOR SAID ORDER AND INTERIM RULE, i.e., SECTION 12 OF R.A. 6715 IS VIOLATIVE
OF THE CONSTITUTIONAL GUARANTY OF DUE PROCESS IT BEING OPPRESSIVE AND
UNREASONABLE.

B. GRANTING ARGUENDO THAT THE PROVISION IN(SIC) REINSTATEMENT PENDING APPEAL IS

VALID, NONETHELESS, THE LABOR ARBITER A QUO AND THE NLRC STILL ACTED IN EXCESS
AND WITHOUT JURISDICTION IN RETROACTIVELY APPLYING SAID PROVISION TO PENDING
LABOR CASES.

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

Respondent NLRC, through the Office of the Solicitor General, filed its Comment on 20 November
1989.13 Meeting squarely the issues raised by petitioner, it submits that the provision concerning the
mandatory and automatic reinstatement of an employee whose dismissal is found unjustified by the labor
arbiter is a valid exercise of the police power of the state and the contested provision "is then a police
legislation."

As regards the retroactive application thereof, it maintains that being merely procedural in nature, it can
apply to cases pending at the time of its effectivity on the theory that no one can claim a vested right in a
rule of procedure. Moreover, such a law is compatible with the constitutional provision on protection to
labor.

27
On 11 December 1989, private respondents filed a Manifestation 14 informing the Court that they are
adopting the Comment filed by the Solicitor General and stressing that petitioner failed to comply with
the requisites for a valid petition for certiorari under Rule 65 of the Rules of Court.

On 20 December 1989, petitioner filed a Rejoinder15 to the Comment of the Solicitor General.

In the resolution of 11 January 1990,16 We considered the Comments as respondents' Answers, gave due
course to the petition, and directed that the case be calendared for deliberation.

In urging Us to declare as unconstitutional that portion of Section 223 of the Labor Code introduced by
Section 12 of R.A. No. 6715, as well as the implementing provision covered by Section 2 of the NLRC
Interim Rules, allowing immediate execution, even pending appeal, of the reinstatement aspect of a
decision of a labor arbiter reinstating a dismissed or separated employee, petitioner submits that said
portion violates the due process clause of the Constitution in that it is oppressive and unreasonable. It
argues that a reinstatement pending appeal negates the right of the employer to self-protection for it has
been ruled that an employer cannot be compelled to continue in employment an employee guilty of acts
inimical to the interest of the employer; the right of an employer to dismiss is consistent with the legal
truism that the law, in protecting the rights of the laborer, authorizes neither the oppression nor the
destruction of the employer. For, social justice should be implemented not through mistaken sympathy
for or misplaced antipathy against any group, but even-handedly and fairly.17

To clinch its case, petitioner tries to demonstrate the oppressiveness of reinstatement pending appeal by
portraying the following consequences: (a) the employer would be compelled to hire additional
employees or adjust the duties of other employees simply to have someone watch over the reinstated
employee to prevent the commission of further acts prejudicial to the employer, (b) reinstatement of an
undeserving, if not undesirable, employee may demoralize the rank and file, and (c) it may encourage
and embolden not only the reinstated employees but also other employees to commit similar, if not
graver infractions.

These rationalizations and portrayals are misplaced and are purely conjectural which, unfortunately,
proceed from a misunderstanding of the nature and scope of the relief of execution pending appeal.

Execution pending appeal is interlinked with the right to appeal. One cannot be divorced from the other.
The latter may be availed of by the losing party or a party who is not satisfied with a judgment, while the
former may be applied for by the prevailing party during the pendency of the appeal. The right to appeal,
however, is not a constitutional, natural or inherent right. It is a statutory privilege of statutory
origin18 and, therefore, available only if granted or provided by statute. The law may then validly provide
limitations or qualifications thereto or relief to the prevailing party in the event an appeal is interposed by
the losing party. Execution pending appeal is one such relief long recognized in this jurisdiction. The
Revised Rules of Court allows execution pending appeal and the grant thereof is left to the discretion of
the court upon good reasons to be stated in a special order.19

Before its amendment by Section 12 of R.A. No. 6715, Article 223 of the Labor Code already allowed
execution of decisions of the NLRC pending their appeal to the Secretary of Labor and Employment.

In authorizing execution pending appeal of the reinstatement aspect of a decision of the Labor Arbiter
reinstating a dismissed or separated employee, the law itself has laid down a compassionate policy
which, once more, vivifies and enhances the provisions of the 1987 Constitution on labor and the
working-man.

These provisions are the quintessence of the aspirations of the workingman for recognition of his role in
the social and economic life of the nation, for the protection of his rights, and the promotion of his

28
welfare. Thus, in the Article on Social Justice and Human Rights of the Constitution, 20 which principally
directs Congress to give highest priority to the enactment of measures that protect and enhance the right
of all people to human dignity, reduce social, economic, and political inequalities, and remove cultural
inequities by equitably diffusing wealth and political power for the common good, the State is mandated
to afford full protection to labor, local and overseas, organized and unorganized, and promote full
employment and equality of employment opportunities for all; to guarantee the rights of all workers to
self-organization, collective bargaining and negotiations, and peaceful concerted activities, including the
right to strike in accordance with law, security of tenure, human conditions of work, and a living wage, to
participate in policy and decision-making processes affecting their rights and benefits as may be provided
by law; and to promote the principle of shared responsibility between workers and employers and the
preferential use of voluntary modes in settling disputes. Incidentally, a study of the Constitutions of
various nations readily reveals that it is only our Constitution which devotes a separate article on Social
Justice and Human Rights. Thus, by no less than its fundamental law, the Philippines has laid down the
strong foundations of a truly just and humane society. This Article addresses itself to specified areas of
concern labor, agrarian and natural resources reform, urban land reform and housing, health, working
women, and people's organizations and reaches out to the underprivileged sector of society, for which
reason the President of the Constitutional Commission of 1986, former Associate Justice of this Court
Cecilia Muñoz-Palma, aptly describes this Article as the "heart of the new Charter." 21

These duties and responsibilities of the State are imposed not so much to express sympathy for the
workingman as to forcefully and meaningfully underscore labor as a primary social and economic force,
which the Constitution also expressly affirms With equal intensity. 22 Labor is an indispensable partner for
the nation's progress and stability.

If in ordinary civil actions execution of judgment pending appeal is authorized for reasons the
determination of which is merely left to the discretion of the judge, We find no plausible reason to
withhold it in cases of decisions reinstating dismissed or separated employees. In such cases, the poor
employees had been deprived of their only source of livelihood, their only means of support for their
family their very lifeblood. To Us, this special circumstance is far better than any other which a judge, in
his sound discretion, may determine. In short, with respect to decisions reinstating employees, the law
itself has determined a sufficiently overwhelming reason for its execution pending appeal.

The validity of the questioned law is not only supported and sustained by the foregoing considerations.
As contended by the Solicitor General, it is a valid exercise of the police power of the State. Certainly, if
the right of an employer to freely discharge his employees is subject to regulation by the State, basically
in the exercise of its permanent police power on the theory that the preservation of the lives of the
citizens is a basic duty of the State, that is more vital than the preservation of corporate profits. 23 Then,
by and pursuant to the same power, the State may authorize an immediate implementation, pending
appeal, of a decision reinstating a dismissed or separated employee since that saving act is designed to
stop, although temporarily since the appeal may be decided in favor of the appellant, a continuing threat
or danger to the survival or even the life of the dismissed or separated employee and its family.

The charge then that the challenged law as well as the implementing rule are unconstitutional is
absolutely baseless.1âwphi1 Laws are presumed constitutional.24 To justify nullification of a law, there
must be a clear and unequivocal breach of the Constitution, not a doubtful and argumentative
implication; a law shall not be declared invalid unless the conflict with the constitution is clear beyond
reasonable doubt.25 In Parades, et al. vs. Executive Secretary26 We stated:

2. For one thing, it is in accordance with the settled doctrine that between two possible
constructions, one avoiding a finding of unconstitutionality and the other yielding such a result,
the former is to be preferred. That which will save, not that which will destroy, commends itself
for acceptance. After all, the basic presumption all these years is one of validity. The onerous

29
 task of proving otherwise is on the party seeking to nullify a statute. It must be proved by clear
and convincing evidence that there is an infringement of a constitutional provision, save in those
cases where the challenged act is void on its face. Absent such a showing, there can be no
finding of unconstitutionality. A doubt, even if well-founded, does not suffice. Justice Malcolm's
aphorism is apropos: To doubt is to sustain.27

The reason for this:

... can be traced to the doctrine of separation of powers which enjoins on each department a
proper respect for the acts of the other departments. ... The theory is that, as the joint act of the
legislative and executive authorities, a law is supposed to have been carefully studied and
determined to be constitution before it was finally enacted. Hence, as long as there is some other
basis that can be used by the courts for its decision, the constitutionality of the challenged law
will not be touched upon and the case will be decided on other available grounds. 28

The issue concerning Section 17 of the NLRC Interim Rules does not deserve a measure of attention. The
reference to it in the Order of the Labor Arbiter of 5 October 1989 was unnecessary since the procedure
of the appeal proper is not involved in this case. Moreover, the questioned interim rules of the NLRC,
promulgated on 8 August 1989, can validly be given retroactive effect. They are procedural or remedial in
character, promulgated pursuant to the authority vested upon it under Article 218(a) of the Labor Code
of the Philippines, as amended. Settled is the rule that procedural laws may be given retroactive
effect.29 There are no vested rights in rules of procedure.30 A remedial statute may be made applicable to
cases pending at the time of its enactment.31

WHEREFORE, the petition is hereby DISMISSED for lack of merit. Costs against petitioner.

SO ORDERED.

30
 JOVENCIO LIM and TERESITA LIM, Petitioners, v. THE PEOPLE OF THE PHILIPPINES, THE
REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH 217, THE CITY PROSECUTOR OF
QUEZON CITY, AND WILSON CHAM, Respondents.

DECISION

CORONA, J.:

The constitutionality of PD 818, a decree which amended Article 315 of the Revised Penal Code by
increasing the penalties for estafa committed by means of bouncing checks, is being challenged in this
petition for certiorari, for being violative of the due process clause, the right to bail and the provision
against cruel, degrading or inhuman punishment enshrined under the Constitution.chanrob1es virtua1
1aw 1ibrary

The antecedents of this case, as gathered from the parties’ pleadings and documentary proofs, follow.

In December 1991, petitioner spouses issued to private respondent two postdated checks, namely,
Metrobank check no. 464728 dated January 15, 1992 in the amount of P365,750 and Metrobank check
no. 464743 dated January 22, 1992 in the amount of P429,000. Check no. 464728 was dishonored upon
presentment for having been drawn against insufficient funds while check no. 464743 was not presented
for payment upon request of petitioners who promised to replace the dishonored check.

When petitioners reneged on their promise to cover the amount of check no. 464728, the private
respondent filed a complaint-affidavit before the Office of the City Prosecutor of Quezon City charging
petitioner spouses with the crime of estafa under Article 315, par. 2 (d) of the Revised Penal Code, as
amended by PD 818.

On February 16, 2001, the City Prosecutor issued a resolution finding probable cause against petitioners
and recommending the filing of an information for estafa with no bail recommended. On the same day,
an information for the crime of estafa was filed with Branch 217 of the Regional Trial Court of Quezon
City against petitioners. The case was docketed as Criminal Case No. Q-01-101574. Thereafter, the trial
court issued a warrant for the arrest of herein petitioners, thus:chanrob1es virtual 1aw library

It appearing on the face of the information and from supporting affidavit of the complaining witness and
its annexes that probable cause exists, that the crime charged was committed and accused is probably
guilty thereof, let a warrant for the arrest of the accused be issued.

No Bail Recommended.

SO ORDERED. 1

On July 18, 2001, petitioners filed an "Urgent Motion to Quash Information and Warrant of Arrest" which
was denied by the trial court. Likewise, petitioners’ motion for bail filed on July 24, 2001 was denied by
the trial court on the same day. Petitioner Jovencio Lim was arrested by virtue of the warrant of arrest
issued by the trial court and was detained at the Quezon City Jail. However, petitioner Teresita Lim
remained at large.

On August 22, 2001, petitioners filed the instant petition for certiorari imputing grave abuse of discretion
on the part of the lower court and the Office of the City Prosecutor of Quezon City, arguing that PD 818
violates the constitutional provisions on due process, bail and imposition of cruel, degrading or inhuman
punishment.

In a resolution dated February 26, 2002, this Court granted the petition of Jovencio Lim to post bail

31
pursuant to Department of Justice Circular No. 74 dated November 6, 2001 which amended the 2000 Bail
Bond Guide involving estafa under Article 315, par. 2 (d), and qualified theft. Said Circular specifically
provides as follows:chanrob1es virtual 1aw library

x x x

3) Where the amount of fraud is P32,000.00 or over in which the imposable penalty is reclusion temporal
to reclusion perpetua, bail shall be based on reclusion temporal maximum, pursuant to Par. 2 (a) of the
2000 Bail Bond Guide, multiplied by P2,000.00, plus an additional of P2,000.00 for every P10,000.00 in
excess of P22,000.00; Provided, however, that the total amount of bail shall not exceed P60,000.00.

In view of the aforementioned resolution, the matter concerning bail shall no longer be discussed. Thus,
this decision will focus on whether or not PD 818 violates Sections 1 and 19 of Article III of the
Constitution, which respectively provide:chanrob1es virtual 1aw library

Section 1. No person shall be deprived of life, liberty or property without due process of law, nor shall
any person be denied the equal protection of the laws.

x x x

Section 19 (1) Excessive fines shall not be imposed, nor cruel, degrading or inhuman punishment
inflicted. . . .

We shall deal first with the issue of whether PD 818 was enacted in contravention of Section 19 of Article
III of the Constitution. In this regard, the impugned provision of PD 818 reads as follows:chanrob1es
virtual 1aw library

SECTION 1. Any person who shall defraud another by means of false pretenses or fraudulent acts as
defined in paragraph 2(d) of Article 315 of the Revised Penal Code, as amended by Republic Act No.
4885, shall punished by:chanrob1es virtual 1aw library

1st. The penalty of reclusion temporal if the amount of the fraud is over 12,000 pesos but does not
exceed 22,000 pesos, and if such amount exceeds the later sum, the penalty provided in this paragraph
shall be imposed in its maximum period, adding one year for each additional 10,000 pesos but the total
penalty which may be imposed shall in no case exceed thirty years. In such cases, and in connection with
the accessory penalties which may be imposed under the Revised Penal Code, the penalty shall be
termed reclusion perpetua;

2nd. The penalty of prision mayor in its maximum period, if the amount of the fraud is over 6,000 pesos
but does not exceed 12,000 pesos.

3rd. The penalty of prision mayor in its medium period, if such amount is over 200 pesos but does not
exceed 6,000 pesos; and

4th. By prision mayor in its minimum period, if such amount does not exceed 200 pesos.

Petitioners contend that, inasmuch as the amount of the subject check is P365,750, they can be
penalized with reclusion perpetua or 30 years of imprisonment. This penalty, according to petitioners, is
too severe and disproportionate to the crime they committed and infringes on the express mandate of
Article III, Section 19 of the Constitution which prohibits the infliction of cruel, degrading and inhuman
punishment.

Settled is the rule that a punishment authorized by statute is not cruel, degrading or disproportionate to

32
the nature of the offense unless it is flagrantly and plainly oppressive and wholly disproportionate to the
nature of the offense as to shock the moral sense of the community. It takes more than merely being
harsh, excessive, out of proportion or severe for a penalty to be obnoxious to the Constitution. 2 Based
on this principle, the Court has consistently overruled contentions of the defense that the penalty of fine
or imprisonment authorized by the statute involved is cruel and degrading.

In People v. Tongko, 3 this Court held that the prohibition against cruel and unusual punishment is
generally aimed at the form or character of the punishment rather than its severity in respect of its
duration or amount, and applies to punishments which never existed in America or which public
sentiment regards as cruel or obsolete. This refers, for instance, to those inflicted at the whipping post or
in the pillory, to burning at the stake, breaking on the wheel, disemboweling and the like. The fact that
the penalty is severe provides insufficient basis to declare a law unconstitutional and does not, by that
circumstance alone, make it cruel and inhuman.

Petitioners also argue that while PD 818 increased the imposable penalties for estafa committed under
Article 315, par. 2 (d) of the Revised Penal Code, it did not increase the amounts corresponding to the
said new penalties. Thus, the original amounts provided for in the Revised Penal Code have remained the
same notwithstanding that they have become negligible and insignificant compared to the present value
of the peso.

This argument is without merit. The primary purpose of PD 818 is emphatically and categorically stated in
the following:chanrob1es virtual 1aw library

WHEREAS, reports received of late indicate an upsurge of estafa (swindling) cases committed by means
of bouncing checks;

WHEREAS, if not checked at once, these criminal acts would erode the people’s confidence in the use of
negotiable instruments as a medium of commercial transaction and consequently result in the retardation
of trade and commerce and the undermining of the banking system of the country;

WHEREAS, it is vitally necessary to arrest and curb the rise in this kind of estafa cases by increasing the
existing penalties provided therefor.

Clearly, the increase in the penalty, far from being cruel and degrading, was motivated by a laudable
purpose, namely, to effectuate the repression of an evil that undermines the country’s commercial and
economic growth, and to serve as a necessary precaution to deter people from issuing bouncing checks.
The fact that PD 818 did not increase the amounts corresponding to the new penalties only proves that
the amount is immaterial and inconsequential. What the law sought to avert was the proliferation of
estafa cases committed by means of bouncing checks. Taking into account the salutary purpose for which
said law was decreed, we conclude that PD 818 does not violate Section 19 of Article III of the
Constitution.

Moreover, when a law is questioned before the Court, the presumption is in favor of its constitutionality.
To justify its nullification, there must be a clear and unmistakable breach of the Constitution, not a
doubtful and argumentative one. 4 The burden of proving the invalidity of a law rests on those who
challenge it. In this case, petitioners failed to present clear and convincing proof to defeat the
presumption of constitutionality of PD 818.

With respect to the issue of whether PD 818 infringes on Section 1 of Article III of the Constitution,
petitioners claim that PD 818 is violative of the due process clause of the Constitution as it was not
published in the Official Gazette. This claim is incorrect and must be rejected. Publication, being an
indispensable part of due process, is imperative to the validity of laws, presidential decrees and executive
orders. 5 PD 818 was published in the Official Gazette on December 1, 1975. 6

33
With the foregoing considerations in mind, this Court upholds the constitutionality of PD 818.chanrob1es
virtua1 1aw 1ibrary

WHEREFORE, the petition is hereby DISMISSED.

SO ORDERED.

34
 G.R. No. 72873 May 28, 1987

CARLOS ALONZO and CASIMIRA ALONZO, petitioners,

vs.
INTERMEDIATE APPELLATE COURT and TECLA PADUA, respondents.

Perpetuo L.B. Alonzo for petitioners.

Luis R. Reyes for private respondent.

CRUZ, J.:

The question is sometimes asked, in serious inquiry or in curious conjecture, whether we are a court of
law or a court of justice. Do we apply the law even if it is unjust or do we administer justice even against
the law? Thus queried, we do not equivocate. The answer is that we do neither because we are a
court both of law and of justice. We apply the law with justice for that is our mission and purpose in the
scheme of our Republic. This case is an illustration.

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

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

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

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

The trial court * also dismiss this complaint, now on the ground that the right had lapsed, not having
been exercised within thirty days from notice of the sales in 1963 and 1964. Although there was no
written notice, it was held that actual knowledge of the sales by the co-heirs satisfied the requirement of
the law. 7

In truth, such actual notice as acquired by the co-heirs cannot be plausibly denied. The other co-heirs,
including Tecla Padua, lived on the same lot, which consisted of only 604 square meters, including the
portions sold to the petitioners . 8 Eustaquia herself, who had sold her portion, was staying in the same
house with her sister Tecla, who later claimed redemption petition. 9 Moreover, the petitioners and the
private respondents were close friends and neighbors whose children went to school together. 10

It is highly improbable that the other co-heirs were unaware of the sales and that they thought, as they
alleged, that the area occupied by the petitioners had merely been mortgaged by Celestino and
Eustaquia. In the circumstances just narrated, it was impossible for Tecla not to know that the area
occupied by the petitioners had been purchased by them from the other. co-heirs. Especially significant

35
was the erection thereon of the permanent semi-concrete structure by the petitioners' son, which was
done without objection on her part or of any of the other co-heirs.

The only real question in this case, therefore, is the correct interpretation and application of the pertinent
law as invoked, interestingly enough, by both the petitioners and the private respondents. This is Article
1088 of the Civil Code, providing as follows:

Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the
partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by
reimbursing him for the price of the sale, provided they do so within the period of one
month from the time they were notified in writing of the sale by the vendor.

In reversing the trial court, the respondent court ** declared that the notice required by the said article
was written notice and that actual notice would not suffice as a substitute. Citing the same case of De
Conejero v. Court of Appeals 11 applied by the trial court, the respondent court held that that decision,
interpreting a like rule in Article 1623, stressed the need for written notice although no particular form
was required.

Thus, according to Justice J.B.L. Reyes, who was the ponente of the Court, furnishing the co-heirs with a
copy of the deed of sale of the property subject to redemption would satisfy the requirement for written
notice. "So long, therefore, as the latter (i.e., the redemptioner) is informed in writing of the sale and the
particulars thereof," he declared, "the thirty days for redemption start running. "

In the earlier decision of Butte v. UY, 12 " the Court, speaking through the same learned jurist,
emphasized that the written notice should be given by the vendor and not the vendees, conformably to a
similar requirement under Article 1623, reading as follows:

Art. 1623. The right of legal pre-emption or redemption shall not be exercised except
within thirty days from the notice in writing by the prospective vendor, or by the vendors,
as the case may be. The deed of sale shall not be recorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that he has given written notice thereof
to all possible redemptioners.

The right of redemption of co-owners excludes that of the adjoining owners.

As "it is thus apparent that the Philippine legislature in Article 1623 deliberately selected a particular
method of giving notice, and that notice must be deemed exclusive," the Court held that notice given by
the vendees and not the vendor would not toll the running of the 30-day period.

The petition before us appears to be an illustration of the Holmes dictum that "hard cases make bad
laws" as the petitioners obviously cannot argue against the fact that there was really no written notice
given by the vendors to their co-heirs. Strictly applied and interpreted, Article 1088 can lead to only one
conclusion, to wit, that in view of such deficiency, the 30 day period for redemption had not begun to
run, much less expired in 1977.

But as has also been aptly observed, we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the law, the first concern of the judge
should be to discover in its provisions the in tent of the lawmaker. Unquestionably, the law should never
be interpreted in such a way as to cause injustice as this is never within the legislative intent. An
indispensable part of that intent, in fact, for we presume the good motives of the legislature, is to render
justice.

36
Thus, we interpret and apply the law not independently of but in consonance with justice. Law and
justice are inseparable, and we must keep them so. To be sure, there are some laws that, while generally
valid, may seem arbitrary when applied in a particular case because of its peculiar circumstances. In such
a situation, we are not bound, because only of our nature and functions, to apply them just the same, in
slavish obedience to their language. What we do instead is find a balance between the word and the will,
that justice may be done even as the law is obeyed.

As judges, we are not automatons. We do not and must not unfeelingly apply the law as it is worded,
yielding like robots to the literal command without regard to its cause and consequence. "Courts are apt
to err by sticking too closely to the words of a law," so we are warned, by Justice Holmes again, "where
these words import a policy that goes beyond them." 13 While we admittedly may not legislate, we
nevertheless have the power to interpret the law in such a way as to reflect the will of the legislature.
While we may not read into the law a purpose that is not there, we nevertheless have the right to
read out of it the reason for its enactment. In doing so, we defer not to "the letter that killeth" but to
"the spirit that vivifieth," to give effect to the law maker'swill.

The spirit, rather than the letter of a statute determines its construction, hence, a statute
must be read according to its spirit or intent. For what is within the spirit is within the
letter but although it is not within the letter thereof, and that which is within the letter
but not within the spirit is not within the statute. Stated differently, a thing which is
within the intent of the lawmaker is as much within the statute as if within the letter; and
a thing which is within the letter of the statute is not within the statute unless within the
intent of the lawmakers. 14

In requiring written notice, Article 1088 seeks to ensure that the redemptioner is properly
notified of the sale and to indicate the date of such notice as the starting time of the 30-
day period of redemption. Considering the shortness of the period, it is really necessary,
as a general rule, to pinpoint the precise date it is supposed to begin, to obviate any
problem of alleged delays, sometimes consisting of only a day or two.

The instant case presents no such problem because the right of redemption was invoked
not days but years after the sales were made in 1963 and 1964. The complaint was filed by Tecla Padua
in 1977, thirteen years after the first sale and fourteen years after the second sale. The delay invoked by
the petitioners extends to more than a decade, assuming of course that there was a valid notice that
tolled the running of the period of redemption.

Was there a valid notice? Granting that the law requires the notice to be written, would such notice be
necessary in this case? Assuming there was a valid notice although it was not in writing. would there be
any question that the 30-day period for redemption had expired long before the complaint was filed in
1977?

In the face of the established facts, we cannot accept the private respondents' pretense that they were
unaware of the sales made by their brother and sister in 1963 and 1964. By requiring written proof of
such notice, we would be closing our eyes to the obvious truth in favor of their palpably false claim of
ignorance, thus exalting the letter of the law over its purpose. The purpose is clear enough: to make sure
that the redemptioners are duly notified. We are satisfied that in this case the other brothers and sisters
were actually informed, although not in writing, of the sales made in 1963 and 1964, and that such
notice was sufficient.

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

37
While we do not here declare that this period started from the dates of such sales in 1963 and 1964, we
do say that sometime between those years and 1976, when the first complaint for redemption was filed,
the other co-heirs were actually informed of the sale and that thereafter the 30-day period started
running and ultimately expired. This could have happened any time during the interval of thirteen years,
when none of the co-heirs made a move to redeem the properties sold. By 1977, in other words, when
Tecla Padua filed her complaint, the right of redemption had already been extinguished because the
period for its exercise had already expired.

The following doctrine is also worth noting:

While the general rule is, that to charge a party with laches in the assertion of an alleged
right it is essential that he should have knowledge of the facts upon which he bases his
claim, yet if the circumstances were such as should have induced inquiry, and the means
of ascertaining the truth were readily available upon inquiry, but the party neglects to
make it, he will be chargeable with laches, the same as if he had known the facts. 15

It was the perfectly natural thing for the co-heirs to wonder why the spouses Alonzo, who were not
among them, should enclose a portion of the inherited lot and build thereon a house of strong materials.
This definitely was not the act of a temporary possessor or a mere mortgagee. This certainly looked like
an act of ownership. Yet, given this unseemly situation, none of the co-heirs saw fit to object or at least
inquire, to ascertain the facts, which were readily available. It took all of thirteen years before one of
them chose to claim the right of redemption, but then it was already too late.

We realize that in arriving at our conclusion today, we are deviating from the strict letter of the law,
which the respondent court understandably applied pursuant to existing jurisprudence. The said court
acted properly as it had no competence to reverse the doctrines laid down by this Court in the above-
cited cases. In fact, and this should be clearly stressed, we ourselves are not abandoning the De
Conejero and Buttle doctrines. What we are doing simply is adopting an exception to the general rule, in
view of the peculiar circumstances of this case.

The co-heirs in this case were undeniably informed of the sales although no notice in writing was given
them. And there is no doubt either that the 30-day period began and ended during the 14 years between
the sales in question and the filing of the complaint for redemption in 1977, without the co-heirs
exercising their right of redemption. These are the justifications for this exception.

More than twenty centuries ago, Justinian defined justice "as the constant and perpetual wish to render
every one his due." 16 That wish continues to motivate this Court when it assesses the facts and the law
in every case brought to it for decision. Justice is always an essential ingredient of its decisions. Thus
when the facts warrants, we interpret the law in a way that will render justice, presuming that it was the
intention of the lawmaker, to begin with, that the law be dispensed with justice. So we have done in this
case.

WHEREFORE, the petition is granted. The decision of the respondent court is REVERSED and that of the
trial court is reinstated, without any pronouncement as to costs. It is so ordered.

38
 G.R. No. 94723 August 21, 1997

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

TORRES, JR., J.:

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

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

a.) Immediately upon the filing of this petition, an Order be issued restraining the
respondents from applying and enforcing Section 113 of Central Bank Circular No. 960;

b.) After hearing, judgment be rendered:

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

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

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

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

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

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

The antecedent facts:

On February 4, 1989, Greg Bartelli y Northcott, an American tourist, coaxed and lured petitioner Karen
Salvacion, then 12 years old to go with him to his apartment. Therein, Greg Bartelli detained Karen
Salvacion for four days, or up to February 7, 1989 and was able to rape the child once on February 4,
and three times each day on February 5, 6, and 7, 1989. On February 7, 1989, after policemen and
people living nearby, rescued Karen, Greg Bartelli was arrested and detained at the Makati Municipal Jail.
The policemen recovered from Bartelli the following items: 1.) Dollar Check No. 368, Control No.

39
021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book No. 104-108758-8 (Peso Acct.); 3.)
Dollar Account — China Banking Corp., US$/A#54105028-2; 4.)ID-122-30-8877; 5.)Philippine Money
(P234.00) cash; 6.)Door Keys 6 pieces; 7.)Stuffed Doll (Teddy Bear) used in seducing the complainant.

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

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

Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order dated February 22, 1989 granting the
application of herein petitioners, for the issuance of the writ of preliminary attachment. After petitioners
gave Bond No. JCL (4) 1981 by FGU Insurance Corporation in the amount of P100,000.00, a Writ of
Preliminary Attachment was issued by the trial court on February 28, 1989.

On March 1, 1989, the Deputy Sheriff of Makati served a Notice of Garnishment on China Banking
Corporation. In a letter dated March 13, 1989 to the Deputy Sheriff of Makati, China Banking Corporation
invoked Republic Act No. 1405 as its answer to the notice of garnishment served on it. On March 15,
1989, Deputy Sheriff of Makati Armando de Guzman sent his reply to China Banking Corporation saying
that the garnishment did not violate the secrecy of bank deposits since the disclosure is merely incidental
to a garnishment properly and legally made by virtue of a court order which has placed the subject
deposits in custodia legis. In answer to this letter of the Deputy Sheriff of Makati, China Banking
Corporation, in a letter dated March 20, 1989, invoked Section 113 of Central Bank Circular No. 960 to
the effect that the dollar deposits or defendant Greg Bartelli are exempt from attachment, garnishment,
or any other order or process of any court, legislative body, government agency or any administrative
body, whatsoever.

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

May 26, 1989

Ms. Erlinda S. Carolino

12 Pres. Osmena Avenue
South Admiral Village
Paranaque, Metro Manila

Dear Ms. Carolino:

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

The cited provision is absolute in application. It does not admit of any exception, nor has
the same been repealed nor amended.

40
 The purpose of the law is to encourage dollar accounts within the country's banking
system which would help in the development of the economy. There is no intention to
render futile the basic rights of a person as was suggested in your subject letter. The law
may be harsh as some perceive it, but it is still the law. Compliance is, therefore,
enjoined.

Very truly yours,

(SGD) AGAPITO S. FAJARDO

Director1

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

WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against defendant,

ordering the latter:

1. To pay plaintiff Karen E. Salvacion the amount of P500,000.00 as moral damages;

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

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

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

damages herein awarded;

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

6. Costs of the suit.

SO ORDERED.

The heinous acts of respondent Greg Bartelli which gave rise to the award were related in graphic detail
by the trial court in its decision as follows:

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

41
In support of the complaint, plaintiffs presented as witnesses the minor Karen E.
Salvacion, her father, Federico N. Salvacion, Jr., a certain Joseph Aguilar and a certain
LiberatoMadulio, who gave the following testimony:

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

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

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

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

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

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

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

Then, defendant suddenly pushed Karen towards the bed which was just near the door.
He tied her feet and hands spread apart to the bed posts. He knelt in front of her and
inserted his finger in her sex organ. She felt severe pain. She tried to shout but no sound
could come out because there were tapes on her mouth. When defendant withdrew his
finger it was full of blood and Karen felt more pain after the withdrawal of the finger.
(Id., p. 8)

He then got a Johnson's Baby Oil and he applied it to his sex organ as well as to her sex
organ. After that he forced his sex organ into her but he was not able to do so. While he
was doing it, Karen found it difficult to breathe and she perspired a lot while feeling
severe pain. She merely presumed that he was able to insert his sex organ a little,
because she could not see. Karen could not recall how long the defendant was in that
position. (Id. pp. 8-9)

42
After that, he stood up and went to the bathroom to wash. He also told Karen to take a
shower and he untied her hands. Karen could only hear the sound of the water while the
defendant, she presumed, was in the bathroom washing his sex organ. When she took a
shower more blood came out from her. In the meantime, defendant changed the
mattress because it was full of blood. After the shower, Karen was allowed by defendant
to sleep. She fell asleep because she got tired crying. The incident happened at about
4:00 p.m. Karen had no way of determining the exact time because defendant removed
her watch. Defendant did not care to give her food before she went to sleep. Karen woke
up at about 8:00 o'clock the following morning. (Id., pp. 9-10)

The following day, February 5, 1989, a Sunday, after a breakfast of biscuit and coke at
about 8:30 to 9:00 a.m. defendant raped Karen while she was still bleeding. For lunch,
they also took biscuit and coke. She was raped for the second time at about 12:00 to
2:00 p.m. In the evening, they had rice for dinner which defendant had stored
downstairs; it was he who cooked the rice that is why it looks like "lugaw". For the third
time, Karen was raped again during the night. During those three times defendant
succeeded in inserting his sex organ but she could not say whether the organ was
inserted wholly.

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

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

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

She woke up at 6:00 o'clock the following morning, and she saw defendant in bed, this
time sleeping. She waited for him to wake up. When he woke up, he again got some
food but he always kept the door locked. As usual, she was merely fed with biscuit and
coke. On that day, February 7, 1989, she was again raped three times. The first at about
6:30 to 7:00 a.m., the second at about 8:30 — 9:00, and the third was after lunch at
12:00 noon. After he had raped her for the second time he left but only for a short while.
Upon his return, he caught her shouting for help but he did not understand what she was

43
shouting about. After she was raped the third time, he left the house. (TSN, Aug. 15,
1989, pp. 16-17) She again went to the bathroom and shouted for help. After shouting
for about five minutes, she heard many voices. The voices were asking for her name and
she gave her name as Karen Salvacion. After a while, she heard a voice of a woman
saying they will just call the police. They were also telling her to change her clothes. She
went from the bathroom to the room but she did not change her clothes being afraid
that should the neighbors call for the police and the defendant see her in different
clothes, he might kill her. At that time she was wearing a T-shirt of the American
because the latter washed her dress. (Id., p. 16)

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

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

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

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

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

xxxxxxxxx

After the incident, Karen has changed a lot. She does not play with her brother and sister
anymore, and she is always in a state of shock; she has been absent-minded and is

44
 ashamed even to go out of the house. (TSN, Sept. 12, 1989, p. 10) She appears to be
restless or sad, (Id., p. 11) The father prays for P500,000.00 moral damages for Karen
for this shocking experience which probably, she would always recall until she reaches
old age, and he is not sure if she could ever recover from this experience. (TSN, Sept.
24, 1989, pp. 10-11)

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

Thus, petitioners decided to seek relief from this Court.

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

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

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

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

Expanding, the Central Bank said; that one reason for exempting the foreign currency deposits from
attachment, garnishment or any other order or process of any court, is to assure the development and
speedy growth of the Foreign Currency Deposit System and the Offshore Banking System in the
Philippines; that another reason is to encourage the inflow of foreign currency deposits into the banking
institutions thereby placing such institutions more in a position to properly channel the same to loans and

45
investments in the Philippines, thus directly contributing to the economic development of the country;
that the subject section is being enforced according to the regular methods of procedure; and that it
applies to all foreign currency deposits made by any person and therefore does not violate the equal
protection clause of the Constitution.

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

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

This Court finds the petition to be partly meritorious.

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

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

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

Indeed, after hearing the testimony of Karen, the Court believes that it was undoubtedly
a shocking and traumatic experience she had undergone which could haunt her mind for
a long, long time, the mere recall of which could make her feel so humiliated, as in fact
she had been actually humiliated once when she was refused admission at the Abad
Santos High School, Arellano University, where she sought to transfer from another

46
 school, simply because the school authorities of the said High School learned about what
happened to her and allegedly feared that they might be implicated in the case.

xxxxxxxxx

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

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

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

It has thus been said that —

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

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

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

The resolution of this question is important for the protection of nationals who are
victimized in the forum by foreigners who are merely passing through.

xxxxxxxxx

47
. . . Respondents China Banking Corporation and Central Bank of the Philippines refused
to honor the writ of execution issued in Civil Case No. 89-3214 on the strength of the
following provision of Central Bank Circular No. 960:

Sec. 113.Exemption from attachment. — Foreign currency deposits shall

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

Central Bank Circular No. 960 was issued pursuant to Section 7 of Republic Act No. 6426:

Sec. 7.Rules and Regulations. The Monetary Board of the Central Bank
shall promulgate such rules and regulations as may be necessary to
carry out the provisions of this Act which shall take effect after the
publication of such rules and regulations in the Official Gazette and in a
newspaper of national circulation for at least once a week for three
consecutive weeks. In case the Central Bank promulgates new rules and
regulations decreasing the rights of depositors, the rules and regulations
at the time the deposit was made shall govern.

The aforecited Section 113 was copied from Section 8 of Republic Act NO. 6426, as
amended by P.D. 1246, thus:

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

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

The purpose of PD 1246 in according protection against attachment, garnishment and

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

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

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

WHEREAS, under the provisions of Presidential Decree No. 1034

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

48
 WHEREAS, in order to assure the development and speedy growth of the
Foreign Currency Deposit System and the Offshore Banking System in
the Philippines, certain incentives were provided for under the two
Systems such as confidentiality of deposits subject to certain exceptions
and tax exemptions on the interest income of depositors who are
nonresidents and are not engaged in trade or business in the Philippines;

WHEREAS, making absolute the protective cloak of confidentiality over

such foreign currency deposits, exempting such deposits from tax, and
guaranteeing the vested rights of depositors would better encourage the
inflow of foreign currency deposits into the banking institutions
authorized to accept such deposits in the Philippines thereby placing
such institutions more in a position to properly channel the same to
loans and investments in the Philippines, thus directly contributing to the
economic development of the country;

Thus, one of the principal purposes of the protection accorded to foreign currency
deposits is "to assure the development and speedy growth of the Foreign Currency
Deposit system and the Offshore Banking in the Philippines" (3rd Whereas).

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

WHEREAS, conditions conducive to the establishment of an offshore

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

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

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

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

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

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

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

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

WHEREAS, the establishment of an offshore banking system in the

Philippines has been authorized under a separate decree;

49
 WHEREAS, a number of local commercial banks, as depository bank
under the Foreign Currency Deposit Act (RA No. 6426), have the
resources and managerial competence to more actively engage in
foreign exchange transactions and participate in the grant of foreign
currency loans to resident corporations and firms;

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

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

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

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

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

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

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

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

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

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

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

50
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular No. 960 and PD No. 1246, insofar as it
amends Section 8 of R.A. No. 6426 are hereby held to be INAPPLICABLE to this case because of its
peculiar circumstances. Respondents are hereby REQUIRED to COMPLY with the writ of execution issued
in Civil Case No. 89-3214, "Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV, RTC
Makati and to RELEASE to petitioners the dollar deposit of respondent Greg Bartelli y Northcott in such
amount as would satisfy the judgment.

SO ORDERED.

G.R. No. L-630 November 15, 1947

ALEXANDER A. KRIVENKO, petitioner-appellant,

vs.
THE REGISTER OF DEEDS, CITY OF MANILA, respondent and appellee.

Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.

First Assistant Solicitor General Reyes and Solicitor Carreon for respondent-appellee.
MarcelinoLontok appeared as amicus curies.

MORAN, C.J.:

Alenxander A. Kriventoralien, bought a residential lot from the Magdalena Estate, Inc., in December of
1941, the registration of which was interrupted by the war. In May, 1945, he sought to accomplish said
registration but was denied by the register of deeds of Manila on the ground that, being an alien, he
cannot acquire land in this jurisdiction. Krivenko then brought the case to the fourth branch of the Court
of First Instance of Manila by means of a consulta, and that court rendered judgment sustaining the
refusal of the register of deeds, from which Krivenko appealed to this Court.

There is no dispute as to these facts. The real point in issue is whether or not an alien under our
Constitution may acquire residential land.

It is said that the decision of the case on the merits is unnecessary, there being a motion to withdraw the
appeal which should have been granted outright, and reference is made to the ruling laid down by this
Court in another case to the effect that a court should not pass upon a constitutional question if its
judgment may be made to rest upon other grounds. There is, we believe, a confusion of ideas in this
reasoning. It cannot be denied that the constitutional question is unavoidable if we choose to decide this
case upon the merits. Our judgment cannot to be made to rest upon other grounds if we have to render
any judgment at all. And we cannot avoid our judgment simply because we have to avoid a constitutional
question. We cannot, for instance, grant the motion withdrawing the appeal only because we wish to
evade the constitutional; issue. Whether the motion should be, or should not be, granted, is a question
involving different considerations now to be stated.

According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant a
withdrawal of appeal after the briefs have been presented. At the time the motion for withdrawal was
filed in this case, not only had the briefs been prensented, but the case had already been voted and the
majority decision was being prepared. The motion for withdrawal stated no reason whatsoever, and the
Solicitor General was agreeable to it. While the motion was pending in this Court, came the new circular
of the Department of Justice, instructing all register of deeds to accept for registration all transfers of
residential lots to aliens. The herein respondent-appellee was naturally one of the registers of deeds to

51
obey the new circular, as against his own stand in this case which had been maintained by the trial court
and firmly defended in this Court by the Solicitor General. If we grant the withdrawal, the the result
would be that petitioner-appellant Alexander A. Krivenko wins his case, not by a decision of this Court,
but by the decision or circular of the Department of Justice, issued while this case was pending before
this Court. Whether or not this is the reason why appellant seeks the withdrawal of his appeal and why
the Solicitor General readily agrees to that withdrawal, is now immaterial. What is material and indeed
very important, is whether or not we should allow interference with the regular and complete exercise by
this Court of its constitutional functions, and whether or not after having held long deliberations and after
having reached a clear and positive conviction as to what the constitutional mandate is, we may still allow
our conviction to be silenced, and the constitutional mandate to be ignored or misconceived, with all the
harmful consequences that might be brought upon the national patromony. For it is but natural that the
new circular be taken full advantage of by many, with the circumstance that perhaps the constitutional
question may never come up again before this court, because both vendors and vendees will have no
interest but to uphold the validity of their transactions, and very unlikely will the register of deeds venture
to disobey the orders of their superior. Thus, the possibility for this court to voice its conviction in a
future case may be remote, with the result that our indifference of today might signify a permanent
offense to the Constitution.

All thse circumstances were thoroughly considered and weighted by this Court for a number of days and
the legal result of the last vote was a denial of the motion withdrawing the appeal. We are thus
confronted, at this stage of the proceedings, with our duty, the constitutional question becomes
unavoidable. We shall then proceed to decide that question.

Article XIII, section 1, of the Constitutional is as follows:

Article XIII. — Conservation and utilization of natural resources .

SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal,
petroleum, and other mineral oils, all forces of potential energy, and other natural resources of
the Philippines belong to the State, and their disposition, exploitation, development, or utilization
shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per
centum of the capital of which is owned by such citizens, subject to any existing right, grant,
lease, or concession at the time of the inaguration of the Government established uunder this
Constitution. Natural resources, with the exception of public agricultural land, shall not be
alienated, and no licence, concession, or lease for the exploitation, development, or utilization of
any of the natural resources shall be granted for a period exceeding twenty-five years, renewable
for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or
industrial uses other than the development of water "power" in which cases beneficial use may
be the measure and the limit of the grant.

The scope of this constitutional provision, according to its heading and its language, embraces all lands of
any kind of the public domain, its purpose being to establish a permanent and fundamental policy for the
conservation and utilization of all natural resources of the Nation. When, therefore, this provision, with
reference to lands of the public domain, makes mention of only agricultural, timber and mineral lands, it
means that all lands of the public domain are classified into said three groups, namely, agricultural,
timber and mineral. And this classification finds corroboration in the circumstance that at the time of the
adoption of the Constitution, that was the basic classification existing in the public laws and judicial
decisions in the Philippines, and the term "public agricultural lands" under said classification had then
acquired a technical meaning that was well-known to the members of the Constitutional Convention who
were mostly members of the legal profession.

52
As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court said that the
phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902, which phrase is also
to be found in several sections of the Public Land Act (No. 926), means "those public lands acquired from
Spain which are neither mineral for timber lands." This definition has been followed in long line of
decisions of this Court. (See Montano vs.Insular Government, 12 Phil., 593; Ibañez de Aldecoa vs. Insular
Government, 13 Phil., 159; Ramos vs. Director of Lands, 39 Phil., 175; Jocson vs. Director of Forestry, 39
Phil., 560; Ankron vs. Government of the Philippines, 40 Phil., 10.) And with respect to residential lands,
it has been held that since they are neither mineral nor timber lands, of necessity they must be classified
as agricultural. In Ibañez de Aldecoa vs. Insular Government (13 Phil., 159, 163), this Court said:

Hence, any parcel of land or building lot is susceptible of cultivation, and may be converted into a
field, and planted with all kinds of vegetation; for this reason, where land is not mining or
forestal in its nature, it must necessarily be included within the classification of agricultural land,
not because it is actually used for the purposes of agriculture, but because it was originally
agricultural and may again become so under other circumstances; besides, the Act of Congress
contains only three classification, and makes no special provision with respect to building lots or
urban lands that have ceased to be agricultural land.

In other words, the Court ruled that in determining whether a parcel of land is agricultural, the test is not
only whether it is actually agricultural, but also its susceptibility to cultivation for agricultural purposes.
But whatever the test might be, the fact remains that at the time the Constitution was adopted, lands of
the public domain were classified in our laws and jurisprudence into agricultural, mineral, and timber, and
that the term "public agricultural lands" was construed as referring to those lands that were not timber or
mineral, and as including residential lands. It may safely be presumed, therefore, that what the members
of the Constitutional Convention had in mind when they drafted the Constitution was this well-known
classification and its technical meaning then prevailing.

Certain expressions which appear in Constitutions, . . . are obviously technical; and where such
words have been in use prior to the adoption of a Constitution, it is presumed that its framers
and the people who ratified it have used such expressions in accordance with their technical
meaning. (11 Am. Jur., sec. 66, p. 683.) AlsoCalder vs. Bull, 3 Dall. [U.S.], 386; 1 Law.ed., 648;
Bronson vs. Syverson, 88 Wash., 264; 152 P., 1039.)

It is a fundamental rule that, in construing constitutions, terms employed therein shall be given
the meaning which had been put upon them, and which they possessed, at the time of the
framing and adoption of the instrument. If a word has acquired a fixed, technical meaning in
legal and constitutional history, it will be presumed to have been employed in that sense in a
written Constitution. (McKinney vs. Barker, 180 Ky., 526; 203 S.W., 303; L.R.A., 1918 E, 581.)

Where words have been long used in a technical sense and have been judicially construed to
have a certain meaning, and have been adopted by the legislature as having a certain meaning
prior to a particular statute in which they are used, the rule of construction requires that the
words used in such statute should be construed according to the sense in which they have been
so previously used, although the sense may vary from strict literal meaning of the words. (II
Sutherland, Statutory Construction, p. 758.)

Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the Constitution
must be construed as including residential lands, and this is in conformity with a legislative interpretation
given after the adoption of the Constitution. Well known is the rule that "where the Legislature has
revised a statute after a Constitution has been adopted, such a revision is to be regarded as a legislative
construction that the statute so revised conforms to the Constitution." (59 C.J., 1102.) Soon after the
Constitution was adopted, the National Assembly revised the Public Land Law and passed Commonwealth

53
Act No. 141, and sections 58, 59 and 60 thereof permit the sale of residential lots to Filipino citizens or to
associations or corporations controlled by such citizens, which is equivalent to a solemn declaration that
residential lots are considered as agricultural lands, for, under the Constitution, only agricultural lands
may be alienated.

It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public lands"
which are the same "public agriculture lands" under the Constitution, are classified into agricultural,
residential, commercial, industrial and for other puposes. This simply means that the term "public
agricultural lands" has both a broad and a particular meaning. Under its broad or general meaning, as
used in the Constitution, it embraces all lands that are neither timber nor mineral. This broad meaning is
particularized in section 9 of Commonwealth Act No. 141 which classifies "public agricultural lands" for
purposes of alienation or disposition, into lands that are stricly agricultural or actually devoted to
cultivation for agricultural puposes; lands that are residential; commercial; industrial; or lands for other
purposes. The fact that these lands are made alienable or disposable under Commonwealth Act No. 141,
in favor of Filipino citizens, is a conclusive indication of their character as public agricultural lands under
said statute and under the Constitution.

It must be observed, in this connection that prior to the Constitution, under section 24 of Public Land Act
No. 2874, aliens could acquire public agricultural lands used for industrial or residential puposes, but after
the Constitution and under section 23 of Commonwealth Act No. 141, the right of aliens to acquire such
kind of lands is completely stricken out, undoubtedly in pursuance of the constitutional limitation. And,
again, prior to the Constitution, under section 57 of Public Land Act No. 2874, land of the public domain
suitable for residence or industrial purposes could be sold or leased to aliens, but after the Constitution
and under section 60 of Commonwealth Act No. 141, such land may only be leased, but not sold, to
aliens, and the lease granted shall only be valid while the land is used for the purposes referred to. The
exclusion of sale in the new Act is undoubtedly in pursuance of the constitutional limitation, and this
again is another legislative construction that the term "public agricultural land" includes land for residence
purposes.

Such legislative interpretation is also in harmony with the interpretation given by the Executive
Department of the Government. Way back in 1939, Secretary of Justice Jose Abad Santos, in answer to a
query as to "whether or not the phrase 'public agricultural lands' in section 1 of Article XII (now XIII) of
the Constitution may be interpreted to include residential, commercial, and industrial lands for purposes
of their disposition," rendered the following short, sharp and crystal-clear opinion:

Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain in the
Philippines into agricultural, timber and mineral. This is the basic classification adopted since the
enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill. At the time of the
adoption of the Constitution of the Philippines, the term 'agricultural public lands' and, therefore,
acquired a technical meaning in our public laws. The Supreme Court of the Philippines in the
leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the phrase 'agricultural
public lands' means those public lands acquired from Spain which are neither timber nor mineral
lands. This definition has been followed by our Supreme Court in many subsequent case. . . .

Residential commercial, or industrial lots forming part of the public domain must have to be
included in one or more of these classes. Clearly, they are neither timber nor mineral, of
necessity, therefore, they must be classified as agricultural.

Viewed from another angle, it has been held that in determining whether lands are agricultural or
not, the character of the land is the test (Odell vs. Durant, 62 N.W., 524; Lorch vs. Missoula Brick
and Tile Co., 123 p.25). In other words, it is the susceptibility of the land to cultivation for

54
 agricultural purposes by ordinary farming methods which determines whether it is agricultural or
not (State vs. Stewart, 190 p. 129).

Furthermore, as said by the Director of Lands, no reason is seen why a piece of land, which may
be sold to a person if he is to devote it to agricultural, cannot be sold to him if he intends to use
it as a site for his home.

This opinion is important not alone because it comes from a Secratary of Justice who later became the
Chief Justice of this Court, but also because it was rendered by a member of the cabinet of the late
President Quezon who actively participated in the drafting of the constitutional provision under
consideration. (2 Aruego, Framing of the Philippine Constitution, p. 598.) And the opinion of the Quezon
administration was reiterated by the Secretary of Justice under the Osmeña administration, and it was
firmly maintained in this Court by the Solicitor General of both administrations.

It is thus clear that the three great departments of the Government — judicial, legislative and executive
— have always maintained that lands of the public domain are classified into agricultural, mineral and
timber, and that agricultural lands include residential lots.

Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public
agricultural land, shall not be aliented," and with respect to public agricultural lands, their alienation is
limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands
of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their
agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article
XIII, and it reads as follows:

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain in the Philippines.

This constitutional provision closes the only remaining avenue through which agricultural resources may
leak into aliens' hands. It would certainly be futile to prohibit the alienation of public agricultural lands to
aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the
hands of Filipino citizens. Undoubtedly, as above indicated, section 5 is intended to insure the policy of
nationalization contained in section 1. Both sections must, therefore, be read together for they have the
same purpose and the same subject matter. It must be noticed that the persons against whom the
prohibition is directed in section 5 are the very same persons who under section 1 are disqualified "to
acquire or hold lands of the public domain in the Philippines." And the subject matter of both sections is
the same, namely, the non-transferability of "agricultural land" to aliens. Since "agricultural land" under
section 1 includes residential lots, the same technical meaning should be attached to "agricultural land
under section 5. It is a rule of statutory construction that "a word or phrase repeated in a statute will
bear the same meaning throughout the statute, unless a different intention appears." (II Sutherland,
Statutory Construction, p. 758.) The only difference between "agricultural land" under section 5, is that
the former is public and the latter private. But such difference refers to ownership and not to the class of
land. The lands are the same in both sections, and, for the conservation of the national patrimony, what
is important is the nature or class of the property regardless of whether it is owned by the State or by its
citizens.

Reference is made to an opinion rendered on September 19, 1941, by the Hon. TeofiloSison, then
Secretary of Justice, to the effect that residential lands of the public domain may be considered as
agricultural lands, whereas residential lands of private ownership cannot be so considered. No reason
whatsoever is given in the opinion for such a distinction, and no valid reason can be adduced for such a
discriminatory view, particularly having in mind that the purpose of the constitutional provision is the

55
conservation of the national patrimony, and private residential lands are as much an integral part of the
national patrimony as the residential lands of the public domain. Specially is this so where, as indicated
above, the prohibition as to the alienable of public residential lots would become superflous if the same
prohibition is not equally applied to private residential lots. Indeed, the prohibition as to private
residential lands will eventually become more important, for time will come when, in view of the constant
disposition of public lands in favor of private individuals, almost all, if not all, the residential lands of the
public domain shall have become private residential lands.

It is maintained that in the first draft of section 5, the words "no land of private ownership" were used
and later changed into "no agricultural land of private ownership," and lastly into "no private agricultural
land" and from these changes it is argued that the word "agricultural" introduced in the second and final
drafts was intended to limit the meaning of the word "land" to land actually used for agricultural
purposes. The implication is not accurate. The wording of the first draft was amended for no other
purpose than to clarify concepts and avoid uncertainties. The words "no land" of the first draft,
unqualified by the word "agricultural," may be mistaken to include timber and mineral lands, and since
under section 1, this kind of lands can never be private, the prohibition to transfer the same would be
superfluous. Upon the other hand, section 5 had to be drafted in harmony with section 1 to which it is
supplementary, as above indicated. Inasmuch as under section 1, timber and mineral lands can never be
private, and the only lands that may become private are agricultural lands, the words "no land of private
ownership" of the first draft can have no other meaning than "private agricultural land." And thus the
change in the final draft is merely one of words in order to make its subject matter more specific with a
view to avoiding the possible confusion of ideas that could have arisen from the first draft.

If the term "private agricultural lands" is to be construed as not including residential lots or lands not
strictly agricultural, the result would be that "aliens may freely acquire and possess not only residential
lots and houses for themselves but entire subdivisions, and whole towns and cities," and that "they may
validly buy and hold in their names lands of any area for building homes, factories, industrial plants,
fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields,
and a host of other uses and purposes that are not, in appellant's words, strictly agricultural." (Solicitor
General's Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond
question.

One of the fundamental principles underlying the provision of Article XIII of the Constitution and which
was embodied in the report of the Committee on Nationalization and Preservation of Lands and other
Natural Resources of the Constitutional Convention, is "that lands, minerals, forests, and other natural
resources constitute the exclusive heritage of the Filipino nation. They should, therefore, be preserved for
those under the sovereign authority of that nation and for their posterity." (2 Aruego, Framing of the
Filipino Constitution, p. 595.) Delegate Ledesma, Chairman of the Committee on Agricultural
Development of the Constitutional Convention, in a speech delivered in connection with the national
policy on agricultural lands, said: "The exclusion of aliens from the privilege of acquiring public
agricultural lands and of owning real estate is a necessary part of the Public Land Laws of the Philippines
to keep pace with the idea of preserving the Philippines for the Filipinos." (Emphasis ours.) And, of the
same tenor was the speech of Delegate Montilla who said: "With the complete nationalization of our
lands and natural resources it is to be understood that our God-given birthright should be one hundred
per cent in Filipino hands . . .. Lands and natural resources are immovables and as such can be compared
to the vital organs of a person's body, the lack of possession of which may cause instant death or the
shortening of life. If we do not completely antionalize these two of our most important belongings, I am
afraid that the time will come when we shall be sorry for the time we were born. Our independence will
be just a mockery, for what kind of independence are we going to have if a part of our country is not in
our hands but in those of foreigners?" (Emphasis ours.) Professor Aruego says that since the opening
days of the Constitutional Convention one of its fixed and dominating objectives was the conservation
and nationalization of the natural resources of the country. (2 Aruego, Framing of the Philippine
Constitution, p 592.) This is ratified by the members of the Constitutional Convention who are now

56
members of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr. Justice Hontiveros. And,
indeed, if under Article XIV, section 8, of the Constitution, an alien may not even operate a small jitney
for hire, it is certainly not hard to understand that neither is he allowed to own a pieace of land.

This constitutional intent is made more patent and is strongly implemented by an act of the National
Assembly passed soon after the Constitution was approved. We are referring again to Commonwealth Act
No. 141. Prior to the Constitution, there were in the Public Land Act No. 2874 sections 120 and 121 which
granted aliens the right to acquire private only by way of reciprocity. Said section reads as follows:

SEC. 120. No land originally acquired in any manner under the provisions of this Act, nor any
permanent improvement on such land, shall be encumbered, alienated, or transferred, except to
persons, corporations, associations, or partnerships who may acquire lands of the public domain
under this Act; to corporations organized in the Philippine Islands authorized therefor by their
charters, and, upon express authorization by the Philippine Legislature, to citizens of countries
the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease,
encumber, dispose of, or alienate land, or permanent improvements thereon, or any interest
therein, as to their own citizens, only in the manner and to the extent specified in such laws, and
while the same are in force but not thereafter.

SEC. 121. No land originally acquired in any manner under the provisions of the former Public
Land Act or of any other Act, ordinance, royal order, royal decree, or any other provision of law
formerly in force in the Philippine Islands with regard to public lands, terrenosbaldios y
realengos, or lands of any other denomination that were actually or presumptively of the public
domain or by royal grant or in any other form, nor any permanent improvement on such land,
shall be encumbered, alienated, or conveyed, except to persons, corporations, or associations
who may acquire land of the public domain under this Act; to corporate bodies organized in the
Philippine Islands whose charters may authorize them to do so, and, upon express authorization
by the Philippine Legislature, to citizens of the countries the laws of which grant to citizens of the
Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land
or pemanent improvements thereon or any interest therein, as to their own citizens, and only in
the manner and to the extent specified in such laws, and while the same are in force, but not
thereafter: Provided, however, That this prohibition shall not be applicable to the conveyance or
acquisition by reason of hereditary succession duly acknowledged and legalized by competent
courts, nor to lands and improvements acquired or held for industrial or residence purposes,
while used for such purposes: Provided, further, That in the event of the ownership of the lands
and improvements mentioned in this section and in the last preceding section being transferred
by judicial decree to persons,corporations or associations not legally capacitated to acquire the
same under the provisions of this Act, such persons, corporations, or associations shall be obliged
to alienate said lands or improvements to others so capacitated within the precise period of five
years, under the penalty of such property reverting to the Government in the contrary case."
(Public Land Act, No. 2874.)

It is to be observed that the pharase "no land" used in these section refers to all private lands, whether
strictly agricultural, residential or otherwise, there being practically no private land which had not been
acquired by any of the means provided in said two sections. Therefore, the prohibition contained in these
two provisions was, in effect, that no private land could be transferred to aliens except "upon express
authorization by the Philippine Legislature, to citizens of Philippine Islands the same right to acquire,
hold, lease, encumber, dispose of, or alienate land." In other words, aliens were granted the right to
acquire private land merely by way of reciprocity. Then came the Constitution and Commonwealth Act
No. 141 was passed, sections 122 and 123 of which read as follows:

57
 SEC. 122. No land originally acquired in any manner under the provisions of this Act, nor any
permanent improvement on such land, shall be encumbered, alienated, or transferred, except to
persons, corporations, associations, or partnerships who may acquire lands of the public domain
under this Act or to corporations organized in the Philippines authorized thereof by their charters.

SEC. 123. No land originally acquired in any manner under the provisions of any previous Act,
ordinance, royal order, royal decree, or any other provision of law formerly in force in the
Philippines with regard to public lands terrenosbaldios y realengos, or lands of any other
denomination that were actually or presumptively of the public domain, or by royal grant or in
any other form, nor any permanent improvement on such land, shall be encumbered, alienated,
or conveyed, except to persons, corporations or associations who may acquire land of the public
domain under this Act or to corporate bodies organized in the Philippines whose charters
authorize them to do so: Provided, however, That this prohibition shall not be applicable to the
conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by
competent courts: Provided, further, That in the event of the ownership of the lands and
improvements mentioned in this section and in the last preceding section being transferred by
judicial decree to persons, corporations or associations not legally capacitated to acquire the
same under the provisions of this Act, such persons, corporations, or associations shall be obliged
to alienate said lands or improvements to others so capacitated within the precise period of five
years; otherwise, such property shall revert to the Government.

These two sections are almost literally the same as sections 120 and 121 of Act No. 2874, the only
difference being that in the new provisions, the right to reciprocity granted to aliens is completely stricken
out. This, undoubtedly, is to conform to the absolute policy contained in section 5 of Article XIII of the
Constitution which, in prohibiting the alienation of private agricultural lands to aliens, grants them no
right of reciprocity. This legislative construction carries exceptional weight, for prominent members of the
National Assembly who approved the new Act had been members of the Constitutional Convention.

It is said that the lot question does not come within the purview of sections 122 and 123 of
Commonwealth Act No. 141, there being no proof that the same had been acquired by one of the means
provided in said provisions. We are not, however, diciding the instant case under the provisions of the
Public Land Act, which have to refer to land that had been formerly of the public domain, otherwise their
constitutionality may be doubtful. We are deciding the instant case under section 5 of Article XIII of the
Constitution which is more comprehensive and more absolute in the sense that it prohibits the transfer to
alien of any private agricultural land including residential land whatever its origin might have been.

And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows mortgage of
"private real property" of any kind in favor of aliens but with a qualification consisting of expressly
prohibiting aliens to bid or take part in any sale of such real property as a consequence of the mortgage.
This prohibition makes no distinction between private lands that are strictly agricultural and private lands
that are residental or commercial. The prohibition embraces the sale of private lands of any kind in favor
of aliens, which is again a clear implementation and a legislative interpretation of the constitutional
prohibition. Had the Congress been of opinion that private residential lands may be sold to aliens under
the Constitution, no legislative measure would have been found necessary to authorize mortgage which
would have been deemed also permissible under the Constitution. But clearly it was the opinion of the
Congress that such sale is forbidden by the Constitution and it was such opinion that prompted the
legislative measure intended to clarify that mortgage is not within the constitutional prohibition.

It is well to note at this juncture that in the present case we have no choice. We are construing the
Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to
preclude aliens, admitted freely into the Philippines from owning sites where they may build their homes.
But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the

58
name of amity or equity. We are satisfied, however, that aliens are not completely excluded by the
Constitution from the use of lands for residential purposes. Since their residence in the Philippines is
temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the
Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino
citizenship is not impossible to acquire.

For all the foregoing, we hold that under the Constitution aliens may not acquire private or public
agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.

Feria, Pablo, Perfecto, Hilado, and Briones, JJ., concur.

59
 G.R. Nos. L-28502-03 April 18, 1989

COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
ESSO STANDARD EASTERN, INC. and THE COURT OF TAX APPEALS, respondents.

NARVASA, J.:

In two (2) cases appealed to it 1 by the private respondent, hereafter simply referred to as ESSO, the
Court of Tax Appeals rendered judgment 2sustaining the decisions of the Commissioner of Internal
Revenue excepted to, save "the refund-claim .. in the amount of P39,787.94 as overpaid interest which it
ordered refunded to ESSO

Reversal of this decision is sought by the Commissioner by a petition for review on certiorari filed with
this Court. He ascribes to the Tax Court one sole error: "of applying the tax credit for overpayment of the
1959 income tax of .. ESSO, granted by the petitioner (Commissioner), to .. (ESSO's) basic 1960
deficiency income tax liability x x and imposing the 1-1/2% monthly interests 3 only on the remaining
balance thereof in the sum of P146,961.00" 4 (instead of the full amount of the 1960 deficiency liability
in the amount of P367,994.00). Reversal of the same judgment of the Court of Tax Appeals is also sought
by ESSO in its own appeal (docketed as G.R. Nos. L28508-09); but in the brief filed by it in this case, it
indicates that it will not press its appeal in the event that "the instant petition for review be denied and
that judgment be rendered affirming the decision of the Court of Tax Appeals."

The facts are simple enough and are quite quickly recounted. ESSO overpaid its 1959 income tax by
P221,033.00. It was accordingly granted a tax credit in this amount by the Comissioner on August
5,1964. However, ESSOs payment of its income tax for 1960 was found to be short by P367,994.00. So,
on July 10, 1964, the Commissioner wrote to ESSO demanding payment of the deficiency tax, together
with interest thereon for the period from April 18,1961 to April 18,1964. On August 10, 1964, ESSO paid
under protest the amount alleged to be due, including the interest as reckoned by the Commissioner. It
protested the computation of interest, contending it was more than that properly due. It claimed that it
should not have been required to pay interest on the total amount of the deficiency tax, P367,994.00, but
only on the amount of P146,961.00—representing the difference between said deficiency, P367,994.00,
and ESSOs earlier overpayment of P221,033.00 (for which it had been granted a tax credit). ESSO thus
asked for a refund.

The Internal Revenue Commissioner denied the claim for refund. ESSO appealed to the Court of Tax
Appeals. As aforestated.that Court ordered payment to ESSO of its "refund-claim x x in the amount of
P39,787.94 as overpaid interest. Hence, this appeal by the Commissioner. The CTA justified its award of
the refund as follows:

... In the letter of August 5, 1964, .. (the Commissioner) admitted that .. ESSO had
overpaid its 1959 income tax by P221,033.00. Accordingly .. (the Commissioner) granted
to .. ESSO a tax credit of P221,033.00. In short, the said sum of P221,033.00 of ESSO's
money was in the Government's hands at the latest on July 15, 1960 when it ESSO paid
in full its second installment of income tax for 1959. On July 10, 1964 .. (the
Commissioner) claimed that for 1960, .. ESSO underpaid its income tax by P367,994.00.
However, instead of deducting from P367,994.00 the tax credit of P221,033.00 which ..
(the Commissioner) had already admitted was due .. ESSO .. (the Commissioner) still
insists in collecting the interest on the full amount of P367,994.00 for the period April 18,
1961 to April 18,1964 when the Government had already in its hands the sum of
P221,033.00 of .. ESSOs money even before the latter's income tax for 1960 was due
and payable. If the imposition of interest does not amount to a penalty but merely a just

60
 compensation to the State for the delay in paying the tax, and for the concomitant use
by the taxpayer of funds that rightfully should be in the Government's hand (Castro v.
Collector, G.R. No. L-1274, Dec. 28, 1962), the collection of the interest on the full
amount of P367,994.00 without deducting first the tax credit of P221,033.00, which has
long been in the hands of the Government, becomes erroneous, illegal and arbitrary.

.. (ESSO) could hardly be charged of delinquency in paying P221,033.00 out of the

deficiency income tax of P367,994.00, for which the State should be compensated by the
payment of interest, because the said amount of P221,033.00 was already in the coffers
of the Government. Neither could .. ESSO be charged for the concomitant use of funds
that rightfully belong to the Government because as early as July 15, 1960, it was the
Government that was using .. ESSOs funds of P221,033.00. In the circumstances, we
find it unfair and unjust for .. (the Commissioner) to exact the interest on the said sum of
P221,033.00 which, after all, was paid to and received by the Government even before
the incidence of the deficiency income tax of P367,994.00. (Itogon-Suyoc Mines, Inc. v.
Commissioner, C.T.A. Case No. 1327, Sept. 30,1965). On the contrary, the Government
should be the first to blaze the trail and set the example of fairness and honest dealing in
the administration of tax laws.

Accordingly, we hold that the tax credit of P221,033.00 for 1959 should first be deducted
from the basic deficiency tax of P367,994.00 for 1960 and the resulting difference of
P146,961.00 would be subject to the 18% interest prescribed by Section 51 (d) of the
Revenue Code. According to the prayer of ..(ESSO) .. (the Commissioner) is hereby
ordered to refund to .. (ESSO) the amount of P39,787.94 as overpaid interest in the
settlement of its 1960 income tax liability. However, as the collection of the tax was not
attended with arbitrariness because .. (ESSO) itself followed x x (the Commissioner's)
manner of computing the tax in paying the sum of P213,189.93 on August 10, 1964, the
prayer of .. (ESSO) that it be granted the legal rate of interest on its overpayment of
P39,787.94 from August 10, 1964 to the time it is actually refunded is denied. (See
Collector of Internal Revenue v. Binalbagan Estate, Inc., G.R. No. 1,12752, Jan. 30,
1965).

The Commissioner's position is that income taxes are determined and paid on an annual basis, and that
such determination and payment of annual taxes are separate and independent transactions; and that a
tax credit could not be so considered until it has been finally approved and the taxpayer duly notified
thereof. Since in this case, he argues, the tax credit of P221,033.00 was approved only on August 5,
1964, it could not be availed of in reduction of ESSOs earlier tax deficiency for the year 1960; as of that
year, 1960, there was as yet no tax credit to speak of, which would reduce the deficiency tax liability for
1960. In support of his position, the Commissioner invokes the provisions of Section 51 of the Tax Code
pertinently reading as follows:

(c) Definition of deficiency. As used in this Chapter in respect of tax imposed by this
Title, the term 'deficiency' means:

(1) The amount by which the tax imposed by this Title exceeds the amount shown as the
tax by the taxpayer upon his return; but the amount so shown on the return shall first be
increased by the amounts previously assessed (or collected without assessment) as a
deficiency, and decreased by the amount previously abated credited, returned, or
otherwise in respect of such tax; ..

xxxxxxxxx

61
 (d) Interest on deficiency. — Interest upon the amount determined as deficiency shall be
assessed at the same time as the deficiency and shall be paid upon notice and demand
from the Commissioner of Internal Revenue; and shall be collected as a part of the tax,
at the rate of six per centum per annum from the date prescribed for the payment of the
tax (or, if the tax is paid in installments, from the date prescribed for the payment of the
first installment) to the date the deficiency is assessed; Provided, That the amount that
may be collected as interest on deficiency shall in no case exceed the amount
corresponding to a period of three years, the present provision regarding prescription to
the contrary notwithstanding.

The fact is that, as respondent Court of Tax Appeals has stressed, as early as July 15, 1960, the
Government already had in its hands the sum of P221,033.00 representing excess payment. Having been
paid and received by mistake, as petitioner Commissioner subsequently acknowledged, that sum
unquestionably belonged to ESSO, and the Government had the obligation to return it to ESSO That
acknowledgment of the erroneous payment came some four (4) years afterwards in nowise negates or
detracts from its actuality. The obligation to return money mistakenly paid arises from the moment that
payment is made, and not from the time that the payee admits the obligation to reimburse. The
obligation of the payee to reimburse an amount paid to him results from the mistake, not from the
payee's confession of the mistake or recognition of the obligation to reimburse. In other words, since the
amount of P221,033.00 belonging to ESSO was already in the hands of the Government as of July, 1960,
although the latter had no right whatever to the amount and indeed was bound to return it to ESSO, it
was neither legally nor logically possible for ESSO thereafter to be considered a debtor of the
Government in that amount of P221,033.00; and whatever other obligation ESSO might subsequently
incur in favor of the Government would have to be reduced by that sum, in respect of which no interest
could be charged. To interpret the words of the statute in such a manner as to subvert these truisms
simply can not and should not be countenanced. "Nothing is better settled than that courts are not to
give words a meaning which would lead to absurd or unreasonable consequences. That is a principle that
goes back to In re Allen (2 Phil. 630) decided on October 29, 1903, where it was held that a literal
interpretation is to be rejected if it would be unjust or lead to absurd results." 6 "Statutes should receive
a sensible construction, such as will give effect to the legislative intention and so as to avoid an unjust or
absurd conclusion." 7

WHEREFORE, the petition for review is DENIED, and the Decision of the Court of Tax Appeals dated
October 28, 1967 subject of the petition is AFFIRMED, without pronouncement as to costs.

62
 G.R. No. L-10858 October 20, 1915

PEDRO M. DUARTE, petitioner,

vs.
WALLER H. DADE, Director of Prisons, respondent.

Sanz, Opisso and Luzuriaga for petitioner.

Attorney-General Avanceña for respondent.

TRENT, J.:

This is an original application in this Supreme Court a writ of habeas corpus. The petitioner, Pedro M.
Duarte, was tried in the first instance over his objection by the court of appeals of the Island of Guam on
the 1st day of March, 1915, and sentenced to fourteen years eight months and one day of cadena
temporal, to the accessory penalties provided by law, to indemnify the Government of the United states
in the sum of $40,944.20, and to the payment of the costs of the cause for the crime of misappropriation
of public funds while postmaster at Guam. The governor of Guam mitigated the term of imprisonment to
ten years and, under an agreement with the Governor-General of the Philippine Islands, designated
Bilibid Prison, in the city of Manila, Philippine Islands, "as the place of the execution of so much of the
sentence as relates to confinement." Subsequent thereto the petitioner was sent to Manila and turned
over to the respondent to be confined in Bilibid Prison, where he now is.

This case presents only two questions. (1) Had the court of appeals of the Island of Guam jurisdiction
legally to try and sentence the petitioner in the manner and form above set forth? (2) Is the respondent
authorized to hold the petitioner in confinement in Bilibid Prison, Philippine Islands? The petitioner insists
that both these questions should be answered in the negative.

During the consideration of this case, it was suggested that this supreme Court has no authority to
inquire whether the court of appeals of Guam had jurisdiction to try the petitioner or not, because Guam
and the Philippine Islands are separate and distinct governmental entities and it is our duty to accept
without question the judgments of the courts of that Island.

Cases are cited from the United States Supreme Court reports in which it is held that state courts have no
power to examine into the regularity of Federal judicial process or judgments of Federal courts. If, for
instance, as in the case of Ableman vs. Booth (21 How., 506, 16 L. ed., 169), a United States marshal
makes return to a writ issuing out of a state court that the petitioner is held on an order of a United
States circuit court commissioners; or if, as in Booth vs.United States (139 Fed., 252; 71 C.C.A., 378), the
petitioner is in custody in pursuance of a judgment upon an indictment, charging him with an offense
against the laws of the United States; or if, as in Tarble's case (13 Wall., 397, 20 L. ed., 597), the person
whose discharge is sought is held as an enlisted soldier of the army by an officer of that army, acting
directly under the Constitution and laws of the United States, state courts have no power to go further in
the premises. The return of the writ closes the door to all investigation. If the petitioner would have a
judicial determination of the legality of his detention, he must apply to a Federal court. The reason for
this is best stated in the language used by the court in Tarble's case, where, after reviewing both the
other cases cited, it was said: "State judges and state courts, authorized by laws of their states to issue
writs of habeas corpus, have, undoubtedly, a right to issue the writ in any case where a party is alleged
to be illegally confined within their limits,unless it appear upon his application that he is confined under
the authority, or claim and color of the authority, of the United States, by an officer of that
government. If such fact appear upon the application to writ should be refused. If it does not appear, the
judge or court issuing the writ has a right to inquire into the cause of imprisonment, and ascertain by
what authority the person is held within the limits of the state; and it is the duty of the marshal, or other
officer having the custody of the prisoner, to give, by a proper return, information in this respect."

63
These cases do not supply a precedent governing the case at bar. The analogy fails in most important
respects. The cases cited are, be it remembered, predicated upon the dual system of government in the
United States where two governmental entities, both supreme in their own spheres of action, have
identical territorial jurisdiction. They simply observe the rule that officers of the one cannot interfere with
officers of the other in matters pertaining strictly to the latter. The governments of Guam and of the
Philippine Islands are two separate entities presiding over wholly separate and distinct territories and
neither has any control over the other, but both derive their powers from the central Government of the
United States. Any respect which is given to the official acts of the one government by the other is, in the
absence of constitutional restrictions and legislation by the Congress of the United States, purely a matter
of comity and not of coercion. There is no compelling reason, other than comity, why the courts of this
country should give to judgments of courts of the government of Guam any effect whatever, except in so
far as our laws so direct. And the laws of this country treat judgments emanating from the Island of
Guam precisely as it does judgments from other territories or States of the United States. Section 309 of
the Code of Civil Procedure provides the effect of such a judgment in this country, and section 312
provides that "Any judicial record may be impeached by evidence of a want of jurisdiction in the court or
judicial officer . . .."

The whole purpose of the writ of habeas corpus is to determine if the petitioner is legally held. According
to the record before us, the judgment of the Guam court is the first link in the chain that deprives the
petitioners of his liberty. If we are to determine the legality of his confinement, it seems to us that no
valid reason can be assigned for not examining into the jurisdiction of the Guam court.

This court is authorized to grant writs of habeas corpus. (Sec. 526, C.C.P.) The petitioner is being
deprived of his liberty within its territorial jurisdiction. His detention is not caused by the decree, order, or
judgment of any Federal court of officer. Hence, the jurisdiction of this court is complete. If he can show
that his confinement is illegal his case is good. He is attempting to do this by alleging a want of
jurisdiction in the court which rendered judgment against him. If this is true, then his confinement is
strictly illegal, for any detention which starts with a void judgment is illegal. It is our right and our duty to
investigate the jurisdiction of the committing court.

The Island of Guam was occupied by the armed forces of the United States during the late war with
Spain. By the Treaty of Paris, Spain formally ceded the island to the United States. (Art. II.) On
December 23, 1898, the President of the United States issued the following Executive Order: "The Island
of Guam, in the Ladrones, is hereby placed under the control of the Department of the Navy. The
Secretary of the Navy will take such steps as may be necessary to establish the authority of the United
States and to give it the necessary protection and government. (Sgd.) WILLIAM MCKINLEY."

On January 12, 1899, the Secretary of the Navy wrote the following letter:

SIR: 1. The Island of Guam, in the Ladrones, Pacific Ocean, having been, by Executive
Order, dated December 23, 1898 (copy of which is inclosed herewith), made a naval
station and placed under the control of the Department of the navy, you are hereby
appointed naval governor of the Island of Guam, this duty being in addition to your duty
as commander of a division of the Asiatic Fleet.

2. In taking control of the government of the Island of Guam, you will particularly
assume control of all crown lands, fortifications and public buildings of the Island,
together with such archives as may be found there.

3. You will, whenever opportunity affords, communicate with the Department, giving
such suggestions as you may deem advisable in reference to the naval, commercial, and
civil control, and the development of the Island.

64
 Very respectfully,

(Sgd.) JOHN D. LONG, Secretary.

On the same date the Secretary of the Navy issued "Instructions for the military commander of the Island
of Guam," which, in general outline, are of a similar tenor to President McKinley's instructions to the first
Philippine Commission. Portions thereof read as follows:

In performing this duty, the military commander of the United States is enjoined to make known
to the inhabitants of the Island of Guam, that, in succeeding to the sovereignty of Spain, in
severing the former political power, the authority of the United States is to be exerted for the
security of the persons and property of the people of the Island and for the confirmation of all
their private rights and relations. It will be the duty of the military commander to announce and
proclaim in the most public manner that we come, not as invaders or conquerors, but as friends,
to protect the natives in their homes, in their employments and in their personal and religious
rights. All persons who, either by active aid or by honest submission, cooperate with the
Government of the United States to give effect to those beneficent purposes, will receive the
reward of its support and protection. All others will be brought within the lawful rule we have
assumed, with firmness if need be, but without severity as far as it may be possible.

Within the absolute domain of naval authority, which necessarily is and must remain supreme in
the ceded territory until the legislation of the United States shall otherwise provide, the municipal
laws of the territory, in respect to private rights and property and the repression of crime are to
be considered as continuing in force, and to be administered by the ordinary tribunals, so far as
practicable. The operations of civil and municipal government are to be performed by such
officers as may accept the supremacy of the United States by taking the oath of allegiance, or by
officers chosen as far as may be practicable from the inhabitants of the Island.

x xx x xx x xx

Finally, it should be the earnest and paramount aim of the naval administration to win the
confidence, respect, and affection of the inhabitants of the Island of Guam by assuring to them in
every possible way that full measure of individual rights and liberties which is the heritage of free
peoples, and by proving to them that the mission of the United States is owner of benevolent
assimilation, substituting the mild way of justice and right for arbitrary rule. In the fulfillment of
this high mission, supporting the temperate administration of affairs for the greatest good of the
governed, there must be sedulously maintained the strong arm of authority, to repress
disturbance and to overcome all obstacles to the bestowal of the blessings of good and stable
government upon the people of the Island of Guam under the free flag of the United States.

So far as the record shows, neither the President of the United States nor the Secretary of the Navy has
issued any subsequent orders or instructions to the governor of Guam respecting the government of the
civil population of that Island.

If we compare the government of Guam so constituted with the Government existing in the Philippine
Islands from August 13, 1898, until September 1, 1900; or with the government existing in Porto Rico
from July 25, 1898, until the Act of Congress of April 12, 1900 (31 Stat. at L., 77), became effective, we
shall find that all three were similarly governed. In both Porto Rico and the Philippine Islands there was
first an entry of the armed forces of the United States, followed by a resumption of civil government
under the supervision and control of military governors who received their appointments and their
instructions from the President of the United States. So that, in discussing the powers and limitations of
the governor of Guam, we may rightly consider as precedent the powers exercised by the military

65
governors of the Philippine Islands and Porto Rico as to the legality of such governments are put at rest
by the stamp of approval placed upon them both by the legislative and judicial departments of the
Federal Government. In the Organic Act Porto Rico Congress recognized the exercise of legislative powers
by the military governor in section 8 in the following language: "That the laws and ordinances of Porto
Rico now in force shall continue in full force and effect, except as altered, amended or modified
hereinafter, or as modified by military orders and decrees in force when this act shall take effect."
Congress approved of and consented to the government established by the President in the Philippine
Islands by the Act of March 2, 1901 (31 Stat. at L., 910), which reads in part as follows: "All military, civil,
and judicial powers necessary to govern the Philippine Islands, acquired from Spain by the treaty
concluded at Paris on the tenth day of December, eighteen hundred and ninety-eight, and at Washington
on the seventh day of November, nineteen hundred, shall, until otherwise provided by Congress, be
vested in such person and persons and shall be exercised in such manner as the President of the United
States shall direct, for the establishment of civil government and for maintaining and protecting the
inhabitants of said Islands in the free enjoyment of their liberty, property, and religion."

Still later, in the Act of July 1, 1902 (32 Stat. at L., 692), Congress again approved of the President's
administration of government in the Philippines.

We quote rather fully from a late decision of the Supreme Court of the United States, owing to its
peculiar fitness as a precedent for the case at bar:

By the ratifications of the treaty of peace, Porto Rico ceased to be subject to the crown of Spain,
and became subject to the legislative power of Congress. But the civil government of the Unites
States cannot extend immediately and of its own force over conquered and ceded territory.
Theoretically, Congress might prepare and enact a scheme of civil government to take effect
immediately upon the cession, but, practically, here always have been delays and always will be.
Time is required for a study of the situation, and for the maturing and enactment of an adequate
scheme of civil government. In the meantime, pending the action of Congress, there is no civil
power under our system of government, not even that of the President as civil executive, which
can take the place of the government which has ceased to exist by the cession. Is it possible
that, under such circumstances, there must be an interregnum? We think clearly not. The
authority to govern such ceded territory is found in the laws applicable to conquest and cession.
That authority is the military power, under the control of the President as Commander in chief. In
the case of Cross vs. Harrison (16 How., 164, 14 L. ed., 889), a situation of this kind was referred
to in the opinion of the court, where it is said: "It [the military authority] was the government
when the territory was ceded as a conquest, and it did not cease as a matter of course, or as a
necessary consequence of the restoration of peace. The President might have dissolved it by
withdrawing the army and navy officers who administered it, but he did not do so. Congress
could have put an end to it, but that was not done. The right inference from the inaction of both
is that it was meant to be continued until it had been legislatively changed. No presumption of a
contrary intention can be made. Whatever may have been the causes of the delay, it must be
presumed that the delay was consistent with the true policy of the government." (pp. 193, 194.)
And see Leitensdorfer vs. Webb (20 How., 176, 15 L. ed., 891), and opinion of Mr. Justice Gray
in Downes vs. Bidwell (182 U.S., 244, 345, 45 L. ed., 1088, 1128, 21 Sup. Ct. Rep., 770).

The authority of a military government during the period between the cession and the action of
Congress, like the authority of the same government before the cession, is of large, though it
may not be of unlimited, extent. In fact, certain limits, not material here, were put upon it in
Dooley vs. United States (182 U.S., 222, 45 L. ed., 1074, 21 Sup. Ct. Rep., 762), ad
Lincoln vs. United States (197 U.S., 419, 49 L. ed., 816, 25 Sup. Ct. Rep., 455), though it was
said in the Dooley case, page 234: "We have no doubt, however, that, from the necessities of the
case, the right to administer the government of Porto Rico continued in the military commander

66
 after the ratification of the treaty, and until further action by Congress," — citing
Cross vs.Harrison, supra.

But, whatever may be the limits of the military power, it certainly must include the authority to
establish courts of justice, which are so essential a part of any government. So it seems to have
been thought in Leitensdorfer vs. Webb, supra. With this thought in mind, the military power not
only established this particular court in Porto Rico, but as well a system of courts which took the
place of the courts under Spanish sovereignty, and were continued by the organic act. The same
course was pursued in the Philippine Islands. (Santiago vs.Nogueras, 214 U.S., 260, 53 L. ed.,
989.)

When new Mexico was conquered by the United states, the executive authority of the United States
properly established a provisional government, which ordained laws and instituted a judicial system; all of
which continued in force after the termination of the war, and until modified by the direct legislation of
Congress, or by the territorial government established by authority of Congress. In
Leitensdorfer vs. Webb (20 How., 176, 178) the Supreme Court of the United States, in speaking of the
military government thus established, said:

Accordingly we find that there was ordained by the provincial government a judicial system,
which created a superior or appellant court, constituted of three judges; the circuits courts, in
which the laws were to be administered by the judges of the superior or appellate court, in the
circuits to which they should be respectively assigned. By the same authority the jurisdiction of
the circuit courts to be held in the several counties was declared to embrace, first, all criminal
cases that shall not be otherwise provided for by law; and second, exclusive original jurisdiction
in all civil cases which shall not be cognizable before the prefects and alcaldes. ( Vide Laws of
New Mexico, Kearney's Code, p. 48.) Of the validity of these ordinances of the provisional
government there is made no question with respect to the period during which the territory was
held by the United States as occupying conqueror, and it would seem to admit of no doubt that
during the period of their valid existence and superseded every previous institution of the
vanquished or deposed political power which was incompatible with them. But it has been
contended that whatever may have been the rights of the occupying conqueror as such, these
were all terminated by the termination of the belligerent attitude of the parties, and that with the
close of the contest every institution which had been overthrown or suspended would be revived
and reestablished. The fallacy of this pretension is exposed by the fact that the territory never
was relinquished by the conqueror nor restored to its original condition or allegiance, but was
retained by the occupant until possession was matured into absolute permanent dominion and
sovereignty; and this, too, under the settled purpose of the United States never to relinquish the
possession acquired by arms. We conclude, therefore, that the ordinances and institutions of the
provisional government would be revoked or modified by the United States alone, either by direct
legislation on the part of Congress or by that of the Territorial government in the exercise of
powers delegated by Congress.

The above citations and quotations are sufficient to dispel all doubt as to the legality of military
governments from the time a particular territory is acquired by the United States until Congress chooses
to legislate for it and the power of such governments to create courts of justice. Aside from the
establishment of judicial machinery by the military governments of Porto Rico and the Philippine Islands,
as referred to in the quotation from Santiago vs. Nogueras, supra, we find two very notable pieces of
legislation in the Philippine Islands promulgated in the form of military General Orders and which to this
day have the force of law and are administered as such by all departments of the present Civil
Government. They are General Orders No. 58, series of 1900, which still constitutes the bulk of our
criminal procedure; and General Orders No. 68, under date of December 18, 1899, making radical
changes in the marriage law, and which is still in effect without material amendment. Hence, we may
conclude that the powers of a military governor to issue orders, decrees, regulations, etc., which have

67
the force of law in the territory over which he has jurisdiction is beyond question. Therefore, the
governor of Guam had power to recognize the courts by his General Order No. 69 of 1903; No. 89 of
1905; and his Executive General Order No. 158 of 1910.

But it is objected that he had no power to issue the following communication or order:

From: Governor of Guam.

To: The court of appeals, Guam.
SUBJECT: Pedro M. Duarte, charges against.

1. The court of appeals of Guam shall take original jurisdiction in this case.

(Sgd.)W.J. MAXWELL.

It may be admitted that under Executive General Order No. 158 of 1910, which embodies the last
reorganization of the judiciary of the Guam government, original jurisdiction of the crime with which the
petitioner was charged was vested in the "Island court of Guam" and not in the "court of appeals." But
while much tress is laid upon the absolute lack of power on the part of the governor of Guam to issue
this order, we are referred to nothing except previous orders of the governor himself relating to the
establishment of courts, to which we have referred above, and to the ordinary criminal procedure
observed in the Island, which is also embodied in an executive order of the governor of Guam. Certainly,
these general orders, deriving their force as law from the governor himself, are liable to repeal by him at
any time and cannot of themselves prevent the governor from trying an accused person in some other
manner. It is fundamental that what legislators have the power to enact they have the power to repeal.
In speaking of the powers of legislative bodies, it is said in Lewis' Southernland on Statutory
Construction, section 244: "A state legislature has a plenary law-making power over all subjects, whether
pertaining to persons or things, within its territorial jurisdiction, either to introduce new laws or repeal the
old, unless prohibited expressly or by implication by the federal constitution or limited or restrained by its
own. It cannot bind itself or its successors by enacting irrepealable laws except when so restrained. Every
legislative body may modify or abolish the acts passed by itself or its predecessors. This power of repeal
may be exercised at the same session at which the original act was passed; and even while a bill is in its
progress and before it becomes a law. This legislature cannot bind a future legislature to a particular
mode of repeal. It cannot declare in advance the intent of subsequent legislatures or the effect of
subsequent legislation upon existing statutes.".

These principles must necessarily apply to the military governor of Guam. A military governor is not, of
course, restrained by any laws of the territory which he governs. As to the people within that territory,
"the will of the conqueror is the law." Limitations upon his powers must be looked for in the laws of his
own government and the instructions handed him by his superiors. Therefore, it is in order to determine
whether the action of the military governor of Guam in ordering his court of appeals to take original
jurisdiction in the petitioner's case and in denying him the right of appeal conflict with the constitutions or
laws of the United States, or with instructions emanating from his superiors. The President of the United
States and the Secretary of the navy, who are the superiors of the governor of Guam, are bound to
observe the Constitutions and laws of the United States in any instructions they give to him. It seems
proper, therefore, to first determine whether the Constitution and law prohibit the action taken by the
governor of Guam in the petitioner's case. It is now pretty well settled that the Constitution of the United
States does not extend ex propriovigore to newly acquired possessions of the United States until they are
formally incorporated into what Chief Justice Marshall has called the "American Empire."
(Downes vs. Bidwell, 182 U.S., 244, 276, 45 L. Ed., 1088, 1102.) But in the case cited, Mr. Justice Brown,
in announcing the judgment of the court, intimated that possibly some of its provisions limited the
powers of Congress to legislate for such possessions. Among these he mentioned the prohibition against
passing ex post facto laws, laws granting titles of nobility, laws restricting religious freedom, free speech,

68
and others. If these are restrictions upon the powers of Congress to deal with newly acquired
possessions, there is good reason to suppose that they operate in a similar manner upon the executive
department of the government in its administration of a military government. But, obviously, the action of
the governor of Guam in the Duarte case does not touch any of these points.

The treaty of peace with Spain is a law of the land. (Const., Art. VI.) There are various provisions of this
treaty which the President of the United states, the Secretary of the Navy, and the governor of Guam
must recognize and obey. For instance, Articles IV and XV provide for the entry of Spanish ships and
merchandise on the same terms as American ships and merchandise for a period of ten years. These
provisions are now, of course, obsolete. Article VIII protects private property rights generally, and Article
XIII property rights in copyrights and patents, and provides from the free admission of Spanish scientific,
literary, and artistic works for a period of ten years, the latter provision now being obsolete. Article X
provides that the inhabitants of the ceded territories shall be secured in the free exercise of their religion.
All these are restrictions upon the authority of the President of the United States and his subordinates in
their administration of the Guam government, but they do not approach the facts of the petitioner's case.

In a recent case, the Supreme Court of the United States, in referring to the military government of Porto
Rico, said that the limitations upon the powers of the military governor must be looked for in the
instructions given to the governor by his superiors, which were founded on the "general rules of
international law, and from fundamental principles known wherever the american flag flies."
(Ochoa vs. Hernandez y Morales, 230 U.S., 139, 57 L. ed., 1427.) The Hague Conference Code of 1899
contains much that robs martial law and military government of their terrors. Assuming that the President
of the United States is bound by this international treaty, there is nothing contained therein which
prohibits the actions taken in the petitioner's case.

Chief Justice Marshall said in American Ins. co. vs. Canter (1 Pet., 511, 7 L. ed., 242): "The usage of the
world is, if a nation be not entirely subdued, to consider the holding of conquered territory as a mere
military occupation, until its fate shall be determined at the treaty of peace. If it be ceded by treaty, the
acquisition is confirmed, and the ceded territory becomes a part of the nation to which it is annexed;
either on the terms stipulated in the treaty of cession, or on such as its new master shall impose. On
such transfer of territory, it has never been held that the relations of the inhabitants with each other
undergo any change. Their relations with their former sovereign are dissolved, and new relations are
created between them and the government which has acquired their territory. The same act which
transfer their country transfers the allegiance of those who remain in it and the law, which may be
denominated political, is, necessarily, changed; although that which regulates the intercourse and general
conduct of individuals remain in force until altered by the newly created power of the states."

There is no doubt that this correctly states the policy of the United States as is attested by the history of
successive additions to its territory, and may be said to control military government inaugurated by the
President of the United States. But it cannot be said this policy has been violated in the petitioner's case.

If we examine the legislation of Congress relating to Guam, we find that it has to do almost wholly with
appropriations for improvements either of a public or of a military character. There has been an annual
appropriation for the care of lepers, a considerable amount has been allotted to an agricultural
experiment station, for the building of roads, a water supply system, etc. The last two Tariff Acts have
applied to the Island of Guam. The Immigration Act of 1908 was extended to Guam. United States Army
transports were authorized to carry passengers and freight destined to Guam. The government of Guam
was directed to keep certain trade statistics. By Act of June 28, 1906, deeds and other instruments
affecting land situated in the District of Columbia or any territory of the United States may be
acknowledged in the Island of Guam before any notary public or judge appointed by the proper authority.
This act and the acts appropriating monies afford some considerable ground for the argument that
Congress has tacitly recognized and approved of the existing government of Guam. By the Act of august

69
22, 1912 (37 Stat, at L., 332), Congress decreed: "The Secretary of the Navy is authorized to transfer all
lepers of Guam now segregated, and other cases that may later appear, to the Island of Culion in the
Philippines, and to pay the cost of their transfer and maintenance from ..." (the appropriation included in
the Act).

It will be noted that Congress has never exercised its undoubted right to change or alter the form of
government established on the Island of Guam by the executive department of the Federal Government.
And none of these acts limit the power of the governor of Guam to take the action he did in the case of
this petitioner.

To the argument that section 1891 of the Revised Statutes of the United States, which extends the
Constitution and laws of the United States not locally inapplicable to all organized territories, it is
sufficient to say that Guam is not an organized territory. Until it becomes one, a blanket extension to it of
the Constitution and laws of the United States by virtue of section 1891 of the Revised Statutes is an
academic question.

As a check upon the excesses of a military governor, we must not forget his responsibility to his
superiors. Birkhimer, in his Military Government, has the following to say upon this point: "310. ...
Contrary to the very general belief, it will be found, when attentively considered, that military
government, arbitrary though it be in its essential features, is far from being the mere will of the
commanding general to be enforced by him without responsibility, either directly or through the medium
of subordinates who themselves are answerable only to that commander. His responsibility is both
military and civil; the former complete, the latter qualified by circumstances.

311. First, the responsibility to military superiors extends wherever commanders may go. How
extensive soever may be their operations, how far soever conducted from the territory of their
own government, they, and of course their subordinates as well, are never independent of that
authority which sent them forth.

Lieber's Instructions for the Government of Armies of the United States in the Field, known in Army
circles as General orders No. 100, 1863, contains much that limits the will of military commanders in
directions they ought not to go, and the governor of Guam is, possibly, bound thereby. But they do not
prohibit the action taken by him in the petitioner's case.

Finally, it may be added that the executive branch of the Federal Government cannot collide with public
opinion in its administration of dependencies without serious consequences. Bryce, in his American
Commonwealth (vol., 2, chap. 78), truly says: "Towering over Presidents and State governors, over
Congress and State legislatures, over conventions and the vast machinery of party, public opinion stand
out, in the United States, as the great source of power, the master of servants who tremble before it."

It is urged that the governor of Guam violated the instructions to him by the Secretary of the Navy under
date of July 12, 1899, special stress being laid on the last paragraph of the quotation therefrom which we
have inserted above. In the first place, we are clearly of the opinion that these very general instructions
are not opposed to the particular act complained of, and that, therefore, the governor of Guam did not
violate his instructions. But assuming, for the moment, that his action in the petitioner's case was
violative of those instructions, the Secretary of the Navy specifically ratified the disposition of the Duarte
case under date of June 4, 1915, as appears from the somewhat lengthy cablegram inserted in the
record. It will hardly be denied that the Secretary of the Navy could thus ratify an act of his agent, the
governor of Guam.

From the above authorities, it will be observed that the military governor of Guam and his superiors, the
Secretary of the Navy and the President of the United States, are all limited and restricted in the

70
administration of the civil affairs of the Island of Guam by the Constitution of the United States; by the
Treaty of Paris; by international law with respect to conquered or ceded territory; by the declared policy
of the United States with respect to such territories; by national and international codes of war; and,
ultimately, by the judgment which public opinion must pass upon their administration of the civil
government of Guam; and that the governor of Guam is directly and speedily answerable to his superiors
for any ill-advised or arbitrary official act or conduct. These authorities require a government by the
military authorities which will secure to the inhabitants of the territory over which they preside protection
for life, liberty, and property. This is the task set for a military government, but in its accomplishment
there are no instructions as to the procedure which they must observe. Civil governments under military
authority will naturally assume a quite close resemblance to civil government as it exists in the homeland.
The whole government machinery and its methods of doing business will be made to conform to the
sovereign's standards of government. If the administration of justice under the laws of the foreign
sovereign is not in harmony with the rest of the newly organized government, the courts and procedural
law are remodeled to the extent that may be necessary. When these matters are satisfactorily adjusted,
the military governor will permit the civil officials appointed by him or elected by the people with his
permission, to administer the new government. With the exception of these administrative duties retained
by himself, he will ordinarily allow the civil authorities to enforce the law and maintain order according to
their best judgment and discretion without hindrance from him. But the military governor has it in his
power to at any time summarily dismiss any such official who incurs his displeasure or to immediately
modify or annul an order or law promulgated by him which does not appear to be accomplishing its
purpose. All the power of the new government comes from him and what he has created he can destroy.
His official acts, his decrees or laws and his administration of justice are not tested by laws of procedure.
In observing those substantive principles which make government tolerable, he may adopt any procedure
which will the more speedily gain the desired end.

In the case at bar, if the governor's order to his court of appeals were tested by what is required of
lawmakers in governmental entities of the United States, where the ultimate power resides in the people,
who, by written constitutions, require their lawmakers to mold their laws into certain specific forms;
prohibit them from passing retroactive laws; from enacting local or special laws; it is true that the said
order would have to be declared invalid. It violates all of these rules of lawmaking which are so generally
observed throughout the United States. But where in the authorities we have discussed above is there
limitation of this sort upon the lawmaking powers of a military governor? We have not discovered any
such restrictions, and, in the lengthy argument for the petitioner, it seems that these restrictions
are assumed to exist. The fallacy of such argument is apparent. Such restrictions upon legislative power
have never been assumed to exist in the United States. The people have only succeeded in incorporating
these requirements into written constitutions after long and bitter struggles with selfish interests. A
military governor is not obliged to put expressions of his into any particular form in order that they may
have the effect of law. He may, for the sake of convenience, adopt the practice of recording his
legislative acts in a numbered series of formal orders or decrees. But this does not imply that he shall
not, if he so desires, inform the people within his jurisdiction by some other method which may, in his
judgment, be more desirable. It is objected that the order to the court of appeals to try the case is not
law. It comes from the same source as General Orders No. 58. We can conceive of no reason why it has
not the same sanction as that general order; and, it being a later expression of the governor's will, must
overrule all previous proclamations, orders, or regulations of the governor to the extent necessary to give
it its full effect.

Nor, indeed, is it the first time in the history of the United States that military governors by a special
order have compelled a defendant to stand trial in a court different from that which would ordinarily take
cognizance of his case. In 1867 Congress enacted what are known as the Reconstruction Acts (14 Stat. at
L., 428; 15 Stat. at L., 14), dividing the States which had participated in the late rebellion into five
military districts, each governed by a military governor. These governors were authorized among other
things to "allow local civil tribunals to take jurisdiction of and to try offenders, or, when in his judgment it
may be necessary for the trial of offenders, he shall have power to organize military commissions or

71
tribunals for that purpose, and all interference under color of State authority with the exercise of military
authority under this act, shall be null and void." These laws were in effect sustained by the Supreme
Court of the United States in White vs. Hart (13 Wall., 646, 20 L. ed., 685); Texas vs. White (7 Wall.,
700, 19 L. ed., 227). Birkhimer, in his Military Government, says:

As observed by Chief Justice Chase, the military existed only to prevent illegal violence to persons
and property, and to facilitate the restoration of the States, and this fact district commanders
constantly sought to impress upon the people interested. This appears from their orders, as, for
instance, that the military courts convened under these laws were to be "governed by the rules
of evidence prescribed by the laws of the State in which the case was tried" (Second district,
G.O. 18, 1868); that it was the purpose of the commanding general "not to interfere with the
operation of the State laws, as administered by civil tribunals, except where the remedies thereby
afforded are inadequate to secure individuals substantial justice" (First District, G.O. 24, 1868);
that "the trial and punishment of criminals was to be left to the civil authorities so long as the
said authorities are energetic, active, and do justice to the rights of persons and property without
distinction of race or color" (Third District, G.O. 10, 1868). Birkhimer, p. 486.)

The Military Governor of the Philippine Islands issued a general order (No. 22) on June 17, 1899, in
which, after referring to the reestablishment of the civil courts by previous orders, he said: "The
jurisdiction of the courts specified in paragraph 1 of this order, and of other civil courts which may
hereafter be reestablished, shall not extend to and include crimes and offenses committed by either
citizens of or persons sojourning within the Philippine Islands, which are prejudicial to military
administration and discipline, except by authority especially conferred by the military governor."

In General Orders No. 24 [23], issued on June 24, 1899, the Military Governor said: "The provost courts
named will take cognizance of only such civil causes as are referred to them for trial by the authority
appointing them, or the successor to that authority; and their decree and judgments, when approved by
that authority, shall be final; . . .."

In General Orders No. 30, of July 22, 1899, which created a civil government for the Island of Negros
under military supervision, it was said with reference to the judiciary of that government: "XIX. The
jurisdiction of these courts shall not extend to nor include crimes and offenses committed by either
citizens or persons sojourning within the Island of Negros which are prejudicial to military administration
and discipline, except by authority especially conferred by the military governor."

By General Orders No. 64, dated December 5, 1899, civil courts were given jurisdiction of "the class of
offenses specified in Rule 12, article 53, of the reformed compilation of provisions of Spanish law as to
criminal procedure, under the usual procedure as to jurisdiction and appeal, excepting only such of these
offenses as are, under provisions of law of the United States, within the jurisdiction of its military or naval
courts martial, or are reserved by the military authorities for trial by other military tribunals; . . .."

In his general orders No. 64, dated August 10, 1900, the military governor said: "I. During the existence
of military government in these Islands the duty devolves upon the military authorities to protect all
persons in their rights of person and property, to suppress insurrection, disorder and violence and to
punish, or cause to be punished, all disturbers of the public peace, and criminals. To this end local civil
tribunals, where the same have been reconstituted, may take cognizance of and try offenses within their
jurisdiction, or, when in their judgment it may be expedient, the Department Commanders may cause
such offenses to be brought to trial before duly constituted military commissions or provost courts; . .
.."lawphil.net

72
 II. Criminal cases arising within the city of Manila and lawfully cognizable by the civil courts of the
Province of Manila, will be reserved for trial by military commission only by authority of these
headquarters; . . ..

In all these general orders, it will be noted that the right is asserted to remove any particular case from
the court which would have jurisdiction under the general orders in question, as a matter of expediency,
if the military governor deemed it necessary. If time and opportunity were available to inspect the
records of the military government of the Philippine Islands, no doubt letters or communications of
precisely the same nature as the one directed by the governor of Guam to his court of appeals could be
found, taking from a court of original jurisdiction a particular case and causing it to be tried by some
other court.

Some discussion has been indulged in of the deprivation of the defendant's right to appear before the
court of appeals as an appellant from the judgment of the inferior court, the "island court of Guam." In
McKane vs. Durston (153 U.S., 684, 38 L. ed., 866) it was said: "An appeal from a judgment of conviction
is not a matter of absolute right, independently of constitutional or statutory provisions allowing such
appeal. A review by an appellate court of the final judgment in a criminal case, however grave the
offense of which the accused is convicted, was not at common law and is not now a necessary element
of due process of law. It is wholly within the discretion of the state to allow or not to allow such a review.
A citation of authorities upon the point is unnecessary."

This case has been frequently affirmed by the Supreme Court of the United States and state courts, and
has been approved by noted constitutional writers, and is, without doubt, the accepted doctrine on the
point. Duarte had no inherent right, as seems to be argued by his counsel, to have his sentence reviewed
by an appellate court of the Island of Guam.

Finally, it is urged that the respondent, the warden of Bilibid, has no legal authority to hold the petitioner.
We presume that this objection is based upon the lack of authority of the Governor-General of the
Philippine Islands to enter into a contract or agreement with the governor of Guam to keep Guam
convicts in Bilibid Prison at Manila. Upon this point, we think it sufficient to quote from ex
parte Karstendick (93 U.S., 396, 23 L. ed., 889). In this case, a Federal prisoner was sentenced to
imprisonment in the State penitentiary of West Virginia. The court said: "It is further insisted, on behalf
of the petitioner, that the legislature of the State of West Virginia has not given its consent to the use of
the penitentiary of the State by the United States for the punishment of their criminals, and that for this
reason the order for his confinement there is void. The petitioner is actually confined in the penitentiary,
and neither the state nor its officers object. Congress has authorized imprisonment, as a punishment for
crimes against the United States, in the State prisons. So far as the United States can do so, they have
made the penitentiary at Moundsville a penitentiary of the United States, and the State officers having
charge of it their agents to enforce the sentences of imprisonments passed by their courts. The question
is not now whether the state shall submit to this use of its property by the United States, nor whether
these state officers shall be compelled to act as the custodians of those confined there under the
authority of the United States, but whether this petitioner can object if they do not. We think he cannot.
So long as the State permits him to remain in its as the prisoner of the United States, and does not
object to his detention by its officers, he is rightfully detained in custody under a sentence lawfully
passed."

Writ denied and prisoner remanded, with costs.

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

73
Separate Opinions

JOHNSON, J., dissenting:

The petition for the writ of habeas corpus in the present case presents the question of the right of the
warden of Bilibid Prison in the Philippine Islands to hold and detain, for a period of ten years, or for any
other period, a person sentenced to be imprisoned by the court of appeals of the Island of Guam. There
is no law in force in the Philippine Islands which authorizes said warden to accept and hold persons
sentenced, except those who have been sentenced by the courts of the Philippine Archipelago. No law
has been cited, and it is believed there is none, which authorizes the government of the Island of Guam
to imprison its citizens in prisons outside of its territory.

Conceding for the purposes of the argument only, that the governor of Guam has all the power, military
or civil, defined in the majority opinion; that he can make a law today and unmake it tomorrow; that he
can adopt one procedure today and another to suit his own pleasure tomorrow; that he can create courts
with well-defined jurisdiction today, and other courts with special and limited jurisdiction to suit his
convenience, the next day; that, notwithstanding the fact the he had courts, regularly organized, with
prescribed jurisdiction, he can, by a letter simply, deprive such courts of their jurisdiction and give it to
another, for a particular instance, yet, nevertheless, no law has been called to our attention, and diligent
search has found none, which authorizes the Government of the Philippine islands to detain in its prisons
persons sentenced by another and separate sovereign. Neither has nay law or regulation been found
which authorizes the governor of the Island of Guam to have the citizens of his realm imprisoned in a
foreign country. If he can contract with one sovereign to detain his prisoners, without express legal
authority, then he can arrange with another. The Congress of the United States thought it necessary to
have a law regulating the question of the imprisonment of prisoners in jail or penitentiaries, other than
those expressly provided for. (Sec. 5540, 5541, 5542, and 5546 of the Revised Statutes of the United
States.)

No contention is made that section 5546 of the Revised Statutes of the United States is applicable to the
Island of Guam; and even granting that it is, no contention is made that the Attorney-General of the
United States has designated the penitentiary of the Philippine Islands as the place for the detention of
citizens of the Island of Guam, who have been sentenced by the courts of said island.

An imprisonment at a place and in a prison not authorized by law is illegal. ( In re Mills, 135 U.S., 263.)

74
 G. R. No. L-41001 September 30, 1976

MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF THE ELKS,
INC., petitioner,
vs.
THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and TARLAC DEVELOPMENT
CORPORATION, respondents.

No. L-41012 September 30, 1976

TARLAC DEVELOPMENT CORPORATION, petitioner,

vs.
HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO. 761, BENEVOLENT AND
PROTECTIVE ORDER OF ELKS, INC., respondents.

CASTRO, C.J.:

STATEMENT OF THE CASE AND STATEMENTOF THE FACTS

These two cases are petitions on certiorari to review the decision dated June 30, 1975 of the Court of
Appeals in CA-G.R. No. 51590-R entitled "Tarlac Development Corporation vs. City of Manila, and Manila
Lodge No. 761, Benevolent and Protective Order of Elks, Inc.," affirming the trial court's finding in Civil
Case No. 83009 that the property subject of the decision a quo is a "public park or plaza."

On June 26, 1905 the Philippine Commission enacted Act No. l360 which authorized the City of Manila to
reclaim a portion of Manila Bay. The reclaimed area was to form part of the Luneta extension. The Act
provided that the reclaimed area "Shall be the property of the City of Manila" and that "the City of Manila
is hereby authorized to set aside a tract of the reclaimed land formed by the Luneta extension x xx at the
north end not to exceed five hundred feet by six hundred feet in size, for a hotel site, and to lease the
same, with the approval of the Governor General, to a responsible person or corporation for a term not
exceed ninety-nine years."

Subsequently, the Philippine Commission passed on May 18, 1907 Act No. 1657, amending Act No. 1360,
so as to authorize the City of' Manila either to lease or to sell the portion set aside as a hotel site.

The total area reclaimed was a little over 25 hectares. The City of Manila applied for the registration of
the reclaimed area, and on January 20, 1911, O.C.T. No. 1909 was issued in the name of the City of
Manila. The title described the registered land as "unterrenoconocido con el nombre de Luneta Extension,
situato en el distrito de la Ermita x xx." The registration was "subject, however to such of the
incumbrances mentioned in Article 39 of said law (Land Registration Act) as may be subsisting" and
"sujeto a lasdisposiciones y condicionesimpuestas en la Ley No. 1360; y sujetotambein a los contratos de
venta, celebrados y otorgadospor la Ciudad de Manila a favor del Army and Navy Club y la Manila Lodge
No. 761, Benevolent and Protective Order of Elks, fechadosrespectivamente, en 29 de Diciembre de 1908
y 16 de Enero de 1909." 1

On July 13, 1911 the City of Manila, affirming a prior sale dated January 16, 1909 cancelled 5,543.07
square meters of the reclaimed area to the Manila Lodge No. 761, Benevolent and Protective Order of
Elks of the U.S.A. (BPOE, for short) on the basis of which TCT No. 2195 2 was issued to the latter over
the Marcela de terrenoquees parte de la Luneta Extension, Situada en el Distrito le la Ermita ... ." At the
back of this title vas annotated document 4608/T-1635, which in part reads as follows: "que la
citadaCiusdad de Manila tendraderecho a suopcion, de recomparar la expresadapropiedadpara fines

75
publicossolamete in cualquiertiempodespues de cincuentaanosdesde el 13 le Julio le 1911, precio de la
mismapropiedad, mas el valor queentoncestenganlasmejoras."

For the remainder of the Luneta Extension, that is, after segregating therefrom the portion sold to the
Manila Lodge No. 761, PBOE, a new Certificate of Title No. 2196 3 was issued on July 17, 1911 to the City
of Manila.

Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 square meters to the Elks Club, Inc., to
which was issued TCT No. 67488. 4 The registered owner, "The Elks Club, Inc.," was later changed by
court oder to "Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc."

In January 1963 the BPOE.petitioned the Court of First Instance of Manila, Branch IV, for the cancellation
of the right of the City of Manila to repurchase the property This petition was granted on February 15,
1963.

On November 19, 1963 the BPOE sold for the sum of P4,700,000 the land together with all the
improvements thereon to the Tarlac Development Corporation (TDC, for short) which paid P1,700.000 as
down payment and mortgaged to the vendor the same realty to secure the payment of the balance to be
paid in quarterly installments.5At the time of the sale,, there was no annotation of any subsisting lien on
the title to the property. On December 12, 1963 TCT No. 73444 was issued to TDC over the subject land
still described as "UNA PARCELA DE TERRENO, quees parte de la Luneta Extension, situada en el Distrito
de Ermita... ."

In June 1964 the City of Manila filed with the Court of First Instance of Manila a petition for the
reannotation of its right to repurchase; the court, after haering, issued an order, dated November 19,
1964, directing the Register of Deeds of the City of Manila to reannotate in toto the entry regarind the
right of the City of Manila to repurchase the property after fifty years. From this order TDC and BPOE
appealed to this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L-24469 the trial court's
order of reannotation, but reserved to TDC the right to bring another action for the clarification of its
rights.

As a consequence of such reservation, TDC filed on April 28, 1971 against the City of Manila and the
Manila Lodge No. 761, BPOE, a complaint, docketed as Civil Case No. 83009 of the Court of First Instance
of Manila, containing three causes of action and praying -

a) On the first cause of action, that the plaintiff TDC be declared to have purchased the parcel of land
now in question with the buildings and improvements thereon from the defendant BPOE for value and in
good faith, and accordingly ordering the cancellation of Entry No. 4608/T-1635 on Transfer Certificate of
Title No. 73444 in the name of the Plaintiff;

b) On the second cause of action, ordering the defendant City of Manila to pay the plaintiff TDC damages
in the sum of note less than one hundred thousand pesos (P100,000.00);

c) On the third cause of action, reserving to the plaintiff TDC the right to recover from the defendant
BPOE the amounts mentioned in par. XVI of the complaint in accordance with Art. 1555 of the Civil Code,
in the remote event that the final judgment in this case should be that the parcel of land now in question
is a public park; and

d) For costs, and for such other and further relief as the Court may deem just and equitable. 6

76
Therein defendant City of Manila, in its answer dated May 19, 1971, admitted all the facts alleged in the
first cause of action except the allegation that TDC purchased said property "for value and in good faith,"
but denied for lack of knowledge or information the allegations in the second and third causes of action.
As, special and affirmative defense, the City of Manila claimed that TDC was not a purchaser in good faith
for it had actual notice of the City's right to repurchase which was annotated at the back of the title prior
to its cancellation, and that, assuming arguendo that TDC had no notice of the right to repurchase, it
was, nevertheless, under obligation to investigate inasmuch as its title recites that the property is a part
of the Luneta extension. 7

The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971, admitted having sold the land
together with the improvements thereon for value to therein plaintiff which was in good faith, but denied
for lack of knowledge as to their veracity the allegations under the second cause of action. It furthermore
admitted that TDC had paid the quarterly installments until October l5, 1964 but claimed that the latter
failed without justifiable cause to pay the subsequent installments. It also asserted that it was a seller for
value in good faith without having misrepresented or concealed tacts relative to the title on the property.
As counterclaim, Manila Lodge No. 761 (BPOE) sought to recover the balance of the purchase price plus
interest and costs. 8

On June 15, 1971 TDC answered the aforesaid counterclaim, alleging that its refusal to make further
payments was fully justified.9

After due trial the court a quo rendered on July 14, 1972 its decision finding the subject land to be part of
the "public park or plaza" and, therefore, part of the public domain. The court consequently declared that
the sale of the subject land by the City of Manila to Manila Lodge No. 761, BPOE, was null and void; that
plaintiff TDC was a purchaser thereof in g faith and for value from BPOE and can enforce its rights
against the latter; and that BPOE is entitled to recover from the City of Manila whatever consideration it
had 'paid the latter. 'The dispositive part of the decision reads: ñé+.£ªwph!1

WHEREFORE, the Court hereby declares that the parcel of land formerly covered by
Transfer Certificate of Title Nos 2195 and 67488 in the name of BPOE and now by
Transfer Certificate of Title No. 73444 in the name of Tarlac Development Corporation is
a public' park or plaza, and, consequently, instant complaint is dimissed, without
pronouncement as to costs.

In view of the reservation made by plaintiff Tarlac Development Corporation to recover

from defendant BPOE the amounts mentioned in paragraph XVI of the complaint in
accordance with Article 1555 of the Civil Code, the Court makes no pronouncement on
this point. 10

From said decision the therein plaintiff TDC as well as the defendant Manila Lodge No. 761, BPOE,
appealed to the Court of Appeals.

In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No. 761, BPOE, avers that the trial
court committed the following errors, namely:

1. In holding that the property subject of the action is not patrimonial property of the City of Manila; and

2. In holding that the Tarlac Development Corporation may recover and enforce its right against the
defendant BPOE. 11

The Tarlac Development Corporation, on the other hand, asserts that the trial court erred:

77
(1) In finding that the property in question is or was a public park and in consequently nullifying the sale
thereof by the City of Manila to BPOE;

(2) In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil. 602, and Government vs. Cabangis,
53 Phil. 112, to the case at bar; and

(3) In not holding that the plaintiff-appellant is entitled to ,recover damages from the defendant City of
Manila. 12

Furthermore, TDC as appellee regarding the second assignment of error raised by BPOE, maintained that
it can recover and enforce its rigth against BPOE in the event that the land in question is declared a
public park or part thereof.13

In its decision promulgated on June 30, 1975, the Court of Appeals concur ed in the findings and
conclusions of the lower court upon the ground that they are supported by he evidence and are in
accordance with law, and accordingly affirmed the lower court's judgment.

Hence, the present petitions for review on certiorari.

G.R. No. L-41001

The Manila Lodge No. 761, BPOE, contends, in its petition for review on certiorari docketed as G.R. No. L-
41001, that the Court of Appeals erred in (1) disregarding the very enabling acts and/or statutes
according to which the subject property was, and still is, patrimonial property of the City of Manila and
could therefore be sold and/or disposed of like any other private property; and (2) in departing from the
accepted and usual course of judicial proceedings when it simply made a general affirmance of the
court a quo's findings and conclusions without bothering to discuss or resolve several vital points stressed
by the BPOE in its assigned errrors. 14

G.R. No. L-41012

The Tarlac Development Corporation, in its petition for review on certiorari docketed as G.R. No. L-
41012, relies on the following grounds for the allowance of its petition:

1. that the Court of Appeals did not correctly interpret Act No. 1360, as amended by Act No. 1657, of the
Philippine Commission; and

2. that the Court of Appeals has departed from the accepted and usual course of judicial proceedings in
that it did not make its own findings but simply recited those of the lower court. 15

ISSUES AND ARGUMENTS

FIRST ISSUE

Upon the first issue, both petitioners claim that the property subject of the action, pursuant to the
provisions of Act No. 1360, as amended by Act No. 1657, was patrimonial property of the City of Manila
and not a park or plaza.

Arguments of Petitioners

78
In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that "there appears to be some logic in the
conclusion" of the Court of Appeals that "neither Act No. 1360 nor Act No. 1657 could have meant to
supply the City of Manila the authority to sell the subject property which is located at the south end not
the north — of the reclaimed area." 16 It argues, however, that when Act No. 1360, as amended,
authorized the City of Manila to undertake the construction of the Luneta extension by reclaimed land
from the Manila Bay, and declared that the reclaimed land shall be the "property of the City of Manila,"
the State expressly granted the ownership thereof to the City of Manila which. consequently. could enter
into transactions involving it; that upon the issuance of O.C.T. No. 1909, there could he no doubt that the
reclaimed area owned by the City was its patrimonial property;" that the south end of the reclaimed area
could not be for public use for. as argued by TDC a street, park or promenade can be property for public
use pursuant to Article 344 of the Spanish Civil Code only when it has already been so constructed or laid
out, and the subject land, at the time it was sold to the Elk's Club, was neither actually constructed as a
street, park or promenade nor laid out as a street, park or promenade;" that even assuming that the
subject property was at the beginning property of public dominion, it was subsequently converted into
patrimonial property pursuant to Art. 422 of the Civil Code, inasmuch as it had never been used, red or
utilized since it was reclaimed in 1905 for purpose other than this of an ordinary real estate for sale or
lease; that the subject property had never been intended for public use, is further shown by the fact that
it was neither included as a part of the Luneta Park under Plan No. 30 of the National Planning
Commission nor considered a part of the Luneta National Park (now Rizal Park) by Proclamation No. 234
dated December 19, 1955 of President Ramon Magsaysay or by Proclamation Order No. 274 dated
October 4, 1967 of President Ferdinand E. Marcos;" 19 that, such being the case, there is no reason why
the subject property should -not be considered as having been converted into patrimonial property,
pursuant to the ruling in Municipality vs. Roa 7 Phil. 20, inasmuch as the City of Manila has considered it
as its patrimonial property not only bringing it under the operation of the Land Registration Act but also
by disposing of it; 20 and that to consider now the subject property as a public plaza or park would not
only impair the obligations of the parties to the contract of sale (rated July 13, 1911, but also authorize
deprivation of property without due process of law.21

G.R. No. L-410112

In L-41012, the petitioner TDC stresses that the principal issue is the interpretation of Act No. 1360, as
amended by. Act No. 1657 of the Philippine Commission, 22 and avers that inasmuch as Section 6 of Act
No. 1360, as amended by Act 1657, provided that the reclamation of the Luneta extension was to be paid
for out of the funds of the City of Manila which was authorized to borrow P350,000 "to be expended in
the construction of Luneta Extension," the reclaimed area became "public land" belonging to the City of
Manila that spent for the reclamation, conformably to the holding in Cabangis,23 and consequently, said
land was subject to sale and other disposition; that the Insular Government itself considered the
reclaimed Luneta extension as patrimonial property subject to disposition as evidenced by the fact that
See. 3 of Act 1360 declared that "the land hereby reclaimed shall be the property of the City of Manila;"
that this property cannot be property for public use for according to Article 344 of the Civil Code, the
character of property for public use can only attach to roads and squares that have already been
constructed or at least laid out as such, which conditions did not obtain regarding the subject land, that
Sec. 5 of Act 1360 authorized the City of Manila to lease the northern part of the reclaimed area for hotel
purposes; that Act No. 1657 furthermore authorized the City of Manila to sell the same; 24 that the
express statutory authority to lease or sell the northern part of the reclaimed area cannot be interpreted
to mean that the remaining area could not be sold inasmuch as the purpose of the statute was not
merely to confer authority to sell the northern portion but rather to limit the city's power of disposition
thereof, to wit: to prevent disposition of the northern portion for any purpose other than for a hotel site
that the northern and southern ends of the reclaimed area cannot be considered as extension of the
Luneta for they lie beyond the sides of the original Luneta when extended in the direction of the sea, and
that is the reason why the law authorized the sale of the northern portion for hotel purposes, and, for the
same reason, it is implied that the southern portion could likewise be disposed of. 26

79
TDC argues likewise that there are several items of uncontradicted circumstantial evidence which may
serve as aids in construing the legislative intent and which demonstrate that the subject property is
patrimonial in nature, to wit: (1) Exhibits "J" and "J-1", or Plan No. 30 of the National Planning
Commission showing the Luneta and its vicinity, do not include the subject property as part of the Luneta
Park; (2) Exhibit "K", which is the plan of the subject property covered by TCT No. 67488 of BPOE,
prepared on November 11, 1963, indicates that said property is not a public park; (3) Exhibit "T", which
is a certified copy of Proclamation No. 234 issued on December 15, 1955 is President Magsaysay, and
Exhibit "U" which is Proclamation Order No. 273 issued on October 4, 1967 by President Marcos, do not
include the subject property in the Luneta Park-, (4) Exhibit "W", which is the location plan of the Luneta
National Park under Proclamations Nos. 234 and 273, further confirms that the subject property is not a
public park; and (5) Exhibit "Y", which is a copy of O.C.T. No. 7333 in the name of the United States of
America covering the land now occupied by the America covering the land now occupied by the American
Embassy, the boundaries of which were delineated by the Philippine Legislature, states that the said land
is bounded on the northwest by properties of the Army and Navy Club (Block No. 321) and the Elks Club
(Block No. 321), and this circumstance shows that even the Philippine Legislature recognized the subject
property as private property of the Elks Club. 27

TDC furthermore contends that the City of Manila is estopped from questioning the validity of the sale of
the subject property that it executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for several
reasons, namely: (1) the City's petition for the reannotation of Entry No. 4608/T-1635 was predicated on
the validity of said sale; (2) when the property was bought by the petitioner TDC it was not a public plaza
or park as testified to by both Pedro Cojuanco, treasurer of TDC, and the surveyor, Manuel Añoneuvo,
according to whom the subject property was from all appearances private property as it was enclosed by
fences; (3) the property in question was cadastrally surveyed and registered as property of the Elks Club,
according to Manuel Anonuevo; (4) the property was never used as a public park, for, since the issuance
of T.C.T. No. 2165 on July 17, 1911 in the name of the Manila Lodge NO. 761, the latter used it as
private property, and as early as January 16, 1909 the City of Manila had already executed a deed of sale
over the property in favor of the Manila Lodge No. 761; and (5) the City of Manila has not presented any
evidence to show that the subject property has ever been proclaimed or used as a public park. 28

TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot apply to the subject land, for Com.
Act No. 141 took effect on December 1, 1936 and at that time the subject land was no longer part of the
part of the public domain. 29

TDC also stresses that its rights as a purchaser in good faith cannot be disregarded, for the mere
mention in the certificate of title that the lot it purchased was "part of the Luneta extension" was not a
sufficient warning that tile title to the City of Manila was invalid; and that although the trial court, in its
decision affirmed by the Court of Appeals, found the TDC -to has been an innocent purchaser for value,
the court disregarded the petitioner's rights as such purchaser that relied on Torrens certificate of title. 30

The Court, continues the petitioner TDC erred in not holding that the latter is entitled to recover from the
City of Manila damages in the amount of P100,000 caused by the City's petition for- reannotation of its
right to repurchase.

DISCUSSION AND RESOLUTION OF FIRST ISSUE

It is a cardinal rule of statutory construction that courts must give effect to the general legislative intent
that can be discovered from or is unraveled by the four corners of the statute, 31 and in order to discover
said intent, the whole statute, and not only a particular provision thereof, should be considered. 32 It is,
therefore, necessary to analyze all the provisions of Act No. 1360, as amended, in order to unravel the
legislative intent.

80
Act No. 1360 which was enacted by the Philippine Commission on June 26, 1905, as amended by Act No.
1657 enacted on May 18, 1907, authorized the "construction of such rock and timber bulkheads or sea
walls as may be necessary for the making of an extension to the Luneta" (Sec. 1 [a]), and the placing of
the material dredged from the harbor of Manila "inside the bulkheads constructed to inclose the Luneta
extension above referred to" (Sec. 1 [a]). It likewise provided that the plan of Architect D. H. Burnham as
"a general outline for the extension and improvement of the Luneta in the City of Manila" be adopted;
that "the reclamation from the Bay of Manila of the land included in said projected Luneta extension... is
hereby authorized and the land thereby reclaimed shall be the property of the City of Manila " (Sec. 3);
that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the
Luneta extension authorized by this Act at the worth end of said tract, not to exceed five hundred feet by
six hundred feet in size, for a hotel site, and to lease the same with the approval of the Governor
General, ... for a term not exceeding ninety-nine years; that "should the Municipal Board ... deem it
advisable it is hereby authorized to advertise for sale to sell said tract of land ... ;" "that said tract shall
be used for hotel purposes as herein prescribed, and shall not be devoted to any other purpose or object
whatever;" "that should the grantee x xx fail to maintain on said tract a first-class hotel x xx then the title
to said tract of land sold, conveyed, and transferred, and shall not be devoted to any other purpose or
object whatever;" "that should the grantee x xx fail to maintain on said tract a first-class hotel x xx then
the title to said tract of land sold, conveyed, and transferred to the grantee shall revert to the City of
Manila, and said City of Manila shall thereupon become entitled to immediate possession of said tract of
land" (Sec. 5); that the construction of the rock and timber bulkheads or sea wall "shall be paid for out of
the funds of the City of Manila, but the area to be reclaimed by said proposed Luneta extension shall be
filled, without cost to the City of Manila, with material dredged from Manila Bay at the expense of the
Insular Government" (Sec. 6); and that "the City of Manila is hereby authorized to borrow from the
Insular Government ... the sum of three hundred thousand pesos, to be expended in the construction of
Luneta extension provided for by paragraph (a) of section one hereof" (Sec.7).

The grant made by Act No. 1360 of the reclaimed land to the City of Manila is a grant of "public" nature,
the same having been made to a local political subdivision. Such grants have always
been strictly construed against the grantee.33 One compelling reason given for the strict interpretation of
a public grant is that there is in such grant a gratuitous donation of, public money or resources which
results in an unfair advantage to the grantee and for that reason, the grant should be narrowly restricted
in favor of the public.34 This reason for strict interpretation obtains relative to the aforesaid grant, for,
although the City of Manila was to pay for the construction of such work and timber bulkheads or sea
walls as may be necessary for the making of the Luneta extension, the area to be reclaimed would be
filled at the expense of the Insular Government and without cost to the City of Manila, with material
dredged from Manila Bay. Hence, the letter of the statute should be narrowed to exclude maters which if
included would defeat the policy of the legislation.

The reclaimed area, an extension to the Luneta, is declared to be property of the City of Manila. Property,
however, is either of public ownership or of private ownership. 35 What kind of property of the City is the
reclaimed land? Is it of public ownership (dominion) or of private ownership?

We hold that it is of public dominion, intended for public use.

Firstly, if the reclaimed area was granted to the City of Manila as its patrimonial property, the City could,
by virtue of its ownership, dispose of the whole reclaimed area without need of authorization to do so
from the lawmaking body. Thus Article 348 of the Civil Code of Spain provides that "ownership is the
right to enjoy and dispose of a thing without further limitations than those established by law." 36 The
right to dispose (jus disponendi) of one's property is an attribute of ownership. Act No. 1360, as
amended, however, provides by necessary implication, that the City of Manila could not dispose of the
reclaimed area without being authorized by the lawmaking body. Thus the statute provides that "the City
of Manila is hereby authorized to set aside a tract ... at the north end, for a hotel site, and to lease the
same ... should the municipal board ... deem it advisable, it is hereby authorized ...to sell said tract of

81
land ... " (Sec. 5). If the reclaimed area were patrimonial property of the City, the latter could dispose of
it without need of the authorization provided by the statute, and the authorization to set aside ... lease ...
or sell ... given by the statute would indeed be superfluous. To so construe the statute s to render the
term "authorize," which is repeatedly used by the statute, superfluous would violate the elementary rule
of legal hermeneutics that effect must be given to every word, clause, and sentence of the statute and
that a statute should be so interpreted that no part thereof becomes inoperative or superfluous. 37 To
authorize means to empower, to give a right to act. 38 Act No. 1360 furthermore qualifies the verb it
authorize" with the adverb "hereby," which means "by means of this statue or section," Hence without
the authorization expressly given by Act No. 1360, the City of Manila could not lease or sell even the
northern portion; much less could it dispose of the whole reclaimed area. Consequently, the reclaimed
area was granted to the City of Manila, not as its patrimonial property. At most, only the northern portion
reserved as a hotel site could be said to be patrimonial property for, by express statutory provision it
could be disposed of, and the title thereto would revert to the City should the grantee fail to comply with
the terms provided by the statute.

TDC however, contends that the purpose of the authorization provided in Act No. 1360 to lease or sell
was really to limit the City's power of disposition. To sustain such contention is to beg the question. If the
purpose of the law was to limit the City's power of disposition then it is necessarily assumed that the City
had already the power to dispose, for if such power did not exist, how could it be limited? It was
precisely Act 1360 that gave the City the power to dispose for it was hereby authorized by lease of sale.
Hence, the City of Manila had no power to dispose of the reclaimed land had such power not been
granted by Act No. 1360, and the purpose of the authorization was to empower the city to sell or lease
the northern part and not, as TDC claims, to limit only the power to dispose. Moreover, it is presumed
that when the lawmaking body enacted the statute, it had full knowledge of prior and existing laws and
legislation on the subject of the statute and acted in accordance or with respect thereto.39 If by another
previous law, the City of Manila could already dispose of the reclaimed area, which it could do if such
area were given to it as its patrimonial property, would it then not be a superfluity for Act No. 1360
to authorize the City to dispose of the reclaimed land? Neither has petitioner TDC pointed to any other
law that authorized the City to do so, nor have we come across any. What we do know is that if the
reclaimed land were patrimonial property, there would be no need of giving special authorization to the
City to dispose of it. Said authorization was given because the reclaimed land was not intended to be
patrimonial property of the City of Manila, and without the express authorization to dispose of the
northern portion, the City could not dispose of even that part.

Secondly, the reclaimed area is an "extension to the Luneta in the City of Manila." 40
If the reclaimed area
is an extension of the Luneta, then it is of the same nature or character as the old Luneta. Anent this
matter, it has been said that a power to extend (or continue an act or business) cannot authorize a
transaction that is totally distinct. 41 It is not disputed that the old Luneta is a public park or plaza and it
is so considered by Section 859 of the Revised Ordinances of the City of Manila. 42 Hence the "extension
to the Luneta" must be also a public park or plaza and for public use.

TDC, however, contends that the subject property cannot be considered an extension of the old Luneta
because it is outside of the limits of the old Luneta when extended to the sea. This is a strained
interpretation of the term "extension," for an "extension," it has been held, "signifies enlargement in any
direction — in length, breadth, or circumstance." 43

Thirdly, the reclaimed area was formerly a part of the manila Bay. A bay is nothing more than an inlet of
the sea. Pursuant to Article 1 of the Law of Waters of 1866, bays, roadsteads, coast sea, inlets and
shores are parts of the national domain open to public use. These are also property of public ownership
devoted to public use, according to Article 339 of the Civil Code of Spain.

82
When the shore or part of the bay is reclaimed, it does not lose its character of being property for public
use, according to Government of the Philippine Islands vs. Cabangis.44 The predecessor of the claimants
in this case was the owner of a big tract of land including the lots in question. From 1896 said land began
to wear away due to the action of the waters of Manila Bay. In 1901 the lots in question became
completely submerged in water in ordinary tides. It remained in such a state until 1912 when the
Government undertook the dredging of the Vitas estuary and dumped the Sand and - silt from estuary on
the low lands completely Submerged in water thereby gradually forming the lots in question. Tomas
Cabangis took possession thereof as soon as they were reclaimed hence, the claimants, his successors in
interest, claimed that the lots belonged to them. The trial court found for the claimants and the
Government appealed. This Court held that when the lots became a part of the shore. As they remained
in that condition until reclaimed by the filling done by the Government, they belonged to the public
domain. for public use .4' Hence, a part of the shore, and for that purpose a part of the bay, did not lose
its character of being for public use after it was reclaimed.

Fourthly, Act 1360, as amended, authorized the lease or sale of the northern portion of the reclaimed
area as a hotel sites. The subject property is not that northern portion authorized to be leased or sold;
the subject property is the southern portion. Hence, applying the rule of expresiouniusestexlusioalterius,
the City of Manila was not authorized to sell the subject property. The application of this principle of
statutory construction becomes the more imperative in the case at bar inasmuch as not only must the
public grant of the reclaimed area to the City of Manila be, as above stated, strictly construed against the
City of Manila, but also because a grant of power to a municipal corporation, as happens in this case
where the city is author ized to lease or sell the northern portion of the Luneta extension, is strictly
limited to such as are expressly or impliedly authorized or necessarily incidental to the objectives of the
corporation.

Fifthly, Article 344 of the Civil Code of Spain provides that to property of public use, in provinces and in
towns, comprises the provincial and town roads, the squares streets fountains, and public waters the
promenades, and public works of general service paid for by such towns or provinces." A park or plaza,
such as the extension to the Luneta, is undoubtedly comprised in said article.

The petitioners, however, argue that, according to said Article 344, in order that the character of property
for public use may be so attached to a plaza, the latter must be actually constructed or at least laid out
as such, and since the subject property was not yet constructed as a plaza or at least laid out as a plaza
when it was sold by the City, it could not be property for public use. It should be noted, however, that
properties of provinces and towns for public use are governed by the same principles as properties of the
same character belonging to the public domain.46 In order to be property of public domain an intention to
devote it to public use is sufficient. 47 The, petitioners' contention is refuted by Manresa himself who said,
in his comments", on Article 344, that: ñé+.£ªwph!1

Las plazas, calles y paseospublicos correspondent sin dudaaigunaaldominiopublico

municipal ), porque se hallanestablecidossobresuelo municipal y estandestinadas al uso
de todos Laurent presentatratando de las plazas, una question relativa a
sidebenconceptuarsecomo de dominiopublico los lugaresvacioslibres, que se encuenttan
en los Municipiosrurales ... Laurent opina contra Pioudhonquetodavezqueestan al servicio
de todos pesos lugares, deben considerable publicos y de dominion publico. Realmente,
paladecidir el punto, bastarasiemprefijarse en el destino real y efectivo de los
citadoslugares, y siestedestinoentraña un usocomun de todos, no hay dudaque son de
dominiopublico municipal si no patrimoniales.

It is not necessary, therefore, that a plaza be already constructed of- laid out as a plaza in order that it
be considered property for public use. It is sufficient that it be intended to be such In the case at bar, it

83
has been shown that the intention of the lawmaking body in giving to the City of Manila the extension to
the Luneta was not a grant to it of patrimonial property but a grant for public use as a plaza.

We have demonstrated ad satietatem that the Luneta extension as intended to be property of the City of
Manila for public use. But, could not said property-later on be converted, as the petitioners contend, to
patrimonial property? It could be. But this Court has already said, in Ignacio vs. The Director of
Lands, 49 the executive and possibly the legislation department that has the authority and the power to
make the declaration that said property, is no longer required for public use, and until such declaration i
made the property must continue to form paint of the public domain. In the case at bar, there has been
no such explicit or unequivocal declaration It should be noted, furthermore, anent this matter, that courts
are undoubted v not. primarily called upon, and are not in a position, to determine whether any public
land is still needed for the purposes specified in Article 4 of the Law of Waters .50

Having disposed of the petitioners' principal arguments relative to the main issue, we now pass to the
items of circumstantial evidence which TDC claims may serve as aids in construing the legislative intent in
the enactment of Act No. 1360, as amended. It is noteworthy that all these items of alleged
circumstantial evidence are acts far removed in time from the date of the enactment of Act No.1360 such
that they cannot be considered contemporaneous with its enactment. Moreover, it is not farfetched that
this mass of circumstantial evidence might have been influenced by the antecedent series of invalid acts,
to wit: the City's having obtained over the reclaimed area OCT No. 1909 on January 20,1911; the sale
made by the City of the subject property to Manila Lodge No. 761; and the issuance to the latter of
T.C.T. No. 2195. It cannot gainsaid that if the subsequent acts constituting the circumstantial evidence
have been base on, or at least influenced, by those antecedent invalid acts and Torrens titles S they can
hardly be indicative of the intent of the lawmaking body in enacting Act No. 1360 and its amendatory act.

TDC claims that Exhs. "J," "J-l" "K," "T," "U," "W" and "Y" show that the subject property is not a park.

Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed development" dated May 14, 1949,
were prepared by the National Urban Planning Commission of the Office of the President. It cannot be
reasonably expected that this plan for development of the Luneta should show that the subject property
occupied by the ElksClub is a public park, for it was made 38 years after the sale to the Elks, and after
T.C.T. No. 2195 had been issued to Elks. It is to be assumed that the Office of the President was
cognizant of the Torrens title of BPOE. That the subject property was not included as a part of the Luneta
only indicated that the National Urban Planning Commission that made the plan knew that the subject
property was occupied by Elks and that Elks had a Torrens title thereto. But this in no way proves that
the subject property was originally intended to be patrimonial property of the City of Manila or that the
sale to Elks or that the Torrens-title of the latter is valid.

Exhibit "K" is the "Plan of land covered by T.C.T . No ----, as prepared for Tarlac Development Company."
It was made on November 11, 1963 by Felipe F. Cruz, private land surveyor. This surveyor is admittedly
a surveyor for TDC. 51 This plan cannot be expected to show that the subject property is a part of the
Luneta Park, for he plan was made to show the lot that "was to be sold to petitioner." This plan must
have also assumed the existence of a valid title to the land in favor of Elks.

Exhibits "T" and "U" are copies of Presidential Proclamations No. 234 issued on November 15, 1955 and
No. 273 issued on October 4, 1967, respectively. The purpose of the said Proclamations was to reserve
certain parcels of land situated in the District of Ermita, City of Manila, for park site purposes. Assuming
that the subject property is not within the boundaries of the reservation, this cannot be interpreted to
mean that the subject property was not originally intended to be for public use or that it has ceased to be
such. Conversely, had the subject property been included in the reservation, it would mean, if it really
were private property, that the rights of the owners thereof would be extinguished, for the reservations
was "subject to private rights, if any there be." That the subject property was not included in the

84
reservation only indicates that the President knew of the existence of the Torrens titles mentioned above.
The failure of the Proclamations to include the subject property in the reservation for park site could not
change the character of the subject property as originally for public use and to form part of the Luneta
Park. What has been said here applies to Exhibits "V", "V-1" to "V-3," and "W" which also refer to the
area and location of the reservation for the Luneta Park.

Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935, covering the lot where now stands
the American Embassy [Chancery]. It states that the property is "bounded ... on the Northwest by
properties of Army and Navy Club (Block No.321) and Elks Club (Block No. 321)." Inasmuch as the said
bounderies delineated by the Philippine Legislature in Act No. 4269, the petitioners contend that the
Legislature recognized and conceded the existence of the Elks Club property as a primate property (the
property in question) and not as a public park or plaza. This argument is non sequitur plain and simple
Said Original Certificate of Title cannot be considered as an incontrovertible declaration that the Elks Club
was in truth and in fact the owner of such boundary lot. Such mention as boundary owner is not a means
of acquiring title nor can it validate a title that is null and void.

TDC finally claims that the City of Manila is estopped from questioning the validity of the sale it executed
on July 13,'1911 conconveying the subject property to the Manila Lodge No. 761, BPOE. This contention
cannot be seriously defended in the light of the doctrine repeatedly enunciated by this Court that the
Government is never estopped by mistakes or errors on the pan of its agents, and estoppel does not
apply to a municipal corporation to validate a contract that is prohibited by law or its against Republic
policy, and the sale of July 13, 1911 executed by the City of Manila to Manila Lodge was certainly a
contract prohibited by law. Moreover, estoppel cannot be urged even if the City of Manila accepted the
benefits of such contract of sale and the Manila Lodge No. 761 had performed its part of the agreement,
for to apply the doctrine of estoppel against the City of Manila in this case would be tantamount to
enabling it to do indirectly what it could not do directly. 52

The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761, BPOE, was
void and inexistent for lack of subject matter. 53 It suffered from an incurable defect that could not be
ratified either by lapse of time or by express ratification. The Manila Lodge No. 761 therefore acquired no
right by virtue of the said sale. Hence to consider now the contract inexistent as it always has seen,
cannot be, as claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for
there was it, contemplation of law, no contract at all.

The inexistence of said sale can be set up against anyone who asserts a right arising from it, not only
against the first vendee, the Manila Lodge No. 761, BPOE, but also against all its suceessors, including
the TDC which are not protected the doctrine of bona fide ii purchaser without notice, being claimed by
the TDC does not apply where there is a total absence of title in the vendor, and the good faith of the
purchaser TDC cannot create title where none exists. 55

The so-called sale of the subject property having been executed, the restoration or restitution of what
has been given is order 56

SECOND ISSUE

The second ground alleged in support of the instant petitions for review on certiorari is that the Court of
Appeals has departed from the accepted and usual course of judicial proceedings as to call for an
exercise of the power of supervision. TDC in L-41012, argues that the respondent Court did not make its
own findings but simply recited those of the lower court and made a general affirmance, contrary to the
requirements of the Constitution; that the respondent Court made glaring and patent mistakes in
recounting even the copied findings, palpably showing lack of deliberate consideration of the matters
involved, as, for example, when said court said that Act No. 1657 authorized the City of Manila to set

85
aside a portion of the reclaimed land "formed by the Luneta Extension of- to lease or sell the same for
park purposes;" and that respondent Court. further more, did not resolve or dispose of any of the
assigned errors contrary to the mandate of the Judiciary Act.. 57

The Manila Lodge No. 761, in L-41001, likewise alleges, as one of the reasons warranting review, that the
Court of Appeals departed from the accepted and usual course of Judicial proceedings by simply making
a general affirmance of the court a quo findings without bothering to resolve several vital points
mentioned by the BPOE in its assigned errors. 58

COMMENTS ON SECOND ISSUE

We have shown in our discussion of the first issue that the decision of the trial court is fully in accordance
with law. To follows that when such decision was affirmed by the Court of Appeals, the affirmance was
likewise in accordance with law. Hence, no useful purpose will be served in further discussing the second
issue.

CONCLUSION

ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012 are denied for lack of merit, and the
decision of the Court of Appeals of June 30, 1975, is hereby affirmed, at petitioner's cost.

86
 G.R. No. L-49112 February 2, 1979

LEOVILLO C. AGUSTIN, petitioner,

vs.
HON. ROMEO F. EDU, in his capacity as Land Transportation Commissioner; HON. JUAN
PONCE ENRILE, in his capacity as Minister of National Defense; HON. ALFREDO L. JUINIO, in
his capacity as Minister Of Public Works, Transportation and Communications; and HON:
BALTAZAR AQUINO, in his capacity as Minister of Public Highways, respondents.

Leovillo C. Agustin Law Office for petitioner.

Solicitor General Estelito P. Mendoza, Assistant Solicitor General Ruben E. Agpalo and Solicitor Amado D.
Aquino for respondents.

FERNANDO, J.:

The validity of a letter of Instruction 1 providing for an early seaming device for motor vehicles is assailed
in this prohibition proceeding as being violative of the constitutional guarantee of due process and,
insofar as the rules and regulations for its implementation are concerned, for transgressing the
fundamental principle of non- delegation of legislative power. The Letter of Instruction is stigmatized by
petitioner who is possessed of the requisite standing, as being arbitrary and oppressive. A temporary
restraining order as issued and respondents Romeo F. Edu, Land Transportation Commissioner Juan
Ponce Enrile, Minister of National Defense; Alfredo L. Juinio, Minister of Public Works, Transportation and
Communications; and Baltazar Aquino, Minister of Public Highways; were to answer. That they did in a
pleading submitted by Solicitor General Estelito P. Mendoza. 2 Impressed with a highly persuasive quality,
it makes devoid clear that the imputation of a constitutional infirmity is devoid of justification The Letter
of Instruction on is a valid police power measure. Nor could the implementing rules and regulations
issued by respondent Edu be considered as amounting to an exercise of legislative power. Accordingly,
the petition must be dismissed.

The facts are undisputed. The assailed Letter of Instruction No. 229 of President Marcos, issued on
December 2, 1974, reads in full: "[Whereas], statistics show that one of the major causes of fatal or
serious accidents in land transportation is the presence of disabled, stalled or parked motor vehicles
along streets or highways without any appropriate early warning device to signal approaching motorists
of their presence; [Whereas], the hazards posed by such obstructions to traffic have been recognized by
international bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and Signals
and the United Nations Organization (U.N.); [Whereas], the said Vienna Convention which was ratified by
the Philippine Government under P.D. No. 207, recommended the enactment of local legislation for the
installation of road safety signs and devices; [Now, therefore, I, Ferdinand E. Marcos], President of the
Philippines, in the interest of safety on all streets and highways, including expressways or limited access
roads, do hereby direct: 1. That all owners, users or drivers of motor vehicles shall have at all times in
their motor vehicles at least one (1) pair of early warning device consisting of triangular, collapsible
reflectorized plates in red and yellow colors at least 15 cms. at the base and 40 cms. at the sides. 2.
Whenever any motor vehicle is stalled or disabled or is parked for thirty (30) minutes or more on any
street or highway, including expressways or limited access roads, the owner, user or driver thereof shall
cause the warning device mentioned herein to be installed at least four meters away to the front and rear
of the motor vehicle staged, disabled or parked. 3. The Land Transportation Commissioner shall cause
Reflectorized Triangular Early Warning Devices, as herein described, to be prepared and issued to
registered owners of motor vehicles, except motorcycles and trailers, charging for each piece not more
than 15 % of the acquisition cost. He shall also promulgate such rules and regulations as are appropriate
to effectively implement this order. 4. All hereby concerned shall closely coordinate and take such
measures as are necessary or appropriate to carry into effect then instruction. 3 Thereafter, on November

87
15, 1976, it was amended by Letter of Instruction No. 479 in this wise. "Paragraph 3 of Letter of
Instruction No. 229 is hereby amended to read as follows: 3. The Land transportation Commissioner shall
require every motor vehicle owner to procure from any and present at the registration of his vehicle, one
pair of a reflectorized early warning device, as d bed of any brand or make chosen by mid motor vehicle .
The Land Transportation Commissioner shall also promulgate such rule and regulations as are
appropriate to effectively implement this order.'" 4 There was issued accordingly, by respondent Edu, the
implementing rules and regulations on December 10, 1976. 5 They were not enforced as President
Marcos on January 25, 1977, ordered a six-month period of suspension insofar as the installation of early
warning device as a pre-registration requirement for motor vehicle was concerned. 6 Then on June 30,
1978, another Letter of Instruction 7 the lifting of such suspension and directed the immediate
implementation of Letter of Instruction No. 229 as amended. 8 It was not until August 29, 1978 that
respondent Edu issued Memorandum Circular No. 32, worded thus: "In pursuance of Letter of Instruction
No. 716, dated June 30, 1978, the implementation of Letter of Instruction No. 229, as amended by Letter
of Instructions No. 479, requiring the use of Early Warning Devices (EWD) on motor vehicle, the following
rules and regulations are hereby issued: 1. LTC Administrative Order No. 1, dated December 10, 1976;
shall now be implemented provided that the device may come from whatever source and that it shall
have substantially complied with the EWD specifications contained in Section 2 of said administrative
order; 2. In order to insure that every motor vehicle , except motorcycles, is equipped with the device, a
pair of serially numbered stickers, to be issued free of charge by this Commission, shall be attached to
each EWD. The EWD.serial number shall be indicated on the registration certificate and official receipt of
payment of current registration fees of the motor vehicle concerned. All Orders, Circulars, and
Memoranda in conflict herewith are hereby superseded, This Order shall take effect immediately. 9 It was
for immediate implementation by respondent Alfredo L. Juinio, as Minister of Public Works,
transportation, and Communications. 10

Petitioner, after setting forth that he "is the owner of a Volkswagen Beetle Car, Model 13035, already
properly equipped when it came out from the assembly lines with blinking lights fore and aft, which could
very well serve as an early warning device in case of the emergencies mentioned in Letter of Instructions
No. 229, as amended, as well as the implementing rules and regulations in Administrative Order No. 1
issued by the land transportation Commission," 11 alleged that said Letter of Instruction No. 229, as
amended, "clearly violates the provisions and delegation of police power, [sic] * * *: " For him they are
"oppressive, unreasonable, arbitrary, confiscatory, nay unconstitutional and contrary to the precepts of
our compassionate New Society." 12 He contended that they are "infected with arbitrariness because it is
harsh, cruel and unconscionable to the motoring public;" 13 are "one-sided, onerous and patently illegal
and immoral because [they] will make manufacturers and dealers instant millionaires at the expense of
car owners who are compelled to buy a set of the so-called early warning device at the rate of P 56.00 to
P72.00 per set." 14 are unlawful and unconstitutional and contrary to the precepts of a compassionate
New Society [as being] compulsory and confiscatory on the part of the motorists who could very well
provide a practical alternative road safety device, or a better substitute to the specified set of
EWD's." 15 He therefore prayed for a judgment both the assailed Letters of Instructions and Memorandum
Circular void and unconstitutional and for a restraining order in the meanwhile.

A resolution to this effect was handed down by this Court on October 19, 1978: "L-49112 (Leovillo C.
Agustin v. Hon. Romeo F. Edu, etc., et al.) — Considering the allegations contained, the issues raised and
the arguments adduced in the petition for prohibition with writ of p prohibitory and/or mandatory
injunction, the Court Resolved to (require) the respondents to file an answer thereto within ton (10) days
from notice and not to move to dismiss the petition. The Court further Resolved to [issue] a [temporary
restraining order] effective as of this date and continuing until otherwise ordered by this Court. 16

Two motions for extension were filed by the Office of the Solicitor General and granted. Then on
November 15, 1978, he Answer for respondents was submitted. After admitting the factual allegations
and stating that they lacked knowledge or information sufficient to form a belief as to petitioner owning a
Volkswagen Beetle car," they "specifically deny the allegations and stating they lacked knowledge or

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information sufficient to form a belief as to petitioner owning a Volkswagen Beetle Car, 17 they specifically
deny the allegations in paragraphs X and XI (including its subparagraphs 1, 2, 3, 4) of Petition to the
effect that Letter of Instruction No. 229 as amended by Letters of Instructions Nos. 479 and 716 as well
as Land transportation Commission Administrative Order No. 1 and its Memorandum Circular No. 32
violates the constitutional provisions on due process of law, equal protection of law and undue delegation
of police power, and that the same are likewise oppressive, arbitrary, confiscatory, one-sided, onerous,
immoral unreasonable and illegal the truth being that said allegations are without legal and factual basis
and for the reasons alleged in the Special and Affirmative Defenses of this Answer." 18 Unlike petitioner
who contented himself with a rhetorical recital of his litany of grievances and merely invoked the
sacramental phrases of constitutional litigation, the Answer, in demonstrating that the assailed Letter of
Instruction was a valid exercise of the police power and implementing rules and regulations of
respondent Edu not susceptible to the charge that there was unlawful delegation of legislative power,
there was in the portion captioned Special and Affirmative Defenses, a citation of what respondents
believed to be the authoritative decisions of this Tribunal calling for application. They are Calalang v.
Williams, 19 Morfe v. Mutuc, 20 and Edu v. Ericta. 21 Reference was likewise made to the 1968 Vienna
Conventions of the United Nations on road traffic, road signs, and signals, of which the Philippines was a
signatory and which was duly ratified. 22 Solicitor General Mendoza took pains to refute in detail, in
language calm and dispassionate, the vigorous, at times intemperate, accusation of petitioner that the
assailed Letter of Instruction and the implementing rules and regulations cannot survive the test of
rigorous scrutiny. To repeat, its highly-persuasive quality cannot be denied.

This Court thus considered the petition submitted for decision, the issues being clearly joined. As noted at
the outset, it is far from meritorious and must be dismissed.

1. The Letter of Instruction in question was issued in the exercise of the police power. That is conceded
by petitioner and is the main reliance of respondents. It is the submission of the former, however, that
while embraced in such a category, it has offended against the due process and equal protection
safeguards of the Constitution, although the latter point was mentioned only in passing. The broad and
expansive scope of the police power which was originally Identified by Chief Justice Taney of the
American Supreme Court in an 1847 decision as "nothing more or less than the powers of government
inherent in every sovereignty" 23 was stressed in the aforementioned case of Edu v. Ericta thus: "Justice
Laurel, in the first leading decision after the Constitution came into force, Calalang v. Williams, Identified
police power with state authority to enact legislation that may interfere with personal liberty or property
in order to promote the general welfare. Persons and property could thus 'be subjected to all kinds of
restraints and burdens in order to we the general comfort, health and prosperity of the state.' Shortly
after independence in 1948, Primicias v. Fugoso reiterated the doctrine, such a competence being
referred to as 'the power to prescribe regulations to promote the health, morals, peace, education, good
order or safety, and general welfare of the people. The concept was set forth in negative terms by Justice
Malcolm in a pre-Commonwealth decision as 'that inherent and plenary power in the State which enables
it to prohibit all things hurtful to the comfort, safety and welfare of society. In that sense it could be
hardly distinguishable as noted by this Court in Morfe v. Mutuc with the totality of legislative power. It is
in the above sense the greatest and most powerful at. tribute of government. It is, to quote Justice
Malcolm anew, 'the most essential, insistent, and at least table powers, I extending as Justice Holmes
aptly pointed out 'to all the great public needs.' Its scope, ever-expanding to meet the exigencies of the
times, even to anticipate the future where it could be done, provides enough room for an efficient and
flexible response to conditions and circumstances thus assuring the greatest benefits. In the language of
Justice Cardozo: 'Needs that were narrow or parochial in the past may be interwoven in the present with
the well-being of the nation. What is critical or urgent changes with the time.' The police power is thus a
dynamic agency, suitably vague and far from precisely defined, rooted in the conception that men in
organizing the state and imposing upon its government limitations to safeguard constitutional rights did
not intend thereby to enable an individual citizen or a group of citizens to obstruct unreasonably the
enactment of such salutary measures calculated to communal peace, safety, good order, and welfare." 24

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2. It was thus a heavy burden to be shouldered by petitioner, compounded by the fact that the particular
police power measure challenged was clearly intended to promote public safety. It would be a rare
occurrence indeed for this Court to invalidate a legislative or executive act of that character. None has
been called to our attention, an indication of its being non-existent. The latest decision in point, Edu v.
Ericta, sustained the validity of the Reflector Law, 25 an enactment conceived with the same end in
view. Calalang v. Williams found nothing objectionable in a statute, the purpose of which was: "To
promote safe transit upon, and. avoid obstruction on roads and streets designated as national roads * *
*. 26 As a matter of fact, the first law sought to be nullified after the effectivity of the 1935 Constitution,
the National Defense Act, 27 with petitioner failing in his quest, was likewise prompted by the imperative
demands of public safety.

3. The futility of petitioner's effort to nullify both the Letter of Instruction and the implementing rules and
regulations becomes even more apparent considering his failure to lay the necessary factual foundation
to rebut the presumption of validity. So it was held in Ermita-Malate Hotel and Motel Operators
Association, Inc. v. City Mayor of Manila. 28 The rationale was clearly set forth in an excerpt from a
decision of Justice Branders of the American Supreme Court, quoted in the opinion: "The statute here
questioned deals with a subject clearly within the scope of the police power. We are asked to declare it
void on the ground that the specific method of regulation prescribed is unreasonable and hence deprives
the plaintiff of due process of law. As underlying questions of fact may condition the constitutionality of
legislation of this character, the presumption of constitutionality must prevail in the absence of some
factual foundation of record in overthrowing the statute. 29

4. Nor did the Solicitor General as he very well could, rely solely on such rebutted presumption of validity.
As was pointed out in his Answer "The President certainly had in his possession the necessary statistical
information and data at the time he issued said letter of instructions, and such factual foundation cannot
be defeated by petitioner's naked assertion that early warning devices 'are not too vital to the prevention
of nighttime vehicular accidents' because allegedly only 390 or 1.5 per cent of the supposed 26,000
motor vehicle accidents that in 1976 involved rear-end collisions (p. 12 of petition). Petitioner's statistics
is not backed up by demonstrable data on record. As aptly stated by this Honorable Court: Further: "It
admits of no doubt therefore that there being a presumption of validity, the necessity for evidence to
rebut it is unavoidable, unless the statute or ordinance is void on its face, which is not the case here"' * *
*. But even as g the verity of petitioner's statistics, is that not reason enough to require the installation of
early warning devices to prevent another 390 rear-end collisions that could mean the death of 390 or
more Filipinos and the deaths that could likewise result from head-on or frontal collisions with stalled
vehicles?" 30 It is quite manifest then that the issuance of such Letter of Instruction is encased in the
armor of prior, careful study by the Executive Department. To set it aside for alleged repugnancy to the
due process clause is to give sanction to conjectural claims that exceeded even the broadest permissible
limits of a pleader's well known penchant for exaggeration.

5. The rather wild and fantastic nature of the charge of oppressiveness of this Letter of Instruction was
exposed in the Answer of the Solicitor General thus: "Such early warning device requirement is not
an expensive redundancy, nor oppressive, for car owners whose cars are already equipped with 1)
blinking lights in the fore and aft of said motor vehicles,' 2) "battery-powered blinking lights inside motor
vehicles," 3) "built-in reflectorized tapes on front and rear bumpers of motor vehicles," or 4) "well-lighted
two (2) petroleum lamps (the Kinke) * * * because: Being universal among the signatory countries to the
said 1968 Vienna Conventions, and visible even under adverse conditions at a distance of at least 400
meters, any motorist from this country or from any part of the world, who sees a reflectorized
rectangular early seaming device installed on the roads, highways or expressways, will conclude, without
thinking, that somewhere along the travelled portion of that road, highway, or expressway, there is a
motor vehicle which is stationary, stalled or disabled which obstructs or endangers passing traffic. On the
other hand, a motorist who sees any of the aforementioned other built in warning devices or the
petroleum lamps will not immediately get adequate advance warning because he will still think what that
blinking light is all about. Is it an emergency vehicle? Is it a law enforcement car? Is it an ambulance?

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Such confusion or uncertainty in the mind of the motorist will thus increase, rather than decrease, the
danger of collision. 31

6. Nor did the other extravagant assertions of constitutional deficiency go unrefuted in the Answer of the
Solicitor General "There is nothing in the questioned Letter of Instruction No. 229, as amended, or in
Administrative Order No. 1, which requires or compels motor vehicle owners to purchase the early
warning device prescribed thereby. All that is required is for motor vehicle owners concerned like
petitioner, to equip their motor vehicles with a pair of this early warning device in question, procuring or
obtaining the same from whatever source. In fact, with a little of industry and practical ingenuity, motor
vehicle owners can even personally make or produce this early warning device so long as the same
substantially conforms with the specifications laid down in said letter of instruction and administrative
order. Accordingly the early warning device requirement can neither be oppressive, onerous, immoral,
nor confiscatory, much less does it make manufacturers and dealers of said devices 'instant millionaires
at the expense of car owners' as petitioner so sweepingly concludes * * *. Petitioner's fear that with the
early warning device requirement 'a more subtle racket may be committed by those called upon to
enforce it * * * is an unfounded speculation. Besides, that unscrupulous officials may try to enforce said
requirement in an unreasonable manner or to an unreasonable degree, does not render the same illegal
or immoral where, as in the instant case, the challenged Letter of Instruction No. 229 and implementing
order disclose none of the constitutional defects alleged against it.32

7 It does appear clearly that petitioner's objection to this Letter of Instruction is not premised on lack of
power, the justification for a finding of unconstitutionality, but on the pessimistic, not to say negative,
view he entertains as to its wisdom. That approach, it put it at its mildest, is distinguished, if that is the
appropriate word, by its unorthodoxy. It bears repeating "that this Court, in the language of Justice
Laurel, 'does not pass upon questions of wisdom justice or expediency of legislation.' As expressed by
Justice Tuason: 'It is not the province of the courts to supervise legislation and keep it within the bounds
of propriety and common sense. That is primarily and exclusively a legislative concern.' There can be no
possible objection then to the observation of Justice Montemayor. 'As long as laws do not violate any
Constitutional provision, the Courts merely interpret and apply them regardless of whether or not they
are wise or salutary. For they, according to Justice Labrador, 'are not supposed to override legitimate
policy and * * * never inquire into the wisdom of the law.' It is thus settled, to paraphrase Chief Justice
Concepcion in Gonzales v. Commission on Elections, that only congressional power or competence, not
the wisdom of the action taken, may be the basis for declaring a statute invalid. This is as it ought to be.
The principle of separation of powers has in the main wisely allocated the respective authority of each
department and confined its jurisdiction to such a sphere. There would then be intrusion not allowable
under the Constitution if on a matter left to the discretion of a coordinate branch, the judiciary would
substitute its own. If there be adherence to the rule of law, as there ought to be, the last offender should
be courts of justice, to which rightly litigants submit their controversy precisely to maintain unimpaired
the supremacy of legal norms and prescriptions. The attack on the validity of the challenged provision
likewise insofar as there may be objections, even if valid and cogent on is wisdom cannot be sustained. 33

8. The alleged infringement of the fundamental principle of non-delegation of legislative power is equally
without any support well-settled legal doctrines. Had petitioner taken the trouble to acquaint himself with
authoritative pronouncements from this Tribunal, he would not have the temerity to make such an
assertion. An exempt from the aforecited decision of Edu v. Ericta sheds light on the matter: "To avoid
the taint of unlawful delegation, there must be a standard, which implies at the very least that the
legislature itself determines matters of principle and lays down fundamental policy. Otherwise, the charge
of complete abdication may be hard to repel A standard thus defines legislative policy, marks its maps
out its boundaries and specifies the public agency to apply it. It indicates the circumstances under which
the legislative command is to be effected. It is the criterion by which legislative purpose may be carried
out. Thereafter, the executive or administrative office designated may in pursuance of the above
guidelines promulgate supplemental rules and regulations. The standard may be either express or
implied. If the former, the non-delegation objection is easily met. The standard though does not have to

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be spelled out specifically. It could be implied from the policy and purpose of the act considered as a
whole. In the Reflector Law clearly, the legislative objective is public safety. What is sought to be
attained as in Calalang v. Williams is "safe transit upon the roads.' This is to adhere to the recognition
given expression by Justice Laurel in a decision announced not too long after the Constitution came into
force and effect that the principle of non-delegation "has been made to adapt itself to the complexities of
modern governments, giving rise to the adoption, within certain limits, of the principle of "subordinate
legislation" not only in the United States and England but in practically all modern governments.' He
continued: 'Accordingly, with the growing complexity of modern life, the multiplication of the subjects of
governmental regulation, and the increased difficulty of administering the laws, there is a constantly
growing tendency toward the delegation of greater powers by the legislature and toward the approval of
the practice by the courts.' Consistency with the conceptual approach requires the reminder that what is
delegated is authority non-legislative in character, the completeness of the statute when it leaves the
hands of Congress being assumed." 34

9. The conclusion reached by this Court that this petition must be dismissed is reinforced by this
consideration. The petition itself quoted these two whereas clauses of the assailed Letter of Instruction:
"[Whereas], the hazards posed by such obstructions to traffic have been recognized by international
bodies concerned with traffic safety, the 1968 Vienna Convention on Road Signs and Signals and the
United Nations Organization (U.N.); [Whereas], the said Vionna Convention, which was ratified by the
Philippine Government under P.D. No. 207, recommended the enactment of local legislation for the
installation of road safety signs and devices; * * * " 35 It cannot be disputed then that this Declaration of
Principle found in the Constitution possesses relevance: "The Philippines * * * adopts the generally
accepted principles of international law as part of the law of the land * * *." 36 The 1968 Vienna
Convention on Road Signs and Signals is impressed with such a character. It is not for this country to
repudiate a commitment to which it had pledged its word. The concept of Pactasuntservanda stands in
the way of such an attitude, which is, moreover, at war with the principle of international morality.

10. That is about all that needs be said. The rather court reference to equal protection did not even elicit
any attempt on the Part of Petitioner to substantiate in a manner clear, positive, and categorical why
such a casual observation should be taken seriously. In no case is there a more appropriate occasion for
insistence on what was referred to as "the general rule" in Santiago v. Far Eastern Broadcasting
Co., 37 namely, "that the constitutionality of a law wig not be considered unless the point is specially
pleaded, insisted upon, and adequately argued." 38 "Equal protection" is not a talismanic formula at the
mere invocation of which a party to a lawsuit can rightfully expect that success will crown his efforts. The
law is anything but that.

WHEREFORE, this petition is dismissed. The restraining order is lifted. This decision is immediately
executory. No costs

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