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Case Assignments I Statutory Construction

18 June 2016

1. G.R. No. L-19650

September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,


vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL,
respondent-appellant.
In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex)
conceived and laid the groundwork for a promotional scheme calculated to drum up
patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it calls
for participants therein to estimate the actual number of liters a hooded gas pump
at each Caltex station will dispense during a specified period. Employees of the
Caltex (Philippines) Inc., its dealers and its advertising agency, and their immediate
families excepted, participation is to be open indiscriminately to all "motor vehicle
owners and/or licensed drivers". For the privilege to participate, no fee or
consideration is required to be paid, no purchase of Caltex products required to be
made. Entry forms are to be made available upon request at each Caltex station
where a sealed can will be provided for the deposit of accomplished entry stubs.
A three-staged winner selection system is envisioned. At the station level, called
"Dealer Contest", the contestant whose estimate is closest to the actual number of
liters dispensed by the hooded pump thereat is to be awarded the first prize; the
next closest, the second; and the next, the third. Prizes at this level consist of a 3burner kerosene stove for first; a thermos bottle and a Ray-O-Vac hunter lantern for
second; and an Everready Magnet-lite flashlight with batteries and a screwdriver set
for third. The first-prize winner in each station will then be qualified to join in the
"Regional Contest" in seven different regions. The winning stubs of the qualified
contestants in each region will be deposited in a sealed can from which the firstprize, second-prize and third-prize winners of that region will be drawn. The regional
first-prize winners will be entitled to make a three-day all-expenses-paid round trip
to Manila, accompanied by their respective Caltex dealers, in order to take part in
the "National Contest". The regional second-prize and third-prize winners will
receive cash prizes of P500 and P300, respectively. At the national level, the stubs
of the seven regional first-prize winners will be placed inside a sealed can from
which the drawing for the final first-prize, second-prize and third-prize winners will
be made. Cash prizes in store for winners at this final stage are: P3,000 for first;
P2,000 for second; Pl,500 for third; and P650 as consolation prize for each of the
remaining four participants.
Foreseeing the extensive use of the mails not only as amongst the media for
publicizing the contest but also for the transmission of communications relative
thereto, representations were made by Caltex with the postal authorities for the
contest to be cleared in advance for mailing, having in view sections 1954(a), 1982
and 1983 of the Revised Administrative Code, the pertinent provisions of which read
as follows:
SECTION 1954. Absolutely non-mailable matter. No matter belonging to any of
the following classes, whether sealed as first-class matter or not, shall be imported
into the Philippines through the mails, or to be deposited in or carried by the mails

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of the Philippines, or be delivered to its addressee by any officer or employee of the
Bureau of Posts:
Written or printed matter in any form advertising, describing, or in any manner
pertaining to, or conveying or purporting to convey any information concerning any
lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or
chance, or any scheme, device, or enterprise for obtaining any money or property of
any kind by means of false or fraudulent pretenses, representations, or promises.
"SECTION 1982. Fraud orders.Upon satisfactory evidence that any person or
company is engaged in conducting any lottery, gift enterprise, or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing
of any kind, or that any person or company is conducting any scheme, device, or
enterprise for obtaining money or property of any kind through the mails by means
of false or fraudulent pretenses, representations, or promises, the Director of Posts
may instruct any postmaster or other officer or employee of the Bureau to return to
the person, depositing the same in the mails, with the word "fraudulent" plainly
written or stamped upon the outside cover thereof, any mail matter of whatever
class mailed by or addressed to such person or company or the representative or
agent of such person or company.
SECTION 1983. Deprivation of use of money order system and telegraphic transfer
service.The Director of Posts may, upon evidence satisfactory to him that any
person or company is engaged in conducting any lottery, gift enterprise or scheme
for the distribution of money, or of any real or personal property by lot, chance, or
drawing of any kind, or that any person or company is conducting any scheme,
device, or enterprise for obtaining money or property of any kind through the mails
by means of false or fraudulent pretenses, representations, or promise, forbid the
issue or payment by any postmaster of any postal money order or telegraphic
transfer to said person or company or to the agent of any such person or company,
whether such agent is acting as an individual or as a firm, bank, corporation, or
association of any kind, and may provide by regulation for the return to the
remitters of the sums named in money orders or telegraphic transfers drawn in
favor of such person or company or its agent.
The overtures were later formalized in a letter to the Postmaster General, dated
October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest
rules and endeavored to justify its position that the contest does not violate the
anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster
General opined that the scheme falls within the purview of the provisions aforesaid
and declined to grant the requested clearance. In its counsel's letter of December 7,
1960, Caltex sought a reconsideration of the foregoing stand, stressing that there
being involved no consideration in the part of any contestant, the contest was not,
under controlling authorities, condemnable as a lottery. Relying, however, on an
opinion rendered by the Secretary of Justice on an unrelated case seven years
before (Opinion 217, Series of 1953), the Postmaster General maintained his view
that the contest involves consideration, or that, if it does not, it is nevertheless a
"gift enterprise" which is equally banned by the Postal Law, and in his letter of
December 10, 1960 not only denied the use of the mails for purposes of the

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proposed contest but as well threatened that if the contest was conducted, "a fraud
order will have to be issued against it (Caltex) and all its representatives".
Caltex thereupon invoked judicial intervention by filing the present petition for
declaratory relief against Postmaster General Enrico Palomar, praying "that
judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be
violative of the Postal Law, and ordering respondent to allow petitioner the use of
the mails to bring the contest to the attention of the public". After issues were
joined and upon the respective memoranda of the parties, the trial court rendered
judgment as follows:
In view of the foregoing considerations, the Court holds that the proposed 'Caltex
Hooded Pump Contest' announced to be conducted by the petitioner under the rules
marked as Annex B of the petitioner does not violate the Postal Law and the
respondent has no right to bar the public distribution of said rules by the mails.
The respondent appealed.
The parties are now before us, arrayed against each other upon two basic issues:
first, whether the petition states a sufficient cause of action for declaratory relief;
and second, whether the proposed "Caltex Hooded Pump Contest" violates the
Postal Law. We shall take these up in seriatim.
1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was
the applicable legal basis for the remedy at the time it was invoked, declaratory
relief is available to any person "whose rights are affected by a statute . . . to
determine any question of construction or validity arising under the . . . statute and
for a declaration of his rights thereunder" (now section 1, Rule 64, Revised Rules of
Court). In amplification, this Court, conformably to established jurisprudence on the
matter, laid down certain conditions sine qua non therefor, to wit: (1) there must be
a justiciable controversy; (2) the controversy must be between persons whose
interests are adverse; (3) the party seeking declaratory relief must have a legal
interest in the controversy; and (4) the issue involved must be ripe for judicial
determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-3062,
September 28, 1951; Delumen, et al. vs. Republic of the Philippines, 50 O.G., No. 2,
pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-8964, July 31, 1956). The
gravamen of the appellant's stand being that the petition herein states no sufficient
cause of action for declaratory relief, our duty is to assay the factual bases thereof
upon the foregoing crucible.
As we look in retrospect at the incidents that generated the present controversy, a
number of significant points stand out in bold relief. The appellee (Caltex), as a
business enterprise of some consequence, concededly has the unquestioned right
to exploit every legitimate means, and to avail of all appropriate media to advertise
and stimulate increased patronage for its products. In contrast, the appellant, as the
authority charged with the enforcement of the Postal Law, admittedly has the power
and the duty to suppress transgressions thereof particularly thru the issuance of
fraud orders, under Sections 1982 and 1983 of the Revised Administrative Code,
against legally non-mailable schemes. Obviously pursuing its right aforesaid, the
appellee laid out plans for the sales promotion scheme hereinbefore detailed. To

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forestall possible difficulties in the dissemination of information thereon thru the
mails, amongst other media, it was found expedient to request the appellant for an
advance clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the appellant
saw a violation thereof in the proposed scheme and accordingly declined the
request. A point of difference as to the correct construction to be given to the
applicable statute was thus reached. Communications in which the parties
expounded on their respective theories were exchanged. The confidence with which
the appellee insisted upon its position was matched only by the obstinacy with
which the appellant stood his ground. And this impasse was climaxed by the
appellant's open warning to the appellee that if the proposed contest was
"conducted, a fraud order will have to be issued against it and all its
representatives."
Against this backdrop, the stage was indeed set for the remedy prayed for. The
appellee's insistent assertion of its claim to the use of the mails for its proposed
contest, and the challenge thereto and consequent denial by the appellant of the
privilege demanded, undoubtedly spawned a live controversy. The justiciability of
the dispute cannot be gainsaid. There is an active antagonistic assertion of a legal
right on one side and a denial thereof on the other, concerning a real not a mere
theoretical question or issue. The contenders are as real as their interests are
substantial. To the appellee, the uncertainty occasioned by the divergence of views
on the issue of construction hampers or disturbs its freedom to enhance its
business. To the appellant, the suppression of the appellee's proposed contest
believed to transgress a law he has sworn to uphold and enforce is an unavoidable
duty. With the appellee's bent to hold the contest and the appellant's threat to issue
a fraud order therefor if carried out, the contenders are confronted by the ominous
shadow of an imminent and inevitable litigation unless their differences are settled
and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the
Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the
appellant, the time is long past when it can rightly be said that merely the
appellee's "desires are thwarted by its own doubts, or by the fears of others"
which admittedly does not confer a cause of action. Doubt, if any there was, has
ripened into a justiciable controversy when, as in the case at bar, it was translated
into a positive claim of right which is actually contested (III Moran, Comments on
the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast
Theaters, 36 Ariz., 251, 284 Pac. 350).
We cannot hospitably entertain the appellant's pretense that there is here no
question of construction because the said appellant "simply applied the clear
provisions of the law to a given set of facts as embodied in the rules of the contest",
hence, there is no room for declaratory relief. The infirmity of this pose lies in the
fact that it proceeds from the assumption that, if the circumstances here presented,
the construction of the legal provisions can be divorced from the matter of their
application to the appellee's contest. This is not feasible. Construction, verily, is the
art or process of discovering and expounding the meaning and intention of the
authors of the law with respect to its application to a given case, where that
intention is rendered doubtful, amongst others, by reason of the fact that the given
case is not explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This
is precisely the case here. Whether or not the scheme proposed by the appellee is

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within the coverage of the prohibitive provisions of the Postal Law inescapably
requires an inquiry into the intended meaning of the words used therein. To our
mind, this is as much a question of construction or interpretation as any other.
Nor is it accurate to say, as the appellant intimates, that a pronouncement on the
matter at hand can amount to nothing more than an advisory opinion the handing
down of which is anathema to a declaratory relief action. Of course, no breach of
the Postal Law has as yet been committed. Yet, the disagreement over the
construction thereof is no longer nebulous or contingent. It has taken a fixed and
final shape, presenting clearly defined legal issues susceptible of immediate
resolution. With the battle lines drawn, in a manner of speaking, the propriety
nay, the necessity of setting the dispute at rest before it accumulates the
asperity distemper, animosity, passion and violence of a full-blown battle which
looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and
cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs.
Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur.,
2d., p. 869, to deny declaratory relief to the appellee in the situation into which it
has been cast, would be to force it to choose between undesirable alternatives. If it
cannot obtain a final and definitive pronouncement as to whether the anti-lottery
provisions of the Postal Law apply to its proposed contest, it would be faced with
these choices: If it launches the contest and uses the mails for purposes thereof, it
not only incurs the risk, but is also actually threatened with the certain imposition,
of a fraud order with its concomitant stigma which may attach even if the appellee
will eventually be vindicated; if it abandons the contest, it becomes a self-appointed
censor, or permits the appellant to put into effect a virtual fiat of previous
censorship which is constitutionally unwarranted. As we weigh these considerations
in one equation and in the spirit of liberality with which the Rules of Court are to be
interpreted in order to promote their object (section 1, Rule 1, Revised Rules of
Court) which, in the instant case, is to settle, and afford relief from uncertainty
and insecurity with respect to, rights and duties under a law we can see in the
present case any imposition upon our jurisdiction or any futility or prematurity in our
intervention.
The appellant, we apprehend, underrates the force and binding effect of the ruling
we hand down in this case if he believes that it will not have the final and pacifying
function that a declaratory judgment is calculated to subserve. At the very least, the
appellant will be bound. But more than this, he obviously overlooks that in this
jurisdiction, "Judicial decisions applying or interpreting the law shall form a part of
the legal system" (Article 8, Civil Code of the Philippines). In effect, judicial decisions
assume the same authority as the statute itself and, until authoritatively
abandoned, necessarily become, to the extent that they are applicable, the criteria
which must control the actuations not only of those called upon to abide thereby but
also of those in duty bound to enforce obedience thereto. Accordingly, we entertain
no misgivings that our resolution of this case will terminate the controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein just
reached is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399,
117 A. 2d., 487, where a corporation engaged in promotional advertising was
advised by the county prosecutor that its proposed sales promotion plan had the
characteristics of a lottery, and that if such sales promotion were conducted, the

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corporation would be subject to criminal prosecution, it was held that the
corporation was entitled to maintain a declaratory relief action against the county
prosecutor to determine the legality of its sales promotion plan. In pari materia, see
also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs.
Arnebergh, supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.
In fine, we hold that the appellee has made out a case for declaratory relief.
2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost
identical terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns
as absolutely non-mailable, and empowers the Postmaster General to issue fraud
orders against, or otherwise deny the use of the facilities of the postal service to,
any information concerning "any lottery, gift enterprise, or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing
of any kind". Upon these words hinges the resolution of the second issue posed in
this appeal.
Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El
Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the
power of the postal authorities under the abovementioned provisions of the Postal
Law, this Court declared that
While countless definitions of lottery have been attempted, the authoritative one for
this jurisdiction is that of the United States Supreme Court, in analogous cases
having to do with the power of the United States Postmaster General, viz.: The term
"lottery" extends to all schemes for the distribution of prizes by chance, such as
policy playing, gift exhibitions, prize concerts, raffles at fairs, etc., and various forms
of gambling. The three essential elements of a lottery are: First, consideration;
second, prize; and third, chance. (Horner vs. States [1892], 147 U.S. 449; Public
Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915],
30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919],
39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)
Unanimity there is in all quarters, and we agree, that the elements of prize and
chance are too obvious in the disputed scheme to be the subject of contention.
Consequently as the appellant himself concedes, the field of inquiry is narrowed
down to the existence of the element of consideration therein. Respecting this
matter, our task is considerably lightened inasmuch as in the same case just cited,
this Court has laid down a definitive yard-stick in the following terms
In respect to the last element of consideration, the law does not condemn the
gratuitous distribution of property by chance, if no consideration is derived directly
or indirectly from the party receiving the chance, but does condemn as criminal
schemes in which a valuable consideration of some kind is paid directly or indirectly
for the chance to draw a prize.
Reverting to the rules of the proposed contest, we are struck by the clarity of the
language in which the invitation to participate therein is couched. Thus

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No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have
to buy anything? Simply estimate the actual number of liter the Caltex gas pump
with the hood at your favorite Caltex dealer will dispense from to , and win
valuable prizes . . . ." .
Nowhere in the said rules is any requirement that any fee be paid, any merchandise
be bought, any service be rendered, or any value whatsoever be given for the
privilege to participate. A prospective contestant has but to go to a Caltex station,
request for the entry form which is available on demand, and accomplish and
submit the same for the drawing of the winner. Viewed from all angles or turned
inside out, the contest fails to exhibit any discernible consideration which would
brand it as a lottery. Indeed, even as we head the stern injunction, "look beyond the
fair exterior, to the substance, in order to unmask the real element and pernicious
tendencies which the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra,
p. 291), we find none. In our appraisal, the scheme does not only appear to be, but
actually is, a gratuitous distribution of property by chance.
There is no point to the appellant's insistence that non-Caltex customers who may
buy Caltex products simply to win a prize would actually be indirectly paying a
consideration for the privilege to join the contest. Perhaps this would be tenable if
the purchase of any Caltex product or the use of any Caltex service were a prerequisite to participation. But it is not. A contestant, it hardly needs reiterating, does
not have to buy anything or to give anything of value.1awphl.nt
Off-tangent, too, is the suggestion that the scheme, being admittedly for sales
promotion, would naturally benefit the sponsor in the way of increased patronage
by those who will be encouraged to prefer Caltex products "if only to get the chance
to draw a prize by securing entry blanks". The required element of consideration
does not consist of the benefit derived by the proponent of the contest. The true
test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is
whether the participant pays a valuable consideration for the chance, and not
whether those conducting the enterprise receive something of value in return for
the distribution of the prize. Perspective properly oriented, the standpoint of the
contestant is all that matters, not that of the sponsor. The following, culled from
Corpus Juris Secundum, should set the matter at rest:
The fact that the holder of the drawing expects thereby to receive, or in fact does
receive, some benefit in the way of patronage or otherwise, as a result of the
drawing; does not supply the element of consideration. Griffith Amusement Co. vs.
Morgan, Tex. Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).
Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump
Contest" proposed by the appellee is not a lottery that may be administratively and
adversely dealt with under the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the
distribution of money, or of any real or personal property by lot, chance, or drawing
of any kind", which is equally prescribed? Incidentally, while the appellant's brief
appears to have concentrated on the issue of consideration, this aspect of the case
cannot be avoided if the remedy here invoked is to achieve its tranquilizing effect as

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an instrument of both curative and preventive justice. Recalling that the appellant's
action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the
Secretary of Justice, which opined in effect that a scheme, though not a lottery for
want of consideration, may nevertheless be a gift enterprise in which that element
is not essential, the determination of whether or not the proposed contest
wanting in consideration as we have found it to be is a prohibited gift enterprise,
cannot be passed over sub silencio.
While an all-embracing concept of the term "gift enterprise" is yet to be spelled out
in explicit words, there appears to be a consensus among lexicographers and
standard authorities that the term is commonly applied to a sporting artifice of
under which goods are sold for their market value but by way of inducement each
purchaser is given a chance to win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black,
Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd
ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257
N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs.
State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly
cannot embrace the scheme at bar. As already noted, there is no sale of anything to
which the chance offered is attached as an inducement to the purchaser. The
contest is open to all qualified contestants irrespective of whether or not they buy
the appellee's products.
Going a step farther, however, and assuming that the appellee's contest can be
encompassed within the broadest sweep that the term "gift enterprise" is capable of
being extended, we think that the appellant's pose will gain no added comfort. As
stated in the opinion relied upon, rulings there are indeed holding that a gift
enterprise involving an award by chance, even in default of the element of
consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs.
States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154,
58 S.E., 88; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d.,
689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally
impressive authorities declare that, like a lottery, a gift enterprise comes within the
prohibitive statutes only if it exhibits the tripartite elements of prize, chance and
consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs.
Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City
and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A., N.S., 1131,
12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga.
App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of
opinions is explained by the fact that the specific statutory provisions relied upon
are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms "lottery"
and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others,
the necessity for the element of consideration or chance has been specifically
eliminated by statute. (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex
rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we
derive from this state of the pertinent jurisprudence is, therefore, that every case
must be resolved upon the particular phraseology of the applicable statutory
provision.
Taking this cue, we note that in the Postal Law, the term in question is used in
association with the word "lottery". With the meaning of lottery settled, and

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consonant to the well-known principle of legal hermeneutics noscitur a sociis
which Opinion 217 aforesaid also relied upon although only insofar as the element
of chance is concerned it is only logical that the term under a construction should
be accorded no other meaning than that which is consistent with the nature of the
word associated therewith. Hence, if lottery is prohibited only if it involves a
consideration, so also must the term "gift enterprise" be so construed. Significantly,
there is not in the law the slightest indicium of any intent to eliminate that element
of consideration from the "gift enterprise" therein included.
This conclusion firms up in the light of the mischief sought to be remedied by the
law, resort to the determination thereof being an accepted extrinsic aid in statutory
construction. Mail fraud orders, it is axiomatic, are designed to prevent the use of
the mails as a medium for disseminating printed matters which on grounds of public
policy are declared non-mailable. As applied to lotteries, gift enterprises and similar
schemes, justification lies in the recognized necessity to suppress their tendency to
inflame the gambling spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d.,
839, 143 Pa. Super. 208). Since in gambling it is inherent that something of value be
hazarded for a chance to gain a larger amount, it follows ineluctably that where no
consideration is paid by the contestant to participate, the reason behind the law can
hardly be said to obtain. If, as it has been held
Gratuitous distribution of property by lot or chance does not constitute "lottery", if it
is not resorted to as a device to evade the law and no consideration is derived,
directly or indirectly, from the party receiving the chance, gambling spirit not being
cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M.,
258." (25 Words and Phrases, perm. ed., p. 695, emphasis supplied).
we find no obstacle in saying the same respecting a gift enterprise. In the end, we
are persuaded to hold that, under the prohibitive provisions of the Postal Law which
we have heretofore examined, gift enterprises and similar schemes therein
contemplated are condemnable only if, like lotteries, they involve the element of
consideration. Finding none in the contest here in question, we rule that the
appellee may not be denied the use of the mails for purposes thereof.
Recapitulating, we hold that the petition herein states a sufficient cause of action for
declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the
rules submitted by the appellee does not transgress the provisions of the Postal
Law.
ACCORDINGLY, the judgment appealed from is affirmed. No costs.

2. G.R. No. L-61236 January 31, 1984


NATIONAL FEDERATION OF LABOR and ZAMBOWOOD MONTHLY EMPLOYEES
UNION, ITS OFFICERS AND MEMBERS, petitioners,
vs.
THE HONORABLE CARLITO A. EISMA, LT. COL. JACOB CARUNCHO, COMMANDING
OFFICER, ZAMBOANGA DISTRICT COMMAND, PC, AFP, and ZAMBOANGA WOOD
PRODUCTS, respondents.

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This Court is confronted once again with the question of whether or not it is a court
or a labor arbiter that can pass on a suit for damages filed by the employer, here
private respondent Zamboanga Wood Products. Respondent Judge Carlito A. Eisma 1
then of the Court of First Instance, now of the Regional Trial Court of Zamboanga
City, was of the view that it is a court and denied a motion to dismiss filed by
petitioners National Federation of labor and Zambowood Monthly Employees Union,
its officers and members. It was such an order dated July 20, 1982 that led to the
filing of this certiorari and prohibition proceeding. In the order assailed, it was
required that the officers and members of petitioner union appear before the court
to show cause why a writ of preliminary injunction should not be issued against
them and in the meanwhile such persons as well as any other persons acting under
their command and on their behalf were "temporarily restrained and ordered to
desist and refrain from further obstructing, impeding and impairing plaintiff's use of
its property and free ingress to or egress from plaintiff's Manufacturing Division
facilities at Lumbayao, Zamboanga City and on its road right of way leading to and
from said plaintiff's facilities, pending the determination of the litigation, and unless
a contrary order is issued by this Court." 2
The record discloses that petitioner National Federation of Labor, on March 5, 1982,
filed with the Ministry of Labor and Employment, Labor Relations Division,
Zamboanga City, a petition for direct certification as the sole exclusive collective
bargaining representative of the monthly paid employees of the respondent
Zamboanga Wood Products, Inc. at its manufacturing plant in Lumbayao,
Zamboanga City. 3 Such employees, on April 17, 1982 charged respondent firm
before the same office of the Ministry of Labor for underpayment of monthly living
allowances. 4 Then came, on May 3, 1982, from petitioner union, a notice of strike
against private respondent, alleging illegal termination of Dionisio Estioca, president
of the said local union; unfair labor practice, non-payment of living allowances; and
"employment of oppressive alien management personnel without proper permit. 5 It
was followed by the union submitting the minutes of the declaration of strike,
"including the ninety (90) ballots, of which 79 voted for yes and three voted for no."
6 The strike began on May 23, 1982. 7 On July 9, 1982, private respondent
Zambowood filed a complaint with respondent Judge against the officers and
members of petitioners union, for "damages for obstruction of private property with
prayer for preliminary injunction and/or restraining order." 8 It was alleged that
defendants, now petitioners, blockaded the road leading to its manufacturing
division, thus preventing customers and suppliers free ingress to or egress from
such premises. 9 Six days later, there was a motion for the dismissal and for the
dissolution of the restraining order and opposition to the issuance of the writ of
preliminary injunction filed by petitioners. It was contended that the acts
complained of were incidents of picketing by defendants then on strike against
private respondent, and that therefore the exclusive jurisdiction belongs to the
Labor Arbiter pursuant to Batas Pambansa Blg. 227, not to a court of first
instance.10 There was, as noted earlier, a motion to dismiss, which was denied.
Hence this petition for certiorari.
Four days after such petition was filed, on August 3, 1982, this Court required
respondents to answer and set the plea for a preliminary injunction to be heard on
Thursday, August 5, 1982. 11 After such hearing, a temporary restraining order was
issued, "directing respondent Judge and the commanding officer in Zamboanga and

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his agents from enforcing the ex-parte order of injunction dated July 20, 1982; and
to restrain the respondent Judge from proceeding with the hearing of the until
otherwise case effective as of [that] date and continuing ordered by [the] Court. In
the exercise of the right to peaceful picketing, petitioner unions must abide strictly
with Batas Pambansa Blg. 227, specifically Section 6 thereof, amending Article 265
of the Labor Code, which now reads: '(e) No person engaged in picketing shall
commit any act of violence, coercion or intimidation or obstruct the free ingress to
or egress from the employer's premises for lawful purposes, or obstruct public
thoroughfares.' " 12
On August 13, 1982, the answer of private respondent was filed sustaining the
original jurisdiction of respondent Judge and maintaining that the order complained
of was not in excess of such jurisdiction, or issued with grave abuse of discretion.
Solicitor General Estelito P. Mendoza, 13 on the other hand, instead of filing an
answer, submitted a Manifestation in lieu thereof. He met squarely the issue of
whether or not respondent Judge had jurisdiction, and answered in the negative. He
(i)ncluded that "the instant petition has merit and should be given due course."
He traced the changes undergone by the Labor Code, citing at the same time the
decisions issued by this Court after each of such changes. As pointed out, the
original wording of Article 217 vested the labor arbiters with jurisdictional. 14 So it
was applied by this Court in Garcia v. Martinez 15 and in Bengzon v. Inciong. 16 On
May 1, 1978, however, Presidential Decree No. 1367 was issued, amending Article
217, and provided "that the Regional Directors shall not indorse and Labor Arbiters
shall not entertain claims for moral and other forms of damages." 17 The ordinary
courts were thus vested with jurisdiction to award actual and moral damages in the
case of illegal dismissal of employees. 18 That is not, as pointed out by the Solicitor
General, the end of the story, for on May 1, 1980, Presidential Decree No. 1691 was
issued, further amending Article 217, returning the original jurisdiction to the labor
arbiters, thus enabling them to decide "3. All money claims of workers, including
those based on non-payment or underpayment of wages, overtime compensation,
separation pay and other benefits provided by law or appropriate agreement,
except claims for employees compensation, social security, medicare and maternity
benefits; [and] (5) All other claims arising from employer-employee relations unless
expressly excluded by tills Code." 19 An equally conclusive manifestation of the lack
of jurisdiction of a court of first instance then, a regional trial court now, is Batas
Pambansa Blg. 130, amending Article 217 of the Labor Code. It took effect on
August 21, 1981. Subparagraph 2, paragraph (a) is now worded thus: "(2) those that
involve wages, hours of work and other terms and conditions of employment." 20
This is to be compared with the former phraseology "(2) unresolved issue in
collective bargaining, including those that involve wages, hours of work and other
terms and conditions of employment." 21 It is to be noted that Batas Pambansa Blg.
130 made no change with respect to the original and exclusive jurisdiction of Labor
Arbiters with respect to money claims of workers or claims for damages arising from
employer-employee relations.
Nothing becomes clearer, therefore, than the meritorious character of this petition.
certiorari and prohibition lie, respondent Judge being devoid of jurisdiction to act on
the matter.

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1. Article 217 is to be applied the way it is worded. The exclusive original jurisdiction
of a labor arbiter is therein provided for explicitly. It means, it can only mean, that a
court of first instance judge then, a regional trial court judge now, certainly acts
beyond the scope of the authority conferred on him by law when he entertained the
suit for damages, arising from picketing that accompanied a strike. That was
squarely within the express terms of the law. Any deviation cannot therefore be
tolerated. So it has been the constant ruling of this Court even prior to Lizarraga
Hermanos v. Yap Tico, 22 a 1913 decision. The ringing words of the ponencia of
Justice Moreland still call for obedience. Thus, "The first and fundamental duty of
courts, in our judgment, is to apply the law. Construction and interpretation come
only after it has been demonstrated that application is impossible or inadequate
without them." 23 It is so even after the lapse of sixty years. 24
2. On the precise question at issue under the law as it now stands, this Court has
spoken in three decisions. They all reflect the utmost fidelity to the plain command
of the law that it is a labor arbiter, not a court, that ossesses original and exclusive
jurisdiction to decide a claim for damages arising from picketing or a strike. In PepsiCola Bottling Co. v. Martinez, 25 the issue was set forth in the opening paragraph, in
the ponencia of Justice Escolin: "This petition for certiorari, prohibition and
mandamus raises anew the legal question often brought to this Court: Which
tribunal has exclusive jurisdiction over an action filed by an employee against his
employer for recovery of unpaid salaries, separation benefits and damages the
court of general jurisdiction or the Labor Arbiter of the National Labor Relations
Commission [NLRC]?" 26 It was categorically held: "We rule that the Labor Arbiter
has exclusive jurisdiction over the case." 27 Then came this portion of the opinion:
"Jurisdiction over the subject matter in a judicial proceeding is conferred by the
sovereign authority which organizes the court; and it is given only by law.
Jurisdiction is never presumed; it must be conferred by law in words that do not
admit of doubt. Since the jurisdiction of courts and judicial tribunals is derived
exclusively from the statutes of the forum, the issue before us should be resolved
on the basis of the law or statute now in force. We find that law in presidential
Decree 1691 which took effect on May 1, 1980, Section 3 of which reads as
follows: ... Article 217. Jurisdiction of Labor Arbiters and the Commission. (a) The
Labor Arbiters shall have the original and exclusive jurisdiction to hear and decide
the following cases involving all workers, whether agricultural or non-agricultural: ...
3. All money claims of workers, including those based on nonpayment or
underpayment of wages, overtime compensation, separation pay and other benefits
provided by law or appropriate agreement, except claims for employees'
compensation, social security, medicare and maternity benefits; 4. Cases involving
household services; and 5. All other claims arising from employer-employee
relations, unless expressly excluded by this Code." 28 That same month, two other
cases were similarly decided, Ebon v. De Guzman 29 and Aguda v. Vallejos. 30
3.
It is regrettable that the ruling in the above three decisions, decided in March
of 1982, was not followed by private respondent when it filed the complaint for
damages on July 9, 1982, more than four months later. 31 On this point, reference
may be made to our decision in National Federation of Labor, et al. v. The Honorable
Minister of Labor and Employment, 32 promulgated on September 15, 1983. In that
case, the question involved was the failure of the same private respondent,
Zamboanga Wood Products, Inc., to admit the striking petitioners, eighty-one in

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number, back to work after an order of Minister Blas F. Ople certifying to the
National Labor Relations Commission the labor dispute for compulsory arbitration
pursuant to Article 264 (g) of the Labor Code of the Philippines. It was noted in the
first paragraph of our opinion in that case: "On the face of it, it seems difficult to
explain why private respondent would not comply with such order considering that
the request for compulsory arbitration came from it. It ignored this notification by
the presidents of the labor unions involved to its resident manager that the striking
employees would lift their picket line and start returning to work on August 20,
1982. Then, too, Minister Ople denied a partial motion for reconsideration insofar as
the return-to-work aspect is concerned which reads: 'We find no merit in the said
Motion for Reconsideration. The Labor code, as amended, specifically Article 264
(g), mandates that whenever a labor dispute is certified by the Minister of Labor and
Employment to the National Labor Relations Commission for compulsory arbitration
and a strike has already taken place at the time of certification, "all striking
employees shall immediately return to work and the employees shall immediately
resume operations and readmit all workers under the same terms and conditions
prevailing before the strike." ' " 33 No valid distinction can be made between the
exercise of compulsory arbitration vested in the Ministry of Labor and the
jurisdiction of a labor arbiter to pass over claims for damages in the light of the
express provision of the Labor Code as set forth in Article 217. In both cases, it is
the Ministry, not a court of justice, that is vested by law with competence to act on
the matter.
4. The issuance of Presidential Decree No. 1691 and the enactment of Batas
Pambansa Blg. 130, made clear that the exclusive and original jurisdiction for
damages would once again be vested in labor arbiters. It can be affirmed that even
if they were not that explicit, history has vindicated the view that in the appraisal of
what was referred to by Philippine American Management & Financing Co., Inc. v.
Management & Supervisors Association of the Philippine-American Management &
Financing Co., Inc. 34 as "the rather thorny question as to where in labor matters
the dividing line is to be drawn" 35 between the power lodged in an administrative
body and a court, the unmistakable trend has been to refer it to the former. Thus:
"Increasingly, this Court has been committed to the view that unless the law speaks
clearly and unequivocally, the choice should fall on [an administrative agency]." 36
Certainly, the present Labor Code is even more committed to the view that on
policy grounds, and equally so in the interest of greater promptness in the
disposition of labor matters, a court is spared the often onerous task of determining
what essentially is a factual matter, namely, the damages that may be incurred by
either labor or management as a result of disputes or controversies arising from
employer-employee relations.
WHEREFORE, the writ of certiorari is granted and the order of July 20, 1982, issued
by respondent Judge, is nullified and set aside. The writ of prohibition is likewise
granted and respondent Judge, or whoever acts in his behalf in the Regional Trial
Court to which this case is assigned, is enjoin from taking any further action on Civil
Case No. 716 (2751), except for the purpose of dismissing it. The temporary
restraining order of August 5, 1982 is hereby made permanent.

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3. G.R. No. 111107. January 10, 1997


LEONARDO A. PAAT, in his capacity as Officer-in-Charge (OIC), Regional Executive
Director (RED), Region 2 and JOVITO LAYUGAN, JR., in his capacity as Community
Environment and Natural Resources Officer (CENRO), both of the Department of
Environment and Natural Resources (DENR), petitioners,
vs.
COURT OF APPEALS, HON. RICARDO A. BACULI in his capacity as Presiding Judge
of Branch 2, Regional Trial Court at Tuguegarao, Cagayan, and SPOUSES
BIENVENIDO and VICTORIA DE GUZMAN, respondents.
Without violating the principle of exhaustion of administrative remedies, may an
action for replevin prosper to recover a movable property which is the subject
matter of an administrative forfeiture proceeding in the Department of Environment
and Natural Resources pursuant to Section 68-A of P. D. 705, as amended, entitled
The Revised Forestry Code of the Philippines?
Are the Secretary of DENR and his representatives empowered to confiscate and
forfeit conveyances used in transporting illegal forest products in favor of the
government?
These are two fundamental questions presented before us for our resolution.
The controversy on hand had its incipiency on May 19, 1989 when the truck of
private respondent Victoria de Guzman while on its way to Bulacan from San Jose,
Baggao, Cagayan, was seized by the Department of Environment and Natural
Resources (DENR, for brevity) personnel in Aritao, Nueva Vizcaya because the driver
could not produce the required documents for the forest products found concealed
in the truck. Petitioner Jovito Layugan, the Community Environment and Natural
Resources Officer (CENRO) in Aritao, Cagayan, issued on May 23, 1989 an order of
confiscation of the truck and gave the owner thereof fifteen (15) days within which
to submit an explanation why the truck should not be forfeited. Private respondents,
however, failed to submit the required explanation. On June 22, 1989,[1] Regional
Executive Director Rogelio Baggayan of DENR sustained petitioner Layugans action
of confiscation and ordered the forfeiture of the truck invoking Section 68-A of
Presidential Decree No. 705 as amended by Executive Order No. 277. Private
respondents filed a letter of reconsideration dated June 28, 1989 of the June 22,
1989 order of Executive Director Baggayan, which was, however, denied in a
subsequent order of July 12, 1989.[2] Subsequently, the case was brought by the
petitioners to the Secretary of DENR pursuant to private respondents statement in
their letter dated June 28, 1989 that in case their letter for reconsideration would be
denied then this letter should be considered as an appeal to the Secretary.[3]
Pending resolution however of the appeal, a suit for replevin, docketed as Civil Case
4031, was filed by the private respondents against petitioner Layugan and
Executive Director Baggayan[4] with the Regional Trial Court, Branch 2 of Cagayan,
[5] which issued a writ ordering the return of the truck to private respondents.[6]
Petitioner Layugan and Executive Director Baggayan filed a motion to dismiss with
the trial court contending, inter alia, that private respondents had no cause of
action for their failure to exhaust administrative remedies. The trial court denied the

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motion to dismiss in an order dated December 28, 1989.[7] Their motion for
reconsideration having been likewise denied, a petition for certiorari was filed by
the petitioners with the respondent Court of Appeals which sustained the trial courts
order ruling that the question involved is purely a legal question.[8] Hence, this
present petition,[9] with prayer for temporary restraining order and/or preliminary
injunction, seeking to reverse the decision of the respondent Court of Appeals was
filed by the petitioners on September 9, 1993. By virtue of the Resolution dated
September 27, 1993,[10] the prayer for the issuance of temporary restraining order
of petitioners was granted by this Court.
Invoking the doctrine of exhaustion of administrative remedies, petitioners aver that
the trial court could not legally entertain the suit for replevin because the truck was
under administrative seizure proceedings pursuant to Section 68-A of P.D. 705, as
amended by E.O. 277. Private respondents, on the other hand, would seek to avoid
the operation of this principle asserting that the instant case falls within the
exception of the doctrine upon the justification that (1) due process was violated
because they were not given the chance to be heard, and (2) the seizure and
forfeiture was unlawful on the grounds: (a) that the Secretary of DENR and his
representatives have no authority to confiscate and forfeit conveyances utilized in
transporting illegal forest products, and (b) that the truck as admitted by petitioners
was not used in the commission of the crime.
Upon a thorough and delicate scrutiny of the records and relevant jurisprudence on
the matter, we are of the opinion that the plea of petitioners for reversal is in order.
This Court in a long line of cases has consistently held that before a party is allowed
to seek the intervention of the court, it is a pre-condition that he should have
availed of all the means of administrative processes afforded him. Hence, if a
remedy within the administrative machinery can still be resorted to by giving the
administrative officer concerned every opportunity to decide on a matter that
comes within his jurisdiction then such remedy should be exhausted first before
courts judicial power can be sought. The premature invocation of courts intervention
is fatal to ones cause of action.[11] Accordingly, absent any finding of waiver or
estoppel the case is susceptible of dismissal for lack of cause of action.[12] This
doctrine of exhaustion of administrative remedies was not without its practical and
legal reasons, for one thing, availment of administrative remedy entails lesser
expenses and provides for a speedier disposition of controversies. It is no less true
to state that the courts of justice for reasons of comity and convenience will shy
away from a dispute until the system of administrative redress has been completed
and complied with so as to give the administrative agency concerned every
opportunity to correct its error and to dispose of the case. However, we are not
amiss to reiterate that the principle of exhaustion of administrative remedies as
tested by a battery of cases is not an ironclad rule. This doctrine is a relative one
and its flexibility is called upon by the peculiarity and uniqueness of the factual and
circumstantial settings of a case. Hence, it is disregarded (1) when there is a
violation of due process,[13] (2) when the issue involved is purely a legal question,
[14] (3) when the administrative action is patently illegal amounting to lack or
excess of jurisdiction,[15] (4) when there is estoppel on the part of the
administrative agency concerned,[16] (5) when there is irreparable injury,[17] (6)
when the respondent is a department secretary whose acts as an alter ego of the

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President bears the implied and assumed approval of the latter,[18] (7) when to
require exhaustion of administrative remedies would be unreasonable,[19] (8) when
it would amount to a nullification of a claim,[20] (9) when the subject matter is a
private land in land case proceedings,[21] (10) when the rule does not provide a
plain, speedy and adequate remedy, and (11) when there are circumstances
indicating the urgency of judicial intervention.[22]
In the case at bar, there is no question that the controversy was pending before the
Secretary of DENR when it was forwarded to him following the denial by the
petitioners of the motion for reconsideration of private respondents through the
order of July 12, 1989. In their letter of reconsideration dated June 28, 1989,[23]
private respondents clearly recognize the presence of an administrative forum to
which they seek to avail, as they did avail, in the resolution of their case. The letter,
reads, thus:
xxx
If this motion for reconsideration does not merit your favorable action, then this
letter should be considered as an appeal to the Secretary.[24]
It was easy to perceive then that the private respondents looked up to the Secretary
for the review and disposition of their case. By appealing to him, they acknowledged
the existence of an adequate and plain remedy still available and open to them in
the ordinary course of the law. Thus, they cannot now, without violating the
principle of exhaustion of administrative remedies, seek courts intervention by filing
an action for replevin for the grant of their relief during the pendency of an
administrative proceedings.
Moreover, it is important to point out that the enforcement of forestry laws, rules
and regulations and the protection, development and management of forest lands
fall within the primary and special responsibilities of the Department of Environment
and Natural Resources. By the very nature of its function, the DENR should be given
a free hand unperturbed by judicial intrusion to determine a controversy which is
well within its jurisdiction. The assumption by the trial court, therefore, of the
replevin suit filed by private respondents constitutes an unjustified encroachment
into the domain of the administrative agencys prerogative. The doctrine of primary
jurisdiction does not warrant a court to arrogate unto itself the authority to resolve a
controversy the jurisdiction over which is initially lodged with an administrative
body of special competence.[25] In Felipe Ismael, Jr. and Co. vs. Deputy Executive
Secretary,[26] which was reiterated in the recent case of Concerned Officials of
MWSS vs. Vasquez,[27] this Court held:
Thus, while the administration grapples with the complex and multifarious problems
caused by unbriddled exploitation of these resources, the judiciary will stand clear.
A long line of cases establish the basic rule that the courts will not interfere in
matters which are addressed to the sound discretion of government agencies
entrusted with the regulation of activities coming under the special technical
knowledge and training of such agencies.

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To sustain the claim of private respondents would in effect bring the instant
controversy beyond the pale of the principle of exhaustion of administrative
remedies and fall within the ambit of excepted cases heretofore stated. However,
considering the circumstances prevailing in this case, we can not but rule out these
assertions of private respondents to be without merit. First, they argued that there
was violation of due process because they did not receive the May 23, 1989 order of
confiscation of petitioner Layugan. This contention has no leg to stand on. Due
process does not necessarily mean or require a hearing, but simply an opportunity
or right to be heard.[28] One may be heard , not solely by verbal presentation but
also, and perhaps many times more creditably and practicable than oral argument,
through pleadings.[29] In administrative proceedings moreover, technical rules of
procedure and evidence are not strictly applied; administrative process cannot be
fully equated with due process in its strict judicial sense.[30] Indeed, deprivation of
due process cannot be successfully invoked where a party was given the chance to
be heard on his motion for reconsideration,[31] as in the instant case, when private
respondents were undisputedly given the opportunity to present their side when
they filed a letter of reconsideration dated June 28, 1989 which was, however,
denied in an order of July 12, 1989 of Executive Director Baggayan. In Navarro III vs.
Damasco,[32] we ruled that :
The essence of due process is simply an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain ones side or an opportunity to
seek a reconsideration of the action or ruling complained of. A formal or trial type
hearing is not at all times and in all instances essential. The requirements are
satisfied when the parties are afforded fair and reasonable opportunity to explain
their side of the controversy at hand. What is frowned upon is the absolute lack of
notice or hearing.
Second, private respondents imputed the patent illegality of seizure and forfeiture
of the truck because the administrative officers of the DENR allegedly have no
power to perform these acts under the law. They insisted that only the court is
authorized to confiscate and forfeit conveyances used in transporting illegal forest
products as can be gleaned from the second paragraph of Section 68 of P.D. 705, as
amended by E.O. 277. The pertinent provision reads as follows:
SECTION 68. xxx
xxx
The court shall further order the confiscation in favor of the government of the
timber or any forest products cut, gathered, collected, removed, or possessed, as
well as the machinery, equipments, implements and tools illegaly [sic] used in the
area where the timber or forest products are found. (Underline ours)
A reading, however, of the law persuades us not to go along with private
respondents thinking not only because the aforequoted provision apparently does
not mention nor include conveyances that can be the subject of confiscation by the
courts, but to a large extent, due to the fact that private respondents interpretation
of the subject provision unduly restricts the clear intention of the law and inevitably
reduces the other provision of Section 68-A , which is quoted herein below:

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SECTION 68-A. Administrative Authority of the Department or His Duly Authorized
Representative To Order Confiscation. In all cases of violation of this Code or other
forest laws, rules and regulations, the Department Head or his duly authorized
representative, may order the confiscation of any forest products illegally cut,
gathered, removed, or possessed or abandoned, and all conveyances used either by
land, water or air in the commission of the offense and to dispose of the same in
accordance with pertinent laws, regulations and policies on the matter. (Underline
ours)
It is, thus, clear from the foregoing provision that the Secretary and his duly
authorized representatives are given the authority to confiscate and forfeit any
conveyances utilized in violating the Code or other forest laws, rules and
regulations. The phrase to dispose of the same is broad enough to cover the act of
forfeiting conveyances in favor of the government. The only limitation is that it
should be made in accordance with pertinent laws, regulations or policies on the
matter. In the construction of statutes, it must be read in such a way as to give
effect to the purpose projected in the statute.[33] Statutes should be construed in
the light of the object to be achieved and the evil or mischief to be suppressed, and
they should be given such construction as will advance the object, suppress the
mischief, and secure the benefits intended.[34] In this wise, the observation of the
Solicitor General is significant, thus:
But precisely because of the need to make forestry laws more responsive to present
situations and realities and in view of the urgency to conserve the remaining
resources of the country, that the government opted to add Section 68-A. This
amendatory provision is an administrative remedy totally separate and distinct from
criminal proceedings. More than anything else, it is intended to supplant the
inadequacies that characterize enforcement of forestry laws through criminal
actions. The preamble of EO 277-the law that added Section 68-A to PD 705-is most
revealing:
WHEREAS, there is an urgency to conserve the remaining forest resources of the
country for the benefit and welfare of the present and future generations of
Filipinos;
WHEREAS, our forest resources may be effectively conserved and protected through
the vigilant enforcement and implementation of our forestry laws, rules and
regulations;
WHEREAS, the implementation of our forestry laws suffers from technical
difficulties, due to certain inadequacies in the penal provisions of the Revised
Forestry Code of the Philippines; and
WHEREAS, to overcome this difficulties, there is a need to penalize certain acts
more responsive to present situations and realities;
It is interesting to note that Section 68-A is a new provision authorizing the DENR to
confiscate, not only conveyances, but forest products as well. On the other hand,
confiscation of forest products by the court in a criminal action has long been

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provided for in Section 68. If as private respondents insist, the power on
confiscation cannot be exercised except only through the court under Section 68,
then Section 68-A would have no purpose at all. Simply put, Section 68-A would not
have provided any solution to the problem perceived in EO 277, supra.[35]
Private respondents, likewise, contend that the seizure was illegal because the
petitioners themselves admitted in the Order dated July 12, 1989 of Executive
Director Baggayan that the truck of private respondents was not used in the
commission of the crime. This order, a copy of which was given to and received by
the counsel of private respondents, reads in part , viz. :
xxx while it is true that the truck of your client was not used by her in the
commission of the crime, we uphold your claim that the truck owner is not liable for
the crime and in no case could a criminal case be filed against her as provided
under Article 309 and 310 of the Revised Penal Code. xxx[36]
We observed that private respondents misread the content of the aforestated order
and obviously misinterpreted the intention of petitioners. What is contemplated by
the petitioners when they stated that the truck "was not used in the commission of
the crime" is that it was not used in the commission of the crime of theft, hence, in
no case can a criminal action be filed against the owner thereof for violation of
Article 309 and 310 of the Revised Penal Code. Petitioners did not eliminate the
possibility that the truck was being used in the commission of another crime, that
is, the breach of Section 68 of P.D.705 as amended by E.O. 277. In the same order of
July 12, 1989, petitioners pointed out:
xxx However, under Section 68 of P.D.705 as amended and further amended by
Executive Order No.277 specifically provides for the confiscation of the conveyance
used in the transport of forest products not covered by the required legal
documents. She may not have been involved in the cutting and gathering of the
product in question but the fact that she accepted the goods for a fee or fare the
same is therefor liable. xxx[37]
Private respondents, however, contended that there is no crime defined and
punishable under Section 68 other than qualified theft, so that, when petitioners
admitted in the July 12, 1989 order that private respondents could not be charged
for theft as provided for under Articles 309 and 310 of the Revised Penal Code, then
necessarily private respondents could not have committed an act constituting a
crime under Section 68. We disagree. For clarity, the provision of Section 68 of P.D.
705 before its amendment by E.O. 277 and the provision of Section 1 of E.O. No.277
amending the aforementioned Section 68 are reproduced herein, thus:
SECTION 68. Cutting, gathering and/or collecting timber or other products without
license. - Any person who shall cut , gather , collect , or remove timber or other
forest products from any forest land, or timber from alienable and disposable public
lands, or from private lands, without any authority under a license agreement,
lease, license or permit, shall be guilty of qualified theft as defined and punished
under Articles 309 and 310 of the Revised Penal Code xxx. (Underscoring ours;
Section 68, P.D.705 before its amendment by E.O.277 )

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SECTION 1. Section 68 of Presidential Decree No.705, as amended, is hereby
amended to read as follows:
Section 68. Cutting, gathering and/or collecting timber or other forest products
without license. -Any person who shall cut, gather, collect, remove timber or other
forest products from any forest land, or timber from alienable or disposable public
land, or from private land, without any authority, or possess timber or other forest
products without the legal documents as required under existing forest laws and
regulations, shall be punished with the penalties imposed under Articles 309 and
310 of the Revised Penal Code xxx." (Underscoring ours; Section 1, E.O No. 277
amending Section 68, P.D. 705 as amended)
With the introduction of Executive Order No. 277 amending Section 68 of P.D. 705,
the act of cutting, gathering, collecting, removing, or possessing forest products
without authority constitutes a distinct offense independent now from the crime of
theft under Articles 309 and 310 of the Revised Penal Code, but the penalty to be
imposed is that provided for under Article 309 and 310 of the Revised Penal Code.
This is clear from the language of Executive Order No. 277 when it eliminated the
phrase shall be guilty of qualified theft as defined and punished under Articles 309
and 310 of the Revised Penal Code and inserted the words shall be punished with
the penalties imposed under Article 309 and 310 of the Revised Penal Code . When
the statute is clear and explicit, there is hardly room for any extended court
ratiocination or rationalization of the law.[38]
From the foregoing disquisition, it is clear that a suit for replevin can not be
sustained against the petitioners for the subject truck taken and retained by them
for administrative forfeiture proceedings in pursuant to Section 68-A of the P. D.
705, as amended. Dismissal of the replevin suit for lack of cause of action in view of
the private respondents failure to exhaust administrative remedies should have
been the proper course of action by the lower court instead of assuming jurisdiction
over the case and consequently issuing the writ ordering the return of the truck.
Exhaustion of the remedies in the administrative forum, being a condition precedent
prior to ones recourse to the courts and more importantly, being an element of
private respondents right of action, is too significant to be waylaid by the lower
court.
It is worth stressing at this point, that a suit for replevin is founded solely on the
claim that the defendant wrongfully withholds the property sought to be recovered.
It lies to recover possession of personal chattels that are unlawfully detained.[39] To
detain is defined as to mean to hold or keep in custody,[40] and it has been held
that there is tortuous taking whenever there is an unlawful meddling with the
property, or an exercise or claim of dominion over it, without any pretense of
authority or right; this, without manual seizing of the property is sufficient.[41]
Under the Rules of Court, it is indispensable in replevin proceedings, that the
plaintiff must show by his own affidavit that he is entitled to the possession of
property, that the property is wrongfully detained by the defendant, alleging the
cause of detention, that the same has not been taken for tax assessment, or seized
under execution, or attachment, or if so seized, that it is exempt from such seizure,
and the actual value of the property.[42] Private respondents miserably failed to
convince this Court that a wrongful detention of the subject truck obtains in the

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instant case. It should be noted that the truck was seized by the petitioners because
it was transporting forest products with out the required permit of the DENR in
manifest contravention of Section 68 of P.D. 705 as amended by E.O 277. Section
68-A of P.D. 705, as amended, unquestionably warrants the confiscation as well as
the disposition by the Secretary of DENR or his duly authorized representatives of
the conveyances used in violating the provision of forestry laws. Evidently, the
continued possession or detention of the truck by the petitioners for administrative
forfeiture proceeding is legally permissible, hence , no wrongful detention exists in
the case at bar.
Moreover, the suit for replevin is never intended as a procedural tool to question the
orders of confiscation and forfeiture issued by the DENR in pursuance to the
authority given under P.D.705, as amended. Section 8 of the said law is explicit that
actions taken by the Director of the Bureau of Forest Development concerning the
enforcement of the provisions of the said law are subject to review by the Secretary
of DENR and that courts may not review the decisions of the Secretary except
through a special civil action for certiorari or prohibition. It reads :
SECTION 8 . REVIEW - All actions and decisions of the Director are subject to review,
motu propio or upon appeal of any person aggrieved thereby, by the Department
Head whose decision shall be final and executory after the lapse of thirty (30) days
from the receipt of the aggrieved party of said decision, unless appealed to the
President in accordance with Executive Order No. 19, Series of 1966. The Decision
of the Department Head may not be reviewed by the courts except through a
special civil action for certiorari or prohibition.
WHEREFORE, the Petition is GRANTED; the Decision of the respondent Court of
Appeals dated October 16, 1991 and its Resolution dated July 14, 1992 are hereby
SET ASIDE AND REVERSED; the Restraining Order promulgated on September 27,
1993 is hereby made permanent; and the Secretary of DENR is directed to resolve
the controversy with utmost dispatch.
SO ORDERED.

4. G.R. No. L-22301

August 30, 1967

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,


vs.
MARIO MAPA Y MAPULONG, defendant-appellant.
The sole question in this appeal from a judgment of conviction by the lower court is
whether or not the appointment to and holding of the position of a secret agent to
the provincial governor would constitute a sufficient defense to a prosecution for the
crime of illegal possession of firearm and ammunition. We hold that it does not.
The accused in this case was indicted for the above offense in an information dated
August 14, 1962 reading as follows: "The undersized accuses MARIO MAPA Y
MAPULONG of a violation of Section 878 in connection with Section 2692 of the
Revised Administrative Code, as amended by Commonwealth Act No. 56 and as
further amended by Republic Act No. 4, committed as follows: That on or about the

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13th day of August, 1962, in the City of Manila, Philippines, the said accused did
then and there wilfully and unlawfully have in his possession and under his custody
and control one home-made revolver (Paltik), Cal. 22, without serial number, with
six (6) rounds of ammunition, without first having secured the necessary license or
permit therefor from the corresponding authorities. Contrary to law."
When the case was called for hearing on September 3, 1963, the lower court at the
outset asked the counsel for the accused: "May counsel stipulate that the accused
was found in possession of the gun involved in this case, that he has neither a
permit or license to possess the same and that we can submit the same on a
question of law whether or not an agent of the governor can hold a firearm without
a permit issued by the Philippine Constabulary." After counsel sought from the fiscal
an assurance that he would not question the authenticity of his exhibits, the
understanding being that only a question of law would be submitted for decision, he
explicitly specified such question to be "whether or not a secret agent is not
required to get a license for his firearm."
Upon the lower court stating that the fiscal should examine the document so that he
could pass on their authenticity, the fiscal asked the following question: "Does the
accused admit that this pistol cal. 22 revolver with six rounds of ammunition
mentioned in the information was found in his possession on August 13, 1962, in
the City of Manila without first having secured the necessary license or permit
thereof from the corresponding authority?" The accused, now the appellant,
answered categorically: "Yes, Your Honor." Upon which, the lower court made a
statement: "The accused admits, Yes, and his counsel Atty. Cabigao also affirms that
the accused admits."
Forthwith, the fiscal announced that he was "willing to submit the same for
decision." Counsel for the accused on his part presented four (4) exhibits consisting
of his appointment "as secret agent of the Hon. Feliciano Leviste," then Governor of
Batangas, dated June 2, 1962;1 another document likewise issued by Gov. Leviste
also addressed to the accused directing him to proceed to Manila, Pasay and
Quezon City on a confidential mission;2 the oath of office of the accused as such
secret agent,3 a certificate dated March 11, 1963, to the effect that the accused "is
a secret agent" of Gov. Leviste.4 Counsel for the accused then stated that with the
presentation of the above exhibits he was "willing to submit the case on the
question of whether or not a secret agent duly appointed and qualified as such of
the provincial governor is exempt from the requirement of having a license of
firearm." The exhibits were admitted and the parties were given time to file their
respective memoranda.1wph1.t
Thereafter on November 27, 1963, the lower court rendered a decision convicting
the accused "of the crime of illegal possession of firearms and sentenced to an
indeterminate penalty of from one year and one day to two years and to pay the
costs. The firearm and ammunition confiscated from him are forfeited in favor of the
Government."
The only question being one of law, the appeal was taken to this Court. The decision
must be affirmed.

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The law is explicit that except as thereafter specifically allowed, "it shall be unlawful
for any person to . . . possess any firearm, detached parts of firearms or ammunition
therefor, or any instrument or implement used or intended to be used in the
manufacture of firearms, parts of firearms, or ammunition."5 The next section
provides that "firearms and ammunition regularly and lawfully issued to officers,
soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine
Constabulary, guards in the employment of the Bureau of Prisons, municipal police,
provincial governors, lieutenant governors, provincial treasurers, municipal
treasurers, municipal mayors, and guards of provincial prisoners and jails," are not
covered "when such firearms are in possession of such officials and public servants
for use in the performance of their official duties."6
The law cannot be any clearer. No provision is made for a secret agent. As such he
is not exempt. Our task is equally clear. The first and fundamental duty of courts is
to apply the law. "Construction and interpretation come only after it has been
demonstrated that application is impossible or inadequate without them."7 The
conviction of the accused must stand. It cannot be set aside.
Accused however would rely on People v. Macarandang,8 where a secret agent was
acquitted on appeal on the assumption that the appointment "of the accused as a
secret agent to assist in the maintenance of peace and order campaigns and
detection of crimes, sufficiently put him within the category of a "peace officer"
equivalent even to a member of the municipal police expressly covered by section
879." Such reliance is misplaced. It is not within the power of this Court to set aside
the clear and explicit mandate of a statutory provision. To the extent therefore that
this decision conflicts with what was held in People v. Macarandang, it no longer
speaks with authority.
Wherefore, the judgment appealed from is affirmed.

5. G.R. No. L-34568 March 28, 1988


RODERICK DAOANG, and ROMMEL DAOANG, assisted by their father, ROMEO
DAOANG, petitioners,
vs.
THE MUNICIPAL JUDGE, SAN NICOLAS, ILOCOS NORTE, ANTERO AGONOY and
AMANDA RAMOS-AGONOY, respondents.
This is a petition for review on certiorari of the decision, dated 30 June 1971,
rendered by the respondent judge * in Spec. Proc. No. 37 of Municipal Court of San
Nicolas, Ilocos Norte, entitled: "In re Adoption of the Minors Quirino Bonilla and
Wilson Marcos; Antero Agonoy and Amanda R. Agonoy, petitioners", the dispositive
part of which reads, as follows:
Wherefore, Court renders judgment declaring that henceforth Quirino Bonilla and
Wilson Marcos be, to all legitimate intents and purposes, the children by adoption of
the joint petitioners Antero Agonoy and Amanda R. Agonoy and that the former be
freed from legal obedience and maintenance by their respective parents, Miguel
Bonilla and Laureana Agonoy for Quirino Bonilla and Modesto Marcos and Benjamina

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Gonzales for Wilson Marcos and their family names 'Bonilla' and 'Marcos' be
changed with "Agonoy", which is the family name of the petitioners.
Successional rights of the children and that of their adopting parents shall be
governed by the pertinent provisions of the New Civil Code.
Let copy of this decision be furnished and entered into the records of the Local Civil
Registry of San Nicolas, Ilocos Norte, for its legal effects at the expense of the
petitioners. 1
The undisputed facts of the case are as follows:
On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a
petition with the Municipal Court of San Nicolas, Ilocos Norte, seeking the adoption
of the minors Quirino Bonilla and Wilson Marcos. The case, entitled: "In re Adoption
of the Minors Quirino Bonilla and Wilson Marcos, Antero Agonoy and Amanda
Ramos-Agonoy, petitioners", was docketed therein as Spec. Proc. No. 37. 2
The petition was set for hearing on 24 April 1971 and notices thereof were caused
to be served upon the office of the Solicitor General and ordered published in the
ILOCOS TIMES, a weekly newspaper of general circulation in the province of Ilocos
Norte, with editorial offices in Laoag City. 3
On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father
and guardian ad litem, the petitioners herein, filed an opposition to the
aforementioned petition for adoption, claiming that the spouses Antero and Amanda
Agonoy had a legitimate daughter named Estrella Agonoy, oppositors' mother, who
died on 1 March 1971, and therefore, said spouses were disqualified to adopt under
Art. 335 of the Civil Code. 4
After the required publication of notice had been accomplished, evidence was
presented. Thereafter, the Municipal Court of San Nicolas, Ilocos Norte rendred its
decision, granting the petition for adoption. 5
Hence, the present recourse by the petitioners (oppositors in the lower court).
The sole issue for consideration is one of law and it is whether or not the respondent
spouses Antero Agonoy and Amanda Ramos-Agonoy are disqualified to adopt under
paragraph (1), Art. 335 of the Civil Code.
The pertinent provision of law reads, as follows:
Art. 335.

The following cannot adopt:

(1)
Those who have legitimate, legitimated, acknowledged natural children, or
children by legal fiction;
xxx

xxx

xxx

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In overruling the opposition of the herein petitioners, the respondents judge held
that "to add grandchildren in this article where no grandchil is included would
violate to (sic) the legal maxim that what is expressly included would naturally
exclude what is not included".
But, it is contended by the petitioners, citing the case of In re Adoption of Millendez,
6 that the adoption of Quirino Bonilla and Wilson Marcos would not only introduce a
foreign element into the family unit, but would result in the reduction of their
legititimes. It would also produce an indirect, permanent and irrevocable
disinheritance which is contrary to the policy of the law that a subsequent
reconciliation between the offender and the offended person deprives the latter of
the right to disinherit and renders ineffectual any disinheritance that may have
been made.
We find, however, that the words used in paragraph (1) of Art. 335 of the Civil Code,
in enumerating the persons who cannot adopt, are clear and unambiguous. The
children mentioned therein have a clearly defined meaning in law and, as pointed
out by the respondent judge, do not include grandchildren.
Well known is the rule of statutory construction to the effect that a statute clear and
unambiguous on its face need not be interpreted; stated otherwise, the rule is that
only statutes with an ambiguous or doubtful meaning may be the subject of
statutory construction. 7
Besides, it appears that the legislator, in enacting the Civil Code of the Philippines,
obviously intended that only those persons who have certain classes of children, are
disqualified to adopt. The Civil Code of Spain, which was once in force in the
Philippines, and which served as the pattern for the Civil Code of the Philippines, in
its Article 174, disqualified persons who have legitimate or legitimated descendants
from adopting. Under this article, the spouses Antero and Amanda Agonoy would
have been disqualified to adopt as they have legitimate grandchildren, the
petitioners herein. But, when the Civil Code of the Philippines was adopted, the
word "descendants" was changed to "children", in paragraph (1) of Article 335.
Adoption used to be for the benefit of the adoptor. It was intended to afford to
persons who have no child of their own the consolation of having one, by creating
through legal fiction, the relation of paternity and filiation where none exists by
blood relationship. 8 The present tendency, however, is geared more towards the
promotion of the welfare of the child and the enhancement of his opportunities for a
useful and happy life, and every intendment is sustained to promote that objective.
9 Under the law now in force, having legitimate, legitimated, acknowledged natural
children, or children by legal fiction, is no longer a ground for disqualification to
adopt. 10
WHEREFORE, the petition is DENIED. The judgment of the Municipal Court of San
Nicolas, Ilocos Norte in Spec. Proc. No. 37 is AFFIRMED. Without pronouncement as
to costs in this instance.
SO ORDERED.

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6. G.R. No. 123169. November 4, 1996


DANILO E. PARAS, petitioner,
vs.
COMMISSION ON ELECTIONS, respondent.
Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula, Cabanatuan
City who won during the last regular barangay election in 1994. A petition for his
recall as Punong Barangay was filed by the registered voters of the barangay. Acting
on the petition for recall, public respondent Commission on Elections (COMELEC)
resolved to approve the petition, scheduled the petition signing on October 14,
1995, and set the recall election on November 13, 1995.[1] At least 29.30% of the
registered voters signed the petition, well above the 25% requirement provided by
law. The COMELEC, however, deferred the recall election in view of petitioners
opposition. On December 6, 1995, the COMELEC set anew the recall election, this
time on December 16, 1995. To prevent the holding of the recall election, petitioner
filed before the Regional Trial Court of Cabanatuan City a petition for injunction,
docketed as SP Civil Action No. 2254-AF, with the trial court issuing a temporary
restraining order. After conducting a summary hearing, the trial court lifted the
restraining order, dismissed the petition and required petitioner and his counsel to
explain why they should not be cited for contempt for misrepresenting that the
barangay recall election was without COMELEC approval.[2]
In a resolution dated January 5, 1996, the COMELEC, for the third time, re-scheduled
the recall election on January 13, 1996; hence, the instant petition for certiorari with
urgent prayer for injunction. On January 12, 1996, the Court issued a temporary
restraining order and required the Office of the Solicitor General, in behalf of public
respondent, to comment on the petition. In view of the Office of the Solicitor
Generals manifestation maintaining an opinion adverse to that of the COMELEC, the
latter through its law department filed the required comment. Petitioner thereafter
filed a reply.[3]
Petitioners argument is simple and to the point. Citing Section 74 (b) of Republic Act
No. 7160, otherwise known as the Local Government Code, which states that no
recall shall take place within one (1) year from the date of the officials assumption
to office or one (1) year immediately preceding a regular local election, petitioner
insists that the scheduled January 13, 1996 recall election is now barred as the
Sangguniang Kabataan (SK) election was set by Republic Act No. 7808 on the first
Monday of May 1996, and every three years thereafter. In support thereof,
petitioner cites Associated Labor Union v. Letrondo-Montejo, 237 SCRA 621, where
the Court considered the SK election as a regular local election. Petitioner maintains
that as the SK election is a regular local election, hence no recall election can be
had for barely four months separate the SK election from the recall election. We do
not agree.
The subject provision of the Local Government Code provides:
SEC. 74. Limitations on Recall. (a) Any elective local official may be the subject of a
recall election only once during his term of office for loss of confidence.

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(b) No recall shall take place within one (1) year from the date of the officials
assumption to office or one (1) year immediately preceding a regular local election.
[Emphasis added.]
It is a rule in statutory construction that every part of the statute must be
interpreted with reference to the context, i.e., that every part of the statute must be
considered together with the other parts, and kept subservient to the general intent
of the whole enactment.[4] The evident intent of Section 74 is to subject an elective
local official to recall election once during his term of office. Paragraph (b) construed
together with paragraph (a) merely designates the period when such elective local
official may be subject of a recall election, that is, during the second year of his
term of office. Thus, subscribing to petitioners interpretation of the phrase regular
local election to include the SK election will unduly circumscribe the novel provision
of the Local Government Code on recall, a mode of removal of public officers by
initiation of the people before the end of his term. And if the SK election which is set
by R.A. No. 7808 to be held every three years from May 1996 were to be deemed
within the purview of the phrase regular local election, as erroneously insisted by
petitioner, then no recall election can be conducted rendering inutile the recall
provision of the Local Government Code.
In the interpretation of a statute, the Court should start with the assumption that
the legislature intended to enact an effective law, and the legislature is not
presumed to have done a vain thing in the enactment of a statute.[5] An
interpretation should, if possible, be avoided under which a statute or provision
being construed is defeated, or as otherwise expressed, nullified, destroyed,
emasculated, repealed, explained away, or rendered insignificant, meaningless,
inoperative or nugatory.[6]
It is likewise a basic precept in statutory construction that a statute should be
interpreted in harmony with the Constitution.[7] Thus, the interpretation of Section
74 of the Local Government Code, specifically paragraph (b) thereof, should not be
in conflict with the Constitutional mandate of Section 3 of Article X of the
Constitution to enact a local government code which shall provide for a more
responsive and accountable local government structure instituted through a system
of decentralization with effective mechanisms of recall, initiative, and referendum x
x x.
Moreover, petitioners too literal interpretation of the law leads to absurdity which
we cannot countenance. Thus, in a case, the Court made the following admonition:
We admonish against a too-literal reading of the law as this is apt to constrict rather
than fulfill its purpose and defeat the intention of its authors. That intention is
usually found not in the letter that killeth but in the spirit that vivifieth x x x[8]
The spirit, rather than the letter of a law determines its construction; hence, a
statute, as in this case, must be read according to its spirit and intent.
Finally, recall election is potentially disruptive of the normal working of the local
government unit necessitating additional expenses, hence the prohibition against

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18 June 2016
the conduct of recall election one year immediately preceding the regular local
election. The proscription is due to the proximity of the next regular election for the
office of the local elective official concerned. The electorate could choose the
officials replacement in the said election who certainly has a longer tenure in office
than a successor elected through a recall election. It would, therefore, be more in
keeping with the intent of the recall provision of the Code to construe regular local
election as one referring to an election where the office held by the local elective
official sought to be recalled will be contested and be filled by the electorate.
Nevertheless, recall at this time is no longer possible because of the limitation
stated under Section 74 (b) of the Code considering that the next regular election
involving the barangay office concerned is barely seven (7) months away, the same
having been scheduled on May 1997.[9]
ACCORDINGLY, the petition is hereby dismissed for having become moot and
academic. The temporary restraining order issued by the Court on January 12, 1996,
enjoining the recall election should be as it is hereby made permanent.
SO ORDERED.

7. G.R. No. L-30642 April 30, 1985


PERFECTO S. FLORESCA,
Vs.
PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of
Branch XIII, Court of First Instance of Manila, respondents.
This is a petition to review the order of the former Court of First Instance of Manila,
Branch XIII, dated December 16, 1968 dismissing petitioners' complaint for
damages on the ground of lack of jurisdiction.
Petitioners are the heirs of the deceased employees of Philex Mining Corporation
(hereinafter referred to as Philex), who, while working at its copper mines
underground operations at Tuba, Benguet on June 28, 1967, died as a result of the
cave-in that buried them in the tunnels of the mine. Specifically, the complaint
alleges that Philex, in violation of government rules and regulations, negligently and
deliberately failed to take the required precautions for the protection of the lives of
its men working underground. Portion of the complaint reads:
xxx

xxx

xxx

9.
That for sometime prior and up to June 28,1967, the defendant PHILEX, with
gross and reckless negligence and imprudence and deliberate failure to take the
required precautions for the due protection of the lives of its men working
underground at the time, and in utter violation of the laws and the rules and
regulations duly promulgated by the Government pursuant thereto, allowed great
amount of water and mud to accumulate in an open pit area at the mine above
Block 43-S-1 which seeped through and saturated the 600 ft. column of broken ore
and rock below it, thereby exerting tremendous pressure on the working spaces at
its 4300 level, with the result that, on the said date, at about 4 o'clock in the

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afternoon, with the collapse of all underground supports due to such enormous
pressure, approximately 500,000 cubic feet of broken ores rocks, mud and water,
accompanied by surface boulders, blasted through the tunnels and flowed out and
filled in, in a matter of approximately five (5) minutes, the underground workings,
ripped timber supports and carried off materials, machines and equipment which
blocked all avenues of exit, thereby trapping within its tunnels of all its men above
referred to, including those named in the next preceding paragraph, represented by
the plaintiffs herein;
10.
That out of the 48 mine workers who were then working at defendant
PHILEX's mine on the said date, five (5) were able to escape from the terrifying
holocaust; 22 were rescued within the next 7 days; and the rest, 21 in number,
including those referred to in paragraph 7 hereinabove, were left mercilessly to their
fate, notwithstanding the fact that up to then, a great many of them were still alive,
entombed in the tunnels of the mine, but were not rescued due to defendant
PHILEX's decision to abandon rescue operations, in utter disregard of its bounden
legal and moral duties in the premises;
xxx

xxx

xxx

13.
That defendant PHILEX not only violated the law and the rules and
regulations duly promulgated by the duly constituted authorities as set out by the
Special Committee above referred to, in their Report of investigation, pages 7-13,
Annex 'B' hereof, but also failed completely to provide its men working underground
the necessary security for the protection of their lives notwithstanding the fact that
it had vast financial resources, it having made, during the year 1966 alone, a total
operating income of P 38,220,254.00, or net earnings, after taxes of
P19,117,394.00, as per its llth Annual Report for the year ended December 31,
1966, and with aggregate assets totalling P 45,794,103.00 as of December 31,
1966;
xxx

xxx

xxx

(pp. 42-44, rec.)


A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes
of action of petitioners based on an industrial accident are covered by the
provisions of the Workmen's Compensation Act (Act 3428, as amended by RA 772)
and that the former Court of First Instance has no jurisdiction over the case.
Petitioners filed an opposition dated May 27, 1968 to the said motion to dismiss
claiming that the causes of action are not based on the provisions of the Workmen's
Compensation Act but on the provisions of the Civil Code allowing the award of
actual, moral and exemplary damages, particularly:
Art. 2176.
Whoever by act or omission causes damage to another, there being
fault or negligence, is obliged to pay for the damage done. Such fault or negligence,
if there is no pre- existing contractual relation between the parties, is called a quasidelict and is governed by the provisions of this Chapter.

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Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasidelict.
(b)
Art. 1173The fault or negligence of the obligor consists in the omission of
that diligence which is required by the nature of the obligation and corresponds with
the circumstances of the persons, of the time and of the place. When negligence
shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply.
Art. 2201. x x x x x x x x x
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the nonperformance of the obligation.
Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant
acted with gross negligence.
After a reply and a rejoinder thereto were filed, respondent Judge issued an order
dated June 27, 1968 dismissing the case on the ground that it falls within the
exclusive jurisdiction of the Workmen's Compensation Commission. On petitioners'
motion for reconsideration of the said order, respondent Judge, on September 23,
1968, reconsidered and set aside his order of June 27, 1968 and allowed Philex to
file an answer to the complaint. Philex moved to reconsider the aforesaid order
which was opposed by petitioners.
On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction
and ruled that in accordance with the established jurisprudence, the Workmen's
Compensation Commission has exclusive original jurisdiction over damage or
compensation claims for work-connected deaths or injuries of workmen or
employees, irrespective of whether or not the employer was negligent, adding that
if the employer's negligence results in work-connected deaths or injuries, the
employer shall, pursuant to Section 4-A of the Workmen's Compensation Act, pay
additional compensation equal to 50% of the compensation fixed in the Act.
Petitioners thus filed the present petition.
In their brief, petitioners raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DISMISSING
COMPLAINT FOR LACK OF JURISDICTION.

THE

PLAINTIFFS-

PETITIONERS'

II
THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION
BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR
COMPENSATION UNDER THE WORKMEN'S COMPENSATION ACT.
A

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In the first assignment of error, petitioners argue that the lower court has
jurisdiction over the cause of action since the complaint is based on the provisions
of the Civil Code on damages, particularly Articles 2176, 2178, 1173, 2201 and
2231, and not on the provisions of the Workmen's Compensation Act. They point out
that the complaint alleges gross and brazen negligence on the part of Philex in
failing to take the necessary security for the protection of the lives of its employees
working underground. They also assert that since Philex opted to file a motion to
dismiss in the court a quo, the allegations in their complaint including those
contained in the annexes are deemed admitted.
In the second assignment of error, petitioners asseverate that respondent Judge
failed to see the distinction between the claims for compensation under the
Workmen's Compensation Act and the claims for damages based on gross
negligence of Philex under the Civil Code. They point out that workmen's
compensation refers to liability for compensation for loss resulting from injury,
disability or death of the working man through industrial accident or disease,
without regard to the fault or negligence of the employer, while the claim for
damages under the Civil Code which petitioners pursued in the regular court, refers
to the employer's liability for reckless and wanton negligence resulting in the death
of the employees and for which the regular court has jurisdiction to adjudicate the
same.
On the other hand, Philex asserts that work-connected injuries are compensable
exclusively under the provisions of Sections 5 and 46 of the Workmen's
Compensation Act, which read:
SEC. 5.
Exclusive right to compensation.The rights and remedies granted by
this Act to an employee by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury ...
SEC. 46.
Jurisdiction. The Workmen's Compensation Commissioner shall have
exclusive jurisdiction to hear and decide claims for compensation under the
Workmen's Compensation Act, subject to appeal to the Supreme Court, ...
Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was
held that "all claims of workmen against their employer for damages due to
accident suffered in the course of employment shall be investigated and
adjudicated by the Workmen's Compensation Commission," subject to appeal to the
Supreme Court.
Philex maintains that the fact that an employer was negligent, does not remove the
case from the exclusive character of recoveries under the Workmen's Compensation
Act; because Section 4-A of the Act provides an additional compensation in case the
employer fails to comply with the requirements of safety as imposed by law to
prevent accidents. In fact, it points out that Philex voluntarily paid the compensation
due the petitioners and all the payments have been accepted in behalf of the

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deceased miners, except the heirs of Nazarito Floresca who insisted that they are
entitled to a greater amount of damages under the Civil Code.
In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty.
Edgardo Angara, now President of the University of the Philippines, Justice Manuel
Lazaro, as corporate counsel and Assistant General Manager of the GSIS Legal
Affairs Department, and Commissioner on Elections, formerly UP Law Center
Director Froilan Bacungan, appeared as amici curiae and thereafter, submitted their
respective memoranda.
The issue to be resolved as WE stated in the resolution of November 26, 1976, is:
Whether the action of an injured employee or worker or that of his heirs in case of
his death under the Workmen's Compensation Act is exclusive, selective or
cumulative, that is to say, whether his or his heirs' action is exclusively restricted to
seeking the limited compensation provided under the Workmen's Compensation Act
or whether they have a right of selection or choice of action between availing of the
worker's right under the Workmen's Compensation Act and suing in the regular
courts under the Civil Code for higher damages (actual, moral and/or exemplary)
from the employer by virtue of negligence (or fault) of the employer or of his other
employees or whether they may avail cumulatively of both actions, i.e., collect the
limited compensation under the Workmen's Compensation Act and sue in addition
for damages in the regular courts.
There are divergent opinions in this case. Justice Lazaro is of the opinion that an
injured employee or worker, or the heirs in case of his death, may initiate a
complaint to recover damages (not compensation under the Workmen's
Compensation Act) with the regular court on the basis of negligence of an employer
pursuant to the Civil Code provisions. Atty. Angara believes otherwise. He submits
that the remedy of an injured employee for work-connected injury or accident is
exclusive in accordance with Section 5 of the Workmen's Compensation Act, while
Atty. Bacungan's position is that the action is selective. He opines that the heirs of
the employee in case of his death have a right of choice to avail themselves of the
benefits provided under the Workmen's Compensation Act or to sue in the regular
court under the Civil Code for higher damages from the employer by virtue of
negligence of the latter. Atty. Bocobo's stand is the same as that of Atty. Bacungan
and adds that once the heirs elect the remedy provided for under the Act, they are
no longer entitled to avail themselves of the remedy provided for under the Civil
Code by filing an action for higher damages in the regular court, and vice versa.
On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a
motion to dismiss on the ground that they have amicably settled their claim with
respondent Philex. In the resolution of September 7, 1978, WE dismissed the
petition only insofar as the aforesaid petitioners are connected, it appearing that
there are other petitioners in this case.
WE hold that the former Court of First Instance has jurisdiction to try the case,
It should be underscored that petitioners' complaint is not for compensation based
on the Workmen's Compensation Act but a complaint for damages (actual,

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exemplary and moral) in the total amount of eight hundred twenty-five thousand
(P825,000.00) pesos. Petitioners did not invoke the provisions of the Workmen's
Compensation Act to entitle them to compensation thereunder. In fact, no allegation
appeared in the complaint that the employees died from accident arising out of and
in the course of their employments. The complaint instead alleges gross and
reckless negligence and deliberate failure on the part of Philex to protect the lives of
its workers as a consequence of which a cave-in occurred resulting in the death of
the employees working underground. Settled is the rule that in ascertaining whether
or not the cause of action is in the nature of workmen's compensation claim or a
claim for damages pursuant to the provisions of the Civil Code, the test is the
averments or allegations in the complaint (Belandres vs. Lopez Sugar Mill, Co., Inc.,
97 Phil. 100).
In the present case, there exists between Philex and the deceased employees a
contractual relationship. The alleged gross and reckless negligence and deliberate
failure that amount to bad faith on the part of Philex, constitute a breach of contract
for which it may be held liable for damages. The provisions of the Civil Code on
cases of breach of contract when there is fraud or bad faith, read:
Art. 2232.
In contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or
malevolent manner.
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is able shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties have foreseen
or could have reasonably foreseen at the time the obligation was constituted.
In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the nonperformance of the obligation.
Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of
damages, as assessed by the court.
The rationale in awarding compensation under the Workmen's Compensation Act
differs from that in giving damages under the Civil Code. The compensation acts are
based on a theory of compensation distinct from the existing theories of damages,
payments under the acts being made as compensation and not as damages (99
C.J.S. 53). Compensation is given to mitigate the harshness and insecurity of
industrial life for the workman and his family. Hence, an employer is liable whether
negligence exists or not since liability is created by law. Recovery under the Act is
not based on any theory of actionable wrong on the part of the employer (99 C.J.S.
36).
In other words, under the compensation acts, the employer is liable to pay
compensation benefits for loss of income, as long as the death, sickness or injury is
work-connected or work-aggravated, even if the death or injury is not due to the
fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On the other hand,
damages are awarded to one as a vindication of the wrongful invasion of his rights.

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It is the indemnity recoverable by a person who has sustained injury either in his
person, property or relative rights, through the act or default of another (25 C.J.S.
452).
The claimant for damages under the Civil Code has the burden of proving the causal
relation between the defendant's negligence and the resulting injury as well as the
damages suffered. While under the Workmen's Compensation Act, there is a
presumption in favor of the deceased or injured employee that the death or injury is
work-connected or work-aggravated; and the employer has the burden to prove
otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551;
Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228).
The claim of petitioners that the case is not cognizable by the Workmen's
Compensation Commission then, now Employees Compensation Commission, is
strengthened by the fact that unlike in the Civil Code, the Workmen's Compensation
Act did not contain any provision for an award of actual, moral and exemplary
damages. What the Act provided was merely the right of the heirs to claim limited
compensation for the death in the amount of six thousand (P6,000.00) pesos plus
burial expenses of two hundred (P200.00) pesos, and medical expenses when
incurred (Sections 8, 12 and 13, Workmen's Compensation Act), and an additional
compensation of only 50% if the complaint alleges failure on the part of the
employer to "install and maintain safety appliances or to take other precautions for
the prevention of accident or occupational disease" (Section 4-A, Ibid.). In the case
at bar, the amount sought to be recovered is over and above that which was
provided under the Workmen's Compensation Act and which cannot be granted by
the Commission.
Moreover, under the Workmen's Compensation Act, compensation benefits should
be paid to an employee who suffered an accident not due to the facilities or lack of
facilities in the industry of his employer but caused by factors outside the industrial
plant of his employer. Under the Civil Code, the liability of the employer, depends on
breach of contract or tort. The Workmen's Compensation Act was specifically
enacted to afford protection to the employees or workmen. It is a social legislation
designed to give relief to the workman who has been the victim of an accident
causing his death or ailment or injury in the pursuit of his employment (Abong vs.
WCC, 54 SCRA 379).
WE now come to the query as to whether or not the injured employee or his heirs in
case of death have a right of selection or choice of action between availing
themselves of the worker's right under the Workmen's Compensation Act and suing
in the regular courts under the Civil Code for higher damages (actual, moral and
exemplary) from the employers by virtue of that negligence or fault of the
employers or whether they may avail themselves cumulatively of both actions, i.e.,
collect the limited compensation under the Workmen's Compensation Act and sue in
addition for damages in the regular courts.
In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32
SCRA 442, ruled that an injured worker has a choice of either to recover from the
employer the fixed amounts set by the Workmen's Compensation Act or to

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prosecute an ordinary civil action against the tortfeasor for higher damages but he
cannot pursue both courses of action simultaneously.
In Pacaa WE said:
In the analogous case of Esguerra vs. Munoz Palma, involving the application of
Section 6 of the Workmen's Compensation Act on the injured workers' right to sue
third- party tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again speaking
for the Court, pointed out that the injured worker has the choice of remedies but
cannot pursue both courses of action simultaneously and thus balanced the relative
advantage of recourse under the Workmen's Compensation Act as against an
ordinary action.
As applied to this case, petitioner Esguerra cannot maintain his action for damages
against the respondents (defendants below), because he has elected to seek
compensation under the Workmen's Compensation Law, and his claim (case No.
44549 of the Compensation Commission) was being processed at the time he filed
this action in the Court of First Instance. It is argued for petitioner that as the
damages recoverable under the Civil Code are much more extensive than the
amounts that may be awarded under the Workmen's Compensation Act, they should
not be deemed incompatible. As already indicated, the injured laborer was initially
free to choose either to recover from the employer the fixed amounts set by the
Compensation Law or else, to prosecute an ordinary civil action against the
tortfeasor for higher damages. While perhaps not as profitable, the smaller
indemnity obtainable by the first course is balanced by the claimant's being relieved
of the burden of proving the causal connection between the defendant's negligence
and the resulting injury, and of having to establish the extent of the damage
suffered; issues that are apt to be troublesome to establish satisfactorily. Having
staked his fortunes on a particular remedy, petitioner is precluded from pursuing
the alternate course, at least until the prior claim is rejected by the Compensation
Commission. Anyway, under the proviso of Section 6 aforequoted, if the employer
Franklin Baker Company recovers, by derivative action against the alleged
tortfeasors, a sum greater than the compensation he may have paid the herein
petitioner, the excess accrues to the latter.
Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582),
applies to third-party tortfeasor, said rule should likewise apply to the employertortfeasor.
Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the
petition has been dismissed in the resolution of September 7, 1978 in view of the
amicable settlement reached by Philex and the said heirs.
With regard to the other petitioners, it was alleged by Philex in its motion to dismiss
dated May 14, 1968 before the court a quo, that the heirs of the deceased
employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and
Saturnino Martinez submitted notices and claims for compensation to the Regional
Office No. 1 of the then Department of Labor and all of them have been paid in full
as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be
paid in installments (pp. 106-107, rec.). Such allegation was admitted by herein

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petitioners in their opposition to the motion to dismiss dated May 27, 1968 (pp. 121122, rec.) in the lower court, but they set up the defense that the claims were filed
under the Workmen's Compensation Act before they learned of the official report of
the committee created to investigate the accident which established the criminal
negligence and violation of law by Philex, and which report was forwarded by the
Director of Mines to the then Executive Secretary Rafael Salas in a letter dated
October 19, 1967 only (p. 76, rec.).
WE hold that although the other petitioners had received the benefits under the
Workmen's Compensation Act, such may not preclude them from bringing an action
before the regular court because they became cognizant of the fact that Philex has
been remiss in its contractual obligations with the deceased miners only after
receiving compensation under the Act. Had petitioners been aware of said violation
of government rules and regulations by Philex, and of its negligence, they would not
have sought redress under the Workmen's Compensation Commission which
awarded a lesser amount for compensation. The choice of the first remedy was
based on ignorance or a mistake of fact, which nullifies the choice as it was not an
intelligent choice. The case should therefore be remanded to the lower court for
further proceedings. However, should the petitioners be successful in their bid
before the lower court, the payments made under the Workmen's Compensation Act
should be deducted from the damages that may be decreed in their favor.
B
Contrary to the perception of the dissenting opinion, the Court does not legislate in
the instant case. The Court merely applies and gives effect to the constitutional
guarantees of social justice then secured by Section 5 of Article 11 and Section 6 of
Article XIV of the 1935 Constitution, and now by Sections 6, 7, and 9 of Article 11 of
the DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, as
amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216,
2231 and 2232 of the New Civil Code of 1950.
To emphasize, the 1935 Constitution declares that:
Sec. 5. The promotion of social justice to insure the well-being and economic
security of all the people should be the concern of the State (Art. II).
Sec. 6. The State shall afford protection to labor, especially to working women, and
minors, and shall regulate the relations between landowner and tenant, and
between labor and capital in industry and in agriculture. The State may provide for
compulsory arbitration (Art. XIV).
The 1973 Constitution likewise commands the State to "promote social justice to
insure the dignity, welfare, and security of all the people "... regulate the use ... and
disposition of private property and equitably diffuse property ownership and profits
"establish, maintain and ensure adequate social services in, the field of education,
health, housing, employment, welfare and social security to guarantee the
enjoyment by the people of a decent standard of living" (Sections 6 and 7, Art. II,
1973 Constitution); "... afford protection to labor, ... and regulate the relations

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between workers and employers ..., and assure the rights of workers to ... just and
humane conditions of work" (Sec. 9, Art. II, 1973 Constitution, emphasis supplied).
The foregoing constitutional guarantees in favor of labor institutionalized in Section
9 of Article 11 of the 1973 Constitution and re-stated as a declaration of basic policy
in Article 3 of the New Labor Code, thus:
Art. 3. Declaration of basic policy.The State shall afford protection to labor,
promote full employment, ensure equal work opportunities regardless of sex, race
or creed, and regulate the relations between workers and employers. The State shall
assure the rights of workers to self-organization, collective bargaining, security of
tenure, and just and humane conditions of work. (emphasis supplied).
The aforestated constitutional principles as implemented by the aforementioned
articles of the New Civil Code cannot be impliedly repealed by the restrictive
provisions of Article 173 of the New Labor Code. Section 5 of the Workmen's
Compensation Act (before it was amended by R.A. No. 772 on June 20, 1952),
predecessor of Article 173 of the New Labor Code, has been superseded by the
aforestated provisions of the New Civil Code, a subsequent law, which took effect on
August 30, 1950, which obey the constitutional mandates of social justice
enhancing as they do the rights of the workers as against their employers. Article
173 of the New Labor Code seems to diminish the rights of the workers and
therefore collides with the social justice guarantee of the Constitution and the
liberal provisions of the New Civil Code.
The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the
1973 Constitution are statements of legal principles to be applied and enforced by
the courts. Mr. Justice Robert Jackson in the case of West Virginia State Board of
Education vs. Barnette, with characteristic eloquence, enunciated:
The very purpose of a Bill of Rights was to withdraw certain subjects from the
vicissitudes of political controversy, to place them beyond the reach of majorities
and officials and to establish them as legal principles to be applied by the courts.
One's right to life, liberty, and property, to free speech, a free press, freedom of
worship and assembly, and other fundamental rights may not be submitted to vote;
they depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638,
emphasis supplied).
In case of any doubt which may be engendered by Article 173 of the New Labor
Code, both the New Labor Code and the Civil Code direct that the doubts should be
resolved in favor of the workers and employees.
Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No.
442, as amended, promulgated on May 1, 1974, but which took effect six months
thereafter, provides that "all doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be
resolved in favor of labor" (Art. 2, Labor Code).

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Article 10 of the New Civil Code states: "In case of doubt in the interpretation or
application of laws, it is presumed that the law-making body intended right and
justice to prevail. "
More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of
doubt, all labor legislation and all labor contracts shall be construed in favor of the
safety and decent living of the laborer."
Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5
of the Workmen's Compensation Act provided:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this
Act to an employee by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury (emphasis supplied).
Employers contracting laborecsrs in the Philippine Islands for work outside the same
may stipulate with such laborers that the remedies prescribed by this Act shall
apply exclusively to injuries received outside the Islands through accidents
happening in and during the performance of the duties of the employment; and all
service contracts made in the manner prescribed in this section shall be presumed
to include such agreement.
Only the second paragraph of Section 5 of the Workmen's Compensation Act No.
3428, was amended by Commonwealth Act No. 772 on June 20, 1952, thus:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this
Act to an employee by reason of a personal injury entitling him to compensation
shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury.
Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall
apply to injuries received outside the Island through accidents happening in and
during the performance of the duties of the employment. Such stipulation shall not
prejudice the right of the laborers to the benefits of the Workmen's Compensation
Law of the place where the accident occurs, should such law be more favorable to
them (As amended by section 5 of Republic Act No. 772).
Article 173 of the New Labor Code does not repeal expressly nor impliedly the
applicable provisions of the New Civil Code, because said Article 173 provides:
Art. 173.
Exclusiveness of liability.- Unless otherwise provided, the liability of the
State Insurance Fund under this Title shall be exclusive and in place of all other
liabilities of the employer to the employee, his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents. The
payment of compensation under this Title shall bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act

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Numbered Eleven hundred sixty-one, as amended, Commonwealth Act Numbered
One hundred eighty- six, as amended, Commonwealth Act Numbered Six hundred
ten, as amended, Republic Act Numbered Forty-eight hundred Sixty-four, as
amended, and other laws whose benefits are administered by the System during the
period of such payment for the same disability or death, and conversely (emphasis
supplied).
As above-quoted, Article 173 of the New Labor Code expressly repealed only
Section 699 of the Revised Administrative Code, R.A. No. 1161, as amended, C.A.
No. 186, as amended, R.A. No. 610, as amended, R.A. No. 4864, as amended, and
all other laws whose benefits are administered by the System (referring to the GSIS
or SSS).
Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of
the New Labor Code does not even remotely, much less expressly, repeal the New
Civil Code provisions heretofore quoted.
It is patent, therefore, that recovery under the New Civil Code for damages arising
from negligence, is not barred by Article 173 of the New Labor Code. And the
damages recoverable under the New Civil Code are not administered by the System
provided for by the New Labor Code, which defines the "System" as referring to the
Government Service Insurance System or the Social Security System (Art. 167 [c],
[d] and [e] of the New Labor Code).
Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court
form part of the law of the land.
Article 8 of the New Civil Code provides:
Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall
form a part of the legal system of the Philippines.
The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:
Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying
or interpreting the laws or the Constitution form part of this jurisdiction's legal
system. These decisions, although in themselves not laws, constitute evidence of
what the laws mean. The application or interpretation placed by the Court upon a
law is part of the law as of the date of the enactment of the said law since the
Court's application or interpretation merely establishes the contemporaneous
legislative intent that the construed law purports to carry into effect" (65 SCRA 270,
272-273 [1975]).
WE ruled that judicial decisions of the Supreme Court assume the same authority as
the statute itself (Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).
The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before
and after it was amended by Commonwealth Act No. 772 on June 20, 1952, limited
the right of recovery in favor of the deceased, ailing or injured employee to the
compensation provided for therein. Said Section 5 was not accorded controlling

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application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus
Company (32 SCRA 442) when WE ruled that an injured worker has a choice of
either to recover from the employer the fixed amount set by the Workmen's
Compensation Act or to prosecute an ordinary civil action against the tortfeasor for
greater damages; but he cannot pursue both courses of action simultaneously. Said
Pacana case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil Code
as against the Workmen's Compensation Act, reiterating the 1969 ruling in the case
of Valencia vs. Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958 case of
Esguerra vs. Munoz Palma (104 Phil. 582), both penned by Justice J.B.L. Reyes. Said
Pacana case was concurred in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar,
Castro, Fernando and Villamor.
Since the first sentence of Article 173 of the New Labor Code is merely a restatement of the first paragraph of Section 5 of the Workmen's Compensation Act,
as amended, and does not even refer, neither expressly nor impliedly, to the Civil
Code as Section 5 of the Workmen's Compensation Act did, with greater reason said
Article 173 must be subject to the same interpretation adopted in the cases of
Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid
three (3) cases is faithful to and advances the social justice guarantees enshrined in
both the 1935 and 1973 Constitutions.
It should be stressed likewise that there is no similar provision on social justice in
the American Federal Constitution, nor in the various state constitutions of the
American Union. Consequently, the restrictive nature of the American decisions on
the Workmen's Compensation Act cannot limit the range and compass of OUR
interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-avis Article 173 of the New Labor Code, in relation to Section 5 of Article II and
Section 6 of Article XIV of the 1935 Constitution then, and now Sections 6, 7 and 9
of the Declaration of Principles and State Policies of Article II of the 1973
Constitution.
The dissent seems to subordinate the life of the laborer to the property rights of the
employer. The right to life is guaranteed specifically by the due process clause of
the Constitution. To relieve the employer from liability for the death of his workers
arising from his gross or wanton fault or failure to provide safety devices for the
protection of his employees or workers against the dangers which are inherent in
underground mining, is to deprive the deceased worker and his heirs of the right to
recover indemnity for the loss of the life of the worker and the consequent loss to
his family without due process of law. The dissent in effect condones and therefore
encourages such gross or wanton neglect on the part of the employer to comply
with his legal obligation to provide safety measures for the protection of the life,
limb and health of his worker. Even from the moral viewpoint alone, such attitude is
un-Christian.
It is therefore patent that giving effect to the social justice guarantees of the
Constitution, as implemented by the provisions of the New Civil Code, is not an
exercise of the power of law-making, but is rendering obedience to the mandates of
the fundamental law and the implementing legislation aforementioned.
The Court, to repeat, is not legislating in the instant case.

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It is axiomatic that no ordinary statute can override a constitutional provision.
The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the
New Labor Code subvert the rights of the petitioners as surviving heirs of the
deceased mining employees. Section 5 of the Workmen's Compensation Act and
Article 173 of the New Labor Code are retrogressive; because they are a throwback
to the obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his
treatise Wealth of Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964), which has
been discarded soon after the close of the 18th century due to the Industrial
Revolution that generated the machines and other mechanical devices (beginning
with Eli Whitney's cotton gin of 1793 and Robert Fulton's steamboat of 1807) for
production and transportation which are dangerous to life, limb and health. The old
socio-political-economic philosophy of live-and-let-live is now superdesed by the
benign Christian shibboleth of live-and-help others to live. Those who profess to be
Christians should not adhere to Cain's selfish affirmation that he is not his brother's
keeper. In this our civilization, each one of us is our brother's keeper. No man is an
island. To assert otherwise is to be as atavistic and ante-deluvian as the 1837 case
of Prisley vs. Fowler (3 MN 1,150 reprint 1030) invoked by the dissent, The Prisley
case was decided in 1837 during the era of economic royalists and robber barons of
America. Only ruthless, unfeeling capitalistics and egoistic reactionaries continue to
pay obeisance to such un-Christian doctrine. The Prisley rule humiliates man and
debases him; because the decision derisively refers to the lowly worker as "servant"
and utilizes with aristocratic arrogance "master" for "employer." It robs man of his
inherent dignity and dehumanizes him. To stress this affront to human dignity, WE
only have to restate the quotation from Prisley, thus: "The mere relation of the
master and the servant never can imply an obligation on the part of the master to
take more care of the servant than he may reasonably be expected to do himself."
This is the very selfish doctrine that provoked the American Civil War which
generated so much hatred and drew so much precious blood on American plains
and valleys from 1861 to 1864.
"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit
of the law insures man's survival and ennobles him. In the words of Shakespeare,
"the letter of the law killeth; its spirit giveth life."
C
It is curious that the dissenting opinion clings to the myth that the courts cannot
legislate.
That myth had been exploded by Article 9 of the New Civil Code, which provides
that "No judge or court shall decline to render judgment by reason of the silence,
obscurity or insufficiency of the laws. "
Hence, even the legislator himself, through Article 9 of the New Civil Code,
recognizes that in certain instances, the court, in the language of Justice Holmes,
"do and must legislate" to fill in the gaps in the law; because the mind of the
legislator, like all human beings, is finite and therefore cannot envisage all possible

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cases to which the law may apply Nor has the human mind the infinite capacity to
anticipate all situations.
But about two centuries before Article 9 of the New Civil Code, the founding fathers
of the American Constitution foresaw and recognized the eventuality that the courts
may have to legislate to supply the omissions or to clarify the ambiguities in the
American Constitution and the statutes.
'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be
justified but denies that the power of the Judiciary to nullify statutes may give rise
to Judicial tyranny (The Federalist, Modern Library, pp. 503-511, 1937 ed.). Thomas
Jefferson went farther to concede that the court is even independent of the Nation
itself (A.F.L. vs. American Sash Company, 1949 335 US 538).
Many of the great expounders of the American Constitution likewise share the same
view. Chief Justice Marshall pronounced: "It is emphatically the province and duty of
the Judicial department to say what the law is (Marbury vs. Madison I Cranch 127
1803), which was re-stated by Chief Justice Hughes when he said that "the
Constitution is what the judge says it is (Address on May 3, 1907, quoted by
President Franklin Delano Roosevelt on March 9, 1937). This was reiterated by
Justice Cardozo who pronounced that "No doubt the limits for the judge are
narrower. He legislates only between gaps. He fills the open spaces in the law. "
(The Nature of the Judicial Process, p. 113). In the language of Chief Justice Harlan F.
Stone, "The only limit to the judicial legislation is the restraint of the judge" (U.S. vs.
Butler 297 U.S. 1 Dissenting Opinion, p. 79), which view is also entertained by
Justice Frankfurter and Justice Robert Jackson. In the rhetoric of Justice Frankfurter,
"the courts breathe life, feeble or strong, into the inert pages of the Constitution and
all statute books."
It should be stressed that the liability of the employer under Section 5 of the
Workmen's Compensation Act or Article 173 of the New Labor Code is limited to
death, ailment or injury caused by the nature of the work, without any fault on the
part of the employers. It is correctly termed no fault liability. Section 5 of the
Workmen's Compensation Act, as amended, or Article 173 of the New Labor Code,
does not cover the tortious liability of the employer occasioned by his fault or
culpable negligence in failing to provide the safety devices required by the law for
the protection of the life, limb and health of the workers. Under either Section 5 or
Article 173, the employer remains liable to pay compensation benefits to the
employee whose death, ailment or injury is work-connected, even if the employer
has faithfully and diligently furnished all the safety measures and contrivances
decreed by the law to protect the employee.
The written word is no longer the "sovereign talisman." In the epigrammatic
language of Mr. Justice Cardozo, "the law has outgrown its primitive stage of
formalism when the precise word was the sovereign talisman, and every slip was
fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The Nature of the Judicial Process
100). Justice Cardozo warned that: "Sometimes the conservatism of judges has
threatened for an interval to rob the legislation of its efficacy. ... Precedents
established in those items exert an unhappy influence even now" (citing Pound,
Common Law and Legislation 21 Harvard Law Review 383, 387).

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Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted,
although with a cautionary undertone: "that judges do and must legislate, but they
can do so only interstitially they are confined from molar to molecular motions"
(Southern Pacific Company vs. Jensen, 244 US 204 1917). And in the subsequent
case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853),
Justice Holmes pronounced:
The great ordinances of the Constitution do not establish and divide fields of black
and white. Even the more specific of them are found to terminate in a penumbra
shading gradually from one extreme to the other. x x x. When we come to the
fundamental distinctions it is still more obvious that they must be received with a
certain latitude or our government could not go on.
To make a rule of conduct applicable to an individual who but for such action would
be free from it is to legislate yet it is what the judges do whenever they determine
which of two competing principles of policy shall prevail.
xxx

xxx

xxx

It does not seem to need argument to show that however we may disguise it by
veiling words we do not and cannot carry out the distinction between legislative and
executive action with mathematical precision and divide the branches into
waterlight compartments, were it ever so desirable to do so, which I am far from
believing that it is, or that the Constitution requires.
True, there are jurists and legal writers who affirm that judges should not legislate,
but grudgingly concede that in certain cases judges do legislate. They criticize the
assumption by the courts of such law-making power as dangerous for it may
degenerate into Judicial tyranny. They include Blackstone, Jeremy Bentham, Justice
Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf
Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal
commentators, who either deny the power of the courts to legislate in-between
gaps of the law, or decry the exercise of such power, have not pointed to examples
of the exercise by the courts of such law-making authority in the interpretation and
application of the laws in specific cases that gave rise to judicial tyranny or
oppression or that such judicial legislation has not protected public interest or
individual welfare, particularly the lowly workers or the underprivileged.
On the other hand, there are numerous decisions interpreting the Bill of Rights and
statutory enactments expanding the scope of such provisions to protect human
rights. Foremost among them is the doctrine in the cases of Miranda vs. Arizona
(384 US 436 1964), Gideon vs. Wainright (372 US 335), Escubedo vs. Illinois (378 US
478), which guaranteed the accused under custodial investigation his rights to
remain silent and to counsel and to be informed of such rights as even as it protects
him against the use of force or intimidation to extort confession from him. These
rights are not found in the American Bill of Rights. These rights are now
institutionalized in Section 20, Article IV of the 1973 Constitution. Only the peaceand-order adherents were critical of the activism of the American Supreme Court led
by Chief Justice Earl Warren.

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Even the definition of Identical offenses for purposes of the double jeopardy
provision was developed by American judicial decisions, not by amendment to the
Bill of Rights on double jeopardy (see Justice Laurel in People vs. Tarok, 73 Phil. 260,
261-268). And these judicial decisions have been re-stated in Section 7 of Rule 117
of the 1985 Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the
1964 Revised Rules of Court. In both provisions, the second offense is the same as
the first offense if the second offense is an attempt to commit the first or frustration
thereof or necessarily includes or is necessarily included in the first offense.
The requisites of double jeopardy are not spelled out in the Bill of Rights. They were
also developed by judicial decisions in the United States and in the Philippines even
before people vs. Ylagan (58 Phil. 851-853).
Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson
(163 US 537) as securing to the Negroes equal but separate facilities, which
doctrine was revoked in the case of Brown vs. Maryland Board of Education (349 US
294), holding that the equal protection clause means that the Negroes are entitled
to attend the same schools attended by the whites-equal facilities in the same
school-which was extended to public parks and public buses.
De-segregation, not segregation, is now the governing principle.
Among other examples, the due process clause was interpreted in the case of
People vs. Pomar (46 Phil. 440) by a conservative, capitalistic court to invalidate a
law granting maternity leave to working women-according primacy to property
rights over human rights. The case of People vs. Pomar is no longer the rule.
As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937,
949), Justice Holmes had been railing against the conservatism of Judges perverting
the guarantee of due process to protect property rights as against human rights or
social justice for the working man. The law fixing maximum hours of labor was
invalidated. Justice Holmes was vindicated finally in 1936 in the case of West Coast
Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court
upheld the rights of workers to social justice in the form of guaranteed minimum
wage for women and minors, working hours not exceeding eight (8) daily, and
maternity leave for women employees.
The power of judicial review and the principle of separation of powers as well as the
rule on political questions have been evolved and grafted into the American
Constitution by judicial decisions (Marbury vs. Madison, supra Coleman vs. Miller,
307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-212, 72 L. ed.
852, 853).
It is noteworthy that Justice Black, who seems to be against judicial legislation,
penned a separate concurring opinion in the case of Coleman vs. Miller, supra,
affirming the doctrine of political question as beyond the ambit of judicial review.
There is nothing in both the American and Philippine Constitutions expressly
providing that the power of the courts is limited by the principle of separation of
powers and the doctrine on political questions. There are numerous cases in

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Philippine jurisprudence applying the doctrines of separation of powers and political
questions and invoking American precedents.
Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions
expressly vest in the Supreme Court the power to review the validity or
constitutionality of any legislative enactment or executive act.
WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND
SET ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS.
SHOULD A GREATER AMOUNT OF DAMAGES BE DECREED IN FAVOR OF HEREIN
PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM PURSUANT TO THE
WORKMEN'S COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.
SO ORDERED.

8. G.R. No. 108763 February 13, 1997


REPUBLIC OF THE PHILIPPINES,
vs.
COURT OF APPEALS and RORIDEL OLAVIANO MOLINA, respondents.
The Family Code of the Philippines provides an entirely new ground (in addition to
those enumerated in the Civil Code) to assail the validity of a marriage, namely,
"psychological incapacity." Since the Code's effectivity, our courts have been
swamped with various petitions to declare marriages void based on this ground.
Although this Court had interpreted the meaning of psychological incapacity in the
recent case of Santos vs. Court of Appeals, still many judges and lawyers find
difficulty in applying said novel provision in specific cases. In the present case and
in the context of the herein assailed Decision of the Court of Appeals, the Solicitor
General has labelled exaggerated to be sure but nonetheless expressive of his
frustration Article 36 as the "most liberal divorce procedure in the world." Hence,
this Court in addition to resolving the present case, finds the need to lay down
specific guidelines in the interpretation and application of Article 36 of the Family
Code.
Before us is a petition for review on certiorari under Rule 45 challenging the January
25, 1993 Decision 1 of the Court of Appeals 2 in CA-G.R. CV No. 34858 affirming in
toto the May 14, 1991 decision of the Regional Trial Court of La Trinidad, 3 Benguet,
which declared the marriage of respondent Roridel Olaviano Molina to Reynaldo
Molina void ab initio, on the ground of "psychological incapacity" under Article 36 of
the Family Code.
The Facts
This case was commenced on August 16, 1990 with the filing by respondent Roridel
O. Molina of a verified petition for declaration of nullity of her marriage to Reynaldo
Molina. Essentially, the petition alleged that Roridel and Reynaldo were married on
April 14, 1985 at the San Agustin Church 4 in Manila; that a son, Andre O. Molina
was born; that after a year of marriage, Reynaldo showed signs of "immaturity and
irresponsibility" as a husband and a father since he preferred to spend more time

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with his peers and friends on whom he squandered his money; that he depended on
his parents for aid and assistance, and was never honest with his wife in regard to
their finances, resulting in frequent quarrels between them; that sometime in
February 1986, Reynaldo was relieved of his job in Manila, and since then Roridel
had been the sole breadwinner of the family; that in October 1986 the couple had a
very intense quarrel, as a result of which their relationship was estranged; that in
March 1987, Roridel resigned from her job in Manila and went to live with her
parents in Baguio City; that a few weeks later, Reynaldo left Roridel and their child,
and had since then abandoned them; that Reynaldo had thus shown that he was
psychologically incapable of complying with essential marital obligations and was a
highly immature and habitually quarrel some individual who thought of himself as a
king to be served; and that it would be to the couple's best interest to have their
marriage declared null and void in order to free them from what appeared to be an
incompatible marriage from the start.
In his Answer filed on August 28, 1989, Reynaldo admitted that he and Roridel could
no longer live together as husband and wife, but contended that their
misunderstandings and frequent quarrels were due to (1) Roridel's strange behavior
of insisting on maintaining her group of friends even after their marriage; (2)
Roridel's refusal to perform some of her marital duties such as cooking meals; and
(3) Roridel's failure to run the household and handle their finances.
During the pre-trial on October 17, 1990, the following were stipulated:
1.
That the parties herein were legally married on April 14, 1985 at the Church
of St. Augustine, Manila;
2.
That out of their marriage, a child named Albert Andre Olaviano Molina was
born on July 29, 1986;
3.

That the parties are separated-in-fact for more than three years;

4.

That petitioner is not asking support for her and her child;

5.

That the respondent is not asking for damages;

6.

That the common child of the parties is in the custody of the petitioner wife.

Evidence for herein respondent wife consisted of her own testimony and that of her
friends Rosemarie Ventura and Maria Leonora Padilla as well as of Ruth G. Lalas, a
social worker, and of Dr. Teresita Hidalgo-Sison, a psychiatrist of the Baguio General
Hospital and Medical Center. She also submitted documents marked as Exhibits "A"
to "E-1." Reynaldo did not present any evidence as he appeared only during the pretrial conference.
On May 14, 1991, the trial court rendered judgment declaring the marriage void.
The appeal of petitioner was denied by the Court of Appeals which affirmed in toto
the RTC's decision. Hence, the present recourse.
The Issue

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In his petition, the Solicitor General insists that "the Court of Appeals made an
erroneous and incorrect interpretation of the phrase 'psychological incapacity' (as
provided under Art. 36 of the Family Code) and made an incorrect application
thereof to the facts of the case," adding that the appealed Decision tended "to
establish in effect the most liberal divorce procedure in the world which is anathema
to our culture."
In denying the Solicitor General's appeal, the respondent Court relied 5 heavily on
the trial court's findings "that the marriage between the parties broke up because of
their opposing and conflicting personalities." Then, it added it sown opinion that
"the Civil Code Revision Committee (hereinafter referred to as Committee) intended
to liberalize the application of our civil laws on personal and family rights. . . ." It
concluded that:
As ground for annulment of marriage, We view psychologically incapacity as a broad
range of mental and behavioral conduct on the part of one spouse indicative of how
he or she regards the marital union, his or her personal relationship with the other
spouse, as well as his or her conduct in the long haul for the attainment of the
principal objectives of marriage. If said conduct, observed and considered as a
whole, tends to cause the union to self-destruct because it defeats the very
objectives of marriage, then there is enough reason to leave the spouses to their
individual fates.
In the case at bar, We find that the trial judge committed no indiscretion in
analyzing and deciding the instant case, as it did, hence, We find no cogent reason
to disturb the findings and conclusions thus made.
Respondent, in her Memorandum, adopts these discussions of the Court of Appeals.
The petitioner, on the other hand, argues that "opposing and conflicting
personalities" is not equivalent to psychological incapacity, explaining that such
ground "is not simply the neglect by the parties to the marriage of their
responsibilities and duties, but a defect in their psychological nature which renders
them incapable of performing such marital responsibilities and duties."
The Court's Ruling
The petition is meritorious.
In Leouel Santos vs. Court of Appeals 6 this Court, speaking thru Mr. Justice Jose C.
Vitug, ruled that "psychological incapacity should refer to no less than a mental (nor
physical) incapacity . . . and that (t)here is hardly any doubt that the intendment of
the law has been to confine the meaning of 'psychological incapacity' to the most
serious cases of personality disorders clearly demonstrative of an utter insensitivity
or inability to give meaning and significance to the marriage. This psychologic
condition must exist at the time the marriage is celebrated." Citing Dr. Gerardo
Veloso, a former presiding judge of the Metropolitan Marriage Tribunal of the
Catholic Archdiocese of Manila, 7 Justice Vitug wrote that "the psychological

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incapacity must be characterized by (a) gravity, (b) juridical antecedence, and (c)
incurability."
On the other hand, in the present case, there is no clear showing to us that the
psychological defect spoken of is an incapacity. It appears to us to be more of a
"difficulty," if not outright "refusal" or "neglect" in the performance of some marital
obligations. Mere showing of "irreconciliable differences" and "conflicting
personalities" in no wise constitutes psychological incapacity. It is not enough to
prove that the parties failed to meet their responsibilities and duties as married
persons; it is essential that they must be shown to be incapable of doing so, due to
some psychological (nor physical) illness.
The evidence adduced by respondent merely showed that she and her husband
could nor get along with each other. There had been no showing of the gravity of
the problem; neither its juridical antecedence nor its incurability. The expert
testimony of Dr. Sison showed no incurable psychiatric disorder but only
incompatibility, not psychological incapacity. Dr. Sison testified: 8
COURT
Q
It is therefore the recommendation of the psychiatrist based on your findings
that it is better for the Court to annul (sic) the marriage?
A

Yes, Your Honor.

There is no hope for the marriage?

There is no hope, the man is also living with another woman.

Q
Is it also the stand of the psychiatrist that the parties are psychologically unfit
for each other but they are psychologically fit with other parties?
A

Yes, Your Honor.

Neither are they psychologically unfit for their professions?

Yes, Your Honor.

The Court has no more questions.


In the case of Reynaldo, there is no showing that his alleged personality traits were
constitutive of psychological incapacity existing at the time of marriage celebration.
While some effort was made to prove that there was a failure to fulfill pre-nuptial
impressions of "thoughtfulness and gentleness" on Reynaldo's part of being
"conservative, homely and intelligent" on the part of Roridel, such failure of
expectation is nor indicative of antecedent psychological incapacity. If at all, it
merely shows love's temporary blindness to the faults and blemishes of the
beloved.

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During its deliberations, the Court decided to go beyond merely ruling on the facts
of this case vis-a-vis existing law and jurisprudence. In view of the novelty of Art. 36
of the Family Code and the difficulty experienced by many trial courts interpreting
and applying it, the Court decided to invite two amici curiae, namely, the Most
Reverend Oscar V. Cruz, 9 Vicar Judicial (Presiding Judge) of the National Appellate
Matrimonial Tribunal of the Catholic Church in the Philippines, and Justice Ricardo C.
Puno, 10 a member of the Family Code Revision Committee. The Court takes this
occasion to thank these friends of the Court for their informative and interesting
discussions during the oral argument on December 3, 1996, which they followed up
with written memoranda.
From their submissions and the Court's own deliberations, the following guidelines
in the interpretation and application of Art. 36 of the Family Code are hereby
handed down for the guidance of the bench and the bar:
(1)
The burden of proof to show the nullity of the marriage belongs to the
plaintiff. Any doubt should be resolved in favor of the existence and continuation of
the marriage and against its dissolution and nullity. This is rooted in the fact that
both our Constitution and our laws cherish the validity of marriage and unity of the
family. Thus, our Constitution devotes an entire Article on the Family, 11 recognizing
it "as the foundation of the nation." It decrees marriage as legally "inviolable,"
thereby protecting it from dissolution at the whim of the parties. Both the family and
marriage are to be "protected" by the state.
The Family Code 12 echoes this constitutional edict on marriage and the family and
emphasizes the permanence, inviolability and solidarity
(2)
The root cause of the psychological incapacity must be (a) medically or
clinically identified, (b) alleged in the complaint, (c) sufficiently proven by experts
and (d) clearly explained in the decision. Article 36 of the Family Code requires that
the incapacity must be psychological not physical. although its manifestations
and/or symptoms may be physical. The evidence must convince the court that the
parties, or one of them, was mentally or physically ill to such an extent that the
person could not have known the obligations he was assuming, or knowing them,
could not have given valid assumption thereof. Although no example of such
incapacity need be given here so as not to limit the application of the provision
under the principle of ejusdem generis, 13 nevertheless such root cause must be
identified as a psychological illness and its incapacitating nature explained. Expert
evidence may be given qualified psychiatrist and clinical psychologists.
(3)
The incapacity must be proven to be existing at "the time of the celebration"
of the marriage. The evidence must show that the illness was existing when the
parties exchanged their "I do's." The manifestation of the illness need not be
perceivable at such time, but the illness itself must have attached at such moment,
or prior thereto.
(4)
Such incapacity must also be shown to be medically or clinically permanent
or incurable. Such incurability may be absolute or even relative only in regard to the
other spouse, not necessarily absolutely against everyone of the same sex.
Furthermore, such incapacity must be relevant to the assumption of marriage

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obligations, not necessarily to those not related to marriage, like the exercise of a
profession or employment in a job. Hence, a pediatrician may be effective in
diagnosing illnesses of children and prescribing medicine to cure them but may not
be psychologically capacitated to procreate, bear and raise his/her own children as
an essential obligation of marriage.
(5)
Such illness must be grave enough to bring about the disability of the party
to assume the essential obligations of marriage. Thus, "mild characteriological
peculiarities, mood changes, occasional emotional outbursts" cannot be accepted as
root causes. The illness must be shown as downright incapacity or inability, nor a
refusal, neglect or difficulty, much less ill will. In other words, there is a natal or
supervening disabling factor in the person, an adverse integral element in the
personality structure that effectively incapacitates the person from really accepting
and thereby complying with the obligations essential to marriage.
(6)
The essential marital obligations must be those embraced by Articles 68 up
to 71 of the Family Code as regards the husband and wife as well as Articles 220,
221 and 225 of the same Code in regard to parents and their children. Such noncomplied marital obligation(s) must also be stated in the petition, proven by
evidence and included in the text of the decision.
(7)
Interpretations given by the National Appellate Matrimonial Tribunal of the
Catholic Church in the Philippines, while not controlling or decisive, should be given
great respect by our courts. It is clear that Article 36 was taken by the Family Code
Revision Committee from Canon 1095 of the New Code of Canon Law, which
became effective in 1983 and which provides:
The following are incapable of contracting marriage: Those who are unable to
assume the essential obligations of marriage due to causes of psychological nature.
14
Since the purpose of including such provision in our Family Code is to harmonize our
civil laws with the religious faith of our people, it stands to reason that to achieve
such harmonization, great persuasive weight should be given to decision of such
appellate tribunal. Ideally subject to our law on evidence what is decreed as
canonically invalid should also be decreed civilly void.
This is one instance where, in view of the evident source and purpose of the Family
Code provision, contemporaneous religious interpretation is to be given persuasive
effect. Here, the State and the Church while remaining independent, separate
and apart from each other shall walk together in synodal cadence towards the
same goal of protecting and cherishing marriage and the family as the inviolable
base of the nation.
(8)
The trial court must order the prosecuting attorney or fiscal and the Solicitor
General to appear as counsel for the state. No decision shall he handed down unless
the Solicitor General issues a certification, which will be quoted in the decision,
briefly staring therein his reasons for his agreement or opposition, as the case may
be, to the petition. The Solicitor General, along with the prosecuting attorney, shall
submit to the court such certification within fifteen (15) days from the date the case

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is deemed submitted for resolution of the court. The Solicitor General shall
discharge the equivalent function of the defensor vinculi contemplated under Canon
1095.
In the instant case and applying Leouel Santos, we have already ruled to grant the
petition. Such ruling becomes even more cogent with the use of the foregoing
guidelines.
WHEREFORE, the petition is GRANTED. The assailed Decision is REVERSED and SET
ASIDE. The marriage of Roridel Olaviano to Reynaldo Molina subsists and remains
valid.
SO ORDERED.

9. G.R. No. L-34964 January 31, 1973


CHINA BANKING CORPORATION and TAN KIM LIONG, petitioners-appellants,
vs.
HON. WENCESLAO ORTEGA, as Presiding Judge of the Court of First Instance of
Manila, Branch VIII, and VICENTE G. ACABAN, respondents-appellees.
The only issue in this petition for certiorari to review the orders dated March 4, 1972
and March 27, 1972, respectively, of the Court of First Instance of Manila in its Civil
Case No. 75138, is whether or not a banking institution may validly refuse to comply
with a court process garnishing the bank deposit of a judgment debtor, by invoking
the provisions of Republic Act No. 1405. *
On December 17, 1968 Vicente Acaban filed a complaint in the court a quo against
Bautista Logging Co., Inc., B & B Forest Development Corporation and Marino
Bautista for the collection of a sum of money. Upon motion of the plaintiff the trial
court declared the defendants in default for failure to answer within the
reglementary period, and authorized the Branch Clerk of Court and/or Deputy Clerk
to receive the plaintiff's evidence. On January 20, 1970 judgment by default was
rendered against the defendants.
To satisfy the judgment, the plaintiff sought the garnishment of the bank deposit of
the defendant B & B Forest Development Corporation with the China Banking
Corporation. Accordingly, a notice of garnishment was issued by the Deputy Sheriff
of the trial court and served on said bank through its cashier, Tan Kim Liong. In
reply, the bank' cashier invited the attention of the Deputy Sheriff to the provisions
of Republic Act No. 1405 which, it was alleged, prohibit the disclosure of any
information relative to bank deposits. Thereupon the plaintiff filed a motion to cite
Tan Kim Liong for contempt of court.
In an order dated March 4, 1972 the trial court denied the plaintiff's motion.
However, Tan Kim Liong was ordered "to inform the Court within five days from
receipt of this order whether or not there is a deposit in the China Banking
Corporation of defendant B & B Forest Development Corporation, and if there is any
deposit, to hold the same intact and not allow any withdrawal until further order
from this Court." Tan Kim Liong moved to reconsider but was turned down by order

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18 June 2016
of March 27, 1972. In the same order he was directed "to comply with the order of
this Court dated March 4, 1972 within ten (10) days from the receipt of copy of this
order, otherwise his arrest and confinement will be ordered by the Court." Resisting
the two orders, the China Banking Corporation and Tan Kim Liong instituted the
instant petition.
The pertinent provisions of Republic Act No. 1405 relied upon by the petitioners
reads:
Sec. 2.
All deposits of whatever nature with banks or banking institutions in
the Philippines including investments in bonds issued by the Government of the
Philippines, its political subdivisions and its instrumentalities, are hereby considered
as of absolutely confidential nature and may not be examined, inquired or looked
into by any person, government official, bureau or office, except upon written
permission of the depositor, or in cases of impeachment, or upon order of a
competent court in cases of bribery or dereliction of duty of public officials, or in
cases where the money deposited or invested is the subject matter of the litigation.
Sec 3. It shall be unlawful for any official or employee of a banking institution to
disclose to any person other than those mentioned in Section two hereof any
information concerning said deposits.
Sec. 5.
Any violation of this law will subject offender upon conviction, to an
imprisonment of not more than five years or a fine of not more than twenty
thousand pesos or both, in the discretion of the court.
The petitioners argue that the disclosure of the information required by the court
does not fall within any of the four (4) exceptions enumerated in Section 2, and that
if the questioned orders are complied with Tan Kim Liong may be criminally liable
under Section 5 and the bank exposed to a possible damage suit by B & B Forest
Development Corporation. Specifically referring to this case, the position of the
petitioners is that the bank deposit of judgment debtor B & B Forest Development
Corporation cannot be subject to garnishment to satisfy a final judgment against it
in view of the aforequoted provisions of law.
We do not view the situation in that light. The lower court did not order an
examination of or inquiry into the deposit of B & B Forest Development Corporation,
as contemplated in the law. It merely required Tan Kim Liong to inform the court
whether or not the defendant B & B Forest Development Corporation had a deposit
in the China Banking Corporation only for purposes of the garnishment issued by it,
so that the bank would hold the same intact and not allow any withdrawal until
further order. It will be noted from the discussion of the conference committee
report on Senate Bill No. 351 and House Bill No. 3977, which later became Republic
Act 1405, that it was not the intention of the lawmakers to place bank deposits
beyond the reach of execution to satisfy a final judgment. Thus:
Mr. MARCOS. Now, for purposes of the record, I should like the Chairman of the
Committee on Ways and Means to clarify this further. Suppose an individual has a
tax case. He is being held liable by the Bureau of Internal Revenue for, say,

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18 June 2016
P1,000.00 worth of tax liability, and because of this the deposit of this individual is
attached by the Bureau of Internal Revenue.
Mr. RAMOS. The attachment will only apply after the court has pronounced
sentence declaring the liability of such person. But where the primary aim is to
determine whether he has a bank deposit in order to bring about a proper
assessment by the Bureau of Internal Revenue, such inquiry is not authorized by
this proposed law.
Mr. MARCOS. But under our rules of procedure and under the Civil Code, the
attachment or garnishment of money deposited is allowed. Let us assume, for
instance, that there is a preliminary attachment which is for garnishment or for
holding liable all moneys deposited belonging to a certain individual, but such
attachment or garnishment will bring out into the open the value of such deposit. Is
that prohibited by this amendment or by this law?
Mr. RAMOS. It is only prohibited to the extent that the inquiry is limited, or rather,
the inquiry is made only for the purpose of satisfying a tax liability already declared
for the protection of the right in favor of the government; but when the object is
merely to inquire whether he has a deposit or not for purposes of taxation, then this
is fully covered by the law.
Mr. MARCOS. And it protects the depositor, does it not?
Mr. RAMOS. Yes, it protects the depositor.
Mr. MARCOS. The law prohibits a mere investigation into the existence and the
amount of the deposit.
Mr. RAMOS. Into the very nature of such deposit.
Mr. MARCOS. So I come to my original question. Therefore, preliminary garnishment
or attachment of the deposit is not allowed?
Mr. RAMOS. No, without judicial authorization.
Mr. MARCOS. I am glad that is clarified. So that the established rule of procedure as
well as the substantive law on the matter is amended?
Mr. RAMOS. Yes. That is the effect.
Mr. MARCOS. I see. Suppose there has been a decision, definitely establishing the
liability of an individual for taxation purposes and this judgment is sought to be
executed ... in the execution of that judgment, does this bill, or this proposed law, if
approved, allow the investigation or scrutiny of the bank deposit in order to execute
the judgment?
Mr. RAMOS. To satisfy a judgment which has become executory.

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18 June 2016
Mr. MARCOS. Yes, but, as I said before, suppose the tax liability is P1,000,000 and
the deposit is half a million, will this bill allow scrutiny into the deposit in order that
the judgment may be executed?
Mr. RAMOS. Merely to determine the amount of such money to satisfy that
obligation to the Government, but not to determine whether a deposit has been
made in evasion of taxes.
xxx

xxx

xxx

Mr. MACAPAGAL.
But let us suppose that in an ordinary civil action for the
recovery of a sum of money the plaintiff wishes to attach the properties of the
defendant to insure the satisfaction of the judgment. Once the judgment is
rendered, does the gentleman mean that the plaintiff cannot attach the bank
deposit of the defendant?
Mr. RAMOS. That was the question raised by the gentleman from Pangasinan to
which I replied that outside the very purpose of this law it could be reached by
attachment.
Mr. MACAPAGAL.

Therefore, in such ordinary civil cases it can be attached?

Mr. RAMOS. That is so.


(Vol. II, Congressional Record, House of Representatives, No. 12, pp. 3839-3840, July
27, 1955).
It is sufficiently clear from the foregoing discussion of the conference committee
report of the two houses of Congress that the prohibition against examination of or
inquiry into a bank deposit under Republic Act 1405 does not preclude its being
garnished to insure satisfaction of a judgment. Indeed there is no real inquiry in
such a case, and if the existence of the deposit is disclosed the disclosure is purely
incidental to the execution process. It is hard to conceive that it was ever within the
intention of Congress to enable debtors to evade payment of their just debts, even
if ordered by the Court, through the expedient of converting their assets into cash
and depositing the same in a bank.
WHEREFORE, the orders of the lower court dated March 4 and 27, 1972,
respectively, are hereby affirmed, with costs against the petitioners-appellants.

10.

G.R. No. L-37867 February 22, 1982

BOARD OF ADMINISTRATORS, PHILIPPINES VETERANS ADMINISTRATION,


petitioner,
vs.
HON. JOSE G. BAUTISTA, in his capacity as Presiding Judge of the CFI Manila,
Branch III, and CALIXTO V. GASILAO, respondents.
This is a petition to review on certiorari the decision of respondent Court of First
Instance of Manila, Branch III, rendered on October 25, 1973 in Civil Case No. 90450

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18 June 2016
for mandamus filed by Calixto V. Gasilao against the Board of Administrators of the
Philippine Veterans Administration.
The facts as found by the Court a quo to have been established by the pleadings
find by the parties are stated in the decision under review from which We quote the
following:
Calixto V. Gasilao, pauper litigant and petitioner in the above-entitled case, was a
veteran in good standing during World War II. On October 19, 1955, he filed a claim
for disability pension under Section 9, Republic Act No. 65. The claim was
disapproved by the Philippine Veterans Board (now Board of Administrators,
Philippine Veterans Administration).
Meanwhile, Republic Act 65 was amended by Republic Act 1362 on June 22, 1955 by
including as part of the benefit of P50.00, P10.00 a month for each of the unmarried
minor children below 18 of the veteran Republic Act No. 1362 was implemented by
the respondents only on July 1, 1955.
On June 18, 1957, Section 9 of Republic Act No. 65 was further amended by
Republic Act 1920 increasing the life pension of the veteran to P100.00 a month and
maintaining the P10.00 a month each for the unmarried minor children below 18.
Fortunately, on August 8, 1968, the claim of the petitioner which was disapproved in
December, 1955 was reconsidered and his claim was finally approved at the rate of
P100.00 a month, life pension, and the additional Pl0.00 for each of his ten
unmarried minor children below 18. In view of the approval of the claim of
petitioner, he requested respondents that his claim be made retroactive as of the
date when his original application was flied or disapproved in 1955. Respondents
did not act on his request.
On June 22, 1969, Section 9 of Republic Act No. 65 was amended by Republic Act
No. 5753 which increased the life pension of the veteran to P200.00 a month and
granted besides P30.00 a month for the wife and P30.00 a month each for his
unmarried minor children below 18. In view of the new law, respondents increased
the monthly pension of petitioner to P125.00 effective January 15, 1971 due to
insufficient funds to cover full implementation. His wife was given a monthly
pension of P7.50 until January 1, 1972 when Republic Act 5753 was fully
implemented.
Petitioner now claims that he was deprived of his right to the pension from October
19, 1955 to June 21, 1957 at the rate of P50.00 per month plus P10.00 a month
each for his six (6) unmarried minor children below 18. lie also alleges that from
June 22, 1957 to August 7, 1968 he is entitled to the difference of P100.00 per
month plus P10.00 a month each for his seven (7) unmarried nor children below 18.
Again, petitioner asserts the difference of P100.00 per month, plus P30.00 a month
for his wife and the difference of P20.00 a month each for his four (4) unmarried
minor children below 18 from June 22, 1969 up to January 14, 1971 and finally, the
difference of P75.00 per month plus P30.00 a month for his wife and the difference
of P20.00 a month for his three (3) unmarried minor children below 18 from January
15, 1971 to December 31, 1971. 1

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According to the records, the parties, through their respective counsels, filed on
September 24, 1973 the following stipulation of facts in the lower Court:
STIPULATION OF FACTS
COME NOW the parties thru their respective counsel, and unto this Honorable Court,
respectfully state that they agree on the following facts which may be considered as
proved without the need of the introduction of any evidence thereon, to wit:
1.
Petitioner was a veteran in good standing during the last World War that took
active participation in the liberation drive against the enemy, and due to his military
service, he was rendered disabled.
2.
The Philippine Veterans Administration, formerly the Philippine Veterans
Board, (now Philippine Veterans Affairs Office) is an agency of the Government
charged with the administration of different laws giving various benefits in favor of
veterans and their orphans/or widows and parents; that it has the power to adopt
rules and regulations to implement said laws and to pass upon the merits and
qualifications of persons applying for rights and privileges extended by this Act
pursuant to such rules and regulations as it may adopt to insure the speedy and
honest fulfillment of its aims and purposes.
3. On July 23, 1955, petitioner filed a claim (Claim No. Dis-12336) for disability
pension under Section 9 of RA 65, with the Philippine Veterans Board (later
succeeded by the Philippine Veterans Administration, now Philippine Veterans
Affairs Office), alleging that he was suffering from PTB, which he incurred in line of
duty.
4. Due to petitioner's failure to complete his supporting papers and submit evidence
to establish his service connected illness, his claim was disapproved by the Board of
the defunct Philippine Veterans Board on December 18, 1955.
5. On August 8, 1968, petitioner was able to complete his supporting papers and,
after due investigation and processing, the Board of Administrators found out that
his disability was 100% thus he was awarded the full benefits of section 9 of RA 65,
and was therefore given a pension of P100.00 a month and with an additional P
10.00 a month for each of his unmarried minor children pursuant to RA 1920,
amending section 9 of RA 65.
6. RA 5753 was approved on June 22, 1969, providing for an increase in the basic
pension to P200.00 a month and the additional pension, to P30.00 a month for the
wife and each of the unmarried minor children. Petitioner's monthly pension was,
however, increased only on January 15, 1971, and by 25% of the increases provided
by law, due to the fact that it was only on said date that funds were released for the
purpose, and the amount so released was only sufficient to pay only 25% of the
increase.
7. On January 15, 1972, more funds were released to implement fully RA 5753 and
snow payment in full of the benefits thereunder from said date.

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18 June 2016
WHEREFORE, it is respectfully prayed that a decision be rendered in accordance
with the foregoing stipulation of facts. It is likewise prayed that the parties be
granted a period of (15) days within which to file their memoranda. 2
Upon consideration of the foregoing and the Memoranda filed by the parties, the
lower Court rendered judgment against therein respondent Board of Administrators,
the dispositive portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered for petitioner and
the respondents are ordered to make petitioner's pension effective as of December
18, 1955 at the rate of P50.00 per month; and the rate increased to P100.00 per
month plus P10.00 per month each for his ten unmarried minor children below 18
years of age from June 22, 1957 up to August 7..1968; to pay the difference of
P100.00 per month plus P30.00 per month and P20.00 per month each for his ten
unmarried children below 18 years of age from June 22, 1969 up to January 15,
1971, the difference of P75.00 per month plus P22.50 per month for his wife and
P20.00 per month each for his unmarried nor children then below 18 years of age
from January 16, 1971 up to December 31, 1971.
SO ORDERED.
Manila, October 25, 1973. 3
In its Petition before this Court, the Board of Administrators of the Philippine
Veterans Administration, through the Office of the Solicitor General, challenges the
abovementioned decision of the Court a quo on the following grounds:
1.
The lower Court erred in ordering the petitioners to retroact the effectivity of
their award to respondent Calixto V. Gasilao of full benefits under section 9 of RA 65
to December 18, 1955, the date when his application was disapproved due to dis
failure to complete his supporting papers and submit evidence to establish his
service connected illness, and not August 8, 1968, the date when he was able to
complete his papers and allow processing and approval of his application.
2. The lower Court erred in ordering payment of claims which had prescribed.
3. The lower Court erred in allowing payment of claims under a law for which no
funds had been released. 4
The question raised under the first assigned error is: When should private
respondent Gasilao's pension benefits start
The lower Court, quoting excerpts from Our decision in Begosa vs. Chairman
Philippine Veterans Administration, 5 ruled that Gasilao's pension benefits should
retroact to the date of the disapproval of his claim on December 18, 1955, and not
commence from the approval thereon on August 8, 1968 as contended by the Board
of Administrators.

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18 June 2016
Petitioner maintains the stand that the facts of the Begosa case are not similar to
those of the case at bar to warrant an application of the ruling therein on the
retroactivity of a pension award to the date of prior disapproval of the claim. In the
Begosa case, the Supreme Court speaking thru then Associate Justice, now Chief
Justice Fernando, affirmed the decision of the lower Court, and ruled in part as
follows:
From the facts just set out, it will be noted that plaintiff filed his said claim for
disability pension as far back as March 4, 1955; that it was erroneously disapproved
on June 21, 1955, because his dishonorable discharge from the Army was not a
good or proper ground for the said disapproval and that on reconsideration asked
for by him on November 1, 1957, which he continued to follow up, the Board of
Administrators, Philippine Veterans Administration, composed of herein defendants,
which took over the duties of the Philippine Veterans Board, finally approved his
claim on September 2, 1964, at the rate of P30.00 a month. 6
Had it not been for the said error, it appears that there was no good ground to deny
the said claim, so that the latter was valid and meritorious even as of the date of its
filing on March 4, 1955, hence to make the same effective only as of the date of its
approval on September 2, 1964 according to defendant's stand would be
greatly unfair and prejudicial to plaintiff. 7
In other words, the favorable award which claimant Begosa finally obtained on
September 2, 1964 was made to retroact to the date of prior disapproval of the
claim on June 2, 1955 for the reason that such disapproval was erroneously made.
In the instant case, on the other hand, the herein claim of respondent Gasilao was
denied on December 18, 1955 because of his "failure to complete his supporting
papers and submit evidence to establish his service-connected illness" (Stipulation
of Facts, Par. 4, ante). Nonetheless, the Stipulation of Facts admitted in par. 1 that
"Petitioner was a veteran in good standing during the last World War that took
active participation in the liberation drive against the enemy, and due to his military
service, he was rendered disabled." From this admission in par. 1, it can reasonably
be deduced that the action on the claim of Gasilao was merely suspended by the
Philippine Veterans Administration pending the completion of the required
supporting papers and evidence to establish his service-connected illness. Hence,
Our ruling in the Begosa case making retroactive the award in favor of the veteran
still holds.
Republic Act No. 65 otherwise known as the Veterans' Bill of Rights, as amended,
does not explicitly provide for the effectivity of pension awards. However, petitioner
seeks to remedy this legislative deficiency by citing Section 15 of the law which in
part reads as follows:
Sec. 15. Any person who desires to take advantage of the rights and privileges
provided for in this Act should file his application with the Board ...
Petitioner contends that since the foregoing section impliedly requires that the
application filed should first be approved by the Board of Administrators before the

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18 June 2016
claimant could receive his pension, therefore, an award of pension benefits should
commence form the date of he approval of the application.
This stand of the petitioner does not appear to be in consonance with the spirit and
intent of the law, considering that Republic Act 65 is a veteran pension law which
must be accorded a liberal construction and interpretation in order to favor those
entitled to the rights, privileges and benefits granted thereunder, among which are
the right to resume old positions in the government, educational benefits, the
privilege to take promotional examinations, a life pension for the incapacitated,
pensions for widow and children, hospitalization and medical care benefits.
As it is generally known, the purpose of Congress in granting veteran pensions is to
compensate, as far as may be, a class of men who suffered in the service for the
hardships they endured and the dangers they encountered, 8 and more particularly,
those who have become incapacitated for work owing to sickness, disease or
injuries sustained while in line of duty. 9 A veteran pension law is, therefore, a
governmental expression of gratitude to and recognition of those who rendered
service for the country, especially during times of war or revolution, by extending to
them regular monetary aid. For this reason, it is the general rule that a liberal
construction is given to pension statutes in favor of those entitled to pension. Courts
tend to favor the pensioner, but such constructional preference is to be considered
with other guides to interpretation, and a construction of pension laws must depend
on its own particular language. 10
Significantly, the original text of RA 65 provided that:
Sec. 6. It also shall be the duty of the Board (then the Philippine Veterans Board) to
pass upon the merits and qualifications of persons applying for the rights and/or
privileges extended by this Act, pursuant to such rules as it may adopt to insure the
speedy and honest fulfillment of its aims and purposes. (Emphasis supplied.)
The foregoing provision clearly makes it incumbent upon the implementing Board to
carry out the provisions of the statute in the most expeditious way possible and
without unnecessary delay. In the Begosa case, it took nine years (from June 2, 1955
to September 2, 1964) before the claimant finally obtained his pension grant,
whereas in the instant case, it took about twelve years (from December, 1955 to
August 8, 1968) for respondent Gasilao to receive his pension claim. To Our mind, it
would be more in consonance with the spirit and intentment of the law that the
benefits therein granted be received and enjoyed at the earliest possible time by
according retroactive effect to the grant of the pension award as We have done in
the Begosa case.
On the other hand, if the pension awards are made effective only upon approval of
the corresponding application which would be dependent on the discretion of the
Board of Administrators which as noted above had been abused through inaction
extending to nine years, even to twelve years, the noble and humanitarian purposes
for which the law had enacted could easily be thwarted or defeated.
On the issue of prescription, petitioner cites Article 1144 of the Civil Code which
provides:

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18 June 2016
Art. 1144. The following actions must be brought within ten years from the time the
right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law; and
(3) Upon a judgment.
Petitioner now contends that since the action was filed in the lower Court on April
13, 1973 seeking the payment of alleged claims which have accrued more than ten
(10) years prior to said date, the same should have been disallowed as to the
prescribed claims.
The obligation of the government to pay pension was created by law (Sec. 9, R.A.
65). Hence, the ten-year prescriptive period should be counted from the date of
passage of the law which is September 25, 1946, the reason being that it is only
from said date that private respondent could have filed his application. Taking
September 25, 1946 as the point of reference, the actual filing of Gasilao's
application on July 23, 1955 was clearly made within and effectively interrupted the
prescriptive period. It is not the date of the commencement of the action in the
lower Court which should be reckoned with, for it was not on said date that Gasilao
first sought to claim his pension benefits, but on July 23, 1955 when he filed his
application with the defunct Philippine Veterans Board. As We had the occasion to
state in the case of Vda. de Nator vs. C.I.R., 11 "the basis of prescription is the
unwarranted failure to bring the matter to the attention of those who are by law
authorized to take cognizance thereof."
The Stipulation of Facts do not show and neither do the records indicate when
Gasilao attempted to reinstate his claim after the same was disapproved on
December 18, 1955. What is evident is that he did take steps to reinstate his claim
because on August 8, 1968, herein petitioner finally approved his application. We
find it more logical to presume that upon being properly notified of the disapproval
of his application and the reasons therefor, Gasilao, being the interested party that
he was proceeded to work for the completion of the requirements of the Board, as in
fact he was successful in meeting such requirements. There is nothing in the record
to show intentional abandonment of the claim to as to make the prescriptive period
continue to run again.
The third ground relied upon in support of this Petition involves the issue as to
whether or not the payment of increased pension provided in the amendatory Act,
R.A. 5753, could be ordered, even where there was no actual release of funds for
the purpose, although the law itself expressly provided for an appropriation. In the
case of Board of Adminitrators, Philippine Veterans Administration vs. Hon. Agcoili,
et al., 12 penned by Chief Justice Fred Ruiz Castro, the same issue was treated in
this wise:
... The inability of the petitioner to pay Abrera the differential of P60.00 in monthly
pension is attributed by it, in its own words, "to the failure of Congress to

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18 June 2016
appropriate the necessary funds to cover all claims for benefits, pensions and
allowances." And the petitioner states that it has "no alternative but to suspend (full
implementation of said laws until such time, as sufficient funds have been
appropriated by Congress" to cover the total amount of all approved claims.
We find the explanation of the petitioner satisfactory, but we nevertheless hold that
as a matter of law Abrera is entitled to a monthly pension of P120.00 from January
1, 1972 when Republic Act 5753 was implemented up to the present, if his physical
disability rating has continued and continues to be 60%. Payment to him of what is
due him from January 1, 1972 must however remain subject to the availability of
Government funds duly set aside for the purpose and subject further periodic rerating of his physical disability.
But even if we have thus defined the precise terms, nature and scope of the
entitlement of the respondent Abrera, for the guidance of petitioner, we
nevertheless refrain from ordering the petitioner to pay the amount of P120.00 per
month from January 1, 1972 that is due to the respondent by virtue of the mandate
of section 9 of Republic Act 65, as amended by Republic Act 5753, because the
Government has thus far not provided the necessary funds to pay all valid claims
duly approved under the authority of said statute.
ACCORDINGLY, the judgment of the Court a quo is hereby modified to read as
follows:
WHEREFORE, premises considered, the Board of Administrators of the Philippine
Veterans Administration (now the Philippine Veterans Affairs Office) is hereby
ordered to make Gasilao's pension effective December 18, 1955 at the rate of P5000 per month plus P10.00 per month for each of his then unmarried minor children
below 18, and the former amount increased to P100.00 from June 22, 1957 to
August 7, 1968.
The differentials in pension to which said Gasilao, his wife and his unmarried minor
children below 18 are entitled for the period from June 22, 1969 to January 14, 1972
by virtue of Republic Act No. 5753 are hereby declared subject to the availability of
Government funds appropriated for the purpose.
SO ORDERED.

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