Quijano vs. Development Bank of the Phil.

FACTS:

II. That the petitioners' urban real estate loan was approved per RFC Board Resolution No. 2533 on April 30, 1953;

Appellants' applied for an urban real estate loan which was approved by appellee bank on April 30, 1953. they
executed the mortgage contract on March 23, 1954 , and that the release of the amount of the said loan of P19,500.00
was to be made in installments subject to certain conditions. That the loan obtained from DBP is to be received in
several releases and to be paid later in installments, under the terms and conditions specified in the loan agreement.
That the first release of P4,200 was made on April 29, 1954, and the other releases were made subsequent thereafter,
then the balance of the loan were all availed of and received by him later than June, 1953. Rodriguez paid the
installments as they fell due. When a balance of about P14,000.00 remained unpaid, quijano offered to pay for the said
outstanding balance with his back pay certificate pursuant to Republic Act. No. 897, The Amendatory Act of June 20,
1953.The Bank refused to accept the said tender of payment in certificate on the ground that the loan was not incurred
before on June 20, 1953.

III. That the mortgage contract was executed by the petitioners in favor of the respondent-bank on March 23, 1954;

ISSUE:
Whether or not the obligation of the petitioners was subsisting at the time of the approval of Republic Act No. 897, the
Amendatory Act of June 20, 1953 to Republic Act 304.Whether or not there is a room for interpretation or construction.
HELD:
Thus even before the amendment of the Back Pay Law, when said law limited the applicability of back pay certificates to
"obligations subsisting at the time of the approval of this Act," this Court has ruled that obligations contracted after its
enactment on June 18, 1948 cannot come within its purview. WHEREFORE, the judgment of the trial court is affirmed.
No costs.
Stat. Con.:
Clear and unambiguous provisions of law offer no room for interpretation or construction. TheSupreme Court has
steadfastly adhered to the doctrine that its first and fundamental duty is theapplication of the law according to its express
terms, interpretation being called for only whensuch literal application is impossible. No process
of interpretation or construction need beresorted to where a provision of law peremptorily calls for application. Where a
requirement or condition is made in explicit and unambiguous terms, no discretion is left to the judiciary
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>
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-26419 October 16, 1970
GEDEON G. QUIJANO and EUGENIA T. QUIJANO, petitioners-appellants,
vs.
THE DEVELOPMENT BANK OF THE PHILIPPINES and THE EX-OFICIO SHERIFF OF MISAMIS OCCIDENTAL,
respondents-appellees.
J. Alaric P. Acosta for petitioners-appellant.
Esperanza Valenzoga for respondents-appellees.
BARREDO, J.:.
Appeal from the decision of the Court of First Instance of Misamis Occidental in its Special Civil Case No. 2519,
dismissing the petition for mandamus with prayer for a writ of preliminary injunction filed therein by the herein
petitioners-appellants Gedeon G. Quijano and Eugenio T. Quijano to compel the herein respondent-appellee
Development Bank of the Philippines to accept said petitioners-appellants' back pay certificate payment of their loan
from the said appellee Bank, and to restrain the herein respondent-appellee ex-oficio sheriff of the province of Misamis
Occidental from proceeding with the scheduled foreclosure sale of the real properties the above-named appellant
spouses had mortgaged with the Development Bank of the Philippines to secure the loan aforementioned.
The said appealed decision was based on the following:
STIPULATION OF FACTS.
The undersigned parties, thru counsels, hereby submit the foregoing stipulation of facts, to wit:
I. That the petitioners filed an application for an urban estate loan with the Rehabilitation Finance Corporation (RFC),
predecessor-in-interest of the herein respondent-bank, in the amount of P19,500.00;

IV. That the said loan of P19,500.00 was to be received by the petitioners in several releases, subject among others, to
the following conditions:.
"(1) That the amount of P4,200.00 shall be released only after:.
"(a) the execution and registration of the mortgage contract;
"(b) the presentation of a duly approved building permit;
"(c) the construction has been started and the value of the work done amounted to P6,500.00;.
"(d) the submission of the certificate of title covering Psu-136173, free form any encumbrance and
"(e) the submission of evidence showing full payment of current estate taxes;
(2) That the subsequent releases shall not be more than 100% of the value of the construction completed in excess of
P6,500.00; that all releases shall be made against the payroll of workers engaged in the project, receipts of all materials
used and that there are no unpaid labor or unpaid materials;
(3) That a sufficient amount may be withheld until the building is completed and painted and found in accordance with
the plans and specifications submitted;
(4) That the amount of insurance of the building, when completed, shall not be less than P18,000.00, which shall be
secured by the mortgagee, in accordance with its Board Resolution No. 3395, series of 1947;
(5) That the construction and painting of the building shall be completed within 120 days from the date of the mortgage
contract;
(6) That the release of this loan is subject to the availability of funds;
(7) That the lien appearing on the face of the title shall be cancelled, otherwise, Luciana Jimenez shall sign as comortgagor; that this mortgage contract was registered on March 23, 1954 with the Register of Deeds of Misamis
Occidental at Oroquieta;
"V. That the first release of P4,200 was made on April 29, 1954, and the other releases were made subsequent
thereafter;
"VI. That as of July 31, 1965, the outstanding obligation of the petitioners with the respondent-bank, including interests,
was P13,983.59;
"VII. That on July 27, 1965, petitioner Gedeon Quijano, as holder of Acknowledgment No. 10181, wrote the respondentbank in Manila offering to pay in the amount of P14,000.00 for his outstanding obligation with the respondent-bank, out
of the proceeds of his back pay pursuant to Republic Act No. 897;
"VIII. That the respondent-bank, thru its Ozamis Branch advised the petitioners of the non-acceptance of his offer on the
ground that the loan was not incurred before or subsisting on June 20, 1953 when Republic Act 897 was approved;
"IX. That the respondent-bank, thru its Ozamis City Branch, filed on October 14, 1965, an application for the foreclosure
of real estate mortgage executed by the petitioners, and that acting on the application of the respondent-bank, the
Provincial Sheriff, thru his deputies, scheduled the public auction sale for January 18, 1966, after advising petitioner
Gedeon Quijano of the application for foreclosure filed by the respondent-bank;
"X. That the parties herein agree to transfer the auction sale scheduled for January 16, 1966 to February 18, 1966,
without the necessity of republication of the notice of sale."
Upon these facts and the submission of the parties that the only issue is whether or not the obligation of the petitioners
was subsisting at the time of the approval of Republic Act No. 897, the Amendatory Act of June 20, 1953 to Republic Act
304, the original back pay law, the trial court dismissed the petition, as already stated, and directed respondent sheriff to
proceed and continue with the public auction sale of the property mortgaged in accordance with the foreclosure
application of respondent Development Bank of the Philippines after due notice to petitioners. In their appeal,
petitioners' sole assignment of error is that: "The trial court erred in declaring that the loan of the petitioners-appellants
was not subsisting when Republic Act No. 897 was enacted on June 20, 1953."

The appeal has no merit.

The pertinent portions of the controlling provisions of the aforementioned Back Pay Law, as amended by Republic Act
No. 897 on June 20, 1953,1 read as follows:.
SEC. 2. The Treasurer of the Philippines shall, upon application of all persons specified in section one hereof and within
one year from the approval of this Amendatory Act, and under such rules and regulations as may be promulgated by the
Secretary of Finance, acknowledge and file requests for the recognition of the right to the Salaries and wages as
provided in section one hereof and notice of such acknowledgment shall be issued to the applicant which shall state the
total amount of such salaries or wages due the applicant, and certify that it shall be redeemed by the Government of the
Philippines within ten years from the date of their issuance without interests: Provided, That upon application and
subject to such rules and regulations as may be approved by the Secretary of Finance a certificate of indebtedness may
be issued by the Treasurer of the Philippines covering the whole or a part of the total salaries and wages the right to
which has been duly acknowledged and recognized, provided that the face value of such certificate of indebtedness
shall not exceed the amount that the applicant may need for the payment of (1) obligations subsisting at the time of the
approval of this Amendatory Act for which the applicant may directly be liable to the government or to any of its
branches or instrumentalities, or the corporations owned or controlled by the Government, or to any citizen of the
Philippines, or to any association or corporation organized under the laws of the Philippines, who may be willing to
accept the same for such settlement; ...
It is indeed settled that under the above provisions, the Government or any of its agencies does not have any discretion
in the acceptance of back pay certificates, 2 when they are used by the applicants or original holders themselves for the
settlement of any of the obligations or liabilities specifically enumerated in the law. 3 It is equally clear, however, that the
same provisions expressly require that the obligations for which certificates of indebtedness may be accepted as
payments of must be subsisting at the time of the approval of Republic Act No. 897; hence when, as in the instant
case, such back pay certificates are offered in payment to a government-owned corporation of an obligation thereto
which was not subsisting at the time of the enactment of said amendatory Act on June 20, 1953, which corporation may
not, legally be compelled to accept the certificates.
It is true that appellants' application for an urban real estate loan was approved by appellee bank on April 30, 1953. It
appears, however, that appellants did not avail of it until much later, as in fact, they executed the mortgage contract only
on March 23, 1954, and furthermore, that the release of the amount of the said loan of P19,500.00 was to be made in
installments and subject to compliance with certain conditions by said appellants. Under these circumstances, Our ruling
in the case of Rodriguez vs. Development Bank of the Philippines 4 is controlling.
In that case, Rodriguez obtained a loan from the said Development Bank of the Philippines to be received by him in
several releases and to be paid later in installments, under the terms and conditions specified in the loan agreement.
Pursuant to said agreement, Rodriguez received the first release in the sum of P5,000.00 on May 27, 1953, while the
subsequent releases covering the P9,000.00 balance of the loan were all availed of and received by him later than
June, 1953. Later, Rodriguez paid the installments as they fell due. When a balance of about P10,000.00 remained
unpaid, Rodriguez offered to pay the said outstanding balance of the loan with his back pay certificate. The Bank
refused at first to accept the said tender of payment in certificate, and when it accepted the same later, it limited its
acceptance only to the amount of P5,000.00 representing the portion of the loan released before the passage of
Republic Act No. 897, although the amount of the back pay certificate offered by Rodriguez was more than sufficient to
cover the total unpaid balance of the loan. So, Rodriguez instituted an action for mandamus in the Court of First
Instance of Davao to compel the Bank to accept his back pay certificate in payment of his whole outstanding obligation
or, in other words, even for the portions of the loan corresponding to the releases made after June 20, 1953. This action
was dismissed by the trial court and upon appeal to this Court, the dismissal was affirmed upon the following rationale:.
It can not be said that appellant became indebted to the Bank for the total amount of P14,000.00 from the date of the
agreement. The releases of the balance of the agreed loan were made dependent on certain conditions (see additional
conditions mentioned in paragraph 4 of the stipulation of facts, supra) among which is the availability of funds. Noncompliance with any of these conditions will not entitle the appellant to the release of the balance of the agreed loan and
conversely, will not entitle the bank to hold the appellant liable for the unreleased amounts. Consequently, we hold, as
did the trial court, that:.
"... the amounts released in July, 1953 and thereafter cannot be considered as obligations subsisting in June, 1953. The
defendant may be compelled to accept a back pay certificate in payment of obligations subsisting when the Amendatory
Act was approved (Sec. 2, Republic Act 897).t.hqw Republic Act 897 was approved on June 20, 1953. The
defendant may not be compelled to accept plaintiff's back pay certificate in payment of the amounts released after June
20, 1953."

The case of Sabelino v. RFC (G.R. No. L-11790, Sept. 30, 1958) relied upon by appellant is irrelevant, as the mortgage
indebtedness sought to be paid with appellee's back pay certificate therein, appears to have subsisted prior to the
approval of Republic Act No. 897. ...
Herein appellants' situation is even worse than that of Rodriguez. Here appellants actually availed of their approved loan
only about nine (9) months after the enactment of Republic Act 897 and the corresponding releases thereof were
received by appellants only after the execution of the mortgage contract on March 23, 1954. Undoubtedly,
notwithstanding the approval by the appellee Development Bank of the Philippines (RFC) of appellants' loan application
on April 30, 1953, appellants did not thereby incur any obligation to pay the same; only after the corresponding amounts
were released to appellants after March 23, 1954 did such obligation attach; and it cannot, therefore, be said that the
said loan was an obligation subsisting at the time of the approval of Republic Act No. 897 on June 20, 1953.
It may be truly said, as contended by appellants, that when their application for the loan was approved by the appellee
Bank on April 30, 1953, an agreement was perfected between them and said Bank, but it should be noted that under
such agreement the only enforceable obligation that was created was that of the Bank to grant the loan applied for,
whereas the obligation of appellants to pay the same could not have arisen until after the amount of the loan has been
actually released to them; and said release was even subject to their compliance with certain conditions specified in the
mortgage contract executed after the approval already of Republic Act 897. Appellants' appeal that a more liberal
construction of the law would enable "many crippled or disabled veterans, or their wives and orphans, or those who had
in one way or another unselfishly sacrificed or contributed to the cause of the last war" to take advantage of their back
pay certificates, does deserve sympathy, for indeed, among the avowed purposes of the said law are: "First, to serve as
a source of financial aid to needy veterans, like crippled or disabled veterans, and to their wives and orphans. Secondly,
to give recognition to the sacrifices of those who joined the last war, and particularly to those who have given their all for
the cause of the last war." (Congressional Record No. 61, 2nd Congress, 4th Regular Session, May 6, 1953, page 74,
as quoted in Florentino, et al. vs. PNB, 98 Phil. 959, 961-963).t.hqw On the other hand, however, We cannot see
any room for interpretation or construction in the clear and unambiguous language of the above-quoted provision of law.
This Court has steadfastly adhered to the doctrine that its first and fundamental duty is the application of the law
according to its express terms, interpretation being called for only when such literal application is
impossible.5 No process of interpretation or construction need be resorted to here a provision of law peremptorily calls
for application. Where a requirement or condition is made in explicit and unambiguous terms, no discretion is left
to the judiciary. It must see to it that its mandate is obeyed. 6 Thus, even before the amendment of the Back Pay Law,
when said law limited the applicability of back pay certificates to "obligations subsisting at the time of the approval of this
Act," this Court has ruled that obligations contracted after its enactment on June 18, 1948 cannot come within its
purview.
Since the debt of appellants was contracted on November 24, 1948, they could not validly seek to discharge it by
application of their back pay certificate under Republic Act 304, on June 18, 1948, because that Act, in terms, limited
any such application to "obligations subsisting at the time of the approval of this Act". (Sec. 2)7
WHEREFORE, the judgment of the trial court is affirmed. No costs.
# Footnotes.
1 On June 22, 1957, the law was further amended by Republic Act 1853 to read, among others, and so far as pertinent
to this case as follows:
"(1) obligations subsisting at the time of the approval of this amendatory act for which the applicant may directly be liable
to the Government or to any of its branches and instrumentalities, or the corporations owned or controlled by the
Government, the provisions of their charters, articles of incorporation, by-laws or rules and regulations to the contrary
notwithstanding, or to any citizen of the Philippines, or to any association or corporation organized under the laws of the
Philippines, who may be willing to accept the same for such settlement;
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>
REPUBLIC FLOUR MILLS INC. VS. THE COMMISSIONER OF CUSTOMS and THE COURTOF TAX APPEALS, G.R.
No. L-28463, May 31, 1971
FACTS:
From December 1963 to July 1964, Republic Flour Mills (petitioner) exported Pollard and/or bran which was
loaded from lighters alongside vessels engaged in foreign trade while anchored near the breakwater. The
Commissioner of Customs and The Court of Tax Appeals(respondent) assessed the petitioner by way of wharf
age dues on the said exportations in the sum of P7,948.00, which assessment was paid by petitioner under protest.
In this case, Republic Flour Mills, Inc. would want the Court to interpret the words products of the Philippines
found in Section 2802 of the Tariff and Custom Code, as excluding bran (ipa) and pollard (darak) on the ground that,
coming as they do from wheat grain which is imported in the Philippines, they are merely waste from the production
of flour. Another main argument of the petitioner is that no government or private wharves or government facilities
were utilized in exporting such products. In that way, it would not be liable at all for the wharf age dues assessed
under such section by respondent Commission of
Customs.On the other hand, the stand of respondent Commissioner of Customs was that petitioner was liable for
wharfage dues upon receipt or discharge of the exported goods by a vessel engaged in foreign trade

regardless of the non-use of government-owned or private wharves. Respondent Court of Tax Appeals sustained
the action taken by the Commissioner of Customs under the appropriate provision of the Tariff and Customs Code.
ISSUE:
Whether or not such collection of wharfage dues was in accordance with law
RULING/HELD:
As stated on the Section 2802 of the Tariff and Custom Code, "There shall be levied, collected and paid on all articles
imported or brought into the Philippines, and on products of the Philippines exported from the Philippines, a charge of
two pesos per gross metric ton as a fee
or wharfage." appears to be quite precise. Section 2802 refers to what is imported and exported.The objective of this
act must be carried out. Even if there is doubt to the meaning of the language employed, the interpretation should
not be at war with the end sought to be attained. If petitioner were to prevail, subsequent pleas motivated by the
same desire to be excluded from the operation of the Tariff and Customs Code would likewise be entitled to sympathetic
consideration. It was desirable then that the gates to such efforts at unjustified restriction of the coverage of the Act are
kept closed. Otherwise, the end result would be not respect for, but defiance of, a clear legislative mandate.The decision
of respondent Court of Tax Appeals of November 27, 1967 is affirmed with costs against petitioner.
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>
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-28463 May 31, 1971
REPUBLIC FLOUR MILLS INC., petitioner,
vs.
THE COMMISSIONER OF CUSTOMS and THE COURT OF TAX APPEALS, respondents.
Agrava & Agrava for petitioner.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Pacifico P. de Castro and Solicitor
Santiago M. Kapunan for respondents.
FERNANDO, J.:
It is a novel question that this petition for the review of a decision of respondent Court of Tax Appeals presents.
Petitioner Republic Flour Mills, Inc. would have this Court construe the words "products of the Philippines" found in
Section 2802 of the Tariff and Custom Code 1 as excluding bran (ipa) and pollard (darak) on the ground that, coming as
they do from wheat grain which is imported in the Philippines, they are merely waste and not the products, which is the
flour produced. 2 That way, it would not be liable at all for the wharfage dues assessed under such section by respondent
Commission of Customs. It elevated the matter to respondent Court, as the construction it would place on the aforesaid
section appears too strained and far remote from the ordinary meaning of the text, not to mention the policy of the Act.
We affirm.
In the decision of respondent Court now sought to be reviewed, after stating that what was before it was an appeal from
a decision of the Commissioner of Customs holding petitioner liable for the sum of P7,948.00 as wharfage due the facts
were set forth as follows: "Petitioner, Republic Flour Mills, Inc., is a domestic corporation, primarily engaged in the
manufacture of wheat flour, and produces pollard (darak) and bran (ipa) in the process of milling. During the period from
December, 1963 to July, 1964, inclusive, petitioner exported Pollard and/or bran which was loaded from lighters
alongside vessels engaged in foreign trade while anchored near the breakwater The respondent assessed the
petitioner by way of wharfage dues on the said exportations in the sum of P7,948.00, which assessment was paid by
petitioner under protest." 3 The only issue, in the opinion of respondent Court, is whether or not such collection of
wharfage dues was in accordance with law. The main contention before respondent Court of petitioner was "that
inasmuch as no government or private wharves or government facilities [were] utilized in exporting the pollard
and/or bran, the collection of wharfage dues is contrary to law." 4 On the other hand, the stand of respondent
Commissioner of Customs was that petitioner was liable for wharfage dues "upon receipt or discharge of the
exported goods by a vessel engaged in foreign trade regardless of the non-use of government-owned or private
wharves." 5 Respondent Court of Tax Appeals sustained the action taken by the Commissioner of Customs under
the appropriate provision of the Tariff and Customs Code, relying on our decision in Procter & Gamble Phil.
Manufacturing Corp. v. Commissioner of Customs. 6 It did not feel called upon to answer the question now before us as,
in its opinion, petitioner only called its attention to it for the first time in its memorandum.
Hence, this petition for review. The sole error assigned by petitioner is that it should not, under its construction of the
Act, be liable for wharfage dues on its exportation of bran and pollard as they are not "products of the Philippines",
coming as they did from wheat grain which were imported from abroad, and being "merely parts of the wheat grain
milled by Petitioner to produce flour which had become waste." 7 We find, to repeat, such contention unpersuasive and
affirm the decision of respondent Court of Tax Appeals.

1. The language of Section 2802 appears to be quite explicit: "There shall be levied, collected and paid on all
articles imported or brought into the Philippines, and on products of the Philippines ... exported from the
Philippines, a charge of two pesos per gross metric ton as a fee for wharfage ...." One category refers to what is
imported. The other mentions products of the Philippines that are exported. Even without undue scrutiny, it does appear
quite obvious that as long as the goods are produced in the country, they fall within the terms of the above section.
Petitioner appeared to have entertained such a nation. In its petition for review before respondent Court, it categorically
asserted: "Petitioner is primarily engaged in the manufacture of flour from wheat grain. In the process of milling the
wheat grain into flour, petitioner also produces 'bran' and 'pollard' which it exports abroad." 8 It does take a certain
amount of hair-splitting to exclude from its operation what petitioner calls "waste" resulting from the production of
flour processed from the wheat grain in petitioner's flour mills in the Philippines. It is always timely to remember that, as
stressed by Justice Moreland: "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." 9 Petitioner ought to have been aware that deference to such a doctrine precludes an
affirmative response to its contention. The law is clear; it must be obeyed. It is as simple, as that. 10
2. There is need of confining familiar language of a statute to its usual signification. While statutory construction involves
the exercise of choice, the temptation to roam at will and rely on one's predilections as to what policy should prevail is to
be resisted. The search must be for a reasonable interpretation. It is best to keep in mind the reminder from Holmes that
"there is no canon against using common sense in construing laws as saying what obviously means." 11 To paraphrase
Frankfurter, interpolation must be eschewed but evisceration avoided. Certainly, the utmost effort should be exerted lest
the interpretation arrived at does violence to the statutory language in its total context. It would be then to ignore what
has been stressed time and time again as to limits of judicial freedom in the construction of statutes to accept their view
advanced by petitioner.
3. Then, again, there is the fundamental postulate in statutory construction requiring fidelity to the legislative purpose.
What Congress intended is not to be frustrates. Its objective must be carried out. Even if there be doubt as to the
meaning of the language employed, the interpretation should not be at war with the end sought to be attained.
No undue reflection is needed to show that if through an ingenious argument, the scope of a statute may be contracted,
the probability that other exceptions may be thought of is not remote. If petitioner were to prevail, subsequent pleas
motivated by the same desire to be excluded from the operation of the Tariff and Customs Code would likewise be
entitled to sympathetic consideration. It is desirable then that the gates to such efforts at undue restriction of the
coverage of the Act be kept closed. Otherwise, the end result would be not respect for, but defiance of, a clear
legislative mandate. That kind of approach in statutory construction has never recommended itself. It does not now. 12
WHEREFORE, the decision of respondent Court of Tax Appeals of November 27, 1967 is affirmed. With costs against
petitioner.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Villamor and Makasiar, JJ., concur.
Castro, Teehankee and Barredo, JJ., took no part.
Footnotes
1 Section 2802 of the Tariff and Customs Code (1957) reads in full "Schedule of Dues. There shall be levied,
collected and paid on all articles imported or brought into the Philippines, and on products of the Philippines except coal,
lumber, creosoted and other pressure treated materials as well as other minor forest products, cement, guano natural
rock asphalt, the minerals and ores of base metals (e.g., copper, lead, zinc, iron, chromite manganese, magnesite and
steel), and sugar molasses exported from the Philippines, a charge of two pesos per gross metric ton as a fee for
wharfage: Provided, That in the case of logs, or flitches twelve inches square or equivalent cross-sectional area, or over,
a charge of sixty centavos per cubic meter shall be collected."
2 According to the petition: "(a) Petitioner is engaged in the manufacture of flour from wheat grain. It imports the wheat
grain from abroad and mills the same to produce the flour. The wheat grain is not a product of the Philippines. Properly
and technically speaking, the product of the milling process is the flour produced. (b) In the course of producing flour,
part of the wheat grain be waste in the form of bran and pollard." Par. 4, p. 2.
6 L-22819, April 27, 1967, 19 SCRA 883. This portion of Justice Bengzon's opinion was cited in the opinion of
respondent Court of Tax Appeals: "But when a vessel anchors at the Bay and discharges or unloads its cargo, wharf age
dues are forthwith collected. For, as stated, said dues are assessed against the cargo discharged. This is clear from the
provision of the law under which the assessment is based on the quantity, weight or measure of the cargo received by
the importer and/or discharged by such vessel. And wharf age dues on the cargo are distinct from harbor fees or
berthing charges on the vessel, so much so that different sections of the law cover them." At p. 889.

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>

National Federation of Labor (NFL) v. Eisma

GR L-61236, 31 January 1984 (127 SCRA 419)En Banc, Fernando (p): 9 concur, 1 concur with comments, 1 took no
part, 1 on leave
Facts:
On 5 March 1982, the National Federation of Labor 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 at the Lumbayao manufacturing plant of the Zamboanga Wood Products, Inc.
(Zambowood). On 17 April 1982, such employees charged the firm before the same office for underpayment of monthly
living allowances. On 3 May 1982, the union issued a notice of strike against the firm, alleging illegal termination of
Dionisio Estioca, president of the said local union; unfair labor practice; nonpayment of living allowances; and
employment of oppressive alien management personnel without proper permit. The strike began on 23 May 1982.On 9
July 1982, Zambo wood filed a complaint with the trial court against the officers and members of the union, for
damages for obstruction of private property with prayer for preliminary injunction and/orre straining order. The union
filed a motion for the dismissal and for the dissolution of the restraining order, and opposition to the issuance of the writ
of preliminary injunction, contending that the incidents of picketing are within the exclusive jurisdiction of the
Labor Arbiter pursuant to Batas Pambansa 227 (Labor Code, Article 217) and not to the Court of First Instance. The
motion was denied. Hence, the petition for certiorari.
Issue:
Whether construction of the law is required to determine jurisdiction.
Held:
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. 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 bylaw 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 should be resolved on the basis of the
law or statute in force. Therefore, since (1) the original wording of Article 217 vested the labor arbiters with jurisdiction;
since (2) Presidential Decree 1691 reverted the jurisdiction with respect to money claims of workers or claims for
damages arising from employer-employee relations to the labor arbiters after Presidential Decree 1367 transferred such
jurisdiction to the ordinary courts, and since (3) Batas Pambansa 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; 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.The Supreme Court, thus, granted the
writ of certiorari, and nullified and set aside the 20 July 1982 order issued by the court a quo. It granted the writ of
prohibition, and enjoined the Judge of said court, or whoever acts in his behalf in the RTC to which this case is
assigned, from taking any further action on the civil case (Civil Case 716 [2751]), except for the purpose of dismissing it.
It also made permanent there straining order issued on 5 August 1982.
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
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.

Jose C. Espina and Potenciano Flores for petitioners.

The Solicitor General for public respondents.
Gaspar V. Tagalo for private respondent Zamboanga Wood Products.
FERNANDO, C.J.:
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. 4Then 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." 6The 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 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.
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 toLizarraga 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 Pepsi-Cola 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 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.
Teehankee, Makasiar, Aquino, Guerrero, Melencio-Herrera, Plana, Escolin Relova and Gutierrez, Jr., JJ., concur.
Concepcion Jr., J., took no part.
De Castro, J., is on leave.
Separate Opinions
ABAD SANTOS, J., concurring:
I concur and express the hope that Art. 217 should not undergo repeated amendments.
Separate Opinions
ABAD SANTOS, J., concurring:
I concur and express the hope that Art. 217 should not undergo repeated amendments.