Catiis vs.

CA

Before us is a petition for review on certiorari filed by Regino Sy Catiis (petitioner) seeking to nullify the Decision [1] dated
June 14, 2002 of the Court of Appeals (CA) which sustained the Order dated December 18, 2001 of the Regional Trial
Court, Branch 96, Quezon City,[2] allowing private respondents to post bail and the Order dated December 21, 2001 of the
Executive Judge of the same court[3] approving the surety bond posted by respondents and their release.

Petitioner filed a letter-complaint dated May 28, 2001 against private respondents Reynaldo A. Patacsil, Enrico D. Lopez,
Luzviminda A. Portuguez and a certain Margielyn Tafalla before the Office of the City Prosecutor of Quezon City, for
violation of Art. 315, No. 2(a) of the Revised Penal Code in relation to Presidential Decree No. 1689 (syndicated estafa)
and other related offenses. The complaint was docketed as I.S. No. 01-10686. Private respondents, except for Tafalla,
filed their joint counter-affidavits denying the charges against them.

On October 10, 2001, Assistant City Prosecutor Alessandro D. Jurado issued a Resolution [4] finding the existence of a
probable cause for syndicated Estafa against private respondents and Tafalla with no bail recommended. The Resolution
was approved by City Prosecutor Claro A. Arellano.

An Information was filed on the same day by Prosecutor Jurado against private respondents and Tafalla before the
Regional Trial Court of Quezon City and raffled off to Branch 96, which reads:

The undersigned accuses REYNALDO A. PATACSIL, ENRICO D. LOPEZ, LUZVIMINDA A. PORTUGUEZ and
MARGIELYN TAFALLA, of the crime of Estafa under Article 315, paragraph 2(a) of the Revise Penal Code in relation to
P.D. 1689, committed as follows:

That on or about the 3rd week of January 2000 or subsequent thereto in Quezon City and within the jurisdiction of this
Honorable Court, the above-named accused, conspiring and confederating together and all of them mutually helping and
aiding one another in a syndicated manner consisting of five (5) or more persons through corporations registered with the
Securities and Exchange Commission (SEC) and/or unregistered foreign entities with intention of carrying out the unlawful
or illegal act, transaction, enterprise or scheme, with intent to gain and by means of fraud and deceit, did then and there
willfully, unlawfully and feloniously defraud REGINO SY CATIIS and several other persons in the following manner, to wit:
by falsely or fraudulently pretending or representing, in a transaction or series of transactions, which they made with the
Complainant and the public in general to the effect that they were in a legitimate business of foreign exchange trading
successively or simultaneously operating under the following name and style of Asia Profits Philippines, Incorporation,
Winggold Management Philippines Incorporated, Belkin Management Consultancy, Inc. and/or Belkin Profits Limited or
other unregistered foreign entities induced and succeeded in inducing complainant and several other persons to give and
deliver and in fact, the latter and said persons gave and delivered to said accused the amount of at least US$ 123,461.14
or its equivalent in Philippine Pesos on the strength of said manifestations and representations, the accused knowing fully
well that the above-named corporations registered with the SEC and/or those unregistered foreign entities are not
licensed nor authorized to engage in foreign exchange trading corporations and that such manifestations and
representations to transact in foreign exchange were false and fraudulent that resulted to the damage and prejudice of the
complainant and other persons and that the defraudation pertains to funds solicited from the public in general by such
corporations/associations.[5]
On November 7, 2001, Judge Lucas P. Bersamin issued an Order finding probable cause against all the accused and
approved the recommendation of the City Prosecutor that the charge be non-bailable. The corresponding warrants of
arrest were issued.[6]

A return[7] on the warrant of arrest was made by PO3 Joselito M. Coronel, PNP Criminal Investigation and Detection
Group, Camp Crame, Quezon City, with the information that except for Margielyn Tafalla, who remained at large, all other
accused were already detained at the Makati City Jail.

On November 12, 2001, a notice of hearing was issued by Judge Bersamin setting the case for arraignment on November
20, 2001. Private respondents on the same day filed an urgent motion to fix bail.

On November 20, 2001, private respondents, when arraigned, entered pleas of not guilty. The Prosecution was required
to file their comment/opposition on private respondents' motion to fix bail which they did through the Private Prosecutor
with the conformity of Assistant City Prosecutor Arthur O. Malabaguio.[8]

On December 18, 2001, Judge Bersamin issued an Order reconsidering his earlier Order of November 7, 2001 by
declaring that the offense charged is bailable. In finding that the accused are entitled to bail, Judge Bersamin made the
following disquisitions:
xxx

In order to impose the penalty of life imprisonment to death under Sec. 1, P.D. No. 1689, the estafa or swindling must be
committed by a syndicate. The law plainly states that a syndicate consists of five or more persons formed with the
intention of carrying out the unlawful or illegal act, transaction, enterprise, or scheme, and the defraudation results in the
misappropriation of money or of funds solicited by corporations/associations from the general public.

Herein, only four persons are actually charged. Consequently, the estafa charged has no relation to the crime punished
with life imprisonment to death under Sec. 1, Presidential Decree No. 1689.

The allegation of the information that the accused conspired with each other "in a syndicated manner consisting of five (5)
or more persons through corporations registered with the Securities and Exchange Commission (SEC) and/or
unregistered foreign entities with intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme"
cannot change the juridical nature of the offense charged. If the Government has chosen to indict only four persons,
without more, the obvious reason is that only the persons actually charged were involved in the commission of the
offense. As such, there was no syndicate.

In all likelihood, the allegation of "in a syndicated manner consisting of five (5) or more persons" is made herein solely for
having bail denied. Whether that is true or not is beside the point, but the Court cannot now lend itself to such a likelihood
which, according to the foregoing disquisition, lacks legal basis. For that matter, the Court must recant its approval of the
recommendation to deny bail.

The Prosecution represents that the Supreme Court has affirmed in People vs. Romero a conviction under Presidential
Decree No.1689 "even if the accused charged is only less than five (5) accused."

Such representation is grossly misleading. Far to the contrary, in People v. Romero, where two accused were actually
charged but only one was ultimately penalized due to the death of the other accused during the pendency of the case, the
Supreme Court did not impose the higher penalty of life imprisonment to death because the Prosecution "failed to clearly
establish that the corporation was a syndicate, as defined under the law," holding, instead, that, since the crime was not
committed by a syndicate, the proper penalty is that provided in the second paragraph of Sec.1, P.D. No. 1689, to wit:

When not committed by a syndicate as above defined, the penalty imposable shall be reclusion temporal to reclusion
perpetua if the amount of the fraud exceeds 100,000.00 pesos.
Yet, one should ask: Where, as here, the amount alleged in the information clearly "exceeds 100,000.00 pesos" such that
the second paragraph of Sec. 1, P.D. No. 1689, is applicable, is the offense still bailable considering that the range of the
imposable penalty is from reclusion temporal to reclusion perpetua?

The answer is in the affirmative.

Under Rule 110, 2000 Rules of Criminal Procedure, the Information should aver, among others, the qualifying and
aggravating circumstances of the offense "in ordinary and concise language and not necessarily in the language used in
the statute but in terms sufficient to enable a person of common understanding to know what offense is being charged as
well as its qualifying and aggravating circumstance and for the court to pronounce judgment."

A perusal of the information discloses that no aggravating circumstance has been alleged in the information. The
omission consequently precludes the State from proving any aggravating circumstance which will raise the penalty to its
maximum period of reclusion perpetua. The Court itself is also prohibited from imposing reclusion perpetua, since the
requirement of complete allegations of the particulars in the indictment is based on the right of the accused to be fully
informed of the nature of the charges against him so that he may adequately prepare for his defense pursuant to the due
process clause of the Constitution.

As stated in People v. Romero, supra, the penalty under the second paragraph of Sec.1, P.D. No. 1689, when there is
neither mitigating or aggravating circumstance attendant, is the medium period of reclusion temporal, that is from sixteen
(16) years and one (1) day to twenty (20) years.

Hence, the offense charged is unquestionably bailable.[9]

On December 26, 2001, petitioner filed with the CA a petition for certiorari with prayer for temporary restraining order
and/or writ of preliminary injunction[10] assailing the Order of Judge Bersamin allowing private respondents to post bail.

On the same day, then Associate Justice Romeo J. Callejo Sr.,[11] Justice on Duty Per Office Memorandum of Presiding
Justice, issued a Resolution[12] granting petitioner's prayer for the issuance of a temporary restraining order, thus, private
respondents and all those acting for and in their behalf were temporarily restrained from enforcing and implementing the
Order of Judge Bersamin and from further proceeding in Criminal Case No. 01-105430.

However, unknown to petitioner, private respondents had already filed or posted their surety bonds on December 21,
2001 with the Office of Executive Judge Monina A. Zenarosa[13] who approved the same on the same day and ordered
the immediate release of private respondents unless held for other lawful cause. [14] Petitioner filed a supplemental petition
with the CA on January 14, 2002 assailing the jurisdiction of Judge Zenarosa in issuing the Order dated December 21,
2001.

On June 14, 2002, the CA issued its assailed decision denying due course to the petition and dismissed the same after it
found no grave abuse of discretion committed by Judge Bersamin and Judge Zenarosa in issuing the assailed orders.

Hence, the instant petition filed by petitioner raising the following issues, to wit:

Whether or not the issuance of the questioned Decision promulgated June 14, 2002 by the 17th Division of the Court of
Appeals sustaining the validity of the 1st assailed Order dated December 18, 2001 of Hon. Presiding Judge Lucas P.
Bersamin of Branch 96 of the Regional Trial Court of Quezon City ruling that there should be at least five (5) persons that
must be charged under Section 1, Presidential Decree No. 1689 is not in accordance with law or with applicable decisions
of this Honorable Supreme Court.

Whether or not the questioned Decision sanctioning the grant of bail in the 1 st assailed Order dated December 18, 2001 of
Hon. Presiding Judge Lucas P. Bersamin of Branch 96 of the Regional Trial Court of Quezon City violated Section 7, Rule
114 of the Revised Rules of Criminal Procedure and actually departed from the accepted and usual course in the
determination of bailability of criminal offenses.

Whether or not the questioned Decision sustaining the order of release in the 2 nd assailed Order dated December 21 of
Hon. Executive Judge Monina A. Zenarosa of the Regional Trial Court of Quezon City violated Section 17, Rule 114 of the
Revised Rules of Criminal Procedure[15]
Anent the first issue, petitioner contends that under Section 1 of P.D. No. 1689, the term "any person" must be understood
and read in its singular meaning so that even only one person can be indicted for committing "estafa or other forms of
swindling" in relation to P.D. No. 1689 citing the case of People v. Romero; that Judge Bersamin erred when he already
computed the possible penalty in case of private respondents' conviction; that the capital nature of an offense for the
purpose of bailability is determined by the penalty prescribed by law, not by penalty which may actually be imposed since
the latter requires a consideration of the evidence on trial; that since no evidence had yet been presented by both
prosecution and defense, Judge Bersamin has again shown bias by already computing the imposable penalty just to
stretch the application of the law and questionably grant bail in favor of private respondents.

We are not persuaded.

The CA found that the assailed order of Judge Bersamin cannot be characterized as one issued with grave abuse of
discretion for he correctly determined that the Information did not charge a syndicated Estafa; that with only four charged
in the information, it could not be considered as committed by a syndicate which must consist of five or more persons and
he cannot be faulted for that.

Section 1 of P.D. No. 1689, increasing the penalty for certain forms of swindling or estafa, provides:

SECTION 1. Any person or persons who shall commit estafa or other forms of swindling as defined in Articles 315 and
316 of the Revised Penal Code, as amended, shall be punished by life imprisonment to death if the swindling (estafa) is
committed by a syndicate consisting of five or more persons formed with the intention of carrying out the unlawful or illegal
act, transaction, enterprise or scheme, and the defraudation results in the misappropriation of moneys contributed by
stockholders, or members of rural banks cooperatives, "samahang nayon(s)," or farmers' associations, or of funds
solicited by corporations/associations from the general public.

When not committed by a syndicate as above defined, the penalty imposable shall be reclusion temporal to reclusion
perpetua if the amount of the fraud exceeds 100,000 pesos.
Clearly, P.D. No. 1689 penalizes offenders with life imprisonment to death regardless of the amount involved, provided
that a syndicate committed the crime. A syndicate is defined in the same law as "consisting of five or more persons
formed with the intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme." Under the second
paragraph, it is provided that if the offenders are not members of a syndicate, they shall nevertheless be held liable for the
acts prohibited by the law but they shall be penalized by reclusion temporal to reclusion perpetua if the amount of the
fraud is more than P100,000.00.

Petitioner's interpretation that the term "any person" in the first paragraph of section 1 could mean that even one person
can be indicted for syndicated estafa is contrary to the provision of the law. It bears stressing that the law must be
considered as a whole, just as it is necessary to consider a sentence in its entirety in order to grasp its true meaning.[16] It
is a dangerous practice to base construction upon only a part of a section since one portion may be qualified by the other
portion.[17] In fact, there is no need for any construction or interpretation of P. D. No. 1689 since the law is clear and free
from any doubt or ambiguity. Section 1 of P.D. No. 1689 has defined what constitutes a syndicate and such definition is
controlling. Where a requirement is made in explicit and unambiguous terms, no discretion is left to the judiciary. It must
see to it that its mandate is obeyed.[18]

In this case, the Information specifically charged only four persons without specifying any other person who had
participated in the commission of the crime charged, thus, based on the definition of syndicate under the law, the crime
charged was not committed by a syndicate. We find no reversible error committed by the CA when it upheld the ruling of
Judge Bersamin that with only four persons actually charged, the estafa charged has no relation to the crime punished
with life imprisonment to death under section 1 of P. D. No. 1689.

The wordings in the information that the accused conspired with each other "in a syndicated manner consisting of five (5)
or more persons through corporations registered with the Securities and Exchange Commission (SEC) and/or
unregistered foreign entities with intention of carrying out the unlawful or illegal act, transaction, enterprise or scheme" is
not sufficient compliance with the requirements of the law on what constitute a syndicate. It bears stressing that the first
paragraph of the accusatory portion of the Information charges only four persons. To repeat, P.D. No. 1689 has provided
for the definition of a syndicate and it is controlling. As correctly found by the trial court, if the government has chosen to
indict only four persons, without more, the obvious reason is that only the persons actually charged were involved in the
commission of the offense, thus, there was no syndicate.

Petitioner's reliance in People v. Romero to support his argument is misleading. First, the issue of whether only one
person can be indicted for syndicated estafa was not an issue in the Romero case. Secondly, the Court did not impose
the penalty of life imprisonment to death on the accused since the prosecution failed to clearly establish that the
corporation was a syndicate as defined under the law. There is no other way of establishing a syndicate under P.D. No.
1689 than by the adherence to the definition provided by law.

Since the crime charged was not committed by a syndicate as defined under the law, the penalty of life imprisonment to
death cannot be imposed on private respondents. Judge Bersamin is correct when he ruled that private respondents
could only be punished with reclusion temporal to reclusion perpetua in case of conviction since the amount of the fraud
exceeds P100,000.00. The next question is, whether Judge Bersamin is correct in finding that the crime charged is
bailable despite that the imposable penalty ranges from reclusion temporal to reclusion perpetua?

The Court answers in the affirmative.

Sections 8 and 9 of Rule 110 of the Revised Rules of Criminal Procedure, which took effect on December 1, 2000,
provide:

Sec. 8. Designation of the offense. The complaint or information shall state the designation of the offense given by the
statute, aver the acts or omissions constituting the offense, and specify its qualifying and aggravating circumstances. If
there is no designation of the offense, reference shall be made to the section or subsection of the statute punishing it.

Sec. 9. Cause of the accusations. The acts or omissions complained of as constituting the offense and the qualifying and
aggravating circumstances must be stated in ordinary and concise language and not necessarily in the language used in
the statute but in terms sufficient to enable a person of common understanding to know what offense is being charged as
well as its qualifying and aggravating circumstances and for the court to pronounce judgment.
Clearly, it is now a requirement that the aggravating as well as the qualifying circumstances be expressly and specifically
alleged in the complaint or information. Otherwise, they cannot be considered by the trial court in their judgment, even, if
they are subsequently proved during trial.[19] A reading of the Information shows that there was no allegation of any
aggravating circumstance, thus Judge Bersamin is correct when he found that the lesser penalty, i.e., reclusion temporal,
is imposable in case of conviction.
Section 13, Article III of the Constitution provides that all persons, except those charged with offenses punishable
by reclusion perpetua when evidence of guilt is strong, shall before conviction, be bailable by sufficient sureties or be
released on recognizance as may be provided by law. In pursuance thereof, Section 4 of Rule 114, as amended, now
provides that all persons in custody shall, before conviction by a regional trial court of an offense not punishable by
death, reclusion perpetua or life imprisonment, be admitted to bail as a matter of right. Since the imposable penalty on
private respondents, in case of conviction, is reclusion temporal, they are entitled to bail as a matter of right. Notably,
Judge Bersamin issued his Order finding the crime charge bailable and fixed the amount of P150,000.00 each for the
provisional liberty of private respondents only after petitioner had submitted their comment/opposition to petitioner's
motion to fix bail.

Petitioner claims that the Order of Judge Bersamin allowing private respondents to post bail already prejudged the case;
that he summarily decided the eventual and imminent dismissal of the criminal case without even the reception of
evidence; that such prejudgment came from a ruling on a mere issue of bail.

Such argument is baseless. The Order was issued on the basis that the allegations in the Information do not establish
that the crime charged was committed by a syndicate as defined under the law where the penalty of life imprisonment to
death could be imposed. Nowhere in the Order did Judge Bersamin state that the act complained of is not punishable at
all.

Petitioner next contends that private respondents' filing of bail with Executive Judge Monina Zenarosa, other than Branch
96 where the case is pending, is questionable and not in accordance with Section 17, Rule 114 [20] of the Revised Rules on
Criminal Procedure; that the records show that when private respondents filed their bail with Judge Zenarosa, Branch 96
was open and available as private respondents through their representative were able to pay for the issuance of the
certifications on the Information and the Order dated December 18, 2001; that petitioner's counsel and the Assistant City
Prosecutor Arthur Malabaguio had personally received their respective copies of the Order dated December 18, 2001
inside the staff room of Branch 96 and they even attested that Judge Bersamin was physically present on December 21,
2002, the day private respondents filed their bail bond with Judge Zenarosa; that despite these circumstances, Judge
Zenarosa still exercised jurisdiction over the bail filed by private respondents and issued the Order dated December 21,
2001 approving the surety bonds and ordering the release of private respondents; that the CA's justification that Judge
Zenarosa accepted the bail bond due to the fact that Judge Bersamin was momentarily out of his office or premises at the
time of posting of the bond was not borne by the records.

We are not persuaded.

Section 17, Rule 114 of the Revised Rules on Criminal Procedure provides that bail in the amount fixed may be filed with
the court where the case is pending, or, in the absence or unavailability of the judge thereof, with another branch of the
same court within the province or city. While Branch 96 is open and available on the day private respondents posted their
bail with Judge Zenarosa, it does not necessarily follow that Judge Bersamin was available at that precise
moment. Although it is alleged in the supplemental petition prepared by petitioner's counsel, Atty. Rodeo Nuñez, with the
conformity of Prosecutor Malabaguio filed before the CA that both of them saw Judge Bersamin discharging his function
on that day, it is not under oath. Moreover, it is not specifically stated in the supplemental petition that at the exact time
Judge Zenarosa approved the bail, Judge Bersamin was available. Thus, petitioner failed to rebut the presumption that
official duty had been regularly performed[21] by Judge Zenarosa under the rules.

WHEREFORE, the petition for review on certiorari is DENIED. The assailed decision of the Court of Appeals dated June
14, 2002 is AFFIRMED. Costs against petitioner.

SO ORDERED.
Aquino vs. QC

In an order issued by this Court dated October 18, 2000, two petitions for review on certiorari involving the decisions of
the Court of Appeals in CA-G.R. CV Nos. 37487 and 49241, declaring valid the auction sales of two real properties by the
Quezon City local government for failure to pay real property taxes, were consolidated for the Court's consideration.

G.R. No. 137534

The first case, docketed as G.R. No. 137534, deals with a 612-square meter lot in East Avenue Subdivision, Diliman,
Quezon City. The lot was formerly owned by petitioner spouses Efren and Angelica Aquino (Petitioners Aquino) under
Transfer Certificate of Title (TCT) No. 260878. By their own admission, Petitioners Aquino withheld payment of the real
property taxes thereto from 1975 to 1982 as a form of protest against the government of then President Marcos. As a
result of the nonpayment, the property was sold by the Quezon City local government, through the Treasurer's Office, at
public auction on February 29, 1984 to private respondent Aida Linao, the highest bidder. Aida Linao eventually
consolidated her ownership under a petition granted by the Regional Trial Court (RTC) of Quezon City on September 25,
1985.[1] Accordingly, TCT No. 260878 was cancelled and a new one was issued under TCT No. 339476 in the name of
Aida Linao.[2]

Petitioners Aquino claimed that they learned of the sale only in April 1987 after they were informed by people "squatting"
on the property that Aida Linao was taking steps to eject them. They then filed an action for annulment of title,
reconveyance and damages against respondents Quezon City local government, its Treasurer, the Register of Deeds of
Quezon City and Aida Linao[3] before the RTC of Quezon City.[4] They charged that the Quezon City local government sold
their property without informing them of their tax default, in derogation of the notice requirements of the law. They also
impute bad faith upon Aida Linao in buying their property despite knowledge of the infirmities leading to the auction sale.

On February 25, 1995, after the parties presented their case, the RTC of Quezon City rendered a decision dismissing the
complaint. The dismissal was later affirmed by the Court of Appeals on February 3, 1999.

In this petition, Petitioners Aquino raise two issues:

1. Whether there was failure on the part of the Quezon City local government to satisfy the notice requirements
before selling the property for tax delinquency; and
2.
3. Whether there was failure on the part of the Quezon City local government to give actual notice of the impending
sale despite knowing that the mailed notices were returned unclaimed.
4.
5. Whether or not Petitioners Aquino were estopped to question the absence of notice given their admission that
they deliberately did not pay their taxes.

G.R. No. 138624

The second case, docketed as G.R. No. 138624, deals with a 407-square meter property located at No. 20 North Road,
Cubao, Quezon City under TCT No. 21996 in the name of Solomon Torrado.[5] TCT No. 21996 covers two lots, Lots 7 & 8,
but only the latter is the subject of the controversy. According to the Heirs of Solomon Torrado (Petitioner
Heirs),[6] Solomon Torrado paid taxes on the improvements on Lot 8 for 1976, 1977, 1978, 1979, 1981 and 1982 but not
on the lot itself because the Treasurer's Office could not locate the index card for that property. For failure to pay real
property taxes on Lot 8 from 1976 to 1982, the City Treasurer sent a Notice of Intent to Sell dated October 6, 1982 to
Solomon Torrado to his address indicated in the tax register, which simply states as "Butuan City." The notice was
returned by reason of "Insufficient Address." Next sent was a Notice of Sale of Delinquent Property dated December 10,
1982. This was sent to the same address and similarly returned unclaimed.[7] Thereafter, a public auction for Lot 8 was
held on February 23, 1983 and the lot was sold to Veronica Baluyot, the winning bidder. A Notice of Sold Property was
subsequently sent to Solomon Torrado to "Butuan City," which was returned unclaimed.

On May 29, 1985, a Final Bill of Sale was executed by the City Treasurer. On that basis, TCT No. 21996 was cancelled in
part and TCT No. 355133, covering Lot 8, was issued in the name of Veronica Baluyot. Veronica Baluyot later mortgaged
the property to spouses Corazon and Maximino Uy. For failure to pay the mortgage debt, Lot 8 was foreclosed and TCT
No. 355133 was cancelled and substituted with TCT No. 45536 in the name of spouses Uy. Spouses Uy then sold the lot
to DNX Corporation and TCT No. 45536 was cancelled and substituted with TCT No. N-162170, in the name of DNX
Corporation.

Meanwhile, on January 13, 1989, Solomon Torrado commenced an action with the RTC of Quezon City against the
spouses Baluyot, the Quezon City local government, the City Treasurer and Register of Deeds.[8] On March 12, 1992, the
RTC of Quezon City dismissed the action. Recourse to the Court of Appeals was made but on March 24, 1998, the appeal
was dismissed.

Before this Court, Petitioner Heirs raise the following questions:

1. In the auction sale of tax delinquent property, is constructive notice sufficient?

2.
3. Was the City Treasurer negligent in continuing to send notices to an "insufficient address" notwithstanding a tax
declaration in the tax records pertaining to another property bearing Solomon Torrado's complete address?
4.
5. Was the auction sale conducted in accordance with P.D. 464?
6.
7. Was the title of Veronica Baluyot, the purchaser of the property, void as well as those of the subsequent
transferees?
8.
9. Is DNX Corporation, the subsequent purchaser of the property, a buyer in good faith?

Issues common to both petitions

The Court will first discuss the issues that were raised in common by petitioners.

The first issue in common relates to the interpretation of the notice requirements under Sections 65 and 73 of Presidential
Decree (P.D.) No. 464 (the Real Property Tax Code then in force): [9]

xxx

SECTION 65. Notice of delinquency in the payment of the real property tax. Upon the real property tax or any installment
thereof becoming delinquent, the provincial or city treasurer shall immediately cause notice of the fact to be posted at the
main entrance of the provincial building and of all municipal buildings or municipal or city hall and in a public and
conspicuous place in each barrio of the municipality of the province or city as the case may be. The notice of delinquency
shall also be published once a week for three consecutive weeks, in a newspaper of general circulation in the province or
city, if any there be, and announced by a crier at the market place for at least three market days.

Such notice shall specify the date upon which tax became delinquent, and shall state that personal property may be
seized to effect payment. It shall also state that, at any time, before the seizure of personal property, payment may be
made with penalty in accordance with the next following section, and further, that unless the tax and penalties be paid
before the expiration of the year for which the tax is due, or the tax shall have been judicially set aside, the entire
delinquent real property will be sold at public auction, and that thereafter the full title to the property will be and remain
with the purchaser, subject only to the right of delinquent taxpayer or any other person in his behalf to redeem the sold
property within one year from the date of sale.

xxx

SECTION 73. Advertisement of sale of real property at public auction. After the expiration of the year for which the tax is
due, the provincial or city treasurer shall advertise the sale at public auction of the entire delinquent real property, except
real property mentioned in subsection (a) of Section forty hereof, to satisfy all the taxes and penalties due and the costs of
sale. Such advertisement shall be made by posting a notice for three consecutive weeks at the main entrance of the
provincial building and of all municipal buildings in the province, or at the main entrance of the city or municipal hall in the
case of cities, and in a public and conspicuous place in the barrio or district wherein the property is situated, in English,
Spanish and the local dialect commonly used, and by announcement at least three market days at the market by crier,
and, in the discretion of the provincial or city treasurer, by publication once a week for three consecutive weeks in a
newspaper of general circulation published in the province or city.

The notice, publication, and announcement by crier shall state the amount of the taxes, penalties and costs of sale; the
date, hour, and place of sale, the name of the taxpayer against whom the tax was assessed; and the kind or nature of
property and, if land, its approximate areas, lot number, and location stating the street and block number, district or barrio,
municipality and the province or city where the property to be sold is situated. Copy of the notice shall forthwith be sent
either by registered mail or by messenger, or through the barrio captain, to the delinquent taxpayer, at his address as
shown in the tax rolls or property tax record cards of the municipality or city where the property is located, or at his
residence, if known to said treasurer or barrio captain: Provided, however, That a return of the proof of service under oath
shall be filed by the person making the service with the provincial or city treasurer concerned.
Both petitioners construe the above-quoted provisions to mean that two sets of notices, one under Section 65 and the
other under Section 73, are required before a delinquent property could be sold for failure to pay real property taxes. With
respect to the first notice under Section 65, the owner of the real property subject to tax is supposed to be given a Notice
of Tax Delinquency stating that if the property tax is not paid, the local government would sell the real property to satisfy
the tax in arrears. This consists of four separate measures: 1) posting of the notice of tax delinquency at the main
entrance of the city hall; 2) posting of the notice of tax delinquency in a public and conspicuous place in each barangay of
the city; 3) publication of the notice of tax delinquency once a week for three consecutive weeks in a newspaper of
general circulation in the city; and 4) verbal announcement of the existence of the notice of tax delinquency by a crier at
the market place for at least three market days.

The second notice under Section 73 pertains to a Notice of Sale at Public Auction notifying the owner of the real property
that since there was failure to heed the first notice, the local government would now be selling his delinquent property at
public auction on a specified date to satisfy the tax in arrears.

For Petitioners Aquino, while it seems the Quezon City local government complied with the second set of requirements in
selling their lot, it failed to do the same with the first.[10] The only compliance by the Quezon City local government was the
sending of a Notice of Intent to Sell by registered mail to the last known address of Petitioners Aquino. No posting or
publication of any kind was done.

Petitioner Heirs, on the other hand, push for the same construction and claim that there was failure on the part of the City
Treasurer to send Solomon Torrado a Notice of Delinquency at all.

Respondents, on the other hand, counter with their own interpretation of P.D. No. 464. Instead of a two-step notice
requirement, respondents put forward the view that there are three methods of enforcement on tax delinquent real
property provided under P.D. No. 464. The first method is by distraint of personal property under Sections 65, 68, 70, 71
and 72. The second method is by sale of the delinquent real property itself under Sections 73 to 81. The third method is
by filing a case in court under Section 82. Respondents submit that the real property in issue was sold under the second
method. That being the case, while they admit that there was only partial compliance with the provisions of Section
65[11] this would be relevant had the local government chosen the method of distraint of personal property. In this case,
the Quezon City local government chose the second method of sale and there was full compliance with the provisions of
Section 73. Hence, the auction sale was valid.

A simple application of the elementary rules of statutory construction provides a straightforward resolution to this conflict.
Section 65 basically provides that upon delinquency of a real property tax, a notice of delinquency shall be given. This is
followed by Section 66, penalty for delinquency, and Section 67, application of the remedies. The latter reads in its
entirety as follows:

SECTION 67. Remedies cumulative, simultaneous and unconditional. Collection of the real property tax may be enforced
through any or all of the remedies provided under this Code, and the use or non-use of one remedy shall not be a bar
against the institution of the others. Formal demand for the payment of the delinquent taxes and penalties due need not
be made before any of such remedies may be resorted to; notice of delinquency as required in Section sixty-five hereof
shall be sufficient for the purpose.
Following Section 67 are provisions on distraint of personal property (Sections 68, 69, 70, 71 and 72), provisions
concerning the sale of real property (Sections 73 to 81) and the provision on collection of real property tax through the
courts (Section 82).

A rule of statutory construction is that a statute must be construed as a whole. The meaning of the law is not to be
extracted from a single part, portion or section or from isolated words and phrases, clauses or sentences, but from a
general consideration or view of the act as a whole. Every part of the statute must be interpreted with reference to the
context.[12] In line with this rule, the Court finds that Section 65's notice of delinquency should be read in line with the
Section 67's statement that the different tax remedies do not require a formal demand for the payment but may be
substituted by the notice of delinquency. Reference to the notice of delinquency in relation to tax remedies, in general,
illustrates the former's function as a prerequisite to all the individual tax remedies subsequently detailed. Also, the phrase
"notice of delinquency as required in Section sixty-five" found on the last part of Section 67 further underscores its
mandatory nature and interrelation to the three remedies.

It is incorrect for the respondents to claim that notice of delinquency has limited application only to distraint of personal
property. They mistakenly lumped Section 65 exclusively with Sections 68 to 72 and, in so doing, restricted its application
from the other tax remedies. Section 65 is to be construed together with Sections 66 and 78 and all three operate in
reference to tax methods in general. Definitely, there is no more logical way to construe the whole chapter on "Collection
of Real Property Tax" (Sections 56 to 85) than to stress that while three methods are provided to enforce collection on real
property taxes, a notice of delinquency is a requirement regardless of the method or methods chosen.

Thus, while the Court agrees with the respondents' interpretation that there are three methods by which taxes may be
enforced, petitioners are correct in insisting that two notices must be sent to the taxpayer concerned. Nevertheless,
respondents still prevail because the Court is satisfied that the two-notice requirement has been complied with by the
Treasurer's Office.

Contrary to the stand taken by Petitioners Aquino, despite the provisions of Section 65, the local government concerned
need not post and publish the notice of delinquency, it being sufficient that personal service was done. In Talusan v.
Tayag,[13] one of the issues raised was the lack of publication of the notice of delinquency. As to this issue the Court said,
speaking through now Chief Justice Panganiban:

Petitioners assert that the tax sale should be annulled because of noncompliance with the requirement of publication
prescribed in Section 65 of PD 464.

In this regard, we note that unlike land registration proceedings which are in rem, cases involving an auction sale of land
for the collection of delinquent taxes are in personam. Thus, notice by publication, though sufficient in proceedings in rem,
does not as a rule satisfy the requirement of proceedings in personam. As such, mere publication of the notice of
delinquency would not suffice, considering that the procedure in tax sales is in personam. It was, therefore, still incumbent
upon the city treasurer to send the notice of tax delinquency directly to the taxpayer in order to protect the interests of the
latter.

In the present case, the notice of delinquency was sent by registered mail to the permanent address of the registered
owner in Manila. In that notice, the city treasurer of Baguio City directed him to settle the charges immediately and to
protect his interest in the property. Under the circumstances, we hold that the notice sent by registered mail adequately
protected the rights of the taxpayer, who was the registered owner of the condominium unit.
Petitioners Aquino admit that notice of delinquency was mailed, hence, they cannot complain that their rights were not
adequately protected. Publication and posting not being indispensable, there was proper compliance with Section 65.

Petitioner Heirs, on the other hand, made no such admission but, on the contrary, argued that no notice of delinquency
was prepared by the City Treasurer much less sent to Solomon Torrado. The Court holds, for one, that this is a question
of fact that will generally not be resolved on a petition for review.[14] Second, records bear out that a Notice of Intent to Sell
dated October 6, 1982 was sent by the Treasurer's Office to Solomon Torrado. While this was not captioned as a "Notice
of Delinquency," its contents sufficiently inform the recipient of the deficiency in real property taxes, and this notice is apart
from the subsequent Notice of Sale sent immediately prior to the auction sale.

Hence, on the common issue concerning compliance with P.D. No. 464, the Court rules in favor of respondents.

The Court proceeds to the common issue of actual versus constructive notice of sale.

Petitioners Aquino argue that actual notice is required and, therefore, the mailing of the Notice of Sale to their last known
address, which they had abandoned, did not constitute valid notice under the law. Petitioner Heirs likewise argue that
constructive notice to the delinquent owner of the real property by mailing is not sufficient, especially when the local
government concerned is aware that the mailed notices have not reached the owner.

The applicable provision in regard to this issue is found in the last paragraph of Section 73, quoted above. Under said
provision, notices of the sale at public auction may be sent to the delinquent taxpayer, either (i) at the address as shown
in the tax rolls or property tax record cards of the municipality or city where the property is located or (ii) at his residence, if
known to such treasurer or barrio captain. Plainly, Section 73 gives the treasurer the option of where to send the notice of
sale. In giving the treasurer the option, nowhere in the wordings is there an indication of a requirement that notice must
actually be received by the intended recipient. Compliance by the treasurer is limited to strictly following the provisions of
the statute: he may send it at the address of the delinquent taxpayer as shown in the tax rolls or tax records or to the
residence if known by him or the barrio captain.

In both petitions, the City Treasurer opted to comply with the first option. Petitioners Aquino and Petitioner Heirs do not
deny that notices were sent to their or their predecessor's address, as shown in the tax records. The named persons in
the notices sent by City Treasurer were the correct delinquent taxpayers and were the registered owners of the property
subject to tax, albeit the mailing addresses were not to their actual residences. Therefore, the prescribed procedure in
auction sales of property for tax delinquency was followed punctiliously. Had the City Treasurer sent the notices to an
address other than the one indicated in the tax records, and such address is not the residence known to the treasurer or
barangay captain, or if sent to a person who is not the registered owner of the property, then the Court would be able to
declare non-compliance with the law. But the fact that petitioners were not able to read their notices is of no consequence
to the annulment of the auction sale.

Additionally, Petitioner Heirs maintain that the Treasurer's Office was already aware that Solomon Torrado's address
stated in the tax records as "Butuan City" was insufficient so that the notices could not possibly be sufficient for the
notices to reach the recipient. There was however a more complete address indicated in the tax records for the
improvements to Lot 8, which was No. 20 North Road, Cubao, Quezon City. Petitioner Heirs argue that the City Treasurer
could have used this address instead of repeatedly sending notice to an insufficient address which for certain would be
returned unclaimed.

The fault herein lies with Solomon Torrado and not with the City Treasurer. Solomon Torrado's use in his tax declarations
for Lot 8, as well as in TCT No. 21996, the minimal address of "Butuan City," is further compounded by the fact that he
can no longer be found in Butuan City as he had moved to Quezon City since 1959. [15] He, therefore, had more than 25
years, or 25 opportunities, to amend his address and provide the City Treasurer of a more complete and reliable one. By
neglecting to do so, he was aware of the chances he was taking should notices be sent to him by the Treasurer's Office.
Instead, he maintained the terse address of "Butuan City."

In contrast, the Treasurer's Office cannot be faulted for not sending the notices to Solomon Torrado's address at No. 20
North Road, Cubao, Quezon City, which was indicated in his tax declarations to his other properties. As discussed, the
last paragraph of Section 73 instructs the treasurer on where to send the notice of sale: either at the address as shown in
the tax rolls or property tax record cards of the municipality or city where the property is located or at his residence, if
known to such treasurer or barrio captain. Petitioner Heirs have not shown that the City Treasurer or barrio captain
actually knew that Solomon Torrado's residence was No. 20 North Road, Cubao, Quezon City. Therefore, the City
Treasurer could not be blamed for having mailed the notices to the address shown in the tax records, which was in
conformity with Section 73.

In disposing of these two issues, there is no further need to discuss the issues of estoppel and good faith.

WHEREFORE, both petitions are DENIED and the decisions of the Court of Appeals in CA-G.R. CV Nos. 37487 and
49241 are AFFIRMED. No costs.

SO ORDERED.
Gaanan vs. IAC

This petition for certiorari asks for an interpretation of Republic Act (RA) No. 4200, otherwise known as the Anti-
Wiretapping Act, on the issue of whether or not an extension telephone is among the prohibited devices in Section 1 of
the Act, such that its use to overhear a private conversation would constitute unlawful interception of communications
between the two parties using a telephone line.

The facts presented by the People and narrated in the respondent court's decision are not disputed by the petitioner.

"In the morning of October 22, 1975, complainant Atty. Tito Pintor and his client Manuel Montebon were in the living room
of complainant's residence discussing the terms for the withdrawal of the complaint for direct assault which they filed with
the Office of the City Fiscal of Cebu against Leonardo Laconic. After they had decided on the proposed conditions,
complainant made a telephone call to Laconico (tsn, August 26, 1981, pp. 3-5).

"That same morning, Laconico telephoned appellant, who is a lawyer, to come to his office and advise him on the
settlement of the direct assault case because his regular lawyer, Atty. Leon Gonzaga, went on a business trip. According
to the request, appellant went to the office of Laconico where he was briefed about the problem. (Exhibit 'D', tsn, April 22,
1982, pp. 4-5).

"When complainant called up, Laconico requested appellant to secretly listen to the telephone conversation through a
telephone extension so as to hear personally the proposed conditions for the settlement. Appellant heard complainant
enumerate the following conditions for withdrawal of the complaint for direct assault"

"(a) the P5,000.00 was no longer acceptable, and that the figure had been increased to P8,000.00. A breakdown of
the P8,000.00 had been made together with other demands, to wits: (a) P5,000.00 no longer for the teacher Manuel
Montebon, but for Atty. Pintor himself in persuading his client to withdraw the case for Direct Assault against Atty.
Laconico before the Cebu City Fiscal's Office;

"(b Public apology to be made by Atty. Laconico before the students of Don Bosco Technical High School;

"(c) P1,000.00 to be given to the Don Bosco Faculty club;

"(d) transfer of son of Atty. Laconico to another school or another section of Don Bosco Technical High School;

"(e) Affidavit of desistance by Atty. Laconico on the Maltreatment case earlier filed against Manuel Montebon at the
Cebu City Fiscal's Office, whereas Montebon's affidavit of desistance on the Direct Assault Case against Atty. Laconico to
be filed later;

"(f) Allow Manuel Montebon to continue teaching at the Don Bosco Technical School;

"(g) Not to divulge the truth about the settlement of the Direct Assault Case to the mass media;

"(h) P2,000.00 attorney's fees for Atty. Pintor.

(tsn, August 26, 1981, pp. 47-48).

"Twenty minutes later, complainant called up again to ask Laconico if he was agreeable to the conditions. Laconico
answered 'Yes'. Complainant then told Laconico to wait for instructions on where to deliver the money. (tsn, march 10,
1983, pp. 2-12).

"Complainant called up again and instructed Laconico to give the money to his wife at the office of the then Department of
Public Highways. Laconico who earlier alerted his friend Colonel Zulueta of the Criminal Investigation Service of the
Philippine Constabulary, insisted that complainant himself should receive the money. (tsn, March 10, 1982, pp. 26-
33). When he received the money at the Igloo Restaurant, complainant was arrested by agents of the Philippine
Constabulary.

"Appellant executed on the following day an affidavit stating that he heard complainant demand P8,000.00 for the
withdrawal of the case for direct assault. Laconico attached the affidavit of appellant to the complaint for robbery/extortion
which he filed against complainant. Since appellant listened to the telephone conversation without complainant's consent,
complainant charged appellant and Laconico with violation of the Anti-Wiretapping Act."
After trial on the merits, the lower court, in a decision dated November 22, 1982, found both Gaanan and Laconico guilty
of violating Section 1 of Republic Act No. 4200. The two were each sentenced to one (1) year imprisonment with
costs. Not satisfied with the decision, the petitioner appealed to the appellate court.

On August 16, 1984, the Intermediate Appellate Court affirmed the decision of the trial court, holding that the
communication between the complainant and accused Laconico was private in nature and, therefore, covered by Rep. Act
No. 4200; that the petitioner over heard such communication without the knowledge and consent of the complainant; and
that the extension telephone which was used by the petitioner to overhear the telephone conversation between
complainant and Laconico is covered in the term "device" as provided in Rep. Act No. 4200.

In this petition for certiorari, the petitioner assails the decision of the appellate court and raises the following issues: (a)
whether or not the telephone conversation between the complainant and accused Laconico was private in nature; (b)
whether or not an extension telephone is covered by the term "device or arrangement" under Rep. Act No. 4200; (c)
whether or not the petitioner had authority to listen or overhear said telephone conversation and (d) whether or not Rep.
Act No. 4200 is ambiguous and, therefore, should be construed in favor of the petitioner.

Section 1 of Rep. Act No. 4200 provides:

"Section 1. It shall be unlawful for any person, not being authorized by all the parties to any private communication or
spoken word, to tap any wire or cable or by using any other device or arrangement, to secretly overhear, intercept, or
record such communication or spoken word by using a device commonly known as a dictaphone or dictagraph or
detectaphone or walkie-talkie or tape-recorder, or however otherwise described:

It shall be unlawful for any person, be he a participant or not in the act or acts penalized in the next preceeding sentence,
to knowingly possess any tape record, wire record, disc record, or any other such record, or copies thereof, of any
communication or spoken word secured either before or after the effective date of this Act in the manner prohibited by this
law; or to replay the same for any other person or persons; or to communicate the contents thereof, either verbally or in
writing, or to furnish transcriptions thereof, whether complete or partial, to any other person: Provided, that the use of
such record or any copies thereof as evidence in any civil, criminal investigation or trial of offenses mentioned in Section 3
hereof, shall not be covered by this prohibition."
We rule for the petitioner.

We are confronted in this case with the interpretation of a penal statute and not a rule of evidence. The issue is not the
admissibility of evidence secured over an extension line of a telephone by a third party. The issue is whether or not the
person called over the telephone and his lawyer listening to the conversation on an extension line should both face prison
sentences simply because the extension was used to enable them to both listen to an alleged attempt at extortion.

There is no question that the telephone conversation between complainant Atty. Pintor and accused Atty. Laconico was
"private" in the sense that the words uttered were made between one person and another as distinguished from words
between a speaker and a public. It is also undisputed that only one of the parties gave the petitioner the authority to listen
to and overhear the caller's message with the use of an extension telephone line. Obviously, complainant Pintor, a
member of the Philippine bar, would not have discussed the alleged demand for an P8,000.00 consideration in order to
have his client withdraw a direct assault charge against Atty. Laconico filed with the Cebu City Fiscal's Office if he knew
that another lawyer was also listening. We have to consider, however, that affirmance of the criminal conviction would, in
effect, mean that a caller by merely using a telephone line can force the listener to secrecy no matter how obscene,
criminal, or annoying the call may be. It would be the word of the caller against the listener's.

Because of technical problems caused by the sensitive nature of electronic equipment and the extra heavy loads which
telephone cables are made to carry in certain areas, telephone users often encounter what are called "crossed lines". An
unwary citizen who happens to pick up his telephone and who overhears the details of a crime might hesitate to inform
police authorities if he knows that he could be accused under Rep. Act 4200 of using his own telephone to secretly
overhear the private communications of the would be criminals. Surely the law was never intended for such mischievous
results.

The main issue in the resolution of this petition, however, revolves around the meaning of the phrase "any other device or
arrangement." Is an extension of a telephone unit such a device or arrangement as would subject the user to
imprisonment ranging from six months to six years with the accessory penalty of perpetual absolute disqualification for a
public officer or deportation for an alien? Private secretaries with extension lines to their bosses' telephones are
sometimes asked to use answering or recording devices to record business conversations between a boss and another
businessman. Would transcribing a recorded message for the use of the boss be a proscribed offense? Or for that
matter, would a "party line" be a device or arrangement under the law?

The petitioner contends that telephones or extension telephones are not included in the enumeration of "commonly
known" listening or recording devices, nor do they belong to the same class of enumerated electronic devices
contemplated by law. He maintains that in 1964, when Senate Bill No. 9 (later Rep. Act No. 4200) was being considered
in the Senate, telephones and extension telephones were already widely used instruments, probably the most popularly
known communication device.

Whether or not listening over a telephone party line would be punishable was discussed on the floor of the Senate. Yet,
when the bill was finalized into a statute, no mention was made of telephones in the enumeration of devices "commonly
known as a dictaphone or dictagraph, detectaphone or walkie talkie or tape recorder or however otherwise described."
The omission was not a mere oversight. Telephone party lines were intentionally deleted from the provision of the Act.

The respondent People argue that an extension telephone is embraced and covered by the term "device" within the
context of the aforementioned law because it is not a part or portion of a complete set of a telephone apparatus. It is a
separate device and distinct set of a movable apparatus consisting of a wire and a set of telephone receiver not forming
part of a main telephone set which can be detached or removed and can be transferred away from one place to another
and to be plugged or attached to a main telephone line to get the desired communication coming from the other party or
end.

The law refers to a "tap" of a wire or cable or the use of a "device or arrangement" for the purpose of secretly overhearing,
intercepting, or recording the communication. There must be either a physical interruption through a wiretap or the
deliberate installation of a device or arrangement in order to overhear, intercept, or record the spoken words.

An extension telephone cannot be placed in the same category as a dictaphone, dictagraph or the other devices
enumerated in Section 1 of RA No. 4200 as the use thereof cannot be considered as "tapping" the wire or cable of a
telephone line. The telephone extension in this case was not installed for that purpose. It just happened to be there for
ordinary office use. It is a rule in statutory construction that in order to determine the true intent of the legislature, the
particular clauses and phrases of the statute should not be taken as detached and isolated expressions, but the whole
and every part thereof must be considered in fixing the meaning of any of its parts. (see Commissioner of Customs v.
Esso Estandard Eastern, Inc., 66 SCRA 113,120).

In the case of Empire Insurance Company v. Rufino (90 SCRA 437, 443-44), we ruled:

"Likewise, Article 1372 of the Civil Code stipulates that 'however general the terms of a contract may be, they shall not be
understood to comprehend things that are distinct and cases that are different from those upon which the parties intended
to agree.' Similarly, Article 1374 of the same Code provides that 'the various stipulations of a contract shall be interpreted
together, attributing to the doubtful ones that sense which may result from all of them taken jointly.'

xxx xxx xxx

"Consequently, the phrase 'all liabilities or obligations of the decedent' used in paragraphs 5(c) and 7(d) should be then
restricted only to those listed in the Inventory and should not be construed as to comprehend all other obligations of the
decedent. The rule that 'particularization followed by a general expression will ordinarily be restricted to the former' is
based on the fact in human experience that usually the minds of parties are addressed specially to the particularization,
and that the generalities, though broad enough to comprehend other fields if they stood alone, are used in contemplation
of that upon which the minds of the parties are centered. (Hoffman v. Eastern Wisconsin R., etc., Co., 134 Wis. 603, 607;
115 NW 383, cited in Francisco, Revised Rules of Court (Evidence), 1973 ed., pp. 180-181."
Hence, the phrase "device or arrangement" in Section 1 of RA No. 4200, although not exclusive to that enumerated
therein, should be construed to comprehend instruments of the same or similar nature, that is, instruments the use of
which would be tantamount to tapping the main line of a telephone. It refers to instruments whose installation or presence
cannot be presumed by the party or parties being overheard because by their very nature, they are not of common usage
and their purpose is precisely for tapping, intercepting or recording a telephone conversation.

An extension telephone is an instrument which is very common especially now when the extended unit does not have to
be connected by wire to the main telephone but can be moved from place to place within a radius of a kilometer or
more. A person should safely presume that the party he is calling at the other end of the line probably has an extension
telephone and he runs the risk of a third party listening as in the case of a party line or a telephone unit which shares its
line with another. As was held in the case of Rathbun v. United States (355, U.S. 107, 2 L Ed 2d 137-138):

"Common experience tells us that a call to a particular telephone number may cause the bell to ring in more than one
ordinarily used instrument. Each party to a telephone conversation takes the risk that the other party may have an
extension telephone and may allow another to overhear the conversation. When such takes place there has been no
violation of any privacy of which the parties may complain. Consequently, one element of 605, interception, has not
occurred."
In the same case, the Court further ruled that the conduct of the party would differ in no way if instead of repeating the
message he held out his handset so that another could hear out of it and that there is no distinction between that sort of
action and permitting an outsider to use an extension telephone for the same purpose.

Furthermore, it is a general rule that penal statutes must be construed strictly in favor of the accused. Thus, in case of
doubt as in the case at bar, on whether or not an extension telephone is included in the phrase "device or arrangement",
the penal statute must be construed as not including an extension telephone. In the case of People v. Purisima, 86 SCRA
542, 562, we explained the rationale behind the rule:

"American jurisprudence sets down the reason for this rule to be 'the tenderness of the law of the rights of individuals; the
object is to establish a certain rule by conformity to which mankind would be safe, and the discretion of the court
limited. (United States v. Harris, 177 US 305, 44 L Ed 780, 20 S Ct 609; Braffith v. Virgin Islands (CA3) 26 F2d
646; Caudill v. State, 224 Ind 531, 69 NE2d 549; Jennings v. Commonwealth, 109 Va 821, 63 SE 1080, all cited in 73 Am
Jur 2d 452.) The purpose is not to enable a guilty person to escape punishment through a technicality but to provide a
precise definition of forbidden acts." (State v. Zazzaro, 20 A 2d 737, quoted in Martin's Handbook on Statutory
Costruction, Rev. Ed. pp. 183-184)."
In the same case of Purisima, we also ruled that in the construction or interpretation of a legislative measure, the primary
rule is to search for and determine the intent and spirit of the law. A perusal of the Senate Congressional Records will
show that not only did our lawmakers not contemplate the inclusion of an extension telephone as a prohibited "device or
arrangement" but of greater importance, they were more concerned with penalizing the act of recording than the act of
merely listening to a telephone conversation.

xxx xxx xxx

Senator Tanada. Another possible objection to that is entrapment which is certainly objectionable. It is made possible by
special amendment which Your Honor may introduce.

Senator Diokno. Your Honor, I would feel that entrapment would be less possible with the amendment than without it,
because with the amendment the evidence of entrapment would only consist of government testimony as against the
testimony of the defendant. With this amendment, they would have the right, and the government officials and the person
in fact would have the right to tape record their conversation.

Senator Tanada. In case of entrapment, it would be the government.

Senator Diokno. In the same way, under this provision, neither party could record and, therefore, the court would be
limited to saying: "Okay, who is more credible, the police officers or the defendant?" In these cases, as experienced
lawyers, we know that the Court go with the peace offices.

(Congressional Record, Vol. III, No. 33, p. 628, March 12, 1964).

xxx xxx xxx

Senator Diokno. The point I have in mind is that under these conditions, with an agent outside listening in, he could falsify
the testimony and there is no way of checking it. But if you allow him to record or make a recording in any form of what is
happening, then the chances of falsifying the evidence is not very much.

Senator Tanada. Your Honor, this bill is not intended to prevent the presentation of false testimony. If we could devise a
way by which we could prevent the presentation of false testimony, it would be wonderful. But what this bill intends to
prohibit is the use of tape record and other electronic devices to intercept private conversations which later on will be used
in court.

(Congressional Record, Vol. III, No. 33, March 12, 1964, p. 629).
It can be readily seen that our lawmakers intended to discourage, through punishment, persons such as government
authorities or representatives of organized groups from installing devices in order to gather evidence for use in court or to
intimidate, blackmail or gain some unwarranted advantage over the telephone users. Consequently, the mere act of
listening, in order to be punishable must strictly be with the use of the enumerated devices in RA No. 4200 or others of
similar nature. We are of the view that an extension telephone is not among such devices or arrangements.
WHEREFORE, the petition is GRANTED. The decision of the then Intermediate Appellate Court dated August 16, 1984 is
ANNULLED and SET ASIDE. The petitioner is hereby ACQUITTED of the crime of violation of Rep. Act No. 4200,
otherwise known as the Anti-Wiretapping Act.

SO ORDERED.
Republic vs. CA

Private respondent Acil Corporation owned several hectares of Land Linoan, Montevista, Davao del Norte, which the
government took pursuant to the Comprehensive Agrarian Reform Law (R.A. No. 6657). Private respondent's certificates
of title were cancelled and new ones were issued and distributed to farmer-beneficiaries.

The lands were valued by the Land Bank of the Philippines at P19,312.24 per hectare for the riceland and P4,267.68 per
hectare for brushland, or for a total of P439,105.39. It appears, however, that in the Statement of Agricultural
Landholdings ("LISTASAKA") which private respondent had earlier filed with the Department of Agrarian Reform (DAR), a
lower "Fair Value Acceptable to Landowner" was stated and that based on this statement, the Land Bank of the
Philippines valued private respondent's lands uniformly at P15,311.79 per hectare and fixed the amount of P390,557.84
as the total compensation to be paid for the lands.

Private respondent rejected the government's offer, pointing out that nearby lands planted to the same crops were valued
at the higher price of P24,717.40 per hectare. The matter was brought before the Provincial Agrarian Reform Adjudicator
(PARAD) who, on October 8, 1992, sustained the initial valuation made by the LBP.

On December 12, 1992, private respondent filed a Petition for Just Compensation in the Regional Trial Court of Tagum,
Davao del Norte, sitting as a Special Agrarian Court. Private respondent prayed that DAR be ordered to pay P24,717.40
per hectare. However, the RTC dismissed its petition on the ground that private respondent should have appealed to the
Department of Agrarian Reform Adjudication Board (DARAB), pursuant to the latter's Revised Rules of Procedure, before
recourse to it (the RTC) could be had. In addition the RTC found that, in violation of the DARAB's rules of procedure the
petition had been filed more than fifteen (15) days after notice of the decision of the PARAD.

Private respondent moved for reconsideration but its motion was denied on October 13, 1994. Private respondent
therefore filed a petition for certiorari with the Court of Appeals, contending that a petition for just compensation under
R.A. No. 6657 §§56-57 falls under the exclusive and original jurisdiction of the RTC. His contention was sustained by the
Court of Appeals which, in its decision[1] of October 4, 1995, set aside the order of dismissal of the RTC. Accordingly, the
case was remanded to the RTC for further proceedings.

In turn the government, represented by the Department of Agrarian Reform, filed this petition for review on certiorari,
raising as the issue whether in cases involving claims for just compensation under R.A. No. 6657 an appeal from the
decision of the provincial adjudicator to the DARAB must first be made before a landowner can resort to the RTC under
§57. Petitioners sustain the affirmative proposition. They cite §50 of R.A. No. 6657 which in pertinent part provides:

§50. Quasi-judicial Powers of the Dar. - The DAR is hereby vested with primary jurisdiction to determine and adjudicate
agrarian reform matters and shall have exclusive original jurisdiction over all matters involving the implementation of
agrarian reform, except those falling under the exclusive jurisdiction of the Department of Agriculture (DA) and the
Department of Environment and Natural Resources (DENR)...
and argue that the fixing of just compensation for the taking of lands under R.A. No. 6657 is a "[matter] involving the
implementation of agrarian reform" within the contemplation of this provision. They invoke §16(f) of R.A. No. 6657, which
provides that "any party who disagrees to the decision [of the DAR] may bring the matter to the court of proper jurisdiction
for final determination of just compensation," as confirming their construction of §50.

The contention has no merit.

It is true that §50 grants the DAR primary jurisdiction to determine and adjudicate "agrarian reform matters" and exclusive
original jurisdiction over "all matters involving the implementation of agrarian reform," except those falling under the
exclusive jurisdiction of the Department of Agriculture and the Department of Environment and Natural Resources. It is
also true, however, that §57 provides:

§57. Special jurisdiction. - The Special Agrarian Court shall have original and exclusive jurisdiction over all petitions for the
determination of just compensation to landowners, and the prosecution of all criminal offenses under this Act. the Rules of
Court shall apply to all proceedings before the Special Agrarian Courts, unless modified by this Act.

The Special Agrarian Courts shall decide all appropriate cases under their special jurisdiction within thirty (30) days from
submission of the case for decision.
Thus Special Agrarian Courts, which are Regional Trial Courts, are given original and exclusive jurisdiction over two
categories of cases, to wit: (1) "all petitions for the determination of just compensation to landowners" and (2) "the
prosecution of all criminal offenses under [R.A. No. 6657]."[2] The provisions of §50 must be construed in harmony with
this provision by considering cases involving the determination of just compensation and criminal cases for violations of
R.A. No. 6657 as excepted from the plenitude of power conferred on the DAR. Indeed, there is a reason for this
distinction. The DAR is an administrative agency which cannot be granted jurisdiction over cases of eminent domain (for
such are takings under R.A. No. 6657) and over criminal cases. Thus, in EPZA v. Dulay[3] and Sumulong v.
Guerrero[4] we held that the valuation of property in eminent domain is essentially a judicial function which cannot be
vested in administrative agencies, while in Scoty's Department Store v. Micaller[5] we struck down a law granting the then
Court of Industrial Relations jurisdiction to try criminal cases for violations of the Industrial Peace Act.

Petitioners also cite Rule II, §5 and Rule XIII, §1 of the DARAB Rules of Procedure in support of their contention that
decisions of agrarian reform adjudicators may only be appealed to the DARAB. These rules provide:

Rule II §5. Appellate Jurisdiction. The Board shall have exclusive appellate jurisdiction to review, reverse, modify, alter or
affirm resolutions, orders, decisions, and other dispositions of its [regional and provincial agrarian reform adjudicators].

Rule XIII, §1. Appeal to the Board. - a) An appeal may be taken from an order or decision of the Regional or Provincial
Adjudicator to the Board by either of the parties or both, by giving or stating a written or oral appeal within a period of fifteen
(15) days from the receipt of the resolution, order or decision appealed from, and serving a copy thereof on the opposite or
adverse party, if the appeal is in writing.

b) An oral appeal shall be reduced into writing by the Adjudicator to be signed by the appellant, and a copy thereof shall
be served upon the opposite or adverse party within ten (10) days from the taking of oral appeal.
Apart from the fact that only a statute can confer jurisdiction on courts and administrative agencies - rules of procedure
cannot - it is noteworthy that the New Rules of Procedure of the DARAB, which was adopted on May 30, 1994, now
provide that in the event a landowner is not satisfied with a decision of an agrarian adjudicator, the landowner can bring
the matter directly to the Regional Trial Court sitting as Special Agrarian Court. Thus Rule XIII, §11 of the new rules
provides:

§11. Land Valuation and Preliminary Determination and Payment of Just Compensation. The decision of the Adjudicator
on land valuation and preliminary determination and payment of just compensation shall not be appealable to the Board but
shall be brought directly to the Regional Trial Courts designated as Special Agrarian Courts within fifteen (15) days from
receipt of the notice thereof. Any party shall be entitled to only one motion for reconsideration. (Emphasis supplied)
This is an acknowledgment by the DARAB that the decision of just compensation cases for the taking of lands under R.A.
No. 6657 is a power vested in the courts.

Thus, under the law, the Land Bank of the Philippines is charged with the initial responsibility of determining the value of
lands placed under land reform and the compensation to be paid for their taking. [6] Through notice sent to the landowner
pursuant to §16(a) of R.A. No. 6657, the DAR makes an offer. In case the landowner rejects the offer, a summary
administrative proceeding is held[7] and afterward the provincial (PARAD), the regional (RARAD) or the central (DARAB)
adjudicator as the case may be, depending on the value of the land, fixes the price to be paid for the land. If the
landowner does not agree to the price fixed, he may bring the matter to the RTC acting as Special Agrarian Court.[8] This
in essence is the procedure for the determination of compensation cases under R.A. No. 6657. In accordance with it, the
private respondent's case was properly brought by it in the RTC, and it was error for the latter court to have dismissed the
case. In the terminology of §57, the RTC, sitting as a Special Agrarian Court, has "original and exclusive jurisdiction over
all petitions for the determination of just compensation to landowners."[9] It would subvert this "original and exclusive"
jurisdiction of the RTC for the DAR to vest original jurisdiction in compensation cases in administrative officials and make
the RTC an appellate court for the review of administrative decisions.

Consequently, although the new rules speak of directly appealing the decision of adjudicators to the RTCs sitting as
Special Agrarian Courts, it is clear from §57 that the original and exclusive jurisdiction to determine such cases is in the
RTCs. Any effort to transfer such jurisdiction to the adjudicators and to convert the original jurisdiction of the RTCs into
appellate jurisdiction would be contrary to §57 and therefore would be void. What adjudicators are empowered to do is
only to determine in a preliminary manner the reasonable compensation to be paid to landowners, leaving to the courts
the ultimate power to decide this question.

WHEREFORE the petition for review on certiorari is DENIED and the decision of the Court of Appeals is AFFIRMED.

SO ORDERED.
Sajonas vs. CA

A word or group of words conveys intentions. When used truncatedly, its meaning disappears and breeds conflict. Thus, it
is written - "By thy words shalt thou be justified, and by thy words shalt thou be condemned." (Matthew, 12:37)

Construing the new words of a statute separately is the raison d'etre of this appeal.

Essentially, the case before us is for cancellation of the inscription of a Notice of Levy on Execution from a certificate of
Title covering a parcel of real property. The inscription was caused to be made by the private respondent on Transfer
Certificate of Title No. N-79073 of the Register of Deeds of Marikina, issued in the name of the spouses Ernesto B.
Uychocde and Lucita Jarin, and was later carried over to and annotated on Transfer Certificate of Title No. N-109417 of
the same registry, issued in the name of the spouses Alfredo Sajonas and Conchita R. Sajonas, who purchased the
parcel of land from the Uychocdes, and are now the petitioners in this case.

The facts are not disputed, and are hereby reproduced as follows:

"On September 22, 1983, the spouses Ernesto Uychocde and Lucita Jarin agreed to sell a parcel of residential land located
in Antipolo, Rizal to the spouses Alfredo Sajonas and Conchita R. Sajonas on installment basis as evidenced by a Contract
to Sell dated September 22, 1983. The property was registered in the names of the Uychocde spouses under TCT No. N-
79073 of the Register of Deeds of Marikina, Rizal. On August 27, 1984, the Sajonas couple caused the annotation of an
adverse claim based on the said Contract to Sell on the title of the subject property, which was inscribed as Entry No.
116017. Upon full payment of the purchase price, the Uychocdes executed a Deed of Sale involving the property in question
in favor of the Sajonas couple on September 4, 1984. The deed of absolute sale was registered almost a year after, or on
August 28, 1985.

Meanwhile, it appears that Domingo Pilares (defendant-appellant) filed Civil Case No. Q-28850 for collection of sum of
money against Ernesto Uychocde. On June 25, 1980, a Compromise Agreement was entered into by the parties in the said
case under which Ernesto Uychocde acknowledged his monetary obligation to Domingo Pilares amounting to P27,800 and
agreed to pay the same in two years from June 25, 1980. When Uychocde failed to comply with his undertaking in the
compromise agreement, defendant-appellant Pilares moved for the issuance of a writ of execution to enforce the decision
based on the compromise agreement, which the court granted in its order dated August 3, 1982. Accordingly, a writ of
execution was issued on August 12, 1982 by the CFI of Quezon City where the civil case was pending. Pursuant to the
order of execution dated August 3, 1982, a notice of levy on execution was issued on February 12, 1985. On February 12,
1985, defendant sheriff Roberto Garcia of Quezon City presented said notice of levy on execution before the Register of
Deeds of Marikina and the same was annotated at the back of TCT No. 79073 as Entry No. 123283.

When the deed of absolute sale dated September 4 1984 was registered on August 28, 1985, TCT No. N-79073 was
cancelled and in lieu thereof, TCT No. N-109417 was ssued in the name of the Sajonas couple. The notice of levy on
execution annotated by defendant sheriff was carried over to the new title. On October 21, 1985, the Sajonas couple filed
a Third Party Claim with the sheriff of Quezon City, hence the auction sale of the subject property did not push through as
scheduled.

On January 10, 1986, the Sajonas spouses demanded the cancellation of the notice of levy on execution upon defendant-
appellant Pilares, through a letter to their lawyer, Atty. Melchor Flores. Despite said demand, defendant-appellant Pilares
refused to cause the cancellation of said annotation. In view thereof, plaintiffs-appellees filed this complaint dated January
11, 1986 on February 5, 1986."[1]

The Sajonases filed their complaint[2] in the Regional Trial Court of Rizal, Branch 71, against Domingo Pilares, the
judgment creditor of the Uychocdes. The relevant portion of the complaint alleges:

"7. That at the time the notice of levy was annotated by the defendant, the Uychocde spouses, debtors of the defendant,
have already transferred, conveyed and assigned all their title, rights and interests to the plaintiffs and there was no more
title, rights or interests therein which the defendant could levy upon;

8. That the annotation of the levy on execution which was carried over to the title of said plaintiffs is illegal and invalid and
was made in utter bad faith, in view of the existence of the Adverse Claim annotated by the plaintiffs on the corresponding
title of the Uychocde spouses;

9. That a demand was made by the plaintiffs upon the defendant Domingo A. Pilares, to cause the cancellation of the said
notice of levy but the latter, without justifiable reason and with the sole purpose of harassing and embarrassing the plaintiffs
ignored and refused plaintiffs' demand;

10. That in view of the neglect, failure and refusal of the defendant to cause the cancellation of the notice of levy on
execution, the plaintiffs were compelled to litigate and engage the services of the undersigned counsel, to protect their rights
and interests, for which they agreed to pay attorney's fees in the amount of P10,000 and appearance fees of P500 per day
in court."[3]

Pilares filed his answer with compulsory counterclaim [4] on March 8, 1986, raising special and affirmative defenses, the
relevant portions of which are as follows:

"10. Plaintiff has no cause of action against herein defendants;

11. Assuming, without however admitting that they filed an adverse claim against the property covered by TCT No. 79073
registered under the name of spouses Ernesto Uychocde on August 27, 1984, the same ceases to have any legal force and
effect (30) days thereafter pursuant to Section 70 of P.D. 1529;

12. The Notice of Levy annotated at the back of TCT No. 79073 being effected pursuant to the Writ of Execution dated
August 31, 1982, duly issued by the CFI (now RTC) of Quezon City proceeding from a decision rendered in Civil Case No.
28859 in favor of herein defendant against Ernesto Uychocde, is undoubtedly proper and appropriate because the property
is registered in the name of the judgment debtor and is not among those exempted from execution;

13. Assuming without admitting that the property subject matter of this case was in fact sold by the registered owner in favor
of the herein plaintiffs, the sale is the null and void (sic) and without any legal force and effect because it was done in fraud
of a judgment creditor, the defendant Pilares."[5]

Pilares likewise sought moral and exemplary damages in a counterclaim against the Sajonas spouses. The parties
appeared at pre-trial proceedings on January 21, 1987,[6] after which, trial on the merits ensued.

The trial court rendered its decision on February 15, 1989.[7] It found in favor of the Sajonas couple, and ordered the
cancellation of the Notice of Levy from Transfer Certificate of Title No. N-109417.

The court a quo stated, thus:

"After going over the evidence presented by the parties, the court finds that although the title of the subject matter of the
Notice of Levy on Execution was still in the name of the Spouses Uychocde when the same was annotated on the said title,
an earlier Affidavit of Adverse Claim was annotated on the same title by the plaintiffs who earlier bought said property from
the Uychocdes.

It is a well settled rule in this jurisdiction (Guidote vs. Maravilla, 48 Phil. 442) that actual notice of an adverse claim is
equivalent to registration and the subsequent registration of the Notice of Levy could not have any legal effect in any respect
on account of prior inscription of the adverse claim annotated on the title of the Uychocdes.

xxx xxx xxx

On the issue of whether or not plaintiffs are buyers in good faith of the property of the spouses Uychocde even
notwithstanding the claim of the defendant that said sale executed by the spouses was made in fraud of creditors, the Court
finds that the evidence in this instance is bare of any indication that said plaintiffs as purchasers had notice beforehand of
the claim of the defendant over said property or that the same is involved in a litigation between said spouses and the
defendant. Good faith is the opposite of fraud and bad faith, and the existence of any bad faith must be established by
competent proof.[8] (Cai vs. Henson, 51 Phil 606)

xxx xxx xxx

In view of the foregoing, the Court renders judgment in favor of the plaintiffs and against the defendant Pilares, as follows:

1. Ordering the cancellation of the Notice of Levy on Execution annotated on Transfer Certificate of Title No. N-109417.

2. Ordering said defendant to pay the amount of P5,000 as attorney's fees.

3. Dismissing the Counterclaim interposed by said defendant.

Said defendant is likewise ordered to pay the costs.

Dissatisfied, Pilares appealed to the Court of Appeals [9], assigning errors on the part of the lower court. The appellate
court reversed the lower court's decision, and upheld the annotation of the levy on execution on the certificate of title,
thus:

"WHEREFORE, the decision of the lower court dated February 15, 1989 is reversed and set aside and this complaint is
dismissed.

Costs against the plaintiffs-appellees."[10]

The Sajonas couple are now before us, on a Petition for Review on Certiorari[11], praying inter alia to set aside the Court
of Appeals' decision, and to reinstate that of the Regional Trial Court.

Private respondent filed his Comment[12] on March 5, 1992, after which, the parties were ordered to file their respective
Memoranda. Private respondent complied thereto on April 27, 1994[13], while petitioners were able to submit their
Memorandum on September 29, 1992.[14]

Petitioner assigns the following as errors of the appellate court, to wit:

THE LOWER COURT ERRED IN HOLDING THAT THE RULE ON THE 30-DAY PERIOD FOR ADVERSE CLAIM UNDER
SECTION 70 OF P.D. NO. 1529 IS ABSOLUTE INASMUCH AS IT FAILED TO READ OR CONSTRUE THE PROVISION
IN ITS ENTIRETY AND TO RECONCILE THE APPARENT INCONSISTENCY WITHIN THE PROVISION IN ORDER TO
GIVE EFFECT TO IT AS A WHOLE.

II

THE LOWER COURT ERRED IN INTERPRETING SECTION 70 OF P.D. NO. 1529 IN SUCH WISE ON THE GROUND
THAT IT VIOLATES PETITIONERS' SUBSTANTIAL RIGHT TO DUE PROCESS.

Primarily, we are being asked to ascertain who among the parties in suit has a better right over the property in question.
The petitioners derive their claim from the right of ownership arising from a perfected contract of absolute sale between
them and the registered owners of the property, such right being attested to by the notice of adverse claim [15] annotated
on TCT No. N-79073 as early as August 27, 1984. Private respondent on the other hand, claims the right to levy on the
property, and have it sold on execution to satisfy his judgment credit, arising from Civil Case No. Q-28850[16] against the
Uychocdes, from whose title, petitioners derived their own.

Concededly, annotation of an adverse claim is a measure designed to protect the interest of a person over a piece of real
property where the registration of such interest or right is not otherwise provided for by the Land Registration Act or Act
496 (now P.D. 1529 or the Property Registration Decree), and serves a warning to third parties dealing with said property
that someone is claiming an interest on the same or a better right than that of the registered owner thereof. Such notice is
registered by filing a sworn statement with the Register of Deeds of the province where the property is located, setting
forth the basis of the claimed right together with other dates pertinent thereto. [17]

The registration of an adverse claim is expressly recognized under Section 70 of P.D. No. 1529. [*]

Noting the changes made in the terminology of the provisions of the law, private respondent interpreted this to mean that
a Notice of Adverse Claim remains effective only for a period of 30 days from its annotation, and does not automatically
lose its force afterwards. Private respondent further maintains that the notice of adverse claim was annotated on August
27, 1984, hence, it will be effective only up to September 26, 1984, after which it will no longer have any binding force and
effect pursuant to Section 70 of P.D. No. 1529. Thus, the sale in favor of the petitioners by the Uychocdes was made in
order to defraud their creditor (Pilares), as the same was executed subsequent to their having defaulted in the payment of
their obligation based on a compromise agreement.[18]

The respondent appellate court upheld private respondents' theory when it ruled:

"The above stated conclusion of the lower court is based on the premise that the adverse claim filed by plaintiffs-appellees
is still effective despite the lapse of 30 days from the date of registration. However, under the provisions of Section 70 of
P.D. 1529, an adverse claim shall be effective only for a period of 30 days from the date of its registration. The provision of
this Decree is clear and specific.

xxx xxx xxx

It should be noted that the adverse claim provision in Section 110 of the Land Registration Act (Act 496) does not provide
for a period of effectivity of the annotation of an adverse claim. P.D. No. 1529, however, now specifically provides for only
30 days. If the intention of the law was for the adverse claim to remain effective until cancelled by petition of the interested
party, then the aforecited provision in P.D. No. 1529 stating the period of effectivity would not have been inserted in the law.

Since the adverse claim was annotated On August 27, 1984, it was effective only until September 26, 1984. Hence, when
the defendant sheriff annotated the notice of levy on execution on February 12, 1985, said adverse claim was already
ineffective. It cannot be said that actual or prior knowledge of the existence of the adverse claim on the Uychocdes' title is
equivalent to registration inasmuch as the adverse claim was already ineffective when the notice of levy on execution was
annotated. Thus, the act of defendant sheriff in annotating the notice of levy on execution was proper and justified."

The appellate court relied on the rule of statutory construction that Section 70 is specific and unambiguous and hence,
needs no interpretation nor construction.[19] Perforce, the appellate court stated, the provision was clear enough to warrant
immediate enforcement, and no interpretation was needed to give it force and effect. A fortiori, an adverse claim shall be
effective only for a period of thirty (30) days from the date of its registration, after which it shall be without force and effect.
Continuing, the court further stated;

". . . clearly, the issue now has been reduced to one of preference- which should be preferred between the notice of levy on
execution and the deed of absolute sale. The Deed of Absolute Sale was executed on September 4, 1984, but was
registered only on August 28, 1985, while the notice of levy on execution was annotated six (6) months prior to the
registration of the sale on February 12, 1985.

In the case of Landig vs. U.S. Commercial Co., 89 Phil 638 it was held that where a sale is recorded later than an
attachment, although the former is of an earlier date, the sale must give way to the attachment on the ground that the act
of registration is the operative act to affect the land. A similar ruling was restated in Campillo vs. Court of Appeals (129
SCRA 513).

xxx xxx xxx

The reason for these rulings may be found in Section 51 of P.D. 1529, otherwise known as the Property Registration Decree,
which provides as follows:
Section 51. Conveyance and other dealings by the registered owner.- An owner of registered land may convey, mortgage,
lease, charge, or otherwise deal with the same in accordance with existing laws. He may use such forms of deeds,
mortgages, leases or other voluntary instruments as are sufficient in law. But no deed, mortgage, lease or other voluntary
instrument, except a will purporting to convey or affect registered land shall take effect as a conveyance or bind the land,
but shall operate only as a contract between the parties and as evidence of authority to the Register of Deeds to make
registration.

The act of registration shall be the operative act to convey or affect the land in so far as third persons are concerned, and
in all cases under the Decree, the registration shall be made in the office of the Register of Deeds for the province or city
where the land lies." (Italics supplied by the lower court.)

Under the Torrens system, registration is the operative act which gives validity to the transfer or creates a lien upon the
land. A person dealing with registered land is not required to go behind the register to determine the condition of the
property. He is only charged with notice of the burdens on the property which are noted on the face of the register or
certificate of title.[20]

Although we have relied on the foregoing rule, in many cases coming before us, the same, however, does not fit in the
case at bar. While it is the act of registration which is the operative act which conveys or affects the land insofar as third
persons are concerned, it is likewise true, that the subsequent sale of property covered by a Certificate of Title cannot
prevail over an adverse claim, duly sworn to and annotated on the certificate of title previous to the sale.[21] While it is true
that under the provisions of the Property Registration Decree, deeds of conveyance of property registered under the
system, or any interest therein only take effect as a conveyance to bind the land upon its registration, and that a
purchaser is not required to explore further than what the Torrens title, upon its face, indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right thereto, nonetheless, this rule is not absolute. Thus, one
who buys from the registered owner need not have to look behind the certificate of title, he is, nevertheless, bound by the
liens and encumbrances annotated thereon. One who buys without checking the vendor's title takes all the risks and
losses consequent to such failure.[22]

In PNB vs. Court of Appeals, we held that "the subsequent sale of the property to the De Castro spouses cannot prevail
over the adverse claim of Perez, which was inscribed on the bank's certificate of title on October 6, 1958. That should
have put said spouses on notice, and they can claim no better legal right over and above that of Perez. The TCT issued in
the spouses' names on July, 1959 also carried the said annotation of adverse claim. Consequently, they are not entitled to
any interest on the price they paid for the property."[23]

Then again, in Gardner vs. Court of Appeals, we said that "the statement of respondent court in its resolution of reversal
that 'until the validity of an adverse claim is determined judicially, it cannot be considered a flaw in the vendor's title'
contradicts the very object of adverse claims. As stated earlier, the annotation of an adverse claim is a measure designed
to protect the interest of a person over a piece of real property, and serves as a notice and warning to third parties dealing
with said property that someone is claiming an interest on the same or has a better right than the registered owner
thereof. A subsequent sale cannot prevail over the adverse claim which was previously annotated in the certificate of title
over the property."[24]

The question may be posed, was the adverse claim inscribed in the Transfer Certificate of Title No. N-109417 still in force
when private respondent caused the notice of levy on execution to be registered and annotated in the said title,
considering that more than thirty days had already lapsed since it was annotated? This is a decisive factor in the
resolution of this instant case.

If the adverse claim was still in effect, then respondents are charged with knowledge of pre-existing interest over the
subject property, and thus, petitioners are entitled to the cancellation of the notice of levy attached to the certificate of title.

For a definitive answer to this query, we refer to the law itself. Section 110 of Act 496 or the Land Registration Act reads:

"Sec. 110. Whoever claims any part or interest in registered lands adverse to the registered owner, arising subsequent to
the date of the original registration, may, if no other provision is made in this Act for registering the same, make a statement
in writing setting forth fully his alleged right or interest, and how or under whom acquired, and a reference to the volume
and page of the certificate of title of the registered owner, and a description of the land in which the right or interest is
claimed.
The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and designate a place at
which all notices may be served upon him. The statement shall be entitled to registration as an adverse claim, and the court,
upon a petition of any party in interest, shall grant a speedy hearing upon the question of the validity of such adverse claim
and shall enter such decree therein as justice and equity may require. If the claim is adjudged to be invalid, the registration
shall be cancelled. If in any case, the court after notice and hearing shall find that a claim thus registered was frivolous or
vexatious, it may tax the adverse claimant double or treble the costs in its discretion."

The validity of the above-mentioned rules on adverse claims has to be reexamined in the light of the changes introduced
by P.D. 1529, which provides:

"Sec. 70 Adverse Claim- Whoever claims any part or interest in registered land adverse to the registered owner, arising
subsequent to the date of the original registration, may, if no other provision is made in this decree for registering the same,
make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to
the number of certificate of title of the registered owner, the name of the registered owner, and a description of the land in
which the right or interest is claimed.

The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a place at which all
notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of
title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said
period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in
interest: Provided, however, that after cancellation, no second adverse claim based on the same ground shall be registered
by the same claimant.

Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the land
is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of the
validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is adjudged to
be invalid, the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and hearing shall find
that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos,
nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse
claim by filing with the Register of Deeds a sworn petition to that effect." (Italics ours)

In construing the law aforesaid, care should be taken that every part thereof be given effect and a construction that could
render a provision inoperative should be avoided, and inconsistent provisions should be reconciled whenever possible as
parts of a harmonious whole.[25] For taken in solitude, a word or phrase might easily convey a meaning quite different from
the one actually intended and evident when a word or phrase is considered with those with which it is associated. [26] In
ascertaining the period of effectivity of an inscription of adverse claim, we must read the law in its entirety. Sentence
three, paragraph two of Section 70 of P.D. 1529 provides:

"The adverse claim shall be effective for a period of thirty days from the date of registration."

At first blush, the provision in question would seem to restrict the effectivity of the adverse claim to thirty days. But the
above provision cannot and should not be treated separately, but should be read in relation to the sentence following,
which reads:

"After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by
the party in interest."

If the rationale of the law was for the adverse claim to ipso facto lose force and effect after the lapse of thirty days, then it
would not have been necessary to include the foregoing caveat to clarify and complete the rule. For then, no adverse
claim need be cancelled. If it has been automatically terminated by mere lapse of time, the law would not have required
the party in interest to do a useless act.
A statute's clauses and phrases must not be taken separately, but in its relation to the statute's totality. Each statute must,
in fact, be construed as to harmonize it with the pre-existing body of laws. Unless clearly repugnant, provisions of statutes
must be reconciled. The printed pages of the published Act, its history, origin, and its purposes may be examined by the
courts in their construction.[27] An eminent authority on the subject matter states the rule candidly:

"A statute is passed as a whole and not in parts or sections, and is animated by one general purpose and intent.
Consequently, each part or section should be construed in connection with every other part or section so as to produce a
harmonious whole. It is not proper to confine its intention to the one section construed. It is always an unsafe way of
construing a statute or contract to divide it by a process of etymological dissection, into separate words, and then apply to
each, thus separated from the context, some particular meaning to be attached to any word or phrase usually to be
ascertained from the context."[28]

Construing the provision as a whole would reconcile the apparent inconsistency between the portions of the law such that
the provision on cancellation of adverse claim by verified petition would serve to qualify the provision on the effectivity
period. The law, taken together, simply means that the cancellation of the adverse claim is still necessary to render it
ineffective, otherwise, the inscription will remain annotated and shall continue as a lien upon the property. For if the
adverse claim has already ceased to be effective upon the lapse of said period, its cancellation is no longer necessary
and the process of cancellation would be a useless ceremony. [29]

It should be noted that the law employs the phrase "may be cancelled", which obviously indicates, as inherent in its
decision making power, that the court may or may not order the cancellation of an adverse claim, notwithstanding such
provision limiting the effectivity of an adverse claim for thirty days from the date of registration. The court cannot be bound
by such period as it would be inconsistent with the very authority vested in it. A fortiori, the limitation on the period of
effectivity is immaterial in determining the validity or invalidity of an adverse claim which is the principal issue to be
decided in the court hearing. It will therefore depend upon the evidence at a proper hearing for the court to determine
whether it will order the cancellation of the adverse claim or not.[30]

To interpret the effectivity period of the adverse claim as absolute and without qualification limited to thirty days defeats
the very purpose for which the statute provides for the remedy of an inscription of adverse claim, as the annotation of an
adverse claim is a measure designed to protect the interest of a person over a piece of real property where the
registration of such interest or right is not otherwise provided for by the Land Registration Act or Act 496 (now P.D. 1529
or the Property Registration Decree), and serves as a warning to third parties dealing with said property that someone is
claiming an interest or the same or a better right than the registered owner thereof. [31]

The reason why the law provides for a hearing where the validity of the adverse claim is to be threshed out is to afford the
adverse claimant an opportunity to be heard, providing a venue where the propriety of his claimed interest can be
established or revoked, all for the purpose of determining at last the existence of any encumbrance on the title arising
from such adverse claim. This is in line with the provision immediately following:

"Provided, however, that after cancellation, no second adverse claim shall be registered by the same claimant."

Should the adverse claimant fail to sustain his interest in the property, the adverse claimant will be precluded from
registering a second adverse claim based on the same ground.

It was held that "validity or efficaciousness of the claim may only be determined by the Court upon petition by an
interested party, in which event, the Court shall order the immediate hearing thereof and make the proper adjudication as
justice and equity may warrant. And it is only when such claim is found unmeritorious that the registration of the adverse
claim may be cancelled, thereby protecting the interest of the adverse claimant and giving notice and warning to third
parties."[32]

In sum, the disputed inscription of adverse claim on the Transfer Certificate of Title No. N-79073 was still in effect on
February 12, 1985 when Quezon City Sheriff Roberto Garcia annotated the notice of levy on execution thereto.
Consequently, he is charged with knowledge that the property sought to be levied upon on execution was encumbered by
an interest the same as or better than that of the registered owner thereof. Such notice of levy cannot prevail over the
existing adverse claim inscribed on the certificate of title in favor of the petitioners. This can be deduced from the pertinent
provision of the Rules of Court, to wit:
"Section 16. Effect of levy on execution as to third persons- The levy on execution shall create a lien in favor of the judgment
creditor over the right, title and interest of the judgment debtor in such property at the time of the levy, subject to liens or
encumbrances then existing." (Italics supplied)

To hold otherwise would be to deprive petitioners of their property, who waited a long time to complete payments on their
property, convinced that their interest was amply protected by the inscribed adverse claim.

As lucidly observed by the trial court in the challenged decision:

"True, the foregoing section provides that an adverse claim shall be effective for a period of thirty days from the date of
registration. Does this mean however, that the plaintiffs thereby lost their right over the property in question? Stated in
another, did the lapse of the thirty day period automatically nullify the contract to sell between the plaintiffs and the
Uychocdes thereby depriving the former of their vested right over the property?

It is respectfully submitted that it did not."[33]

As to whether or not the petitioners are buyers in good faith of the subject property, the same should be made to rest on
the findings of the trial court. As pointedly observed by the appellate court, "there is no question that plaintiffs-appellees
were not aware of the pending case filed by Pilares against Uychocde at the time of the sale of the property by the latter in
their favor. This was clearly elicited from the testimony of Conchita Sajonas, wife of plaintiff, during cross-examination on
April 21, 1988".[34]

ATTY. REYES

Q - Madam Witness, when Engr. Uychocde and his wife offered to you and your husband the property subject matter of
this case, they showed you the owner's transfer certificate, is it not?

A - Yes, sir.

Q - That was shown to you the very first time that this lot was offered to you for sale?

A - Yes.

Q - After you were shown a copy of the title and after you were informed that they are desirous in selling the same, did you
and your husband decide to buy the same?

A - No, we did not decide right after seeing the title. Of course, we visited...

Q - No, you just answer my question. You did not immediately decide?

A - Yes.

Q - When did you finally decide to buy the same?

A - After seeing the site and after verifying from the Register of Deeds in Marikina that it is free from encumbrances, that
was the time we decided.

Q - How soon after you were offered this lot did you verify the exact location and the genuineness of the title, as soon after
this was offered to you?

A - I think it's one week after they were offered.[35]

A purchaser in good faith and for value is one who buys property of another without notice that some other person has a
right to or interest in such property and pays a full and fair price for the same, at the time of such purchase, or before he
has notice of the claims or interest of some other person in the property.[36] Good faith consists in an honest intention to
abstain from taking any unconscientious advantage of another.[37] Thus, the claim of the private respondent that the sale
executed by the spouses was made in fraud of creditors has no basis in fact, there being no evidence that the petitioners
had any knowledge or notice of the debt of the Uychocdes in favor of the private respondents, nor of any claim by the
latter over the Uychocdes' properties or that the same was involved in any litigation between said spouses and the private
respondent. While it may be stated that good faith is presumed, conversely, bad faith must be established by competent
proof by the party alleging the same. Sans such proof, the petitioners are deemed to be purchasers in good faith, and
their interest in the subject property must not be disturbed.

At any rate, the Land Registration Act (Property Registration Decree) guarantees to every purchaser of registered land in
good faith that they can take and hold the same free from any and all prior claims, liens and encumbrances except those
set forth on the Certificate of Title and those expressly mentioned in the ACT as having been preserved against it.
Otherwise, the efficacy of the conclusiveness of the Certificate of Title which the Torrens system seeks to insure would be
futile and nugatory.[38]

ACCORDINGLY, the assailed decision of the respondent Court of Appeals dated October 17, 1991 is hereby REVERSED
and SET ASIDE. The decision of the Regional Trial Court dated February 15, 1989 finding for the cancellation of the
notice of levy on execution from Transfer Certificate of Title No. N-109417 is hereby REINSTATED.

The inscription of the notice of levy on execution on TCT No. N-109417 is hereby CANCELLED.

Costs against private respondent.

SO ORDERED.
Cuyegkeng vs. Cruz

This quo warranto proceeding was initiated on November 25, 1959. The prayer in the petition, as amended on December
1, 1959, reads:
"Wherefore, it is respectfully prayed that judgment be rendered in favor of the petitioners:
ON THE FIRST CAUSE OF ACTION:

1. Declaring the petitioners as duly qualified for the position of member of the Board of Medical Examiners and that
any one of them is legally entitled to be appointed as members of said Board;

2. Declaring the appointment of the respondent Dr. Pedro M. Cruz as a member of the Board of Medical Examiners
illegal and therefore null and void and ousting him therefrom and perpetually prohibiting him (unless appointed in
accordance with law) from exercising the rights and performing the duties and functions connected therewith.

ON THE SECOND CAUSE OF ACTION:

1. That pending the hearing on the merits of this case, a writ of preliminary injunction be issued forthwith ex parte
ordering the respondent to cease, desist and refrain from assuming the office of member of the Board of Medical
Examiners and exercising the rights and performing the duties and functions connected therewith, particularly to
give or conduct the next examinations for physicians scheduled on or about December 14, 1959, or to take part in
any way in the giving or conducting thereof, and after due hearing to make said injunction permanent;

2. Ordering the respondent to pay the costs of this suit.

Petitioners further pray for such further and other relief as this Honorable Court "may deem just and proper under the
premises."
By a resolution dated December 3, 1959, this Court denied the petition for a writ of preliminary injunction.
The petitioners are doctors Jose Cuyegkeng, Pedro N. Mayuga, Benjamin Roa, Timoteo Alday, Dominador Jacinto,
Alejandro Gaerlan and Rosita Rivera-Ramirez. Their alleged cause of action is predicated upon the fact that their names
appear in a list of qualified physicians, approved and submitted, to the President of the Philippines, by the Executive
Council of the Philippine Medical Association of the Philippines pursuant to the provisions of section 13 of Republic Act
No. 2382, for appointment as members of the Board of Medical Examiners, and that respondent Dr. Pedro M. Cruz, whom
the President appointed to said board, was not named in said list.
Soon after the institution of this case, the officers and members of said Council of the Philippine Medical Association,
which is said to be an incorporated association of the medical profession in the Philippines, were allowed to intervene and
then filed a petition in intervention, joining the petitioners in praying for the relief sought by them.
It appears that, on October 16, 1959, said Council, acting in conformity with section 13 of Republic Act No. 2882,
otherwise known as The Medical Act of 1959, approved and submitted to the President a revised list of qualified
physicians, including petitioners herein, for appointment to the aforementioned Board. The letter of said Council
transmitting the aforementioned list reads as follows.
"October 16, 1959
Hon. Enrique C. Quema
Assistant Executive Secretary
Office of the President
Republic of the Philippines
Malacañang, Manila

Dear Sir:

In compliance with your request as contained in your letter of October 15, addressed to the Executive Council of the
Philippine Medical Association, and pursuant to a decision reached by the said Council at a special meeting held
yesterday, please be informed that the nominee who placed 13th in our order of priority for recommendation as members
of the Board of Medical Examiners, namely, Dr. Rosita Rivera-Ramirez, is now being recommended as No. 12. With the
disqualification of Dr. Dionisio R. Parulan (No. 11) by virtue of his candidacy to an elective post, we hereunder enumerate
our twelve recommendees in the modified order:

1. Dr. Cesar Filoteo

 2. Dr. Jose Cuyegkeng
3. Dr. Edgardo Caparas
4. Dr. Antonio Guytingco
5. Dr. Pedro N. Mayuga
6. 6. Dr. Benjamin Roa
7. Dr. Jose Cocjin
8. Dr. Timoteo Alday
9. Dr. Dominador Jacinto
10. Dr. Alejandro Gaerlan
11. Dr. Oscar Chacon
12. Dr. Rosita Rivera-Ramirez

Thank you for your interest on this matter.

Very truly yours,

FOR THE EXECUTIVE COUNCIL

S/ALBERTO Z. ROMUALDEZ
T/ALBERTO Z. ROMUALDEZ, MD."
By a letter of the Assistant Executive Secretary dated November 18, 1959, said Council was advised that the President
had decided to appoint, as member of said Board, Dr. Cesar Filoteo, Dr. Oscar Chacon, Dr. Edgardo Caparas, Dr. Jose
Cocjin, Dr. Antonio Guytingco and Dr. Pedro M. Cruz. Said letter follows:
"OFFICE OF THE PRESIDENT
OF THE PHILIPPINES
Manila, November 18, 1959
The Executive Council
Philippine Medical Association
1850 Taft Avenue, Manila

Gentlemen:

The President wishes me to thank you for your letter of October 16, 1959, submitted a revised list of recommendees for
appointment as members of the Board of Medical Examiners under the provisions of Republic Act No. 2382.
After mature deliberation, the President has decided to appoint in the board two graduates from the University of the
Philippines, two from the University of Santo Tomas and two government physicians irrespective of alma mater. The
following were the candidates selected and appointed by the President:
1. Dr. Cesar Filoteo U. P.
2. Dr. Oscar Chacon U. P.
3. Dr. Edgardo Caparas U. S. T.
4. Dr. Jose Cocjin U. S. T.
5. Dr. Antonio Guytingco Government Physician
6. Dr. Pedro M. Cruz Government Physician
Of the twelve (12) names submitted in your above-mentioned letter of October 16, 1959, Dr. Antonio Guytingco and Dr.
Alejandro Gaerlan, government physicians, happen to be both personal physicians of the President. For this reason, the
President decided on renewing the appointment of Dr. Pedro M. Gruz, also a government physician, whose term under
the old law would not have expired until August 7, 1960, were it not for the enactment of Republic Act No. 2382.
Very truly yours,
(Sgd.) Enrique C. Quema

t/ENRIQUE C. QUEMA
Assistant Executive Secretary"
The first five (5) persons mentioned in this letter were included in the list aforementioned, but the name of the last,
namely, that of respondent herein, did not appear in said list. Petitioners herein, as well as the intervenors, maintain that,
pursuant to section 13 of Republic Act No. 2382, the President cannot appoint to the Board of Medical Examiners any
person not named in the list submitted by the Executive Council of the Philippine Medical Association, and that,
accordingly, the aforementioned appointment of respondent is null and void.
Respondent alleged in his answer that three (3) of petitioners herein are, pursuant to section 14 of Republic Act No. 2382,
not qualified for appointment to the Board of Medical Examiners, they being members of the professional staff of certain
private medical colleges; that there is no cause of action against him for none of the petitioners and intervenors claim to
be entitled to the office in question; that the aforementioned list, submitted by the executive Council of the Philippine
Medical Association, is merely recommendatory in nature and, as such, not binding upon the President; that insofar as
Section 13 of Republic Act No. 2382 may be construed as limiting the choice of the President, in a mandatory manner, in
the selection of members of the Board of Medical Examiners, to the list aforementioned, said legal provision is
unconstitutional and void; and that inclusion in the list above referred to is not one of the qualifications prescribed in
section 14 of Republic Act No. 2382 for appointment to said Board.
The members of this Court are split into three (3) croups in their views on the issues thus raised by the pleadings. Section
13 of Republic Act No. 2382, upon which the petitioners and the intervenors rely, provides:
"The Board of Medical Examiners, its composition and duties. The Board of Medical Examiners shall be composed of six
members to be appointed by the President of the Philippines from a confidential list of not more than twelve names
approved and submitted by the executive council of the Philippine Medical Association, after due consultation with other
medical associations, during the months of April and October of each year. The chairman of the Board shall be elected
from among themselves by the members at a meeting called for the purpose. The President of the Philippines shall fill any
vacancy that may occur during any examination from the list of names submitted by the Philippine Medical Association in
accordance with the provisions of this Act.
"No examiner shall handle the examinations in more than four subjects or groups of subjects as hereinafter provided. The
distribution of subjects to each member shall be agreed upon at a meeting called by the chairman for the purpose. The
examination papers shall be under the custody of the Commissioner of Civil Service or his duly authorized representative,
and shall be distributed to each member of the Board who shall correct, grade, and sign, and submit them to the said
Commissioner within one hundred twenty days from the date of the termination of the examinations.
"A final meeting of the Board for the deliberation and approval of the grades shall be called by the Commissioner of Civil
Service immediately after receipt of the records from the members of the Board of Medical Examiners. The secretary of
the Board shall submit to the President of the Philippines for approval the names of the successful candidates as having
been duly qualified for licensure in alphabetical order, without stating the ratings obtained by each."
One group of members of this Court is of the opinion that the provisions of this section are mandatory in character; that,
although Congress may, by law, prescribe the qualifications for appointment to a public office created by statute, such as
membership of the Board of Medical Examiners, and has specified the qualifications for eligibility to said Board in Section
14 of Republic Act No. 2382, reading:
"Qualifications of examiners. No person shall be appointed a member of the Board of Medical Examiners unless he or she
(1) is a natural-born citizen of the Philippines, (2) is a duly registered physician in the Philippines, (3) has been in the
practice of medicine for at least ten years, (4) is of good moral character and of recognized standing in the medical
profession, (5) is not a member of the faculty of any medical school and has no pecuniary interest, directly or indirectly, in
any college of medicine or in any institution where any branch of medicine is taught, at the time of his
appointment: Provided, That of the six members to be appointed, not more than two shall be graduates of the same
institution and not more than three shall be government physicians."
inclusion in the list submitted by the Executive Council of the Philippine Medical Association, in compliance with section
13 of the same Act, is not one of the qualifications enumerated in said section 14; that by confining the selection of the six
(6) members of the Board of Medical Examiners to the twelve (12) person included in said list, the framers of the law have
evinced the intent, not merely to prescribe the qualifications for eligibility to said Board, but, also, to limit and curtail, and,
hence, to reduce and impair the power of appointment vested in the President by the Constitution, which authority
connotes necessarily a reasonable measure of freedom, latitude or discretion in the exercise of the power to choose the
appointees (67 C. J. S. 157-158); and that, consequently, the pertinent portion of section 13 of Republic Act No. 2382 is
unconstitutional and the appointment of respondent herein lawful and valid.
It may not be amiss to note, in this connection, that none of the cases cited in the memorandum of the intervenors herein
(Marks vs. Frantz [1956] 179 Kan. 638, 298 P 2nd 316; Railroad et al. vs. Willis [1947] 305 Ky. 224, 203 S. W. 2nd 18;
Bradley vs. Board of Zoning Adjustment [1926], 255 Mass. 160, 150 N. E. 892) is in point for the constitutions of Kansas,
Kentucky and Massachusetts contain no provision identical or analogous to that found in our fundamental law, vesting in
the President all executive powers not conferred upon others, and explicitly stating that all officers of the Government
whose appointment are not otherwise provided for in the charter of said states shall be appointed by him. The authority of
the chief executive of those states to appoint the officers involved in said cases springs mostly from statutes, unlike the
President of the Philippines, whose appointing power emanates from our Constitution.
Another group adheres to the view that said portion of section 13 of Republic Act No. 2382 is merely directory in nature.
Indeed, in their respective pleadings, the petitioners, as well as the intervenors, refer to the persons named in the list
aforementioned as "recommendees". They are identically referred to in the communication transmitting said list to the
President of the Philippines, which communication is, in turn, described in said pleadings as a letter of "recommendation".
By their very acts therefore, the intervenors have clearly expressed the belief, which was shared by the President, that the
function of the former under said section 13 is purely recommendatory. Needless to say, a "recommendation", as such,
implies merely an advice, exhortation or indorsement, which is essentially persuasive in character, not binding upon the
party to whom it is made. The members of the Court constituting this group feel, therefore, that, although section 13 of
Republic Act No. 2382 is constitutional, respondent herein has a valid title to his office as member of the Board of Medical
Examiners.
The third group, which is bigger than any of the two (2) groups already adverted to, deems it unnecessary, either to
inquire into the constitutionality of said section 13, or to determine whether the same is mandatory or directory, for the
reasons presently to be stated.
The letter to the Executive Council of the Philippine Medical Association dated November 18, 1959, informing the
Association of the action taken by the President, states that he "had decided to appoint in the Board two graduates from
the University of the Philippines, two from the University of Santo Tomas and. two government physicians irrespective of
alma mater". The list submitted by the Executive Council of the Philippine Medical Association included two (2)
government physicians, namely, Dr. Antonio Guytingco and Dr. Alejandro Gaerlan, both of whom were "personal
physicians of the President". Believing, perhaps, that their appointment to the Board may either deprive him completely of
the benefits of their professional services, or impair the quality or usefulness thereof, or that a choice in favor of his two (2)
personal doctors, as representatives of the government physicians in said Board, may smack of, or be misconstrued as,
an act of nepotism, it was deemed best to appoint to the Board only one of them so that the other could continue giving
his undivided attention to the health of the President. Hence, the latter had to look for another government physician for
appointment to the Board. In this connection, it should be noted that respondent's professional competency for the post he
now holds is not disputed. In fact, he had been a member of said Board twice before. What is more, when the questioned
appointment was extended to him, on November 18, 1959, respondent was a member of said Board, and his term as
such would have expired on August 7, 1960, had it not been for the approval of Republic Act No. 2382 on June 20, 1959.
The President made, therefore, said appointment, which, the members of the Court belonging to the third group believe, is
sanctioned by section 15 of Republic Act No. 2382, reading:
"Tenure of office and compensation of members. The members of the Board of Medical Examiners shall hold office for
one year: Provided, That any member may be reappointed for not more than one year. Each member shall receive as
compensation ten pesos for each candidate examined for registration as physician, and five pesos for each candidate
examined in the preliminary or final physician examination.
"The President of the Philippines, upon the recommendation of the Commissioner of Civil Service, after due investigation,
may remove any member of the Board of Medical Examiners for neglect of duty, incompetency, or unprofessional or
dishonorable conduct."
The members of said group opine that it is not absolutely necessary that the person reappointed under this provision be
included in the list mentioned in section 13 of Republic Act No. 2382, for, in case of conflict between two (2) provisions of
the same statute, the last in order of position is frequently held to prevail (82 C. J. S. 718), unless it clearly appears that
the intent of Congress is otherwise, and no such intent is patent in the case at bar. Furthermore, the purpose of section
13, in requiring the favorable indorsement of the Philippine Medical Association, evidently, to reasonably assure that the
members of the Board of Medical Examiners are among the best in their profession, and one who has already held, or
who still holds a position in said Board, is presumed to belong to such class, in the absence of proof to the contrary. There
is not even the slightest suggestion that respondent does not live up to the standard required for membership in said
Board.
In conclusion, although none of the groups already adverted to have sufficient votes to constitute the requisite majority,
the members of this Court are unanimous in the opinion that respondent herein has a good and valid title to his office.
Lastly, this is a quo warranto proceeding, which, pursuant to Rule 68 of the Rules of Court, may be brought, either by the
Government or by a private individual. Not every individual may, however, initiate the proceedings. Section 6 of said Rule
provides:
"When an individual may commence such an action. A person claiming to be entitled to a public office usurped or
unlawfully held or exercised by another may bring an action therefor in his own name."
Thus, one who does not claim to be entitled to the office allegedly usurped or unlawfully held or exercised by another
cannot question his title thereto by quo warranto. In the case at bar, petitioners do not claim to be entitled to the
office held by respondent herein. None of them has been appointed thereto and none of them may, therefore, be placed in
said office, regardless of the alleged flaws in respondent's title thereto. They merely assert a right to be appointed to said
office. Considering, however, that there are seven (7) petitioners and that only one (1) office is involved in this case, none
of them can, or does, give an assurance that he will be the one appointed by the President, should said office be declared
vacant. In short, the claim of each petitioner is predicated solely upon a more or less remote possibility that in said event,
he may be the recipient of the appointment. It is obvious, therefore, that none of them has a cause of action against
respondent herein (Acosta vs. Flor, 5 Phil., 18, 22; Lino Luna vs. Rodriguez, 36 Phil., 401; Nueno vs. Angeles, 76 Phil.,
12).
Upon the other hand, the petition in intervention is predicated upon the right of the intervenors to submit a list
of recommendees for appointment to the Board of Medical Examiners. Such right does not entitle the intervenors, under
the above provision of Rule 68, to question the title of respondent herein. Hence, the petition for quo warranto has no leg
to stand on.
Wherefore, the writ prayed for should be, as it is hereby, denied, with costs against the petitioners. It is so ordered.
Paras, C. J., Bengzon, Padilla, Bautista Angelo, Labrador, Reyes, Endencia, and Barrera, JJ., concur.
Montemayor, and Gutierrez David, JJ., concur in the result.
Paras vs. COE

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 petitioner's 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 General's 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]

Petitioner's 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 official's
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.

(b) No recall shall take place within one (1) year from the date of the official's 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
petitioner's 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, petitioner's 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 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 official's 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.
Corona vs. CA

A Petition to review on Certiorari the judgment of the Court of Appeals[1] (CA-G.R. No. 12404-SP) of August 11, 1981,
upholding the appointment by the Court of First Instance of Rizal, Pasig, Branch VI, of respondent Romarico G. Vitug, as
Special Administrator, although in the Will of his deceased wife, she had disinherited him, as well as the Appellate Court's
Resolution of February 17, 1982 denying reconsideration.
On November 10, 1980, Dolores Luchangco Vitug died in New York, U.S.A., leaving two Wills: one, a holographic Will dated
October 3, 1980, which excluded her husband, respondent Romarico G. Vitug, as one of her heirs, and the other, a formal
Will sworn to on October 24, 1980, or about three weeks thereafter, which expressly disinherited her husband Romarico
"for reason of his improper and immoral conduct amounting to concubinage, which is a ground for legal separation under
Philippine Law"; bequeathed her properties in equal shares to her sisters Exaltacion L. Allarde, Vicenta L. Faustino and
Gloria L. Teoxon, and her nieces Rowena F. Corona and Jennifer F. Way; and appointed Rowena F. Corona, herein
petitioner, as her Executrix.
On November 21, 1980, Rowena filed a petition for the probate of the Wills before the Court of First Instance of Rizal,
Branch VI (Spec. Procs. No. 9398), and for the appointment of Nenita P. Alonte as Administrator because she (Rowena) is
presently employed in the United Nations in New York City.
On December 2, 1980, upon Rowena's urgent Motion, the Probate Court appointed Nenita P. Alonte as Special
Administratrix, upon a P100,000.00 bond.
On December 12, 1980, the surviving husband, Romarico Vitug, filed an "Opposition and Motion" and prayed that the
Petition for Probate be denied and that the two Wills be disallowed on the ground that they were procured through undue
and improper pressure and influence, having been executed at a time when the decedent was seriously ill and under the
medical care of Dr. Antonio P. Corona, petitioner's husband, and that the holographic Will impaired his legitime. Romarico
further prayed for his appointment as Special Administrator because the Special Administratrix appointed is not related to
the heirs and has no interest to be protected, besides, the surviving spouse is qualified to administer.
Oppositions to probate with almost identical arguments and prayers were also filed by respondent (1) Avelino L. Castillo
and Nicanor Castillo, legitimate children of Constancia Luchangco, full blood sister of the decedent; (2) Guillermo
Luchangco, full blood brother of the decedent; (3) Rodolfo Torres, Reynaldo Torres, and Purisima Torres Polintan, all
legitimate children of the deceased Lourdes Luchangco Torres, full blood sister of the decedent.
On December 18, 1980, Nenita P. Alonte posted her bond and took her oath of office before a Notary Public.
On February 6, 1981, the Probate Court set aside its Order of December 2, 1980 appointing Nenita as Special Administratrix,
and appointed instead the surviving husband, Romarico, as Special Administrator with a bond of P200,000.00, essentially
for the reasons that under Section 6, Rule 78, of the Rules of Court, the surviving spouse is first in the order of preference
for appointment as Administrator as he has an interest in the estate; that the disinheritance of the surviving spouse is not
among the grounds of disqualification for appointment as Administrator; that the next of kin is appointed only where the
surviving spouse is not competent or is unwilling to serve besides the fact that the Executrix appointed, is not the next of
kin but merely a niece, and that the decedent's estate is nothing more than half of the unliquidated conjugal partnership
property.
Petitioner moved for reconsideration with an alternate Motion for the appointment of co-Special Administrators to which
private respondents filed their Opposition. Reconsideration having been denied, petitioner resorted to a Petition
for Certiorari before the Court of Appeals to annul, for having been issued with grave abuse of discretion, the Order setting
aside the appointment of Nenita as Special Administratrix and appointing in her stead the surviving spouse Romarico.
On August 11, 1981, the Court of Appeals found no grave abuse of discretion on the part of the Probate Court and dismissed
the Petition stating that the Probate Court strictly observed the order of preference established by the Rules; that petitioner
though named Executrix in the alleged Will, declined the trust and instead nominated a stranger as Special Administrator;
that the surviving husband has legitimate interests to protect which are not adverse to the decedent's estate which is merely
part of the conjugal property; and that disinheritance is not a disqualification to appointment as Special Administrator besides
the fact that the legality of the disinheritance would involve a determination of the intrinsic validity of the Will which is
decidedly premature at this stage.
On March 24, 1982, petitioner elevated the case to this Court for review on Certiorari after her Motion for Reconsideration
was turned down by the Court of Appeals.
Petitioner stresses that the order of preference laid down in the Rules should not be followed where the surviving spouse is
expressly disinherited, opposes probate, and clearly possesses an adverse interest to the estate which would disqualify him
from the trust.
The three sets of Oppositors, all respondents herein, in the Comments which they respectively filed, essentially claimed
lack of grave abuse of discretion on the part of the Appellate Court in upholding the appointment of the surviving husband
as Special Administrator; that Certiorari is improper and unavailing as the appointment of a Special Administrator is
discretionary with the Court and is unappealable; that co-administratorship is impractical and unsound and as between the
surviving husband, who was responsible for the accumulation of the estate by his acumen and who must be deemed to
have a beneficial interest in the entire estate, and a stranger, respondent Court had made the correct choice; and that the
legality of the disinheritance made by the decedent cannot affect the appointment of a Special Administrator.
This Court, in resolving to give due course to the Petition taking into account the allegations, arguments and issues raised
by the parties, is of the considered opinion that petitioner's nominee, Nenita F. Alonte, should be appointed as co-Special
Administrator. The executrix's choice of Special Administrator, considering her own inability to serve and the wide latitude
of discretion given her by the testatrix in her Will (Annex "A-1), is entitled to the highest consideration. Objections to Nenita's
appointment on grounds of impracticality and lack of kinship are overshadowed by the fact that justice and equity demand
that the side of the deceased wife and the faction of the surviving husband be represented in the management of the
decedent's estate.[2]
En passant, it is apropos to remind the Special Administrators that while they may have respective interests to protect, they
are officers of the Court subject to the supervision and control of the Probate Court and are expected to work for the best
interests of the entire estate, its smooth administration, and its earliest settlement.
WHEREFORE, modifying the judgment under review, the Court of First Instance of Rizal, Branch VI, is hereby ordered, in
Special Proceedings No. 9398 pending before it, to appoint Nenita F. Alonte as co-Special Administrator, properly bonded,
who shall act as such jointly with the other Special Administrator on all matters affecting the estate.
No costs.
SO ORDERED.
Bagatsing vs. Ramirez
The chief question to be decided in this case is what law shall govern the publication of a tax ordinance enacted by the
Municipal Board of Manila, the Revised City Charter (R.A. 409, as amended), which requires publication of the ordinance
before its enactment and after its approval, or the Local Tax Code (P.D. No. 231), which only demands publication after
approval.
On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522, "AN ORDINANCE REGULATING THE
OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES FOR THE RENTALS OF STALLS AND PROVIDING
PENALTIES FOR VIOLATION THEREOF AND FOR OTHER PURPOSES." The petitioner City Mayor, Ramon D.
Bagatsing, approved the ordinance on June 15, 1974.
On February 17, 1975, respondent Federation of Manila Market Vendors, Inc. commenced Civil Case 96787 before the
Court of First Instance of Manila, presided over by respondent Judge, seeking the declaration of nullity of Ordinance No.
7522 for the reason that (a) the publication requirement under the Revised Charter of the City of Manila has not been
complied with; (b) the Market Committee was not given any participation in the enactment of the ordinance, as envisioned
by Republic Act 6039; (c) Section 3 (e) of the Anti-Graft and Corrupt Practices Act has been violated; and (d) the ordinance
would violate Presidential Decree No. 7 of September 30, 1972 prescribing the collection of fees and charges on livestock
and animal products.
Resolving the accompanying prayer for the issuance of a writ of preliminary injunction, respondent Judge issued an order
on March 11, 1975, denying the plea for failure of the respondent Federation of Manila Market Vendors, Inc. to exhaust the
administrative remedies outlined in the Local Tax Code.
After due hearing on the merits, respondent Judge rendered its decision on August 29, 1975, declaring the nullity of
Ordinance No. 7522 of the City of Manila on the primary ground of non-compliance with the requirement of publication under
the Revised City Charter. Respondent Judge ruled:
"There is, therefore, no question that the ordinance in question was not published at all in two daily newspapers of general
circulation in the City of Manila before its enactment. Neither was it published in the same manner after approval, although
it was posted in the legislative hall and in all city public markets and city public libraries. There being no compliance with
the mandatory requirement of publication before and after approval, the ordinance in question is invalid and, therefore, null
and void."
Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a post-publication is required by the
Local Tax Code; and (b) private respondent failed to exhaust all administrative remedies before instituting an action in court.
On September 26, 1975, respondent Judge denied the motion.
Forthwith, petitioners brought the matter to Us through the present petition for review on certiorari.
We find the petition impressed with merits.
1. The nexus of the present controversy is the apparent conflict between the Revised Charter of the City of Manila and the
Local Tax Code on the manner of publishing a tax ordinance enacted by the Municipal Board of Manila. For, while Section
17 of the Revised Charter provides:
"Each proposed ordinance shall be published in two daily newspapers of general circulation in the city, and shall not be
discussed or enacted by the Board until after the third day following such publication. * * * Each approved ordiance * * *
shall be published in two daily newspapers of general circulation in the city, within ten days after its approval; and shall take
effect and be in force on and after the twentieth day following its publication, if no date is fixed in the ordinance."
Section 43 of the Local Tax Code directs:
"Within ten days after their approval, certified true copies of all provincial, city, municipal and barrio ordinances levying or
imposing taxes, fees or other charges shall be published for three consecutive days in a newspaper or publication widely
circulated within the jurisdiction of the local government, or posted in the local legislative hall or premises and in two other
conspicuous places within the territorial jurisdiction of the local government. In either case, copies of all provincial, city,
municipal and barrio ordinances shall be furnished the treasurers of the respective component and mother units of a local
government for dissemination."
In other words, while the Revised Charter of the City of Manila requires publication before the enactment of the
ordinance and after the approval thereof in two daily newspapers of general circulation in the city, the Local Tax Code only
prescribes for publication after the approval of "ordinances levying or imposing taxes, fees or other charges" either in a
newspaper or publication widely circulated within the jurisdiction of the local government or by posting the ordinance in the
local legislative hall or premises and in two other conspicuous places within the territorial jurisdiction of the local
government. Petitioners' compliance with the Local Tax Code rather than with the Revised Charter of the City spawned this
litigation.
There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the City of Manila,
whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone defines
general law as a universal rule affecting the entire community and special law as one relating to particular persons or things
of a class.[1] And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general
law. The fact that one is special and the other general creates a presumption that the special is to be considered as
remaining an exception to the general, one as a general law of the land, the other as the law of a particular case.[2] However,
the rule readily yields to a situation where the special statute refers to a subject in general, which the general statute treats in
particular. That exactly is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the City of
Manila speaks of "ordinance" in general, i.e., irrespective of the nature and scope thereof, whereas, Section 43 of the Local
Tax Code relates to "ordinances levying or imposing taxes, fees or other charges" in particular. In regard, therefore, to
ordinances in general, the Revised Charter of the City of Manila is doubtless dominant, but, that dominant force loses its
continuity when it approaches the realm of "ordinances levying or imposing taxes, fees or other charges" in
particular. There, the Local Tax Code controls. Here, as always, a general provision must give way to a particular
provision.[3] Special provision governs.[4] This is especially true where the law containing the particular provision was
enacted later than the one containing the general provision. The City Charter of Manila was promulgated on June 18, 1949
as against the Local Tax Code which was decreed on June 1, 1973. The law-making power cannot be said to have intended
the establishment of conflicting and hostile systems upon the same subject, or to leave in force provisions of a prior law by
which the new will of the legislating power may be thwarted and overthrown. Such a result would render legislation a
useless and idle ceremony, and subject the law to reproach of uncertainty and unintelligibility.[5]
The case of City of Manila v. Teotico[6] is apposite. In that case, Teotico sued the City of Manila for damages arising from
the injuries he suffered when he fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue. The
City of Manila denied liability on the basis of the City Charter (R.A. 409) exempting the City of Manila from any liability for
damages or injury to persons or property arising from the failure of the city officers to enforce the provisions of the charter
or any other law or ordinance, or from negligence of the City Mayor, Municipal Board, or other officers while enforcing or
attempting to enforce the provision of the charter or of any other law or ordinance. Upon the other hand, Article 2189 of the
Civil Code makes cities liable for damages for the death of, or injury suffered by any persons by reason of the defective
condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. On review,
the Court held the Civil Code controlling. It is true that, insofar as its territorial application is concerned, the Revised City
Charter is a special law and the Civil Code a general legislation, yet, as regards the subject matter of the two laws, the
Revised City Charter establishes a general rule of liability arising from negligence, in general, regardless of the object
thereof, whereas the Civil Code constitutes a particular prescription for liability due to defective streets in particular. In the
same manner, the Revised Charter of the City prescribes a rule for the publication of "ordinance" in general, while the Local
Tax Code establishes a rule for the publication of "ordinances levying or imposing taxes, fees or other charges" in particular.
In fact, there is no rule which prohibits the repeal even by implication of a special or specific act by a general or broad
one.[7] A charter provision may be impliedly modified or superseded by a later statute, and where a statute is controlling, it
must be read into the charter notwithstanding any particular charter provision. [8] A subsequent general law similarly
applicable to all cities prevails over any conflicting charter provision, for the reason that a charter must not be inconsistent
with the general laws and public policy of the state.[9] A chartered city is not an independent sovereignty. The state remains
supreme in all matters not purely local. Otherwise stated, a charter must yield to the constitution and general laws of the
state, it is to have read into it that general law which governs the municipal corporation and which the corporation cannot
set aside but to which it must yield. When a city adopts a charter, it in effect adopts as part of its charter general law of
such character.[10]
2. The principle of exhaustion of administrative remedies is strongly asserted by petitioners as having been violated by
private respondent in bringing a direct suit in court. This is because Section 47 of the Local Tax Code provides that any
question or issue raised against the legality of any tax ordinance, or portion thereof, shall be referred for opinion to the city
fiscal in the case of tax ordinance of a city. The opinion of the city fiscal is appealable to the Secretary of Justice, whose
decision shall be final and executory unless contested before a competent court within thirty (30) days. But, the petition
below plainly shows that the controversy between the parties is deeply rooted in a pure question of law: whether it is the
Revised Charter of the City of Manila or the Local Tax Code that should govern the publication of the tax ordinance. In
other words, the dispute is sharply focused on the applicability of the Revised City Charter or the Local Tax Code on the
point at issue, and not on the legality of the imposition of the tax. Exhaustion of administrative remedies before resort to
judicial bodies is not an absolute rule. It admits of exceptions. Where the question litigated upon is purely a legal one, the
rule does not apply.[11] The principle may also be disregarded when it does not provide a plain, speedy and adequate
remedy. It may and should be relaxed when its application may cause great and irreparable damage. [12]
3. It is maintained by private respondent that the subject ordinance is not a "tax ordinance," because the imposition of
rentals, permit fees, tolls and other fees is not strictly a taxing power but a revenue-raising function, so that the procedure
for publication under the Local Tax Code finds no application. The pretense bears its own marks of fallacy. Precisely, the
raising of revenues is the principal object of taxation. Under Section 5, Article XI of the New Constitution, "Each local
government unit shall have the power to create its own sources of revenue and to levy taxes, subject to such provisions as
may be provided by law."[13] And one of those sources of revenue is what the Local Tax Code points to in particular: "Local
governments may collect fees or rentals for the occupancy or use of public markets and premises* * *."[14] They can provide
for and regulate market stands, stalls and privileges, and also, the sale, lease or occupancy thereof. They can license, or
permit the use of, lease, sell or otherwise dispose of stands, stalls or marketing privileges.[15]
It is a feeble attempt to argue that the ordinance violates Presidential Decree No. 7, dated September 30, 1972, insofar as
it affects livestock and animal products, because the said decree prescribes the collection of other fees and charges thereon
"with the exception of ante-mortem and post-mortem inspection fees, as well as the delivery, stockyard and slaughter fees
as may be authorized by the Secretary of Agriculture and Natural Resources."[16] Clearly, even the exception clause of the
decree itself permits the collection of the proper fees for livestock. And the Local Tax Code (P.D. 231, July 1, 1973)
authorizes in its Section 31: "Local governments may collect fees for the slaughter of animals and the use of corrals* * *."
4. The non-participation of the Market Committee in the enactment of Ordinance No. 7522 supposedly in accordance with
Republic Act No. 6039, an amendment to the City Charter of Manila, providing that "the market commitee shall formulate,
recommend and adopt, subject to the ratification of the municipal board, and approval of the mayor, policies and rules or
regulation repealing or amending existing provisions of the market code" does not infect the ordinance with any germ of
invalidity.[17] The function of the committee is purely recommendatory as the underscored phrase suggests, its
recommendation is without binding effect on the Municipal Board and the City Mayor. Its prior acquiescence of an intended
or proposed city ordinance is not a condition sine qua non before the Municipal Board could enact such
ordinance. The native power of the Municipal Board to legislate remains undisturbed even in the slightest degree. It can
move in its own initiative and the Market Committee cannot demur. At most, the Market Committee may serve as a
legislative aide of the Municipal Board in the enactment of city ordinances affecting the city markets or, in plain words, in
the gathering of the necessary data, studies and the collection of consensus for the proposal of ordinances regarding city
markets. Much less could it be said that Republic Act 6039 intended to delegate to the Market Committee the adoption of
regulatory measures for the operation and administration of the city markets. Potestas delegata non delegare potest.
5. Private respondent bewails that the market stall fees imposed in the disputed ordinance are diverted to the exclusive
private use of the Asiatic Integrated Corporation since the collection of said fees had been let by the City of Manila to the
said corporation in a "Management and Operating Contract." The assumption is of course saddled on erroneous
premise. The fees collected do not go direct to the private coffers of the corporation. Ordinance No. 7522 was not made
for the corporation but for the purpose of raising revenues for the city. That is the object it serves. The entrusting of the
collection of the fees does not destroy the public purpose of the ordinance. So long as the purpose is public, it does not
matter whether the agency through which the money is dispensed is public or private. The right to tax depends upon the
ultimate use, purpose and object for which the fund is raised. It is not dependent on the nature or character of the person
or corporation whose intermediate agency is to be used in applying it. The people may be taxed for a public purpose,
although it be under the direction of an individual or private corporation. [18]
Nor can the ordinance be stricken down as violative of Section 3 (e) of the Anti-Graft and Corrupt Practices Act because
the increased rates of market stall fees as levied by the ordinance will necessarily inure to the unwarranted benefit and
advantage of the corporation.[19] We are concerned only with the issue whether the ordinance in question is intra
vires. Once determined in the affirmative, the measure may not be invalidated because of consequences that may arise
from its enforcement.[20]
ACCORDINGLY , the decision of the court below is hereby reversed and set aside. Ordinance No. 7522 of the City of
Manila, dated June 15, 1975, is hereby held to have been validly enacted. No costs.

SO ORDERED.
City of Naga vs. Agna

Petition for review on certiorari, which We treat as special civil action, of the decision of the Court of First Instance of
Camarines Sur in Civil Case No. 7084, entitled Agna, et al. vs. City of Naga, et al., declaring Ordinance No. 360 of the
City of Naga enforceable in 1971 the year following its approval and requiring petitioners to pay to private respondents the
amounts sought for in their complaint plus attorney's fees and costs. Included in the present controversy as proper parties
are Vicente P. Sibulo and Joaquin C. Cleope, the City Mayor and City Treasurer of the City of Naga, respectively.
On June 15, 1970, the City of Naga enacted Ordinance No. 360 changing and amending the graduated tax on quarterly
gross sales of merchants prescribed in Section 3 of Ordinance No. 4 of the City of Naga to percentage tax on gross sales
provided for in Section 2 thereof. Pursuant to said ordinance, private respondents paid to the City of Naga the following
taxes on their gross sales for the quarter from July 1, 1970 to September 30, 1970, as follows:
Catalino Agna paid P1,805.17 as per Official Receipt No. 1826591;
Felipe Agna paid P625.00 as per Official Receipt No. 1826594; and
Salud Velasco paid P129.81 as per Official Receipt No. 1820339.
On February 13, 1971, private respondents filed with the City Treasurer of the City of Naga a claim for refund of the
following amounts, together with interests thereon from the date of payments: To Catalino Agna, P1,555.17; to Felipe
Agna, P560.00; and to Salud Velasco, P127.81, representing the difference between the amounts they paid under Section
3, Ordinance No. 4 of the City of Naga, i.e., P250.00; P65.00 and P12.00 respectively. They alleged that under existing
law, Ordinance No. 360, which amended Section 3, Ordinance No. 4 of the City of Naga, did not take effect in 1970, the
year it was approved but in the next succeeding year after the year of its approval, or in 1971, and that therefore, the
taxes they paid in 1970 on their gross sales for the quarter from July 1, 1970 to September 30, 1970 were illegal and
should be refunded to them by the petitioners.
The City Treasurer denied the claim for refund of the amounts in question. So private respondents filed a complaint with
the Court of First Instance of Naga (Civil Case No. 7084), seeking to have Ordinance No. 360 declared effective only in
the year following the year of its approval, that is, in 1971; to have Sections 4, 6 and 8 Ordinance No. 360 declared unjust,
oppressive and arbitrary, and therefore, null and void; and to require petitioners to refund the sums being claimed with
interests thereon from the date the taxes complained of were paid and to pay all legal costs and attorney's fees in the sum
of P1,000.00. Private respondents further prayed that the petitioners be enjoined from enforcing Ordinance No. 360.
In their answer, the petitioners among other things, claimed that private respondents were not "compelled" but voluntarily
made the payments of their taxes under Ordinance No. 360; that the said ordinance was published in accordance with
law; that in accordance with Republic Act No. 305 (Charter of the City of Naga) an ordinance takes effect after the tenth
day following its passage unless otherwise stated in said ordinance; that under existing law the City of Naga is authorized
to impose certain conditions to secure and accomplish the collection of sales taxes in the most effective manner. As
special and affirmative defenses, the petitioners allege that the private respondents have no cause of action against them;
that granting that the collection of taxes can be enjoined, the complaint does not allege facts sufficient to justify the
issuance of a writ of preliminary injunction; that the refund prayed for by the private respondents is untenable; that
petitioners Vicente P. Sibulo and Joaquin C. Cleope, the City Mayor and Treasurer of the City of Naga, respectively, are
not proper parties in interest; that the private respondents are estopped from questioning the validity and/or
constitutionality of the provisions of Ordinance No. 360. Petitioners counterclaimed for P20,000.00 as exemplary
damages, for the alleged unlawful and malicious filing of the claim against them, in such amount as the court may
determine.
During the hearing of the petition for the issuance of a writ of preliminary injunction and at the pre-trial conference as well
as at the trial on the merits of the case, the parties agreed on the following stipulation of facts: That on June 15, 1970, the
City Board of the City of Naga enacted Ordinance No. 360 entitled "An ordinance repealing Ordinance No. 4, as
amended, imposing a sales tax on the quarterly sales or receipts on all businesses in the City of Naga," which ordinance
was transmitted to the City Mayor for approval or veto on June 25, 1970; that the ordinance was duly posted in the
designated places by the Secretary of the Municipal Board; that private respondents voluntarily paid the gross sales tax,
pursuant to Ordinance No. 360, but that on February 15, 1971, they filed a claim for refund with the City Treasurer who
denied the same.
On October 9, 1971, the respondent Judge rendered judgment holding that Ordinance No. 360, series of 1970 of the City
of Naga was enforceable in the year following the date of its approval, that is, in 1971 and required the petitioners to
reimburse the following sums, from the date they paid their taxes to the City of Naga: To Catalino Agna, the sum of
P1,555.17; to Felipe Agna, P560.00; and to Salud Velasco, P127.81 and the corresponding interests from the filing of the
complaint up to the reimbursement of the amounts plus the sum of P500.00 as attorney's fees and the costs of the
proceedings.
Petitioners' submit that Ordinance No. 360, series of 1970 of the City of Naga, took effect in the quarter of the year of its
approval, that is in July 1970, invoking Section 14 of Republic Act No. 305,[1] as amended, otherwise known as the
Charter of the City of Naga, which, among others, provides that "Each approved ordinance * * * shall take effect and be
enforced on and after the 10th day following its passage unless otherwise stated in said ordinance * * *". They contend
that Ordinance No. 360 was enacted by the Municipal Board of the City of Naga on June 15, 1970 [2] and was transmitted
to the City Mayor for his approval or veto on June 25, 1970[3] but it was not acted upon by the City Mayor until August 4,
1970. Ordinarily, pursuant to Section 14 of Republic Act No. 305, said ordinance should have taken effect after the 10th
day following its passage on June 15, 1970, or on June 25, 1970. But because the ordinance itself provides that it shall
take effect upon its approval, it becomes necessary to determine when Ordinance No. 360 was deemed approved.
According to the same Section 14 of Republic Act No. 305, "if within 10 days after receipt of the ordinance the Mayor does
not return it with his veto or approval[4] the ordinance is deemed approved." Since the ordinance in question was not
returned by the City Mayor with his veto or approval within 10 days after he received it on June 25, 1970, the same was
deemed approved after the lapse of ten (10) days from June 25, 1970, or on July 6, 1970. On this date, the petitioners
claim that Ordinance No. 360 became effective. They further contend that even under Section 2, of Republic Act No. 2264
(Local Autonomy Act)[5] which expressly provides: "A tax ordinance shall go into effect on the fifteenth day after its
passage unless the ordinance shall provide otherwise", Ordinance No. 360 could have taken effect on June 30, 1970,
which is the fifteenth day after its passage by the Municipal Board of the City of Naga on June 15, 1970, or as earlier
explained, it could have taken effect on July 6, 1970, the date the ordinance was deemed approved because the
ordinance itself provides that it shall take effect upon its approval. Of the two provisions invoked by petitioners to support
their stand that the ordinance in question took effect in the year of its approval, it is Section 2 of Republic Act No. 2264
(Local Autonomy Act) that is more relevant because it is the provision that specifically refers to effectivity of a
tax ordinance and being a provision of much later law it is deemed to have superseded Section 14 of Republic Act No.
305 (Charter of the City of Naga) in so far as effectivity of a tax ordinance is concerned.
On the other hand, private respondents contend that Ordinance No. 360 became effective and enforceable in 1971, the
year following the year of its approval, invoking Section 2309 of the Revised Administrative Code which provides:
"Section 2309. Imposition of tax and duration of license. A municipal license tax already in existence shall be subject to
change only by ordinance enacted prior to the 15th day of December of any year after the next succeeding year, but an
entirely new tax may be created by any ordinance enacted during the quarter year effective at the beginning of any
subsequent quarter."
They submit that since Ordinance No. 360, series of 1970 of the City of Naga, is one which changes the existing
graduated sales tax on gross sales or receipts of dealers of merchandise and sari-sari merchants provided for in
Ordinance No. 4 of the City of Naga to a percentage tax on their gross sales prescribed in the questioned ordinance, the
same should take effect in the next succeeding year after the year of its approval or in 1971.
Evidently, the divergence of opinion as to when Ordinance No. 360 took effect and became enforceable is mainly due to
the seemingly apparent conflict between Section 2309 of the Revised Administrative Code and Section 2 of Republic No.
2264 (Local Autonomy Act). Is there really such a conflict in the above-mentioned provisions? It will be easily noted that
Section 2309 of the Revised Administrative Code contemplates of two types of municipal ordinances, namely: (1) a
municipal ordinance which changes a municipal license tax already in existence and (2) an ordinance which creates an
entirely new tax. Under the first type, a municipal license tax already in existence shall be subject to change only by an
ordinance enacted prior to the 15th day of December of any year after the next succeeding year. This means that the
ordinance enacted prior to the 15th day of December changing or repealing a municipal license tax already in existence
will have to take effect in next succeeding year. The evident purpose of the provision is to enable the taxpayers to adjust
themselves to the new charge or burden brought about by the new ordinance. This is different from the second type of a
municipal ordinance where an entirely new tax may be created by any ordinance enacted during the quarter year to be
effective at the beginning of any subsequent quarter. We do not find any such distinction between an ordinance which
changes a municipal license tax already in existence and an ordinance creating an entirely new tax in Section 2 of
Republic Act No. 2264 (Local Autonomy Act) which merely refers to a "tax ordinance" without any qualification
whatsoever.
Now to the meat of the problem in this petition. Is not Section 2309 of the Revised Administrative Code deemed repealed
or abrogated by Section 2 of Republic Act No. 2264 (Local Autonomy Act) in so far as effectivity of a tax ordinance is
concerned? An examination of Republic Act No. 2264 (Local Autonomy Act) fails to show any provision expressly
repealing Section 2309 of the Revised Administrative Code. All that is mentioned therein is Section 9 which reads:
"Section 9 All acts, executive orders, administrative orders, proclamations or parts thereof, inconsistent with any of the
provisions of this Act are hereby repealed and modified accordingly."
The foregoing provision does not amount to an express repeal of Section 2309 of the Revised Administrative Code. It is a
well established principle in statutory construction that a statute will not be construed as repealing prior acts on the same
subject in the absence of words to that effect unless there is an irreconcilable repugnancy between them, or unless the
new law is evidently intended to supersede all prior acts on the matter in hand and to comprise itself the sole and
complete system of legislation on that subject. Every new statute should be construed in connection with those already
existing in relation to the same subject matter and all should be made to harmonize and stand together, if they can be
done by any fair and reasonable interpretation * * *.[6] It will also be noted that Section 2309 of the Revised Administrative
Code and Section 2 of Republic Act No. 2264 (Local Autonomy Act) refer to the same subject matter enactment and
effectivity of a tax ordinance. In this respect they can be considered in pari materia. Statutes are said to be in pari
materia when they relate to the same person or thing, or to the same class of persons or things, or have the same
purpose or object.[7] When statutes are in pari materia, the rule of statutory construction dictates that they should be
construed together. This is because all enactments of the same legislature on the same subject matter are supposed to
form part of one uniform system; that later statutes are supplementary or complimentary to the earlier enactments and in
the passage of its acts the legislature is supposed to have in mind the existing legislation on the same subject and to have
enacted its new act with reference thereto.[8] Having thus in mind the previous statutes relating to the same subject
matter, whenever the legislature enacts a new law, it is deemed to have enacted the new provision in accordance with the
legislative policy embodied in those prior statutes unless there is an express repeal of the old and they all should be
construed together.[9] In construing them the old statutes relating to the same subject matter should be compared with the
new provisions and if possible by reasonable construction, both should be so construed that effect may be given to every
provision of each. However, when the new provision and the old relating to the same subject cannot be reconciled the
former shall prevail as it is the latter expression of the legislative will. [10] Actually we do not see any conflict between
Section 2309 of the Revised Administrative Code and Section 2 of Republic Act No. 2264 (Local Autonomy Act). The
conflict, if any, is more apparent than real. It is one that is not incapable of reconciliation. And the two provisions can be
reconciled by applying the first clause of Section 2309 of the Revised Administrative Code when the problem refers to the
effectivity of an ordinance changing or repealing a municipal license tax already in existence. But where the problem
refers to effectivity of an ordinance creating an entirely new tax, let Section 2 of Republic Act No. 2264 (Local Autonomy
Act) govern.
In the case before Us, the ordinance in question is one which changes the graduated sales tax on gross sales or receipts
of dealers of merchandise and sari-sari merchants prescribed in Section 3 of Ordinance No. 4 of the City of Naga to
percentage tax on their gross sales an ordinance which definitely falls within the clause of Section 2309 of the Revised
Administrative Code. Accordingly it should be effective and enforceable in the next succeeding year after the year of its
approval or in 1971 and private respondents should be refunded of the taxes they have paid to the petitioners on their
gross sales for the quarter from July 1, 1970 to September 30, 1970 plus the corresponding interests from the filing of the
complaint until reimbursement of the amount.
IN VIEW OF THE FOREGOING, the instant petition is hereby dismissed.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Esguerra, and Muñoz Palma, JJ., concur.

[1] Section 14, R.A. 305, as amended, otherwise known as the Charter of Naga City, provides:
*********
Each approved ordinance, resolution or motion shall be sealed with the seal of the Board, signed by the presiding officer
and the secretary of the Board and recorded in a book for the purpose and shall, on the day following its passage, be
posted by the secretary at the main entrance to the City Hall, and shall take effect and be in force on and after the tenth
day following its passage, unless otherwise stated in said ordinance, resolution or motion or vetoed by the Mayor as
hereinafter provided." (Italics supplied)
*********
[2] Stipulation of Facts.
[3] Stipulation of Facts.
[4] "Sec. 14 (RA 305) Method of transacting business by the Board Veto Authentication and publication of ordinance.
*** *** ***
* * * Within ten days after the receipt of the ordinance, resolution, or motion, the Mayor shall return it with his approval or
veto. If he does not return it within that time it shall be deemed to be approved, if he returns it with his veto, his reasons
therefor in writing shall accompany it. It may then be again enacted by the affirmative vetoes of six members of the Board
and again forwarded to the Mayor for his approval, and if within ten days after his receipt he does not again return it with
his veto, it shall be deemed to be approved. If within said time he again returns it with his veto, it shall be forwarded
forthwith to the Secretary of the Interior for his approval or disapproval, which shall be final." (italics supplied.)
[5] Sec. 2, Republic Act 2264, otherwise known as the Local Autonomy Act, provides:
Section 2. (Republic Act No. 2264). Taxation Any provision of law to the contrary notwithstanding, all chartered cities,
municipalities and municipal districts shall have authority to impose municipal license taxes or fees upon persons
engaged in any occupation or business * * *.
*** *** ***
A tax ordinance shall go into effect on the fifteenth day after its passage, unless the ordinance shall provide otherwise:
Provided, however, that the Secretary of Finance shall have authority to suspend the effectivity of any ordinance within
one hundred and twenty days after its passage, if, in his opinion the tax or fees therein levied, or imposed is unjust,
excessive, oppressive, or confiscatory, and when the said secretary exercises this authority the effectivity or such
ordinance shall be suspended. (italization supplied)
*** *** ***
[6] Black on Interpretation of Laws, p. 351.
[7] Sutherland Statutory Construction, Vol. II, pp. 535-536.
[8] Black on Interpretation of Laws, Sec. 106.
[9] Ibid.
[10] Sutherland Statutory Construction, Vol. II p. 529.
Facts Issues Ruling Principles
King vs. Hernaez

On January 1,1957, Macario King, a naturalized Filipino citizen, became the owner of the business establishment known
as "Import Meat and Produce" a grocery wholesale and retail business, previously owned by the Philippine Cold Stores,
Inc. In the business 15 persons were employed 12 of whom are Filipinos and the other 3 Chinese. The three Chinese
were old employees of the previous owner, the Philippine Cold Stores, Inc., one having been employed as purchaser and
the other two as salesmen.
Three weeks after King had acquired the business as aforesaid, he sought permission from the President of the Philippines
to retain the services of the three Chinese employees pursuant to Section 2-A of Commonwealth Act 108, coursing his letter
thru the Secretary of Commerce and Industry. This official recommended to the President the disapproval of King's request
on the ground that aliens may not be appointed to operate or administer a retail business under Section 1 of Republic Act
No. 1180 which requires that its capital be wholly owned by citizens of the Philippines, the only exception thereto being the
employment of technical personnel which may be allowed after securing to that effect an authorization from the President.
The President approved the recommendation of the Secretary of Commerce and Industry since the positions of purchaser
and salesmen occupied by the three Chinese employees are not technical positions within the meaning of Section 2-A of
Commonwealth Act 108, as amended by Republic Act No. 134.
As a result of such adverse ruling, Macario King and his three Chinese employees filed a petition for declaratory relief,
injunction and mandamus on August 25,1958 against the Secretary of Commerce and Industry and the Executive Secretary
before the Court of First Instance of Manila praying that they be given relief because they are "uncertain and in doubt as to
their rights and duties under Republic Act No. 1180 and Commonwealth Act No. 108, as amended by Republic Act No. 134,
in view of the aforesaid rulings of the Department of Commerce and Industry and of the Executive Secretary." They alleged
that said rulings are illegal in view of the respective situations and positions of petitioners in the retail establishment, the
purposes and language of the laws above-mentioned, and. the constitutional guarantee of the rights of an employer to
employ and of an employee to work accorded to citizens and aliens alike. The lower court issued a writ of preliminary
injunction ex parte upon petitioners' filing a bond in the amount of P5.000.00.
Respondents filed an answer setting up certain affirmative and special defenses tending to show that the petition does not
allege facts sufficient to constitute a cause of action. With regard to the declaratory relief, respondents claim that such
remedy is not available to petitioners because they have already committed a breach of the statute which is apparent on
the face of the petition, meaning that the employment of the three Chinese as salesmen and purchaser in the store of
Macario King is a violation of Section 1 of the Retail Trade Act which provides that only citizens of the Philippines can
engage in retail trade, as well as of Section 2-A of the Anti-Dummy Law which prohibits Chinese citizens to intervene in the
management, operation, administration or control of such business, whether as an officer, employee or laborer with or
without remuneration. Respondents further claim that the three Chinese employees are not technical men who are
exempted from the operation of the law, and even if they are, they need the authorization of the President which they failed
to obtain in their case.
With regard to the petition for preliminary injunction, respondents contend that the requisites for its issuance have not been
satisfied. And with regard to the petition for mandamus, respondents alleged that petitioners have failed to show that
respondents have unlawfully neglected any duty which they are called upon to perform and which would make them liable
for such relief. Hence, respondents prayed that the petition be dismissed and that the writ of preliminary injunction issued
by the court ex parte be lifted.
To this answer, petitioners filed a reply, which was followed by a rejoinder and sur-rejoinder, with a detailed discussion of
the arguments advanced in support thereof. And because the motion to dismiss filed by respondents had been denied for
lack of merit, trial proceeded, after | which the lower court entered judgment holding "that petitioner Macario King may
employ any person, although not a citizen of the Philippines or of the United States of America, including the three petitioners
herein as purchaser and salesmen, in any position in his retail business not involving participation, or intervention in the
management, operation, administration or control of said business; that petitioners Lim Pin, Chang Pak and Ng See Keng
are entitled to continue as purchaser and salesmen, respectively, in Macario King's Import Meat and Produce or in any
other retail establishment; that the writ of preliminary injunction issued against respondents ordering them to desist from
interfering by criminal and/or administrative action with the rights of the petitioners as above defined, is hereby declared
final; and, finally respondents are hereby ordered to allow and permit petitioners to enjoy and exercise their rights in the
manner and to the extent aforestated." Respondents took the present appeal before this Court.
The center of controversy between petitioners-appellees and respondents-appellants hinges on the interpretation to be
given to Section 1, Republic Act No. 1180, in relation to Section 2-A, Commonwealth Act 108, as amended by Republic Act
No. 134. For ready reference we quote the pertinent provisions:
"Section 1. No person who is not a citizen of the Philippines, and no association, partnership, or corporation the capital of
which is not wholly owned by citizens of the Philippines, shall engage directly or indirectly in the retail business: x x x" (Italics
supplied)
"Sec. 2-A. Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege,
property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of
the Philippines, or of any other specific country, or to corporations or associations at least sixty per centum of the capital of
which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or
association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any
other way transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association
not otherwise qualified under the Constitution, or the provisions of the existing laws; or in any manner permits or allows any
person, not possessing the qualifications required by the Constitution or existing laws to acquire, use, exploit or enjoy a
right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the
Constitution or existing laws to citizens of the Philippines or of any other specific country, to intervene in the management,
operation, administration or control thereof, whether as an officer, .employee or laborer therein, with or without remuneration
except technical personnel whose employment may be specifically authorized, by the President of the Philippines upon
recommendation of the Department Head concerned.x x x." (Italics supplied)
With regard to the Retail Trade Law, this Court had already occasion to rule on its constitutionality. We held that the same
is valid and that its purpose is to completely nationalize the retail trade in the Philippines. In other words, its primordial
purpose is to confine the privilege to engage in retail trade to Filipino citizens by prohibiting any person who is not a Filipino
citizen or any entity whose capital is not wholly owned by citizens of the Philippines from engaging, directly or indirectly, in
the retail business. The nationalization of retail trade is, therefore, complete in the sense that it must be wholly owned by a
Filipino citizen or Filipino controlled entity in order that it may be licensed to operate. The law seeks a complete ban to aliens
who may not engage in it directly or indirectly. And the reasons behind such ban are the pernicious and intolerable practices
of alien retailers who in the past have either individually or in organized groups contrived in many dubious ways to control
the trade and |g dominate the distribution of goods vital to the life of our people thereby resulting not only in the increasing
dominance of alien control in retail trade but at times in the strangle hold on our economic life. These reasons were well
expressed by Mr. Justice Labrador in the following wise:
"But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone; there is
a prevailing feeling that such predominance may truly endanger the national interest. With ample capital, unity of purpose
and action and thorough organization, alien retailers and merchants can act in such complete unison and concert on such
vital matters as the fixing of prices, the determination of the amount of goods or articles to be made available in the market,
and even the choice of the goods or articles they would or would not patronize or distribute, that fears of dislocation of the
national economy and of the complete subservience of national retailers and of the producers and consumers alike, can be
placed completely at their mercy. x x x
"x x x Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which
courts of justice may not properly overlook or ignore in the interests of truth and justice, that there exists a general feeling
on the part of the public that alien participation in the retail trade has been attended by a pernicious and intolerable practices,
the mention of a few of which would suffice for our purposes; that at some time or other they have cornered the market of
essential commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to unreasonable
proportions; that they have hoarded essential foods to the inconvenience and prejudice of the consuming public, so much
so that the Government has had to establish the National Rice and Corn Corporation to save the public from their continuous
hoarding practices and tendencies; that they have violated price control laws, especially on foods and essential
commodities, such that the legislature had to enact a law (See. 9, Republic Act No, 1168), authorizing their immediate and
automatic deportation for price control convictions; that they have secret combinations among themselves to control prices,
cheating the operation of the law of supply and demand; that they have connived to boycott honest merchants and traders
who would not cater or yield to their demands, in unlawful restraint of freedom of trade and enterprise. They are believed
by the public to have evaded tax laws, smuggled goods and money into and out of the land, violated import and export
prohibitions, control laws and the like, in derision and contempt of lawful authority. It is also believed that they have engaged
in corrupting public officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the Government.
As a matter of fact appeals to unscrupulous aliens have been made both by the Government and by their own lawful
diplomatic representatives, action which impliedly admits a prevailing feeling about the existence of many of the above
practices.
"The circumstances above set forth create well founded fears that worse things may come in the future. The present
dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential source of danger
on occasions of war or other calamity. We do not have here in this country isolated groups of harmless aliens retailing goods
among nationals; what we have are well organized and powerful groups that dominate the distribution of goods and
commodities in the communities and big centers of population. They own no allegiance or loyalty to the State, and the State
cannot rely upon them in times of crisis or emergency. While the national holds his life, his person and his property subject
to the needs of his country, the alien may even become the potential enemy of the State." (Lao H. Ichong vs. Hernandez,
et al., G.R. No. L-7995, May 31, 1957).
The purpose of the enactment of the Retail Trade Law, therefore, is clear. As expressed by this Court, it is to translate the
general preoccupation of the Filipinos against the threat and danger to our national economy caused by alien dominance
and control of the retail business by weeding out such threat and danger and thus prevent aliens from having a strangle
hold upon our economic life. But in so doing the legislature did not intend to deprive aliens of their means of livelihood. This
is clearly pointed out in the explanatory note of the law:
"This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of the Philippines
from having a strangle hold upon our economic life. If the persons who control this vital artery of our economic life are those
who owe no allegiance to this Republic, who have no profound devotion to our free institutions and who have no permanent
state in our people's welfare, we are not really the masters of our own country. All aspects of our life, even our national
security, will be at the mercy of other people.
"In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not citizens of the
Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons who are not citizens of
the Philippines a power that can be wielded to paralyze all aspects of our national life and endanger our national security,
it respects existing rights."
It is in the light of this view of the Retail Trade Law that the issue was posed whether the prohibition to aliens from engaging
in such trade is intended merely to ban them from its ownership and not from its management, control or operation. However,
from the context of the law as well as from the decision of this Court in the Ichong case, it may be safely inferred that the
nationalization of the retail trade is merely confined to its ownership and not its management, control, or operation.
Nevertheless, this apparent Haw in the Retail Trade Law cannot be availed of by an unscrupulous alien as a convenient
pretext to employ in the management of his business persons of his ilk to flout the law or subvert its nationalistic purpose,
for in pari materia with such law we have the Anti-Dummy Law (Commonwealth Act No. 108, as amended by Republic Act
No. 134), which seeks "to punish acts of evasion of the laws of nationalization of certain rights, franchises or privileges."
Read in connection with the Retail Trade Law, the Anti-Dummy Law would punish acts intended to circumvent the provisions
of the former law which nationalize the retail business.
The question that now arises is: Is the employment of aliens in non-control positions in a retail establishment or trade
prohibited by the Anti-Dummy Law?
Petitioners contend that their employment is not prohibited either by the Retail Trade Law or the Anti-Dummy Law. The
three Chinese petitioners testified that they had nothing to do with the management and control of the business, nor do they
participate in its profits outside of their monthly salaries. They had been employed long before the enactment of Republic
Act No. 1180. They only wait for customers and sell according to the prices appearing on the tags previously fixed by their
manager Macario King. They desire to continue in the employ of Macario King in his business and their job is their only
means of earning support for themselves and their families. Lim Pin who is employed as buyer declared that his duties
include no more than buying the groceries appearing in a list prepared and given to him from time to time by Macario King
and at no more than the prices indicated in said list. Respondents did not present any evidence to contradict these facts,
as they merely relied on their motion to dismiss.
It is evident that petitioners theory is that since they do not intervene in the management, operation, administration or control
of the retail establishment of Macario King they are not covered by the Anti-Dummy Law. Indeed, they contend, Section 1,
of Republic Act No. 1180 mirrors the legislative intent to nationalize the retail trade merely thru the ownership by Filipinos
of the business, and as stated by this Court in the Ichong case, the ownership of the retail business by non-citizens lies at
the foundation of the prohibition, and since there is nothing in the Retail Trade Law which prohibits a Filipino-owned retail
enterprise from employing an alien and the dummy law merely limits the prohibition to any position that relates to
management, operation, administration or control, petitioners contend that they may be allowed to continue in their positions
without doing violence to both the Retail Trade Law and the Anti-Dummy Law. In other words, they draw a line of distinction
between one class of alien employees occupying positions of control and another class occupying non-control positions.
Respondents, on the other hand, sustain a different view. They hold that the language of the Anti-Dummy Law bans aliens'
employment in both control and non-control positions. They contend that the words management, operation, administration
and control, followed by and blended with the words "whether as an officer, employee or laborer therein", signify the
legislative intent to cover the entire scale of personnel activity so that even laborers are excluded from employment, the
only exemption being technical personnel whose employment may be allowed with the previous authorization of the
President. This contention, according to respondents, results from the application of the rule known in statutory construction
as redendo singula singulis. This means that the antecedents "management, operation, administration and control" and the
consequents "officer, employee, and laborer" should be read distributively to the effect that each word is to be applied to
the subject to which it appears by context most properly related and to which it is most applicable (Vol. 2, Sutherland,
Statutory Construction, Section 4819).
We agree to this contention of respondents not only because the context of the law seems to be clear on what its extent
and scope seem to prohibit but also because the same is in full accord with the main objective that permeates both the
Retail Trade Law and the Anti-Dummy Law. The one advocates the complete nationalization of the retail trade by denying
its ownership to any alien, while the other limits its management, operation, administration and control to Filipino citizens.
The prevailing idea is to secure both the ownership and management of the retail business in Filipino hands. It prohibits a
person not a Filipino from engaging in retail trade directly or indirectly while it limits the management, operation,
administration and control to Filipino citizens. These words may be technically synonymous in the ,sense that they all refer
to the exercise of a directing, restraining or governing influence over an affair or business to which they relate, but it cannot
be denied that by reading them in connection with the positions therein enumerated one cannot draw any other conclusion
than that they cover the entire range of employment regardless of whether they involve control or non-control activities.
When the law says that you cannot employ an alien in any position pertaining to management, operation, administration
and control, "whether as an officer, employee, or laborer therein", it only means one thing: the employment of a person who
is not a Filipino citizen even in a minor or clerical or non-control position is prohibited. The reason is obvious : to plug any
loophole or close any avenue that an unscrupulous alien may resort to flout the law or defeat its purpose, for no one can
deny that while one may be employed in a non-control position who apparently is harmless he may later turn out to be a
mere tool to further the evil designs of the employer. It is imperative that the law be interpreted in a manner that would' stave
off any attempt at circumvention of this legislative purpose.
In this respect, we agree with the following remark of the Solicitor General: "Summing up, there is no point in distinguishing
employments in positions of control from employments in non-control positions except to facilitate violations of the Anti-
Dummy Law. It does not require ingenuity to realize that the law is framed up the way we find it so that no difficulties will be
encountered in its enforcement. This is not the first time, to use the words of the United States Supreme Court x x x that a
government wants to know, without being put to a search, that what it forbids is carried out effectively."
There is an intimation in the decision of the trial court that if the employment of aliens in non-control positions is prohibited
as respondents so advocate, it may impair the right of a citizen under our Constitution to select, pick and employ any one
who in his opinion may be amenable to his business provided he is not a criminal, a communist, or affected by a contagious
disease, in the same manner as one may not be deprived of his right to associate with people of his own choice because
those are rights that are guaranteed by our Constitution. The language of the trial, court on this matter follows:
"There is no question that a Filipino citizen has a right under the Constitution and the laws of this Republic to engage in any
lawful business, to select, pick and employ anyone who in his opinion may be amenable, congenial, friendly, understanding
and profitable to his business provided that they are not criminals, say communists, or affected by some contagious disease
or morally unfit. The right to associate with our friends or people of our choice cannot be seriously contracted in .a democratic
form of government. This is one of the most cherished privileges of a citizen. Nullify it and it will produce a communist control
of action in our free movement and intercourse with our fellow citizens as now prevails in Russia and other Soviet satellites.
History has amply demonstrated that in countries where personal liberties are limited, curtailed or hampered, communism
thrives; while in the lands where personal liberties are protected, democracy lives. We need but look at the horizons and
see terrible and sinister shadows of some catastrophic events threatening to annihilate all our hopes and love for liberty if
we are to traffic with our rights as citizens like any other ordinary commodities. It is our sacred and bounden duty to protect
individual rights so that by their benign influence real democracy may be nurtured to full maturity.
xxxx
"There is no need of any lengthy discussion as to the rights of a Filipino citizen to employ-any person in his business
provided the latter is not a criminal, affected with some contagious disease, or a recognized human derelict. The right to
employ is the same as the right to associate. The right to associate is admittedly one of the most sacred privileges of a
Filipino citizen. If a Filipino citizen has the right to employ any person in his business, has a naturalized citizen the sam e
rights? We hold and sustain that under the Constitution and laws of this country, there is no difference between a natural-
born citizen and a naturalized citizen, with the possible exception, as provided by the Constitution, that while the former can
be President, Vice-President or member of Congress, the latter cannot. But outside of these exceptions, they have the same
rights and privileges."
It is hard to see how the nationalization of employment in the Philippines can run counter to any provision of our Constitution
considering that its aim is not exactly to deprive a citizen of a right that he may exercise under it but rather to promote,
enhance and protect those that are expressly accorded to a citizen such as the right to life, liberty and pursuit of happiness.
The nationalization of an economic measure when founded on grounds of public policy cannot be branded as unjust,
arbitrary or oppressive or contrary to the Constitution because its aim is merely to further the material progress and welfare
of the citizens of a country. This is what we expressed in no uncertain terms in the Ichong case when we declared
constitutional the nationalization of the retail trade. Indeed, we said there that it is a law "clearly in the interest of the public,
nay of the national security itself, and indisputably falls within the scope of police power, thru which and by which the State
insures its existence and security and the supreme welfare of its citizens." True, this fundamental policy was expressed in
'a decision the subject of which concerns the constitutionality of the Retail Trade Act, but since the Anti-Dummy Law is but
a mere complement of the former in the sense that it is designed to make effective its aims and purposes and both tend to
accomplish the same objective either by excluding aliens from owning any retail trade or by banning their employment if the
trade is owned by Filipinos, and the target of both is "the removal and eradication of the shackles of foreign economic control
and domination" thru the nationalization of the retail trade both in ownership and employment, the pronouncement made in
one regarding its constitutionality applies equally if not with greater reason to the other both being complementary one to
the other. Indeed, in nationalizing employment in retail trade the right of choice of an employer is not impaired but its sphere
is merely limited to the citizens to the exclusion of those of other nationalities.
We note that the case cited by the trial court to substantiate its conclusion that freedom to employ is guaranteed by our
Constitution is Meyer vs. Nebraska, 67 Law Ed., 1042, which is also the same case relied upon by petitioners in support of
their proposition that "the liberty I guaranteed by the Constitution includes the right to engage in any of the common
occupations of life." We also note that this is the same case cited by counsel for Lao Ichong to support the same proposition
in his advocacy of the unconstitutionality of the nationalization of the Retail Trade Law which did not deserve favorable
consideration by this Court in the Ichong case. To refute counsel's argument that the retail trade is a common occupation
the pursuit of which cannot be impaired and consequently the right to employ therein is guaranteed by our Constitution,
suffice it to state that we brushed aside such theory in the Ichong case in view of the monopolistic control exercised by
aliens in the retail business and their "deadly strangle hold on the national economy endangering the national security in
times of crisis and emergency." The circumstances surrounding the enforcement of the Retail Trade Law being the very
foundation of the Anti-Dummy Law the same circumstances that justify the rejection of counsel's proposition in the Ichong
case should also apply with regard to the application of the Meyer case in the consideration of the unconstitutionality of the
Anti-Dummy Law.
The thinking of the lower court that the nationalization of employment in retail trade produces communistic control or impairs
a right guaranteed by the Constitution to a citizen seems to have as basis its pronouncement that "the right to employ is the
same as the right to associate." This premise has no foundation in law for it confuses the right of employment with the right
of association embodied in the Bill of Rights of our Constitution. Section 1, paragraph 6, of said Bill of Rights, provides that
"the right to form associations or societies for purposes not contrary to law, shall not be abridged", and this has as its main
purpose "to encourage the formation of voluntary associations so that thru the cooperative activities of individuals the welfare
of the nation may be advanced."[1] Petitioners have never been denied the right to form voluntary associations. In fact, they
can so organize to engage in any business venture of their own choosing provided that they comply with the limitations
prescribed by our regulatory laws. These laws cannot be assailed as abridging our Constitution because they were adopted
in the exercise of the police power of the State (Lao Ichong case, supra).
Against the charge that this nationalization movement initiated by Congress in connection with several measures that affect
the economic life of our people places the Philippines in a unique position in the free world, we have only to cite the cases
of Commonwealth vs. Hana, 81 N.E. 149, and Bloomfield vs. State, 99 N.E. 309, which this Court considered as basic
authorities for nationalization of legislative measures in the Lao Ichong case. Similar laws had been declared constitutional
by the Supreme Court of California and the United States Supreme Court in a series of cases involving contracts under the
Alien Land Law, and because of the similarities of the facts and laws involved therein we can consider the decisions
rendered in said on Philippine Political Law, 10th ed., p. 647 cases of persuasive force and effect in the determination of
the present case.[2]
We wish to add one word with regard to the procedural aspect raised in respondents' brief. It is respondents' theory that a
complaint for declaratory relief will not prosper if filed after a contract or statute has been breached. The law does not even
require that there shall be an actual pending case. It is sufficient that there is a breach of the law, or an actionable violation,
to bar a complaint for declaratory judgment (Vol. 2, Moran, Comments on the Rules of Court, 1957 Ed., 145). The pertinent
provisions of the Anti-Dummy Law postulates that aliens cannot be employed by Filipino retailers except for technical
positions with previous authority of the President, and it is contended that Macario King had in his employ his Chinese co-
petitioners for a period of more than 2 years in violation of Section 2-A of Republic Act No. 134. Hence, respondents contend,
due to their breach of the law petitioners have forfeited their right to file the present action for declaratory relief.
It appears, however, that alien petitioners were already in the employ of the establishment known as "Import Meat and
Produce" previously owned by the Philippine Cold Stores, Inc. when Macario King acquired the ownership of said
establishment and because of the doubt he entertained as regards the scope of the prohibition of the law King wrote the
President of the Philippines to request permission to continue said petitioners in his employment, and immediately after the
request was denied, he instituted the present petition for declaratory relief. It cannot, therefore, be said that King has already
breached the law when he filed the present action.
WHEREFORE, the decision appealed from is reversed. The preliminary injunction issued by the trial court on December 6,
1958 is hereby lifted, The petition for mandamus is dismissed, with costs against appellees.
Manila Jockey vs. CA

An illegally dismissed employee is entitled to her reinstatement without loss of seniority rights and other privileges, and to
full backwages, inclusive of allowances and other benefits or their monetary equivalent. Should the reinstatement be no
longer feasible, an award of separation pay in lieu of reinstatement will be justified, and the backwages shall be reckoned
from the time her wages were withheld until the finality of the decision.

The Case

Employer Manila Jockey Club, Inc. (MJCI) appeals via petition for review on certiorari the adverse decision promulgated
on January 30, 2003,[1] whereby the Court of Appeals (CA) dismissed the petition for certiorari MJCI had brought to assail
the decision rendered by the National Labor Relations Commission (NLRC) declaring respondent Aimee O. Trajano to
have been illegally dismissed, and ordered it to reinstate her to her former position with limited backwages of six months,
without loss of seniority rights and other benefits.[2]

Antecedents

MJCI had employed Trajano as a selling teller of betting tickets since November 1989. On April 25, 1998, she reported for
work. At around 7:15 p.m., two regular bettors gave her their respective lists of bets (rota) and money for the bets for
Race 14. Although the bettors suddenly left her, she entered their bets in the selling machine and segregated the tickets
for pick up by the two bettors upon their return. Before closing time, one of the bettors (requesting bettor) returned and
asked her to cancel one of his bets worth P2,000.00. Since she was also operating the negative machine on that day, she
obliged and immediately cancelled the bet as requested. She gave the remaining tickets and the P2,000.00 to the
requesting bettor, the money pertaining to the canceled bet. When Race 14 was completed, she counted the bets
received and the sold tickets. She found that the bets and the tickets balanced. But then she saw in her drawer the receipt
for the canceled ticket, but the canceled ticket was not inside the drawer. Thinking she could have given the canceled
ticket to the requesting bettor, she immediately looked for him but could not find him. It was only then that she
remembered that there were two bettors who had earlier left their bets with her. Thus, she went to look for the other bettor
(second bettor) to ask if the canceled ticket was with him. When she located the second bettor, she showed him the
receipt of the canceled ticket to counter-check the serial number with his tickets.[3]

Thereafter, the second bettor returned to Trajano and told her that it was one of his bets that had been canceled, instead
of that of the requesting bettor. To complicate things, it was also the same bet that had won Race 14. Considering that the
bet was for a daily double, the second bettor only needed to win Race 15 in order to claim dividends. At that point, she
realized her mistake, and explained to the second bettor that the cancellation of his ticket had not been intentional, but the
result of an honest mistake on her part. She offered to personally pay the dividends should the second bettor win Race
15, which the latter accepted. When Race 15 was completed, the second bettor lost. She was thus relieved of the
obligation to pay any winnings to the second bettor.[4]

To her surprise, the reliever-supervisor later approached Trajano and told her to submit a written explanation about the
ticket cancellation incident. The next day (April 26, 1998), she submitted the handwritten explanation to Atty. Joey R.
Galit, Assistant Racing Supervisor. She then resumed her work as a selling teller, until later that day, when she received
an inter-office correspondence signed by Atty. Galit informing her that she was being placed under preventive suspension
effective April 28, 1998, for an unstated period of time. At the end of thirty days of her suspension, Trajano reported for
work. But she was no longer admitted.[5] She then learned that she had been dismissed when she read a copy of an inter-
office correspondence[6] about her termination posted in a selling station of MJCI.

Trajano instituted a complaint[7] for illegal dismissal against MJCI in the Department of Labor and Employment (DOLE).
She claimed that her dismissal was not based on any of the grounds enumerated under Article 282 of the Labor Code;
that her dismissal on the ground of unauthorized cancellation of ticket had no basis because she was also the operator of
the negative machine on the day in question with the authority to cancel tickets as requested; that the cancellation was
not intentional on her part but resulted from an honest mistake that did not amount to dishonesty; that her dismissal was
without due process of law because she was not aware of any justifiable cause of her termination; that she was not
notified about or furnished a copy of the notice of dismissal; that instead, MJCI simply posted copies of the notice in all its
selling stations, an act intended to embarrass and humiliate her by imputing an allegedly unauthorized cancellation of
ticket against her; and that MCJI's acts were tainted with evident bad faith and malice.

Trajano prayed that she be reinstated to her former position without loss of seniority rights; that she be paid backwages
until she would be fully reinstated; and that she be paid moral and exemplary damages amounting to P180,000.00 and
attorney's fees of 10% of the total award.[8]

On its part, MJCI averred that on April 25, 1998, it received a letter[9] from Jun Carpio, the Field Officer of the Games and
Amusement Board, calling its attention to a complaint against Trajano brought by a certain bettor named "Tito" who had
reported the cancellation of his ticket that had already won the first leg (Race 14) of the daily double bet; that it acted on
the complaint by placing her under preventive suspension[10] upon her submission of a written explanation[11] and after the
conduct of preliminary investigation on the matter; that on June 5, 1998, it invited her to a clarificatory meeting in the
presence of MJCI Raceday Union President Miguel Altonaga; and that it terminated her services on the next day "for
cause due to unauthorized cancellation of ticket."[12]

MJCI maintained that Trajano's dismissal was justified because the unauthorized cancellation of the ticket had constituted
a serious violation of company policy amounting to dishonesty; that her action had also constituted a just cause for
terminating her employment under Article 282 of the Labor Code, particularly paragraph (a) on serious misconduct or
willful disobedience and paragraph (b) on gross and habitual neglect of duty; that the admissions made in her written
explanation left no doubt as to her participation in the unauthorized cancellation of the ticket; that she was afforded her
right to due process by being given the chance to submit her written explanation and being appraised of the charges
against her; that she was accompanied by the union leaders during the preliminary investigation of her case; and that the
non-appeal of the decision to terminate her indicated that she and the union leaders believed in the merit of the decision
to terminate her.[13]

Decision of the Labor Arbiter

On April 23, 1999, the Labor Arbiter dismissed the complaint for illegal dismissal upon finding that Trajano's gross
negligence in the performance of her job warranted the termination of her employment. The Labor Arbiter observed that
the bet of P2,000.00 was "a huge amount that necessarily requires extra care like [sic] its cancellation;" [14] and that she
had been given her chance to dispute the charges made against her. [15]

Decision of the NLRC

Aggrieved, Trajano appealed to the NLRC, arguing that she did not commit any gross dishonesty or any serious
misconduct or habitual neglect of duties, because what she committed was purely an honest mistake that did not merit the
imposition of the penalty of dismissal from the service.

On October 27, 1999, the NLRC rendered its decision reversing and setting aside the decision of the Labor Arbiter and
declaring Trajano to have been illegally dismissed by MJCI without just or authorized cause and without due process of
law. It concluded that her cancellation of the ticket was an honest mistake that did not constitute a serious misconduct or
willful disobedience of the lawful orders of her employer; that such cancellation did not amount to a gross and habitual
neglect of duty because her mistake was only her first offense in the nine years of service to MJCI; and that MJCI
sustained no damage.[16] It ordered MJCI to reinstate her to her former position without loss of seniority rights, and with
payment of backwages equivalent to at least six months and other benefits. [17]

The NLRC denied MJCI's motion for reconsideration on February 18, 2000. [18]

Ruling of the CA

MJCI elevated the decision of the NLRC to the CA on certiorari, claiming that the NLRC thereby gravely abused its
discretion in reversing the Labor Arbiter's decision. MJCI insisted that Trajano had been accorded procedural due process
and had been dismissed for just cause; and that she was not entitled to the reliefs of reinstatement with payment of limited
backwages of six months, without loss of seniority rights and other benefits.

On January 30, 2003, however, the CA upheld the NLRC, pointing out that MJCI had not given the valid notice of
termination as required by law; that MJCI had not shown that the unauthorized cancellation of tickets by Trajano had
violated company policy; and that the cancellation of the ticket had been only an honest mistake that did not amount to
gross negligence as to warrant dismissal.[19]

Aggrieved, MJCI filed a motion for reconsideration,[20] but the CA denied its motion.[21]

Issues
Hence, MJCI appealed to the Court, raising the following issues:

1. Whether or not there was just cause when Petitioner (MJCI) dismissed Respondent Aimee O. Trajano from the
service;[22] and

2. Whether or not Petitioner MJCI complied with the due process requirement when it effected the dismissal of Respondent
Trajano.[23]
Ruling of the Court

The appeal lacks merit.

MJCI posits that Trajano held a position of trust and confidence; that the act of canceling the ticket was unauthorized
because it was done without the consent of the bettor; that the CA thus erred in construing the phrase unauthorized
cancellation of ticket as referring to whether or not she was authorized to cancel the ticket pursuant to company rules; that
under the same premise, the loss of trust and confidence was established because the unauthorized cancellation of the
ticket was a serious misconduct on her part considering that had the bet of P2,000.00 won the daily double race, the
dividend to be paid could have been such a big amount that she would be unable to pay on her own; that the
repercussions of her act to MJCI would have been disastrous had the bet won, with MJCI being sued by the bettor and
being scandalized in the media; that MJCI would have suffered great loss in both income and reputation due to such
unauthorized cancellation of ticket; and that, consequently, MJCI had the just cause to dismiss her. [24]

We cannot sustain the position of MJCI.

The valid termination of an employee may either be for just causes under Article 282[25] or for authorized causes under
Article 283[26] and Article 284,[27] all of the Labor Code.

Specifically, loss of the employer's trust and confidence is a just cause under Article 282 (c), a provision that ideally
applies only to cases involving an employee occupying a position of trust and confidence, or to a situation where the
employee has been routinely charged with the care and custody of the employer's money or property. [28] But the loss of
trust and confidence, to be a valid ground for dismissal, must be based on a willful breach of trust and confidence founded
on clearly established facts. "A breach is willful," according to AMA Computer College, Inc. v. Garay,[29] " if it is done
intentionally, knowingly and purposely, without justifiable excuse, as distinguished from an act done carelessly,
thoughtlessly, heedlessly or inadvertently. It must rest on substantial grounds and not on the employer's arbitrariness,
whims, caprices or suspicion; otherwise, the employee would eternally remain at the mercy of the employer."[30] An
ordinary breach is not enough.

Moreover, the loss of trust and confidence must be related to the employee's performance of duties. As held in Gonzales
v. National Labor Relations Commission:[31]

Loss of confidence, as a just cause for termination of employment, is premised on the fact that the employee concerned
holds a position of responsibility, trust and confidence. He must be invested with confidence on delicate matters such as
the custody, handling, care and protection of the employer's property and/or funds. But in order to constitute a just cause
for dismissal, the act complained of must be "work-related" such as would show the employee concerned to be unfit to
continue working for the employer.
As a selling teller, Trajano held a position of trust and confidence. The nature of her employment required her to handle
and keep in custody the tickets issued and the bets made in her assigned selling station. The bets were funds belonging
to her employer. Although the act complained of the unauthorized cancellation of the ticket (i.e., unauthorized because it
was done without the consent of the bettor) was related to her work as a selling teller, MJCI did not establish that the
cancellation of the ticket was intentional, knowing and purposeful on her part in order for her to have breached the trust
and confidence reposed in her by MJCI, instead of being only out of an honest mistake.

Still, to justify the supposed loss of its trust and confidence in Trajano, MJCI contends that the unauthorized cancellation
of the ticket could have greatly prejudiced MJCI for causing damage to both its income and reputation.

We consider the contention of MJCI unwarranted. As the records indicate, MJCI's prejudice remained speculative and
unrealized. To dismiss an employee based on speculation as to the damage the employer could have suffered would be
an injustice. The injustice in the case of Trajano would be greater if the supposed just cause for her dismissal was not
even sufficiently established. While MJCI as the employer understandably had its own interests to protect, and could
validly terminate any employee for a just cause, its exercise of the power to dismiss should always be tempered with
compassion and imbued with understanding, avoiding its abuse.[32]
In this regard, we have to stress that the loss of trust and confidence as a ground for the dismissal of an employee must
also be shown to be genuine, for, as the Court has aptly pointed out in Mabeza v. National Labor Relations
Commission:[33] " x x x loss of confidence should not be simulated in order to justify what would otherwise be, under the
provisions of law, an illegal dismissal. It should not be used as a subterfuge for causes which are illegal, improper and
unjustified. It must be genuine, not a mere afterthought to justify an earlier action taken in bad faith."

The foregoing notwithstanding, the Court unavoidably notes that the invocation of loss of trust and confidence as a ground
for dismissing Trajano was made belatedly. In its position paper dated September 2, 1998,[34] MJCI invoked the grounds
under Article 282 (a) and (b) of the Labor Code to support its dismissal of her, submitting then that the unauthorized
cancellation of the ticket constituted a serious violation of company policy amounting to dishonesty. The first time that
MJCI invoked breach of trust was in its motion for the reconsideration of the decision of the NLRC. [35] MJCI also thereafter
urged the ground of breach of trust in its petition for certiorari in the CA.[36] Such a belated invocation of loss of confidence
broadly hints the ground as a mere afterthought to buttress an otherwise baseless dismissal of the employee.

Anent compliance with due process, MJCI argues that Trajano's notification of her termination through the posting in the
selling stations should be deemed a substantial if not full compliance with the due process requirement, considering that
she herself even presented a copy of the posting as evidence;[37] that the rule on giving notice of termination to an
employee did not expressly require the personal service of the notice to the dismissed worker; and that what mattered
was that she was notified in writing of MJCI's decision to terminate her through the posting in its selling stations.[38]

The argument is bereft of worth and substance.

The procedure to be followed in the termination of employment based on just causes is laid down in Section 2 (d), Rule I
of the Implementing Rules of Book VI of the Labor Code, to wit:

Section 2. Security of Tenure. --

x x x x

(d) In all cases of termination of employment, the following standards of due process shall be substantially observed:

For termination of employment based on just causes as defined in Article 282 of the Labor Code:

(i) A written notice served on the employee specifying the ground or grounds for termination, and giving said employee
reasonable opportunity within which to explain his side.

(ii) A hearing or conference during which the employee concerned, with the assistance of counsel if he so desires is given
opportunity to respond to the charge, present his evidence, or rebut the evidence presented against him.

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served on
the employee's last known address.
A review of the records warrants a finding that MJCI did not comply with the prescribed procedure.

In its October 27, 1999 decision, the NLRC declared that MJCI complied with the first notice requirement by serving a
copy of the first notice upon Trajano,[39] who received the copy and affixed her signature thereon on April 26,
1998.[40] Such declaration seems to be supported by the records.

Yet, the NLRC concluded that the clarificatory meeting was not the hearing contemplated by law because the supposed
complainants were not there for Trajano to confront.[41]

We disagree with the NLRC's conclusion, and instead find that there was a compliance with the second requirement for a
hearing or conference. It is undeniable that Trajano was accorded the real opportunity to respond to the complaint against
her, for she did submit her written explanation on April 26, 1998 and was invited to the final clarificatory meeting set on
June 5, 1998 in the presence of the MJCI Raceday Union President. [42]

Nor was it necessary at all for Trajano to be able to confront the complainant against her. In Muaje-Tuazon v. Wenphil
Corporation,[43] the Court has clarified that the opportunity to confront a witness is not demanded in company
investigations of the administrative sins of an employee, holding thusly:
x x x x

Petitioners must be reminded, however, that confrontation of witnesses is required only in adversarial criminal prosecutions,
and not in company investigations for the administrative liability of the employee. Additionally, actual adversarial
proceedings become necessary only for clarification, or when there is a need to propound searching questions to witnesses
who give vague testimonies. This is not an inherent right, and in company investigations, summary proceedings may be
conducted.
As for the last procedural requirement of giving the second notice, the posting of the notice of termination at MJCI's selling
stations did not satisfy it, and the fact that Trajano was eventually notified of her dismissal did not cure the infirmity. It is
notable, indeed, that the NLRC explicitly found in its October 27, 1999 decision that MJCI did not comply, to wit:

In this case, there is the first written notice required but none of the second notice that informs her of the employer's or
MJCI's decision to dismiss her. In fact, it was not even shown that the investigator, Atty. Joey Galit, whose office is that of
an assistant racing manager, has the company's authority to dismiss the complainant, since that power is usually lodged
with the head of the human resource department or with the President, but unusual with an assistant manager. The
complainant asserts that she was never furnished a copy of her termination letter and what she had submitted as evidence
on record (Annex "A" for the complainant, Record, p. 25) was one of those copies posted on all selling stations of MJCI.
This accusation was not answered by the respondents nor have they ever proved that they had furnished the complainant
a written notice of the decision of MJCI to terminate her services on the ground of serious violation of company policy
(dishonesty).[44]
We uphold this finding of the NLRC, for the law on the matter has been clear. While personal service of the notice of
termination on the employee is not required, Section 2 (d), Rule I of the Implementing Rules of Book VI of the Labor
Code mandates that such notice be served on Trajano at her last known address, viz:

x x x x

(iii) A written notice of termination served on the employee, indicating that upon due consideration of all the circumstances,
grounds have been established to justify his termination. In case of termination, the foregoing notices shall be served
on the employee's last known address. (Emphasis supplied)

xxxx
Accordingly, the CA did not commit any error in dismissing MJCI's petition for certiorari assailing the decision of the
NLRC. It is worth repeating that in termination cases, the employer carries the burden of proving that its dismissal of the
employee was legal.[45] The employer's failure discharged its burden will readily mean that the dismissal has not been
justified, and was, therefore, illegal.[46] Accordingly, the failure of MJCI to establish the just cause for terminating Trajano
fully warranted the NLRC's finding that Trajano's termination was illegal.

Considering the lapse of time between the rendition of the decision of the NLRC and this ultimate resolution of the case,
however, the Court holds that a review of the order of reinstatement and the award of backwages is necessary and in
order.

There is no question that an illegally dismissed employee is entitled to her reinstatement without loss of seniority rights
and other privileges, and to full backwages, inclusive of allowances and other benefits or their monetary equivalent. [47]

In case the reinstatement is no longer possible, however, an award of separation pay, in lieu of reinstatement, will be
justified.[48] The Court has ruled that reinstatement is no longer possible: (a) when the former position of the illegally
dismissed employee no longer exists;[49] or (b) when the employer's business has closed down;[50] or (c) when the
employer-employee relationship has already been strained as to render the reinstatement impossible. [51] The Court
likewise considered reinstatement to be non-feasible because a "considerable time" has lapsed between the dismissal
and the resolution of the case.[52] In that regard, a lag of eight years or ten years is sufficient to justify an award of
separation pay in lieu of reinstatement.

Applying the foregoing to this case, the Court concludes that the reinstatement of Trajano is no longer feasible. More than
14 years have already passed since she initiated her complaint for illegal dismissal in 1998, filing her position paper on
September 3, 1998,[53] before the Court could finally resolve her case. The lapse of that long time has rendered her
reinstatement an impractical, if not an impossible, option for both her and MJCI. Consequently, an award of separation
pay has become the practical alternative, computed at one month pay for every year of service. [54]
Anent backwages, Trajano is entitled to full backwages, inclusive of allowances and other benefits or their monetary
equivalent, computed from the time her actual compensation was withheld on June 6, 1998 up to the finality of this
decision (on account of her reinstatement having meanwhile become non-feasible and impractical).[55] This ruling is
consistent with the legislative intent behind Republic Act No. 6715. [56]

WHEREFORE, the Court AFFIRMS the decision promulgated on January 30, 2003, subject to the MODIFICATIONS that:
(a) separation pay computed at one month pay for every year of service be awarded in lieu of reinstatement, and (b)
backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from June 6, 1998, the
date of respondent's termination, until the finality of this decision be paid to respondent.

The petitioner shall pay the costs of suit.

SO ORDERED.