G.R. No.

L-15045

January 20, 1961

IN RE: PETITION FOR EXEMPTION FROM COVERAGE BY THE SOCIAL SECURITY SYSTEM. ROMAN CATHOLIC ARCHBISHOP OF MANILA, petitioner-appellant, vs. SOCIAL SECURITY COMMISSION, respondent-appellee. Feria, Manglapus and Associates for petitioner-appellant. Legal Staff, Social Security System and Solicitor General for respondentappellee. GUTIERREZ DAVID, J.: On September 1, 1958, the Roman Catholic Archbishop of Manila, thru counsel, filed with the Social Security Commission a request that "Catholic Charities, and all religious and charitable institutions and/or organizations, which are directly or indirectly, wholly or partially, operated by the Roman Catholic Archbishop of Manila," be exempted from compulsory coverage of Republic Act No. 1161, as amended, otherwise known as the Social Security Law of 1954. The request was based on the claim that the said Act is a labor law and does not cover religious and charitable institutions but is limited to businesses and activities organized for profit. Acting upon the recommendation of its Legal Staff, the Social Security Commission in its Resolution No. 572, series of 1958, denied the request. The Roman Catholic Archbishop of Manila, reiterating its arguments and raising constitutional objections, requested for reconsideration of the resolution. The request, however, was denied by the Commission in its Resolution No. 767, series of 1958; hence, this appeal taken in pursuance of section 5(c) of Republic Act No. 1161, as amended. Section 9 of the Social Security Law, as amended, provides that coverage "in the System shall be compulsory upon all members between the age of sixteen and sixty rears inclusive, if they have been for at least six months a the service of an employer who is a member of the System, Provided, that the Commission may not compel any employer to become member of the System unless he shall have been in operation for at least two years and has at the time of admission, if admitted for membership during the first year of the System's operation at least fifty employees, and if admitted for

membership the following year of operation and thereafter, at least six employees x x x." The term employer" as used in the law is defined as any person, natural or juridical, domestic or foreign, who carries in the Philippines any trade, business, industry, undertaking, or activity of any kind and uses the services of another person who is under his orders as regards the employment, except the Government and any of its political subdivisions, branches or instrumentalities, including corporations owned or controlled by the Government" (par. [c], see. 8), while an "employee" refers to "any person who performs services for an 'employer' in which either or both mental and physical efforts are used and who receives compensation for such services" (par. [d], see. 8). "Employment", according to paragraph [i] of said section 8, covers any service performed by an employer except those expressly enumerated thereunder, like employment under the Government, or any of its political subdivisions, branches or instrumentalities including corporations owned and controlled by the Government, domestic service in a private home, employment purely casual, etc. From the above legal provisions, it is apparent that the coverage of the Social Security Law is predicated on the existence of an employeremployee relationship of more or less permanent nature and extends to employment of all kinds except those expressly excluded. Appellant contends that the term "employer" as defined in the law should following the principle of ejusdem generis be limited to those who carry on "undertakings or activities which have the element of profit or gain, or which are pursued for profit or gain," because the phrase ,activity of any kind" in the definition is preceded by the words "any trade, business, industry, undertaking." The contention cannot be sustained. The rule ejusdem generisapplies only where there is uncertainty. It is not controlling where the plain purpose and intent of the Legislature would thereby be hindered and defeated. (Grosjean vs. American Paints Works [La], 160 So. 449). In the case at bar, the definition of the term "employer" is, we think, sufficiently comprehensive as to include religious and charitable institutions or entities not organized for profit, like herein appellant, within its meaning. This is made more evident by the fact that it contains an exception in which said institutions or entities are not included. And, certainly, had the Legislature really intended to limit the operation of the law to entities organized for profit or gain, it would not have defined an

"employer" in such a way as to include the Government and yet make an express exception of it. It is significant to note that when Republic Act No. 1161 was enacted, services performed in the employ of institutions organized for religious or charitable purposes were by express provisions of said Act excluded from coverage thereof (sec. 8, par. [j] subpars. 7 and 8). That portion of the law, however, has been deleted by express provision of Republic Act No. 1792, which took effect in 1957. This is clear indication that the Legislature intended to include charitable and religious institutions within the scope of the law. In support of its contention that the Social Security Law was intended to cover only employment for profit or gain, appellant also cites the discussions of the Senate, portions of which were quoted in its brief. There is, however, nothing whatsoever in those discussions touching upon the question of whether the law should be limited to organizations for profit or gain. Of course, the said discussions dwelt at length upon the need of a law to meet the problems of industrializing society and upon the plight of an employer who fails to make a profit. But this is readily explained by the fact that the majority of those to be affected by the operation of the law are corporations and industries which are established primarily for profit or gain. Appellant further argues that the Social Security Law is a labor law and, consequently, following the rule laid down in the case of Boy Scouts of the Philippines vs. Araos (G.R. No. L-10091, January 29, 1958) and other cases1, applies only to industry and occupation for purposes of profit and gain. The cases cited, however, are not in point, for the reason that the law therein involved expressly limits its application either to commercial, industrial, or agricultural establishments, or enterprises. . Upon the other hand, the Social Security Law was enacted pursuant to the "policy of the Republic of the Philippines to develop, establish gradually and perfect a social security system which shall be suitable to the needs of the people throughout the Philippines and shall provide protection to employees against the hazards of disability, sickness, old age and death." (See. 2, Republic Act No. 1161, as amended.) Such enactment is a legitimate exercise of the police power. It affords protection to labor,

especially to working women and minors, and is in full accord with the constitutional provisions on the "promotion of social justice to insure the well-being and economic security of all the people." Being in fact a social legislation, compatible with the policy of the Church to ameliorate living conditions of the working class, appellant cannot arbitrarily delimit the extent of its provisions to relations between capital and labor in industry and agriculture. There is no merit in the claim that the inclusion of religious organizations under the coverage of the Social Security Law violates the constitutional prohibition against the application of public funds for the use, benefit or support of any priest who might be employed by appellant. The funds contributed to the System created by the law are not public funds, but funds belonging to the members which are merely held in trust by the Government. At any rate, assuming that said funds are impressed with the character of public funds, their payment as retirement death or disability benefits would not constitute a violation of the cited provisions of the Constitution, since such payment shall be made to the priest not because he is a priest but because he is an employee. Neither may it be validly argued that the enforcement of the Social Security Law impairs appellant's right to disseminate religious information. All that is required of appellant is to make monthly contributions to the System for covered employees in its employ. These contributions, contrary to appellant's contention, are not in the nature of taxes on employment." Together with the contributions imposed upon the employees and the Government, they are intended for the protection of said employees against the hazards of disability, sickness, old age and death in line with the constitutional mandate to promote social justice to insure the well-being and economic security of all the people. IN VIEW OF THE FOREGOING, Resolutions Nos. 572 kind 767, series of 1958, of the Social Security Commission are hereby affirmed. So ordered with costs against appellant. Paras, C.J., Padilla, Bautista Angelo, Paredes and Dizon, JJ., concur. Concepcion, Reyes, J.B.L. and Barrera, JJ., concur in the result. Bengzon, J., reserves his vote.

G.R. No. 127116 April 8, 1997 ALEX L. DAVID, in his own behalf as Barangay Chairman of Barangay 77, Zone 7, Kalookan City and as President of the LIGA NG MGA BARANGAY SA PILIPINAS, petitioner, vs. COMMISSION ON ELECTIONS, Department of Interior and Local Government, and THE HONORABLE SECRETARY, Department of Budget and Management, respondents. G.R. No. 128039 April 8, 1997 LIGA NG MGA BARANGAY QUEZON CITY CHAPTER, Represented by BONIFACIO M. RILLON, petitioner, vs. COMMISSION ON ELECTIONS and DEPARTMENT OF BUDGET AND MANAGEMENT, respondents.

docketed in this Court as G.R. No. 127116, under Rule 65 of the Rules of Court, to prohibit the holding of the barangay election scheduled on the second Monday of May 1997. On January 14, 1997, the Court resolved to require the respondents to comment on the petition within a non-extendible period of fifteen days ending on January 29, 1997. On January 29, 1997, the Solicitor General filed his four-page Comment siding with petitioner and praying that "the election scheduled on May 12, 1997 be held in abeyance." Respondent Commission on Elections filed a separate Comment, dated February 1, 1997 opposing the petition. On February 11, 1997, the Court issued a Resolution giving due course to the petition and requiring the parties to file simultaneous memoranda within a non-extendible period of twenty days from notice. It also requested former Senator Aquilino Q. Pimentel, Jr. 1 to act as amicus curiae and to file a memorandum also within a non-extendible period of twenty days. It noted but did not grant petitioner's Urgent Motion for Issuance of Temporary Restraining Order and/or Writ of Preliminary Injunction dated January 31, 1997 (as well as his Urgent Ex-Parte Second Motion to the same effect, dated March 6, 1997). Accordingly, the parties filed their respective memoranda. The Petition for Leave to Intervene filed on March 17, 1997 by Punong Barangay Rodson F. Mayor was denied as it would just unduly delay the resolution of the case, his interest like those of all other barangay officials being already adequately represented by Petitioner David who filed this petition as "president of the Liga ng mga Barangay sa Pilipinas." G.R. No. 128039 On February 20, 1997, Petitioner Liga ng mga Barangay Quezon City Chapter represented by its president Bonifacio M. Rillon filed a petition, docketed as G.R. No. 128039, "to seek a judicial review by certiorari to declare as unconstitutional: 1. Section 43(c) of R.A. 7160 which reads as follows: (c) The term of office of barangay officials and members of the sangguniang kabataan shall be for three (3) years, which shall begin after the regular election of barangay officials on the second Monday of May 1994.

PANGANIBAN, J.: The two petitions before us raise a common question: How long is the term of office of barangay chairmen and other barangay officials who were elected to their respective offices on the second Monday of May 1994? Is it three years, as provided by RA 7160 (the Local Government Code) or five years, as contained in RA 6679? Contending that their term is five years, petitioners ask this Court to order the cancellation of the scheduled barangay election this coming May 12, 1997 and to reset it to the second Monday of May, 1999. The Antecedents G.R. No. 127116 In his capacity as barangay chairman of Barangay 77, Zone 7, Kalookan City and as president of the Liga ng mga Barangay sa Pilipinas, Petitioner Alex L. David filed on December 2, 1996 a petition for prohibition

2. COMELEC Resolution Nos. 2880 and 2887 fixing the date of the holding of the barangay elections on May 12, 1997 and other activities related thereto; 3. The budgetary appropriation of P400 million contained in Republic Act No. 8250 otherwise known as the General Appropriations Act of 1997 intended to defray the costs and expenses in holding the 1997 barangay elections: 2 Comelec Resolution 2880, 3 promulgated on December 27, 1996 and referred to above, adopted a "Calendar of Activities and List and Periods of Certain Prohibited Acts for the May 12, 1997 Barangay Elections." On the other hand, Comelec Resolution 2887 promulgated on February 5, 1997 moved certain dates fixed in Resolution 2880. 4 Acting on the petition, the Court on February 25, 1997 required respondents to submit their comment thereon within a non-extendible period of ten days ending on March 7, 1997. The Court further resolved to consolidate the two cases inasmuch as they raised basically the same issue. Respondent Commission filed its Comment on March 6, 1997 5 and the Solicitor General, in representation of the other respondent, filed his on March 6, 1997. Petitioner's Urgent Omnibus Motion for oral argument and temporary restraining order was noted but not granted. The petition was deemed submitted for resolution by the Court without need of memoranda. The Issues Both petitions though worded differently raise the same ultimate issue: How long is the term of office of barangay officials? Petitioners 6 contend that under Sec. 2 of Republic Act No. 6653, approved on May 6, 1988, "(t)he term of office of barangay officials shall be for five (5) years . . ." This is reiterated in Republic Act No. 6679, approved on November 4, 1988, which reset the barangay elections from "the second Monday of November 1988" to March 28, 1989 and provided in Sec. 1 thereof that such five-year term shall begin on the "first day of May 1989 and ending on the thirty-first day of May 1994." Petitioners further aver 7 that although Sec. 43 of RA 7160 reduced the term of office of all local elective officials to three years, such reduction does not apply to

barangay officials because (1) RA 6679 is a special law applicable only to barangays while RA 7160 is a general law which applies to all other local government units; (2) RA 7160 does not expressly or impliedly repeal RA 6679 insofar as the term of barangay officials is concerned; (3) while Sec. 8 of Article X of the 1987 constitution fixes the term of elective local officials at three years, the same provision states that the term of barangay officials "shall be determined by law"; and (4) thus, it follows that the constitutional intention is to grant barangay officials any term, except three years; otherwise, "there would be no rhyme or reason for the framers of the Constitution to except barangay officials from the three year term found in Sec. 8 (of) Article X of the Constitution." Petitioners conclude (1) that the Commission on Elections committed grave abuse of discretion when it promulgated Resolution Nos. 2880 and 2887 because it "substituted its own will for that of the legislative and usurped the judicial function . . . by interpreting the conflicting provisions of Sec. 1 of RA 6679 and Sec. 43 (c) of RA 7160; and (2) that the appropriation of P400 million in the General Appropriation Act of 1997 (RA 8250) to be used in the conduct of the barangay elections on May 12, 1997 is itself unconstitutional and a waste of public funds. The Solicitor General agrees with petitioners, arguing that RA 6679 was not repealed by RA 7160 and thus "he believes that the holding of the barangay elections (o)n the second Monday of May 1997 is without sufficient legal basis." Respondent Commission on Elections, through Chairman Bernardo P. Pardo, defends its assailed Resolutions and maintains that the repealing clause of RA 7160 includes "all laws, whether general or special, inconsistent, with the provisions of the Local Government Code," citing this Court's dictum in Paras vs. Comelec 8 that "the next regular election involving the barangay office is barely seven (7) months away, the same having been scheduled in May 1997." Furthermore, RA 8250 (the General Appropriations Act for 1997) and RA 8189 (providing for a general registration of voters) both "indicate that Congress considered that the barangay elections shall take place in May, 1997, as provided for in RA 7160, Sec. 43 (c)." 9 Besides, petitioners cannot claim a term of more than three years since they were elected under the aegis of the Local Government Code of 1991 which prescribes a term of only three years. Finally, Respondent Comelec denies the charge of grave abuse of discretion stating that the "question presented . . . is a purely legal one involving no exercise

of an act without or in excess of jurisdiction or with grave abuse of discretion." 10 As amicus curiae, former Senator Aquilino Q. Pimentel, Jr. urges the Court to deny the petitions because (1) the Local Autonomy Code repealed both RA 6679 and 6653 "not only by implication but by design as well"; (2) the legislative intent is to shorten the term of barangay officials to three years; (3) the barangay officials should not have a term longer than that of their administrative superiors, the city and municipal mayors; and (4) barangay officials are estopped from contesting the applicability of the three-year term provided by the Local Government Code as they were elected under the provisions of said Code. From the foregoing discussions of the parties, the Court believes that the issues can be condensed into; three, as follows: 1. Which law governs the term of office of barangay official: RA 7160 or RA 6679? 2. Is RA 7160 insofar as it shortened such term to only three years constitutional? 3. Are petitioners estopped from claiming a term other than that provided under RA 7160?. The Court's Ruling The petitions are devoid of merit. Brief Historical Background of Barangay Elections For a clear understanding of the issues, it is necessary to delve briefly into the history of barangay elections. An a unit of government, the barangay antedated the Spanish conquest of the Philippines The word "barangay" is derived from the Malay "balangay," a boat which transported them (the Malays) to these shores. 11 Quoting from

Juan de Plasencia, a Franciscan missionary in 1577, Historian Conrado Benitez 12 wrote that the barangay was ruled by a datowho exercised absolute powers of government. While the Spaniards kept the barangay as the basic structure of government, they stripped the dato or rajah, of his powers. 13 Instead, power was centralized nationally in the governor general and locally in the encomiendero and later, in the alcalde mayor and the gobernadorcillo. The dato or rajah was much later renamed cabeza de barangay, who was elected by the local citizens possessing property. The position degenerated from a title of honor to that of a "mere government employee. Only the poor who needed a salary, no matter how low, accepted the post." 14 After the Americans colonized the Philippines, the barangays became known as "barrios." 15 For some time, the laws governing barrio governments were found in the Revised Administrative Code of 1916 and later in the Revised Administrative Code of 1917. 16 Barrios were granted autonomy by the original Barrio Charter, RA 2370, and formally recognized as quasi-municipal corporations 17 by the Revised Barrio Charter, RA 3590. During the martial law regime, barrios were "declared" or renamed "barangays" a reversion really to their pre-Spanish names by PD. No. 86 and PD No. 557. Their basic organization and functions under RA 3590, which was expressly "adopted as the Barangay Charter, were retained. However, the titles of the officials were changed to "barangay captain," "barangay councilman," "barangay secretary" and "barangay treasurer." Pursuant to Sec. 6 of Batas Pambansa Big. 222, 18 "a Punong Barangay (Barangay Captain) and six Kagawads ng Sangguniang Barangay (Barangay Councilmen), who shall constitute the presiding officer and members of the Sangguniang Barangay (Barangay Council) respectively" were first elected on May 17, 1982. They had a term of six years which began on June 7, 1982. The Local Government Code of 1983 19 also fixed the term of office of local elective officials at six years. 20 Under this Code, the chief officials of the barangay were the punong barangay, six elective sangguniang barangay members, the kabataang barangay chairman, a barangay secretary and a barangay treasurer. 21 B.P. Blg. 881, the Omnibus Election Code, 22 reiterated that barangay officials "shall hold office, for six years," and stated that their election was to be held "on the second Monday of May

nineteen hundred and eighty eight and on the same day every six years thereafter." 23 This election scheduled by B.P. Blg. 881 on the second Monday of May 1988 was reset to "the second Monday of November 1988 and every five years thereafter 24 by RA 6653. Under this law, the term of office of the barangay officials was cut to five years 25 and the punong barangay was to be chosen from among themselves by seven kagawads, who in turn were to be elected at large by the barangay electorate. 26 But the election date set by RA 6653 on the second Monday of November 1988 was again "postponed and reset to March 28, 1989" by RA 6679, 27 and the term of office of barangay officials was to begin on May 1, 1989 and to end on May 31, 1994. RA 6679 further provided that "there shall be held a regular election of barangay officials on the second Monday of May 1994 and on the same day every five (5) years thereafter Their term shall be for five years . . . " 28 Significantly, the manner of election of the punong barangay was changed. Sec. 5 of said law ordained that while the seven kagawads were to be elected by the registered voters of the barangay, "(t)he candidate who obtains the highest number of votes shall be the punong barangay and in the event of a tie, there shall be a drawing of lots under the supervision of the Commission on Elections." Under the Local Government Code of 1991, RA 7160, 29 several provisions concerning barangay official were introduced: (1) The term of office was reduced to three years, as follows: Sec. 43. Term of Office. xxx xxx xxx (c) The term of office of barangay officials and members of the sangguniang kabataan shall be for three (3)years, which shall begin after the regular election of barangay officials on the second Monday of May, 1994 (Emphasis supplied.)

(2) The composition of the Sangguniang Barangay and the manner of electing its officials were altered, inter alia, the barangay chairman was to be elected directly by the electorate, as follows: Sec. 387. Chief Officials and Offices. (a) There shall be in each barangay a punong barangay, seven (7) sanggunian barangay members, the sanggunian kabataan chairman, a barangay secretary and a barangay treasurer. xxx xxx xxx Sec. 390. Composition. The Sangguniang barangay, the legislative body of the barangay, shall be composed of the punong barangay as presiding officer, and the seven (7) regular sangguniang barangay members elected at large and the sangguniang kabataan chairman as members. Sec. 41. Manner of Election. (a) The . . . punong barangay shall be elected at large . . . by the qualified voters in the barangay. (Emphasis supplied.) Pursuant to the foregoing mandates of the Local Autonomy Code, the qualified barangay voters actually voted for one punong barangay and seven (7) kagawads during the barangay elections held on May 9, 1994. In other words, the punong barangay was elected directly and separately by the electorate, and not by the seven (7) kagawads from among themselves. The First Issue: Clear Legislative Intent and Design to Limit Term to Three Years In light of the foregoing brief historical background, the intent and design of the legislature to limit the term of barangay officials to only three (3) years as provided under the Local Government Code emerges as bright as the sunlight. The cardinal rule in the interpretation of all laws is to ascertain and give effect to the intent of the law. 30 And three years is the obvious intent.

First. RA 7160, the Local Government Code, was enacted later than RA 6679. It is basic that in case of an irreconciliable conflict between two laws of different vintages, the later enactment prevails. 31 Legis posteriores priores contrarias abrogant. The rationale is simple: a later law repeals an earlier one because it is the later legislative will. It is to be presumed that the lawmakers knew the older law and intended to change it. In enacting the older law, the legislators could not have known the newer one and hence could not have intended to change what they did not know. Under the Civil Code, laws are repealed only by subsequent ones 32 and not the other way around. Under Sec. 43-c of RA 7160, the term of office of barangay officials was fixed at "three (3) years which shall begin after the regular election of barangay officials on the second Monday of May 1994." This provision is clearly inconsistent with and repugnant to Sec. 1 of RA 6679 which states that such "term shall be for five years." Note that both laws refer to the same officials who were elected "on the second Monday of May 1994." Second. RA 6679 requires the barangay voters to elect seven kagawads and the candidate obtaining the highest number of votes shall automatically be the punong barangay. RA 6653 empowers the seven elected barangay kagawads to select the punong barangay from among themselves. On the other hand, the Local Autonomy Code mandates a direct vote on the barangay chairman by the entire barangay electorate, separately from the seven kagawads. Hence, under the Code, voters elect eight barangay officials, namely, the punong barangay plus the seven kagawads. Under both RA 6679 and 6653, they vote for only seven kagawads, and not for the barangay chairman. Third. During the barangay elections held on May 9, 1994 (second Monday), the voters actually and directly elected one punong barangay and seven kagawads. If we agree with the thesis of petitioners, it follows that all the punong barangays were elected illegally and thus, Petitioner Alex David cannot claim to be a validly elected barangay chairman, much less president of the national league, of barangays which he purports to represent in this petition. It then necessarily follows also that he is not the real party-ininterest and on that ground, his petition should be summarily dismissed.

Fourth. In enacting the general appropriations act of 1997, 33 Congress appropriated the amount of P400 million to cover expenses for the holding of barangay elections this year. Likewise, under Sec. 7 of RA 8189, Congress ordained that a general registration of voters shall be held "immediately after the barangay elections in 1997." These are clear and express contemporaneous statements of Congress that barangay officials shall be elected this May, in accordance with Sec. 43-c of RA 7160. Fifth. In Paras vs. Comelec, 34 this Court said that "the next regular election involving the barangay office concerned is barely seven (7) months away, the same having been scheduled in May, 1997." This judicial decision, per Article 8 of the Civil Code, is now a "part of the legal system of the Philippines." Sixth. Petitioners pompously claim that RA 6679, being a special law, should prevail over RA 7160, all alleged general law pursuant to the doctrine of generaila specialibus non derogant. Petitioners are wrong. RA. 7160 is a codified set of laws that specifically applies to local government units. It specifically and definitively provides in its Sec. 43-c that "the term of office of barangay officials . . . shall be for three years." It is a special provision that applies only to the term of barangay officials who were elected on the second Monday of May 1994. With such particularity, the provision cannot be deemed a general law. Petitioner may be correct in alleging that RA 6679 is a special law, but they are incorrect in stating (without however giving the reasons therefor) that RA 7160 is necessarily a general law. 35 It is a special law insofar as it governs the term of office of barangay officials. In its repealing clause, 36 RA 7160 states that "all general and special laws . . . which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly." There being a clear repugnance and incompatibility between the two specific provisions, they cannot stand together. The later law, RA 7160, should thus prevail in accordance with its repealing clause. When a subsequent law encompasses entirely the subject matter of the former enactments, the latter is deemed repealed. 37 The Second Issue: Three-Year Term Not Repugnant, to Constitution Sec. 8, Article X of the Constitution states:

Sec. 8. The term of office of elective local officials, except barangay officials, which shall be determined by law, shall be three years, and no such official shall serve for more than three consecutive terms. Voluntary renunciation of the office for any length of time shall not be considered as an interruption in the continuity of his service for the full term for which he was elected. Petetioner Liga ng mga Barangay Quezon City Chapter posits that by excepting barangay officials whose "term shall be determined by law" from the general provision fixing the term of "elective local officials" at three years, the Constitution thereby impliedly prohibits Congress from legislating a three year term for such officers. We find this theory rather novel but nonetheless logically and legally flawed. Undoubtedly, the Constitution did not expressly prohibit Congress from fixing any term of office for barangay officials. It merely left the determination of such term to the lawmaking body, without any specific limitation or prohibition, thereby leaving to the lawmakers full discretion to fix such term in accordance with the exigencies of public service. It must be remembered that every law has in its favor the presumption of constitutionality. 38 For a law to be nullified, it must be shown that there is a clear and unequivocal (not just implied) breach of the Constitution. 39 To strike down a law as unconstitutional, there must be a clear and unequivocal showing that what the fundamental law prohibits, the statute permits. 40 The petitioners have miserably failed to discharge this burden and to show clearly the unconstitutionality they aver. There is absolutely no doubt in our mind that Sec. 43-c of RA 7160 is constitutional. Sec. 8, Article X of the Constitution limiting the term of all elective local officials to three years, except that of barangay officials which "shall be determined by law" was an amendment proposed by Constitutional Commissioner (now Supreme Court Justice) Hilario G. Davide, Jr. According to Fr. Joaquin G. Bernas, S.J., the amendment was "readily accepted without much discussion and formally approved." Indeed, a search into the Record of the Constitutional Commission yielded only a few pages 41 of actual deliberations, the portions pertinent to the Constitutional Commission's intent being the following:

MR. NOLLEDO. One clarificatory question, Madam President. What will be the term of the office of barangay officials as provided for? MR. DAVIDE. As may be determined by law.. MR. NOLLEDO. As provided for in the Local Government Code? MR. DAVIDE. Yes. xxx xxx xxx THE PRESIDENT. Is there any other comment? Is there any objection to this proposed new section as submitted by Commissioner Davide and accepted by the Committee? MR. RODRIGO. Madam President, does this prohibition to serve for more than three consecutive terms apply to barangay officials? MR. DAVIDE. Madam President, the voting that we had on the terms of office did not include the barangay officials because it was then the stand of the Chairman of the Committee on Local Governments that the term of barangay officials must be determined by law. So it is now for the law to determine whether the restriction on the number of reelections will be included in the Local Government Code. MR. RODRIGO. So that is up to Congress to decide. MR. DAVIDE. Yes. MR. RODRIGO. I just wanted that clear in the record.

Although the discussions in the Constitutional Commission were very brief, they nonetheless provide the exact answer to the main issue. To the question at issue here on how long the term of barangay officials is, the answer of the Commission was simple, clear and quick: "As may be determined by law"; more precisely, "(a)s provided for in the Local Autonomy Code." And the Local Autonomy Code, in its Sec. 43-c, limits their term to three years. The Third Issue: Petitioners Estopped From Challenging Their Three-Year Terms We have already shown that constitutionally, statutorily, logically, historically and commonsensically, the petitions are completely devoid of merit. And we could have ended our Decision right here. But there is one last point why petitioners have no moral ascendancy for their dubious claim to a longer term of office: the equities of their own petition militate against them. As pointed out by Amicus Curiae Pimentel, 42 petitioners are barred by estoppel from pursuing their petitions. Respondent Commission on Elections submitted as Annex "A" of its memorandum, 43 a machine copy of the certificate of candidacy of Petitioner Alex L. David in the May 9, 1994 barangay elections, the authenticity of which was not denied by said petitioner. In said certificate of candidacy, he expressly stated under oath that he was announcing his "candidacy for the office of punong barangay for Barangay 77, Zone 7" of Kalookan City and that he was "eligible for said office." The Comelec also submitted as Annex "B" 44 to its said memorandum, a certified statement of the votes obtained by the candidates in said elections, thus: BARANGAY 77 CERTIFIED LIST OF CANDIDATES VOTES OBTAINED May 9, 1994 BARANGAY ELECTIONS PUNONG BARANGAY VOTES OBTAINED

1. Magalona, Ruben 150 2. Quinto, Nelson L. 130 3. Ramon, Dolores Z. 120 4. Dela Pena, Roberto T. 115 5. Castillo, Luciana 114 6. Lorico, Amy A. 107 7. Valencia, Arnold 102 8. Ang, Jose 97 9. Dequilla, Teresita D. 58 10. Primavera, Marcelina 52 If, as claimed by petitioners, the applicable law is RA 6679, then (1) Petitioner David should not have run and could not have been elected chairman of his barangay because under RA 6679, there was to be no direct election for the punong barangay; the kagawad candidate who obtained the highest number of votes was to be automatically elected barangay chairman; (2) thus, applying said law, the punong barangay should have been Ruben Magalona, who obtained the highest number of votes among the kagawads 150, which was much more than David's 112; (3) the electorate should have elected only seven kagawads and not one punong barangay plus seven kagawads. In other words, following petitioners' own theory, the election of Petitioner David as well as all the barangay chairmen of the two Liga petitioners was illegal. The sum total of these absurdities in petitioners' theory is that barangay officials are estopped from asking for any term other than that which they ran for and were elected to, under the law governing thie very claim to such offices: namely, RA 7160, the Local Government Code. Petitioners' belated claim of ignorance as to what law governed their election to office in 1994 is unacceptable because under Art. 3 of the Civil Code, "(i)gnorance of the law excuses no one from compliance therewith." Epilogue

1. DAVID, ALEX L. 112 KAGAWAD It is obvious that these two petitions must fail. The Constitution and the laws do not support them. Extant jurisprudence militates against them. Reason and common sense reject them. Equity and morality abhor them.

They are subtle but nonetheless self-serving propositions to lengthen governance without a mandate from the governed. In a democracy, elected leaders can legally and morally justify their reign only by obtaining the voluntary consent of the electorate. In this case however, petitioners propose to extend their terms not by seeking the people's vote but by faulty legal argumentation This Court cannot and will not grant its imprimatur to such untenable proposition. If they want to continue serving, they must get a new mandate in the elections scheduled on May 12, 1997. WHEREFORE, the petitions are DENIED for being completely devoid of merit. SO ORDERED. Narvasa, C.J., Padilla, Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco and Torres, Jr., JJ., concur. Vitug, J., reserves his vote.

same Code which limits the period of the filing of actions on certain grounds to ten years? Likewise, at issue is whether or not there was a double sale to a party or parties under the facts obtaining. The petitioners in this case filed the herein petition for certiorari, assailing as they do the decision of the Court of Appeals which held 1: WHEREFORE, the decision appealed from is herein REVERSED, defendants-appellees are ordered to reconvey to plaintiffs-appellants the 149-sq. m. portion of Lot. 26 registered in the name of Anselmo Salvatierra under OCT 0-4221 as described in the deed of sale Exh. "A" or "1" of this case; and defendants-appellees are furthermore ordered to pay plaintiffs-appellants the amount of P5,000.00 as attorney's fees. The antecedent facts are not disputed:

Hermosisima, Jr., J., is on leave. G.R. No. 107797 August 26, 1996 PURITA SALVATIERRA, ELENITA SALVATIERRA NUNEZ, ANSELMO SALVATIERRA, JR., EMELITA SALVATIERRA, and ROMEL SALVATIERRA, petitioners, vs. THE HONORABLE COURT OF APPEALS and SPS. LINO LONGALONG and PACIENCIA MARIANO, respondents. In 1930, Enrique Salvatierra died intestate and without any issue. He was survived by his legitimate brothers:Tomas, Bartolome, Venancio and Macario, and sister Marcela, all surnamed Salvatierra. His estate consisted of three (3) parcels of land, more particularly described in the following manner: Cad. Lot No. 25 covered by Tax Declaration No. 11950 A parcel of land Lot No. 25, situated at Poblacion, San Leonardo, Nueva Ecija. Bounded on the NE-Lots Nos. 26 & 27; on the SE-Rizal St., SW-Lot No. 24; and on the NW-Bonifacio Street. Containing an area of ONE THOUSAND ONE HUNDRED AND SIXTEEN (1,116) sq. m. more or less and assessed at P1,460.00. Cad. Lot No. 26 covered by Tax Decl. No. 11951

HERMOSISIMA, JR. J.:p The intricate yet timeworn issue of prescription has come to the fore in this case. Which prescriptive period for actions for annulment should prevail, Art. 1391 of the New Civil Code which limits the filing of actions to four (4) years or Art. 1144 of the

A parcel of land situated at Poblacion, San Leonardo, Nueva Ecija, Lot No. 26, bounded on the NE-Lot No. 29 & 27; on the SE-Lot No. 25; and on the NW-Bonifacio St. Containing an area of SEVEN HUNDRED FORTY NINE (749) sq. m. more or less and assessed at P720.00. Cad. Lot No. 27 Covered by Tax Decl. No. 11949 A parcel of land situated at Poblacion, San Leonardo, Nueva Ecija, Lot No. 27, bounded on the NE-Lot No. 28; SE-Rizal St.; SW-Lot No. 25 and on the NW-Lot No. 26. Containing an area of SIX HUNDRED SEVENTY (670) sq. m. more or less. (Exh. :B: or "2") On May 4, 1966, Macario Salvatierra sold Lot No. 26 to his son, Anselmo Salvatierra by means of a deed of sale, and in consideration of the amount of P1,000.00. Meanwhile, Marcela, prior to her death sold her 1/5 undivided share in the Estate of Enrique Salvatierra to her brother, Venancio. After the death of Bartolome, his heirs Catalina and Ignacia Marquez sold his 1/5 undivided share to Tomas and his wife, Catalina Azarcon. On September 24, 1968, an "Extrajudicial Partition with Confirmation of Sale" was executed by and among the surviving legal heirs and descendants of Enrique Salvatierra, which consisted of the aforementioned Lot No. 25, 26 and 27. By virtue of the sale executed by Marcela in favor of Venancio, the latter now owns 2/5 shares of the estate. By virtue of the sale by Bartolome's heirs Catalina and Ignacia, of his undivided shares to Tomas, now deceased, represented by his widow, Catalina Azarcon, the latter now owns 2/5 shares in the said estate. Anselmo Salvatierra represented his father Macario, who had already died. The extrajudicial partition with confirmation of sale summed up the shares assigned to the heirs of Enrique Salvatierra: To: VENANCIO SALVATIERRA 1,041 sq. m. known as Lot

No. 27 covered by Tax Decl. N. 11949 and portion of Lot No. 26 covered by Tax Decl. No. 11951; To: Macario Salvatierra now ANSELMO SALVATIERRA 405 sq. m. known as Lot No. 26-part and covered by Tax. Decl. No. 11951; To: HEIRS OF TOMAS SALVATIERRA 1,116 sq. m. the whole of Lot No. 25 and declared under Tax Decl. No. 11950. Legal Heirs of Tomas Salvatierra are: Montano Salvatierra Anselmo Salvatierra Donata Salvatierra Francisco Salvatierra Cecilio Salvatierra Leonilla Salvatierra (Exhs. "B-1", and 2B", p. 8, id.). 2 (Emphasis supplied) Thereafter, on June 15, 1970, Venancio sold the whole of Lot No. 27 and a 149-sq. m. portion of Lot 26 for the consideration of P8,500.00 to herein respondent spouses Lino Longalong and Paciencia Mariano. The Longalongs took possession of the said lots. It was discovered in 1982 (through a relocation survey) that the 149 sq. m. portion of Lot No. 26 was outside their fence. It turned out that Anselmo Salvatierra was able to obtain a title, Original Certificate of Title No. 0-4221 in his name, the title covering the whole of Lot No. 26 which has an area of 749 sq. m.

Efforts to settle the matter at the barangay level proved futile because Purita Salvatierra (widow of Anselmo) refused to yield to the demand of Lino Longalong to return to the latter the 149 sq. m. portion of Lot No. 26. Private respondents Longalong then filed a case with the RTC for the reconveyance of the said portion of Lot 26. The court a quo dismissed the case on the following grounds: 1) that Longalong, et al. failed to establish ownership of the portion of the land in question, and 2) that the prescriptive period of four (4) years from discovery of the alleged fraud committed by defendants' predecessor Anselmo Salvatierra within which plaintiffs should have filed their action had already elapsed. 3 On appeal, the Court of Appeals ruled: To start with, a vendor can sell only what he owns or what he is authorized to sell (Segura v. Segura, 165 SCRA 368). As to the co-owner of a piece of land, he can of course sell his pro indiviso share therein to anyone (Art. 493, New Civil Code; Pamplona v. Moreto, 96 SCRA 775), but he cannot sell more than his share therein. The deed of extrajudicial partition with confirmation of previous sale Exh. "B" or "2" executed by the heirs of Enrique Salvatierra was explicit that the share of Anselmo Salvatierra which he got from his father Macario Salvatierra thru sale, was only Four Hundred Five (405) sq. mts. out of Lot No. 26 (Exhs. "B-1" and "B-2"), the whole lot of which has an area of 749 sq. mts., so that 344 sq. mts. of said lot do not pertain to Anselmo Salvatierra and his heirs, herein defendants-appellees. This must be the reason why, in said deed of extrajudicial partition, Venancio Salvatierra was still given a "portion of Lot No. 26 covered by Tax Declaration No. 11951" (Exh. "B-3", p. 7, Rec.), for logically, if the whole of Lot No. 26 measuring 749 sq. mts. had been given to Anselmo Salvatierra, Venancio Salvatierra would no longer be

entitled to a portion of said lot. And as both parties to this case do not at all dispute the truth, correctness, and authenticity of the deed of extrajudicial partition with confirmation of sale Exh. "B" or "2" dated September 24, 1968, as in fact both parties even marked the same as their own exhibit, we have no choice but simply to enforce the provisions of said deed. Now, as we have stated earlier, Macario Salvatierra, even before the extrajudicial partition of the three lots left by the late Enrique Salvatierra among his heirs, could very well dispose only of his pro indiviso share in said lots, as he in fact did on May 4, 1966 in a deed of sale in favor of his son Anselmo Salvatierra; and two years later, on September 24, 1968, when the deed of extrajudicial partition Exh. "B" or "2" was executed by the heirs of Enrique Salvatierra, it was stipulated that Macario's share in Lot No. 26 was only 405 sq. mts. thereof, which share Macario had already sold to his son Anselmo Salvatierra. As of September 24, 1968, the date of said deed of partition, then, Anselmo Salvatierra already knew that he had only acquired 405 sq. mts. of Lot No. 26 from his father Macario Salvatierra, and yet on May 20, 1980, or 12 years later, he proceeded with the registration of the earlier deed of sale between him and his father and of the whole Lot No. 26 with an area of 749 sq. mts. although he already knew through the deed of extrajudicial partition Exh. "A" or "1" that he was only entitled to 405 sq. mts. out of Lot No. 26, and which knowledge he could not deny as he was one of the signatories to said deed of extrajudicial partition (Exh. "B-1" or "2-b"). It is, therefore, obvious and clear, on the basis of the evidence on record, that when Anselmo Salvatierra registered the deed of sale Exh. "7" dated May 4, 1966 between him and his father Macario Salvatierra on May 20, 1980, and when he obtained a title in his name over the whole of Lot No. 26 with an area of 749 sq. mts., he did so with intent to defraud the other heirs of the late Enrique Salvatierra, particularly Venancio Salvatierra and

the latter's heirs and successors-in-interest, for he, Anselmo Salvatierra, knew that he was entitled to only 405 sq. mts. out of the whole Lot No. 26 with an area of 749 sq. mts. In fact, a closer look at the deed of sale Exh. "7" dated May 4, 1966 between father and son, Macario and Anselmo, reveals that the word and figure "SEVEN HUNDRED FORTY NINE (749)" sq. mts. written therein appear to have been only superimposed over another word and figure that had been erased, and even the word "FORTY NINE" was merely inserted and written above the regular line, thereby creating the strong conviction that said word and figure were altered to suit Anselmo's fraudulent design (p. 12, Rec.). Apparently, the lower court failed to examine carefully the deed of extrajudicial partition Exh. "B" or "2" and the deed of sale Exh. "7" between Macario Salvatierra and his son Anselmo Salvatierra, for had it done so, it could not have failed to notice that Anselmo Salvatierra received only 405 sq. mts. out of Lot No. 26 from his father Macario Salvatierra, not the whole Lot No. 26 measuring 749 sq. mts. The lower court was also of the mistaken impression that this case involves a double sale of Lot No. 26, when the truth is that Macario Salvatierra could only sell and, therefore, sold only 405 sq. mts. out of Lot No. 26 to his son Anselmo by virtue of the deed of sale Exh. "7", not the whole 749 sq. mts. of said lot, and plaintiffs in turn bought by virtue of the deed of sale Exh. "A" 149 sq. mts. out of the remaining area of 344 sq. mts. of Lot No. 26 from Venancio Salvatierra, to whom said 344-sq. mt. portion of Lot No. 26 was given under the deed of partition Exh. "B" or "2". Neither can we agree with the lower court that even if plaintiffs-appellants had established their ownership over the 149-sq. mt. portion of Lot No. 26 in question, they are already barred by prescription to recover said portion from defendants. In this connection, the lower court ratiocinated that an action for reconveyance should be filed within four (4) years from the discovery of the fraud,

citing Esconde v. Barlongay, 152 SCRA 603, which in turn cited Babin v. Medalla, 108 SCRA 666, so that since plaintiffs-appellants filed their action for reconveyance only on November 22, 1985 or five years after the issuance of Anselmo Salvatierra's title over Lot No. 26 on May 20, 1980, said court held that appellant's action for reconveyance against defendants has already prescribed. At this juncture, we find the need to remind the court a quo as well as other trial courts to keep abreast with the latest jurisprudence so as not to cause possible miscarriages of justice in the disposition of the cases before them. In the relatively recent case of Caro v. CA, 180 SCRA 401, the Supreme Court clarified the seemingly confusing precedents on the matter of prescription of actions for reconveyance of real property, as follows: We disagree. The case of Liwalug Amerold, et al. v. Molok Bagumbaran, G.R. L-33261, September 30, 1987, 154 SCRA 396 illuminated what used to be a gray area on the prescriptive period for an action to reconvey the title to real property and corrollarily, its point of reference: . . . It must be remembered that before August 30, 1950, the date of the effectivity of the new Civil Code, the Old Code of Civil Procedure (Act No. 190) governed prescription. It provided: Sec. 43. Other civil actions; how limited. Civil actions other than for the recovery of real property can only be brought within the following periods after the right of action accrues:

3. Within four years: . . . An action for relief on the ground of fraud, but the right of action in such case shall not be deemed to have accrued until the discovery of the fraud: xxx xxx xxx In contract under the present Civil Code, we find that just as an implied or constructive trust in an offspring of the law (Art. 1465, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-a-visprescription, Article 1144 of the Civil Code is applicable. Art. 1144. The following actions must be brought within ten years from the time the right of action accrues: 1) Upon a written contract; 2) Upon an obligation created by law; 3) Upon a judgment; xxx xxx xxx An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrated this rule.Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property. The only discordant note, it seems,

is Balbin v. Medalla, which states that the prescriptive period for a reconveyance action is four years. However, this variance can be explained by the erroneous reliance on Gerona v. de Guzman. But in Gerona, the fraud was discovered on June 25, 1948, hence Section 43(3) of Act No. 190 was applied, the New Civil Code not coming into effect until August 30, 1950 as mentioned earlier. It must be stressed, at this juncture, that Article 1144 and Article 1456, are new provisions. They have "no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter being than resorted to as legal basis of the fouryear prescriptive period for an action for reconveyance of title of real property acquired under false pretenses. An Action for reconveyance has its basis in Section 53, paragraph 3 of Presidential Decree No. 1529, which provides: In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder of the decree of registration on the original petition or application, . . . This provision should be read in conjunction with Article 1456 of the Civil Code, which provides: Art. 1456. If property is acquire through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. The law thereby creates the obligation of the trustee to reconvey the property and the tile thereto in favor of the true owner. Correlating Section 53,

paragraph 3 of Presidential Decree No. 1529 and Article 1456 of the Civil Code with Article 1144 (2) of the Civil Code, supra, the prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title. In the present case, therefore, inasmuch as Civil Case No. 10235 was filed on June 4, 1975, it was well-within the prescriptive period of ten (10) years from the date of the issuance of "Original Certificate of Title No. 06836 on September 17, 1970." (All Emphasis Supplied). And the above ruling was re-affirmed in the very recent case of Tale vs. C.A. G.R. No. 101028, promulgated only last April 23, 1992. Guided by the above clarificatory doctrine on prescription of actions for reconveyance of real property, it is obvious that the lower court erred in relying on the discredited ruling in Esconde v. Barlongay, supra, which case in turn relied on the earlier discredited case of Balbin v. Medalla, also supra, which mistakenly limited the running of the prescriptive period in an action for reconveyance of real property to only four (4) years form the issuance of the certificate of title. Since OCT No. 0-4221 over Lot No. 26 was issued to Anselmo Salvatierra on May 20, 1980, appellants' filing of the instance action for reconveyance on November 22, 1985 was well within the ten (10) year prescriptive period provided by law for such action.

A motion for reconsideration having been denied, petitioners brought this petition to set aside the decision of the respondent appellate court and to affirm in toto the decision of the trial court. Petitioners assail the decision of the respondent appellate court for its failure to consider the application and interpretation of certain provisions of the New Civil Code in the case at bar, namely Articles 1134, 493, 1088, 1544, 1431, 1396, and 1391. 4 Since petitioners invoke the abovementioned provisions of law, it is apparent that they rely on the theory that this is a case of double sale of Lot No. 26 to both petitioners and respondents Longalong, et al. A perusal of the records and evidence (exhibits and annexes), however, reveals otherwise. Both parties did not dispute the existence and contents of the Extrajudicial Partition with Confirmation of Sale, as both presented them as their respective exhibits (Exh. "B-1" and "2"). The parties may not have realized it, but the deciding factor of this dispute is this very document itself. It is very clear therein that Macario Salvatierra's share in the estate of the deceased Enrique Salvatierra is only 405 sq. m. out of the 749 sq. m. comprising Lot No. 26. Since Venancio Salvatierra, under this document, is to get a portion of Lot No. 26 in addition to Lot No. 27, then it follows that Venancio is entitled to the remaining 344 sq. m. of Lot No. 26, after deducting the 405 sq. m. share of Macario. We find no ambiguity in the terms and stipulations of the extrajudicial partition. The terms of the agreement are clear and unequivocal, hence the literal and plain meaning thereof should be observed. 5 The applicable provision of law in the case at bar is Article 1370 of the New Civil Code which states: Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulation shall control. Contracts which are the private laws of the contracting parties, should be fulfilled according to the literal sense of their stipulations, if their terms are clear and leave no room for doubt as

to the intention of the contracting parties, for contracts are obligatory, no matter what their forms maybe, whenever the essential requisites for their validity are present. 6 As such, the confirmation of sale between Macario and his son Anselmo, mentioned in the extrajudicial partition involves only the share of Macario in the estate. The law is clear on the matter that where there are two or more heirs, the whole estate of the decedent its, before its partition, owned in common by such heirs, 7 and hence, the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be alloted to him in the division upon the termination of the co-ownership. 8 It goes without saying, therefore, that what Anselmo bought from his father in 1966 was only his father's share in the estate which turned out to be 405 sq. m. of Lot No. 26, as agreed upon during their extrajudicial partition, in which Anselmo was a signatory. The registration of the whole Lot No. 26 in the name of Anselmo Salvatierra was therefore, done with evident bad faith. A careful examination of Deed of Sale (Exh. 7) dated May 4, 1966 between Macario and Anselmo (father and son) shows that an alteration was perpetrated by the superimposition of the words and figure SEVEN HUNDRED FORTY NINE (749) sq. m. over other words and figures therein. Besides, when Anselmo Salvatierra obtained the Original Certificate of Title No. 0-4221 covering the whole of Lot No. 26 on May 20, 1980, he had already known that he was entitled to only 405 sq. m. of the said lot since the extrajudicial partition has already been executed earlier in 1968. Obviously, Anselmo's act of registering the whole Lot No. 26 in his name was intended to defraud Venancio who was then legally entitled to a certain portion of Lot No. 26 by the extrajudicial partition. With regard to the issue as to prescription of the action, we agree with the respondents appellate court that this action has not yet prescribed. Indeed, the applicable provision in the case at bar is Art. 1144 of the New Civil Code which provides that: Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon written contract; (2) Upon an obligation created by law; and (3) Upon a judgment. Art. 1391 9 of the same code, referred to by petitioners is not in point. This article must be read in conjunction with Art. 1390 10 which refers to voidable contracts. This case at hand involves fraud committed by petitioner Anselmo Salvatierra in registering the whole of Lot No. 26 in his name, with evident bad faith. In effect, an implied trust was created by virtue of Art. 1456 of the New Civil Code which states: Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. Implied trust is defined as the right, enforceable solely in equity, to the beneficial enjoyment of property, the legal title to which is vested in another and is further subdivided into resulting and constructive trust. 11 While resulting trust is one raised by implication of law and presumed to have been contemplated by the parties; constructive trust, on the other hand, is one raised by construction of law or arising by operation of law. 12 This case more specifically involves constructive trust. In a more restricted sense, it is a trust not created by any words, either expressly or impliedly, evincing a direct intention to create a trust, but by the construction of equity in order to satisfy the demands of justice. 13 It does not arise by agreement or intention but by operation of law. 14 In this connection, we hold that an action for reconveyance of registered land based on an implied trust may be barred by laches. The prescriptive period for such actions is ten (10) years from the date the right of action accrued.15 We have held in the case of Armamento v. Central Bank 16 that an action for reconveyance

of registered land based on implied trust, prescribes in ten (10) years even if the decree of registration is no longer open to review. In Duque v. Domingo, 17 especially, we went further by stating: The registration of an instrument in the Office of the Register of Deeds constitutes constructive notice to the whole world, and, therefore, discovery of the fraud is deemed to have taken place at the time of registration. Such registration is deemed to be a constructive notice that the alleged fiduciary or trust relationship has been repudiated. It is now settled that an action on an implied or constructive trust prescribes in ten (10) years from the date the right of action accrued. The complaint for reconveyance was filed by the Longalong spouses on November 22, 1985, only five (5) years after the issuance of the O.C.T. No. 0-4221 over Lot No. 26 in the name of Anselmo Salvatierra. Hence prescription has not yet set in. We find no reason to disturb the findings of the respondent Court of Appeals as to facts its said factual findings having been supported by substantial evidence on record. They are final and conclusive and may not be reviewed on appeal. The analysis by the Court of Appeals of the evidence on record and the process by which it arrived at its findings on the basis thereof, impel conferment of the Supreme Court's approval on said findings, on account of the intrinsic merit and cogency thereof no less than that Court's superior status as a review tribunal. 18 No reversible errors can be attributed to the findings of the respondent Court of Appeals because the decision herein assailed was properly supported by substantial evidence on record, which were not in anyway impugned by the petitioners. IN VIEW OF THE FOREGOING CONSIDERATIONS, we resolve to DENY the petition for want of merit, with costs against petitioners.

SO ORDERED. G.R. No. L-25316 February 28, 1979 KAPISANAN NG MGA MANGGAGAWA SA MANILA RAILROAD COMPANY CREDIT UNION, INC., petitioner-appellant, vs. MANILA RAILROAD COMPANY, respondent appellee. Gregorio E. Fajardo for appellant. Gregorio Baroque for appellee.

FERNANDO, J.: In this mandamus petition dismissed by the lower court, petitioner-appellant would seek a reversal of such decision relying on what it considered to be a right granted by Section 62 of the Republic Act No. 2023, more specifically the first two paragraphs thereof: "... (1) A member of a cooperative may, notwithstanding the provisions of existing laws, execute an agreement in favor of the co-operative authorizing his employer to deduct from the salary or wages payable to him by the employer such amount as may be specified in the agreement and to pay the amount so deducted to the co-operative in satisfaction of any debt or other demand owing from the member to the cooperative. (2) Upon the exemption of such agreement the employer shall if so required by the co-operative by a request in writing and so long as such debt or other demand or any part of it remains unpaid, make the claimant and remit forth with the amount so deducted to the co-operative." 1 To show that such is futile, the appealed decision, as quoted in the brief for petitioner-appellant, stated the following: "Then petitioner contends that under the above provisions of Rep. Act 2023, the loans granted by credit union to its members enjoy first priority in the payroll collection from the respondent's employees' wages and salaries. As can be clearly seen, there is nothing in the provision of Rep. Act 2023 hereinabove quoted which provides that obligation of laborers and employees payable to credit unions

shall enjoy first priority in the deduction from the employees' wages and salaries. The only effect of Rep. Act 2023 is to compel the employer to deduct from the salaries or wages payable to members of the employees' cooperative credit unions the employees' debts to the union and to pay the same to the credit union. In other words, if Rep. Act 2023 had been enacted, the employer could not be compelled to act as the collecting agent of the employees' credit union for the employees' debt to his credit union but to contend that the debt of a member of the employees cooperative credit union as having first priority in the matter of deduction, is to write something into the law which does not appear. In other words, the mandatory character of Rep. Act 2023 is only to compel the employer to make the deduction of the employees' debt from the latter's salary and turn this over to the employees' credit union but this mandatory character does not convert the credit union's credit into a first priority credit. If the legislative intent in enacting pars. 1 and 2 of Sec. 62 of Rep. Act 2023 were to give first priority in the matter of payments to the obligations of employees in favor of their credit unions, then, the law would have so expressly declared. Thus, the express provisions of the New Civil Code, Arts. 2241, 2242 and 2244 show the legislative intent on preference of credits. 2 Such an interpretation, as could be expected, found favor with the respondent-appellee, which, in its brief, succinctly pointed out "that there is nothing in said provision from which it could be implied that it gives top priority to obligations of the nature of that payable to petitioner, and that, therefore, respondent company, in issuing the documents known as Exhibit "3" and Exhibit "P", which establish the order of priority of payment out of the salaries of the employees of respondent-appellee, did not violate the above-quoted Section 62 of Republic Act 2023. In promulgating Exhibit "3", [and] Exhibit "P" respondent, in effect, implemented the said provision of law. 3 This petition being one for mandamus and the provision of law relied upon being clear on its face, it would appear that no favorable action can be taken on this appeal. We affirm. 1. The applicable provision of Republic Act No. 2023 quoted earlier, speaks for itself. There is no ambiguity. As thus worded, it was so applied. Petitioner-appellant cannot therefore raise any valid objection. For the lower court to view it otherwise would have been to alter the law. That

cannot be done by the judiciary. That is a function that properly appertains to the legislative branch. As was pointed out in Gonzaga v. Court of Appeals: 4 "It has been repeated time and time again that where the statutory norm speaks unequivocally, there is nothing for the courts to do except to apply it. The law, leaving no doubt as to the scope of its operation, must be obeyed. Our decisions have consistently born to that effect. 5. 2. Clearly, then, mandamus does not lie. Petitioner-appellant was unable to show a clear legal right. The very law on which he would base his action fails to supply any basis for this petition. A more rigorous analysis would have prevented him from instituting a a suit of this character. In J.R.S. Business Corporation v. Montesa, 6 this Court held. "Man-damus is the proper remedy if it could be shown that there was neglect on the part of a tribunal in the performance of an act, which specifically the law enjoins as a duty or an unlawful exclusion of a party from the use and enjoyment of a right to which he is entitled. 7 The opinion continued in this wise:"According to former Chief Justice Moran," only specific legal rights may be enforced by mandamus if they are clear and certain. If the legal rights are of the petitioner are not well defined, clear, and certain, the petition must be dismissed. In support of the above view, Viuda e Hijos de Crispulo Zamora v. Wright was cited. As was there categorically stated: "This court has held that it is fundamental that the duties to be enforced by mandamus must be those which are clear and enjoined by law or by reason of official station, and that petitioner must have a clear, legal right to the thing and that it must be the legal duty of the defendant to perform the required act.' As expressed by the then Justice Recto in a subsequent opinion: "It is well establish that only specific legal rights are enforceable by mandamus, that the right sought to be enforced must be certain and clear, and that the writ not issue in cases where the right is doubtful." To the same effect is the formulation of such doctrine by former Justice Barrera: "Stated otherwise, the writ never issues in doubtful cases. It neither confers powers nor imposes duties. It is simply a command to exercise a power already possessed and to perform a duty already imposed." 8 So it has been since then. 9 The latest reported case, Province. of Pangasinan v. Reparations Commission, 10 this court speaking through Justice Concepcion Jr., reiterated such a well-settled doctrine: "It has also been held that it is essential to the issuance of the writ of mandamus that the plaintiff should have a clear legal right to the thing demanded, and it must be the imperative duty of the defendant to perform the act required. It never issues in doubtful cases. 11

WHEREFORE, the appealed decision is affirmed. No pronouncement as to costs. Barredo, Antonio, Concepcion, Jr., Santos and Abad Santos, JJ., concur. Aquino, J., took no part. G.R. No. L-27760 May 29, 1974 CRISPIN ABELLANA and FRANCISCO ABELLANA, petitioners, vs. HONORABLE GERONIMO R. MARAVE, Judge, Court of First Instance of Misamis Occidental, Branch II; and GERONIMO CAMPANER, MARCELO LAMASON, MARIA GURREA, PACIENCIOSA FLORES and ESTELITA NEMEN0, respondents. Prud. V. Villafuerte for petitioners. Hon. Geronimo R. Marave in his own behalf.

this Court to promulgate rules concerning pleading, practice, and procedure being limited in the sense that they "shall not diminish, increase, or modify substantive rights." 4 It thus appears clear that the petition for certiorari is without merit. The relevant facts were set forth in the petition and admitted in the answer. The dispute had its origins in a prosecution of petitioner Francisco Abellana of the crime of physical injuries through reckless imprudence in driving his cargo truck, hitting a motorized pedicab resulting in injuries to its passengers, namely, private respondents Marcelo Lamason, Maria Gurrea, Pacienciosa Flores, and Estelita Nemeo. The criminal case was filed with the city court of Ozamis City, which found the accused Francisco Abellana guilty as charged, damages in favor of the offended parties likewise being awarded. The accused, now petitioner, Francisco Abellana appealed such decision to the Court of First Instance. 5 At this stage, the private respondents as the offended parties filed with another branch of the Court of First Instance of Misamis Occidental, presided by respondent Judge, a separate and independent civil action for damages allegedly suffered by them from the reckless driving of the aforesaid Francisco Abellana. 6 In such complaint, the other petitioner, Crispin Abellana, as the alleged employer, was included as defendant. Both of them then sought the dismissal of such action principally on the ground that there was no reservation for the filing thereof in the City Court of Ozamis. It was argued by them that it was not allowable at the stage where the criminal case was already on appeal. 7 Respondent Judge was not persuaded. On April 28, 1967, he issued the following order: "This is a motion to dismiss this case on the ground that in Criminal Case No. OZ-342 which was decided by the City Court and appealed to this Court, the offended parties failed to expressly waive the civil action or reserve their right to institute it separately in said City Court, as required in Section 1, Rule 111, Rules of Court. From the Records of Criminal Case No. OZ-342, it appears that the City Court convicted the accused. On appeal to this Court, the judgment of the City Court was vacated and a trial de novo will have to be conducted. This Court has not as yet begun trying said criminal case. In the meantime, the offended parties expressly waived in this Court the civil action impliedly instituted with the criminal action, and reserve their right to institute a separate action as in fact, they did file. The Court is of the opinion that at this stage, the offended parties may still waive the civil action because the judgment of the City

FERNANDO, J.:p This petition for certiorari is characterized by a rather vigorous insistence on the part of petitioners Crispin Abellana and Francisco Abellana that an order of respondent Judge was issued with grave abuse of discretion. It is their contention that he ought to have dismissed an independent civil action filed in his court, considering that the plaintiffs, as offended parties, private respondents here, 1 failed to reserve their right to institute it separately in the City Court of Ozamis City, when the criminal case for physical injuries through reckless imprudence was commenced. Such a stand of petitioners was sought to be bolstered by a literal reading of Sections 1 and 2 of Rule 111. 2 It does not take into account, however, the rule as to a trial de novo found in Section 7 of Rule 123. 3 What is worse, petitioners appear to be oblivious of the principle that if such an interpretation were to be accorded the applicable Rules of Court provisions, it would give rise to a grave constitutional question in view of the constitutional grant of power to

Court is vacated and a trial de novo will have to be had. In view of this waiver and reservation, this Court would be precluded from judging civil damages against the accused and in favor of the offended parties. [Wherefore], the motion to dismiss is hereby denied. ..." 8 There was a motion for reconsideration which was denied. Hence this petition. The only basis of petitioners for the imputation that in the issuance of the challenged order there was a grave abuse of discretion, is their reading of the cited Rules of Court provision to the effect that upon the institution of a criminal action "the civil action for recovery of civil liability arising from the offense charge is impliedly instituted with the criminal action, unless the offended party ...reserves his right to institute it separately." 9 Such an interpretation, as noted, ignores the de novo aspect of appealed cases from city courts. 10 It does likewise, as mentioned, give rise to a constitutional question to the extent that it could yield a meaning to a rule of court that may trench on a substantive right. Such an interpretation is to be rejected. Certiorari, to repeat, clearly does not lie. 1. In the language of the petition, this is the legal proposition submitted for the consideration of this Court : "That a separate civil action can be legally filed and allowed by the court only at the institution, or the right to file such separate civil action reserved or waived, at such institution of the criminal action, and never on appeal to the next higher court." 11 It admits of no doubt that an independent civil action was filed by private respondents only at the stage of appeal. Nor was there any reservation to that effect when the criminal case was instituted in the city court of Ozamis. Petitioners would then take comfort from the language of the aforesaid Section 1 of Rule 111 for the unwarranted conclusion that absent such a reservation, an independent civil action is barred. In the first place, such an inference does not per se arise from the wording of the cited rule. It could be looked upon plausibly as a non-sequitur. Moreover, it is vitiated by the grievous fault of ignoring what is so explicitly provided in Section 7 of Rule 123: "An appealed case shall be tried in all respects anew in the Court of First Instance as if it had been originally instituted in that court." 12 Unlike petitioners, respondent Judge was duly mindful of such a norm. This Court has made clear that its observance in appealed criminal cases is mandatory. 13 In a 1962 decision, People v. Carreon, 14 Justice Barrera, as ponente, could trace such a rule to a 1905 decision, Andres v. Wolfe. 15 Another case cited by him is Crisostomo v. Director of Prisons, 16 where Justice Malcolm emphasized how deeply rooted in Anglo-

American legal history is such a rule. In the latest case in point, People v. Jamisola, 17 this Court, through Justice Dizon, reiterated such a doctrine in these words: "The rule in this jurisdiction is that upon appeal by the defendant from a judgment of conviction by the municipal court, the appealed decision is vacated and the appealed case 'shall be tried in all respects anew in the court of first instance as if it had been originally instituted in that court.'" 18 So it is in civil cases under Section 9 of Rule 40. 19 Again, there is a host of decisions attesting to its observance. 20 It cannot be said then that there was an error committed by respondent Judge, much less a grave abuse of discretion, which is indispensable if this petition were to prosper. 2. Nor is the above the only ground for rejecting the contention of petitioners. The restrictive interpretation they would place on the applicable rule does not only result in its emasculation but also gives rise to a serious constitutional question. Article 33 of the Civil Code is quite clear: "In cases of ... physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence." 21 That is a substantive right, not to be frittered away by a construction that could render it nugatory, if through oversight, the offended parties failed at the initial stage to seek recovery for damages in a civil suit. As referred to earlier, the grant of power to this Court, both in the present Constitution and under the 1935 Charter, does not extend to any diminution, increase or modification of substantive right. 22 It is a well-settled doctrine that a court is to avoid construing a statute or legal norm in such a manner as would give rise to a constitutional doubt. Unfortunately, petitioners, unlike respondent Judge, appeared to lack awareness of the undesirable consequence of their submission. Thus is discernible another insuperable obstacle to the success of this suit. 3. Nor is this all that needs to be said. It is understandable for any counsel to invoke legal propositions impressed with a certain degree of plausibility if thereby the interest of his client would be served. That is though, merely one aspect of the matter. There is this other consideration. He is not to ignore the basic purpose of a litigation, which is to assure parties justice according to law. He is not to fall prey, as admonished by Justice Frankfurter, to the vice of literalness. The law as an instrument of social control will fail in its function if through an ingenious construction sought

to be fastened on a legal norm, particularly a procedural rule, there is placed an impediment to a litigant being given an opportunity of vindicating an alleged right. 23 The commitment of this Court to such a primordial objective has been manifested time and time again. 24 WHEREFORE, this petition for certiorari is dismissed. Costs against petitioners. Zaldivar (Chairman), Barredo, Fernandez and Aquino, JJ., concur. Antonio, J., concurs on the bases of par. nos. 2 & 3 of opinion. G.R. No. 123169 November 4, 1996 DANILO E. PARAS, petitioner, vs. COMMISSION ON ELECTIONS, respondent. RESOLUTION

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, rescheduled the recall election an 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.

FRANCISCO, J.: 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

(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 mechanism of recall, initiative, and referendum . . . ." 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". . . 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. G.R. No. L-43760 August 21, 1976 PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS (PAFLU), petitioner vs. BUREAU OF LABOR RELATIONS, HONORABLE CARMELO C. NORIEL, NATIONAL FEDERATION OF FREE LABOR UNIONS (NAFLU), and PHILIPPINE BLOOMING MILLS CO., INC., respondents. Guevara, Pineda, Guevara & Castillon for petitioner. Olalia Dimapilis & Associates for respondent Union (NAFLU) Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V. Diaz for respondent Bureau of Labor Relations, etc., et al.

Relations 3 that spoiled ballots should be counted in determining the valid votes cast. Considering there were seventeen spoiled ballots, it is the submission that there was a grave abuse of discretion on the part of respondent Director. Implicit in the comment of respondent Director of Labor Relations, 4 considered as an answer, is the controlling weight to be accorded the implementing rule above-cited, no inconsistency being shown between such rule and the present Labor Code. Under such a view, the ruling in the Allied Workers Association case that arose during the period when it was the Industrial Peace Act 5, that was in effect and not the present law, no longer possesses relevance. It cannot and should not be applied. It is not controlling. There was no abuse of discretion then, much less a grave one. This Court is in agreement. The law is on the side of respondent Director, not to mention the decisive fact appearing in the Petition itself that at most, only ten of the spoiled ballots "were intended for the petitioner Union," 6 thus rendering clear that it would on its own showing obtain only 424 votes as against 429 for respondent Union. certiorari does not lie. 1. What is of the essence of the certification process, as noted in Lakas Ng Manggagawang Pilipino v. Benguet Consolidated, Inc. 7 "is that every labor organization be given the opportunity in a free and honest election to make good its claim that it should be the exclusive collective bargaining representative." 8 Petitioner cannot complain. It was given that opportunity. It lost in a fair election. It came out second best. The implementing rule favors, as it should, respondent Union, It obtained a majority of the valid votes cast. So our law Prescribes. It is equally the case in the United States as this excerpt from the work of Cox and Bok makes clear: "It is a wellsettled rule that a representative will he certified even though less than a majority of all the employees in the unit cast ballots in favor of the union. It is enough that the union be designated by a majority of the valid ballots, and this is so even though only a small proportion of the eligible voters participates. Following the analogy of political elections, the courts have approved this practice of the Board." 9 2. There is this policy consideration. The country is at present embarked on a wide-scale industrialization project. As a matter of fact, respondent firm is engaged in such activity. Industrialization, as noted by Professor Smith, Merrifield and Rothschild, "can thrive only as there is developed a. stable structure of law and order in the productive sector." 10 That objective is best

FERNANDO, Acting C.J.: A certification by respondent Director of Labor Relations, Carmelo C. Noriel, that respondent National Federation of Free Labor Unions (NAFLU) as the exclusive bargaining agent of all the employees in the Philippine Blooming Mills, Company, Inc. disregarding the objection raised by petitioner, the Philippine Association of Free Labor Unions (PAFLU), is assailed in this certiorari proceeding. Admittedly, in the certification election held on February 27, 1976, respondent Union obtained 429 votes as against 414 of petitioner Union. Again, admittedly, under the Rules and Regulations implementing the present Labor Code, a majority of the valid votes cast suffices for certification of the victorious labor union as the sole and exclusive bargaining agent. 1 There were four votes cast by employees who did not want any union. 2 On its face therefore, respondent Union ought to have been certified in accordance with the above applicable rule. Petitioner, undeterred, would seize upon the doctrine announced in the case of Allied Workers Association of the Philippines v. Court of Industrial

attained in a collective bargaining regime, which is a manifestation of industrial democracy at work, if there be no undue obstacles placed in the way of the choice of a bargaining representative. To insist on the absolute majority where there are various unions and where the possibility of invalid ballots may not be ruled out, would be to frustrate that goal. For the probability of a long drawn-out, protracted process is not easy to dismiss. That is not unlikely given the intensity of rivalry among unions capable of enlisting the allegiance of a group of workers. It is to avoid such a contingency that there is this explicit pronouncement in the implementing rule. It speaks categorically. It must be obeyed. That was what respondent Director did. 3. Nor can fault of a grave and serious character be imputed to respondent Director presumably because of failure to abide by the doctrine or pronouncement of this Court in the aforesaid Allied Workers Association case. The reliance is on this excerpt from the opinion: "However, spoiled ballots, i.e., those which are defaced, torn or marked (Rules for Certification Elections, Rule II, sec. 2[j]) should be counted in determining the majority since they are nevertheless votes cast by those who are qualified to do so." 11 Nothing can be clearer than that its basis is a paragraph in a section of the then applicable rules for certification elections. 12 They were promulgated under the authority of the then prevailing Industrial Peace Act. 13That Legislation is no longer in force, having been superseded by the present Labor Code which took effect on November 1, 1974. This certification election is governed therefore, as was made clear, by the present Labor Code and the Rules issued thereunder. Absent a showing that such rules and regulations -are violative of the Code, this Court cannot ignore their existence. When, as should be the case, a public official acts in accordance with a norm therein contained, no infraction of the law is committed. Respondent Director did, as he ought to, comply with its terms. He took into consideration only the "valid votes" as was required by the Rules. He had no choice as long as they remain in force. In a proper showing, the judiciary can nullify any rule it found in conflict with the governing statute. 14 That was not even attempted here. All that petitioner did was to set forth in two separate paragraphs the applicable rule followed by respondent Director 15 and the governing article. 16 It did not even bother to discuss why such rule was in conflict with the present Labor Code. It failed to point out any repugnancy. Such being the case, respondent Director must be upheld.

4. The conclusion reached by us derives further support from the deservedly high repute attached to the construction placed by the executive officials entrusted with the responsibility of applying a statute. The Rules and Regulations implementing the present Labor Code were issued by Secretary Blas Ople of the Department of Labor and took effect on February 3, 1975, the present Labor Code having been made known to the public as far back as May 1, 1974, although its date of effectivity was postponed to November 1, 1974, although its date of effectivity was postponed to November 1, 1974. It would appear then that there was more than enough time for a really serious and careful study of such suppletory rules and regulations to avoid any inconsistency with the Code. This Court certainly cannot ignore the interpretation thereafter embodied in the Rules. As far back as In re Allen," 17 a 1903 decision, Justice McDonough, as ponente, cited this excerpt from the leading American case of Pennoyer v. McConnaughy, decided in 1891: "The principle that the contemporaneous construction of a statute by the executive officers of the government, whose duty it is to execute it, is entitled to great respect, and should ordinarily control the construction of the statute by the courts, is so firmly embedded in our jurisprudence that no authorities need be cited to support it." 18 There was a paraphrase by Justice Malcolm of such a pronouncement in Molina v. Rafferty," 19 a 1918 decision: "Courts will and should respect the contemporaneous construction placed upon a statute by the executive officers whose duty it is to enforce it, and unless such interpretation is clearly erroneous will ordinarily be controlled thereby." 20 Since then, such a doctrine has been reiterated in numerous decisions . 21 As was emphasized by Chief Justice Castro, "the construction placed by the office charged with implementing and enforcing the provisions of a Code should he given controlling weight. " 22 WHEREFORE, the petition for certiorari is dismissed. Costs against petitioner Philippine Association of Free Labor Unions (PAFLU). Barredo, Antonio, Aquino and Concepcion Jr., JJ., concur.

FIRST DIVISION [G.R. No. L-50320 : July 31, 1981.]

PHILIPPINE APPAREL WORKERS UNION, Petitioners, vs. THE NATIONAL LABOR RELATIONS COMMISSION and PHILIPPINE APPAREL, INC., Respondents.

1977 by the respondent company, as shown by Memorandum No. 6-77 of the respondent companys General Manager to all employees dated April 23, 1977 cranad(p. 12, rec.). The controversy arose when the petitioner union sought the implementation of the negotiated wage increase of P0.80 as provided for in the collective bargaining agreement. The respondent company alleges that it has opted to consider the P0.80 daily wage increase cranad(roughly P22 per month) as partial compliance with the requirements of said decree, so that it is obliged to pay only the balance of P38 per month. In effect, the payment of the additional P60 covers both the requirements of the decree and the negotiated wage increase of P0.80 daily. Respondent company asserts that since there was already a meeting of the minds between the parties as early as April 2, 1977 about the wage increases which were made retroactive to April 1, 1977, it fell well within the exemption provided for in the Rules Implementing P.D. 1123, as follows: Section 1. Coverage. These rules shall apply to all employers except the following: xxx (k) Those that have granted in addition to the allowance under P.D. 525, at least P60.00 monthly wage increase on or after January 1, 1977, provided that those who paid less than this amount shall pay the difference. On the other hand, petitioner maintains that the living allowance under P.D. 1123cranad(originally P.D. 525) is distinct and separate from the negotiated wage increase of P0.80 daily [pp. 6 & 96, rec.]. In fact, it adds, when the CBA was signed by the parties on September 3, 1977, the respondent company was fully aware of the effectivity of P.D. 1123 and had already been paying the increased allowance provided therein [p. 94, rec.]. Hence, the respondent company acted in bad faith when it refused to pay the negotiated wage increase in violation of the collective bargaining agreement and the respondent company is guilty of unfair labor practice, pursuant to the following provisions of the Labor Code: Article 248. Unfair Labor Practices of Employers. It shall be unfair labor practice for an employer: xxx (J) To violate a collective bargaining agreement.

DECISION

MAKASIAR, J.:

Petition for Certiorari to review the decision dated September 1, 1978 of respondent Commission which sustained the position of respondent employer and dismissed the case for lack of merit. It appears from the records that the petitioner, in anticipation of the expiration of their 1973-1976 collective bargaining agreement on July 31,1976, and as an initial step for its renewal, submitted to the respondent company a set of bargaining proposals dated June 2, 1976. Negotiations were held thereafter between the parties; but because of an impasse, the complainant cranad(petitioner herein) filed on September 15, 1976 a complaint with the Department of Labor praying that the parties therein be assisted in concluding a collective agreement. Notwithstanding the complaint, the parties nevertheless continued their negotiations. On September 3, 1977, the private respondent and petitioner concluded and signed a collective bargaining agreement which, among other things, provided for a 3-stage wage increase for all rank and file employees. The terms of the agreement on wage increase, which were retroactive to April 1, 1977, follow: (a) Effective April 1, 1977, EIGHTY CENTAVOS [P0.80] will be added to the basic daily wages of all said employees. (b) Effective April 1, 1978, FIFTY CENTAVOS [P0.50] will be added to the basic daily wages of all said employees. (c) Effective April 1, 1979, FIFTY CENTAVOS [P0.50] will be added to the basic daily wages of all said employees. Meanwhile, on April 21, 1977, P.D. 1123 was enacted to take effect on May 1, 1977 providing for an increase by P60.00 in the living allowance ordained by P.D. 525. This increase was implemented effective May 1,

On February 13, 1978, the petitioner filed a complaint dated February 10, 1978 for unfair labor practice and violation of the CBA against the respondent company [pp. 13-16, rec.]. On May 30, 1978, an Order [p. 18, rec.] was issued by Labor Arbiter Conrado B. Maglaya, the dispositive portion of which reads as follows: WHEREFORE, premises considered, and by authority of Article 263 of the Labor Code as amended, let this case be, as it is hereby, DISMISSED and the same is referred to the parties or disputants for them to resolve their disputes, grievances or matters arising from the implementation, application or interpretation of their Collective Bargaining Agreement in accordance with the Machinery established in the CBA. From this order, both parties appealed to the respondent Commission. Petitioner filed its appeal on June 28, 1978 [pp. 31-34, rec.] assailing the order of Labor Arbiter Maglaya as contrary to law and the evidence adduced during the hearing, which constitutes grave abuse of discretion amounting to lack of jurisdiction. It avers that the matter had already been taken up on grievance but the respondent company refused to implement the P0.80 wage increase under the CBA, and that it further refuses to submit to voluntary arbitration. Hence, it prays for the setting aside of the Labor Arbiters Order and for the parties to submit to voluntary arbitration as provided for in their CBA and the provisions of the Labor Code. On the other hand, respondent company filed on July 5, 1978 a partial appeal [pp. 19-27, rec.], accepting the dismissal of the complaint but assailing that portion of the Labor Arbiters Order declaring the subject matter as grievable and therefore threshable under the parties CBA. Its prayer was for affirmance of the dismissal, reversal of the referral to the parties for threshing out under their CBA, and for a declaration that it has not committed an unfair labor practice nor violated the CBA. On September 1, 1978, the respondent Commission cranad(Second Division) promulgated its decision, setting aside the order appealed from and entering a new one dismissing the case for obvious lack of merit. The dismissal is predicated on the opinion [p. 45, rec.] of the Undersecretary of Labor when he said: xxx If as you said, management and labor had agreed on April 2, 1977 to grant an amount of P27.00 cranad(roughly) per month to its

employees retroactive to April 1, 1977, then the exemption is squarely in point, notwithstanding that the CBA was signed in May or June. This must be so for reason that on April 7, 1977, there was already the meeting of the minds of the parties and for legal purposes, the contract was already perfected as of said date. Said the respondent Commission: We fully subscribe to this view. It needs no further elaboration to demonstrate that by the facts and the terms of the law, the respondent has to pay each of the employees concerned a total of P60.00 monthly for it to satisfy payment of both the wage increase and the allowance. In resume, we find the refusal of the respondent to submit to voluntary arbitration to be validly grounded and, therefore, not constitutive of unfair labor practice. We further find to be untenable the complainants claim for full payment of both the P0.80 daily wage increase under the CBA and the P60 allowance under P.D. 1123 [pp. 45-46, rec.]. Petitioner than filed its motion for reconsideration but the NLRC en banc dismissed the same in its resolution of February 8, 1979 [pp. 48-54, rec.], pursuant to Section 7, Rule II of the Rules and Regulations Implementing P.D. No. 1391, which became effective on September 15, 1978 and provides thus Sec. 7. Decisions of the Commissions. There shall henceforth be no appeal from such decisions to the Minister of Labor except as provided in P.D. 1367 and its implementing rules concerning appeals to the Prime Minister, and the decisions of the Commission en banc or any of its Decisions shall be final and executory. Hence, the instant petition. Petitioner maintains that private respondent violated the CBA and committed an ULP when it refused to pay the negotiated wage increase of P0.80 daily effective April 1, 1977, to the employees within the bargaining unit. Private respondents, however, contend that there was no violation of the CBA and that its application of the negotiated wage increase as partial compliance with P.D. 1123 is well within the provisions of the latter.

A perusal of the CBA shows that it was made and entered into on the 3rd day of September, 1977 by and between the parties herein cranad(pl. see p. 1 of Annex B at p. 7 of NLRC rec.) although the first year of its increase was retroactive to April 1, 1977. At the time it was perfected and signed by the parties, P.D. 1123 was already in force and effect. A sample pay advice [p. 11 insert, rec.] and the Memorandum No. 6-77 dated April 23, 1977 [p. 12, rec.] signed by the General Manager of respondent company show that the said P.D. was implemented by respondent company on May 1, 1977. On the other hand, there is nothing in the records to indicate that the negotiated wage increases were granted or paid before May, 1977. Hence, it cannot be said that the respondent Company falls within the exceptions provided for in paragraph cranad(k) of the rules implementing P.D. 1123. At the time the said P.D. took effect, there was neither a perfected contract nor an actual payment of the said increase. There was therefore no grant of said increases as yet, despite the contrary opinion expressed in the letter of Undersecretary of Labor Amado G. Inciong. The said letter dated May 13, 1977 [p. 33, NLRC rec.] of Undersecretary Inciong is based on a wrong premise and misrepresentation on the part of respondent company. It was alleged in the letter of respondent company that the wage increases were agreed upon by the company and the bargaining union on April 2, 1977 in recognition of the imperative need for employees to cope up with inflation brought about by, among others, another increase in oil price [p. 31, NLRC rec.]. It was not, however stated that at the time the said letter was written, negotiations were still being held on other unresolved economic and non-economic bargaining items and it was only on September 3, 1977 when they reached agreement thereon [pl. see p. 7 of private respondents Memorandum, p. 107, rec.]. There was therefore no binding contract between the parties before September 3, 1977. For if any essential item is left open for future consideration, there is no binding contract, and an agreement to reach an agreement imposes no obligation on the parties thereto [17 Am. Jur., 2d 362]. Such being the case, and without actual payment of the agreed P0.80 wage increase, there could have been no grant of wage increases within the contemplation of paragraph K, Section 1 of the Rules Implementing P.D. 1123 to place the respondent company within the purview of the exemption provided for in the said rules.

Consequently, its refusal to implement the P0.80 wage increase for the first year of the CBA constitutes a violation thereof and makes the respondent company guilty of unfair labor practice. The respondent company is also guilty of bad faith when it signed the CBA on September 3, 1977 without in any way letting the petitioner union know that it was going to apply part of the allowances being paid under P.D. 1123 to the wage increases provided for in the CBA. Between the time of the implementation of P.D. 1123 on May 1, 1977 and the signing of the CBA on September 3, 1977, nothing was said between the parties about the wage increase despite the fact that negotiations were still going on between the parties. The exchange of letters between the respondent company and Labor Undersecretary Inciong appears to have been concealed from the union. According to the respondent Commission, the wage increase cranad(however) was not immediately implemented because Mr. Alfred Flug who was to bring home funds was still in the United States [p. 40, rec.]. It was only upon arrival from the U.S.A. on January 19, 1978 of Robert Flug, son of said Alfred Flug, that the union had an inkling that the company will not pay the negotiated wage increase. At this point the CBA was already perfected and signed by the parties, so that its terms and stipulations have the force of law between them. A collective bargaining agreement is the law between the parties cranad(Kapisanan ng mga Manggagawa sa La Suerte-FOITAF vs. Noriel, 77 SCRA 414). In the construction or interpretation of such a contract, the primary purpose and guideline and indeed the very foundation of all the rules for such construction or interpretation is the intention of the parties cranad(17 Am. Jur. 2d., 631). What was the intention of the parties relative to the wage increases? A cursory reading of the CBA indicates that the benefits provided therein are not exclusive of other benefits, as may be gleaned from the provisions of its Section 4, Article XIV [p. 42 of the CBA at p. 6, NLRC rec.], which speaks of any other benefits or privileges which are not expressly provided in this Agreement, even if now accorded or hereafter accorded to the employees and workers, shall be deemed purely acts of grace . cra . Likewise, in the accompanying Memorandum of Understanding [pp. 82-83, NLRC rec.] dated September 3, 1977, the parties have agreed as follows: 1. As long as it does not contravene the law and its implementing rules and regulations the COMPANY agrees to effect a uniform and indiscriminate wage increase in the salaries of its employees

within the bargaining unit represented by the UNION regardless of their position and pay rates, in the event that the government shall direct another increase(s) in the statutory minimum wage fixed under P.D 928 within the period of three years from the signing of this instrument. The uniform increase contemplated in this instrument will be equivalent to the amount of the statutory wage increase or adjustment. The bases of the dissent of Madame Justice Herrera are that: I. The P0.80 per day increase was already granted as early as April 2, 1977 when the company agreed to give wage increases to its employees effective April 1, 1977. Hence, such grant should be credited against the emergency cost of living allowance cranad(ECOLA) provided for by P.D. 1123. II. The Departments cranad(Labor) view on the matter of exemptions from P.D. 1123 should be given weight since it was not interpreting or construing a statute but explaining the extent of its own rule. III. It is inequitable that an employer who has granted increases in pay to his employees on a given day is further ordered to give additional increases one, two or three days thereafter. IV. Social justice requires that the broader requirements of a stable economy should be taken into account in resolving conflicts between labor and management. I There is no controversy that the first years wage increase under the CBA was supposed to retroact to April 1, 1977. There is likewise no question that had the company paid the eighty centavos daily increase in April 1977, the conclusion would have been unquestionable that such negotiated wage increase cranad(NWI) should be credited against the emergency cost of living allowance cranad(ECOLA) under P.D. 1123. The question arose because, first, there was no such payment either before or after the effectivity of P.D. 1123 on May 1, 1977; and second, because there was no binding contract to speak of on May 1, 1977. It is conceded that the word grant in its broader sense may include to agree or assent to; to allow to be fulfilled; to accord; to bestow or confer; and is synonymous with concede which means to agree on the idea of

bestowal or acknowledgment especially of a right or privilege chanroblesvirtualawlibrary(Woods vs. Reilly, 211 S.W. 2d 591, 597). Such being the case, the grant could be said to have been made at the time of the agreement, although there may not have been payment as yet. But the question is, when was the inception or actual birth of the agreement? The company contends that it was on April 2, 1977, whereas the Union alleges that it was only on September 3, 1977, the date of the CBA. Paragraph 1 of the CBA reads: This agreement, made and entered into this 3rd day of September 1977 . cra . chanroblesvirtualawlibrary(p. 7, NLRC rec.). On the other hand, there is nothing in the record to indicate that the P0.80 wage increase was indeed agreed upon on April 2, 1977. Aside from the self-serving statements of the company in its various communications cranad(pp. 121, 125 and 128, rec.) and pleadings cranad(pp. 73 and 102, rec.), the only other reference to said date is found on the second paragraph of page 1 of the Memorandum of Understanding dated September 3, 1977 cranad(p. 82, NLRC rec.) which, however, does not mention anything about the 80-centavo increase effective April 1, 1977. In fact, the said paragraph speaks of the companys commitment to effect uniform and indiscriminate wage increases among its employees within the bargaining unit represented by the union in the event that the government shall, within a period of three cranad(3) years from execution hereof, direct additional increases in the statutory minimum wage fixed under P.D. 928. In other words, what was agreed upon on April 2, 1977, was a conditional increase contingent upon the governments increasing of the statutory minimum wage then prevailing. Is it not possible that the companys decision to give the P0.80 daily increase effective April 1, 1977 was influenced by the knowledge that it could be absorbed by the additional ECOLA provided for by P.D. 1123, and that such decision was definitely made after receipt of the letter dated July 15, 1977 of then Undersecretary Inciong cranad(p. 130, rec.)? In any case, the company admits that after April 1977 there were negotiations on other unresolved economic and non -economic bargaining items and it was only on September 3, 1977 when they reached agreement thereon. chanroblesvirtualawlibrary(p. 107, rec.).

This brings us to no other conclusion that the agreement was born only on September 3, 1977: Mere preliminary negotiations as to the terms of an agreement do not constitute a contract. A complete contract is effected generally only by an agreement as to all the terms which the parties intend to introduce into the contract, and where such is the intention of the parties, by the execution of a formal written instrument embodying those terms chanroblesvirtualawlibrary(17 C.J.S. 390). Where preliminary negotiations are consummated by a written contract, or an oral agreement is evidenced by a subsequent agreed memorandum in writing, the writing supersedes all previous understandings and the intent of the parties must be ascertained therefrom . cra . chanroblesvirtualawlibrary(17 C.J.S. 750). In the light of the foregoing, there was therefore no grant of the wage increase as of May 1, 1977 to enable the company to avail of the exemption under P.D. 1123. II It is also conceded that the Department of Labor had the right to construe the word grant as used in its rules implementing P.D. 1123, and its explanation regarding the exemptions to P.D. 1123 should be given weight. However, when it is based on misrepresentations as to the existence of an agreement between the parties, the same cannot be applied. At any rate, the opinion of then Undersecretary Inciong about the matter is based on the wrong premise that there was already an agreementcranad(If as you said management and labor agreed on April 2, 1977 . cra ., p. 33, NLRC rec.). There is no such agreement perfected on April 2, 1977. There is no distinction between interpretation and explaining the extent and scope of the law; because where one explains the intent and scope of a statute, he is interpreting it. The construction or explanation of then Undersecretary Inciong is not only wrong as it was purely based on a misapprehension of facts, but also unlawful because it goes beyond the scope of the law as hereinafter demonstrated. III The CBA entered into between the parties on September 3, 1977 created certain obligations between the parties which they are bound to keep

without being ordered to do so. The principle of equity need not even come in, for unless fraud, mistake or the like is set up, a court will not disturb contract rights as evidenced by a writing which purports to express the intention or will of the parties . cra . chanroblesvirtualawlibrary(27 Am. Jur. 594). A cursory reading of the CBA dated September 3, 1977 reveals the following intentions of the parties: a. That the wage increases thereunder should be staggered for a 3-year period retroactive to April 1, 1977 cranad(see page 2 of Private Respondents Memorandum, p 102, rec.); and b. That such wage increases are exclusive of any statutory increase in the minimum wage, obliging the company to effect a uniform and indiscriminate wage increase equivalent to the increase or adjustment in the minimum wage that may be decreed within a period of three years from the signing of the instrument on September 3, 1977 cranad(see par. 1 of the Memorandum of Understanding, p. 83, NLRC rec.). The staggered wage increase will not be achieved if the same were to be absorbed by the P60-increase in the ECOLA. For a computation of NWI under the CBA will approximately amount to the following: First year P0.80 daily or approximately P22/mo. Second year .50 daily or approximately 13.75/mo. Third year .50 daily or approximately 13.75/mo. Monthly total for 3 years P49.50 Thus, it will be seen that because the resultant total in the monthly-wage increase over the 3-year period under the CBA is less than P60.00, the same will always be covered by the ECOLA, and there will be no occasion for a staggered increase during the period other than what the law may provide which is not the intention of the parties. It is submitted that had the parties intended that to be the end, they should have incorporated the same in their CBA or in their Memorandum of Understanding. It is also apparent that the crediting of the NWI in the ECOLA was an afterthought on the part of the company. If not, then the company was in

bad faith when it did not mention its plan to credit the NWI to the ECOLA during the negotiations prior to the signing of the CBA on September 3, 1977, as soon as it received the opinion of then Undersecretary Inciong in his letter of July 13, 1977 cranad(p. 130, rec.). IV It is submitted that the principle of social justice will be better served by upholding the protection-to-labor policy guaranteed by the Constitution. The Honorable Chief Justice Enrique M. Fernando, in explaining the concept of social justice, wrote: What is thus stressed is that a fundamental principle as social justice, identified as it is with the broad scope of the police power, has an even more basic role to play in aiding those whose lives are spent in toil, with destitution an ever-present threat, to attain a certain degree of economic well-being. Precisely, through the social justice coupled with the protection to labor provisions, the government is enabled to pursue an active and militant policy to give reality and substance to the proclaimed aspiration of a better life and more decent living conditions for all. It is in that spirit that in 1969, in Del Rosario vs. Delos Santos cranad(L-20586, March 21, 1969, 22 SCRA 1196), reference was made to what the social justice concept signifies in the realistic language of the late President Magsaysay: He who has less in life should have more in law. After tracing the course of decisions which spoke uniformly to the effect that the tenancy legislation, now on the statute books, is not vitiated by constitutional infirmity, the Del Rosario opinion made clear why it is easily understandable from the enactment of the Constitution with its avowed concern for those who have less in life, [that] the constitutionality of such legislation has been repeatedly upheld. What is sought to be accomplished by the above fundamental principle is to assure the effectiveness of the communitys effort to assist the economically underprivileged. Fo r under existing conditions, without succor and support, they might not, unaided, be able to secure justice for themselves chanroblesvirtualawlibrary(Fernando, Enrique M., Constitution of the Philippines, pp. 80-81 [1974]). More than elusive justice, survival is the daily problem of the worker and his family. The employer is not faced with such a problem. More often than not, the employer dissipates part of his income or profit in pleasures of the

flesh and gambling aside from luxuries, fabulous parties and conspicuous consumption. The stability of the economy does not depend on the employer alone, but on government economic policies concerning productivity in all areas and not only in the clothing or textile industries. There is not even an intimation that the company is losing. It is the living wage of the workers which is the basis of a stable economy. If the company cannot pay a living wage, it has no business operating at the expense of the lives of its workers from the very start. The preservation of the lives of the citizens is a basic duty of the State, more vital than the preservation of the profits of the corporation. When the State is engaged in a life-and-death struggle, like war or rebellion, it is the citizen worker who fights in defense of the State and for the preservation of the existence of corporations and businesses within its territorial confines. When the life of the State is threatened from within and without, it is the citizen, not the corporation or business enterprise, that mans the weapons of war and march into battle. To invoke the nebulous term stable economy to justify rejection of the claims of the workers as against the assets of the employer, is to regard human life as more expendable than corporate capital. There is nothing in the Constitution that expressly guarantees the viability of business enterprises much less assuring them of profits. V Moreover, it must be pointed out that the Secretary of Labor has exceeded his authority when he included paragraph cranad(k) in Section 1 of the Rules Implementing P.D. 1123. Section 1 of said decree spells out the scope of its benefits, as follows: Section 1. In the Private Sector. In the private sector, an across-the-board increase of sixty pesos cranad(P60.00) in emergency allowance as provided in P.D. 525 shall be paid by all employers to their employees effective 1 May 1977. Accordingly, the monthly emergency allowance under P.D. 525 is hereby amended as follows: a) For workers being paid P50.00 P110 b) For workers being paid P30.00 90

c) For workers being paid P15.00 75. To implement P.D. 1123, the then Secretary of Labor was authorized in Section 4 of the same decree to issue appropriate rules and regulations. Such authority is quoted hereunder: Sec. 4. The Secretary of Labor and the Commissioner of the Budget shall issue appropriate rules and regulations to implement this Decree for their respective sectors. Under such rules and regulations, distressed employers whether public or private may be exempted while in such condition in the interest of development and employment. By virtue of such rule-making authority, the Secretary of Labor issued on May 1, 1977 a set of rules which exempts not only distressed employers cranad(see paragraph 1, Section 1 as well as Sections 6, 7, 8 and 9 of said rules) but also those who have granted in addition to the allowance under P.D. 525, at least P60.00 monthly wage increase on or after January 1, 1977, provided that those who paid less than this amount shall pay the difference cranad(see paragraph k of said rules). Clearly, the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor, and the same is therefore void, as ruled by this Court in a long line of cases among which are: 1. Teozon vs. Members of the Board of Administrators, PVA cranad(33 SCRA 585, 588-589): The recognition of the power of administrative officials to promulgate rules in the administration of the statute, necessarily limited to what is provided for in the legislative enactment, may be found in the early case of United States vs. Barrios decided in 1908. Then came in a 1914 decision, United States vs. Tupasi Molina cranad(29 Phil. 119) delineation of the scope of such competence. Thus: Of course the regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. So long, however, as the regulations relate solely to carrying into effect the provisions of the law, they are valid. In 1936, in People vs. Santos, this Court expressed its disapproval of an administrative order that would amount to an excess of the regulatory power vested in an

administrative official. We reaffirmed such a doctrine in a 1951 decision, where we again made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, the mandate of the Act must prevail and must be followed. Justice Barrera, speaking for the Court in Victorias Milling Inc. vs. Social Security Commission, citing Parker as well as Davis did tersely sum up the matter thus: A rule is binding on the Courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom . cra . On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means. It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be faithfully executed. No lesser administrative executive office or agency then can, contrary to the express language of the Constitution, assert for itself a more extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict compliance with the legislative enactment. Its terms must be followed. The statute requires adherence to, not departure from its provisions. No deviation is allowable. In the terse language of the present Chief Justice, an administrative agency cannot amend an act of Congress. Respondents can be sustained, therefore, only if it could be shown that the rules and regulations promulgated by them were in accordance with what the Veterans Bill of Rights provides chanroblesvirtualawlibrary(Emphasis supplied). 2. Santos vs. Hon. Estenzo, et al. cranad(109 Phil. 419): It is of elementary knowledge that an act of Congress cannot be amended by a rule promulgated by the Workers Compensation Commission. 3. Hilado vs. Collector of Internal Revenue cranad(100 Phil. 295): It seems too clear for serious argument that an administrative officer cannot change a law enacted by Congress. A regulation that is merely an interpretation of the statute when once determined to have been erroneous becomes a nullity.

4. Sy Man vs. Jacinto & Fabros cranad(93 Phil. 1093): . cra . We also find and hold that the memorandum order of the Insular Collector of Customs of August 18, 1947, is void and of no effect, not only because it has not been duly approved by the Department Head and fully published as required by Section 551 of the Revised Administrative Code but also because it is inconsistent with law . cra . chanroblesvirtualawlibrary(Emphasis supplied). 5. Olsen & Co., Inc. vs. Aldenese and Trinidad cranad(43 Phil. 259): The important question here involved is the construction of Sections 6, 7 and 11 of Act No. 2613 of the Philippine Legislature, and Section 9 of the Tobacco Inspection Regulations, promulgated by Administrative Order No. 35. It must be conceded that the authority of the Collector of Internal Revenue to make any rules and regulations must be founded upon some legislature act, and that they must follow and be within the scope and purview of the act. In the light of the foregoing, paragraph cranad(k) of the Rules Implementing P.D. 1123 must be declared void. Consequently, the argument about crediting the NWI against the ECOLA has no more leg to stand on and must perforce fall. It is also obvious that the negotiated wage increases provided for in the CBA are intended to be distinct and separate from any other benefit or privilege that may be forthcoming to the workers. The respondent company must perforce pay both the benefits under P.D. 1123 and the CBA. Its refusal to pay the wage increase provided for in the latter constitutes a question that should have been settled before a voluntary arbitrator. Moreover, in case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer cranad(Insular Lumber Co. vs. CA, 80 SCRA 28, citing Art. 1702, Civil Code of the Philippines). Consequently, We find that the respondent Commission acted with grave abuse of discretion when it dismissed petitioners case and upheld the private respondents posture in the absence of substantial evidence in support thereof.

WHEREFORE, THE WRIT OF CERTIORARI IS HEREBY GRANTED, THE DECISION OF THE RESPONDENT COMMISSION IS HEREBY SET ASIDE, AND PRIVATE RESPONDENT IS HEREBY DIRECTED TO PAY, IN ADDITION TO THE INCREASED ALLOWANCE PROVIDED FOR IN P.D. 1123, THE NEGOTIATED WAGE INCREASE OF P0.80 DAILY EFFECTIVE APRIL 1, 1977 AS WELL AS ALL OTHER WAGE INCREASES EMBODIED IN THE COLLECTIVE BARGAINING AGREEMENT, TO ALL COVERED EMPLOYEES. COSTS AGAINST PRIVATE RESPONDENT. THIS DECISION IS IMMEDIATELY EXECUTORY. SO ORDERED. Fernandez, Guerrero and De Castro, JJ., concur.

G.R. No. L-52415 October 23, 1984 INSULAR BANK OF ASIA AND AMERICA EMPLOYEES' UNION (IBAAEU), petitioner, vs. HON. AMADO G. INCIONG, Deputy Minister, Ministry of Labor and INSULAR BANK OF ASIA AND AMERICA,respondents. Sisenando R. Villaluz, Jr. for petitioner. Abdulmaid Kiram Muin colloborating counsel for petitioner. The Solicitor General Caparas, Tabios, Ilagan Alcantara & Gatmaytan Law Office and Sycip, Salazar, Feliciano & Hernandez Law Office for respondents.

MAKASIAR, J.:+.wph!1 This is a petition for certiorari to set aside the order dated November 10, 1979, of respondent Deputy Minister of Labor, Amado G. Inciong, in

NLRC case No. RB-IV-1561-76 entitled "Insular Bank of Asia and America Employees' Union (complainant-appellee), vs. Insular Bank of Asia and America" (respondent-appellant), the dispositive portion of which reads as follows: t.hqw xxx xxx xxx ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment. promulgated dismissing the instant case for lack of merit (p. 109 rec.). The antecedent facts culled from the records are as follows: On June 20, 1975, petitioner filed a complaint against the respondent bank for the payment of holiday pay before the then Department of Labor, National Labor Relations Commission, Regional Office No. IV in Manila. Conciliation having failed, and upon the request of both parties, the case was certified for arbitration on July 7, 1975 (p. 18, NLRC rec. On August 25, 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the above-entitled case, granting petitioner's complaint for payment of holiday pay. Pertinent portions of the decision read: t.hqw xxx xxx xxx The records disclosed that employees of respondent bank were not paid their wages on unworked regular holidays as mandated by the Code, particularly Article 208, to wit: t.hqw Art. 208. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays, except in retail and service xxx xxx xxx

establishments regularly employing less than 10 workers. (b) The term "holiday" as used in this chapter, shall include: New Year's Day, Maundy Thursday, Good Friday, the ninth of April the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and the thirtieth of December and the day designated by law for holding a general election.

This conclusion is deduced from the fact that the daily rate of pay of the bank employees was computed in the past with the unworked regular holidays as excluded for purposes of determining the deductible amount for absences incurred Thus, if the employer uses the factor 303 days as a divisor in determining the daily rate of monthly paid employee, this gives rise to a presumption that the monthly rate does not include payments for unworked regular holidays. The use of the factor 303 indicates the number of ordinary working days in a year (which normally has 365 calendar days), excluding the 52 Sundays and the 10 regular holidays. The use of 251 as a factor (365 calendar days less 52 Saturdays, 52 Sundays, and 10 regular holidays) gives rise likewise to the same presumption that the unworked Saturdays, Sundays and regular holidays are unpaid. This being the case, it is not amiss to state with certainty that the instant claim for wages on regular unworked holidays is found to be tenable and meritorious. WHEREFORE, judgment is hereby rendered: (a) xxx xxxx xxx

(b) Ordering respondent to pay wages to all its employees for all regular h(olidays since November 1, 1974 (pp. 9799, rec., underscoring supplied). Respondent bank did not appeal from the said decision. Instead, it complied with the order of Arbiter Ricarte T. Soriano by paying their holiday pay up to and including January, 1976. On December 16, 1975, Presidential Decree No. 850 was promulgated amending, among others, the provisions of the Labor Code on the right to holiday pay to read as follows: t.hqw Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wages during regular holidays, except in retail and service establishments regularly employing less than ten (10) workers; (b) The employer may require an employee to work on any holiday but such employee shall be paid a compensation equivalent to twice his regular rate and (c) As used in this Article, "holiday" includes New Year's Day, Maundy Thursday, Good Friday, the ninth of April, the first of May, the twelfth of June, the fourth of July, the thirtieth of November, the twenty-fifth and the thirtieth of December, and the day designated by law for holding a general election. Accordingly, on February 16, 1976, by authority of Article 5 of the same Code, the Department of Labor (now Ministry of Labor) promulgated the rules and regulations for the implementation of holidays with pay. The controversial section thereof reads: t.hqw Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not.

For this purpose, the monthly minimum wage shall not be less than the statutory minimum wage multiplied by 365 days divided by twelve" (italics supplied). On April 23, 1976, Policy Instruction No. 9 was issued by the then Secretary of Labor (now Minister) interpreting the above-quoted rule, pertinent portions of which read: t.hqw xxx xxx xxx The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In the case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit. Under the rules implementing P.D. 850, this policy has been fully clarified to eliminate controversies on the entitlement of monthly paid employees, The new determining rule is this: If the monthly paid employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on account of holidays in months where they occur, then he is still entitled to the ten (10) paid legal holidays. ..." (emphasis supplied). Respondent bank, by reason of the ruling laid down by the aforecited rule implementing Article 94 of the Labor Code and by Policy Instruction No. 9, stopped the payment of holiday pay to an its employees. On August 30, 1976, petitioner filed a motion for a writ of execution to enforce the arbiter's decision of August 25, 1975, whereby the respondent bank was ordered to pay its employees their daily wage for the unworked regular holidays. On September 10, 1975, respondent bank filed an opposition to the motion for a writ of execution alleging, among others, that: (a) its refusal to pay the

corresponding unworked holiday pay in accordance with the award of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, is based on and justified by Policy Instruction No. 9 which interpreted the rules implementing P. D. 850; and (b) that the said award is already repealed by P.D. 850 which took effect on December 16, 1975, and by said Policy Instruction No. 9 of the Department of Labor, considering that its monthly paid employees are not receiving less than P240.00 and their monthly pay is uniform from January to December, and that no deductions are made from the monthly salaries of its employees on account of holidays in months where they occur (pp. 64-65, NLRC rec.). On October 18, 1976, Labor Arbiter Ricarte T. Soriano, instead of issuing a writ of execution, issued an order enjoining the respondent bank to continue paying its employees their regular holiday pay on the following grounds: (a) that the judgment is already final and the findings which is found in the body of the decision as well as the dispositive portion thereof is res judicata or is the law of the case between the parties; and (b) that since the decision had been partially implemented by the respondent bank, appeal from the said decision is no longer available (pp. 100-103, rec.). On November 17, 1976, respondent bank appealed from the above-cited order of Labor Arbiter Soriano to the National Labor Relations Commission, reiterating therein its contentions averred in its opposition to the motion for writ of execution. Respondent bank further alleged for the first time that the questioned order is not supported by evidence insofar as it finds that respondent bank discontinued payment of holiday pay beginning January, 1976 (p. 84, NLRC rec.). On June 20, 1978, the National Labor Relations Commission promulgated its resolution en banc dismissing respondent bank's appeal, the dispositive portion of which reads as follows: t.hqw In view of the foregoing, we hereby resolve to dismiss, as we hereby dismiss, respondent's appeal; to set aside Labor Arbiter Ricarte T. Soriano's order of 18 October 1976 and, as prayed for by complainant, to order the issuance of the proper writ of execution (p. 244, NLRC rec.).

Copies of the above resolution were served on the petitioner only on February 9, 1979 or almost eight. (8) months after it was promulgated, while copies were served on the respondent bank on February 13, 1979. On February 21, 1979, respondent bank filed with the Office of the Minister of Labor a motion for reconsideration/appeal with urgent prayer to stay execution, alleging therein the following: (a) that there is prima facie evidence of grave abuse of discretion, amounting to lack of jurisdiction on the part of the National Labor Relations Commission, in dismissing the respondent's appeal on pure technicalities without passing upon the merits of the appeal and (b) that the resolution appealed from is contrary to the law and jurisprudence (pp. 260-274, NLRC rec.). On March 19, 1979, petitioner filed its opposition to the respondent bank's appeal and alleged the following grounds: (a) that the office of the Minister of Labor has no jurisdiction to entertain the instant appeal pursuant to the provisions of P. D. 1391; (b) that the labor arbiter's decision being final, executory and unappealable, execution is a matter of right for the petitioner; and (c) that the decision of the labor arbiter dated August 25, 1975 is supported by the law and the evidence in the case (p. 364, NLRC rec.). On July 30, 1979, petitioner filed a second motion for execution pending appeal, praying that a writ of execution be issued by the National Labor Relations Commission pending appeal of the case with the Office of the Minister of Labor. Respondent bank filed its opposition thereto on August 8, 1979. On August 13, 1979, the National Labor Relations Commission issued an order which states: t.hqw The Chief, Research and Information Division of this Commission is hereby directed to designate a SocioEconomic Analyst to compute the holiday pay of the employees of the Insular Bank of Asia and America from April 1976 to the present, in accordance with the Decision of the Labor Arbiter dated August 25, 1975" (p. 80, rec.).

On November 10, 1979, the Office of the Minister of Labor, through Deputy Minister Amado G. Inciong, issued an order, the dispositive portion of which states: t.hqw ALL THE FOREGOING CONSIDERED, let the appealed Resolution en banc of the National Labor Relations Commission dated 20 June 1978 be, as it is hereby, set aside and a new judgment promulgated dismissing the instant case for lack of merit (p. 436, NLRC rec.). Hence, this petition for certiorari charging public respondent Amado G. Inciong with abuse of discretion amounting to lack or excess of jurisdiction. The issue in this case is: whether or not the decision of a Labor Arbiter awarding payment of regular holiday pay can still be set aside on appeal by the Deputy Minister of Labor even though it has already become final and had been partially executed, the finality of which was affirmed by the National Labor Relations Commission sitting en banc, on the basis of an Implementing Rule and Policy Instruction promulgated by the Ministry of Labor long after the said decision had become final and executory. WE find for the petitioner. I WE agree with the petitioner's contention that Section 2, Rule IV, Book III of the implementing rules and Policy Instruction No. 9 issued by the then Secretary of Labor are null and void since in the guise of clarifying the Labor Code's provisions on holiday pay, they in effect amended them by enlarging the scope of their exclusion (p. 1 1, rec.). Article 94 of the Labor Code, as amended by P.D. 850, provides: t.hqw Art. 94. Right to holiday pay. (a) Every worker shall be paid his regular daily wage during regular holidays,

except in retail and service establishments regularly employing less than ten (10) workers. ... The coverage and scope of exclusion of the Labor Code's holiday pay provisions is spelled out under Article 82 thereof which reads: t.hqw Art. 82. Coverage. The provision of this Title shall apply to employees in all establishments and undertakings, whether for profit or not, but not to government employees, managerial employees, field personnel members of the family of the employer who are dependent on him for support domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. ... (emphasis supplied). From the above-cited provisions, it is clear that monthly paid employees are not excluded from the benefits of holiday pay. However, the implementing rules on holiday pay promulgated by the then Secretary of Labor excludes monthly paid employees from the said benefits by inserting, under Rule IV, Book Ill of the implementing rules, Section 2, which provides that: "employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established minimum wage shall be presumed to be paid for all days in the month whether worked or not. " Public respondent maintains that "(T)he rules implementing P. D. 850 and Policy Instruction No. 9 were issued to clarify the policy in the implementation of the ten (10) paid legal holidays. As interpreted, 'unworked' legal holidays are deemed paid insofar as monthly paid employees are concerned if (a) they are receiving not less than the statutory minimum wage, (b) their monthly pay is uniform from January to December, and (c) no deduction is made from their monthly salary on account of holidays in months where they occur. As explained in Policy Instruction No, 9, 'The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily paid employees. In case of monthly, only those whose monthly salary did not yet include payment for the ten

(10) paid legal holidays are entitled to the benefit' " (pp. 340-341, rec.). This contention is untenable. It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and explicit - it provides for both the coverage of and exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees, when the law clearly states that every worker shall be paid their regular holiday pay. This is a flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that "All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor." Moreover, it shall always be presumed that the legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits (Orlosky vs. Haskell, 155 A. 112.) Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules and regulations. Public respondent vehemently argues that the intent and spirit of the holiday pay law, as expressed by the Secretary of Labor in the case of Chartered Bank Employees Association v. The Chartered Bank (NLRC Case No. RB1789-75, March 24, 1976), is to correct the disadvantages inherent in the daily compensation system of employment holiday pay is primarily intended to benefit the daily paid workers whose employment and income are circumscribed by the principle of "no work, no pay." This argument may sound meritorious; but, until the provisions of the Labor Code on holiday pay is amended by another law, monthly paid employees are definitely included in the benefits of regular holiday pay. As earlier stated, the presumption is always in favor of law, negatively put, the Labor Code is always strictly construed against management. While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to enforce it should be given great weight by the courts, still if such construction is so erroneous, as in the

instant case, the same must be declared as null and void. It is the role of the Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the context of the interactions of the three branches of the government, almost always in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of governmental power (The Supreme Court in Modern Role, C. B. Swisher 1958, p. 36). Thus. in the case of Philippine Apparel Workers Union vs. National Labor Relations Commission (106 SCRA 444, July 31, 1981) where the Secretary of Labor enlarged the scope of exemption from the coverage of a Presidential Decree granting increase in emergency allowance, this Court ruled that: t.hqw ... the Secretary of Labor has exceeded his authority when he included paragraph (k) in Section 1 of the Rules implementing P. D. 1 1 23. xxx xxx xxx Clearly, the inclusion of paragraph k contravenes the statutory authority granted to the Secretary of Labor, and the same is therefore void, as ruled by this Court in a long line of cases . . . .. t.hqw The recognition of the power of administrative officials to promulgate rules in the administration of the statute, necessarily limited to what is provided for in the legislative enactment, may be found in the early case of United States vs. Barrios decided in 1908. Then came in a 1914 decision, United States vs. Tupasi Molina (29 Phil. 119) delineation of the scope of such competence. Thus: "Of course the regulations adopted under legislative authority by a particular department must be in harmony with the provisions

of the law, and for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. So long, however, as the regulations relate solely to carrying into effect the provisions of the law, they are valid." In 1936, in People vs. Santos, this Court expressed its disapproval of an administrative order that would amount to an excess of the regulatory power vested in an administrative official We reaffirmed such a doctrine in a 1951 decision, where we again made clear that where an administrative order betrays inconsistency or repugnancy to the provisions of the Act, 'the mandate of the Act must prevail and must be followed. Justice Barrera, speaking for the Court in Victorias Milling inc. vs. Social Security Commission, citing Parker as well as Davis did tersely sum up the matter thus: "A rule is binding on the Courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom. ... On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine chat the law means." "It cannot be otherwise as the Constitution limits the authority of the President, in whom all executive power resides, to take care that the laws be

faithfully executed. No lesser administrative executive office or agency then can, contrary to the express language of the Constitution assert for itself a more extensive prerogative. Necessarily, it is bound to observe the constitutional mandate. There must be strict compliance with the legislative enactment. Its terms must be followed the statute requires adherence to, not departure from its provisions. No deviation is allowable. In the terse language of the present Chief Justice, an administrative agency "cannot amend an act of Congress." Respondents can be sustained, therefore, only if it could be shown that the rules and regulations promulgated by them were in accordance with what the Veterans Bill of Rights provides" (Phil. Apparel Workers Union vs. National Labor Relations Commission, supra, 463, 464, citing Teozon vs. Members of the Board of Administrators, PVA 33 SCRA 585; see also Santos vs. Hon. Estenzo, et al, 109 Phil. 419; Hilado vs. Collector of Internal Revenue, 100 Phil. 295; Sy Man vs. Jacinto & Fabros, 93 Phil. 1093; Olsen & Co., Inc. vs. Aldanese and Trinidad, 43 Phil. 259). This ruling of the Court was recently reiterated in the case of American Wire & Cable Workers Union (TUPAS) vs. The National Labor Relations Commission and American Wire & Cable Co., Inc., G.R. No. 53337, promulgated on June 29, 1984. In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy instruction No. 9 issued by the then Secretary of Labor must be declared null and void. Accordingly, public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all

to deny the members of petitioner union their regular holiday pay as directed by the Labor Code. II It is not disputed that the decision of Labor Arbiter Ricarte T. Soriano dated August 25, 1975, had already become final, and was, in fact, partially executed by the respondent bank. However, public respondent maintains that on the authority of De Luna vs. Kayanan, 61 SCRA 49, November 13, 1974, he can annul the final decision of Labor Arbiter Soriano since the ensuing promulgation of the integrated implementing rules of the Labor Code pursuant to P.D. 850 on February 16, 1976, and the issuance of Policy Instruction No. 9 on April 23, 1976 by the then Secretary of Labor are facts and circumstances that transpired subsequent to the promulgation of the decision of the labor arbiter, which renders the execution of the said decision impossible and unjust on the part of herein respondent bank (pp. 342-343, rec.). This contention is untenable. To start with, unlike the instant case, the case of De Luna relied upon by the public respondent is not a labor case wherein the express mandate of the Constitution on the protection to labor is applied. Thus Article 4 of the Labor Code provides that, "All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor and Article 1702 of the Civil Code provides that, " In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living for the laborer. Consequently, contrary to public respondent's allegations, it is patently unjust to deprive the members of petitioner union of their vested right acquired by virtue of a final judgment on the basis of a labor statute promulgated following the acquisition of the "right". On the question of whether or not a law or statute can annul or modify a judicial order issued prior to its promulgation, this Court, through Associate Justice Claro M. Recto, said: t.hqw

xxx xxx xxx We are decidedly of the opinion that they did not. Said order, being unappealable, became final on the date of its issuance and the parties who acquired rights thereunder cannot be deprived thereof by a constitutional provision enacted or promulgated subsequent thereto. Neither the Constitution nor the statutes, except penal laws favorable to the accused, have retroactive effect in the sense of annulling or modifying vested rights, or altering contractual obligations" (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324, emphasis supplied). In the case of In re: Cunanan, et al., 19 Phil. 585, March 18, 1954, this Court said: "... when a court renders a decision or promulgates a resolution or order on the basis of and in accordance with a certain law or rule then in force, the subsequent amendment or even repeal of said law or rule may not affect the final decision, order, or resolution already promulgated, in the sense of revoking or rendering it void and of no effect." Thus, the amendatory rule (Rule IV, Book III of the Rules to Implement the Labor Code) cannot be given retroactive effect as to modify final judgments. Not even a law can validly annul final decisions (In re: Cunanan, et al., Ibid). Furthermore, the facts of the case relied upon by the public respondent are not analogous to that of the case at bar. The case of De Luna speaks of final and executory judgment, while iii the instant case, the final judgment is partially executed. just as the court is ousted of its jurisdiction to annul or modify a judgment the moment it becomes final, the court also loses its jurisdiction to annul or modify a writ of execution upon its service or execution; for, otherwise, we will have a situation wherein a final and executed judgment can still be annulled or modified by the court upon mere motion of a panty This would certainly result in endless litigations thereby rendering inutile the rule of law. Respondent bank counters with the argument that its partial compliance was involuntary because it did so under pain of levy and execution of its assets (p. 138, rec.). WE find no merit in this argument. Respondent bank clearly manifested its voluntariness in complying with the decision of the labor

arbiter by not appealing to the National Labor Relations Commission as provided for under the Labor Code under Article 223. A party who waives his right to appeal is deemed to have accepted the judgment, adverse or not, as correct, especially if such party readily acquiesced in the judgment by starting to execute said judgment even before a writ of execution was issued, as in this case. Under these circumstances, to permit a party to appeal from the said partially executed final judgment would make a mockery of the doctrine of finality of judgments long enshrined in this jurisdiction. Section I of Rule 39 of the Revised Rules of Court provides that "... execution shall issue as a matter of right upon the expiration of the period to appeal ... or if no appeal has been duly perfected." This rule applies to decisions or orders of labor arbiters who are exercising quasi-judicial functions since "... the rule of execution of judgments under the rules should govern all kinds of execution of judgment, unless it is otherwise provided in other laws" Sagucio vs. Bulos 5 SCRA 803) and Article 223 of the Labor Code provides that "... decisions, awards, or orders of the Labor Arbiter or compulsory arbitrators are final and executory unless appealed to the Commission by any or both of the parties within ten (10) days from receipt of such awards, orders, or decisions. ..." Thus, under the aforecited rule, the lapse of the appeal period deprives the courts of jurisdiction to alter the final judgment and the judgment becomes final ipso jure (Vega vs. WCC, 89 SCRA 143, citing Cruz vs. WCC, 2 PHILAJUR 436, 440, January 31, 1978; see also Soliven vs. WCC, 77 SCRA 621; Carrero vs. WCC and Regala vs. WCC, decided jointly, 77 SCRA 297; Vitug vs. Republic, 75 SCRA 436; Ramos vs. Republic, 69 SCRA 576). In Galvez vs. Philippine Long Distance Telephone Co., 3 SCRA 422, 423, October 31, 1961, where the lower court modified a final order, this Court ruled thus: t.hqw xxx xxx xxx The lower court was thus aware of the fact that it was thereby altering or modifying its order of January 8, 1959. Regardless of the excellence of the motive for acting as it

did, we are constrained to hold however, that the lower court had no authorities to make said alteration or modification. ... xxx xxx xxx The equitable considerations that led the lower court to take the action complained of cannot offset the dem ands of public policy and public interest which are also responsive to the tenets of equity requiring that an issues passed upon in decisions or final orders that have become executory, be deemed conclusively disposed of and definitely closed for, otherwise, there would be no end to litigations, thus setting at naught the main role of courts of justice, which is to assist in the enforcement of the rule of law and the maintenance of peace and order, by settling justiciable controversies with finality. xxx xxx xxx In the recent case of Gabaya vs. Mendoza, 113 SCRA 405, 406, March 30, 1982, this Court said: t.hqw xxx xxx xxx In Marasigan vs. Ronquillo (94 Phil. 237), it was categorically stated that the rule is absolute that after a judgment becomes final by the expiration of the period provided by the rules within which it so becomes, no further amendment or correction can be made by the court except for clerical errors or mistakes. And such final judgment is conclusive not only as to every matter which was offered and received to sustain or defeat the claim or demand but as to any other admissible matter which must have been offered for that purpose (L-7044, 96 Phil. 526). In the earlier case of Contreras and Ginco vs. Felix and China Banking Corp., Inc. (44 O.G. 4306), it was stated that the rule must be adhered to regardless of any possible injustice in a particular case for (W)e have to

subordinate the equity of a particular situation to the over-mastering need of certainty and immutability of judicial pronouncements xxx xxx xxx III The despotic manner by which public respondent Amado G. Inciong divested the members of the petitioner union of their rights acquired by virtue of a final judgment is tantamount to a deprivation of property without due process of law Public respondent completely ignored the rights of the petitioner union's members in dismissing their complaint since he knew for a fact that the judgment of the labor arbiter had long become final and was even partially executed by the respondent bank. A final judgment vests in the prevailing party a right recognized and protected by law under the due process clause of the Constitution (China Ins. & Surety Co. vs. Judge of First Instance of Manila, 63 Phil. 324). A final judgment is "a vested interest which it is right and equitable that the government should recognize and protect, and of which the individual could no. be deprived arbitrarily without injustice" (Rookledge v. Garwood, 65 N.W. 2d 785, 791). lt is by this guiding principle that the due process clause is interpreted. Thus, in the pithy language of then Justice, later Chief Justice, Concepcion "... acts of Congress, as well as those of the Executive, can deny due process only under pain of nullity, and judicial proceedings suffering from the same flaw are subject to the same sanction, any statutory provision to the contrary notwithstanding (Vda. de Cuaycong vs. Vda. de Sengbengco 110 Phil. 118, emphasis supplied), And "(I)t has been likewise established that a violation of a constitutional right divested the court of jurisdiction; and as a consequence its judgment is null and void and confers no rights" (Phil. Blooming Mills Employees Organization vs. Phil. Blooming Mills Co., Inc., 51 SCRA 211, June 5, 1973). Tested by and pitted against this broad concept of the constitutional guarantee of due process, the action of public respondent Amado G. Inciong is a clear example of deprivation of property without due process of law and

constituted grave abuse of discretion, amounting to lack or excess of jurisdiction in issuing the order dated November 10, 1979. WHEREFORE, THE PETITION IS HEREBY GRANTED, THE ORDER OF PUBLIC RESPONDENT IS SET ASIDE, AND THE DECISION OF LABOR ARBITER RICARTE T. SORIANO DATED AUGUST 25, 1975, IS HEREBY REINSTATED. COSTS AGAINST PRIVATE RESPONDENT INSULAR BANK OF ASIA AND AMERICA SO ORDERED.1wph1.t Guerrero, Escolin and Cuevas, JJ., concur. Aquino and Abad Santos, JJ., concur in the result. Concepcion Jr., J., took no part G.R. No. L-44717 August 28, 1985 THE CHARTERED BANK EMPLOYEES ASSOCIATION, petitioner, vs. HON. BLAS F. OPLE, in his capacity as the Incumbent Secretary of Labor, and THE CHARTERED BANK,respondents.

GUTIERREZ, JR., J.: This is a petition for certiorari seeking to annul the decision of the respondent Secretary, now Minister of Labor which denied the petitioner's claim for holiday pay and its claim for premium and overtime pay differentials. The petitioner claims that the respondent Minister of Labor acted contrary to law and jurisprudence and with grave abuse of discretion in promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and in issuing Policy Instruction No. 9, both referring to holidays with pay.

On May 20, 1975, the Chartered Bank Employees Association, in representation of its monthly paid employees/members, instituted a complaint with the Regional Office No. IV, Department of Labor, now Ministry of Labor and Employment (MOLE) against private respondent Chartered Bank, for the payment of ten (10) unworked legal holidays, as well as for premium and overtime differentials for worked legal holidays from November 1, 1974. The memorandum for the respondents summarizes the admitted and/or undisputed facts as follows: l. The work force of respondent bank consists of 149 regular employees, all of whom are paid by the month; 2. Under their existing collective bargaining agreement, (Art. VII thereof) said monthly paid employees are paid for overtime work as follows: Section l. The basic work week for all employees excepting security guards who by virtue of the nature of their work are required to be at their posts for 365 days per year, shall be forty (40) hours based on five (5) eight (8) hours days, Monday to Friday. Section 2. Time and a quarter hourly rate shall be paid for authorized work performed in excess of eight (8) hours from Monday through Friday and for any hour of work performed on Saturdays subject to Section 5 hereof. Section 3. Time and a half hourly rate shall be paid for authorized work performed on Sundays, legal and special holidays. xxx xxx xxx xxx xxx xxx

Section 5. The provisions of Section I above notwithstanding the BANK may revert to the six (6) days work week, to include Saturday for a four (4) hour day, in the event the Central Bank should require commercial banks to open for business on Saturday. 3. In computing overtime pay and premium pay for work done during regular holidays, the divisor used in arriving at the daily rate of pay is 251 days although formerly the divisor used was 303 days and this was when the respondent bank was still operating on a 6-day work week basis. However, for purposes of computing deductions corresponding to absences without pay the divisor used is 365 days. 4. All regular monthly paid employees of respondent bank are receiving salaries way beyond the statutory or minimum rates and are among the highest paid employees in the banking industry. 5. The salaries of respondent bank's monthly paid employees suffer no deduction for holidays occurring within the month. On the bases of the foregoing facts, both the arbitrator and the National Labor Relations Commission (NLRC) ruled in favor of the petitioners ordering the respondent bank to pay its monthly paid employees, holiday pay for the ten (10) legal holidays effective November 1, 1974 and to pay premium or overtime pay differentials to all employees who rendered work during said legal holidays. On appeal, the Minister of Labor set aside the decision of the NLRC and dismissed the petitioner's claim for lack of merit basing its decision on Section 2, Rule IV, Book Ill of the Integrated Rules and Policy Instruction No. 9, which respectively provide: Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month, irrespective of the number of working days therein, with a salary of not less than the statutory or established

minimum wage shall be presumed to be paid for all days in the month whether worked or not. POLICY INSTRUCTION NO. 9

This issuance shall take effect immediately. The issues are presented in the form of the following assignments of errors: First Error

TO: All Regional Directors SUBJECT: PAID LEGAL HOLIDAYS The rules implementing PD 850 have clarified the policy in the implementation of the ten (10) paid legal holidays. Before PD 850, the number of working days a year in a firm was considered important in determining entitlement to the benefit. Thus, where an employee was working for at least 313 days, he was considered definitely already paid. If he was working for less than 313, there was no certainty whether the ten (10) paid legal holidays were already paid to him or not. The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily employees. In the case of monthly, only those whose monthly salary did not yet include payment for the ten (10) paid legal holidays are entitled to the benefit. Under the rules implementing PD 850, this policy has been fully clarified to eliminate controversies on the entitlement of monthly paid employees. The new determining rule is this: 'If the monthly paid employee is receiving not less than P240, the maximum monthly minimum wage, and his monthly pay is uniform from January to December, he is presumed to be already paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on account of holidays in months where they occur, then he is still entitled to the ten (10) paid legal holidays. These new interpretations must be uniformly and consistently upheld. Whether or not the Secretary of Labor erred and acted contrary to law in promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9. Second Error Whether or not the respondent Secretary of Labor abused his discretion and acted contrary to law in applying Sec. 2, Rule IV of the Integrated Rules and Policy Instruction No. 9 abovestated to private respondent's monthly-paid employees. Third Error Whether or not the respondent Secretary of Labor, in not giving due credence to the respondent bank's practice of paying its employees base pay of 100% and premium pay of 50% for work done during legal holidays, acted contrary to law and abused his discretion in denying the claim of petitioners for unworked holidays and premium and overtime pay differentials for worked holidays. The petitioner contends that the respondent Minister of Labor gravely abused his discretion in promulgating Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9 as guidelines for the

implementation of Articles 82 and 94 of the Labor Code and in applying said guidelines to this case. It maintains that while it is true that the respondent Minister has the authority in the performance of his duty to promulgate rules and regulations to implement, construe and clarify the Labor Code, such power is limited by provisions of the statute sought to be implemented, construed or clarified. According to the petitioner, the socalled "guidelines" promulgated by the respondent Minister totally contravened and violated the Code by excluding the employees/members of the petitioner from the benefits of the holiday pay, when the Code itself did not provide for their expanding the Code's clear and concise conclusion and notwithstanding the Code's clear and concise phraseology defining those employees who are covered and those who are excluded from the benefits of holiday pay. On the other hand, the private respondent contends that the questioned guidelines did not deprive the petitioner's members of the benefits of holiday pay but merely classified those monthly paid employees whose monthly salary already includes holiday pay and those whose do not, and that the guidelines did not deprive the employees of holiday pay. It states that the question to be clarified is whether or not the monthly salaries of the petitioner's members already includes holiday pay. Thus, the guidelines were promulgated to avoid confusion or misconstruction in the application of Articles 82 and 94 of the Labor Code but not to violate them. Respondent explains that the rationale behind the promulgation of the questioned guidelines is to benefit the daily paid workers who, unlike monthly-paid employees, suffer deductions in their salaries for not working on holidays. Hence, the Holiday Pay Law was enacted precisely to countervail the disparity between daily paid workers and monthly-paid employees. The decision in Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong (132 SCRA 663) resolved a similar issue. Significantly, the petitioner in that case was also a union of bank employees. We ruled that Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9, are contrary to the provisions of the Labor Code and, therefore, invalid This Court stated: It is elementary in the rules of statutory construction that when the language of the law is clear and unequivocal the law must be taken to mean exactly what it says. In the case at bar, the provisions of the Labor Code on the

entitlement to the benefits of holiday pay are clear and explicit it provides for both the coverage of and exclusion from the benefit. In Policy Instruction No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is principally intended for daily paid employees, when the law clearly states that every worker shall be paid their regular holiday pay. This is flagrant violation of the mandatory directive of Article 4 of the Labor Code, which states that 'All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor.' Moreover, it shall always be presumed that the legislature intended to enact a valid and permanent statute which would have the most beneficial effect that its language permits (Orlosky v. Hasken, 155 A. 112) Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules and regulations. We further ruled: While it is true that the contemporaneous construction placed upon a statute by executive officers whose duty is to enforce it should be given great weight by the courts, still if such construction is so erroneous, as in the instant case, the same must be declared as null and void. It is the role of the Judiciary to refine and, when necessary correct constitutional (and/or statutory) interpretation, in the context of the interactions of the three branches of the government, almost always in situations where some agency of the State has engaged in action that stems ultimately from some legitimate area of governmental power (The Supreme Court in Modern Role, C.B. Swisher 1958, p. 36). xxx xxx xxx

In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code and Policy Instruction No. 9 issued by the then Secretary of Labor must be declared null and void. Accordinglyl public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to deny the members of petitioner union their regular holiday pay as directed by the Labor Code. Since the private respondent premises its action on the invalidated rule and policy instruction, it is clear that the employees belonging to the petitioner association are entitled to the payment of ten (10) legal holidays under Articles 82 and 94 of the Labor Code, aside from their monthly salary. They are not among those excluded by law from the benefits of such holiday pay. Presidential Decree No. 850 states who are excluded from the holiday provisions of that law. It states: ART. 82. Coverage. The provision of this Title shall apply to employees in all establishments and undertakings, whether for profit or not, but not to government employees, managerial employees, field personnel members of the family of the employer who are dependent on him for support, domestic helpers, persons in the personal service of another, and workers who are paid by results as determined by the Secretary of Labor in appropriate regulations. (Emphasis supplied). The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add another excluded group, namely, "employees who are uniformly paid by the month." While the additional exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday pay, it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously ultra vires. It is argued that even without the presumption found in the rules and in the policy instruction, the company practice indicates that the monthly salaries

of the employees are so computed as to include the holiday pay provided by law. The petitioner contends otherwise. One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in computing overtime compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor is the result of subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar days in a year. If the employees are already paid for all non-working days, the divisor should be 365 and not 251. The situation is muddled somewhat by the fact that, in computing the employees' absences from work, the respondent bank uses 365 as divisor. Any slight doubts, however, must be resolved in favor of the workers. This is in keeping with the constitutional mandate of promoting social justice and affording protection to labor (Sections 6 and 9, Article II, Constitution). The Labor Code, as amended, itself provides: ART. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor. Any remaining doubts which may arise from the conflicting or different divisors used in the computation of overtime pay and employees' absences are resolved by the manner in which work actually rendered on holidays is paid. Thus, whenever monthly paid employees work on a holiday, they are given an additional 100% base pay on top of a premium pay of 50%. If the employees' monthly pay already includes their salaries for holidays, they should be paid only premium pay but not both base pay and premium pay. The contention of the respondent that 100% base pay and 50% premium pay for work actually rendered on holidays is given in addition to monthly salaries only because the collective bargaining agreement so provides is itself an argument in favor of the petitioner stand. It shows that the Collective Bargaining Agreement already contemplated a divisor of 251 days for holiday pay computations before the questioned presumption in the Integrated Rules and the Policy Instruction was formulated. There is furthermore a similarity between overtime pay, which is computed on the basis of 251 working days a year, and holiday pay, which should be

similarly treated notwithstanding the public respondents' issuances. In both cases overtime work and holiday work- the employee works when he is supposed to be resting. In the absence of an express provision of the CBA or the law to the contrary, the computation should be similarly handled. We are not unmindful of the fact that the respondent's employees are among the highest paid in the industry. It is not the intent of this Court to impose any undue burdens on an employer which is already doing its best for its personnel. we have to resolve the labor dispute in the light of the parties' own collective bargaining agreement and the benefits given by law to all workers. When the law provides benefits for "employees in all establishments and undertakings, whether for profit or not" and lists specifically the employees not entitled to those benefits, the administrative agency implementing that law cannot exclude certain employees from its coverage simply because they are paid by the month or because they are already highly paid. The remedy lies in a clear redrafting of the collective bargaining agreement with a statement that monthly pay already includes holiday pay or an amendment of the law to that effect but not an administrative rule or a policy instruction. WHEREFORE, the September 7, 1976 order of the public respondent is hereby REVERSED and SET ASIDE. The March 24, 1976 decision of the National Labor Relations Commission which affirmed the October 30, 1975 resolution of the Labor Arbiter but deleted interest payments is REINSTATED. SO ORDERED. Makasiar, C.J., Concepcion, Jr., Melencio-Herrera, Plana, Escolin, Relova, De la Fuente, Cuevas, Alampay and Patajo, JJ., concur. Teehankee, J., in the result. Aquino, J., took no part. G.R. No. L-16704 March 17, 1962

VICTORIAS MILLING COMPANY, INC., petitioner-appellant, vs. SOCIAL SECURITY COMMISSION, respondent-appellee. Ross, Selph and Carrascoso for petitioner-appellant. Office of the Solicitor General and Ernesto T. Duran for respondentappellee. BARRERA, J.: On October 15, 1958, the Social Security Commission issued its Circular No. 22 of the following tenor: . Effective November 1, 1958, all Employers in computing the premiums due the System, will take into consideration and include in the Employee's remuneration all bonuses and overtime pay, as well as the cash value of other media of remuneration. All these will comprise the Employee's remuneration or earnings, upon which the 3-1/2% and 2-1/2% contributions will be based, up to a maximum of P500 for any one month. Upon receipt of a copy thereof, petitioner Victorias Milling Company, Inc., through counsel, wrote the Social Security Commission in effect protesting against the circular as contradictory to a previous Circular No. 7, dated October 7, 1957 expressly excluding overtime pay and bonus in the computation of the employers' and employees' respective monthly premium contributions, and submitting, "In order to assist your System in arriving at a proper interpretation of the term 'compensation' for the purposes of" such computation, their observations on Republic Act 1161 and its amendment and on the general interpretation of the words "compensation", "remuneration" and "wages". Counsel further questioned the validity of the circular for lack of authority on the part of the Social Security Commission to promulgate it without the approval of the President and for lack of publication in the Official Gazette. Overruling these objections, the Social Security Commission ruled that Circular No. 22 is not a rule or regulation that needed the approval of the President and publication in the Official Gazette to be effective, but a mere

administrative interpretation of the statute, a mere statement of general policy or opinion as to how the law should be construed. Not satisfied with this ruling, petitioner comes to this Court on appeal. The single issue involved in this appeal is whether or not Circular No. 22 is a rule or regulation, as contemplated in Section 4(a) of Republic Act 1161 empowering the Social Security Commission "to adopt, amend and repeal subject to the approval of the President such rules and regulations as may be necessary to carry out the provisions and purposes of this Act." There can be no doubt that there is a distinction between an administrative rule or regulation and an administrative interpretation of a law whose enforcement is entrusted to an administrative body. When an administrative agency promulgates rules and regulations, it "makes" a new law with the force and effect of a valid law, while when it renders an opinion or gives a statement of policy, it merely interprets a pre-existing law (Parker, Administrative Law, p. 197; Davis, Administrative Law, p. 194). Rules and regulations when promulgated in pursuance of the procedure or authority conferred upon the administrative agency by law, partake of the nature of a statute, and compliance therewith may be enforced by a penal sanction provided in the law. This is so because statutes are usually couched in general terms, after expressing the policy, purposes, objectives, remedies and sanctions intended by the legislature. The details and the manner of carrying out the law are often times left to the administrative agency entrusted with its enforcement. In this sense, it has been said that rules and regulations are the product of a delegated power to create new or additional legal provisions that have the effect of law. (Davis, op. cit., p. 194.) . A rule is binding on the courts so long as the procedure fixed for its promulgation is followed and its scope is within the statutory authority granted by the legislature, even if the courts are not in agreement with the policy stated therein or its innate wisdom (Davis, op. cit., 195-197). On the other hand, administrative interpretation of the law is at best merely advisory, for it is the courts that finally determine what the law means. Circular No. 22 in question was issued by the Social Security Commission, in view of the amendment of the provisions of the Social Security Law

defining the term "compensation" contained in Section 8 (f) of Republic Act No. 1161 which, before its amendment, reads as follows: . (f) Compensation All remuneration for employment include the cash value of any remuneration paid in any medium other than cash except (1) that part of the remuneration in excess of P500 received during the month; (2) bonuses, allowances or overtime pay; and (3) dismissal and all other payments which the employer may make, although not legally required to do so. Republic Act No. 1792 changed the definition of "compensation" to: (f) Compensation All remuneration for employment include the cash value of any remuneration paid in any medium other than cash except that part of the remuneration in excess of P500.00 received during the month. It will thus be seen that whereas prior to the amendment, bonuses, allowances, and overtime pay given in addition to the regular or base pay were expressly excluded, or exempted from the definition of the term "compensation", such exemption or exclusion was deleted by the amendatory law. It thus became necessary for the Social Security Commission to interpret the effect of such deletion or elimination. Circular No. 22 was, therefore, issued to apprise those concerned of the interpretation or understanding of the Commission, of the law as amended, which it was its duty to enforce. It did not add any duty or detail that was not already in the law as amended. It merely stated and circularized the opinion of the Commission as to how the law should be construed. 1wph1.t The case of People v. Jolliffe (G.R. No. L-9553, promulgated on May 30, 1959) cited by appellant, does not support its contention that the circular in question is a rule or regulation. What was there said was merely that a regulation may be incorporated in the form of a circular. Such statement simply meant that the substance and not the form of a regulation is decisive in determining its nature. It does not lay down a general proposition of law that any circular, regardless of its substance and even if it is only interpretative, constitutes a rule or regulation which must be published in the Official Gazette before it could take effect.

The case of People v. Que Po Lay (50 O.G. 2850) also cited by appellant is not applicable to the present case, because the penalty that may be incurred by employers and employees if they refuse to pay the corresponding premiums on bonus, overtime pay, etc. which the employer pays to his employees, is not by reason of non-compliance with Circular No. 22, but for violation of the specific legal provisions contained in Section 27(c) and (f) of Republic Act No. 1161. We find, therefore, that Circular No. 22 purports merely to advise employers-members of the System of what, in the light of the amendment of the law, they should include in determining the monthly compensation of their employees upon which the social security contributions should be based, and that such circular did not require presidential approval and publication in the Official Gazette for its effectivity. It hardly need be said that the Commission's interpretation of the amendment embodied in its Circular No. 22, is correct. The express elimination among the exemptions excluded in the old law, of all bonuses, allowances and overtime pay in the determination of the "compensation" paid to employees makes it imperative that such bonuses and overtime pay must now be included in the employee's remuneration in pursuance of the amendatory law. It is true that in previous cases, this Court has held that bonus is not demandable because it is not part of the wage, salary, or compensation of the employee. But the question in the instant case is not whether bonus is demandable or not as part of compensation, but whether, after the employer does, in fact, give or pay bonus to his employees, such bonuses shall be considered compensation under the Social Security Act after they have been received by the employees. While it is true that terms or words are to be interpreted in accordance with their well-accepted meaning in law, nevertheless, when such term or word is specifically defined in a particular law, such interpretation must be adopted in enforcing that particular law, for it can not be gainsaid that a particular phrase or term may have one meaning for one purpose and another meaning for some other purpose. Such is the case that is now before us. Republic Act 1161 specifically defined what "compensation" should mean " For the purposes of this Act". Republic Act 1792 amended such definition by deleting same exemptions authorized in the original Act. By virtue of this express substantial change in the phraseology of the law, whatever prior executive or judicial construction may have been given to the phrase in question should give way to the clear mandate of the new law.

IN VIEW OF THE FOREGOING, the Resolution appealed from is hereby affirmed, with costs against appellant. So ordered. Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Paredes, Dizon and De Leon, JJ., concur