Endencio and Jugo vs David

Facts of the case

The Court of First Instance ordered David ,whos is a collector of
Internal Revenue, to refund Justice Endencia the amount of P1744.45
representing income tax as Associate Justice in the Court of Appeals in
1951 and Justice Jugo the amount of P2345.46 representing
combined income tax as Justice in the Court of appeals and Associate
Justice of the Supreme Court in 1950
The reason of presiding justice Macaeg was that a previous case
decision (Perfecto vs Meer) clearly states that taxing salaries of
judicial officers is a dimmunition of their compensation as fixed by
law and is therefore in violation of Article 8 sec 9 of the Constitution
stating that the there shall be no dimmunition in the compensation of
public officers especially judicial officers in continuance of their service
The court also reasoned that sec. 13 of RA 590 (stating that income
tax may not be considered a dimmunition of compensation) is a
violation of the constitutionmainly on the separation of powers.
Sec 13 was created after the Perfecto vs Meer case because of the
simple reason that the congress did not agree with the decision to
exclude judicial officers from tax.
The Court of First instance appealed the case in the Supreme Court.
SC sees no profit in rediscussing the case since it was clearly decided
in Perfecto vs Meer case. They instead will concentrate on sec. 13 of
RA. 590
Issue
Whether or not sec. 13 passed by the legislative branch is
limiting and restricting the power of the Judicial branch and is therefore
unconstitutional.
Whether or not the legislative branch can declare the collection
of income tax of public officials especially judicial officers even if the
SC has previously decided otherwise

and to pay attorneys' fees. Some of the petitioners were former NARIC
employees, others allegedly were recently employed by RCA and
never employed by NARIC. The record is not altogether clear as to
whether petitioners are members of the Naric Workers' Union [NWU].
For, they claim they are not, a fact negated, and no evidence was
taken by CIR thereon.
RCA pleaded disclaimer upon the averment, inter alia, that because
"RCA was created under Republic Act 3452 since June 14, 1962 as a
service agency or instrumentality of the government to implement a
government policy and program pursuant to R.A. 3452, the law
applicable governing the extra hours of work of employees of the
Administration, is no longer Commonwealth Act 444 known as the
Eight-Hour Labor Law but Commonwealth Act 246 known as the
Budget Act"; and that "the liabilities transferred from the NARIC to the
RCA are those liabilities incurred by the NARIC but not those to be
incurred by the RCA such as the claims for overtime from creation of
the RCA on June 14, 1962 stated in the herein petition."
Allowed to intervene, NWU moved to dismiss upon the ground of
pendency of incidental case No. 746-V (21) filed 10 days after the
petition below which is a petition similar in terms to the aforesaid
petition filed in CIR by the 147 laborers and employees, in that the
union also sought to compel RCA to pay its laborers and employees
under the same partial decision, from June 14, 1962. It is to be noted
that Case No. 746-V (21 )3 is filed as an incident in Case No. 746-V of
the Court of Industrial Relations where said partial judgment was
entered.
CIR, through then Associate Judge Arsenio I. Martinez, on December
6, 1963, sustained the pendency of another action theory advocated by
NWU. On February 27, 1964, acting on petitioners' motion for
reconsideration, CIR en banc in a resolution, affirmed the order of
Associate Judge Arsenio I. Martinez. Presiding Judge Jose S. Bautista
dissented in an opinion subsequently filed on March 30, 1964.
The resolution en banc finally disposed of petitioners' case below.
Hence, this appeal to review the order and resolution en
banc aforesaid.

Ratio
Defining and interpreting the law is a judicial function and the
legislative branch may not limit or restrict the power granted to courts
Sec 13 is defining the law which is invasion of Judicial jurisdiction
The legislative branch cannot validate a law which has weight unto
decisions made by the court
Chief Justice Marshall stated that A statute which is in violation of a
fundamental law should be reviewed by the judiciary, Any other course
will be destructive to the Constitution.
Other reasons of the SC are income taxe is a dimmunition of
compensation mainly because it is deducted from the time of pay
unlike before where income tax is paid separately in a later time.
Judiciary officers are few in number and receive low pay. The nation
benefits more from independence of judges than revenue of taxes
Justices serve the country similar to soldiers , who were exempted
from income tax during 1942 -1945.
Result: Appeal is AFFIRMED. Judicial officers are excluded from tax.
RAMOS VS CIR
The meat of the case, as tendered by the pleadings below, is whether
Rice and Corn Administration [RCA] should be held answerable
from June 14, 1962 when the National Rice and Corn Corporation
[NARIC] ceased to exist and RCA was created for an obligation
created by agreement confirmed in a partial judgment of the
Commission of Industrial Relations [CIR]1 rendered on February 16
1953, directing NARIC, to pay 25% additional compensation for
overtime work, night work, and work rendered on Sundays and legal
holidays by its laborers and employees.
The present case had its incipiency in a petition filed with ClR 2 on
February 9, 1963, almost ten years to the date of the CIR partial
decision. Petitioners are 147 workers and employees, allegedly in the
service of RCA, who lodged the petition in their individual capacity, not
as union members. They pray that respondent RCA be required to
comply with CIR's February 16, 1953 partial judgment from June, 1962

1. We do not go along with the majority of the CIR judges in their ruling
that this case should be dismissed upon the ground of pendency of
another action. The action referred to is Case 746-V (21), which is a
petition filed as aforesaid after the petition below was lodged in
court also to enforce the 1953 partial judgment in Case 746-V.
The 1953 judgment in that case (746-V) was against NARIC. It is
contended on one side that RCA is responsible for NARIC's obligation
thus created. But a genuine issue was raised in RCA's answer: Under
the law of its creation, RCA should not be held liable from the time it
was constituted on June 14, 1962, for any continuing obligation under
the 1953 partial judgment aforesaid contracted by NARIC which had
ceased to exist. RCA did not contract that obligation.
In effect then, petitioner's action herein is a fresh suit against RCA to
enforce NARIC's continuing liability against RCA as NARIC's
successor. It is idle to contend that the present should be but an
incident of the former suit. For, petitioners here do not seek to alter or
clarify the partial judgment. Neither could the present petition be
considered as one for execution of the partial judgment of 1953.
Because judgment for execution is against a defeated party or its
privies. No privity, if RCA is to be believed, exists here between RCA
and NARIC. That is a question which, in our opinion, demands serious
consideration. CIR should have passed upon it. Pendency of another
similar petition presented ten days after the present case was
commenced in court should not have stood on the way. First. Because
the identity of party respondents in the previous 1953 case (Case 746V), from which case 746-V (21) sprang and in the present 1963 case
(Case 1799-V) deserves explicit determination. Second. If at all, it is
posterior Case 746-V (21) which should be held in abeyance.itcalf Indeed, CIR stopped proceedings therein pending decision by this
Court of the present case.
2. Is there merit then to RCA's defense that it is not liable for NARIC's
continuing obligation aforesaid from and after its constitution on June
14, 1962?

This is the poser because RCA concedes that under the law of its
creation, Republic Act 3452, it should answer for all the liabilities
contracted by NARIC, but only those incurred prior to the date of
NARIC's abolition.

suspend or otherwise discipline, for cause and subject to Civil Service

Law, any subordinate employee of the Administration with the consent
of the Board of Administrators and perform such other duties as may
be assigned by the Board.

Congress, by said Republic Act 3452, approved on June 14, 1962,

created RCA, in pursuance of its declared policy, viz:
Sec. 1. It is hereby declared to be the policy of the Government that in
order to stabilize the price of palay, rice and corn, it shall engage in the
purchase of these basic foods directly from those tenants, farmers,
growers, producers and landowners in the Philippines who wish to
dispose of their produce at a price that will afford them a fair and just
return for their labor and capital investment and whenever
circumstances brought about by any cause, natural or artificial, should
so require, shall sell and dispose of these commodities to the
consumers at areas of consumption at a price that is within their
reach.4

By Section 562 of the Revised Administrative Code, as amended, the

legal hours of labor of employees in every branch of the government
service shall be "eight (8) hours a day, for five (5) days a week or a
total of forty (40) hours a week, exclusive of time for
lunch: . . . ."9 However, "[w]hen the interests of the public service so
require, the head of any Department, Bureau, or Office may extend the
daily hours of labor, in what manner ever fixed, for any or all of the
employees under him, and may likewise require any or all of them to
do overtime work not only on workdays but also on holidays."10

RCA is, therefore, a government machinery to carry out a declared

government policy just noted, and not for profit.
And more. By law, RCA depends for its continuous operation on
appropriations yearly set aside by the General Appropriations Act. So
says Section 14 of Republic Act 3452:
Sec. 14. The sum of one hundred million pesos is hereby appropriated,
out of any funds in the National Treasury not otherwise appropriated,
for the capitalization of the Administration: Provided, That the annual
operational expenses of the Administration shall not exceed three
million pesos of the said amount:Provided, further, That the budget of
the Rice and Corn Administration for the fiscal year nineteen hundred
and sixty-three to nineteen hundred and sixty-four and the years
thereafter shall be included in the General Appropriations submitted to
Congress.
RCA is not possessed of a separate and distinct corporate existence.
On the contrary, by the law of its creation, it is an office directly "under
the Office of the President of the Philippines."5
3. So it is, that petitioners' claim against RCA must have to be planted
upon Section 13 of R.A. 3452 which reads:
Sec. 13. The National Rice and Corn Corporation is hereby abolished
and all its assets, liabilities, functions, powers which are not
inconsistent with the provisions of this Act, and all personnel are
transferred to the Administration.6
The accent here is on the legal provision that liabilities which RCA is
under obligation to respect are those of the defunct NARIC "which are
not inconsistent with the provisions" of Republic Act 3452.
But petitioners forge the argument that amongst the liabilities
transferred to and to be met by RCA from NARIC's abolition in June,
1962 is the continuation by RCA of the payment of 25% additional.
compensation assumed by NARIC under the 1953 judgment.
Thrust upon us then is the problem of ascertaining whether the
liabilities under CIR's said decision are inconsistent with the provisions
of R.A. 3452. Our answer is in the affirmative.
To begin: At bottom, that decision was rendered in pursuance of an
agreement touching on one aspect of employment payment of extra
compensation. It was legally possible for NARIC to enter into such an
agreement which was, indeed, incorporated in the judgment. NARIC
was a corporation, as aforesaid.7
But with the RCA, a different picture is presented. A mere
instrumentality of the national government performing primarily
governmental functions to promote general welfare, the terms and
conditions of employment of its laborers and employees, such as
herein petitioners, are governed by law.8 They are subject to civil
service rules.itc-alfThey are governed by the WAPCO Salary Plan.
Explicit and unmistakable is Section 5 of R.A. 3452 which, in par,
reads:
. . . He [General Manager] shall fix the number and, subject to WAPCO
salary plan allowed by the Civil Service. salaries of, and appoint,
subject to the Civil Service Law and with the consent of the Board of
Administrators, such subordinate employees as may be necessary for
the proper discharge of the duties of the Administration. He shall

4. The foregoing notwithstanding, Congress had not left the workers

and employees previously with the NARIC and now with RCA
without ample protection.
Section 259 of the Revised Administrative Code states that "[i]n the
absence of special provision, persons regularly and permanently
appointed under the Civil Service Law or whose salary, wages, or
emoluments are fixed by law or regulation shall not, for any service
rendered or labor done by them on holidays or for other overtime work,
receive or be paid any additional compensation: . . . ." The special
provision contemplated in the status just mentioned is paragraph 32,
Section 7-I of Commonwealth Act 246, otherwise known as the Budget
Act, which reads:
(32) Additional compensation for overtime service. Officers and
employees of the National Government, except secretaries and
undersecretaries of departments, chiefs of bureaus and offices, and
those occupying positions of similar category, when working overtime
on Saturdays, Sundays, holidays, or during half-day sessions, and
after five o'clock post meridian on regular working days to finish work
that must be completed within a specified time, when authorized by the
President, may be paid from any unexpended balance of the
appropriation for salaries and wages authorized in any annual General
Appropriation Act, compensation at rates to be fixed by the heads of
departments concerned, with the approval of the President, which shall
not exceed the rate of their regular compensation. Such additional
compensation shall not exceed, for any one month, the equivalent of
the regular compensation, nor shall it exceed, for any one year, fifty per
centum of such regular compensation.11
Paragraph 16 of RCA's answer below avers:
That the President of the Philippines, thru the Executive Secretary, has
authorized under certain limits the payment of extra hours of work on
ordinary days and on Saturdays, Sundays, and legal holidays under
the provisions of the said Commonwealth Act No. 246 which the
President has authority to do under the provisions of said law; The
foregoing averment is not without prop. Through the years since the
enactment of R.A. 3452 on June 14, 1962, the President of the
Philippines had authorized payment of overtime compensation.
On November 29, 1962, the President allowed additional pay for
overtime service rendered by RCA personnel in "the procurement,
warehousing, milling and distribution of rice and in the inspection and
inventory of property, to effectively implement the massive palay
procurement program of the President and the stabilization function of
the RCA," for the period from July 1, 1962 to Decree 31, 1962
"pursuant to Section 7-I (32) of Commonwealth Act No. 246, as
amended, subject to availability of funds and the usual audit", provided
"that at no time shall such additional compensation exceed for any one
month the equivalent of the regular compensation, nor shall it exceed
for any one year fifty per centum thereof." This authority was, on
October 24, 1963, extended up to December 31, 1963.
In April, 1964, RCA was granted authority to pay overtime
compensation to the replacement personnel of the Security
Department from January 1 up to June 30, 1964. On June 10, 1964,
overtime pay was given RCA personnel for services rendered "in
connection with the unloading, checking, transporting, storage and
distribution, including the financing and accounting of imported rice,
from April 15, 1964 to December 29, 1964."
On June 21, 1965, RCA employees who were required to render
"overtime services during the period from March 16 to May 31, 1965"
were granted meal allowance only, it "pursuant to GAO General

Circular No. 301, series of 1939, as amended:" and payment to

employees who have rendered overtime services from June 1 to June
30, 1965 was approved as an exceptional case. On July 2, 1965,
overtime compensation was authorized for RCA employees who
rendered services in connection with the unloading and stockpiling of
imported rice for the months of July, August, And September, 1965.itcalf RCA employees whose work involved the distribution of rice from
July 1 to December 31, 1965, were granted meal allowance upon the
condition that "overtime services of only needed personnel shall be
required."

WHEREFORE, in view thereof, AppellantIntervenor, Kalipunan ng Manggagawang Pilipino

is hereby included as one of the contending
unions.

On April 5, 1966, the President permitted meal allowance and

transportation expenses to RCA personnel for overtime services
rendered and to be rendered after office hours or beyond their tours of
duty effective January 5, 1966 until June 30, 1966.

1. Malayang Samahan ng mga Manggagawa sa

Hundred Island Chemical Corporation;

On August 3, 1967, payment of meal allowance and ordinary

transportation expenses was allowed to not more than 20% of the RCA
personnel at any one time, for overtime services rendered and to be
rendered up to December, 1967 in connection with the distribution of
rice and corn grits.
The facts just recited prove the consistent administrative interpretation
by the Office of the President as to what may, under the law, be
granted RCA workers and employees for overtime work and work on
Sundays and holidays. And, the President of the Philippines, from time
to time, authorized such payments. Not a matter of right, such
compensation was given upon authority of Section 7-I (32) of the
Budget Act. It would seem incongruous if said employees and laborers,
formerly of NARIC, were allowed to recover under the partial judgment
rendered on February 16, 1953 in CIR Case 746-V instituted by NARIC
Workers' Union against NARIC here in dispute, and at the same time
reap the benefits under the aforesaid Budget Law. After all, they are no
longer NARIC workers and employees but workers and employees of
RCA which operates by law "under the Office of the President of the
Philippines."
While executive construction is not necessarily binding upon courts, it
is entitled to great weight and consideration. Reason for this is that
such construction comes from the particular branch of government
called upon to implement the particular law involved. 12 We adhere to
the interpretation just mentioned. It is in accord with law.
5. The ruling enunciated in Garcia Valdez vs. Tuason, 40 Phil. 943,
951, oft-repeated, paves the way for the conclusion we reach herein.
We may affirm a challenged order and resolution en banc upon
grounds different from those relied upon by the court below. While we
disagree with CIR on the basis of the dismissal of the petition, namely,
pendency of another action, we nonetheless affirm the order and
resolution of dismissal, upon the ground that petitioners are not entitled
to recover the additional compensation prayed for. And for that reason,
they have no cause of action against RCA.
Upon the view we take of this case, the order of December 6, 1963
and the CIR's resolution en banc of February 27, 1964 are hereby
affirmed. No costs allowed. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P.,
Zaldivar, Castro, Angeles and Fernan., concur.
PAFLU VS BLR

Before Us is a special civil action for certiorari, questioning the order of

respondent Director dated 27, July 1987,.which in part states:
xxx
Without going into the merits of the above-entitled
case this office finds that the best forum to
determine once and for all whether or not herein
appellant-intervenor commands support of the
rank-and-file in the unit is through the process of a
certification election.

Let, therefore, a certification election proceed

without any further delay, with the following
choices:

2. Philippine Association of Free Labor Unions

(September Convention) and 3. Kalipunan ng
Manggagawang Pilipino.
SO ORDERED. (pp. 26-27, Rollo)

The basic facts of this case are undisputed:

A petition for certification election among the rank-and-file workers of
the Hundred Island Chemical Corporation was filed with the Bureau of
Labor Relations (BLR) by respondent Malayang Samahan ng mga
Manggagawa sa Hundred Island Chemical Corporation (Samahan, for
short) and was docketed as BLR Case No. A-6-201-87. A motion to
intervene, accompanied by the written consent of twenty percent (20%)
of the rank-and-file employees of the said corporation was filed by
petitioner Philippine Association of Free Labor Unions (September
Convention), or PAFLU, on 27 April 1987, Likewise the Katipunan ng
Manggagawang Pilipino (KAMAPI, for brevity) flied its motion to
intervene on 1 June 1987 but unaccompanied by a similar written
consent of the employer's workers. Due to such want of a written
consent, PAFLU moved for the striking out of KAMAPI's motion for
intervention. Acting on said motion, Med-Arbiter Renato D. Parungo
issued an order dated 8 June 1987 denying KAMAPI's motion for
intervention and allowing PAFLU's inclusion in the certification election.
On 17 June 1987, KAMAPI appealed the said Med-Arbiter's order to
the respondent Director of the BLR, who issued the afore-quoted order.
Thus, on 17 August 1987, this petition was filed. And as prayed for in
the said petition, We issued a temporary restraining order dated 24,
August 1987. Respondent Samahan has contested the issuance of
said restraining order and has prayed that it be lifted since the delay of
the certification election only defeats the constitutional right of labor to
organize.

The main issue in this petition was aptly deposited by the Solicitor
General in his consolidated comment; Whether or not KAMAPI should
be allowed to participate in a certification election thru a motion for
intervention without a prior showing that it has the required support
expressed in the written consent of at least twenty (20%) percent of all
employees in the collective bargaining unit. In taking the negative
stance, petitioner cites Section 6, Rule V of the Rules Implementing
Executive Order No. 111, which reads:

SEC. 6. PROCEDURE. Upon receipt of a petition,

the Regional Director shall assign the case to a
Med-Arbiter for appropriate action. The MedArbiter shall have twenty (20) working days within

which to grant or dismiss the petition. In a petition

filed by a legitimate organization involving an
unorganized establishment, the Med-Arbiter shall
grant the petition upon verification that the same is
supported by the written consent of at least twenty
(20%) of all the employees in the collective
bargaining unit, the twenty (20%) support shall be
satisfied upon the filing of the petition for
certification election, otherwise, the petition shall
be dismissed. In either case, he shall cite the
ground.

Pertinent to the above rule is Section 7 of E.O. 111 to which the former
relates, and which provides:

SEC. 7. Articles 257 and 258 of the Labor Code of

the Philippines are hereby amended to read as
follows:

In the light of the foregoing, KAMAPI must be allowed to participate in

the certification election since the essence of such proceeding is to
settle once and for all which union is preferred by the workers to
represent them (PAFLU vs. BLR, 69 SCRA 132; PAFLU vs. BLR, 72
SCRA 396). As long as the motion for intervention has been properly
and timely filed and the intervention would not cause any injustice to
anyone, it should not be denied and this is so even if the eventual
purpose of the motion for intervention is to participate in the
certification election. After all the original applicant had already met the
20% requirement.

WHEREFORE, the instant petition is hereby DISMISSED and the

Temporary Restraining Order dated 24 August 1987 LIFTED. With
costs against petitioner.
SO ORDERED.
Melencio-Herrera, (Chairperson), Padilla, Sarmiento and Regalado,
JJ., concur.

xxx
Art. 258. Petitions in unorganized establishments.
In any establishment where there is no certified
bargaining agent, the petition for certification
election filed by a legitimate labor organization
shall be supported by the written consent of at
least twenty (20%) percent of all the employees in
the bargaining unit. Upon receipt of such petition,
the Med-Arbiter shall automatically order the
conduct of a certification election.

Considering the above provisions of law, We rule to dismiss the instant

petition for certiorari. The respondent Director did not abuse her
discretion in issuing the contested order. It is crystal clear from the said
provisions that the requisite written consent of at least 20% of the
workers in the bargaining unit applies to petitioners for certification
election only, and not to motions for intervention. Nowhere in the
aforesaid legal provisions does it appear that a motion for intervention
in a certification election must be accompanied by a similar written
consent. Not even in the Implementing Rules of the Labor Code (see
Rule V, Rules Implementing the Labor Code). Obviously, the
percentage requirement pertains only to the petition for certification
election, and nothing else.

This leads Us to the question of purpose. the reason behind the 20%
requirement is to ensure that the petitioning union has a substantial
interest in the representation proceedings ** and, as correctly pointed
out by the Solicitor General, that a considerable number of workers
desire their representation by the said petitioning union for collective
bargaining purposes. Hence, the mere fact that 20% of the workers in
the bargaining unit signify their support to the petition by their written
consent, it becomes mandatory on the part of the Med-Arbiter to order
the holding of a certification election in an unorganized establishment
(Samahang Manggagawa ng Pacific Mills, Inc. vs. Noriel, 134 SCRA
152). The 20% requirement, thereof, is peculiar to petitions for
certification election.

PAWU VS NLRC
This is a classic case of dilatory tactics employed to obstruct justice.
On July 31, 1981, this Court rendered Judgment in this case, the
dispositive portion of which reads:
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 (p. 178, rec.).
A motion for reconsideration of the July 31, 1981 decision. this Court
was filed by private respondent. Petitioner, through the Paterno D.
Menzon Law Office, filed a comment thereon. This Court, on October
21, 1981 denied the aforesaid motion for reconsideration and the
denial was declared final Entry of judgment was made on October 30,
1981 (Rollo, p. 244).
On December 18, 1981 the respondent NLRC issued an order, through
Labor Arbiter Antonio Tria Tirona, directing the Chief of the Research
and Information Division of the NLRC to designate a Socio-Economic
Analyst to compute the awards due the members of the petitioner
union in accordance with the final disposition of this case.
On January 10, 1983 petitioner flied an "Urgent Manifestation and
Motion" claiming that despite its filing of a motion for execution dated
November 12, 1981, a manifestation and motion dated February 10,
1982, and another manifestation and motion dated February 26, 1982,
the execution arm of public respondent NLRC continued to fail to
implement the decision of this Court. Petitioner prayed that those
obstructing the implementation of the decision be declared in
contempt, especially the president of Bagong Pilipino Philippine
Apparel Workers' Union (BPPAWU) and private respondent PAI for
circumventing the final decision of this Court by offering members of
petitioner the amount of P500 each as full payment of their claims in
the instant case.
The respondent NLRC, in its Comment on petitioner's "Urgent
Manifestation and Motion" explained that it could not issue a writ of
execution because the actual or exact amounts of the various awards
due the members of the petitioner union could not be determined. For
that matter, even with the submission of the "Report of Examiner"

prepared by the Research and Information Division of the NLRC, it was

not possible for the NLRC to issue a writ of execution in full satisfaction
of the judgment of this Court because said "Report of Examiner" did
not include the computation of the amounts due for the months of May,
June, November and December 1978, and January and February 1980
as the pertinent records covering those periods were not available at
the time of the preparation of the Report. Adding confusion was the
fact that even before the submission of the "Report of Examiner,"
private respondent PAI had already made payments in satisfaction of
this Court's decision to some of the members of the petitioner union.
Moreover, after the submission of the Reports, and notwithstanding its
exception to the findings therein, private respondent PAI continued to
make payments to the other members of the union. Respondent PAI
offered the payment to petitioner's counsel but the latter refused to
accept the payment because the amount offered left some 88
members of the petitioner unpaid. Petitioner's counsel was willing to
accept the money only as partial payment, but not as full payment as
PAI wanted it to be.
On October 27, 1983, this Court issued an order requiring private
respondent PAI to comply fully with this Court's decision of July 31,
1981; to pay the members of the petitioner the amount of P695,413.17,
with 10% thereof to be deducted as attorney's fees payable to the
Menzon Law Office; to make available, within ten (10) days from notice
thereof, to public respondent its payrolls corresponding to the unpaid
periods, for the latter to prepare immediately a computation within thirty
(30.1 days from receipt of such payrolls; and, thereafter, to pay
members of petitioner the remaining backwages within ten (1 0) days
from receipt of such computation. In that same order of October 27,
1983, the BPPAWU, Atty. Luis D. Flores and respondent Philippine
Apparel, Inc. were adjudged guilty of contempt and were ordered to
pay one thousand pesos (Pl,000) each within ten (10) days from notice
thereof.
The Court justified its ruling as follows:
...The judgment in this case has already become final and executory
and as such the prevailing party as a matter of right is entitled to a writ
of execution. What seems to be the problem in this case is that
execution of the judgment cannot be had at the earliest possible time,
since a computation of the amount due the members of petitioner must
first be undertaken. The Report of the Examiner indicating the amount
due them was submitted only after one and a half years, so that in the
meantime, negotiations on how the judgment may be executed were
made. It is the posture of the Paterno D. Menzon Law Office that the
judgment cannot be negotiated, hence any act to subvert it is
contemptuous.

computation, as may be gleaned from the urgent motion for issuance

of a restraining order dated March 11, 1982, on backwages alone, not
counting adjustments in overtime pay and other benefits, each
employee is entitled to receive at the very least of Pl,248.00 (P0.80 x
26 working days x 12 months x 5 years from 1977 to 1982) [p. 281,
recli If we shall include the backwages corresponding from January,
1983 to the present, the same will definitely be higher than Pl,248.00.
Clearly, the offer by the company, supported by the BPPAWU to pay
the employees in the amount of P300.00 or P500.00 as full and final
payment is unjust to them, especially if We shall consider that some
employees did not have the alternative but to accept the payment
because they were in a tight financial condition. Such move cannot he
sanctioned by this Court, for otherwise giving effect to the award of
backwages would be left to the whim of the losing company taking
advantage of the rationale behind the decision in Mercury Drug Co. v.
CIR (L-23357, promulgated April 30, 1974, 56 SCRA 695), the
quitclaims and releases signed by the employees are considered null
and void. The employees are therefore still entitled to the difference
between what is due them and the amount they received. Another
important consideration is that if We countenance such act, the
sanctity of the contract validly entered into by the parties which as in
this case was interpreted by this Court, will be violated. Rollo, pp. 382384)
In their obvious attempts to derail the implementation of this Court's
decision which had long become final and executory as far back as
over six years ago on October 21, 1981, private respondents endlessly
belabored this Court's ruling finding them guilty of contempt. Enough is
enough. If there is anything that needs to be done in this case, it is the
fun and complete implementation of this Court's final and executory
decision.
PREMISES CONSIDERED, We hereby enjoin the respondent NLRC to
fully implement this Court's Resolution dated October 27,1983, with
these modifications: (a) To pay members of the petitioner the partial
backwages in the amount of P695,413.17 plus legal interest computed
from the time the decision became final (October 21, 1981) until fully
paid, with 10% thereof to be deducted as attorney's fees payable to the
Menzon Law Office, less the amount that respondent company may
have paid to some members of the petitioner union; and (b) The
BPPAWU Atty. Luis D. Flores and respondent Philippine Apparel, Inc.
are hereby adjudged guilty of contempt and are ordered to pay TEN
THOUSAND (P10,000.00) PESOS each within ten (10) days from
notice thereof. This resolution is immediately executory.
SO ORDERED.
IBAA EMPLOYEES UNION VS INCIONG

We agree, The attempts of the BPPAWU and its counsel and

respondent company to render the decision of this Court meaningless
by paying the backwages of the affected employees in a lesser amount
clearly manifest a willful disregard on their part, of the authority of this
Court as the final arbiter of cases brought to it. The series of acts by
the BPPAWU from the outset, where they caused the 'Kapahintulutan'
to be circulated and signed by workers declaring as invalid any acts of
petitioner union and its counsel to the time they campaigned for the
workers to receive the amount of P300.00 or P500.00 but with the
concomitant obligation to release the company from any further liability
showed disrespect for the administration of justice.
The BPPAWU and its counsel cannot pretend that they are just being
more protective to the employees when they encouraged them to
receive the amount of P300.00 or P500.00. They know too well that
said amount is much less than that to be received by the employees
after computing all the backwages if the decision is executed. It would
have been laudable had not the company pressed the workers to sign
the quitclaims and release of which the BPPAWU cannot pretend to be
unaware, for the payment could be taken as initial compliance with the
judgment with the balance to be paid by the company when the final
computation of the backwages has been finished and submitted by the
Research and Information Division of the National Labor Relations
Commission. Indeed, their questionable acts do not sit well with a
desire to implement the decision of this Court. If the BPPAWU is really
after the welfare of the employees, they will not leave any stone
unturned to get the best for them by giving effect to the decision of this
Court.
In our decision, we have ordered the company to pay the negotiated
wage increase of P0.80 daily effective April 1, 1977. As per petitioner's;

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 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.
xxx xxx xxx
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. 97-99, 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 abovecited 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 Socio-Economic 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. 340341, 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. RB-1789-75, 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
CHARTERED BANK EMPLOYEES' ASSOCIATION VS OPLE
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
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.
This issuance shall take effect immediately.
The issues are presented in the form of the following assignments of
errors:
First Error
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 so-called "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.
ORENCIA VS ENRILE
Petitioner, in his appeal against a lower court decision, dismissing his
suit for mandamus to compel respondent officials, the then Secretary
of Justice, the then Commissioner of Land Registration and the then
Commissioner of Civil Service, 1 to recognize his alleged right as
Assistant Chief, Clerks of Court Division, Land Registration
Commission is confronted with obstacles not only formidable but
insurmountable in character. For all the skill evident in his brief as
appellant, submitted by his counsel, former Delegate Ramon
Gonzales, he was not able to demonstrate his clear legal right to such
a position. Nor is the procedural hurdle the only one that stands in the
way. There are barriers substantive in character that refuse to yield
even under the most vigorous and insistent attack. For the crucial
issue, a public office being involved and public interest being the prime
consideration, is whether the choice for the position of Assistant Chief
of the Clerks of Court Division of the Land Registration Commission
should fall on respondent Guillermina M. Gener, a member of the Bar,
rather than on petitioner, whose educational attainment was that of a
high school graduate. For respondent officials, the answer was not in
doubt. Since there was a new legal provision to be construed, one
which admittedly, to follow the approach of counsel for petitioner, has
an ambiguous aspect, they chose to follow the principle that a public
office is a public trust. Certainly, such a contemporaneous construction,
one moreover dictated by the soundest constitutional postulate, is
entitled to the highest respect from the judiciary. In manifesting such an
attitude, the lower court could not have been in error. We affirm.
What did transpire in this suit? From petitioner's statement of the case:
"On June 20, 1967, petitioner-appellant filed the said petition
for mandamus with preliminary injunction before the Manila Court of
First Instance against respondents docketed as Civil Case No. 69840,
alleging substantially that he is the deputy clerk of court of the Clerks
of Court Division of the Land Registration Commission, an he has been
performing functions of Assistant Chief of said division and has been
considered and recognized as such until Rep. Act 4040, enacted June
18, 1964 increasing the salaries of Assistant Chiefs of Divisions,
among others, implemented where he was left out while co-assistant
chief of the nine (9) other divisions of the Land Registration
Commission were so recognized and extended increased
compensation, in spite of his protest to respondents Secretary of
Justice, Land Registration Commissioner, and Commissioner of Civil
Service; and to add insult to injury, respondent Guillermina M. Gener,
was appointed assistant of the Clerks of Court Division, when there
was no vacancy to said position and given an increased compensation
of P9,600.00 for the said position, while petitioner continued to receive
the old rate of P3,070.08 per annum, and praying that he be extended
similar recognition as assistant chief of the Clerks of Court Division of
the Land Registration Commission, and paid the corresponding salary
under Rep. Act 4040 and that the appointment of respondent
Guillermina M. Gener be declared null and void, with damages and
attorney's fees. On July 17, 1967, respondents filed their answer, and
after usual admissions and denials, interposed a defense that
petitioner is unqualified for the position of Assistant Chief, Clerks of
Court Division, and being a new position created under Republic Act
4040, the same can only be filed by a qualified person; that respondent
[Gener], being a lawyer, is more qualified than petitioner who is only a
high school graduate with second grade civil service eligibility, and
praying that the petition be dismissed." 2
Then from his statement of facts: "Petitioner is a deputy clerk of court
of the Clerks of Court Division, Land Registration Commission, having
been appointed as such on July 16, 1962 after having [risen] from the
ranks for the last 23 years in said office ... with compensation of
P3,070.08 per annum ... . The Clerks of Court Division is one of the ten
(10) divisions in the Land Registration Commission, all of which prior to
Rep. Act 4040 are headed, each by a Chief and Assistant Chief, but
none of them carries an appointment of Division Chief and Assistant

Chief, although they are considered and recognized as

such, ... ." 3 Then on the very next page of his brief, petitioner made
clear that his position was not Assistant Chief of the Clerks of Court
Division, for there was none as yet existing, but Deputy Clerk of
Court. 4
The rest of his statement of facts follows: "On July 6, 1964, petitioner
formally requested respondent commissioner of Land Registration
commission for recommendation and payment of his differential salary,
which request was, however, denied on July 10, 1964. ... On
September 1, 1964, petitioner appealed to the Secretary of Justice, but
his appeal was likewise denied ... . From the ruling of the Secretary of
Justice, he appealed to respondent Commissioner of Civil Service on
June 3, 1965, and, again, he was rebuffed on February 21, 1966 ... .
On July 29, 1966, said respondent Gener was appointed Assistant
Chief of the Clerks of Court Division effective July 1, 1966, by the
respondent Secretary of Justice, upon recommendation of respondent
Land Registration Commission, and duly attested to by the
Commissioner of Civil Service ... . Aggrieved, petitioner has brought
the present suit." 5
Petitioner's own summation of the matter thus renders clear that until
the passage of Republic Act No. 4040, there was no such position as
Assistant Chief of the Clerks of Court Division. It would be only through
the utmost straining of words that an assertion may be made as to his
right thereto, specially so as his designation was specifically of Deputy
Clerk of Court. Where, then, is that clear legal right so indispensable
for a suit of mandamusto prosper? His claim being far-fetched and
untenable, it is not for him to dispute the appointment of respondent
Gener, possessed of the very qualification of membership in the Bar
which petitioner sadly lacks. That is to accord the principle of public
office being a public trust. Moreover, in a case where such
appointment was sustained by respondent Secretary of Justice and
found favor with respondent Commissioner Civil Service, the
contemporaneous construction thus placed on the legal provision in
Republic Act No. 4040, admitting its ambiguity, is for this court to
uphold. Hence, as noted at the outset, the appealed decision must be
affirmed.
1. "Mandamus," as held in JRS Business Corporation v. Montesa, 6 a
1968 decision, "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. ... 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 of the petition 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 mandamusmust 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 demanded 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
established 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.'" 7 A month after the JRS Business Corporation v.
Montesa decision,
Justice
J.B.L.
Reyes,
in Valdez
v.
Gutierrez, 8categorically affirmed: "It is a rule well-entrenched in this
jurisdiction that mandamus requires a showing of clear and certain
right, and never issues in doubtful cases." 9
2. This is not the worst of it. It is not merely that petitioner does not
have a clear legal right. The more accurate way of putting it is that he
has no right at all to the position of Assistant Chief to the Clerks of
Court Division. The ingenuity displayed by counsel, worthy of a better
cause, it might be added, cannot obscure the undeniable fact that
without Republic Act No. 4040, there would be no such position that is
now the subject of dispute between him and respondent Gener. His
position left untouched, it is to be assumed, is that of deputy clerk. As
was made mention of, he did so admit, for that was something he
could not very well deny. He would argue however that he might as
well "be considered as Assistant Chief, Clerks of Court
Division." 10 This is not the language of affirmation but of surmise. It
does credit to petitioner's respect for the truth, but it certainly leaves his
contention legally without support. Nothing daunted, petitioner would

argue that to view the matter in a way opposed to his would in effect
"sanction removal of petitioner from such position, without cause in
violation of the constitution ... ." 11 Here, he seeks shelter within the
provision of Section 4 of the 1935 Constitution. 12 There is here a
glaring misapprehension. To so construe such provision by way merely
of assurance of term to a government functionary and to lose sight of
the paramount public interest involved is to ignore and disregard the
fundamental postulate that a public office is a public trust. That
accounts for the rather qualified and limited sense it possesses as
property safeguarded by the due process clause. 13 The essential
requirement then for a place in the government service is the
possession of the requisite ability and competence. Only thus may
there be fulfillment of a trust. Evidently, that was in the mind of
respondent dignitaries. A member of the bar, respondent Gener met
the prescribed standard. The position in question is that of Assistant
Chief, precisely of the Division for the Clerks of Court.
On the other hand, it is not disputed that petitioner's scholastic
background is much more limited, he being merely a high school
graduate. 14 Under such circumstances, his previous experience in his
capacity as Deputy Clerk of Court attesting to his years of service
could not avail. As this Court had occasion to observe in Aguilar vs.
Nieva, Jr.: 15 "Whatever sympathy might be elicited for public officials
who had stayed long in the public service and who, for some reason or
another, did not receive the promotion to which they felt they should be
entitled, cannot obscure the discretion that the law leaves in the hands
of the appointing official. ... The basic intent of the law itself is to foster
a more efficient public service. It is ever timely to keep in mind the
public trust character of any governmental office. Its creation is
justifiable only if it serves to assure that the functions of government,
whether through the traditional public offices or government-owned or
controlled corporations, be attended to with dispatch and competence.
Necessarily then, the appointing official, especially so where his
position is a constitutional creation, as in this case, must be left that
necessary latitude of choice as to who can best discharge the
responsibilities of the office where the vacancy occurs. This is what
happened here, and no legal infirmity can validly be said to have
vitiated such an appointment. The impassioned plea of counsel for
petitioner, while not without its plausibility, if the individual welfare of
those in the ranks of government personnel were considered, certainly
cannot merit our approval in the light of the greater and more exigent
public interest which has to be served." 16
3. Presumably not unaware of the inherent weakness of his stand,
petitioner would discern an alleged legislative intent in Republic Act
No. 4040 to accord him the recognition his heart is set on. What he
sees is a mirage. Assuming ambiguity in the applicable statute, it must
receive a construction in accordance with and not in disregard of the
cardinal postulate of a public office being a public trust. Moreover, if
there is any other principle of legal hermeneutics that can be invoked,
it is that of contemporaneous construction. Petitioner, after the
unanimity shown by the Commissioner of Land Registration, the
Secretary of Justice, and the Commissioner of Civil Service on the
precise point at issue, certainly is not in a position to do so. All three
find his pretension bereft of any merit. They are for respondent Gener.
It is not inappropriate to note that such a principle was given
expression by Justice Malcolm in Molina v. Rafferty 17 in these words:
"Courts will 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." 18 Later that same year in 1918, inMadrigal v.
Rafferty, 19 there was a reiteration of the same doctrine by the same
jurist. So it has been ever since.20
WHEREFORE, the lower court decision of March 26, 1968, dismissing
the petition for mandamus, is affirmed. No costs.
SY KIONG VS SARMIENTO
This is an action for declaratory relief filed in the Court of First Instance
of Manila for the purpose of determining if petitioner is liable to pay the
municipal license tax upon his sales of flour to bakeries under
Ordinance No. 2723 of the city of Manila, as amended.
Petitioner is the owner of a duly licensed grocery store located in the
city of Manila and an importer of flour who sells it either to bakeries or
to retail dealers for the purposes of resale. Sometime in September
1948, the Treasurer of the City of Manila assessed against him the
sum of P566.50 which, it is claimed, represents the alleged deficiency
municipal license tax due from him on his gross sales made to retail
dealers for the purposes of resale. Petitioner, instead of honoring the
demand, filed the present action for declaratory relief.

In his answer, respondent admitted all the factual allegations of the

complaint, but contended that the sales in question are sales at retail
and in this sense are subject to the provisions of Ordinance No. 2723,
as amended. As the pleadings only raised questions of law, the case
was submitted for decision after the parties had submitted their
respective memoranda. And on March 4, 1949, the court rendered
judgment upholding the contention of the petitioner and declaring that
he is not liable to pay the tax question. From this decision respondent
appealed.
The only issue involved in this appeal is whether the sales of flour
made by petitioner to bakeries to be manufactured into bread are retail
or wholesale. If retail, they are subject to tax; if wholesale, they are not.
In the case of City of Manila vs. Manila Blue Printing Co., 74 Phil. 317,
this Court had occasion to determine when a sale of commodity should
be considered retail or wholesale. It was there said that there are two
criteria by which this can be determined. "Only is by the quantity,
whether small or large; and the other is by the nature of the buyer,
whether he is a consumer or a merchant who resells to a profit." The
Court followed the second criterion and held that it is the character of
the purchaser and not the quantity of the commodity sold that
determines if the sale is wholesale or retail. If the purchaser buys the
commodity for his own consumption, the sale is considered retail,
irrespective of the quantity of the commodity sold. If the purchaser
buys the commodity for resale, the sale is deemed wholesale
regardless of the quantity of the transaction.
Now, having this criterion in mind, the next question to be determined
is, is the sale of flour to a bakery retail or wholesale? Is a bakery who
purchases flour to be manufactured into bread a consumer? Can a
sale of flour to a bakery be considered wholesale for the simple reason
that the flour after its conversion into bread is resold to the public? The
answer to these question will depend largely upon the consideration
that may be given to the incidence touching on the manufacture of flour
into bread before it is resold to the public. This is the main point that
should be determined in order that we may have a basis for the
determination of this novel controversy.
The Ordinance under which the municipal license tax in question has
been assessed does not contain any definition of what is retail gross
sale. Said ordinance merely provides that the retail gross sales of a
grocery store shall be subject to a license fee to be fixed by the City
Treasurer in accordance with certain schedule therein specified, but is
silent as to what are considered "retail gross sales". The National
Internal Revenue Code does not also furnish any lead as regards the
nature of a sale for purposes of taxation. It does not give any definition
nor pattern as to how a sale to a bakery or a manufacturer should be
considered. This is a loophole that our Congress has not foreseen.
It is true that said Code gives the definition of a "manufacturer" and in
so defining it includes every person who manufactures by any of the
processes therein specified subject only to the limitation that the
finished products shall be "for the purpose of their sale or distribution to
others and not for his own use or consumption" (Section 194 [x].); but
this definition in our opinion merely gives an idea of who are the
persons who would be considered manufacturers for purposes of
paying the specific tax provided for therein, and does not state when a
manufacturer should be considered a retail dealer or wholesale dealer
of the raw materials he uses in the process of manufacture. It cannot
be denied that many materials or ingredients are used in the
manufacture of a finished product and the question whether the
purchase of these materials for the purpose intended is retail or
wholesale is not clarified. We have failed to find any legal provision in
this jurisdiction that may be invoked to solve this important issue.
But we find one lead that may guide us in the case of
Buenaventura vs. Collector of Internal Revenue (50 Phil. 875) wherein
a similar question was raised and decided. In that case this Court ruled
that the sale of fish to a hotel by a vendor in a public market during
certain period of time and for a certain value is a sale at retail and,
therefore, is subject to the retail sales tax law. And then the Court
added: "even the isolated case of those made to the Hotel de Francia
cannot be considered as transactions for resale of fish, because it has
not been proved, nor is it probable, that said hotel, as such, cannot be
said or considered to be a reseller of fish". The implication of this ruling
is that the sale of fish to a hotel is retail even if the same is to be sold
later in the form of food.
We believe this ruling to be in point and one of persuasive force in the
present case in the absence of any express provisions of law on the
matter. The parallelism between that case and the one we are
considering is apparent. In one case, the fish is converted into food
through certain physical process, and, therefore, it suffers an alteration
in form before it is sold. In such case the fish is resold in different form.

A similar situation obtains in the case of a bakery. The flour is

converted into a bread through a physical or chemical process and
later is sold to the public in the form of bread.
We have taken notice of the fact that in many states of the American
Union, sales of tangible property to manufacturers, producers or
processors, or "sales of goods which as ingredients or constituents go
into and form part of tangible personal property sold by the buyer are
not taxable" as retail transactions because they are considered
wholesale transactions upon the theory that they have to be resold
even in a different form or condition. But we have noted that if these
transactions are so treated it is not by judicial interpretation but by
express statutory provisions. As well stated by counsel for the
appellee, these transactions are considered wholesale either because
they are so declared by retail sales statutes of different American
States, by administrative rules and regulations promulgated
thereunder, or by judicial decisions construing and applying them. If
there is an express provision of the law on the matter, there is no room
for judicial interpretation. Our duty is to apply the law. But, as we have
already pointed out, such is not the situation obtaining in the
Philippines. Our law on the point is silent, and being silent we do not
feel justified to extend the force and effect of American statutes to our
jurisdiction. To do so would be to incorporate into our statutes some
legislative matter by judicial ruling which is certainly beyond our
province to do.
The decision appealed from should be reversed, with costs against the
appellee.

in violation of government rules and regulations, negligently and

deliberately failed to take the required precautions for the protection of
the lives of its men working underground. Floresca et al moved to
claim their benefits pursuant to the Workmens Compensation Act
before the Workmens Compensation Commission. They also
petitioned before the regular courts and sue Philex for additional
damages. Philex invoked that they can no longer be sued because the
petitioners have already claimed benefits under the WCA.
ISSUE: Whether or not Floresca et al can claim benefits and at the
same time sue.
HELD: Under the law, Floresca et al could only do either one. If they
filed for benefits under the WCA then they will be estopped from
proceeding with a civil case before the regular courts. Conversely, if
they sued before the civil courts then they would also be estopped
from claiming benefits under the WCA. The SC however ruled that
Floresca et al are excused from this deficiency due to ignorance of the
fact. Had they been aware of such then they may have not availed of
such a remedy. However, if in case theyll win in the lower court
whatever award may be granted, the amount given to them under the
WCA should be deducted. The SC emphasized that if they would go
strictly by the book in this case then the purpose of the law may be
defeated. Idolatrous reverence for the letter of the law sacrifices the
human being. The spirit of the law insures mans survival and ennobles
him. As Shakespeare said, the letter of the law killeth but its spirit
giveth life.

FLORESCA VS PHILEX MINING

Floresca et al are the heirs of the deceased employees of Philex
Mining Corporation (hereinafter referred to as Philex), who, while
working at its copper mines underground operations at Tuba, Benguet
on June 28, 1967, died as a result of the cave-in that buried them in
the tunnels of the mine. Specifically, the complaint alleges that Philex,

Justice Gutierrez dissenting

No civil suit should prosper after claiming benefits under the WCA. If
employers are already liable to pay benefits under the WCA they
should not be compelled to bear the cost of damage suits or get
insurance for that purpose. The exclusion provided by the WCA can
only be properly removed by the legislature NOT the SC.