HANNAH

EUNICE
vs.
SANDIGANBAYAN
and
PHILIPPINES, respondents.

D.

SERANA, petitioner,
PEOPLE

OF

1999 as a student regent of UP, to serve a one-year term

starting January 1, 2000 and ending on December 31, 2000.

THE

DECISION
REYES, R.T., J.:

In the early part of 2000, petitioner discussed with President

Estrada the renovation of Vinzons Hall Annex in UP
Diliman.2 On September 4, 2000, petitioner, with her siblings
and relatives, registered with the Securities and Exchange
Commission the Office of the Student Regent Foundation, Inc.
(OSRFI).3

CAN
the
Sandiganbayan
try
a
government
scholaran** accused, along with her brother, of swindling
government funds?
MAAARI bang litisin ng Sandiganbayan ang isang iskolar
ng bayan, at ang kanyang kapatid, na kapwa
pinararatangan ng estafa ng pera ng bayan?

The jurisdictional question is posed in this petition for certiorari

assailing the Resolutions1 of the Sandiganbayan, Fifth
Division, denying petitioners motion to quash the information
and her motion for reconsideration.

One of the projects of the OSRFI was the renovation of the

Vinzons Hall Annex.4 President Estrada gave Fifteen Million
Pesos (P15,000,000.00) to the OSRFI as financial assistance
for the proposed renovation. The source of the funds,
according to the information, was the Office of the President.
The renovation of Vinzons Hall Annex failed to
materialize.5 The succeeding student regent, Kristine Clare
Bugayong, and Christine Jill De Guzman, Secretary General of
the KASAMA sa U.P., a system-wide alliance of student
councils within the state university, consequently filed a
complaint for Malversation of Public Funds and Property with
the Office of the Ombudsman.6

The Antecedents
Petitioner Hannah Eunice D. Serana was a senior student of
the University of the Philippines-Cebu. A student of a state
university is known as a government scholar. She was
appointed by then President Joseph Estrada on December 21,

On July 3, 2003, the Ombudsman, after due investigation,

found probable cause to indict petitioner and her brother Jade
Ian D. Serana for estafa, docketed as Criminal Case No.
27819 of the Sandiganbayan.7 The Information reads:

The undersigned Special Prosecution Officer III, Office of the

Special Prosecutor, hereby accuses HANNAH EUNICE D.
SERANA and JADE IAN D. SERANA of the crime of Estafa,
defined and penalized under Paragraph 2(a), Article 315 of
the Revised Penal Code, as amended committed as follows:

demands made upon the accused for them to return

aforesaid amount, the said accused failed and refused to do
so to the damage and prejudice of the government in the
aforesaid amount.

CONTRARY TO LAW. (Underscoring supplied)

That on October, 24, 2000, or sometime prior or subsequent
thereto, in Quezon City, Metro Manila, Philippines, and within
the jurisdiction of this Honorable Court, above-named
accused, HANNAH EUNICE D. SERANA, a high-ranking
public officer, being then the Student Regent of the
University of the Philippines, Diliman, Quezon City, while in
the performance of her official functions, committing the
offense in relation to her office and taking advantage of her
position, with intent to gain, conspiring with her brother,
JADE IAN D. SERANA, a private individual, did then and
there wilfully, unlawfully and feloniously defraud the
government by falsely and fraudulently representing to
former President Joseph Ejercito Estrada that the renovation
of the Vinzons Hall of the University of the Philippines will be
renovated and renamed as "President Joseph Ejercito
Estrada Student Hall," and for which purpose accused
HANNAH EUNICE D. SERANA requested the amount of
FIFTEEN MILLION PESOS (P15,000,000.00), Philippine
Currency, from the Office of the President, and the latter
relying and believing on said false pretenses and
misrepresentation gave and delivered to said accused Land
Bank Check No. 91353 dated October 24, 2000 in the
amount of FIFTEEN MILLION PESOS (P15,000,000.00),
which check was subsequently encashed by accused Jade
Ian D. Serana on October 25, 2000 and misappropriated for
their personal use and benefit, and despite repeated

Petitioner moved to quash the information. She claimed that

the Sandiganbayan does not have any jurisdiction over the
offense charged or over her person, in her capacity as UP
student regent.
Petitioner claimed that Republic Act (R.A.) No. 3019, as
amended by R.A. No. 8249, enumerates the crimes or
offenses over which the Sandiganbayan has jurisdiction. 8 It
has no jurisdiction over the crime of estafa.9 It only has
jurisdiction over crimes covered by Title VII, Chapter II, Section
2 (Crimes Committed by Public Officers), Book II of the
Revised Penal Code (RPC). Estafa falling under Title X,
Chapter VI (Crimes Against Property), Book II of the RPC is
not within the Sandiganbayans jurisdiction.

She also argued that it was President Estrada, not the

government, that was duped. Even assuming that she
received the P15,000,000.00, that amount came from Estrada,
not from the coffers of the government.10

Petitioner likewise posited that the Sandiganbayan had no

jurisdiction over her person. As a student regent, she was not
a public officer since she merely represented her peers, in
contrast to the other regents who held their positions in an ex
officio capacity. She addsed that she was a simple student and
did not receive any salary as a student regent.

Compensation is not an essential part of public office.

Parenthetically, compensation has been interpreted to include
allowances. By this definition, petitioner was compensated.14

Sandiganbayan Disposition

She further contended that she had no power or authority to

receive monies or funds. Such power was vested with the
Board of Regents (BOR) as a whole. Since it was not alleged
in the information that it was among her functions or duties to
receive funds, or that the crime was committed in connection
with her official functions, the same is beyond the jurisdiction
of the Sandiganbayan citing the case of Soller v.
Sandiganbayan.11

The Ombudsman opposed the motion.12 It disputed petitioners

interpretation of the law. Section 4(b) of Presidential Decree
(P.D.) No. 1606 clearly contains the catch -all phrase "in
relation to office," thus, the Sandiganbayan has jurisdiction
over the charges against petitioner. In the same breath, the
prosecution countered that the source of the money is a matter
of defense. It should be threshed out during a full-blown trial.13
According to the Ombudsman, petitioner, despite her
protestations, iwas a public officer. As a member of the BOR,
she hads the general powers of administration and exerciseds
the corporate powers of UP. Based on Mechems definition of
a public office, petitioners stance that she was not
compensated, hence, not a public officer, is erroneous.

In a Resolution dated November 14, 2003, the Sandiganbayan

denied petitioners motion for lack of merit.15 It ratiocinated:
The focal point in controversy is the jurisdiction of the
Sandiganbayan over this case.

It is extremely erroneous to hold that only criminal offenses

covered by Chapter II, Section 2, Title VII, Book II of the
Revised Penal Code are within the jurisdiction of this Court.
As correctly pointed out by the prosecution, Section 4(b) of
R.A. 8249 provides that the Sandiganbayan also has
jurisdiction over other offenses committed by public officials
and employees in relation to their office. From this provision,
there is no single doubt that this Court has jurisdiction over
the offense of estafa committed by a public official in relation
to his office.

Accused-movants claim that being merely a member in

representation of the student body, she was never a public
officer since she never received any compensation nor does
she fall under Salary Grade 27, is of no moment, in view of

the express provision of Section 4 of Republic Act No. 8249

which provides:

Sec. 4. Jurisdiction The Sandiganbayan shall exercise

exclusive original jurisdiction in all cases involving:
(A) x x x
(1) Officials of the executive branch occupying the positions
of regional director and higher, otherwise classified as Grade
"27" and higher, of the Compensation and Position
Classification
Act
of
1989
(Republic
Act
No.
6758), specifically including:
xxxx
(g) Presidents, directors or trustees, or managers of
government-owned or controlled corporations, state
universities or educational institutions or foundations. (Italics
supplied)

It is very clear from the aforequoted provision that the

Sandiganbayan has original exclusive jurisdiction over all
offenses involving the officials enumerated in subsection
(g), irrespective of their salary grades, because the
primordial consideration in the inclusion of these officials is
the nature of their responsibilities and functions.
Is accused-movant included in the contemplated provision of
law?

A meticulous review of the existing Charter of the University

of the Philippines reveals that the Board of Regents, to
which accused-movant belongs, exclusively exercises the
general powers of administration and corporate powers in
the university, such as: 1) To receive and appropriate to the
ends specified by law such sums as may be provided by law
for the support of the university; 2) To prescribe rules for its
own government and to enact for the government of the
university such general ordinances and regulations, not
contrary to law, as are consistent with the purposes of the
university; and 3) To appoint, on recommendation of the
President of the University, professors, instructors, lecturers
and other employees of the University; to fix their
compensation, hours of service, and such other duties and
conditions as it may deem proper; to grant to them in its
discretion leave of absence under such regulations as it may
promulgate, any other provisions of law to the contrary
notwithstanding, and to remove them for cause after an
investigation and hearing shall have been had.

It is well-established in corporation law that the corporation

can act only through its board of directors, or board of
trustees in the case of non-stock corporations. The board of
directors or trustees, therefore, is the governing body of the
corporation.

It is unmistakably evident that the Board of Regents of the

University of the Philippines is performing functions similar to

those of the Board of Trustees of a non-stock corporation.

This draws to fore the conclusion that being a member of
such board, accused-movant undoubtedly falls within the
category of public officials upon whom this Court is vested
with original exclusive jurisdiction, regardless of the fact that
she does not occupy a position classified as Salary Grade
27 or higher under the Compensation and Position
Classification Act of 1989.
Finally, this court finds that accused-movants contention that
the same of P15 Million was received from former President
Estrada and not from the coffers of the government, is a
matter a defense that should be properly ventilated during
the trial on the merits of this case.16

On November 19, 2003, petitioner filed a motion for

reconsideration.17 The motion was denied with finality in a
Resolution dated February 4, 2004.18

Issue
Petitioner is now before this Court, contending that "THE
RESPONDENT COURT COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK AND/OR EXCESS OF
JURISDICTION IN NOT QUASHING THE INFORMATION
AND DISMISING THE CASE NOTWITHSTANDING THAT IS
HAS NO JURISDICTION OVER THE OFFENSE CHARGED
IN THE INFORMATION."19

In her discussion, she reiterates her four-fold argument below,

namely: (a) the Sandiganbayan has no jurisdiction over estafa;
(b) petitioner is not a public officer with Salary Grade 27 and
she paid her tuition fees; (c) the offense charged was not
committed in relation to her office; (d) the funds in question
personally came from President Estrada, not from the
government.

Our Ruling
The petition cannot be granted.

Preliminarily,
the
denial
of
quash is not correctible by certiorari.

motion

to

We would ordinarily dismiss this petition for certiorari outright

on procedural grounds. Well-established is the rule that when
a motion to quash in a criminal case is denied, the remedy is
not a petition for certiorari, but for petitioners to go to trial,
without prejudice to reiterating the special defenses invoked in
their motion to quash.20Remedial measures as regards
interlocutory orders, such as a motion to quash, are frowned
upon and often dismissed.21 The evident reason for this rule is
to avoid multiplicity of appeals in a single action.22
In Newsweek, Inc. v. Intermediate Appellate Court,23 the Court
clearly explained and illustrated the rule and the exceptions,
thus:

As a general rule, an order denying a motion to dismiss is

merely interlocutory and cannot be subject of appeal until
final judgment or order is rendered. (Sec. 2 of Rule 41). The
ordinary procedure to be followed in such a case is to file an
answer, go to trial and if the decision is adverse, reiterate
the issue on appeal from the final judgment. The same rule
applies to an order denying a motion to quash, except that
instead of filing an answer a plea is entered and no appeal
lies from a judgment of acquittal.

This general rule is subject to certain exceptions. If the

court, in denying the motion to dismiss or motion to quash,
acts without or in excess of jurisdiction or with grave abuse
of discretion, then certiorari or prohibition lies. The reason is
that it would be unfair to require the defendant or accused
to undergo the ordeal and expense of a trial if the court has
no jurisdiction over the subject matter or offense, or is not
the court of proper venue, or if the denial of the motion to
dismiss or motion to quash is made with grave abuse of
discretion or a whimsical and capricious exercise of
judgment. In such cases, the ordinary remedy of appeal
cannot be plain and adequate. The following are a few
examples of the exceptions to the general rule.
In De Jesus v. Garcia (19 SCRA 554), upon the denial of a
motion to dismiss based on lack of jurisdiction over the
subject matter, this Court granted the petition
for certiorari and prohibition against the City Court of Manila
and directed the respondent court to dismiss the case.

In Lopez v. City Judge (18 SCRA 616), upon the denial of a

motion to quash based on lack of jurisdiction over the
offense, this Court granted the petition for prohibition and
enjoined the respondent court from further proceeding in
the case.

In Enriquez v. Macadaeg (84 Phil. 674), upon the denial of a

motion to dismiss based on improper venue, this Court
granted the petition for prohibition and enjoined the
respondent judge from taking cognizance of the case
except to dismiss the same.

In Manalo v. Mariano (69 SCRA 80), upon the denial of a

motion to dismiss based on bar by prior judgment, this
Court granted the petition for certiorari and directed the
respondent judge to dismiss the case.

In Yuviengco v. Dacuycuy (105 SCRA 668), upon the denial

of a motion to dismiss based on the Statute of Frauds, this
Court granted the petition for certiorari and dismissed the
amended complaint.

In Tacas v. Cariaso (72 SCRA 527), this Court granted the

petition for certiorari after the motion to quash based on

double jeopardy was denied by respondent judge and

ordered him to desist from further action in the criminal case
except to dismiss the same.
In People v. Ramos (83 SCRA 11), the order denying the
motion to quash based on prescription was set aside
on certiorari and the criminal case was dismissed by this
Court.24

We do not find the Sandiganbayan to have committed a grave

abuse of discretion.

The
jurisdiction
of
the
set by P.D. No. 1606, as
R.A. No. 3019, as amended.

Sandiganbayan
amended, not

is
by

We first address petitioners contention that the jurisdiction of

the Sandiganbayan is determined by Section 4 of R.A. No.
3019 (The Anti-Graft and Corrupt Practices Act, as amended).
We note that petitioner refers to Section 4 of the said law yet
quotes Section 4 of P.D. No. 1606, as amended, in her motion
to quash before the Sandiganbayan.25 She repeats the
reference in the instant petition for certiorari26 and in her
memorandum of authorities.27

We cannot bring ourselves to write this off as a mere clerical or

typographical error. It bears stressing that petitioner repeated
this claim twice despite corrections made by the
Sandiganbayan.28

Her claim has no basis in law. It is P.D. No. 1606, as amended,

rather than R.A. No. 3019, as amended, that determines the
jurisdiction of the Sandiganbayan. A brief legislative history of
the statute creating the Sandiganbayan is in order. The
Sandiganbayan was created by P.D. No. 1486, promulgated
by then President Ferdinand E. Marcos on June 11, 1978. It
was promulgated to attain the highest norms of official conduct
required of public officers and employees, based on the
concept that public officers and employees shall serve with the
highest degree of responsibility, integrity, loyalty and efficiency
and shall remain at all times accountable to the people.29

P.D. No. 1486 was, in turn, amended by P.D. No. 1606 which
was promulgated on December 10, 1978. P.D. No. 1606
expanded the jurisdiction of the Sandiganbayan.30

P.D. No. 1606 was later amended by P.D. No. 1861 on March
23, 1983, further altering the Sandiganbayan jurisdiction. R.A.
No. 7975 approved on March 30, 1995 made succeeding
amendments to P.D. No. 1606, which was again amended on
February 5, 1997 by R.A. No. 8249. Section 4 of R.A. No.
8249
further
modified
the
jurisdiction
of
the

Sandiganbayan. As it now stands, the Sandiganbayan has

jurisdiction over the following:

"(c ) Officials of the diplomatic service occupying the

position of consul and higher;
" (d) Philippine army and air force colonels, naval captains,
and all officers of higher rank;

Sec. 4. Jurisdiction. - The Sandiganbayan shall exercise

exclusive original jurisdiction in all cases involving:

A. Violations of Republic Act No. 3019, as amended, other

known as the Anti-Graft and Corrupt Practices Act,
Republic Act No. 1379, and Chapter II, Section 2, Title VII,
Book II of the Revised Penal Code, where one or more of
the accused are officials occupying the following positions
in the government, whether in a permanent, acting or
interim capacity, at the time of the commission of the
offense:

" (e) Officers of the Philippine National Police while

occupying the position of provincial director and those
holding the rank of senior superintended or higher;
" (f) City and provincial prosecutors and their assistants,
and officials and prosecutors in the Office of the
Ombudsman and special prosecutor;
" (g) Presidents, directors or trustees, or managers of
government-owned or controlled corporations, state
universities or educational institutions or foundations.
" (2) Members of Congress and officials thereof classified
as Grade "27'" and up under the Compensation and
Position Classification Act of 1989;

(1) Officials of the executive branch occupying the

positions of regional director and higher, otherwise
classified as Grade "27" and higher, of the Compensation
and Position Classification Act of 989 (Republic Act No.
6758), specifically including:
" (a) Provincial governors, vice-governors, members of
the sangguniang panlalawigan, and provincial treasurers,
assessors, engineers, and other city department heads;
"
(b)
City
mayor,
vice-mayors,
members
of
the sangguniang panlungsod, city treasurers, assessors,
engineers, and other city department heads;

" (3) Members of the judiciary without prejudice to the

provisions of the Constitution;
" (4) Chairmen and members of Constitutional
Commission, without prejudice to the provisions of the
Constitution; and
" (5) All other national and local officials classified as
Grade "27'" and higher under the Compensation and
Position Classification Act of 1989.

B. Other offenses of felonies whether simple or complexed

with other crimes committed by the public officials and
employees mentioned in subsection a of this section in
relation to their office.
C. Civil and criminal cases filed pursuant to and in
connection with Executive Order Nos. 1, 2, 14 and 14-A,
issued in 1986.

" In cases where none of the accused are occupying

positions corresponding to Salary Grade "27'" or higher, as
prescribed in the said Republic Act No. 6758, or military
and PNP officer mentioned above, exclusive original
jurisdiction thereof shall be vested in the proper regional
court, metropolitan trial court, municipal trial court, and
municipal circuit trial court, as the case may be, pursuant
to their respective jurisdictions as provided in Batas
Pambansa Blg. 129, as amended.

" The Sandiganbayan shall exercise exclusive appellate

jurisdiction over final judgments, resolutions or order of
regional trial courts whether in the exercise of their own
original jurisdiction or of their appellate jurisdiction as
herein provided.

" The Sandiganbayan shall have exclusive original

jurisdiction over petitions for the issuance of the writs of
mandamus,
prohibition, certiorari,
habeas
corpus,

injunctions, and other ancillary writs and processes in aid

of its appellate jurisdiction and over petitions of similar
nature, including quo warranto, arising or that may arise in
cases filed or which may be filed under Executive Order
Nos. 1, 2, 14 and 14-A, issued in 1986: Provided, That the
jurisdiction over these petitions shall not be exclusive of
the Supreme Court.

" The procedure prescribed in Batas Pambansa Blg. 129,

as well as the implementing rules that the Supreme Court
has promulgated and may thereafter promulgate, relative
to appeals/petitions for review to the Court of Appeals,
shall apply to appeals and petitions for review filed with the
Sandiganbayan. In all cases elevated to the
Sandiganbayan and from the Sandiganbayan to the
Supreme Court, the Office of the Ombudsman, through its
special prosecutor, shall represent the People of the
Philippines, except in cases filed pursuant to Executive
Order Nos. 1, 2, 14 and 14-A, issued in 1986.

" In case private individuals are charged as co-principals,

accomplices or accessories with the public officers or
employees, including those employed in governmentowned or controlled corporations, they shall be tried jointly
with said public officers and employees in the proper
courts which shall exercise exclusive jurisdiction over
them.

" Any provisions of law or Rules of Court to the contrary

notwithstanding, the criminal action and the corresponding
civil action for the recovery of civil liability shall, at all times,
be simultaneously instituted with, and jointly determined in,
the same proceeding by the Sandiganbayan or the
appropriate courts, the filing of the criminal action being
deemed to necessarily carry with it the filing of the civil
action, and no right to reserve the filing such civil action
separately from the criminal action shall be recognized:
Provided, however, That where the civil action had
heretofore been filed separately but judgment therein has
not yet been rendered, and the criminal case is hereafter
filed with the Sandiganbayan or the appropriate court, said
civil action shall be transferred to the Sandiganbayan or
the appropriate court, as the case may be, for
consolidation and joint determination with the criminal
action, otherwise the separate civil action shall be deemed
abandoned."

Upon the other hand, R.A. No. 3019 is a penal statute

approved on August 17, 1960. The said law represses certain
acts of public officers and private persons alike which
constitute graft or corrupt practices or which may lead
thereto.31 Pursuant to Section 10 of R.A. No. 3019, all
prosecutions for violation of the said law should be filed with
the Sandiganbayan.32

R.A. No. 3019 does not contain an enumeration of the cases

over which the Sandiganbayan has jurisdiction. In fact, Section
4 of R.A. No. 3019 erroneously cited by petitioner, deals not

with the jurisdiction of the Sandiganbayan but with prohibition

on private individuals. We quote:

Section 4. Prohibition on private individuals. (a) It

shall be unlawful for any person having family or close
personal relation with any public official to capitalize or
exploit or take advantage of such family or close
personal relation by directly or indirectly requesting or
receiving any present, gift or material or pecuniary
advantage from any other person having some
business, transaction, application, request or contract
with the government, in which such public official has
to intervene. Family relation shall include the spouse or
relatives by consanguinity or affinity in the third civil
degree. The word "close personal relation" shall
include close personal friendship, social and fraternal
connections, and professional employment all giving
rise to intimacy which assures free access to such
public officer.

(b) It shall be unlawful for any person knowingly to

induce or cause any public official to commit any of the
offenses defined in Section 3 hereof.

In fine, the two statutes differ in that P.D. No. 1606, as

amended, defines the jurisdiction of the Sandiganbayan while
R.A. No. 3019, as amended, defines graft and corrupt
practices and provides for their penalties.

Sandiganbayan
the offense of estafa.

has

jurisdiction

over

principle that the best interpreter of a statute is the statute

itself.36 Optima statuti interpretatrix est ipsum statutum. Ang
isang batas ay marapat na bigyan ng kahulugan sa
kanyang kabuuan sa ilalim ng prinsipyo na ang
pinakamainam na interpretasyon ay ang mismong batas.
Section 4(B) of P.D. No. 1606 reads:

Relying on Section 4 of P.D. No. 1606, petitioner contends

that estafa is not among those crimes cognizable by the
Sandiganbayan. We note that in hoisting this argument,
petitioner isolated the first paragraph of Section 4 of P.D. No.
1606, without regard to the succeeding paragraphs of the said
provision.

The rule is well-established in this jurisdiction that statutes

should receive a sensible construction so as to avoid an unjust
or an absurd conclusion.33 Interpretatio talis in ambiguis
semper fienda est, ut evitetur inconveniens et absurdum.
Where there is ambiguity, such interpretation as will avoid
inconvenience and absurdity is to be adopted. Kung saan
mayroong kalabuan, ang pagpapaliwanag ay hindi dapat
maging mahirap at katawa-tawa.

Every section, provision or clause of the statute must be

expounded by reference to each other in order to arrive at the
effect contemplated by the legislature.34 The intention of the
legislator must be ascertained from the whole text of the law
and every part of the act is to be taken into view. 35 In other
words, petitioners interpretation lies in direct opposition to the
rule that a statute must be interpreted as a whole under the

B. Other offenses or felonies whether simple or

complexed with other crimes committed by the public
officials and employees mentioned in subsection of this
section in relation to their office.

Evidently, the Sandiganbayan has jurisdiction over other

felonies committed by public officials in relation to their office.
We see no plausible or sensible reason to exclude estafa as
one of the offenses included in Section 4(bB) of P.D. No. 1606.
Plainly, estafa is one of those other felonies. The jurisdiction is
simply subject to the twin requirements that (a) the offense is
committed by public officials and employees mentioned in
Section 4(A) of P.D. No. 1606, as amended, and that (b) the
offense is committed in relation to their office.

In Perlas, Jr. v. People,37 the Court had occasion to explain

that the Sandiganbayan has jurisdiction over an indictment
for estafa versus a director of the National Parks Development
Committee, a government instrumentality. The Court held then:
The National Parks Development Committee was
created originally as an Executive Committee on

January 14, 1963, for the development of the Quezon

Memorial, Luneta and other national parks (Executive
Order No. 30). It was later designated as the National
Parks Development Committee (NPDC) on February 7,
1974 (E.O. No. 69). On January 9, 1966, Mrs. Imelda
R. Marcos and Teodoro F. Valencia were designated
Chairman and Vice-Chairman respectively (E.O. No.
3). Despite an attempt to transfer it to the Bureau of
Forest
Development,
Department
of
Natural
Resources, on December 1, 1975 (Letter of
Implementation No. 39, issued pursuant to PD No. 830,
dated November 27, 1975), the NPDC has remained
under the Office of the President (E.O. No. 709, dated
July 27, 1981).
Since 1977 to 1981, the annual appropriations decrees
listed NPDC as a regular government agency under
the Office of the President and allotments for its
maintenance and operating expenses were issued
direct to NPDC (Exh. 10-A, Perlas, Item Nos. 2, 3).

The Sandiganbayans jurisdiction over estafa was reiterated

with greater firmness in Bondoc v. Sandiganbayan.38Pertinent
parts of the Courts ruling in Bondoc read:

Furthermore, it is not legally possible to transfer

Bondocs cases to the Regional Trial Court, for the
simple reason that the latter would not have jurisdiction
over the offenses. As already above intimated, the
inability of the Sandiganbayan to hold a joint trial of

Bondocs cases and those of the government

employees separately charged for the same crimes,
has not altered the nature of the offenses charged,
as estafa thru falsification punishable by penalties
higher than prision correccional or imprisonment of six
years, or a fine of P6,000.00, committed by
government employees in conspiracy with private
persons, including Bondoc. These crimes are within the
exclusive, original jurisdiction of the Sandiganbayan.
They simply cannot be taken cognizance of by the
regular courts, apart from the fact that even if the cases
could be so transferred, a joint trial would nonetheless
not be possible.

Petitioner
is a public officer.

UP

student

regent

Petitioner also contends that she is not a public officer. She

does not receive any salary or remuneration as a UP student
regent. This is not the first or likely the last time that We will be
called upon to define a public officer. In Khan, Jr. v. Office of
the Ombudsman, We ruled that it is difficult to pin down the
definition of a public officer.39The 1987 Constitution does not
define who are public officers. Rather, the varied definitions
and concepts are found in different statutes and jurisprudence.
In Aparri v. Court of Appeals,40 the Court held that:

A public office is the right, authority, and duty created

and conferred by law, by which for a given period,
either fixed by law or enduring at the pleasure of the
creating power, an individual is invested with some
portion of the sovereign functions of the government, to
be exercise by him for the benefit of the public
([Mechem Public Offices and Officers,] Sec. 1). The
right to hold a public office under our political system is
therefore not a natural right. It exists, when it exists at
all only because and by virtue of some law expressly or
impliedly creating and conferring it (Mechem Ibid., Sec.
64). There is no such thing as a vested interest or an
estate in an office, or even an absolute right to hold
office. Excepting constitutional offices which provide for
special immunity as regards salary and tenure, no one
can be said to have any vested right in an office or its
salary (42 Am. Jur. 881).

In Laurel v. Desierto,41 the Court adopted the definition of

Mechem of a public office:

"A public office is the right, authority and duty, created

and conferred by law, by which, for a given period,
either fixed by law or enduring at the pleasure of the
creating power, an individual is invested with some
portion of the sovereign functions of the government, to
be exercised by him for the benefit of the public. The
individual so invested is a public officer."42

Petitioner claims that she is not a public officer with Salary

Grade 27; she is, in fact, a regular tuition fee-paying student.
This is likewise bereft of merit. It is not only the salary grade
that determines the jurisdiction of the Sandiganbayan. The
Sandiganbayan also has jurisdiction over other officers
enumerated in P.D. No. 1606. InGeduspan v. People,43 We
held that while the first part of Section 4(A) covers only officials
with Salary Grade 27 and higher, its second part specifically
includes other executive officials whose positions may not be
of Salary Grade 27 and higher but who are by express
provision of law placed under the jurisdiction of the said court.
Petitioner falls under the jurisdiction of the Sandiganbayan as
she is placed there by express provision of law.44

Section 4(A)(1)(g) of P.D. No. 1606 explicitly vested the

Sandiganbayan with jurisdiction over Presidents, directors or
trustees, or managers of government-owned or controlled
corporations, state universities or educational institutions or
foundations. Petitioner falls under this category. As the
Sandiganbayan pointed out, the BOR performs functions
similar to those of a board of trustees of a non-stock
corporation.45 By express mandate of law, petitioner is, indeed,
a public officer as contemplated by P.D. No. 1606.

Moreover, it is well established that compensation is not an

essential element of public office.46 At most, it is merely
incidental to the public office.47

Delegation of sovereign functions is essential in the public

office. An investment in an individual of some portion of the
sovereign functions of the government, to be exercised by him
for the benefit of the public makes one a public officer.48

The administration of the UP is a sovereign function in line

with Article XIV of the Constitution. UP performs a legitimate
governmental function by providing advanced instruction in
literature, philosophy, the sciences, and arts, and giving
professional and technical training.49 Moreover, UP is
maintained by the Government and it declares no dividends
and is not a corporation created for profit.50

The
offense
in
relation
to
to the Information.

charged
public

was
office,

committed
according

Petitioner likewise argues that even assuming that she is a

public officer, the Sandiganbayan would still not have
jurisdiction over the offense because it was not committed in
relation to her office.

According to petitioner, she had no power or authority to act

without the approval of the BOR. She adds there was no
Board Resolution issued by the BOR authorizing her to
contract with then President Estrada; and that her acts were

not ratified by the governing body of the state university.

Resultantly, her act was done in a private capacity and not in
relation to public office.

It is axiomatic that jurisdiction is determined by the averments

in the information.51 More than that, jurisdiction is not affected
by the pleas or the theories set up by defendant or respondent
in an answer, a motion to dismiss, or a motion to
quash.52 Otherwise, jurisdiction would become dependent
almost entirely upon the whims of defendant or respondent.53

In the case at bench, the information alleged, in no uncertain

terms that petitioner, being then a student regent of U.P.,
"while in the performance of her official functions, committing
the offense in relation to her office and taking advantage of her
position, with intent to gain, conspiring with her brother, JADE
IAN D. SERANA, a private individual, did then and there
wilfully, unlawfully and feloniously defraud the government x x
x." (Underscoring supplied)

Clearly, there was no grave abuse of discretion on the part of

the Sandiganbayan when it did not quash the information
based on this ground.

Source of funds is a defense

be raised during trial on the merits.

that

should

It is contended anew that the amount came from President

Estradas private funds and not from the government coffers.
Petitioner insists the charge has no leg to stand on.

We cannot agree. The information alleges that the funds came

from the Office of the President and not its then occupant,
President Joseph Ejercito Estrada. Under the information, it is
averred that "petitioner requested the amount of Fifteen Million
Pesos (P15,000,000.00), Philippine Currency, from the Office
of the President, and the latter relying and believing on said
false pretenses and misrepresentation gave and delivered to
said accused Land Bank Check No. 91353 dated October 24,
2000
in
the
amount
of
Fifteen
Million
Pesos
(P15,000,000.00)."

Again, the Court sustains the Sandiganbayan observation that

the source of the P15,000,000 is a matter of defense that
should be ventilated during the trial on the merits of the instant
case.54

As a parting note, petitioners counsel, Renato G. dela Cruz,

misrepresented his reference to Section 4 of P.D. No. 1606 as
a quotation from Section 4 of R.A. No. 3019. A review of his
motion to quash, the instant petition forcertiorari and his
memorandum, unveils the misquotation. We urge petitioners
counsel to observe Canon 10 of the Code of Professional
Responsibility, specifically Rule 10.02 of the Rules stating that
"a lawyer shall not misquote or misrepresent."

The Court stressed the importance of this rule in Pangan v.

Ramos,55 where Atty Dionisio D. Ramos used the name Pedro
D.D. Ramos in connection with a criminal case. The Court
ruled that Atty. Ramos resorted to deception by using a name
different from that with which he was authorized. We severely
reprimanded Atty. Ramos and warned that a repetition may
warrant suspension or disbarment.56

We admonish petitioners counsel to be more careful and

accurate in his citation. A lawyers conduct before the court
should be characterized by candor and fairness. 57 The
administration of justice would gravely suffer if lawyers do not
act with complete candor and honesty before the courts.58
WHEREFORE, the petition is DENIED for lack of merit.

A
lawyer
owes
and honesty to the Court.

candor,

fairness
SO ORDERED.

C. SPIRIT AND PURPOSE OF THE LAW: RATIO LEGISEST

ANIMA LEGIS Reason of the law is the soul of the law

ELENA
SALENILLAS
AND
BERNARDINO
SALENILLAS, petitioners,
vs.
HONORABLE COURT OF APPEALS and HONORABLE
RAYMUNDO SEVA, JUDGE OF BRANCH 38 OF THE
REGIONAL TRIAL COURT OF CAMARINES NORTE and
WILLIAM GUERRA, respondents.
Jose L. Lapak for petitioners.
Jose T. Atienza for private respondent.

SARMIENTO, J.:

This petition for review on certiorari which seeks the reversal

and setting aside of the decision 1 of the Court of
Appeals 2 dismissing the petition for certiorari against Judge
Raymundo Seva of the Regional Trial Court of Camarines
Norte and the private respondent, William Guerra, involves a
pure question of law i.e., the coverage and application of
Section 119 of Commonwealth Act No. 141, as amended,
known otherwise as the Public Land Act.

The facts are undisputed.

The property subject matter of the case was formerly covered

by Original Certificate of Title No. P-1248, issued by virtue of
Free Patent Application No. 192765, in favor of the spouses,
Florencia H. de Enciso and Miguel Enciso. The said original
certificate of title was inscribed in the Registration Book for the
Province of Camarines Norte on December 10, 1961. On
February 28, 1970, the patentees, the Enciso spouses, by an
Absolute Deed of Sale, sold the property in favor of the
petitioners, the spouses Elena Salenillas and Bernardino
Salenillas for a consideration of P900.00. Petitioner Elena
Salenillas is a daughter of the Encisos. As a result of the
aforementioned sale, Transfer Certificate of Title No. T-8104 of
the Register of Deeds of Camarines Norte was issued in the
name of the Salenillas, cancelling Original Certificate of Title
No. P-1248. On June 30, 1971, the petitioners mortgaged the
property now covered by T.C.T. No. T-8104 with the Rural
Bank of Daet, Inc. The mortgage was subsequently released

on November 22, 1973 after the petitioners paid the amount of

P1,000.00. Later, or on December 4, 1975, the petitioners
again mortgaged the property, this time in favor of the
Philippine National Bank Branch, Daet, Camarines Norte as
security for a loan of P2,500.00.

For failure of the petitioners to pay their loan, extrajudicial

foreclosure proceeding, pursuant to Act No. 3135, was
instituted by the Philippine National Bank against the mortgage
and the property was sold at a public auction held on February
27, 1981. The private respondent, William Guerra, emerged as
the highest bidder in the said public auction and as a result
thereof a "Certificate of Sale" was issued to him by the Ex
Officio Provincial Sheriff of Camarines Norte. Ultimately, on
July 12, 1983, a "Sheriff's Final Deed" was executed in favor of
the private respondent.

On August 17,1983, the Philippine National Bank filed with the

Regional Trial Court of Camarines Norte at Daet, a motion for
a writ of possession. The public respondent, Judge Raymundo
Seva of the trial court, acting on the motion, issued on
September 22, 1983 an order for the issuance of a writ of
possession in favor of the private respondent. When the
deputy sheriff of Camarines Norte however, attempted on
November 17, 1983, to place the property in the possession of
the private respondent, the petitioners refused to vacate and
surrender the possession of the same and instead offered to
repurchase it under Section 119 of the Public Land Act. On
August 15, 1984, another motion, this time for the issuance of
an alias writ of possession was filed by the private respondent

with the trial court. The petitioners, on August 31, 1984,

opposed the private respondents' motion and instead made a
formal offer to repurchase the property. Notwithstanding the
petitioners' opposition and formal offer, the trial court judge on
October 12, 1984 issued the alias writ of possession prayed
for the private respondent. The petitioners moved for a
reconsideration of the order but their motion was denied.

Undeterred by their initial setback, the petitioners elevated the

case to the respondent Court of Appeals by way of a petition
for certiorari claiming that the respondent trial court judge
acted with grave abuse of discretion in issuing the order dated
October 12, 1984 granting the writ of possession, and the
order dated October 22, 1984, denying their motion for
reconsider consideration.

In a resolution dated January 23, 1985, the respondent

appellate court gave due course to the petition; required the
parties to submit simultaneous memoranda in support to their
respective positions; and restrained the trial court and the
private respondent from executing, implementing or otherwise
giving effect to the assailed writ of possession until further
orders from the court. 3 However, in a decision promulgated on
September 17, 1986, the respondent Court of Appeals
dismissed the case for lack of merit. According to the appellate
court:

It must be noted that when the original owner, Florencia H.

Enciso whose title, OCT No. P-1248, was issued on
August 9, 1961, executed a deed of absolute sale on
February 28, 1970 of the property covered by said title to
spouses Elena Salenillas and Bernardino Salenillas, the
five year period to repurchase the property provided for in
Section 119 of Commonwealth Act No. 141 as amended
could have already started. Prom this fact alone, the
petition should have been dismissed. However, granting
that the transfer from parent to child for a nominal sum
may not be the "conveyance" contemplated by the law. We
will rule on the issue raised by the petitioners. 4
xxx xxx xxx

Applying the case of Monge, et al. vs. Angeles, et al., 5 the

appellate court went on to hold that the five-year period of the
petitioners to repurchase under Section 119 of the Public Land
Act had already prescribed. The point of reckoning, ruled the
respondent court in consonance with Monge is from the date
the petitioners mortgaged the property on December 4, 1973.
Thus, when the petitioners made their formal offer to
repurchase on August 31, 1984, the period had clearly
expired.

In an effort to still overturn the decision, the petitioners moved

for reconsideration. Their motion apparently went for naught
because on May 7, 1987, the respondent appellate court
resolved to deny the same. Hence, this petition.

Section 119 of the Public Land Act, as amended, provides in

full:
Before us, the petitioners maintain that contrary to the rulings
of the courts below, their right to repurchase within five years
under Section 119 of the Public Land Act has not yet
prescribed. To support their contention, the petitioners cite the
cases of Paras vs. Court of Appeals 6 and Manuel vs.
Philippine National Bank, et al. 7

On the other side, the private respondent, in support of the

appellate court's decision, states that the sale of the contested
property by the patentees to the petitioners disqualified the
latter from being legal heirs vis-a-vis the said property. As
such, they (the petitioners) no longer enjoy the right granted to
heirs under the provisions of Section 119 of the Public Land
Act. 8
In fine, what need be determined and resolved here are:
whether or not the petitioners have the right to repurchase the
contested property under Section 119 of the Public Land Act;
and assuming the answer to the question is in the affirmative,
whether or not their right to repurchase had already
prescribed.

We rule for the petitioners. They are granted by the law the
right to repurchase their property and their right to do so
subsists.

Sec. 119. Every conveyance of land acquired under the

free patent or homestead provisions, when proper, shall
be subject to repurchase by the applicant, his widow, or
legal heirs within a period of five years from the date of
the conveyance.

From the foregoing legal provision, it is explicit that only three

classes of persons are bestowed the right to repurchase the
applicant-patentee, his widow, or other legal heirs.
Consequently, the contention of the private respondent
sustained by the respondent appellate court that the
petitioners do not belong to any of those classes of
repurchasers because they acquired the property not through
inheritance but by sale, has no legal basis. The petitionersspouses are the daughter and son-in-law of the Encisos,
patentees of the contested property. At the very least,
petitioner Elena Salenillas, being a child of the Encisos, is a
"legal heir" of the latter. As such, and even on this score alone,
she may therefore validly repurchase. This must be so
because Section 119 of the Public Land Act, in speaking of
"legal heirs," makes no distinction. Ubi lex non distinguit nec
nos distinguere debemos.
Moreover, to indorse the distinction made by the private
respondent and the appellate court would be to contravene the
very purpose of Section 119 of the Public Land Act which is to
give the homesteader or patentee every chance to preserve
for himself and his family the land that the State had
gratuitously given him as a reward for his labor in clearing and

cultivating it. 9 Considering that petitioner Salenillas is a

daughter of the spouses Florencia H. Enciso and Miguel
Enciso, there is no gainsaying that allowing her (Elena) and
her husband to repurchase the property would be more in
keeping with the spirit of the law. We have time and again said
that between two statutory interpretations, that which better
serves the purpose of the law should prevail.

Guided by the same purpose of the law, and proceeding to the

other issue here raised, we rule that the five-year period for
the petitioners to repurchase their property had not yet
prescribed.

The case of Monge et al. vs. Angeles, et al., 10 cited as

authority by the respondent Court of Appeals is inapplicable to
the present controversy. The facts obtaining there are
substantially different from those in this case. In Monge the
conveyance involved was a pacto de retro sale and not a
foreclosure sale. More importantly, the question raised there
was whether the five-year period provided for in Section 119
"should be counted from the date of the sale even if the same
is with an option to repurchase or from the date the ownership
of the land has become consolidated in favor of the purchaser
because of the homesteader's failure to redeem it. 11 It is
therefore understandable why the Court ruled there as it did. A
sale on pacto de retro immediately vests title, ownership, and,
generally possession over the property on the vendee a retro,
subject only to the right of the vendor a retro to repurchase
within the stipulated period. It is an absolute sale with a
resolutory condition.

The cases 12 pointed to by the petitioner in support of their

position, on the other hand, present facts that are quite
identical to those in the case at bar. Both cases involved
properties the titles over which were obtained either through
homestead or free patent. These properties were mortgaged
to a bank as collateral for loans, and, upon failure of the
owners to pay their indebtedness, the mortgages were
foreclosed. In both instances, the Court ruled that the five-year
period to. repurchase a homestead sold at public auction or
foreclosure sale under Act 3135 begins on the day after the
expiration of the period of redemption when the deed of
absolute sale is executed thereby formally transferring the
property to the purchaser, and not otherwise. Taking into
account that the mortgage was foreclosed and the mortgaged
property sold at a public auction to the private respondent on
February 27, 1981, with the "Sheriff's Final Deed" issued on
July 12, 1983, the two offers of the petitioners to repurchase
the first on November 17, 1983, and the second, formally, on
August 31, 1984 were both made within the prescribed fiveyear period.

Now, as regards the redemption price, applying Sec. 30 of

Rule 39 of the Revised Rules of Court, the petitioners should
reimburse the private respondent the amount of the purchase
price at the public auction plus interest at the rate of one per
centum per month up to November 17, 1983, together with the
amounts of assessments and taxes on the property that the
private respondent might have paid after purchase and interest
on the last named amount at the same rate as that on the
purchase price. 13

WHEREFORE, the petition is GRANTED. The Decision dated

September 17, 1986, and the Resolution dated May 7, 1987 of
the Court of Appeals, and the Orders dated September 22,
1983, October 12, 1984, and October 22, 1984 of the Regional
Trial Court of Daet, Camarines Norte, are hereby REVERSED
and SET ASIDE, and another one ENTERED directing the
private respondent to reconvey the subject property and to
execute the corresponding deed of reconveyance therefor in
favor of the petitioners upon the return to him by the latter of
the purchase price and the amounts, if any, of assessments or
taxes he paid plus interest of one (1%) per centum per month
on both amounts up to November 17, 1983

No. 96948 August 2, 1991

B/GEN. JOSE COMENDADOR, B/GEN. MARCELO

BLANDO, CAPT. DANILO PIZARRO PN, CAPT. MANUEL
ISON PN, LTC. ROMELINO GOJO PN (M), LTC. ARSENIO
TECSON PA, LTC. RAFAEL GALVEZ PA, LTC. TIBURCIO
FUSILLERO PA, LTC. ERICSON AURELIO PA, LTC.
JACINTO LIGOT PA, LTC. FRANKLIN BRAWNER PA, MAJ.
ALFREDO OLIVEROS PA, MAJ. CESAR DE LA PENA PN
(M): MAJ. LEUVINO VALENCIA PA, CAPT. FLORENCIO
FLORES PA, CAPT. JAIME JUNIO PA, CAPT. DANILO LIM
PA, CAPT. ELMER AMON PAF CAPT. VERGEL NACINO,
and
LT.
JOEY
SARROZA, petitioners,
vs.
B/GEN. DEMETRIO CAMUA COL. HERMINIO A. MENDOZA,
COL. ERNESTO B. YU, COL. ROMEO ODI COL. WILLY
FLORENDO, COL. DIONY A. VENTURA, and CAPT.
FRANCISCO T. MALLILLIN PRESIDENT AND MEMBERS
OF GENERAL COURT-MARTIAL NO. 14, respondents.
No. 97454 August 2, 1991
AFP CHIEF OF STAFF LT. GEN. RODOLFO BIAZON,
DEPUTY CHIEF OF STAFF MAJOR GEN. ALEXANDER
AGUIRRE, PNP DIRECTOR GENERAL MAJOR GEN.
CESAR NAZARENO and LT. COL. ALBERTO OLARIO,
Commanding Officer of the PNP/INP Detention
Center/Jail, petitioners,
vs.
HON. ANTONIO P. SOLANO, Presiding Judge, Regional

Trial Court, Quezon City, Branch 86, CAPTAIN REYNALDO

S. RAFAEL, 1 LT SERVANDO A. BAOANAN PN(M), 1 LT.
WILFREDO JIMENEZ PAF 1 LT. ATANACIO T. MACALAN
JR PMM 2LT ELISEO T. RASCO PC, 2LT JONAS CALLEJA
PC, 2LT JAIRUS JS GELVEZON III PMM 2LT JOSELITO
CABREROS PMM 2LT MEMEL ROJAS PN(M) and 2LT
HERMINIO L. CANTACO PC, respondents.
CRUZ, J.:p
These four cases have been consolidated because they
involve practically the same parties and related issues arising
from the same incident.

The petitioners in G.R. Nos. 93177 and 96948 and the private
respondents in G.R. Nos. 95020 and 97454 are officers of the
Armed Forces of the Philippines facing prosecution for their
alleged participation in the failed coup d' etat that took place
on December 1 to 9, 1989.

The charges against them are violation of Articles of War (AW)

67 (Mutiny), AW 96 (Conduct Unbecoming an Officer and a
Gentleman) and AW 94 (Various Crimes) in relation to Article
248 of the Revised Penal Code (Murder).

In G.R. No. 93177, which is a petition for certiorari, prohibition

and mandamus, they are questioning the conduct of the PreTrial Investigation PTI Panel constituted to investigate the

charges against them and the creation of the General Court

Martial GCM convened to try them.

issued a uniform subpoena dated January 30, 1990,

individually addressed to the petitioners, to wit:

In G.R. No. 96948, the petitioners, besides challenging the

legality of GCM No. 14, seek certiorari against its ruling
denying them the right to peremptory challenge as granted by
Article 18 of Com. Act No. 408.

You are hereby directed to appear in person before the

undersigned Pre-Trial Investigating Officers on 12 Feb 90
9:00 a.m. at Kiangan Hall, Camp Crame Quezon City, then
and there to submit your counter-affidavit and the affidavits
of your witnesses, if any, in the pre-trial investigation of the
charge/charges against you for violence of AWs
_______________. DO NOT SUBMIT A MOTION TO
DISMISS.

In G.R. No. 95020, the orders of the respondent judge of the

Regional Trial Court of Quezon City are assailed on
certiorari on the ground that he has no jurisdiction over GCM
No. 14 and no authority either to set aside its ruling denying
bail to the private respondents.

In G.R. No. 97454, certiorari is also sought against the

decision of the Regional Trial Court of Quezon City in a
petition for habeas corpus directing the release of the private
respondents. Jurisdictional objections are likewise raised as in
G.R. No. 95020.

I
Before the charges were referred to GCM No. 14, a Pre-Trial
Investigation PTI Panel had been constituted pursuant to
Office Order No. 16 dated January 14, 1990, to investigate the
petitioners in G.R. Nos. 93177 and 96948. The PTI Panel

Failure to submit the aforementioned counter-affidavits on

the date above specified shall be deemed a waiver of your
right to submit controverting evidence.

On the same date, the petitioners acknowledged receipt of a

copy of the charge sheet, sworn statements of witnesses, and
death and medical certificates of victims of the rebellion.

At the first scheduled hearing, the petitioners challenged the

proceedings on various grounds, prompting the PTI Panel to
grant them 10 days within which to file their objections in
writing This was done through a Motion for Summary
Dismissal dated February 21, 1990.

In a resolution dated February 27,1990, the PTI Panel denied

the motion and gave the petitioners 5 days from notice to
submit their respective counter-affidavits and the affidavits of
their witnesses.

On March 7, 1990, the petitioners verbally moved for

reconsideration of the foregoing denial and the PTI Panel gave
them 7 days within which to reduce their motion to writing. This
was done on March 14,1990.

The petitioners now claim that there was no pre-trial

investigation of the charges as mandated by Article of War 71,
which provides:
Art. 71. Charges Action upon. Charges and
specifications must be signed by a person
subject to military law, and under the oath either
that he has personal knowledge of, or has
investigated, the matters set forth therein and
that the same are true in fact, to the best of his
knowledge and belief.
No charge will be referred to a general courtmartial for trial until after a thorough and
impartial investigation thereof shall have been
made. This investigation will include inquiries
as to the truth of the matter set forth in said
charges, form of charges, and what disposition
of the case should be made in the interest of
justice and discipline. At such investigation full

opportunity shall be given to the accused to

cross-examine witnesses against him if they
are available and to present anything he may
desire in his own behalf, either in defense or
mitigation, and the investigating officer shall
examine available witnesses requested by the
accused. If the charges are forwarded after
such investigation, they shall be accompanied
by a statement of the substance of the
testimony taken on both sides. (Emphasis
supplied.)

They also allege that the initial hearing of the charges

consisted merely of a roll call and that no prosecution
witnesses were presented to reaffirm their affidavits. while the
motion for summary dismissal was denied, the motion for
reconsideration remains unresolved to date and they have not
been able to submit their counter-affidavits.

At the hearing of May 15, 1990, the petitioners in G.R. No.

96948 manifested that they were exercising their right to raise
peremptory challenges against the president and members of
GCM No.14. They invoked Article 18 of Com. Act No. 408 for
this purpose. GCM No. 14 ruled, however, that peremptory
challenges had been discontinued under P.D. No. 39.

In G.R. No. 95020, Ltc Jacinto Ligot applied for bail on June 5,
1990, but the application was denied by GCM No.14. He

thereupon filed with the Regional Trial Court of Quezon City a

petition for certiorari and mandamus with prayer for provisional
liberty and a writ of preliminary injunction. After considering the
petition and the answer thereto filed by the president and
members of GCM No.14, Judge Maximiano C. Asuncion
issued an order granting provisional liberty to Ligot.

General Court- Martial No. 14 denying bail to

petitioner and intervenors on the mistaken
assumption that bail does not apply to military
men facing court-martial proceedings on the
ground that there is no precedent, are hereby
set aside and declared null and void.
Respondent General Court-Martial No. 14 is
hereby directed to conduct proceedings on the
applications of bail of the petitioner, intervenors
and which may as well include other persons
facing charges before General Court-Martial
No. 14.

On July 28, 1990, Ligot filed an urgent omnibus motion to

enforce the order for his release and to declare in contempt
the commanding officer of the PC/INP Jail for disobey 'ng the
said order. He later also complained that Generals De Villa
and Aguirre had refused to release him "pending final
resolution of the appeal to be taken" to this Court.

After hearing, the trial court reiterated its order for the
provisional liberty of Ligot, as well as of intervenors Ltc
Franklin Brawner, Lt/Col. Arsenio Tecson and Maj. Alfredo
Oliveros, and later of additional intervenors Ltc Romelino Gojo
and Capt. Manuel Ison.

On August 22, 1990, the trial court rendered judgment inter

alia:
(a) Declaring, that Section 13, Article III of the
Constitution granting the right to bail to all
persons with the defined exception is applicable
and covers all military men facing court-martial
proceedings. Accordingly, the assailed orders of

Pending the proceedings on the applications for

bail before General Court-Martial No. 14, this
Court reiterates its orders of release on the
provisional liberty of petitioner Jacinto Ligot as
well as intervenors Franklin Brawner and
Arsenio Tecson.

On February 18, 1991, the private respondents in G.R. No.

97454 filed with this Court a petition for habeas corpus on the
ground that they were being detained in Camp Crame without
charges. The petition was referred to the Regional Trial Court
of Quezon City, where it was raffled to respondent Judge
Antonio P. Solano. Finding after hearing that no formal
charges had been filed against the petitioners after more than
a year after their arrest, the trial court ordered their release.

II

The Court has examined the records of this case and rules as
follows.

It appears that the petitioners in G.R. Nos. 93177 and 96948

were given several opportunities to present their side at the
pre-trial investigation, first at the scheduled hearing of
February 12, 1990, and then again after the denial of their
motion of February 21, 1990, when they were given until
March 7, 1990, to submit their counter-affidavits. On that date,
they filed instead a verbal motion for reconsideration which
they were again asked to submit in writing. This they did on
March 13, 1990. The motion was in effect denied when the PTI
Panel resolved to recommend that the charges be referred to
the General Court Martial for trial.

Due process is satisfied as long as the party is accorded an

opportunity to be heard. If it is not availed of, it is deemed
waived or forfeited without violation of the Bill of Rights.

There was in our view substantial compliance with Article of

War 71 by the PTI Panel. Moreover, it is now settled that "even
a failure to conduct a pre-trial investigation does not deprive a
general court- martial of jurisdiction." We so held in Arula v.
Espino, 1 thus:
xxx xxx xxx

But even a failure to conduct a pre-trial investigation does

not deprive a general court-martial of jurisdiction.
The said petitioners cannot now claim they have been denied
due process because the investigation was resolved against
them owing to their own failure to submit their counteraffidavits. They had been expressly warned In the subpoena
sent them that "failure to submit the aforementioned counteraffidavits on the date above specified shall be deemed a
waiver of (their) right to submit controverting evidence." They
chose not to heed the warning. As their motions appeared to
be dilatory, the PTI Panel was justified in referring the charges
to GCM No. 14 without waiting for the petitioners to submit
their defense.

The better accepted concept of pre-trial investigation is that

it is directory, not mandatory, and in no way affects the
jurisdiction of a court-martial. In Humphrey v. Smith, 336
U.S. 695, 93 L ed 986 (1949), the Court said:

We do not think that the pre-trial investigation procedure

by Article 70 (The Philippine counter-part is article of war
71, Commonwealth Act 408) can properly be construed
as an indispensable pre-requisite to the exercise of the
Army General court martial jurisdiction.. The Article does
serve important functions in the administration of courtmartial procedures and does provide safeguards to an
accused. Its language is clearly such that a defendant

could object to trial in the absence of the required

investigation. In that event the court-martial could itself
postpone trial pending the investigation. And the military
reviewing authorities could consider the same
contention, reversing a court- martial conviction where
failure to comply with Article 70 has substantially injured
an accused. But we are not persuaded that Congress
intended to make otherwise valid court-martial judgments
wholly void because pre-trial investigations fall short of
the standards prescribed by Article 70. That Congress
has not required analogous pre-trial procedure for Navy
court-martial is an indication that the investigatory plan
was not intended to be exalted to the jurisdictional level.

A trial before a general court-martial convened without

any pretrial investigation under article of war 71 would of
course be altogether irregular but the court-martial might
nevertheless have jurisdiction. Significantly, this rule is
similar to the one obtaining in criminal procedure in the
civil courts to the effect that absence of preliminary
investigation does not go into the jurisdiction of the court
but merely to the regularity of the proceedings.

As to what law should govern the conduct of the preliminary

investigation, that issue was resolved more than two years ago
in Kapunan v. De Villa, 2 where we declared:

xxx xxx xxx

Shortly after enactment of Article 70 in 1920 the Judge
Advocate General of the Army did hold that where there
had been no pre-trial investigation, court-martial
proceedings were void ab initio. But this holding has
been expressly repudiated in later holdings of the Judge
Advocate General. This later interpretation has been that
the pre-trial requirements of Article 70 are directory, not
mandatory, and in no way effect the jurisdiction of a
court-martial. The War Department's interpretation was
pointedly called to the attention of Congress in 1947 after
which Congress amended Article 70 but left unchanged
the language here under consideration. compensable
pre-requisite to the exercise of Army general courtmartial jurisdiction

The Court finds that, contrary to the contention of

petitioners, there was substantial compliance with the
requirements of law as provided in the Articles of War and
P.D. No. 77, as amended by P.D. No. 911. The amended
charge sheets, charging petitioners and their corespondents with mutiny and conduct unbecoming an
officer, were signed by Maj. Antonio Ruiz, a person
subject to military law, after he had investigated the matter
through an evaluation of the pertinent records, including
the reports of respondent AFP Board of Officers, and was
convinced of the truth of the testimonies on record. The
charge sheets were sworn to by Maj. Ruiz, the "accuser,"
in accordance with and in the manner provided under Art.
71 of the Articles of War. Considering that P.D. No. 77, as
amended by P.D. No. 911, is only of suppletory
application, the fact that the charge sheets were not
certified in the manner provided under said decrees, i.e.,
that the officer administering the oath has personally
examined the affiant and that he is satisfied that they

voluntarily executed and understood its affidavit, does not

invalidate said charge sheets. Thereafter, a "pretrial
investigation" was conducted by respondent Maj.
Baldonado, wherein, pursuant to P.D. No. 77, as
amended by P.D. No. 911, petitioners were subpoenaed
and required to file their counter-affidavit. However,
instead of doing so, they filed an untitled pleading seeking
the dismissal of the charges against them. That
petitioners were not able to confront the witnesses against
them was their own doing, for they never even asked Maj.
Baldonado to subpoena said witnesses so that they may
be made to answer clarificatory questions in accordance
with P. D, No. 77, as amended by P.D. No. 911.

The petitioners also allege that GCM No. 14 has not been
constitute in accordance with Article 8 of the Articles of War
because General Order No. M-6, which supposedly convened
the body, was not signed by Gen. Renato de Villa as Chief of
Staff.

Academy, the commanding officer of a separate

brigade or body of troops may appoint general
courts-martial; but when any such commander
is the accuser or the prosecutor of the person
or persons to be tried, the court shall be
appointed by superior competent authority. ...

While it is true that General Order No. M-6 was not signed by
Gen. De Villa, there is no doubt that he authorized it because
the order itself said it was issued "By Command of General De
Villa" and it has not been shown to be spurious. As observed
by the Solicitor General, the Summary Disposition Form
showed that Gen. De Villa, as Chief of Staff, AFP, actually
constituted GCM No. 14 and appointed its president and
members. It is significant that General De Villa has not
disauthorized or revoked or in any way disowned the said
order, as he would certainly have done if his authority had
been improperly invoked. On the contrary, as the principal
respondent in G.R. No. 93177, he sustained General Order
No. M 6 in the Comment filed for him and the other
respondents by the Solicitor General.

Article of War No. 8 reads:

Art. 8. General Courts-Martial. The President
of the Philippines, the Chief of Staff of the
Armed Forces of the Philippines, the Chief of
Constabulary and, when empowered by the
President, the commanding officer of a major
command or task force, the commanding officer
of a division, the commanding officer of a
military area, the superintendent of the Military

Coming now to the right to peremptory challenge, we note that

this was originally provided for under Article 18 of Com. Act
No. 408 (Articles of War), as amended by Rep. Act No. 242, on
June 12, 1948, to wit:
Art. 18. Challenges. Members of general or
special courts-martial may be challenged by the
accused or the trial judge advocate for cause

stated to the court. The court shall determine

the relevancy and validity thereof, and shall not
receive a challenge to more than one member
at a time. Challenges by the trial judge
advocate shall ordinarily be presented and
decided before those by the accused are
offered. Each side shall be entitled to the
peremptory challenge, but the law member of
the court shall not be challenged except for
cause.

The history of peremptory challenge was traced in Martelino v.

Alejandro, 3 thus:
In the early formative years of the infant Philippine Army,
after the passage in 1935 of Commonwealth Act No. 1
(otherwise known as the National Defense Act), except for a
handful of Philippine Scout officers and graduates of the
United States military and naval academies who were on
duty with the Philippine Army, there was a complete dearth
of officers learned in military law, its aside from the fact that
the officer corps of the developing army was numerically
made equate for the demands of the strictly military aspects
of the national defense program. Because of these
considerations it was then felt that peremptory challenges
should not in the meanwhile be permitted and that only
challenges for cause, in any number, would be allowed.
Thus Article 18 of the Articles of War (Commonwealth Act
No. 408), as worded on September 14, 1938, the date of
the approval of the Act, made no mention or reference to
any peremptory challenge by either the trial judge advocate
of a court- martial or by the accused. After December

17,1958, when the Manual for Courts-Martial of the

Philippine Army became effective, the Judge Advocate
General's Service of the Philippine Army conducted a
continuing and intensive program of training and education
in military law, encompassing the length and breadth of the
Philippines. This program was pursued until the outbreak of
World War 11 in the Pacific on December 7, 1941. After the
formal surrender of Japan to the allies in 1945, the officer
corps of the Armed Forces of the Philippines had expanded
to a very large number, and a great many of the officers had
been indoctrinated in military law. It was in these
environmental circumstances that Article of War 18 was
amended on June 12,1948 to entitle "each side" to one
peremptory challenge, with the sole proviso that "the law
member of court shall not be challenged except for cause.

On September 27,1972, President Marcos issued General

Order No. 8, empowering the Chief of Staff of the Armed
Forces to create military tribunals "to try and decide cases of
military personnel and such other cases as may be referred to
them.

On November 7,1972, he promulgated P.D. No. 39 (Governing

the Creation, Composition, Jurisdiction, Procedure, and other
matters relevant to military Tribunals). This decree disallowed
the peremptory challenge, thus:

No peremptory challenge shall be allowed. Challenges for

cause may be entertained to insure impartiality and good
faith. Challenges shall immediately be heard and
determined by a majority of the members excluding the
challenged member. A tie vote does not disqualify the
challenged member. A successfully challenged member
shall be immediately replaced.

On June 11, 1978, President Marcos promulgated P.D. No.

1498, or the National Security Code, which was a compilation
and codification of decrees, general orders, LOI and policies
intended "to meet the continuing threats to the existence,
security and stability of the State." The modified rule on
challenges under P.D. No. 39 was embodied in this decree.

On January 17,1981, President Marcos issued Proc. No. 2045

proclaiming the termination of the state of martial law
throughout the Philippines. The proclamation revoked General
Order No. 8 and declared the dissolution of the military
tribunals created pursuant thereto upon final determination of
the cases pending therein.

P.D. No. 39 was issued to implement General Order No. 8 and

the other general orders mentioned therein. With the
termination of martial law and the dissolution of the military
tribunals created thereunder, the reason for the existence of
P.D. No. 39 ceased automatically.

It is a basic canon of statutory construction that when the

reason of the law ceases, the law itself ceases. Cessante
ratione legis, cessat ipsa lex. This principle is also expressed
in the maxim ratio legis est anima: the reason of law is its soul.
Applying these rules, we hold that the withdrawal of the right to
peremptory challenge in L P.D. No. 39 became ineffective
when the apparatus of martial law was dismantled with the
issuance of Proclamation No. 2045, As a result, the old rule
embodied in Article 18 of Com. Act No. 408 was automatically
revived and now again allows the right to peremptory
challenge.

We do not agree with the respondents in G.R. No. 96948 that

the right to peremptory challenge remains withdrawn under
P.D. No. 39. To repeat for emphasis, this decree was itself
withdrawn when martial law was lifted on January 17, 1981.
Indeed, even if not so withdrawn, it could still be considered no
longer operative, having been cast out under the new
dispensation as, in the words of the Freedom Constitution, one
of the "iniquitous vestiges of the previous regime.

The military tribunal was one of the most oppressive

instruments of martial law. It is curious that the present
government should invoke the rules of that discredited body to
justify its action against the accused officers.

The Court realizes that the recognition of the right to

peremptory challenge may be exploited by a respondent in a
court-martial trial to delay the proceedings and defer his
deserved Punishment. It is hoped that the accused officers in
the cases at bar will not be so motivated. At any rate, the
wisdom of Com. Act No. 408, in the light of present
circumstances, is a matter addressed to the law-makers and
not to this Court. The judiciary can only interpret and apply the
laws without regard to its own misgivings on their adverse
effects. This is a problem only the political departments can
resolve.

It should be noted that the aforecited provision and the case

cited refer to ordinary appeals and not to the remedies
employed by the accused officers before the respondent
courts.

In Martelino, we observed as follows:

The petitioners in G.R. Nos. 95020 and 97454 question the

propriety of the petition for certiorari and mandamus and the
petition for habeas corpus filed by the private respondents with
the Regional Trial Courts of Quezon City. It is argued that
since the private respondents are officers of the Armed Forces
accused of violations of the Articles of War, the respondent
courts have no authority to order their release and otherwise
interfere with the court-martial proceedings.

It is true that civil courts as a rule exercise no supervision

or correcting power over the proceedings of courtsmartial, and that mere errors in their proceedings are not
open to consideration. The single inquiry, the test, is
jurisdiction. But it is equally true that in the exercise of
their undoubted discretion, courts-martial may commit
such an abuse of discretion what in the language of
Rule 65 is referred to as "grave abuse of discretion"
as to give rise to a defect in their jurisdiction. This is
precisely the point at issue in this action suggested by its
nature as one for certiorari and prohibition ... .

The petitioners further contend that under Sec. 9(3) of BP 1

29, the Court of Appeals is vested with "exclusive appellate
jurisdiction over all final judgments, decisions, resolutions,
orders, or awards of Regional Trial Courts and quasi-judicial
agencies, instrumentalities, boards or commissions." Rather
irrelevantly, the petitioners also cite the case of Yang v. Court
of Appeals 4 where this Court held that "appeals from the
Professional Regulation Commission are now exclusively
cognizable by the Court of Appeals.

The Regional Trial Court has concurrent jurisdiction with the

Court of Appeals and the Supreme Court over petitions
for certiorari, prohibition or mandamus against inferior courts
and other bodies and on petitions forhabeas corpus and quo
warranto. 5 In the absence of a law providing that the
decisions, orders and ruling of a court-martial or the Office of
the Chief of Staff can be questioned only before the Court of
Appeals and the Supreme Court, we hold that the Regional
Trial Court can exercise similar jurisdiction.

We find that the right to bail invoked by the private

respondents in G.R. Nos. 95020 has traditionally not been
recognized and is not available in the military, as an exception
to the general rule embodied in the Bill of Rights. This much
was suggested in Arula, where we observed that "the right to a
speedy trial is given more emphasis in the military where the
right to bail does not exist.

National security considerations should also impress upon

this Honorable Court that release on bail of respondents
constitutes a damaging precedent. Imagine a scenario of
say 1,000 putschists roaming the streets of the Metropolis
on bail, or if the assailed July 25,1990 Order were
sustained, on "provisional" bail. The sheer number alone
is already discomforting. But, the truly disquieting thought
is that they could freely resume their heinous activity
which could very well result in the overthrow of duly
constituted authorities, including this Honorable Court,
and replace the same with a system consonant with their
own concept of government and justice.

The justification for this exception was well explained by the

Solicitor General as follows:
The unique structure of the military should be enough
reason to exempt military men from the constitutional
coverage on the right to bail.
Aside from structural peculiarity, it is vital to note that
mutinous soldiers operate within the framework of
democratic system, are allowed the fiduciary use of
firearms by the government for the discharge of their
duties and responsibilities and are paid out of revenues
collected from the people. All other insurgent elements
carry out their activities outside of and against the existing
political system.

xxx xxx xxx

The argument that denial from the military of the right to bail
would violate the equal protection clause is not acceptable.
This guaranty requires equal treatment only of persons or
things similarly situated and does not apply where the subject
of the treatment is substantially different from others. The
accused officers can complain if they are denied bail and other
members of the military are not. But they cannot say they have
been discriminated against because they are not allowed the
same right that is extended to civilians.

On the contention of the private respondents in G.R. No.

97454 that they had not been charged after more than one
year from their arrest, our finding is that there was substantial
compliance with the requirements of due process and the right
to a speedy trial.

The petition for habeas corpus was directly filed with this Court
on February 18, 1991, and was referred to the Regional Trial
Court of Quezon City for raffle, hearing and decision. It was
heard on February 26, 1991, by the respondent court, where
the petitioners submitted the charge memorandum and
specifications against the private respondents dated January
30, 1991. On February 12, 1991, pursuant to Office Order No.
31-91, the PTI panel was created and initial investigation was
scheduled on March 12, 1991 at 2:00 p.m. On March 20,
1991, the private respondents received the copies of the
charges, charge sheets and specifications and were required
to submit their counter-affidavits on or before April 11, 1991.
There was indeed a delay of more than one year in the
investigation and preparation of the charges against the
private respondents. However, this was explained by the
Solicitor General thus:

... The AFP Special Investigating Committee was able to

complete it pre-charge investigation only after one (1) year
because hundreds of officers and thousands of enlisted
men were involved in the failed coup. All of them, as well as
other witnesses, had to be interviewed or investigated, and
these inevitably took months to finish. The pre-charge
investigation was rendered doubly difficult by the fact that
those involved were dispersed and scattered throughout the
Philippines. In some cases, command units, such as the
Scout Rangers, have already been disbanded. After the
charges were completed, the same still had to pass review
and approval by the AFP Chief of Staff.

While accepting this explanation, the Court nevertheless must

reiterate the following admonition:
This Court as protector of the rights of the people, must
stress the point that if the participation of petitioner in
several coup attempts for which he is confined on orders of
Adjutant General Jorge Agcaoili cannot be established and
no charges can be filed against him or the existence of
a prima facie case warranting trial before a military
commission is wanting, it behooves respondent then Major
General Rodolfo Biazon (now General) to release
petitioner. Respondents must also be reminded that even if
a military officer is arrested pursuant to Article 70 of then
Articles of War, indefinite confinement is not sanctioned, as
Article 71 thereof mandates that immediate steps must be
taken to try the person accused or to dismiss the charge
and release him. Any officer who is responsible for
unnecessary delay in investigating or carrying the case to
a final conclusion may even be punished as a court martial
may direct. 6

It should be noted, finally, that after the decision was rendered

by Judge Solano on February 26, 1991, the government filed a
notice of appeal ad cautelam and a motion for reconsideration,
the latter was ultimately denied, after hearing, on March 4,
1991. The 48- hour period for appeal under Rule 41, Section
18, of the Rules of Court did not run until after notice of such
denial was received by the petitioners on March 12, 1991.
Contrary to the private respondents' contention, therefore, the
decision had not yet become final and executory when the
special civil action in G.R. No. 97454 was filed with this Court
on March 12, 1991.

III
Regarding the propriety of the petitions at bar, it is well to
reiterate the following observations of the Court in Arula:

ACCORDINGLY, in G.R. No. 93177, the petition is

DISMISSED for lack of merit. In G.R. No. 96948, the petition is
GRANTED, and the respondents are DIRECTED to allow the
petitioners to exercise the right of peremptory challenge under
Article 18 of the Articles of War. In G.R. Nos. 95020 and
97454, the petitions are also GRANTED, and the orders of the
respondent courts for the release of the private respondents
are hereby REVERSED and SET ASIDE. No costs.

The referral of charges to a court-martial involves the

exercise of judgment and discretion (AW 71). A petition
for certiorari, in order to prosper, must be based on
jurisdictional grounds because, as long as the respondent
acted with jurisdiction, any error committed by him or it in
the exercise thereof will amount to nothing more than an
error of judgment which may be reviewed or corrected only
by appeal. Even an abuse of discretion is not sufficient by
itself to justify the issuance of a writ of certiorari.
D. Doctrine of Necessary Implication: Ex Necessitate
Legis From necessity of the law
As in that case, we find that the respondents in G.R. No.
93177 have not acted with grave abuse of discretion or without
or in excess of jurisdiction to justify the intervention of the
Court and the reversal of the acts complained of by the
petitioners. Such action is indicated, however, in G.R. No.
96948, where we find that the right to peremptory challenge
should not have been denied, and in G.R. Nos. 95020 and
97454, where the private respondents should not have been
ordered released.

LYDIA
O.
CHUA, petitioner,
vs.
THE CIVIL SERVICE COMMISSION, THE NATIONAL
IRRIGATION ADMINISTRATION and THE DEPARTMENT OF
BUDGET AND MANAGEMENT, respondents.

PADILLA, J.:

Pursuant to the policy of streamlining and trimming the

bureaucracy, Republic Act No. 6683 was approved on 2
December 1988 providing for benefits for early retirement and
voluntary separation from the government service as well as
for involuntary separation due to reorganization. Deemed
qualified to avail of its benefits are those enumerated in Sec. 2
of the Act, as follows:

Sec. 2. Coverage. This Act shall cover all appointive

officials and employees of the National Government, including
government-owned or controlled corporations with original
charters, as well as the personnel of all local government
units. The benefits authorized under this Act shall apply to all
regular, temporary, casual and emergency employees,
regardless of age, who have rendered at least a total of two
(2) consecutive years of government service as of the date of
separation. Uniformed personnel of the Armed Forces of the
Philippines including those of the PC-INP are excluded from
the coverage of this Act.

xxx xxx xxx

With due respect, I think the interpretation of the Honorable

Commissioner of RA 6683 does not conform with the
beneficent purpose of the law. The law merely requires that
a government employee whether regular, temporary,
emergency, or casual, should have two consecutive years
of government service in order to be entitled to its benefits. I
more than meet the requirement. Persons who are not
entitled are consultants, experts and contractual(s). As to
the budget needed, the law provides that the Department of
Budget and Management will shoulder a certain portion of
the benefits to be allotted to government corporations.
Moreover, personnel of these NIA special projects art
entitled to the regular benefits, such (sic) leaves,
compulsory retirement and the like. There is no reason why
we should not be entitled to RA 6683.

xxx xxx xxx 2

Petitioner Lydia Chua believing that she is qualified to avail of
the benefits of the program, filed an application on 30 January
1989 with respondent National Irrigation Administration (NIA)
which, however, denied the same; instead, she was offered
separation benefits equivalent to one half (1/2) month basic
pay for every year of service commencing from 1980. A
recourse by petitioner to the Civil Service Commission yielded
negative results. 1 Her letter for reconsideration dated 25 April
1989 pleaded thus:

Denying the plea for reconsideration, the Civil Service

Commission (CSC) emphasized:

xxx xxx xxx

We regret to inform you that your request cannot be

granted. The provision of Section 3.1 of Joint DBM-CSC
Circular Letter No. 89-1 does not only require an applicant
to have two years of satisfactory service on the date of
separation/retirement but further requires said applicant to
be on a casual, emergency, temporary or regular
employment status as of December 2, 1988, the date of
enactment of R.A. 6683. The law does not contemplate
contractual employees in the coverage.
Inasmuch as your employment as of December 31, 1988,
the date of your separation from the service, is coterminous with the NIA project which is contractual in
nature, this Commission shall sustain its original decision.
xxx xxx xxx 3

In view of such denial, petitioner is before this Court by way of

a special civil action for certiorari, insisting that she is entitled
to the benefits granted under Republic Act No. 6683. Her
arguments:

It is submitted that R.A. 6683, as well as Section 3.1 of the

Joint DBM-CSC Circular Letter No. 89-1 requires an
applicant to be on a casual, emergency, temporary or
regular employment status. Likewise, the provisions of
Section 23 (sic) of the Joint DBM-CSC Circular Letter No.
88-1, implementing guidelines of R.A. No. 6683, provides:

"2.3 Excluded from the benefits under R.A. No. 6683 are
the following:
a) Experts and Consultants hired by agencies for a limited
period to perform specific activities or services with a
definite expected output: i.e. membership in Task Force,
Part-Time, Consultant/Employees.
b) Uniformed personnel of the Armed Forces of the
Philippines including those of the Philippine Constabulary
and Integrated National Police (PC-INP).
c) Appointive officials and employees who retire or elect to
be separated from the service for optional retirement with
gratuity under R.A. No. 1616, 4968 or with pension under
R.A. No. 186, as amended by R.A. No. 6680 or P.D. No.
1146, an amended, or vice- versa.
d) Officials and employees who retired voluntarily prior to
the enactment of this law and have received the
corresponding benefits of that retirement/separation.
e) Officials and employees with pending cases punishable
by mandatory separation from the service under existing
civil service laws, rules and regulations; provided that if
such officials and employees apply in writing within the
prescriptive period for the availment of the benefits herein
authorized, shall be allowed only if acquitted or cleared of
all charges and their application accepted and approved by
the head of office concerned."

Based on the above exclusions, herein petitioner does not

belong to any one of them. Ms. Chua is a full time employee
of NIA entitled to all the regular benefits provided for by the
Civil Service Commission. She held a permanent status as
Personnel Assistant A, a position which belongs to the
Administrative Service. . . . If casuals and emergency
employees were given the benefit of R.A. 6683 with more
reason that this petitioner who was holding a permanent
status as Personnel Assistant A and has rendered almost
15 years of faithful, continuous service in the government
should be similarly rewarded by the beneficient (sic)
purpose of the law. 4

The NIA and the Civil Service Commission reiterate in their

comment petitioner's exclusion from the benefits of Republic
Act No. 6683, because:

1. Petitioner's employment is co-terminous with the project per

appointment papers kept by the Administrative Service in the
head office of NIA (the service record was issued by the
Watershed Management and Erosion Control Project
(WMECP), Pantabangan, Nueva Ecija). The project, funded by
the World Bank, was completed as of 31 December 1988,
after which petitioner's position became functus officio.

2. Petitioner is not a regular and career employee of NIA

her position is not included in its regular plantilla. She belongs
to the non-career service (Sec. 6, P.D. No. 807) which is

inherently short-lived, temporary and transient; on the other

hand, retirement presupposes employment for a long period.
The most that a non-career personnel can expect upon the
expiration of his employment is financial assistance. Petitioner
is not even qualified to retire under the GSIS law.

3. Assuming arguendo that petitioner's appointment is

permanent, security of tenure is available only for the term of
office (i.e., duration of project).

4. The objective of Republic Act No. 6683 is not really to grant

separation or retirement benefits but reorganization 5 to
streamline government functions. The application of the law
must be made consistent with the purpose for which it was
enacted. Thus, as the expressed purpose of the law is to
reorganize the government, it will not have any application to
special projects such as the WMECP which exists only for a
short and definite period. This being the nature of special
projects, there is no necessity for offering its personnel early
retirement benefits just to induce voluntary separation as a
step to reorganization. In fact, there is even no need of
reorganizing the WMECP considering its short and limited lifespan. 6

5. The law applies only to employees of the national

government, government-owned or controlled corporations
with original charters and local government units.

Due to the impossibility of reconciling the conflicting

interpretations of the parties, the Court is called upon to define
the different classes of employees in the public sector (i.e.
government civil servants).

Who are regular employees? The Labor Code in Art. 280 (P.D.
No. 492, as amended) deems an employment regular where
the employee has been engaged to perform activities which
are usually necessary or desirable in the usual business or
trade of the employer. No equivalent definition can be found in
P.D.No. 807 (promulgated on 6 October 1975, which
superseded the Civil Service Act of 1965 R.A. No. 2260) or
in the Administrative Code of 1987 (Executive Order No. 292
promulgated on 25 July 1987). The Early Retirement Law itself
(Rep. Act No. 6683) merely includes such class of employees
(regular employees) in its coverage, unmindful that no such
specie is employed in the public sector.

The appointment status of government

the career service is classified as follows:

employees

2. temporary In the absence of appropriate eligibles and it

becomes necessary in the public interest to fill a vacancy, a
temporary appointment should be issued to a person who
meets all the requirements for the position to which he is being
appointed except the appropriate civil service eligibility:
Provided, That such temporary appointment shall not exceed
twelve months, but the appointee may be replaced sooner if a
qualified civil service eligible becomes available. 8

The Administrative Code of 1987 characterizes the Career

Service as:
(1) Open Career positions for appointment to which prior
qualification in an appropriate examination is required;
(2) Closed Career positions which are scientific, or highly
technical in nature; these include the faculty and academic
staff of state colleges and universities, and scientific and
technical positions in scientific or research institutions which
shall establish and maintain their own merit systems;

in

1. permanent one issued to a person who has met the

requirements of the position to which appointment is made, in
accordance with the provisions of the Civil Service Act and the
Rules and Standards promulgated in pursuance thereof; 7

(3) Positions in the Career Executive Service; namely,

Undersecretary, Assistant Secretary, Bureau Director,
Assistant Bureau Director, Regional Director, Assistant
Regional Director, Chief of Department Service and other
officers of equivalent rank as may be identified by the
Career Executive Service Board, all of whom are appointed
by the President.

(4) Career officers, other than those in the Career Executive

Service, who are appointed by the President, such as the
Foreign Service Officers in the Department of Foreign
Affairs;

or subject to his pleasure, or which is limited to

the duration of a particular project for which
purpose employment was made.

Included in the non-career service are:

1. elective officials and their personal or confidential staff;
(5) Commission officers and enlisted men of the Armed
Forces which shall maintain a separate merit system;

(6) Personnel of government-owned or controlled

corporations, whether performing governmental or
proprietary functions, who do not fall under the non-career
service; and

(7) Permanent laborers, whether skilled, semi-skilled, or

unskilled. 9

The Non-Career Service, on the other hand, is characterized

by:
. . . (1) entrance on bases other than those of
the usual tests of merit and fitness utilized for
the career service; and (2) tenure which is
limited to a period specified by law, or which is
coterminous with that of the appointing authority

2. secretaries and other officials of Cabinet rank who hold

their positions at the pleasure of the President and their
personal confidential staff(s);
3. Chairman and Members of Commissions and boards with
fixed terms of office and their personal or confidential staff;
4. contractual personnel or those whose employment in the
government is in accordance with a special contract to
undertake a specific work or job requiring special or
technical skills not available in the employing agency, to be
accomplished within a specific period, which in no case
shall exceed one year and performs or accomplishes the
specific work or job, under his own responsibility with a
minimum of direction and supervision from the hiring
agency.
5. emergency and seasonal personnel. 10
There is another type of non-career employee:
Casual where and when employment is not permanent
but occasional, unpredictable, sporadic and brief in nature

(Caro v. Rilloroza, 102 Phil. 70; Manuel v. P.P. Gocheco

Lumber Co., 96 Phil. 945)

Consider petitioner's record of service:

Service with the government commenced on 2 December
1974 designated as a laborer holding emergency status
with the NIA Upper Pampanga River Project, R & R
Division. 11 From 24 March 1975 to 31 August 1975, she
was a research aide with temporary status on the same
project. On 1 September 1975 to 31 December 1976, she
was with the NIA-FES III; R & R Division, then on 1 January
1977 to 31 May 1980, she was with NIA UPR IIS (Upper
Pampanga River Integrated Irrigation Systems) DRD. On 1
June 1980, she went to NIA W.M.E.C.P. (Watershed
Management & Erosion Control Project) retaining the status
of temporary employee. While with this project, her
designation was changed to personnel assistant on 5
November 1981; starting 9 July 1982, the status
became permanent until the completion of the project on 31
December 1988. The appointment paper 12 attached to the
OSG's comment lists her status as co-terminus with the
Project.

The employment status of personnel hired under foreign

assisted projects is considered co-terminous, that is, they are
considered employees for the duration of the project or until
the completion or cessation of said project (CSC
Memorandum Circular No. 39, S. 1990, 27 June 1990).

Republic Act No. 6683 seeks to cover and benefits regular,

temporary, casual and emergency employees who have
rendered at least a total of two (2) consecutive years
government service.

Resolution No. 87-104 of the CSC, 21 April 1987, provides:

WHEREAS, pursuant to Executive Order No. 966 dated

June 22, 1984, the Civil Service Commission is charged with
the function of determining creditable services for retiring
officers and employees of the national government;
WHEREAS, Section 4 (b) of the same Executive Order No.
966 provides that all previous services by an
officer/employee pursuant to a duly approved appointment to
a position in the Civil Service are considered creditable
services, while Section 6 (a) thereof states that services
rendered on contractual, emergency or casual status are
non-creditable services;
WHEREAS, there is a need to clarify the aforesaid
provisions inasmuch as some contractual, emergency or
casual employment are covered by contracts or
appointments duly approved by the Commission.

NOW, therefore, the Commission resolved that services

rendered on contractual, emergency or casual status,
irrespective of the mode or manner of payment therefor shall
be considered as creditable for retirement purposes subject
to the following conditions: (emphasis provided)

1. These services are supported by approved appointments,

official records and/or other competent evidence.
Parties/agencies concerned shall submit the necessary proof
of said services;

the Project. CSC Memorandum Circular No. 11, series of 1991

(5 April 1991) characterizes the status of a co-terminous
employee

(3) Co-terminous status shall be issued to a person whose

entrance in the service is characterized by confidentiality by
the appointing authority or that which is subject to his
pleasure or co-existent with his tenure.

The foregoing status (co-terminous) may be further

classified into the following:
2. Said services are on full time basis and rendered prior to
June 22, 1984, the effectivity date of Executive Order No.
966; and

3. The services for the three (3) years period prior to

retirement are continuous and fulfill the service requirement
for retirement.

What substantial differences exist, if any, between casual,

emergency, seasonal, project, co-terminous or contractual
personnel? All are tenurial employees with no fixed term, noncareer, and temporary. The 12 May 1989 CSC letter of
denial 13 characterized herein petitioner's employment as coterminous with the NIA project which in turn was contractual in
nature. The OSG says petitioner's status is co-terminous with

a) co-terminous with the project When the appointment is

co-existent with the duration of a particular project for which
purpose employment was made or subject to the availability
of funds for the same;
b) co-terminous with the appointing authority when
appointment is co-existent with the tenure of the appointing
authority.
c) co-terminous with the incumbent when appointment is
co-existent with the appointee, in that after the resignation,
separation or termination of the services of the incumbent
the position shall be deemed automatically abolished; and
d) co-terminous with a specific period, e.g. "co-terminous
for a period of 3 years" the appointment is for a specific
period and upon expiration thereof, the position is deemed
abolished.

continuously from one project to another were considered nonproject-regular and permanent employees.
It is stressed, however, that in the last two classifications (c)
and (d), what is termed co-terminous is the position, and not
the appointee-employee. Further, in (c) the security of
tenure of the appointee is guaranteed during his
incumbency; in (d) the security of tenure is limited to a
specific period.

A co-terminous employee is a non-career civil servant,

like casual and emergency employees. We see no solid
reason why the latter are extended benefits under the Early
Retirement Law but the former are not. It will be noted that
Rep. Act No. 6683 expressly extends its benefits for early
retirement
to regular,
temporary,
casual and
emergency employees. But specifically excluded from the
benefits are uniformed personnel of the AFP including those of
the PC-INP. It can be argued that, expressio unius est exclusio
alterius. The legislature would not have made a specific
enumeration in a statute had not the intention been to restrict
its meaning and confine its terms and benefits to those
expressly mentioned 14 or casus omissus pro omisso
habendus est A person, object or thing omitted from an
enumeration must be held to have been omitted
intentionally. 15 Yet adherence to these legal maxims can result
in incongruities and in a violation of the equal protection clause
of the Constitution.

The case of Fegurin, et al. v. NLRC, et al., 16 comes to mind

where, workers belonging to a work pool, hired and re-hired

Petitioner Lydia Chua was hired and re-hired in four (4)

successive projects during a span of fifteen (15) years.
Although no proof of the existence of a work pool can be
assumed, her service record cannot be disregarded.

Art. III, Sec. 1 of the 1987 Constitution guarantees: "No person

shall be deprived of life, liberty, or property without due
process of law, nor shall any person be denied the equal
protection of the laws."

. . . In Felwa vs. Salas, L-26511, Oct. 29, 1966, We ruled

that the equal protection clause applies only to persons or
things identically situated and does not bar a reasonable
classification of the subject of legislation, and a
classification is reasonable where (1) it is based on
substantial distinctions which make real differences; (2)
these are germane to the purpose of the law; (3) the
classification applies not only to present conditions but also
to future conditions which are substantially identical to
those of the present; (4) the classification applies only to
those who belong to the same class. 17

Applying the criteria set forth above, the Early Retirement

Law would violate the equal protection clause were we to
sustain respondents' submission that the benefits of said
law are to be denied a class of government employees
who are similarly situated as those covered by said law.
The maxim of Expressio unius est exclusio alterius should
not be the applicable maxim in this case but the doctrine
of necessary implication which holds that:

No statute can be enacted that can provide all the details

involved in its application. There is always an omission that
may not meet a particular situation. What is thought, at the
time of enactment, to be an all-embracing legislation may
be inadequate to provide for the unfolding events of the
future. So-called gaps in the law develop as the law is
enforced. One of the rules of statutory construction used to
fill in the gap is the doctrine of necessary implication. The
doctrine states that what is implied in a statute is as much
a part thereof as that which is expressed. Every statute is
understood, by implication, to contain all such provisions
as may be necessary to effectuate its object and purpose,
or to make effective rights, powers, privileges or jurisdiction
which it grants, including all such collateral and subsidiary
consequences as may be fairly and logically inferred from
its terms. Ex necessitate legis. And every statutory grant of
power, right or privilege is deemed to include all incidental
power, right or privilege. This is so because the greater
includes the lesser, expressed in the Maxim, in eo plus sit,
simper inest et minus. 18

During the sponsorship speech of Congressman Dragon (re:

Early Retirement Law), in response to Congressman
Dimaporo's interpellation on coverage of state university
employees who are extended appointments for one (1) year,
renewable for two (2) or three (3) years, 19 he explained:

This Bill covers only those who would like to go

on early retirement and voluntary separation. It
is irrespective of the actual status or nature of
the appointment one received, but if he opts to
retire under this, then he is covered.

It will be noted that, presently Pending in Congress, is House

Bill No. 33399 (a proposal to extend the scope of the Early
Retirement Law). Its wording supports the submission that
Rep. Act No. 6683 indeed overlooked a qualified group of civil
servants. Sec. 3 of said House bill, on coverage of early
retirement, would provide:

Sec. 3. Coverage. It will cover all employees

of
the
national
government,
including
government-owned or controlled corporations,
as well as the personnel of all local government
units. The benefits authorized under this Act
shall
apply
to
all regular,
temporary,
casual, emergency and contractual employees,
regardless of age, who have rendered at least a
total of two (2) consecutive years government

service as of the date of separation. The term

"contractual employees" as used in this Act
does not include experts and consultants hired
by agencies for a limited period to perform
specific activities or services with definite
expected output.

Uniformed personnel of the Armed Forces of

the Philippines, including those of the PC-INP
are excluded from the coverage of this Act.
(emphasis supplied)
The objective of the Early Retirement or Voluntary Separation
Law is to trim the bureaucracy, hence, vacated positions are
deemed abolished upon early/voluntary retirement of their
occupants. Will the inclusion of co-terminous personnel (like
the petitioner) defeat such objective? In their case, upon
termination of the project and separation of the project
personnel from the service, the term of employment is
considered expired, the office functus officio. Casual,
temporary and contractual personnel serve for shorter periods,
and yet, they only have to establish two (2) years of
continuous service to qualify. This, incidentally, negates the
OSG's argument that co-terminous or project employment is
inherently short-lived, temporary and transient, whereas,
retirement presupposes employment for a long period. Here,
violation of the equal protection clause of the Constitution
becomes glaring because casuals are not even in the plantilla,
and yet, they are entitled to the benefits of early retirement.
How can the objective of the Early Retirement Law of trimming
the bureaucracy be achieved by granting early retirement
benefits to a group of employees (casual) without plantilla

positions? There would, in such a case, be no abolition of

permanent positions or streamlining of functions; it would
merely be a removal of excess personnel; but the positions
remain, and future appointments can be made thereto.

Co-terminous or project personnel, on the other hand, who

have rendered years of continuous service should be included
in the coverage of the Early Retirement Law, as long as they
file their application prior to the expiration of their term, and as
long as they comply with CSC regulations promulgated for
such purpose. In this connection, Memorandum Circular No.
14, Series of 1990 (5 March 1990) implementing Rep. Act No.
6850, 20 requires, as a condition to qualify for the grant of
eligibility, an aggregate or total of seven (7) years of
government service which need not be continuous, in the
career or non-career service, whether appointive, elective,
casual,
emergency,
seasonal,
contractualor coterminous including military and police service, as evaluated
and confirmed by the Civil Service Commission. 21 A similar
regulation should be promulgated for the inclusion in Rep. Act
No. 6683 of co-terminous personnel who survive the test of
time. This would be in keeping with the coverage of "all social
legislations enacted to promote the physical and mental wellbeing of public servants" 22 After all, co-terminous personnel,
are also obligated to the government for GSIS contributions,
medicare and income tax payments, with the general
disadvantage of transience.

In fine, the Court believes, and so holds, that the denial by the
respondents NIA and CSC of petitioner's application for early

retirement benefits under Rep. Act No. 6683 is unreasonable,

unjustified, and oppressive, as petitioner had filed an
application for voluntary retirement within a reasonable period
and she is entitled to the benefits of said law. While the
application was filed after expiration of her term, we can give
allowance for the fact that she originally filed the application on
her own without the assistance of counsel. In the interest of
substantial justice, her application must be granted; after all
she served the government not only for two (2) years the
minimum requirement under the law but for almost fifteen (15)
years in four (4) successive governmental projects.

WHEREFORE, the petition is GRANTED.

Let this case be remanded to the CSC-NIA for a favorable
disposition of petitioner's application for early retirement
benefits under Rep. Act No. 6683, in accordance with the
pronouncements in this decision.

CITY OF MANILA and CITY TREASURER, petitionersappellants,

vs.

JUDGE AMADOR E. GOMEZ of the Court of First Instance

of Manila and ESSO PHILIPPINES, INC.,respondentsappellees.

AQUINO, J.:

This case is about the legality of the additional one-half

percent (%) realty tax imposed by the City of Manila.
Section 64 of the Revised Charter of Manila, Republic Act No.
409, which took effect on June 18, 1949, fixes the annual
realty tax at one and one-half percent (1- %).

On the other hand, section 4 of the Special Education Fund

Law, Republic Act No. 5447, which took effect on January 1,
1969, imposed "an annual additional tax of one per centum on
the assessed value of real property in addition to the real
property tax regularly levied thereon under existing laws" but
"the total real property tax shall not exceed a maximum of
three per centrum.

That maximum limit gave the municipal board of Manila the

Idea of fixing the realty tax at three percent. So, by means of
Ordinance No. 7125, approved by the city mayor on December
26, 1971 and effective beginning the third quarter of 1972, the

board imposed an additional one-half percent realty tax. The

ordinance reads:

Court under Republic Act No. 5440 (which superseded Rule

42 of the Rules of Court).

SECTION 1. An additional annual realty tax of

one-half percent (1/2%), or in short a total
of three percent (3%) realty tax (1-% pursuant
to the Revised Charter of Manila; 1% per
Republic Act No. 5447; and % per this
Ordinance) on the assessed value ... is hereby
levied and imposed.

The only issue is the validity of the tax ordinance or the legality
of the additional one-half percent realty tax.

Esso Philippines, Inc. paid under protest the sum of

P16,092.69 as additional one-half percent realty tax for the
third quarter of 1972 on its land and machineries located in
Manila.

On November 9, 1972, Esso filed a complaint in the Court of

First Instance of Manila for the recovery of the said amount. It
contended that the additional one-half percent tax is void
because it is not authorized by the city charter nor by any law
(Civil Case No. 88827).

After hearing, the trial court declared the tax ordinance void
and ordered the city treasurer of Manila to refund to Esso the
said tax. The City of Manila and its treasurer appealed to this

The petitioners in their manifestation of March 17, 1981

averred that the said tax ordinance is still in force; that
Ordinance No. 7566, which was enacted on September 10,
1974, imposed a two percent tax on commercial real
properties (like the real properties of Esso and that that two
percent tax plus the one percent tax under the Special
Education Fund Law gives a total of three percent realty tax on
commercial properties.

Esso Philippines, Inc., now Petrophil Corporation, in its

manifestation of March 2, 1981, revealed that up to this time it
has been paying the additional one-half percent tax and that
from 1975 to 1980 it paid the total sum of P4,206,240.71 as
three percent tax on its real properties.

In this connection, it is relevant to note that section 39(2) of the

Real Property Tax Code, Presidential Decree No. 464, which
took effect on June 1, 1974, provides that a city council may,
by ordinance, impose a realty tax "of not less than one half of

one percent but not more than two percent of the assessed
value of real property".

While the 1949 Revised Charter of Manila fixed the realty tax
at one and a half percent, on the other hand, the 1968 Special
Education Fund Law definitively fixed three percent as
the maximum real property tax of which one percent would
accrue to the Special Education Fund.

Section 41 of the said Code reaffirms the one percent tax on

real property for the Special Education Fund in addition to the
basic two percent realty tax.

So, there is no question now that the additional one-half

percent realty tax is valid under the Real Property Tax Code.
What is in controversy is the legality of the additional one-half
percent realty tax for the two-year period from the third quarter
of 1972 up to the second quarter of 1974.

We hold that the doctrine of implications in statutory

construction sustains the City of Manila's contention that the
additional one-half percent realty tax is sanctioned by the
provision in section 4 of the Special Education Fund Law that
"the total real property tax shall not exceed a maximum of
three per centum.

The doctrine of implications means that "that which is plainly

implied in the language of a statute is as much a part of it as
that which is expressed" (In re McCulloch Dick, 38 Phil. 41, 45,
90; 82 C.J.S. 632, 73 Am Jur 2nd 404).

The obvious implication is that an additional one-half percent

tax could be imposed by municipal corporations. Inferentially,
that law fixed at two percent the realty tax that would accrue to
a city or municipality.

And the fact that the 1974 Real Property Tax Code specifically
fixes the real property tax at two percent confirms the prior
intention of the lawmaker to impose two percent as the realty
tax proper. That was also the avowed intention of the
questioned ordinance.

In invalidating the ordinance, the trial court upheld the view of

Esso Philippines, Inc, that the Special Education Fund Law
refers to a contingency where the application of the additional
one percent realty tax would have the effect of raising the total
realty tax to more than three percent and that it cannot be
construed as an authority to impose an additional realty tax
beyond the one percent fixed by the said law.

At first glance, that appears to be a specious or reasonable

contention. But the fact remains that the city charter fixed the
realty tax at 1-% and the later law, the Special Education
Fund Law, provides for three percent as the maximum realty
tax of which one percent would be earmarked for the
education fund.

The unavoidable inference is that the later law authorized the

imposition of an additional one-half percent realty tax since the
contingency referred to by the complaining taxpayer would not
arise in the City of Manila.

It is true, as contended by the taxpayer, that the power of a

municipal corporation to levy a tax should be expressly
granted and should not be merely inferred. But in this case,
the power to impose a realty tax is not controverted. What is
disputed is the amount thereof, whether one and one-half
percent only or two percent. (See sec. 2 of Rep. Act No. 2264.)

As repeatedly observed, section 4 of the Special Education

Fund Law, as confirmed by the Real Property Tax Code, in
prescribing a total realty tax of three percent impliedly
authorizes the augmentation by one-half percent of the preexisting one and one- half percent realty tax.

WHEREFORE, the decision of the trial court is reversed and

set aside. The complaint of Esso Philippines, Inc. for recovery
of the realty tax paid under protest is dismissed. No costs.

Office of the Solicitor General for

Padilla Law Office for defendant-appellee.

plaintiff-appellant.

REGALA, J.:

This is an appeal of the Solicitor General from the order of the

Court of First Instance of Pangasinan dismissing the
information against the defendant.

The records show that the statement of the case and the facts,
as recited in the brief of plaintiff-appellant, is complete and
accurate. The same is, consequently, here adopted, to wit:

E. Casus omissus pro omissohabendusest a person or

thing omitted from an enumeration must be held to have
been omitted intentionally

PEOPLE
vs.

OF

THE

PHILIPPINES, plaintiff-appellant,

GUILLERMO MANANTAN, defendant-appellee.

In an information filed by the Provincial Fiscal of

Pangasinan in the Court of First Instance of that
Province, defendant Guillermo Manantan was charged
with a violation Section 54 of the Revised Election
Code. A preliminary investigation conducted by said
court resulted in the finding a probable cause that the
crime charged as committed by defendant. Thereafter,
the trial started upon defendant's plea of not guilty, the
defense moved to dismiss the information on the
ground that as justice of the peace the defendant is
one of the officers enumerated in Section 54 of the
Revised Election Code. The lower court denied the
motion to dismiss holding that a justice of the peace is

within the purview Section 54. A second motion was

filed by defense counsel who cited in support thereof
the decision of the Court of Appeals in People vs.
Macaraeg, (CA-G.R. No. 15613-R, 54 Off. Gaz., pp.
1873-76) where it was held that a justice of the peace
is excluded from the prohibition of Section 54 of the
Revised Election Code. Acting on this second motion to
dismiss, the answer of the prosecution, the reply of the
defense, and the opposition of the prosecution, the
lower court dismissed the information against the
accused upon the authority of the ruling in the case
cited by the defense.

Both parties are submitting this case upon the determination of

this single question of law: Is a justice the peace included in
the prohibition of Section 54 of the Revised Election Code?
Section 54 of the said Code reads:

No justice, judge, fiscal, treasurer, or assessor of any

province, no officer or employee of the Army, no
member of the national, provincial, city, municipal or
rural police force and no classified civil service officer
or employee shall aid any candidate, or exert any
influence in any manner in a election or take part
therein, except to vote, if entitled thereto, or to preserve
public peace, if he is a peace officer.

Defendant-appellee argues that a justice of the peace is not

comprehended among the officers enumerated in Section 54
of the Revised Election Code. He submits the aforecited
section was taken from Section 449 of the Revised
Administrative Code, which provided the following:

SEC. 449. Persons prohibited from influencing

elections. No judge of the First Instance, justice of
the peace, or treasurer, fiscal or assessor of any
province and no officer or employee of the Philippine
Constabulary, or any Bureau or employee of the
classified civil service, shall aid any candidate or exert
influence in any manner in any election or take part
therein otherwise than exercising the right to vote.

When, therefore, section 54 of the Revised Election Code

omitted the words "justice of the peace," the omission revealed
the intention of the Legislature to exclude justices of the peace
from its operation.

The above argument overlooks one fundamental fact. It is to

be noted that under Section 449 of the Revised Administrative
Code, the word "judge" was modified or qualified by the
phrase "of First instance", while under Section 54 of the
Revised Election Code, no such modification exists. In other
words, justices of the peace were expressly included in
Section 449 of the Revised Administrative Code because the
kinds of judges therein were specified, i.e., judge of the First

Instance and justice of the peace. In Section 54, however,

there was no necessity therefore to include justices of the
peace in the enumeration because the legislature had availed
itself of the more generic and broader term, "judge." It was a
term not modified by any word or phrase and was intended to
comprehend all kinds of judges, like judges of the courts of
First Instance, Judges of the courts of Agrarian Relations,
judges of the courts of Industrial Relations, and justices of the
peace.

It is a well known fact that a justice of the peace is sometimes

addressed as "judge" in this jurisdiction. It is because a justice
of the peace is indeed a judge. A "judge" is a public officer,
who, by virtue of his office, is clothed with judicial authority
(U.S. v. Clark, 25 Fed. Cas. 441, 422). According to Bouvier
Law Dictionary, "a judge is a public officer lawfully appointed to
decide litigated questions according to law. In its most
extensive sense the term includes all officers appointed to
decide
litigated
questions
while
acting
in
that
capacity, including justices of the peace, and even jurors, it is
said, who are judges of facts."

A review of the history of the Revised Election Code will help

to justify and clarify the above conclusion.

The first election law in the Philippines was Act 1582 enacted
by the Philippine Commission in 1907, and which was later
amended by Act. Nos. 1669, 1709, 1726 and 1768. (Of these 4

amendments, however, only Act No. 1709 has a relation to the

discussion of the instant case as shall be shown later.) Act No.
1582, with its subsequent 4 amendments were later on
incorporated Chapter 18 of the Administrative Code. Under the
Philippine Legislature, several amendments were made
through the passage of Acts Nos. 2310, 3336 and 3387.
(Again, of these last 3 amendments, only Act No. 3587 has
pertinent to the case at bar as shall be seen later.) During the
time of the Commonwealth, the National Assembly passed
Commonwealth Act No. 23 and later on enacted
Commonwealth Act No. 357, which was the law enforced until
June 1947, when the Revised Election Code was approved.
Included as its basic provisions are the provisions of
Commonwealth Acts Nos. 233, 357, 605, 666, 657. The
present Code was further amended by Republic Acts Nos.
599, 867, 2242 and again, during the session of Congress in
1960, amended by Rep. Acts Nos. 3036 and 3038. In the
history of our election law, the following should be noted:

Under Act 1582, Section 29, it was provided:

No public officer shall offer himself as a candidate for
elections, nor shall he be eligible during the time that
he holds said public office to election at any municipal,
provincial or Assembly election, except for reelection to
the position which he may be holding, and no judge of
the First Instance, justice of the peace, provincial fiscal,
or officer or employee of the Philippine Constabulary or
of the Bureau of Education shall aid any candidate or
influence in any manner or take part in any municipal,
provincial, or Assembly election under the penalty of
being deprived of his office and being disqualified to

hold any public office whatsoever for a term of 5

year: Provide, however, That the foregoing provisions
shall not be construe to deprive any person otherwise
qualified of the right to vote it any election." (Enacted
January 9, 1907; Took effect on January 15, 1907.)

the peace, or treasurer, fiscal or assessor of any

province and no officer or employee of the Philippine
Constabulary or any Bureau or employee of the
classified civil service, shall aid any candidate or exert
influence in any manner in any election or take part
therein otherwise than exercising the right to vote.
(Emphasis supplied)

Then, in Act 1709, Sec. 6, it was likewise provided:

. . . No judge of the First Instance, Justice of the peace
provincial fiscal or officer or employee of the Bureau of
Constabulary or of the Bureau of Education shall aid
any candidate or influence in any manner to take part
in any municipal provincial or Assembly election. Any
person violating the provisions of this section shall be
deprived of his office or employment and shall be
disqualified to hold any public office or employment
whatever for a term of 5 years, Provided, however, that
the foregoing provisions shall not be construed to
deprive any person otherwise qualified of the right to
vote at any election. (Enacted on August 31, 1907;
Took effect on September 15, 1907.)

Again, when the existing election laws were incorporated in

the Administrative Code on March 10, 1917, the provisions in
question read:

SEC. 449. Persons prohibited from influencing

elections. No judge of the First Instance, justice of

After the Administrative Code, the next pertinent legislation

was Act No. 3387. This Act reads:

SEC. 2636. Officers and employees meddling with the

election. Any judge of the First Instance, justice of
the peace, treasurer, fiscal or assessor of any province,
any officer or employee of the Philippine Constabulary
or of the police of any municipality, or any officer or
employee of any Bureau of the classified civil service,
who aids any candidate or violated in any manner the
provisions of this section or takes part in any election
otherwise by exercising the right to vote, shall be
punished by a fine of not less than P100.00 nor more
than P2,000.00, or by imprisonment for not less than 2
months nor more than 2 years, and in all cases by
disqualification from public office and deprivation of the
right of suffrage for a period of 5 years. (Approved
December 3, 1927.) (Emphasis supplied.)

Subsequently, however, Commonwealth Act No. 357 was

enacted on August 22, 1938. This law provided in Section 48:

SEC. 48. Active Interventation of Public Officers and

Employees. No justice, judge, fiscal, treasurer or
assessor of any province, no officer or employee of the
Army, the Constabulary of the national, provincial,
municipal or rural police, and no classified civil service
officer or employee shall aid any candidate, nor exert
influence in any manner in any election nor take part
therein, except to vote, if entitled thereto, or to preserve
public peace, if he is a peace officer.
This last law was the legislation from which Section 54 of the
Revised Election Code was taken.

It will thus be observed from the foregoing narration of the

legislative development or history of Section 54 of the Revised
Election Code that the first omission of the word "justice of the
peace" was effected in Section 48 of Commonwealth Act No.
357 and not in the present code as averred by defendantappellee. Note carefully, however, that in the two instances
when the words "justice of the peace" were omitted (in Com.
Act No. 357 and Rep. Act No. 180), the word "judge" which
preceded in the enumeration did not carry the qualification "of
the First Instance." In other words, whenever the word "judge"
was qualified by the phrase "of the First Instance", the words
"justice of the peace" would follow; however, if the law simply
said "judge," the words "justice of the peace" were omitted.

The above-mentioned pattern of congressional phraseology

would seem to justify the conclusion that when the legislature
omitted the words "justice of the peace" in Rep. Act No. 180, it
did not intend to exempt the said officer from its operation.
Rather, it had considered the said officer as already
comprehended in the broader term "judge".

It is unfortunate and regrettable that the last World War had

destroyed congressional records which might have offered
some explanation of the discussion of Com. Act No. 357 which
legislation, as indicated above, has eliminated for the first time
the words "justice of the peace." Having been completely
destroyed, all efforts to seek deeper and additional
clarifications from these records proved futile. Nevertheless,
the conclusions drawn from the historical background of Rep.
Act No. 180 is sufficiently borne out by reason hid equity.

Defendant further argues that he cannot possibly be among

the officers enumerated in Section 54 inasmuch as under that
said section, the word "judge" is modified or qualified by the
phrase "of any province." The last mentioned phrase,
defendant submits, cannot then refer to a justice of the peace
since the latter is not an officer of a province but of a
municipality.

Defendant's argument in that respect is too strained. If it is true

that the phrase "of any province" necessarily removes justices
of the peace from the enumeration for the reason that they are
municipal and not provincial officials, then the same thing may
be said of the Justices of the Supreme Court and of the Court
of Appeals. They are national officials. Yet, can there be any
doubt that Justices of the Supreme Court and of the Court of
Appeals are not included in the prohibition? The more sensible
and logical interpretation of the said phrase is that it qualifies
fiscals, treasurers and assessors who are generally known as
provincial officers.

The rule of "casus omisus pro omisso habendus est" is

likewise invoked by the defendant-appellee. Under the said
rule, a person, object or thing omitted from an enumeration
must be held to have been omitted intentionally. If that rule is
applicable to the present, then indeed, justices of the peace
must be held to have been intentionally and deliberately
exempted from the operation of Section 54 of the Revised
Election Code.

The rule has no applicability to the case at bar. The maxim

"casus omisus" can operate and apply only if and when the
omission has been clearly established. In the case under
consideration, it has already been shown that the legislature
did not exclude or omit justices of the peace from the
enumeration of officers precluded from engaging in partisan
political activities. Rather, they were merely called by another
term. In the new law, or Section 54 of the Revised Election
Code, justices of the peace were just called "judges."

In insisting on the application of the rule of "casus omisus" to

this case, defendant-appellee cites authorities to the effect that
the said rule, being restrictive in nature, has more particular
application to statutes that should be strictly construed. It is
pointed out that Section 54 must be strictly construed against
the government since proceedings under it are criminal in
nature and the jurisprudence is settled that penal statutes
should be strictly interpreted against the state.

Amplifying on the above argument regarding strict

interpretation of penal statutes, defendant asserts that the
spirit of fair play and due process demand such strict
construction in order to give "fair warning of what the law
intends to do, if a certain line is passed, in language that the
common world will understand." (Justice Holmes, in McBoyle
v. U.S., 283 U.S. 25, L. Ed. 816).

The application of the rule of "casus omisus" does not proceed

from the mere fact that a case is criminal in nature, but rather
from a reasonable certainty that a particular person, object or
thing has been omitted from a legislative enumeration. In the
present case, and for reasons already mentioned, there has
been no such omission. There has only been a substitution of
terms.

The rule that penal statutes are given a strict construction is

not the only factor controlling the interpretation of such laws;
instead, the rule merely serves as an additional, single factor

to be considered as an aid in determining the meaning of

penal laws. This has been recognized time and again by
decisions of various courts. (3 Sutherland, Statutory
Construction, p. 56.) Thus, cases will frequently be found
enunciating the principle that the intent of the legislature will
govern (U.S. vs. Corbet, 215 U.S. 233). It is to be noted that a
strict construction should not be permitted to defeat the policy
and purposes of the statute (Ash Sheep Co. v. U.S., 252 U.S.
159). The court may consider the spirit and reason of a
statute, as in this particular instance, where a literal meaning
would lead to absurdity, contradiction, injustice, or would
defeat the clear purpose of the law makers (Crawford,
Interpretation of Laws, Sec. 78, p. 294). A Federal District
court in the U.S. has well said:

The strict construction of a criminal statute does not

mean such construction of it as to deprive it of the
meaning intended. Penal statutes must be construed in
the sense which best harmonizes with their intent and
purpose. (U.S. v. Betteridge 43 F. Supp. 53, 56, cited in
3 Sutherland Statutory Construction 56.)

As well stated by the Supreme Court of the United States, the

language of criminal statutes, frequently, has been narrowed
where the letter includes situations inconsistent with the
legislative plan (U.S. v. Katz, 271 U.S. 354; See also Ernest
Brunchen, Interpretation of the Written Law (1915) 25 Yale L.J.
129.)

Another reason in support of the conclusion reached herein is

the fact that the purpose of the statute is to enlarge the officers
within its purview. Justices of the Supreme Court, the Court of
Appeals, and various judges, such as the judges of the Court
of Industrial Relations, judges of the Court of Agrarian
Relations, etc., who were not included in the prohibition under
the old statute, are now within its encompass. If such were the
evident purpose, can the legislature intend to eliminate the
justice of the peace within its orbit? Certainly not. This point is
fully explained in the brief of the Solicitor General, to wit:

On the other hand, when the legislature eliminated the

phrases "Judge of First Instance" and justice of the
peace", found in Section 449 of the Revised
Administrative Code, and used "judge" in lieu thereof,
the obvious intention was to include in the scope of the
term not just one class of judges but all judges,
whether of first Instance justices of the peace or
special courts, such as judges of the Court of Industrial
Relations. . . . .

The weakest link in our judicial system is the justice of

the peace court, and to so construe the law as to allow
a judge thereof to engage in partisan political activities
would weaken rather than strengthen the judiciary. On
the other hand, there are cogent reasons found in the
Revised Election Code itself why justices of the peace
should be prohibited from electioneering. Along with
Justices of the appellate courts and judges of the Court
of First Instance, they are given authority and

jurisdiction over certain election cases (See Secs. 103,

104, 117-123). Justices of the peace are authorized to
hear and decided inclusion and exclusion cases, and if
they are permitted to campaign for candidates for an
elective office the impartiality of their decisions in
election cases would be open to serious doubt. We do
not believe that the legislature had, in Section 54 of the
Revised Election Code, intended to create such an
unfortunate situation. (pp. 708, Appellant's Brief.)

Another factor which fortifies the conclusion reached herein is

the fact that the administrative or executive department has
regarded justices of the peace within the purview of Section 54
of the Revised Election Code.

In Tranquilino O. Calo, Jr. v. The Executive Secretary, the

Secretary of Justice, etc. (G.R. No. L-12601), this Court did
not give due course to the petition for certiorari and prohibition
with preliminary injunction against the respondents, for not
setting aside, among others, Administrative Order No. 237,
dated March 31, 1957, of the President of the Philippines,
dismissing the petitioner as justice of the peace of Carmen,
Agusan. It is worthy of note that one of the causes of the
separation of the petitioner was the fact that he was found
guilty in engaging in electioneering, contrary to the provisions
of the Election Code.

Defendant-appellee calls the attention of this Court to House

Bill No. 2676, which was filed on January 25, 1955. In that
proposed legislation, under Section 56, justices of the peace
are already expressly included among the officers enjoined
from active political participation. The argument is that with the
filing of the said House Bill, Congress impliedly acknowledged
that existing laws do not prohibit justices of the peace from
partisan political activities.

The argument is unacceptable. To begin with, House Bill No.

2676 was a proposed amendment to Rep. Act No. 180 as a
whole and not merely to section 54 of said Rep. Act No. 180.
In other words, House Bill No. 2676 was a proposed recodification of the existing election laws at the time that it was
filed. Besides, the proposed amendment, until it has become a
law, cannot be considered to contain or manifest any
legislative intent. If the motives, opinions, and the reasons
expressed by the individual members of the legislature even in
debates, cannot be properly taken into consideration in
ascertaining the meaning of a statute (Crawford, Statutory
Construction, Sec. 213, pp. 375-376), a fortiori what weight
can We give to a mere draft of a bill.

On law reason and public policy, defendant-appellee's

contention that justices of the peace are not covered by the
injunction of Section 54 must be rejected. To accept it is to
render ineffective a policy so clearly and emphatically laid
down by the legislature.

Our law-making body has consistently prohibited justices of

the peace from participating in partisan politics. They were
prohibited under the old Election Law since 1907 (Act No.
1582 and Act No. 1709). Likewise, they were so enjoined by
the Revised Administrative Code. Another which expressed
the prohibition to them was Act No. 3387, and later, Com. Act
No. 357.

things by enumerating them, but no reason exists why

other persons or things not so enumerated should not
have been included, and manifest injustice will follow
by not so including them, the maxim expressio unius
est exclusion alterius, should not be invoked. (Blevins
v. Mullally 135 p. 307, 22 Cal. App. 519.) .
FOR THE ABOVE REASONS, the order of dismissal entered
by the trial court should be set aside and this case is
remanded for trial on the merits.

Lastly, it is observed that both the Court of Appeals and the

trial court applied the rule of "expressio unius, est exclusion
alterius" in arriving at the conclusion that justices of the peace
are not covered by Section 54. Said the Court of Appeals:
"Anyway, guided by the rule of exclusion, otherwise known
as expressio unius est exclusion alterius, it would not be
beyond reason to infer that there was an intention of omitting
the term "justice of the peace from Section 54 of the Revised
Election Code. . . ."

The rule has no application. If the legislature had intended to

exclude a justice of the peace from the purview of Section 54,
neither the trial court nor the Court of Appeals has given the
reason for the exclusion. Indeed, there appears no reason for
the alleged change. Hence, the rule of expressio unius est
exclusion alterius has been erroneously applied. (Appellant's
Brief, p. 6.)

Where a statute appears on its face to limit the

operation of its provisions to particular persons or

SPS.
vs.

NEREO

&

NIEVA

DELFINO, Petitioners,

ST. JAMES HOSPITAL, INC., and THE HONORABLE

RONALDO ZAMORA, EXECUTIVE SECRETARY, OFFICE
OF THE PRESIDENT. Respondents.

RESOLUTION

CHICO-NAZARIO, J.:
Before Us for Resolution is the Motion for Reconsideration of
private respondent St. James Hospital, Inc., seeking the
reversal of Our Decision dated 5 September 2006.
Respondent assails the Decision on the ground that the Court
had erroneously interpreted the 1991 Comprehensive Land
Use Plan (CLUP) or the Comprehensive Zoning Ordinance of
the Municipality of Santa Rosa, Laguna, in ruling that the St.
James Hospital is a non-conforming structure under the 1991
Zoning Ordinance and that the expansion of the St. James
Hospital into a four-storey, forty-bed capacity medical

institution within the Mariquita Pueblo Subdivision is prohibited

under the provisions of the 1991 Zoning Ordinance. Moreover,
respondent now contends that the case must now be decided
in accordance with the latest Zoning Ordinance passed in
1999 or the Santa Rosa Zoning Ordinance which was only
submitted as evidence in the instant Motion for
Reconsideration.

Respondent now claims that the legislative history of the 1991

Zoning Ordinance shows that commercial and institutional
uses were expressly allowed in Sec. 2, par. 1 of said
Ordinance as it retained uses that are commercial and
institutional as well as recreational in character and those for
the maintenance of ecological balance. Thus, respondent
postulates that even if parks, playgrounds and recreation
centers which were expressly provided for in the 1981 Zoning
Ordinance under letters (h) and (k) were excluded in the
enumeration in the 1991 Zoning Ordinance, the same cannot,
by any stretch of logic, be interpreted to mean that they are no
longer allowed. On the contrary, respondent explains that what
appears is the fact that parks, playgrounds, and recreation
centers are deemed to have been covered by Sec. 2, par. 1 of
the 1991 Zoning Ordinance which speaks of "x x x other
spaces designed for recreational pursuit and maintenance of
ecological balance x x x." Hence, respondent concludes that
the same reading applies in the non-inclusion of the words
hospitals, clinics, school, churches and other places of
worship, and drugstores which cannot be interpreted to mean
that the aforesaid uses are to be deemed non-conforming
under the 1991 Zoning Ordinance as these uses are allegedly
covered by the clause allowing for institutional and commercial
uses.

Arising from this interpretation, respondent maintains that the

Court erred in applying Sec. 1 of Article X of the 1991 Zoning
Ordinance which pertains only to existing non-conforming uses
and buildings, since, according to respondent, the St. James
Hospital and its expansion are consistent with the uses
allowed under the zoning ordinance.

To address this matter, we deem it necessary to reiterate our

discussion in our Decision dated 5 September 2006, wherein
we have thoroughly examined the pertinent provisions of the
1981 and 1991 Zoning Ordinances, to wit:

Likewise, it must be stressed at this juncture that a

comprehensive scrutiny of both Ordinances will disclose that
the uses formerly allowed within a residential zone under the
1981 Zoning Ordinance such as schools, religious facilities
and places of worship, and clinics and hospitals have now
been transferred to the institutional zone under the 1991
Zoning Ordinance1 . This clearly demonstrates the intention of
the Sangguniang Bayan to delimit the allowable uses in the
residential zone only to those expressly enumerated under
Section 2, Article VI of the 1991 Zoning Ordinance, which no
longer includes hospitals.

It is lamentable that both the Office of the President and the

Court of Appeals gave undue emphasis to the word

"institutional" as mentioned in Section 2, Article VI of the 1991

Zoning Ordinance and even went through great lengths to
define said term in order to include hospitals under the ambit
of said provision. However, they neglected the fact that under
Section 4, Article VI of said Ordinance2 , there is now another
zone, separate and distinct from a residential zone, which is
classified as "institutional", wherein health facilities, such as
hospitals, are expressly enumerated among those structures
allowed within said zone.

Moreover, both the Office of the President and the appellate

court failed to consider that any meaning or interpretation to be
given to the term "institutional" as used in Section 2, Article VI
must be correspondingly limited by the explicit enumeration of
allowable uses contained in the same section. Whatever
meaning the legislative body had intended in employing the
word "institutional" must be discerned in light of the restrictive
enumeration in the said article. Under the legal
maxim expression unius est exclusion alterius, the express
mention of one thing in a law, means the exclusion of others
not expressly mentioned3 . Thus, in interpreting the whole of
Section 2, Article VI, it must be understood that in expressly
enumerating the allowable uses within a residential zone,
those not included in the enumeration are deemed excluded.
Hence, since hospitals, among other things, are not among
those enumerated as allowable uses within the residential
zone, the only inference to be deduced from said exclusion is
that said hospitals have been deliberately eliminated from
those structures permitted to be constructed within a
residential area in Santa Rosa, Laguna.

Furthermore, according to the rule of casus omissus in

statutory construction, a thing omitted must be considered to
have been omitted intentionally. Therefore, with the omission
of the phrase "hospital with not more than ten capacity" in the
new Zoning Ordinance, and the corresponding transfer of said
allowable usage to another zone classification, the only logical
conclusion is that the legislative body had intended that said
use be removed from those allowed within a residential zone.
Thus, the construction of medical institutions, such as St.
James Hospital, within a residential zone is now prohibited
under the 1991 Zoning Ordinance.

xxxx

Having concluded that the St. James Hospital is now

considered a non-conforming structure under the 1991 Zoning
Ordinance, we now come to the issue of the legality of the
proposed expansion of said hospital into a four-storey, fortybed medical institution. We shall decide this said issue in
accordance with the provisions of the 1991 Zoning Ordinance
relating to non-conforming buildings, the applicable law at the
time of the proposal. As stated in Section 1 of Article X of the
1991 Zoning Ordinance:

Section 1. EXISTING NON-CONFORMING USES AND

BUILDINGS. The lawful uses of any building, structure or land
at the point of adoption or amendment of this Ordinance may

be continued, although such does not conform with the

provisions of this Ordinance.

1. That no non-conforming use shall be enlarged or

increased or extended to occupy a greater area or land
that has already been occupied by such use at the time of
the adoption of this Ordinance, or moved in whole or in part
to any other portion of the lot parcel of land where such nonconforming use exist at the time of the adoption of this
Ordinance.4 (Emphasis ours.)

It is clear from the abovequoted provision of the 1991 Zoning

Ordinance that the expansion of a non-conforming building is
prohibited. Hence, we accordingly resolve that the expansion
of the St. James Hospital into a four-storey, forty-bed capacity
medical institution within the Mariquita Pueblo Subdivision as
prohibited under the provisions of the 1991 Zoning Ordinance.
From our discussion above, it is clear that the position of
respondent is erroneous.1awp++i1 As stated in our Decision,
a comprehensive scrutiny of both zoning ordinances will
disclose that the uses formerly allowed within a residential
zone under the 1981 Zoning Ordinance such as schools,
religious facilities and places of worship, and clinics and
hospitals have been transferred to the institutional zone under
the 1991 Zoning Ordinance. This clearly indicates that the
allowable uses in the residential zone have been delimited
only to those expressly enumerated under Section 2, Article VI
of the 1991 Zoning Ordinance, which no longer includes
hospitals.

With respect to respondents claim that the controversy must

now be decided in light of latest Zoning Ordinance passed in
1999 or the Santa Rosa Zoning Ordinance, it must be stressed
at this point that the present case arose in 1994 when
respondent St. James Hospital, Inc., applied for a permit with
the Housing and Land Use Regulatory Board (HLURB) to
expand its hospital into a four-storey, forty-bed capacity
medical institution, at which time, the zoning ordinance in
effect was the 1991 Zoning Ordinance. It is a well-settled rule
that the law in force at the time of the occurrence of the cause
of action is the applicable law notwithstanding its subsequent
amendment or repeal.5 Hence, in resolving the instant case,
the zoning ordinance to be used in interpreting the legality or
illegality of said expansion is that which was in full force and
effect at the time of the application for expansion which is the
1991 Zoning Ordinance, regardless of its subsequent
amendment or repeal by the passage of the 1999 Zoning
Ordinance.

Moreover, pleadings, arguments and evidence were submitted

by both parties as regards the provisions of the 1991 Zoning
Ordinance only. Apparently, the 1999 Zoning Ordinance was
already enacted and in effect by the time the petitioners
appealed their case to this Court on 7 February 2005.
Petitioners, however, in their appeal, consistently maintained
their argument that the expansion undertaken by the
respondent in 1994 violated the 1991 Zoning Ordinance, and
respondent likewise limited itself to the defense that it had
complied therewith. It bears to emphasize that respondent
called the attention of this Court to the enactment of the 1999

Zoning Ordinance and asserted its compliance with this latest

zoning ordinance only in its Motion for Reconsideration before
this Court. Points of law, theories, issues and arguments not
adequately brought to the attention of the trial court need not
be, and ordinarily will not be, considered by a reviewing court
as they cannot be raised for the first time on appeal because
this would be offensive to the basic rules of fair play, justice
and due process.6 This rule holds even more true when the
points of law, theories, issues and arguments are belatedly
raised for the first time in the motion for reconsideration of this
Courts decision.

Accordingly, the Motion for Reconsideration of respondent St.

James Hospital, Inc., is hereby DENIED. However, this is
without prejudice to respondent St. James Hospital, Inc.s
reapplication for expansion in accordance with the
requirements under zoning ordinances now in effect.

AQUIAL, Spouses JOSE M. CORDOVA and SATURNINA C.

CORDOVA, respondents.

Sison Law Office and Senensio O. Ortile for petitioners.

Hill & Associates Law Office for respondents Aquials.
Antonio E. Pesigan for respondents Cordovas.

AQUINO, J.:
This is another litigation regarding the validity of the much
controverted Original Certificate of Title No. 735 covering the
Santa Mesa and D Estates of the Tuason mayorazgo or Entail
with areas of 877 (879) and 1,625 hectares, respectively
(Barrette vs. Tuason, 50 Phil. 888; Benin case, infra).

F. STARE DECISIS ( Follow past precedents and do not

disturb what has been settled)

J. M. TUASON & CO., INC., JOSE M. TUASON, NICASIO A.

TUASON, TERESA TUASON, CELSO S. TUASON and
SEVERO
A.
TUASON, petitioners,
vs.

HON. HERMINIO C. MARIANO, Presiding Judge of the

Court of First Instance of Rizal MANUELA AQUIAL, MARIA

On October 1, 1965, Manuela Aquial and Maria Aquial filed a

complaint in forma pauperis in the Court of First Instance of
Rizal Pasig Branch X, wherein they prayed that they be
declared the owners of a parcel of land located at Balara,
Marikina, Rizal (now Quezon City) and bounded on the north
by Sapang Mapalad, on the south by the land of Eladio,
Tiburcio on the east by Sapang Kolotkolotan, and on the west
by Sapang Kuliat The land, which has an area of three
hundred eighty-three quiones was allegedly acquired by their
father by means of a Spanish title issued to him on May 10,
1877 (Civil Case No. 8943).

They alleged that sometime in 1960, or after J. M. Tuason &

Co., Inc. had illegally entered upon that land, they discovered
that it had been fraudulently or erroneously included in OCT
No. 735 of the Registry of Deeds of Rizal and that it was
registered in the names of defendants Mariano, Teresa, Juan,
Demetrio and Augusta all surnamed Tuason pursuant to a
decree issued on July 6. 1914 in Case No. 7681 of the Court
of Land Registration.

They further alleged that transfer certificates of title, derived

from OCT No. 735, were issued to defendants J. M. Tuason &
Co., Inc., University of the Philippines and National
Waterworks and Sewerage Authority (Nawasa) which leased a
portion of its land to defendant Capitol Golf Club.

Plaintiffs Aquial prayed that OCT No. 735 and the titles derived
therefrom be declared void due to certain irregularities in the
land registration proceeding. They asked for damages.

Defendant J.M. Tuason & Co., Inc. filed a motion to dismiss on

the grounds of lack of jurisdiction, improper venue,
prescription, laches and prior judgment. The plaintiffs opposed
that motion. The lower court denied it. The grounds of the
motion to dismiss were pleaded as affirmative defenses in the
answer of defendants Tuason and J. M. Tuason & Co., Inc.
They insisted that a preliminary hearing be held on those
defenses.

On January 25, 1967, the spouses Jose M. Cordova and

Saturnina C. Cordova, who had bought eleven hectares of the
disputed land from the plaintiffs, were allowed to intervene in
the case.

On September 5, 1970, the lower court issued an order

requiring the parties the Register of Deeds of Rizal to produce
in court on October 16, 1970 OCT No. 735 and certain transfer
certificates of title derived from that first or basic title. Later, the
court required the production in court of the plan of the land
covered by OCT No. 735 allegedly for the purpose of
determining whether the lands claimed by the plaintiffs and the
intervenors are included therein.

On February 11, 1971, the Tuason and J. M. Tuason & Co.,

Inc. filed the instant civil actions of certiorari and prohibition
praying, inter alia, that the trial court be ordered to dismiss the
complaint and enjoined from proceeding in the said case. After
the petitioners had filed the proper bond, a writ of preliminary
injunction was issued. Respondents Aquial and Cordova
answered the petition. The parties, except the Aquials, filed
memoranda in lieu of oral argument.

The issue is whether OCT No. 735 and the titles derived
therefrom can be questioned at this late hour by respondents
Aquial and Cordova. The supposed irregularities in the land

registration proceeding, which led to the issuance of the

decree upon which OCT. No. 735 was based, are the same
issues raised in Civil Cases Nos. 3621, 3622 and 3623 of the
lower court. The 1965 decision of Judge Eulogio Mencias in
those cases, in validating OCT No. 735, is annexed to the
complaint of the Aquials. It is cited by them to support their
support their action and it might have encouraged them to
ventilate their action in court.

On appeal to this Court, that decision was reversed and the

validity of OCT No. 735 and the titles derived therefrom
was once more upheld. (Benin vs. Tuason, L-26127, Alcantara
vs. Tuason, L-26128 and Pili vs. Tuason, L-26129, all decided
on June 28, 1974, 57 SCRA 531).

The ruling in the Benin, Alcantara and Pili cases was applied in
Mara, Inc. vs. Estrella, L-40511, July 25, 1975, 65 SCRA 471.
That ruling is simply a reiteration or confirmation of the holding
in the following cases directly or incidentally sustaining OCT
No. 735: Bank of the P. I. vs. Acua, 59 Phil. 183; Tiburcio vs.
PHHC, 106 Phil. 447;Galvez and Tiburcio vs. Tuason y de la
Paz, 119 Phil. 612; Alcantara vs. Tuason, 92 Phil.
796; Santiago vs. J. M. Tuason & Co., Inc. 110 Phil. 16; J. M.
Tuason & Co., Inc. vs. Bolaos, 95 Phil. 106; J. M. Tuason &
Co., Inc. vs. Santiago, 99 Phil. 615; J. M. Tuason & Co., Inc.
vs. De Guzman, 99 Phil. 281; J. M. Tuason & Co., Inc. vs.
Aguirre, 117 Phil. 110; J. M. Tuason & Co., Inc. vs.
Macalindong, 116 Phil. 1227; J. M. Tuason & Co., Inc. vs.
Magdangal, 114 Phil. 42; Varsity Hills, Inc. vs. Navarro, L30889, February 29, 1972, 43 SCRA 503, and People's

Homesite and Housing Corporation vs. Mencias, L-24114,

August 16, 1967, 20 SCRA 1031.

Considering the governing principle of stare decisis et non

quieta movere (follow past precedents and do not disturb what
has been settled) it becomes evident that respondents Aquial
and Cordova cannot maintain their action in Civil Case No.
8943 without eroding the long settled holding of the courts that
OCT No. 735 is valid and no longer open to attack.

It is against public policy that matters already decided on the

merits be relitigated again and again, consuming the court's
time and energies at the expense of other litigants: Interest rei
publicae ut finis sit litium." (Varsity Hills, Inc. vs. Navarro,
supra).

Finding the petition for certiorari and prohibition to be

meritorious, the trial court is directed to dismiss Civil Case No.
8943 with prejudice and without costs. No costs.

TALA
vs.

REALTY

BANCO
FILIPINO
BANK, respondent.

SERVICES

SAVINGS

CORP.,

petitioner,

AND

MORTGAGE

SANDOVAL-GUTIERREZ, J.:

Stare decisis et non quieta movere. This principle of

adherence to precedents has not lost its luster and continues
to guide the bench in keeping with the need to maintain
stability in the law.

The principle finds application to the case now before us.

This is a petition for review on certiorari under Rule 45 of the

1997 Rules of Civil Procedure, as amended, assailing the
Resolution dated December 23, 1997 of the Court of Appeals
in C.A.-G.R. SP No. 44257.

Under Republic Act No. 337 (General Banking Act),

commercial banks are allowed to invest in real property
subject to the limitation that:

"Sec. 25. Any commercial bank may purchase, hold

and convey real estate for the following purposes:
"(a) such as shall be necessary for its immediate
accommodation in the transaction of its business:
Provided, however, that the total investment in such
real estate and improvements thereof, including bank
equipment, shall not exceed fifty percent (50%) of net
worth x x x x x x ." (Emphasis Ours)

Investments in real estate made by savings and mortgage

banks are likewise subject to the same limitation imposed by
the aforequoted provision.1
Bound by such limitation, the management of Banco Filipino
Savings and Mortgage Bank (Banco Filipino for brevity)
devised means to pursue its endeavor to expand its banking
operations. To this end, Tala Realty Services Corporation (Tala
for brevity) was organized by Banco Filipino's four (4) major
stockholders namely, Antonio Tiu, Tomas B. Aguirre,
Nancy Lim Ty and Pedro B. Aguirre. Tala and Banco Filipino
agreed on this scheme Tala would acquire the existing
branch sites and new branch sites which it would lease out to
Banco Filipino.

On August 25, 1981, pursuant to their agreement, Banco

Filipino sold its eleven (11) branch sites all over the country to
Tala. In turn Tala leased those sites to Banco Filipino under
contracts of lease executed by both parties on the same day.
Years after, dissension between Tala and Banco Filipino arose
in connection with their lease contracts resulting in a chain of
lawsuits for illegal detainer. Some of these cases are still
pending in courts. At present, three of the illegal detainer
cases have been passed upon by the Supreme Court.

The case at bar, involving Banco Filipino's Iloilo City branch

site, is one of those cases for illegal detainer filed by Tala
against Banco Filipino based on these grounds: (a) expiration
of the period of lease and (b) non-payment of rentals.
The facts of the present controversy may be summed up as
follows:

In its complaint in Civil Case No. 51(95) filed with the

Municipal Trial Court (MTC) of Iloilo City on March 29, 1995,
Tala alleged that on the basis of a contract of lease executed
on August 25, 1981 which provides in part:

"1. That the term of this LEASE shall be for a period of

eleven (11) years, renewable for another period of nine
(9) years at the option of the LESSEE under terms and
conditions mutually agreeable to both parties."2,

its contract with Banco Filipino expired on August 31, 1992.

However, Banco Filipino has continued to occupy the premises
even after the expiration of the lease.

On June 2, 1993, Tala imposed upon Banco Filipino the

following terms and conditions: that the bank should pay
P70,050.00 as monthly rental retroactive as of September 1,
1992, with rental escalation of 10% per year; and advance
deposit equivalent to rents for four months, plus a goodwill of
P500,000.00.

Banco Filipino did not comply and in April 1994, it stopped

paying rents.

In its letter dated April 14, 1994, Tala notified Banco Filipino
that the lease contract would no longer be renewed; that it
should pay its back rentals, including goodwill, deposit and
adjusted rentals in the amount of P2,059, 540.00 and vacate
the premises on or before April 30, 1994. 3 In its second letter
dated May 2, 1994, Tala demanded upon Banco Filipino to pay
the rents and vacate the premises.4

In answer to Tala's complaint, Banco Filipino denied having

executed the lease contract providing for a term of eleven (11)

years; claiming that its contract with Tala is for twenty (20)
years, citing the Contract of Lease executed on August 25,
1981 providing:

"That the term of this LEASE shall be for a period of

twenty (20) years, renewable for another period of
twenty (20) years at the option of the LESSEE under
terms and conditions mutually agreeable to both
parties."5
On July 1, 1996, the MTC rendered judgment holding that the
eleven (11)-year lease contract superseded the twenty (20)year lease contract. Thus, the court ordered the ejectment of
Banco Filipino from the premises on these grounds: expiration
of the eleven (11)-year lease contract and non-payment of the
adjusted rental. Banco Filipino was likewise ordered to pay
back rentals in the amount of P79,050.00 corresponding to the
period from May 1994 up to the time that it shall have
surrendered to Tala possession of the premises.6

On appeal, the Regional Trial Court, Branch 26, Iloilo City

affirmed the MTC decision.7

Banco Filipino elevated the RTC decision to the Court of

Appeals which affirmed the challenged decision.8

Banco Filipino sought for a reconsideration of the Court of

Appeals Decision, invoking in its Supplemental Motion for
Reconsideration the Decisions of the same court in two of the
other illegal detainer cases initiated by Tala against Banco
Filipino, docketed as CA-G.R. SP Nos. 39104 and 40524. In
these cases, the Court of Appeals upheld the validity of the
lease contract providing for a period of twenty (20) years.
Finding Banco Filipino's motions for reconsideration
meritorious, the Court of Appeals issued the herein assailed
Resolution, thus:

"This Court agrees with petitioner that its Decision of

August 30, 1996 in CA-G.R. SP No. 39104, having
been declared final and executory by no less than the
Supreme Court in G.R. No. 127586, now constitutes
the law of the case between the parties in the present
case. Accordingly, this Court is not at liberty to
disregard or abandon the same at will without wreaking
havoc on said legal principle.
"WHEREFORE, petitioner's motion for reconsideration
and supplemental motion for reconsideration are
hereby GRANTED. Accordingly, the Court's Decision of
August 25, 1997 is hereby SET ASIDE and, in lieu
thereof, a new one is rendered REVERSING and
SETTING ASIDE the appealed decision and
DISMISSING the complaint for ejectment filed against
herein petitioner in the Municipal Trial Court of Iloilo
City."9

Tala now comes to this Court on the lone ground that:

"The Honorable Court of Appeals erred in considering
that principle of 'the law of the case' finds application in
the instant case."10

Petitioner Tala contends that its complaint for illegal detainer

should not have been dismissed by the Court of Appeals on
the basis of its decision in CA-G.R. SP No. 39104. Petitioner
claims that this decision is not a precedent.

The first in the series of illegal detainer cases filed by Tala

against the bank which reached the Supreme Court is CAG.R. SP No. 39104. This involves the site in Malabon. The
Court of Appeals held that Banco Filipino cannot be ejected
from the subject premises considering that the twenty (20)year lease contract has not expired. Tala elevated this Court of
Appeals decision to the Supreme Court in G.R. No. 127586. In
a Resolution dated March 12, 1997, the Supreme Court
dismissed Tala's petition as the "appeal" was not timely
perfected, thus:

"Considering the manifestation dated January 31, 1997

filed by petitioner that it is no longer pursuing or holding
in abeyance recourse to the Supreme Court for
reasons stated therein, the Court Resolved to
DECLARE
THIS
CASE
TERMINATED and DIRECT the
Clerk
of
Court

to INFORM the parties that the judgment sought to be

reviewed has become final and executory, no appeal
therefrom having been timely perfected."11

We agree with petitioner Tala that the decision of the Court of

Appeals in CA-G.R. SP No. 39104 holding that the twenty
(20)-year contract of lease governs the contractual relationship
between the parties is not a precedent considering that the
Supreme Court in G.R. No. 127586 did not decide the case on
the merits. The petition was dismissed on mere technicality. It
is significant to note, however, that the Supreme Court in G.R.
No. 129887,12through Mr. Justice Sabino R. de Leon, resolved
the identical issue raised in the present petition, i.e., whether
the period of the lease between the parties is twenty (20) or
eleven (11) years, thus:

"Second. Petitioner Tala Realty insists that its eleven

(11)-year lease contract controls. We agree with the
MTC and the RTC, however, that the eleven (11)-year
contract is a forgery because (1) Teodoro O. Arcenas,
then Executive Vice-President of private respondent
Banco Filipino, denied having signed the contract; (2)
the records of the notary public who notarized the said
contract, Atty. Generoso S. Fulgencio, Jr., do not
include the said document; and (3) the said contract
was never submitted to the Central Bank as required
by the latter's rules and regulations (Rollo, pp. 383384.).

"Clearly, the foregoing circumstances are badges of

fraud and simulation that rightly make any court
suspicious and wary of imputing any legitimacy and
validity to the said lease contract.

"Executive Vice-President Arcenas of private

respondent Banco Filipino testified that he was
responsible for the daily operations of said bank. He
denied having signed the eleven (11)-year contract and
reasoned that it was not in the interest of Banco
Filipino to do so (Rollo, p. 384). The fact was
corroborated by Josefina C. Salvador, typist of Banco
Filipino's Legal Department, who allegedly witnessed
the said contract and whose initials allegedly appear in
all the pages thereof. She disowned the said marginal
initials (id., p. 385).

"The Executive Judge of the RTC supervises a notary

public by requiring submission to the Office of the Clerk
of Court of his monthly notarial report with copies of
acknowledged documents thereto attached. Under this
procedure and requirement of the Notarial Law, failure
to submit such notarial report and copies of
acknowledged documents has dire consequences
including the possible revocation of the notary's notarial
commission.

"The fact that the notary public who notarized petitioner

Tala Realty's alleged eleven (11)-year lease contract
did not retain a copy thereof for submission to the
Office of the Clerk of Court of the proper RTC militates
against the use of said document as a basis to uphold
petitioner's claim. The said alleged eleven (11)-year
lease contract was not submitted to the Central Bank
whose strict documentation rules must be complied
with by banks to ensure their continued good standing.
On the contrary, what was submitted to the Central
Bank was the twenty (20)-year lease contract.

"Granting arguendo that private respondent Banco

Filipino deliberately omitted to submit the eleven (11)year contract to the Central Bank, we do not consider
that fact as violative of the res inter alios acta aliis non
nocet (Section 28, Rule 130, Revised Rules of Court
provides, viz.: 'Sec. 28. Admission by third party - The
rights of a party cannot be prejudiced by an act,
declaration or omission of another, except as
hereinafter provided.'; Compania General de Tabacos
v. Ganson, 13 Phil. 472, 477 [1909]) rule in evidence.
Rather, it is an indication of said contract's inexistence.
"It is not the eleven (11)-year lease contract but the
twenty (20)-year lease contract which is the real and
genuine contract between petitioner Tala Realty and
private respondent Banco Filipino. Considering that
the twenty (20)-year lease contract is still
subsisting and will expire in 2001 yet, Banco
Filipino is entitled to the possession of the subject
premises for as long as it pays the agreed rental

and does not violate the other terms and

conditions thereof (Art. 1673, New Civil Code)."
(Emphasis supplied)

and trial was conducted separately. Petitioner

contends that the decision in this case should
be based on the allegations and defenses
pleaded and evidence adduced in it, or, in short,
on the record of this case.

The validity of the twenty (20) year lease contract was further
reinforced on June 20, 2000 when the First Division of this
Court, this time, speaking through Madame Justice Consuelo
Ynares-Santiago, rendered a Decision in G.R. No. 137980,
likewise upholding the twenty (20)-year lease contract, thus:

'The contention is without merit. What petitioner

contends may be true with respect to the merits
of the individual claims against petitioner but
not as to the cause of the sinking of its ship on
April 22, 1980 and its liability for such accident,
of which there is only one truth. Otherwise, one
would be subscribing to the sophistry: truth on
one side of the Pyrenees, falsehood on the
other!

"In light of the foregoing recent Decision of this Court

(G.R. No. 129887), we have no option but to uphold
the twenty-year lease contract over the eleven-year
contract presented by petitioner. It is the better practice
that when a court has laid down a principle of law as
applicable to a certain state of facts, it will adhere to
that principle and apply it to all future cases where the
facts are substantially the same. 'Stare decisis et non
quieta movere.'
"That the principle of stare decisis applies in the instant
case, even though the subject property is different,
may be gleaned from the pronouncement in Negros
Navigation Co., Inc. vs. Court of Appeals [G.R. No.
110398, 281 SCRA 534, 542-543 (1997)], to wit
'Petitioner criticizes the lower court's reliance on
the Mecenas case, arguing that although this
case arose out of the same incident as that
involved in Mecenas, the parties are different

'Adherence to the Mecenas case is dictated by

this Court's policy of maintaining stability in
jurisprudence in accordance with the legal
maxim 'stare decisis et non quieta movere'
(Follow past precedents and do not disturb
what has been settled.) Where, as in this case,
the same questions relating to the same event
have been put forward by parties similarly
situated as in a previous case litigated and
decided by a competent court, the rule of stare
decisis is a bar to any attempt to relitigate the
same issue (J.M. Tuason & Corp. v. Mariano,
85 SCRA 644 [1978]). In Woulfe v. Associated
Realties Corporation (130 N.J. Eq. 519, 23 A.
2d 399, 401 [1942]), the Supreme Court of New
Jersey held that where substantially similar

cases to the pending case were presented and

applicable principles declared in prior decisions,
the court was bound by the principle of stare
decisis.Similarly, in State ex rel. Tollinger v.
Gill (75 Ohio App., 62 N.E. 2d 760 [1944]), it
was held that under the doctrine of stare
decisis a ruling is final even as to parties who
are strangers to the original proceeding and not
bound by the judgment under the res judicata
doctrine. The Philadelphia court expressed itself
in this wise: 'Stare decisis simply declares that,
for the sake of certainty, a conclusion reached
in one case should be applied to those which
follow, if the facts are substantially the same,
even
though
the
parties
may
be
different' (Heisler v. Thomas Colliery Co., 274
Pa. 448, 452, 118A, 394, 395 [1922].
Manogahela Street Ry, Co. v. Philadelphia Co.,
350 Pa 603, 39 A. 2d 909, 916 [1944]; In re
Burtt's Estate, 353 Pa. 217, 4 A. 2d 670, 677
[1945]). Thus, in J.M. Tuason v. Mariano, supra,
this Court relied on its rulings in other cases
involving different parties in sustaining the
validity of a land title on the principle of 'stare
decisis et non quieta movere.'(underscoring,
Ours)

"Here, therefore, even if the property subject of the

Decision of G.R. No. 129887 is located in Urdaneta,
Pangasinan while that in the instant case is located in
Davao, we can very well apply the conclusion in G.R.
No. 129887 that it is the twenty-year lease contract

which is controlling inasmuch as not only are the

parties the same, but more importantly, the issue
regarding its validity is one and the same and, hence,
should no longer be relitigated."

Considering the above rulings, we hold that the term of the

lease in the present case is also twenty (20) years.

Resolving now the issue of whether or not respondent Banco

Filipino should be ejected for non-payment of rentals, the First
Division of this Court in the same G.R. No. 137980 held:

"Coming now to the issue of whether or not respondent

should be ejected for non-payment of rentals, we do
not agree with the ruling in G.R. No 129887 that since
the unpaid rentals demanded by petitioner were based
on a new rate which it unilaterally imposed and to
which respondent did not agree, there lies no ground
for ejectment. In such a case, there could still be
ground for ejectment based on non-payment of rentals.
The recent case of T & C Development Corporation vs.
Court of Appeals13 is instructional on this point. It was
there cautioned that

'The trial court found that private respondent

had failed to pay the monthly rental of

P1,800.00 from November 1992 to February

16, 1993, despite demands to pay and to
vacate the premises made by petitioner. Even if
private respondent deposited the rents in
arrears in the bank, this fact cannot alter the
legal situation of private respondent since the
account was opened in private respondent's
name. Clearly, there was cause for the
ejectment of private respondent. Although the
increase in monthly rentals from P700.00 to
P1,800.00 was in excess of 20% allowed by
B.P. Blg. 877, as amended by R.A. No. 6828,
what private respondent could have done was
to deposit the original rent of P700.00 either
with the judicial authorities or in a bank in the
name of, and with notice to, petitioner. As this
Court held in Uy v. Court of Appeals (178 SCRA
671, 676 [1989]):

'The records reveal that the new rentals

demanded since 1979 (P150.00 per month)
exceed that allowed by law so refusal on the
part
of
the
lessor
to
accept
was
justified. However, what the lessee should have
done was to deposit in 1979 the previous
rent. This deposit in the Bank was made only in
1984 indicating a delay of more than four years.
'From the foregoing facts, it is clear that the
lessor was correct in asking for the ejectment of
the delinquent lessee. Moreover, he should be
granted not only the current rentals but also all

the rentals in arrears. This is so even if the

lessor himself did not appeal because as ruled
by this Court, there have been instances when
substantial justice demands the giving of the
proper reliefs.' x x x

"While advance rentals appear to have been made to

be applied for the payment of rentals due from the
eleventh year to the twentieth year of the lease, to wit'3. That upon the signing and execution of this
Contract, the LESSEE shall pay the LESSOR
ONE MILLION TWENTY THOUSAND PESOS
ONLY (P1,020,000.00) Philippine Currency
representing advance rental to be applied on
the monthly rental for period from the eleventh
to the twentieth year',

"the records show that such advance rental had

already been applied for rent on the property for the
period of August, 1985 to November, 1989.

"Thus, when respondent stopped paying any rent at all

beginning April, 1994, it gave petitioner good ground
for instituting ejectment proceedings. We reiterate the
ruling in T & C Development Corporation, supra, that if
ever petitioner took exception to the unilateral or illegal
increase in rental rate, it should not have completely

stopped paying rent but should have deposited the

original rent amount with the judicial authorities or in a
bank in the name of, and with notice to, petitioner. This
circumstance, i.e., respondent's failure to pay rent at
the old rate, does not appear in G.R. No. 129887.
Thus, while we are bound by the findings of this Court's
Second Division in that case under the principle
of stare decisis, the fact that respondent's failure to pay
any rentals beginning April 1994, which provided
ground for its ejectment from the premises, justifies our
departure from the outcome of G.R. No. 129887. In this
case, we uphold petitioner's right to eject respondent
from the leased premises."

It bears stressing that the facts of the instant case and those of
G.R. Nos. 129887 and 137980 are substantially the same. The
only difference is the site of respondent bank. The opposing
parties are likewise the same.

Clearly, in light of the Decisions of this Court in G.R. Nos.

129887 and 137980, which we follow as precedents,
respondent Banco Filipino may not be ejected on the ground
of expiration of the lease. However, since it stopped paying the
rents beginning April 1994, its eviction from the premises is
justified.

WHEREFORE, the petition is GRANTED. The assailed

Resolution of the Court of Appeals in CA- G.R. SP No. 44257

is MODIFIED insofar as it denies petitioner Tala's prayer for

ejectment of respondent Banco Filipino.

Judgment is rendered ordering respondent Banco Filipino to

vacate the subject premises and to restore possession thereof
to petitioner Tala. Respondent is also ordered to pay Tala the
monthly rental of P21,100.00 computed from April 1994 up to
the time it vacates the premises.1wphi1.nt
Costs against respondent.

DEL CASTILLO, J.:

Stare decisis et non quieta movere.
Courts are bound by prior decisions. Thus, once a case has
been decided one way, courts have no choice but to resolve
subsequent cases involving the same issue in the same
manner.1 We ruled then, as we rule now, that failure to print the
word "zero-rated" in the invoices/receipts is fatal to a claim for
credit/refund of input value-added tax (VAT) on zero-rated
sales.

This Petition for Review on Certiorari under Rule 45 of the

Rules of Court seeks to set aside the January 15, 2007
Decision2 and the March 16, 2007

Resolution3 of the Court of Tax Appeals (CTA) En Banc.

J.R.A.
vs.

PHILIPPINES,

INC., Petitioner,
Factual Antecedents

COMMISSIONER OF INTERNAL REVENUE, Respondent.

DECISION

Petitioner J.R.A. Philippines, Inc., a domestic corporation, is

engaged in the manufacture and wholesale export of jackets,
pants, trousers, overalls, shirts, polo shirts, ladies wear,
dresses and other wearing apparel.4 It is registered with the
Bureau of Internal Revenue (BIR) as a VAT taxpayer 5 and as
an Ecozone Export Enterprise with the Philippine Economic
Zone Authority (PEZA).6

On separate dates, petitioner filed with the Revenue District

Office (RDO) No. 54 of the BIR, Trece Martires City,
applications for tax credit/refund of unutilized input VAT on its
zero-rated sales for the taxable quarters of 2000 in the total
amount of P8,228,276.34, broken down as follows:

In his Answer,9 respondent interposed the following special

and affirmative defenses, to wit:
4. Petitioners alleged claim for refund is subject to
administrative routinary investigation/examination by
the Bureau;

1st quarter P 2,369,060.97

2nd quarter 2,528,126.02
3rd quarter 1,918,015.38
4th quarter 1,413,073.977

The claim for credit/refund, however, remained unacted by the

respondent. Hence, petitioner was constrained to file a petition
before the CTA.

5. Being allegedly registered with the Philippine

Economic Zone Authority as an export enterprise,
petitioners business is not subject to VAT pursuant to
Section 24 of R.A. No. 7916 in relation to Section 109
(q) of the Tax Code. Hence, it is not entitled to tax
credit of input taxes pursuant to Section 4.103-1 of
Revenue Regulations No. 7-95;
6. The amount of P8,228,276.34 being claimed by
petitioner as alleged unutilized VAT input taxes for the
year 2000 was not properly documented;
7. In an action for refund, the burden of proof is on the
taxpayer to establish its right to refund, and failure to
[do so] is fatal to the claim for refund/ credit;

Proceedings before the Second Division of the Court of

Tax Appeals

On April 16, 2002, petitioner filed a Petition for Review8 with

the CTA for the refund/credit of the same input VAT which was
docketed as CTA Case No.6454 and raffled to the Second
Division of the CTA.

8. Petitioner must show that it has complied with the

provisions of Section 204 (c) and 229 of the Tax Code
on the prescriptive period for claiming tax refund/credit;
9. Claims for refund are construed strictly against the
claimant for the same partake the nature of exemption
from taxation.10

After trial, the Second Division of the CTA rendered a

Decision11 denying petitioners claim for refund/credit of input
VAT attributable to its zero-rated sales due to the failure of
petitioner to indicate its Taxpayers Identification Number-VAT
(TIN-V) and the word "zero-rated" on its invoices.12 Thus, the
fallo reads:

results in the denial of a claim for refund. 19 Hence, it disposed

of the petition as follows:

WHEREFORE, premises considered, the instant petition is

hereby DENIED
DUE
COURSE, and,
accordingly,
DISMISSED for lack of merit.

SO ORDERED.20

SO ORDERED.13

Presiding Justice Ernesto D. Acosta (Presiding Justice Acosta)

concurred with the findings of the majority that there was
failure on the part of petitioner to comply with the invoicing
requirements;21 he dissented, however, to the outright denial of
petitioners claim since there are other pieces of evidence
proving petitioners transactions and VAT status.22

Aggrieved by the Decision, petitioner filed a Motion for

Reconsideration14 to
which
respondent
filed
an
Opposition.15 Petitioner, in turn, tendered a Reply.16

The Second Division of the CTA, however, stood firm on its

Decision and denied petitioners Motion for lack of merit in a
Resolution17 dated October 5, 2005. This prompted petitioner
to elevate the matter to the CTA En Banc.18

WHEREFORE, the petition for review is DENIED for lack of

merit. ACCORDINGLY, the Decision dated June 30, 2005 and
Resolution dated October 5, 2005 of Second Division of the
Court of Tax Appeals in C.T.A Case No. 6454 are
hereby AFFIRMED.

Petitioner sought reconsideration23 of the Decision but the

CTA En Banc denied the same in a Resolution 24 dated March
16, 2007. Presiding Justice Acosta maintained his dissent.

Issue
Ruling of the CTA En Banc
On January 15, 2007, the CTA En Banc denied the petition,
reiterating that failure to comply with invoicing requirements

Hence, the instant Petition with the solitary issue of whether

the failure to print the word "zero-rated" on the
invoices/receipts is fatal to a claim for credit/ refund of input
VAT on zero-rated sales.

Petitioners Arguments

D.
PETITIONER
PRESENTED
SUBSTANTIAL
EVIDENCE THAT UNEQUIVOCALLY PROVED
PETITIONERS ZERO-RATED TRANSACTIONS FOR
THE YEAR 2000.

Petitioner submits that:

THE COURT OF TAX APPEALS ERRED BY DECIDING
QUESTIONS OF SUBSTANCE IN A MANNER THAT IS NOT
IN ACCORD WITH LAW AND JURISPRUDENCE, IN THAT:
A. THE INVOICING REQUIREMENTS UNDER THE
1997 TAX CODE DO NOT REQUIRE THAT INVOICES
AND/OR RECEIPTS ISSUED BY A VAT-REGISTERED
TAXPAYER, SUCH AS THE PETITIONER, SHOULD
BE IMPRINTED WITH THE WORD "ZERO-RATED."
B. THE INVOICING REQUIREMENTS PRESCRIBED
BY THE 1997 TAX CODE AND THE REQUIREMENT
THAT THE WORDS "ZERO-RATED" BE IMPRINTED
ON THE SALES INVOICES/OFFICIAL RECEIPTS
UNDER REVENUE REGULATIONS NO. 7-95 ARE
NOT EVIDENTIARY RULES AND THE ABSENCE
THEREOF IS NOT FATAL TO A TAXPAYERS CLAIM
FOR REFUND.

C. RESPONDENTS REGULATIONS ARE INVALID

BECAUSE THEY DO NOT IMPLEMENT THE 1997
TAX CODE BUT INSTEAD, [EXCEED] THE
LIMITATIONS OF THE LAW.

E. NO PREJUDICE CAN RESULT TO THE

GOVERNMENT BY REASON OF THE FAILURE OF
PETITIONER TO IMPRINT THE WORD "ZERORATED" ON ITS INVOICES. PETITIONERS CLIENTS
FOR ITS ZERO-RATED TRANSACTIONS CANNOT
UNDULY BENEFIT
FROM
ITS
"OMISSION"
CONSIDERING THAT THEY ARE NON-RESIDENT
FOREIGN CORPORATIONS [that] ARE NOT
COVERED BY THE PHILIPPINE VAT SYSTEM.

F. IN CIVIL CASE[S], SUCH AS CLAIMS FOR

REFUND, STRICT COMPLIANCE WITH TECHNICAL
RULES OF EVIDENCE IS NOT REQUIRED.
MOREOVER, A MERE PREPONDERANCE OF
EVIDENCE WILL SUFFICE TO JUSTIFY THE GRANT
OF A CLAIM.25

Respondents Arguments
Emphasizing that tax refunds are in the nature of tax
exemptions which are strictly construed against the claimant,
respondent seeks the affirmance of the assailed Decision and
Resolution of the CTA En Banc. 26 He insists that the denial of

petitioners claim for tax credit/refund is justified because it

failed to comply with the invoicing requirements under Section
4.108-127 of Revenue Regulations No. 7-95.

Our Ruling

or services sold, such zero rate results in no tax chargeable

against the foreign buyer or customer. But, although the seller
in such transactions charges no output tax, he can claim a
refund of the VAT that his suppliers charged him. The seller
thus enjoys automatic zero rating, which allows him to recover
the input taxes he paid relating to the export sales, making him
internationally competitive.

The petition is bereft of merit.

The absence of the word "zero-rated" on the invoices/receipts

is fatal to a claim for credit/refund of input VAT

For the effective zero rating of such transactions, however, the

taxpayer has to be VAT-registered and must comply with
invoicing requirements. x x x

xxxx
The question of whether the absence of the word "zero-rated"
on the invoices/receipts is fatal to a claim for credit/refund of
input VAT is not novel. This has been squarely resolved
in Panasonic Communications Imaging Corporation of the
Philippines
(formerly
Matsushita
Business
Machine
Corporation of the Philippines) v. Commissioner of Internal
Revenue.28 In that case, we sustained the denial of petitioners
claim for tax credit/refund for non-compliance with Section
4.108-1 of Revenue Regulations No. 7-95, which requires the
word "zero rated" to be printed on the invoices/receipts
covering zero-rated sales. We explained that:

Zero-rated transactions generally refer to the export sale of

goods and services. The tax rate in this case is set at zero.
When applied to the tax base or the selling price of the goods

Petitioner Panasonic points out, however, that in requiring the

printing on its sales invoices of the word "zero-rated," the
Secretary of Finance unduly expanded, amended, and
modified by a mere regulation (Section 4.108-1 of RR 7-95)
the letter and spirit of Sections 113 and 237 of the 1997 NIRC,
prior to their amendment by R.A. 9337. Panasonic argues that
the 1997 NIRC, which applied to its payments specifically
Sections 113 and 237 required the VAT-registered taxpayers
receipts or invoices to indicate only the following information:
(1) A statement that the seller is a VAT-registered
person, followed by his taxpayers identification number
(TIN);

(2) The total amount which the purchaser [paid] or is

obligated to pay to the seller with the indication that
such amount includes the value-added tax;
(3) The date of transaction, quantity, unit cost and
description of the goods or properties or nature of the
service; and
(4) The name, business style, if any, address and
taxpayer's identification number (TIN) of the purchaser,
customer or client.

Petitioner Panasonic points out that Sections 113 and 237 did
not require the inclusion of the word "zero-rated" for zero-rated
sales covered by its receipts or invoices. The BIR incorporated
this requirement only after the enactment of R.A. 9337 on
November 1, 2005, a law that did not yet exist at the time it
issued its invoices.

But when petitioner Panasonic made the export sales subject

of this case, i.e., from April 1998 to March 1999, the rule that
applied was Section 4.108-1 of RR 7-95, otherwise known as
the Consolidated Value-Added Tax Regulations, which the
Secretary of Finance issued on December 9, 1995 and [which]
took effect on January 1, 1996.1avvphil It already required the
printing of the word "zero-rated" on the invoices covering zerorated sales. When R.A. 9337 amended the 1997 NIRC on
November 1, 2005, it made this particular revenue regulation a
part of the tax code. This conversion from regulation to law did
not diminish the binding force of such regulation with respect
to acts committed prior to the enactment of that law.

Section 4.108-1 of RR 7-95 proceeds from the rule-making

authority granted to the Secretary of Finance under Section
245 of the 1977 NIRC (Presidential Decree 1158) for the
efficient enforcement of the tax code and of course its
amendments. The requirement is reasonable and is in accord
with the efficient collection of VAT from the covered sales of
goods and services. As aptly explained by the CTAs First
Division, the appearance of the word "zero-rated" on the face
of invoices covering zero-rated sales prevents buyers from
falsely claiming input VAT from their purchases when no VAT
was actually paid. If, absent such word, a successful claim for
input VAT is made, the government would be refunding money
it did not collect.

Further, the printing of the word "zero-rated" on the invoice

helps segregate sales that are subject to 10% (now 12%) VAT
from those sales that are zero-rated. Unable to submit the

proper invoices, petitioner Panasonic has been unable to

substantiate its claim for refund.29
Consistent with the foregoing jurisprudence, petitioners claim
for credit/ refund of input VAT for the taxable quarters of 2000
must be denied. Failure to print the word "zero-rated" on the
invoices/receipts is fatal to a claim for credit/ refund of input
VAT on zero-rated sales.

WHEREFORE, the petition is hereby DENIED. The assailed

Decision dated January 15, 2007 and the Resolution dated
March 16, 2007 of the Court of Tax Appeals En Banc are
hereby AFFIRMED.
SO ORDERED.