Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-28329 August 17, 1975
COMMISSIONER OF CUSTOMS, petitioner,
vs.
ESSO STANDARD EASTERN, INC., (Formerly: Standard-
Vacuum Refining Corp. (Phil.), respondent.
Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor
General Antonio A. Torres and Solicitor Antonio M. Martinez for
petitioner.
Carlos J. Valdez & Associates for respondent.
ESGUERRA, J.:
Appeal from the decision of the Court of Tax Appeals
reversing the Commissioner of Customs' decision holding
respondent ESSO Standard Eastern, Inc., (formerly the
Standard-Vacuum Refining Corporation (Phil.) and hereinafter
referred to as ESSO) liable in the total sum of P775.62 as special
import tax on certain articles imported by the latter under
Republic Act No. 387, otherwise known as the Petroleum Act of
1949.
Respondent ESSO is the holder of Refining Concession
No. 2, issued by the Secretary of Agriculture and Natural
Resources on December 9, 1957, and operates a petroleum
refining plant in Limay Bataan. Under Article 103 of Republic
Act No. 387 which provides: "During the five years following
the granting of any concession, the concessionaire may import
free of customs duty, all equipment, machinery, material,
instruments, supplies and accessories," respondent imported
and was assessed the special import tax (which it paid under
protest) on the following separate importations:
1) One carton, scientific instruments with C & F
value of assessed a special import tax in the
amount of P31.98 (Airport Protest No. 10);
2) One carton of recorder parts with C & F value of
$221.56; assessed special import tax in the amount
of P43.82 (Airport Protest No. 11);
3) One carton of valves with C & F value of
$310.58; assessed special import tax in the amount
of P60.72 (Airport Protest No. 12);
4) One box of parts for Conversion boilers and
Auxiliary Equipment with C & F value of
$2,389.69; assessed special import tax in the
amount of P467.00 (Airport Protest No. 15);
5) One carton of X-ray films with C & F value of
$132.80; assessed special import tax in the amount
of P26.00 (Airport Protest No. 16); and
6) One carton of recorder parts with C & F value of
$750.39; assessed special import tax in the amount
of P147.00 (Airport Protest No. 17).1
The Collector of Customs on February 16, 1962, held that
respondent ESSO was subject to the payment of the special
import tax provided in Republic Act No. 1394, as amended by
R.A. No. 2352, and dismissed the protest.2
On March 1, 1962, respondent appealed the ruling of the
Collector of Customs to the Commissioner of Customs who, on
March 19, 1965, affirmed the decision of said Collector of
Customs.3
On July 2, 1965, respondent ESSO filed a petition with the
Court of Tax Appeals for review of the decision of the
Commissioner of Customs.
The Court of Tax Appeals, on September 30, 1967,
reversed the decision of herein petitioner Commissioner of
Customs and ordered refund of the amount of P775.62 to
respondent ESSO which the latter had paid under protest.4
This decision of the Court of Tax Appeals is now before this
Court for review.
 Petitioner contends that the special import tax under
Republic Act No. 1394 is separate and distinct from the customs
duty prescribed by the Tariff and Customs Code, and that the
exemption enjoyed by respondent ESSO from the payment of
customs duties under the Petroleum net of 1949 does not
include exemption from the payment of the special import tax
provided in R.A. No. 1394.5
For its stand petitioner puts forward this rationale:
A perusal of the provisions of R.A. No. 1394 will
show that the legislature considered the special
import tax as a tax distinct from customs duties as
witness the fact that Section 2(a) of the said law
made separate mention of customs duties and
special import tax when it provided that ... if as a
result of the application of the schedule therein,
the total revenue derived from the customs duties
and from the special import tax on goods, ...
imported from the United States is less in any
calendar year than the proceeds from the exchange
tax imposed under Republic Act Numbered Six
Hundred and One, as amended, on such goods,
articles or products during the calendar year 1955,
the President may, by proclamation, suspend the
reduction of the special import tax for the next
succeeding calendar year ....
If it were the intention of Congress to exempt the
holders of petroleum refinery concessions like the
protestant (respondent herein), such exemption
should have been clearly stated in the statute.
Exemptions are never presumed. They must be
expressed in the clearest and most unambiguous
language and not left to mere implication.6
Specifically, petitioner in his brief submitted two
assignment of errors allegedly committed by the Court of Tax
Appeals in the controverted decision, to wit:
1st assignment of error:
THE COURT OF TAX APPEALS ERRED IN
HOLDING THAT THE TERM "CUSTOMS DUTY"
IN ARTICLE 103 OF REPUBLIC ACT NO. 387
INCLUDES THE SPECIAL IMPORT TAX
IMPOSED BY REPUBLIC ACT NO. 1394;
2nd assignment of error:
THE COURT OF TAX APPEALS ERRED IN
HOLDING THAT EXEMPTION FROM
PAYMENT OF CUSTOMS DUTIES UNDER
REPUBLIC ACT NO. 387 INCLUDES
EXEMPTION FROM PAYMENT OF THE
SPECIAL IMPORT TAX.
On the other hand, the Court of Tax Appeals rationalized
the ground for its ruling thus:
If we are to adhere, as we should, to the plain and
obvious meaning of words in consonance with
settled rules of interpretation, it seems clear that
the special import tax is an impost or a charge on
the importation or bringing into the Philippines of
all goods, articles or products subject thereto, for
the phrase "import tax on all goods, articles or
products imported or brought into the
Philippines" in explicit and unambiguous terms
simply means customs duties. It is hardly
necessary to add that "customs duties" are simply
taxes assessed on merchandise imported from, or
exported to a foreign country.
And being a charge upon importation, the special
import tax is essentially a customs duty, or at least
partakes of the character thereof.
 Citing numberous American decisions and definitions of
terms "customs duties," "duties," "imposts," "levies," "tax," and
"tolls," and their distinctions, including some pronouncements
of this Court on the subject, the Court of Tax Appeals in its
decision, went to great lengths to show that the term "special
import tax" as used in R.A. No. 1394 includes customs duties. It
sees the special import tax as nothing but an impost or a charge
on the importation or bringing into the Philippines of goods,
articles or products.7
To clinch its theory the Court of Tax Appeals cited the
similarity in the basis of computation of the customs duty as
well as the similarity in the phraseology of Section 3 of Republic
Act No. 1394 (which established the special import tax) and
Section 9-01 of the Tariff & Customs code (the basic law
providing for and regulating the imposition of customs duties
and imposts on importations).8
For its part, private respondent, ESSO, in its answer to
the petition, leaned heavily on the same arguments as those
given by the Tax Court, the burden of which is that the special
import tax law is a customs law. 9
It is clear that the only issue involved in this case is
whether or not the exemption enjoyed by herein private
respondent ESSO Standard Eastern, Inc. from customs duties
granted by Republic Act No. 387, or the Petroleum Act of 1949,
should embrace or include the special import tax imposed by
R.A. No. 1394, or the Special Import Tax Law.
We have examined the records of this case thoroughly
and carefully considered the arguments presented by both
parties and We are convinced that the only thing left to this
Court to do is to determine the intention of the legislature
through interpretation of the two statutes involved, i.e.,
Republic Act No. 1394 and Republic Act No. 387.
It is a well accepted principle that where a statute is ambiguous,
as Republic Act No. 1394 appears to be, courts may examine
both the printed pages of the published Act as well as those
extrinsic matters that may aid in construing the meaning of the
statute, such as the history of its enactment, the reasons for the
passage of the bill and purposes to be accomplished by the
measure. 10
Petitioner in the first assignment of error took exception
to the finding of the Court of Tax Appeals that "The language of
Republic Act No. 1394 seems to leave no room for doubt that the
law intends that the phrase 'Special import tax' is taken to
include customs duties" and countered with the argument that
"An examination of the provisions of Republic Act No. 1394 will
indubitably reveal that Congress considered the special import
tax as a tax different from customs duties, as may be seen from
the fact that Section 2(a) of said law made separate mention of
customs duties and special import tax ..." Thus:
... if as a result of the application of the schedule
therein the total revenue derived from the customs
duties and from the special import tax on goods, ...
imported from the United States is less in any
calendar year than the proceeds from the exchange
tax imposed under Republic Act Numbered Six
Hundred and One, as amended, on such goods,
articles or products during the calendar year 1955,
the President may, by proclamation, suspend the
reduction of the special import tax for the next
succeeding calendar year ...
Petitioner further argues:
Customs duties are prescribed by the Tariff and
Customs Code, while the special import tax is
provided for by Republic Act No. 1394. If our
legislature had intended to classify the special
import tax as customs duty, the said Art would
not have expressly exempted from payment of the
special Import tax importations of machinery,
equipment, accessories, and spare parts for use of
industries, without distinguishing whether the
industries referred to are the industries exempt
 from the payment of Customs duties or the non-
exempt ones (Sec. 6). It is sufficient that the
imported machinery, etc., is for the use of any
industry. 11
A study of petitioner's two assignments of errors shows
that one is anchored on practically the same ground as the
other: both involve the interpretation of R.A. No. 387 (The
Petroleum Act of 1949) in relation with R.A. No. 1394 (The
Special Import Tax Law).
While the petitioner harps on particular clauses and
phrases found in the two cited laws, which in a way was
likewise resorted to by the respondent ESSO, it would do Us
well to restate the fundamental rule in the construction of a
statute.
In order to determine the true intent of the legislature,
the particular clauses and phrases of the statute should not be
taken as detached and isolated expressions, but the whole and
every part thereof must be considered in fixing the meaning of
any of its parts. In fact every statute should receive such
construction as will make it harmonize with the pre-existing
body of laws. Antagonism between the Act to be interpreted
and existing or previous laws is to be avoided, unless it was
clearly the intention of the legislature that such antagonism
should arise and one amends or repeals the other, either
expressly or by implication.
Another rule applied by this Court is that the courts may
take judicial notice of the origin and history of the statutes
which they are called upon to construe and administer, and of
facts which affect their derivation, validity and operation. 12
Applying the above stated rules and principles, let us consider
the history, the purpose and objectives of Republic Act No. 387
as it relates to Republic Act No. 1394 and other laws passed by
the Congress of the Philippines insofar as they relate to each
other.
Republic Act No. 387, the Petroleum Act of 1949, has this
for its title, to wit:
AN ACT TO PROMOTE THE EXPLORATION,
DEVELOPMENT, EXPLOITATION, AND
UTILIZATION OF THE PETROLEUM
RESOURCES OF THE PHILIPPINES; TO
ENCOURAGE THE CONSERVATION OF SUCH
PETROLEUM RESOURCES; TO AUTHORIZE
THE SECRETARY OF AGRICULTURE AND
NATURAL RESOURCES TO CREATE AN
ADMINISTRATION UNIT AND A TECHNICAL
BOARD IN THE BUREAU OF MINES; TO
APPROPRIATE FUNDS THEREFORE; AND FOR
OTHER PURPOSES.
Art. 103 of said Act reads:
ART. 103. Customs duties. — During the five years
following the granting of any concessions, the
concessionaire may import free of customs duty,
all equipment, machinery, material, instruments,
supplies and accessories.
xxx xxx xxx
Art. 102 of the Same law insofar as pertinent, provides:
ART. 102. Work obligations, taxes, royalties not to be
charged. — ...; nor shall any other special taxes or
levies be applied to such concessions, nor shall
concessionaires under this Act be subjected to any
provincial, municipal, or other local taxes or
levies; nor shall any sales tax be charged on any
petroleum produced from the concession or
portion thereof, manufactured by the
concessionaire and used in the working of his
concession. ....
Art. 104, still of the same Act, reads:
 ART. 104. No export to be imposed. — No export tax
shall be levied upon petroleum produced from
concessions granted under this Act.
The title of Republic Act No. 387 and the provisions of its
three articles just cited give a clue to the intent of the Philippine
legislature, which is to encourage the exploitation and
development of the petroleum resources of the country.
Through the instrumentality of said law, it declared in no
uncertain terms that the intensification of the exploration for
petroleum must be carried on unflinchingly even if, for the time
being, no taxes, both national and local, may be collected from
the industry. This is the unequivocal intention of the Philippine
Congress when the language of the Petroleum Act is examined.
Until this law or any substantial portion thereof is clearly
amended or repealed by subsequent statutes, the intention of
the legislature must be upheld.
Against this unambiguous language of R.A. No. 387,
there is the subsequent legislation, R.A. No. 1394, the Special
Import Tax Law, which, according to the herein petitioner,
shows that the legislature considered the special import tax as a
tax distinct from customs duties.
Republic Act No. 1394, otherwise known as the Special
Import Tax Law, is entitled as follows:
AN ACT TO IMPOSE A SPECIAL IMPORT TAX
ON ALL GOODS, ARTICLES OR PRODUCTS
IMPORTED OR BROUGHT INTO THE
PHILIPPINES, AND TO REPEAL REPUBLIC
ACTS NUMBERED SIX HUNDRED AND ONE,
EIGHT HUNDRED AND FOURTEEN, EIGHT
HUNDRED AND SEVENTY-ONE, ELEVEN
HUNDRED AND SEVENTY-FIVE. ELEVEN
HUNDRED AND NINETY-SEVEN AND
THIRTEEN HUNDRED AND SEVENTY FIVE.
The title indicates unmistakably that it is repealing six
prior statutes. As will be seen later, all these laws dealt with the
imposition of a special excise tax on foreign exchange or other
form of levy on importation of goods into the country.
Section I of Republic Act No. 1394 reads as follows:
SECTION 1. Except as herein otherwise provided,
there shall be levied, collected and paid as special
import tax on all goods, articles or products
imported or brought into the Philippines,
irrespective of source, during the period and in
accordance with the rates provided for in the
following schedule:
xxx xxx xxx
It would appear that by the provision of Section 1 of this
Act, the pertinent provision of the Petroleum Law, for which
there appears to be no proviso to the contrary has been
modified or altered.
Section 6 of Republic Act No. 1394 declares that the tax
provided for in its Section I shall not be imposed against
importation into the Philippines of machinery and/or raw
materials to be used by new and necessary industries as
determined in accordance with R A. No. 901 and a long list of
other goods, articles, machinery, equipment, accessories and
others.
We shall now examine the six statutes repealed by R.A.
No. 1394, namely:
R.A. No. 601 is an Act imposing a special excise tax
of 17% on foreign exchange sold by the Central
Bank or its agents. This is known as the Exchange
Tax Law;
R.A. No. 814 amended Sections one, two and five
and repealed Sections three and four of R.A. No.
601;
R.A. No. 871 amended Sections one and two of
R.A. No. 601, as amended earlier by R.A. No. 814;
 R.A. No. 1175 amended further Sections one and
two of R.A. No. 601, as amended;
R.A. No. 1197 amended furthermore R.A. No. 601
as amended previously by R.A. No. 1175;
R.A. No. 1375 amended Sections one and two of
R.A. No. 601 as amended by R.A. Nos. 1175 and
1197.
As can be seen from the foregoing, in one fell
swoop, Republic Act No. 1394 repealed and
revoked six earlier statutes which had something
to do with the imposition of special levies and/or
exemption of certain importations from the
burden of the special import taxes or levies. On
the other hand, it is apparent that R.A. No. 387, the
Petroleum Act, had been spared from the pruning
knife of Congress, although this latter law had
granted more concessions and tax exemption
privileges than any of the statutes that were
amended, repealed or revoked by R.A. No. 1394.
The answer must be that the Congress of the
Philippine saw fit to preserve the privileges
granted under the Petroleum Law of 1949 in order
to keep the door open to the exploitation and
development of the petroleum resources of the
country with such incentives as are given under
that law.
This ascertained will and intention of the
legislature finds a parallelism in a case brought
earlier before this Court.
A fishpond owner was slapped with taxes as a
"merchant" by the Collector of Internal Revenue. He paid under
protest and filed an action to recover the taxes paid, claiming
that he was an agriculturist and not a merchant. When this
Court was called upon to interpret the provisions of the Internal
Revenue Law on whether fish is an agricultural product which
falls under the exemption provisions of said law, it inquired into
the purpose of the legislature in establishing the exemption for
agricultural products. We held:
The first inquiry, therefore, must relate to the
purpose the legislature had in mind in
establishing the exemption contained in the clause
now under consideration. It seems reasonable to
assume that it was due to the belief on the part of
the law-making body that by exempting
agricultural products from this tax the farming
industry would be favored and the development
of the resources of the country encouraged. .... 13
Having this in mind, particularly the manner in which
extrinsic aids the history of the enactment of the statute and
purpose of the legislature in employing a clause or provision in
the law had been applied in determining the true intent of the
lawmaking body, We are convinced that R.A. No. 387, The
Petroleum Act of 1949, was intended to encourage the
exploitation, exploration and development of the petroleum
resources of the country by giving it the necessary incentive in
the form of tax exemptions. This is the raison d etre for the
generous grant of tax exemptions to those who would invest
their financial resources towards the achievement of this
national economic goal.
On the contention of herein petitioner that the
exemptions enjoyed by respondent ESSO under R.A. No. 387
have been abrogated by R.A. No. 1394, We hold that repeal by
implication is not favored unless it is manifest that the
legislature so intended. As laws are presumed to be passed with
deliberation and with full knowledge of all existing ones on the
subject, it is logical to conclude that in passing a statute it was
not intended to interfere with or abrogate any former law
relating to the same matter, unless the repugnancy between the
two is not only irreconcilable but also clear and convincing as a
result of the language used, or unless the latter act fully
embraces the subject matter of the earlier. 14
As observed earlier, Congress lined up for revocation by
Republic Act No. 1394 six statutes dealing with the imposition
of special imposts or levies or the granting of exemptions from
special import taxes. Yet, considering the tremendous amount of
revenues it was losing under the Petroleum Law of 1949, it
failed to include the latter statute among those it chose to bury
by the Special Import Taw Law. The reason for this is very clear:
The legislature wanted to continue the incentives for the
continuing development of the petroleum industry.
It is not amiss to mention herein passing that contrary to the
theory of the herein petitioner, R.A. No. 387 had not been
repealed by R.A. No. 2352 which expressly abrogated Section 6
of R.A. No. 1394 but did not repeal any part of R.A. No. 387.
Therefore, the exemption granted by Republic Act No. 387 still
stands.
WHEREFORE, taking into consideration the weight given by
this Court to the findings and conclusions of the Court of Tax
Appeals on a matter it is well-equipped to handle, which
findings and conclusions We find no reason to overturn, the
petition of the Commissioner of Customs to reverse the decision
of the Court of Tax Appeals should be, as it is hereby, denied.
No costs.
SO ORDERED.
Castro (Chairman), Makasiar, Muñoz Palma and Martin, JJ., concur.

Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33693-94 May 31, 1979
MISAEL P. VERA, as Commissioner of Internal Revenue, and
THE FAIR TRADE BOARD, petitioner,
vs.
HON. SERAFIN R. CUEVAS, as Judge of the Court of First
Instance of Manila, Branch IV, INSTITUTE OF
EVAPORATED FILLED MILK MANUFACTURERS OF THE
PHILIPPINES, INC., CONSOLIDATED MILK COMPANY
(PHIL.) INC., and MILK INDUSTRIES, INC., respondents.
Solicitor General Felix Q. Antonio and Solicitor Bernardo P. Pardo for
petitioners.
Sycip, Salazar, Luna, Manalo & Feliciano for private respondents.
DE CASTRO, J.:
This is a petition for certiorari with preliminary
injunction to review the decision rendered by respondent judge,
in Civil Case No. 52276 and in Special Civil Action No. 52383
both of the Court of First Instance of Manila.
Plaintiffs, in Civil Case No. 52276 private respondents
herein, are engaged in the manufacture, sale and distribution of
filled milk products throughout the Philippines. The products of
private respondent, Consolidated Philippines Inc. are marketed
and sold under the brand Darigold whereas those of private
respondent, General Milk Company (Phil.), Inc., under the
brand "Liberty;" and those of private respondent, Milk
Industries Inc., under the brand "Dutch Baby." Private
respondent, Institute of Evaporated Filled Milk Manufacturers
of the Philippines, is a corporation organized for the principal
purpose of upholding and maintaining at its highest the
standards of local filled milk industry, of which all the other
private respondents are members.
Civil Case No. 52276 is an action for declaratory relief
with ex-parte petition for preliminary injunction wherein
plaintiffs pray for an adjudication of their respective rights and
obligations in relation to the enforcement of Section 169 of the
Tax Code against their filled milk products.
The controversy arose from the order of defendant,
Commissioner of Internal Revenue now petitioner herein,
requiring plaintiffs- private respondents to withdraw from the
market all of their filled milk products which do not bear the
inscription required by Section 169 of the Tax Code within
fifteen (15) days from receipt of the order with the explicit
warning that failure of plaintiffs' private respondents to comply
with said order will result in the institution of the necessary
action against any violation of the aforesaid order. Section 169
of the Tax Code reads as follows:
Section 169. Inscription to be placed on skimmed milk.
— All condensed skimmed milk and all milk in
whatever form, from which the fatty part has been
removed totally or in part, sold or put on sale in
 the Philippines shall be clearly and legibly marked
on its immediate containers, and in all the
language in which such containers are marked,
with the words, "This milk is not suitable for
nourishment for infants less than one year of age,"
or with other equivalent words.
The Court issued a writ of preliminary injunction dated
February 16, 1963 restraining the Commissioner of Internal
Revenue from requiring plaintiffs' private respondents to print
on the labels of their rifled milk products the words, "This milk
is not suitable for nourishment for infants less than one year of
age or words of similar import, " as directed by the above
quoted provision of Law, and from taking any action to enforce
the above legal provision against the plaintiffs' private
respondents in connection with their rifled milk products,
pending the final determination of the case, Civil Case No.
52276, on the merits.
On July 25, 1969, however, the Office of the Solicitor
General brought an appeal from the said order by way of
certiorari to the Supreme Court. 1 In view thereof, the
respondent court in the meantime suspended disposition of
these cases but in view of the absence of any injunction or
restraining order from the Supreme Court, it resumed action on
them until their final disposition therein.
Special Civil Action No. 52383, on the other hand, is an
action for prohibition and injunction with a petition for
preliminary injunction. Petitioners therein pray that the
respondent Fair Trade Board desist from further proceeding
with FTB I.S. No. I . entitled "Antonio R. de Joya vs. Institute of
Evaporated Milk Manufacturers of the Philippines, etc."
pending final determination of Civil Case No. 52276. The facts
of this special civil action show that on December 7, 1962,
Antonio R. de Joya and Sufronio Carrasco, both in their
individual capacities and in their capacities as Public Relations
Counsel and President of the Philippine Association of
Nutrition, respectively, filed FTB I.S. No. 1 with Fair Trade
Board for misleading advertisement, mislabeling and/or
misbranding. Among other things, the complaint filed include
the charge of omitting to state in their labels any statement
sufficient to Identify their filled milk products as "imitation
milk" or as an imitation of genuine cows milk. and omitting to
mark the immediate containers of their filled milk products
with the words: "This milk is not suitable for nourishment for
infants less than one year of age or with other equivalent words
as required under Section 169 of the Tax Code. The Board
proceeded to hear the complaint until it received the writ of
preliminary injunction issued by the Court of First Instance on
March 19, 1963.
Upon agreement of the parties, Civil Case No. 52276 and
Special Civil Action No. 52383 were heard jointly being
intimately related with each other, with common facts and
issues being also involved therein. On April 16, 1971, the
respondent court issued its decision, the dispositive part of
which reads as follows:
Wherefore, judgment is hereby rendered:
In Civil Case No. 52276:
(a) Perpetually restraining the defendant,
Commissioner of Internal Revenue, his agents,
or employees from requiring plaintiffs to print
on the labels of their filled milk products the
words: "This milk is not suitable for
nourishment for infants less than one year of
age" or words with equivalent import and
declaring as nun and void and without
authority in law, the order of said defendant
dated September 28, 1961, Annex A of the
complaint, and the Ruling of the Secretary of
Finance, dated November 12, 1962, Annex G of
the complaint; and
In Special Civil Action No. 52383:
 (b) Restraining perpetually the respondent Fair
Trade Board, its agents or employees from
continuing in the investigation of the
complaints against petitioners docketed as FTB
I.S. No. 2, or any charges related to the
manufacture or sale by the petitioners of their
filled milk products and declaring as null the
proceedings so far undertaken by the
respondent Board on said complaints. (pp. 20-
21, Rollo).
From the above decision of the respondent court, the
Commissioner of Internal Revenue and the Fair Trade Board
joined together to file the present petition for certiorari with
preliminary injunction, assigning the following errors:
I. THE LOWER COURT ERRED IN RULING
THAT SEC. TION 169 OF THE TAX CODE HAS
BEEN REPEALED BY IMPLICATION.
II. THE LOWER COURT ERRED IN RULING
THAT SECTION 169 OF THE TAX CODE HAS
LOST ITS TAX PURPOSE, AND THAT
COMMISSIONER NECESSARILY LOST HIS
AUTHORITY TO ENFORCE THE SAME AND
THAT THE PROPER AUTHORITY TO
PROMOTE THE HEALTH OF INFANTS IS THE
FOOD AND DRUG ADMINISTRATION, THE
SECRETARY OF HEALTH AND THE
SECRETARY OF JUSTICE, AS PROVIDED FOR
IN RA 3720, NOT THE COMMISSIONER OF
INTERNAL REVENUE.
III. THE LOWER COURT ERRED IN RULING
THAT THE POWER TO INVESTIGATE AND TO
PROSECUTE VIOLATIONS OF FOOD LAWS IS
ENTRUSTED TO THE FOOD AND DRUG
INSPECTION, THE FOOD AND DRUG
ADMINISTRATION, THE SECRETARY OF
HEALTH AND THE SECRETARY OF JUSTICE,
AND THAT THE FAIR TRADE BOARD IS
WITHOUT JURISDICTION TO INVESTIGATE
AND PROSECUTE ALLEGED MISBRANDING,
MISLABELLING AND/OR MISLEADING
ADVERTISEMENT OF FILLED MILK
PRODUCTS. (pp, 4-5, Rollo).
The lower court did not err in ruling that Section 169 of
the Tax Code has been repealed by implication. Section 169 was
enacted in 1939, together with Section 141 (which imposed a
Specific tax on skimmed milk) and Section 177 (which penalized
the sale of skimmed milk without payment of the specific tax
and without the legend required by Section 169). However,
Section 141 was expressly repealed by Section 1 of Republic Act
No. 344, and Section 177, by Section 1 of Republic Act No. 463.
By the express repeal of Sections 141 and 177, Section 169
became a merely declaratory provision, without a tax purpose,
or a penal sanction.
Moreover, it seems apparent that Section 169 of the Tax
Code does not apply to filled milk. The use of the specific and
qualifying terms "skimmed milk" in the headnote and
"condensed skimmed milk" in the text of the cited section,
would restrict the scope of the general clause "all milk, in
whatever form, from which the fatty pat has been removed
totally or in part." In other words, the general clause is restricted
by the specific term "skimmed milk" under the familiar rule
of ejusdem generis that general and unlimited terms are
restrained and limited by the particular terms they follow in the
statute.
Skimmed milk is different from filled milk. According to
the "Definitions, Standards of Purity, Rules and Regulations of
the Board of Food Inspection," skimmed milk is milk in
whatever form from which the fatty part has been removed.
Filled milk, on the other hand, is any milk, whether or not
condensed, evaporated concentrated, powdered, dried,
dessicated, to which has been added or which has been blended
or compounded with any fat or oil other than milk fat so that
the resulting product is an imitation or semblance of milk cream
or skim milk." The difference, therefore, between skimmed milk
and filled milk is that in the former, the fatty part has been
removed while in the latter, the fatty part is likewise removed
but is substituted with refined coconut oil or corn oil or both. It
cannot then be readily or safely assumed that Section 169
applies both to skimmed milk and filled milk.
The Board of Food Inspection way back in 1961 rendered
an opinion that filled milk does not come within the purview of
Section 169, it being a product distinct from those specified in
the said Section since the removed fat portion of the milk has
been replaced with coconut oil and Vitamins A and D as
fortifying substances (p. 58, Rollo). This opinion bolsters the
Court's stand as to its interpretation of the scope of Section 169.
Opinions and rulings of officials of the government called upon
to execute or implement administrative laws command much
respect and weight. (Asturias Sugar Central Inc. vs.
Commissioner of Customs, G. R. No. L-19337, September 30,
1969, 29 SCRA 617; Tan, et. al. vs. The Municipality of Pagbilao
et. al., L-14264, April 30, 1963, 7 SCRA 887; Grapilon vs.
Municipal Council of Carigara L-12347, May 30, 1961, 2 SCRA
103).
This Court is, likewise, induced to the belief that filled
milk is suitable for nourishment for infants of all ages. The
Petitioners themselves admitted that: "the filled milk products
of the petitioners (now private respondents) are safe, nutritious,
wholesome and suitable for feeding infants of all ages" (p. 44,
Rollo) and that "up to the present, Filipino infants fed since birth
with filled milk have not suffered any defects, illness or disease
attributable to their having been fed with filled milk." (p. 45,
Rollo).
There would seem, therefore, to be no dispute that filled
milk is suitable for feeding infants of all ages. Being so, the
declaration required by Section 169 of the Tax Code that filled
milk is not suitable for nourishment for infants less than one
year of age would, in effect, constitute a deprivation of property
without due. process of law.
Section 169 is being enforced only against respondent
manufacturers of filled milk product and not as against
manufacturers, distributors or sellers of condensed skimmed
milk such as SIMILAC, SMA, BREMIL, ENFAMIL, OLAC, in
which, as admitted by the petitioner, the fatty part has been
removed and substituted with vegetable or corn oil. The
enforcement of Section 169 against the private respondents only
but not against other persons similarly situated as the private
respondents amounts to an unconstitutional denial of the equal
pro petition of the laws, for the law, equally enforced, would
similarly offend against the Constitution. Yick Wo vs. Hopkins,
118 U.S. 356,30 L. ed. 220).
As stated in the early part of this decision, with the repeal
of Sections 141 and 177 of the Tax Code, Section 169 has lost its
tax purpose. Since Section 169 is devoid of any tax purpose,
petitioner Commissioner necessarily lost his authority to enforce
the same. This was so held by his predecessor immediately after
Sections 141 and 177 were repealed in General Circular No. V-85
as stated in paragraph IX of the Partial Stipulation of facts
entered into by the parties, to wit:
... As the act of sewing skimmed milk without first
paying the specific tax thereon is no longer
unlawful and the enforcement of the requirement
in regard to the placing of the proper legend on its
immediate containers is a subject which does not
come within the jurisdiction of the Bureau of
Internal Revenue, the penal provisions of Section
177 of the said Code having been repealed by
Republic Act No. 463. (p. 102, Rollo).
Petitioner's contention that he still has jurisdiction to
enforce Section 169 by virtue of Section 3 of the Tax Code which
provides that the Bureau of Internal Revenue shall also "give
effect to and administer the supervisory and police power
conferred to it by this Code or other laws" is untenable. The
Bureau of Internal Revenue may claim police power only when
necessary in the enforcement of its principal powers and duties
consisting of the "collection of all national internal revenue
taxes, fees and charges, and the enforcement of all forfeitures,
penalties and fines connected therewith." The enforcement of
Section 169 entails the promotion of the health of the nation and
is thus unconnected with any tax purpose. This is the exclusive
function of the Food and Drug Administration of the
Department of Health as provided for in Republic Act No. 3720.
In particular, Republic Act No. 3720 provides:
Section 9. ... It shall be the duty of the Board (Food
and Drug Inspection), conformably with the rules
and regulations, to hold hearings and conduct
investigations relative to matters touching the
Administration of this Act, to investigate
processes of food, drug and cosmetic manufacture
and to subject reports to the Food and Drug
Administrator, recommending food and drug
standards for adoption. Said Board shall also
perform such additional functions, properly
within the scope of the administration thereof, as
maybe assigned to it by the Food and Drug
Administrator. The decisions of the Board shall be
advisory to the Food and Drug Administrator.
Section 26. ...
xxx xxx xxx
(c) Hearing authorized or required by this Act
shall be conducted by the Board of Food and Drug
Inspection which shall submit recommendation to
the Food and Drug Administrator.
(d) When it appears to the Food and Drug
Administrator from the reports of the Food and
Drug Laboratory that any article of food or any
drug or cosmetic secured pursuant to Section 28 of
this Act is adulterated or branded he shall cause
notice thereof to be given to the person or persons
concerned and such person or persons shall be
given an opportunity to subject evidence
impeaching the correctness of the finding or
charge in question.
(e) When a violation of any provisions of this Act
comes to the knowledge of the Food and Drug
Administrator of such character that a criminal
prosecution ought to be instituted against the
offender, he shall certify the facts to the Secretary
of Justice through the Secretary of Health, together
with the chemists' report, the findings of the Board
of Food and Drug Inspection, or other
documentary evidence on which the charge is
based.
(f) Nothing in this Act shall be construed as
requiring the Food and Drug Administrator to
certify for prosecution pursuant to subparagraph
(e) hereof, minor violations of this Act whenever
he believes that public interest will be adequately
served by a suitable written notice or warning.
The aforequoted provisions of law clearly show that
petitioners, Commissioner of Internal Revenue and the Fair
Trade Board, are without jurisdiction to investigate and to
prosecute alleged misbranding, mislabeling and/or misleading
advertisements of filled milk. The jurisdiction on the matters
cited is vested upon the Board of Food and Drug inspection and
the Food and Drug Administrator, with the Secretary of Health
and the Secretary of Justice, also intervening in case criminal
prosecution has to be instituted. To hold that the petitioners
have also jurisdiction as would be the result were their instant
petition granted, would only cause overlapping of powers and
functions likely to produce confusion and conflict of official
action which is neither practical nor desirable.
WHEREFORE, the decision appealed from is hereby affirmed en
toto. No costs.
SO ORDERED.
Teehankee, (Chairman), Fernandez, Melencio-Herrera, JJ., concur.
CARMELO C. NORIEL, NATIONAL FEDERATION OF FREE
LABOR UNIONS (NAFLU), and PHILIPPINE BLOOMING
MILLS CO., INC., respondents.
Guevara, Pineda, Guevara & Castillon for petitioner.
Olalia Dimapilis & Associates for respondent Union (NAFLU)
Assistant Solicitor General Reynato S. Puno and Solicitor Jesus V.
Diaz for respondent Bureau of Labor Relations, etc., et al.

FERNANDO, Acting C.J.:

A certification by respondent Director of Labor Relations,
Carmelo C. Noriel, that respondent National Federation of Free
Labor Unions (NAFLU) as the exclusive bargaining agent of all
the employees in the Philippine Blooming Mills, Company, Inc.
disregarding the objection raised by petitioner, the Philippine
Association of Free Labor Unions (PAFLU), is assailed in this
certiorari proceeding. Admittedly, in the certification election
held on February 27, 1976, respondent Union obtained 429 votes
as against 414 of petitioner Union. Again, admittedly, under the
Rules and Regulations implementing the present Labor Code, a
majority of the valid votes cast suffices for certification of the
victorious labor union as the sole and exclusive bargaining
agent.1 There were four votes cast by employees who did not
want any union. 2 On its face therefore, respondent Union
ought to have been certified in accordance with the above
applicable rule. Petitioner, undeterred, would seize upon the
doctrine announced in the case of Allied Workers Association of
the Philippines v. Court of Industrial Relations3 that spoiled ballots
Republic of the Philippines should be counted in determining the valid votes cast.
SUPREME COURT Considering there were seventeen spoiled ballots, it is the
Manila submission that there was a grave abuse of discretion on the
SECOND DIVISION part of respondent Director. Implicit in the comment of
G.R. No. L-43760 August 21, 1976 respondent Director of Labor Relations, 4 considered as an
PHILIPPINE ASSOCIATION OF FREE LABOR UNIONS answer, is the controlling weight to be accorded the
(PAFLU), petitioner implementing rule above-cited, no inconsistency being shown
vs. between such rule and the present Labor Code. Under such a
BUREAU OF LABOR RELATIONS, HONORABLE view, the ruling in the Allied Workers Association case that
arose during the period when it was the Industrial Peace Act 5,
that was in effect and not the present law, no longer possesses
relevance. It cannot and should not be applied. It is not
controlling. There was no abuse of discretion then, much less a
grave one.
This Court is in agreement. The law is on the side of
respondent Director, not to mention the decisive fact appearing
in the Petition itself that at most, only ten of the spoiled ballots
"were intended for the petitioner Union,"6 thus rendering clear
that it would on its own showing obtain only 424 votes as
against 429 for respondent Union. certiorari does not lie.
1. What is of the essence of the certification process, as
noted in Lakas Ng Manggagawang Pilipino v. Benguet Consolidated,
Inc.7 "is that every labor organization be given the opportunity
in a free and honest election to make good its claim that it
should be the exclusive collective bargaining
representative."8 Petitioner cannot complain. It was given that
opportunity. It lost in a fair election. It came out second best.
The implementing rule favors, as it should, respondent Union, It
obtained a majority of the valid votes cast. So our law
Prescribes. It is equally the case in the United States as this
excerpt from the work of Cox and Bok makes clear: "It is a well-
settled rule that a representative will he certified even though
less than a majority of all the employees in the unit cast ballots
in favor of the union. It is enough that the union be designated
by a majority of the valid ballots, and this is so even though
only a small proportion of the eligible voters participates.
Following the analogy of political elections, the courts have
approved this practice of the Board."9
2. There is this policy consideration. The country is at
present embarked on a wide-scale industrialization project. As a
matter of fact, respondent firm is engaged in such activity.
Industrialization, as noted by Professor Smith, Merrifield and
Rothschild, "can thrive only as there is developed a. stable
structure of law and order in the productive sector."10That
objective is best attained in a collective bargaining regime,
which is a manifestation of industrial democracy at work, if
there be no undue obstacles placed in the way of the choice of a
bargaining representative. To insist on the absolute majority
where there are various unions and where the possibility of
invalid ballots may not be ruled out, would be to frustrate that
goal. For the probability of a long drawn-out, protracted process
is not easy to dismiss. That is not unlikely given the intensity of
rivalry among unions capable of enlisting the allegiance of a
group of workers. It is to avoid such a contingency that there is
this explicit pronouncement in the implementing rule. It speaks
categorically. It must be obeyed. That was what respondent
Director did.
3. Nor can fault of a grave and serious character be
imputed to respondent Director presumably because of failure
to abide by the doctrine or pronouncement of this Court in the
aforesaid Allied Workers Association case. The reliance is on
this excerpt from the opinion: "However, spoiled ballots, i.e.,
those which are defaced, torn or marked (Rules for Certification
Elections, Rule II, sec. 2[j]) should be counted in determining the
majority since they are nevertheless votes cast by those who are
qualified to do so." 11 Nothing can be clearer than that its basis
is a paragraph in a section of the then applicable rules for
certification elections. 12 They were promulgated under the
authority of the then prevailing Industrial Peace Act. 13 That
Legislation is no longer in force, having been superseded by the
present Labor Code which took effect on November 1, 1974.
This certification election is governed therefore, as was made
clear, by the present Labor Code and the Rules issued
thereunder. Absent a showing that such rules and regulations -
are violative of the Code, this Court cannot ignore their
existence. When, as should be the case, a public official acts in
accordance with a norm therein contained, no infraction of the
law is committed. Respondent Director did, as he ought to,
comply with its terms. He took into consideration only the 1918 decision: "Courts will and should respect the
"valid votes" as was required by the Rules. He had no choice as contemporaneous construction placed upon a statute by the
long as they remain in force. In a proper showing, the judiciary executive officers whose duty it is to enforce it, and unless such
can nullify any rule it found in conflict with the governing interpretation is clearly erroneous will ordinarily be controlled
statute. 14 That was not even attempted here. All that petitioner thereby." 20 Since then, such a doctrine has been reiterated in
did was to set forth in two separate paragraphs the applicable numerous decisions . 21 As was emphasized by Chief Justice
rule followed by respondent Director 15and the governing Castro, "the construction placed by the office charged with
article. 16 It did not even bother to discuss why such rule was in implementing and enforcing the provisions of a Code should he
conflict with the present Labor Code. It failed to point out any given controlling weight. " 22
repugnancy. Such being the case, respondent Director must be WHEREFORE, the petition for certiorari is dismissed. Costs
upheld. against petitioner Philippine Association of Free Labor Unions
(PAFLU).
4. The conclusion reached by us derives further support Barredo, Antonio, Aquino and Concepcion Jr., JJ., concur.
from the deservedly high repute attached to the construction
placed by the executive officials entrusted with the
responsibility of applying a statute. The Rules and Regulations
implementing the present Labor Code were issued by Secretary
Blas Ople of the Department of Labor and took effect on
February 3, 1975, the present Labor Code having been made
known to the public as far back as May 1, 1974, although its date
of effectivity was postponed to November 1, 1974, although its
date of effectivity was postponed to November 1, 1974. It would
appear then that there was more than enough time for a really
serious and careful study of such suppletory rules and
regulations to avoid any inconsistency with the Code. This
Court certainly cannot ignore the interpretation thereafter
embodied in the Rules. As far back as In re Allen," 17 a 1903
decision, Justice McDonough, as ponente, cited this excerpt from
the leading American case of Pennoyer v. McConnaughy, decided
in 1891: "The principle that the contemporaneous construction
of a statute by the executive officers of the government, whose
duty it is to execute it, is entitled to great respect, and should
ordinarily control the construction of the statute by the courts, is
so firmly embedded in our jurisprudence that no authorities
need be cited to support it." 18 There was a paraphrase by Justice
Malcolm of such a pronouncement in Molina v. Rafferty," 19 a
 G.R. No. 106724 February 9, 1994
THE NATIONAL POLICE COMMISSION, represented by its
Acting Chairman, Cesar Sarino, Teodolo C. Natividad, Vice-
Chairman and Executive Officer, Brig. Gen. Virgilio H. David,
Edgar Dula Torre, Guillermo P. Enriquez, Commissioners,
and Chief Supt. Levy D. Macasiano Director for
Personnel, petitioners,
vs.
Honorable Judge Salvador de Guzman, Jr., Chief Supt.
Norberto M. Lina, Chief Supt. Ricardo Trinidad, Jr., Sr. Supt.
Manuel Suarez, Supt. Justito B. Tagum, Sr. Supt. Tranquilino
Aspiras, Sr., Supt. Ramon I. Navarro,
Sr. Supt. Ramon I. Navarro, Sr. Supt. Jose P. Suria, Sr. Supt.
Agaton Abiera, Chief Insp. Bienvenido Torres, and the
National (ROTC) Alumni Association Inc. (NARRA),
represented by its President Col. Benjamin Gundran, and
Director Hermogenes Peralta, Jr., respondents.
The Solicitor General for petitioners.
Renecio R. Espiritu for private respondents.
Diosdado P. Peralta for respondent-intervenor.

BIDIN, J.:
The case at bar had its origin in the implementation of
the compulsory retirement of PNP officers as mandated in Sec.
39, RA 6975, otherwise known as "An Act Establishing the
Philippine National Police Under a Reorganized Department of
the Interior and Local Government", which took effect on
January 2, 1991. Among others, RA 6975 provides for a uniform
retirement system for PNP members. Section 39 thereof reads:
Sec. 39. Compulsory Retirement. — Compulsory
retirement, for officer and non-officer, shall be
upon the attainment of age fifty-six (56); Provided,
Republic of the Philippines
That, in case of any officer with the rank of chief
SUPREME COURT
superintendent, director or deputy director
Manila
general, the Commission may allow his retention
EN BANC
 in the service for an unextendible period of one (1)
year.
Based on the above provision, petitioners sent notices of
retirement to private respondents who are all members of the
defunct Philippine Constabulary and have reached the age of
fifty-six (56).
In response, private respondents filed a complaint on December
19, 1991 for declaratory relief with prayer for the issuance of
an ex parte restraining order and/or injunction (docketed as
Civil Case No. 91-3498) before the Regional Trial Court of
Makati, Branch 142. In their complaint, respondents aver that
the age of retirement set at fifty-six (56) by Section 39 of RA 6975
cannot be applied to them since they are also covered by Sec. 89
thereof which provides:
Any provision hereof to the contrary
notwithstanding, and within the transition period
of four (4) years following the effectivity of this
Act, the following members of the INP shall be
considered compulsorily retired:
a) Those who shall attain the age of sixty (60) on
the first year of the effectivity of this Act.
b) Those who shall attain the age of fifty-nine (59)
on the second year of the effectivity of this Act.
c) Those who shall attain the age of fifty-eight (58)
on the third year of the effectivity of this Act.
d) Those who shall attain the age of fifty-seven
(57) on the fourth year of the effectivity of this Act.
It is the submission of respondents that the term "INP" includes
both the former members of the Philippine Constabulary and
the local police force who were earlier constituted as the
Integrated National Police (INP) by virtue of
PD 765 in 1975.
On the other hand, it is the belief of petitioners that the 4-year
transition period provided in Section 89 applies only to the local
police forces who previously retire, compulsorily, at age sixty
(60) for those in the ranks of Police/Fire Lieutenant or higher
(Sec. 33, PD 1184); while the retirement age for the PC had
already been set at fifty-six (56) under the AFP law.
On December 23, 1991, respondent judge issued a
restraining order followed by a writ of injunction on January 8,
1992 upon posting of a P100,000.00 bond by private
respondents.
After the parties have submitted their respective
pleadings, the case was submitted for resolution and on August
14, 1992, the respondent judge rendered the assailed decision,
the decretal portion of which reads:
WHEREFORE, the court hereby declares that the
term "INP" in Section 89 of the PNP Law includes
all members of the present Philippine National
Police, irrespective of the original status of the
present members of the Philippine National Police
before its creation and establishment, and that
Section 39 thereof shall become operative after the
lapse of the
four-year transition period.
The preliminary injunction issued is made
permanent.
SO ORDERED. (Rollo, pp. 29-30)
Petitioners filed the instant petition on October 8, 1992
seeking the reversal of the above judgment. On January 12,
1993, the Court resolved to treat the respondents' Comment as
Answer and gave due course to the petition.
In ruling in favor of private respondents, respondent judge
observed, among others, that:
It may have been the intention of Congress to refer to
the local police forces as the "INP" but the PNP Law
failed to define who or what constituted the INP. The
natural recourse of the court is to trace the source
of the "INP" as courts are permitted to look to
prior laws on the same subject and to investigate
the antecedents involved. There is nothing extant
in the statute books except that which was created
and established under
PD 765 pursuant to the mandate of Article XV of
the 1973 Constitution providing that the "State
shall establish and maintain an integrated national
police force whose organization, administration
and operation shall be provided by law."
Heretofore, INP was unknown. And the said law
categorically declared the PC "as the principal
component of the Integrated National Police" (Sec.
5, PD 765).
The court was supplied by respondents (petitioners
herein) with excerpts taken from the discussion
amongst the members of Congress concerning the
particular provision of Section 89. The court is not
persuaded by said discussion; it was a simple matter
for the members of the legislature to state
precisely in clear and unequivocal terms their
meaning, such as "integrated police" as used in PD
765. Instead, they employed "INP", a generic term
that includes the PC as the principal component of
the INP, supra. In failing to categorically restrict the
application of Section 89 as the members of legislature
are said to have intended, it gave rise to the
presumption that it has not limited nor intended to
limit the meaning of the word when the bill was finally
passed into law. It is not difficult for the court to
also presume that in drafting the wording of the
PNP Law, the legislators were aware of the
historical legislative origin of the "INP".
xxx xxx xxx
The court takes particular note of the fact that
Section 89 is found in the Transitory Provisions of
the law which do not provide for any distinction
between the former PC officers and those
belonging to the civilian police forces. These
provision are specifically enacted to regulate the
period covering the dissolution of the PC and the
creation of the PNP, a period that necessarily
would be attended by imbalances and or
confusion occasioned by the wholesale and mass
integration. In fact, the retirement payment
scheme of the INP is still to be formulated, leaving
the impression that nothing is really settled until
after the transition of four years has lapsed.
Section 89 therefore prevails over Section 39 up to
the year 1995 when the retirement age for the
members of the PNP shall then be age 56; after the
year 1995, Section 39 shall then be the applicable
law on retirement of PNP members. (Rollo, pp. 27-
28; emphasis supplied)
Petitioners disagree and claim that the use of the term
INP in Sec. 89 does not imply the same meaning contemplated
under PD 765 wherein it is provided:
Sec. 1. Constitution of the Integrated National Police.
— There is hereby established and constituted the
Integrated National Police (INP) which shall be
composed of the Philippine Constabulary as the
nucleus, and the integrated police forces as
established by Presidential Decrees
Nos. 421, 482, 531, 585 and 641, as components,
under the Department of National Defense.
On the other hand, private respondents assert that being
the nucleus of the Integrated National Police (INP) under PD
765, former members of the Philippine Constabulary (PC)
should not be discriminated against from the coverage of the
term "INP" in Sec. 89, RA 6975. Clearly, it is argued, the term
"INP" found in Section 89 of RA 6975 refers to the INP in PD
765. Thus, where the law does not distinguish, the courts should
not distinguish.
Does the law, RA 6975, distinguish INP from the PC? Petitioners
submit that it does and cite Sections 23 and 85 to stress the
point, viz.:
Sec. 23. Composition. — Subject to the limitations
provided for in this Act, the Philippine National
Police, hereinafter referred to as the PNP, is
hereby established, initially consisting of the
members of the police forces who were integrated
into the Integrated National Police (INP) pursuant
to Presidential Decree No. 765, and the officers
and enlisted personnel of the Philippine
Constabulary (PC). . .
xxx xxx xxx
The permanent civilian employees of the present
PC, INP, Narcotics Command, CIS and the
technical command of the AFP assigned with the
PC, including NAPOLCOM hearing officers
holding regular items as such, shall be absorbed
by the Department as employees thereof, subject
to existing laws and regulations.
xxx xxx xxx
Sec. 85. Phase of Implementation. — The
implementation of this Act shall be undertaken in
three (3) phases, to wit:
Phase I — Exercise of option by the uniformed
members of the Philippine Constabulary, the PC
elements assigned with the Narcotics Command,
CIS, and the personnel of the technical services of
the AFP assigned with the PC to include the
regular CIS investigating agents and the
operatives and agents of the NAPOLCOM
Inspection, Investigation and Intelligence Branch,
and the personnel of the absorbed National Action
Committee on Anti-Hijacking (NACAH) of the
Department of National Defense, to be completed
within six (6) months from the date of the
effectivity of this Act. At the end of this phase, all
personnel from the INP, PC, technical Services,
NACAH, and NAPOLCOM Inspection,
Investigation and Intelligence Branch shall have
been covered by official orders assigning them to
the PNP . . .
xxx xxx xxx
. . . Any PC-INP officer or enlisted personnel may,
within the twelve-month period from the
effectivity of this Act, retire . . .
Phase III — . . . To accomplish the tasks of Phase
III, the Commission shall create a Board of Officers
composed of the following: NAPOLCOM
Commissioner as Chairman and one (1)
representative each from the PC, INP, Civil
Service Commission and the Department of
Budget and Management.
Section 86 of the same law further provides:
Sec. 86. Assumption by the PNP of Police Functions.
— The PNP shall absorb the functions of the PC,
the INP and the Narcotics Command upon the
effectivity of this Act.
From a careful perusal of the above provisions, it appears
therefore that the use of the term INP is not synonymous with
the PC. Had it been otherwise, the statute could have just made
a uniform reference to the members of the whole Philippine
National Police (PNP) for retirement purposes and not just the
INP. The law itself distinguishes INP from the PC and it cannot
be construed that "INP" as used in Sec. 89 includes the members
of the PC.
And contrary to the pronouncement of respondent judge
that the law failed to define who constitutes the INP, Sec. 90 of
RA 6975 has in fact defined the same. Thus,
 Sec. 90. Status of Present NAPOLCOM, PC-INP. —
Upon the effectivity of this Act, the present
National Police Commission and the Philippine
Constabulary-Integrated National Police shall
cease to exist. The Philippine Constabulary, which
is the nucleus of the Philippine Constabulary-
Integrated National Police shall cease to be a major
service of the Armed Forces of the Philippines. The
Integrated National Police, which is the civilian
component of the Philippine Constabulary-Integrated
National Police, shall cease to be the national police
force and lieu thereof, a new police force shall be
established and constituted pursuant to this Act.
(emphasis supplied)
It is not altogether correct to state, therefore, that the
legislature failed to define who the members of the INP are. In
this regard, it is of no moment that the legislature failed to
categorically restrict the application of the transition period in
Sec. 89 specifically in favor of the local police forces for it would
be a mere superfluity as the PC component of the INP was
already retirable at age fifty-six (56).
Having defined the meaning of INP, the trial court need
not have belabored on the supposed dubious meaning of the
term. Nonetheless, if confronted with such a situation, courts
are not without recourse in determining the construction of the
statute with doubtful meaning for they may avail themselves of
the actual proceedings of the legislative body. In case of doubt
as to what a provision of a statute means, the meaning put to
the provision during the legislative deliberations may be
adopted (De Villa v. Court of Appeals, 195 SCRA 722 [1991]
citing Palanca v. City of Manila, 41 Phil. 125 [1920]; Arenas v.
City of San Carlos, 82 SCRA 318 [1978]).Courts should not give
a literal interpretation to the letter of the law if it runs counter to
the legislative intent (Yellow Taxi and Pasay Transportation
Workers' Association v. Manila Yellow Taxi Cab. Co., 80 Phil. 83
[1948]).
Examining the records of the Bicameral Conference
Committee, we find that the legislature did intent to exclude the
members of the PC from the coverage of Sec. 89 insofar as the
retirement age is concerned, thus:
THE CHAIRMAN. (SEN. MACEDA). Well, it
seems what people really want is one common
rule, so if it is fifty-six, fifty-six; of course, the PC
wants sixty for everybody. Of course, it is not
acceptable to us in the sense that we tied this up
really to the question of: If you are lax in allowing
their (the PC) entry into the PNP, then tighten up
the retirement. If we will be strict in, like requiring
examinations and other conditions for their
original entry, then since we have sifted out a
certain amount of undesirables, then we can allow
a longer retirement age. That was the rationale,
that was the tie-up. Since we are relaxing the
entry, we should speed up . . .
THE CHAIRMAN. (REP. GUTANG). Exit.
THE CHAIRMAN. (SEN. MACEDA) . . . the
retirement, the exit.
THE CHAIRMAN. (REP. GUTANG). So let me get
it very clear, Mr. Chairman. Fifty-six, let's say, that
will not make any adjustment in the PC because
there (they) are (retirable at age) fifty-six.
THE CHAIRMAN. (SEN. MACEDA). Kaya nga,
wala na silang masasabi.
THE CHAIRMAN. (REP. GUTANG). In the case
of the Police, since they are retireable now at sixty,
for the officers, it will be
applicable to them on a one-year every year basis
for a total period of four years transition.
(Bicameral Conference Committee on National
Defense, March 12, 1990)
 REP. GUTANG. On the first year of effectivity, the
police will retire at 60 years.
THE CHAIRMAN. (SEN. MACEDA). Sixty.
REP. GUTANG. On the second year, 59.
THE CHAIRMAN. (SEN. MACEDA). Oo.
REP. GUTANG. On the third year, 58.
THE CHAIRMAN. (SEN. MACEDA). Fifty-eight.
So 'yung 55, on the third year, 58, doon siya re-
retire.
REP. GUTANG. Oo.
SEN. SAGUISAG. So kung 55, when the law
becomes effective . . .
THE CHAIRMAN. (SEN. MACEDA). He will
retire at 58, doon siya aabot.
REP. UNICO. Pwede.
SEN. SAGUISAG. Dahil 'yon, may time to . . .
THE CHAIRMAN. (SEN. MACEDA). Walang
problema dito sa transition ng pulis, acceptable
ito, eh.
THE CHAIRMAN. (REP. COJUANGCO). Sa PC?
THE CHAIRMAN. (SEN. MACEDA). PC, walang
mawawala sa kanila, 56 ang retirement age nilang
talaga, eh. Kaya ayaw ko
ngang dagdagan 'yung 56 nila at 'yon din ang sa
Armed Forces, 56. (Ibid., May 22, 1990)
In applying the provisions of Sec. 89 in favor of the local
police force as established in PD 765, the Court does not, in any
manner, give any undue preferential treatment in favor of the
other group. On the contrary, the Court is merely giving life to
the real intent of the legislators based on the deliberations of the
Bicameral Conference Committee that preceded the enactment
of RA 6975.
The legislative intent to classify the INP in such manner
that Section 89 of RA 6975 is applicable only to the local police
force is clear. The question now is whether the classification is
valid. The test for this is reasonableness such that it must
conform to the following requirements: (1) It must be based
upon substantial distinctions; (2) It must be germane to the
purpose of the law; (3) It must not be limited to existing
conditions only; (4) It must apply equally to all members of the
same class (People vs. Cayat, 68 Phil. 12 [1939]).
The classification is based upon substantial distinctions. The PC,
before the effectivity of the law (RA 6975), were already
retirable at age 56 while the local police force were retirable at
60, and governed by different laws (P.D. 1184, Sec. 33 and Sec.
50). The distinction is relevant for the purpose of the statute,
which is to enable the local police force to plan for their
retirement which would be earlier than usual because of the
new law. Section 89 is merely transitory, remedial in nature, and
loses its force and effect once the four-year transitory period has
elapsed. Finally, it applies not only to some but to all local
police officers.
It may be appropriate to state at this point that it seems
absurd that a law will grant an extension to PC officers' retirable
age from 56 to 60 and then gradually lower it back to 56 without
any cogent reason at all. Why should the retirement age of PC
officers be increased during the transitory period to the
exclusion of other PC officers who would retire at age 56 after
such period? Such absurdity was never contemplated by the
law and would defeat its purpose of providing a uniform
retirement age for PNP members.
WHEREFORE, the petition is GRANTED. The writ of
injunction issued on January 8, 1992 is hereby LIFTED and the
assailed decision of respondent judge is REVERSED and SET
ASIDE.
SO ORDERED.
Narvasa, C.J., Cruz, Feliciano, Padilla, Regalado, Davide, Jr., Romero,
Bellosillo, Melo, Quiason, Puno, Vitug and Kapunan, JJ., concur.
Nocon, J., is on leave.
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-17931 February 28, 1963
CASCO PHILIPPINE CHEMICAL CO., INC., petitioner,
vs.
HON. PEDRO GIMENEZ, in his capacity as Auditor General
of the Philippines,
and HON. ISMAEL MATHAY, in his capacity as Auditor of
the Central Bank, respondents.
Jalandoni & Jamir for petitioner.
Officer of the Solicitor General for respondents.

CONCEPCION, J.:
This is a petition for review of a decision of the Auditor
General denying a claim for refund of petitioner Casco
Philippine Chemical Co., Inc.
The main facts are not disputed. Pursuant to the
provisions of Republic Act No. 2609, otherwise known as the
Foreign Exchange Margin Fee Law, the Central Bank of the
Philippines issued on July 1, 1959, its Circular No. 95. fixing a
uniform margin fee of 25% on foreign exchange transactions. To
supplement the circular, the Bank later promulgated a
memorandum establishing the procedure for applications for
exemption from the payment of said fee, as provided in said
Republic Act No. 2609. Several times in November and
December 1959, petitioner Casco Philippine Chemical Co., Inc.
— which is engaged in the manufacture of synthetic resin glues,
used in bonding lumber and veneer by plywood and hardwood
producers — bought foreign exchange for the importation of
urea and formaldehyde — which are the main raw materials in
the production of said glues — and paid therefor the
aforementioned margin fee aggregating P33,765.42. In May,
1960, petitioner made another purchase of foreign exchange and
paid the sum of P6,345.72 as margin fee therefor.
Prior thereto, petitioner had sought the refund of the first
sum of P33,765.42, relying upon Resolution No. 1529 of the
Monetary Board of said Bank, dated November 3, 1959,
declaring that the separate importation of urea and
formaldehyde is exempt from said fee. Soon after the last
importation of these products, petitioner made a similar request
for refund of the sum of P6,345.72 paid as margin fee therefor.
Although the Central Bank issued the corresponding margin fee
vouchers for the refund of said amounts, the Auditor of the
Bank refused to pass in audit and approve said vouchers, upon
the ground that the exemption granted by the Monetary Board
for petitioner's separate importations of urea and formaldehyde
is not in accord with the provisions of section 2, paragraph
XVIII of Republic Act No. 2609. On appeal taken by petitioner,
the Auditor General subsequently affirmed said action of the
Auditor of the Bank. Hence, this petition for review.
The only question for determination in this case is whether or
not "urea" and "formaldehyde" are exempt by law from the
payment of the aforesaid margin fee. The pertinent portion of
Section 2 of Republic Act No. 2609 reads:
The margin established by the Monetary Board pursuant
to the provision of section one hereof shall not be
imposed upon the sale of foreign exchange for the
importation of the following:.
xxx xxx xxx
XVIII. Urea formaldehyde for the manufacture of
plywood and hardboard when imported by and for the
exclusive use of end-users.
Wherefore, the parties respectfully pray that the
foregoing stipulation of facts be admitted and approved
by this Honorable Court, without prejudice to the parties
adducing other evidence to prove their case not covered
by this stipulation of facts. 1äwphï1.ñët
Petitioner maintains that the term "urea formaldehyde"
appearing in this provision should be construed as
"urea andformaldehyde" (emphasis supplied) and that
respondents herein, the Auditor General and the Auditor of the
Central Bank, have erred in holding otherwise. In this
connection, it should be noted that, whereas "urea" and
"formaldehyde" are the principal raw materials in the
manufacture of synthetic resin glues, the National Institute of
Science and Technology has expressed, through its
Commissioner, the view that:
Urea formaldehyde is not a chemical solution. It is the
synthetic resin formed as a condensation product from
definite proportions of urea and formaldehyde under
certain conditions relating to temperature, acidity, and
time of reaction. This produce when applied in water
solution and extended with inexpensive fillers constitutes
a fairly low cost adhesive for use in the manufacture of
plywood.
Hence, "urea formaldehyde" is clearly a finished product,
which is patently distinct and different from urea" and
"formaldehyde", as separate articles used in the manufacture of
the synthetic resin known as "urea formaldehyde". Petitioner
contends, however, that the bill approved in Congress
contained the copulative conjunction "and" between the terms
"urea" and "formaldehyde", and that the members of Congress
intended to exempt "urea" and "formaldehyde" separately as
essential elements in the manufacture of the synthetic resin glue
called "urea" formaldehyde", not the latter as a finished product,
citing in support of this view the statements made on the floor
of the Senate, during the consideration of the bill before said
House, by members thereof. But, said individual statements do
not necessarily reflect the view of the Senate. Much less do they
indicate the intent of the House of Representatives (see Song
Kiat Chocolate Factory vs. Central Bank, 54 Off. Gaz., 615;
Mayon Motors Inc. vs. Acting Commissioner of Internal
Revenue, L-15000 [March 29, 1961]; Manila Jockey Club, Inc. vs.
Games & Amusement Board, L-12727 [February 29, 1960]).
Furthermore, it is well settled that the enrolled bill — which
uses the term "urea formaldehyde" instead of "urea and
formaldehyde" — is conclusive upon the courts as regards the
tenor of the measure passed by Congress and approved by the Republic of the Philippines
President (Primicias vs. Paredes, 61 Phil. 118, 120; Mabanag vs. Supreme Court
Manila
Lopez Vito, 78 Phil. 1; Macias vs. Comm. on Elections, L-18684,
September 14, 1961). If there has been any mistake in the
EN BANC
printing ofthe bill before it was certified by the officers of
Congress and approved by the Executive — on which we
cannot speculate, without jeopardizing the principle of
MUNICIPALITY OF NUEVA ERA, G.R. No. 169435
separation of powers and undermining one of the cornerstones
ILOCOS NORTE, represented by its
of our democratic system — the remedy is by amendment or
Municipal Mayor, CAROLINE Present:
curative legislation, not by judicial decree.
ARZADON-GARVIDA,
WHEREFORE, the decision appealed from is hereby affirmed, Petitioner, PUNO, C.J.,
with costs against the petitioner. It is so ordered. QUISUMBING,*
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Reyes, J.B.L.,
YNARES-SANTIAGO,**
Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur.
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
- versus - CORONA,
CARPIO MORALES,
AZCUNA,
TINGA,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA,
MUNICIPALITY OF MARCOS, REYES, and
ILOCOS NORTE, represented by its LEONARDO-DE CASTRO, JJ.
Municipal Mayor, SALVADOR
PILLOS, and the HONORABLE Promulgated:
COURT OF APPEALS,
Respondents. February 27, 2008
DECISION
REYES, R.T., J.:
AS the law creating a municipality fixes its boundaries,
settlement of boundary disputes between municipalities is
facilitated by carrying into effect the law that created them.
Any alteration of boundaries that is not in accordance with
the law creating a municipality is not the carrying into effect of
that law but its amendment, which only the Congress can do.[1]
For Our review on certiorari is the Decision[2] of the Court
of Appeals (CA) reversing to a certain extent that[3] of the
Regional Trial Court (RTC), Branch 12, Laoag City, Ilocos Norte,
in a case that originated from the Sangguniang Panlalawigan (SP)
of Ilocos Norte about the boundary dispute between the
Municipalities of Marcos and Nueva Era in Ilocos Norte.
The CA declared that Marcos is entitled to have its eastern
boundary extended up to the boundary line between
the province of Ilocos Norte and Kalinga-Apayao.[4] By this
extension of Marcos eastern boundary, the CA allocated to
Marcos a portion of Nueva Eras territory.
The Facts
The Municipality of Nueva Era was created from the
settlements of Bugayong, Cabittaoran, Garnaden, Padpadon,
Padsan, Paorpatoc, Tibangran, and Uguis which were previously
organized as rancherias, each of which was under the
independent control of a chief. Governor General Francis Burton
Harrison, acting on a resolution passed by the provincial
government of Ilocos Norte, united these rancherias and created
the township of Nueva Era by virtue of Executive Order (E.O.)
No. 66 [5] dated September 30, 1916.
The Municipality of Marcos, on the other hand, was
created on June 22, 1963 pursuant to Republic Act (R.A.) No. 3753
entitled An Act Creating the Municipality of Marcos in the
Province of Ilocos Norte. Section 1 of R.A. No. 3753 provides:
SECTION 1. The barrios of Capariaan, Biding,
Escoda, Culao, Alabaan, Ragas and Agunit in
the Municipality of Dingras, Province of Ilocos
Norte, are hereby separated from the said
municipality and constituted into a new and
separate municipality to be known as
the Municipality of Marcos, with the following
boundaries:
On the Northwest, by the barrios Biding-
Rangay boundary going down to the barrios
Capariaan-Gabon boundary consisting of foot path
and feeder road; on the Northeast, by the Burnay
River which is the common boundary of barrios
Agunit and Naglayaan; on the East, by the Ilocos
Norte-Mt. Province boundary; on the South, by the
Padsan River which is at the same time the
boundary between the municipalities of Banna and
Dingras; on the West and Southwest, by the
boundary between the municipalities of Batac and
Dingras.
 The Municipality of Marcos shall have its
seat of government in the barrio of Biding.
Based on the first paragraph of the said Section 1 of R.A.
No. 3753, it is clear that Marcos shall be derived from the
listed barangays of Dingras, namely: Capariaan, Biding, Escoda,
Culao, Alabaan, Ragas and Agunit. The Municipality of Nueva
Era or any of its barangays was not mentioned. Hence, if based
only on said paragraph, it is clear that Nueva Era may not be
considered as a source of territory of Marcos.
There is no issue insofar as the first paragraph is
concerned which named only Dingras as the
mother municipality of Marcos. The problem, however, lies in
the description of Marcos boundaries as stated in the second
paragraph, particularly in the phrase: on the East, by
the Ilocos Norte-Mt. Province boundary.
It must be noted that the term Mt. Province stated in the
above phrase refers to the present adjoining provinces of
Benguet, Mountain Province, Ifugao, Kalinga and Apayao,
which were then a single province.
Mt. Province was divided into the four provinces of
Benguet, Mountain Province, Ifugao, and Kalinga-Apayao by
virtue of R.A. No. 4695 which was enacted on June 18,
1966. On February 14, 1995, the province of Kalinga-Apayao,
which comprises the sub-provinces of Kalinga and Apayao, was
further converted into the regular provinces of Kalinga and
Apayao pursuant to R.A. No. 7878.
The part of then Mt. Province which was at the east of
Marcos is now the province of Apayao. Hence, the eastern
boundary referred to by the second paragraph of Section 1 of R.A.
No. 3753 is the present Ilocos Norte-Apayao boundary.
On the basis of the said phrase, which described Marcos
eastern boundary, Marcos claimed that the middle portion of
Nueva Era, which adjoins its eastern side, formed part of its
territory. Its reasoning was founded upon the fact that Nueva Era
was between Marcos and the Ilocos Norte-Apayao boundary
such that if Marcos was to be bounded on the east by the Ilocos
Norte-Apayao boundary, part of Nueva Era would consequently
be obtained by it.[6]
Marcos did not claim any part of Nueva Era as its own
territory until after almost 30 years,[7] or only on March 8, 1993,
when its Sangguniang Bayan passed Resolution No. 93-
015.[8] Said resolution was entitled: Resolution Claiming an Area
which is an Original Part of Nueva Era, But Now Separated Due
to the Creation of Marcos Town in the Province of Ilocos Norte.
Marcos submitted its claim to the SP of Ilocos Norte for its
consideration and approval. The SP, on the other hand, required
Marcos to submit its position paper.[9]
In its position paper, Marcos alleged that since its
northeastern and eastern boundaries under R.A. No. 3753 were
the Burnay River and the Ilocos Norte-
Mountain Provinceboundary, respectively, its eastern boundary
should not be limited to the former Dingras-Nueva Era
boundary, which was coterminous and aligned with the eastern
boundary of Dingras. According to Marcos, its eastern boundary
should extend further to the east or up to the Ilocos-Norte-
Mt. Province boundary pursuant to the description of its eastern
boundary under R.A. No. 3753.[10]
In view of its claim over the middle portion of Nueva Era,
Marcos posited that Nueva Era was cut into two parts. And since
the law required that the land area of a municipality must be
compact and contiguous, Nueva Eras northern isolated portion
could no longer be considered as its territory but that of
Marcos. Thus, Marcos claimed that it was entitled not only to the
middle portion[11] of Nueva Era but also to Nueva Eras isolated
northern portion. These areas claimed by Marcos were
within Barangay Sto. Nio, Nueva Era.
Nueva Era reacted to the claim of Marcos through its
Resolution No. 1, Series of 1993. It alleged that since time
immemorial, its entire land area was an ancestral domain of
the tinguians, an indigenous cultural community. It argued to the
effect that since the land being claimed by Marcos must be
protected for the tinguians, it must be preserved as part of Nueva
Era.[12]
According to Nueva Era, Marcos was created out of
the territory of Dingras only. And since R.A. No. 3753
specifically mentioned seven (7) barrios of Dingras to become
Marcos, the area which should comprise Marcos should not go
beyond the territory of said barrios.[13]
From the time Marcos was created in 1963, its eastern
boundary had been considered to be aligned and coterminous
with the eastern boundary of the
adjacent municipality of Dingras. However, based on a re-
survey in 1992, supposedly done to conform to the second
paragraph of Section 1 of R.A. No. 3753, an area of 15,400 hectares
of Nueva Era was alleged to form part of Marcos.[14] This was the
area of Barangay Sto. Nio, Nueva Era that Marcos claimed in its
position paper.
On March 29, 2000, the SP of Ilocos Norte ruled in favor of
Nueva Era. The fallo of its decision[15] reads:
WHEREFORE, in view of all the foregoing,
this Body has no alternative but to dismiss, as it
hereby DISMISSES said petition for lack of
merit. The disputed area consisting of 15,400
hectares, more or less, is hereby declared as part
and portion of the territorial jurisdiction of
respondent Nueva Era.[16]
R.A. No. 3753 expressly named the barangays that would
comprise Marcos, but none of Nueva Eras barangays were
mentioned. The SP thus construed, applying the rule of expressio
unius est exclusio alterius, that no part of Nueva Era was included
by R.A. No. 3753 in creating Marcos.[17]
The SP ratiocinated that if Marcos was to be bounded
by Mt. Province, it would encroach upon a portion, not only of
Nueva Era but also of Abra. Thus:
x x x Even granting, for the sake of
argument, that the eastern boundary of Marcos is
indeed Mountain Province, Marcos will then be
claiming a portion of Abra because the province,
specifically Barangay Sto. Nio, Nueva Era, is
actually bounded on the East by
the Province of Abra. Abra is situated between and
separates the Provinces of Ilocos Norte
and Mountain Province.
This is precisely what this body would like
to avoid. Statutes should be construed in the light
of the object to be achieved and the evil or mischief
to be suppressed, and they should be given such
construction as will advance the object, suppress
the mischief and secure the benefits
intended. (Citations omitted)
[18]
The SP further explained: absent with Marcos, let it not be
disturbed. (Emphasis ours and citations omitted)
[19]

Invariably, it is not the letter, but the spirit of

the law and the intent of the legislature that is
important. When the interpretation of the statute
according to the exact and literal import of its
words would lead to absurdity, it should be
construed according to the spirit and reason,
disregarding if necessary the letters of the law. It is
believed that congress did not intend to have this
absurd situation to be created when it created
the Municipality of Marcos. This body, by the
mandate given to it by the RA 7160 otherwise
known Local Government Code, so believes that
respondent Nueva Era or any portion thereof has
been excluded from the ambit of RA 3753. Under
the principle of espressio (sic) unios (sic) est exclusio
alterius, by expressly naming the barangays that will
comprise the town of Marcos, those not mentioned
are deemed excluded. In Republic Act 4354, where
Section 2 thereof enumerated the barrios
comprising the City of Davaoexcluding the
petitioner Barrio Central as part of the said City, the
court held that there arose a prima facie conclusion
that the said law abolished Barrio Central as part
of Davao City.
Historically, the hinterlands of Nueva Era
have been known to be the home of our brothers
and sisters belonging to peculiar groups of non-
(C)hristian inhabitants with their own rich customs
and traditions and this body takes judicial notice
that the inhabitants of Nueva Era have proudly
claimed to be a part of this rich culture. With this
common ancestral heritage which unfortunately is
RTC Decision
On appeal by Marcos, the RTC affirmed the decision of the
SP in its decision[20] of March 19, 2001. The dispositive part of
the RTC decision reads:
WHEREFORE, the instant appeal is hereby
DISMISSED. The questioned decision of
the Sangguniang Panlalawigan of Ilocos Norte is
hereby AFFIRMED.
No costs.
SO ORDERED.[21]
The RTC reasoned out in this wise:
The position of the Municipality of Marcos is that
the provision of R.A. 3753 as regards its boundary
on the East which is the Ilocos Norte-
Mt. Province should prevail.
On the other hand, the Municipality of Nueva
Era posits the theory that only the barrios of
the Municipality of Dingras as stated in R.A. 3753
should be included in the territorial jurisdiction of
the Municipality of Marcos. The Sangguniang
Panlalawigan agreed with the position of Nueva
Era.
xxxx
An examination of the Congressional Records
during the deliberations of the R.A. 3753 (House
Bill No. 3721) shows the Explanatory Note of
Congressman Simeon M. Valdez, 2nd District, In view of the foregoing,
Ilocos Norte, to wit: approval of this bill is earnestly
requested.

EXPLANATORY NOTE
(Sgd.) SIMEON M. VALDEZ
This bill seeks to create in Congressman, 2nd District
the Province of Ilocos Norte a new Ilocos Norte[22]
municipality to be known as
the Municipality of Marcos, to be Parenthetically, the legislative intent was for
comprised by the present barrios of the creation of the Municipality of Marcos, Ilocos
Capariaan, Biding Escoda, Culao, Norte from the barrios (barangays) of
Alabaan, Ragas and Agunit, all in the Municipality of Dingras, Ilocos Norte
the Municipality of Dingras of the only.Hence, the Municipality of Marcos cannot
same province. The seat of add any area beyond the territorial jurisdiction of
government will be in the sitio of San the Municipality of Dingras, Ilocos Norte. This
Magro in the present barrio of Ragas. conclusion might have been different only if the
area being claimed by
xxxx the Municipality of Marcos is within the territorial
jurisdiction of the Municipality of Dingras and not
On the other the Municipality of Nueva Era. In such case, the
hand, the Municipality of Dingras wi two conflicting provisions may be harmonized by
ll not be adversely affected too much including such area within the territorial
because its finances will still be sound jurisdiction of the Municipality of Dingras as
and stable. Its capacity to comply within the territorial jurisdiction of
with its obligations, especially to its the Municipality of Marcos. (Emphasis ours)
[23]

employees and personnel, will not be

diminished nor its operations
paralyzed. On the contrary, economic
development in both the mother and
the proposed municipalities will be
accelerated.
CA Disposition
Still determined to have a more extensive eastern
boundary, Marcos filed a petition for review[24] of
the RTC decision before the CA. The issues raised by Marcos
before the CA were:

1. Whether or not the site of Hercules Minerals and
Oil, Inc. which is within a Government Forest
Reservation in Barangay Sto. Nio, formerly of
Nueva Era, is a part of the newly
created Municipality of Marcos, Ilocos Norte.
2. Whether or not the portion
of Barangay Sto. Nio on the East which is separated
from Nueva Era as a result of the full
implementation of the boundaries of the
new Municipality of Marcos belongs also to
Marcos or to Nueva Era. [25]
The twin issues involved two portions of Nueva Era, viz.: (1)
middle portion, where Hercules Minerals and Oil, Inc. is located;
and (2) northern portion of Nueva Era, which, according to
Marcos, was isolated from Nueva Era in view of the integration
to Marcos of said middle portion.
Marcos prayed before the CA that the above two portions of
Nueva Era be declared as part of its own territory. It alleged that
it was entitled to the middle portion of Nueva Era in view of the
description of Marcos eastern boundary under R.A. No.
3753. Marcos likewise contended that it was entitled to the
northern portion of Nueva Era which was allegedly isolated from
Nueva Era when Marcos was created. It posited that such
isolation of territory was contrary to law because the law
required that a municipality must have a compact and
contiguous territory.[26]
In a Decision[27] dated June 6, 2005, the CA partly reversed
the RTC decision with the following disposition:
WHEREFORE, we partially GRANT the
petition treated as one for certiorari. The Decisions
of both the Sangguniang Panlalawigan and
Regional Trial Court of Ilocos
Norte are REVERSED and SET ASIDE insofar as
they made the eastern boundary of the
municipality of Marcos co-terminous with the
eastern boundary of Dingras town, and another is
rendered extending the said boundary of Marcos to
the boundary line between the province of Ilocos
Norte and Kalinga-Apayao, but the same
Decisions are AFFIRMED with respect to the
denial of the claim of Marcos to the detached
northern portion of barangay Sto. Nio which
should, as it is hereby ordered to, remain with
the municipality of Nueva Era. No costs.
SO ORDERED.[28]
In concluding that the eastern boundary of Marcos was the
boundary line between Ilocos Norte and Kalinga-Apayao, the CA
gave the following explanation:
Clearly then, both the SP and the RTC erred
when they ruled that the eastern boundary of
Marcos is only coterminous with the eastern
boundary of the adjacent municipality of Dingras
and refused to extend it up to the boundary line
between the provinces of Ilocos Norte and
Mountain Province (Kalinga-Apayao). R.A. No.
3753, the law creating Marcos, is very explicit and
leaves no room for equivocation that the
boundaries of Marcos town are:
 On the Northwest by the
barrios Biding-Rangay boundary
going down to the barrios Capariaan-
Gabon boundary consisting of foot
path and feeder road; on the
Northeast, by the Burnay River which
is the common boundary of barrios
Agunit and Naglayaan; on the East,
by the Ilocos Norte-Mt. Province
boundary; on the South by the
Padsan River, which is at the same
time the boundary between the
municipalities of Banna and Dingras;
on the West and Southwest by the
boundary between the municipalities
of Batac and Dingras.
To stop short at the eastern boundary of
Dingras as the eastern boundary also of Marcos and
refusing to go farther to the boundary line between
Ilocos Norte and Mountain Province(Kalinga-
Apayao) is tantamount to amending the law which
Congress alone can do. Both the SP and RTC have
no competence to undo a valid act of Congress.
It is not correct to say that Congress did not
intend to take away any part of Nueva Era and
merge it with Marcos for it is chargeable with
conclusive knowledge that when it provided that
the eastern boundary of Marcos is the boundary
line between Ilocos Norte and Mountain Province,
(by the time of both the SB and RTC Decision was
already Kalinga-Apayao), it would be cutting
through a portion of Nueva Era. As the law is
written so must it be applied. Dura lex sed lex![29]
The CA likewise held that the province Abra was not
located between Marcos and Kalinga-Apayao; and that Marcos
would not encroach upon a portion of Abra for it to be bounded
by Kalinga-Apayao, to wit:
Nueva Eras contention that to lay out the
eastern jurisdiction of Marcos to the boundary line
between Ilocos Norte
and Mountain Province (Kalinga-Apayao) would
mean annexing part of
the municipality of Itnig, province of Abra to
Marcos as Abra is between Ilocos Norte
and Mountain Province is geographically
erroneous. From Nueva Eras own map of Region 1,
which also depicts the locations of Kalinga-Apayao,
Abra, Mountain Province, Benguet and Nueva
Vizcaya after the partition of the old Mountain
Province into the provinces of Kalinga-Apayao,
Ifugao, Mountain Province and Benguet, the
province of Abra is situated far to the south of
Kalinga Apayao and is between the latter and the
present Mountain Province, which is farther south
of Abra. Abra is part of the eastern boundary of
Ilocos Sur while Kalinga-Apayao is the eastern
boundary of Ilocos Norte. Hence, in no way will the
eastern boundary of
the municipality of Marcosencroach upon a
portion of Abra. [30]
However, Marcos claim over the alleged isolated northern
portion of Nueva Era was denied. The CA ruled:
Going now to the other area involved, i.e.,
the portion of Sto. Nio that is separated from its
mother town Nueva Era and now lies east of the
municipalities of Solsona and Dingras and north of
Marcos, it bears stressing that it is not included
within the area of Marcos as defined by law. But
since it is already detached from Sto. Nio, Marcos is
laying claim to it to be integrated into its territory
by the SP because it is contiguous to a portion of
said municipality.
We hold that the SP has no jurisdiction or
authority to act on the claim, for it will necessarily
substantially alter the north eastern and southern
boundaries of Marcos from that defined by law and
unduly enlarge its area. Only Congress can do
that. True, the SP may substantially alter the
boundary of a barangay within its jurisdiction. But
this means the alteration of the boundary of
a barangay in relation to another barangay within
the same municipality for as long as that will not
result in any change in the boundary of that
municipality. The area in dispute therefore remains
to be a part of Sto. Nio, a barangay of Nueva Era
although separated by the newly created Marcos
town pursuant to Section 7(c) of the 1991 Local
Government Code which states:
SEC. 7. Creation and Conversion.
As a general rule, the creation of a
local government unit or its
conversion from one level to another
shall be based on verifiable indicators
of viability and projected capacity to
provide services, to wit:
xxxx
(c) Land Area. It must be
contiguous, unless it comprises two
or more islands or is separated by a
local government unit independent
of the others; properly identified by
metes and bounds with technical
descriptions; and sufficient to
provide for such basic services and
facilities to meet the requirements of
its populace.[31]
The CA also expressed the view that Marcos adopted the
wrong mode of appeal in bringing the case to it. The case,
according to the CA, was appealable only to
the RTC.Nonetheless, despite its pronouncement that the case
was dismissible, the CA took cognizance of the same by treating
it as one for certiorari, to wit:
A final word. At the outset, we agonized
over the dilemma of choosing between dismissing
outright the petition at bar or entertaining it. This is
for the simple reason that a petition for review is a
mode of appeal and is not appropriate as the Local
Government Code provides for the remedy of
appeal in boundary disputes only to the Regional
Trial Court but not any further appeal to this
Court. Appeal is a purely statutory right. It cannot
be exercised unless it is expressly granted by
law. This is too basic to require the citation of
supporting authority.
xxxx
By the same token, since the Local
Government Code does not explicitly grant the
right of further appeal from decisions of the RTCs
 in boundary disputes between or among local
government units, Marcos town cannot exercise
that right from the adverse decision of the RTC of
Ilocos Norte. Nonetheless, because of the
transcendental legal and jurisdictional issues
involved, we solved our inceptive dilemma by
treating the petition at bar as a special civil action
for certiorari.[32]
Nueva Era was not pleased with the decision of the
CA. Hence, this petition for review on certiorari under Rule 45.
Issues
Nueva Era now raises the following issues:
a) Whether or not, the Court of Appeals has
jurisdiction on the Petition for Review on
Appeal, since Sec. 119 of the Local Government
Code, which provides that An appeal to the
Decision of the Sangguniang Panlalawigan is
exclusively vested to the Regional Trial Court,
without further Appeal to the Court of
Appeals;
b) Whether or not, the Court of Appeals gravely
abused its discretion, in treating the Petition for
Review On Appeal, filed under Rule 45,
Revised Rules of Court, as a Petition
for Certiorari, under Rule 65 of the Revised
Rules of Court;
c) Whether or not, the Court of Appeals erred in its
appreciation of facts, in declaring that
MARCOS East is not coterminous with the
Eastern boundary of its mother town-
Dingras. That it has no factual and legal basis
to extend MARCOS territory beyond Brgys.
Agunit (Ferdinand) and Culao (Elizabeth) of
Marcos, and to go further East, by traversing
and disintegrating Brgy. Sto. Nio, and drawing
parallel lines from Sto. Nio, there lies
Abra, not Mt. Province or Kalinga-Apayao.[33]
Basically, there are two (2) issues to resolve here: (1)
whether or not the mode of appeal adopted by Marcos in
bringing the case to the CA is proper; and (2) whether or not the
eastern boundary of Marcos extends over and covers a portion of
Nueva Era.
Our Ruling
Marcos correctly
appealed
the RTC judgment via
petition for review
under Rule 42.
Under Section 118(b) of the Local Government Code, (b)oundary
disputes involving two (2) or more municipalities within the
same province shall be referred for settlement to the sangguniang
panlalawigan concerned. The dispute shall be formally tried by
the said sanggunian in case the disputing municipalities fail to
effect an amicable settlement.[34]
The SP of Ilocos validly took cognizance of the dispute between
the parties. The appeal of the SP judgment to the RTC was
likewise properly filed by Marcos before the RTC. The problem,
however, lies in whether the RTC judgment may still be further
appealed to the CA.
 The CA pronounced that the RTC decision on the
boundary dispute was not appealable to it. It ruled that no
further appeal of the RTC decision may be made pursuant to
Section 119 of the Local Government Code[35] which provides:
SECTION 119. Appeal. Within the time and
manner prescribed by the Rules of Court, any party
may elevate the decision of
the sanggunian concerned to the proper Regional
Trial Court having jurisdiction over the area in
dispute. The Regional Trial Court shall decide the
appeal within one (1) year from the filing
thereof. Pending final resolution of the disputed
area prior to the dispute shall be maintained and
continued for all legal purposes.
The CA concluded that since only the RTC was mentioned
as appellate court, the case may no longer be further appealed to
it. The CA stated that (a)ppeal is a purely statutory right. It
cannot be exercised unless it is expressly granted by law. This is
too basic to require the citation of supporting authority.[36]
The CA, however, justified its taking cognizance of the
case by declaring that: because of the transcendental legal and
jurisdictional issues involved, we solved our inceptive dilemma
by treating the petition at bar as a special civil action
for certiorari.[37]
The CA erred in declaring that only the RTC has appellate
jurisdiction over the judgment of the SP.
True, appeal is a purely statutory right and it cannot be
exercised unless it is expressly granted by law. Nevertheless, the
CA can pass upon the petition for review precisely because the
law allows it.
Batas Pambansa (B.P.) Blg. 129 or the Judiciary
Reorganization Act of 1980, as amended by R.A. No.
7902,[38] vests in the CA the appellate jurisdiction over all final
judgments, decisions, resolutions, orders or awards of Regional
Trial Courts and quasi-judicial agencies, instrumentalities,
boards or commissions, among others.[39] B.P. Blg. 129 has been
further supplemented by the 1997 Rules of Civil Procedure, as
amended, which provides for the remedy of appeal via petition
for review under Rule 42 to the CA in cases decided by
the RTC in the exercise of its appellate jurisdiction.
Thus, the CA need not treat the appeal via petition for
review filed by Marcos as a petition for certiorari to be able to pass
upon the same. B.P. Blg. 129, as amended, which is supplemented
by Rule 42 of the Rules of
Civil Procedure, gives the CA the authority to entertain appeals
of such judgments and final orders rendered by the RTC in the
exercise of its appellate jurisdiction.
At the time of creation
of Marcos, approval in
a plebiscite of the
creation of a local
government unit is not
required.
Section 10, Article X of the 1987 Constitution provides
that:
No province, city, municipality, or
barangay may be created, divided, merged,
abolished, or its boundary substantially altered,
except in accordance with the criteria established
in the local government code and subject to
approval by a majority of the votes cast in a
plebiscite in the political units directly affected.[40]

The purpose of the above constitutional provision was
acknowledged by the Court through Justice Reynato S. Puno
in Miranda v. Aguirre,[41] where it was held that:
The 1987 Constitution, more than any of
our previous Constitutions, gave more reality to
the sovereignty of our people for it was borne out
of the people power in the 1986 EDSA revolution.
Its Section 10, Article X addressed the undesirable
practice in the past whereby local government
units were created, abolished, merged or divided
on the basis of the vagaries of politics and not of
the welfare of the people. Thus, the consent of the
people of the local government unit directly
affected was required to serve as a checking
mechanism to any exercise of legislative power
creating, dividing, abolishing, merging or altering
the boundaries of local government units. It is one
instance where the people in their sovereign
capacity decide on a matter that affects them direct
democracy of the people as opposed to democracy
thru peoples representatives. This plebiscite
requirement is also in accord with the philosophy
of the Constitution granting more autonomy to
local government units.[42]
Nueva Era contends that the constitutional and
statutory[43] plebiscite requirement for the creation of a local
government unit is applicable to this case. It posits that the claim
of Marcos to its territory should be denied due to lack of the
required plebiscite.
We agree with Nueva Eras contention that Marcos claim
over parts of its territory is not tenable. However, the reason is
not the lack of the required plebiscite under the 1987 and 1973
constitutions and the Local Government Code of 1991 but other
reasons as will be discussed below.
At the time Marcos was created, a plebiscite was not
required by law to create a local government unit. Hence, Marcos
was validly created without conducting a plebiscite.As a matter
of fact, no plebiscite was conducted in Dingras, where it was
derived.
Lex prospicit, non respicit. The law looks forward, not
backward.[44] It is the basic norm that provisions of the
fundamental law should be given prospective application only,
unless legislative intent for its retroactive application is so
provided.[45]
In the comparable case of Ceniza v. Commission on
Elections[46] involving the City of Mandaue, the Court has this to
say:
Petitioners assail the charter of the City
of Mandaue as unconstitutional for not having
been ratified by the residents of the city in a
plebiscite. This contention is untenable. The
Constitutional requirement that the creation,
division, merger, abolition, or alteration of the
boundary of a province, city, municipality, or
barrio should be subject to the approval by the
majority of the votes cast in a plebiscite in the
governmental unit or units affected is a new
requirement that came into being only with the
1973 Constitution. It is prospective in character and
therefore cannot affect the creation of the City
of Mandaue which came into existence on June 21,
 1969.[47] (Citations omitted and underlining
supplied).
Moreover, by deciding this case, We are not creating
Marcos but merely interpreting the law that created it. Its
creation was already a fait accompli. Therefore, there is no reason
for Us to further require a plebiscite.
As pointed out by Justice Isagani Cruz, to wit:
Finally, it should be observed that the
provisions of the Constitution should be given
only a prospective application unless the contrary
is clearly intended. Were the rule otherwise, rights
already acquired or vested might be unduly
disturbed or withdrawn even in the absence of an
unmistakable intention to place them within the
scope of the Constitution.[48]
No part of Nueva Eras
territory was taken for
the creation of Marcos
under R.A. No. 3753.
Only the barrios (now barangays) of Dingras from which
Marcos obtained its territory are named in R.A. No. 3753. To wit:
SECTION 1. The barrios of Capariaan, Biding,
Escoda, Culao, Alabaan, Ragas and Agunit in
the Municipality of Dingras, Province of Ilocos
Norte, are hereby separated from the said
municipality and constituted into a new and
separate municipality to be known as
the Municipality of Marcos, with the following
boundaries:
Since only the barangays of Dingras are enumerated as
Marcos source of territory, Nueva Eras territory is, therefore,
excluded.
Under the maxim expressio unius est exclusio alterius, the
mention of one thing implies the exclusion of another thing not
mentioned. If a statute enumerates the things upon which it is to
operate, everything else must necessarily and by implication be
excluded from its operation and effect.[49] This rule, as a guide to
probable legislative intent, is based upon the rules of logic and
natural workings of the human mind.[50]
Had the legislature intended other barangays from Nueva
Era to become part of Marcos, it could have easily done so by
clear and concise language. Where the terms are expressly
limited to certain matters, it may not by interpretation or
construction be extended to other matters.[51] The rule proceeds
from the premise that the legislature would not have made
specified enumerations in a statute had the intention been not to
restrict its meaning and to confine its terms to those expressly
mentioned.[52]
Moreover, since the barangays of Nueva Era were not
mentioned in the enumeration of barangays out of which
the territory of Marcos shall be set, their omission must be held
to have been done intentionally. This conclusion finds support in
the rule of casus omissus pro omisso habendus est, which states that
a person, object or thing omitted from an enumeration must be
held to have been omitted intentionally.[53]
Furthermore, this conclusion on the intention of the
legislature is bolstered by the explanatory note of the bill which
paved the way for the creation of Marcos. Said explanatory note
mentioned only Dingras as the mother municipality of Marcos.
 Where there is ambiguity in a statute, as in this case, courts
may resort to the explanatory note to clarify the ambiguity and
ascertain the purpose and intent of the statute.[54]
Despite the omission of Nueva Era as a mother territory in
the law creating Marcos, the latter still contends that said law
included Nueva Era. It alleges that based on the description of its
boundaries, a portion of Nueva Era is within its territory.
The boundaries of Marcos under R.A. No. 3753 read:
On the Northwest, by the barrios Biding-
Rangay boundary going down to the barrios
Capariaan-Gabon boundary consisting of foot path
and feeder road; on the Northeast, by the Burnay
River which is the common boundary of barrios
Agunit and Naglayaan; on the East, by the Ilocos
Norte-Mt. Province boundary; on the South, by the
Padsan River which is at the same time the
boundary between the municipalities of Banna and
Dingras; on the West and Southwest, by the
boundary between the municipalities of Batac and
Dingras.
Marcos contends that since it is bounded on the East, by
the Ilocos Norte-Mt. Province boundary, a portion of Nueva Era
formed part of its territory because, according to it, Nueva Era is
between the Marcos and Ilocos Norte-
Mt. Province boundary. Marcos posits that in order for its eastern
side to reach the Ilocos Norte-Mt. Province boundary, it will
necessarily traverse the middle portion of Nueva Era.
Marcos further claims that it is entitled not only to the
middle portion of Nueva Era but also to its northern portion
which, as a consequence, was isolated from the major part of
Nueva Era.
We cannot accept the contentions of Marcos.
Only Dingras is specifically named by law as
source territory of Marcos. Hence, the said description of
boundaries of Marcos is descriptive only of the listed barangays of
Dingras as a compact and contiguous territory.
Considering that the description of the eastern boundary
of Marcos under R.A. No. 3753 is ambiguous, the same must be
interpreted in light of the legislative intent.
The law must be given a reasonable interpretation, to
preclude absurdity in its application.[55] We thus uphold the
legislative intent to create Marcos out of
the territory of Dingras only.
Courts must give effect to the general legislative intent
that can be discovered from or is unraveled by the four corners
of the statute, and in order to discover said intent, the whole
statute, and not only a particular provision thereof, should be
considered.[56] 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. 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.[57]
It is axiomatic that laws should be given a reasonable
interpretation, not one which defeats the very purpose for which
they were passed. This Court has in many cases involving the
construction of statutes always cautioned against narrowly
interpreting a statute as to defeat the purpose of the legislature
and stressed that it is of the essence of judicial duty to construe
statutes so as to avoid such a deplorable result (of injustice or
absurdity) and that therefore a literal interpretation is to be
rejected if it would be unjust or lead to absurd results.[58]

Statutes are to be construed in the light of the purposes to

be achieved and the evils sought to be remedied. Thus, in
construing a statute, the reason for its enactment should be kept
in mind and the statute should be construed with reference to the
intended scope and purpose. The court may consider the spirit
and reason of the statute, where a literal meaning would lead to
absurdity, contradiction, injustice, or would defeat the clear
purpose of the lawmakers.[59]

WHEREFORE, the petition is GRANTED. The Decision

of the Court of Appeals is partly REVERSED. The Decision of the
Regional Trial Court in Ilocos Norte isREINSTATED.

SO ORDERED.

RUBEN T. REYES
Associate Justice