USE OF WORDS AND PHRASES

Accordingly, the counterclaim of the defendant is hereby DISMISSED for lack of merit.

A. Ubilex non distinguitnecnosdistingueredebemos (When the law does not

distinguish, courts should not distinguish)

SO ORDERED. 5

PHILIPPINE BRITISH ASSURANCE CO., INC., petitioner,

vs.
HONORABLE INTERMEDIATE APPELLATE COURT; SYCWIN COATING & WIRES,
INC., and DOMINADOR CACPAL, CHIEF DEPUTY SHERRIF OF MANILA, respondents.
GANCAYCO, J.:
This is a Petition for Review on certiorari of the Resolution dated September 12, 1985 of
the Intermediate Appellate Court in AC-G.R. No. CR-05409 1 granting private respondent's
motion for execution pending appeal and ordering the issuance of the corresponding writ of
execution on the counterbond to lift attachment filed by petitioner. The focal issue that
emerges is whether an order of execution pending appeal of a judgment maybe enforced
on the said bond. In the Resolution of September 25, 1985 2 this Court as prayed for,
without necessarily giving due course to the petition, issued a temporary restraining order
enjoining the respondents from enforcing the order complaint of.
The records disclose that private respondent Sycwin Coating & Wires, Inc., filed a
complaint for collection of a sum of money against Varian Industrial Corporation before the
Regional Trial Court of Quezon City. During the pendency of the suit, private respondent
succeeded in attaching some of the properties of Varian Industrial Corporation upon the
posting of a supersedeas bond. 3 The latter in turn posted a counterbond in the sum of
P1,400, 000.00 4 thru petitioner Philippine British Assurance Co., Inc., so the attached
properties were released.
On December 28, 1984, the trial court rendered a Decision, the dispositive portion of which
reads:
WHEREFORE, plaintiff's Motion for Summary Judgment is hereby GRANTED, and
judgment is rendered in favor of the plaintiff and against the defendant Varian Industrial
Corporation, and the latter is hereby ordered:

Varian Industrial Corporation appealed the decision to the respondent Court. Sycwin then
filed a petition for execution pending appeal against the properties of Varian in respondent
Court. Varian was required to file its comment but none was filed. In the Resolution of July
5, 1985, respondent Court ordered the execution pending appeal as prayed for. 6 However,
the writ of execution was returned unsatisfied as Varian failed to deliver the previously
attached personal properties upon demand. In a Petition dated August 13, 1985 filed with
respondent Court Sycwin prayed that the surety (herein petitioner) be ordered to pay the
value of its bond. 7 In compliance with the Resolution of August 23, 1985 of the respondent
Court herein petitioner filed its comment. 8 In the Resolution of September 12, 1985, 9 the
respondent Court granted the petition. Hence this action.
It is the submission of private respondent Sycwin that without a previous motion for
reconsideration of the questioned resolution, certiorari would not lie. While as a general
rule a motion for reconsideration has been considered a condition sine qua non for the
granting of a writ of certiorari, this rule does not apply when special circumstances warrant
immediate or more direct action. 10 It has been held further that a motion for
reconsideration may be dispensed with in cases like this where execution had been
ordered and the need for relief was extremely urgent. 11
The counterbond provides:
WHEREAS, in the above-entitled case pending in the Regional Trial Court, National
Capital Judicial Region, Branch LXXXV, Quezon City, an order of Attachment was issued
against abovenamed Defendant;
WHEREAS, the Defendant, for the purpose of lifting and/or dissolving the order of
attachment issued against them in the above-en-titled case, have offered to file a
counterbond in the sum of PESOS ONE MILLION FOUR HUNDRED THOUSAND ONLY
(P1,400,000.00), Philippine Currency, as provided for in Section 5, Rule 57 of the Revised
Rules of Court.

4. To pay plaintiff 15% of P1,401,468.00, the principal obligation, as and for attorney's
fees; and

NOW, THEREFORE, we, VARIAN INDUSTRIAL CORPORATION, as Principal and the

PHILIPPINE BRITISH ASSURANCE COMPANY, INC., a corporation duly organized and
existing under and by virtue of the laws of the Philippines, as Surety, in consideration of
the above and of the lifting or dissolution of the order of attachment, hereby jointly and
severally, bind ourselves in favor of the above Plaintiff in the sum of PESOS ONE
MILLION FOUR HUNDRED THOUSAND ONLY (P1,400,000.00), Philippine Currency,
under the condition that in case the Plaintiff recovers judgment in the action, and
Defendant will, on demand, re-deliver the attached property so released to the Officer of
the Court and the same shall be applied to the payment of the judgment, or in default
thereof, the defendant and Surety will, on demand, pay to the Plaintiff the full value of the
property released.

5. To pay the costs of suit.

EXECUTED at Manila, Philippines, this 28th day of June, 1984. 12

1. To pay plaintiff the amount of P1,401,468.00, the principal obligation with 12% interest
per annum from the date of default until fully paid;
2. To pay plaintiff 5% of the principal obligation as liquidated damages;
3. To pay plaintiff P30,000.00 as exemplary damages;

Sections 5, 12, and 17 of Rule 57 of the Revised Rules of Court also provide:
SEC. 5. Manner of attaching property. The officer executing the order shall without
delay attach, to await judgment and execution in the action, all the properties of the party
against whom the order is issued in the province, not exempt from execution, or so
much thereof as may be sufficient to satisfy the applicant's demand, unless the former
makes a deposit with the clerk or judge of the court from which the order issued, or gives
a counter-bond executed to the applicant, in an amount sufficient to satisfy such demand
besides costs, or in an amount equal to the value of the property which is about to be
attached, to secure payment to the applicant of any judgement ment which he may
recover in the action. The officer shall also forthwith serve a copy of the applicant's
affidavit and bond, and of the order of attachment, on the adverse party, if he be found
within the province.
SEC. 12. Discharge of attachment upon giving counterbond. At any time after an
order of attachment has been granted, the party whose property has been attached, or
the person appearing on his behalf, may, upon reasonable notice to the applicant, apply
to the judge who granted the order, or to the judge of the court in which the action is
pending, for an order discharging the attachment wholly or in part on the security given.
The judge shall, after hearing, order the discharge of the attachment if a cash deposit is
made, or a counter-bond executed to the attaching creditor is filed, on behalf of the
adverse party, with the clerk or judge of the court where the application is made, in an
amount equal to the value of the property attached as determined by the judge, to
secure the payment of any judgment that the attaching creditor may recover in the
action. Upon the filing of such counter-bond, copy thereof shall forthwith be served on
the attaching creditor or his lawyer. Upon the discharge of an attachment in accordance
with the provisions of this section the property attached, or the proceeds of any sale
thereof, shall be delivered to the party making the deposit or giving the counterbond
aforesaid standing in place of the property so released. Should such counterbond for
any reason be found to be, or become, insufficient, and the party furnishing the same fail
to file an additional counterbond, the attaching creditor may apply for a new order of
attachment.
SEC. 17. When execution returned unsatisfied, recovery had upon bond. If the
execution be returned unsatisfied in whole or in part, the surety or sureties on any
counter-bond given pursuant to the provisions of this rule to secure the payment of the
judgment shall become charged on such counter- bond, and bound to pay to the
judgement creditor upon demand, the amount due under the judgment, which amount
may be recovered from such surety or sureties after notice and summary hearing in the
same action. (Emphasis supplied.)
Under Sections 5 and 12, Rule 57 above reproduced it is provided that the counterbond is
intended to secure the payment of "any judgment" that the attaching creditor may recover
in the action. Under Section 17 of same rule it provides that when "the execution be
returned unsatisfied in whole or in part" it is only then that "payment of thejudgment shall
become charged on such counterbond."
The counterbond was issued in accordance with the provisions of Section 5, Rule 57 of the
Rules of Court as provided in the second paragraph aforecited which is deemed

reproduced as part of the counterbond. In the third paragraph it is also stipulated that the
counterbond is to be "applied for the payment of the judgment." Neither the rules nor the
provisions of the counterbond limited its application to a final and executory judgment.
Indeed, it is specified that it applies to the payment of any judgment that maybe recovered
by plaintiff. Thus, the only logical conclusion is that an execution of any judgment including
one pending appeal if returned unsatisfied maybe charged against such a counterbond.
It is well recognized rule that where the law does not distinguish, courts should not
distinguish. Ubi lex non distinguish nec nos distinguere debemos. 13 "The rule, founded on
logic, is a corollary of the principle that general words and phrases in a statute should
ordinarily be accorded their natural and general significance. 14 The rule requires that a
general term or phrase should not be reduced into parts and one part distinguished from
the other so as to justify its exclusion from the operation of the law. 15 In other words,
there should be no distinction in the application of a statute where none is indicated.16 For
courts are not authorized to distinguish where the law makes no distinction. They should
instead administer the law not as they think it ought to be but as they find it and without
regard to consequences. 17
A corollary of the principle is the rule that where the law does not make any exception,
courts may not except something therefrom, unless there is compelling reason apparent in
the law to justify it.18 Thus where a statute grants a person against whom possession of
"any land" is unlawfully withheld the right to bring an action for unlawful detainer, this Court
held that the phrase "any land" includes all kinds of land, whether agricultural, residential,
or mineral.19 Since the law in this case does not make any distinction nor intended to
make any exception, when it speaks of "any judgment" which maybe charged against the
counterbond, it should be interpreted to refer not only to a final and executory judgment in
the case but also a judgment pending appeal.
All that is required is that the conditions provided for by law are complied with, as outlined
in the case of Towers Assurance Corporation v. Ororama Supermart, 20
Under Section 17, in order that the judgment creditor might recover from the surety on
the counterbond, it is necessary (1) that the execution be first issued against the
principal debtor and that such execution was returned unsatisfied in whole or in part;
(2) that the creditor make a demand upon the surety for the satisfaction of the
judgment, and (3) that the surety be given notice and a summary hearing on the same
action as to his liability for the judgment under his counterbond.
The rule therefore, is that the counterbond to lift attachment that is issued in accordance
with the provisions of Section 5, Rule 57, of the Rules of Court, shall be charged with the
payment of any judgment that is returned unsatisfied. It covers not only a final and
executory judgement but also the execution of a judgment pending appeal.
WHEREFORE, the petition is hereby DISMISSED for lack of merit and the restraining
order issued on September 25, 1985 is hereby dissolved with costs against petitioner.

JUANITO C. PILAR, petitioner,

vs.
COMMISSION ON ELECTIONS, respondent.

The same prohibition shall apply if the political party which nominated the winning
candidate fails to file the statement required herein within the period prescribed by this
Act.

This is a petition for certiorari under Rule 65 of the Revised Rules of Court assailing the
Resolution dated April 28, 1994 of the Commission on Elections (COMELEC) in UND No.
94-040.

Except candidates for elective barangay office, failure to file the statements or reports
in connection with electoral contributions and expenditures as required herein shall
constitute an administrative offense for which the offenders shall be liable to pay an
administrative fine ranging from One Thousand Pesos ( P1,000.00) to Thirty Thousand
Pesos (P30,000.00), in the discretion of the Commission.

QUIASON, J.:

I
On March 22, 1992, petitioner Juanito C. Pilar filed his certificate of candidacy for the
position of member of the Sangguniang Panlalawigan of the Province of Isabela.
On March 25, 1992, petitioner withdrew his certificate of candidacy.
In M.R. Nos. 93-2654 and 94-0065 dated November 3, 1993 and February 13, 1994
respectively, the COMELEC imposed upon petitioner the fine of Ten Thousand Pesos
(P10,000.00) for failure to file his statement of contributions and expenditures.
In M.R. No. 94-0594 dated February 24, 1994, the COMELEC denied the motion for
reconsideration of petitioner and deemed final M.R. Nos. 93-2654 and 94-0065 (Rollo, p.
14).
Petitioner went to the COMELEC En Banc (UND No. 94-040), which denied the petition in
a Resolution dated April 28, 1994 (Rollo, pp. 10-13).

The fine shall be paid within thirty (30) days from receipt of notice of such failure;
otherwise, it shall be enforceable by a writ of execution issued by the Commission
against the properties of the offender.
It shall be the duty of every city or municipal election registrar to advise in writing, by
personal delivery or registered mail, within five (5) days from the date of election all
candidates residing in his jurisdiction to comply with their obligation to file their
statements of contributions and expenditures.
For the commission of a second or subsequent offense under this Section, the
administrative fine shall be from Two Thousand Pesos (P2,000.00) to Sixty Thousand
Pesos (P60,000.00), in the discretion of the Commission. In addition, the offender shall
be subject to perpetual disqualification to hold public office (Emphasis supplied).
To implement the provisions of law relative to election contributions and expenditures, the
COMELEC promulgated on January 13, 1992 Resolution No. 2348 (Re: Rules and
Regulations Governing Electoral Contributions and Expenditures in Connection with the
National
and
Local
Elections
on
May 11, 1992). The pertinent provisions of said Resolution are:

Hence, this petition for certiorari.

We dismiss the petition.
II
Section 14 of R.A. No. 7166 entitled "An Act Providing for Synchronized National and Local
Elections and for Electoral Reforms, Authorizing Appropriations Therefor, and for Other
Purposes" provides as follows:
Statement of Contributions and Expenditures: Effect of Failure to File Statement. Every
candidateand treasurer of the political party shall, within thirty (30) days after the day of
the election, file in duplicate with the offices of the Commission the full, true and
itemized statement of all contributions and expenditures in connection with the election.
No person elected to any public office shall enter upon the duties of his office until he
has filed the statement of contributions and expenditures herein required.

Sec. 13. Statement of contributions and expenditures: Reminders to candidates to file

statements. Within five (5) days from the day of the election, the Law Department of
the Commission, the regional election director of the National Capital Region, the
provincial election supervisors and the election registrars shall advise in writing by
personal delivery or registered mail all candidates who filed their certificates of
candidacy with them to comply with their obligation to file their statements of
contributions and expenditures in connection with the elections. Every election
registrar shall also advise all candidates residing in his jurisdiction to comply with said
obligation (Emphasis supplied).
Sec. 17. Effect of failure to file statement. (a) No person elected to any public office
shall enter upon the duties of his office until he has filed the statement of contributions
and expenditures herein required.
The same prohibition shall apply if the political party which nominated the winning
candidates fails to file the statement required within the period prescribed by law.

(b) Except candidates for elective barangay office, failure to file statements or reports
in connection with the electoral contributions and expenditures as required herein
shall constitute an administrative offense for which the offenders shall be liable to pay
an administrative fine ranging from One Thousand Pesos (P1,000) to Thirty Thousand
Pesos (P30,000), in the discretion of the Commission.
The fine shall be paid within thirty (30) days from receipt of notice of such failure;
otherwise, it shall be enforceable by a writ of execution issued by the Commission
against the properties of the offender.
For the commission of a second or subsequent offense under this section, the
administrative fine shall be from Two Thousand Pesos (P2,000) to Sixty Thousand
Pesos (P60,000), in the discretion of the Commission. In addition, the offender shall
be subject to perpetual disqualification to hold public office.
Petitioner argues that he cannot be held liable for failure to file a statement of contributions
and expenditures because he was a "non-candidate," having withdrawn his certificates of
candidacy three days after its filing. Petitioner posits that "it is . . . clear from the law that
candidate must have entered the political contest, and should have either won or lost"
(Rollo, p. 39).
Petitioner's argument is without merit.
Section 14 of R.A. No. 7166 states that "every candidate" has the obligation to file his
statement of contributions and expenditures.
Well-recognized is the rule that where the law does not distinguish, courts should not
distinguish, Ubi lex non distinguit nec nos distinguere debemos (Philippine British
Assurance Co. Inc. v. Intermediate Appellate Court, 150 SCRA 520 [1987]; cf Olfato v.
Commission on Elections, 103 SCRA 741 [1981]). No distinction is to be made in the
application of a law where none is indicated (Lo Cham v. Ocampo, 77 Phil. 636 [1946]).
In the case at bench, as the law makes no distinction or qualification as to whether the
candidate pursued his candidacy or withdrew the same, the term "every candidate" must
be deemed to refer not only to a candidate who pursued his campaign, but also to one who
withdrew his candidacy.
The COMELEC, the body tasked with the enforcement and administration of all laws and
regulations relative to the conduct of an election, plebiscite, initiative, referendum, and
recall (The Constitution of the Republic of the Philippines, Art. IX(C), Sec. 2[1]), issued
Resolution No. 2348 in implementation or interpretation of the provisions of Republic Act
No. 7166 on election contributions and expenditures. Section 13 of Resolution No. 2348
categorically refers to "all candidates who filed their certificates of candidacy."
Furthermore, Section 14 of the law uses the word "shall." As a general rule, the use of the
word "shall" in a statute implies that the statute is mandatory, and imposes a duty which
may be enforced , particularly if public policy is in favor of this meaning or where public

interest is involved. We apply the general rule (Baranda v. Gustilo, 165 SCRA 757 [1988];
Diokno v. Rehabilitation Finance Corporation, 91 Phil. 608 [1952]).
The state has an interest in seeing that the electoral process is clean, and ultimately
expressive of the true will of the electorate. One way of attaining such objective is to pass
legislation regulating contributions and expenditures of candidates, and compelling the
publication of the same. Admittedly, contributions and expenditures are made for the
purpose of influencing the results of the elections (B.P. Blg. 881, Sec. 94; Resolution No.
2348, Sec. 1). Thus, laws and regulations prescribe what contributions are prohibited (B.P.
Blg. 881, Sec. 95, Resolution No. 2348, Sec. 4), or unlawful (B.P. Blg. 881, Sec. 96), and
what expenditures are authorized (B.P. Blg. 881, Sec. 102; R.A. No. 7166, Sec. 13;
Resolution No. 2348, Sec. 7) or lawful (Resolution No. 2348, Sec. 8).
Such statutes are not peculiar to the Philippines. In "corrupt and illegal practices acts" of
several states in the United States, as well as in federal statutes, expenditures of
candidates are regulated by requiring the filing of statements of expenses and by limiting
the amount of money that may be spent by a candidate. Some statutes also regulate the
solicitation of campaign contributions (26 Am Jur 2d, Elections 287). These laws are
designed to compel publicity with respect to matters contained in the statements and to
prevent, by such publicity, the improper use of moneys devoted by candidates to the
furtherance of their ambitions (26 Am Jur 2d, Elections 289). These statutes also enable
voters to evaluate the influences exerted on behalf of candidates by the contributors, and
to furnish evidence of corrupt practices for annulment of elections (Sparkman v. Saylor
[Court of Appeals of Kentucky], 180 Ky. 263, 202 S.W. 649 [1918]).
State courts have also ruled that such provisions are mandatory as to the requirement of
filing (State ex rel. Butchofsky v. Crawford [Court of Civil Appeals of Texas], 269 S.W. 2d
536 [1954]; Best v. Sidebottom, 270 Ky. 423,109 S.W. 2d 826 [1937]; Sparkman v.
Saylor, supra.)
It is not improbable that a candidate who withdrew his candidacy has accepted
contributions and incurred expenditures, even in the short span of his campaign. The evil
sought to be prevented by the law is not all too remote.
It is notesworthy that Resolution No. 2348 even contemplates the situation where a
candidate may not have received any contribution or made any expenditure. Such a
candidate is not excused from filing a statement, and is in fact required to file a statement
to that effect. Under Section 15 of Resolution No. 2348, it is provided that "[i]f a candidate
or treasurer of the party has received no contribution, made no expenditure, or has no
pending obligation, the statement shall reflect such fact."
Lastly, we note that under the fourth paragraph of Section 73 of the B.P. Blg. 881 or the
Omnibus Election Code of the Philippines, it is provided that "[t]he filing or withdrawal of
certificate of candidacy shall not affect whatever civil, criminal or administrative liabilities
which a candidate may have incurred." Petitioner's withdrawal of his candidacy did not
extinguish his liability for the administrative fine.
WHEREFORE, the petition is DISMISSED.

PEOPLE
OF
THE
PHILIPPINES, petitioner,
vs.
HON. JUDGE ANTONIO C. EVANGELISTA, as Presiding Judge of Branch XXI, 10th
Judicial Region, RTC of Misamis Oriental, Cagayan de Oro City, and GRILDO S.
TUGONON, respondents.
DECISION
MENDOZA, J.:
Private respondent Grildo S. Tugonan was charged with frustrated homicide in the
Regional Trial Court of Misamis Oriental (Branch 21), the information against him alleging
That on or about the 26th day of May, 1988, at more or less 9:00 o'clock in the
evening at Barangay Publican+.3, Municipality of Villanueva, Province of Misamis
Oriental, Republic of the Philippines and within the jurisdiction of this Honorable
Court, the above-named accused with intent to kill and with the use of a knife,
which he was then conveniently provided of, did then and there willfully,
unlawfully and feloniously assault, attack and stab Roque T. Bade thereby
inflicting upon him the following injuries, to wit:
Stab wound, right iliac area,
0.5 cm. penetrating non
perforating lacerating posterior
peritoneum, 0,5 cm.
thus performing all the acts of execution which would produce the crime of
Homicide as a consequence but which, nevertheless, did not produce it by
reason of causes independent of the will of the accused, that is by timely medical
attendance which prevented his death.
CONTRARY TO and in violation of Article 249 in relation to Article 6 of the
Revised Penal Code.
After trial he was found guilty and sentenced to one year of prision correccional in its
minimum period and ordered to pay to the offended party P5,000.00 for medical expense,
without subsidiary imprisonment, and the costs. The RTC appreciated in his favor the
privileged mitigating circumstances of incomplete self-defense and the mitigating
circumstance of voluntary surrender.
On appeal the Court of Appeals affirmed private respondent's conviction but modified his
sentence by imposing on him an indeterminate penalty of 2 months of arresto mayor, as
minimum, to 2 years and 4 months of prision correccional, as maximum.1
On December 21, 1992, respondent Judge Antonio C. Evangelista of the RTC set the case
for repromulgation on January 4, 1993.

On December 28, 1992, private respondent filed a petition for probation, 2 alleging that (1)
he possessed all the qualifications and none of the disqualifications for probation under
P.D. No. 968, as amended; (2) the Court of Appeals has in fact reduced the penalty
imposed on him by the trial court; (3) in its resolution, the Court of Appeals took no action
on a petition for probation which he had earlier filed with it so that the petition could be filed
with the trial court; (4) in the trial court's decision, two mitigating circumstances of
incomplete self-defense and voluntarily surrender were appreciated in his favor; and (5)
in Santos To v. Pao,3 the Supreme Court upheld the right of the accused to probation
notwithstanding the fact that he had appealed from his conviction by the trial court.
On February 2, 1993, the RTC ordered private respondent to report for interview to the
Provincial Probation Officer. The Provincial Probation Officer on the other hand was
required to submit his report with recommendation to the court within 60 days. 4
On February 18, 1993, Chief Probation and Parole Officer Isias B. Valdehueza
recommended denial of private respondent's application for probation on the ground that
by appealing the sentence of the trial court, when he could have then applied for probation,
private respondent waived the right to make his application. The Probation Officer thought
the present case to be distinguishable from Santos To v. Pao in the sense that in this
case the original sentence imposed on private respondent by the trial court (1 year of
imprisonment) was probationable and there was no reason for private respondent not to
have filed his application for probation then, whereas inSantos To v. Pao the penalty only
became probationable after it had been reduced as a result of the appeal.
On April 16, 1993 Valdehueza reiterated 5 his "respectful recommendation that private
respondent's application for probation be denied and that a warrant of arrest be issued for
him to serve his sentence in jail."
The RTC set aside the Probation Officer's recommendation and granted private
respondent's application for probation in its order of April 23, 1993, 6 Hence this petition by
the prosecution.
The issue in this case is whether the RTC committed a grave abuse of its discretion by
granting private respondent's application for probation despite the fact that he had
appealed from the judgment of his conviction of the trial court.
The Court holds that it did.
Until its amendment by P.D. No. 1990 in 1986, it was possible under P.D. No. 986,
otherwise known as the Probation Law, for the accused to take his chances on appeal by
allowing probation to be granted even after an accused had appealed his sentence and
failed to obtain an acquittal, just so long as he had not yet started to serve the
sentence.7 Accordingly, in Santos To v. Pao, it was held that the fact that the accused had
appealed did not bar him from applying for probation especially because it was as a result
of the appeal that his sentence was reduced and made the probationable limit.
The law was, however, amended by P.D. No. 1990 which took effect on January 15,
19868 precisely to put a stop to the practice of appealing from judgments of conviction

even if the sentence is probationable for the purpose of securing an acquittal and applying
for probation only if the accused fails in his bid. Thus, as amended by P.D. No, 1990, 4 of
the Probation Law now reads:
4. Grant of Probation. Subject to the provisions of this Decree, the trial court
may, after it shall have convicted and sentenced a defendant, and upon
application by said defendant within the period for perfecting an appeal, suspend
the execution of the sentence and place the defendant on probation for such
period and upon such terms and conditions as it may deem best; Provided,
That no application for probation shall be entertained or granted if the defendant
has perfected the appeal from the judgment of conviction.
Probation may be granted whether the sentence imposes a term of imprisonment
or a fine only. An application for probation shall be filed with the trial court. The
filing of the application shall be deemed a waiver of the right to appeal.
An order granting or denying probation shall not be appealable. (Emphasis
added).
Since private respondent filed his application for probation on December 28, 1992, after
P.D. No. 1990 had taken effect,9 it is covered by the prohibition that "no application for
probation shall be entertained or granted if the defendant has perfected the appeal from
the judgment of conviction" and that "the filing of the application shall be deemed a waiver
of the right to appeal," Having appealed from the judgment of the trial court and having
applied for probation only after the Court of Appeals had affirmed his conviction, private
respondent was clearly precluded from the benefits of probation.
Private respondent argues, however, that a distinction should be drawn between
meritorious appeals (like his appeal notwithstanding the appellate court's affirmance of his
conviction) and unmeritorious appeals. But the law does not make any distinction and so
neither should the Court. In fact if an appeal is truly meritorious the accused would be set
free and not only given probation. Private respondent's original sentence (1 year of prision
correccional in its minimum period) and the modified sentence imposed by the Court of
Appeals (2 months ofarresto mayor, as minimum, to 2 years and 4 months of prision
correccional, as maximum) are probationable. Thus the fact that he appealed meant that
private respondent was taking his chances which the law precisely frowns upon. This is
precisely the evil that the amendment in P.D. No. 1990 sought to correct, since in the
words of the preamble to the amendatory law, "probation was not intended as an escape
hatch and should not be used to obstruct and delay the administration of justice, but should
be availed of at the first opportunity by offenders who are willing to be reformed and
rehabilitated."
The ruling of the RTC that "[h]aving not perfected an appeal against the Court of Appeals
decision, [private respondent] is, therefore, not covered by [the amendment in] P.D. 1990"
is an obvious misreading of the law. The perfection of the appeal referred in the law refers
to the .appeal taken from a judgment of conviction by the trial court and not that of the
appellate court, since under the law an application for probation is filed with the trial court
which can only grant the same "after it shall have convicted and sentenced [the]
defendant, and upon application by said defendant within the period for perfecting an

appeal. "Accordingly, in Llamado v. Court of Appeals, 10 it was held that the petitioner who
had appealed his sentence could not subsequently apply for probation.
WHEREFORE, the petition is GRANTED and the order of April 23, 1993 of the Regional
Trial Court of Misamis Oriental (Branch 21) granting probation to private respondent Grildo
S. Tugonon is SET ASIDE.

When the law does not make any exceptions, courts shouldnt make any.
CECILIO S. DE VILLA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, PEOPLE OF THE PHILIPPINES,
HONORABLE JOB B. MADAYAG, and ROBERTO Z. LORAYES, respondents.
San
Jose
Enriquez,
Lacas
Santos
&
Borje
for
petitioner.
Eduardo R. Robles for private respondent.
PARAS, J.:
This petition for review on certiorari seeks to reverse and set aside the decision* of the
Court of Appeals promulgated on February 1, 1989 in CA-G.R. SP No. 16071 entitled
"Cecilio S. de Villa vs. Judge Job B. Madayag, etc. and Roberto Z. Lorayes," dismissing
the petition for certiorari filed therein.
The factual backdrop of this case, as found by the Court of Appeals, is as follows:
On October 5, 1987, petitioner Cecilio S. de Villa was charged before the Regional
Trial Court of the National Capital Judicial Region (Makati, Branch 145) with violation
of Batas Pambansa Bilang 22, allegedly committed as follows:
That on or about the 3rd day of April 1987, in the municipality of Makati, Metro
Manila, Philippines and within the jurisdiction of this Honorable Court, the abovenamed accused, did, then and there willfully, unlawfully and feloniously make or
draw and issue to ROBERTO Z. LORAYEZ, to apply on account or for value a
Depositors Trust Company Check No. 3371 antedated March 31, 1987, payable
to herein complainant in the total amount of U.S. $2,500.00 equivalent to
P50,000.00, said accused well knowing that at the time of issue he had no
sufficient funds in or credit with drawee bank for payment of such check in full
upon its presentment which check when presented to the drawee bank within
ninety (90) days from the date thereof was subsequently dishonored for the
reason "INSUFFICIENT FUNDS" and despite receipt of notice of such dishonor
said accused failed to pay said ROBERTO Z. LORAYEZ the amount of
P50,000.00 of said check or to make arrangement for full payment of the same
within five (5) banking days after receiving said notice.
After arraignment and after private respondent had testified on direct examination,
petitioner moved to dismiss the Information on the following grounds: (a) Respondent
court has no jurisdiction over the offense charged; and (b) That no offense was
committed since the check involved was payable in dollars, hence, the obligation
created is null and void pursuant to Republic Act No. 529 (An Act to Assure Uniform
Value of Philippine Coin and Currency).
On July 19, 1988, respondent court issued its first questioned orders stating:
Accused's motion to dismiss dated July 5, 1988, is denied for lack of merit.
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks, provided they are
either drawn and issued in the Philippines though payable outside thereof, or
made payable and dishonored in the Philippines though drawn and issued

outside thereof, are within the coverage of said law. The law likewise applied to
checks drawn against current accounts in foreign currency.
Petitioner moved for reconsideration but his motion was subsequently denied by
respondent court in its order dated September 6, 1988, and which reads:
Accused's motion for reconsideration, dated August 9, 1988, which was opposed
by the prosecution, is denied for lack of merit.1wphi1
The Bouncing Checks Law is applicable to checks drawn against current
accounts in foreign currency (Proceedings of the Batasang Pambansa, February
7, 1979, p. 1376, cited in Makati RTC Judge (now Manila City Fiscal) Jesus F.
Guerrero's The Ramifications of the Law on Bouncing Checks, p. 5).
A petition for certiorari seeking to declare the nullity of the aforequoted orders dated
July 19, 1988 and September 6, 1988 was filed by the petitioner in the Court of
Appeals wherein he contended:
(a) That since the questioned check was drawn against the dollar account of
petitioner with a foreign bank, respondent court has no jurisdiction over the same
or with accounts outside the territorial jurisdiction of the Philippines and that
Batas Pambansa Bilang 22 could have not contemplated extending its coverage
over dollar accounts;
(b) That assuming that the subject check was issued in connection with a private
transaction between petitioner and private respondent, the payment could not be
legally paid in dollars as it would violate Republic Act No. 529; and
(c) That the obligation arising from the issuance of the questioned check is null
and void and is not enforceable with the Philippines either in a civil or criminal
suit. Upon such premises, petitioner concludes that the dishonor of the
questioned check cannot be said to have violated the provisions of Batas
Pambansa Bilang 22. (Rollo, Annex "A", Decision, p. 22).
On February 1, 1989, the Court of Appeals rendered a decision, the decretal portion of
which reads:
WHEREFORE, the petition is hereby dismissed. Costs against
petitioner.
SO ORDERED. (Rollo, Annex "A", Decision, p. 5)
A motion for reconsideration of the said decision was filed by the petitioner on February 7,
1989 (Rollo, Petition, p. 6) but the same was denied by the Court of Appeals in its
resolution dated March 3, 1989 (Rollo, Annex "B", p. 26).
Hence, this petition.
In its resolution dated November 13, 1989, the Second Division of this Court gave due
course to the petition and required the parties to submit simultaneously their respective
memoranda (Rollo, Resolution, p. 81).
The sole issue in this case is whether or not the Regional Trial Court of Makati has
jurisdiction over the case in question.
The petition is without merit.
Jurisdiction is the power with which courts are invested for administering justice, that is, for
hearing and deciding cases (Velunta vs. Philippine Constabulary, 157 SCRA 147 [1988]).
Jurisdiction in general, is either over the nature of the action, over the subject matter, over
the person of the defendant, or over the issues framed in the pleadings (Balais vs. Balais,
159 SCRA 37 [1988]).
Jurisdiction over the subject matter is determined by the statute in force at the time of
commencement of the action (De la Cruz vs. Moya, 160 SCRA 538 [1988]).
The trial court's jurisdiction over the case, subject of this review, can not be questioned.
Sections 10 and 15(a), Rule 110 of the Rules of Court specifically provide that:
Sec. 10. Place of the commission of the offense. The complaint or
information is sufficient if it can be understood therefrom that the
offense was committed or some of the essential ingredients thereof
occured at some place within the jurisdiction of the court, unless the

particular place wherein it was committed constitutes an essential

element of the offense or is necessary for identifying the offense
charged.
Sec. 15. Place where action is to be instituted. (a) Subject to existing
laws, in all criminal prosecutions the action shall be instituted and tried
in the court of the municipality or territory where the offense was
committed or any of the essential ingredients thereof took place.
In the case of People vs. Hon. Manzanilla (156 SCRA 279 [1987] cited in the
case of Lim vs. Rodrigo, 167 SCRA 487 [1988]), the Supreme Court ruled "that
jurisdiction or venue is determined by the allegations in the information."
The information under consideration specifically alleged that the offense was
committed in Makati, Metro Manila and therefore, the same is controlling and
sufficient to vest jurisdiction upon the Regional Trial Court of Makati. The Court
acquires jurisdiction over the case and over the person of the accused upon the
filing of a complaint or information in court which initiates a criminal action
(Republic vs. Sunga, 162 SCRA 191 [1988]).
Moreover, it has been held in the case of Que v. People of the Philippines (154
SCRA 160 [1987] cited in the case of People vs. Grospe, 157 SCRA 154 [1988])
that "the determinative factor (in determining venue) is the place of the issuance
of the check."
On the matter of venue for violation of Batas Pambansa Bilang 22, the Ministry of
Justice, citing the case of People vs. Yabut (76 SCRA 624 [1977], laid down the
following guidelines in Memorandum Circular No. 4 dated December 15, 1981,
the pertinent portion of which reads:
(1) Venue of the offense lies at the place where the check was executed and
delivered; (2) the place where the check was written, signed or dated does not
necessarily fix the place where it was executed, as what is of decisive importance
is the delivery thereof which is the final act essential to its consummation as an
obligation; . . . (Res. No. 377, s. 1980, Filtex Mfg. Corp. vs. Manuel Chua,
October 28, 1980)." (See The Law on Bouncing Checks Analyzed by Judge
Jesus F. Guerrero, Philippine Law Gazette, Vol. 7. Nos. 11 & 12, OctoberDecember, 1983, p. 14).
It is undisputed that the check in question was executed and delivered by the
petitioner to herein private respondent at Makati, Metro Manila.
However, petitioner argues that the check in question was drawn against the
dollar account of petitioner with a foreign bank, and is therefore, not covered by
the Bouncing Checks Law (B.P. Blg. 22).
But it will be noted that the law does not distinguish the currency involved in the
case. As the trial court correctly ruled in its order dated July 5, 1988:
Under the Bouncing Checks Law (B.P. Blg. 22), foreign checks,
provided they are either drawn and issued in the Philippines though
payable outside thereof . . . are within the coverage of said law.
It is a cardinal principle in statutory construction that where the law does not
distinguish courts should not distinguish.1wphi1 Parenthetically, the rule is that
where the law does not make any exception, courts may not except something
unless compelling reasons exist to justify it (Phil. British Assurance Co., Inc. vs.
IAC, 150 SCRA 520 [1987]).
More importantly, it is well established that courts may avail themselves of the
actual proceedings of the legislative body to assist in determining the
construction of a statute of doubtful meaning (Palanca vs. City of Manila, 41 Phil.
125 [1920]). Thus, where there is doubts as to what a provision of a statute
means, the meaning put to the provision during the legislative deliberation or

discussion on the bill may be adopted (Arenas vs. City of San Carlos, 82 SCRA
318 [1978]).
The records of the Batasan, Vol. III, unmistakably show that the intention of the
lawmakers is to apply the law to whatever currency may be the subject thereof.
The discussion on the floor of the then Batasang Pambansa fully sustains this
view, as follows:
xxx
xxx
xxx
THE SPEAKER. The Gentleman from Basilan is recognized.
MR. TUPAY. Parliamentary inquiry, Mr. Speaker.
THE SPEAKER. The Gentleman may proceed.
MR. TUPAY. Mr. Speaker, it has been mentioned by one of the
Gentlemen who interpellated that any check may be involved, like U.S.
dollar checks, etc. We are talking about checks in our country. There
are U.S. dollar checks, checks, in our currency, and many others.
THE SPEAKER. The Sponsor may answer that inquiry.
MR. MENDOZA. The bill refers to any check, Mr. Speaker, and this
check may be a check in whatever currency. This would not even be
limited to U.S. dollar checks. The check may be in French francs or
Japanese yen or deutschunorhs. (sic.) If drawn, then this bill will apply.
MR TUPAY. So it include U.S. dollar checks.
MR. MENDOZA. Yes, Mr. Speaker.
xxx
xxx
xxx
(p. 1376, Records of the Batasan, Volume III; Emphasis supplied).
PREMISES CONSIDERED, the petition is DISMISSED for lack of merit.

cream it manufactures. For every importation made of these materials, the petitioner paid
to the Central Bank of the Philippines the 17% special excise tax on the foreign exchange
used for the payment of the cost, transportation and other charges incident thereto,
pursuant to Republic Act No. 601, as amended, commonly known as the Exchange Tax
Law.

B. EJUSDEM GENERIS ( WHERE GENERAL WORDS OF A PARTICULAR, AND

SPECIFIC MEANING, SUCH GENERAL WORDS ARE NOT TO BE CONSTRUED IN
THEIR WIDEST EXTENT BUT ARE TO BE HELD AS APPLYING ONLY TO PERSONS
OR THINGS OF THE SAME KIND OR CLASS AS THOSE SPECFICALLY MENTIONED)
GENERAL TERMS LIMITED BY SPECIAL TERMS

The decisive issue to be resolved is whether or not the foreign exchange used by petitioner
for the importation of dental cream stabilizers and flavors is exempt from the 17% special
excise tax imposed by the Exchange Tax Law, (Republic Act No. 601) so as to entitle it to
refund under section 2 thereof, which reads as follows:

COLGATE-PALMOLIVE PHILIPPINE, INC., petitioner,

vs.
HON. PEDRO M. GIMENEZ as Auditor General and ISMAEL MATHAY as AUDITOR OF
THE CENTRAL BANK OF THE PHILIPPINES, respondents.
Ross,
Selph
and
Carrascoso
Office of the Solicitor General for respondents.

for

petitioner.

GUTIERREZ DAVID, J.:

The petitioner Colgate-Palmolive Philippines, Inc. is a corporation duly organized and
existing under Philippine laws engaged in the manufacture of toilet preparations and
household remedies. On several occasions, it imported from abroad various materials
such as irish moss extract, sodium benzoate, sodium saccharinate precipitated calcium
carbonate and dicalcium phosphate, for use as stabilizers and flavoring of the dental

On March 14, 1956, the petitioner filed with the Central Bank three applications for refund
of the 17% special excise tax it had paid in the aggregate sum of P113,343.99. The claim
for refund was based on section 2 of Republic Act 601, which provides that "foreign
exchange used for the payment of the cost, transportation and/or other charges incident to
the importation into the Philippines of . . . stabilizer and flavors . . . shall be refunded to any
importer making application therefor, upon satisfactory proof of actual importation under
the rules and regulations to be promulgated pursuant to section seven thereof." After the
applications were processed by the officer-in-charge of the Exchange Tax Administration of
the Central Bank, that official advised, the petitioner that of the total sum of P113,343.99
claimed by it for refund, the amount of P23,958.13 representing the 17% special excise tax
on the foreign exchange used to import irish moss extract, sodium benzoate and
precipitated calcium carbonate had been approved. The auditor of the Central Bank,
however, refused to pass in audit its claims for refund even for the reduced amount fixed
by the Officer-in-Charge of the Exchange Tax Administration, on the theory that toothpaste
stabilizers and flavors are not exempt under section 2 of the Exchange Tax Law.
Petitioner appealed to the Auditor General, but the latter or, December 4, 1958 affirmed the
ruling of the auditor of the Central Bank, maintaining that the term "stabilizer and flavors"
mentioned in section 2 of the Exchange Tax Law refers only to those used in the
preparation or manufacture of food or food products. Not satisfied, the petitioner brought
the case to this Court thru the present petition for review.

SEC, 2. The tax collected under the preceding section on foreign exchange used for
the payment of the cost, transportation and/or other charges incident to importation
into the Philippines of rice, flour, canned milk, cattle and beef, canned fish, soya
beans, butterfat, chocolate, malt syrup, tapioca, stabilizer and flavors, vitamin
concentrate, fertilizer, poultry feed; textbooks, reference books, and supplementary
readers approved by the Board of Textbooks and/or established public or private
educational institutions; newsprint imported by or for publishers for use in the
publication of books, pamphlets, magazines and newspapers; book paper, book
cloth, chip board imported for the printing of supplementary readers (approved by the
Board of Textbooks) to be supplied to the Government under contracts perfected
before the approval of this Act, the quantity thereof to be certified by the Director of
Printing; anesthetics, anti-biotics, vitamins, hormones, x-ray films, laboratory
reagents, biologicals, dental supplies, and pharmaceutical drugs necessary for
compounding medicines; medical and hospital supplies listed in the appendix to this
Act, in quantities to be certified by the Director of Hospitals as actually needed by the
hospitals applying therefor; drugs and medicines listed in the said appendix; and
such other drugs and medicines as may be certified by the Secretary of Health from

time to time to promote and protect the health of the people of the Philippines shall
be refunded to any importer making application therefor, upon satisfactory proof of
actual importation under the rules and regulations to be promulgated pursuant to
section seven thereof." (Emphasis supplied.)
The ruling of the Auditor General that the term "stabilizer and flavors" as used in the law
refers only to those materials actually used in the preparation or manufacture of food and
food products is based, apparently, on the principle of statutory construction that "general
terms may be restricted by specific words, with the result that the general language will be
limited by the specific language which indicates the statute's object and purpose."
(Statutory Construction by Crawford, 1940 ed. p. 324-325.) The rule, however, is, in our
opinion, applicable only to cases where, except for one general term, all the items in an
enumeration belong to or fall under one specific class. In the case at bar, it is true that the
term "stabilizer and flavors" is preceded by a number of articles that may be classified as
food or food products, but it is likewise true that the other items immediately following it do
not belong to the same classification. Thus "fertilizer" and "poultry feed" do not fall under
the category of food or food products because they are used in the farming and poultry
industries, respectively. "Vitamin concentrate" appears to be more of a medicine than food
or food product, for, as matter of fact, vitamins are among those enumerated in the list of
medicines and drugs appearing in the appendix to the law. It should also here be stated
that "cattle", which is among those listed preceding the term in question, includes not only
those intended for slaughter but also those for breeding purposes. Again, it is noteworthy
that under, Republic Act No. 814 amending the above-quoted section of Republic Act No.
601, "industrial starch", which does not always refer to food for human consumption, was
added among the items grouped with "stabilizer and flavors". Thus, on the basis of the
grouping of the articles alone, it cannot validly be maintained that the term "stabilizer and
flavors" as used in the above-quoted provision of the Exchange Tax Law refers only to
those used in the manufacture of food and food products. This view is supported by the
principle "Ubi lex non distinguish nec nos distinguire debemos", or "where the law does not
distinguish, neither do we distinguish". (Ligget & Myers Tobacco Company vs. Collector of
Internal Revenue, 53 Off. Gaz. No. 15, page 4831). Since the law does not distinguish
between "stabilizer and flavors" used in the preparation of food and those used in the
manufacture of toothpaste or dental cream, we are not authorized to make any distinction
and must construe the words in their general sense. The rule of construction that general
and unlimited terms are restrained and limited by particular recitals when used in
connection with them, does not require the rejection of general terms entirely. It is intended
merely as an aid in ascertaining the intention of the legislature and is to be taken in
connection with other rules of construction. (See Handbook of the Construction and
Interpretation of Laws by Black, p. 215.216, 2nd ed.)
Having arrived at the above conclusion, we deem it now idle to pass upon the other
questions raised by the parties.
WHEREFORE, the decision under review is reversed and the respondents are hereby
ordered to audit petitioners applications for refund which were approved by the Officer-inCharge of the Exchange Tax Administration in the total amount of P23,958.13.

REPUBLIC OF THE PHILIPPINES THRU: THE PRESIDENTIAL COMMISSION ON

GOOD GOVERNMENT (PCGG), AFP ANTI-GRAFT BOARD, COL. ERNESTO A.

PUNSALANG and PETER T. TABANG, Petitioners, v. HON. EUTROPIO MIGRINO, as

Presiding Judge, Regional Trial Court, NCJR, Branch 151, Pasig, Metro Manila and
TROADIO TECSON, Respondents.
DECISION
CORTES, J.:
This case puts in issue the authority of the Presidential Commission on Good Government
(PCGG), through the New Armed Forces of the Philippines Anti-Graft Board (hereinafter
referred to as the "Board"), to investigate and cause the prosecution of petitioner, a retired
military officer, for violation of Republic Acts Nos. 3019 and 1379.
Assailed by the Republic in this petition for certiorari, prohibition and/or mandamus with
prayer for the issuance of a writ of preliminary injunction and/or temporary restraining order
are the orders of respondent judge in Civil Case No. 57092 Branch 151 of the Regional
Trial Court of Pasig, Metro Manila: (1) dated June 23, 1989, denying petitioners Motion to
Dismiss and Opposition, and (2) dated June 26, 1989, granting private respondents
application for the issuance of a writ of preliminary injunction. Thus, the petition seeks the
annulment of the two orders, the issuance of an injunction to enjoin respondent judge from
proceeding with Civil Case No. 57092 and, finally, the dismissal of the case before the trial
court.
The controversy traces its roots to the order of then PCGG Chairman Jovito R. Salonga,
dated May 13, 1986, which created the New Armed Forces of the Philippines Anti-Graft
Board. The Board was created to "investigate the unexplained wealth and corrupt practices
of AFP personnel, both retired and in active service." The order further stated that" [t]he
Board shall be primarily charged with the task of investigating cases of alleged violations of
the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019, as amended) and shall
make the necessary recommendations to appropriate government agencies and
instrumentalities with respect to the action to be taken thereon based on its findings."
Acting on information received by the Board, which indicated the acquisition of wealth
beyond his lawful income, private respondent Lt. Col. Troadio Tecson (ret.) was required by
the Board to submit his explanation/comment together with his supporting evidence by
October 31, 1987 [Annex "B", Petition]. Private respondent requested, and was granted,
several postponements, but was unable to produce his supporting evidence because they
were allegedly in the custody of his bookkeeper who had gone abroad.
Just the same, the Board proceeded with its investigation and submitted its resolution,
dated June 30, 1988, recommending that private respondent be prosecuted and tried for
violation of Rep. Act No. 3019, as amended, and Rep. Act No. 1379, as amended.
The case was set for preliminary investigation by the PCGG. Private respondent moved to
dismiss the case on the following grounds: (1) that the PCGG has no jurisdiction over his
person; (2) that the action against him under Rep. Act No. 1379 has already prescribed; (3)
that E.O. No. 14, insofar as it suspended the provisions of Rep. Act No. 1379 on
prescription of actions, was inapplicable to his case; and (4) that having retired from the
AFP on May 9, 1984, he was now beyond the reach of Rep. Act No. 3019. The Board
opposed the motion to dismiss.
In a resolution dated February 8, 1989, the PCGG denied the motion to dismiss for lack of
merit. Private respondent moved for reconsideration but this was denied by the PCGG in a
resolution dated March 8, 1989. Private respondent was directed to submit his counteraffidavit and other controverting evidence on March 20, 1989 at 2:00 p.m.
On March 13, 1989, private respondent filed a petition for prohibition with preliminary
injunction with the Regional Trial Court in Pasig, Metro Manila. The case was docketed as
Case No. 57092 and raffled to Branch 151, respondent judges court. Petitioner filed a
motion to dismiss and opposed the application for the issuance of a writ of preliminary

injunction on the principal ground that the Regional Trial Court had no jurisdiction over the
Board, citing the case of PCGG v. Pea, G.R. No. 77663, April 12, 1988, 159 SCRA 556.
Private respondent opposed the motion to dismiss. Petitioner replied to the opposition.
On June 23, 1989, respondent judge denied petitioners motion to dismiss. On June 26,
1989, respondent judge granted the application for the issuance of a writ of preliminary
injunction, enjoining petitioners from investigating or prosecuting private respondent under
Rep. Acts Nos. 3019 and 1379 upon the filing of a bond in the amount of Twenty Thousand
Pesos (P20,000.00).
Hence, the instant petition.
On August 29, 1989, the Court issued a restraining order enjoining respondent judge from
enforcing his orders dated June 23, 1989 and June 26, 1989 and from proceeding with
Civil Case No. 57092.
Private respondent filed his comment, to which petitioners filed a reply. A rejoinder to the
reply was filed by private Respondent. The Court gave due course to the petition and the
parties filed their memoranda. Thereafter, the case was deemed submitted.
The issues raised in the petition are as follows:
I.
WHETHER OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION OR
ACTED WITHOUT OR IN EXCESS OF JURISDICTION IN ASSUMING JURISDICTION
OVER AND INTERFERING WITH THE ORDERS AND FUNCTIONS OF THE
PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT.
II.
WHETHER, OR NOT RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION OR
ACTED WITHOUT OR IN EXCESS OF JURISDICTION IN ISSUING THE ASSAILED
ORDER DATED JUNE 26, 1989 ENJOINING PETITIONERS FROM INVESTIGATING
AND PROSECUTING PRIVATE RESPONDENT FOR VIOLATION OF REPUBLIC ACT
NO. 3019, OTHERWISE KNOWN AS ANTI-GRAFT AND CORRUPT PRACTICES ACT
AND REPUBLIC ACT NO. 1379, OTHERWISE KNOWN AS AN ACT FOR THE
FORFEITURE OF UNLAWFULLY ACQUIRED PROPERTY [Rollo, p. 19].
As to the first issue, petitioner contends that following the ruling of the Court in PCGG v.
Pea the Board, being a creation and/or extension of the PCGG, is beyond the jurisdiction
of the Regional Trial Court. On the second issue, petitioner strongly argues that the private
respondents case falls within the jurisdiction of the PCGG.
The pivotal issue is the second one. On this point, private respondents position is as
follows:
1. . . . he is not one of the subordinates contemplated in Executive Orders 1 , 2 , 14 and
14-A as the alleged illegal acts being imputed to him, that of alleged amassing wealth
beyond his legal means while Finance Officer of the Philippine Constabulary, are acts of
his own alone, not connected with his being a crony, business associate, etc. or
subordinate as the petition does not allege so. Hence the PCGG has no jurisdiction to
investigate him.
If indeed private respondent amassed wealth beyond his legal means, the procedure laid
down by Rep. Act 1379 as already pointed out before be applied. And since, he has been
separated from the government more than four years ago, the action against him under
Republic Act 1379 has already prescribed.
2. . . . no action can be filed anymore against him now under Republic Act 1379 for
recovery of unexplained wealth for the reason that he has retired more than four years

ago.
3. . . . The order creating the AFP Anti-Graft Board (Annex "A", Petition) is null and void.
Nowhere in Executive Orders 1, 2, 14 and 14-A is there any authority given to the
commission, its chairman and members, to create Boards or bodies to be invested with
powers similar to the powers invested with the commission .. [Comment, pp. 6-7; Rollo, pp.
117-118].
1. The most important question to be resolved in this case is whether or not private
respondent may be investigated and caused to be prosecuted by the Board, an agency of
the PCGG, for violation of Rep. Acts Nos. 3019 and 1379. According to petitioners, the
PCGG has the power to investigate and cause the prosecution of private respondent
because he is a "subordinate" of former President Marcos. They cite the PCGGs
jurisdiction over
(a) The recovery of all ill-gotten wealth accumulated by former President Ferdinand E.
Marcos, his immediate family, relatives, subordinates and close associates, whether
located in the Philippines or abroad, including the takeover or sequestration of all business
enterprises and entities owned or controlled by them, during his administration, directly or
through nominees, by taking undue advantage of their public office and/or using their
powers, authority, influence, connections or relationship. [E.O. No. 1, sec. 2.].
Undoubtedly, the alleged unlawful accumulation of wealth was done during the
administration of Pres. Marcos. However, what has to be inquired into is whether or not
private respondent acted as a "subordinate" of Pres. Marcos within the contemplation of
E.O. No. 1, the law creating the PCGG, when he allegedly unlawfully acquired the
properties.
A close reading of E. O. No. 1 and related executive orders will readily show what is
contemplated within the term "subordinate."cralaw virtua1aw library
The Whereas Clauses of E. O. No. 1 express the urgent need to recover the ill-gotten
wealth amassed by former President Ferdinand E. Marcos, his immediate family, relatives,
and close associates both here and abroad.
E.O. No. 2 freezes "all assets and properties in the Philippines in which former President
Marcos and/or his wife, Mrs. Imelda Romualdez Marcos, their close relatives,
subordinates, business associates, dummies, agents, or nominees have any interest or
participation."cralaw virtua1aw library
Applying the rule in statutory construction known as ejusdem generis, that is
[W]here general words follow an enumeration of persons or things, by words of a particular
and specific meaning, such general words are not to be construed in their widest extent,
but are to be held as applying only to persons or things of the same kind or class as those
specifically mentioned [Smith, Bell & Co., Ltd. v. Register of Deeds of Davao, 96 Phil. 53,
58 (1954), citing Black on Interpretation of Laws, 2nd Ed., 203].
the term "subordinate" as used in E.O. Nos. 1 and 2 would refer to one who enjoys a close
association or relation with former Pres. Marcos and/or his wife, similar to the immediate
family member, relative, and close associate in E.O. No. 1 and the close relative, business
associate, dummy, agent, or nominee in E.O. No. 2.
Thus, as stated by the Court in Bataan Shipyard & Engineering Co., Inc. v. PCGG, G.R.
No. 75885, May 27, 1987, 150 SCRA 181, 205-206.
The situations envisaged and sought to be governed [by Proclamation No. 3 and E.O. Nos.
1, 2 and 14] are self-evident, these being:chanrob1es virtual 1aw library

1) that" (i)ll gotten properties (were) amassed by the leaders and supporters of the
previous regime" ;
a) more particularly, that" (i)ll-gotten wealth (was) accumulated by former President
Ferdinand E. Marcos, his immediate family, relatives, subordinates, and close associates, .
. . located in the Philippines or abroad, xx (and) business enterprises and entities (came to
be) owned or controlled by them, during . . . (the Marcos) administration, directly or through
nominees, by taking undue advantage of their public office and/or using their powers,
authority, influence, connections or relationship;"

(a) The letter of the chairman of the AFP Anti-Graft Board to private respondent, dated
October 16, 1987, states: "This letter is in connection with the alleged information received
by the AFP Anti-Graft Board indicating your acquisition of wealth beyond legal means of
income in violation of Rep. Act No. 3019 known as the Anti-Graft and Corrupt Practices
Act." [Rollo, p. 39].
(b) The Resolution dated June 30, 1988 of the Board categorically states:chanrob1es
virtual 1aw library
I. PRELIMINARY STATEMENT:chanrob1es virtual 1aw library

b) otherwise stated, that "there are assets and properties pertaining to former President
Ferdinand E. Marcos, and/or his wife Mrs. Imelda Romualdez Marcos, their close relatives,
subordinates, business associates, dummies, agents or nominees which had been or were
acquired by them directly or indirectly, through or as a result of the improper or illegal use
of funds or properties owned by the Government of the Philippines or any of its branches,
instrumentalities, enterprises, banks or financial institutions, or by taking undue advantage
of their office, authority, influence, connections or relationship, resulting in their unjust
enrichment and causing grave damage and prejudice to the Filipino people and the
Republic of the Philippines" ;

This refers to the case against Col Troadio B. Tecson PC (Ret) for alleged unexplained
wealth pursuant to R.A. 3019, as amended, otherwise known as Anti-Graft and Corrupt
Practices Act and R.A. 1379, as amended, otherwise known as the "Act for Forfeiture of
Unlawfully Acquired Property." [Rollo, p. 43].

c) that "said assets and properties are in the form of bank accounts, deposits, trust
accounts, shares of stocks, buildings, shopping centers, condominiums, mansions,
residences, estates, and other kinds of real and personal properties in the Philippines and
in various countries of the world;" and.

(c) The letter of the Board chairman to the chairman of the PCGG, dated July 28, 1988, is
clear:chanrob1es virtual 1aw library

2) that certain "business enterprises and properties (were) taken over by the government
of the Marcos Administration or by entities or persons close to former President Marcos."
[Footnotes deleted].
It does not suffice, as in this case, that the respondent is or was a government official or
employee during the administration of former Pres. Marcos. There must be a prima facie
showing that the respondent unlawfully accumulated wealth by virtue of his close
association or relation with former Pres. Marcos and/or his wife. This is so because
otherwise the respondents case will fall under existing general laws and procedures on the
matter. Rep. Act No. 3019, the Anti-Graft and Corrupt Practices Act, penalizes the corrupt
practices of any public officer. Under Rep. Act No. 1379 (An Act Declaring Forfeited in
Favor of the State Any Property Found to Have Been Unlawfully Acquired By Any Public
Officer or Employee and Providing for the Procedure Therefor), whenever any public officer
or employee has acquired during his incumbency an amount of property which is
manifestly out of proportion to his salary as such public officer or employee and to his other
lawful income and the income from legitimately acquired property, said property shall be
presumed prima facie to have been unlawfully acquired [Sec. 2]. The Solicitor General
shall file the petition and prosecute the case in behalf of the Republic, after preliminary
investigation by the provincial or city prosecutor [Ibid].
Moreover, the record shows that private respondent was being investigated for unlawfully
acquired wealth under Rep. Acts Nos. 3019 and 1379, and not under E.O. Nos. 1, 2, 14
and 14-A.
Since private respondent was being investigated by the PCGG through the AFP Anti-Graft
Board it would have been presumed that this was under Rep. Acts Nos. 3019 and 1379 in
relation to E.O. Nos. 1, 2, 14 and 14-A. But the record itself belies this
presumption:chanrob1es virtual 1aw library

The resolution alleges that private respondent unlawfully accumulated wealth by taking
advantage of his office as Finance Officer of the Philippine Constabulary. No attempt is
made in the Boards resolution to link him or his accumulation of wealth to former Pres.
Marcos and/or his wife.

Respectfully transmitted herewith for the prosecution before the Sandiganbayan is the
case folder of COLONEL TROADIO TECSON (Ret) who after preliminary investigation of
the case by the Board, found a prima facie evidence against subject officer for violating
Section 8, R.A. 3019, as amended by BP 195, otherwise known as the Anti-Graft and
Corrupt Practices Act and R.A. 1379, otherwise known as an Act for the Forfeiture of
Unlawfully Acquired Property." [Rollo, p. 46].
Moreover, from the allegations of petitioner in its memorandum, it would appear that
private respondent accumulated his wealth for his own account. Petitioner quoted the letter
of Ignacio Datahan, a retired PC sergeant, to General Fidel Ramos, the material portion of
which reads:chanrob1es virtual 1aw library
. . . After an official in the military unit received an Allotment Advice the same signed a cash
advance voucher, let us say in the amount of P5,000.00. Without much ado, outright, Col.
Tecson paid the amount. The official concerned was also made to sign the receipt portion
on the voucher the amount of which was left blank. Before the voucher is passed for
routine processing by Mrs. Leonor Cagas, clerk of Col. Tecson and its facilitator, the
maneuver began. The amount on the face of the cash advance voucher is altered or
superimposed. The original amount of P5,000.00 was now made say, P95,000.00. So it
was actually the amount of P95,000.00 that appeared on the records. The difference of
P90,000.00 went to the syndicate.
. . . Boy Tanyag, bookkeeper in Col. Tecsons office took care of the work.
. . . In the liquidation of the altered cash advance amount, names of persons found in the
Metropolitan Manila Telephone Directory with fictitious addresses appeared as recipients
or payees. Leonor and Boy got their shares on commission basis of the looted amount
while the greater part went to Col. Tecson. [Rollo, pp. 184-185.].
Clearly, this alleged unlawful accumulation of wealth is not that contemplated in E.O. Nos.
1, 2, 14 and 14-A.

2. It will not do to cite the order of the PCGG Chairman, dated May 13, 1986, creating the
Board and authorizing it to investigate the unexplained wealth and corrupt practices of AFP
personnel, both retired and in active service, to support the contention that PCGG has
jurisdiction over the case of privateRespondent. The PCGG cannot do more than what it
was empowered to do. Its powers are limited. Its task is limited to the recovery of the illgotten wealth of the Marcoses, their relatives and cronies. The PCGG cannot, through an
order of its chairman, grant itself additional powers powers not contemplated in its
enabling law.
3. Petitioner assails the trial courts cognizance of the petition filed by private Respondent.
Particularly, petitioner argues that the trial court cannot acquire jurisdiction over the PCGG.
This matter has already been settled in Pea, supra, where the Court ruled that those who
wish to question or challenge the PCGGs acts or orders must seek recourse in the
Sandiganbayan, which is vested with exclusive and original jurisdiction. The
Sandiganbayans decisions and final orders are in turn subject to review
on certiorariexclusively by this Court. [Ibid, at pp. 564-565].
The ruling in Pea was applied in PCGG v. Aquino, G.R. No. 77816, June 30, 1988, 163
SCRA 363, Soriano III v. Yuson, G.R. No. 74910 (and five other cases), August 10, 1988,
164 SCRA 226 and Olaguer v. RTC, NCJR, Br. 48, G.R. No. 81385, February 21, 1989,
170 SCRA 478, among others, to enjoin the regional trial courts from interfering with the
actions of the PCGG.
Respondent judge clearly acted without or in excess of his jurisdiction when he took
cognizance of Civil Case No. 57092 and issued the writ of preliminary injunction against
the PCGG.
4. Thus, we are confronted with a situation wherein the PCGG acted in excess of its
jurisdiction and, hence, may be enjoined from doing so, but the court that issued the
injunction against the PCGG has not been vested by law with jurisdiction over it and, thus,
the injunction issued was null and void.
The nullification of the assailed order of respondent judge issuing the writ of preliminary
injunction is therefore in order. Likewise, respondent judge must be enjoined from
proceeding with Civil Case No. 57092.
But in view of the patent lack of authority of the PCGG to investigate and cause the
prosecution of private respondent for violation of Rep. Acts Nos. 3019 and 1379, the
PCGG must also be enjoined from proceeding with the case, without prejudice to any
action that may be taken by the proper prosecutory agency. The rule of law mandates that
an agency of government be allowed to exercise only the powers granted it.
5. The pronouncements made above should not be taken to mean that the PCGGs
creation of the AFP Anti-Graft Board is a nullity and that the PCGG has no authority to
investigate and cause the prosecution of members and former members of the Armed
Forces of the Philippines for violations of Rep. Acts Nos. 3019 and 1379. The PCGG may
investigate and cause the prosecution of active and retired members of the AFP for
violations of Rep. Acts Nos. 3019 and 1379 only in relation to E.O. Nos. 1, 2, 14 and 14-A,
i.e., insofar as they involve the recovery of the ill-gotten wealth of former Pres. Marcos and
his family and "cronies." But the PCGG would not have jurisdiction over an ordinary case
falling under Rep. Acts Nos. 3019 and 1379, as in the case at bar. E.O. Nos. 1, 2, 14 and
14-A did not envision the PCGG as the investigator and prosecutor of all unlawful
accumulations of wealth. The PCGG was created for a specific and limited purpose, as we
have explained earlier, and necessarily its powers must be construed with this in mind.

6. n his pleadings, private respondent contends that he may no longer be prosecuted

because of prescription. He relies on section 2 of Rep. Act No. 1379 which provides that"
[t]he right to file such petition [for forfeiture of unlawfully acquired wealth] shall prescribe
within four years from the date of resignation, dismissal or separation or expiration of the
term of the officer or employee concerned." He retired on May 9, 1984, or more than six (6)
years ago. However, it must be pointed out that section 2 of Rep. Act No. 1379 should be
deemed amended or repealed by Article XI, section 15 of the 1987 Constitution which
provides that" [t]he right of the State to recover properties unlawfully acquired by public
officials or employees, from them or from their nominees or transferees, shall not be barred
by prescription, laches, or estoppel." Considering that sec. 2 of Rep. Act No. 1379 was
deemed amended or repealed before the prescriptive period provided therein had lapsed
insofar as private respondent is concerned, we cannot say that he had already acquired a
vested right that may not be prejudiced by a subsequent enactment.
Moreover, to bar the Government from recovering ill-gotten wealth would result in the
validation or legitimization of the unlawful acquisition, a consequence at variance with the
clear intent of Rep. Act No. 1379, which provides:
SEC. 11. Laws on prescription. The laws concerning acquisitive prescription and
limitation of actions cannot be invoked by, nor shall they benefit the respondent, in respect
to any property unlawfully acquired by him.
Thus, we hold that the appropriate prosecutory agencies, i.e., the city or provincial
prosecutor and the Solicitor General under sec. 2 of Rep. Act No. 1379, may still
investigate the case and file the petition for the forfeiture of unlawfully acquired wealth
against private respondent, now a private citizen. (On the other hand, as regards
respondents for violations of Rep. Acts Nos. 3019 and 1379 who are still in the government
service, the agency granted the power to investigate and prosecute them is the Office of
the Ombudsman [Rep. Act No. 6770]). Under Presidential Decree No. 1606, as amended,
and Batas Pambansa Blg. 195 violations of Rep. Acts Nos. 3019 and 1379 shall be tried by
the Sandiganbayan.
7. The Court hastens to add that this decision is without prejudice to the prosecution of
private respondent under the pertinent provisions of the Revised Penal Code and other
related penal laws.
WHEREFORE, the order of respondent judge dated June 26, 1989 in Civil Case No.
57092 is NULLIFIED and SET ASIDE. Respondent judge is ORDERED to dismiss Civil
Case No. 57092. The temporary restraining order issued by the Court on August 29, 1989
is MADE PERMANENT. The PCGG is ENJOINED from proceeding with the investigation
and prosecution of private respondent in I.S. No. 37, without prejudice to his investigation
and prosecution by the appropriate prosecutory agency.
SO ORDERED.

THE PEOPLE OF THE PHILIPPINES, ABUNDIO R. ELLO, As 4th Assistant of

Provincial Bohol VICENTE DE LA SERNA. JR., as complainant all private
prosecutor, petitioners,
vs.
HON. VICENTE B. ECHAVES, JR., as Judge of the Court of First Instance of Bohol
Branch II, ANO DACULLO, GERONIMO OROYAN, MARIO APARICI, RUPERTO CAJES
and MODESTO S SUELLO,respondents.

Before the accused could be arraigned, Judge Echaves motu proprio issued an omnibus
order dated December 9, 1977 dismissing the five informations on the grounds (1) that it
was alleged that the accused entered the land through "stealth and strategy", whereas
under the decree the entry should be effected "with the use of force, intimidation or threat,
or taking advantage of the absence or tolerance of the landowner", and (2) that under the
rule of ejusdem generis the decree does not apply to the cultivation of a grazing land.

AQUINO, J.:p

Because of that order, the fiscal amended the informations by using in lieu of "stealth and
strategy" the expression "with threat, and taking advantage of the absence of the
ranchowner and/or tolerance of the said ranchowner". The fiscal asked that the dismissal
order be reconsidered and that the amended informations be admitted.

The legal issue in this case is whether Presidential Decree No. 772, which penalizes
squatting and similar acts, applies to agricultural lands. The decree (which took effect on
August 20, 1975) provides:

The lower court denied the motion. It insisted that the phrase "and for other purposes" in
the decree does not include agricultural purposes because its preamble does not mention
the Secretary of Agriculture and makes reference to the affluent class.

SECTION 1. Any person who, with the use of force, intimidation or threat, or taking
advantage of the absence or tolerance of the landowner, succeeds in occupying or
possessing the property of the latter against his will for residential, commercial or
any other purposes, shall be punished by an imprisonment ranging from six months
to one year or a fine of not less than one thousand nor more than five thousand
pesos at the discretion of the court, with subsidiary imprisonment in case of
insolvency. (2nd paragraph is omitted.)

From the order of dismissal, the fiscal appealed to this Court under Republic Act No. 5440.
The appeal is devoid of merit.

The record shows that on October 25, 1977 Fiscal Abundio R. Ello filed with the lower
court separate informations against sixteen persons charging them with squatting as
penalized by Presidential Decree No. 772. The information against Mario Aparici which is
similar to the other fifteen informations, reads:
That sometime in the year 1974 continuously up to the present at barangay
Magsaysay, municipality of Talibon, province of Bohol, Philippines and within the
jurisdiction of this Honorable Court, the above-named accused, with stealth and
strategy, enter into, occupy and cultivate a portion of a grazing land physically
occupied, possessed and claimed by Atty. Vicente de la Serna, Jr. as successor to
the pasture applicant Celestino de la Serna of Pasture Lease Application No. 8919,
accused's entrance into the area has been and is still against the win of the offended
party; did then and there willfully, unlawfully, and feloniously squat and cultivate a
portion of the said grazing land; said cultivating has rendered a nuisance to and has
deprived the pasture applicant from the full use thereof for which the land applied for
has been intended, that is preventing applicant's cattle from grazing the whole area,
thereby causing damage and prejudice to the said applicant-possessor-occupant,
Atty. Vicente de la Serna, Jr. (sic)
Five of the informations, wherein Ano Dacullo, Geronimo Oroyan, Mario Aparici, Ruperto
Cajes and Modesto Suello were the accused, were raffled to Judge Vicente B. Echaves, Jr.
of Branch II (Criminal Cases Nos. 1824, 1828, 1832, 1833 and 1839, respectively).

We hold that the lower court correctly ruled that the decree does not apply to pasture lands
because its preamble shows that it was intended to apply to squatting in urban
communities or more particularly to illegal constructions in squatter areas made by well-todo individuals. The squating complained of involves pasture lands in rural areas.
The preamble of the decree is quoted below:
WHEREAS, it came to my knowledge that despite the issuance of Letter of Instruction
No. 19 dated October 2, 1972, directing the Secretaries of National Defense, Public
Work. 9 and communications, Social Welfare and the Director of Public Works, the
PHHC General Manager, the Presidential Assistant on Housing and Rehabilitation
Agency, Governors, City and Municipal Mayors, and City and District Engineers, "to
remove an illegal constructions including buildings on and along esteros and river
banks, those along railroad tracks and those built without permits on public and private
property." squatting is still a major problem in urban communities all over the country;
WHEREAS, many persons or entities found to have been unlawfully occupying public
and private lands belong to the affluent class;
WHEREAS, there is a need to further intensify the government's drive against this
illegal and nefarious practice.
It should be stressed that Letter of Instruction No. 19 refers to illegal constructions on
public and private property. It is complemented by Letter of Instruction No. 19-A which
provides for the relocation of squatters in the interest of public health, safety and peace
and order.
On the other hand, it should be noted that squatting on public agricultural lands, like the
grazing lands involved in this case, is punished by Republic Act No. 947 which makes it

unlawful for any person, corporation or association to forcibly enter or occupy public
agricultural lands. That law provides:
SECTION 1. It shall be unlawful for any person corporation or association to enter
or occupy, through force, intimidation, threat, strategy or stealth, any public
agriculture land including such public lands as are granted to private individuals
under the provision of the Public Land Act or any other laws providing for the of
public agriculture lands in the Philippines and are duly covered by the
corresponding applications for the notwithstanding standing the fact that title thereto
still remains in the Government or for any person, natural or judicial to investigate
induce or force another to commit such acts.
Violations of the law are punished by a fine of not exceeding one thousand or
imprisonment for not more than one year, or both such fine and imprisonment in the
discretion of the court, with subsidiary imprisonment in case of insolvency. (See People vs.
Lapasaran 100 Phil. 40.)
The rule of ejusdem generis (of the same kind or species) invoked by the trial court does
not apply to this case. Here, the intent of the decree is unmistakable. It is intended to apply
only to urban communities, particularly to illegal constructions. The rule of ejusdem
generis is merely a tool of statutory construction which is resorted to when the legislative
intent is uncertain (Genato Commercial Corp. vs. Court of Tax Appeals, 104 Phil. 615,618;
28 C.J.S. 1049-50).
WHEREFORE, the trial court's order of dismissal is affirmed. No costs.

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.

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.

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.

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:

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.

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,

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).

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.

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 26. ...

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:

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.

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

C. EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS ( THE EXPRESS MENTION OF ONE

PERSON, THING OR CONSEQUENCE IS TANTAMOUNT TO AN EXPRESS
EXCLUSION OF ALL OTHERS)
SAN PABLO MANUFACTURING CORPORATION, Petitioner,
vs.
COMMISSIONER OF INTERNAL REVENUE,* Respondent.
DECISION
CORONA, J.:
In this petition for review under Rule 45 of the Rules of Court, San Pablo Manufacturing
Corporation (SPMC) assails the July 19, 2000 1 and April 3, 2001 resolutions of the Court of
Appeals in CA-G.R. SP No. 59139.
SPMC is a domestic corporation engaged in the business of milling, manufacturing and
exporting of coconut oil and other allied products. It was assessed and ordered to pay by
the Commissioner of Internal Revenue the total amount of P8,182,182.852 representing
deficiency millers tax and manufacturers sales tax, 3 among other deficiency taxes, 4 for
taxable year 1987. The deficiency millers tax was imposed on SPMCs sales of crude oil to
United Coconut Chemicals, Inc. (UNICHEM) while the deficiency sales tax was applied on
its sales of corn and edible oil as manufactured products.
SPMC opposed the assessments but the Commissioner denied its protest. SPMC
appealed the denial of its protest to the Court of Tax Appeals (CTA) by way of a petition for
review docketed as CTA Case No. 5423.
In its March 10, 2000 decision, the CTA cancelled SPMCs liability for deficiency
manufacturers tax on the sales of corn and edible oils but upheld the Commissioners
assessment for the deficiency millers tax. SPMC moved for the partial reconsideration of
the CTA affirmation of the millers tax assessment but it was denied.
SPMC elevated the case to the Court of Appeals via a petition for review of the CTA
decision insofar as it upheld the deficiency millers tax assessment. In its July 19, 2000
resolution, the appellate court dismissed the petition on the principal ground 5 that the
verification attached to it was signed merely by SPMCs chief financial officer without
the corporate secretarys certificate, board resolution or power of attorney authorizing him
to sign the verification and certification against forum shopping. SPMC sought a
reconsideration of the resolution but the same was denied. Hence, this petition.
Did the Court of Appeals err when it dismissed SPMCs appeal?
SPMC contends that its appeal should have been given due course since it substantially
complied with the requirements on verification and certification against forum shopping. It
insists on the liberal application of the rules because, on the merits of the petition, SPMC
was not liable for the 3% millers tax. It maintains that the crude oil which it sold to

UNICHEM was actually exported by UNICHEM as an ingredient of fatty acid and glycerine,
hence, not subject to millers tax pursuant to Section 168 of the 1987 Tax Code.
For SPMC, Section 168 of the 1987 Tax Code contemplates two exemptions from the
millers tax: (a) the milled products in their original state were actually exported by the
miller himself or by another person, and (b) the milled products sold by the miller were
actually exported as an ingredient or part of any manufactured article by the buyer or
manufacturer of the milled products. The exportation may be effected by the miller himself
or by the buyer or manufacturer of the milled products. Since UNICHEM, the buyer of
SPMCs milled products, subsequently exported said products, SPMC should be exempted
from the millers tax.
The petition must fail.
Under Rule 43, Section 5 of the Rules of Court, appeals from the CTA and quasi-judicial
agencies to the Court of Appeals should be verified. A pleading required to be verified
which lacks proper verification shall be treated as an unsigned pleading. 6
Moreover, a petition for review under Rule 43 requires a sworn certification against forum
shopping.7 Failure of the petitioner to comply with any of the requirements of a petition for
review is sufficient ground for the dismissal of the petition. 8
A corporation may exercise the powers expressly conferred upon it by the Corporation
Code and those that are implied by or are incidental to its existence through its board of
directors and/or duly authorized officers and agents. 9 Hence, physical acts, like the signing
of documents, can be performed only by natural persons duly authorized for the purpose
by corporate by-laws or by specific act of the board of directors. 10 In the absence of
authority from the board of directors, no person, not even the officers of the corporation,
can bind the corporation.11
SPMCs petition in the Court of Appeals did not indicate that the person who signed the
verification/certification on non-forum shopping was authorized to do so. SPMC merely
relied on the alleged inherent power of its chief financial officer to represent SPMC in all
matters regarding the finances of the corporation including, among others, the filing of suits
to defend or protect it from assessments and to recover erroneously paid taxes. SPMC
even admitted that no power of attorney, secretarys certificate or board resolution to prove
the affiants authority was attached to the petition. Thus, the petition was not properly
verified. Since the petition lacked proper verification, it was to be treated as an unsigned
pleading subject to dismissal.12
In PET Plans, Inc. v. Court of Appeals,13 the Court upheld the dismissal by the Court of
Appeals of the petition on the ground that the verification and certification against forum
shopping was signed by PET Plans, Inc.s first vice-president for legal affairs/corporate
secretary without any certification that he was authorized to sign in behalf of the
corporation.
In BPI Leasing Corporation v. Court of Appeals,14 the Court ruled that the petition should be
dismissed outright on the ground that the verification/certification against forum shopping

was signed by BPI Leasing Corporations counsel with no specific authority to do so. Since
the counsel was purportedly acting for the corporation, he needed a resolution issued by
the board of directors that specifically authorized him to institute the petition and execute
the certification. Only then would his actions be legally binding on the corporation. 15
In this case, therefore, the appellate court did not commit an error when it dismissed the
petition on the ground that it was signed by a person who had not been issued any
authority by the board of directors to represent the corporation.
Neither can the Court subscribe to SPMCs claim of substantial compliance or to its plea
for a liberal application of the rules. Save for the most persuasive of reasons, strict
compliance with procedural rules is enjoined to facilitate the orderly administration of
justice.16 Substantial compliance will not suffice in a matter involving strict observance such
as the requirement on non-forum shopping, 17 as well as verification. Utter disregard of the
rules cannot justly be rationalized by harping on the policy of liberal construction. 18
But even if the fatal procedural infirmity were to be disregarded, the petition must still fail
for lack of merit.
As the CTA correctly ruled, SPMCs sale of crude coconut oil to UNICHEM was subject to
the 3% millers tax. Section 168 of the 1987 Tax Code provided:
Sec. 168. Percentage tax upon proprietors or operators of rope factories, sugar central
mills, coconut oil mills, palm oil mills, cassava mills and desiccated coconut factories .
Proprietors or operators of rope factories, sugar central and mills, coconut oil mills, palm oil
mills, cassava mills and desiccated coconut factories, shall pay a tax equivalent to three
percent (3%) of the gross value in money of all the rope, sugar, coconut oil, palm oil,
cassava flour or starch, dessicated coconut, manufactured, processed or milled by them,
including the by-product of the raw materials from which said articles are produced,
processed or manufactured, such tax to be based on the actual selling price or market
value of these articles at the time they leave the factory or mill warehouse: Provided,
however, That this tax shall not apply to rope, coconut oil, palm oil and the byproduct of copra from which it is produced or manufactured and dessicated
coconut, if such rope, coconut oil, palm oil, copra by-products and dessicated
coconuts, shall be removed for exportation by the proprietor or operator of the
factory or the miller himself, and are actually exported without returning to the
Philippines, whether in their original state or as an ingredient or part of any
manufactured article or products: Provided further, That where the planter or the owner
of the raw materials is the exporter of the aforementioned milled or manufactured products,
he shall be entitled to a tax credit of the miller's taxes withheld by the proprietor or operator
of the factory or mill, corresponding to the quantity exported, which may be used against
any internal revenue tax directly due from him: and Provided, finally, That credit for any
sales, miller's or excise taxes paid on raw materials or supplies used in the milling process
shall not be allowed against the miller's tax due, except in the case of a proprietor or
operator of a refined sugar factory as provided hereunder. (emphasis supplied)
The language of the exempting clause of Section 168 of the 1987 Tax Code was clear. The
tax exemption applied only to the exportation of rope, coconut oil, palm oil, copra byproducts and dessicated coconuts, whether in their original state or as an ingredient or part

of any manufactured article or products, by the proprietor or operator of the factory or by

the miller himself.
The language of the exemption proviso did not warrant the interpretation advanced by
SPMC. Nowhere did it provide that the exportation made by the purchaser of the materials
enumerated in the exempting clause or the manufacturer of products utilizing the said
materials was covered by the exemption. Since SPMCs situation was not within the ambit
of the exemption, it was subject to the 3% millers tax imposed under Section 168 of the
1987 Tax Code.
SPMCs proposed interpretation unduly enlarged the scope of the exemption clause. The
rule is that the exemption must not be so enlarged by construction since the reasonable
presumption is that the State has granted in express terms all it intended to grant and that,
unless the privilege is limited to the very terms of the statute, the favor would be intended
beyond what was meant.19
Where the law enumerates the subject or condition upon which it applies, it is to be
construed as excluding from its effects all those not expressly mentioned. Expressio unius
est exclusio alterius. Anything that is not included in the enumeration is excluded therefrom
and a meaning that does not appear nor is intended or reflected in the very language of the
statute cannot be placed therein. 20 The rule proceeds from the premise that the legislature
would not have made specific enumerations in a statute if it had the intention not to restrict
its meaning and confine its terms to those expressly mentioned. 21
The rule of expressio unius est exclusio alterius is a canon of restrictive interpretation. 22 Its
application in this case is consistent with the construction of tax exemptions in strictissimi
juris against the taxpayer. To allow SPMCs claim for tax exemption will violate these
established principles and unduly derogate sovereign authority.
WHEREFORE, the petition is hereby DENIED.

CONCEPCION PARAYNO, petitioner,

vs.
JOSE JOVELLANOS and the MUNICIPALITY OF CALASIAO,
PANGASINAN,* respondents.
DECISION
CORONA, J.:
This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Court
questioning the resolution of the Court of Appeals (CA) which dismissed the petition for
certiorari, mandamus and prohibition, with prayer for issuance of a preliminary and
mandatory injunction, filed by petitioner Concepcion Parayno against respondents Jose
Jovellanos and the Municipality of Calasiao, Pangasinan.

Petitioner was the owner of a gasoline filling station in Calasiao, Pangasinan. In 1989,
some residents of Calasiao petitioned the Sangguniang Bayan (SB) of said municipality for
the closure or transfer of the station to another location. The matter was referred to the
Municipal Engineer, Chief of Police, Municipal Health Officer and the Bureau of Fire
Protection for investigation. Upon their advise, the Sangguniang Bayan recommended to
the Mayor the closure or transfer of location of petitioner's gasoline station. In Resolution
No. 50, it declared:
a) xxx the existing gasoline station is a blatant violation and disregard of existing
law to wit:
The Official Zoning Code of Calasiao, Art. 6, Section 44, 1 the nearest
school building which is San Miguel Elementary School and church, the
distances are less than 100 meters. No neighbors were called as
witnesses when actual measurements were done by HLURB Staff,
Baguio City dated 22 June 1989.

prohibited radius under Section 44 and (2) it posed a pernicious effect on the health and
safety of the people in Calasiao.
After the hearing on the propriety of issuing a writ of preliminary prohibitory and mandatory
injunction, the trial court ruled:
There is no basis for the court to issue a writ of preliminary prohibitory and
mandatory injunction. Albeit,Section 44 of the Official Zoning Code of
respondent municipality does not mention a gasoline filling station, [but]
following the principle of ejusdem generis, a gasoline filling station falls
within the ambit of Section 44.
The gasoline filling station of the petitioner is located under the establishment
belonging to the petitioner and is very near several buildings occupied by several
persons. Justice dictates that the same should not be allowed to continue
operating its business on that particular place. Further, the gasoline filling
station endangers the lives and safety of people because once there is fire,
the establishment and houses nearby will be razed to the
ground.4(emphasis supplied)

b) The gasoline station remains in thickly populated area with

commercial/residential buildings, houses closed (sic) to each other which still
endangers the lives and safety of the people in case of fire. Moreover, additional
selling and storing of several LPG tanks in the station (sic).

Petitioner moved for reconsideration of the decision but it was denied by the trial court.

c) The residents of our barangay always complain of the irritating smell of

gasoline most of the time especially during gas filling which tend to expose
residents especially children to frequent colds, asthma, cough and the like
nowadays.

Petitioner elevated the case to the CA via a petition for certiorari, prohibition and
mandamus,5 with a prayer for injunctive relief. She ascribed grave abuse of discretion,
amounting to lack or excess of jurisdiction, on the part of Judge Laron who dismissed her
case.

d) xxx the gasoline station violated Building and Fire Safety Codes because the
station has 2nd floor storey building used for business rental offices, with iron
grilled windows, no firewalls. It also endangers the lives of people upstairs.

After the CA dismissed the petition, petitioner filed a motion for reconsideration but the
same was denied. Hence, this appeal.

e) It hampers the flow of traffic, the gasoline station is too small and narrow, the
entrance and exit are closed to the street property lines. It couldn't cope situation
(sic) on traffic because the place is a congested area.2

Before us, petitioner insists that (1) the legal maxim of ejusdem generis did not apply to her
case; (2) the closure/transfer of her gasoline filling station by respondent municipality was
an invalid exercise of the latter's police powers and (3) it was the principle of res
judicata that applied in this case.6

Petitioner moved for the reconsideration of the SB resolution but it was denied. Hence, she
filed a special civil action for prohibition and mandamus with the Regional Trial Court
(RTC) of Dagupan City, Branch 44 against respondents. The case, docketed as SP Civil
Case No. 99-03010-D, was raffled to the sala of Judge Crispin Laron.

We find merit in the petition.

Petitioner claimed that her gasoline station was not covered by Section 44 of the Official
Zoning Code since it was not a "gasoline service station" but a "gasoline filling station"
governed by Section 21 thereof. She added that the decision of the Housing and Land Use
Regulatory Board (HLURB),3 in a previous case filed by the same respondent Jovellanos
against her predecessor (Dennis Parayno), barred the grounds invoked by respondent
municipality in Resolution No. 50. In the HLURB case, respondent Jovellanos opposed the
establishment of the gas station on the grounds that: (1) it was within the 100-meter

We hold that the zoning ordinance of respondent municipality made a clear distinction
between "gasoline service station" and "gasoline filling station." The pertinent provisions
read:

The Principle of Ejusdem Generis

xxx

xxx

xxx

Section 21. Filling Station. A retail station servicing automobiles and other motor
vehicles with gasoline and oil only.7

xxx

xxx

xxx

Section 42. Service Station. A building and its premises where gasoline oil,
grease, batteries, tires and car accessories may be supplied and dispensed at
retail and where, in addition, the following services may be rendered and sales
and no other.
a. Sale and servicing of spark plugs, batteries, and distributor parts;
b. Tire servicing and repair, but not recapping or regrooving;
c. Replacement of mufflers and tail pipes, water hose, fan belts, brake
fluids, light bulbs, fuses, floor mats, seat covers, windshield wipers and
wiper blades, grease retainers, wheel, bearing, mirrors and the like;
d. Radiator cleaning and flushing;
e. Washing and polishing, and sale of automobile washing and
polishing materials;
f. Grease and lubricating;
g. Emergency wiring repairs;
h. Minor servicing of carburators;

3. That the business of the petitioner [was] one of a gasoline filling station
as defined in Article III, Section 21 of the zoning code and not as a service
station as differently defined under Article 42 of the said official zoning
code;
4. That under Section 44 of the official zoning code of Calasiao, the term
filling station as clearly defined under Article III, Section 21, [did] not
appear in the wordings thereof;9(emphasis supplied)
The foregoing were judicial admissions which were conclusive on the municipality, the
party making them.10Respondent municipality thus could not find solace in the legal maxim
of ejusdem generis11 which means "of the same kind, class or nature." Under this maxim,
where general words follow the enumeration of particular classes of persons or things, the
general words will apply only to persons or things of the same general nature or class as
those enumerated.12 Instead, what applied in this case was the legal maxim expressio
unius est exclusio alteriuswhich means that the express mention of one thing implies the
exclusion of others.13 Hence, because of the distinct and definite meanings alluded to the
two terms by the zoning ordinance, respondents could not insist that "gasoline service
station" under Section 44 necessarily included "gasoline filling station" under Section 21.
Indeed, the activities undertaken in a "gas service station" did not automatically embrace
those in a "gas filling station."
The Exercise of Police Powers
Respondent municipality invalidly used its police powers in ordering the closure/transfer of
petitioner's gasoline station. While it had, under RA 7160, 14 the power to take actions and
enact measures to promote the health and general welfare of its constituents, it should
have given due deference to the law and the rights of petitioner.

i. Adjusting and repairing brakes;

j. Minor motor adjustments not involving removal of the head or
crankcase, or raising the motor.8
xxx

xxx

xxx

It is evident from the foregoing that the ordinance intended these two terms to be separate
and distinct from each other. Even respondent municipality's counsel admitted this
dissimilarity during the hearing on the application for the issuance of a writ of preliminary
prohibitory and mandatory injunction. Counsel in fact admitted:

A local government is considered to have properly exercised its police powers only when
the following requisites are met: (1) the interests of the public generally, as distinguished
from those of a particular class, require the interference of the State and (2) the means
employed are reasonably necessary for the attainment of the object sought to be
accomplished and not unduly oppressive.15 The first requirement refers to the equal
protection clause and the second, to the due process clause of the Constitution. 16

1. That there exist[ed] an official zoning code of Calasiao, Pangasinan which

[was] not yet amended;

Respondent municipality failed to comply with the due process clause when it passed
Resolution No. 50. While it maintained that the gasoline filling station of petitioner was less
than 100 meters from the nearest public school and church, the records do not show that it
even attempted to measure the distance, notwithstanding that such distance was crucial in
determining whether there was an actual violation of Section 44. The different local offices
that respondent municipality tapped to conduct an investigation never conducted such
measurement either.

2. That under Article III of said official zoning code there [were] certain
distinctions made by said municipality about the designation of the
gasoline filling station and that of the gasoline service station as appearing
in Article III, Nos. 21 and 42, [respectively];

Moreover, petitioner's business could not be considered a nuisance which respondent

municipality could summarily abate in the guise of exercising its police powers. The
abatement of a nuisance without judicial proceedings is possible only if it is a nuisance per
se. A gas station is not a nuisance per se or one affecting the immediate safety of persons

and property,17 hence, it cannot be closed down or transferred summarily to another

location.
As a rule, this Court does not pass upon evidence submitted by the parties in the lower
courts.18 We deem it necessary, however, to recall the findings of the HLURB which
petitioner submitted as evidence during the proceedings before the trial court, if only to
underscore petitioner's compliance with the requirements of law before she put up her
gasoline station.
Another factor that should not be left unnoticed is the diligence exercised by
[petitioner] in complying with the requirements of the several laws prior to the
actual implementation of the project as can be attested by the fact that
[petitioner] has secured the necessary building permit and approval of [her]
application for authority to relocate as per the letter of the Energy Regulatory
Board xxx.19
On the alleged hazardous effects of the gasoline station to the lives and properties of the
people of Calasiao, we again note:
Relative to the allegations that the project (gasoline station) is hazardous to life
and property, the Board takes cognizance of the respondent's contention that the
project "is not a fire hazard since petroleum products shall be safely stored in
underground tanks and that the installation and construction of the underground
tanks shall be in accordance with the Caltex Engineering Procedures which is
true to all gasoline stations in the country. xxx
Hence, the Board is inclined to believe that the project being hazardous to
life and property is more perceived than factual. For, after all, even the Fire
Station Commander, after studying the plans and specifications of the subject
proposed construction, recommended on 20 January 1989, "to build such
buildings after conform (sic) all the requirements of PP 1185." It is further
alleged by the complainants that the proposed location is "in the heart of
the thickly populated residential area of Calasiao." Again, findings of the
[HLURB] staff negate the allegations as the same is within a designated
Business/Commercial Zone per the Zoning Ordinance. xxx20 (emphasis
supplied)
The findings of fact of the HLURB are binding as they are already final and conclusive vis-vis the evidence submitted by respondents.

suits on all points and matters determined in the former suit. 21 For res judicata to apply, the
following elements must be present: (1) the judgment or order must be final; (2) the
judgment must be on the merits; (3) it must have been rendered by a court having
jurisdiction over the subject matter and the parties and (4) there must be, between the first
and second actions, identity of parties, of subject matter and of cause of action. 22
Respondent municipality does not contest the first, second and third requisites. However, it
claims that it was not a party to the HLURB case but only its co-respondent Jovellanos,
hence, the fourth requisite was not met. The argument is untenable.
The absolute identity of parties is not required for the principle of res judicata to apply.23 A
shared identity of interests is sufficient to invoke the application of this principle. 24 The
proscription may not be evaded by the mere expedient of including an additional
party.25 Res judicata may lie as long as there is a community of interests between a party in
the first case and a party in the second case although the latter may not have been
impleaded in the first.26
In the assailed resolution of respondent municipality, it raised the same grounds invoked
by its co-respondent in the HLURB: (1) that the resolution aimed to close down or transfer
the gasoline station to another location due to the alleged violation of Section 44 of the
zoning ordinance and (2) that the hazards of said gasoline station threatened the health
and safety of the public. The HLURB had already settled these concerns and its
adjudication had long attained finality. It is to the interest of the public that there should be
an end to litigation by the parties over a subject matter already fully and fairly adjudged.
Furthermore, an individual should not be vexed twice for the same cause. 27
WHEREFORE, the petition is hereby GRANTED. The assailed resolution of the Court of
the Appeals isREVERSED and SET ASIDE. Respondent Municipality of Calasiao is
hereby directed to cease and desist from enforcing Resolution No. 50 against petitioner
insofar as it seeks to close down or transfer her gasoline station to another location.

D. NOSCITUR A SOCIIS ( ASSOCIATED WORDS EXPLAIN AND LIMIT EACH OTHER)

DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO
REY MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners,
vs.
SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH
NURSES ASSOCIATION, represented by RAOULITO GAYUTIN, respondents.

The Principle of Res Judicata

Renato J. Dilag and Benjamin C. Santos for petitioners.

Petitioner points out that the HLURB decision in the previous case filed against her
predecessor (Dennis Parayno) by respondent Jovellanos had effectively barred the issues
in Resolution No. 50 based on the principle of res judicata. We agree.

Danilo C. Cunanan for respondent Ombudsman.

Res judicata refers to the rule that a final judgment or decree on the merits by a court of
competent jurisdiction is conclusive of the rights of the parties or their privies in all later

Crispin T. Reyes and Florencio T. Domingo for private respondent.

QUIASON, J.:
This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary
Injunction or Temporary Restraining Order, under Rule 65 of the Revised Rules of Court.
Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7,
1992,
directing
the
preventive
suspension
of
petitioners,
Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer
III; Conrado Rey Matias, Technical Assistant to the Chief of Hospital; Cora C. Solis,
Accountant III; and Enya N. Lopez, Supply Officer III, all of the National Center for Mental
Health. The petition also asks for an order directing the Ombudsman to disqualify Director
Raul Arnaw and Investigator Amy de Villa-Rosero, of the Office of the Ombudsman, from
participation in the preliminary investigation of the charges against petitioner (Rollo, pp. 217; Annexes to Petition, Rollo, pp. 19-21).
The questioned order was issued in connection with the administrative complaint filed with
the Ombudsman (OBM-ADM-0-91-0151) by the private respondents against the petitioners
for violation of the Anti-Graft and Corrupt Practices Act.
According to the petition, the said order was issued upon the recommendation of Director
Raul Arnaw and Investigator Amy de Villa-Rosero, without affording petitioners the
opportunity to controvert the charges filed against them. Petitioners had sought to
disqualify Director Arnaw and Investigator Villa-Rosero for manifest partiality and bias
(Rollo, pp. 4-15).
On September 10, 1992, this Court required respondents' Comment on the petition.
On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition
(Rollo, pp. 124-130); Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent
Supplemental
Manifestation"
(Rollo,
pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176),
respectively, averring developments that transpired after the filing of the petition and
stressing the urgency for the issuance of the writ of preliminary injunction or temporary
restraining order.
On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to
MAINTAIN in the meantime, the STATUS QUO pending filing of comments by said
respondents on the original supplemental manifestation" (Rollo, p. 177).
On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health
to comply with the Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp.
192-203). In a Resolution dated October 1, 1992, this Court required respondent Secretary
of Health to comment on the said motion.
On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH
Nurses Association submitted its Comment to the Petition, Supplemental Petition and
Urgent Supplemental Manifestation. Included in said pleadings were the motions to hold
the lawyers of petitioners in contempt and to disbar them (Rollo, pp. 210-267). Attached to

the "Omnibus Submission" as annexes were the orders and pleadings filed in
Administrative Case No. OBM-ADM-0-91-1051 against petitioners (Rollo, pp. 268-480).
The Motion for Disbarment charges the lawyers of petitioners with:
(1) unlawfully advising or otherwise causing or inducing their clients petitioners
Buenaseda, et al., to openly defy, ignore, disregard, disobey or otherwise violate,
maliciously evade their preventive suspension by Order of July 7, 1992 of the Ombudsman
. . ."; (2) "unlawfully interfering with and obstructing the implementation of the said order
(Omnibus Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of the Canons of
the Code of Professional Responsibility and of unprofessional and unethical conduct "by
foisting blatant lies, malicious falsehood and outrageous deception" and by committing
subornation of perjury, falsification and fabrication in their pleadings (Omnibus Submission,
pp. 52-54; Rollo, pp. 261-263).
On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to
Direct Respondent Secretary of Health to Comply with 22 September 1992 Resolution'"
(Manifestation attached to Rollo without pagination between pp. 613 and 614 thereof).
On November 13, 1992, the Solicitor General submitted its Comment dated November 10,
1992, alleging that: (a) "despite the issuance of the September 22, 1992 Resolution
directing respondents to maintain the status quo, respondent Secretary refuses to hold in
abeyance the implementation of petitioners' preventive suspension; (b) the clear intent and
spirit of the Resolution dated September 22, 1992 is to hold in abeyance the
implementation of petitioners' preventive suspension, the status quo obtaining the time of
the filing of the instant petition; (c) respondent Secretary's acts in refusing to hold in
abeyance implementation of petitioners' preventive suspension and in tolerating and
approving the acts of Dr. Abueva, the OIC appointed to replace petitioner Buenaseda, are
in
violation
of
the
Resolution
dated
September
22,
1992;
and
(d) therefore, respondent Secretary should be directed to comply with the Resolution dated
September 22, 1992 immediately, by restoring the status quo ante contemplated by the
aforesaid resolution" (Comment attached toRollo without paginations between pp. 613-614
thereof).
In the Resolution dated November 25, 1992, this Court required respondent Secretary to
comply with the aforestated status quo order, stating inter alia, that:
It appearing that the status quo ante litem motam, or the last peaceable
uncontested status which preceded the present controversy was the
situation obtaining at the time of the filing of the petition at bar on
September 7, 1992 wherein petitioners were then actually occupying
their respective positions, the Court hereby ORDERS that petitioners
be allowed to perform the duties of their respective positions and to
receive such salaries and benefits as they may be lawfully entitled to,
and that respondents and/or any and all persons acting under their
authority desist and refrain from performing any act in violation of the
aforementioned Resolution of September 22, 1992 until further orders
from the Court (Attached to Rollo after p. 615 thereof).

On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental

Petition and Supplemental Manifestation, stated that (a) "The authority of the Ombudsman
is only to recommend suspension and he has no direct power to suspend;" and (b)
"Assuming the Ombudsman has the power to directly suspend a government official or
employee, there are conditions required by law for the exercise of such powers; [and] said
conditions have not been met in the instant case" (Attached to Rollo without pagination).
In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor
General that the Ombudsman can only suspend government officials or employees
connected with his office. Petitioners also refuted private respondents' motion to disbar
petitioners' counsel and to cite them for contempt (Attached to Rollowithout pagination).
The crucial issue to resolve is whether the Ombudsman has the power to suspend
government officials and employees working in offices other than the Office of the
Ombudsman, pending the investigation of the administrative complaints filed against said
officials and employees.
In upholding the power of the Ombudsman to preventively suspend petitioners,
respondents (Urgent Motion to LiftStatus Quo, etc, dated January 11, 1993, pp. 10-11),
invoke Section 24 of R.A. No. 6770, which provides:
Sec. 24. Preventive Suspension. The Ombudsman or his Deputy
may preventively suspend any officer or employee under his authority
pending an investigation, if in his judgment the evidence of guilt is
strong, and (a) the charge against such officer or employee involves
dishonesty, oppression or grave misconduct or neglect in the
performance of duty; (b) the charge would warrant removal from the
service; or (c) the respondent's continued stay in office may prejudice
the case filed against him.
The preventive suspension shall continue until the case is terminated
by the Office of Ombudsman but not more than six months, without pay,
except when the delay in the disposition of the case by the Office of the
Ombudsman is due to the fault, negligence or petition of the
respondent, in which case the period of such delay shall not be counted
in computing the period of suspension herein provided.
Respondents argue that the power of preventive suspension given the Ombudsman under
Section 24 of R.A. No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987
Constitution, which provides that the Ombudsman shall exercise such other power or
perform such functions or duties as may be provided by law."
On the other hand, the Solicitor General and the petitioners claim that under the 1987
Constitution, the Ombudsman can only recommend to the heads of the departments and
other agencies the preventive suspension of officials and employees facing administrative
investigation conducted by his office. Hence, he cannot order the preventive suspension
himself.

They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the
Ombudsman shall haveinter alia the power, function, and duty to:
Direct the officer concerned to take appropriate action against a public
official or employee at fault, and recommend his removal, suspension,
demotion, fine, censure or prosecution, and ensure compliance
therewith.
The Solicitor General argues that under said provision of the Constitutions, the
Ombudsman has three distinct powers, namely: (1) direct the officer concerned to take
appropriate action against public officials or employees at fault; (2) recommend their
removal, suspension, demotion fine, censure, or prosecution; and (3) compel compliance
with the recommendation (Comment dated December 3, 1992, pp. 9-10).
The line of argument of the Solicitor General is a siren call that can easily mislead, unless
one bears in mind that what the Ombudsman imposed on petitioners was not a punitive but
only a preventive suspension.
When the constitution vested on the Ombudsman the power "to recommend the
suspension" of a public official or employees (Sec. 13 [3]), it referred to "suspension," as a
punitive measure. All the words associated with the word "suspension" in said provision
referred to penalties in administrative cases, e.g. removal, demotion, fine, censure. Under
the rule of Noscitor a sociis, the word "suspension" should be given the same sense as the
other words with which it is associated. Where a particular word is equally susceptible of
various meanings, its correct construction may be made specific by considering the
company of terms in which it is found or with which it is associated (Co Kim Chan v. Valdez
Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247 [1966]).
Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively
suspend public officials and employees facing administrative charges before him, is a
procedural, not a penal statute. The preventive suspension is imposed after compliance
with the requisites therein set forth, as an aid in the investigation of the administrative
charges.
Under the Constitution, the Ombudsman is expressly authorized to recommend to the
appropriate official the discipline or prosecution of erring public officials or employees. In
order to make an intelligent determination whether to recommend such actions, the
Ombudsman has to conduct an investigation. In turn, in order for him to conduct such
investigation in an expeditious and efficient manner, he may need to suspend the
respondent.
The need for the preventive suspension may arise from several causes, among them, the
danger of tampering or destruction of evidence in the possession of respondent; the
intimidation of witnesses, etc. The Ombudsman should be given the discretion to decide
when the persons facing administrative charges should be preventively suspended.
Penal statutes are strictly construed while procedural statutes are liberally construed
(Crawford, Statutory Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero,

92 Phil. 456 [1953]). The test in determining if a statute is penal is whether a penalty is
imposed for the punishment of a wrong to the public or for the redress of an injury to an
individual (59 Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp. 496-497). A
Code prescribing the procedure in criminal cases is not a penal statute and is to be
interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644).
The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to
perform efficiently the task committed to him by the Constitution. Such being the case, said
statute, particularly its provisions dealing with procedure, should be given such
interpretation that will effectuate the purposes and objectives of the Constitution. Any
interpretation that will hamper the work of the Ombudsman should be avoided.
A statute granting powers to an agency created by the Constitution should be liberally
construed for the advancement of the purposes and objectives for which it was created (Cf.
Department of Public Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d)
213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]).
In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is
not a penalty, said:
Suspension is a preliminary step in an administrative investigation. If
after such investigation, the charges are established and the person
investigated is found guilty of acts warranting his removal, then he is
removed or dismissed. This is the penalty.
To support his theory that the Ombudsman can only preventively suspend respondents in
administrative cases who are employed in his office, the Solicitor General leans heavily on
the phrase "suspend any officer or employee under his authority" in Section 24 of R.A. No.
6770.
The origin of the phrase can be traced to Section 694 of the Revised Administrative Code,
which dealt with preventive suspension and which authorized the chief of a bureau or office
to "suspend any subordinate or employee in his bureau or under his authority pending an
investigation . . . ."
Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694
of the Revised Administrative Code also authorized the chief of a bureau or office to
"suspend any subordinate officer or employees, in his bureau or under his authority."
However, when the power to discipline government officials and employees was extended
to the Civil Service Commission by the Civil Service Law of 1975 (P.D. No. 805),
concurrently with the President, the Department Secretaries and the heads of bureaus and
offices, the phrase "subordinate officer and employee in his bureau" was deleted,
appropriately leaving the phrase "under his authority." Therefore, Section 41 of said law
only mentions that the proper disciplining authority may preventively suspend "any
subordinate officer or employee under his authority pending an investigation . . ." (Sec. 41).

The Administrative Code of 1987 also empowered the proper disciplining authority to
"preventively suspend any subordinate officer or employee under his authority pending an
investigation" (Sec. 51).
The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau,"
leaving the phrase to read "suspend any officer or employee under his authority pending
an investigation . . . ." The conclusion that can be deduced from the deletion of the word
"subordinate" before and the words "in his bureau" after "officer or employee" is that the
Congress intended to empower the Ombudsman to preventively suspend all officials and
employees under investigation by his office, irrespective of whether they are employed "in
his office" or in other offices of the government. The moment a criminal or administrative
complaint is filed with the Ombudsman, the respondent therein is deemed to be "in his
authority" and he can proceed to determine whether said respondent should be placed
under preventive suspension.
In their petition, petitioners also claim that the Ombudsman committed grave abuse of
discretion amounting to lack of jurisdiction when he issued the suspension order without
affording petitioners the opportunity to confront the charges against them during the
preliminary conference and even after petitioners had asked for the disqualification of
Director Arnaw and Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the Solicitor
General contends that assuming arguendo that the Ombudsman has the power to
preventively suspend erring public officials and employees who are working in other
departments and offices, the questioned order remains null and void for his failure to
comply with the requisites in Section 24 of the Ombudsman Law (Comment dated
December 3, 1992, pp. 11-19).
Being a mere order for preventive suspension, the questioned order of the Ombudsman
was validly issued even without a full-blown hearing and the formal presentation of
evidence by the parties. In Nera, supra, petitioner therein also claimed that the Secretary
of Health could not preventively suspend him before he could file his answer to the
administrative complaint. The contention of petitioners herein can be dismissed
perfunctorily by holding that the suspension meted out was merely preventive and
therefore, as held in Nera, there was "nothing improper in suspending an officer pending
his investigation and before tho charges against him are heard . . . (Nera v. Garcia., supra).
There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot
order the preventive suspension of a respondent unless the evidence of guilt is strong and
(1) the charts against such officer or employee involves dishonesty, oppression or grave
misconduct or neglect in the performance of duty; (2) the charge would warrant removal
from the service; or (3) the respondent's continued stay in office may prejudice the case
filed against him.
The same conditions for the exercise of the power to preventively suspend officials or
employees under investigation were found in Section 34 of R.A. No. 2260.
The import of the Nera decision is that the disciplining authority is given the discretion to
decide when the evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No.
6770, which expressly left such determination of guilt to the "judgment" of the Ombudsman
on the basis of the administrative complaint. In the case at bench, the Ombudsman issued

the order of preventive suspension only after: (a) petitioners had filed their answer to the
administrative complaint and the "Motion for the Preventive Suspension" of petitioners,
which incorporated the charges in the criminal complaint against them (Annex 3, Omnibus
Submission, Rollo,
pp.
288-289;
Annex
4, Rollo,
pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners,
specifying 23 cases of harassment by petitioners of the members of the private respondent
(Annex 6, Omnibus Submission, Rollo, pp. 309-333); and (c) a preliminary conference
wherein the complainant and the respondents in the administrative case agreed to submit
their list of witnesses and documentary evidence.
Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of
Omnibus Submission, Rollo, pp. 336-337) while private respondents submitted their list of
exhibits (Annex 9 of Omnibus Submission, Rollo, pp. 338-348).
Under these circumstances, it can not be said that Director Raul Arnaw and Investigator
Amy de Villa-Rosero acted with manifest partiality and bias in recommending the
suspension of petitioners. Neither can it be said that the Ombudsman had acted with grave
abuse of discretion in acting favorably on their recommendation.
The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing
or otherwise inducing their clients to openly defy and disobey the preventive suspension as
ordered by the Ombudsman and the Secretary of Health can not prosper (Rollo, pp. 259261). The Motion should be filed, as in fact such a motion was filed, with the Ombudsman.
At any rate, we find that the acts alleged to constitute indirect contempt were legitimate
measures taken by said lawyers to question the validity and propriety of the preventive
suspension of their clients.
On the other hand, we take cognizance of the intemperate language used by counsel for
private respondents hurled against petitioners and their counsel (Consolidated: (1)
Comment
on
Private
Respondent"
"Urgent
Motions,
etc.;
(2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and
Supplemental Comment, pp. 4-5).
A lawyer should not be carried away in espousing his client's cause. The language of a
lawyer, both oral or written, must be respectful and restrained in keeping with the dignity of
the legal profession and with his behavioral attitude toward his brethren in the profession
(Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of abusive language by counsel
against the opposing counsel constitutes at the same time a disrespect to the dignity of the
court of justice. Besides, the use of impassioned language in pleadings, more often than
not, creates more heat than light.
The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action,
which is confined to questions of jurisdiction or abuse of discretion for the purpose of
relieving persons from the arbitrary acts of judges and quasi-judicial officers. There is a set
of procedure for the discipline of members of the bar separate and apart from the present
special civil action.
WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in
the Resolution dated September 22, 1992 is LIFTED and SET ASIDE.

E. USE OF NEGATIVE AND AFFIRMATIVE WORDS

MANOLO P. FULE, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, respondent.
Balagtas P. Ilagan for petitioner.
The Solicitor General for respondent.

MELENCIO-HERRERA, J.:
This is a Petition for Review on certiorari of the Decision of respondent Appellate Court,
which affirmed the judgment of the Regional Trial Court, Lucena City, Branch LIV,
convicting petitioner (the accused-appellant) of Violation of Batas Pambansa Blg. 22 (The
Bouncing Checks Law) on the basis of the Stipulation of Facts entered into between the
prosecution and the defense during the pre-trial conference in the Trial Court. The facts
stipulated upon read:
a) That this Court has jurisdiction over the person and subject matter of this case;
b) That the accused was an agent of the Towers Assurance Corporation on or
before January 21, 1981;
c) That on January 21, 1981, the accused issued and made out check No. 26741,
dated January 24, 1981 in the sum of P2,541.05;
d) That the said check was drawn in favor of the complaining witness, Roy Nadera;
e) That the check was drawn in favor of the complaining witness in remittance of
collection;
f) That the said check was presented for payment on January 24, 1981 but the
same was dishonored for the reason that the said checking account was already
closed;

g) That the accused Manolo Fule has been properly Identified as the accused party
in this case.

Facts. Without said evidence independent of the admission, the guilt of the accused cannot
be deemed established beyond reasonable doubt.

At the hearing of August 23, 1985, only the prosecution presented its evidence consisting
of Exhibits "A," "B" and "C." At the subsequent hearing on September 17, 1985, petitionerappellant waived the right to present evidence and, in lieu thereof, submitted a
Memorandum confirming the Stipulation of Facts. The Trial Court convicted petitionerappellant.

Consequently, under the circumstances obtaining in this case, the ends of justice require
that evidence be presented to determine the culpability of the accused. When a judgment
has been entered by consent of an attorney without special authority, it will sometimes be
set aside or reopened (Natividad vs. Natividad, 51 Phil. 613 [1928]).

On appeal, respondent Appellate Court upheld the Stipulation of Facts and affirmed the
judgment of conviction. 1

WHEREFORE, the judgment of respondent Appellate Court is REVERSED and this case
is hereby ordered RE-OPENED and REMANDED to the appropriate Branch of the
Regional Trial Court of Lucena City, for further reception of evidence.

Hence, this recourse, with petitioner-appellant contending that:

F. USE OF PERMISSIVE AND IMPERATIVE WORDS
The Honorable Respondent Court of Appeals erred in the decision of the Regional
Trial Court convicting the petitioner of the offense charged, despite the cold fact that
the basis of the conviction was based solely on the stipulation of facts made during
the pre-trial on August 8, 1985, which was not signed by the petitioner, nor by his
counsel.

PURITA BERSABAL, petitioner,

vs.
HONORABLE JUDGE SERAFIN SALVADOR, as Judge of the Court of First Instance
of Caloocan City, Branch XIV, TAN THAT and ONG PIN TEE, respondents.

Finding the petition meritorious, we resolved to give due course.

The 1985 Rules on Criminal Procedure, which became effective on January 1, 1985,
applicable to this case since the pre-trial was held on August 8, 1985, provides:
SEC. 4. Pre-trial agreements must be signed. No agreement or admission made
or entered during the pre-trial conference shall be used in evidence against the
accused unless reduced to writing and signed by him and his counsel. (Rule 118)
By its very language, the Rule is mandatory. Under the rule of statutory construction,
negative words and phrases are to be regarded as mandatory while those in the affirmative
are merely directory (McGee vs. Republic, 94 Phil. 820 [1954]). The use of the term "shall"
further emphasizes its mandatory character and means that it is imperative, operating to
impose a duty which may be enforced (Bersabal vs. Salvador, No. L-35910, July 21, 1978,
84 SCRA 176). And more importantly, penal statutes whether substantive and remedial or
procedural are, by consecrated rule, to be strictly applied against the government and
liberally in favor of the accused (People vs. Terrado No. L-23625, November 25, 1983, 125
SCRA 648).
The conclusion is inevitable, therefore, that the omission of the signature of the accused
and his counsel, as mandatorily required by the Rules, renders the Stipulation of Facts
inadmissible in evidence. The fact that the lawyer of the accused, in his memorandum,
confirmed the Stipulation of Facts does not cure the defect because Rule 118 requires both
the accused and his counsel to sign the Stipulation of Facts. What the prosecution should
have done, upon discovering that the accused did not sign the Stipulation of Facts, as
required by Rule 118, was to submit evidence to establish the elements of the crime,
instead of relying solely on the supposed admission of the accused in the Stipulation of

MAKASIAR, J.:
On March 23, 1972, petitioner Purita Bersabal seeks to annul the orders of respondent
Judge of August 4, 1971, October 30, 1971 and March 15, 1972 and to compel said
respondent Judge to decide petitioner's perfected appeal on the basis of the evidence and
records of the case submitted by the City Court of Caloocan City plus the memorandum
already submitted by the petitioner and respondents.
Since only questions of law were raised therein, the Court of Appeals, on October 13,
1972, issued a resolution certifying said case to this Court pursuant to Section 17,
paragraph (4) of the Judiciary Act of 1948, as amended.
As found by the Court of Appeals, the facts of this case are as follows:
It appears that private respondents Tan That and Ong Pin Tee filed an
ejectment suit, docketed as Civil Case No. 6926 in the City Court of
Caloocan City, against the petitioner. A decision was rendered by said
Court on November 25, 1970, which decision was appealed by the
petitioner to the respondent Court and docketed therein as Civil Case
No. C-2036.
During the pendency of the appeal the respondent court issued on
March 23, 1971 an order which reads:

Pursuant to the provisions of Rep. Act No. 6031, the

Clerk of Court of Caloocan City, is hereby directed to
transmit to this Court within fifteen (15) days from
receipt hereof the transcripts of stenographic notes
taken down during the hearing of this case before
the City Court of Caloocan City, and likewise,
counsels for both parties are given thirty (30) days
from receipt of this order within which to file their
respective memoranda, and thereafter, this case
shall be deemed submitted for decision by this
Court.
which order was apparently received by petitioner on April 17, 1971.
The transcript of stenographic notes not having yet been forwarded to
the respondent court, petitioner filed on May 5, 1971 a 'MOTION EXPARTE TO SUBMIT MEMORANDUM WITHIN 30 DAYS FROM
RECEIPT OF NOTICE OF SUBMISSION OF THE TRANSCRIPT OF
STENOGRAPHIC NOTES TAKEN DURING THE HEARING OF THE
CASE BEFORE THE CITY COURT OF CALOOCAN CITY' which was
granted by respondent court on May 7, 1971. However, before the
petitioner could receive any such notice from the respondent court, the
respondent Judge issued an order on August 4, 1971 which says:
For failure of the defendant-appellant to prosecute
her appeal the same is hereby ordered DISMISSED
with costs against her.
Petitioner filed a motion for reconsideration of the order on September
28, 1971, citing as a ground the granting of his ex-parte motion to
submit memorandum within 30 days from notice of the submission of
the stenographic notes taken before the City Court. Private
respondents filed their opposition to the motion on September 30,1971.
In the meantime, on October 20,1971, petitioner filed her memorandum
dated October 18, 1971. On October 30, 1971 the respondent Court
denied the motion for reconsideration. Then on January 25, 1972,
petitioner filed a motion for leave to file second motion for
reconsideration which was likewise denied by the respondent court on
March 15, 1972. Hence this petition.
The sole inquiry in the case at bar can be stated thus: Whether, in the light of the
provisions of the second paragraph of Section 45 of Republic Act No. 296, as amended by
R.A. No. 6031, the mere failure of an appellant to submit on nine the memorandum
mentioned in the same paragraph would empower the Court of First Instance to dismiss
the appeal on the ground of failure to Prosecute; or, whether it is mandatory upon said
Court to proceed to decide the appealed case on the basis of the evidence and records
transmitted to it, the failure of the appellant to submit a memorandum on time
notwithstanding.

The second paragraph of Section 45 of R.A. No. 296, otherwise known as the Philippine
Judiciary Act of 1948, as amended by R.A. No. 6031 provides, in part, as follows:
Courts of First Instance shall decide such appealed cases on the basis
of the evidence and records transmitted from the city or municipal
courts: Provided, That the parties may submit memoranda and/or brief
with oral argument if so requested ... . (Emphasis supplied).
The foregoing provision is clear and leaves no room for doubt. It cannot be interpreted
otherwise than that the submission of memoranda is optional on the part of the parties.
Being optional on the part of the parties, the latter may so choose to waive submission of
the memoranda. And as a logical concomitant of the choice given to the Parties, the Court
cannot dismiss the appeal of the party waiving the submission of said memorandum the
appellant so chooses not to submit the memorandum, the Court of First Instance is left with
no alternative but to decide the case on the basis of the evidence and records transmitted
from the city or municipal courts. In other words, the Court is not empowered by law to
dismiss the appeal on the mere failure of an appellant to submit his memorandum, but
rather it is the Court's mandatory duty to decide the case on the basis of the available
evidence and records transmitted to it.
As a general rule, the word "may" when used in a statute is permissive only and operates
to confer discretion; while the word "shall" is imperative, operating to impose a duty which
may be enforced (Dizon vs. Encarnacion, L-18615, Dec. 24, 1963, 9 SCRA 714, 716-717).
The implication is that the Court is left with no choice but to decide the appealed case
either on the basis of the evidence and records transmitted to it, or on the basis of the
latter plus memoranda and/or brief with oral argument duly submitted and/or made on
request.
Moreover, memoranda, briefs and oral arguments are not essential requirements. They
may be submitted and/or made only if so requested.
Finally, a contrary interpretation would be unjust and dangerous as it may defeat the
litigant's right to appeal granted to him by law. In the case of Republic vs. Rodriguez
(L-26056, May 29, 1969, 28 SCRA 378) this Court underscored "the need of proceeding
with caution so that a party may not be deprived of its right to appeal except for weighty
reasons." Courts should heed the rule inMunicipality of Tiwi, Albay vs. Cirujales
(L-37520, Dec. 26, 1973, 54 SCRA 390, 395), thus:
The appellate court's summary dismissal of the appeal even before
receipt of the records of the appealed case as ordered by it in a prior
mandamus case must be set aside as having been issued precipitously
and without an opportunity to consider and appreciate unavoidable
circumstances of record not attributable to petitioners that caused the
delay in the elevation of the records of the case on appeal.
In the instant case, no notice was received by petitioner about the submission of the
transcript of the stenographic notes, so that his 30-day period to submit his memorandum
would commence to run. Only after the expiration of such period can the respondent Judge
act on the case by deciding it on the merits, not by dismissing the appeal of petitioner.

WHEREFORE, THE CHALLENGED ORDERS OF RESPONDENT JUDGE DATED

AUGUST 4, 1971, OCTOBER 30, 1971 AND MARCH 15, 1971 ARE HEREBY SET ASIDE
AS NULL AND VOID AND THE RESPONDENT COURT IS HEREBY DIRECTED TO
DECIDE CIVIL CASE NO. C-2036 ON THE MERITS. NO COSTS.
Jenette Marie B. Crisologo, Petitioner,
vs.
GLOBE TELECOM INC. and Cesar M. Maureal, Vice President for Human
Resources, Respondents.
RESOLUTION

2. The sum of TWO HUNDRED THOUSAND PESOS (P200,000.00) AS AND BY WAY OF

Attorneys fee;
3. The sum of TWO HUNDRED THOUSAND PESOS (P200,000.00) as exemplary
damages in order to deter others from doing similar act in withholding possession of a
property to another to which he/she has no right to possess; and
4. Costs of suit.
SO ORDERED.

AUSTRIA-MARTINEZ, J.:

Petitioner then filed with the Court a petition for review on certiorari under Rule 45 of the
Rules of Court, which was denied by the Court in a Resolution dated May 16, 2005, for
being the wrong remedy under the 1997 Rules of Civil Procedure, as amended.

Petitioner was an employee of respondent company. When she was promoted as Director
of Corporate Affairs and Regulatory Matters, she became entitled to an executive car, and
she procured a 1997 Toyota Camry. In April 2002, she was separated from the company.
Petitioner filed a complaint for illegal dismissal and reinstatement with the National Labor
Relations Commission (NLRC), which later dismissed the complaint. Petitioner filed, on
August 12, 2004, a petition for certiorari with the Court of Appeals, docketed as CA-G.R.
SP No. 85679 assailing the NLRCs dismissal.

Petitioner thus filed the present motion for reconsideration, alleging that the filing of said
petition is the proper recourse, citing Matute vs. Court of Appeals, 26 SCRA 798 (1969),
wherein it was ruled that a defendant declared in default has the remedy set forth in
Section 2, paragraph 3 of Rule 41 of the old Rules of Court. 2 Petitioner then cited in her
motion, "Section 2, paragraph 3 or (c) of the Rules of Civil Procedure." 3

Pending said petition, respondent company filed with the Regional Trial Court of
Mandaluyong (Branch 213) an action for recovery of possession of a motor vehicle with
application for a writ of replevin with damages, docketed as Civil Case No. MC04-2480.
Petitioner filed a motion to dismiss on the ground of litis pendentia and forum shopping but
this was denied by the trial court. Thus, petitioner filed a petition for certiorari with the Court
of Appeals, docketed as CA-G.R. SP No. 85927. 1 Petitioner also filed with the Court of
Appeals a motion for the issuance of a writ of prohibition to enjoin proceedings in the
replevin case before the trial court.
Thereafter, respondent company filed a motion to declare defendant in default in Civil Case
No. MC04-2480, which was granted by the trial court. Respondent company was thus
allowed to present its evidence ex-parte. Petitioner filed a motion for reconsideration of the
order of default but it was denied by the trial court. On April 5, 2005, the trial court rendered
a judgment by default, the dispositive portion of which reads:
WHEREFORE, finding merit in all the foregoing uncontroverted facts supported by
documentary exhibits, judgment is hereby rendered declaring plaintiff to have the right of
possession over the subject motor vehicle and ordering defendant plaintiff to pay plaintiff
the following:
1. The amount of TWO MILLION FIVE HUNDRED FIFTY SIX THOUSAND FOUR
HUNDRED SIXTY PESOS (p2,556,460.00) as damages in the form of unpaid daily car
rental for 730 (From 15 August 2002 until 22 June 2004) days at THREE THOUSAND
FIVE HUNDRED TWO PESOS (P3,502.00) per day;

Evidently, petitioner misread the provision cited in the Matute case as that pertaining to
Section 2(c), Rule 41 of the 1997 Rules of Civil Procedure, as amended, which states:
"(c) Appeal by certiorari. - In all cases where only questions of law are raised or involved,
the appeal shall be to the Supreme Court by petition for review oncertiorari in accordance
with Rule 45." Hence, she directly filed her petition for review on certiorari with the Court.
Petitioner should be reminded that the Matute case is of 1969 vintage and pertained to the
old Rules of Court. As stated in the Matute case, a defendant validly declared in default
has the remedy set forth in Section 2, paragraph 3 of Rule 41. Note that under the old
Rules, Section 2, paragraph 3 of Rule 41 governed appeals from Courts of First Instance,
the Social Security Commission and the Court of Agrarian Relations TO THE COURT OF
APPEALS, and reads:
A party who has been declared in default may likewise appeal from the judgment rendered
against him as contrary to the evidence or to the law, even if no petition for relief to set
aside the order of default has been presented by him in accordance with Rule 38.
(Emphasis supplied)
Had petitioner been more circumspect, she would have easily ascertained that said
Section 2, paragraph 3 of Rule 41 of the old Rules of Court, as cited in the Matute case,
had already been superseded by the 1997 Rules of Civil Procedure, as amended, and
under these new rules, the different modes of appeal are clearly laid down.
The decision sought to be reviewed in this case is a judgment by default rendered by the
trial court in Civil Case No. MC04-2480. As such, the applicable rule is Section 2, Rule 41
of the 1997 Rules of Civil Procedure, as amended, which provides for the different
modes of appeal from a Regional Trial Courts judgment or final order, to wit:

Section 2. Modes of appeal.

appeal with the Court of Appeals under Section 2(a), Rule 41 of the 1997 Rules of Civil
Procedure, as amended.

(a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing
a notice of appeal with the court which rendered the judgment or final order
appealed from and serving a copy thereof upon the adverse party. No record on
appeal shall be required except in special proceedings and other cases of multiple
or separate appeals where the law or these Rules so require. In such cases, the
record on appeal shall be filed and served in like manner.

Instead, she came directly to this Court via petition for review on certiorari, without setting
forth substantial reasons why the ordinary remedies under the law should be disregarded
and the petition entertained. Petitioner cannot even find solace in the Matute case as the
old Rules of Court then applicable explicitly laid down the remedy of an ordinary appeal to
the Court of Appeals, and not appeal by certiorari to this Court, by a defendant declared in
default.

(b) Petition for review. The appeal to the Court of Appeals in cases decided by the
Regional Trial Court in the exercise of its appellate jurisdiction shall be by petition for
review in accordance with Rule 42.

Petitioner further argues that the petition involved questions of law, and the Court should
have taken cognizance of the case. The grounds set forth in her petition prove otherwise,
viz.:

(c) Appeal by certiorari. In all cases where only questions of law are raised or involved,
the appeal shall be to the Supreme Court by petition for review on certiorari in accordance
with Rule 45. (Emphasis supplied)

GROUNDS

In Cerezo vs. Tuazon,4 the Court reiterated the remedies available to a party declared in
default:

THE COMPLAINT FOR REPLEVIN FILED BY RESPONDENTS AGAINST PETITIONER

SHOULD HAVE BEEN DISMISSED ON THE GROUND OF LITIS PENDENTIA AND FOR
RESPONDENTS VIOLATION OF THE RULES AGAINST FORUM-SHOPPING

a) The defendant in default may, at any time after discovery thereof and before judgment,
file a motion under oath to set aside the order of default on the ground that his failure
to answer was due to fraud, accident, mistake or excusable negligence, and that he has a
meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the default,
but before the same has become final and executory, he may file a motion for new
trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and
executory, he may file apetition for relief under Section 2 [now Section 1] of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has been
presented by him (Sec. 2, Rule 41).
Moreover, a petition for certiorari to declare the nullity of a judgment by default is also
available if the trial court improperly declared a party in default, or even if the trial court
properly declared a party in default, if grave abuse of discretion attended such declaration. 5
The filing of the present petition is clearly not the proper remedy to assail the default
judgment rendered by the trial court. Petitioner still has the available remedy of filing with
the Regional Trial Court a motion for new trial or an ordinary appeal to the Court of Appeals
from the trial courts default judgment. Note that petitioner admits that she was "properly
declared in default."6 Thus, there is no question of any improvident or improper declaration
of default by the trial court, and the remedy of filing a special civil action for certiorari has
been effectively foreclosed on petitioner. Her only recourse then is to file an ordinary

II
THE TRIAL COURT WENT AHEAD WITH THE EX-PARTE PRESENTATION OF
RESPONDENTS EVIDENCE DESPITE THE PETITIONERS PENDING MOTION FOR
RECONSIDERATION
III
THE MONETARY AWARDS FOR DAMAGES AND ATTORNEYS FEES ARE
UNWARRANTED AND UNJUSTIFIABLE CONSIDERING THAT SUCH ARE NOT
SUPPORTED BY LAW AND JURISPRUDENCE
IV
THE COURT A QUO ISSUED THE ASSAILED DECISION IN A WAY THAT IT IS NOT IN
ACCORD WITH LAW OR APPLICABLE DECISIONS OF THE SUPREME COURT AND
HAS SO FAR DEPARTED FROM THE USUAL COURSE OF JUDICIAL PROCEEDINGS
AS TO CALL FOR THE EXERCISE BY THE SUPREME COURT OF ITS POWER OF
SUPERVISION
The test of whether a question is one of law or of fact is not the appellation given to such
question by the party raising the same; rather, it is whether the appellate court can
determine the issue raised without reviewing or evaluating the evidence, in which case, it is
a question of law; otherwise, it is a question of fact. 7 The issues on the award of damages
call for a re-evaluation of the evidence before the trial court, which is obviously a question

of fact. Cases where an appeal involved questions of fact, of law, or both fall within the
exclusive appellate jurisdiction of the Court of Appeals.8 (Emphasis supplied)
It is on this score that the Court is inclined to concur with petitioners argument that even if
the remedy resorted to was wrong, the Court may refer the case to the Court of Appeals
under Rule 56, Section 6, paragraph 2 of the 1997 Rules of Civil Procedure, as amended,
which provides: "(A)n appeal by certiorari taken to the Supreme Court from the Regional
Trial Court submitting issues of fact may be referred to the Court of Appeals for decision or
appropriate action." This despite the express provision in Section 5(f) of the same Rule,
which provides that an appeal may be dismissed when there is error in the choice or mode
of appeal.
Both Sections 5(f) and 6 of Rule 57 use the term "may," denoting discretion on the part of
the Court in dismissing the appeal or referring the case to the Court of Appeals. The
question of fact involved in the appeal and substantial ends of justice warrant a referral of
this case to the Court of Appeals for further appropriate proceedings.
WHEREFORE, the motion for reconsideration is GRANTED. The petition is reinstated and
the case is REFERREDto the Court of Appeals for appropriate action.

THE WORD MUST IS NOT ALWAYS IMPERATIVE

LOYOLA GRAND VILLAS HOMEOWNERS (SOUTH) ASSOCIATION, INC., petitioner,
vs.
HON. COURT OF APPEALS, HOME INSURANCE AND GUARANTY CORPORATION,
EMDEN ENCARNACION and HORATIO AYCARDO, respondents.

Corporation, the predecessor of herein respondent HIGC, as the sole homeowners'

organization in the said subdivision under Certificate of Registration No. 04-197. It was
organized by the developer of the subdivision and its first president was Victorio V. Soliven,
himself the owner of the developer. For unknown reasons, however, LGVHAI did not file its
corporate by-laws.
Sometime in 1988, the officers of the LGVHAI tried to register its by-laws. They failed to do
so. 2 To the officers' consternation, they discovered that there were two other organizations
within the subdivision the North Association and the South Association. According to
private respondents, a non-resident and Soliven himself, respectively headed these
associations. They also discovered that these associations had five (5) registered
homeowners each who were also the incorporators, directors and officers thereof. None of
the members of the LGVHAI was listed as member of the North Association while three (3)
members of LGVHAI were listed as members of the South Association. 3 The North
Association was registered with the HIGC on February 13, 1989 under Certificate of
Registration No. 04-1160 covering Phases West II, East III, West III and East IV. It
submitted its by-laws on December 20, 1988.
In July, 1989, when Soliven inquired about the status of LGVHAI, Atty. Joaquin A. Bautista,
the head of the legal department of the HIGC, informed him that LGVHAI had been
automatically dissolved for two reasons. First, it did not submit its by-laws within the period
required by the Corporation Code and, second, there was non-user of corporate charter
because HIGC had not received any report on the association's activities. Apparently, this
information resulted in the registration of the South Association with the HIGC on July 27,
1989 covering Phases West I, East I and East II. It filed its by-laws on July 26, 1989.
These developments prompted the officers of the LGVHAI to lodge a complaint with the
HIGC. They questioned the revocation of LGVHAI's certificate of registration without due
notice and hearing and concomitantly prayed for the cancellation of the certificates of
registration of the North and South Associations by reason of the earlier issuance of a
certificate of registration in favor of LGVHAI.

ROMERO, J.:
May the failure of a corporation to file its by-laws within one month from the date of its
incorporation, as mandated by Section 46 of the Corporation Code, result in its automatic
dissolution?
1

This is the issue raised in this petition for review on certiorari of the Decision of the Court
of Appeals affirming the decision of the Home Insurance and Guaranty Corporation
(HIGC). This quasi-judicial body recognized Loyola Grand Villas Homeowners Association
(LGVHA) as the sole homeowners' association in Loyola Grand Villas, a duly registered
subdivision in Quezon City and Marikina City that was owned and developed by Solid
Homes, Inc. It revoked the certificates of registration issued to Loyola Grand Villas
homeowners (North) Association Incorporated (the North Association for brevity) and
Loyola Grand Villas Homeowners (South) Association Incorporated (the South
Association).
LGVHAI was organized on February 8, 1983 as the association of homeowners and
residents of the Loyola Grand Villas. It was registered with the Home Financing

On January 26, 1993, after due notice and hearing, private respondents obtained a
favorable ruling from HIGC Hearing Officer Danilo C. Javier who disposed of HIGC Case
No. RRM-5-89 as follows:
WHEREFORE, judgment is hereby rendered recognizing the Loyola Grand Villas
Homeowners Association, Inc., under Certificate of Registration No. 04-197 as
the duly registered and existing homeowners association for Loyola Grand Villas
homeowners, and declaring the Certificates of Registration of Loyola Grand Villas
Homeowners (North) Association, Inc. and Loyola Grand Villas Homeowners
(South) Association, Inc. as hereby revoked or cancelled; that the receivership be
terminated and the Receiver is hereby ordered to render an accounting and turnover to Loyola Grand Villas Homeowners Association, Inc., all assets and records
of the Association now under his custody and possession.
The South Association appealed to the Appeals Board of the HIGC. In its Resolution of
September 8, 1993, the Board 4 dismissed the appeal for lack of merit.

Rebuffed, the South Association in turn appealed to the Court of Appeals, raising two
issues. First, whether or not LGVHAI's failure to file its by-laws within the period prescribed
by Section 46 of the Corporation Code resulted in the automatic dissolution of
LGVHAI. Second, whether or not two homeowners' associations may be authorized by the
HIGC in one "sprawling subdivision." However, in the Decision of August 23, 1994 being
assailed here, the Court of Appeals affirmed the Resolution of the HIGC Appeals Board.

that LGVHAI had been organized and that, thereafter, it transacted business within the
period prescribed by law.

In resolving the first issue, the Court of Appeals held that under the Corporation Code, a
private corporation commences to have corporate existence and juridical personality from
the date the Securities and Exchange Commission (SEC) issues a certificate of
incorporation under its official seal. The requirement for the filing of by-laws under Section
46 of the Corporation Code within one month from official notice of the issuance of the
certificate of incorporation presupposes that it is already incorporated, although it may file
its by-laws with its articles of incorporation. Elucidating on the effect of a delayed filing of
by-laws, the Court of Appeals said:

Undaunted, the South Association filed the instant petition for review on certiorari. It
elevates as sole issue for resolution the first issue it had raised before the Court of
Appeals, i.e., whether or not the LGVHAI's failure to file its by-laws within the period
prescribed by Section 46 of the Corporation Code had the effect of automatically dissolving
the said corporation.

We also find nothing in the provisions cited by the petitioner, i.e., Section 46 and
22, Corporation Code, or in any other provision of the Code and other laws which
provide or at least imply that failure to file the by-laws results in an automatic
dissolution of the corporation. While Section 46, in prescribing that by-laws must
be adopted within the period prescribed therein, may be interpreted as a
mandatory provision, particularly because of the use of the word "must," its
meaning cannot be stretched to support the argument that automatic dissolution
results from non-compliance.
We realize that Section 46 or other provisions of the Corporation Code are silent
on the result of the failure to adopt and file the by-laws within the required period.
Thus, Section 46 and other related provisions of the Corporation Code are to be
construed with Section 6 (1) of P.D. 902-A. This section empowers the SEC to
suspend or revoke certificates of registration on the grounds listed therein.
Among the grounds stated is the failure to file by-laws (see also II Campos: The
Corporation Code, 1990 ed., pp. 124-125). Such suspension or revocation, the
same section provides, should be made upon proper notice and hearing.
Although P.D. 902-A refers to the SEC, the same principles and procedures apply
to the public respondent HIGC as it exercises its power to revoke or suspend the
certificates of registration or homeowners association. (Section 2 [a], E.O. 535,
series 1979, transferred the powers and authorities of the SEC over homeowners
associations to the HIGC.)
We also do not agree with the petitioner's interpretation that Section 46,
Corporation Code prevails over Section 6, P.D. 902-A and that the latter is invalid
because it contravenes the former. There is no basis for such interpretation
considering that these two provisions are not inconsistent with each other. They
are, in fact, complementary to each other so that one cannot be considered as
invalidating the other.
The Court of Appeals added that, as there was no showing that the registration of LGVHAI
had been validly revoked, it continued to be the duly registered homeowners' association
in the Loyola Grand Villas. More importantly, the South Association did not dispute the fact

On the second issue, the Court of Appeals reiterated its previous ruling 5 that the HIGC has
the authority to order the holding of a referendum to determine which of two contending
associations should represent the entire community, village or subdivision.

Petitioner contends that, since Section 46 uses the word "must" with respect to the filing of
by-laws, noncompliance therewith would result in "self-extinction" either due to nonoccurrence of a suspensive condition or the occurrence of a resolutory condition "under
the hypothesis that (by) the issuance of the certificate of registration alone the corporate
personality is deemed already formed." It asserts that the Corporation Code provides for a
"gradation of violations of requirements." Hence, Section 22 mandates that the corporation
must be formally organized and should commence transaction within two years from date
of incorporation. Otherwise, the corporation would be deemed dissolved. On the other
hand, if the corporation commences operations but becomes continuously inoperative for
five years, then it may be suspended or its corporate franchise revoked.
Petitioner concedes that Section 46 and the other provisions of the Corporation Code do
not provide for sanctions for non-filing of the by-laws. However, it insists that no sanction
need be provided "because the mandatory nature of the provision is so clear that there can
be no doubt about its being an essential attribute of corporate birth." To petitioner, its
submission is buttressed by the facts that the period for compliance is "spelled out
distinctly;" that the certification of the SEC/HIGC must show that the by-laws are not
inconsistent with the Code, and that a copy of the by-laws "has to be attached to the
articles of incorporation." Moreover, no sanction is provided for because "in the first place,
no corporate identity has been completed." Petitioner asserts that "non-provision for
remedy or sanction is itself the tacit proclamation that non-compliance is fatal and no
corporate existence had yet evolved," and therefore, there was "no need to proclaim its
demise." 6 In a bid to convince the Court of its arguments, petitioner stresses that:
. . . the word MUST is used in Sec. 46 in its universal literal meaning and
corollary human implication its compulsion is integrated in its very essence
MUST is always enforceable by the inevitable consequence that is, "OR
ELSE". The use of the word MUST in Sec. 46 is no exception it means file the
by-laws within one month after notice of issuance of certificate of registration OR
ELSE. The OR ELSE, though not specified, is inextricably a part of MUST . Do
this or if you do not you are "Kaput". The importance of the by-laws to corporate
existence compels such meaning for as decreed the by-laws is "the government"
of the corporation. Indeed, how can the corporation do any lawful act as such
without by-laws. Surely, no law is indeed to create chaos. 7

Petitioner asserts that P.D. No. 902-A cannot exceed the scope and power of the
Corporation Code which itself does not provide sanctions for non-filing of by-laws. For the
petitioner, it is "not proper to assess the true meaning of Sec. 46 . . . on an unauthorized
provision on such matter contained in the said decree."
In their comment on the petition, private respondents counter that the requirement of
adoption of by-laws is not mandatory. They point to P.D. No. 902-A as having resolved the
issue of whether said requirement is mandatory or merely directory. Citing Chung Ka Bio
v. Intermediate Appellate Court, 8 private respondents contend that Section 6(I) of that
decree provides that non-filing of by-laws is only a ground for suspension or revocation of
the certificate of registration of corporations and, therefore, it may not result in automatic
dissolution of the corporation. Moreover, the adoption and filing of by-laws is a condition
subsequent which does not affect the corporate personality of a corporation like the
LGVHAI. This is so because Section 9 of the Corporation Code provides that the corporate
existence and juridical personality of a corporation begins from the date the SEC issues a
certificate of incorporation under its official seal. Consequently, even if the by-laws have
not yet been filed, a corporation may be considered a de facto corporation. To emphasize
the fact the LGVHAI was registered as the sole homeowners' association in the Loyola
Grand Villas, private respondents point out that membership in the LGVHAI was an
"unconditional restriction in the deeds of sale signed by lot buyers."
In its reply to private respondents' comment on the petition, petitioner reiterates its
argument that the word " must" in Section 46 of the Corporation Code is mandatory. It adds
that, before the ruling in Chung Ka Bio v.Intermediate Appellate Court could be applied to
this case, this Court must first resolve the issue of whether or not the provisions of P.D. No.
902-A prescribing the rules and regulations to implement the Corporation Code can "rise
above and change" the substantive provisions of the Code.
The pertinent provision of the Corporation Code that is the focal point of controversy in this
case states:
Sec. 46. Adoption of by-laws. Every corporation formed under this Code, must
within one (1) month after receipt of official notice of the issuance of its certificate
of incorporation by the Securities and Exchange Commission, adopt a code of
by-laws for its government not inconsistent with this Code. For the adoption of
by-laws by the corporation, the affirmative vote of the stockholders representing
at least a majority of the outstanding capital stock, or of at least a majority of the
members, in the case of non-stock corporations, shall be necessary. The by-laws
shall be signed by the stockholders or members voting for them and shall be kept
in the principal office of the corporation, subject to the stockholders or members
voting for them and shall be kept in the principal office of the corporation, subject
to inspection of the stockholders or members during office hours; and a copy
thereof, shall be filed with the Securities and Exchange Commission which shall
be attached to the original articles of incorporation.
Notwithstanding the provisions of the preceding paragraph, by-laws may be
adopted and filed prior to incorporation; in such case, such by-laws shall be
approved and signed by all the incorporators and submitted to the Securities and
Exchange Commission, together with the articles of incorporation.

In all cases, by-laws shall be effective only upon the issuance by the Securities
and Exchange Commission of a certification that the by-laws are not inconsistent
with this Code.
The Securities and Exchange Commission shall not accept for filing the by-laws
or any amendment thereto of any bank, banking institution, building and loan
association, trust company, insurance company, public utility, educational
institution or other special corporations governed by special laws, unless
accompanied by a certificate of the appropriate government agency to the effect
that such by-laws or amendments are in accordance with law.
As correctly postulated by the petitioner, interpretation of this provision of law begins with
the determination of the meaning and import of the word "must" in this section Ordinarily,
the word "must" connotes an imperative act or operates to impose a duty which may be
enforced. 9 It is synonymous with "ought" which connotes compulsion or
mandatoriness. 10 However, the word "must" in a statute, like "shall," is not always
imperative. It may be consistent with an exercise of discretion. In this jurisdiction, the
tendency has been to interpret "shall" as the context or a reasonable construction of the
statute in which it is used demands or requires. 11 This is equally true as regards the word
"must." Thus, if the languages of a statute considered as a whole and with due regard to its
nature and object reveals that the legislature intended to use the words "shall" and "must"
to be directory, they should be given that meaning. 12
In this respect, the following portions of the deliberations of the Batasang Pambansa No.
68 are illuminating:
MR. FUENTEBELLA. Thank you, Mr. Speaker.
On page 34, referring to the adoption of by-laws, are we made to understand
here, Mr. Speaker, that by-laws must immediately be filed within one month after
the issuance? In other words, would this be mandatory or directory in character?
MR. MENDOZA. This is mandatory.
MR. FUENTEBELLA. It being mandatory, Mr. Speaker, what would be the effect
of the failure of the corporation to file these by-laws within one month?
MR. MENDOZA. There is a provision in the latter part of the Code which
identifies and describes the consequences of violations of any provision of this
Code. One such consequences is the dissolution of the corporation for its
inability, or perhaps, incurring certain penalties.
MR. FUENTEBELLA. But it will not automatically amount to a dissolution of the
corporation by merely failing to file the by-laws within one month. Supposing the
corporation was late, say, five days, what would be the mandatory penalty?
MR. MENDOZA. I do not think it will necessarily result in the automatic or ipso
facto dissolution of the corporation. Perhaps, as in the case, as you suggested, in

the case of El Hogar Filipino where a quo warranto action is brought, one takes
into account the gravity of the violation committed. If the by-laws were late the
filing of the by-laws were late by, perhaps, a day or two, I would suppose that
might be a tolerable delay, but if they are delayed over a period of months as
is happening now because of the absence of a clear requirement that by-laws
must be completed within a specified period of time, the corporation must suffer
certain consequences. 13
This exchange of views demonstrates clearly that automatic corporate dissolution for
failure to file the by-laws on time was never the intention of the legislature. Moreover, even
without resorting to the records of deliberations of the Batasang Pambansa, the law itself
provides the answer to the issue propounded by petitioner.
Taken as a whole and under the principle that the best interpreter of a statute is the statute
itself (optima statuli interpretatix est ipsum statutum), 14 Section 46 aforequoted reveals the
legislative intent to attach a directory, and not mandatory, meaning for the word "must" in
the first sentence thereof. Note should be taken of the second paragraph of the law which
allows the filing of the by-laws even prior to incorporation. This provision in the same
section of the Code rules out mandatory compliance with the requirement of filing the bylaws "within one (1) month after receipt of official notice of the issuance of its certificate of
incorporation by the Securities and Exchange Commission." It necessarily follows that
failure to file the by-laws within that period does not imply the "demise" of the corporation.
By-laws may be necessary for the "government" of the corporation but these are
subordinate to the articles of incorporation as well as to the Corporation Code and related
statutes. 15 There are in fact cases where by-laws are unnecessary to corporate existence
or to the valid exercise of corporate powers, thus:
In the absence of charter or statutory provisions to the contrary, by-laws are not
necessary either to the existence of a corporation or to the valid exercise of the
powers conferred upon it, certainly in all cases where the charter sufficiently
provides for the government of the body; and even where the governing statute
in express terms confers upon the corporation the power to adopt by-laws, the
failure to exercise the power will be ascribed to mere nonaction which will not
render void any acts of the corporation which would otherwise be
valid. 16 (Emphasis supplied.)
As Fletcher aptly puts it:
It has been said that the by-laws of a corporation are the rule of its life, and that
until by-laws have been adopted the corporation may not be able to act for the
purposes of its creation, and that the first and most important duty of the
members is to adopt them. This would seem to follow as a matter of principle
from the office and functions of by-laws. Viewed in this light, the adoption of bylaws is a matter of practical, if not one of legal, necessity. Moreover, the peculiar
circumstances attending the formation of a corporation may impose the
obligation to adopt certain by-laws, as in the case of a close corporation
organized for specific purposes. And the statute or general laws from which the
corporation derives its corporate existence may expressly require it to make and
adopt by-laws and specify to some extent what they shall contain and the

manner of their adoption. The mere fact, however, of the existence of power in
the corporation to adopt by-laws does not ordinarily and of necessity make the
exercise of such power essential to its corporate life, or to the validity of any of its
acts. 17
Although the Corporation Code requires the filing of by-laws, it does not expressly provide
for the consequences of the non-filing of the same within the period provided for in Section
46. However, such omission has been rectified by Presidential Decree No. 902-A, the
pertinent provisions on the jurisdiction of the SEC of which state:
Sec. 6. In order to effectively exercise such jurisdiction, the Commission shall
possess the following powers:
xxx xxx xxx
(1) To suspend, or revoke, after proper notice and hearing, the franchise or
certificate of registration of corporations, partnerships or associations, upon any
of the grounds provided by law, including the following:
xxx xxx xxx
5. Failure to file by-laws within the required period;
xxx xxx xxx
In the exercise of the foregoing authority and jurisdiction of the Commission or by
a Commissioner or by such other bodies, boards, committees and/or any officer
as may be created or designated by the Commission for the purpose. The
decision, ruling or order of any such Commissioner, bodies, boards, committees
and/or officer may be appealed to the Commission sitting en banc within thirty
(30) days after receipt by the appellant of notice of such decision, ruling or order.
The Commission shall promulgate rules of procedures to govern the
proceedings, hearings and appeals of cases falling with its jurisdiction.
The aggrieved party may appeal the order, decision or ruling of the Commission
sitting en banc to the Supreme Court by petition for review in accordance with the
pertinent provisions of the Rules of Court.
Even under the foregoing express grant of power and authority, there can be no automatic
corporate dissolutionsimply because the incorporators failed to abide by the required filing
of by-laws embodied in Section 46 of the Corporation Code. There is no outright "demise"
of corporate existence. Proper notice and hearing are cardinal components of due process
in any democratic institution, agency or society. In other words, the incorporators must be
given the chance to explain their neglect or omission and remedy the same.
That the failure to file by-laws is not provided for by the Corporation Code but in another
law is of no moment. P.D. No. 902-A, which took effect immediately after its promulgation

on March 11, 1976, is very much apposite to the Code. Accordingly, the provisions
abovequoted supply the law governing the situation in the case at bar, inasmuch as the
Corporation Code and P.D. No. 902-A are statutes in pari materia. Interpretare et
concordare legibus est optimus interpretandi. Every statute must be so construed and
harmonized with other statutes as to form a uniform system of jurisprudence. 18
As the "rules and regulations or private laws enacted by the corporation to regulate, govern
and control its own actions, affairs and concerns and its stockholders or members and
directors and officers with relation thereto and among themselves in their relation to
it," 19 by-laws are indispensable to corporations in this jurisdiction. These may not be
essential to corporate birth but certainly, these are required by law for an orderly
governance and management of corporations. Nonetheless, failure to file them within the
period required by law by no means tolls the automatic dissolution of a corporation.
In this regard, private respondents are correct in relying on the pronouncements of this
Court in Chung Ka Bio v.Intermediate Appellate Court, 20 as follows:
. . . . Moreover, failure to file the by-laws does not automatically operate to
dissolve a corporation but is now considered only a ground for such dissolution.
Section 19 of the Corporation Law, part of which is now Section 22 of the
Corporation Code, provided that the powers of the corporation would cease if it
did not formally organize and commence the transaction of its business or the
continuation of its works within two years from date of its incorporation. Section
20, which has been reproduced with some modifications in Section 46 of the
Corporation Code, expressly declared that "every corporation formed under this
Act, must within one month after the filing of the articles of incorporation with the
Securities and Exchange Commission, adopt a code of by-laws." Whether this
provision should be given mandatory or only directory effect remained a
controversial question until it became academic with the adoption of PD 902-A.
Under this decree, it is now clear that the failure to file by-laws within the required
period is only a ground for suspension or revocation of the certificate of
registration of corporations.
Non-filing of the by-laws will not result in automatic dissolution of the corporation.
Under Section 6(I) of PD 902-A, the SEC is empowered to "suspend or revoke,
after proper notice and hearing, the franchise or certificate of registration of a
corporation" on the ground inter alia of "failure to file by-laws within the required
period." It is clear from this provision that there must first of all be a hearing to
determine the existence of the ground, and secondly, assuming such finding, the
penalty is not necessarily revocation but may be only suspension of the charter.
In fact, under the rules and regulations of the SEC, failure to file the by-laws on
time may be penalized merely with the imposition of an administrative fine
without affecting the corporate existence of the erring firm.
It should be stressed in this connection that substantial compliance with
conditions subsequent will suffice to perfect corporate personality. Organization
and commencement of transaction of corporate business are but conditions
subsequent and not prerequisites for acquisition of corporate personality. The

adoption and filing of by-laws is also a condition subsequent. Under Section 19 of

the Corporation Code, a Corporation commences its corporate existence and
juridical personality and is deemed incorporated from the date the Securities and
Exchange Commission issues certificate of incorporation under its official seal.
This may be done even before the filing of the by-laws, which under Section 46
of the Corporation Code, must be adopted "within one month after receipt of
official notice of the issuance of its certificate of incorporation." 21
That the corporation involved herein is under the supervision of the HIGC does not alter
the result of this case. The HIGC has taken over the specialized functions of the former
Home Financing Corporation by virtue of Executive Order No. 90 dated December 17,
1989. 22 With respect to homeowners associations, the HIGC shall "exercise all the
powers, authorities and responsibilities that are vested on the Securities and Exchange
Commission . . . , the provision of Act 1459, as amended by P.D. 902-A, to the contrary
notwithstanding." 23
WHEREFORE, the instant petition for review on certiorari is hereby DENIED and the
questioned Decision of the Court of Appeals AFFIRMED. This Decision is immediately
executory. Costs against petitioner.
ROMMEL G. MUOZ, petitioner,
vs.
COMMISSION ON ELECTIONS, CARLOS IRWIN G. BALDO, JR., respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for certiorari and prohibition with prayer for the issuance of a writ of
preliminary injunction and/or temporary restraining order filed by petitioner Rommel G.
Muoz assailing the Resolution1 dated December 15, 2005 of the Commission on
Elections (COMELEC) En Banc in SPC No. 04-124 which affirmed the Resolution2dated
October 25, 2004 of the COMELEC First Division granting the petition of private
respondent Carlos Irwin G. Baldo, Jr. to annul petitioner's proclamation as mayor of
Camalig, Albay.
The facts of the case are as follows:
Petitioner and private respondent were candidates for mayor of Camalig, Albay in the May
10, 2004 election.3 At 6:00 o'clock in the evening of May 10, 2004, the Municipal Board of
Canvassers (MBC) convened and canvassed the election returns (ER). 4
On May 11, 2004, the lawyers of private respondent objected to the inclusion of the 26 ERs
from various precincts based on the following grounds: 1) eight ERs lack inner seal; 2)
seven ERs lack material data; 3) one ER lack signatures; 4) four ERs lack signatures and
thumbmarks of the members of the Board of Election Inspectors on the envelope
containing them; 5) one ER lack the name and signature of the poll clerk on the second

page thereof; 6) one ER lack the number of votes in words and figures; and 7) four ERs
were allegedly prepared under intimidation.5

d) PROCLAIM the winning candidates for Mayoralty position.

SO ORDERED.11

On May 13, 2004, the MBC denied the objections and ruled to include the objected ERs in
the canvass. Private respondent appealed the said ruling to the COMELEC on May 18,
2004 and was docketed as SPC No. 04-087 and raffled to the COMELEC First Division. 6
Despite the pendency of the appeal, petitioner was proclaimed on May 19, 2004 by the
MBC as the winning candidate for mayor of Camalig, Albay.7
On May 21, 2004, private respondent filed with the COMELEC a petition to annul the
proclamation of the petitioner for being premature and illegal. The case was docketed as
SPC No. 04-124 and raffled to the COMELEC First Division.8
On October 25, 2004, the COMELEC First Division rendered a Resolution in SPC No. 04124 granting the petition to annul the proclamation. The dispositive portion thereof reads:
WHEREFORE, in view of the foregoing, the Commission (FIRST DIVISION)
hereby GRANTS the Petition. The proclamation of x x x ROMMEL MUOZ as
winning candidate for mayor of Camalig, Albay is ANNULLED for having been
made in an irregular proceeding and for being precipitate and premature.

Hence, petitioner files the instant petition for certiorari and prohibition with prayer for the
issuance of a writ of preliminary injunction and/or temporary restraining order.
On January 17, 2006, the Court issued a temporary restraining order effective immediately
and ordered the COMELEC to cease and desist from implementing and enforcing the
December 15, 2005 Resolution in SPC No. 04-124. 12
Petitioner relies on the following grounds in support of his petition:
I
THE PUBLIC [RESPONDENT] COMELEC COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN
IT ISSUED THE ASSAILED RESOLUTION DENYING FOR LACK OF MERIT
PETITIONER'S MOTION FOR RECONSIDERATION OF THE 25 OCTOBER
[2004] RESOLUTION OF THE PUBLIC RESPONDENT'S FIRST DIVISION, FOR
BEING
CONTRARY
TO
LAW,
RULES
AND
WELL-SETTLED
JURISPRUDENCE;

SO ORDERED.9
II
Petitioner's motion for reconsideration10 was denied for lack of merit by the COMELEC En
Banc in a Resolution dated December 15, 2005, thus:
WHEREFORE, premises considered, the Commission En Banc hereby DENIES
the Motion for Reconsideration filed by x x x Muoz for lack of merit. Accordingly,
the ANNULMENT and SETTING ASIDE, by the First Division, of the proclamation
of x x x ROMMEL MUOZ as the duly elected Mayor is hereby AFFIRMED.
The Regional Election Director of Region V, Atty. Zacarias C. Zaragoza, Jr., is
hereby DIRECTED to constitute a new Municipal Board of Canvassers from
among the Election Officers in the Region.
Accordingly, the new Municipal Board of Canvassers of Camalig, Albay is hereby
DIRECTED to:
a) RECONVENE, and after due notice to all parties/candidates
concerned,
b) RE-CANVASS all the election returns of Camalig, Albay, and on the
basis thereof,
c) PREPARE a new Certificate of Canvass, and forthwith

THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT ISSUED
THE ASSAILED RESOLUTION ANNULLING AND SETTING ASIDE THE
PROCLAMATION OF PETITIONER AS DULY ELECTED MAYOR OF CAMALIG,
ALBAY WITHOUT FIRST RESOLVING THE PENDING APPEAL FIRST
INITIATED, SPC 04-87;
III
THE PUBLIC RESPONDENT COMMITTED GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION WHEN IT ISSUED
THE ASSAILED RESOLUTION DIRECTING THE NEW MUNICIPAL BOARD OF
CANVASSERS OF CAMALIG, ALBAY, TO RECONVENE AND RE-CANVASS
ALL ELECTION RESULTS OF CAMALIG, ALBAY, FOR BEING CONTRARY TO
LAW.13
The foregoing issues may be summarized into two: 1) whether or not the COMELEC First
Division committed grave abuse of discretion when it decided only the Petition to Annul
Proclamation despite the agreement of the parties to consolidate private respondent's
appeal from the ruling of the MBC since both cases were raffled to the same Division and
the issue in the latter case was connected to, if not determinative of, the merits of the
former case; and 2) whether or not the COMELEC En Banc correctly ordered the new

MBC to re-canvass all the ERs and to proclaim the winner on the basis thereof despite the
pendency of the appeal with the First Division.

We likewise do not agree with petitioner's contention that the proclamation was valid as the
contested ERs will not affect the results of the election.

The petition is partly granted.

Section 20(i) of R.A. No. 7166 reads:

Anent the first issue, we find no merit in petitioner's contention.

Sec. 20. Procedure in Disposition of Contested Election Returns.

While Section 9, Rule 3 of the COMELEC Rules of Procedure provides that "when an
action or proceeding involves a question of law and fact which is similar to or common with
that of another action or proceeding, the same may be consolidated with the action or
proceeding bearing the lower docket number," however, this rule is only permissive, not
mandatory. We have consistently held that the term "may" is indicative of a mere
possibility, an opportunity or an option. The grantee of that opportunity is vested with a
right or faculty which he has the option to exercise. If he chooses to exercise the right, he
must comply with the conditions attached thereto, 14which in this case require that the
cases to be consolidated must involve similar questions of law and fact.

xxxx

In the case at bar, the consolidation of SPC No. 04-087 with SPC No. 04-124 is
inappropriate as they do not involve similar questions of law and fact. SPC No. 04-087
assails the inclusion of the 26 ERs by the MBC on the ground that these were incomplete,
contained material defects and were prepared under intimidation, issues which are proper
for a pre-proclamation controversy under paragraphs (b) and (c) of Section 243 of the
Omnibus Election Code. On the other hand, SPC No. 04-124 is a petition for the
annulment of petitioner's proclamation for allegedly being prematurely done, in violation of
Section 36(i) of COMELEC Resolution No. 6669 15 which instructs the board of canvassers
"not proclaim any candidate as winner unless authorized by the Commission after the
latter has ruled on the objections brought to it on appeal by the losing party; [a]ny
proclamation made in violation hereof shall be void ab initio, unless the contested
returns/certificates will not affect the results of the elections." In fine, SPC No. 04-087
pertains to the preparation of the ERs which is a pre-proclamation controversy, while SPC
No. 04-124 refers to the conduct of the MBC in proclaiming the petitioner without authority
of the COMELEC.
Mere pendency of the two cases before the same division of the COMELEC is not a
ground for their outright consolidation. The discretion to consolidate cases may be
exercised only when the conditions are present. In any event, the records are bereft of
evidence that the parties agreed to consolidate the two cases or that the COMELEC First
Division had granted the same.
Further, we find that the COMELEC First Division correctly annulled the proclamation of
the petitioner. Time and again, this Court has given its imprimatur on the principle that
COMELEC is with authority to annul any canvass and proclamation which was illegally
made.16 At the time the proclamation was made, the COMELEC First Division had not yet
resolved SPC No. 04-087. Pursuant to Section 36(i) of COMELEC Resolution No. 6669,
which finds basis in Section 20(i) of Republic Act (R.A.) No. 7166, 17 the MBC should not
have proclaimed petitioner as the winning candidate absent the authorization from the
COMELEC. Any proclamation made under such circumstances is void ab initio.18

(i) The board of canvassers shall not proclaim any candidate as winner unless
authorized by the Commission after the latter has ruled on the objections brought
to it on appeal by the losing party. Any proclamation made in violation hereof
shall be void ab initio, unless the contested returns will not adversely affect
the results of the election. (Emphasis supplied)
The phrase "results of the election" is not statutorily defined. However, it had been
jurisprudentially explained inLucero v. Commission on Elections19 to mean:
[T]he net result of the election in the rest of the precincts in a given constituency,
such that if the margin of a leading candidate over that of his closest rival in the
latter precincts is less than the total number of votes in the precinct where there
was failure of election, then such failure would certainly affect "the result of the
election."20
Although the Lucero case involves a failure of election, the definition of "results of election"
applies to the disposition of contested election returns under Section 20(i) of R.A. No.
7166. In both situations, the law endeavors to determine the will of the people in an
expeditious manner in that if the total number of votes in the precinct where there is a
failure of election or in case of the contested ERs, is less than the lead of a candidate over
his closest rival, the results of the election would not be adversely affected. Hence, a
proclamation may be made because the winning candidate can be ascertained. Otherwise,
a special election must be held or an authorization of the COMELEC is necessary after
ruling on the objections brought to it on appeal by the losing party in order to determine the
will of the electorate. Proclamation made in violation of the rules is void ab initio as it would
be based on an incomplete canvass of votes. It is well settled that an incomplete canvass
of votes is illegal and cannot be the basis of a subsequent proclamation. A canvass is not
reflective of the true vote of the electorate unless the board of canvassers considers all
returns and omits none.21
In the case at bar, petitioner obtained a margin of 762 votes over the private respondent
based on the canvass of the uncontested ERs whereas the total number of votes in the 26
contested ERs is 5,178, which is higher than the 762-lead of the petitioner over the private
respondent. Clearly, the results of the election would be adversely affected by the
uncanvassed returns.
As aptly held by the COMELEC First Division:

The votes obtained by petitioner and private respondent tallied in the contested
election returns can not be the basis of the partial proclamation. The objected
election returns cannot be considered, even provisionally, as the true and final
result of the elections in the contested precincts. The possibility remains, remote
thought (sic) it may be that they could be excluded and the results reflected
therein disregarded. The contested election returns involved 5,178 votes as this
is the number of voters who actually voted in the precincts covered by the
objections. The lead of [petitioner] over [private respondent] as shown in the
uncontested returns was less than this number. Clearly, the results of the
elections could be adversely affected by the uncanvassed returns. Truly, the
Board erred in its perception that its partial proclamation was warranted. 22

petitioner Rommel G. Muoz as Mayor of Camalig, Albay for being premature,

is AFFIRMED with the MODIFICATION that the order to constitute a new Municipal Board
of Canvassers to re-canvass all the election returns of Camalig, Albay; to prepare a new
Certificate of Canvass; and to declare the winning candidate for mayoralty position is SET
ASIDE for having been issued with grave abuse of discretion. The temporary restraining
order issued on January 17, 2006 is hereby SET ASIDE.

G. USE OF CONJUNCTIVE AND DISJUNCTIVE WORDS

H. COMPUTING TIME

While the COMELEC En Banc correctly affirmed the October 25, 2004 Resolution of its
First Division in SPC 04-124 insofar as it annulled petitioner's proclamation, however, we
find that it exceeded its authority and thus gravely abused its discretion when it ordered the
new MBC to re-canvass all ERs even before its First Division could decide on SPC No. 04087 filed by private respondent assailing the ruling of the MBC to include the 26 contested
ERs in the canvass.

Santiago, Jr., Vidad, Corpus & Associates for petitioner.

Section 3 of Article IX-C of the 1987 Constitution provides:

Pedro R. Lazo for spouses-intervenors.

Sec. 3. The Commission on Elections may sit en banc or in two divisions, and
shall promulgate its rules of procedure in order to expedite disposition of election
cases, including pre-proclamation controversies. All such election cases shall be
heard and decided in division, provided that motions for reconsideration of
decisions shall be decided by the Commission en banc.
In Sarmiento v. Commission on Elections 23 and Zarate v. Commission on Elections,24 the
Court similarly held that "election cases must first be heard and decided by a Division of
the Commission," and that the "Commission, sitting en banc, does not have the authority
to hear and decide the same at the first instance."
Thus, in Acosta v. Commission on Elections,25 the Court held that the COMELEC En
Banc violated the foregoing Constitutional mandate when it affirmed the trial court's
decision that was not the subject of the special civil action before it, but of the appeal filed
by therein petitioner, which was still undocketed at the time and the parties have not yet
submitted any evidence in relation thereto.
Clearly, by ordering the re-canvass of all the ERs in SPC No. 04-124, the COMELEC En
Banc in effect rendered a decision on the merits of SPC No. 04-087, which up to the
present is still pending before its First Division, in violation of the rule that it does not have
the authority to hear and decide election cases, including pre-proclamation controversies,
at the first instance. As the proclamation of the winning candidate has been delayed for
more than two years now due to these cases, the COMELEC First Division is directed to
expeditiously resolve SPC No. 04-087, which is summary in nature.
WHEREFORE, in view of the foregoing, the petition is PARTLY GRANTED. The
December 15, 2005 Resolution of the COMELEC En Banc in SPC No. 04-124 which
affirmed the annulment and setting aside by its First Division of the proclamation of

PHILIPPINE NATIONAL BANK, petitioner,

vs.
THE COURT OF APPEALS and EPIFANIO DE LA CRUZ, respondents.

Rosendo G. Tansinsin, Jr. for private respondent.

MELO, J.:
The notices of sale under Section 3 of Act No. 3135, as amended by Act No. 4118, on
extra-judicial foreclosure of real estate mortgage are required to be posted for not less than
twenty days in at least three public places of the municipality or city where the property is
situated, and if such property is worth more than four hundred pesos, such notices shall
also be published once a week for at least three consecutive weeks in a newspaper of
general circulation in the municipality or city.
Respondent court, through Justice Filemon Mendoza with whom Justices Campos, Jr. and
Aldecoa, Jr. concurred, construed the publication of the notices on March 28, April 11 and
l2, 1969 as a fatal announcement and reversed the judgment appealed from by declaring
void, inter alia, the auction sale of the foreclosed pieces of realty, the final deed of sale,
and the consolidation of ownership (p. 27, Rollo).
Hence, the petition at bar, premised on the following backdrop lifted from the text of the
challenged decision:
The facts of the case as related by the trial court are, as follows:
This is a verified complaint brought by the plaintiff for the reconveyance to him (and
resultant damages) of two (2) parcels of land mortgaged by him to the defendant Philippine
National Bank (Manila), which the defendant allegedly unlawfully foreclosed. The

defendant then consolidated ownership unto itself, and subsequently sold the parcels to
third parties. The amended Answer of the defendant states on the other hand that the
extrajudicial foreclosure, consolidation of ownership, and subsequent sale to the third
parties were all valid, the bank therefore counterclaims for damages and other equitable
remedies.
xxx xxx xxx
From the evidence and exhibits presented by both parties, the Court is of the opinion that
the following facts have been proved: Two lots, located at Bunlo, Bocaue, Bulacan (the first
covered by Torrens Certificate No. 16743 and possessed of an area of approximately
3,109 square meters: the second covered by Torrens Certificate No. 5787, possessed of
an area of around 610 square meters, and upon which stood a residential-commercial
building were mortgaged to the defendant Philippine National Bank. The lots were under
the common names of the plaintiff (Epifanio dela Cruz), his brother (Delfin) and his sister
(Maria). The mortgage was made possible because of the grant by the latter two to the
former of a special power of attorney to mortgage the lots to the defendant. The lots were
mortgaged to guarantee the following promissory notes:

with the defendant PNB as the highest bidder for P28,908.46. On March 7, 1963, Sheriff
Leopoldo Palad executed a Final Deed of Sale, in response to a letter-request by the
Manager of the PNB (Malolos Branch). On January 15, 1963 a Certificate of Sale in favor
of the defendant was executed by Sheriff Palad. The final Deed of Sale was registered in
the Bulacan Registry of Property on March 19, 1963. Inasmuch as the plaintiff did not
volunteer to buy back from the PNB the two lots, the PNB sold on June 4, 1970 the same
to spouses Conrado de Vera and Marina de Vera in a "Deed of Conditional Sale".
(Decision, pp.3-5; Amended Record on Appeal, pp. 96-98).
After due consideration of the evidence, the CFI on January 22, 1978 rendered its
Decision, the dispositive portion of which reads:
WHEREFORE, PREMISES CONSIDERED, the instant complaint against the defendant
Philippine National Bank is hereby ordered DISMISSED, with costs against the plaintiff.
The Counterclaim against the plaintiff is likewise DISMISSED, for the Court does not
believe that the complaint had been made in bad faith.
SO ORDERED. (Decision, p. B.; Amended Record on Appeal, p. 100)

(1) a promissory note for Pl2,000.00, dated September 2, 1958, and payable within 69
days (date of maturity Nov. l0, 1958);

Not satisfied with the judgment, plaintiff interposed the present appeal assigning as errors
the following:

(2) a promissory note for P4,000.00, dated September 22, 1958, and payable within 49
days (date of maturity Nov. 10, 1958);

I.

(3) a promissory note for P4,000.00, dated June 30, 1.958 1 and payable within 120 days
(date of maturity Nov. 10, 1958) See also Annex C of the complaint itself).
[1 This date of June 30, 1958 is disputed by the plaintiff who claims that the correct date is
June 30, 1961, which is the date actually mentioned in the promissory note. It is however
difficult to believe the plaintiff's contention since if it were true and correct, this would mean
that nearly three (3) years elapsed between the second and the third promissory note; that
at the time the third note was executed, the first two had not yet been paid by the plaintiff
despite the fact that the first two were supposed to be payable within 69 and 49 days
respectively. This state of affairs would have necessitated the renewal of said two
promissory notes. No such renewal was proved, nor was the renewal ever alleged. Finally,
and this is very significant: the third mentioned promissory note states that the maturity
date is Nov. 10, 1958. Now then, how could the loan have been contracted on June 30,
1961? It will be observed that in the bank records, the third mentioned promissory note
was really executed on June 30, 1958 (See Exhs. 9 and 9-A). The Court is therefore
inclined to believe that the date "June 30, 1961" was a mere clerical error and hat the true
and correct date is June 1958. However, even assuming that the true and correct date is
June 30, 1961, the fact still remains that the first two promissory notes had been
guaranteed by the mortgage of the two lots, and therefore, it was legal and proper to
foreclose on the lots for failure to pay said two promissory notes.
On September 6, 1961, Atty. Ramon de los Reyes of the bank (PNB) presented under Act
No. 3135 a foreclosure petition of the two mortgaged lots before the Sheriff's Office at
Malolos, Bulacan; accordingly, the two lots were sold or auctioned off on October 20, 1961

THE LOWER COURT ERRED IN HOLDING IN FOOTNOTE I OF ITS DECISION THAT IT

IS THEREFORE INCLINED TO BELIEVE THAT THE DATE "JUNE 30, 1962" WAS A
MERE CLERICAL ERROR AND THAT THE TRUE AND CORRECT DATE IS JUNE 30,
1958. IT ALSO ERRED IN HOLDING IN THE SAME FOOTNOTE I THAT "HOWEVER,
EVEN ASSUMING THAT THE TRUE AND CORRECT DATE IS JUNE 30, 1961, THE
FACT STILL REMAINS THAT THE FIRST TWO PROMISSORY NOTES HAD BEEN
GUARANTEED BY THE MORTGAGE OF THE TWO LOTS, AND THEREFORE, IT WAS
LEGAL AND PROPER TO FORECLOSE ON THE LOTS FOR FAILURE TO PAY SAID
TWO PROMISSORY NOTES". (page 115, Amended Record on Appeal)
II.
THE LOWER COURT ERRED IN NOT HOLDING THAT THE PETITION FOR
EXTRAJUDICIAL FORECLOSURE WAS PREMATURELY FILED AND IS A MERE SCRAP
OF PAPER BECAUSE IT MERELY FORECLOSED THE ORIGINAL AND NOT THE
AMENDED MORTGAGE.
III.
THE LOWER COURT ERRED IN HOLDING THAT "IT IS CLEAR THAT THE AUCTION
SALE WAS NOT PREMATURE". (page 117, Amended Record on Appeal)
IV.

THE LOWER COURT ERRED IN HOLDING THAT "SUFFICE IT TO STATE THAT

ACTUALLY THE POWER OF ATTORNEY GIVEN TO THE PNB WAS EMBODIED IN THE
REAL ESTATE MORTGAGE (EXB. 10) WHICH WAS REGISTERED IN THE REGISTRY
OF PROPERTY OF BULACAN AND WAS ANNOTATED ON THE TWO TORRENS
CERTIFICATES INVOLVED" (page 118, Amended Record on Appeal).
V.
THE LOWER COURT ERRED IN HOLDING THAT "THE NOTICES REQUIRED UNDER
SEC. 3 OF ACT NO. 3135 WERE ALL COMPLIED WITH" AND "THAT THE DAILY
RECORD . . . IS A NEWSPAPER OF GENERAL CIRCULATION (pages 117-118, Amended
Record on Appeal).
VI.
THE LOWER COURT ERRED IN NOT DECLARING THE CERTIFICATE OF SALE, FINAL
DEED OF SALE AND AFFIDAVIT OF CONSOLIDATION, NULL AND VOID.
VII.
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO RECONVEY TO
PLAINTIFF THE PARCELS OF LAND COVERED BY T.C.T. NOS. 40712 AND 40713 OF
BULACAN (page 8, Amended Record on Appeal)
VIII.
THE LOWER COURT ERRED IN NOT ORDERING DEFENDANT TO PAY TO PLAINTIFF
REASONABLE AMOUNTS OF MORAL AND EXEMPLARY DAMAGES AND ATTORNEY'S
FEES (page 8. Amended Record on Appeal).
IX.
THE LOWER COURT ERRED IN DISMISSING THE INSTANT COMPLAINT AGAINST
THE PHILIPPINE NATIONAL BANK WITH COSTS AGAINST THE PLAINTIFF. (page 118,
Amended Record on Appeal)." (Brief for Plaintiff-Appellant, pp. 1-4) (pp. 17-21, Rollo)
With reference to the pertinent issue at hand, respondent court opined:
The Notices of Sale of appellant's foreclosed properties were published on March 228,
April 11 and April 12, 1969 issues of the newspaper "Daily Record" (Amended Record
on Appeal, p. 108). The date March 28, 1969 falls on a Friday while the dates April 11
and 12, 1969 are on a Friday and Saturday, respectively. Section 3 of Act No. 3135
requires that the notice of auction sale shall be "published once a week for at least three
consecutive weeks". Evidently, defendant-appellee bank failed to comly with this legal
requirement. The Supreme Court has held that:

The rule is that statutory provisions governing publication of notice of mortgage

foreclosure sales must be strictly complied with, and that even slight deviations
therefrom will invalidate the notice and render the sale at least voidable
(Jalandoni vs. Ledesma, 64 Phil. l058. G.R. No. 42589, August 1937 and
October 29, 1937). Interpreting Sec. 457 of the Code of Civil Procedure
(reproduced in Sec. 18(c) of Rule 39, Rules of Court and in Sec. 3 of Act No.
3135) in Campomanes vs. Bartolome andGerman & Co. (38 Phil. 808, G.R. No.
1309, October 18, 1918), this Court held that if a sheriff sells without notice
prescribed by the Code of Civil Procedure induced thereto by the judgment
creditor, and the purchaser at the sale is the judgment creditor, the sale is
absolutely void and no title passes. This is regarded as the settled doctrine in this
jurisdiction whatever the rule may be elsewhere (Boria vs. Addison, 14 Phil. 895,
G.R. No. 18010, June 21, 1922).
. . . It has been held that failure to advertise a mortgage foreclosure sale in
compliance with statutory requirements constitutes a jurisdictional defect
invalidating the sale and that a substantial error or omission in a notice of sale
will render the notice insufticient and vitiate the sale (59 C.J.S. 1314).
(Tambunting vs. Court of Appeals, L-48278, November 8, 1988; 167 SCRA 16,
23-24).
In view of the admission of defendant-appellee in its pleading showing that there was no
compliance of the notice prescribed in Section 3 of Act No. 3135, as amended by Act
4118, with respect to the notice of sale of the foreclosed real properties in this case, we
have no choice but to declare the auction sale as absolutely void in view of the fact that
the highest bidder and purchaser in said auction sale was defendant-appellee bank.
Consequently, the Certificate of Sale, the Final Deed of Sale and Affidavit of
Consolidation are likewise of no legal efffect. (pp. 24-25, Rollo)
Before we focus our attention on the subject of whether or not there was valid compliance
in regard to the required publication, we shall briefly discuss the other observations of
respondent court vis-a-vis herein private respondent's ascriptions raised with the appellate
court when his suit for reconveyance was dismissed by the court of origin even as private
respondent does not impugn the remarks of respondent court along this line.
Although respondent court acknowledged that there was an ambiguity on the date of
execution of the third promissory note (June 30, 1961) and the date of maturity thereof
(October 28, 1958), it was nonetheless established that the bank introduced sufficient
proof to show that the discrepancy was a mere clerical error pursuant to Section 7, Rule
l30 of the Rules of Court. Anent the second disputation aired by private respondent, the
appellate court observed that inasmuch as the original as well as the subsequent mortgage
were foreclosed only after private respondent's default, the procedure pursued by herein
petitioner in foreclosing the collaterals was thus appropriate albeit the petition therefor
contained only a copy of the original mortgage.
It was only on the aspect of publication of the notices of sale under Act No. 3135, as
amended, and attorney's fees where herein private respondent scored points which
eliminated in the reversal of the trial court's decision. Respondent court was of the
impression that herein petitioner failed to comply with the legal requirement and the sale

effected thereafter must be adjudged invalid following the ruling of this Court
in Tambunting vs. Court of Appeals (167 SCRA 16 [1988]); p. 8, Decision, p. 24, Rollo). In
view of petitioner's so-called indifference to the rules set forth under Act No. 3135, as
amended, respondent court expressly authorized private respondent to recover attorney's
fees because he was compelled to incur expenses to protect his interest.
Immediately upon the submission of a supplemental petition, the spouses Conrado and
Marina De Vera filed a petition in intervention claiming that the two parcels of land involved
herein were sold to them on June 4, 1970 by petitioner for which transfer certificates of title
were issued in their favor (p. 40, Rollo). On the other hand, private respondent pressed the
idea that the alleged intervenors have no more interest in the disputed lots in view of the
sale effected by them to Teresa Castillo, Aquilino and Antonio dela Cruz in 1990 (pp. 105106, Rollo).
On March 9, 1992, the Court resolved to give due course to the petition and required the
parties to submit their respective memoranda (p. 110, Rollo).
Now, in support of the theory on adherence to the conditions spelled in the preliminary
portion of this discourse, the pronouncement of this Court in Bonnevie vs. Court of
Appeals (125 SCRA [1983]; p. 135, Rollo) is sought to be utilized to press the point that the
notice need not be published for three full weeks. According to petitioner, there is no
breach of the proviso since after the first publication on March 28, 1969, the second notice
was published on April 11, 1969 (the last day of the second week), while the third
publication on April 12, 1969 was announced on the first day of the third week. Petitioner
thus concludes that there was no violation from the mere happenstance that the third
publication was made only a day after the second publication since it is enough that the
second publication be made on any day within the second week and the third publication,
on any day within the third week. Moreover, in its bid to rectify its admission in judicio,
petitioner asseverates that said admission alluded to refers only to the dates of
publications, not that there was non-compliance with the publication requirement.
Private respondent, on the other hand, views the legal question from a different
perspective. He believes that the period between each publication must never be less than
seven consecutive days (p. 4, Memorandum; p. 124,Rollo).
We are not convinced by petitioner's submissions because the disquisition in support
thereof rests on the erroneous impression that the day on which the first publication was
made, or on March 28, 1969, should be excluded pursuant to the third paragraph of Article
17 of the New Civil Code.
It must be conceded that Article 17 is completely silent as to the definition of what is a
"week". In Concepcion vs. Zandueta (36 O.G. 3139 [1938]; Moreno, Philippine Law
Dictionary, Second Ed., 1972, p. 660), this term was interpreted to mean as a period of
time consisting of seven consecutive days a definition which dovetails with the ruling
in E.M. Derby and Co. vs. City of Modesto, et al. (38 Pac. Rep. 900 [1984]; 1 Paras, Civil
Code of the Philippines Annotated, Twelfth Ed., 1989, p. 88; 1 Tolentino, Commentaries
and Jurisprudence on th Civil Code, 1990, p. 46). Following the interpretation in Derby as
to the publication of an ordinance for "at least two weeks" in some newspaper that:

. . . here there is no date or event suggesting the exclusion of the first

day's publication from the computation, and the cases above cited take
this case out of the rule stated in Section 12, Code Civ. Proc. which
excludes the first day and includes the last;
the publication effected on April 11, 1969 cannot be construed as sufficient
advertisement for the second week because the period for the first week should
be reckoned from March 28, 1969 until April 3, 1969 while the second week
should be counted from April 4, 1969 until April 10, 1969. It is clear that the
announcement on April 11, 1969 was both theoretically and physically
accomplished during the first day of the third week and cannot thus be equated
with compliance in law. Indeed, where the word is used simply as a measure of
duration of time and without reference to the calendar, it means a period of seven
consecutive days without regard to the day of the week on which it begins
(1 Tolentino, supra at p. 467citing Derby).
Certainly, it would have been absurd to exclude March 28, 1969 as reckoning point in line
with the third paragraph of Article 13 of the New Civil Code, for the purpose of counting the
first week of publication as to the last day thereof fall on April 4, 1969 because this will
have the effect of extending the first week by another day. This incongruous repercussion
could not have been the unwritten intention of the lawmakers when Act No. 3135 was
enacted. Verily, inclusion of the first day of publication is in keeping with the computation
in Bonnevie vs. Court of Appeals (125 SCRA 122 [1983]) where this Court had occasion to
pronounce, through Justice Guerrero, that the publication of notice on June 30, July 7 and
July 14, 1968 satisfied the publication requirement under Act No. 3135. Respondent court
cannot, therefore, be faulted for holding that there was no compliance with the strict
requirements of publication independently of the so- called admission in judicio.
WHEREFORE, the petitions for certiorari and intervention are hereby dismissed and the
decision of the Court of Appeals dated April 17, 1991 is hereby affirmed in toto.

I. USE OF A PROVISO
ALU-TUCP, Representing Members: ALAN BARINQUE, with 13 others, namely:
ENGR. ALAN G. BARINQUE, ENGR. DARRELL LEE ELTAGONDE, EDUARD H.
FOOKSON, JR., ROMEO R. SARONA, RUSSELL GACUS, JERRY BONTILAO,
EUSEBIO MARIN, JR., LEONIDO ECHAVEZ, BONIFACIO MEJOS, EDGAR S.
BONTUYAN, JOSE G. GARGUENA, JR., OSIAS B. DANDASAN, and GERRY I.
FETALVERO,petitioners,
vs.
NATIONAL LABOR RELATIONS COMMISSION and NATIONAL STEEL
CORPORATION (NSC), respondents.
Leonard U. Sawal for petitioners.
Saturnino Mejorada for private respondent.

FELICIANO, J.:
In this Petition for Certiorari, petitioners assail the Resolution of the National Labor
Relations Commission ("NLRC") dated 8 January 1993 which declared petitioners to be
project employees of private respondent National Steel Corporation ("NSC"), and the
NLRC's subsequent Resolution of 15 February 1993, denying petitioners' motion for
reconsideration.
Petitioners plead that they had been employed by respondent NSC in connection with its
Five Year Expansion Program (FAYEP I & II) 1 for varying lengths of time when they were
separated from NSC's service:
Employee Date Nature of Separated
Employed Employment
1. Alan Barinque 5-14-82 Engineer 1 8-31-91
2. Jerry Bontilao 8-05-85 Engineer 2 6-30-92
3. Edgar Bontuyan 11-03-82 Chairman to present
4. Osias Dandasan 9-21-82 Utilityman 1991
5. Leonido Echavez 6-16-82 Eng. Assistant 6-30-92
6. Darrell Eltagonde 5-20-85 Engineer 1 8-31-91
7. Gerry Fetalvero 4-08-85 Mat. Expediter regularized
8. Eduard Fookson 9-20-84 Eng. Assistant 8-31-91
9. Russell Gacus 1-30-85 Engineer 1 6-30-92
10. Jose Garguena 3-02-81 Warehouseman to present
11. Eusebio Mejos 11-17-82 Survey Aide 8-31-91
12. Bonifacio Mejos 11-17-82 Surv. Party Head 1992
13. Romeo Sarona 2-26-83 Machine Operator 8-31-91 2
On 5 July 1990, petitioners filed separate complaints for unfair labor practice,
regularization and monetary benefits with the NLRC, Sub-Regional Arbitration Branch XII,
Iligan City.
The complaints were consolidated and after hearing, the Labor Arbiter in a Decision dated
7 June 1991, declared petitioners "regular project employees who shall continue their
employment as such for as long as such [project] activity exists," but entitled to the salary
of a regular employee pursuant to the provisions in the collective bargaining agreement. It
also ordered payment of salary differentials. 3
Both parties appealed to the NLRC from that decision. Petitioners argued that they were
regular, not project, employees. Private respondent, on the other hand, claimed that
petitioners are project employees as they were employed to undertake a specific project
NSC's Five Year Expansion Program (FAYEP I & II).

The NLRC in its questioned resolutions modified the Labor Arbiter's decision. It affirmed
the Labor Arbiter's holding that petitioners were project employees since they were hired to
perform work in a specific undertaking the Five Years Expansion Program, the
completion of which had been determined at the time of their engagement and which
operation was not directly related to the business of steel manufacturing. The NLRC,
however, set aside the award to petitioners of the same benefits enjoyed
by regular employees for lack of legal and factual basis.
Deliberating on the present Petition for Certiorari, the Court considers that petitioners have
failed to show any grave abuse of discretion or any act without or in excess of jurisdiction
on the part of the NLRC in rendering its questioned resolutions of 8 January 1993 and 15
February 1993.
The law on the matter is Article 280 of the Labor Code which reads in full:
Art. 280. Regular and Casual Employment The provisions of the
written agreement to the contrary notwithstanding and regardless of the
oral agreement of the parties, and employment shall be deemed to be
regular where the employee has been engaged to perform activities
which are usually necessary or desirable in the usual business or trade
of the employer, except where the employment has been fixed for a
specific project or undertaking the completion or termination of which
has been determined at the time of the engagement of the employee or
where the work or services to be performed is seasonal in nature and
the employment is for the duration of the season.
An employment shall be deemed to be casual if it is not covered by the
preceding paragraph: Provided, That, any employee who has rendered
at least one year service, whether such service is continuous or broken,
shall be considered a regular employee with respect to the activity in
which he is employed and his employment shall continue while such
actually exists. (Emphasis supplied)
Petitioners argue that they are "regular" employees of NSC because: (i) their jobs are
"necessary, desirable and work-related to private respondent's main business, steelmaking"; and (ii) they have rendered service for six (6) or more years to private respondent
NSC. 4
The basic issue is thus whether or not petitioners are properly characterized as "project
employees" rather than "regular employees" of NSC. This issue relates, of course, to an
important consequence: the services of project employees are co-terminous with the
project and may be terminated upon the end or completion of the project for which they
were hired. 5 Regular employees, in contract, are legally entitled to remain in the service of
their employer until that service is terminated by one or another of the recognized modes
of termination of service under the Labor Code. 6
It is evidently important to become clear about the meaning and scope of the term "project"
in the present context. The "project" for the carrying out of which "project employees" are
hired would ordinarily have some relationship to the usual business of the employer.

Exceptionally, the "project" undertaking might not have an ordinary or normal relationship
to the usual business of the employer. In this latter case, the determination of the scope
and parameeters of the "project" becomes fairly easy. It is unusual (but still conceivable)
for a company to undertake a project which has absolutely no relationship to the usual
business of the company; thus, for instance, it would be an unusual steel-making company
which would undertake the breeding and production of fish or the cultivation of vegetables.
From the viewpoint, however, of the legal characterization problem here presented to the
Court, there should be no difficulty in designating the employees who are retained or hired
for the purpose of undertaking fish culture or the production of vegetables as "project
employees," as distinguished from ordinary or "regular employees," so long as the duration
and scope of the project were determined or specified at the time of engagement of the
"project employees." 7 For, as is evident from the provisions of Article 280 of the Labor
Code, quoted earlier, the principal test for determining whether particular employees are
properly characterized as "project employees" as distinguished from "regular employees,"
is whether or not the "project employees" were assigned to carry out a "specific project or
undertaking," the duration (and scope) of which were specified at the time the employees
were engaged for that project.
In the realm of business and industry, we note that "project" could refer to one or the other
of at least two (2) distinguishable types of activities. Firstly, a project could refer to a
particular job or undertaking that is within the regular or usual business of the employer
company, but which is distinct and separate, and identifiable as such, from the other
undertakings of the company. Such job or undertaking begins and ends at determined or
determinable times. The typical example of this first type of project is a particular
construction job or project of a construction company. A construction company ordinarily
carries out two or more discrete identifiable construction projects: e.g., a twenty-five- storey
hotel in Makati; a residential condominium building in Baguio City; and a domestic air
terminal in Iloilo City. Employees who are hired for the carrying out of one of these
separate projects, the scope and duration of which has been determined and made known
to the employees at the time of employment, are properly treated as "project employees,"
and their services may be lawfully terminated at completion of the project.
The term "project" could also refer to, secondly, a particular job or undertaking that
is not within the regular business of the corporation. Such a job or undertaking must also
be identifiably separate and distinct from the ordinary or regular business operations of the
employer. The job or undertaking also begins and ends at determined or determinable
times. The case at bar presents what appears to our mind as a typical example of this kind
of "project."
NSC undertook the ambitious Five Year Expansion Program I and II with the ultimate end
in view of expanding the volume and increasing the kinds of products that it may offer for
sale to the public. The Five Year Expansion Program had a number of component projects:
e.g., (a) the setting up of a "Cold Rolling Mill Expansion Project"; (b) the establishment of a
"Billet Steel-Making Plant" (BSP); (c) the acquisition and installation of a "Five Stand
TDM"; and (d) the "Cold Mill Peripherals Project." 8 Instead of contracting out to an outside
or independent contractor the tasks of constructing the buildings with related civil and
electrical works that would house the new machinery and equipment, the installation of the
newly acquired mill or plant machinery and equipment and the commissioning of such
machinery and equipment, NSC opted to execute and carry out its Five Yeear Expansion
Projects "in house," as it were, by administration. The carrying out of the Five Year

Expansion Program (or more precisely, each of its component projects) constitutes a
distinct undertaking identifiable from the ordinary business and activity of NSC. Each
component project, of course, begins and ends at specified times, which had already been
determined by the time petitioners were engaged. We also note that NSC did the work
here involved the construction of buildings and civil and electrical works, installation of
machinery and equipment and the commissioning of such machinery only for
itself. Private respondent NSC was not in the business of constructing buildings and
installing plant machinery for the general business community, i.e., for unrelated, third
party, corporations. NSC did not hold itself out to the public as a construction company or
as an engineering corporation.
Which ever type of project employment is found in a particular case, a common basic
requisite is that the designation of named employees as "project employees" and their
assignment to a specific project, are effected and implemented in good faith, and not
merely as a means of evading otherwise applicable requirements of labor laws.
Thus, the particular component projects embraced in the Five Year Expansion Program, to
which petitioners were assigned, were distinguishable from the regular or ordinary
business of NSC which, of course, is the production or making and marketing of steel
products. During the time petitioners rendered services to NSC, their work was limited to
one or another of the specific component projects which made up the FAYEP I and II.
There is nothing in the record to show that petitioners were hired for, or in fact assigned to,
other purposes, e.g., for operating or maintaining the old, or previously installed and
commissioned, steel-making machinery and equipment, or for selling the finished steel
products.
We, therefore, agree with the basic finding of the NLRC (and the Labor Arbiter) that the
petitioners were indeed "project employees:"
It is well established by the facts and evidence on record that herein 13
complainants were hired and engaged for specific activities or
undertaking the period of which has been determined at time of hiring
or engagement. It is of public knowledge and which this Commission
can safely take judicial notice that the expansion program (FAYEP) of
respondent NSC consist of various phases [of] project components
which are being executed or implemented independently or
simultaneously from each other . . .
In other words, the employment of each "project worker" is dependent
and co-terminous with the completion or termination of the specific
activity or undertaking [for which] he was hired which has been predetermined at the time of engagement. Since, there is no showing that
they (13 complainants) were engaged to perform work-related activities
to the business of respondent which is steel-making, there is no logical
and legal sense of applying to them the proviso under the second
paragraph of Article 280 of the Labor Code, as amended.
xxx xxx xxx

The present case therefore strictly falls under the definition of "project
employees" on paragraph one of Article 280 of the Labor Code, as
amended. Moreover, it has been held that the length of service of a
project employee is not the controlling test of employment tenure but
whether or not "the employment has been fixed for a specific project or
undertaking the completion or termination of which has been
determined at the time of the engagement of the employee". (See
Hilario Rada v. NLRC, G.R. No. 96078, January 9, 1992; and Sandoval
Shipping, Inc. v. NLRC, 136 SCRA 674 (1985). 9

In the case of Mercado, Sr. vs. National Labor Relations Commission, 11 this Court ruled
that the proviso in the second paragraph of Article 280 relates only to casual
employees and is not applicable to those who fall within the definition of said Article's first
paragraph, i.e., project employees. The familiar grammatical rule is that a proviso is to be
construed with reference to the immediately preceding part of the provision to which it is
attached, and not to other sections thereof, unless the clear legislative intent is to restrict or
qualify not only the phrase immediately preceding the proviso but also earlier provisions of
the statute or even the statute itself as a whole. No such intent is observable in Article 280
of the Labor Code, which has been quoted earlier.

Petitioners next claim that their service to NSC of more than six (6) years should qualify
them as regular employees. We believe this claim is without legal basis. The simple fact
that the employment of petitioners as project employees had gone beyond one (1) year,
does not detract from, or legally dissolve, their status as project employees. 10 The second
paragraph of Article 280 of the Labor Code, quoted above, providing that an employee who
has served for at least one (1) year, shall be considered a regular employee, relates
to casual employees, not to project employees.

ACCORDINGLY, in view of the foregoing, the Petition for Certiorari is hereby DISMISSED
for lack of merit. The Resolutions of the NLRC dated 8 January 1993 and 15 February
1993 are hereby AFFIRMED. No pronouncement as to costs.