FULL-­‐TEXTS

 COMPILATION  
 
PART  5:  INTERPRETATION  OF  WORDS  
 
“May”  
(7)  Capati  vs  Ocampo,  G.R.  No.  L-­‐28742,  April  30,  1982  

We  set  aside  the  order  of  the  Court  of  First  Instance  of  Pampanga  in  Civil  Case  No.  3188  which  dismissed  the  plaintiff's  complaint  on  
ground  of  improper  venue.  

Plaintiff  Virgilio  Capati  a  resident  of  Bacolor,  Pampanga,  was  the  contractor  of  the  Feati  Bank  for  the  construction  of  its  building  in  
Iriga,  Camarines  Sur.  On  May  23,  1967,  plaintiff  entered  into  a  sub-­‐contract  with  the  defendant  Dr.  Jesus  Ocampo,  a  resident  of  Naga  
City,   whereby   the   latter,   in   consideration   of   the   amount   of   P2,200.00,   undertook   to   construct   the   vault   walls,   exterior   walls   and  
columns   of   the   said   Feati   building   in   accordance   with   the   specifications   indicated   therein.   Defendant   further   bound   himself   to  
complete   said   construction   on   or   before   June   5,   1967   and,   to   emphasize   this   time   frame   for   the   completion   of   the   construction   job,  
defendant  affixed  his  signature  below  the  following  stipulation  written  in  bold  letters  in  the  sub-­‐contract:  "TIME  IS  ESSENTIAL,  TO  BE  
FINISHED  5  JUNE'  67."  

Claiming  that  defendant  finished  the  construction  in  question  only  on  June  20,  1967,  plaintiff  filed  in  the  Court  of  First  Instance  of  
Pampanga  an  action  for  recovery  of  consequential  damages  in  the  sum  of  P85,000.00  with  interest,  plus  attorney's  fees  and  costs.  The  
complaint   alleged   inter   alia   that   "due   to   the   long   unjustified   delay   committed   by   defendant,   in   open   violation   of   his   express   written  
agreement  with  plaintiff,  the  latter  has  suffered  great  irreparable  loss  and  damage  ...  "  

Defendant  filed  a  motion  to  dismiss  the  complaint  on  the  ground  that  venue  of  action  was  improperly  laid.  The  motion  was  premised  
on  the  stipulation  printed  at  the  back  of  the  contract  which  reads:  

14.  That  all  actions  arising  out,  or  relating  to  this  contract  may  be  instituted  in  the  Court  of  First  Instance  of  the  City  
of  Naga.  

Plaintiff  filed  an  opposition  to  the  motion,  claiming  that  their  agreement  to  hold  the  venue  in  the  Court  of  First  Instance  of  Naga  City  
was  merely  optional  to  both  contracting  parties.  In  support  thereof,  plaintiff  cited  the  use  of  the  word  "may  "  in  relation  with  the  
institution  of  any  action  arising  out  of  the  contract.  

The  lower  court,  in  resolving  the  motion  to  dismiss,  ruled  that  "there  was  no  sense  in  providing  the  aforequoted  stipulation,  pursuant  
to   Sec.   3   of   Rule   4   of   the   Revised   Rules   of   Court,   if   after   all,   the   parties   are   given   the   discretion   or   option   of   filing   the   action   in   their  
respective  residences,"  and  thereby  ordered  the  dismissal  of  the  complaint.  

Hence,  this  appeal.  

The  rule  on  venue  of  personal  actions  cognizable  by  the  courts  of  first  instance  is  found  in  Section  2  (b),  Rule  4  of  the  Rules  of  Court,  
which  provides  that  such  "actions  may  be  commenced  and  tried  where  the  defendant  or  any  of  the  defendants  resides  or  may  be  
found,  or  where  the  plaintiff  or  any  of  the  plaintiffs  resides,  at  the  election  of  the  plaintiff."  The  said  section  is  qualified  by  the  following  
provisions  of  Section  3  of  the  same  rule:  

By  written  agreement  of  the  parties  the  venue  of  an  action  may  be  changed  or  transferred  from  one  province  to  
another.  

Defendant   stands   firm   on   his   contention   that   because   of   the   aforequoted   covenant   contained   in   par.   14   of   the  
contract,  he  cannot  be  sued  in  any  court  except  the  Court  of  First  Instance  of  Naga  City.  We  are  thus  called  upon  to  
rule   on   the   issue   as   to   whether   the   stipulation   of   the   parties   on   venue   is   restrictive   in   the   sense   that   any   litigation  
arising  from  the  contract  can  be  filed  only  in  the  court  of  Naga  City,  or  merely  permissive  in  that  the  parties  may  
submit  their  disputes  not  only  in  Naga  City  but  also  in  the  court  where  the  defendant  or  the  plaintiff  resides,  at  the  
election  of  the  plaintiff,  as  provided  for  by  Section  2  (b)  Rule  4  of  the  Rules  of  Court.  
 It  is  well  settled  that  the  word  "may"  is  merely  permissive  and  operates  to  confer  discretion  upon  a  party.  Under  
ordinary   circumstances,   the   term   "may   be"   connotes   possibility;   it   does   not   connote   certainty.   "May"   is   an  
1
auxillary  verb  indicating  liberty,  opportunity,  permission  or  possibility.    

2
In   Nicolas   vs.   Reparations   Commission   ,   a   case   involving   the   interpretation   of   a   stipulation   as   to   venue   along   lines   similar   to   the  
present  one,  it  was  held  that  the  agreement  of  the  parties  which  provided  that  "all  legal  actions  arising  out  of  this  contract  ...  may  
be  brought  in  and  submitted  to  the  jurisdiction  of  the  proper  courts  in  the  City  of  Manila,"  is  not  mandatory.  

We  hold  that  the  stipulation  as  to  venue  in  the  contract  in  question  is  simply  permissive.  By  the  said  stipulation,  the  parties  did  not  
agree  to  file  their  suits  solely  and  exclusively  with  the  Court  of  First  Instance  of  Naga.  They  merely  agreed  to  submit  their  disputes  to  
the  said  court,  without  waiving  their  right  to  seek  recourse  in  the  court  specifically  indicated  in  Section  2  (b),  Rule  4  of  the  Rules  of  
Court.  

Since   the   complaint   has   been   filed   in   the   Court   of   First   Instance   of   Pampanga,   where   the   plaintiff   resides,   the   venue   of   action   is  
properly  laid  in  accordance  with  Section  2  (b),  Rule  4  of  the  Rules  of  Court.  

WHEREFORE,  the  order  appealed  from  is  hereby  set  aside.  Let  the  records  be  returned  to  the  court  of  origin  for  further  proceedings.  
Costs  against  defendant-­‐appellee.  

SO  ORDERED.  

 
 
(8)  Philippine  Consumer  vs.  NTC,  G.R.  No.  L-­‐63318,  August  18,  1984  
 

I  

On  March  2,  1983,  petitioner  filed  the  instant  petition  praying,  among  others,  that  the  decision  of  respondent  NTC  dated  November  
22,  1982  and  the  order  dated  January  14,  1983  be  annulled  and  set  aside  on  the  grounds  therein  stated  (pp.  2-­‐19,  rec.).  

After  the  petitioner,  the  private  respondent,  and  the  Solicitor  General  for  public  respondent  NTC  filed  their  respective  comments  and  
memoranda   (pp.   47-­‐53,   96-­‐106,   109-­‐116,   127-­‐142,   147-­‐164,   206-­‐221,   rec.),   on   November   25,   1983,   the   decision   sought   to   be  
reconsidered  was  promulgated,  annulling  and  setting  aside  the  challenged  decision  and  order,  respectively  dated  November  22,  1982  
and  January  14,  1983  (pp.  225-­‐232,  rec.).  

Said  decision  is  not  unanimous  as  it  bears  the  concurrence  of  only  9  members  of  this  Court,  while  3  members  took  no  part  and  1  member  
reserved  his  vote  (p  232,  rec.)  

In  a  resolution  dated  January  10,  1984  and  released  on  January  17,  1984,  the  Court  granted  respondent  PLDT's  motion  for  15-­‐day  
extension  from  the  expiration  of  the  reglementary  period  within  which  to  file  a  motion  for  reconsideration  (pp.  233,  236,  rec.).  

On  January  12,  1984,  PLDT  filed  its  motion  for  reconsideration  (pp.  237-­‐268,  rec.).  

On  February  27,  1984,  respondent  PLDT  filed  a  motion  to  admit  attached  supplemental  motion  for  reconsideration  (pp.  281-­‐301,  rec.).  

On   February   27,   1984,   public   respondent   NTC,   thru   the   Solicitor   General,   filed   a   manifestation   and   motion   that   it   is   joining   core,  
respondent  PLDT  in  its  motion  for  reconsideration  thereby  adopting  the  same  as  its  own  (pp.  302-­‐303,  305-­‐306,  rec.).  

In  a  resolution  dated  March  1,  1984  and  issued  on  March  2,  1984,  the  Court  admitted  the  supplemental  motion  for  reconsideration  of  
PLDT,  noted  the  manifestation  and  motion  of  the  Solicitor  General  for  and  in  behalf  of  respondent  NTC  that  it  is  joining  the  motion  for  
reconsideration  of  PLDT  and  adopting  it  as  its  own,  and  required  petitioner  to  convenient  within  10  days  from  notice  on  the  aforesaid  
supplemental  motion  for  reconsideration  of  PLDT  (p.  304-­‐A,  rec.).  

On  March  28,  1984,  petitioner  filed  its  comment  on  respondent's  motion  for  reconsideration  (pp.  310-­‐317,  rec.).  
In  a  resolution  dated  April  3,  1984  and  issued  on  April  11,  1984,  the  Court  denied  the  motion  for  reconsideration  (p.  318A,  rec.).  

On  April  6,  1984,  respondent  PLDT  filed  a  motion  to  strike  out  "discussion  (e)"  in  petitioner's  "comment  on  respondents'  motions"  
dated  March  20,  1984  (pp.  319-­‐321,  rec.).  

In   a   resolution   dated   April   12,   1984   and   issued   on   April   16,   1984,   the   Court   required   petitioner's   counsel   Atty.   Tomas   Llamas   to  
comment  within  10  days  from  notice  on  the  aforesaid  motion  to  strike  out  (p.  323,  rec.).  

On   April   17,   1984,   respondent   PLDT,   thru   counsel,   filed   a   motion   for   leave   to   file   within   15   days   from   date   a   second   motion   for  
reconsideration  (pp.  324-­‐326,  rec.).  

On  April  27,  1984,  petitioner  filed  an  opposition  to  the  aforesaid  motion  of  PLDT  for  leave  to  file  within  15  days  to  file  a  second  motion  
for  reconsideration  (pp.  328-­‐330,  rec.).  

On  May  2,  1984,  private  respondent  PLDT  filed  a  second  motion  for  reconsideration  with  an  annex  (pp.  332-­‐344,  rec.).  

In  a  resolution  dated  May  8,  1984  but  issued  on  May  11,  1984,  the  Court  granted  the  motion  of  PLDT  to  file  a  second  motion  for  
reconsideration   within   15   days   from   April   16,   1984,   noted   the   opposition   of   petitioner   to   said   motion,   and   required   petitioner   to  
comment   within   15   days   from   notice   on   the   aforesaid   second   motion   for   reconsideration   of   PLDT   for   the   reconsideration   of   the  
decision  of  November  25,  1983  (p.  345,  rec.).  

On  May  4,  1984,  petitioner  filed  its  comment  on  the  second  motion  for  reconsideration  of  private  respondent  (pp.  346-­‐350,  rec.).  

In  a  resolution  dated  May  10,  1984  and  issued  on  May  16,  1984,  the  Court  required  respondents  to  file  a  reply  within  10  days  from  
notice  on  the  aforesaid  comment  of  petitioner  on  private  respondent  PLDT's  motion  praying  that  the  discussion  (par.  3)  in  petitioner's  
comment  on  the  first  motion  for  reconsideration  and  the  supplemental  motion  for  reconsideration  be  deleted  (p.  352,  rec.).  

On   May   21,   1984,   public   respondent   NTC   filed   a   manifestation   joining   private   respondent   PLDT   and   adopting   the   latter's   second  
motion  for  reconsideration  (pp.  353-­‐354,  rec.),  which  the  Court  granted  in  a  resolution  dated  May  29,  1984  and  issued  on  June  6,  1984  
(p.  355-­‐A).  

On   May   28,1984,   respondent   PLDT   filed   a   motion   for   extension   of   10   days   or   until   June   7,   1984   within   which   to   submit   the   required  
reply  in  the  resolution  of  May  10,  1984  and  issued  on  May  16,  1984  (pp.  356-­‐357,  rec.),  which  was  granted  in  a  resolution  dated  June  
5,  1984  and  issued  on  July  3,  1984  (p.  357-­‐A,  rec.).  

On  June  1,  1984,  petitioner  filed  its  comment  on  PLDT's  second  motion  for  reconsideration,  with  a  motion  to  declare  final  the  decision  
with  respect  to  public  respondent  NTC  (pp.  358362,  rec.).  

A  day  before  June  1,  1984,  or  on  May  31,  1984,  private  respondent  PLDT  filed  its  reply  to  petitioner's  "comment  on  motion  of  private  
respondent"  dated  May  4,  1984  [motion  to  strike]  (pp.  366-­‐369,  rec.).  

On  July  16,  1984,  after  its  motions  for  extension  were  granted,  public  respondent  NTC  thru  the  Solicitor  General,  finally  filed  its  reply  
(pp.  370-­‐371,  372-­‐A,  373,  375-­‐381,  rec.).  

It  should  be  emphasized  that  the  resolution  of  this  Court  dated  April  3,  1984  but  issued  on  April  11,  1984,  denying  the  first  motion  for  
reconsideration  did  not  state  that  the  denial  is  final  (see  p.  318-­‐A,  rec.).  

And  the  motion  of  May  29,  1984  but  filed  on  June  1,  1984  of  petitioner  to  declare  as  final  the  decision  of  November  25,  1983  (which  
motion  was  included  in  plaintiff's  comment  on  PLDT's  second  motion  for  reconsideration)  with  respect  to  public  respondent  NTC  (pp.  
361-­‐362,  rec.),  was  not  acted  upon  by  this  Court,  ostensibly  because  as  early  as  May  21,  1984,  public  respondent  NTC,  thru  the  Solicitor  
General,  filed  a  manifestation  that  it  is  joining  private  respondent  PLDT  in  its  second  motion  for  reconsideration  dated  May  18,  1984  
and  adopting  it  as  its  own  (pp.  353-­‐354,  rec.).  

II  
It  is  not  disputed  —  and  should  be  emphasized  that  on  August  31,  1982,  this  Court  set  aside  the  NTC  order  dated  April  14,  1982  in  the  
case   of   Samuel   Bautista   vs.   NTC,   et   al.   (16   SCRA   411)   provisionally   approving   the   revised   schedule   of   rates   for   the   Subscriber  
Investments  Plan,  on  the  ground  that  there  was  necessity  of  a  hearing  by  the  Commission  before  it  could  have  acted  on  the  PLDT  
application   for   said   revised   schedule,   to   give   opportunity   to   the   public,   especially   herein   petitioner   and   the   Solicitor   General   to  
substantiate  their  objections  to  the  said  schedule  as  excessive  and  unreasonable,  especially  for  the  low-­‐income  and  middle-­‐income  
groups,  which  cannot  afford  telephone  connections  and  that  there  is  no  need  to  increase  the  rate  because  PLDT  is  f inancially  sound.  

Thereafter,  in  NTC  Case  No.  82-­‐87  entitled  "Re  Philippine  Long  Distance  Telephone  Co.  respondent  NTC  conducted  several  hearings  
on  PLDT's  revised  Subscriber  Investments  Plan  schedule  at  which  written  oppositions  were  filed  by  herein  petitioner  PCFI,  the  Solicitor  
General,   Atty.   Samuel   Bautista,   Flora   Alabanza,   the   municipality   of   Marikina,   and   the   Integrated   Telecommunications   Suppliers'  
Association  of  the  Philippines  (ITESAP).  Other  oppositors  failed  to  file  their  written  oppositions.  The  hearings  on  the  merits  actually  
started  on  August  4,  1982  and  continued  for  four  (4)  subsequent  dates.  

The  oppositors,  thru  counsel,  thoroughly  cross-­‐examined  the  witness  for  the  applicant,  Mr.  Romeo  Sisteban  applicant's  Vice-­‐President  
for  Budget  and  Financial  Planning.  

None   of   the   oppositors   opted   to   present   evidence   but   merely   filed   Memoranda   and   thereafter   manifested   that   the   case   is   submitted  
for  decision  Because  PLDT  made  some  concessions  in  favor  of  the  oppositors,  oppositors  ITESAP,  Eastern  Telecommunications,  Inc.,  
Philippine  Global  Communications,  Inc.  (Philcom),  Globe-­‐Mackay  Cable  and  Radio  Corporation  (GMCR)  withdrew  their  opposition  and  
manifested  that  they  are  no  longer  opposing  the  application  after  which  respondent  NTC  issued  the  challenged  decision  of  November  
22,  1982.  

Respondent  NTC  rendered  the  challenged  decision  dated  November  22,  1982,  approving  the  revised  schedule  on  the  ground  that  the  
rates   are   within   the   50%   of   cost   limit   provided   in   P.D.   No.   217,   that   they   are   just   and   reasonable   and   in   consonance   with   the   public  
policies  declared  in  said  decree,  and  that  such  approval  is  in  the  public  interest  (see  NTC  decision  of  Nov.  22,  1982,  pp.  2-­‐19,  rec.).  

It  is  undisputed  therefore  that  petitioner  and  the  other  oppositors  were  accorded  due  process.  

From  said  decision  dated  November  22,  1982,  petitioner  filed  the  instant  petition.  

III  

The   decision   promulgated   on   November   25,   1983   interprets   the   rule-­‐making   authority   delegated   in   Section   2   of   P.D.   No.   217   to   the  
then  Department  of  Public  Works,  Transportation  and  Communications  as  mandatory,  which  construction  is  not  supported  by  the  
actual  phraseology  of  said  Section  2,  which  reads  thus:  

The  Department  of  Public  Works,  Transportation  and  Communications,  through  its  Board  of  Communications  and/or  
appropriate   agency   shall   see   to   it   that   the   herein   declared   policies   for   the   telephone   industry   are   immediately  
implemented  and  for  this  purpose,  pertinent  rules  and  regulations  may  be  promulgated  (emphasis  supplied).  

The  basic  canon  of  statutory  interpretation  is  that  the  word  used  in  the  law  must  be  given  its  ordinary  meaning,  unless  a  contrary  
intent  is  manifest  from  the  law  itself.  Hence,  the  phrase  "may  be  promulgated"  should  not  be  construed  to  mean  "shall"  or  "must".  It  
shall  be  interpreted  in  its  ordinary  sense  as  permissive  or  discretionary  on  the  part  of  the  delegate  —  department  or  the  Board  6f  
Communications   then,   now   the   National   Telecommunications   Commission   —   whether   or   not   to   promulgate   pertinent   rules   and  
regulations.  There  is  nothing  in  P.D.  No.  217  which  commands  that  the  phrase  "may  be  promulgated"  should  be  construed  as  "shall  be  
promulgated."  The  National  Telecommunications  Commission  can  function  and  has  functioned  without  additional  rules,  aside  from  
the  existing  Public  Service  Law,  as  amended,  and  the  existing  rules  already  issued  by  the  Public  Service  Commission,  as  well  as  the  
1978  rules  issued  by  the  Board  of  Communications,  the  immediate  predecessor  of  respondent  NTC.  It  should  be  recalled  that  the  PLDT  
petition  for  approval  of  its  revised  SIP  schedule  was  filed  on  March  20,1980.  

P.D.  No.  217  does  not  make  the  rules  and  regulations  to  be  promulgated  by  the  respondent  NTC  as  essential  to  the  exercise  of  its  
jurisdiction  over  applications  for  SIP  schedules.  In  Ang  Tibay  vs.  CIR  (69  Phil.  635),  this  Court,  through  Mr.  Justice  Jose  P.  Laurel,  did  
not  include  the  promulgation  of  rules  and  regulations  as  among  the  seven  (7)  requirements  of  due  process  in  quasi-­‐judicial  proceedings  
before  a  quasi-­‐judicial  body  such  as  the  respondent  NTC.  
What  is  patently  mandatory  on  the  ministry  or  National  Telecommunications  Commission  is  the  immediate  implementation  of  the  
policies  declared  in  P.D.  No.  217.  To  repeat,  the  ministry  or  the  NTC  "shall  see  to  it  that  the  herein  declared  policies  for  the  telephone  
industry  are  immediately  implemented  ..."  The  formulation  of  rules  and  regulations  is  purely  discretionary  on  the  part  of  the  delegate.  

Both  words  "shall  and  "may  be"  are  employed  in  the  lone  sentence  of  Section  2  of  P.D.  No.  217.  This  graphically  demonstrates  that  
P.D.  No.  217  preserves  the  distinction  between  their  ordinary,  usual  or  nominal  senses.  

This   is   emphasized   by   the   fact   that   under   Section   3   of   P.D.   No.   217,   only   "the   pertinent   provisions"   of   the   Public   Service   Act,   as  
amended,  which  are  in  conflict  with  the  provisions  of  P.D.  No.  217,  had  been  repealed  or  modified  by  said  P.D.  No.  217.  

Section  3  of  P.D.  No.  217  states:  

The   pertinent   provisions   of   the   Public   Service   Act,   as   amended,   the   franchise   of   the   Philippine   Long   Distance  
Telephone  Company  under  Act  3436,  as  amended,  all  existing  legislative  and/or  municipal  franchises  and  other  laws,  
executive  orders,  proclamations,  rules  and  regulations  or  parts  thereof,  as  are  in  conflict  with  the  provisions  of  this  
Decree  are  hereby  repealed  or  modified  accordingly.  

And   under   the   Public   Service   Act,   as   amended   (C.A.   No.   146),   the   board   of   Communications   then,   now   the   NTC,   can   fix  
a   provisional   amount   for   the   subscriber's   investment   to   be   effective   immediately,   without   hearing   (par.   3   of   Sec.   16,   C.A.   146,   as  
amended).  

Section  16  (c)  of  C.A.  No.  146,  as  amended,  provides:  

(c)   To   fix   and   determine   individual   or   joint   rates,   toll   charges,   classifications,   or   schedules   thereof,   as   well   as  
communication,   mileage,   kilometrage,   and   oilier   special   rates   which   shall   be   imposed,   observed,   and   followed  
thereafter   by   any   public   service:   Provided   That   the   Commission   may,   in   its   discretion   approve   rates   proposed   by  
public  services  provisionally  and  without  necessity  of  any  hearing,  but  it  shall  call  a  hearing  thereon  within  thirty  days  
thereafter,  upon  publication  and  notice  to  the  concerns  operating  in  the  territory  affects  Provided  further,  That  in  
case  the  public  service  equipment  of  an  operator  is  used  principally  or  secondarily  for  the  promotion  of  a  private  
business,   the   net   profits   of   said   private   business   shall   be   considered   in   relation   with   the   public   service   of   such  
operator  for  the  purpose  of  fixing  the  rates.  

The  Rules  of  Practice  and  Procedures  promulgated  on  January  25,  1978  by  the  Board  of  Communications,  the  immediate  predecessor  
of   respondent   NTC,   pursuant   to   Section   11   of   the   Public   Service   Act,   otherwise   known   as   Commonwealth   Act   No.   146,   as   amended,  
govern  the  rules  of  practice  and  procedure  before  the  BOC  then,  now  respondent  NTC.  Section  2  of  said  Rules  defines  their  scope,  
including  exempting  parties  from  the  application  of  the  rules  in  the  interest  of  justice  and  to  best  serve  the  public  interest,  and  the  
NTC  may  apply  such  suitable  procedure  to  improve  the  service  in  the  transaction  of  public  service.  Thus,  Section  2  of  Rule  1  of  said  
Rules  reads:  

Sec.  2.  Scope.  —  These  rules  govern  pleadings,  practice  and  procedure  before  the  Board  of  Communications  in  all  
matters   of   hearing,   investigation   and   proceedings   within   the   jurisdiction   of   the   Board.   However,   in   the   broader  
interest  of  justice  and  in  order  to  best  serve  the  public  interest,  the  Board  may,  in  any  particular  matter,  except  it  
from  these  rules  and  apply  such  suitable  procedure  to  improve  the  service  in  the  transaction  of  the  public  business.  

Sections  4  and  5  of  Rule  2  of  said  rules  insure  the  appearance  of  the  Solicitor  General  and  other  consumers  or  users.  The  notice  of  
hearing  is  required  to  be  published  and  to  be  served  on  the  affected  parties  by  Section  2  of  Rule  8;  while  Section  I  of  Rule  9  allows  the  
filing   of   written   oppositions   to   the   application   Under   Section   3   of   Rule   15,   the   BOC   then,   now   the   NTC,   may   grant,   on   motion   of   the  
applicant  or  on  its  own  initiative,  provisional  relief  based  on  the  pleading,  supporting  affidavits  and  other  documents  attached  thereto,  
without  prejudice  to  a  final  decision  after  completion  of  the  hearing  which  shall  be  caged  within  thirty  (30)  days  from  the  grant  of  the  
provisional  relief.  

Finally,   Section   1   of   Rule   19   provides   for   the   suppletory   application   of   the   Rules   of   Court   governing   proceedings   before   the   Court   of  
First  Instance  then,  now  the  Regional  Trial  Courts,  which  are  not  inconsistent  with  the  rules  of  practice  and  procedure  promulgated  
by  the  BOC  on  January  25,  1978.  

There  is  nothing  in  P.D.  No.  217  modifying,  much  less  repeating  Section  16  (c)  of  the  Public  Service  Act,  as  amended.  
It   is   true   that   P.D.   No.   1874   promulgated   on   July   21,   1983   amending   Section   2   of   P.D.   No.   217   expressly   authorizes   the   National  
Telecommunications   Commission   (now   the   successor   of   the   Board   of   Communications)   to   approve   "such   amounts   for   subscriber  
investments  as  applied  for  provisionally  and  without  the  necessity  of  a  hearing;  but  shall  call  a  hearing  thereon  within  thirty  (30)  days  
thereafter,   upon   publication  and   notice   to   all   parties   affected."   But   such   amendment   merely   reiterates   or   confirms   paragraph   (c)   of  
Section  16  of  C.A.  No.  146,  as  amended,  otherwise  known  as  the  Public  Service  Law,  and  serves  merely  to  clarify  the  seeming  ambiguity  
of   the   repealing   clause   in   Section   3   of   P.D.   No.   217   to   dissipate   an   doubts   on   such   power   of   the   National   Telecommunications  
Commission.  

The  construction  of  the  majority  decision  of  November  25,  1983  of  the  word  "may"  to  mean  "shall"  is  too  strained,  if  not  tortured.  

IV  

WE  cannot  subscribe  to  the  view  that  the  National  Telecommunications  Commission  should  or  must  promulgate  "pertinent  rules  and  
regulations  because  the  existing  substantive  and  procedural  laws  as  well  as  the  rules  promulgated  by  the  Public  Service  Commission  
under  and  pursuant  to  the  Public  Service  Law,  otherwise  known  as  CA  No.  146,  as  amended,  are  more  than  adequate  to  determine  
the  reasonability  of  the  amounts  of  investment  of  telephone  subscribers,  the  viability  of  the  company  and  the  other  factors  that  go  
into  determining  such  amounts  and  such  viability.  The  existing  laws  and  rules  on  rate-­‐making  are  more  than  sufficient  for  a  proper  
determination  of  such  amounts  of  investments  of  individual  subscribers  and  the  profitability  of  the  venture.  

The  adequacy  of  the  existing  Public  Service  Law,  otherwise  known  as  C.A.  No.  146,  as  amended,  and  rules  had  been  demonstrated,  
because  they  have  been  applied  in  the  following  cases  involving  PLDT:  

1.  PLDT  vs.  PSC,  G.R.  No.  L-­‐26762,  Aug.  31,  1970,  34  SCRA  609;  

2.  Republic  vs.  PLDT,  G.R.  No.  L-­‐18841,  Jan.  27,  1969,  26  SCRA  620;  

3.  PLDT  vs.  PSC,  G.R.  Nos.  L-­‐24198  &  L-­‐24207-­‐10,  Dec.  18,  1968,  26  SCRA  427;  

4.   Republic   Telephone   Co.   vs.   PLDT,   G.R.   No.   L-­‐21070;   PLDT   vs.   Republic   Telephone   Co.,   G.R.   No.   L-­‐21075,   both  
decided  on  Sept.  23,  1968,  25  SCRA  80;  

5.  PLDT  vs.  Medina,  G.R.  No.  L-­‐24658,  April  3,  1968,  23  SCRA  1;  and  

6.  PLDT  vs.  Medina,  G.R.  Nos.  L-­‐24340-­‐44,  July  18,  1967,  20  SCRA  669.  

As  heretofore  stated,  as  early  as  January  25,  1978,  other  pertinent  rules  of  practice  and  procedure  were  promulgated  by  the  then  
Board  of  Communications,  now  the  respondent  National  Telecommunications  Commission,  implementing  P.D.  No,  217,  in  addition  to  
the   applicable   provisions   of   the   Public   Service   Law,   as   amended,   and   the   rules   previously   issue   by   the   Public   Service   Commission  
(Annex  2  to  the  Memo  of  respondent  PLDT  filed  on  August  15,  1983,  pp.  147-­‐165,  rec.).  

Even   before   1978,   respondent   applied   the   procedure   prescribed   by   the   Public   Service   Law,   as   amended,   and   the   rules   previously  
issued   by   the   Public   Service   Commission,   the   NTC   predecessor,   in   several   cases   involving   similar   applications   for   SIP   schedules   of  
Filipino  Telephone  Corporation  (BOC  Case  No.  73-­‐064;  see  BOC  decision  in  said  cases  dated  December  5,  1974,  May  11,  1978,  March  
15,  1977,  Feb.  19,  1976  and  Aug.  31,  1978  —  Annexes  3,  4,  4-­‐A,  5,  pp.  166-­‐195,  rec.).  

The  majority  opinion  recognizes  that  for  the  last  three  years,  the  PLDT  had  earned  a  yearly  average  net  profit  of  over  P100  million  and  
the  existing  subscribers  have  been  receiving  their  corresponding  quarterly  dividends  on  their  investments.  

It   should   be   stressed   that   Section   5   of   Article   XIV   of   the   1973   Constitution,   as   amended,   expressly   directs   that   "the   State   shall  
encourage  equity  participation  in  public  utilities  by  the  general  public."  As  above-­‐stated,  the  existing  individual  subscribers  of  PLDT  
had  been  sharing  in  the  net  profits  of  the  company  every  quarter  after  the  promulgation  of  P.D.  217  on  June  16,  1973.  

The   amount   that   is   provisionally   approved   under   the   subscriber's   investment   plan   for   PBX/PAEX   trunks   and   for   business   telephones  
in   Metro   Manila   and   the   provinces,   whether   new   installations   or   transfers,   appears   to   be   reasonable,   including   those   for   the   leased  
lines  or  outside  local.  
To  lighten  the  burden  of  subscribers,  investments  may  be  paid  in  installments  or  under  some  convenient  arrangements  which  the  NTC  
may  authorize,  which  is  now  expressly  provided  for  in  Section  1  of  P.D.  1874  amending  Sec.  6  of  P.D.  217.  

Section  1  of  P.D.  1874  directs  that:  

Section  1,  paragraph  6  of  the  Presidential  Decree  No.  217  is  hereby  amended  to  read  as  follows:  

6.   In   any   subscriber   self-­‐financing   plan,   the   amount   of   subscriber   self-­‐financing   wilt   in   no   case,  
exceed  fifty  per  centum  (50%)  of  the  amount  which  results  from  dividing  the  telephone  utility's  
gross  investment  in  telephone  plant  in  service  by  its  number  of  primary  stations  in  service,  both  as  
reported  in  the  utility's  latest  audited  annual  report  rendered  he  National  Telecommunications  
Commission;  PROVIDED,  however,  that  the  amount  payable  by  the  telephone  subscriber  may  be  
paid   on   installment   or   under   such   payment   arrangement   as   the   National   Telecommunications  
Commission  may  authorize.  

V  

It  should  be  likewise  emphasized  that  pursuant  to  the  mandate  of  Section  5,  Article  XIV  of  the  1973  Constitution,  as  amended,  the  
law-­‐making  authority,  in  issuing  both  P.D.  Nos.  217  and  1874,  established  the  all-­‐important  policy  of  making  available  on  regular  and  
uninterrupted  basis  the  telephone  service  because  it  is  

a   crucial   element   in   the   conduct   of   business   activity   ...   and   is   essential   for   the   smooth   and   efficient   function   of  
industry,  

...  efficient  telephone  service  contributes  directly  to  national  development  by  facilitating  trade  and  commerce;  

...  the  telephone  industry  is  one  of  the  most  highly  capital  intensive  industries;  

...   the   telephone   industry   has   fundamentally   different   financing   characteristics   from   other   utilities   in   that   capital  
requirements  per  telephone  unit  installed  increase  as  the  number  of  customers  serviced  also  increases  instead  of  
decreasing  in  cost  per  unit  as  in  power  and  water  utilities;  

...  continued  reliance  on  the  traditional  sources  of  capital  funds  through  foreign  and  domestic  borrowing  and  through  
public   ownership   of   common   capital   stock   will   result   in   a   high   cost   of   capital   heavy   cash   requirements   for  
amortization  and  thus  eventually  in  higher  effective  cost  of  telephone  service  to  subscribers;  

...  the  subscribers  to  telephone  service  tend  to  be  among  the  residents  of  urban  areas  and  among  the  relatively  higher  
income  segment  of  the  population;  

...   it   is   in   the   interest   of   the   national   economy   to   encourage   savings   and   to   place   these   savings   in   productive  
enterprises  and  

...  it  is  the  announced  policies  of  the  government  to  encourage  the  spreading  out  of  ownership  in  public  utilities  (see  
Whereases  of  P.D.  217;  emphasis  supplied).  

P.D.  No.  217  further  states  as  the  basic  policies  of  the  State  concerning  the  telephone  industry  "in  the  interest  of  social,  economic  and  
general  well-­‐being  of  the  people  ...  

1.  The  attainment  of  efficient  telephone  service  for  as  wide  an  area  as  possible  at  the  lowest  reasonable  cost  to  the  
subscriber;  

2.  The  expansion  of  telephone  service  shall  be  financed  through  an  optimal  combination  of  domestic  and  foreign  
sources   of   financing   and   an   optimal   combination   of   debt   and   equity   funds   so   as   to   minimize   the   aggregate   cost   of  
capital  of  telephone  utilities;  
 3.  Consistent  with  the  declared  policy  of  the  State  to  attain  widespread  ownership  of  public  utilities  obtained  from  
ownership  funds  shall  be  raised  from  a  broad  base  of  investors,  involving  as  large  a  number  of  individual  investors  as  
may  be  possible;  

4.   In   line   with   the   objective   of   spreading   ownership   among   a   wide   base   of   the   people,   the   concept   of   telephone  
subscriber  self-­‐financing  is  hereby  adopted  whereby  a  telephone  subscriber  finances  part  of  the  capital  investments  
in   telephone   installations   through   the   purchase   of   stocks,   whether   common   or   preferred   stock,   of   the   telephone  
company;  

5.   As   part   of   any   subscriber   self-­‐financing   plan,   when   the   issuance   of   preferred   stock   is   contemplated,   it   is   required  
that  the  subscriber  be  assured,  in  all  cases  of  a  fixed  annual  income  from  his  investment  and  that  these  preferred  
capital   stocks   be   convertible   into   common   shares,   after   a   reasonable   period   and   under   reasonable   terms,   at   the  
option  of  the  preferred  stockholder;  and  

6.   In   any   subscriber   self-­‐financing   plan,   the   amount   of   subscriber   self-­‐financing   wig,   in   no   case,   exceed   fifty   per  
centum  (50%)  of  the  cost  of  the  installed  telephone  line,  as  may  be  determined  from  time  to  time  by  the  regulatory  
bodies  of  the  State.  

The  same  policies  and  objectives  are  substantially  re-­‐stated  and  capsulized  in  the  three  Whereases  of  P.D.  No.  1874  amending  P.D.  
No.  217  as  pointed  out  in  the  basic  policies  aforestated  in  P.D.  No.  217  that  the  cost  per  telephone  unit  increases  in  proportion  to  the  
increase  in  the  number  of  customers  served;  and  that  foreign  borrowing  will  impose  heavy  cash  requirements  for  amortizations  of  
such  foreign  loans  which  would  result  in  the  higher  effective  costs  of  telephone  service  to  subscribers  and  ultimately  would  be  a  heavy  
drain  on  our  dollar  reserves,  which  will  result  in  our  inability  to  meet  our  other  foreign  commitments  and  mark  the  image  of   the  
Republic  of  the  Philippines  in  international  trade  relations.  Thus,  P.D.  No.  217  stresses  that  in  the  interest  of  the  national  economy  it  
is  essential  to  encourage  savings  and  to  place  these  savings  (subscriber's  investments)  in  productive  enterprises.  

PLDT   is   profitable   for   the   subscribers-­‐investors   as   shown   by   its   net   profit   and   the   dividends   received   quarterly   by   the   existing  
subscribers.  

There  is  no  showing  —  not  even  an  allegation  —  that  the  net  profits  realized  by  PLDT  all  these  years  have  been  dissipated  and  not  
plowed  back  into  the  firm  to  improve  its  service.  

But  the  rising  cost  of  materials  and  labor  needed  to  improve  the  PLDT  service,  aggravated  by  the  devaluation  of  our  currency,  all  the  
more  justify  the  revised  SIP  schedule  approved  by  the  respondent  NTC.  

The  approved  revised  SIP  schedule,  which  appears  reasonable  and  fair  is  herein  reproduced:  (I  removed  the  table)  

With  the  dividends  that  will  be  received  quarterly  under  the  revised  SIP  schedule,  the  subscribers  (whether  of  phone  installations  for  
business  with  or  without  trunk  lines,  as  wen  as  transfers  of  the  same;  or  of  residential  phones  whether  single  or  party  line  as  well  as  
transfers  of  the  same),  will  recover  their  investments  after  some  years  and  will  thereafter  remain  stockholders  and  part-­‐owners  of  
PLDT.  All  the  subscribers  therefore,  are  assured  not  only  of  profits  from  but  also  preservation  of,  their  investments,  which  are  not  
donations  to  PLDT.  

There  are  always  two  sides  —  sometimes  more  —  to  a  case  or  proposition  or  issue.  There  are  many  cases  decided  by  this  Court  where  
this  Court  had  reconsidered  Its  decisions  and  even  reversed  Itself,  conformably  to  the  environmental  facts  and  the  applicable  law.  

After  a  re-­‐study  of  the  facts  and  the  law,  illuminated  by  mutual  exchange  of  views  the  members  of  the  Court  may  and  do  change  their  
minds.  

To  repeat,  the  decision  of  November  25,  1983  was  not  a  unanimous  decision  for  it  has  the  concurrence  of  only  nine  
(9)  members  of  the  Court,  because  three  (3)  took  no  part  and  one  (1)  reserved  his  vote  (p.  232,  rec.).  

WHEREFORE,  THE  DECISION  OF  NOVEMBER  25,  1983  SHOULD  BE  AS  IT  IS  HEREBY  RECONSIDERED  AND  SET  ASIDE  AND  THE  PETTION  
IS  HEREBY  DISMISSED.  NO  COSTS.  

SO  ORDERED.  
 Interpretation  depends  upon  the  context  

(9)  People  vs  CA,  G.R.  No.  11623,  March  13,  1995  
 
Petitioners  assail  a  Decision  of  the  Court  of  Appeals  which  reversed  the  Regional  Trial  Court,  Branch  116,  of  Pasay  city  and  granted  
the  motion  for  reinvestigation  of  private  respondent  Esam  Gadi.  

On  31  December  1993,  Esam  Gadi,  a  national  of  Saudi  Arabia,  was  apprehended  at  the  Manila  International  Airport  and  subsequently  
detained  for  possession  of  marijuana.  

On  3  January  1994,  an  information  was  filed  and  docketed  as  Criminal  Case  No.  94-­‐4826  in  the  Regional  Trial  Court,  Branch  116,  Pasay  
City  charging  Esam  Gadi  with  violation  of  section  81  Article  11,  of  the  Dangerous  Drugs  Act,  as  amended.  

Three  (3)  days  later,  on  6  January  1994,  Esam  Gadi  filed  an  "Ex  Parte  Motion  to  Reduce  Bail,"  from  P90,000.00  to  P30,000.00.  This  
Motion  was  denied.  Esam  Gadi  then  posted  a  cash  bond  of  P90,000.00  which  was  approved  by  the  trial  court  on  10  January  1994.  

1
On  9  February  1994,  Esam  Gadi  filed  a  motion  for  "reinvestigation,"  claiming  that  the  seriousness  of  the  offense  charged  warranted  
the  grant  of  his  motion.  Admitting  that  this  motion  was  filed  beyond  the  five-­‐day  period  prescribed  in  Section  7,  Rule  112  of  the  Rules  
2
of  Court,  he  contended  that  the  reglementary  period  was  not  mandatory.  Section  7,  Rule  112  of  the  Rules  of  Court  provides:  

Sec.   7.   When   accused   lawfully   arrested   without   a  

warrant.  —  When  a  person  is  lawfully  arrested  without  a  warrant  for  an  offense  cognizable  by  the  
Regional  Trial  Court  the  complaint  or  information  may  be  filed  by  the  offended  party,  peace  officer  
or   fiscal   without   a   preliminary   investigation   having   first   been   conducted,   on   the   basis   of   the  
affidavit  of  the  offended  party  or  arresting  officer  or  person.  

However,   before   the   filing   of   such   complaint   or   information,   the   person   arrested   may   ask   for   a  
preliminary  investigation  by  a  proper  officer  in  accordance  with  this  rule,  but  he  must  sign  a  waiver  
of  the  provisions  of  Article  125  of  the  Revised  Penal  Code,  as  amended,  with  the  assistance  of  a  
lawyer   and   in   case   of   non-­‐availability   of   a   lawyer,   a   responsible   person   of   his   own   choice.  
Notwithstanding  such  waiver,  he  may  apply  for  bail  as  provided  in  the  corresponding  rule  and  the  
investigation  must  be  terminated  fifteen  (15)  days  from  its  inception.  

If   the   case   has   been   filed   in   court   without   a   preliminary   investigation   having   been   conducted,   the  
accused  may  within  five  (5)  days  from  the  time  he  learns  of  the  filing  of  the  information,  ask  for  a  
preliminary   investigation   with   the   same   right   to   adduce   evidence   in   his   favor   in   the   manner  
prescribed  in  this  Rule.  (Emphasis  supplied)  

The  motion  for  "reinvestigation"  was  denied  by  the  trial  court.  A  motion  for  reconsideration  was  likewise  turned  down  on  8  March  
1994,   the   date   of   his   arraignment   where   Esam   Gadi   pleaded   not   guilty.   He   then   challenged   the   denial   of   his   motion   for  
"reinvestigation"  in  a  petition  for  certiorari  before  the  Court  of  Appeals.  

The  Court  of  Appeals  granted  the  petition  and  reversed  the  trial  court  Order  denying  reinvestigation.  Citing  Tan  vs.  Securities  Exchange  
3
Commission,  the  Court  of  Appeals  held  that  the  five-­‐day  period  for  asking  reinvestigation  was  only  permissive,  considering  the  use  of  
the  word  "may."  The  appellate  court  also  relied  on  Go  vs.  Court  of  Appeals"  and  held  that  a  motion  for  preliminary  investigation  may  
be  granted  even  if  trial  on  the  merits  had  begun,  provided  that  the  motion  was  filed  before  arraignment.  

In  this  Petition  for  Review,  the  Solicitor  General  contends  that  it  is  a  mandatory  rule  that  a  motion  for  preliminary  investigation  be  
filed   within   five   (5)   days   from   the   time   the   accused   had   learned   of   the   filing   of   the   information.   It   is   also   maintained   that   Esam   Gadi  
had  waived  his  right  to  preliminary  investigation  when  he  posted  bail  for  his  release.  

Deliberating  on  the  Petition  for  Review  and  the  Comment  of  private  respondent,  the  Court  finds  that  the  Court  of  Appeals  fell  into  
reversible  error  in  granting  the  motion  for  "reinvestigation"  of  private  respondent.  

The   period   for   filing   a   motion   for   preliminary   investigation   after   an   information   has   been   filed   against   an   accused   who   was   arrested  
5
without  a  warrant  has  been  characterized  as  mandatory  by  the  Court.  In  People  vs.  Figueroa,  the  .Supreme  Court  applied  Section  15,  
 6
Rule  112  of  the  old  Rules,  which  is  substantially  reproduced  in  Section  7,  Rule  112  of  the  1985  Rules  of  Criminal  Procedure.  The  Court  
held   that   Section   15   of   old   Rule   112   granted   the   accused   the   right   to   ask   for   preliminary   investigation   within   a   period   of   five   (5)  
days  from  the  time  he  learned  of  the  filing  of  the  information.  As  the  accused  in  that  case  did  not  exercise  his  right  within  the  five-­‐day  
7
period,  his  motion  for  "reinvestigation"  was  denied.  

Clearly,  Section  7  of  Rule  112  of  the  present  Rules  gives  the  accused  the  right  to  ask  for  a  preliminary  investigation;  but  it  does  not  
give  him  the  right  to  do  so  after  the  lapse  of  the  five-­‐day  period.  This  is  in  accord  with  the  intent  of  the  Rules  of  Criminal  Procedure  to  
make   preliminary   investigation   simple   and   speedy.   The   Supreme   Court,   elaborating   on   the   rationale   of   the   rules   on   preliminary  
investigation,  held:  

The  new  Rules  were  drafted  in  the  light  of  the  Court's  experience  with  cases  where  preliminary  
investigations  had  dragged  on  for  weeks  and  even  months.  The  Court  had  intended  to  remove  this  
clog  upon  the  judicial  machinery  and  to  make  a  preliminary  investigation  as  simple  and  speedy  as  
is  consistent  with  the  substantial  rights  of  the  accused.  The  investigation  is  advisedly  preliminary,  
to   be   followed   by   the   trial   proper.   The   investigating   judge   or   prosecuting   officer   acts   upon  
probable   cause   and   reasonable   belief,   not   upon   proof   beyond   reasonable   doubt.   The   occasion   is  
not  for  the  full  and  exhaustive  display  of  the  parties'  evidence;  it  is  for  the  presentation  of  such  
evidence  only  as  may  engender  well-­‐grounded  belief  that  an  offense  has  been  committed  and  that  
the  accused  is  probably  guilty  thereof.  When  all  this  is  fulfilled,  the  accused  will  not  be  permitted  
to   cast   about   for   fancied   reasons   to   delay   the   proceedings;   the   time   to   ask   for   more   is   at   the  
8
trial.  (Emphases  supplied)  

The  respondent  Court  of  Appeals  held,  however,  that  the  five-­‐day  period  prescribed  in  Section  7,  Rule  112  was  not  mandatory  as  the  
provision   uses   the   permissive   term   "may."   As   already   noted,   the   Court   of   Appeals   cited   Tan   vs.   Securities   and   Exchange  
9
Commission  where  the  Supreme  Court  held  that  the  term  "may"  as  used  in  adjective  rules  is  only  permissive  and  not  mandatory.  

Tan,  however,  does  not  really  support  a  ruling  that  the  five-­‐day  period  for  asking  for  preliminary  investigation  of  a  person  accused  of  
crime  is  only  permissive.  Tan  was  concerned  with  "may"  as  used  in  a  provision  of  the  Corporation  Code  dealing  with  the  transfer  of  
10
shares   of   stock.   Two   (2)   cases   relied   upon   in   Tan   are   equally   inapplicable   to   the   present   case.   In   Shauf   vs.   Court   of   Appeals,     "may"  
was  used  in  a  U.S.  federal  statute  on  equal  opportunity  for  civilian  employment  in  U.S.  military  installations  which  enumerated  the  
remedies   of   an   aggrieved   party.   Holding   that   remedial   statutes  
are  to  be  construed  liberally  and  that  the  term  "may"  as  used  in  adjective  rules  was  only  permissive  and  not  mandatory,  our  Supreme  
11
Court  held  that  the  substantive  remedies  of  a  party  were  not  limited  to  those  enumerated  in  that  U.S.  legislation.    In  Legaspi  vs.  
Estrella,   12   the   Court   had   to   interpret   "may"   as   used   in   section   146   of   Batas   Pambansa   Blg.   337   or   the   old   Local   Government   Code.  
That  term,  being  indicative  of  a  "possibility"  or  an  'opportunity,"  was  read  as  permissive  rather  than  mandatory  to  avoid  defeating  the  
13
purpose  of  the  law  immediately  to  include  sectoral  representatives  in  the  legislative  councils  of  local  government  units.  

While  Tan  and  the  cases  there  cited  show  that  the  use  of  the  term  "may"  is  indicative  of  an  Opportunity  or  possibility,  they  cannot  be  
used  to  support  the  proposition  that  the  five-­‐day  period  under  section  7  of  Rule  112  is  not  mandatory  and  may  be  disregarded  at  will.  
The  "opportunity"  or  "possibility"  engendered  by  the  use  of  the  term  "may"  in  this  rule  relates  only  to  the  option  of  filing  a  motion  for  
preliminary  investigation;  it  does  not  refer  to  the  filing  of  the  motion  after  the  expiration  of  the  five-­‐day  period.  This  rule  grants  the  
accused  a  right  or  faculty  and  not  an  obligation.  In  the  sense  that  he  is  not  obliged  to  exercise  this  right,  this  rule  is  permissive  only;  in  
the  sense  that  he  may  exercise  this  right  only  within  the  five-­‐day  period,  the  rule  is  mandatory.  Put  a  little  differently,  Esam  Gadi  had  
the  option  or  faculty  of  demanding  preliminary  investigation;  if  he  wanted  to  exercise  that  option,  however,  he  had  to  exercise  it  
within  the  reglementary  period.  Upon  expiration  of  that  period,  his  option  lapsed.  

Much   the   same   situation   obtains   in   respect   of   the   period   for   filing   a   petition   for   review.   Section   1,   Rule   45   of   the   Rules   of   Court  
provides  that:  

Sec.  1.  Filing  of  petition  with  Supreme  Court.  —  A  party  may  appeal  by  certiorari  from  a  judgment  of  the  Court  of  
Appeals,   by   filing   with   the   Supreme   Court   a   petition   for   certiorari   within   fifteen   (15)   days   from   notice   of   judgment  
or  of  the  denial  of  his  motion  for  reconsideration  filed  in  due  time,  and  paying  at  the  same  time,  to  the  clerk  of  said  
court   the   corresponding   docketing   fee.   The   petition   shall   not   be   acted   upon   without   proof   of   service   of   a   copy  
thereof  to  the  Court  of  Appeals.  (Emphasis  supplied)  

The  use  of  "may"  in  Section  1  of  Rule  45  refers  only  to  the  opportunity  or  option  to  file  a  petition  for  review.  This,  however,  does  not  
give  a  party  a  license  to  file  a  petition  for  review  beyond  the  fifteen-­‐day  period.  Hence,  under  Rule  45,  Section  1,  a  petition  for  review  
filed  after  lapse  of  the  fifteen-­‐day  period  is  not  to  be  entertained.  Innumerable  petitions  have  been  denied  by  the  Court  for  having  
been  filed  unseasonably.  

14
The  reliance  of  the  Court  of  Appeals  on  the  case  of  Rolito  Go  vs.  Court  of  Appeals    is  misplaced.  In  Go,  as  in  the  present  case,  an  
information  was  filed  without  a  prior  preliminary  investigation  of  the  accused.  The  accused  in  both  cases  demanded  their  right  to  a  
preliminary   investigation   before   arraignment.   The   similarity   between   the   two   (2)   cases   ends   there.   There   are,   upon   the   other   hand,  
critical  differences  in  the  fact  situations  in  one  and  the  other  case  which  must  not  be  overlooked.  

In  Go,  the  accused  asked  for  preliminary  investigation  on  the  very  day  the  information  was  filed.  In  the  present  case,  Esam  Gadi  did  so  
only  on  9  February  1994,  or  a  month  after  he  had  learned  of  the  filing  of  the  information  against  him.  

In  the  present  case,  Esam  Gadi  insists  on  the  application  of  Section  7,  Rule  112  in  effect  claiming  or  conceding  there  was  a  lawful  
warrantless  arrest.  It  appears  that  the  accused  was  apprehended  while  engaged  in  the  commission  of  an  offense,  i.e,  possession  of  
marijuana  punishable  under  Section  8,  Article  II  of  the  Dangerous  Drugs  Act,  as  amended.  In  Go,  the  Court  relied  on  the  general  rule  
that  an  information  may  be  filed  only  after  a  preliminary  investigation  has  been  conducted.  The  Court  did  not  apply  Section  7,  Rule  
112  because  there  had  been  no  arrest  at  all.  The  Court  found  that  accused  Rolito  Go  had  merely  walked  into  the  police  station  in  the  
company   of   his   two   lawyers   and   placed   himself   at   the   disposal   of   the   police   authorities.   In   fact,   the   Court   did   not   consider   his   act   as  
surrender   for   the   accused   did   not   expressly   declare   that   he   was   surrendering   himself,   probably   to   avoid   the   implication   that   he   was  
admitting  his  guilt.  

Further,  in  Go,  the  Prosecutor  had  himself  filed  with  the  trial  court  a  motion  for  leave  to  conduct  a  preliminary  investigation.  This  
motion,  along  with  the  application  for  bail,  was  in  fact  initially  granted  by  the  trial  court.  But  the  trial  court  a  few  days  later  turned  
around   and   inexplicably   changed   its   mind,   cancelled   the   bail,   refused   to   accord   preliminary   investigation   to   the   accused   Go   and   the  
trial  began  over  the  vehement  protests  of  Go.  The  court  said:  

Nonetheless,   since   petitioner   in   his   omnibus   motion   was   asking   for   preliminary   investigation   and  
not  for  a  re-­‐investigation  (Crespo  vs.  Mogul  involved  a  re-­‐investigation),  and  since  the  Prosecutor  
himself  did  file  with  the  trial  court,  on  the  5th  day  after  filing  the  information  for  murder,  a  motion  
for   leave   to   conduct   preliminary   investigation   (attaching   to   his   motion   a   copy   of   petitioner's  
omnibus   motion),   we   conclude   that   petitioner's   omnibus   motion   was   in   effect   filed   with   the   trial  
court.  What  was  crystal  clear  was  that  petitioner  did  ask  for  a  preliminary  investigation  the  very  
day  that  the  information  was  filed  without  such  preliminary  investigation,  and  that  the  trial  court  
was  five  (5)  days  later  apprised  of  the  desire  of  the  petitioner  such  preliminary  investigation.  Thus,  
even  on  the  (mistaken)  supposition  apparently  made  by  the  Prosecutor  that  Section  7  of  Rule  112  
of  the  Revised  Rules  of  Court  was  applicable,  the  5-­‐day  reglementary  period  on  Section  7  Rule  112  
15
must  be  held  to  have  been  substantially  complied  with.    (Emphases  supplied)  

Hence,  while  the  accused  in  Go  was  entitled  to  preliminary  investigation  as  a  matter  of  right,  Esam  Gadi  is  not.  His  right  to  demand  
preliminary  investigation  was  subject  to  the  condition  that  he  should  claim  it  seasonably.  He  did  not  do  so.  Esam  Gadi,  accordingly,  
effectively  waived  his  right  to  a  preliminary  investigation.  

The  denial  of  Esam  Gadi's  motion  for  preliminary  investigation  is  also  warranted:  by  his  posting  of  a  cash  bail  bond  without  previously  
16
or  simultaneously  demanding  a  preliminary  investigation.  In  People  vs.  Hubilo,  an  accused  who  had  posted  bail  was  deemed  to  have  
foregone  his  right  to  preliminary  investigation.  In  the  present  case,  Esam  Gadi  asked  for  and  was  granted  bail  on  10  January  1994,  or  
one   month   before   he   asked   for   a   preliminary   investigation   on   9   February   1994.   Once   more   Esam   Gadi   in   fact   waived   his   right   to  
preliminary  investigation.  

In  Go,  in  contrast,  the  accused  had  asked  for  preliminary  investigation  and  the  right  to  post  bail  at  the  same  time  in  one  omnibus  
motion.  Accordingly,  the  Court  held  that  the  accused  in  Go  had  not  waived  his  right  to  preliminary  investigation:  

Again,   in   the   circumstances   of   this   case,   we   do   not   believe   that   by   posting   bail,   petitioner   had  
waived  his  right  to  preliminary  investigation.  In  People  v.  Selfaison  (110  Phil.  839  [1961]),  we  did  
not   hold   that   appellants   there   had   waived   their   right   to   preliminary   investigation   because  
immediately   after   their   arrest,   they   filed   bail   and   proceeded   to   trial   "without   previously   claiming  
that  they  did  not  have  the  benefit  of  a  preliminary  investigation."  In  the  instant  case,  petitioner  Go  
asked   for   release   on   recognizance   or   on   bail   and   for   preliminary   investigation   in   one   omnibus  
motion.   He   had   thus   claimed   his   right   to   preliminary   investigation   before   respondent   Judge  
 approved   the   cash   bond   posted   by   petitioner   and   ordered   his   release   on   12   July   1991.  
Accordingly,   we   cannot   reasonably   imply   waiver   of   preliminary   investigation   on   the   part   of  
petitioner.   In   fact,   when   the   Prosecutor   filed   a   motion   in   court   asking   for   leave   to   conduct  
preliminary  investigation,  he  clearly  if  impliedly  recognized  that  petitioner's  claim  to  preliminary  
17
investigation  was  a  legitimate  one.  (Emphases  partly  in  the  original  and  partly  supplied)  

All  in  all,  Esam  Gadi's  demand  for  preliminary  investigation  was  an  afterthought  merely.  

WHEREFORE,   the   petition   for   Review   is   hereby   GRANTED   and   the   assailed   Decision   of   the   Court   of   Appeals   is   hereby   REVERSED   and  
SET  ASIDE.  The  Orders  of  the  Regional  Trial  Court,  Branch  116  of  Pasay  City  dated  14  February  1994  and  8  March  1994  are  hereby  
REINSTATED   and   the   Regional   Trial   Court   is   ORDERED   to   proceed   with   the   trial   of   Criminal   Case   No.   94-­‐4820,   with   all   deliberate  
dispatch.  Costs  against  private  respondent.  

WE  CONCUR:  

 
 
 
 
 
 
 
 
(10)  San  Carlos  Milling  vs  CIR,  G.R.  No.  103379,  November  23,  1993  

Assailed  in  this  petition  for  review  on  certiorari  is  the  decision  *  of  the  Court  of  Appeals  in  CA-­‐G.R.  Sp.  No.  22346,  dated  23  December  
1991,  the  dispositive  part  of  which  reads:  

WHEREFORE,  in  view  of  the  foregoing  consideration,  the  petition  is  hereby  DISMISSED,  without  pronouncement  as  
1
to  costs.  

The  undisputed  facts,  as  succinctly  stated  by  the  Court  of  Tax  Appeals  and  adopted  by  the  Court  of  Appeals  in  its  decision  under  review,  
are  as  follows:  

Petitioner   domestic   corporation   had   for   the   taxable   year   1982   a   total   income   tax   overpayment   of   P781,393.00  
reflected  as  creditable  income  tax  in  its  annual  final  adjustment  return.  The  application  of  the  amount  for  the  1983  
tax  liabilities  remained  unutilized  in  view  of  petitioner's  net  loss  for  the  year  and  still  yet  had  a  credible  income  tax  
of  P4,470.00  representing  the  3%  of  15%  withholding  tax  on  storage  credits.  Accordingly  the  final  adjustment  income  
tax  return  for  the  taxable  year  1983  reflected  the  amount  of  P781,393.00  carried  over  as  tax  credit  and  P4,470.00  
creditable  income  tax.  

In  a  May  17,  1984  letter  to  the  respondent,  petitioner  signified  its  intention  to  apply  the  total  creditable  amount  of  
P785,863.00  against  its  1984  tax  dues  consistent  with  the  provision  of  Section  86,  ibid,  coupled  with  a  comforting  
alternative  request  for  a  refund  or  tax  credit  of  the  same.  

Respondent   disallowed   the   proffered   automatic   credit   scheme   but   treated   the   request   as   an   ordinary   claim   for  
refund/tax  credit  under  Section  292  in  relation  to  Section  295  of  the  Tax  Code  and  accordingly  subjected  the  same  
for  verification/investigation.  

No  sooner  than  the  respondent  could  act  on  the  claim,  petitioner  filed  a  petition  for  review  on  July  18,  1984.  And  
before  this  Court  could  formally  hear  the  case,  petitioner  filed  a  supplemental  petition  on  March  11,  1986,  after  
having  unilaterally  effected  a  set-­‐off  of  its  credible  income  tax  vis  a  vis  income  tax  liabilities,  earlier  denied  by  the  
2
respondent.  
On  28  February  1990,  the  Court  of  Tax  Appeals  dismissed  the  petition  and  held  that  prior  investigation  by  and  authority  from  the  
Commissioner  of  Internal  Revenue  were  necessary  before  a  taxpayer  could  avail  of  the   provisions  of  Section  86  (now  Section  69)  of  
3
the  Tax  Code.    A  motion  for  reconsideration  was  then  filed  but  was  denied  in  a  resolution  dated  25  June  1990  without  prejudice,  
however,  to  any  administrative  claim  for  tax  refund  or  tax  credit.  

Thereafter,  petitioner  appealed  the  adverse  decision  of  the  Court  of  Tax  Appeals  to  the  Court  of  Appeals.  On  23  December  1991,  
respondent  Court  dismissed  the  appeal.  

Hence,  this  recourse.  

The  main  issue  to  be  resolved  in  the  petition  at  bench  is  whether  or  not  prior  authority  from  the  Commissioner  of  Internal  Revenue  is  
necessary  before  a  corporate  taxpayer  can  credit  excess  estimated  quarterly  income  taxes  paid  against  the  estimated  quarterly  income  
tax  liabilities  for  the  succeeding  taxable  year,  under  Section  86  (now  Section  69)  of  the  Tax  Code.  

It  is  the  contention  of  the  petitioner,  among  others,  that  in  the  aforecited  provision  of  the  Tax  Code,  nowhere  is  it  stated  that  the  
"imprimatur"   or   approval   of   the   Commissioner   of   Internal   Revenue   must   be   secured   prior   to   crediting   a   refundable   tax   amount.  
Petitioner  further  posits  that  neither  does  Revenue  Regulation  No.  10-­‐77  implementing  the  Tax  Code  provision  require  prior  approval  
of  the  Commissioner  of  Internal  Revenue  to  avail  of  the  automatic  tax  credit  scheme.  

After  a  careful  study  of  the  records  of  the  present  petition,  we  find  the  petition  to  be  devoid  of  merit.  

We  begin  with  the  subject  Tax  Code  provision  under  scrutiny,  thus:  

Sec.  86.  Final  Adjustment  Return.  —  Every  corporation  liable  to  tax  under  Section  24  shall  file  a  final  adjustment  
return   covering   the   total   net   income   for   the   preceding   calendar   or   fiscal   year.   If   the   sum   of   the   quarterly   tax  
payments  made  during  the  said  taxable  year  is  not  equal  to  the  total  tax  due  on  the  entire  taxable  net  income  of  
that  year  the  corporation  shall  either:  

(a)  Pay  the  excess  tax  still  due;  or  

(b)  Be  refunded  the  excess  amount  paid,  as  the  case  may  be.  

In   case   the   corporation   is   entitled   to   refund   of   the   excess   estimated   quarterly   income   tax   paid,   the   refundable  
amount  shown  on  its  final  adjustment  return  may  be  credited  against  the  estimated  quarterly  income  tax  liabilities  
for  the  taxable  quarters  of  the  succeeding  taxable  year.  (Emphasis  supplied)  

On  7  October  1977,  the  Commissioner  of  Internal  Revenue  issued  the  implementing  rules  and  regulations  pertaining  to  the  subject  
provision.  The  procedure  laid  out  in  said  rules  is  found  in  Revenue  Regulation  No.  10-­‐77,  section  7  thereof,  which  reads:  

Sec.  7.  Any  excess  of  the  total  quarterly  payments  over  the  actual  income  tax  computed  and  shown  in  the  adjustment  
or   final   corporate   income   tax   return   shall   either   (a)   be   refunded   to   the   corporation,   or   (b)   may   be   credited   against  
the  estimated  quarterly  income  tax  liabilities  for  the  quarters  of  the  succeeding  taxable  year.  The  corporation  must  
signify  in  its  annual  corporate  adjustment  return  its  intention  whether  to  request  for  the  refund  of  the  overpaid  
income  tax  or  claim  for  automatic  tax  credit  to  be  applied  against  its  income  tax  liabilities  for  the  quarters  of  the  
succeeding  taxable  year,  by  filling  up  the  appropriate  box  on  the  corporate  tax  return,  BIR  Form  No.  1702.  

4
The  case  of  Commissioner  of  Internal  Revenue  vs.  ESSO  Standard  Eastern,  Inc.,  et  al.,    cited  by  petitioner,  while  not  squarely  in  point,  
has  touched  on  a  significant  aspect  directly  related  to  the  issue  at  hand.  There  it  was  said:  

The   Commissioner's   position   is   that   income   taxes   are   determined   and   paid   on   an   annual   basis,   and   that   such  
determination  and  payment  of  annual  taxes  are  separate  and  independent  transactions;  and  that  a  tax  credit  could  
not  be  so  considered  until  it  has  been  finally  approved  and  the  taxpayer  duly  notified  thereof  .  .  .  .  (Emphasis  supplied)  

In  other  words,  far  from  bolstering  its  position,  petitioner's  citation  of  the  above  case  only  serves  to  weaken  the  same.  What  petitioner  
obviously  seeks  is  judicial  sanction  of  its  act  of  unilaterally  declaring  as  tax  credit  its  excess  estimated  quarterly  income  taxes  paid  in  a  
given  year  against  its  tax  liabilities  for  the  quarters  of  the  succeeding  taxable  year.  If  petitioner's  theory  were  to  be  sustained,  this  
could  wreak  havoc  and  confusion  in  the  tax  system.  

The  respondent  Court  held  that  the  choice  of  a  corporate  taxpayer  for  an  automatic  tax  credit  does  not  ipso  facto  confer  on  it  the  right  
to  immediately  avail  of  the  same.  Respondent  court  went  on  to  emphasize  the  need  for  an  investigation  to  ascertain  the  correctness  
of  the  corporate  returns  and  the  amount  sought  to  be  credited.  We  agree.  

It  is  difficult  to  see  by  what  process  of  ratiocination  petitioner  insists  on  the  literal  interpretation  of  the  word  "automatic."  Such  literal  
interpretation  has  been  discussed  and  precluded  by  the  respondent  court  in  its  decision  of  23  December  1991  where,  as  aforestated,  
it  ruled  that  "once  a  taxpayer  opts  for  either  a  refund  or  the  automatic  tax  credit  scheme,  and  signified  his  option  in  accordance  with  
the  regulation,  this  does  not  ipso  facto  confer  on  him  the  right  to  avail  of  the  same  immediately.  An  investigation,  as  a  matter  of  
procedure,  is  necessary  to  enable  the  Commissioner  to  determine  the  correctness  of  the  petitioner's  returns,  and  the  tax  amount  to  
5
be  credited.  

Prior  approval  by  the  Commissioner  of  Internal  Revenue  of  the  tax  credit  under  then  section  86  (now  section  69)  of  the  Tax  Code  
would  appear  to  be  the  most  reasonable  interpretation  to  be  given  to  said  section.  An  opportunity  must  be  given  the  internal  revenue  
branch  of  the  government  to  investigate  and  confirm  the  veracity  of  the  claims  of  the  taxpayer.  The  absolute  freedom  that  petitioner  
seeks  to  automatically  credit  tax  payments  against  tax  liabilities  for  a  succeeding  taxable  year,  can  easily  give  rise  to  confusion  and  
abuse,  depriving  the  government  of  authority  and  control  over  the  manner  by  which  the  taxpayers  credit  and  offset  their  tax  liabilities,  
not  to  mention  the  resultant  loss  of  revenue  to  the  government  under  such  a  scheme.  

Petitioner  points  out  that  the  automatic  tax  credit  scheme  under  the  law  refers  to  the  amount  "shown"  in  the  final  adjustment  return  
of  the  corporate  taxpayer  and  not  as  determined  by  the  Commissioner,  thereby  recognizing  the  computation  made  by  the  taxpayer.  
This   contention   is   not   impressed   with   merit.   To   reiterate,   Section   7   of   Revenue   Regulation   No.   10-­‐77   provides   that   "(a)ny   excess   .   .   .  
computed  and  shown  .  .  .  shall  either  (a)  be  refunded  to  the  corporation,  or  (b)  may  be  credited  against  the  estimated  quarterly  income  
tax  liabilities.  .  .  ."  

The  above  rule  is  clear.  It  does  not  mean  that  reference  to  the  amount  "shown"  in  the  final  adjustment  return  prepared  by  the  taxpayer  
implies  that  the  taxpayer  need  not  seek  approval  of  the  Commissioner  prior  to  its  effective  availment  of  the  tax  credit  scheme,  it  
simply  cannot  credit  an  amount  it  deems  as  correct.  Rather,  it  provides  two  (2)  remedies,  that  is,  the  excess  may  either  be  refunded  
or   credited,   and   insofar   as   the   option   of   tax   credit   is   concerned,   this   right   should   not   be   construed   as   an   absolute   right   which   is  
available  to  the  taxpayer  at  his  sole  option.  It  is  our  view  that  tax  credit  under  the  cited  provision  should  be  construed  as  an  alternative  
remedy  (to  a  refund)  subject  to  the  fulfillment  of  certain  requirements,  i.e.,  prior  verification  and  approval  by  the  Commissioner  of  
Internal  Revenue.  

Further,  the  cited  legal  provision  itself  employs  the  word  "may"  in  the  phrase  "may  be  credited",  implying  that  the  availability  of  the  
remedy  of  tax  credit  is  not  absolute  and  mandatory;  it  does  not  confer  an  absolute  right  on  the  taxpayer  to  avail  of  the  tax  credit  
scheme   if   it   so   chooses;   neither   does   it   impose   a   duty   on   the   part   of   the   government   to   sit   back   and   allow   an   important   facet   of   tax  
collection  to  be  at  the  sole  control  and  discretion  of  the  taxpayer.  

6
As  aptly  held  by  this  Court  in  In  re  Guarina:  

Whether  the  word  "may"  in  the  statute  is  to  be  construed  as  mandatory  and  imposing  a  duty,  or  merely  permissive  
and   conferring   discretion,   is   to   be   determined   in   each   case   from   the   apparent   intention   of   the   statute   as   gathered  
from  the  context,  as  well  as  from  the  language  of  the  particular  provision.  The  question  in  each  case  is  whether,  
taken  as  a  whole  and  viewed  in  the  light  of  surrounding  circumstances,  it  can  be  said  that  a  purpose  existed  on  the  
part  of  the  legislator  to  enact  a  law  mandatory  in  character.  If  it  can,  then  it  should  be  given  a  mandatory  effect;  if  
not,  then  it  should  be  given  its  ordinary  permissive  effect.  .  .  .  

Anent  the  issue  on  petitioner's  entitlement  to  a  refund/credit  under  Sections  292  and  295  (now  Sections  230  and  204  of  the  Tax  Code)  
—   since   automatic   tax   credit   without   prior   approval   of   the   Commission   of   Internal   Revenue   under   then   Section   86   would   not   be  
available  to  the  taxpayer  —  it  must  be  stressed  that  the  remedy  of  a  refund/credit  has  never  been  denied  the  petitioner.  On  the  
contrary,  the  Commissioner  of  Internal  Revenue  has  long  informed  petitioner  that  its  request  for  automatic  tax  credit  has  been  treated  
as   an   ordinary   claim   for   refund/tax   credit   under   Section   292   in   relation   to   Section   295   of   the   Tax   Code,   and   that   the   same   has   been  
referred   for   investigation,   report   and   recommendation   to   the   Chief,   Agriculture   and   Natural   Resources   Division   of   the   Bureau   of  
Internal  Revenue.  All  that  petitioner  had  to  do,  therefore,  is  to  inquire  regarding  the  status  of  its  claim  for  refund/credit  and  await  the  
decision  in  regard  thereto.  
WHEREFORE,   the   petition   is   hereby   DENIED.   The   decision   of   the   Court   of   Appeals   appealed   from   is   AFFIRMED   with   costs   against   the  
petitioner.  

SO  ORDERED.  

 
 
When  “may”  is  construed  as  mandatory  
(11)  De  Mesa  vs  Mecias,  G.R.  No.  L-­‐24583,  October  29,  1966  
 

In  this  petition  for  certiorari  with  preliminary  injunction,  the  petitioners  ask  this  Court  to  review  a  three-­‐to-­‐two  decision  rendered  by  
a  special  division  of  the  Court  of  Appeals  on  March  26,  1965  in  C.A.  35019-­‐R,  sustaining  the  validity  of  the  proceedings  had  and  taken  
by  the  Court  of  First  Instance  of  Rizal  in  election  case  7924  before  it  (Maximino  A.  Argana,  protestant  vs.  Francisco  De  Mesa,  protestee).  
The   issue   of   nullity   of   the   judgment   promulgated   in   the   said   election   case   was   elevated   to   the   Court   of   Appeals   on   a   petition  
for   certiorari   and   mandamus,   upon   the   contention   that   the   said   court   of   first   instance   illegally   and   incorrectly   did   not   allow   the  
substitution  of  the  present  petitioners  as  parties  for  De  Mesa,  after  the  latter's  death,  and  thereafter  denied  due  course  to  their  appeal  
from  the  said  judgment.  

The  antecedent  facts  are  not  complicated.  

Opponents   for   the   mayoralty   of   Muntinlupa,   Rizal   in   the   1963   elections   were   Francisco   De   Mesa   and   Maximino   A.   Argana.   The  
electorate's   choice,   as   tallied   by   the   local   board   of   canvassers,   was   De   Mesa.   Elected   vice-­‐mayor   with   him   was   Demetrio   R.   Loresca.  
Duly,  proclaimed  elected,  these  two  qualified  and  assumed  their  respective  positions  upon  the  commencement  of  their  term  of  office.  

Meanwhile  and  in  due  season,  defeated  candidate  Argana,  charging  the  perpetration  of  frauds,  terrorism  and  other  irregularities  in  
certain  precincts,  protested  the  election  of  De  Mesa,  which  protest  was  docketed  as  election  case  7924,  supra,  in  the  Court  of  First  
Instance  of  Rizal,  the  Honorable  Eulogio  Mencias  presiding.  In  his  return  to  the  protest,  De  Mesa  traversed  the  charges,  and,  in  a  
counter-­‐protest  incorporated  therein,  sought  to  shift  responsibility  for  irregularities  to  the  protestant  and  his  followers,  impugning  in  
view  thereof  the  results  in  some  thirteen  precincts.  

On   March   18,   1964,   however,   an   assassin's   bullet   felled   De   Mesa,   and,   forthwith,   vice-­‐mayor   Loresca   was,   by   operation   of   law,   duly  
installed  as  his  successor.  Notice  of  De  Mesa's  demise  was  given  on  April  22,  1964  to  the  court  a  quo  thru  a  "Constancia"  filed  by  the  
decedent's  counsel  of  record,  in  which  they  also  indicated  their  belief  that,  by  reason  of  said  death,  their  authority  as  such  counsel  
was  terminated.  

In  the  election  case,  meanwhile,  the  protestant  Argana  moved  for  the  constitution  of  committees  on  revision  of  ballots.  Expressly  to  
hear  protestee's  view  thereon  and  to  afford  him  a  chance  to  propose  his  commissioners,  this  motion  was  set  for  hearing  but,  quite  
understandably,   no   appearance   was   entered   for   the   deceased   protestee.   Accordingly,   on   May   6,   1964,   the   court   a   quo   required   the  
protestee's   widow   and   children   to   appear   within   fifteen   days   from   notice   in   order   to   be   substituted   for   said   protestee,   if   they   so  
desired.  They  did  not,  however,  comply.  Taking  no  further  action  in  the  premises,  the  trial  court  left  the  matter  at  that.  

Then  proceeding  ex  parte,  on  June  11,  1964,  the  protestant  Argana  reiterated  his  move  for  the  appointment  of  commissioners  on  
revision   of   ballots,   but   this   time   without   proposing   any   provision   for   representation   for   the   protestee   whose   widow   and   children   he  
sought  to  be  declared  "non-­‐suited."  On  June  23,  1964,  without  notice  to  the  protestee  and/or  his  legal  representative  —  as  indeed  
none  had  thus  far  been  named  —  the  trial  court  granted  the  motion  aforesaid.  

With   the   constitution   of   the   committee   on   revision   of   ballots   in   which,   incidentally,   Ramon   Antilon   Jr.   was   motu   proprio   named   and  
then   served   as   commissioner   for   the   deceased   protestee,   the   completion   of   the   proceedings   on   revision,   and   the   submission   of  the  
report  thereon,  the  trial  court,  in  its  decision  of  August  10,  1964,  adjudged  the  protestant  Maximino  A.  Argana  as  the  duly  elected  
mayor  of  Muntinlupa,  Rizal  in  the  1963  elections,  and  taxed  the  costs  and  expenses  of  the  protest  against  the  estate  of  the  deceased  
protestee  Francisco  De  Mesa.  

On  August  17,  1964,  within  the  reglementary  period  for  the  finality  of  the  decision  aforesaid,  a  three-­‐pronged  move  was  taken  by  De  
Mesa's  widow,  Magdalena  Sibulo  Vda.  de  De  Mesa,  and  the  local  chapter  of  the  Liberal  Party  of  which  the  deceased  protestee  was  a  
member,   thru   its   president   and   secretary.   First,   they   sought   leave   to   represent   the   deceased   protestee,   invoking   specifically   said  
protestee's  interest  to  keep  his  political  opponent  out  of  the  contested  office  in  order  to  maintain  his  successor  therein,  which  interest  
was   not   abated   by   his   death;   second,   they   moved   for   the   reconsideration   of   the   August   10,   1964   decision   and/or   for   new   trial  
based,  inter  alia,  upon  the  ground  that,  for  failure  to  order  the  protestant  to  procure  the  appointment  of  a  legal  representative  of  the  
deceased   protestee   after   his   widow   and   children   had   failed   to   appear,   pursuant   to   the   applicable   provisions   of   the   Rules   of   Court,   it  
was   legally   improper   for   the   trial   court   to   have   proceeded   ex   parte   with   the   election   case;   and   third,   they   filed   a   "Cautionary   Notice  
of  Appeal"  in  anticipation  of  the  possible  denial  of  their  said  motion  for  reconsideration  and  new  trial.  

Pleading  lack  of  personality  both  of  De  Mesa's  widow  and  the  local  Liberal  Party  Chapter  to  intervene  in  the  case,  as  well  as  the  absence  
of  any  ground  for  a  new  trial,  the  protestant  opposed  the  foregoing  moves.  To  the  opposition,  the  movant  below  filed  their  reply.  

On  September  25,  1964  the  court  a  quo,  subscribing  to  the  position  taken  by  the  protestant,  denied  the  movants'  petition  for  leave  to  
represent   the   deceased   protestee,   and   order   stricken   from   the   record   their   motion   for   reconsideration   and   new   trial   and   their  
cautionary  notice  of  appeal.  

On  October  6,  1964  Argana  qualified  as  mayor  and  assumed  office.  

Forthwith,   on   October   7,   1964   the   movants   aforesaid   gave   notice   of   their   intention   to   take   the   matter   on   appeal   to   the   Court   of  
Appeals.  This  was  met  with  the  protestant's  motion  to  strike  out  their  notice  of  appeal,  grounded  on  the  trial  court's  finding  of  movants'  
want  of  personality  to  appear  in  the  case,  and  consequently  to  appeal  the  decision  a  quo.  

In  the  meantime,  Demetrio  R.  Loresca  made  common  cause  with  De  Mesa's  widow  and  the  local  Liberal  Party  Chapter,  and  moved  for  
leave  to  be  added  to  and/or  substituted  as  party-­‐protestee,  claiming  a  legal  and  continuing  interest  in  the  outcome  of  the  election  
protest  as  successor  to  De  Mesa.  

On   November   10,   1964   the   trial   court   dictated   twin   order   (1)   granting   the   protestant's   motion   to   strike   out   the   notice   of   appeal  
heretofore  adverted  to;  and  (2)  denying  Loresca's  motion  to  be  substituted  a  party-­‐protestee.  

This  development  sent  the  herein  petitioners  to  the  Court  of  Appeals  on  a  petition  for  certiorari  and  mandamus,  with  preliminary  
injunction  (CA  35019-­‐R),  to  nullify  for  lack  of  jurisdiction  the  proceedings  taken  by  the  trial  court  in  the  election  case  aforesaid  without  
allowing  the  intervention  and/or  the  inclusion  of  a  legal  representative  of  the  deceased  protestee;  or,  in  the  alternative,  to  compel  
the  trial  court  to  give  due  course  to  the  petitioners'  appeal  from  the  decision  in  said  case.  Upon  bond  duly  filed  and  approved,  the  
Court  of  Appeals  issued  the  writ  of  preliminary  injunction  prayed  for.  However,  upon  respondents'  motion  and  over  the  opposition  of  
the  petitioners,  the  effect  of  said  writ  was  temporarily  suspended  until  the  case  was  finally  decided  by  the  Court  of  Appeals.  

Appropriate   proceedings   having   been   had   in   the   case,   the   latter   court,   besides   finding   the   inapplicability   to   election   cases   of   the  
provisions   of   Section   17,   Rule   3   of   the   Rules   of   Court   on   substitution   of   parties   in   case   of   death,   opined   that   the   petitioners   likewise  
lacked   the   legal   standing   and/or   capacity   to   appear   in   election   case   7924   aforesaid   and/or   to   appeal   from   the   decision   rendered  
therein,  and  that  furthermore  while  the  petitioner  Loresca  may  have  had  such  personality  he  nevertheless  failed  to  timely  invoke  the  
same  to  protect  his  interests.  Accordingly,  it  denied  the  petition  for  certiorari  and  mandamus  and  consequently  permanently  dissolved  
the  writ  of  preliminary  injunction  theretofore  issued.  

Hence,  the  present  recourse.  

The   vital   issue,   to   which   all   other   issues   appear   to   be   subsidiary,   is   the   determination   of   the   legal   effect   of   the   proceedings   taken   by  
the  trial  court  in  the  election  contest  before  it  subsequent  to  the  demise  of  the  protestee  De  Mesa.  

As  we  approach  this  question,  certain  postulates  project  themselves  to  the  fore.  It  is  axiomatic  that  an  election  contest,  involving  as  it  
does  not  only  the  adjudication  and  settlement  of  the  private  interests  of  the  rival  candidates  but  also  the  paramount  need  of  dispelling  
once  and  for  all  the  uncertainty  that  beclouds  the  real  choice  of  the  electorate  with  respect  to  who  shall  discharge  the  prerogatives  of  
the  offices  within  their  gift,  is  a  proceeding  imbued  with  public  interest  which  raises  it  onto  a  plane  over  and  above  ordinary  civil  
actions.  For  this  reason,  broad  perspectives  of  public  policy  impose  upon  courts  the  imperative  duty  to  ascertain  by  all  means  within  
their  command  who  is  the  real  candidate  elected  in  as  expeditious  a  manner  as  possible,  without  being  fettered  by  technicalities  and  
procedural  barriers  to  the  end  that  the  will  of  the  people  may  not  be  frustrated  (Ibasco  vs.  Ilao,  et  al.,  G.R.  L-­‐17512,  December  29,  
1960;  Reforma  vs.  De  Luna,  G.R.  L-­‐13242,  July  31,  1958).  So  inextricably  intertwined  are  the  interests  of  the  contestants  and  those  of  
the  public  that  there  can  be  no  gainsaying  the  logic  of  the  proposition  that  even  the  voluntary  cessation  in  office  of  the  protestee  not  
only  does  not  ipso  facto  divest  him  of  the  character  of  an  adversary  in  the  contest  inasmuch  as  he  retains  a  party  interest  to  keep  his  
political  opponent  out  of  the  office  and  maintain  therein  his  successor,  but  also  does  not  in  any  manner  impair  or  detract  from  the  
jurisdiction   of   the   court   to   pursue   the   proceeding   to   its   final   conclusion   (De   Los   Angeles   vs.   Rodriguez,   46   Phil.   595,   597;   Salcedo   vs.  
Hernandez,  62  Phil.  584,  587;  Galves  vs.  Maramba,  G.R.  L-­‐13206).  

Upon  the  same  principle,  the  death  of  the  protestee  De  Mesa  did  not  abate  the  proceedings  in  the  election  protest  filed  against  him,  
and  it  may  be  stated  as  a  rule  that  an  election  contest  survives  and  must  be  prosecuted  to  final  judgment  despite  the  death  of  the  
protestee.  

With   the   death   of   De   Mesa,   however,   a   contingency   not   expressly   provided   for   by   the   Revised   Election   Code   was   ushered   in.  
Nevertheless,   the,   hiatus   in   the   special   law   posed   no   impediment   to   the   course   of   the   proceedings   because,   precisely   by   express  
mandate  of  Rule  134  of  the  Rules  of  Court,  said  rules,  though  not  generally  applicable  to  election  cases,  may  however  be  applied  "by  
analogy   or   in   a   suppletory   character   and   whenever   practicable   and   convenient."   For   the   eventuality   here   involved,   the   Rules  
specifically  plot  the  course  of  action  to  be  taken,  in  the  following  language:  

SEC.  17.  Death  of  party.—After  a  party  dies  and  the  claim  is  not  thereby  extinguished,  the  court  shall  order,  upon  proper  
notice,   the   legal   representative   of   the   deceased   to   appear   and   to   be   substituted   for   the   deceased,   within   a   period   of   thirty  
(30)   days,   or   within   such   time   as   may   be   granted.   If   the   legal   representative   fails   to   appear   within   said   time,   the   court   may  
order  the  opposing  party  to  procure  the  appointment  of  a  legal  representative  of  the  deceased  within  a  time  to  be  specified  
by  the  court,  and  the  representative  shall  immediately  appear  for  and  on  behalf  of  the  interest  of  the  deceased.  .  .  .  (Rule  3.)  

That  the  applicability  of  the  foregoing  precept  to  the  election  contest  below  was  initially  conceded  is  borne  out  by  the  proceedings  on  
record.  The  trial  court,  it  will  be  recalled  in  its  order  of  May  6,  1964,  required  the  widow  and  children  of  the  deceased  protestee  to  
appear  and  be  substituted  for  and  on  his  behalf  and  to  protect  his  interest  in  the  case.  But  when  they  failed  to  comply  —  mainly  
because  of  the  shock  and  agony  that  followed  in  the  wake  of  the  violent  death  of  the  protestee  —  the  trial  court  took  no  further  steps  
in  the  premises  and,  instead,  at  the  instance  of  the  protestant,  declared  said  widow  and  children  non-­‐suited,  proceeded  with  the  
case  ex  parte,  and  effectively  blocked  all  attempts  at  intervention  and/or  substitution  in  behalf  of  the  deceased  protestee.  In  these  
moves,   the   trial   court   did   not   only   merit   the   unqualified   sanction   of   the   Court   of   Appeals   but   the   latter,   taking   an   even   more   radical  
of  the  matter,  actually  held  that  the  rule  relied  upon  has  no  application  to  election  cases.  

We  cannot  give  our  imprimatur  to  the  foregoing  view.  All  reasonable  intendments  deducible  from  the  law  and  the  essential  nature  of  
the  case  involved,  to  our  mind,  unerringly  tend  to  the  contrary.  All  the  very  least,  nothing  extant  in  the  Revised  Election  Code  either  
expressly   or   by   implication   renders   inappropriate   the   application   of   said   principle   of   substitution   in   case   of   death   to   proceedings  
thereunder.  On  the  contrary,  because  of  its  clear  failure  to  meet  the  contingency  in  question,  the  need  to  supplement  the  deficiency  
becomes   imperative.   Then   the   exertion   of   judicial   power   to   hear   and   determine   a   cause   implicitly   presupposes   in   the   trial   court,  
amongst  other  essentials,  jurisdiction  over  the  persons  of  the  parties.  That  jurisdiction  was  inevitably  impaired  upon  the  death  of  the  
protestee   pending   the   proceedings   below   such   that   unless   and   until   a   legal   representative   is   for   him   duly   named   and   within   the  
jurisdiction  of  the  trial  court,  no  adjudication  in  the  cause  could  have  been  accorded  any  validity  or  binding  effect  upon  any  party,  in  
representation  of  the  deceased,  without  trenching  upon  the  fundamental  right  to  a  day  in  court  which  is  the  very  essence  of  the  
constitutionally  enshrined  guarantee  of  due  process.  As  cogently  synthesized  in  Cupples  vs.  Castro,  137  P.  2d.,  755  —  

Where   contestant   was   declared   elected   and   contestee   appealed   after   which   contestant   died,   rights   of   parties   could   not   be  
determined   in   absence   of   contestant   and   his   legal   representative   and   submission   would   be   set   aside   and   cause   taken   from  
calendar  to  be  heard  only  after  representative  for  contestant  should  have  been  substituted.  (Francisco,  The  Revised  Election  
Code,  1957  ed.,  p.  583).  

If  this  be  the  case  with  the  contestant,  a  fortiori  no  less  can  be  said  of  the  contestee  whose  rights  as  well  as  those  of  his  successor  by  
operation  of  law  would  be  at  hazard  in  an  ex  parte  proceeding.  Further  still,  the  fundamental  purpose  of  the  Revised  Election  Code,  it  
has  been  recognized,  is  to  protect  the  integrity  of  elections  and  suppress  all  evils  that  may  vitiate  their  purity  and  defeat  the  popular  
will.  Judicial  experience  teaches  that  more  often  than  not  frauds  and  irregularities  committed  during  the  voting  come  to  light  only  
when   the   ballot   boxes   are   opened   and   their   contents   examined.   At   no   time   then   in   the   course   of   an   election   contest   is   the   need   for  
vigilance  more  to  be  insisted  upon  than  during  that  critical  stage  when  the  ballot  boxes  are  opened  and  the  ballots  themselves  are  
revised.  To  deny  a  party  to  the  contest  the  representation  that  the  law  allows  him  at  this  juncture  is  virtually  to  take  away  one  of  the  
most  effective  measures  designed  for  the  approximation  of  the  primordial  objective  election  laws  are  intended  to  achieve.  

In  the  light  of  the  foregoing,  it  is  our  considered  view  that  Section  17,  Rule  3  of  the  Rules  of  Court  applies  to  election  contests  to  the  
same  extent  and  with  the  same  force  and  effect  as  it  does  in  ordinary  civil  actions.  And  we  declare  that  unless  and  until  the  procedure  
therein  detailed  is  strictly  adhered  to,  proceedings  taken  by  a  court  in  the  absence  of  a  duly  appointed  legal  representative  of  the  
deceased  protestee  must  be  stricken  down  as  null  and  void.  Considering  that,  in  the  case  at  bar,  the  trial  court  failed  to  order  the  
protestant  to  procure  the  appointment  of  a  legal  representative  of  the  deceased  protestee  after  the  latter's  widow  and  children  had  
failed   to   comply   with   the   court   order   requiring   their   appearance   to   be   substituted   in   lieu   of   their   predecessor,   but   instead   —   in  
derogation  of  the  precepts  of  the  Rule  in  question  and  in  the  total  absence  of  a  legal  representative  of  the  deceased  protestee  —  
proceeded  ex  parte  with  the  election  case,  said  court  not  only  acted  with  grave  abuse  of  discretion  but  actually  committed  a  clear  
extra-­‐limitation  of  its  lawful  jurisdiction  which,  perforce,  tainted  all  its  proceedings  with  the  indelible  stigma  of  nullity  (Barrameda,  et  
al.  vs.  Barbara,  90  Phil.  718,  722,  723;  Ferreria  vs.  Ibarra  Vda.  de  Gonzales,  et  al.,  55  O.G.  No.  8,  1358,  136263;  Sarmiento,  etc.,  et  al.  
vs.  Ortiz,  et  al.,  G.R.  L-­‐18583,  January  31,  1964;  Caisip  vs.  Cabangon,  G.R.  L-­‐14684-­‐14686,  August  26,  1960).  

It  is  no  argument  against  this  conclusion  to  contend  that  the  requirement  for  the  procurement  of  a  legal  representative  of  a  deceased  
litigant  is  couched  in  the  permissive  term  "may"  instead  of  the  mandatory  word  "shall."  While  the  ordinary  acceptations  of  these  terms  
may  indeed  be  resorted  to  as  guides  in  the  ascertainment  of  the  mandatory  or  directory  character  of  statutory  provisions,  they  are  in  
no  wise  absolute  and  inflexible  criteria  in  the  vast  areas  of  law  and  equity.  Depending  upon  a  consideration  of  the  entire  provision,  its  
nature,  its  object  and  the  consequences  that  would  follow  from  construing  it  one  way  or  the  other,  the  convertibility  of  said  terms  
either   as   mandatory   or   permissive   is   a   standard   recourse   in   statutory   construction.   Thus,   Black   is   authority   for   the   rule   that   "Where  
the  statute  provides  for  the  doing  of  some  act  which  is  required  by  justice  or  public  duty,  or  where  it  invests  a  public  body,  municipality  
or  public  officer  with  power  and  authority  to  take  some  action  which  concerns  the  public  interest  or  rights  of  individuals,  the  permissive  
language  will  be  construed  as  mandatory  and  the  execution  of  the  power  may  be  insisted  upon  as  a  duty"  (Black,  Interpretation  of  
Laws,  pp.  540-­‐543).  The  matter  here  involved  not  only  concerns  public  interest  but  also  goes  into  the  jurisdiction  of  the  trial  court  and  
is  of  the  essence  of  the  proceedings  taken  thereon.  On  this  point,  there  is  authority  to  the  effect  that  in  statutes  relating  to  procedure,  
as  is  the  one  now  under  consideration,  every  act  which  is  jurisdictional,  or  of  the  essence  of  the  proceedings,  or  is  prescribed  for  the  
protection  or  benefit  of  the  party  affected,  is  mandatory  (Gonzaga,  Statutes  and  their  Construction,  p.  98,  citing:  Estate  of  Naval,  G.R.  
No.  L-­‐6736,  May  4,  1954).  The  present  case  is  well  within  the  purview  of  this  doctrine.  

Nor  may  the  motu  proprio  appointment  by  the  trial  court  of  Ramon  Antilon  Jr.  as  commissioner  for  the  deceased  protestee  in  the  
revision  proceedings  be  decreed  a  substantial  compliance  with  the  legal  requirement.  As  aptly  observed  in  the  dissent  to  the  decision  
under   review,   said   commissioner   was   not   the   legal   representative   contemplated   by   the   Rules   to   be   substituted   for   the   deceased  
protestee.  Said  commissioner  was  not  supposed  to  represent  the  protestee  as  a  party  litigant.  His  appointment  as  such  was  made  
exclusively  upon  the  initiative  of  the  trial  court  and  is  authorized  by  the  law.  Section  175,  Revised  Election  Code,  merely  as  a  time-­‐
saving  device  for  the  convenience  of  the  court  and  the  parties  in  the  purely  mechanical  operation  of  opening  the  ballots  and  tabulating  
the  count  and  in  the  interest  of  a  speedy  and  expeditious  revision  and  recount  of  the  contested  ballots  (Hontiveros  vs.  Altavas,  24  Phil.  
632,   649-­‐650;   Raymundo   vs.   Gonzales,   80   Phil.   719,   721).   For   all   legal   intents   and  purposes,   while   said   commissioner's   appointment  
may  be  proposed  by  the  contestants  themselves,  he  is  nevertheless  exclusively  an  officer  or  an  agent  of  the  court  under  its  direct  
control  and  supervision.  

Equally  unacceptable  is  the  proposition  that,  because  time  is  of  the  essence  in  an  election  contest,  recourse  to  the  appointment  of  a  
legal  representative  of  a  deceased  protestee  which  can  only  protract  and  delay  the  progress  of  the  case  is  but  a  finical  matter  of  
procedure  which  can  justifiably  be  dispensed  with.  The  validity  of  the  injunction  for  the  prompt  disposal  of  election  controversies  as  
repeatedly  postulated  in  a  consistent  array  of  jurisprudence  is  not  open  to  debate.  The  terms  of  office  of  elective  officials  are  relatively  
brief.   To   dissipate   within   the   shortest   time   possible   any   aura   of   doubt   upon   the   true   result   of   elections   is   a   much   sought-­‐after  
desideratum.  But,  salutary  though  the  precept  may  be,  it  is  no  justification  for  cutting  procedural  corners  or  taking  legal  short  cuts  not  
warranted   in   a   system   of   procedure   where   the   rule   of   law   is   still   held   paramount   over   and   above   all   considerations   of   mere  
convenience  and  expediency.  We  would  be  the  last  to  advocate  a  departure  from  the  policy  of  early  settlement  of  electoral  disputes,  
but  we  are  not  prepared  to  lend  our  approval  to  a  course  of  action  which  would  tend  to  achieve  one  object  of  desire  at  the  expense  
of  the  orderly  administration  of  justice  and  with  the  sacrifice  of  the  fundamental  right  of  litigants  to  due  process  of  law.   Otherwise,  
the  speedy  trial  required  by  the  law  would  be  converted  into  a  denial  of  justice  (Querubin  vs.  Court  of  Appeals,  82  Phil.  226,  230).  In  
law  —  as  in  any  other  sphere  of  human  relations  —  the  end  very  seldom,  if  at  all,  justifies  the  means.  And,  in  the  case  at  bar,  the  
admittedly  imperative  demand  for  a  speedy  disposition  of  the  controversy  cannot  deter  our  hand  from  striking  down  illegality  in  the  
proceedings  therein  and  remanding  the  case  for  new  trial,  despite  the  concomitant  delay  that  may  be  occasioned  thereby,  since  that  
is  the  only  course  open  if  the  ends  of  justice  are  to  be  subserved  (Salcedo  vs.  Hernandez,  62  Phil.  584,  587).  

Consequent  to  the  conclusion  we  have  just  reached,  we  confront  the  issue  of  who  is  the  legal  representative  of  the  deceased  protestee  
entitled  to  be  substituted  in  his  stead.  

As  the  record  of  the  case  reveals,  three  different  aspirants  vied  for  that  legal  representation:  Demetrio  R.  Loresca,  the  vice-­‐mayor  who  
succeeded  to  the  position  of  mayor  upon  the  protestee's  demise;  Magdalena  Sibulo  Vda.  de  De  Mesa,  the  protestee's  widow;  and  the  
local  chapter  of  the  Liberal  Party  at  Muntinlupa,  Rizal,  to  which  the  deceased  protestee  belonged,  as  represented  by  its  officers  who  
are  co-­‐petitioners  herein.  An  examination  of  the  countervailing  interests  of  these  parties  seems  in  order.  
By  virtue  of  Section  7  of  the  Local  Autonomy  Act,  Republic  Act  2264,  the  vice-­‐mayor  stands  next  in  line  of  succession  to  the  mayor  in  
case   of   a   permanent   vacancy   in   the   latter's   position.   Upon   the   death   of   the   protestee   mayor   in   the   case   at   bar,   Loresca   as   then  
incumbent  vice-­‐mayor  succeeded  by  operation  of  law  to  the  vacated  office  and,  as  a  matter  of  right,  is  entitled  to  occupy  the  same  
for  the  unexpired  term  thereof  or  until  the  protest  against  his  predecessor  is  decided  adversely  against  the  latter.  The  outcome  of  that  
contest   thus   bears   directly   upon   his   right   to   his   present   position   and,   amongst   all,   he   is   the   person   most   keenly   concerned   and  
interested  in  the  fair  and  regular  conduct  thereof  in  order  that  the  true  will  of  the  electorate  will  be  upheld.  His  status  as  a  real  party  
in  interest  in  the  continuation  of  the  proceedings  —  a  fact  conceded  by  the  decision  under  review  itself  —  cannot  thus  be  disputed.  

It   is   not   correct   to  subject   Loresca,   as  the   Court   of  Appeals  did,  respecting  his  interest  in  the  controversy  to  the  operation  of  the  
equitable  principle  of  laches.  The  initiative  to  cause  his  substitution  in  lieu  of  the  deceased  protestee  was  not  Loresca's.  It  was  the  trial  
court's   as   well   as   the   protestant's   duty,   upon   being   apprised   of   the   protestee's   death,   to   cause   the   appointment   of   his   legal  
representative  according  to  the  procedure  delineated  in  the  Rules.  Failing  in  this  duty,  it  never  became  the  obligation  of  Loresca  to  
take  it  upon  himself  to  be  appointed  as  such  legal  representative,  as  in  fact,  he  was  not  even  duly  and  seasonably  notified,  much  less  
ordered,  to  appear  and  be  so  substituted.  In  this  posture,  and  particularly  because,  as  above  held,  the  trial  court  did  not  even  acquire  
jurisdiction  over  him,  no  room  exists  for  the  operation  of  the  rule  on  laches  against  him.  His  intervention  should  not  have  been  denied.  

The  same  cannot,  however,  be  said  of  the  protestee's  widow  or  of  the  local  Liberal  Party  chapter  of  Muntinlupa.  The  protestee's  claim  
to  the  contested  office  is  not  in  any  sense  a  right  transmissible  to  this  widow  or  heirs.  Said  widow's  only  remaining  interest  in  the  
outcome  of  the  case  is  limited  to  no  more  than  the  possible  award  of  costs  against  the  deceased  protestee.  Besides  not  being  such  an  
interest  as  would  justify  her  substitution  for  her  deceased  husband  as  an  indispensable  legal  representative,  the  right  to  such  an  award  
if   eventually   made   has   already   been   waived   by   the   protestant   Argana.   This   effectively   withdraws   the   widow   from   the   picture  
altogether.  Much  less  has  the  local  Liberal  Party  Chapter  any  claim  to  substitution.  Not  being  duly  incorporated  as  a  juridical  person,  
it  can  have  no  personality  to  sue  or  be  sued  as  such.  And  while  it  conceivably  may  derive  some  indirect  benefit  consequent  to  the  
resolution  of  the  contest  in  favor  of  the  deceased  protestee,  neither  the  chapter  itself  nor  the  officers  thereof  would  become  entitled  
thereby  to  any  right  to  the  contested  office  in  case  of  a  favorable  judgment,  nor,  for  that  matter,  do  they  stand  to  sustain  any  direct  
prejudice  in  case  of  an  adverse  one.  No  basis  therefore  exists  upon  which  to  predicate  their  claim  to  substitution.  

The  foregoing  views  render  academic  the  alternative  issue  raised  by  the  petitioners  regarding  the  propriety  of  their  appeal  from  the  
trial  court's  decision  in  the  main  case.  

ACCORDINGLY,  the  judgment  under  review  is  reversed  and  in  lieu  thereof,  another  is  rendered  —  

(1)   Declaring   null   and   void   the   judgment   of   the   Court   of   First   Instance   of   Rizal   in   election   case   7924   thereof,   dated   August   10,   1964,  
which  proclaimed  the  protestant  Maximino  A.  Argana  the  duly  elected  mayor  of  Muntinlupa,  Rizal  in  the  1963  elections,  for  having  
been   rendered   without   jurisdiction   over   the   person   of   the   legal   representative   of   the   deceased   protestee   Francisco   de   Mesa   and   all  
other  proceedings  taken  by  said  court  in  said  election  case  subsequent  to  the  death  of  the  said  protestee;  

(2)  Ordering  the  protestant  Maximino  A.  Argana,  without  delay,  to  vacate  the  office  of  the  mayor  of  Muntinlupa,  Rizal  and  to  relinquish  
the  same  in  favor  of  Demetrio  R.  Loresca;  and  

(3)  Ordering  the  Court  of  First  Instance  of  Rizal  to  forthwith  appoint  the  petitioner  Demetrio  R.  Loresca  as  the  legal  representative  of  
the  deceased  protestee  Francisco  de  Mesa  and  allow  his  appearance  as  such  in  substitution  of  the  said  deceased  for  purposes  of  said  
election  case  7924  of  said  court,  to  conduct  a  new  trial  in  said  election  case,  and  thereafter  to  render  judgment  therein  as  the  evidence  
may  warrant.  

No  pronouncement  as  to  costs.  

Concepcion,   C.J.,   Reyes,   J.B.L.,   Dizon,   Regala,   Makalintal,   Bengzon,   J.P.,   Zaldivar   and   Sanchez,   JJ.,   concurs.  
Barrera,  J.,  is  on  leave.  

 
 
(12)  Llenares  vs  Valdeavella,  G.R.  No.  L-­‐21572,  October  4,  1994  

This  is  an  action  in  ejectment,  the  plaintiff  alleging  that  she  is  the  owner  of  two  parcels  of  land  in  the  barrio  of  Wacas,  municipality  of  
Tayabas,  having  acquired  said  parcels  by  purchase  at  a  sheriff's  sale  under  a  writ  of  execution  issued  by  the  justice  of  the  peace  of  the  
municipality  of  Tayabas  in  a  case  in  which  she  was  the  plaintiff  and  the  defendant  Felisa  Valdeavella  and  her  now  deceased  husband  
Zacarias  Zabella  were  the  defendants.  

The  defendants  Felisa  Valdeavella  and  Alfonso  Zoreta  in  their  answer  allege  that  Felisa  Valdeavella  never  has  been  in  possession  of  
the  parcels  as  owner;  that  she  and  her  husband  some  four  years  prior  to  the  filing  of  the  answer  (October  22,  1918)  were  in  possession  
of  the  land  as  tenants  of  Irineo  Valdeavella,  the  true  owner  of  the  land;  and  that  the  defendant  Alfonso  Zoreta  has  been  in  possession  
under  an  agreement  made  with  Zacarias  Zabella  whereby  Zoreta  was  to  have  the  use  and  benefit  of  the  land  as  security  for  a  debt  of  
P100.   Subsequent   to   the   filing   of   this   answer   Irineo   Valdeavella   was   impleaded.   In   his   answer   he   alleges   that   he   is   the   owner   of   the  
land  and  has  been  in  possession  thereof  for  over  fifteen  years.  

The  court  below  rendered  judgment  in  favor  of  the  defendants  holding  that  Irineo  Valdeavella  was  the  owner  of  the  parcels  of  land  in  
question  and  that,  moreover,  the  sheriff's  sale  under  which  the  plaintiff  claims  title  to  the  land  was  irregular  and  void  inasmuch  as  
there  had  not  been  a  sufficient  levy  on  the  lands,  nor  a  sufficient  notice  of  the  sale.  From  this  judgment  the  plaintiff  appeals  to  this  
court.  

In  her  first  assignment  of  error  the  appellant  maintains  that  the  court  erred  in  holding  that  Irineo  Valdeavella  was  the  owner  of  the  
land  at  the  time  of  the  attempted  levy  of  the  execution.  In  our  opinion,  this  assignment  of  error  is  well  taken.  The  testimony  in  support  
of  the  claim  of  Ireneo  Valdeavella  is  so  contradictory  and  inconsistent  that  no  reliance  whatever  can  be  placed  thereon.  

Under  the  second  assignment  of  error  the  appellant  argues  that  the  sale,  under  execution  by  virtue  of  which  she  claims  ownership  of  
the  land,  was  valid.  This  assignment  cannot  be  sustained.  

The  levy  of  an  execution  is  defined  as  the  acts  by  which  an  officer  sets  apart  of  appropriates  for  the  purpose  of  satisfying  the  command  
of  the  writ,  a  part  or  the  whole  of  a  judgment  debtor's  property.  In  the  absence  of  statutory  provisions  no  special  formalities  are  
required  for  a  valid  levy,  and  in  regard  to  real  property  it  has  usually  been  held  sufficient  if  the  seizure  of  the  property  is  made  known  
to  the  occupants  thereof  and  endorsed  on  the  writ.  But  it  is  otherwise  where,  as  in  this  jurisdiction,  the  matter  is  regulated  by  statute;  
there  a  substantial  compliance  with  the  statute  is  indispensable.  

The  statutory  provisions  to  this  case  are  found  in  sections  450  and  429  of  the  Code  of  Civil  Procedure.  Section  450  states  that  property  
"may   be   attached   on   execution   in   like   manner   as   upon   writs   of   attachment."   This   provision   while   permissive   in   form   must,  
nevertheless,  be  regarded  as  mandatory.  No  other  method  of  effecting  the  levy  is  prescribed  and  it  is  an  old  rule  that  powers  through  
the  exercise  of  which  a  person  may  be  divested  of  his  property  are  always  strictly  construed  and  that  the  provisions  regulating  the  
procedure  in  their  exercise  are  mandatory  as  to  the  essence  of  the  thing  to  be  done.  (Lewis'  Sutherland  on  Statutory  Construction,  2d  
ed.,  sec.  627.)  chanrobles  virtual  law  library  

Section  429  of  the  Code  reads  as  follows:  

‘Real  property,  standing  upon  the  records  in  the  name  of  the  defendant  or  not  appearing  at  all  upon  the  record.  shall  be  attached  by  
filing  with  the  registrar  of  titles  of  land  for  the  province  in  which  the  land  is  situated,  a  copy  of  the  order  of  attachment,  together  with  
a  description  of  the  property  attached,  and  a  notice  that  it  is  attached,  and  by  leaving  a  similar  copy  of  the  order,  description  and  
notice  with  an  occupant  of  the  property,  if  there  is  one.’  

Real  property  or  an  interest  therein,  belonging  to  the  defendant  and  held  by  any  other  person,  or  standing  on  the  records  in  the  name  
of  any  other  person,  shall  be  attached  by  filing  with  the  registrar  of  land  titled  in  the  province  in  which  the  land  is  situated,  a  copy  of  
the  order  of  attachment,  together  with  a  description  of  the  property,  and  a  notice  that  such  real  property  and  any  interest  of  the  
defendant  therein,  held  by  or  standing  in  the  name  of  such  other  person  (naming  him)  are  attached;  and  by  leaving  with  the  occupant,  
if  any,  and  with  such  other  person,  or  his  agent,  if  known  and  within  the  province,  a  copy  of  the  order,  description  and  notice.  The  
registrar  must  index  attachment  filed  under  the  first  paragraph  of  this  section,  in  the  names,  both  of  the  plaintiff  and  of  the  defendant,  
and  must  index  attachments  filed  under  the  second  paragraph  of  this  section,  in  the  names  of  the  plaintiff  and  of  the  defendant  and  
of  the  person  by  whom  the  property  is  held  or  in  whose  name  it  stands  on  the  records.  

In  the  present  case  it  is  admitted  by  the  plaintiff  that  notice  of  attachment  for  the  execution  was  not  filed  with  the  registrar  of  deeds  
and  that  there  was  no  copy  thereof  served  on  the  defendants.  It  is  therefore  clear  that  the  attempted  levy  was  not  made  in  accordance  
with  the  provisions  of  the  statute,  and,  according  to  the  great  weight  of  authority,  a  proper  levy  is  indispensable  to  a  valid  sale  on  
execution.   A   sale   unless   preceded   by   a   valid   levy,   is   void,   and   the   purchaser   acquires   no   title.   (Leath   vs.   Deweese,   162   Ky.,   227;  
Jarboe  vs.  Hall,  37  Md.,  345.)  chanrobles  virtual  law  library  
There  having  been  no  sufficient  levy  of  the  execution  in  question,  the  plaintiff  took  to  the  property  sold  thereunder  and  the  present  
action  can  therefore  not  be  maintained.  

The  judgment  appealed  from  is  affirmed,  without  costs.  So  ordered.  

Johnson,  Street,  Malcolm,  Avanceña,  Villamor  and  Romualdez,  JJ.,  concur.  

 
 
“Every”  
(13)  National  Housing  Corp.  vs  Juco,  G.R.  No.  L-­‐64313,  January  17,  1985  

Are   employees   of   the   National   Housing   Corporation   (NHC)   covered   by   the   Labor   Code   or   by   laws   and   regulations   governing   the   civil  
service?  

The  background  facts  of  this  case  are  stated  in  the  respondent-­‐appellee's  brief  as  follows:  

The   records   reveal   that   private   respondent   (Benjamin   C.   Juco)   was   a   project   engineer   of   the   National   Housing  
Corporation  (NHC)  from  November  16,  1970  to  May  14,  1975.  For  having  been  implicated  in  a  crime  of  theft  and/or  
malversation  of  public  funds  involving  214  pieces  of  scrap  G.I.  pipes  owned  by  the  corporation  which  was  allegedly  
committed  on  March  5,  1975.  Juco's  services  were  terminated  by  (NHC)  effective  as  of  the  close  of  working  hours  
on  May  14,  1975.  On  March  25,  1977  he  filed  a  complaint  for  illegal  dismissal  against  petitioner  (NHC)  with  Regional  
Office   No.   4,   Department   of   Labor   (now   Ministry   of   Labor   and   Employment)   docketed   as   R04-­‐3-­‐3309-­‐77   (Annex   A,  
Petition).  The  said  complaint  was  certified  by  Regional  Branch  No.  IV  of  the  NLRC  for  compulsory  arbitration  where  
it  was  docketed  as  Case  No.  RB-­‐IV-­‐12038-­‐77  and  assigned  to  Labor  Arbiter  Ernilo  V.  Peñalosa.  The  latter  conducted  
the  hearing.  By  agreement  of  the  parties,  the  case  was  submitted  for  resolution  upon  submission  of  their  respective  
position  papers.  Private  respondent  (Juco)  submitted  his  position  paper  on  July  15,  1977.  He  professed  innocence  of  
the   criminal   acts   imputed   against   him   contending   "that   he   was   dismissed   based   on   purely   fabricated   charges  
purposely  to  harass  him  because  he  stood  as  a  witness  in  the  theft  case  filed  against  certain  high  officials  of  the  
respondent's  establishment"  (NHC)  and  prayed  for  'his  immediate  reinstatement  to  his  former  position  in  the  (NHC)  
without  loss  of  seniority  rights  and  the  consequent  payment  of  his  will  back  wages  plus  all  the  benefits  appertaining  
thereto.   On   July   28,   1977,   the   NHC   also   filed   its   position   paper   alleging   that   the   Regional   Office   Branch   IV,   Manila,  
NLRC,   "is   without   authority   to   entertain   the   case   for   lack   of   jurisdiction,   considering   that   the   NHC   is   a   government  
owned   and   controlled   corporation;   that   even   assuming   that   this   case   falls   within   the   jurisdiction   of   this   Office,  
respondent  firm  (now  petitioner)  maintains  that  respondent  (Juco),  now  private  respondent,  was  separated  from  
the  service  for  valid  and  justified  reasons,  i.e.,  for  having  sold  company  properties  consisting  of  214  pieces  of  scrap  
G.I.  pipes  at  a  junk  shop  in  Alabang,  Muntinlupa,  Metro  Manila,  and  thereafter  appropriating  the  proceeds  thereof  
to  his  own  benefit."  

The  pertinent  portion  of  the  decision  of  respondent  National  Labor  Relations  Commission  (NLRC)  reads:  

The  fact  that  in  the  early  case  of  Fernandez  v.  Cedro  (NLRC  Case  No.  201165-­‐74,  May  19,  1975)  the  Commission,  
(Second   Division)   ruled   that   the   respondent   National   Housing   Corporation   is   a   government-­‐owned   or   controlled  
corporation  does  not  preclude  us  from  later  taking  a  contrary  stand  if  by  doing  so  the  ends  of  justice  could  better  be  
served.  

For   although   adherence   to   precedents   (stare   decisis)   is   a   sum   formula   for   achieving   uniformity   of   action   and  
conducive   to   the   smooth   operation   of   an   office,   Idolatrous   reverence   for   precedents   which   have   outlived   their  
validity  and  usefulness  retards  progress  and  should  therefore  be  avoided.  In  fact,  even  courts  do  reverse  themselves  
for  reasons  of  justice  and  equity.  This  Commission  as  an  Administrative  body  performing  quasi  judicial  function  is  no  
exception.  

WHEREFORE,  in  the  light  of  the  foregoing,  the  decision  appealed  from  is  hereby,  set  aside.  In  view,  however,  of  the  
fact  that  the  Labor  Arbiter  did  not  resolve  the  issue  of  illegal  dismissal  we  have  opted  to  remand  this  case  to  the  
Labor  Arbiter  a  quo  for  resolution  of  the  aforementioned  issue.  
The  NHC  is  a  one  hundred  percent  (100%)  government-­‐owned  corporation  organized  in  accordance  with  Executive  Order  No.  399,  the  
Uniform   Charter   of   Government   Corporations,   dated   January   5,   1951.   Its   shares   of   stock   are   owned   by   the   Government   Service  
Insurance  System  the  Social  Security  System,  the  Development  Bank  of  the  Philippines,  the  National  Investment  and  Development  
Corporation,  and  the  People's  Homesite  and  Housing  Corporation.  Pursuant  to  Letter  of  Instruction  No.  118,  the  capital  stock  of  NHC  
was   increased   from   P100   million   to   P250   million   with   the   five   government   institutions   above   mentioned   subscribing   in   equal  
proportion   to   the   increased   capital   stock.   The   NHC   has   never   had   any   private   stockholders.   The   government   has   been   the   only  
stockholder  from  its  creation  to  the  present.  

There   should   no   longer   be   any   question   at   this   time   that   employees   of   government-­‐owned   or   controlled   corporations   are   governed  
by  the  civil  service  law  and  civil  service  rules  and  regulations.  

Section  1,  Article  XII-­‐B  of  the  Constitution  specifically  provides:  

The   Civil   Service   embraces   every   branch,   agency,   subdivision,   and   instrumentality   of   the   Government,   including  
every  government-­‐owned  or  controlled  corporation.  ...  

The  1935  Constitution  had  a  similar  provision  in  its  Section  1,  Article  XI  I  which  stated:  

A  Civil  Service  embracing  all  branches  and  subdivisions  of  the  Government  shall  be  provided  by  law.  

The  inclusion  of  "government-­‐owned  or  controlled  corporations"  within  the  embrace  of  the  civil  service  shows  a  deliberate  effort  of  
the  framers  to  plug  an  earlier  loophole  which  allowed  government-­‐owned  or  controlled  corporations  to  avoid  the  full  consequences  
of   the   an   encompassing   coverage   of   the   civil   service   system.   The   same   explicit   intent   is   shown   by   the   addition   of   "agency"   and  
"instrumentality"  to  branches  and  subdivisions  of  the  Government.  All  offices  and  firms  of  the  government  are  covered.  

The  amendments  introduced  in  1973  are  not  Idle  exercises  or  a  meaningless  gestures.  They  carry  the  strong  message  that  t  civil  service  
coverage   is   broad   and   an-­‐   embracing   insofar   as   employment   in   the   government   in   any   of   its   governmental   or   corporate   arms   is  
concerned.  

The   constitutional   provision   has   been   implemented   by   statute.   Presidential   Decree   No.   807   is   unequivocal   that   personnel   of  
government-­‐owned  or  controlled  corporations  belong  to  the  civil  service  and  are  subject  to  civil  service  requirements.  

It  provides:  

SEC.   56.   Government-­‐owned   or   Controlled   Corporations   Personnel.   —   All   permanent   personnel   of   government-­‐
owned  or  controlled  corporations  whose  positions  are  now  embraced  in  the  civil  service  shall  continue  in  the  service  
until  they  have  been  given  a  chance  to  qualify  in  an  appropriate  examination,  but  in  the  meantime,  those  who  do  
not  possess  the  appropriate  civil  service  eligibility  shag  not  be  promoted  until  they  qualify  in  an  appropriate  civil  
service  examination.  Services  of  temporary  personnel  may  be  terminated  any  time.  

The  very  Labor  Code,  P.  D.  No.  442  as  amended,  which  the  respondent  NLRC  wants  to  apply  in  its  entirety  to  the  private  respondent  
provides:  

ART.   277.   Government   employees.   —   The   terms   and   conditions   of   employment   of   all   government   employees,  
including  employees  of  government-­‐owned  and  controlled  corporations  shall  be  governed  by  the  Civil  Service  Law,  
rules   and   regulations.   Their   salaries   shall   be   standardized   by   the   National   Assembly   as   provided   for   in   the   New  
Constitution.   However,   there   shall   be   reduction   of   existing   wages,   benefits   and   other   terms   and   conditions   of  
employment  being  enjoyed  by  them  at  the  time  of  the  adoption  of  the  Code.  

Our   decision   in   Alliance   of   Government   Workers,   et   al   v.   Honorable   Minister   of   Labor   and   Employment   et   all.   (124   SCRA   1)   gives   the  
background  of  the  amendment  which  includes  government-­‐owned  or  controlled  corporations  in  the  embrace  of  the  civil  service.  

We  stated:  
 Records  of  the  1971  Constitutional  Convention  show  that  in  the  deliberation  held  relative  to  what  is  now  Section  
1(1),   Article   XII-­‐B,   supra,   the   issue   of   the   inclusion   of   government-­‐owned   or   controlled   corporations   figured  
prominently.  

The   late   delegate   Roberto   S.   Oca,   a   recognized   labor   leader,   vehemently   objected   to   the   inclusion   of   government-­‐
owned  or  controlled  corporations  in  the  Civil  Service.  He  argued  that  such  inclusion  would  put  asunder  the  right  of  
workers   in   government   corporations,   recognized   in   jurisprudence   under   the   1935   Constitution,   to   form   and   join  
labor  unions  for  purposes  of  collective  bargaining  with  their  employers  in  the  same  manner  as  in  the  private  section  
(see:  records  of  1971  Constitutional  Convention).  

In  contrast,  other  labor  experts  and  delegates  to  the  1971  Constitutional  Convention  enlightened  the  members  of  
the  Committee  on  Labor  on  the  divergent  situation  of  government  workers  under  the  1935  Constitution,  and  called  
for  its  rectification.  Thus,  in  a  Position  Paper  dated  November  22,  197  1,  submitted  to  the  Committee  on  Labor,  1971  
Constitutional  Convention,  then  Acting  Commissioner  of  Civil  Service  Epi  Rey  Pangramuyen  declared:  

It  is   the  stand,  therefore,  of  this  Commission  that  by  reason  of  the  nature  of  the   public   employer  
and  the  peculiar  character  of  the  public  service,  it  must  necessary  regard  the  right  to  strike  given  
to  unions  in  private  industry  as  not  applying  to  public  employees  and  civil  service  employees.  It  
has   been   stated   that   the   Government,  in   contrast   to   the   private   employer,   protects   the   interests  
of  all  people  in  the  public  service,  and  that  accordingly,  such  conflicting  interests  as  are  present  in  
private  labor  relations  could  not  exist  in  the  relations  between  government  and  those  whom  they  
employ.  

Moreover,  determination  of  employment  conditions  as  well  as  supervision  of  the  management  of  
the  public  service  is  in  the  hands  of  legislative  bodies.  It  is  further  emphasized  that  government  
agencies  in  the  performance  of  their  duties  have  a  right  to  demand  undivided  allegiance  from  their  
workers  and  must  always  maintain  a  pronounced  esprit  de  corps  or  firm  discipline  among  their  
staff  members.  It  would  be  highly  incompatible  with  these  requirements  of  the  public  service,  if  
personnel   took   orders   from   union   leaders   or   put   solidarity   with   members   of   the   working   class  
above  solidarity  with  the  Government.  This  would  be  inimical  to  the  public  interest.  

Moreover,   it   is   asserted   that   public   employees   by   joining   labor   unions   may   be   compelled   to  
support  objectives  which  are  political  in  nature  and  thus  jeopardize  the  fundamental  principle  that  
the   governmental   machinery   must   be   impartial   and   non-­‐political   in   the   sense   of   party   politics.  
(See:  Records  of  1971  Constitutional  Convention).  

Similar,  Delegate  Leandro  P.  Garcia,  expressing  for  the  inclusion  of  government-­‐owned  or  controlled  corporations  in  
the  Civil  Service,  argued:  

It   is   meretricious   to   contend   that   because   Government-­‐owned   or   controlled   corporations   yield  

profits,   their   employees   are   entitled   to   better   wages   and   fringe   benefits   than   employees   of  
Government  other  than  Government-­‐owned  and  controlled  corporations  which  are  not  making  
profits.  There  is  no  gainsaying  the  fact  that  the  capital  they  use  is  the  people's  money.  (see:  Records  
of  the  1971  Constitutional  Convention).  

Summarizing   the   deliberations   of   the   1971   Constitutional   Convention   on   the   inclusion   of   Government-­‐owned   or  
controlled  corporation  Dean  Joaquin  G.  Bernas,  SJ.,  of  the  Ateneo  de  Manila  University  Professional  School  of  Law,  
stated  that  government-­‐owned  corporations  came  under  attack  as  g  cows  of  a  privileged  few  enjoying  salaries  far  
higher   than   their   counterparts   in   the   various   branches   of   government,   while   the   capital   of   these   corporations  
belongs  to  the  Government  and  government  money  is  pumped  into  them  whenever  on  the  brink  of  disaster,  and  
they  should  therefore  come  under  the  strict  surveillance  of  the  Civil  Service  System.  (Bernas,  The  1973  Philippine  
Constitution,  Notes  and  Cases,  1974  ed.,  p.  524).  

Applying  the  pertinent  provisions  of  the  Constitution,  the  Labor  Code  as  amended,  and  the  Civil  Service  Decree  as  amended  and  the  
precedent   in   the   Alliance   of   Government   Workers   decision,   it   is   clear   that   the   petitioner   National   Housing   Corporation   comes   under  
the  jurisdiction  of  the  Civil  Service  Commission,  not  the  Ministry  of  Labor  and  Employment.  
This  becomes  more  apparent  if  we  consider  the  fact  that  the  NHC  performs  governmental  functions  and  not  proprietary  ones.  

The  NHC  was  organized  for  the  governmental  objectives  stated  in  its  amended  articles  of  incorporation  as  follows:  

SECOND:  That  the  purpose  for  which  the  corporation  is  organized  is  to  assist  and  carry  out  the  coordinated  massive  
housing  program  of  the  government,  principally  but  not  limited  to  low-­‐cost  housing  with  the  integration  cooperation  
and  assistance  of  all  governmental  agencies  concerned,  through  the  carrying  on  of  any  or  all  the  following  activities:  

l)   The   acquisition,   development   or   reclamation   of   lands   for   the   purpose   of   construction   and   building   therein  
preferably  low-­‐cost  housing  so  as  to  provide  decent  and  durable  dwelling  for  the  greatest  number  of  inhabitants  in  
the  country;  

2)  The  promotion  and  development  of  physical  social  and  economic  community  growth  through  the  establishment  
of   general   physical   plans   for   urban,   suburban   and   metropolitan   areas   to   be   characterized   by   efficient   land   use  
patterns;  

3)  The  coordination  and  implementation  of  all  projects  of  the  government  for  the  establishment  of  nationwide  and  
massive  low  cost  housing;  

4)   The   undertaking   and   conducting   of   research   and   technical   studies   of   the   development   and   promotion   of  
construction  of  houses  and  buildings  of  sound  standards  of  design  liability,  durability,  safety,  comfort  and  size  for  
improvement  of  the  architectural  and  engineering  designs  and  utility  of  houses  and  buildings  with  the  utilization  of  
new  and/or  native  materials  economics  in  material  and  construction,  distribution,  assembly  and  construction  and  of  
applying  advanced  housing  and  building  technology.  

5)  Construction  and  installation  in  these  projects  of  low-­‐cost  housing  privately  or  cooperatively  owned  water  and  
sewerage   system   or   waste   disposal   facilities,   and   the   formulations   of   a   unified   or   officially   coordinated   urban  
transportation  system  as  a  part  of  a  comprehensive  development  plan  in  these  areas.  

The  petitioner  points  out  that  it  was  established  as  an  instrumentality  of  the  government  to  accomplish  governmental  policies  and  
objectives  and  extend  essential  services  to  the  people.  It  would  be  incongruous  if  employees  discharging  essentially  governmental  
functions  are  not  covered  by  the  same  law  and  rules  which  govern  those  performing  other  governmental  functions.  If  government  
corporations   discharging   proprietary   functions   now   belong   to   the   civil   service   with   more   reason   should   those   performing  
governmental  functions  be  governed  by  civil  service  law.  

The  respondent  NLRC  cites  a  1976  opinion  of  the  Secretary  of  Justice  which  holds  that  the  phrase  "government-­‐owned  or  controlled  
corporations"   in   Section   1,   Article   XII-­‐B   of   the   Constitution   contemplates   only   those   government-­‐owned   or   controlled  
corporations  created  by  special  law.  The  opinion  states  that  since  the  Constitution  provides  for  the  organization  or  regulation  of  private  
corporations   only   by   "general   law",   expressly   excluding   government-­‐owned   or   controlled   corporations,   it   follows   that   whenever   the  
Constitution  mentions  government-­‐owned  or  controlled  corporations,  it  must  refer  to  those  created  by  special  law.  P.D.  No.  868  which  
repeals   all   charters,   laws,   decrees,   rules,   and   provisions   exempting   any   branch,   agency,   subdivision,   or   instrumentality   of   the  
government,  including  government-­‐  owned  or  controlled  corporations  from  the  civil  service  law  and  rules  is  also  cited  to  show  that  
corporations   not   governed   by   special   charters   or   laws   are   not   to   be   brought   within   civil   service   coverage.   The   discussions   in   the  
Constitutional  Convention  are  also  mentioned.  It  appears  that  at  the  time  the  Convention  discussed  government-­‐owned  or  controlled  
corporations,  all  such  corporations  were  organized  only  under  special  laws  or  charters.  

The  fact  that  "private"  corporations  owned  or  controlled  by  the  government  may  be  created  by  special  charter  does  not  mean  that  
such  corporations  not  created  by  special  law  are  not  covered  by  the  civil  service.  Nor  does  the  decree  repealing  all  charters  and  special  
laws  granting  exemption  from  the  civil  service  law  imply  that  government  corporations  not  created  by  special  law  are  exempt  from  
civil   service   coverage.   These   charters   and   statutes   are   the   only   laws   granting   such   exemption   and,   therefore,   they   are   the   only   ones  
which  could  be  repealed.  There  was  no  similar  exempting  provision  in  the  general  law  which  called  for  repeal.  And  finally,  the  fact  that  
the   Constitutional   Convention   discussed   only   corporations   created   by   special   law   or   charter   cannot   be   an   argument   to   exclude  
petitioner   NHC   from   civil   service   coverage.   As   stated   in   the   cited   speech   delivered   during   the   convention   sessions   of   March   9,   1972,  
all  government  corporations  then  in  existence  were  organized  under  special  laws  or  charters.  The  convention  delegates  could  not  
possibly   discuss   government-­‐owned   or   controlled   corporations   which   were   still   non-­‐existent   or   about   whose   existence   they   were  
unaware.  
Section  I  of  Article  XII-­‐B,  Constitution  uses  the  word  "every"  to  modify  the  phrase  "government-­‐owned  or  controlled  corporation."  

"Every"   means   each   one   of   a   group,   without   exception   It   means   all   possible   and   all   taken   one   by   one.   Of   course,   our   decision   in   this  
case  refers  to  a  corporation  created  as  a  government-­‐owned  or  controlled  entity.  It  does  not  cover  cases  involving  private  firms  taken  
over   by   the   government   in   foreclosure   or   similar   proceedings.   We   reserve   judgment   on   these   latter   cases   when   the   appropriate  
controversy  is  brought  to  this  Court.  

The   infirmity   of   the   respondents'   position   lies   in   its   permitting   a   circumvention   or   emasculation   of   Section   1,   Article   XII-­‐B   of   the  
Constitution   It   would   be   possible   for   a   regular   ministry   of   government   to   create   a   host   of   subsidiary   corporations   under   the  
Corporation   Code   funded   by   a   willing   legislature.   A   government-­‐owned   corporation   could   create   several   subsidiary   corporations.  
These  subsidiary  corporations  would  enjoy  the  best  of  two  worlds.  Their  officials  and  employees  would  be  privileged  individuals,  free  
from  the  strict  accountability  required  by  the  Civil  Service  Decree  and  the  regulations  of  the  Commission  on  Audit.  Their  incomes  
would  not  be  subject  to  the  competitive   restraints   of  the   open   market   nor   to   the   terms   and   conditions   of   civil   service  employment.  
Conceivably,   all   government-­‐owned   or   controlled   corporations   could   be   created,   no   longer   by   special   charters,   but   through  
incorporation  under  the  general  law.  The  constitutional  amendment  including  such  corporations  in  the  embrace  of  the  civil  service  
would  cease  to  have  application.  Certainly,  such  a  situation  cannot  be  allowed  to  exist.  

WHEREFORE,  the  petition  is  hereby  GRANTED.  The  questioned  decision  of  the  respondent  National  Labor  Relations  Commission  is  SET  
ASIDE.  The  decision  of  the  Labor  Arbiter  dismissing  the  case  before  it  for  lack  of  jurisdiction  is  REINSTATED.  

SO  ORDERED.  

Note:  This  case  has  dissenting  opinions.  Check  online  if  you  want  to  read