[G.R. No. 101279. August 6, 1992.] PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. petitioner, vs. HON. RUBEN D.

TORRES, as Secretary of the Department of Labor & Employment, and JOSE N. SARMIENTO, as Administrator of the PHILIPPINE OVERSEAS EMPLOYMENT ADMINISTRATION, respondents. De Guzman, Meneses & Associates for petitioner. SYLLABUS 1. ADMINISTRATIVE LAW; ADMINISTRATIVE BODIES; VESTURE OF QUASI LEGISLATIVE AND QUASI JUDICIAL POWERS. The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice." 2. LABOR LAW; OVERSEAS EMPLOYMENT; DOLE AND POEA CIRCULARS; POWER TO RESTRICT AND REGULATE INVOLVES A GRANT OF POLICE POWER. It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218). 3. ID.; ID.; ID.; INVALID FOR LACK OF PROPER PUBLICATION AND FILING IN THE OFFICE OF NATIONAL ADMINISTRATIVE REGISTER. Nevertheless, the DOLE and POEA circulars are legally invalid, defective and unenforceable for lack of proper publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987. DECISION GRIO-AQUINO, J p: This petition for prohibition with temporary restraining order was filed by the Philippine Association of Service Exporters (PASEI, for short), to prohibit and enjoin the Secretary of the Department of Labor and Employment (DOLE) and the Administrator of the Philippine Overseas Employment Administration (or POEA) from enforcing and implementing DOLE Department Order No. 16, Series of 1991 and POEA Memorandum Circular Nos. 30 and 37, Series of 1991, temporarily suspending the recruitment by private employment agencies of

Filipino domestic helpers for Hong Kong and vesting in the DOLE, through the facilities of the POEA, the task of processing and deploying such workers. PASEI is the largest national organization of private employment and recruitment agencies duly licensed and authorized by the POEA, to engage in the business of obtaining overseas employment for Filipino landbased workers, including domestic helpers. On June 1, 1991, as a result of published stories regarding the abuses suffered by Filipino housemaids employed in Hong Kong, DOLE Secretary Ruben D. Torres issued Department Order No. 16, Series of 1991, temporarily suspending the recruitment by private employment agencies of "Filipino domestic helpers going to Hong Kong" (p. 30, Rollo). The DOLE itself, through the POEA took over the business of deploying such Hong Kong-bound workers. "In view of the need to establish mechanisms that will enhance the protection for Filipino domestic helpers going to Hong Kong, the recruitment of the same by private employment agencies is hereby temporarily suspended effective 1 July 1991. As such, the DOLE through the facilities of the Philippine Overseas Employment Administration shall take over the processing and deployment of household workers bound for Hong Kong, subject to guidelines to be issued for said purpose. "In support of this policy, all DOLE Regional Directors and the Bureau of Local Employment's regional offices are likewise directed to coordinate with the POEA in maintaining a manpower pool of prospective domestic helpers to Hong Kong on a regional basis. "For compliance." (Emphasis ours; p. 30, Rollo.) Pursuant to the above DOLE circular, the POEA issued Memorandum Circular No. 30, Series of 1991, dated July 10, 1991, providing GUIDELINES on the Government processing and deployment of Filipino domestic helpers to Hong Kong and the accreditation of Hong Kong recruitment agencies intending to hire Filipino domestic helpers. "Subject: Guidelines on the Temporary Government Processing and Deployment of Domestic Helpers to Hong Kong. "Pursuant to Department Order No. 16, series of 1991 and in order to operationalize the temporary government processing and deployment of domestic helpers (DHs) to Hong Kong resulting from the temporary suspension of recruitment by private employment agencies for said skill and host market, the following guidelines and mechanisms shall govern the implementation of said policy: "I. Creation of a Joint POEA-OWWA Household Workers Placement Unit (HWPU).

"An ad hoc, one stop Household Workers Placement Unit [or HWPU] under the supervision of the POEA shall take charge of the various operations involved in the Hong Kong-DH industry segment: "The HWPU shall have the following functions in coordination with appropriate units and other entities concerned: "1. Negotiations with and Accreditation of Hong Kong Recruitment Agencies

"2. "3. "4. "5.

Manpower Pooling Worker Training and Briefing Processing and Deployment Welfare Programs.

"II. Documentary Requirements and Other Conditions for Accreditation of Hong Kong Recruitment Agencies or Principals. "Recruitment agencies in Hong Kong intending to hire Filipino DHs for their employers may negotiate with the HWPU in Manila directly or through the Philippine Labor Attache's Office in Hong Kong. "X. Interim Arrangement

"All contracts stamped in Hong Kong as of June 30 shall continue to be processed by POEA until 31 July 1991 under the name of the Philippine agencies concerned. Thereafter, all contracts shall be processed with the HWPU. "Recruitment agencies in Hong Kong shall submit to the Philippine Consulate General in Hong Kong a list of their accepted applicants in their pool within the last week of July. The last day of acceptance shall be July 31 which shall then be the basis of HWPU in accepting contracts for processing. After the exhaustion of their respective pools the only source of applicants will be the POEA manpower pool. "For strict compliance of all concerned." (pp. 31-35, Rollo.) On August 1, 1991, the POEA Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing of employment contracts of domestic workers for Hong Kong. "TO: All Philippine and Hong Kong Agencies engaged in the recruitment of Domestic helpers for Hong Kong. "Further to Memorandum Circular No. 30, series of 1991 pertaining to the government processing and deployment of domestic helpers (DHs) to Hong Kong, processing of employment contracts which have been attested by the Hong Kong Commissioner of Labor up to 30 June 1991 shall be processed by the POEA Employment Contracts Processing Branch up to 15 August 1991 only. "Effective 16 August 1991, all Hong Kong recruitment agent/s hiring DHs from the Philippines shall recruit under the new scheme which requires prior accreditation with the POEA. "Recruitment agencies in Hong Kong may apply for accreditation at the Office of the Labor Attache, Philippine Consulate General where a POEA team is posted until 31 August 1991. Thereafter, those who failed to have themselves accredited in Hong Kong may proceed to the POEA-OWWA Household Workers Placement Unit in Manila for accreditation before their recruitment and processing of DHs shall be allowed.

"Recruitment agencies in Hong Kong who have some accepted applicants in their pool after the cut-off period shall submit this list of workers upon accreditation. Only those DHs in said list will be allowed processing outside of the HWPU manpower pool. "For strict compliance of all concerned." (Emphasis supplied, p. 36, Rollo.) On September 2, 1991, the petitioner, PASEI, filed this petition for prohibition to annul the aforementioned DOLE and POEA circulars and to prohibit their implementation for the following reasons: 1. that the respondents acted with grave abuse of discretion and/or in excess of their rule-making authority in issuing said circulars; 2. that the assailed DOLE and POEA circulars are contrary to the Constitution, are unreasonable, unfair and oppressive; and 3. that the requirements of publication and filing with the Office of the National Administrative Register were not complied with. There is no merit in the first and second grounds of the petition. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and regulate recruitment and placement activities. "Art. 36. Regulatory Power. The Secretary of Labor shall have the power to restrict and regulate the recruitment and placement activities of all agencies within the coverage of this title [Regulation of Recruitment and Placement Activities] and is hereby authorized to issue orders and promulgate rules and regulations to carry out the objectives and implement the provisions of this title." (Italics ours.) On the other hand, the scope of the regulatory authority of the POEA, which was created by Executive Order No. 797 on May 1, 1982 to take over the functions of the Overseas Employment Development Board, the National Seamen Board, and the overseas employment functions of the Bureau of Employment Services, is broad and far-ranging for: 1. Among the functions inherited by the POEA from the defunct Bureau of Employment Services was the power and duty: "'2. To establish and maintain a registration and/or licensing system to private sector participation in the recruitment and placement of workers, locally and overseas, . . . .' (Art. 15, Labor Code, italics supplied)." (p. 13, Rollo.) 2. duty: It assumed from the defunct Overseas Employment Development Board the power and

"'3. To recruit and place workers for overseas employment of Filipino contract workers, on a government to government arrangement and in such other sectors as policy may dictate . . . .' (Art. 17, Labor Code.)" (p. 13, Rollo.) 3. From the National Seamen Board, the POEA took over:

"2. To regulate and supervise the activities of agents or representatives of shipping companies in the hiring of seamen for overseas employment; and secure the best possible terms of employment for contract seamen workers and secure compliance therewith." (Art. 20, Labor Code.) The vesture of quasi-legislative and quasi-judicial powers in administrative bodies is not unconstitutional, unreasonable and oppressive. It has been necessitated by "the growing complexity of the modern society" (Solid Homes, Inc. vs. Payawal, 177 SCRA 72, 79). More and more administrative bodies are necessary to help in the regulation of society's ramified activities. "Specialized in the particular field assigned to them, they can deal with the problems thereof with more expertise and dispatch than can be expected from the legislature or the courts of justice" (Ibid.). It is noteworthy that the assailed circulars do not prohibit the petitioner from engaging in the recruitment and deployment of Filipino landbased workers for overseas employment. A careful reading of the challenged administrative issuances discloses that the same fall within the "administrative and policing powers expressly or by necessary implication conferred" upon the respondents (People vs. Maceren, 79 SCRA 450). The power to "restrict and regulate conferred by Article 36 of the Labor Code involves a grant of police power (City of Naga vs. Court of Appeals, 24 SCRA 898). To "restrict" means "to confine, limit or stop" (p. 62, Rollo) and whereas the power to "regulate" means "the power to protect, foster, promote, preserve, and control with due regard for the interests, first and foremost, of the public, then of the utility and of its patrons" (Philippine Communications Satellite Corporation vs. Alcuaz, 180 SCRA 218). The Solicitor General, in his Comment, aptly observed: " . . . Said Administrative Order [i.e., DOLE Administrative Order No. 16] merely restricted the scope or area of petitioner's business operations by excluding therefrom recruitment and deployment of domestic helpers for Hong Kong till after the establishment of the `mechanisms' that will enhance the protection of Filipino domestic helpers going to Hong Kong. In fine, other than the recruitment and deployment of Filipino domestic helpers for Hongkong, petitioner may still deploy other class of Filipino workers either for Hongkong and other countries and all other classes of Filipino workers for other countries. Cdpr "Said administrative issuances, intended to curtail, if not to end, rampant violations of the rule against excessive collections of placement and documentation fees, travel fees and other charges committed by private employment agencies recruiting and deploying domestic helpers to Hongkong. [They are] reasonable, valid and justified under the general welfare clause of the Constitution, since the recruitment and deployment business, as it is conducted today, is affected with public interest. "The alleged takeover [of the business of recruiting and placing Filipino domestic helpers in Hongkong] is merely a remedial measure, and expires after its purpose shall have been attained. This is evident from the tenor of Administrative Order No. 16 that recruitment of Filipino domestic helpers going to Hongkong by private employment agencies are hereby 'temporarily suspended effective July 1. 1991.' "The alleged takeover is limited in scope, being confined to recruitment of domestic helpers going to Hongkong only.

" . . . the justification for the takeover of the processing and deploying of domestic helpers for Hongkong resulting from the restriction of the scope of petitioner's business is confined solely to the unscrupulous practice of private employment agencies victimizing applicants for employment as domestic helpers for Hongkong and not the whole recruitment business in the Philippines." (pp. 62-65. Rollo.) The questioned circulars are therefore a valid exercise of the police power as delegated to the executive branch of Government. Nevertheless, they are legally invalid, defective and unenforceable for lack of proper publication and filing in the Office of the National Administrative Register as required in Article 2 of the Civil Code, Article 5 of the Labor Code and Sections 3(1) and 4, Chapter 2, Book VII of the Administrative Code of 1987 which provide: "Art. 2. Laws shall take effect after fifteen (15) days following the completion of their publication in the Official Gazette, unless it is otherwise provided. . . . ." (Civil Code.) "Art. 5. Rules and Regulations. The Department of Labor and other government agencies charged with the administration and enforcement of this Code or any of its parts shall promulgate the necessary implementing rules and regulations. Such rules and regulations shall become effective fifteen (15) days after announcement of their adoption in newspapers of general circulation." (Emphasis supplied, Labor Code, as amended.) Section 3. Filing. (1) Every agency shall file with the University of the Philippines Law Center, three (3) certified copies of every rule adopted by it. Rules in force on the date of effectivity of this Code which are not filed within three (3) months shall not thereafter be the basis of any sanction against any party or persons." (Underscoring supplied, Chapter 2, Book VII of the Administrative Code of 1987.) "Section 4. Effectivity. In addition to other rule-making requirements provided by law not inconsistent with this Book, each rule shall become effective fifteen (15) days from the date of filing as above provided unless a different date is fixed by law, or specified in the rule in cases of imminent danger to public health, safety and welfare, the existence of which must be expressed in a statement accompanying the rule. The agency shall take appropriate measures to make emergency rules known to persons who may be affected by them." (Emphasis supplied, Chapter 2, Book VII of the Administrative Code of 1987.) Once more, we advert to our ruling in Taada vs. Tuvera, 146 SCRA 446 that: " . . . Administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation," (p. 447.). LLjur "Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the administrative agency and not the public, need not be published. Neither is publication required of the so-called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed by their subordinates in the performance of their duties." (p. 448.)

"We agree that publication must be in full or it is no publication at all since its purpose is to inform the public of the content of the laws." (p. 448.) For lack of proper publication, the administrative circulars in question may not be enforced and implemented. WHEREFORE, the writ of prohibition is GRANTED. The implementation of DOLE Department Order No. 16, Series of 1991, and POEA Memorandum Circular Nos. 30 and 37, Series of 1991, by the public respondents is hereby SUSPENDED pending compliance with the statutory requirements of publication and filing under the aforementioned laws of the land. cdll SO ORDERED. Narvasa, C .J ., Gutierrez, Jr., Cruz, Feliciano, Padilla, Bidin, Medialdea, Regalado, Davide, Jr ., Romero, Nocon and Bellosillo, JJ ., concur.

[G.R. No. 178902. April 21, 2010.] MANUEL O. FUENTES and LETICIA L. FUENTES, petitioners, vs. CONRADO G. ROCA, ANNABELLE R. JOSON, ROSE MARIE R. CRISTOBAL and PILAR MALCAMPO, respondents. DECISION ABAD, J p: This case is about a husband's sale of conjugal real property, employing a challenged affidavit of consent from an estranged wife. The buyers claim valid consent, loss of right to declare nullity of sale, and prescription. IHCDAS The Facts and the Case

Sabina Tarroza owned a titled 358-square meter lot in Canelar, Zamboanga City. On October 11, 1982 she sold it to her son, Tarciano T. Roca (Tarciano) under a deed of absolute sale. 1 But Tarciano did not for the meantime have the registered title transferred to his name. Six years later in 1988, Tarciano offered to sell the lot to petitioners Manuel and Leticia Fuentes (the Fuentes spouses). They arranged to meet at the office of Atty. Romulo D. Plagata whom they asked to prepare the documents of sale. They later signed an agreement to sell that Atty. Plagata prepared 2 dated April 29, 1988, which agreement expressly stated that it was to take effect in six months. The agreement required the Fuentes spouses to pay Tarciano a down payment of P60,000.00 for the transfer of the lot's title to him. And, within six months, Tarciano was to clear the lot of structures and occupants and secure the consent of his estranged wife, Rosario Gabriel Roca (Rosario), to the sale. Upon Tarciano's compliance with these conditions, the Fuentes spouses were to take possession of the lot and pay him an additional P140,000.00 or P160,000.00, depending on whether or not he succeeded in demolishing the house standing on it. If Tarciano was unable to comply with these conditions, the Fuentes spouses would become owners of the lot without any further formality and payment. The parties left their signed agreement with Atty. Plagata who then worked on the other requirements of the sale. According to the lawyer, he went to see Rosario in one of his trips to Manila and had her sign an affidavit of consent. 3 As soon as Tarciano met the other conditions, Atty. Plagata notarized Rosario's affidavit in Zamboanga City. On January 11, 1989 Tarciano executed a deed of absolute sale 4 in favor of the Fuentes spouses. They then paid him the additional P140,000.00 mentioned in their agreement. A new title was issued in the name of the spouses 5 who immediately constructed a building on the lot. On January 28, 1990 Tarciano passed away, followed by his wife Rosario who died nine months afterwards. Eight years later in 1997, the children of Tarciano and Rosario, namely, respondents Conrado G. Roca, Annabelle R. Joson, and Rose Marie R. Cristobal, together with Tarciano's sister, Pilar R. Malcampo, represented by her son, John Paul M. Trinidad (collectively, the Rocas), filed an action for annulment of sale and reconveyance of the land against the Fuentes spouses before the Regional Trial Court (RTC) of Zamboanga City in Civil Case 4707. The Rocas claimed that the sale to the spouses was void since Tarciano's wife, Rosario, did not give her consent to it. Her signature on the affidavit of consent had been forged. They thus prayed that the property be reconveyed to them upon reimbursement of the price that the Fuentes spouses paid Tarciano. 6 The spouses denied the Rocas' allegations. They presented Atty. Plagata who testified that he personally saw Rosario sign the affidavit at her residence in Paco, Manila, on September 15, 1988. He admitted, however, that he notarized the document in Zamboanga City four months later on January 11, 1989. 7 All the same, the Fuentes spouses pointed out that the claim of forgery was personal to Rosario and she alone could invoke it. Besides, the four-year prescriptive period for nullifying the sale on ground of fraud had already lapsed. Both the Rocas and the Fuentes spouses presented handwriting experts at the trial. Comparing Rosario's standard signature on the affidavit with those on various documents she signed, the Rocas' expert testified that the signatures were not written by the same person. Making the same comparison, the spouses' expert concluded that they were. 8

On February 1, 2005 the RTC rendered judgment, dismissing the case. It ruled that the action had already prescribed since the ground cited by the Rocas for annulling the sale, forgery or fraud, already prescribed under Article 1391 of the Civil Code four years after its discovery. In this case, the Rocas may be deemed to have notice of the fraud from the date the deed of sale was registered with the Registry of Deeds and the new title was issued. Here, the Rocas filed their action in 1997, almost nine years after the title was issued to the Fuentes spouses on January 18, 1989. 9 Moreover, the Rocas failed to present clear and convincing evidence of the fraud. Mere variance in the signatures of Rosario was not conclusive proof of forgery. 10 The RTC ruled that, although the Rocas presented a handwriting expert, the trial court could not be bound by his opinion since the opposing expert witness contradicted the same. Atty. Plagata's testimony remained technically unrebutted. 11 HSATIC Finally, the RTC noted that Atty. Plagata's defective notarization of the affidavit of consent did not invalidate the sale. The law does not require spousal consent to be on the deed of sale to be valid. Neither does the irregularity vitiate Rosario's consent. She personally signed the affidavit in the presence of Atty. Plagata. 12 On appeal, the Court of Appeals (CA) reversed the RTC decision. The CA found sufficient evidence of forgery and did not give credence to Atty. Plagata's testimony that he saw Rosario sign the document in Quezon City. Its jurat said differently. Also, upon comparing the questioned signature with the specimen signatures, the CA noted significant variance between them. That Tarciano and Rosario had been living separately for 30 years since 1958 also reinforced the conclusion that her signature had been forged. Since Tarciano and Rosario were married in 1950, the CA concluded that their property relations were governed by the Civil Code under which an action for annulment of sale on the ground of lack of spousal consent may be brought by the wife during the marriage within 10 years from the transaction. Consequently, the action that the Rocas, her heirs, brought in 1997 fell within 10 years of the January 11, 1989 sale. Considering, however, that the sale between the Fuentes spouses and Tarciano was merely voidable, the CA held that its annulment entitled the spouses to reimbursement of what they paid him plus legal interest computed from the filing of the complaint until actual payment. Since the Fuentes spouses were also builders in good faith, they were entitled under Article 448 of the Civil Code to payment of the value of the improvements they introduced on the lot. The CA did not award damages in favor of the Rocas and deleted the award of attorney's fees to the Fuentes spouses. 13 Unsatisfied with the CA decision, the Fuentes spouses came to this court by petition for review. 14 The Issues Presented The case presents the following issues: 1. Whether or not Rosario's signature on the document of consent to her husband Tarciano's sale of their conjugal land to the Fuentes spouses was forged;

2. Whether or not the Rocas' action for the declaration of nullity of that sale to the spouses already prescribed; and 3. Whether or not only Rosario, the wife whose consent was not had, could bring the action to annul that sale. The Court's Rulings First. The key issue in this case is whether or not Rosario's signature on the document of consent had been forged. For, if the signature were genuine, the fact that she gave her consent to her husband's sale of the conjugal land would render the other issues merely academic. The CA found that Rosario's signature had been forged. The CA observed a marked difference between her signature on the affidavit of consent 15 and her specimen signatures. 16 The CA gave no weight to Atty. Plagata's testimony that he saw Rosario sign the document in Manila on September 15, 1988 since this clashed with his declaration in the jurat that Rosario signed the affidavit in Zamboanga City on January 11, 1989. The Court agrees with the CA's observation that Rosario's signature strokes on the affidavit appears heavy, deliberate, and forced. Her specimen signatures, on the other hand, are consistently of a lighter stroke and more fluid. The way the letters "R" and "s" were written is also remarkably different. The variance is obvious even to the untrained eye. Significantly, Rosario's specimen signatures were made at about the time that she signed the supposed affidavit of consent. They were, therefore, reliable standards for comparison. The Fuentes spouses presented no evidence that Rosario suffered from any illness or disease that accounted for the variance in her signature when she signed the affidavit of consent. Notably, Rosario had been living separately from Tarciano for 30 years since 1958. And she resided so far away in Manila. It would have been quite tempting for Tarciano to just forge her signature and avoid the risk that she would not give her consent to the sale or demand a stiff price for it. What is more, Atty. Plagata admittedly falsified the jurat of the affidavit of consent. That jurat declared that Rosario swore to the document and signed it in Zamboanga City on January 11, 1989 when, as Atty. Plagata testified, she supposedly signed it about four months earlier at her residence in Paco, Manila on September 15, 1988. While a defective notarization will merely strip the document of its public character and reduce it to a private instrument, that falsified jurat, taken together with the marks of forgery in the signature, dooms such document as proof of Rosario's consent to the sale of the land. That the Fuentes spouses honestly relied on the notarized affidavit as proof of Rosario's consent does not matter. The sale is still void without an authentic consent. Second. Contrary to the ruling of the Court of Appeals, the law that applies to this case is the Family Code, not the Civil Code. Although Tarciano and Rosario got married in 1950, Tarciano sold the conjugal property to the Fuentes spouses on January 11, 1989, a few months after the Family Code took effect on August 3, 1988. When Tarciano married Rosario, the Civil Code put in place the system of conjugal partnership of gains on their property relations. While its Article 165 made Tarciano the sole administrator of the conjugal partnership, Article 166 17 prohibited him from selling commonly owned real

property without his wife's consent. Still, if he sold the same without his wife's consent, the sale is not void but merely voidable. Article 173 gave Rosario the right to have the sale annulled during the marriage within ten years from the date of the sale. Failing in that, she or her heirs may demand, after dissolution of the marriage, only the value of the property that Tarciano fraudulently sold. Thus: Art. 173. The wife may, during the marriage, and within ten years from the transaction questioned, ask the courts for the annulment of any contract of the husband entered into without her consent, when such consent is required, or any act or contract of the husband which tends to defraud her or impair her interest in the conjugal partnership property. Should the wife fail to exercise this right, she or her heirs, after the dissolution of the marriage, may demand the value of property fraudulently alienated by the husband. But, as already stated, the Family Code took effect on August 3, 1988. Its Chapter 4 on Conjugal Partnership of Gains expressly superseded Title VI, Book I of the Civil Code on Property Relations Between Husband and Wife. 18 Further, the Family Code provisions were also made to apply to already existing conjugal partnerships without prejudice to vested rights. 19 Thus: Art. 105. . . . The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before the effectivity of this Code, without prejudice to vested rights already acquired in accordance with the Civil Code or other laws, as provided in Article 256. (n) Consequently, when Tarciano sold the conjugal lot to the Fuentes spouses on January 11, 1989, the law that governed the disposal of that lot was already the Family Code. In contrast to Article 173 of the Civil Code, Article 124 of the Family Code does not provide a period within which the wife who gave no consent may assail her husband's sale of the real property. It simply provides that without the other spouse's written consent or a court order allowing the sale, the same would be void. Article 124 thus provides: Art. 124. . . . In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include the powers of disposition or encumbrance which must have the authority of the court or the written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. . . . Under the provisions of the Civil Code governing contracts, a void or inexistent contract has no force and effect from the very beginning. And this rule applies to contracts that are declared void by positive provision of law, 20 as in the case of a sale of conjugal property without the other spouse's written consent. A void contract is equivalent to nothing and is absolutely wanting in civil effects. It cannot be validated either by ratification or prescription. 21 But, although a void contract has no legal effects even if no action is taken to set it aside, when any of its terms have been performed, an action to declare its inexistence is necessary to allow restitution of what has been given under it. 22 This action, according to Article 1410 of the Civil Code does not prescribe. Thus:

Art. 1410. The action or defense for the declaration of the inexistence of a contract does not prescribe. HTCESI Here, the Rocas filed an action against the Fuentes spouses in 1997 for annulment of sale and reconveyance of the real property that Tarciano sold without their mother's (his wife's) written consent. The passage of time did not erode the right to bring such an action. Besides, even assuming that it is the Civil Code that applies to the transaction as the CA held, Article 173 provides that the wife may bring an action for annulment of sale on the ground of lack of spousal consent during the marriage within 10 years from the transaction. Consequently, the action that the Rocas, her heirs, brought in 1997 fell within 10 years of the January 11, 1989 sale. It did not yet prescribe. The Fuentes spouses of course argue that the RTC nullified the sale to them based on fraud and that, therefore, the applicable prescriptive period should be that which applies to fraudulent transactions, namely, four years from its discovery. Since notice of the sale may be deemed given to the Rocas when it was registered with the Registry of Deeds in 1989, their right of action already prescribed in 1993. But, if there had been a victim of fraud in this case, it would be the Fuentes spouses in that they appeared to have agreed to buy the property upon an honest belief that Rosario's written consent to the sale was genuine. They had four years then from the time they learned that her signature had been forged within which to file an action to annul the sale and get back their money plus damages. They never exercised the right. If, on the other hand, Rosario had agreed to sign the document of consent upon a false representation that the property would go to their children, not to strangers, and it turned out that this was not the case, then she would have four years from the time she discovered the fraud within which to file an action to declare the sale void. But that is not the case here. Rosario was not a victim of fraud or misrepresentation. Her consent was simply not obtained at all. She lost nothing since the sale without her written consent was void. Ultimately, the Rocas ground for annulment is not forgery but the lack of written consent of their mother to the sale. The forgery is merely evidence of lack of consent. Third. The Fuentes spouses point out that it was to Rosario, whose consent was not obtained, that the law gave the right to bring an action to declare void her husband's sale of conjugal land. But here, Rosario died in 1990, the year after the sale. Does this mean that the right to have the sale declared void is forever lost? The answer is no. As stated above, that sale was void from the beginning. Consequently, the land remained the property of Tarciano and Rosario despite that sale. When the two died, they passed on the ownership of the property to their heirs, namely, the Rocas. 23 As lawful owners, the Rocas had the right, under Article 429 of the Civil Code, to exclude any person from its enjoyment and disposal. In fairness to the Fuentes spouses, however, they should be entitled, among other things, to recover from Tarciano's heirs, the Rocas, the P200,000.00 that they paid him, with legal interest until fully paid, chargeable against his estate.

Further, the Fuentes spouses appear to have acted in good faith in entering the land and building improvements on it. Atty. Plagata, whom the parties mutually entrusted with closing and documenting the transaction, represented that he got Rosario's signature on the affidavit of consent. The Fuentes spouses had no reason to believe that the lawyer had violated his commission and his oath. They had no way of knowing that Rosario did not come to Zamboanga to give her consent. There is no evidence that they had a premonition that the requirement of consent presented some difficulty. Indeed, they willingly made a 30 percent down payment on the selling price months earlier on the assurance that it was forthcoming. Further, the notarized document appears to have comforted the Fuentes spouses that everything was already in order when Tarciano executed a deed of absolute sale in their favor on January 11, 1989. In fact, they paid the balance due him. And, acting on the documents submitted to it, the Register of Deeds of Zamboanga City issued a new title in the names of the Fuentes spouses. It was only after all these had passed that the spouses entered the property and built on it. He is deemed a possessor in good faith, said Article 526 of the Civil Code, who is not aware that there exists in his title or mode of acquisition any flaw which invalidates it. As possessor in good faith, the Fuentes spouses were under no obligation to pay for their stay on the property prior to its legal interruption by a final judgment against them. 24 What is more, they are entitled under Article 448 to indemnity for the improvements they introduced into the property with a right of retention until the reimbursement is made. Thus: Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his own the works, sowing or planting, after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one who built or planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in case of disagreement, the court shall fix the terms thereof. (361a) The Rocas shall of course have the option, pursuant to Article 546 of the Civil Code, 25 of indemnifying the Fuentes spouses for the costs of the improvements or paying the increase in value which the property may have acquired by reason of such improvements. WHEREFORE, the Court DENIES the petition and AFFIRMS WITH MODIFICATION the decision of the Court of Appeals in CA-G.R. CV 00531 dated February 27, 2007 as follows: 1. The deed of sale dated January 11, 1989 that Tarciano T. Roca executed in favor of Manuel O. Fuentes, married to Leticia L. Fuentes, as well as the Transfer Certificate of Title T90,981 that the Register of Deeds of Zamboanga City issued in the names of the latter spouses pursuant to that deed of sale are DECLARED void; 2. The Register of Deeds of Zamboanga City is DIRECTED to reinstate Transfer Certificate of Title 3533 in the name of Tarciano T. Roca, married to Rosario Gabriel; 3. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo are ORDERED to pay petitioner spouses Manuel and Leticia Fuentes the

P200,000.00 that the latter paid Tarciano T. Roca, with legal interest from January 11, 1989 until fully paid, chargeable against his estate; 4. Respondents Gonzalo G. Roca, Annabelle R. Joson, Rose Marie R. Cristobal, and Pilar Malcampo are further ORDERED, at their option, to indemnify petitioner spouses Manuel and Leticia Fuentes with their expenses for introducing useful improvements on the subject land or pay the increase in value which it may have acquired by reason of those improvements, with the spouses entitled to the right of retention of the land until the indemnity is made; and 5. The RTC of Zamboanga City from which this case originated is DIRECTED to receive evidence and determine the amount of indemnity to which petitioner spouses Manuel and Leticia Fuentes are entitled. SO ORDERED.

[G.R. No. 162155. August 28, 2007.] COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his official capacity as Revenue District Officer of Revenue District No. 049 (Makati), petitioners, vs. PRIMETOWN PROPERTY GROUP, INC., respondent. DECISION CORONA, J p: This petition for review on certiorari 1 seeks to set aside the August 1, 2003 decision 2 of the Court of Appeals (CA) in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying reconsideration. 3 On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., applied for the refund or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue district officer Arturo V. Parcero of Revenue District No. 049 (Makati) of the Bureau of Internal Revenue (BIR), 4 he explained that the increase in the cost of labor and materials and difficulty in obtaining financing for projects and collecting receivables caused the real estate industry to slowdown. 5 As a consequence, while business was good during the first quarter of 1997, respondent suffered losses amounting to P71,879,228 that year. 6 According to Yap, because respondent suffered losses, it was not liable for income taxes. 7 Nevertheless, respondent paid its quarterly corporate income tax and remitted creditable withholding tax from real estate sales to the BIR in the total amount of P26,318,398.32. 8 Therefore, respondent was entitled to tax refund or tax credit. 9 On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional documents to support its claim. 10 Respondent complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a petition for review 11 in the Court of Tax Appeals (CTA). On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year prescriptive period for filing a judicial claim for tax refund or tax credit. 12 It invoked Section 229 of the National Internal Revenue Code (NIRC):

Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a claim therefore, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. (emphasis supplied) The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to claim a refund or credit commenced on that date. 13 The tax court applied Article 13 of the Civil Code which states: Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are of three hundred sixty-five days each; months, of thirty days; days, of twentyfour hours, and nights from sunset to sunrise. If the months are designated by their name, they shall be computed by the number of days which they respectively have. In computing a period, the first day shall be excluded, and the last included. (emphasis supplied) Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for the filing of judicial claims was equivalent to 730 days. Because the year 2000 was a leap year, respondent's petition, which was filed 731 days 14 after respondent filed its final adjusted return, was filed beyond the reglementary period. 15 Respondent moved for reconsideration but it was denied. 16 Hence, it filed an appeal in the CA. 17 On August 1, 2003, the CA reversed and set aside the decision of the CTA. 18 It ruled that Article 13 of the Civil Code did not distinguish between a regular year and a leap year. According to the CA: The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a leap year. In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to April 14, 1999 and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a total of 730 days. A statute which is clear and explicit shall be neither interpreted nor construed. 20 Petitioners moved for reconsideration but it was denied. 21 Thus, this appeal.

Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed against claimants. 22 Section 229 of the NIRC should be strictly applied against respondent inasmuch as it has been consistently held that the prescriptive period (for the filing of tax refunds and tax credits) begins to run on the day claimants file their final adjusted returns. 23 Hence, the claim should have been filed on or before April 13, 2000 or within 730 days, reckoned from the time respondent filed its final adjusted return. The conclusion of the CA that respondent filed its petition for review in the CTA within the twoyear prescriptive period provided in Section 229 of the NIRC is correct. Its basis, however, is not. The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted return. 24 But how should the two-year prescriptive period be computed? As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is understood to be equivalent to 365 days. In National Marketing Corporation v. Tecson, 25 we ruled that a year is equivalent to 365 days regardless of whether it is a regular year or a leap year. 26 However, in 1987, EO 27 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter VIII, Book I thereof provides: Sec. 31. Legal Periods. "Year" shall be understood to be twelve calendar months; "month" of thirty days, unless it refers to a specific calendar month in which case it shall be computed according to the number of days the specific month contains; "day", to a day of twenty-four hours and; "night" from sunrise to sunset. (emphasis supplied) A calendar month is "a month designated in the calendar without regard to the number of days it may contain." 28 It is the "period of time running from the beginning of a certain numbered day up to, but not including, the corresponding numbered day of the next month, and if there is not a sufficient number of days in the next month, then up to and including the last day of that month." 29 To illustrate, one calendar month from December 31, 2007 will be from January 1, 2008 to January 31, 2008; one calendar month from January 31, 2008 will be from February 1, 2008 until February 29, 2008. 30 A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated by another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled with the previous one). 31 Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 states: Sec. 27. Repealing clause. All laws, decrees, orders, rules and regulation, or portions thereof, inconsistent with this Code are hereby repealed or modified accordingly. A repealing clause like Sec. 27 above is not an express repealing clause because it fails to identify or designate the laws to be abolished. 32 Thus, the provision above only impliedly repealed all laws inconsistent with the Administrative Code of 1987. Implied repeals, however, are not favored. An implied repeal must have been clearly and unmistakably intended by the legislature. The test is whether the subsequent law encompasses entirely the subject matter of the former law and they cannot be logically or reasonably reconciled. 33

Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of 1987 deal with the same subject matter the computation of legal periods. Under the Civil Code, a year is equivalent to 365 days whether it be a regular year or a leap year. Under the Administrative Code of 1987, however, a year is composed of 12 calendar months. Needless to state, under the Administrative Code of 1987, the number of days is irrelevant. There obviously exists a manifest incompatibility in the manner of computing legal periods under the Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs the computation of legal periods. Lex posteriori derogat priori. Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-year prescriptive period (reckoned from the time respondent filed its final adjusted return 34 on April 14, 1998) consisted of 24 calendar months, computed as follows: Year 1 1st calendar month April 15, 1998 to May 14, 1998 June 14, 1998 July 14, 1998 August 14, 1998 to September 14, 1998 October 14, 1998 November 14, 1998 December 14, 1998 January 14, 1999 February 14, 1999 March 14, 1999 April 14, 1999

2nd calendar month May 15, 1998 to 3rd calendar month 4th calendar month 5th calendar month 6th calendar month 7th calendar month 8th calendar month 9th calendar month June 15, 1998 to July 15, 1998 to August 15, 1998

September 15, 1998 to October 15, 1998 November 15, 1998 December 15, 1998 to to to to to to

10th calendar month January 15, 1999 11th calendar month February 15, 1999 12th calendar month March 15, 1999 Year 2 13th calendar month April 15, 1999 to 14th calendar month May 15, 1999 to 15th calendar month June 15, 1999 to 16th calendar month July 15, 1999 to 17th calendar month August 15, 1999

May 14, 1999 June 14, 1999 July 14, 1999 August 14, 1999 to September 14, 1999 October 14, 1999 November 14, 1999 December 14, 1999

18th calendar month September 15, 1999 to 19th calendar month October 15, 1999 20th calendar month November 15, 1999 to to

21st calendar month December 15, 1999 22nd calendar month January 15, 2000 23rd calendar month February 15, 2000 24th calendar month

to to to

January 14, 2000 February 14, 2000 March 14, 2000 to April 14, 2000

March 15, 2000

We therefore hold that respondent's petition (filed on April 14, 2000) was filed on the last day of the 24th calendar month from the day respondent filed its final adjusted return. Hence, it was filed within the reglementary period. Accordingly, the petition is hereby DENIED. The case is REMANDED to the Court of Tax Appeals which is ordered to expeditiously proceed to hear C.T.A. Case No. 6113 entitled Primetown Property Group, Inc. v. Commissioner of Internal Revenue and Arturo V. Parcero. No costs. SO ORDERED.

[G.R. No. 46623. December 7, 1939.] MARCIAL KASILAG, petitioner, vs. RAFAELA RODRIGUEZ, URBANO ROQUE, SEVERO MAPILISAN and IGNACIO DEL ROSARIO, respondents. Luis M. Kasilag; for petitioner. Fortunato de Leon; for respondents. SYLLABUS 1. CONTRACTS, INTERPRETATION; MORTGAGE OF IMPROVEMENTS UPON LAND ACQUIRED AS HOMESTEAD. The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting parties should always prevail because their will has the force of law between them. Article 1281 of the Civil Code consecrates this rule and provides, further, that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed; and if the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail. The contract set out in Exhibit 1' should be interpreted in accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses. The words used by the contracting parties in Exhibit 1 clearly show that they intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired as homestead, the parties having, moreover, agreed upon the pacts and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the improvements on the land acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated interest thereon.

2. ID.; ID.; ID.; ANTICHRESIS. Another fundamental rule in the interpretation of contracts, not less important than those indicated is to the effect that the terms, clauses and conditions contrary to law, morals and public order should be separated from the valid and legal contract when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties. Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we stated that the principal contract is that of loan and the accessory that of mortgage of the improvements upon the land acquired as a homestead. There is no question that the first of these contracts is valid as it is not against the law. The second, or the mortgage of the improvements, is expressly authorized by section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should E. A. fail to redeem the mortgage within the stipulated period of four and a half years, by paying the loan together with interest, she would execute in favor of the petitioner an absolute deed of sale of the land for P1,000, including the interest stipulated and owing. This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. These pacts made by the parties independently, were calculated to alter the mortgage contract clearly entered into, converting the latter into a contract of antichresis (article 1881 of the Civil Code). The contract of antichresis, being a real incumbrance burdening the land, is illegal and void because it is condemned by section 116 of Act No. 2874, as amended, but the clauses regarding the contract of antichresis being independent and separable from the contract of mortgage, can be eliminated, thereby leaving the latter in being because it is legal and valid. 3. ID.; ID.; ID.; ID.; POSSESSION IN GOOD FAITH. It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith. We do not give much importance to the change of the tax declaration, which consisted in making the petitioner appear as the owner of the land, because such an act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the petitioner, about which we have stated that the petitioner's ignorance of the law is possible and excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land and enjoying its fruits. 4. ID.; ID.; ID.; ID.; ID. The petitioner being a possessor in good faith within the meaning of article 433 of the Civil Code and having introduced the improvements upon the land as such, the provisions of article 361 of the same Code are applicable; wherefore, the respondents are entitled to have the improvements and plants upon indemnifying the petitioner the value thereof which we fix at P3,000, as appraised by the trial court; or the respondents may elect to compel the petitioner to have the land by paying its market value to be fixed by the court of origin. DECISION

IMPERIAL, J p: This is an appeal taken by the defendant-petitioner from the decision of the Court of Appeals which modified that rendered by the Court of First Instance of Bataan in civil case No. 1504 of said court and held: that the contract, Exhibit "1" is entirely null and void and without effect; that the plaintiffs-respondents, then appellants, are the owners of the disputed land, with its improvements, in common ownership with their brother Gavino Rodriguez, hence, they are entitled to the possession thereof; that the defendant-petitioner should yield possession of the land in their favor, with all the improvements thereon and free from any lien; that the plaintiffs-respondents jointly and severally pay to the defendant-petitioner the sum of P1,000 with interest at 6 per cent per annum from the date of the decision; and absolved the plaintiffs-respondents from the cross-complaint relative to the value of the improvements claimed by the defendant-petitioner. The appealed decision also ordered the registrar of deeds of Bataan to cancel certificate of title No. 325, in the name of the deceased Emiliana Ambrosio and to issue in lieu thereof another certificate of title in favor of the plaintiffsrespondents and their brother Gavino Rodriguez, as undivided owners in equal parts, free of all liens and incumbrances except those expressly provided by law, without special pronouncement as to the costs. The respondents, children and heirs of the deceased Emiliana Ambrosio, commenced the aforesaid civil case to the end that they recover from the petitioner the possession of the land and its improvements granted by way of homestead to Emiliana Ambrosio under patent No. 16074 issued on January 11, 1931, with certificate of title No. 325 issued by the registrar of deeds of Bataan on June 27, 1931 in her favor, under section 122 of Act. No. 496, which land was surveyed and identified in the cadastre of the municipality of Limay, Province of Bataan, as lot No. 285; that the petitioner pay to them the sum of P650 being the approximate value of the fruits which he received from the land; that the petitioner sign all the necessary documents to transfer the land and its possession to the respondents; that the petitioner be restrained, during the pendency of the case, from conveying or encumbering the land and its improvements; that the registrar of deeds of Bataan cancel certificate of title No. 325 and issue in lieu thereof another in favor of the respondents, and that the petitioner pay the costs of suit. The petitioner denied in his answer all the material allegations of the complaint and by way of special defense alleged that he was in possession of the land and that he was receiving the fruits thereof by virtue of a mortgage contract, entered into between him and the deceased Emiliana Ambrosio on May 16, 1932, which was duly ratified by a notary public; and in counterclaim asked that the respondents pay him the sum of P1,000 with 12 per cent interest per annum which the deceased owed him and that, should the respondents be declared to have a better right to the possession of the land, that they be sentenced to pay him the sum of P5,000 as value of all the improvements which he introduced upon the land. On May 16, 1932 Emiliana Ambrosio, in life, and the petitioner executed the following public deed: "This agreement, made and entered into this 16th day of May, 1932, by and between Emiliana Ambrosio, Filipino, of legal age, widow and resident of Limay, Bataan, P. I., hereinafter called the party of the first part, and Marcial Kasilag, Filipino, of legal age, married to Asuncion Roces, and resident at 312 Perdigon Street, Manila, P. I., hereinafter called party of the second part.

"WITNESSETH: That the parties hereto hereby covenant and agree to and with each other as follows: "ARTICLE I. That the party of the first part is the absolute registered owner of a parcel of land in the barrio of Alagan, municipality of Limay, Province of Bataan, her title thereto being evidenced by homestead certificate of title No. 325 issued by the bureau of Lands on June 11, 1931, said land being lot No. 285 of the Limay Cadastre, General Land Registration Office Cadastral Record No. 1054, bounded and described as follows: "Beginning at point marked 1 on plan E-57394, N. 84 32' W. 614.82 m. from B. B. M. No. 3, thence N. 66 35' E. 307.15 m. to point "2"; S. 5 07' W. to point "5"; 6 10' E. 104.26 m. to point "4"; S. 82 17' W. to point "5"; S. 28 63' W. 72.26 m. to point "6"; N. 71 09' W. to point "7"; N. 1 42' E. 173.72 m. to point 1, point of beginning, "Containing an area of 6.7540 hectares. "Points 1, 2, 6 and 7, B. L.; points 3, 4 and 5, stakes; points 4, 5 and 6 on bank of Alagan River. "Bounded on the North, by property claimed by Maria Ambrocio; on the East, by Road; on the South, by Alagan River and property claimed by Maxima de la Cruz; and on the West, by property claimed by Jose del Rosario. "Bearing true. Declination 0 51' E. "Surveyed under authority of sections 12-22, Act No. 2874 and in accordance with existing regulations of the Bureau of Lands, by Mamerto Jacinto, public land surveyor, on July 8, 1927 and approved on February 25, 1931. "ARTICLE II. That the improvements on the above described land consist of the following:

"Four (4) mango trees, fruit bearing: one hundred ten (110) hills of bamboo trees; one (1) tamarind and six (6) bonga trees. "ARTICLE III. That the assessed value of the land is P940 and the assessed value of the improvements is P860, as evidenced by tax declaration No. 3531 of the municipality of Limay, Bataan. "ARTICLE IV. That for and in consideration of the sum of one thousand pesos (P1,000) Philippine currency, paid by the party of second part to the party of the first part, receipt whereof is hereby acknowledged, the party of the first part hereby encumbers and hypothecates, by way of mortgage, only the improvements described in Articles II and III hereof, of which improvements the party of the first part is the absolute owner. "ARTICLE V. That the condition of said mortgage is such that if the party of the first part shall well and truly pay, or cause to be paid to the party of the second part, his heirs, assigns, or executors, on or before the 16th day of November, 1936, or four and one-half (41) years after date of the execution of this instrument, the aforesaid sum of one thousand pesos (P1,000) with interest at 12 Per cent per annum, then said mortgage shall be and become null and void; otherwise the same shall be and shall remain in full force and effect, and subject to

foreclosure in the manner and form provided by law for the amount due thereunder, with costs and also attorney's fees in the event of such foreclosure. "ARTICLE VI. That the party of the first part shall pay all taxes and assessments which are or may become due on the above described land and improvements during the term of this agreement "ARTICLE VII. That within thirty (30) days after date of execution of this agreement, the party of the first part shall file a motion before the Court of First Instance at Balanga, Bataan, P. I., requesting cancellation of Homestead Certificate of Title No. 325 referred to in Article I hereof and the issuance, in lieu thereof, of a certificate of title under the provisions of Land Registration Act No. 496, as amended by Act 3901. "ARTICLE VIII. It is further agreed that if upon the expiration of the period of time (4) years stipulated in this mortgage, the mortgagor should fail to redeem this mortgage, she would execute a deed of absolute sale of the property herein described for the same amount as this mortgage, including all unpaid interests at the rate of 12 per cent per annum, in favor of the mortgagee. "ARTICLE IX. That in the event the contemplated motion under Article VII hereof is not approved by the Court, the foregoing contract of sale shall automatically become null and void, and the mortgage stipulated under Article IV and V shall remain in full force and effect. "In testimony whereof, the parties hereto have hereunto set their hands the day and year first hereinbefore written. ( Sgd. ) "MARCIAL KASILAG ( Sgd. ) EMILIANA AMBROSIO "Signed in the presence of: ( Sgd. ) "ILLEGIBLE ( Sgd. ) GAVINO RODRIGUEZ

PHILIPPINE ISLANDS } BALANGA, BATAAN } ss.

"Before me this day personally appeared Emiliana Ambrosio without cedula by reason of her sex, to me known and known to me to be the person who signed the foregoing instrument, and acknowledged to me that she executed the same as her free and voluntary act and deed. "I hereby certify that this instrument consists of three (3) pages including this page of the acknowledgment and that each page thereof is signed by the parties to the instrument and the witnesses in their presence and in the presence of each other, and that the land treated in this instrument consists of only one parcel.

"In witness whereof I have hereunto set my hand and affixed my notarial seal, this 16th day of May, 1932.

(Sgd.) "NICOLAS NAVARRO Notary Public

My commission expires December 31, 1933

"DOC. NO. 178 Page 36 of my register Book NO. IV"

One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. By virtue of this verbal contract, the petitioner entered upon the possession of the land, gathered the products thereof, did not collect the interest on the loan, introduced improvements upon the land valued at P5,000, according to him and on May 22, 1934 the tax declaration was transferred in his name and on March 6, 1936 the assessed value of the land was in- creased from P1,020 to P2,180. After an analysis of the conditions of Exhibit "1" the Court of Appeals came to the conclusion and so held that the contract entered into by and between the parties, set out in the said public deed, was one of absolute purchase and sale of the land and its improvements. And upon this ruling it held null and void and without legal effect the entire Exhibit 1 as well as the subsequent verbal contract entered into between the parties, ordering, however, the respondents to pay to the petitioner, jointly and severally, the loan of P1,000, with legal interest at 6 per cent per annum from the date of the decision. In this first assignment of error the petitioner contends that the Court of appeals violated the law in holding that Exhibit 1 is an absolute deed of sale of the land and its improvements and that it is void and without any legal effect. The cardinal rule in the interpretation of contracts is to the effect that the intention of the contracting parties should always prevail because their will has the force of law between them. Article 1281 of the Civil Code consecrates this rule and provides, that if the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed; and if the words appear to be contrary to the

evident intention of the contracting parties, the intention shall prevail. The contract set out in Exhibit I should be interpreted in accordance with these rules. As the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses. The words used by the contracting parties in Exhibit 1 clearly show that they intended to enter into the principal contract of loan in the amount of P1,000, with interest at 12 per cent per annum, and into the accessory contract of mortgage of the improvements on the land acquired as homesteads the parties having, moreover, agreed upon the pacts and conditions stated in the deed. In other words, the parties entered into a contract of mortgage of the improvements on the land acquired as homestead, to secure the payment of the indebtedness for P1,000 and the stipulated interest thereon. In clause V the parties stipulated that Emiliana Ambrosio was to pay, within four and a half years, or until November 16, 1936, the debt with interest thereon, in which event the mortgage would not have any effect; in clause VI the parties agreed that the tax on the land and its improvements, during the existence of the mortgage, should be paid by the owner of the land; in clause VII it was covenanted that within thirty days from the date of the contract, the owner of the land would file a motion in the Court of First Instance of Bataan asking that certificate of title No. 325 be cancelled and that in lieu thereof another be issued under the provisions of the Land Registration Act, No. 496, as amended by Act No. 3901; in clause VIII the parties agreed that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of four years and a half, she would execute an absolute deed of sale of the land in favor of the mortgagee, the petitioner, for the same amount of the loan of P1,000 including unpaid interest; and in clause IX it was stipulated that in case the motion to be presented under clause VII should be disapproved by the Court of First Instance of Bataan, the contract of sale would automatically become void and the mortgage would subsist in all its force. Another fundamental rule in the interpretation of contracts, not less important than those indicated, is to the effect that the terms, clauses and conditions contrary to law, morals and public order should be separated from the valid and legal contract when such separation can be made because they are independent of the valid contract which expresses the will of the contracting parties. Manresa, commenting on article 1255 of the Civil Code and stating the rule of separation just mentioned, gives his views as follows: "On the supposition that the various pacts, clauses or conditions are valid, no difficulty is presented; but should they be void, the question is as to what extent they may produce the nullity of the principal obligation. Under the view that such features of the obligation are added to it and do not go to its essence, a criterion based upon the stability of juridical relations should tend to consider the nullity as confined to the clause or pact suffering therefrom, except in case where the latter, by an established connection or by manifest intention of the parties, is inseparable from the principal obligation, and is a condition, juridically speaking, of that the nullity of which it would also occasion." ( Manresa, Commentaries on the Civil Code, Volume 8, p. 575.) The same view prevails in the Anglo-American law, as condensed in the following words: "Where an agreement founded on a legal consideration contains several promises, or a promise to do several things, and a part only of the things to be done are illegal, the promises which can be separated, or the promise, so far as it can be separated, from the illegality, may be valid. The rule is that a lawful promise made for a lawful consideration is not invalid merely because an unlawful promise was made at the same time and for the same consideration, and

this rule applies, although the invalidity is due to violation of a statutory provision, unless the statute expressly or by necessary implication declares the entire contract void. . . " (13 C. J., par. 470, p. 512; New York Cent. etc. R. Co. v. Gray, 239 U. S., 583; 60 Law. ed., 451; U. S. v. Moran, 97 U. S., 413, 24 Law. ed., 1017: U. S. v. Ilodson, 10 Wall, 395; 19 Law ed. 937; Gelpcke v. Dubuque, 1 Wall. 175, 17 Law. ed., 520; U. S. v. Bradly, 10 Pet. 343, 9 Law. ed., 448; Borland v. Prindle, 144 Fed. 713; Western Union Tel. Co. v. Kansas Pac. R. Co., 4 Fed., 284; Northern Pac. R. Co. v. U. S., 15 Ct. Cl., 428.) Addressing ourselves now to the contract entered into by the parties, set out in Exhibit 1, we stated that the principal contract is that of loan and the accessory that of mortgage of the improvements upon the land acquired as a homestead. There is no question that the first of these contracts is valid as it is not against the law. The second, or the mortgage of the improvements, is expressly authorized by section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, reading: "SEC. 116. Except in favor of the Government or any of its branches, units, or institutions, or legally constituted banking corporations, lands acquired under the free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period; but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations." It will be recalled that by clause VIII of Exhibit 1 the parties agreed that should Emiliana Ambrosio fail to redeem the mortgage within the stipulated period of four and a half years, by paying the loan together with interest, she would execute in favor of the petitioner an absolute deed of sale of the land for P1,000, including the interest stipulated and owing. This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. These pacts made by the parties independently were calculated to alter the mortgage contract clearly entered into, converting the latter into a contract of antichresis. (Article 1881 of the Civil Code.) The contract of antichresis, being a real encumbrance burdening the land, is illegal and void because it is condemned by section 116 of Act No. 2874, as amended, but the clauses regarding the contract of antichresis, being independent of and separable from the contract of mortgage, can be eliminated, thereby leaving the latter in being because it is legal and valid. The foregoing considerations bring us to the conclusion that the first assignment of error is well-founded and that error was committed in holding that the contract entered into between the parties was one of absolute sale of the land and its improvements and that Exhibit 1 is null and void. In the second assignment of error the petitioner contends that the Court of Appeals erred in holding that he is guilty of violating the Public Land Act because he entered into the contract, Exhibit 1. The assigned error is vague and not specific. If it attempts to show that the said document is valid in its entirety, it is not well-founded because we have already said that certain pacts thereof are illegal because they are prohibited by section 116 of Act No. 2874, as amended.

In the third assignment of error the petitioner insists that his testimony, as to the verbal agreement entered into between him and Emiliana Ambrosio, should have been accepted by the Court of Appeals; and in the fourth and last assignment of error the same petitioner contends that the Court of Appeals erred in holding that he acted in bad faith in taking possession of the land and in taking advantage of the fruits thereof, resulting in the denial of his right to be reimbursed for the value of the improvements introduced by him. We have seen that subsequent to the execution of the contract, Exhibit 1, the parties entered into another verbal contract whereby the petitioner was authorized to take possession of the land, to receive the fruits thereof and to introduce improvements thereon, provided that he would renounce the payment of stipulated interest and he would assume payment of the land tax. The possession by the petitioner and his receipt of the fruits of the land, considered as integral elements of the contract of antichresis, are illegal and void agreements because, as already stated, the contract of antichresis is a lien and as such is expressly prohibited by section 116 of Act No. 2874, as amended. The Court of Appeals held that the petitioner acted in bad faith in taking possession of the land because he knew that the contract he made with Emiliana Ambrosio was an absolute deed of sale and, further, that the latter could not sell the land because it is prohibited by section 116. The Civil Code does not expressly define what is meant by bad faith, but section 433 provides that "Every person who is unaware of any flaw in his title, or in the manner of its acquisition, by which it is invalidated, shall be deemed a possessor in good faith"; and provides, further, that "Possessors aware of such flaw are deemed possessors in bad faith." Article 1950 of the same Code, covered by Chapter II relative to prescription of ownership and other real rights, provides, in turn, that "Good faith on the part of the possessor consists in his belief that the person from whom he received the thing was the owner of the same, and could transmit the title thereto." We do not have before us a case of prescription of ownership, hence, the last article is not squarely in point. In resume, it may be stated that a person is deemed a possessor in bad faith when he knows that there is a flaw in his title or in the manner of its acquisition, by which it is invalidated. Borrowing the language of Article 433, the question to be answered is whether the petitioner should be deemed a possessor in good faith because he was unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated. It will be noted that ignorance of the flaw is the keynote of the rule. From the facts found established by the Court of Appeals we can neither deduce nor presume that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside from the prohibition contained in section 116. This being the case, the question is whether good faith may be premised upon ignorance of the laws. Manresa, commenting on article 434 in connection with the preceding article, sustains the affirmative. He says: "We do not believe that in real life there are not many cases of good faith founded upon an error of law. When the acquisition appears in a public document, the capacity of the parties has already been passed upon by competent authority, and even established by appeals taken from final judgments and administrative remedies against the qualification of registrars, and the possibility of error is remote under such circumstances; but, unfortunately, private documents and even verbal agreements far exceed public documents in number, and while no one should be ignorant of the law, the truth is that even we who are called upon to know and apply it fall into error not infrequently. However, a clear, manifest, and truly unexcusable ignorance is one thing, to which undoubtedly refers article 2, and another and different thing

is possible and excusable error arising from complex legal principles and from the interpretation of conflicting doctrines. "But even ignorance of the law may be based upon an error of fact, or better still, ignorance of a fact is possible as to the capacity to transmit and as to the intervention of certain persons, compliance with certain formalities and appreciation of certain acts, and an error of law is possible in the interpretation of doubtful doctrines." (Manresa, Commentaries on the Spanish Civil Code. Volume IV, pp. 100, 101 and 102.) According to this author, gross and inexeusable ignorance of the law may not be the basis of good faith, but possible, excusable ignorance may be such basis. It is a fact that the petitioner is not conversant with the laws because he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does, that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that the latter, as a lien, was prohibited by section 116. These considerations again bring us to the conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and may, therefore, be the basis of his good faith. We do not give much importance to the change of the tax declaration, which consisted in making the petitioner appear as the owner of the land, because such an act may only be considered as a sequel to the change of possession and enjoyment of the fruits by the petitioner, to about which we have stated that the petitioner's ignorance of the law is possible and excusable. We, therefore, hold that the petitioner acted in good faith in taking possession of the land and enjoying its fruits. The petitioner being a possessor in good faith within the meaning of article 433 of the Civil Code and having introduced the improvements upon the land as such, the provisions of article 361 of the same Code are applicable; wherefore, the respondents are entitled to have the improvements and plants upon indemnifying the petitioner the value thereof which we fix at P3,000, as appraised by the trial court; or the respondents may elect to compel the petitioner to have the land by paying its market value to be fixed by the court of origin. The respondents also prayed in their complaint that the petitioner be compelled to pay them the sum of P650, being the approximate value of the fruits obtained by the petitioner from the land. The Court of Appeals affirmed the judgment of the trial court denying the claim or indemnity for damages, being of the same opinion as the trial court that the respondents have not established such damages. Under the verbal contract between the petitioner and the deceased Emiliana Ambrosio, during the latter's lifetime, the former would take possession of the land and would receive the fruits of the mortgaged improvements on condition that he would no longer collect the stipulated interest and that he would attend to the payment of the land tax. This agreement, at bottom, is tantamount to the stipulation that the petitioner should apply the value of the fruits of the land to the payment of stipulated interest on the loan of P1,000 which is, in turn, another of the elements characterizing the contract of antichresis under article 1881 of the Civil Code. It was not possible for the parties to stipulate further that the value of the fruits be also applied to the payment of the capital, because the truth was that nothing remained after paying the interest at 12% per annum. This interest, at the rate fixed, amounted to P120 per annum, whereas the market value of the fruits obtainable from the land hardly reached said amount in view of the fact that the assessed value of said improvements was, according to the decision, P860. To this should be added the

fact that, under the verbal agreement, from the value of the fruits had to be taken a certain amount to pay the annual land tax. We mention these data here to show that the petitioner is also not bound to render an accounting of the value of the fruits of the mortgaged improvements for the reason stated that said value hardly covers the interest earned by the secured indebtedness. For all the foregoing considerations, the appealed decision is reversed, and we hereby adjudge: (1) that the contract of mortgage of the improvements, set out in Exhibit 1, is valid and binding (2) that the contract of antichresis agreed upon verbally by the parties is a real incumbrance which burdens the land and, as such, is null and without effect; (3) that the petitioner is a possessor in good faith; (4) that the respondents may elect to have the improvements introduced by the petitioner by paying the latter the value thereof, P3,000, or to compel the petitioner to buy and have the land where the improvements or plants are found, by paying them its market value to be fixed by the court of origin, upon hearing the parties; (5) that the respondents have a right to the possession of the land and to enjoy the mortgaged improvements; and (6) that the respondents may redeem the mortgage of the improvements by paying to the petitioner within three months the amount of P1,000, without interest, as that stipulated is set off by the value of the fruits of the mortgaged improvements which the petitioner received; and in default thereof the petitioner may ask for the public sale of said improvements for the purpose of applying the proceeds thereof to the payment of his said credit. Without special pronouncement as to the costs in all instances. So ordered. Diaz, J., concur. Separate Opinions VILLA-REAL, J., concurring and dissenting: According to the contract entered into on May 16, 1932, between Emiliana Ambrosio, in life, and the petitioner Marcial Kasilag, the first, in consideration of the sum of P1,000 given to her by the second, constituted a mortgage on the improvements only of the land which she acquired by way of homestead. The improvements which she mortgaged consisted of four fruit-bearing mango trees, one hundred ten hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, the assessed value of which was P660. The conditions of the loan were that if the mortgagor should pay the mortgagee on November 16, 1936, that is, four and a half years after the execution of the deed, said sum of P1,000 with interest thereon at 12% per annum, the aforesaid mortgage would become null and void, otherwise it would remain in full force and effect and would be subject to foreclosure in the manner provided by law; that the mortgagor would pay all the land taxes on the land and its improvements during the duration of the contract; and that if after the expiration of the said period of four and a half years the mortgagor should fail to redeem the mortgage, she would execute in favor of the mortgagee an absolute deed of sale of the property described in the contract for the same sum of P1,000 plus interest due and unpaid at the rate of 12 per cent per annum. The principal rule in the interpretation of contracts is that "If the terms of a contract are clear and leave no doubt as to the intention of the contracting parties, the literal sense of its stipulations shall be followed. If the words appear to be contrary to the evident intention of the contracting parties, the intention shall prevail" (article 1281, Civil Code). "In order to judge as to the intention of the contracting parties, attention must be paid principally to their conduct at the time of making the contract and subsequently thereto." (Article 1282.)

Now, then, what is the true nature of the contract entered into between the parties by virtue of the deed of sale executed by them on May 16, 1932? The Court of Appeals held that it is an absolute deed of sale of a land with a homestead certificate of title, under the guise of a loan secured by a mortgage upon its improvements in order to go around the prohibition contained in section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. Closely examined, the only clauses of the contract which may lead to the conclusion that it is one of sale are those which state that if at the expiration of the period of four years and a half the mortgagor should fail to pay the amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum, she would execute in favor of the mortgagee a deed of absolute sale of the land whose improvements were mortgaged for the amount of the loan and the interest owing. It will be seen that the sale would not be made until after the lapse of four and a half years from the execution of the deed, if the mortgagor should fail or should not wish to redeem the mortgaged improvements. Consequently, the obligation contracted by said mortgagor was no more than a conditional promise to sell. Now, then, is this promise to sell valid? Like any other onerous, consensual and mutually binding contract, that of promise to sell requires for its legal existence and validity the concurrence of consent, consideration and subject-matter. The contract before us does not show what is the cause or consideration for such promise to sell. Assuming that it was the economic impotence of the mortgagor to redeem the mortgaged improvements, before she could be compelled to comply with her obligation to sell, there is need to wait until she should fail to exercise the right to redeem either due to lack of funds or to abandonment. The cause will come into being only upon the happening of said event after the four and a half years and only then will the said contract of promise to sell have juridical existence. The P1,000 and its interest, should the mortgagor fail to redeem the improvements upon the maturity of the indebtedness, would be the consideration of the sale; because the promise to sell is a contract different and distinct from that of sale and each requires a consideration for its legal existence and validity. The terms of the contract are clear and explicit and do not leave room for doubt that the intention of the contracting parties was to constitute a mortgage on the improvements of the land in litigation to secure the payment of the loan for P1,000, with interest thereon at 12 per cent per annum. It cannot be said that this contract is simulated because the assessed value of the improvements is P860 only. It is well known that rural properties are valued for assessment purposes not less than half of their market value. The true value of the said improvements may therefore be P1,720, and the mortgagee may have considered that adequate. Moreover, the petitioner could not have the property whose improvements were mortgaged to him even should the mortgagor default in the payment of interest. He could only have the mortgaged improvements in case of foreclosure should he bid therefor at the sale. Neither could the mortgagor sell the same property to the mortgagee, even after the expiration of five years from the issuance of the homestead certificate of title, for then the sale would be in satisfaction of an obligation contracted during the five years, which is prohibited by the of mentioned section 116 of Act No. 2874, as amended by section 23 of Act No. 3517. The fact that after one year the contracting parties had novated the contract of loan secured by a mortgage, converting the same into a contract of antichresis because of the mortgagor's failure to pay the accrued interest, does not show that they intended to enter into a contract of sale, because the conversion in this case of the contract of loan secured by a mortgage into one of antichresis was accidental, due to the mortgagor's default in the payment of unpaid interest for the first year. If the parties' intention from the beginning had been to sell the property, the mortgagee would have immediately entered upon the

possession of the land instead of waiting until after the expiration of one year. The transfer of the Torrens certificate of title to the homestead by the original owner to the mortgagee in 1934 was only a consequence of the conversion of the mortgage loan into an antichretic loan, the parties having erroneously believed that it was necessary to make such a transfer. The setting off of the interest on the debt against the fruits of the property given in antichresis finds authority in article 1885 of the Civil Code. There is, therefore, no ambiguity in the terms of the contract warranting the search outside its four corners for the true intention of the contracting parties other than that of entering into a contract of loan secured by the said improvements. If the true intention of the contracting parties, as clearly gathered from the terms of the contract, was to enter into a contract of loan secured by a mortgage upon the improvements, although they should convert it into a contract of antichresis after one year and although after the maturity of the loan with interest they may wish to convert it into one of absolute sale-both conversions being illegal and, hence, void,-the original intention of entering into a contract of loan secured by a mortgage upon the improvements would prevail, the said contract of loan being the only one legal and valid, and the petitioner having acted in good faith in making it. The verbal contract of antichresis, entered into by the petitioner Marcial Kasilag and Emiliana Ambrosio, being null and void ab initio and without any legal effect because it is in violation of the express prohibition of section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, (article 4 of the Civil Code), the contracting parties should restore to each other the things which have been the subject-matter of the contract, together with their fruits, and the price paid therefor, together with interest, pursuant to Article 1303 of the same Code. Marcial Kasilag, therefore, should return to Emiliana Ambrosio or to her heirs the possession of the homestead and the improvements thereon with its fruits, and Emiliana Ambrosio or her heirs should pay him the sum of P1,000, being the amount of the loan, plus interest due and unpaid. As to the improvements introduced upon the land by the petitioner, having done so with the knowledge and consent of its owner Emiliana-Ambrosio, the former acted in good faith, and under article 361 of the Civil Code, the owner of the land may have the said improvements upon paying the indemnity provided in articles 453 and 454, or may compel the said Marcial Kasilag, who introduced the said improvements, to pay the price of the land. If the herein respondents, as heirs of Emiliana Ambrosio, do not wish or are unable to pay for said improvements, and Marcial Kasilag does not wish or is unable to pay for the land, said petitioner would lose his right of retention over the same (Bernardo vs. Batclan, 37 Off. G., No. 74, p. 1382), provided that he may remove the improvements which he had introduced in good faith. In view of the foregoing, I concur in the majority opinion except insofar as it holds that the interest is set off against the fruits of the mortgaged improvements, because as a result of the nullity of the contract of antichresis the petitioner should return to the respondents the products of the mortgaged improvements, and the latter should pay to the petitioner the amount of the loan plus interest due and unpaid at the rate of 12 per cent per annum from the date of the contract until fully paid. LAUREL, J., concurring:

On August 27, 1918, Emiliana Ambrosio put in a home- stead application for lot No. 285 of the Limay Cadastre, Province of Bataan. After complying with the requisite legal formalities, she obtained therefor homestead patent No. 16074 and homestead certificate of title 325 on June 11, 1931, the same having been recorded in the registry of Deeds of Bataan on June 26, 1931. On May 16, 1932, she entered with the herein petitioner, Marcial Kasilag, into a contract, Exhibit 1, inserted in the foregoing majority opinion. Sometime in 1933, or a year after the execution of the aforequoted deed, the patentee failed to pay the stipulated interest and land taxes, whereupon, the mortgagee, Marcial Kasilag, and the mortgagor, Emiliana Ambrosio, verbally agreed that the former would pay the land taxes and waive the unpaid interest, enter into the possession of the property in question, introducing improvements thereon, and thereafter be reimbursed for the value of such improvements. Under this verbal pact, Kasilag went into possession of the property, planted it with fruit trees allegedly valued at P5,000, and, on May 22, 1934, declared the same for taxation purposes. In 1934 the original homesteader, Emiliana Ambrosio, died leaving as heirs her children, Rafaela Rodriguez, Severo Mapilisan, Ignacio del Rosario and Gavino Rodriguez. On May 16, 1936, the said heirs, with the exception of Gavino Rodriguez who testified for the defendant, sued Marcial Kasilag in the Court of First Instance of Bataan to recover the possession of the aforesaid property belonging to their mother. For answer, the defendant put in as a general denial plea, a special defense that his possession was in good faith with the knowledge and tolerance of the plaintiffs, a counterclaim for P1,000 representing the loan to the deceased homesteader with stipulated interest thereon, and a recoupment for P5,000 allegedly the value of the improvements he had introduced upon the land. On the issues thus joined, the trial court gave judgment for the defendant couched in the following language: "Resuming all that has been said above, the court finds and declares that the deed of combined mortgage and sale executed by Emiliana Ambrosio in favor of the defendant Marcial Kasilag and dated May 16, 1932, is null and void as a contract for a future conveyance or sale of the homestead, but valid as an equitable mortgage on the improvements for the sum of P1,000; and that the possession of the homestead by the defendant Marcial Kasilag by virtue of paid contract or by virtue of any other agreement is null and void, but that the making of the improvements thereon by him, which the court finds to be valued at P3,000, by virtue of the verbal agreement entered into after the executing of the original instrument of mortgage, was in good faith, entitling the said Marcial Kasilag to be reimbursed of their actual value, the above-mentioned amount. Where- fore, let judgment be entered declaring that the plaintiffs are entitled to the possession as owners of the homestead subject of the present suit, lot No. 285 of the Limay cadastral survey, subject to an encumbrance of the improvements for the sum of P1,000 in favor of the defendant, ordering the defendant to deliver unto the plaintiffs the possession of said homestead, and directing the said plaintiffs in turn to pay unto the defendant jointly and severally, as heirs of their deceased mother Rafaela Rodriguez the sum of P3,000, value of improvements introduced on said homestead by defendant. Let there be no pronouncement as to costs." On appeal by the plaintiffs, the Third Division of the Court of Appeals reached a different result and modified the judgment of the trial court as follows: "Wherefore, the appealed judgment is hereby modified by declaring that the contract, Exhibit '1', is entirely null and void; that the plaintiffs and appellants are the owners of the lot in question together with all the improvements thereon in common with their brother, Gavino Rodriguez, and are, therefore, entitled to the possession thereof; ordering the defendant and

appellee to vacate and deliver the possession of the aforesaid lot together with all the improvements thereon to the aforementioned plaintiffs and appellants free from any encumbrance; requiring the latter, however, to pay jointly and severally to the said appellee the sum of P1,000 with interest thereon at the rate of 6 per cent per annum from and including the date this decision becomes final; and absolving the said plaintiffs and appellants from the cross-complaint with respect to the value of the improvements claimed by the appellee. "It is further ordered that the register of deeds of Bataan cancel the certificate of title No. 325 in the name of the deceased, Emiliana Ambrosio, and issue in lieu thereof a new certificate of title in favor of the herein plaintiffs and appellants and their brother, Gavino Rodriguez, as owners pro indiviso and in equal shares free from any lien or encumbrance except those expressly provided by law. "Without special pronouncement as to the costs." The case is before us on petition for certiorari which was given due course, filed by defendantappellee, Marcial Kasilag, now petitioner, against plaintiffs-appellants, Rafaela Rodriguez and others, now respondents. The burden of petitioner's case is condensed in the following assignments of error: The Honorable Court of Appeals erred: "I. In having interpreted that document Exhibit '1' is an absolute sale and declared it entirely null and void, and in not having interpreted and declared that it is a deed of combined mortgage and future sale which, if void as a contract for the future conveyance of the homestead in question is, however, valid as an equitable mortgage on the improvements thereof for the sum of P1,000 loaned by the petitioner Marcial Kasilag to the homestead owner Emiliana Ambrosio. "II. In holding that the petitioner was guilty of the violation of the public land law for having entered into said contract Exhibit '1'. "III. In not giving probative value to the uncontradicted testimony of the petitioner Marcial Kasilag that he was expressly authorized by the homestead owner Emiliana Ambrosio to introduce improvements in said homestead. "IV. In not declaring that the possession by the petitioner Marcial Kasilag of said homestead and the introduction by him of improvements therein by virtue of the verbal agreement entered into after the execution of the original instrument of mortgage was in good faith, entitling him to be reimbursed of the actual value of improvements he introduced." Boiled down to the fundamentals, there are only two propositions which stand to be resolved in this appeal: (1) What is the legal nature of the agreement, Exhibit 1, entered into by and between the parties? and (2) Is Marcial Kasilag guilty of bad faith in entering upon the possession of the homestead, paying the land tax and introducing improvements thereon? The numerous adjudications in controversies of this nature will show that each case must be decided in the light of the attendant circumstances and the situation of the parties which, upon the whole, mark its character. However, for the purpose of ascertaining the manner and extent to which persons have intended to be bound by their written agreements, the safe

criterion, the time honored test, is their intention which is intimately woven into the instrument itself. It is true that resort to extrinsic evidence is imperative when the contract is ambiguous and is susceptible of divergent interpretations; nevertheless, the primary obligation of the courts is to discover the intention of the contracting parties, as it is expressed by the language of the document itself. We are not authorized to make a contract for the parties. In the trial court as in the Court of Appeals, the discussion centered on the nature and validity of the document, Exhibit 1. This is the correct approach. The Court of Appeals, however, rejected the conclusion of the trial court that it is a deed of combined mortgage and sale, and ruled that it is an absolute deed of sale which is null and void in its entirety because it is banned by section 116, as amended of the Public Land Act. The ruling is now assailed by the petitioner. I share petitioner's view that the deed is not what it was construed to be by the Court of Appeals. From Article I to III thereof is a description of the homestead and the improvements existing thereon. By its Article IV the homesteader, Emiliana Ambrosio, "encumbers and hipothecates, by way of mortgage, only the improvements described in Articles II and III" under the conditions set out in Articles V, VI and VII. Its closing Articles VIII and IX, particularly relied upon by the Court of Appeals, speak, not of a present deed of absolute sale, but of one to be executed "upon the expiration of the period of time (41, years) stipulated in the mortgage" if "the mortgagor should fail to redeem this mortgage". In other words, the redemption of the mortgage by the payment of the loan may bring about the frustration of the contemplated sale, hence, to hold unqualifiedly that the whole of Exhibit 1, or even a part thereof, is an absolute deed of sale would be to do violence to the terms of the document itself. Still other tokens drive home the same conviction. The intimation by the Court of Appeals that the petitioner "know, therefore, that the land subject of the patent could not be alienated by express prohibition of law," is an argument that the petitioner could not have brazenly disregarded the law by intending Exhibit 1 to be an absolute deed of sale. Its further observation that "the stipulation under article VIII of the contract, Exhibit '1' . . . clearly indicates that there was nothing left to be done except the execution of the deed of absolute sale," is a concession that no such sale has yet been executed. Finally, it will be recalled that under Article VII of Exhibit 1, "within thirty (30) days after date of execution of this agreement the party of the first part shall file a motion before the Court of First Instance of Balanga, Bataan, P. I., requesting cancellation of homestead certificate of title No. 325 referred to in Article 1 hereof and the issuance, in lieu thereof, of a certificate of title under the provisions of Land Registration Act 496, as amended by Act 3901." And by its Article IX it provides "That in the event the contemplated motion under Article VII hereof is not approved by the Court, the foregoing contract of sale shall automatically become null and void." (Emphasis is mine.) We have nothing in the record to show that the required motion was filed within thirty days or thereafter, by Emiliana Ambrosio in life, or by her successors-in-interest after her death. Indeed, Homestead Certificate of Title No. 325, sought to be substituted by another through the said motion, still stands. It is, evident, therefore, that the projected sale has and may never come into being, because under Article IX of Exhibit 1, it became automatically null and void. This view, incidentally, precludes further consideration of the validity or invalidity of the sale clause of Exhibit 1, as it will be purely academic to dwell upon the nature and effect of a contract that has passed out of existence in the contemplation of the parties.

Having reached the conclusion, upon its plain language and unequivocal import, that Exhibit 1 is essentially and fundamentally a mortgage upon the improvements found on the questioned homestead, with a conditional clause for the future sale of said homestead and improvements which has become a "dead twig" still attached to a living tree because the condition has never been performed, I would, under Articles 1281 and 1283 of the Civil Code, be otherwise content in resting our decision of this aspect of the case on this interpretation. But I do not propose to so limit my inquiry in view of the fact that the Court of Appeals points to contemporaneous and subsequent circumstances, beyond the four corners of the document, Exhibit 1, allegedly revelatory of petitioner's concealed but evident intention to circumvent the law. I may state, at the outset, that these circumstances are fairly susceptible of legitimate explanations. The appealed decision could not conceive of a man, of petitioner's intelligence, who "would accept improvements valued at only P860 as security for the payment of a larger amount of P1,000." But we are concerned with an assessed valuation which is not always nor even frequently the value that it can command in the market. To ignore this is to live in monastic seclusion. The appealed decision would imply from the fact that petitioner subsequently paid the land taxes and from the further fact that Emiliana never paid stipulated interest on the one thousandpeso loan, that Exhibit 1 was meant to vest absolute title irretrievably in the petitioner. It could hardly be supposed at the time of the execution of Exhibit 1 that the homesteader would fail to make these payments, nor does it seem just to draw from these circumstances, induced by Emiliana's own neglect, deductions unfavorable to the petitioner. That the petitioner went upon the possession of the questioned property is not proof that he was even then already the would-be owner thereof, for as elsewhere stated, the said possession came practically at the suggestion of or at least with the consent of Emiliana Ambrosio as a result of her failure to live up to her part of the bargain. Finally, the Court of Appeals asked: "If the real purpose was to mortgage the improvements only as specified in article IV of the contract, why is it that in article VIII thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be required to execute a deed of absolute sale of the property described therein for the same amount of the mortgage in favor of the grantee, and not of 'the improvements only'?" The precaution which the petitioner took to have the sale clause of Exhibit I so phrased that the said sale would not be effected until after the expiration of the five- year period prohibited by law, at which time the alienation of the homestead would then have been perfectly legitimate, may not be without significance to show petitioner's respect for and intention to be on the side of the law. The very mention of the word "sale" in the document in question argues against any attempt at concealment, for if the said document was intended as a cover and cloak of an illegal alienation, then the reference to the contract of sale therein was illtimed and foolhardy. The question next at hand is whether or not the mortgage constituted upon the improvements of the homestead is valid. It is, under express provisions of section 116 of the Public Land Act, before 2nd after its amendment, reading pertinently that "the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations." I find no occasion to dispute this legislative policy however mistaken it may be. It is sufficient to observe that what the law permits may be done. Upon the other hand, I find no occasion to test the legality of the sale provisions of Exhibit 1 for, as I have heretofore said, this question is, in my opinion, moot. Moreover, the petitioner, technically, is barred from raising this question, as he did not appeal from and, therefore, abided by the decision of the trial court which outlawed this sale clause as violative of the provisions of section 116 of the Public Land Act. This part of the decision of the trial court was affirmed by the Court of Appeals when the

latter struck down Exhibit 1 in its entirety and, even now, petitioner does not complain against the destruction of Exhibit 1 with respect to its sale clause. In other words, counsel for petitioner concedes all along that the said sale clause may be properly legislated out. As the mortgage provisions of Exhibit 1 are independent of and severable from the rest thereof, the same are perfectly enforceable. Where a part of the contract is perfectly valid and separable from the rest, the valid portion should not be avoided. (Ollendorff vs. Abrahamson, 38 Phil., 585.) The question yet to be answered is whether the petitioner's possession of the questioned homestead was in good faith so as to entitle him to reimbursement for improvements introduced upon the land. The basis of petitioner's possession was a verbal agreement with the original homesteader whereby, for failure of the latter to comply with her obligations to pay land taxes and stipulated interest on the loan, the former assumed the said obligations for the privilege of going into possession of the property, introducing improvements thereon, and thereafter being reimbursed for the value of such improvements. The petitioner did enter upon such possession, planted the land to fruit trees valued at P5,000, according to him, and P3,000, according to the trial judge. It should be stated, in passing, that the Court of Appeals was unable to belie this verbal agreement, although it was of the opinion "that the trial court erred in giving probative value to the testimony of the appellee with reference to the alleged verbal agreement". Its reason for the opinion is not because the testimony is untrue, but because even if it were true, "it only tends to corroborate the allegation that he acted in bad faith when he took possession of the property and made improvements thereon, because then he knew full well that the homestead owner could not enter into an agreement involving the future final and absolute alienation of the homestead in his favor." As the said opinion and the reason back of it does not involve a question of strict fact, it is in our power to inquire into its soundness. The weakness of the argument lies, first, in its (a) inconsistency and (b) in the misconception of the legal principle involved: inconsistency, because it considers entry of possession, payment of land tax as facts tending to show the real character of the transaction and as evidencing bad faith on the part of the petitioner, but at the same time it improperly rejects the verbal agreement by which such facts are established. It is clear that we cannot directly reject the verbal agreement between the parties in so far as it is favorable to Ambrosio and indirectly reject it in so far as it is favorable to the petitioner. The misconception proceeds from the erroneous legal conclusion that, upon the facts, the good faith is atributable to the petitioner alone and that Ambrosio was not to be blamed for the prohibited alienation of the homestead, as I shall presently proceed to discuss. In holding that the petitioner was a possessor in bad faith, the decision sought to be reviewed first laid down the premise that such possession is banned by law at least for five years from the issuance of patent (section 116, Public Land Act), assumed that the petitioner had knowledge of such law, and then drew the conclusion that petitioner was aware of the illegality of his possession. We think that the assumption and conclusion are precipitate. As observed in the foregoing majority opinion-citing Manresa-knowledge of a legal provision does not necessarily mean knowledge of its true meaning and scope, or of the interpretation which the courts may place upon it. In this particular case, what section 116 of the Public Land Act prohibits is the "incumbrance or alienation" of land acquired thereunder within the period prescribed therein. We may concede, as assumed by the appealed decision, that the petitioner was cognizant of said section 116, but this is not saying that petitioner knew that his possession came under the phrase "incumbrance or alienation" prohibited by law, and that the petitioner, therefore, knew that his possession was illegal. The import of the phrase

"incumbrance or alienation" is a subject upon which "men of reason may reasonably differ," in the same way that we ourselves have differed in the deliberation of this case. It is not correct to assume that the petitioner had knowledge of the illegality of his possession. The contrary assumption, namely, that petitioner had no idea of such illegality, would have been more in accord with the experience of everyday, for petitioner would not have invested money and labor in the land and assumed obligations incumbent upon the homesteader if he had even the least suspicion that all his efforts would count for nothing and would in the end entangle him in a mild scandal. As possession in bad faith does not necessarily mean possession illegal under the law, is being necessary that the possessor be aware of such illegality, it follows that the petitioner's possession of the homestead of the respondents was in good faith. (Art. 433, Civil Code.) "Good faith is always presumed, and the burden of proving bad faith on the part of the possessor rests upon the person alleging it" (article 434, Civil Code.) As a bona fide possessor, and it being unquestioned that the improvements introduced by him upon the land redounded to its benefit, the petitioner is by law entitled to be paid for the value of such improvements in the amount of P3,000, as found by the trial judge. "Useful expenditures shall be paid the possessor in good faith with the same right of retention, the person who has defeated him in his possession having the option of refunding the amount of such expenditures or paying him the increase in value which the thing has acquired by reason thereof." (Article 453, 2nd par., Civil Code). The reimbursement in this particular case is the more in order in view of the express undertaking of respondents' predecessor-in-interest to pay therefor. Even the equities of the case militate against the respondents and in favor of the petitioner. There is a concession that the petitioner's possession was neither imposed upon nor wrested from the homesteader; on the contrary, it came about by virtue of a mutual agreement whereby the said homesteader and the herein respondents were spared the burden of paying for land taxes and stipulated interest and extended the benefit of having their land improved on condition that they pay the value of such improvements upon redeeming the land. We also have uncontradicted fact that P400 of the one thousand-peso loan were given to the herein respondents and the balance kept by their mother. They may not reap and retain these benefits and at the same time repudiate and go back upon contractual obligations solemnly entered into. But let me grant that the contract, Exhibit 1, is one of absolute sale, as found by the Court of Appeals, what then? As the land could not be alienated for five years from the date of the issuance of the patent, the sale was illegal and void because it was entered into in violation of section 116 of the Public Land Act, as amended. By whom was the law violated? Certainly, not by Kasilag alone but by Ambrosio as well. Both are presumed to know the law, and we cannot justly charge Kasilag alone with that knowledge on the alleged reason that Kasilag is rich and Ambrosio is poor. Neither can we proceed on the bare assumption that because Exhibit 1 was written in English it was prepared by Kasilag as if he were the only English speaking person in the Province of Bataan where the document was executed. Are we already living in the midst of a communistic society that we shall have to incline invariably the balance in favor of a litigant because he happens to be poor and against the litigant who happens to be well-to-do, regardless of the merits of the case? And to this end, shall we, by a series of assumptions and deductions, impute to a party malice aforethought dishonesty and bad faith, in entering into a transaction made in the open sun, publicly recorded and whose effectiveness was even conditioned by the approval of a court of justice? If so, then I dare say that we have not profited by the admonition of Aristotle in his Metaphysics centuries ago that "justice is a virtue

of the soul which discards party, friendship and sentiment and is therefore always represented as blind." There is a charm in rhetoric but its value in cool judicial reasoning is nil. And if as we are confidently told we should relax the legal principle with reference to Ambrosio, because she was "poor and ignorant," I am reluctant to believe that she was ignorant of the condition against the alienation inserted in all homestead patents, and my knowledge of the Public Land Law, of the activities of the Department and bureau charged with the administration of public lands, gives me just the contrary impression. Every homestead patent contains that condition. Circulars and instructions and general information have been issued in pursuance with law. (Sec. 5, Act No. 2874; see also sec. 5, Commonwealth Act No. 141.) I must presume that the Government and its officials charged with the administration of public lands have complied with the law and their duties in this connection, and I cannot believe that Ambrosio, when she alienated the property, was unaware of the legal prohibition. Under the circumstances, then, it is reasonable to conclude that on the hypothesis that the document, Exhibit 1, was a contract of absolute sale between Kasilag and Ambrosio, both of them were guilty of infraction of the law. If this is correct, what is the legal situation of the parties? Justinian who, by his Corpus Juris Civiles, still speaks through practically all the civil codes of Continental Europe, considers both as having acted in good faith. "Realmente," bluntly observes Manresa, "si los dos que se encuentran en lucha sobre la propiedad han provocado el conflicto por su voluntad; a ciencia y paciencia del dueo del suelo, ante cuya vista las obras se han ejecutado, y con conciencia, por parte del que edifica o planta, de que el terreno no es suyo, no hay razon alguna que abone derecho preferente en favor de ninguno de los dos; deben, por tanto, tratarse como si los dos hubiesen obrado de buena fe; la mala fe del uno extingue y neutraliza, en justa reciprocidad, la del otro." (Manresa, Codigo Civil, segunda edicion Tomo III pag. 203.)Article 364 of our Civil Code then comes into play. "When there has been bad faith, not only on the part of the person who built, sewed, or planted on another's land, but also on the part of the owner of the latter, the rights of both shall be the same as if they had acted in good faith. Bad faith on the part of the owner is deemed to exist whenever the act has been done in his presence, with his knowledge and tolerance, and without opposition on his part." (Article 364, Civil Code; see also arts. 1303, 1306 ibid.) The codal section is evidently based upon the venerable maxim of equity that one who comes into equity must come with clean hands. A court which seeks to enforce on the part of the defendant uprightness, fairness, and conscientiousness also insists that, if relief is to be granted, it must be to a plaintiff whose conduct is not inconsistent with the standards he seeks to have applied to his adversary. Fundamenta justitiae sunt, ut ne cui noceatur, deinde ut communi serviatur. I therefore concur in the result. CONCEPCION, J., dissenting: In view of the findings of fact of the Court of Appeals, which are final according to law, I dissent from the majority opinion as to the legal denomination of the contract really entered into by the petitioner and the now deceased Emiliana Ambrosio. The facts according to the decision of the Court of Appeals are as follows:

"On August 27, 1918, the deceased, Emiliana Ambrosio applied for the land in question as a homestead, now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were issued in favor of the applicant on June 11, 1931 which were re- corded on June 26, 1931 in the office of the register of deeds in accordance with the provisions of section 122 of ,Act 496. "On or about May 16, 1932, the homestead owner, Emiliana Ambrosio offered to sell the property to the defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that it was a homestead patent and knew, therefore, that the land subject of the patent could not be alienated by express prohibition of law, so he devised a means by which the proposed sale might not appear in any document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit '1', purporting to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; 110 hills of bamboo trees, 1 tamarind, and 6 bonga trees, with the assessed value of P860, in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee, Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the condition being that if she would fail to redeem the alleged mortgage at the expiration of the stipulated period, she would execute a deed of absolute sale of the property therein described for the same amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and assessment which might become due on the land and improvements during the term of the agreement and that within thirty days after the date of the execution thereof she should file a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325 above referred to and the issuance in lieu thereof a certificate of title under the provisions of the Land Registration Act 496, as amended by Act 3901. "The lot in question was originally declared for land tax purposes in the name of the homestead (owner) Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180. "Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since the execution of the contract. "The evidence further discloses that the appellant entered upon the actual possession of the land and had been holding the same up to the present time, having planted various kinds of fruit trees valued according to him at P5,000, and collected the products thereof for his own exclusive benefit." Relying upon the foregoing facts, the majority contends that the contract executed by the parties was one of mortgage, as per Exhibit 1, with a promise to sell the land in question. I cannot hold to these rulings of the majority, because the nature of the contract of mortgage is inconsistent with the idea that the creditor should immediately enter upon the possession of the mortgaged land; that he should pay the land tax; that he should introduce improvements thereon, and that he should accept as security something whose values does not cover the

amount of the loan sought to be secured, for in this case the supposed loan was P1,000, and what were mortgaged were only the improvements consisting of 4 mango trees, 110 hills of bamboo trees, 1 tamarind tree and 6 betelnut trees, assessed at P860. I believe that the contract which the parties intended to execute is a promise to sell the land, for which reason Ambrosio retained the right of ownership of the land and its improvements while the deed of the promised sale had not been executed. Under the terms of the deed Exhibit 1, Kasilag could not be considered the owner of the land, nor could he execute any act premised upon the assumption of ownership, nor could he alienate the same as he had no title to it. But the parties, in consideration of the fact that Kasilag paid in advance the price of the land and assumed the obligation to pay the tax thereon, which Ambrosio could not pay, agreed that Kasilag may enter upon the enjoyment of the land until the promise to sell is converted in fact into an absolute sale by the execution of the corresponding deed by Ambrosio. It was stipulated, however, that if the sale is not approved by the Court, Kasilag would collect the amount of P1,000 paid by him as a mortgage credit, with all the interest due and payable. Under these circumstances, the conclusion of law that Kasilag acted in bad faith is not supported by the established facts. Wherefore, the plaintiffs are bound to comply with the contract as heirs of Ambrosio, by executing in favor of Kasilag the deed of sale of the land, but should the sale, for any reason, be not approved, Kasilag may collect the amount of P1,000 with all the interests thereon, and may execute the judgment obtained by him upon the land and all its improvements, deducting, however, in his favor the value of the improvements which he introduced upon the land in good faith. In view of the foregoing, I am of the opinion that the decision of the Court of Appeals should be reversed and that another should be entered against the respondents, requiring them to execute the deed of sale of the land in favor of the petitioner, provided that if the sale, for any reason, be not approved by the court, the petitioner may execute his credit upon the land and all its improvements, after deducting the value of the improvements introduced by him upon the land. MORAN, J., dissenting: According to section 116 of Act No. 2874, as amended by section 23 of Act No. 3517, "lands acquired under the free patent or homestead provisions shall not be subject to en- cumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period." About June 11, 1931, homestead patent No. 16074 was issued to Emiliana Ambrosio, now deceased. On May 16, 1932 Emiliana Ambrosio offered the sale of the said homestead to the herein petitioner, Marcial Kasilag, and in view of the above-quoted legal prohibition, the parties executed the document Exhibit 1, copied in the majority decision. The heirs of Emiliana Ambrosio filed a complaint for the annulment of the contract in the Court of First Instance of Bataan, and from the judgment rendered by said court an appeal was taken to the Court of Appeals, which held that the true contract between the parties is one of absolute sale,

wherefore, it is null and void under the already cited legal prohibition. Marcial Kasilag comes to this court on certiorari, and this Court reverses the decision of the Court of Appeals. The only question is as to the true contract between the parties at the time of the execution of the deed Exhibit 1: Kasilag contends that the contract is that set out in the document Exhibit 1, that is, a mortgage of the improvements of the homestead to secure a loan of one thousand pesos given to Emiliana Ambrosio; and the latter's heirs, in turn, contend that the contract is one of absolute sale of the homestead, wherefore, it is null and void. The findings of the Court of Appeals are as follows: "The pertinent facts as disclosed by the evidence of record are as follows: "On August 27, 1918 the deceased, Emiliana Ambrosio, applied for the land in question as a homestead, now known as lot No. 285 of the Limay cadastral survey of Bataan, and the application was approved on September 10, 1919. A final proof was submitted on November 10, 1927 which was approved on October 17, 1929. The homestead patent No. 16074 and homestead certificate of title No. 325 were issued in favor of the applicant on June 11, 1931 which were recorded on June 26, 1931 in the office of the register of deeds in accordance with the provisions of Section 122 of Act No. 496. "On or about May 16, 1932, the homestead owner Emiliana Ambrosio offered to sell the property to the defendant and appellee, Marcial Kasilag. The latter, upon examining her title found that its was a homestead patent and knew, therefore, that the land subject of the patent could not be alienated by express prohibition of law, so he devised means by which the proposed sale might not appear in any document and had the patentee, Emiliana Ambrosio, execute a public instrument, Exhibit 1, purporting to be a mere mortgage of the improvements thereon consisting of four mango trees, fruit bearing; one hundred ten hills of bamboo trees, one thousand and six bonga trees, with the assessed value of P860, in consideration of the sum of P1,000 alleged to have been loaned by the said Kasilag to the said patentee Emiliana Ambrosio. It was expressly stipulated in that document that the aforementioned amount should be paid within four and a half years from the date of the instrument (May 16, 1932), the condition being that if she failed to redeem the alleged mortgage at the expiration of the stipulated period, she would execute a deed of absolute sale of the property therein described for the same amount of the alleged mortgage (P1,000) including all unpaid interest at the rate of 12 per cent per annum in favor of the alleged mortgagee. It was further stipulated therein that the said Emiliana should pay all the taxes and assessment which might become due on the land and improvements during the term of the agreement and that within thirty days after the date of the execution thereof she should file a motion before the Court of First Instance of Bataan requesting the cancellation of the homestead certificate No. 325 above referred to and the issuance in lieu thereof of a certificate of title under the provisions of the Land Registration Act No. 496, as amended by Act No. 3901. "The lot in question was originally declared for land tax purposes in the name of the homestead owner, Emiliana Ambrosio, and assessed at P1,020 in 1933; but on May 22, 1934, the tax declaration was transferred in the name of the appellee, Marcial Kasilag, and on March 6, 1936 the assessed value was raised to P2,180. "Emiliana, however, never paid any interest on the alleged loan of P1,000 or paid taxes on the land since the execution of the contract.

"The evidence further discloses that the appellee entered upon the actual possession of the land and had been holding the same up to the present time, having planted various kinds of fruit trees valued according to him at P5,000, and collected the products thereof for his own exclusive benefit. "Construing the contract, Exhibit 1, in the light of all the foregoing facts and circumstances under which it was executed in relation to the subsequent acts of the contracting parties, we are led to the inescapable conclusion that their real intention was to execute an agreement of absolute sale of the homestead together with the improvements thereon. The stipulation concerning an alleged mortgage in the instrument is a mere devise to circumvent the law which expressly prohibits the alienation or encumbrance of the homestead during the period of five years from the date of the issuance of the homestead patent. (Sec. 116 of Act No. 2874 as amended by Act No. 3517.) "It is inconceivable, and, therefore, we refuse to believe that the appellee, Marcial Kasilag, being an intelligent man far above the average, would accept improvements valued at only P860 as security for the payment of a larger amount of P1,000, the alleged loan. We entertain no doubt that at the time the execution of the contract, Exhibit 1, the appellee knew that the homestead owner, Emiliana Ambrosio, a poor ignorant woman, was badly in need of money and that she was determined to dispose of and alienate definitely her homestead, as evidenced by the fact testified to by Gavino Rodriguez as witness for the said appellee that she actually offered to sell the land to the latter. He also knew that she would not be able to pay back to him such a large amount with interest of 12 per cent per annum because she had no other income except what she would derive from the homestead. Under such circumstances, there is reason to believe that she was no longer concerned with the form in which the contract would be drawn, as long as she could obtain the amount of P1,000 which was agreeable to her as the price of the homestead she offered to sell to the appellee. This conclusion is supported in part by the subsequent action of Emiliana in not paying any interest on the alleged loan of P1,000 or the land taxes thereon since the execution of the contract and by the action of the appellee in declaring the land for tax purposes in his own name as owner thereof, notwithstanding that he had no interest in the land, as he alleged, except in the improvements only. "The contract of absolute sale was consummated, because the grantor, Emiliana, received full payment of the purchase price disguised as a loan of P1,000 and placed the grantee, Marcial Kasilag, in absolute possession and control of the land conveyed to him with all the improvements thereon. The stipulation under article VIII of the contract, Exhibit 1, to the effect that the grantor 'would execute a deed of absolute sale of the property herein described for the said amount of this mortgage including all unpaid interest at the rate of 12 per cent per annum in favor of the mortgagee,' clearly indicates that there was nothing left to be done except the execution of the deed of absolute sale, which is merely a matter of form in contracts of this nature, which was postponed until after the expiration of four and a half years because by that time the period of five years within which the property could not be alienated nor encumbered in any way, as provided by section 116 of Act No. 2874 as amended by Act No. 3517, supra, would have already expired. If the real purpose was to mortgage the improvements only as specified in article IV of the contract, why is it that in article VIII thereof it was provided that in case of failure to redeem the alleged mortgage the grantor would be required to execute a deed of absolute sale of the property described therein for the same amount of the mortgage in favor of the grantee, and not of 'the improvements only'? It is

clear, therefore, that the real contract under Exhibit 1, was one of absolute sale and not a mortgage with future sale." In other words, although the document Exhibit 1 states that it is a mortgage of the improvements, with a stipulation regarding a future sale of the land in case of failure to comply with the mortgage obligations, in reality the true contract between the parties is one of absolute sale in the light of the circumstances of the case, among them the following: First. Emiliana Ambrosio offered the sale, not the mortgage, of her homestead to Marcial Kasilag, and it is a fact found established by the Court of Appeals that she was agreeable to the sum of one thousand pesos as the price of the sale offered by her. If this is so, it is unlikely that Kasilag would refuse the offer of sale of the homestead and would accept in lieu thereof a simple mortgage of the improvements, for the same sum of one thousand pesos; Second. In the deed it is stipulated that, if at the expiration of the period of four and a half years, the debtor should fail to redeem the mortgage, she would execute in favor of the creditor, Marcial Kasilag, a deed of absolute sale not only of the mortgaged improvements but also of the land for the same amount of the loan of one thousand pesos. This magic conversion of the mortgage of the improvements into an absolute sale of the land at the expiration of four and a half years and without any additional consideration can only mean that the two contracts are one and the same thing, and that the first has been availed of to go around the legal prohibition. The scheme is very obvious, and to make any attempt to reconcile it with good faith is simply to fall into it. The mortgage of the improvements could not have been intended because the supposed loan which it guaranteed was the same price of the stipulated sale to be later executed, and further because Kasilag knew, according to the findings of fact of the Court of Appeals, that Emiliana Ambrosio was a poor and ignorant woman who was not in a position to return the one thousand pesos; Third. Kasilag had always considered the contract as one of sale of the land and not as a mortgage of the improvements, because he put the tax declaration of the land in his name, paid the corresponding land tax, took possession of the land, received the fruits thereof for his exclusive use, and introduced thereon permanent improvements, one of them being a summer house, all of which were valued at about five thousand pesos. It is not an attribute of a contract of mortgage that the creditor should take possession of the mortgaged property, or that he should pay the taxes thereon. Kasilag would not spend five thousand pesos for permanent improvements if he knew that his possession was precarious. Fourth. In the document it is stipulated that the debtor would pay interest, but she did not pay any, and the alleged t mortgage was not foreclosed thereby, which shows that the stipulation was nothing but a ruse. Fifth. The deed Exhibit 1 was drawn by Kasilag, because it is in English, and the other party is a poor and ignorant woman, wherefore, all doubts and uncertainties arising therefrom should be resolved against Kasilag. It is to be noted that in this document are phrases indicative of the real contract between the parties. For instance: in clause IV the word paid and not loaned is used in referring to the loan of one thousand pesos; and clause IX of the document states "the foregoing contract of sale".

Under all these circumstances, the irresistible conclusion is that the real contract between the parties is an absolute sale, and that the contract of mortgage was made to appear in the document Exhibit 1 for the sole purpose of defeating the legal prohibition. Nevertheless, the majority of this Court, brushing aside the findings of fact made by the Court of Appeals without stating its reasons therefor, holds as to the document Exhibit 1, that "as the terms thereof are clear and leave no room for doubt, it should be interpreted according to the literal meaning of its clauses." I have already shown in speaking of the second circumstance, that the context itself of the document Exhibit 1 discloses strong tokens that the contract between the parties was one of sale and not of mortgage. Moreover, the rule relied upon by the majority is only applicable in the absence of any allegation that the document does not express the real contract between the parties. Under section 285, No. 1, of Act No. 190, a document, however clear its conditions may be, may and should be rejected when it is alleged and shown by evidence aliunde that it does not express the true intent of the parties. We have often considered a document, by its terms a contract of absolute sale, as one of mortgage because it has been so alleged and established by convincing oral evidence. (Cuyugan vs. Santos, 34 Phil., 100; Villa vs. Santiago, 38 Phil., 167; Laureano vs. Kilayco, 34 Phil., 148; Cuyugan vs. Santos, 39 Phil., 970; Rodriguez vs. Pamintuan, 37 Phil., 876; see also Manalo vs. Gueco, 42 Phil., 925; Gatmaitan vs. Nepomuceno, 42 Phil., 295.) The majority decision does not only pass over the findings of fact made by the Court of Appeals, but, further, gives weight to certain facts which said court finds not to have been established. For instance, we have the following passages from the majority decision: "One year after the execution of the aforequoted deed, that is, in 1933, it came to pass that Emiliana Ambrosio was unable to pay the stipulated interest as well as the tax on the land and its improvements. For this reason, she and the petitioner entered into another verbal contract whereby she conveyed to the latter the possession of the land on condition that the latter would not collect the interest on the loan, would attend to the payment of the land tax, would benefit by the fruits of the land, and would introduce improvements thereon. . . . . . This stipulation was verbally modified by the same parties after the expiration of one year, in the sense that the petitioner would take possession of the land and would benefit by the fruits thereof on condition that he would condone the payment of interest upon the loan and he would attend to the payment of the land tax. . . " These two paragraphs state as an established fact the supposed verbal contract between the parties which Kasilag tried to prove by his testimony. However, the Court of Appeals expressly held: "We believe, however, that the trial court erred in giving probative value to the testimony of the appellee (Marcial Kasilag) with reference to the alleged verbal agreement with the deceased, Emiliana Ambrosio, and based thereon the conclusion that the appellee acted in good faith." (Words in parenthesis are mine.) Rule 47, paragraph (b), of our Rules, provides expressly that in appeals to this court on certiorari, "only questions of law may be raised and must be distinctly set forth." And we have held in various decisions that in passing upon the legal conclusions of the Court of Appeals, we shall abide by the findings of fact of said court. I, moreover, find certain ambiguities in the majority decision, for while it states on the one hand that the verbal contract had for its purpose the "alteration of the mortgage contract clearly entered into, converting the latter into a contract of antichresis," (underscoring mine)

thereby implying that the mortgage contract was abandoned by the parties and ceased to exist, in the dispositive part of its decision, the majority holds that the mortgage of the improvements is valid and binding, and gives to the respondents the right to "redeem the mortgage of the improvements by paying to the petitioner within three months the amount of P1,000 . . ." It, therefore, requires compliance with a contract that has ceased to exist. While on the one hand the majority states that the aforesaid verbal contract is one of antichresis and that it is void, on the other hand, it gives force thereto by holding that the interest on the loan of one thousand pesos is sufficiently "set off by the value of the fruits of the mortgaged improvements which the petitioner received." And, furthermore, why should the interest be set off against the fruits of the improvements only and not against those of the entire land? And if the verbal contract of antichresis is void, why is Kasilag not required to render an accounting of the fruits of the land received by him which may exceed the total amount of interest, taxes and even the principal itself ? The majority states that Kasilag, in taking possession of the homestead, receiving its fruits and introducing improvements thereon did so under the void contract of antichresis, and did so in good faith as he was excusably unaware of the legal provision which prohibits the incumbrance of the homestead within the period of five years. Whether Kasilag was aware or unaware of the legal prohibition is again a factual question resolved by the Court of Appeals as follows: "the appellee (Marcial Kasilag) was also aware of these provisions which were incorporated in the homestead patent shown to him at the beginning of the transaction" (Words in parenthesis are mine). I do not understand how we can disturb this factual finding. I found, moreover, that in the majority decision it is ordered that, if the heirs of Emiliana Ambrosio cannot pay the value of the permanent improvements introduced by Marcial Kasilag, the latter may have the homestead by paying to them its price in the market. The improvements were appraised by the trial court at three thousand pesos, and as the heirs of Emiliana Ambrosio probably inherited nothing from the latter but poverty, they will eventually be unable to pay the said amount and, in the last analysis, will lose the homestead of their mother. The practical effect, therefore, of the majority decision is that the heirs of Emiliana Ambrosio will be deprived of the homestead by virtue of a void antichretic obligation contracted by her within the period of five years from the granting of the homestead. And this, at least, is in violation of the spirit of section 116 of the Homestead Act. I have other reasons which I need not set out to bring this dissent to a close. But before I conclude, I should like to state that the Homestead Act has been enacted for the welfare and protection of the poor. The law gives a needy citizen a piece of land where he may build a modest house for himself and family and plant what is necessary for subsistence and for the satisfaction of life's other needs. The right of the citizens to their homes and to the things necessary for their subsistence is as vital as the right to life itself. They have a right to live with a certain degree of comfort as become human beings, and the State which looks after the welfare of the people's happiness is under a duty to safeguard the satisfaction of this vital right. Moreover, a man with a home and a means of subsistence is a lover of peace and order and will profess affection for his country, whereas one without a home and in penury is not only a social parasite but also a dangerous element in the social order. The Homestead Act at once aims at the promotion of wholesome and happy citizenship and the wiping out of the germs of social discontent found everywhere.

Considering the social and economic ends of the Homestead Act, the courts should exercise supreme care and strict vigilance towards faithful compliance with all its benign provisions and against the defeat, directly or indirectly, of its highly commendable purposes. And it is my firm conviction that where, as in the present case, a rich and clever man attempts to wrest a homestead granted to a poor and ignorant woman, the slightest tokens of illegality should be enough to move the courts to apply the strong arm of the law. I dissent from the majority decision and vote for the affirmance of the decision of the Court of Appeals. Avancea, C.J., concurs.

[G.R. No. 136921. April 17, 2001.] LORNA GUILLEN PESCA, petitioner, vs. ZOSIMO A. PESCA, respondent. Vigilia and Vigilia Law Offices for petitioner. Ernesto M. Tomameng for respondent. SYNOPSIS Petitioner sued respondent before the Regional Trial Court for the declaration of nullity of their marriage invoking psychological incapacity. The trial court rendered its decision declaring the marriage between petitioner and respondent to be null and void ab initio on the basis of psychological incapacity on the part of respondent and ordered the liquidation of the conjugal partnership. Respondent appealed the above decision to the Court of Appeals, contending that the trial court erred, particularly, in holding that there was legal basis to declare the marriage null and void and in denying his motion to reopen the case. The Court of Appeals reversed the

decision of the trial court and declared the marriage between petitioner and respondent valid and subsisting. Petitioner, in her plea to the Court, would have the decision of the Court of Appeals reversed on the thesis that the doctrine enunciated in Santos vs. Court of Appeals, promulgated on 14 January 1995, as well as the guidelines set out in Republic vs. Court of Appeals and Molina, promulgated on 13 February 1997, should have no retroactive application and, on the assumption that the Molina ruling could be applied retroactively, the guidelines therein outlined should be taken to be merely advisory and not mandatory in nature. In any case, petitioner argued, the application of the Santos and Molina dicta should warrant only a remand of the case to the trial court for further proceedings and not its dismissal. The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. In resolving petitioner's contention, the Court applied the "doctrine of stare decisis". The doctrine as ordained in Article 8 of the Civil Code declares that judicial decisions applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim "legis interpretado legis vim obtinet" that the interpretation placed upon the written law by a competent court has the force of law. The interpretation or construction placed by the courts establishes the contemporaneous legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as of the date the statute is enacted. It is only when a prior ruling of the Court finds itself later overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith in accordance therewith under the familiar rule of "lex prospicit, non respicit". In the case at bar, the phrase "psychological incapacity", borrowed from Canon Law, is an entirely novel provision in our statute books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential attention. It is in Santos vs. Court of Appeals when, for the first time, the Court has given life to the term. Republic vs. Court of Appeals and Molina, that followed, has additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of marriages grounded on psychological incapacity. The Court, therefore, concluded that the Molina doctrine has strengthened, not overturned, the Santos doctrine. The Court also opined that petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out a case of psychological incapacity on the part of respondent so as to warrant a declaration of nullity of the marriage. The Court stressed that the alleged emotional immaturity and irresponsibility of respondent, invoked by petitioner, is not synonymous with psychological incapacity. SYLLABUS 1. CIVIL LAW; DOCTRINE OF "STARE DECISIS"; EXPLAINED. The "doctrine of stare decisis", ordained in Article 8 of the Civil Code, expresses that judicial decisions applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim "legis interpretado legis vim obtinet" that the interpretation placed upon the written law by a competent court has the force of law. The interpretation or construction placed by the courts establishes the contemporaneous legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as of the date the statute is enacted. It is only when a prior ruling of this Court finds itself later overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith in accordance therewith under the familiar rule of "lex prospicit, non respicit".

2. ID.; FAMILY CODE; DECLARATION OF NULLITY OF MARRIAGE BY REASON OF PSYCHOLOGICAL INCAPACITY; EMOTIONAL IMMATURITY AND IRRESPONSIBILITY CANNOT BE EQUATED WITH PSYCHOLOGICAL INCAPACITY. The phrase "psychological incapacity", borrowed from Canon Law, is an entirely novel provision in our statute books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential attention. It is in Santos when, for the first time, the Court has given life to the term. Molina, that followed, has additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of marriages grounded on psychological incapacity. Molina has strengthened, not overturned, Santos. At all events, petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out a case of psychological incapacity on the part of respondent, let alone at the time of solemnization of the contract, so as to warrant a declaration of nullity of the marriage. Emotional immaturity and irresponsibility, invoked by her, cannot be equated with psychological incapacity. The Court reiterates its reminder that marriage is an inviolable social institution and the foundation of the family that the State cherishes and protects. While the Court commiserates with petitioner in her unhappy marital relationship with respondent, totally terminating that relationship, however, may not necessarily be the fitting denouement to it. In these cases, the law has not quite given up, neither should we. DECISION VITUG, J p: Submitted for review is the decision of the Court of Appeals, promulgated on 27 May 1998, in C.A. G.R. CV No 52374, reversing the decision of the Regional Trial Court ("RTC") of Caloocan City, Branch 130, which has declared the marriage between petitioner and respondent to be null and void ab initio on the ground of psychological incapacity on the part of respondent. Petitioner Lorna G. Pesca and respondent Zosimo A. Pesca first met sometime in 1975 while on board an inter-island vessel bound for Bacolod City. After a whirlwind courtship, they got married on 03 March 1975. Initially, the young couple did not live together as petitioner was still a student in college and respondent, a seaman, had to leave the country on board an ocean-going vessel barely a month after the marriage. Six months later, the young couple established their residence in Quezon City until they were able to build their own house in Caloocan City where they finally resided. It was blissful marriage for the couple during the two months of the year that they could stay together when respondent was on vacation. The union begot four children, 19-year old Ruhem, 17-year old Rez, 11-year old Ryan, and 9-yearold Richie. It started in 1988, petitioner said, when she noticed that respondent surprisingly showed signs of "psychological incapacity" to perform his marital covenant. His "true color" of being an emotionally immature and irresponsible husband became apparent. He was cruel and violent. He was a habitual drinker, staying with friends daily from 4:00 o'clock in the afternoon until 1:00 o'clock in the morning. When cautioned to stop or, to at least, minimize his drinking, respondent would beat, slap and kick her. At one time, he chased petitioner with a loaded shotgun and threatened to kill her in the presence of the children. The children themselves were not spared from physical violence. Finally, on 19 November 1992, petitioner and her children left the conjugal abode to live in the house of her sister in Quezon City as they could no longer bear his violent ways. Two months

later, petitioner decided to forgive respondent, and she returned home to give him a chance to change. But, to her dismay, things did not so turn out as expected. Indeed, matters became worse. On the morning of 22 March 1994, about eight o'clock, respondent assaulted petitioner for about half an hour in the presence of the children. She was battered black and blue. She submitted herself to medical examination at the Quezon City General Hospital, which diagnosed her injuries as contusions and abrasions. Petitioner filed a complaint with the barangay authorities, and a case was filed against respondent for slight physical injuries. He was convicted by the Metropolitan Trial Court of Caloocan City and sentenced to eleven days of imprisonment. This time, petitioner and her children left the conjugal home for good and stayed with her sister. Eventually, they decided to rent an apartment. Petitioner sued respondent before the Regional Trial Court for the declaration of nullity of their marriage invoking psychological incapacity. Petitioner likewise sought the custody of her minor children and prayed for support pendente lite. Summons, together with a copy of the complaint, was served on respondent on 25 April 1994 by personal service by the sheriff. As respondent failed to file an answer or to enter his appearance within the reglementary period, the trial court ordered the city prosecutor to look into a possible collusion between the parties. Prosecutor Rosa C. Reyes, on 03 August 1994, submitted her report to the effect that she found no evidence to establish that there was collusion between the parties. On 11 January 1995, respondent belatedly filed, without leave of court, an answer, and the same, although filed late, was admitted by the court. In his answer, respondent admitted the fact of his marriage with petitioner and the birth of their children. He also confirmed the veracity of Annex "A" of the complaint which listed the conjugal property. Respondent vehemently denied, however, the allegation that he was psychologically incapacitated. On 15 November 1995, following hearings conducted by it, the trial court rendered its decision declaring the marriage between petitioner and respondent to be null and void ab initio on the basis of psychological incapacity on the part of respondent and ordered the liquidation of the conjugal partnership. Respondent appealed the above decision to the Court of Appeals, contending that the trial court erred, particularly, in holding that there was legal basis to declare the marriage null and void and in denying his motion to reopen the case. The Court of Appeals reversed the decision of the trial court and declared the marriage between petitioner and responder valid and subsisting. The appellate court said: "Definitely the appellee has not established the following: That the appellant showed signs of mental incapacity as would cause him to be truly incognizant of the basic marital covenant, as so provided for in Article 68 of the Family Code; that the incapacity is grave, has preceded the marriage and is incurable; that his incapacity to meet his marital responsibility is because of a psychological, not physical illness; that the root cause of the incapacity has been identified medically or clinically, and has been proven by an expert; and that the incapacity is permanent and incurable in nature.

"The burden of proof to show the nullity of marriage lies in the plaintiff and any doubt should be resolved in favor of the existence and continuation of the marriage and against its dissolution and nullity." 1 Petitioner, in her plea to this Court, would have the decision of the Court of Appeals reversed on the thesis that the doctrine enunciated in Santos vs. Court of Appeals, 2 promulgated on 14 January 1995, as well as the guidelines set out in Republic vs. Court of Appeals and Molina, 3 promulgated on 13 February 1997, should have no retroactive application and, on the assumption that the Molina ruling could be applied retroactively, the guidelines therein outlined should be taken to be merely advisory and not mandatory in nature. In any case, petitioner argues, the application of the Santos and Molina dicta should warrant only a remand of the case to the trial court for further proceedings and not its dismissal. Be that as it may, respondent submits, the appellate court did not err in its assailed decision for there is absolutely no evidence that has been shown to prove psychological incapacity on his part as the term has been so defined in Santos. Indeed, there is no merit in the petition. The term "psychological incapacity," as a ground for the declaration of nullity of a marriage under Article 36 of the Family Code, has been explained by the Court in Santos and reiterated in Molina. The Court, in Santos, concluded: "It should be obvious, looking at all the foregoing disquisitions, including, and most importantly, the deliberations of the Family Code Revision Committee itself, that the use of the phrase 'psychological incapacity' under Article 36 of the Code has not been meant to comprehend all such possible cases of psychoses as, likewise mentioned by some ecclesiastical authorities, extremely low intelligence, immaturity, and like circumstances (cited in Fr. Artemio Balumad's 'Void and Voidable Marriages in the Family Code and their Parallels in Canon Law,' quoting from the Diagnostic Statistical Manuel of Mental Disorder by the American Psychiatric Association; Edward Hudson's 'Handbook II for Marriage Nullity Cases'). Article 36 of the Family Code cannot be taken and construed independently of, but must stand in conjunction with, existing precepts in our law on marriage. Thus correlated, 'psychological incapacity' should refer to no less than a mental (not physical) incapacity that causes a party to be truly incognizant of the basic marital covenants that concomitantly must be assumed and discharged by the parties to the marriage which, as so expressed by Article 68 of the Family Code, include their mutual obligations to live together, observe love, respect and fidelity and render help and support. There is hardly any doubt that the intendment of the law has been to confine the meaning of 'psychological incapacity' to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage. This psychologic condition must exist at the time the marriage is celebrated." The "doctrine of stare decisis," ordained in Article 8 of the Civil Code, expresses that judicial decisions applying or interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim "legis interpretado legis vim obtinet" that the interpretation placed upon the written law by a competent court has the force of law. 4 The interpretation or construction placed by the courts establishes the contemporaneous legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as of the date the statute is enacted. It is only when a prior ruling of this Court

finds itself later overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith in accordance therewith 5 under the familiar rule of "lex prospicit, non respicit." The phrase "psychological incapacity," borrowed from Canon law, is an entirely novel provision in our statute books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential attention. It is in Santos when, for the first time, the Court has given life to the term. Molina, that followed, has additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of marriages grounded on psychological incapacity. Molina has strengthened, not overturned, Santos. At all events, petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out a case of psychological incapacity on the part of respondent, let alone at the time of solemnization of the contract, so as to warrant a declaration of nullity of the marriage. Emotional immaturity and irresponsibility, invoked by her, cannot be equated with psychological incapacity. The Court reiterates its reminder that marriage is an inviolable social institution and the foundation of the family 6 that the State cherishes and protects. While the Court commiserates with petitioner in her unhappy marital relationship with respondent, totally terminating that relationship, however, may not necessarily be the fitting denouement to it. In these cases, the law has not quite given up, neither should we. WHEREFORE, the herein petition is DENIED. No Costs. SO ORDERED.

[G.R. No. 124841. July 31, 1998.] PEFTOK INTEGRATED SERVICES, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and EDUARDO ABUGHO, ET AL., respondents. Marcelino A. Bueno for petitioner. The Solicitor General for respondents. SYNOPSIS Petitioner filed this petition for certiorari under Rule 65 seeking to set aside the decision of the National Labor Relations Commission dismissing its appeal. Private respondents asserted that the waivers and quitclaims signed by them renouncing whatever claims which they may have against petitioner were contrary to public policy, the same being written in the English language which they do not understand and the contents thereof were not explained to them. Moreover, the aforementioned quitclaims were prepared and readied for their signature by

petitioner and they were forced to sign the same for fear that they would not be given their salary on pay day and their services would be terminated if they did not sign them. The petitioner, on the other hand, claimed that the quitclaims executed by private respondents suffered no legal infirmity. Like any other right, the claims can be waived and the waiver thereof was not prohibited by law. Petitioner likewise maintained that no surety bond is required to perfect an appeal, in the same manner that no bond is necessary for the issuance of an alias writ of execution. The Solicitor General prayed that the petition be dismissed outright for non-compliance with the requisite motion for reconsideration and that quitclaims by employees are basically against public policy. The Supreme Court held that the petition was dismissable on the ground of prematurity. In consonance with the principle of exhaustion of administrative remedies, it was necessary for a motion for reconsideration of the decision of the NLRC to be filed in order to give it a chance to correct its mistakes, if there be any. So also, under Rule 65 of the Revised Rules of Court, petitioner must establish that it has no plain, speedy and adequate remedy in the ordinary course of law for its perceived grievance. The Court also found there was no voluntariness in the execution of the quitclaims and waivers in question. Moreover, quitclaims, waivers or releases are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers' legal rights. With respect to the posting of cash or surety bond, the Court held that the requirement therefor is mandatory. The bond is sine qua non to the perfection of appeal from the Labor Arbiter's monetary award. The posting of cash or surety bond is unconditional and cannot therefore be trifled with. Hence, the Court dismissed the petition. SYLLABUS 1. LABOR AND SOCIAL LEGISLATION; LABOR RELATIONS; APPEAL FROM LABOR ARBITER TO THE NLRC; 10-DAY FILING PERIOD, BOTH MANDATORY AND JURISDICTIONAL. There is no quibble over the fact that subject decision of the labor arbiter appealed from was received by petitioner on June 30, 1995. The appeal therefrom should have been interposed within 10 days or not later than July 10, 1995. But unfortunately for petitioner, its appeal was only filed on July 17. 1995. Indeed, it is decisively clear that petitioner's appeal is flawed by late filing. The prescribed period for appeal is both mandatory and jurisdictional. 2. ID.; ID.; APPEAL; CASH OR SURETY BOND, A SINE QUA NON TO THE PERFECTION THEREOF; RATIONALE. With respect to the posting of cash or surety bond, the requirement therefor is mandatory. The bond is sine qua non to the perfection of appeal from the labor arbiter's monetary award. The posting of cash or surety bond is unconditional and cannot therefore be trifled with. It is the intendment of the law that employees be assured that if they finally prevail in the case, they will receive the monetary award granted them. The bond also serves to discourage employers from using the appeal as a ploy to delay or evade payment of monetary obligations to their employees. 3. ID.; ID.; TERMINATION OF EMPLOYMENT; WAIVER OR QUITCLAIM; BASICALLY CONTRARY TO PUBLIC POLICY: LACK OF VOLUNTARINESS IN THE EXECUTION OF WAIVER OR QUITCLAIM IN CASE AT BAR. It is decisively clear that they (guards) affixed their signatures to subject waivers and/or quitclaims for fear that they will not be paid their salaries on pay day or worse, still, their services would be terminated if they did not sign those papers. In short, there was no voluntariness in the execution of the quitclaim or waivers in question. It should

be borne in mind that in this jurisdiction, quitclaims, waivers, or releases are looked upon with disfavor. "Necessitous men are not free men." (954 SCRA 457) "They are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers' legal rights." (259 SCRA 280) 4. REMEDIAL LAW; CIVIL PROCEDURE; PETITION FOR CERTIORARI UNDER RULE 65; DISMISSAL THEREOF, PROPER ON GROUND OF PREMATURITY; FILING OF MOTION FOR RECONSIDERATION OF NLRC DECISION IS A REQUIREMENT BEFORE AVAILING OF PETITION FOR CERTIORARI. Then, too, the petition under consideration is likewise dismissable on the ground of prematurity. In consonance with the principle of exhaustion of administrative remedies, it was necessary for a motion for reconsideration of the decision of the National Labor Relations Commission to be filed in order to give NLRC a chance to correct its mistakes, if there be any. So also, under Rule 65 of the Revised Rules of Court, petitioner must establish that it has no plain, speedy and adequate remedy in the ordinary course of law for its perceived grievance. DECISION PURISIMA, J p: Pacta privata juri publico derogare non possunt. Private agreements (between parties) cannot derogate from public right. Filed on May 22, 1996, this petition for certiorari under Rule 65 of the Revised Rules of Court seeks to set aside the decision of the National Labor Relations Commission (NLRC) dismissing the appeal of petitioner. The case stemmed from the decision handed down by Labor Arbiter Noel Augusto S. Magbanua, disposing, as follows: "WHEREFORE, in view of the foregoing premises, respondents-PEKTOK Security Agency and Timber Industries of the Philippines, Inc. (TIPI) and Union Plywood Corporation are hereby ordered to pay, jointly and solidarity the claims of complainants as previously computed, as follows: 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. Eduardo Abugho Clenio Macanoquit P49,397.83 31,596.12

Claro Mendez 49,308.83 Leovemin Lumban Crispin Balingkit 16,666.45 44,772.34

Ulysses Labis 43,812.64 Fidel Sabellina23,666.90 Leonardo Daluperi Valentine Adame Gonzalo Ernero Celso Niluag 27,026.59 17, 84.92 18, 18.56

18,670.00

12.

Reynaldo Maasin

19,499.28 1

GRAND TOTALP342,598.52 Other claims are hereby dismissed for failure to substantiate and for lack of merit. SO ORDERED." Pertinent sheriff's return shows that the aforesaid decision was partly executed up to fifty percent (50%), Timber Industries of the Philippines (TIPI) having paid half of their solidary obligation to the security guards-employees, who quitclaimed and waived fifty percent (50%) of the benefits adjudged in their favor. On October 13, 1989, 2 Eduardo Abugho, Claro Mendez and Leonardo Daluperi executed a waiver 3 of all their claims against Peftok Integrated Services, Inc. (PEFTOK, for brevity) for the period ending on June 30, 1989. Said waiver 4 appeared to bar all claims they may have had against PEFTOK before June 30, 1989. Urged by their entitlement to full benefits as provided in the labor arbiter's decision, the private respondents sought the issuance of an alias writ of execution. On May 29, 1992, Eduardo Abugho, Fidel Sabellina, Leonardo Daluperi, Claro Mendez and Reynaldo Maasin executed another waiver and quitclaim 5 purportedly renouncing whatever claims they may have against PEFTOK for the period ending March 15, 1998. Such waiver or quitclaim was worded to preclude whatever claim they may have against PEFTOK on or before March 16, 1998. However, Eduardo Abugho, Fidel Sabellina, Leonardo Daluperi, Reynaldo Maasin and Claro Mendez subsequently executed affidavits 6 stating that the aforementioned quitclaims were prepared and readied for their signature by PEFTOK and they were forced to sign the same for fear that they would not be given their salary on pay day, and worse, their services would be terminated if they did not sign the said quitclaims under controversy. Private respondents asserted that the waivers of claims signed by them are contrary to public policy; the same being written in the English language which they do not understand and the contents thereof were not explained to them. On June 19, 1995, the prayer for alias writ of execution was granted by Labor Arbiter Henry F. Te. In support of its prayer, petitioner PEFTOK theorizes that the quitclaims executed by the security guards suffer no legal infirmity. Like any other right, the claims in dispute can be waived and waiver thereof is not prohibited by law. No surety bond is required to perfect an appeal, in the same manner that no bond is necessary for the issuance of an alias writ of execution; petitioner maintains. The comment sent in by the Solicitor General prays that the petition be dismissed outright for being premature and for non-compliance with the requisite motion for reconsideration of the NLRC decision before elevating the same to this court. It stressed that quitclaims by employees are basically against public policy. There is no quibble over the fact that subject decision of the labor arbiter appealed from was received by petitioner on June 30, 1995. The appeal therefrom should have been interposed within 10 days or not later than July 10, 1995. But unfortunately for petitioner, its appeal was only filed on July 17, 1995. Indeed, it is decisively clear that petitioner's appeal is flawed by late filing. The prescribed period for appeal is both mandatory and jurisdictional.

Then, too, the petition under consideration is likewise dismissable on the ground of prematurity. In consonance with the principle of exhaustion of administrative remedies, it was necessary for a motion for reconsideration of the decision of the National Labor Relations Commission to be filed in order to give NLRC a chance to correct its mistakes, if there be any. So also, under Rule 65 of the Revised Rules of Court, petitioner must establish that it has no plain, speedy and adequate remedy in the ordinary course of law for its perceived grievance. 7 It is decisively clear that they (guards) affixed their signatures to subject waivers and/or quitclaims for fear that they would not be paid their salaries on pay day or worse, still, their services would be terminated if they did not sign those papers. In short, there was no voluntariness in the execution of the quitclaim or waivers in question. It should be borne in mind that in this jurisdiction, quitclaims, waivers or releases are looked upon with disfavor. 8 "Necessitous men are not free men." 9 "They are commonly frowned upon as contrary to public policy and ineffective to bar claims for the full measure of the workers' legal rights." 10 With respect to the posting of cash or surety bond, the requirement therefor is mandatory. The bond is sine qua non to the perfection of appeal from the labor arbiter's monetary award. 11 The posting of cash or surety bond is unconditional" 12 and cannot therefore be trifled with. It is the intendment of the law that employees be assured that if they finally prevail in the case, they will receive the monetary award granted them. The bond also serves to discourage employers from using the appeal as a ploy to delay or evade payment of monetary obligations to their employees. WHEREFORE, the petition is hereby DISMISSED for lack of merit; the decision of the NLRC dated February 26, 1995 is AFFIRMED and the questioned alias writ of execution UPHELD. SO ORDERED.

[G.R. No. 165300. April 23, 2010.] ATTY. PEDRO M. FERRER, petitioner, vs. SPOUSES ALFREDO DIAZ and IMELDA DIAZ, REINA COMANDANTE and SPOUSES BIENVENIDO PANGAN and ELIZABETH PANGAN, respondents. DECISION DEL CASTILLO, J p: The basic questions to be resolved in this case are: Is a waiver of hereditary rights in favor of another executed by a future heir while the parents are still living valid? Is an adverse claim annotated on the title of a property on the basis of such waiver likewise valid and effective as to bind the subsequent owners and hold them liable to the claimant? IADCES This Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court assails the December 12, 2003 Decision 2 of the Court of Appeals (CA) in CA-G.R. CV No. 70888. 3 Said Decision modified the June 14, 2001 Summary Judgment 4 of the Regional Trial Court (RTC) of Quezon City in Civil Case No. Q-99-38876 by holding respondents Spouses Bienvenido and Elizabeth Pangan (the Pangans) not solidarily liable with the other respondents, Spouses Alfredo and Imelda Diaz (the Diazes) and Reina Comandante (Comandante), to petitioner Atty. Pedro M. Ferrer (Atty. Ferrer). Likewise assailed is the CA Resolution 5 dated September 10, 2004 which denied petitioner's as well as respondents Spouses Diaz and Comandante's respective motions for reconsideration. The parties' respective versions of the factual antecedents are as follows: Version of the Petitioner Petitioner Atty. Ferrer claimed in his original Complaint 6 that on May 7, 1999, the Diazes, as represented by their daughter Comandante, through a Special Power of Attorney (SPA), 7 obtained from him a loan of P1,118,228.00. The loan was secured by a Real Estate Mortgage Contract 8 by way of second mortgage over Transfer Certificate of Title (TCT) No. RT-6604 9 and a Promissory Note 10 payable within six months or up to November 7, 1999. Comandante also issued to petitioner postdated checks to secure payment of said loan. Petitioner further claimed that prior to this or on May 29, 1998, Comandante, for a valuable consideration of P600,000.00, which amount formed part of the abovementioned secured loan, executed in his favor an instrument entitled Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided), 11 the pertinent portions of which read: I, REINA D. COMANDANTE, of legal age, Filipino, married, with residence and postal address at No. 6, Road 20, Project 8, Quezon City, Metro Manila, Philippines, for a valuable consideration of SIX HUNDRED THOUSAND PESOS (P600,000.00) which constitutes my legal obligation/loan to Pedro M. Ferrer, likewise of legal age, Filipino, married to Erlinda B. Ferrer, with residence and postal address at No. 9, Lot 4, Puerto Rico Street, Loyola Grand Villas, Quezon City, Metro Manila, Philippines, by virtue of these presents, do hereby WAIVE, and/or REPUDIATE all my hereditary rights and interests as a legitimate heir/daughter of Sps. Alfredo T. Diaz and Imelda G. Diaz in favor of said Pedro M. Ferrer, his heirs and assigns over a certain parcel of land

together with all the improvements found thereon and which property is more particularly described as follows: TRANSFER CERTIFICATE OF TITLE NO. RT-6604 (82020) PR-18887 and which property is titled and registered in the name of my parents Alfredo T. Diaz and Imelda G. Diaz, as evidenced by Transfer Certificate of Title No. RT 6604 (82020) PR-18887. (sgd.) REINA D. COMANDANTE Affiant On the basis of said waiver, petitioner executed an Affidavit of Adverse Claim 12 which he caused to be annotated at the back of TCT No. RT-6604 on May 26, 1999. The Diazes, however, reneged on their obligation as the checks issued by Comandante were dishonored upon presentment. Despite repeated demands, said respondents still failed and refused to settle the loan. Thus, petitioner filed on September 29, 1999 a Complaint 13 for Collection of Sum of Money Secured by Real Estate Mortgage Contract against the Diazes and Comandante docketed as Civil Case No. Q-99-38876 and raffled to Branch 224 of RTC, Quezon City. Petitioner twice amended his complaint. First, by including as an alternative relief the Judicial Foreclosure of Mortgage 14 and, second, by impleading as additional defendants the Pangans as the mortgaged property covered by TCT No. RT-6604 was already transferred under their names in TCT No. N-209049. Petitioner prayed in his second amended complaint that all the respondents be ordered to jointly and solidarity pay him the sum of P1,118,228.00, exclusive of interests, and/or for the judicial foreclosure of the property pursuant to the Real Estate Mortgage Contract. Version of the Respondents In her Answer 15 to petitioner's original complaint, Comandante alleged that petitioner and his wife were her fellow members in the Couples for Christ Movement. Sometime in 1998, she sought the help of petitioner with regard to the mortgage with a bank of her parents' lot located at No. 6, Rd. 20, Project 8, Quezon City and covered by TCT No. RT-6604. She also sought financial accommodations from the couple on several occasions which totaled P500,000.00. Comandante, however, claimed that these loans were secured by chattel mortgages over her taxi units in addition to several postdated checks she issued in favor of petitioner. As she could not practically comply with her obligation, petitioner and his wife, presented to Comandante sometime in May 1998 a document denominated as Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) pertaining to a waiver of her hereditary share over her parents' abovementioned property. Purportedly, the execution of said waiver was to secure Comandante's loan with the couple which at that time had already ballooned to P600,000.00 due to interests.

A year later, the couple again required Comandante to sign the following documents: (1) a Real Estate Mortgage Contract over her parents' property; and, (2) an undated Promissory Note, both corresponding to the amount of P1,118,228.00, which petitioner claimed to be the total amount of Comandante's monetary obligation to him exclusive of charges and interests. Comandante alleged that she reminded petitioner that she was not the registered owner of the subject property and that although her parents granted her SPA, same only pertains to her authority to mortgage the property to banks and other financial institutions and not to individuals. Petitioner nonetheless assured Comandante that the SPA was also applicable to their transaction. As Comandante was still hesitant, petitioner and his wife threatened to foreclose the former's taxi units and present the postdated checks she issued to the bank for payment. For fear of losing her taxi units which were the only source of her livelihood, Comandante was thus constrained to sign the mortgage agreement as well as the promissory note. Petitioner, however, did not furnish her with copies of said documents on the pretext that they still have to be notarized, but, as can be gleaned from the records, the documents were never notarized. Moreover, Comandante claimed that the SPA alluded to by petitioner in his complaint was not the same SPA under which she thought she derived the authority to execute the mortgage contract. Comandante likewise alleged that on September 29, 1999 at 10:00 o'clock in the morning, she executed an Affidavit of Repudiation/Revocation of Waiver of Hereditary Rights and Interests Over A (Still Undivided) Real Property, 16 which she caused to be annotated on the title of the subject property with the Registry of Deeds of Quezon City on the same day. Interestingly, petitioner filed his complaint later that day too. By way of special and affirmative defenses, Comandante asserted in her Answer to the amended complaint 17 that said complaint states no cause of action against her because the Real Estate Mortgage Contract and the waiver referred to by petitioner in his complaint were not duly, knowingly and validly executed by her; that the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) is a useless document as its execution is prohibited by Article 1347 of the Civil Code, 18 hence, it cannot be the source of any right or obligation in petitioner's favor; that the Real Estate Mortgage was of doubtful validity as she executed the same without valid authority from her parents; and, that the prayer for collection and/or judicial foreclosure was irregular as petitioner cannot seek said remedies at the same time. Apart from executing the affidavit of repudiation, Comandante also filed on October 4, 1999 a Petition for Cancellation of Adverse Claim (P.E. 2468) Under the Memorandum of Encumbrances of TCT No. RT-6604 (82020) PR-18887 19 docketed as LRC Case No. Q-12009 (99) and raffled to Branch 220 of RTC, Quezon City. Petitioner who was impleaded as respondent therein moved for the consolidation of said case 20 with Civil Case No. Q-9938876. On June 24, 2000, Branch 220 of RTC, Quezon City ordered the consolidation of LRC Case No. Q-12009 (99) with Civil Case No. Q-99-38876. Accordingly, the records of the former case was forwarded to Branch 224. For their part, the Diazes asserted that petitioner has no cause of action against them. They claimed that they do not even know petitioner and that they did not execute any SPA in favor of Comandante authorizing her to mortgage for the second time the subject property. They also contested the due execution of the SPA as it was neither authenticated before the Philippine Consulate in the United States nor notarized before a notary public in the State of New York where the Diazes have been residing for 16 years. They claimed that they do not owe petitioner anything. The Diazes also pointed out that the complaint merely refers to

Comandante's personal obligation to petitioner with which they had nothing to do. They thus prayed that the complaint against them be dismissed. 21 At the Pangans' end, they alleged that they acquired the subject property by purchase in good faith and for a consideration of P3,000,000.00 on November 11, 1999 from the Diazes through the latter's daughter Comandante who was clothed with SPA acknowledged before the Consul of New York. The Pangans immediately took actual possession of the property without anyone complaining or protesting. Soon thereafter, they were issued TCT No. N-209049 in lieu of TCT No. RT-6604 which was cancelled. 22 However, on December 21, 1999, they were surprised upon being informed by petitioner that the subject land had been mortgaged to him by the Diazes. Upon inquiry from Comandante, the latter readily admitted that she has a personal loan with petitioner for which the mortgage of the property in petitioner's favor was executed. She admitted, though, that her parents were not aware of such mortgage and that they did not authorize her to enter into such contract. Comandante also informed the Pangans that the signatures of her parents appearing on the SPA are fictitious and that it was petitioner who prepared such document. As affirmative defense, the Pangans asserted that the annotation of petitioner's adverse claim on TCT No. RT-6604 cannot impair their rights as new owners of the subject property. They claimed that the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) upon which petitioner's adverse claim is anchored cannot be the source of any right or interest over the property considering that it is null and void under paragraph 2 of Article 1347 of the Civil Code. Moreover, the Pangans asserted that the Real Estate Mortgage Contract cannot bind them nor in any way impair their ownership of subject property because it was not registered before the Register of Deeds. 23 All the respondents interposed their respective counterclaims and prayed for moral and exemplary damages and attorney's fees in varying amounts. After the parties have submitted their respective pre-trial briefs, the Diazes filed on March 29, 2001 a Motion for Summary Judgment 24 alleging that: first, since the documents alluded to by petitioner in his complaint were defective, he was not entitled to any legal right or relief; and, second, it was clear from the pleadings that it is Comandante who has an outstanding obligation with petitioner which the latter never denied. With these, the Diazes believed that there is no genuine issue as to any material fact against them and, hence, they were entitled to summary judgment. On May 7, 2001, petitioner also filed a Motion for Summary Judgment, 25 claiming that his suit against the respondents is meritorious and well-founded and that same is documented and supported by law and jurisprudence. He averred that his adverse claim annotated at the back of TCT No. RT-6604, which was carried over in TCT No. 209049 under the names of the Pangans, is not merely anchored on the Waiver of Hereditary Rights and Interests Over a Real Property (Still Undivided) executed by Comandante, but also on the Real Estate Mortgage likewise executed by her in representation of her parents and in favor of petitioner. Petitioner insisted that said adverse claim is not frivolous and invalid and is registrable under Section 70 of Presidential Decree (PD) No. 1529. In fact, the Registrar of Deeds of Quezon City had already determined the sufficiency and/or validity of such registration by annotating said claim, and this, respondents failed to question. Petitioner further averred that even before the sale and transfer to the Pangans of the subject property,

the latter were already aware of the existence of his adverse claim. In view of these, petitioner prayed that his Motion for Summary Judgment be granted. Ruling of the Regional Trial Court After the filing of the parties' respective Oppositions to the said motions for summary judgment, the trial court, in an Order dated May 31, 2001, 26 deemed both motions for summary judgment submitted for resolution. Quoting substantially petitioner's allegations in his Motion for Summary Judgment, it thereafter rendered on June 14, 2001 a Summary Judgment 27 in favor of petitioner, the dispositive portion of which reads: WHEREFORE, premises considered, summary judgment is hereby rendered in favor of plaintiff and against defendants by: a) ORDERING all defendants jointly and solidarily to pay plaintiff the sum of ONE MILLION ONE HUNDRED EIGHTEEN THOUSAND TWO HUNDRED TWENTY EIGHT PESOS (P1,118,228.00) which is blood money of plaintiff; b) ORDERING the Honorable Registrar of Deeds of Quezon City that the rights and interest of the plaintiff over subject property be annotated at the back of T.C.T. No. N-209049; c) SENTENCING all defendants to pay plaintiff's expenses of TEN THOUSAND PESOS (P10,000.00) and to pay the costs of suit. IT IS SO ORDERED. 28 The Pangans, the Diazes, and Comandante appealed to the CA. 29 The Pangans faulted the trial court in holding their jointly and severally liable with the Diazes and Comandante for the satisfaction of the latter's personal obligation to petitioner in the total amount of P1,118,228.00. The Diazes and Comandante, on the other hand, imputed error upon the trial court in rendering summary judgment in favor of petitioner. They averred that assuming the summary judgment was proper, the trial court should not have considered the Real Estate Mortgage Contract and the Promissory Note as they were defective, as well as petitioner's frivolous and non-registrable adverse claim. In its Decision 30 dated December 12, 2003, the CA declared Comandante's waiver of hereditary rights null and void. However, it found the Real Estate Mortgage executed by Comandante on behalf of her parents as binding between the parties thereto. As regards the Pangans, the CA ruled that the mortgage contract was not binding upon them as they were purchasers in good faith and for value. The property was free from the mortgage encumbrance of petitioner when they acquired it as they only came to know of the adverse claim through petitioner's phone call which came right after the former's acquisition of the property. The CA further ruled that as Comandante's waiver of hereditary rights and interests upon which petitioner's adverse claim was based is a nullity, it could not be a source of any right in his favor. Hence, the Pangans were not bound to take notice of such claim and are thus not liable to petitioner. Noticeably, the appellate court did not rule on the propriety of the issuance of the Summary Judgment as raised by the Diazes and Comandante. In the ultimate, the CA merely modified the assailed Summary Judgment of the trial court by excluding the Pangans among those

solidarily liable to petitioner, in effect affirming in all other respects the assailed summary judgment, viz.: TAIcaD WHEREFORE, foregoing premises considered, the Decision of the Regional Trial Court of Quezon City, Branch 224 in Civil Case No. Q-99-38876 is hereby MODIFIED, as follows: 1. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and severally pay plaintiff the sum of Php1,118,228.00; and 2. Ordering defendants-appellants Comandante and Spouses Diaz to jointly and severally pay plaintiff the amount of Php10,000.00 plus cost of suit. SO ORDERED. 31 Petitioner's Motion for Reconsideration 32 having been denied by the CA in its Resolution 33 dated September 10, 2004, he now comes to us through this petition for review on certiorari insisting that the Pangans should, together with the other respondents, be held solidarily liable to him for the amount of P1,118,228.00. Our Ruling The petition lacks merit. Petitioner merely reiterates his contentions in the Motion for Summary Judgment he filed before the trial court. He insists that his Adverse Claim annotated at the back of TCT No. RT6604 is not merely anchored on Comandante's Waiver of Hereditary Rights and Interests Over A Real Property (Still Undivided) but also on her being the attorney-in-fact of the Diazes when she executed the mortgage contract in favor of petitioner. He avers that his adverse claim is not frivolous or invalid and is registrable as the Registrar of Deeds of Quezon City even allowed its annotation. He also claims that even prior to the sale of subject property to the Pangans, the latter already knew of his valid and existing adverse claim thereon and are, therefore, not purchasers in good faith. Thus, petitioner maintains that the Pangans should be held, together with the Diazes and Comandante, jointly and severally liable to him in the total amount of P1,118,228.00. Petitioner's contentions are untenable. The Affidavit of Adverse Claim executed by petitioner reads in part: 1. That I am the Recipient/Benefactor of compulsory heir's share over an undivided certain parcel of land together with all the improvements found therein . . . as evidenced by Waiver of Hereditary Rights and Interests Over A Real Property, executed by REINA D. COMANDANTE (a compulsory/legitimate heir of Sps. Alfredo T. Diaz and Imelda G. Diaz), . . . . 2. That in order to protect my interest over said property as a Recipient/Benefactor, for the registered owners/parents might dispose (of) and/or encumber the same in a fraudulent manner without my knowledge and consent, for the owner's duplicate title was not surrendered to me, it is petitioned that this Affidavit of Adverse Claim be ANNOTATED at the back of the said title particularly on the original copy of Transfer Certificate of Title No. RT6604 (82020) PR-18887 which is on file with the Register of Deeds of Quezon City.

3. That I am executing this Affidavit in order to attest (to) the truth of the foregoing facts and to petition the Honorable Registrar of Deeds, Quezon City, to annotate this Affidavit of Adverse Claim at the back of the said title particularly the original copy of Transfer Certificate of Title No. RT-6604 (82020) PR-18887 which is on file with the said office, so that my interest as Recipient/Benefactor of the said property will be protected especially the registered owner/parents, in a fraudulent manner might dispose (of) and/or encumber the same without my knowledge and consent. (Emphasis ours) HScCEa Clearly, petitioner's Affidavit of Adverse Claim was based solely on the waiver of hereditary interest executed by Comandante. This fact cannot be any clearer especially so when the inscription of his adverse claim at the back of TCT No. RT-6604 reads as follows: P.E. 2468/T-(82020)RT-6604 AFFIDAVIT OF ADVERSE CLAIM Executed under oath by PEDRO M. FERRER, married to Erlinda B. Ferrer, claiming among others that they have a claim, the interest over said property as Recipient/Benefactor, by virtue of a waiver of Hereditary Rights and Interest over a real property . . . 34 (Emphasis ours) Therefore, there is no basis for petitioner's assertion that the adverse claim was also anchored on the mortgage contract allegedly executed by Comandante on behalf of her parents. The questions next to be resolved are: Is Comandante's waiver of hereditary rights valid? Is petitioner's adverse claim based on such waiver likewise valid and effective? We note at the outset that the validity of petitioner's adverse claim should have been determined by the trial court after the petition for cancellation of petitioner's adverse claim filed by Comandante was consolidated with Civil Case No. Q-99-38876. 35 This is in consonance with Section 70 of PD 1529 which provides: Section 70. Adverse Claim. Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Decree for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, a reference to the number of the certificate of title of the registered owner, the name of the registered owner, and a description of the land in which the right or interest is claimed. The statement shall be signed and sworn to, and shall state the adverse claimant's residence, and a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim on the certificate of title. The adverse claim shall be effective for a period of thirty days from the date of registration. After the lapse of said period, the annotation of adverse claim may be cancelled upon filing of a verified petition therefor by the party in interest: Provided, however, That after cancellation, no second adverse claim based on the same ground shall be registered by the same claimant. Before the lapse of thirty days aforesaid, any party in interest may file a petition in the Court of First Instance where the land is situated for the cancellation of the adverse claim, and the court shall grant a speedy hearing upon the question of validity of such adverse claim, and shall render judgment as may be just and equitable. If the adverse claim is adjudged to be invalid, the registration thereof shall be ordered cancelled. If, in any case, the court, after notice and hearing, shall find that the adverse claim thus registered was frivolous, it may fine the claimant in an amount not less than one thousand pesos nor more than five thousand pesos, in its discretion. Before the lapse of thirty days, the claimant may withdraw his adverse

claim by filing with the Register of Deeds a sworn petition to that effect. (Emphasis ours) Pursuant to the third paragraph of the afore-quoted provision, it has been held that the validity or efficaciousness of an adverse claim may only be determined by the Court upon petition by an interested party, in which event, the Court shall order the immediate hearing thereof and make the proper adjudication as justice and equity may warrant. And, it is only when such claim is found unmeritorious that the registration of the adverse claim may be cancelled. 36 As correctly pointed out by respondents, the records is bereft of any showing that the trial court conducted any hearing on the matter. Instead, what the trial court did was to include this material issue among those for which it has rendered its summary judgment as shown by the following portion of the judgment: . . . it will be NOTED that subject Adverse Claim annotated at the back of Transfer Certificate of Title No. RT-6604 (82020) PR-18887, and carried over to defendants-Sps. Pangan's Title No. N-20909, is not merely anchored on defendant Reina Comandante's "Waiver of Hereditary Rights and Interest Over a Real Property" but also on her being the Attorney-In-Fact of the previous registered owners/parents/defendants Sps. Alfredo and Imelda Diaz about the Real Estate Mortgage Contract for a loan of P1,118,228.00 which is a blood money of the plaintiff. Moreover, subject Adverse Claim in LRC Case No. Q-12009 (99) is NOT frivolous and invalid and consequently, REGISTRABLE by virtue of Section 110 of the Land Registration Act (now Section 70 of Presidential Decree No. 1529). 37 (Emphasis ours) It does not escape out attention that the trial court merely echoed the claim of petitioner that his adverse claim subject of LRC Case No. Q-12009 (99) is not frivolous, invalid and is consequently registrable. We likewise lament the apparent lack of effort on the part of said court to make even a short ratiocination as to how it came up with said conclusion. In fact, what followed the abovequoted portion of the summary judgment are mere recitals of the arguments raised by petitioner in his motion for summary judgment. And in the dispositive portion, the trial court merely casually ordered that petitioner's adverse claim be inscribed at the back of the title of the Pangans. What is worse is that despite this glaring defect, the CA manifestly overlooked the matter even if respondents vigorously raised the same before it. Be that as it may, respondents' efforts of pointing out this flaw, which we find significant, have not gone to naught as will be hereinafter discussed. All the respondents contend that the Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by Comandante is null and void for being violative of Article 1347 of the Civil Code, hence, petitioner's adverse claim which was based upon such waiver is likewise void and cannot confer upon the latter any right or interest over the property. We agree with the respondents. Pursuant to the second paragraph of Article 1347 of the Civil Code, no contract may be entered into upon a future inheritance except in cases expressly authorized by law. For the inheritance to be considered "future", the succession must not have been opened at the time of the contract. A contract may be classified as a contract upon future inheritance, prohibited under the second paragraph of Article 1347, where the following requisites concur: (1) That the succession has not yet been opened;

(2)

That the object of the contract forms part of the inheritance; and,

(3) That the promissor has, with respect to the object, an expectancy of a right which is purely hereditary in nature. 38 In this case, there is no question that at the time of execution of Comandante's Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided), succession to either of her parent's properties has not yet been opened since both of them are still living. With respect to the other two requisites, both are likewise present considering that the property subject matter of Comandante's waiver concededly forms part of the properties that she expect to inherit from her parents upon their death and, such expectancy of a right, as shown by the facts, is undoubtedly purely hereditary in nature. From the foregoing, it is clear that Comandante and petitioner entered into a contract involving the former's future inheritance as embodied in the Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by her in petitioner's favor. In Taedo v. Court of Appeals, 39 we invalidated the contract of sale between Lazaro Taedo and therein private respondents since the subject matter thereof was a "one hectare of whatever share the former shall have over Lot 191 of the cadastral survey of Gerona, Province of Tarlac and covered by Title T-13829 of the Register of Deeds of Tarlac." It constitutes a part of Taedo's future inheritance from his parents, which cannot be the source of any right nor the creator of any obligation between the parties. Guided by the above discussions, we similarly declare in this case that the Waiver of Hereditary Rights and Interest Over a Real Property (Still Undivided) executed by Comandante in favor of petitioner as not valid and that same cannot be the source of any right or create any obligation between them for being violative of the second paragraph of Article 1347 of the Civil Code. Anent the validity and effectivity of petitioner's adverse claim, it is provided in Section 70 of PD 1529, that it is necessary that the claimant has a right or interest in the registered land adverse to the registered owner and that it must arise subsequent to registration. Here, as no right or interest on the subject property flows from Comandante's invalid waiver of hereditary rights upon petitioner, the latter is thus not entitled to the registration of his adverse claim. Therefore, petitioner's adverse claim is without any basis and must consequently be adjudged invalid and ineffective and perforce be cancelled. Albeit we have already resolved the issues raised by petitioner, we shall not stop here as the Diazes and Comandante in their Comment 40 call our attention to the failure of the CA to pass upon the issue of the propriety of the issuance by the trial court of the Summary Judgment in favor of petitioner despite the fact that they have raised this issue before the appellate court. They argue that summary judgment is proper only when there is clearly no genuine issue as to any material fact in the action. Thus, where the defendant presented defenses tendering factual issue which call for presentation of evidence, as when he specifically denies the material allegations in the complaint, summary judgment cannot be rendered. The Diazes and Comandante then enumerate the genuine issues in the case which they claim should have precluded the trial court from issuing a summary judgment in petitioner's favor. First, the execution of the SPA in favor of Comandante referred to by petitioner in his complaint was never admitted by the Diazes. They assert that as such fact is disputed, trial should have been

conducted to determine the truth of the matter, same being a genuine issue. Despite this, the trial court merely took the word of the plaintiff and assumed that said document was indeed executed by them. Second, although Comandante acknowledges that she has a personal obligation with petitioner, she nevertheless, did not admit that it was in the amount of P1,118,228.00. Instead, she claims only the amount of P500,000.00 or P600,000.00 (if inclusive of interest) as her obligation. Moreover, the Diazes deny borrowing any money from petitioner and neither did the Pangans owe him a single centavo. Thus, the true amount of the obligation due the petitioner and how each of the respondents are responsible for such amount are genuine issues which need formal presentation of evidence. Lastly, they aver that the trial court ignored factual and material issues such as the lack of probative value of Comandante's waiver of hereditary rights as well as of the SPA; the fact that Comandante signed the mortgage contract and promissory note in her personal capacity; and, that all such documents were prepared by petitioner who acted as a lawyer and the creditor of Comandante at the same time. Rule 35 of the Rules of Court provides for summary judgment, the pertinent provisions of which are the following: Section 1. Summary Judgment for claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits, depositions or admissions for a summary judgment in his favor upon all or any part thereof. Section 2. Summary Judgment for the defending party. A party against whom a claim, counterclaim or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits, depositions or admissions for a summary judgment in his favor as to all or any part thereof. Section 3. Motion and proceedings thereon. The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before the hearing. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits, depositions and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. As can be deduced from the above provisions, summary judgment is a procedural devise resorted to in order to avoid long drawn out litigation and useless delays. When the pleadings on file show that there are no genuine issues of facts to be tried, the Rules of Court allows a party to obtain immediate relief by way of summary judgment. That is, when the facts are not in dispute, the court is allowed to decide the case summarily by applying the law to the material facts. Conversely, where the pleadings tender a genuine issue, summary judgment is not proper. A genuine issue is such fact which requires the presentation of evidence as distinguished from a sham, fictitious, contrived or false claim. 41 ACTaDH Here, we find the existence of genuine issues which removes the case from the coverage of summary judgment. The variance in the allegations of the parties in their pleadings is evident. Petitioner anchors his complaint for sum of money and/or judicial foreclosure on the alleged real estate mortgage over the subject property allegedly entered into by Comandante in

behalf of her parents to secure payment of a loan amounting to P1,118,228.00. To support this claim, petitioner attached to his complaint (1) the SPA alleged to have been executed by the Diazes; (2) the Real Estate Mortgage Contract pertaining to the amount of P1,118,228.00; and, (3) a Promissory Note. Comandante, in her Answer to petitioner's Amended Complaint, assailed the validity and due execution of the abovementioned documents. She asserted that the same were not duly, knowingly and validly executed by her and that it was petitioner who prepared all of them. Also, although she admitted owing petitioner, same was not an absolute admission as she limited herself to an obligation amounting only to P600,000.00 inclusive of charges and interests. She likewise claimed that such obligation is her personal obligation and not of her parents. The Diazes, for their part, also denied that they executed the SPA authorizing their daughter to mortgage their property to petitioner as well as having any obligation to the latter. ATcaID Clearly, there are genuine issues in this case which require the presentation of evidence. For one, it is necessary to ascertain in a full blown trial the validity and due execution of the SPA, the Real Estate Mortgage and the Promissory Notes because the determination of the following equally significant questions depends on them, to wit: (1) Are the Diazes obligated to petitioner or is the obligation a purely personal obligation of Comandante? and, (2) Is the sum of P1,118,228.00 as shown in the Real Estate Mortgage and the Promissory Note, the amount which is really due the petitioner? To stress, trial courts have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as to any material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary judgment cannot take the place of trial. 42 From the foregoing, it is apparent that the trial court should have refrained from issuing the summary judgment but instead proceeded to conduct a full blown trial of the case. In view of this, the present case should be remanded to the trial court for further proceedings and proper disposition according to the rudiments of a regular trial on the merits and not through an abbreviated termination of the case by summary judgment. WHEREFORE, the petition is DENIED. The assailed Decision of the Court of Appeals dated December 12, 2003 insofar as it excluded the respondents Spouses Bienvenido Pangan and Elizabeth Pangan from among those solidarily liable to petitioner Atty. Pedro M. Ferrer, is AFFIRMED. The inscription of the adverse claim of petitioner Atty. Pedro M. Ferrer on T.C.T. No. N-209049 is hereby ordered CANCELLED. Insofar as its other aspects are concerned, the assailed Decision is SET ASIDE and VACATED. The case is REMANDED to the Regional Trial Court of Quezon City, Branch 224 for further proceedings in accordance with this Decision. SO ORDERED.

[G.R. No. 154598. August 16, 2004.] IN THE MATTER OF APPLICATION FOR THE ISSUANCE OF A WRIT OF HABEAS CORPUS RICHARD BRIAN THORNTON for and in behalf of the minor child SEQUEIRA JENNIFER DELLE FRANCISCO THORNTON, petitioner, vs. ADELFA FRANCISCO THORNTON, respondent. Urbano Palamos & Fabros for petitioner. SYNOPSIS Petitioner herein is an American married to a Filipina. Their union produced a baby girl. After three years of marriage, the Filipina wife became restless and irresponsible. Petitioner admonished her but she continued her carefree ways until she left home with her daughter without notifying her husband. Petitioner filed a petition for habeas corpus in the designated Family Court in Makati, but this was dismissed, presumably because of the allegation that the child was in Basilan, the place where the wife claimed she would bring the baby. Petitioner then filed another petition for habeas corpus, this time with the Court of Appeals (CA) which could issue a writ of habeas corpus enforceable in the entire country. The CA denied the petition on the ground that it did not have jurisdiction over the case. It ruled that The Family Courts Act of 1997 (RA 8369) gave family courts exclusive original jurisdiction over petitions for habeas corpus. It impliedly repealed RA 7902 (An Act Expanding the Jurisdiction of the Court of Appeals) and Batas Pambansa 129 (The Judiciary Reorganization Act of 1980). The only issue for resolution in this case, therefore, is whether the Court of Appeals has jurisdiction to issue writs of habeas corpus in cases involving custody of minors.

The Supreme Court granted the petition. According to the Court, the CA should take cognizance of the case since the provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and the Supreme Court to issue writs of habeas corpus relating to the custody of minors. RA 8369 must be read in harmony with RA 7092 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. SYLLABUS 1. REMEDIAL LAW; FAMILY COURT; DOES NOT DIVEST THE SUPREME COURT AND COURT OF APPEALS OF THEIR JURISDICTION OVER HABEAS CORPUS CASES INVOLVING CUSTODY OF MINORS; RATIONALE. As observed by the Solicitor General: Under the Family Courts Act of 1997, the avowed policy of the State is to "protect the rights and promote the welfare of children". The creation of the Family Court is geared towards addressing three major issues regarding children's welfare cases, as expressed by the legislators during the deliberations for the law. The legislative intent behind giving Family Courts exclusive and original jurisdiction over such cases was to avoid further clogging of regular court dockets, ensure greater sensitivity and specialization in view of the nature of the case and the parties, as well as to guarantee that the privacy of the children party to the case remains protected. The primordial consideration is the welfare and best interests of the child. We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. Again, to quote the Solicitor General: To allow the Court

of Appeals to exercise jurisdiction over the petition for habeas corpus involving a minor child whose whereabouts are uncertain and transient will not result in one of the situations that the legislature seeks to avoid. First, the welfare of the child is paramount. Second, the ex parte nature of habeas corpus proceedings will not result in disruption of the child's privacy and emotional well-being; whereas to deprive the appellate court of jurisdiction will result in the evil sought to be avoided by the legislature: the child's welfare and well being will be prejudiced. 2. CIVIL LAW; STATUTE; AS A RULE WHAT IS CONTROLLING IS THE SPIRIT AND INTENT, NOT THE LETTER, OF THE LAW; APPLICATION IN CASE AT BAR. It also applied the wellestablished rule that what is controlling is the spirit and intent, not the letter, of the law: "Idolatrous reverence" for the law sacrifices the human being. The spirit of the law insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit giveth life". . . . It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, but is rendering obedience to the mandates of the fundamental law and the implementing legislation aforementioned. Language is rarely so free from ambiguity as to be incapable of being used in more than one sense. Sometimes, what the legislature actually had in mind is not accurately reflected in the language of a statute, and its literal interpretation may render it meaningless, lead to absurdity, injustice or contradiction. In the case at bar, a literal interpretation of the word "exclusive" will result in grave injustice and negate the policy "to protect the rights and promote the welfare of children" under the Constitution and the United Nations Convention on the Rights of the Child. This mandate must prevail over legal technicalities and serve as the guiding principle in construing the provisions of RA 8369. 3. ID.; ID.; STATUTORY CONSTRUCTION; IMPLIED REPEALS ARE NOT FAVORED. Settled is the rule in statutory construction that implied repeals are not favored: The two laws must be absolutely incompatible, and a clear finding thereof must surface, before the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare et concordare leqibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with other laws as to form a uniform system of jurisprudence. The fundament is that the legislature should be presumed to have known the existing laws on the subject and not have enacted conflicting statutes. Hence, all doubts must be resolved against any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all laws on the subject." 4. REMEDIAL LAW; SPECIAL PROCEEDINGS; HABEAS CORPUS; CONCURRENT JURISDICTION OF THE COURT OF APPEALS AND SUPREME COURT WITH THE FAMILY COURTS IN HABEAS CORPUS CASES WHERE CUSTODY OF MINORS IS CONCERNED, JUSTIFIED. The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of

Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule provides that: Section 20. Petition for writ of habeas corpus. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs. . . . The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits. From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent jurisdiction with family courts in habeas corpus cases where the custody of minors is involved. DECISION CORONA, J p: This is a petition to review, under Rule 45 of the Rules of Court, the July 5, 2002 resolution 1 of the Court of Appeals, Sixteenth Division, in CA G.R. SP No. 70501 dismissing the petition for habeas corpus on the grounds of lack of jurisdiction and lack of substance. The dispositive portion 2 read: WHEREFORE, the Court DISMISSES the petition for habeas corpus on the grounds that: a) this Court has no jurisdiction over the subject matter of the petition; and b) the petition is not sufficient in substance. Petitioner, an American, and respondent, a Filipino, were married on August 28, 1998 in the Catholic Evangelical Church at United Nations Avenue, Manila. A year later, respondent gave birth to a baby girl whom they named Sequeira Jennifer Delle Francisco Thornton. However, after three years, respondent grew restless and bored as a plain housewife. She wanted to return to her old job as a "guest relations officer" in a nightclub, with the freedom to go out with her friends. In fact, whenever petitioner was out of the country, respondent was also often out with her friends, leaving her daughter in the care of the househelp. Petitioner admonished respondent about her irresponsibility but she continued her carefree ways. On December 7, 2001, respondent left the family home with her daughter Sequiera without notifying her husband. She told the servants that she was bringing Sequiera to Purok Marikit, Sta. Clara, Lamitan, Basilan Province. Petitioner filed a petition for habeas corpus in the designated Family Court in Makati City but this was dismissed, presumably because of the allegation that the child was in Basilan. Petitioner then went to Basilan to ascertain the whereabouts of respondent and their daughter. However, he did not find them there and the barangay office of Sta. Clara, Lamitan, Basilan, issued a certification 3 that respondent was no longer residing there. Petitioner gave up his search when he got hold of respondent's cellular phone bills showing calls from different places such as Cavite, Nueva Ecija, Metro Manila and other provinces. Petitioner then filed another petition for habeas corpus, this time in the Court of Appeals which could issue a writ of habeas corpus enforceable in the entire country. However, the petition was denied by the Court of Appeals on the ground that it did not have jurisdiction over the case. It ruled that since RA 8369 (The Family Courts Act of 1997) gave

family courts exclusive original jurisdiction over petitions for habeas corpus, it impliedly repealed RA 7902 (An Act Expanding the Jurisdiction of the Court of Appeals) and Batas Pambansa 129 (The Judiciary Reorganization Act of 1980): Under Sec. 9(1), BP 129 (1981) the Intermediate Appellate Court (now Court of Appeals) has jurisdiction to issue a writ of habeas corpus whether or not in aid of its appellate jurisdiction. This conferment of jurisdiction was re-stated in Sec. 1, RA 7902 (1995), an act expanding the jurisdiction of this Court. This jurisdiction finds its procedural expression in Sec. 1, Rule 102 of the Rules of Court. In 1997, RA 8369 otherwise known as Family Courts Act was enacted. It provides: Sec. 5. Jurisdiction of Family Court. The Family Courts shall have exclusive original jurisdiction to hear and decide the following cases: b. Petition for guardianship, custody of children, habeas corpus in relation to the latter.

The vital question is, did RA 8369 impliedly repeal BP 129 and RA 7902 insofar as the jurisdiction of this Court to issue writ of habeas corpus in custody of minor cases is concerned? The simple answer is, yes, it did, because there is no other meaning of the word "exclusive" than to constitute the Family Court as the sole court which can issue said writ. If a court other than the Family Court also possesses the same competence, then the jurisdiction of the former is not exclusive but concurrent and such an interpretation is contrary to the simple and clear wording of RA 8369. Petitioner argues that unless this Court assumes jurisdiction over a petition for habeas corpus involving custody of minors, a respondent can easily evade the service of a writ of habeas corpus on him or her by just moving out of the region over which the Regional Trial Court issuing the writ has territorial jurisdiction. That may be so but then jurisdiction is conferred by law. In the absence of a law conferring such jurisdiction in this Court, it cannot exercise it even if it is demanded by expediency or necessity. Whether RA 8369 is a good or unwise law is not within the authority of this Court or any court for that matter to determine. The enactment of a law on jurisdiction is within the exclusive domain of the legislature. When there is a perceived defect in the law, the remedy is not to be sought from the courts but only from the legislature. The only issue before us therefore is whether the Court of Appeals has jurisdiction to issue writs of habeas corpus in cases involving custody of minors in the light of the provision in RA 8369 giving family courts exclusive original jurisdiction over such petitions. In his comment, the Solicitor General points out that Section 20 of the Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors (A.M. No. 03-04-04-SC, effective May 15, 2003) has rendered the issue moot. Section 20 of the rule provides that a petition for habeas corpus may be filed in the Supreme Court, 4 Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. 5 The petition is granted. The Court of Appeals should take cognizance of the case since there is nothing in RA 8369 that revoked its jurisdiction to issue writs of habeas corpus involving the custody of minors.

The Court of Appeals opines that RA 8369 impliedly repealed RA 7902 and BP 129 since, by giving family courts exclusive jurisdiction over habeas corpus cases, the lawmakers intended it to be the sole court which can issue writs of habeas corpus. To the court a quo, the word "exclusive" apparently cannot be construed any other way. We disagree with the CA's reasoning because it will result in an iniquitous situation, leaving individuals like petitioner without legal recourse in obtaining custody of their children. Individuals who do not know the whereabouts of minors they are looking for would be helpless since they cannot seek redress from family courts whose writs are enforceable only in their respective territorial jurisdictions. Thus, if a minor is being transferred from one place to another, which seems to be the case here, the petitioner in a habeas corpus case will be left without legal remedy. This lack of recourse could not have been the intention of the lawmakers when they passed the Family Courts Act of 1997. As observed by the Solicitor General: Under the Family Courts Act of 1997, the avowed policy of the State is to "protect the rights and promote the welfare of children." The creation of the Family Court is geared towards addressing three major issues regarding children's welfare cases, as expressed by the legislators during the deliberations for the law. The legislative intent behind giving Family Courts exclusive and original jurisdiction over such cases was to avoid further clogging of regular court dockets, ensure greater sensitivity and specialization in view of the nature of the case and the parties, as well as to guarantee that the privacy of the children party to the case remains protected. The primordial consideration is the welfare and best interests of the child. We rule therefore that RA 8369 did not divest the Court of Appeals and the Supreme Court of their jurisdiction over habeas corpus cases involving the custody of minors. Again, to quote the Solicitor General: To allow the Court of Appeals to exercise jurisdiction over the petition for habeas corpus involving a minor child whose whereabouts are uncertain and transient will not result in one of the situations that the legislature seeks to avoid. First, the welfare of the child is paramount. Second, the ex parte nature of habeas corpus proceedings will not result in disruption of the child's privacy and emotional well-being; whereas to deprive the appellate court of jurisdiction will result in the evil sought to be avoided by the legislature: the child's welfare and well being will be prejudiced. This is not the first time that this Court construed the word "exclusive" as not foreclosing resort to another jurisdiction. As correctly cited by the Solicitor General, in Floresca vs. Philex Mining Corporation, 6 the heirs of miners killed in a work-related accident were allowed to file suit in the regular courts even if, under the Workmen's Compensation Act, the Workmen's Compensation Commissioner had exclusive jurisdiction over such cases. We agree with the observations of the Solicitor General that: While Floresca involved a cause of action different from the case at bar, it supports petitioner's submission that the word "exclusive" in the Family Courts Act of 1997 may not connote automatic foreclosure of the jurisdiction of other courts over habeas corpus cases involving minors. In the same manner that the remedies in the Floresca case were selective, the jurisdiction of the Court of Appeals and Family Court in the case at bar is concurrent. The Family Court can issue writs of habeas corpus enforceable only within its territorial jurisdiction. On the other hand, in cases where the territorial jurisdiction for the enforcement of the writ cannot be determined with certainty, the Court of Appeals can issue the same writ

enforceable throughout the Philippines, as provided in Sec. 2, Rule 102 of the Revised Rules of Court, thus: The Writ of Habeas Corpus may be granted by the Supreme Court, or any member thereof, on any day and at any time, or by the Court of Appeals or any member thereof in the instances authorized by law, and if so granted it shall be enforceable anywhere in the Philippines, and may be made returnable before the court or any member thereof, or before a Court of First Instance, or any judge thereof for hearing and decision on the merits. It may also be granted by a Court of First Instance, or a judge thereof, on any day and at any time, and returnable before himself, enforceable only within his judicial district. (Emphasis supplied) In ruling that the Commissioner's "exclusive" jurisdiction did not foreclose resort to the regular courts for damages, this Court, in the same Floresca case, said that it was merely applying and giving effect to the constitutional guarantees of social justice in the 1935 and 1973 Constitutions and implemented by the Civil Code. It also applied the well-established rule that what is controlling is the spirit and intent, not the letter, of the law: "Idolatrous reverence" for the law sacrifices the human being. The spirit of the law insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit giveth life." It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented by the provisions of the New Civil Code, is not an exercise of the power of lawmaking, but is rendering obedience to the mandates of the fundamental law and the implementing legislation aforementioned. Language is rarely so free from ambiguity as to be incapable of being used in more than one sense. Sometimes, what the legislature actually had in mind is not accurately reflected in the language of a statute, and its literal interpretation may render it meaningless, lead to absurdity, injustice or contradiction. 7 In the case at bar, a literal interpretation of the word "exclusive" will result in grave injustice and negate the policy "to protect the rights and promote the welfare of children" 8 under the Constitution and the United Nations Convention on the Rights of the Child. This mandate must prevail over legal technicalities and serve as the guiding principle in construing the provisions of RA 8369. Moreover, settled is the rule in statutory construction that implied repeals are not favored: The two laws must be absolutely incompatible, and a clear finding thereof must surface, before the inference of implied repeal may be drawn. The rule is expressed in the maxim, interpretare et concordare leqibus est optimus interpretendi, i.e., every statute must be so interpreted and brought into accord with other laws as to form a uniform system of jurisprudence. The fundament is that the legislature should be presumed to have known the existing laws on the subject and not have enacted conflicting statutes. Hence, all doubts must be resolved against any implied repeal, and all efforts should be exerted in order to harmonize and give effect to all laws on the subject." 9 The provisions of RA 8369 reveal no manifest intent to revoke the jurisdiction of the Court of Appeals and Supreme Court to issue writs of habeas corpus relating to the custody of minors. Further, it cannot be said that the provisions of RA 8369, RA 7092 and BP 129 are absolutely incompatible since RA 8369 does not prohibit the Court of Appeals and the Supreme Court

from issuing writs of habeas corpus in cases involving the custody of minors. Thus, the provisions of RA 8369 must be read in harmony with RA 7029 and BP 129 that family courts have concurrent jurisdiction with the Court of Appeals and the Supreme Court in petitions for habeas corpus where the custody of minors is at issue. In any case, whatever uncertainty there was has been settled with the adoption of A.M. No. 03-03-04-SC Re: Rule on Custody of Minors and Writ of Habeas Corpus in Relation to Custody of Minors. Section 20 of the rule provides that: Section 20. Petition for writ of habeas corpus. A verified petition for a writ of habeas corpus involving custody of minors shall be filed with the Family Court. The writ shall be enforceable within its judicial region to which the Family Court belongs.

The petition may likewise be filed with the Supreme Court, Court of Appeals, or with any of its members and, if so granted, the writ shall be enforceable anywhere in the Philippines. The writ may be made returnable to a Family Court or to any regular court within the region where the petitioner resides or where the minor may be found for hearing and decision on the merits. (Emphasis Ours) From the foregoing, there is no doubt that the Court of Appeals and Supreme Court have concurrent jurisdiction with family courts in habeas corpus cases where the custody of minors is involved. IEAaST One final note. Requiring the serving officer to search for the child all over the country is not an unreasonable availment of a remedy which the Court of Appeals cited as a ground for dismissing the petition. As explained by the Solicitor General: 10 That the serving officer will have to "search for the child all over the country" does not represent an insurmountable or unreasonable obstacle, since such a task is no more different from or difficult than the duty of the peace officer in effecting a warrant of arrest, since the latter is likewise enforceable anywhere within the Philippines. WHEREFORE, the petition is hereby GRANTED. The petition for habeas corpus in CA-G.R.-SPNo. 70501 is hereby REINSTATED and REMANDED to the Court of Appeals, Sixteenth Division. SO ORDERED. Panganiban and Carpio-Morales, JJ ., concur. Sandoval-Gutierrez, J ., is on leave.

[G.R. No. 191002. April 20, 2010.] ARTURO M. DE CASTRO, petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC) and PRESIDENT GLORIA MACAPAGAL-ARROYO, respondents. [G.R. No. 191032. April 20, 2010.] JAIME N. SORIANO, petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. [G.R. No. 191057. April 20, 2010.] PHILIPPINE CONSTITUTION ASSOCIATION (PHILCONSA), petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. [A.M. No. 10-2-5-SC. April 20, 2010.] IN RE APPLICABILITY OF SECTION 15, ARTICLE VII OF THE CONSTITUTION TO APPOINTMENTS TO THE JUDICIARY, ESTELITO P. MENDOZA, petitioner, [G.R. No. 191149. April 20, 2010.] JOHN G. PERALTA, petitioner, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. PETER IRVING CORVERA; CHRISTIAN ROBERT S. LIM; ALFONSO V. TAN, JR.; NATIONAL UNION OF PEOPLE'S LAWYERS; MARLOU B. UBANO; INTEGRATED BAR OF THE PHILIPPINES-DAVAO DEL SUR CHAPTER, represented by its Immediate Past President, ATTY. ISRAELITO P. TORREON, and the latter in his own personal capacity as a MEMBER of the PHILIPPINE BAR; MITCHELL JOHN L. BOISER; BAGONG ALYANSANG BAYAN (BAYAN) CHAIRMAN DR. CAROLINA P. ARAULLO; BAYAN SECRETARY GENERAL RENATO M. REYES, JR.; CONFEDERATION FOR UNITY, RECOGNITION AND ADVANCEMENT OF GOVERNMENT EMPLOYEES (COURAGE) CHAIRMAN FERDINAND GAITE; KALIPUNAN NG DAMAYANG MAHIHIRAP (KADAMAY) SECRETARY GENERAL GLORIA ARELLANO; ALYANSA NG NAGKAKAISANG KABATAAN NG SAMBAYANAN PARA SA KAUNLARAN (ANAKBAYAN) CHAIRMAN KEN LEONARD RAMOS; TAYO ANG PAG-ASA CONVENOR ALVIN PETERS; LEAGUE OF FILIPINO STUDENTS (LFS) CHAIRMAN JAMES MARK TERRY LACUANAN RIDON; NATIONAL UNION OF STUDENTS OF THE PHILIPPINES (NUSP) CHAIRMAN EINSTEIN RECEDES; COLLEGE EDITORS GUILD OF THE PHILIPPINES (CEGP) CHAIRMAN VIJAE ALQUISOLA; and STUDENT CHRISTIAN MOVEMENT OF THE PHILIPPINES (SCMP) CHAIRMAN MA. CRISTINA ANGELA GUEVARRA;

WALDEN F. BELLO and LORETTA ANN P. ROSALES; WOMEN TRIAL LAWYERS ORGANIZATION OF THE PHILIPPINES, represented by YOLANDA QUISUMBING-JAVELLANA; BELLEZA ALOJADO DEMAISIP; TERESITA GANDIONCO-OLEDAN; MA. VERENA KASILAG-VILLANUEVA; MARILYN STA. ROMANA; LEONILA DE JESUS; and GUINEVERE DE LEON; AQUILINO Q. PIMENTEL, JR., intervenors. [G.R. No. 191342. April 20, 2010.] ATTY. AMADOR Z. TOLENTINO, JR., (IBP Governor-Southern Luzon), and ATTY. ROLAND B. INTING (IBP Governor-Eastern Visayas), petitioners, vs. JUDICIAL AND BAR COUNCIL (JBC), respondent. [G.R. No. 191420. April 20, 2010.] PHILIPPINE BAR ASSOCIATION, INC., petitioner, vs. JUDICIAL AND BAR COUNCIL and HER EXCELLENCY GLORIA MACAPAGAL-ARROYO, respondents. RESOLUTION BERSAMIN, J p: On March 17, 2010, the Court promulgated its decision, holding: WHEREFORE, the Court: 1. Dismisses the petitions for certiorari and mandamus in G.R. No. 191002 and G.R. No. 191149, and the petition for mandamus in G.R. No. 191057 for being premature; 2. Dismisses the petitions for prohibition in G.R. No. 191032 and G.R. No. 191342 for lack of merit; and 3. Grants the petition in A.M. No. 10-2-5-SC and, accordingly, directs the Judicial and Bar Council: (a) To resume its proceedings for the nomination of candidates to fill the vacancy to be created by the compulsory retirement of Chief Justice Reynato S. Puno by May 17, 2010; (b) To prepare the short list of nominees for the position of Chief Justice;

(c) To submit to the incumbent President the short list of nominees for the position of Chief Justice on or before May 17, 2010; and (d) To continue its proceedings for the nomination of candidates to fill other vacancies in the Judiciary and submit to the President the short list of nominees corresponding thereto in accordance with this decision. SO ORDERED. MOTIONS FOR RECONSIDERATION

Petitioners Jaime N. Soriano (G.R. No. 191032), Amador Z. Tolentino and Roland B. Inting (G.R. No. 191342), and Philippine Bar Association (G.R. No. 191420), as well as intervenors Integrated Bar of the Philippines-Davao del Sur (IBP-Davao del Sur, et al.); Christian Robert S. Lim; Peter Irving Corvera; Bagong Alyansang Bayan and others (BAYAN, et al.); Alfonso V. Tan, Jr.; the Women Trial Lawyers Organization of the Philippines (WTLOP); Marlou B. Ubano; Mitchell John L. Boiser; and Walden F. Bello and Loretta Ann P. Rosales (Bello, et al.), filed their respective motions for reconsideration. Also filing a motion for reconsideration was Senator Aquilino Q. Pimentel, Jr., whose belated intervention was allowed. We summarize the arguments and submissions of the various motions for reconsideration, in the aforegiven order: Soriano 1. The Court has not squarely ruled upon or addressed the issue of whether or not the power to designate the Chief Justice belonged to the Supreme Court en banc. 2. The Mendoza petition should have been dismissed, because it sought a mere declaratory judgment and did not involve a justiciable controversy. 3. All Justices of the Court should participate in the next deliberations. The mere fact that the Chief Justice sits as ex officio head of the JBC should not prevail over the more compelling state interest for him to participate as a Member of the Court. Tolentino and Inting 1. A plain reading of Section 15, Article VII does not lead to an interpretation that exempts judicial appointments from the express ban on midnight appointments. 2. In excluding the Judiciary from the ban, the Court has made distinctions and has created exemptions when none exists. 3. The ban on midnight appointments is placed in Article VII, not in Article VIII, because it limits an executive, not a judicial, power. 4. Resort to the deliberations of the Constitutional Commission is superfluous, and is powerless to vary the terms of the clear prohibition. 5. The Court has given too much credit to the position taken by Justice Regalado. Thereby, the Court has raised the Constitution to the level of a venerated text whose intent can only be divined by its framers as to be outside the realm of understanding by the sovereign people that ratified it. 6. Valenzuela should not be reversed.

7. The petitioners, as taxpayers and lawyers, have the clear legal standing to question the illegal composition of the JBC. Philippine Bar Association

1. The Court's strained interpretation of the Constitution violates the basic principle that the Court should not formulate a rule of constitutional law broader than what is required by the precise facts of the case. 2. Considering that Section 15, Article VII is clear and straightforward, the only duty of the Court is to apply it. The provision expressly and clearly provides a general limitation on the appointing power of the President in prohibiting the appointment of any person to any position in the Government without any qualification and distinction. 3. The Court gravely erred in unilaterally ignoring the constitutional safeguard against midnight appointments. 4. The Constitution has installed two constitutional safeguards: the prohibition against midnight appointments, and the creation of the JBC. It is not within the authority of the Court to prefer one over the other, for the Court's duty is to apply the safeguards as they are, not as the Court likes them to be. 5. The Court has erred in failing to apply the basic principles of statutory construction in interpreting the Constitution. 6. The Court has erred in relying heavily on the title, chapter or section headings, despite precedents on statutory construction holding that such headings carried very little weight. 7. The Constitution has provided a general rule on midnight appointments, and the only exception is that on temporary appointments to executive positions. 8. The Court has erred in directing the JBC to resume the proceedings for the nomination of the candidates to fill the vacancy to be created by the compulsory retirement of Chief Justice Puno with a view to submitting the list of nominees for Chief Justice to President Arroyo on or before May 17, 2010. The Constitution grants the Court only the power of supervision over the JBC; hence, the Court cannot tell the JBC what to do, how to do it, or when to do it, especially in the absence of a real and justiciable case assailing any specific action or inaction of the JBC. 9. The Court has engaged in rendering an advisory opinion and has indulged in speculations. 10. The constitutional ban on appointments being already in effect, the Court's directing the JBC to comply with the decision constitutes a culpable violation of the Constitution and the commission of an election offense. 11. The Court cannot reverse on the basis of a secondary authority a doctrine unanimously formulated by the Court en banc. 12. The practice has been for the most senior Justice to act as Chief Justice whenever the incumbent is indisposed. Thus, the appointment of the successor Chief Justice is not urgently necessary. 13. The principal purpose for the ban on midnight appointments is to arrest any attempt to prolong the outgoing President's powers by means of proxies. The attempt of the incumbent

President to appoint the next Chief Justice is undeniably intended to perpetuate her power beyond her term of office. IBP-Davao del Sur, et al. 1. Its language being unambiguous, Section 15, Article VII of the Constitution applies to appointments to the Judiciary. Hence, no cogent reason exists to warrant the reversal of the Valenzuela pronouncement. 2. Section 16, Article VII of the Constitution provides for presidential appointments to the Constitutional Commissions and the JBC with the consent of the Commission on Appointments. Its phrase "other officers whose appointments are vested in him in this Constitution" is enough proof that the limitation on the appointing power of the President extends to appointments to the Judiciary. Thus, Section 14, Section 15, and Section 16 of Article VII apply to all presidential appointments in the Executive and Judicial Branches of the Government. 3. There is no evidence that the framers of the Constitution abhorred the idea of an Acting Chief Justice in all cases. Lim 1. There is no justiciable controversy that warrants the Court's exercise of judicial review.

2. The election ban under Section 15, Article VII applies to appointments to fill a vacancy in the Court and to other appointments to the Judiciary. 3. The creation of the JBC does not justify the removal of the safeguard under Section 15 of Article VII against midnight appointments in the Judiciary. Corvera 1. The Court's exclusion of appointments to the Judiciary from the Constitutional ban on midnight appointments is based on an interpretation beyond the plain and unequivocal language of the Constitution. 2. The intent of the ban on midnight appointments is to cover appointments in both the Executive and Judicial Departments. The application of the principle of verba legis (ordinary meaning) would have obviated dwelling on the organization and arrangement of the provisions of the Constitution. If there is any ambiguity in Section 15, Article VII, the intent behind the provision, which is to prevent political partisanship in all branches of the Government, should have controlled. 3. A plain reading is preferred to a contorted and strained interpretation based on compartmentalization and physical arrangement, especially considering that the Constitution must be interpreted as a whole. 4. Resort to the deliberations or to the personal interpretation of the framers of the Constitution should yield to the plain and unequivocal language of the Constitution. 5. There is no sufficient reason for reversing Valenzuela, a ruling that is reasonable and in accord with the Constitution.

BAYAN, et al. 1. The Court erred in granting the petition in A.M. No. 10-2-5-SC, because the petition did not present a justiciable controversy. The issues it raised were not yet ripe for adjudication, considering that the office of the Chief Justice was not yet vacant and that the JBC itself has yet to decide whether or not to submit a list of nominees to the President. 2. The collective wisdom of Valenzuela Court is more important and compelling than the opinion of Justice Regalado. 3. In ruling that Section 15, Article VII is in conflict with Section 4 (1), Article VIII, the Court has violated the principle of ut magis valeat quam pereat (which mandates that the Constitution should be interpreted as a whole, such that any conflicting provisions are to be harmonized as to fully give effect to all). There is no conflict between the provisions; they complement each other. 4. The form and structure of the Constitution's titles, chapters, sections, and draftsmanship carry little weight in statutory construction. The clear and plain language of Section 15, Article VII precludes interpretation. Tan, Jr. 1. The factual antecedents do not present an actual case or controversy. The clash of legal rights and interests in the present case are merely anticipated. Even if it is anticipated with certainty, no actual vacancy in the position of the Chief Justice has yet occurred. 2. The ruling that Section 15, Article VII does not apply to a vacancy in the Court and the Judiciary runs in conflict with long standing principles and doctrines of statutory construction. The provision admits only one exception, temporary appointments in the Executive Department. Thus, the Court should not distinguish, because the law itself makes no distinction. 3. Valenzuela was erroneously reversed. The framers of the Constitution clearly intended the ban on midnight appointments to cover the members of the Judiciary. Hence, giving more weight to the opinion of Justice Regalado to reverse the en banc decision in Valenzuela was unwarranted. DTEcSa 4. Section 15, Article VII is not incompatible with Section 4 (1), Article VIII. The 90-day mandate to fill any vacancy lasts until August 15, 2010, or a month and a half after the end of the ban. The next President has roughly the same time of 45 days as the incumbent President (i.e., 44 days) within which to scrutinize and study the qualifications of the next Chief Justice. Thus, the JBC has more than enough opportunity to examine the nominees without haste and political uncertainty. 5. When the constitutional ban is in place, the 90-day period under Section 4 (1), Article VIII is suspended. 6. There is no basis to direct the JBC to submit the list of nominees on or before May 17, 2010. The directive to the JBC sanctions a culpable violation of the Constitution and constitutes an election offense.

7. There is no pressing necessity for the appointment of a Chief Justice, because the Court sits en banc, even when it acts as the sole judge of all contests relative to the election, returns and qualifications of the President and Vice-President. Fourteen other Members of the Court can validly comprise the Presidential Electoral Tribunal. WTLOP 1. The Court exceeded its jurisdiction in ordering the JBC to submit the list of nominees for Chief Justice to the President on or before May 17, 2010, and to continue its proceedings for the nomination of the candidates, because it granted a relief not prayed for; imposed on the JBC a deadline not provided by law or the Constitution; exercised control instead of mere supervision over the JBC; and lacked sufficient votes to reverse Valenzuela. 2. In interpreting Section 15, Article VII, the Court has ignored the basic principle of statutory construction to the effect that the literal meaning of the law must be applied when it is clear and unambiguous; and that we should not distinguish where the law does not distinguish. 3. There is no urgency to appoint the next Chief Justice, considering that the Judiciary Act of 1948 already provides that the power and duties of the office devolve on the most senior Associate Justice in case of a vacancy in the office of the Chief Justice. Ubano 1. The language of Section 15, Article VII, being clear and unequivocal, needs no interpretation. 2. The Constitution must be construed in its entirety, not by resort to the organization and arrangement of its provisions. 3. The opinion of Justice Regalado is irrelevant, because Section 15, Article VII and the pertinent records of the Constitutional Commission are clear and unambiguous. 4. The Court has erred in ordering the JBC to submit the list of nominees to the President by May 17, 2010 at the latest, because no specific law requires the JBC to submit the list of nominees even before the vacancy has occurred. Boiser 1. Under Section 15, Article VII, the only exemption from the ban on midnight appointments is the temporary appointment to an executive position. The limitation is in keeping with the clear intent of the framers of the Constitution to place a restriction on the power of the outgoing Chief Executive to make appointments. 2. To exempt the appointment of the next Chief Justice from the ban on midnight appointments makes the appointee beholden to the outgoing Chief Executive, and compromises the independence of the Chief Justice by having the outgoing President be continually influential. 3. The Court's reversal of Valenzuela without stating the sufficient reason violates the principle of stare decisis.

Bello, et al. 1. Section 15, Article VII does not distinguish as to the type of appointments an outgoing President is prohibited from making within the prescribed period. Plain textual reading and the records of the Constitutional Commission support the view that the ban on midnight appointments extends to judicial appointments. 2. Supervision of the JBC by the Court involves oversight. The subordinate subject to oversight must first act not in accord with prescribed rules before the act can be redone to conform to the prescribed rules. 3. The Court erred in granting the petition in A.M. No. 10-2-5-SC, because the petition did not present a justiciable controversy. Pimentel 1. Any constitutional interpretative changes must be reasonable, rational, and conformable to the general intent of the Constitution as a limitation to the powers of Government and as a bastion for the protection of the rights of the people. Thus, in harmonizing seemingly conflicting provisions of the Constitution, the interpretation should always be one that protects the citizenry from an ever expanding grant of authority to its representatives. 2. The decision expands the constitutional powers of the President in a manner totally repugnant to republican constitutional democracy, and is tantamount to a judicial amendment of the Constitution without proper authority. COMMENTS The Office of the Solicitor General (OSG) and the JBC separately represent in their respective comments, thus: OSG 1. The JBC may be compelled to submit to the President a short list of its nominees for the position of Chief Justice. 2. 3. The incumbent President has the power to appoint the next Chief Justice. Section 15, Article VII does not apply to the Judiciary.

4. The principles of constitutional construction favor the exemption of the Judiciary from the ban on midnight appointments. 5. The Court has the duty to consider and resolve all issues raised by the parties as well as other related matters. JBC 1. The consolidated petitions should have been dismissed for prematurity, because the JBC has not yet decided at the time the petitions were filed whether the incumbent President

has the power to appoint the new Chief Justice, and because the JBC, having yet to interview the candidates, has not submitted a short list to the President. 2. The statement in the decision that there is a doubt on whether a JBC short list is necessary for the President to appoint a Chief Justice should be struck down as bereft of constitutional and legal basis. The statement undermines the independence of the JBC. 3. The JBC will abide by the final decision of the Court, but in accord with its constitutional mandate and its implementing rules and regulations. For his part, petitioner Estelito P. Mendoza (A.M. No. 10-2-5-SC) submits his comment even if the OSG and the JBC were the only ones the Court has required to do so. He states that the motions for reconsideration were directed at the administrative matter he initiated and which the Court resolved. His comment asserts: 1. The grounds of the motions for reconsideration were already resolved by the decision and the separate opinion. 2. The administrative matter he brought invoked the Court's power of supervision over the JBC as provided by Section 8 (1), Article VIII of the Constitution, as distinguished from the Court's adjudicatory power under Section 1, Article VIII. In the former, the requisites for judicial review are not required, which was why Valenzuela was docketed as an administrative matter. Considering that the JBC itself has yet to take a position on when to submit the short list to the proper appointing authority, it has effectively solicited the exercise by the Court of its power of supervision over the JBC. ISDHcT 3. To apply Section 15, Article VII to Section 4 (1) and Section 9, Article VIII is to amend the Constitution. 4. The portions of the deliberations of the Constitutional Commission quoted in the dissent of Justice Carpio Morales, as well as in some of the motions for reconsideration do not refer to either Section 15, Article VII or Section 4 (1), Article VIII, but to Section 13, Article VII (on nepotism). RULING We deny the motions for reconsideration for lack of merit, for all the matters being thereby raised and argued, not being new, have all been resolved by the decision of March 17, 2010. Nonetheless, the Court opts to dwell on some matters only for the purpose of clarification and emphasis. First: Most of the movants contend that the principle of stare decisis is controlling, and accordingly insist that the Court has erred in disobeying or abandoning Valenzuela. 1 The contention has no basis. Stare decisis derives its name from the Latin maxim stare decisis et non quieta movere, i.e., to adhere to precedent and not to unsettle things that are settled. It simply means that a principle underlying the decision in one case is deemed of imperative authority, controlling the decisions of like cases in the same court and in lower courts within the same jurisdiction,

unless and until the decision in question is reversed or overruled by a court of competent authority. The decisions relied upon as precedents are commonly those of appellate courts, because the decisions of the trial courts may be appealed to higher courts and for that reason are probably not the best evidence of the rules of law laid down. 2 ADTEaI Judicial decisions assume the same authority as a statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria that must control the actuations, not only of those called upon to abide by them, but also of those dutybound to enforce obedience to them. 3 In a hierarchical judicial system like ours, the decisions of the higher courts bind the lower courts, but the courts of co-ordinate authority do not bind each other. The one highest court does not bind itself, being invested with the innate authority to rule according to its best lights. 4 The Court, as the highest court of the land, may be guided but is not controlled by precedent. Thus, the Court, especially with a new membership, is not obliged to follow blindly a particular decision that it determines, after re-examination, to call for a rectification. 5 The adherence to precedents is strict and rigid in a common-law setting like the United Kingdom, where judges make law as binding as an Act of Parliament. 6 But ours is not a common-law system; hence, judicial precedents are not always strictly and rigidly followed. A judicial pronouncement in an earlier decision may be followed as a precedent in a subsequent case only when its reasoning and justification are relevant, and the court in the latter case accepts such reasoning and justification to be applicable to the case. The application of the precedent is for the sake of convenience and stability. For the intervenors to insist that Valenzuela ought not to be disobeyed, or abandoned, or reversed, and that its wisdom should guide, if not control, the Court in this case is, therefore, devoid of rationality and foundation. They seem to conveniently forget that the Constitution itself recognizes the innate authority of the Court en banc to modify or reverse a doctrine or principle of law laid down in any decision rendered en banc or in division. 7 Second: Some intervenors are grossly misleading the public by their insistence that the Constitutional Commission extended to the Judiciary the ban on presidential appointments during the period stated in Section 15, Article VII. The deliberations that the dissent of Justice Carpio Morales quoted from the records of the Constitutional Commission did not concern either Section 15, Article VII or Section 4 (1), Article VIII, but only Section 13, Article VII, a provision on nepotism. The records of the Constitutional Commission show that Commissioner Hilario G. Davide, Jr. had proposed to include judges and justices related to the President within the fourth civil degree of consanguinity or affinity among the persons whom the President might not appoint during his or her tenure. In the end, however, Commissioner Davide, Jr. withdrew the proposal to include the Judiciary in Section 13, Article VII "(t)o avoid any further complication," 8 such that the final version of the second paragraph of Section 13, Article VII even completely omits any reference to the Judiciary, to wit: Section 13. ...

The spouse and relatives by consanguinity or affinity within the fourth civil degree of the President shall not during his tenure be appointed as Members of the Constitutional Commissions, or the Office of the Ombudsman, or as Secretaries, Undersecretaries, chairmen

or heads of bureaus or offices, including government-owned or controlled corporations and their subsidiaries. ASTIED Last: The movants take the majority to task for holding that Section 15, Article VII does not apply to appointments in the Judiciary. They aver that the Court either ignored or refused to apply many principles of statutory construction. The movants gravely err in their posture, and are themselves apparently contravening their avowed reliance on the principles of statutory construction. For one, the movants, disregarding the absence from Section 15, Article VII of the express extension of the ban on appointments to the Judiciary, insist that the ban applied to the Judiciary under the principle of verba legis. That is self-contradiction at its worst. Another instance is the movants' unhesitating willingness to read into Section 4 (1) and Section 9, both of Article VIII, the express applicability of the ban under Section 15, Article VII during the period provided therein, despite the silence of said provisions thereon. Yet, construction cannot supply the omission, for doing so would generally constitute an encroachment upon the field of the Constitutional Commission. Rather, Section 4 (1) and Section 9 should be left as they are, given that their meaning is clear and explicit, and no words can be interpolated in them. 9 Interpolation of words is unnecessary, because the law is more than likely to fail to express the legislative intent with the interpolation. In other words, the addition of new words may alter the thought intended to be conveyed. And, even where the meaning of the law is clear and sensible, either with or without the omitted word or words, interpolation is improper, because the primary source of the legislative intent is in the language of the law itself. 10 Thus, the decision of March 17, 2010 has fittingly observed: Had the framers intended to extend the prohibition contained in Section 15, Article VII to the appointment of Members of the Supreme Court, they could have explicitly done so. They could not have ignored the meticulous ordering of the provisions. They would have easily and surely written the prohibition made explicit in Section 15, Article VII as being equally applicable to the appointment of Members of the Supreme Court in Article VIII itself, most likely in Section 4 (1), Article VIII. That such specification was not done only reveals that the prohibition against the President or Acting President making appointments within two months before the next presidential elections and up to the end of the President's or Acting President's term does not refer to the Members of the Supreme Court. We cannot permit the meaning of the Constitution to be stretched to any unintended point in order to suit the purposes of any quarter. FINAL WORD It has been insinuated as part of the polemics attendant to the controversy we are resolving that because all the Members of the present Court were appointed by the incumbent President, a majority of them are now granting to her the authority to appoint the successor of the retiring Chief Justice. The insinuation is misguided and utterly unfair.

The Members of the Court vote on the sole basis of their conscience and the merits of the issues. Any claim to the contrary proceeds from malice and condescension. Neither the outgoing President nor the present Members of the Court had arranged the current situation to happen and to evolve as it has. None of the Members of the Court could have prevented the Members composing the Court when she assumed the Presidency about a decade ago from retiring during her prolonged term and tenure, for their retirements were mandatory. Yet, she is now left with an imperative duty under the Constitution to fill up the vacancies created by such inexorable retirements within 90 days from their occurrence. Her official duty she must comply with. So must we ours who are tasked by the Constitution to settle the controversy. ACCORDINGLY, the motions for reconsideration are denied with finality. SO ORDERED. Leonardo-de Castro, Abad, Villarama, Jr. and Perez, JJ., concur. Puno, C.J., took no part. Chairman of JBC. Carpio, J., took no part, prior inhibition. Corona, J., took no part. Carpio Morales, J., please see my dissenting opinion. Velasco, Jr., J,. I join the dissent of J. Nachura. Nachura, J., I maintain my position that there is no justiciable controversy. Brion, J., see concurring and dissenting opinion. Peralta, Del Castillo and Mendoza, JJ., join Justice Brion in his concurring and dissenting opinion. Separate Opinions CARPIO MORALES, J., dissenting: No compelling reason exists for the Court to deny a reconsideration of the assailed Decision. The various motions for reconsideration raise hollering substantial arguments and legitimately nagging questions which the Court must meet head on. If this Court is to deserve or preserve its revered place not just in the hierarchy but also in history, passion for reason demands the issuance of an extended and extensive resolution that confronts the ramifications and repercussions of its assailed Decision. Only then can it offer an illumination that any self-respecting student of the law clamors and any adherent of the law deserves. Otherwise, it takes the risk of reeking of an objectionable air of supreme judicial arrogance. It is thus imperative to settle the following issues and concerns: Whether the incumbent President is constitutionally proscribed from

appointing the successor of Chief Justice Reynato S. Puno upon his retirement on May 17, 2010 until the ban ends at 12:00 noon of June 30, 2010 1. In interpreting the subject constitutional provisions, the Decision disregarded established canons of statutory construction. Without explaining the inapplicability of each of the relevant rules, the Decision immediately placed premium on the arrangement and ordering of provisions, one of the weakest tools of construction, to arrive at its conclusion. 2. In reversing Valenzuela, the Decision held that the Valenzuela dictum did not firmly rest on ConCom deliberations, yet it did not offer to cite a material ConCom deliberation. It instead opted to rely on the memory of Justice Florenz Regalado which incidentally mentioned only the "Court of Appeals." The Decision's conclusion must rest on the strength of its own favorable Concom deliberation, none of which to date has been cited. 3. Instead of choosing which constitutional provision carves out an exception from the other provision, the most legally feasible interpretation (in the limited cases of temporary physical or legal impossibility of compliance, as expounded in my Dissenting Opinion) is to consider the appointments ban or other substantial obstacle as a temporary impossibility which excuses or releases the constitutional obligation of the Office of the President for the duration of the ban or obstacle. In view of the temporary nature of the circumstance causing the impossibility of performance, the outgoing President is released from non-fulfillment of the obligation to appoint, and the duty devolves upon the new President. The delay in the fulfillment of the obligation becomes excusable, since the law cannot exact compliance with what is impossible. The 90-day period within which to appoint a member of the Court is thus suspended and the period could only start or resume to run when the temporary obstacle disappears (i.e., after the period of the appointments ban; when there is already a quorum in the JBC; or when there is already at least three applicants). Whether the Judicial and Bar Council is obliged to submit to the President the shortlist of nominees for the position of Chief Justice (or Justice of this Court) on or before the occurrence of the vacancy. 1. The ruling in the Decision that obligates the JBC to submit the shortlist to the President on or before the occurrence of the vacancy in the Court runs counter to the Concom deliberations which explain that the 90-day period is allotted for both the nomination by the

JBC and the appointment by the President. In the move to increase the period to 90 days, Commissioner Romulo stated that "[t]he sense of the Committee is that 60 days is awfully short and that the [Judicial and Bar] Council, as well as the President, may have difficulties with that." 2. To require the JBC to submit to the President a shortlist of nominees on or before the occurrence of vacancy in the Court leads to preposterous results. It bears reiterating that the requirement is absurd when, inter alia, the vacancy is occasioned by the death of a member of the Court, in which case the JBC could never anticipate the death of a Justice, and could never submit a list to the President on or before the occurrence of vacancy. 3. The express allowance in the Constitution of a 90-day period of vacancy in the membership of the Court rebuts any public policy argument on avoiding a vacuum of even a single day without a duly appointed Chief Justice. Moreover, as pointed out in my Dissenting Opinion, the practice of having an acting Chief Justice in the interregnum is provided for by law, confirmed by tradition, and settled by jurisprudence to be an internal matter. The RESOLUTION of the majority, in denying the present Motions for Reconsideration, failed to rebut the foregoing crucial matters. I, THEREFORE, maintain my dissent and vote to GRANT the Motions for Reconsideration of the Decision of March 17, 2010 insofar as it holds that the incumbent President is not constitutionally proscribed from appointing the successor of Chief Justice Reynato S. Puno upon his retirement on May 17, 2010 until the ban ends at 12:00 noon of June 30, 2010 and that the Judicial and Bar Council is obliged to submit to the President the shortlist of nominees for the position of Chief Justice on or before May 17, 2010. BRION, J., concurring and dissenting: The Motions for Reconsideration After sifting through the motions for reconsideration, I found that the arguments are largely the same arguments that we have passed upon, in one form or another, in the various petitions. Essentially, the issues boil down to justiciability; the conflict of constitutional provisions; the merits of the cited constitutional deliberations; and the status and effect of the Valenzuela 1 ruling. Even the motion for reconsideration of the Philippine Bar Association (G.R. No. 191420), whose petition I did not expressly touch upon in my Separate Opinion, basically dwells on these issues. I have addressed most, if not all, of these issues and I submit my Separate Opinion 2 as my basic response to the motions for reconsideration, supplemented by the discussions below. As I reflected in my Separate Opinion (which three other Justices joined), 3 the election appointment ban under Article VII, Section 15 of the Constitution should not apply to the appointment of Members of the Supreme Court whose period for appointment is separately provided for under Article VIII, Section 4 (1). I shared this conclusion with the Court's Decision although our reasons differed on some points. I diverged fully from the Decision on the question of whether we should maintain or reverse our ruling in Valenzuela. I maintained that it is still good law; no reason exists to touch the ruling as its main focus the application of the election ban on the appointment of lower

court judges under Article VIII, Section 9 of the Constitution is not even an issue in the present case and was discussed only because the petitions incorrectly cited the ruling as authority on the issue of the Chief Justice's appointment. The Decision proposed to reverse Valenzuela but only secured the support of five (5) votes, while my Separate Opinion in support of Valenzuela had four (4) votes. Thus, on the whole, the Decision did not prevail in reversing Valenzuela, as it only had five (5) votes in a field of 12 participating Members of the Court. Valenzuela should therefore remain, as of the filing of this Opinion, as a valid precedent. DaScHC Acting on the present motions for reconsideration, I join the majority in denying the motions with respect to the Chief Justice issue, although we differ in some respects on the reasons supporting the denial. I dissent from the conclusion that the Valenzuela ruling should be reversed. My divergence from the majority's reasons and conclusions compels me to write this Concurring and Dissenting Opinion. The Basic Requisites/Justiciability One marked difference between the Decision and my Separate Opinion is our approach on the basic requisites/justiciability issues. The Decision apparently glossed over this aspect of the case, while I fully explained why the De Castro 4 and Peralta 5 petitions should be dismissed outright. In my view, these petitions violated the most basic requirements of their chosen medium for review a petition for certiorari and mandamus under Rule 65 of the Rules of Court. The petitions commonly failed to allege that the Judicial and Bar Council (JBC) performs judicial or quasi-judicial functions, an allegation that the petitions could not really make, since the JBC does not really undertake these functions and, for this reason, cannot be the subject of a petition for certiorari; hence, the petitions should be dismissed outright. They likewise failed to facially show any failure or refusal by the JBC to undertake a constitutional duty to justify the issuance of a writ of mandamus; they invoked judicial notice that we could not give because there was, and is, no JBC refusal to act. 6 Thus, the mandamus aspects of these petitions should have also been dismissed outright. The ponencia, unfortunately, failed to fully discuss these legal infirmities. The motions for reconsideration lay major emphasis on the alleged lack of an actual case or controversy that made the Chief Justice's appointment a justiciable issue. They claim that the Court cannot exercise the power of judicial review where there is no clash of legal rights and interests or where this clash is merely anticipated, although the anticipated event shall come with certainty. 7 What the movants apparently forgot, focused as they were on their respective petitions, is that the present case is not a single-petition case that rises or falls on the strength of that single petition. The present case involves various petitions and interventions, 8 not necessarily pulling towards the same direction, although each one is focused on the issue of whether the election appointment ban under Article VII, Section 15 of the Constitution should apply to the appointment of the next Chief Justice of the Supreme Court. Among the petitions filed were those of Tolentino (G.R. No. 191342), Soriano (G.R. No. 191032) and Mendoza (A.M. No. 10-2-5-SC). The first two are petitions for prohibition under Section 2 of Rule 65 of the Rules of Court. 9 While they commonly share this medium of review, they differ in their supporting reasons. The Mendoza petition, on the other hand, is totally different it is a petition presented as an administrative matter (A.M.) in the manner

that the Valenzuela case was an A.M. case. As I pointed out in the Separate Opinion, the Court uses the A.M. docket designation on matters relating to its exercise of supervision over all courts and their personnel. 10 I failed to note then, but I make of record now, that court rules and regulations the outputs in the Court's rulemaking function are also docketed as A.M. cases. That an actual case or controversy involving a clash of rights and interests exists is immediately and patently obvious in the Tolentino and Soriano petitions. At the time the petitions were filed, the JBC had started its six-phase nomination process that would culminate in the submission of a list of nominees to the President of the Philippines for appointive action. Tolentino and Soriano lawyers and citizens with interest in the strict observance of the election ban sought to prohibit the JBC from continuing with this process. The JBC had started to act, without any prodding from the Court, because of its duty to start the nomination process but was hampered by the petitions filed and the legal questions raised that only the Supreme Court can settle with finality. 11 Thus, a clash of interests based on law existed between the petitioners and the JBC. To state the obvious, a decision in favor of Tolentino or Soriano would result in a writ of prohibition that would direct the JBC not to proceed with the nomination process. The Mendoza petition cited the effect of a complete election ban on judicial appointments (in view of the already high level of vacancies and the backlog of cases) as basis, and submitted the question as an administrative matter that the Court, in the exercise of its supervisory authority over the Judiciary and the JBC itself, should act upon. At the same time, it cited the "public discourse and controversy" now taking place because of the application of the election ban on the appointment of the Chief Justice, pointing in this regard to the very same reasons mentioned in Valenzuela about the need to resolve the issue and avoid the recurrence of conflict between the Executive and the Judiciary, and the need to "avoid polemics concerning the matter." 12 I recognized in the Separate Opinion that, unlike in Valenzuela where an outright defiance of the election ban took place, no such obvious triggering event transpired in the Mendoza petition. 13 Rather, the Mendoza petition looked to the supervisory power of the Court over judicial personnel and over the JBC as basis to secure a resolution of the election ban issue. The JBC, at that time, had indicated its intent to look up to the Court's supervisory power and role as the final interpreter of the Constitution to guide it in responding to the challenges it confronts. 14 To me, this was "a point no less critical, from the point of view of supervision, than the appointment of the two judges during the election ban period in Valenzuela." 15 In making this conclusion, I pointed out in my Separate Opinion the unavoidable surrounding realities evident from the confluence of events, namely: (1) an election to be held on May 10, 2010; (2) the retirement of the Chief Justice on May 17, 2010; (3) the lapse of the terms of the elective officials from the President to the congressmen on June 30, 2010; (4) the delay before the Congress can organize and send its JBC representatives; and (5) the expiration of the term of a non-elective JBC member in July 2010. 16 All these juxtaposed with the Court's supervision over the JBC, the latter's need for guidance, and the existence of an actual controversy on the same issues bedeviling the JBC in my view, were sufficient to save the Mendoza petition from being a mere request for opinion or a petition for declaratory relief that falls under the jurisdiction of the lower court. This recognition is beyond the level of what this Court can do in handling a moot and academic case usually, one that no longer presents a judiciable controversy but one that can still be ruled upon at the discretion of the court when

the constitutional issue is of paramount public interest and controlling principles are needed to guide the bench, the bar and the public. 17 To be sure, this approach in recognizing when a petition is actionable is novel. An overriding reason for this approach can be traced to the nature of the petition, as it rests on the Court's supervisory authority and relates to the exercise of the Court's administrative rather than its judicial functions (other than these two functions, the Court also has its rulemaking function under Article VIII, Section 5 (5) of the Constitution). Strictly speaking, the Mendoza petition calls for directions from the Court in the exercise of its power of supervision over the JBC, 18 not on the basis of the power of judicial review. 19 In this sense, it does not need the actual clash of interests of the type that a judicial adjudication requires. All that must be shown is the active need for supervision to justify the Court's intervention as supervising authority. Under these circumstances, the Court's recognition of the Mendoza petition was not an undue stretch of its constitutional powers. If the recognition is unusual at all, it is so only because of its novelty; to my knowledge, this is the first time ever in Philippine jurisprudence that the supervisory authority of the Court over an attached agency has been highlighted in this manner. Novelty, per se, however, is not a ground for objection nor a mark of infirmity for as long as the novel move is founded in law. In this case, as in the case of the writ of amparo and habeas data that were then novel and avowedly activist in character, sufficient legal basis exists to actively invoke the Court's supervisory authority granted under the Constitution, no less as basis for action. To partly quote the wording of the Constitution, Article VIII, Section 8 (1) and (5) provide that "A Judicial and Bar Council is hereby created under the supervision of the Supreme Court. . . It may exercise such other functions and duties as the Supreme Court may assign to it." Supervision, as a legal concept, more often than not, is defined in relation with the concept of control. 20 In Social Justice Society v. Atienza, 21 we defined "supervision" as follows: [Supervision] means overseeing or the power or authority of an officer to see that subordinate officers perform their duties. If the latter fail or neglect to fulfill them, the former may take such action or step as prescribed by law to make them perform their duties. Control, on the other hand, means the power of an officer to alter or modify or nullify or set aside what a subordinate officer ha[s] done in the performance of his duties and to substitute the judgment of the former for that of the latter. Under this definition, the Court cannot dictate on the JBC the results of its assigned task, i.e., who to recommend or what standards to use to determine who to recommend. It cannot even direct the JBC on how and when to do its duty, but it can, under its power of supervision, direct the JBC to "take such action or step as prescribed by law to make them perform their duties," if the duties are not being performed because of JBC's fault or inaction, or because of extraneous factors affecting performance. Note in this regard that, constitutionally, the Court can also assign the JBC other functions and duties a power that suggests authority beyond what is purely supervisory. Where the JBC itself is at a loss on how to proceed in light of disputed constitutional provisions that require interpretation, 22 the Court is not legally out of line as the final authority on the interpretation of the Constitution and as the entity constitutionally-tasked to supervise the JBC in exercising its oversight function by clarifying the interpretation of the disputed constitutional provision to guide the JBC. In doing this, the Court is not simply rendering a

general legal advisory; it is providing concrete and specific legal guidance to the JBC in the exercise of its supervisory authority, after the latter has asked for assistance in this regard. That the Court does this while concretely resolving actual controversies (the Tolentino and Soriano petitions) on the same issue immeasurably strengthens the intrinsic correctness of the Court's action. It may be asked: why does the Court have to recognize the Mendoza petition when it can resolve the conflict between Article VII, Section 15 and Article VIII, Section 4 (1) through the Tolentino and Soriano petitions? The answer is fairly simple and can be read between the lines of the above explanation on the relationship between the Court and the JBC. First, administrative is different from judicial function and providing guidance to the JBC can only be appropriate in the discharge of the Court's administrative function. Second, the resolution of the Tolentino and Soriano petitions will lead to rulings directly related to the underlying facts of these petitions, without clear guidelines to the JBC on the proper parameters to observe vis--vis the constitutional dispute along the lines the JBC needs. In fact, concrete guidelines addressed to the JBC in the resolution of the Tolentino/Soriano petitions may even lead to accusations that the Court's resolution is broader than is required by the facts of the petitions. The Mendoza petition, because it pertains directly to the performance of the JBC's duty and the Court's supervisory authority, allows the issuance of precise guidelines that will enable the JBC to fully and seasonably comply with its constitutional mandate. I hasten to add that the JBC's constitutional task is not as simple as some people think it to be. The process of preparing and submitting a list of nominees is an arduous and time-consuming task that cannot be done overnight. It is a six-step process lined with standards requiring the JBC to attract the best available candidates, to examine and investigate them, to exhibit transparency in all its actions while ensuring that these actions conform to constitutional and statutory standards (such as the election ban on appointments), to submit the required list of nominees on time, and to ensure as well that all these acts are politically neutral. On the time element, the JBC list for the Supreme Court has to be submitted on or before the vacancy occurs given the 90-day deadline that the appointing President is given in making the appointment. The list will be submitted, not to the President as an outgoing President, nor to the election winner as an incoming President, but to the President of the Philippines whoever he or she may be. If the incumbent President does not act on the JBC list within the time left in her term, the same list shall be available to the new President for him to act upon. In all these, the Supreme Court bears the burden of overseeing that the JBC's duty is done, unerringly and with utmost dispatch; the Court cannot undertake this supervision in a manner consistent with the Constitution's expectation from the JBC unless it adopts a pro-active stance within the limits of its supervisory authority. The Disputed Provisions The movants present their arguments on the main issue at several levels. Some argue that the disputed constitutional provisions Article VII, Section 15 and Article VIII, Section 4 (1) are clear and speak for themselves on what the Constitution covers in banning appointments during the election period. 23 One even posits that there is no conflict because both provisions can be given effect without one detracting against the full effectiveness of the other, 24 although the effect is to deny the sitting President the option to appoint in favor of a

deferment for the incoming President's action. Still others, repeating their original arguments, appeal to the principles of interpretation and latin maxims to prove their point. 25 In my discussions in the Separate Opinion, I stated upfront my views on how the disputed provisions interact with each other. Read singly and in isolation, they appear clear (this reading applies the "plain meaning rule" that Tolentino advocates in his motion for reconsideration, as explained below). Arrayed side by side with each other and considered in relation with the other provisions of the Constitution, particularly its structure and underlying intents, the conflict however becomes obvious and unavoidable. Section 15 on its face disallows any appointment in clear negative terms ("shall not make") without specifying the appointments covered by the prohibition. 26 From this literal and isolated reading springs the argument that no exception is provided (except that found in Section 15 itself) so that even the Judiciary is covered by the ban on appointments. On the other hand, Section 4 (1) is likewise very clear and categorical in its terms: any vacancy in the Court shall be filled within 90 days from its occurrence. 27 In the way of Section 15, Section 4 (1) is also clear and categorical and provides no exception; the appointment refers solely to the Members of the Supreme Court and does not mention any period that would interrupt, hold or postpone the 90-day requirement. From this perspective, the view that no conflict exists cannot be seriously made, unless with the mindset that one provision controls and the other should yield. Many of the petitions in fact advocate this kind of reading, some of them openly stating that the power of appointment should be reserved for the incoming President. 28 The question, however, is whether from the viewpoint of strict law and devoid of the emotionalism and political partisanship that permeate the present Philippine political environment this kind of mindset can really be adopted in reading and applying the Constitution. In my view, this kind of mindset and the conclusion it inevitably leads to cannot be adopted; the provisions of the Constitution cannot be read in isolation from what the whole contains. To be exact, the Constitution must be read and understood as a whole, reconciling and harmonizing apparently conflicting provisions so that all of them can be given full force and effect, 29 unless the Constitution itself expressly states otherwise. 30 Not to be forgotten in reading and understanding the Constitution are the many established underlying constitutional principles that we have to observe and respect if we are to be true to the Constitution. These principles among them the principles of checks and balances and separation of powers are not always expressly stated in the Constitution, but no one who believes in and who has studied the Constitution can deny that they are there and deserve utmost attention, respect, and even priority consideration. In establishing the structures of government, the ideal that the Constitution seeks to achieve is one of balance among the three great departments of government the Executive, the Legislative and the Judiciary, with each department undertaking its constitutionally-assigned task as a check against the exercise of power by the others, while all three departments move forward in working for the progress of the nation. Thus, the Legislature makes the laws and is supreme in this regard, in the way that the Executive is supreme in enforcing and administering the law, while the Judiciary interprets both the Constitution and the law. Any

provision in each of the Articles on these three departments 31 that intrudes into the other must be closely examined if the provision affects and upsets the desired balance. Under the division of powers, the President as Chief Executive is given the prerogative of making appointments, subject only to the legal qualification standards, to the checks provided by the Legislature's Commission on Appointments (when applicable) and by the JBC for appointments in the Judiciary, and to the Constitution's own limitations. Conflict comes in when the Constitution laid down Article VII, Section 15 limiting the President's appointing power during the election period. This limitation of power would have been all-encompassing and would, thus, have extended to all government positions the President can fill, had the Constitution not inserted a provision, also on appointments, in the Article on the Judiciary with respect to appointments to the Supreme Court. This conflict gives rise to the questions: which provision should prevail, or should both be given effect? Or should both provisions yield to a higher concern the need to maintain the integrity of our elections? A holistic reading of the Constitution a must in constitutional interpretation dictates as a general rule that the tasks assigned to each department and their limitations should be given full effect to fulfill the constitutional purposes under the check and balance principle, unless the Constitution itself expressly indicates its preference for one task, concern or standard over the others, 32 or unless this Court, in its role as interpreter of the Constitution, has spoken on the appropriate interpretation that should be made. 33 In considering the interests of the Executive and the Judiciary, a holistic approach starts from the premise that the constitutional scheme is to grant the President the power of appointment, subject to the limitation provided under Article VII, Section 15. At the same time, the Judiciary is assured, without qualifications under Article VIII, Section 4 (1), of the immediate appointment of Members of the Supreme Court, i.e., within 90 days from the occurrence of the vacancy. If both provisions would be allowed to take effect, as I believe they should, the limitation on the appointment power of the President under Article VII, Section 15 should itself be limited by the appointment of Members of the Court pursuant to Article VIII, Section 4 (1), so that the provision applicable to the Judiciary can be given full effect without detriment to the President's appointing authority. This harmonization will result in restoring to the President the full authority to appoint Members of the Supreme Court pursuant to the combined operation of Article VII, Section 15 and Article VIII, Section 4 (1). Viewed in this light, there is essentially no conflict, in terms of the authority to appoint, between the Executive and Judiciary; the President would effectively be allowed to exercise the Executive's traditional presidential power of appointment while respecting the Judiciary's own prerogative. In other words, the President retains full powers to appoint Members of the Court during the election period, and the Judiciary is assured of a full membership within the time frame given. Interestingly, the objection to the full application of Article VIII, Section 4 (1) comes, not from the current President, but mainly from petitioners echoing the present presidential candidates, one of whom shall soon be the incoming President. They do not, of course, cite reasons of power and the loss of the opportunity to appoint the Chief Justice; many of the petitioners/intervenors oppose the full application of Article VIII, Section 4 (1) based on the need to maintain the integrity of the elections through the avoidance of a "midnight appointment."

This "integrity" reason is a given in a democracy and can hardly be opposed on the theoretical plane, as the integrity of the elections must indeed prevail in a true democracy. The statement, however, begs a lot of questions, among them the question of whether the appointment of a full Court under the terms of Article VIII, Section 4 (1) will adversely affect or enhance the integrity of the elections. aHADTC In my Separate Opinion, I concluded that the appointment of a Member of the Court even during the election period per se implies no adverse effect on the integrity of the election; a full Court is ideal during this period in light of the Court's unique role during elections. I maintain this view and fully concur in this regard with the majority. During the election period, the court is not only the interpreter of the Constitution and the election laws; other than the Commission on Elections and the lower courts to a limited extent, the Court is likewise the highest impartial recourse available to decisively address any problem or dispute arising from the election. It is the leader and the highest court in the Judiciary, the only one of the three departments of government directly unaffected by the election. The Court is likewise the entity entrusted by the Constitution, no less, with the gravest election-related responsibilities. In particular, it is the sole judge of all contests in the election of the President and the Vice-President, with leadership and participation as well in the election tribunals that directly address Senate and House of Representatives electoral disputes. With this grant of responsibilities, the Constitution itself has spoken on the trust it reposes on the Court on election matters. This reposed trust, to my mind, renders academic any question of whether an appointment during the election period will adversely affect the integrity of the elections it will not, as the maintenance of a full Court in fact contributes to the enforcement of the constitutional scheme to foster a free and orderly election. In reading the motions for reconsideration against the backdrop of the partisan political noise of the coming elections, one cannot avoid hearing echoes from some of the arguments that the objection is related, more than anything else, to their lack of trust in an appointment to be made by the incumbent President who will soon be bowing out of office. They label the incumbent President's act as a "midnight appointment" a term that has acquired a pejorative meaning in contemporary society. As I intimated in my Separate Opinion, the imputation of distrust can be made against any appointing authority, whether outgoing or incoming. The incoming President himself will be before this Court if an election contest arises; any President, past or future, would also naturally wish favorable outcomes in legal problems that the Court would resolve. These possibilities and the potential for continuing influence in the Court, however, cannot be active considerations in resolving the election ban issue as they are, in their present form and presentation, all speculative. If past record is to be the measure, the record of past Chief Justices and of this Court speaks for itself with respect to the Justices' relationship with, and deferral to, the appointing authority in their decisions. What should not be forgotten in examining the records of the Court, from the prism of problems an electoral exercise may bring, is the Court's unique and proven capacity to intervene and diffuse situations that are potentially explosive for the nation. EDSA II particularly comes to mind in this regard (although it was an event that was not rooted in election problems) as it is a perfect example of the potential for damage to the nation that the Court can address and has addressed. When acting in this role, a vacancy in the Court is not

only a vote less, but a significant contribution less in the Court's deliberations and capacity for action, especially if the missing voice is the voice of the Chief Justice. Be it remembered that if any EDSA-type situation arises in the coming elections, it will be compounded by the lack of leaders because of the lapse of the President's term by June 30, 2010; by a possible failure of succession if for some reason the election of the new leadership becomes problematic; and by the similar absence of congressional leadership because Congress has not yet convened to organize itself. 34 In this scenario, only the Judiciary of the three great departments of government stands unaffected by the election and should at least therefore be complete to enable it to discharge its constitutional role to its fullest potential and capacity. To state the obvious, leaving the Judiciary without any permanent leader in this scenario may immeasurably complicate the problem, as all three departments of government will then be leaderless. To stress what I mentioned on this point in my Separate Opinion, the absence of a Chief Justice will make a lot of difference in the effectiveness of the Court as he or she heads the Judiciary, sits as Chair of the JBC and of the Presidential Electoral Tribunal, presides over impeachment proceedings, and provides the moral suasion and leadership that only the permanent mantle of the Chief Justice can bestow. EDSA II is just one of the many lessons from the past when the weightiest of issues were tackled and promptly resolved by the Court. Unseen by the general public in all these was the leadership that was there to ensure that the Court would act as one, in the spirit of harmony and stability although divergent in their individual views, as the Justices individually make their contributions to the collegial result. To some, this leadership may only be symbolic, as the Court has fully functioned in the past even with an incomplete membership or under an Acting Chief Justice. But as I said before, an incomplete Court "is not a whole Supreme Court; it will only be a Court with 14 members who would act and vote on all matters before it." To fully recall what I have said on this matter: The importance of the presence of one Member of the Court can and should never be underestimated, particularly on issues that may gravely affect the nation. Many a case has been won or lost on the basis of one vote. On an issue of the constitutionality of a law, treaty or statute, a tie vote which is possible in a 14 member court means that the constitutionality is upheld. This was our lesson in Isagani Cruz v. DENR Secretary. More than the vote, Court deliberation is the core of the decision-making process and one voice is less is not only a vote less but a contributed opinion, an observation, or a cautionary word less for the Court. One voice can be a big difference if the missing voice is that of the Chief Justice. Without meaning to demean the capability of an Acting Chief Justice, the ascendancy in the Court of a permanent sitting Chief Justice cannot be equaled. He is the first among equals a primus inter pares who sets the tone for the Court and the Judiciary, and who is looked up to on all matters, whether administrative or judicial. To the world outside the Judiciary, he is the personification of the Court and the whole Judiciary. And this is not surprising since, as Chief Justice, he not only chairs the Court en banc, but chairs as well the Presidential Electoral Tribunal that sits in judgment over election disputes affecting the President and the VicePresident. Outside of his immediate Court duties, he sits as Chair of the Judicial and Bar Council, the Philippine Judicial Academy and, by constitutional command, presides over the impeachment of the President. To be sure, the Acting Chief Justice may be the ablest, but he

is not the Chief Justice without the mantle and permanent title of the Office, and even his presence as Acting Chief Justice leaves the Court with one member less. Sadly, this member is the Chief Justice; even with an Acting Chief Justice, the Judiciary and the Court remains headless. 35 Given these views, I see no point in re-discussing the finer points of technical interpretation and their supporting latin maxims that I have addressed in my Separate Opinion and now feel need no further elaboration; maxims can be found to serve a pleader's every need and in any case are the last interpretative tools in constitutional interpretation. Nor do I see any point in discussing arguments based on the intent of the framers of the Constitution now cited by the parties in the contexts that would serve their own ends. As may be evident in these discussions, other than the texts of the disputed provisions, I prefer to examine their purposes and the consequences of their application, understood within the context of democratic values. Past precedents are equally invaluable for the lead, order, and stability they contribute, but only if they are in point, certain, and still alive to current realities, while the history of provisions, including the intents behind them, are primarily important to ascertain the purposes the provisions serve. From these perspectives and without denigrating the framers' historical contributions, I say that it is the Constitution that now primarily speaks to us in this case and what we hear are its direct words, not merely the recorded isolated debates reflecting the personal intents of the constitutional commissioners as cited by the parties to fit their respective theories. The voice speaking the words of the Constitution is our best guide, as these words will unalterably be there for us to read in the context of their purposes and the nation's needs and circumstances. This Concurring and Dissenting Opinion hears and listens to that voice. The Valenzuela Decision The ponencia's ruling reversing Valenzuela, in my view, is out of place in the present case, since at issue here is the appointment of the Chief Justice during the period of the election ban, not the appointment of lower court judges that Valenzuela resolved. To be perfectly clear, the conflict in the constitutional provisions is not confined to Article VII, Section 15 and Article VIII, Section 4 (1) with respect to the appointment of Members of the Supreme Court; even before the Valenzuela ruling, the conflict already existed between Article VII, Section 15 and Article VIII, Section 9 the provision on the appointment of the justices and judges of courts lower than the Supreme Court. After this Court's ruling in Valenzuela, no amount of hairsplitting can result in the conclusion that Article VII, Section 15 applied the election ban over the whole Judiciary, including the Supreme Court, as the facts and the fallo of Valenzuela plainly spoke of the objectionable appointment of two Regional Trial Court judges. To reiterate, Valenzuela only resolved the conflict between Article VII, Section 15 and appointments to the Judiciary under Article VIII, Section 9. If Valenzuela did prominently figure at all in the present case, the prominence can be attributed to the petitioners' mistaken reading that this case is primary authority for the dictum that Article VII, Section 15 completely bans all appointments to the Judiciary, including appointments to the Supreme Court, during the election period up to the end of the incumbent President's term. In reality, this mistaken reading is an obiter dictum in Valenzuela, and hence, cannot be cited for its primary precedential value. This legal situation still holds true as Valenzuela was not

doctrinally reversed as its proposed reversal was supported only by five (5) out of the 12 participating Members of the Court. In other words, this ruling on how Article VII, Section 15 is to be interpreted in relation with Article VIII, Section 9, should continue to stand unless otherwise expressly reversed by this Court. But separately from the mistaken use of an obiter ruling as primary authority, I believe that I should sound the alarm bell about the Valenzuela ruling in light of a recent vacancy in the position of Presiding Justice of the Sandiganbayan resulting from Presiding Justice Norberto Geraldez's death soon after we issued the decision in the present case. Reversing the Valenzuela ruling now, in the absence of a properly filed case addressing an appointment at this time to the Sandiganbayan or to any other vacancy in the lower courts, will be an irregular ruling of the first magnitude by this Court, as it will effectively be a shortcut that lifts the election ban on appointments to the lower courts without the benefit of a case whose facts and arguments would directly confront the continued validity of the Valenzuela ruling. This is especially so after we have placed the Court on notice that a reversal of Valenzuela is uncalled for because its ruling is not the litigated issue in this case. In any case, let me repeat what I stressed in my Separate Opinion about Valenzuela which rests on the reasoning that the evils Section 15 seeks to remedy vote buying, midnight appointments and partisan reasons to influence the elections exist, thus justifying an election appointment ban. In particular, the "midnight appointment" justification, while fully applicable to the more numerous vacancies at the lower echelons of the Judiciary (with an alleged current lower court vacancy level of 537 or a 24.5% vacancy rate), should not apply to the Supreme Court which has only a total of 15 positions that are not even vacated at the same time. The most number of vacancies for any one year occurred only last year (2009) when seven (7) positions were vacated by retirement, but this vacancy rate is not expected to be replicated at any time within the next decade. Thus "midnight appointments" to the extent that they were understood in Aytona 36 will not occur in the vacancies of this Court as nominations to its vacancies are all processed through the JBC under the public's close scrutiny. As already discussed above, the institutional integrity of the Court is hardly an issue. If at all, only objections personal to the individual Members of the Court or against the individual applicants can be made, but these are matters addressed in the first place by the JBC before nominees are submitted. There, too, are specific reasons, likewise discussed above, explaining why the election ban should not apply to the Supreme Court. These exempting reasons, of course, have yet to be shown to apply to the lower courts. Thus, on the whole, the reasons justifying the election ban in Valenzuela still obtain in so far as the lower courts are concerned, and have yet to be proven otherwise in a properly filed case. Until then, Valenzuela, except to the extent that it mentioned Section 4 (1), should remain an authoritative ruling of this Court. aSCHIT CONCLUSION In light of these considerations, a writ of prohibition cannot issue to prevent the JBC from performing its principal function, under the Constitution, of recommending nominees for the position of Chief Justice. Thus, I vote to deny with finality the Tolentino and Soriano motions for reconsideration. The other motions for reconsideration in so far as they challenge the conclusion that the President can appoint the Chief Justice even during the election period are likewise denied

with finality for lack of merit, but are granted in so far as they support the continued validity of the ruling of this Court in In Re: Valenzuela and Vallarta, A.M. No. 98-5-01-SC, November 9, 1998. My opinion on the Mendoza petition stands