V-cases-stat.con.docx

1 Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-33628 December 29, 1987 BIENVENIDO A. EBARLE, SANTIAGO EISMA, MIRUFO CELERIAN, JOSE SAYSON, CESAR TABILIRAN, and MAXIMO ADLAWAN, petitioners, vs. HON. JUDGE MELQUIADES B. SUCALDITO, RUFINO LABANG, MENELEO MESINA, ARTURO GUILLERMO, IN THEIR RESPECTIVE CAPACITIES AS JUDGE OF THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL SUR, CITY FISCAL OF PAGADIAN CITY AND STATE PROSECUTOR, and ANTI-GRAFT LEAGUE OF THE PHILIPPINES, INC., respondents. No. L-34162 December 29, 1987 BIENVENIDO A. EBARLE, petitioner, vs. HON. JUDGE ASAALI S. ISNANI, RUFINO LABANG, ALBERTO S. LIM, JR., JESUS ACEBES, IN THEIR RESPECTIVE CAPACITIES AS JUDGE OF THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL SUR, CITY FISCAL OF PAGADIAN CITY AND STATE PROSECUTORS, ANTI-GRAFT LEAGUE OF THE PHILIPPINES, INC., and ARTEMIO ROMANILLOS, respondents.

SARMIENTO, J.: The petitioner, then provincial Governor of Zamboanga del Sur and a candidate for reelection in the local elections of 1971, seeks injunctive relief in two separate petitions, to enjoin further proceedings in Criminal Cases Nos. CCC XVI-4-ZDS, CCC XVI-6ZDS, and CCC XVI-8-ZDS of the then Circuit Criminal Court sitting in Pagadian City, as well as I.S. Nos. 1-70, 2-71, 4-71, 5-71, 6-71,

and 7-71 of the respondent Fiscal's office of the said city, all in the nature of prosecutions for violation of certain provisions of the Anti-Graft and Corrupt Practices Act (Republic Act No. 3019) and various provisions of the Revised Penal Code, commenced by the respondent Anti-Graft League of the Philippines, Inc. On June 16, 1971 and October 8, 1971, respectively, we issued temporary restraining orders directing the respondents (in both petitions) to desist from further proceedings in the cases in question until further orders from the Court. At the same time, we gave due course to the petitions and accordingly, required the respondents to answer.

private secretary of respondent Bienvenido Ebarle, formerly confidential secretary of the latter; that said awardee was given wholly unwarranted advantage and preference by means of manifest partiality; that respondent officials are hereby also charged with interest for personal gain for approving said award which was manifestly irregular and grossly unlawful because the same was facilitated and committed by means of falsification of official documents. SPECIFICATION NO. II

The petitions raise pure question of law. The facts are hence, undisputed. On September 26, 1970, the private respondent Anti-Graft League of the Philippines, Inc., filed a complaint with the respondent City Fiscal, docketed as Criminal Case No. 1-70 thereof, for violation of the provisions of the Anti-Graft Law as well as Article 171 of the Revised Penal Code, as follows: xxx xxx xxx SPECIFICATION NO. I — That on or about October 10, 1969, abovenamed respondents, conspiring and confabulating together, allegedly conducted a bidding for the supply of gravel and sand for the Province of Zamboanga del Sur: that it was made to appear that Tabiliran Trucking Company won the bidding; that, thereafter, the award and contract pursuant to the said simulated bidding were effected and executed in favor of Tabiliran Trucking Company; that, in truth and in fact, the said bidding was really simulated and the papers on the same were falsified to favor Tabiliran Trucking Company, represented by the

That after the aforecited award and contract, Tabiliran Trucking Company, represented by respondent Cesar Tabiliran, attempted to collect advances under his trucking contract in the under his trucking contract in the amount of P4,823.95 under PTA No. 3654; that the same was not passed in audit by the Provincial Auditor in view of the then subsisting contract with Tecson Trucking Company; which was to expire on November 2, 1969; that nevertheless the said amount was paid and it was made to appear that it was collected by Tecson Trucking Company, although there was nothing due from tile latter and the voucher was never indorsed or signed by the operator of Tecson Trucking; and that in facilitating and consummating the aforecited collection, respondent officials, hereinabove cited, conspired and connived to the great prejudice and damage of the Provincial Government of Zamboanga del Sur. 1 xxx xxx xxx On the same date, the private respondent commenced Criminal Case No. 2-71 of the respondent City Fiscal, another proceeding

2 for violation of Republic Act No. 3019 as well as Article 171 of the Revised Penal Code. The complaint reads as follows: xxx xxx xxx That on or about April 8, 1970, a bidding was held for the construction of the right wing portion of the Capitol Building of the Province of Zamboanga del Sur, by the Bidding Committee composed of respondents cited hereinabove; that the said building was maliciously manipulated so as to give wholly unwarranted advantage and preference in favor of the, supposed winning bidder, Codeniera Construction, allegedly owned and managed by Wenceslao Codeniera, brotherin-law of the wife of respondent Bienvenido Ebarle; that respondent official is interested for personal gain because he is responsible for the approval of the manifestly irregular and unlawful award and contract aforecited; and that, furthermore, respondent, being a Member of the Bidding Committee, also violated Article 171 of the Revised Penal Code, by making it appear in the very abstract of bids that another interested bidder, was not interested in the bidding, when in truth and in fact, it was not so. 2 xxx xxx xxx On January 26, 1971, the private respondent instituted I.S. No. 471 of the respondent Fiscal, a prosecution for violation of Articles 182, 183, and 318 of the Revised Penal Code, as follows: xxx xxx xxx That on or about April 4, 1967, in Pagadian City, said respondent testified falsely under oath in Cadastral Case No. N-17, LRC CAD

REC. NO. N-468, for registration of title to Lot No. 2545 in particular; That respondent BIENVENIDO EBARLE testified falsely under oath during the hearing and reception of evidence that he acquired said lot by purchase from a certain Brigido Sanchez and that he is the owner, when in truth and in fact Lot 2545 had been previously acquired and is owned by the provincial Government of Zamboanga del Sur, where the provincial jail building is now located. 2. That aforesaid deceit, false testimony and untruthful statement of respondent in said Cadastral case were made knowingly to the great damage and prejudice of the Provincial Government of Zamboanga del Sur in violation of aforecited provisions of the Revised Penal Code. 3 On February 10, 1971, finally, the private respondent filed a complaint, docketed as I.S. No. 5-71 of the respondent Fiscal, an action for violation of Republic Act No. 3019 and Articles 171 and 213 of the Revised Penal Code, as follows: xxx xxx xxx We hereby respectfully charge the abovenamed respondents for violation of Sec. 3, R.A. No. 3019, otherwise known as the AntiGraft and Corrupt Practices Act, Articles 171 and 213, Revised Penal Code and the rules and regulations of public bidding, committed as follows: 1. That on June 16, 1970, without publication, respondents conducted

the so-called "bidding" for the supply of gravel and sand for the province of Zamboanga del Sur; that said respondents, without any valid or legal ground, did not include or even open the bid of one Jesus Teoson that was seasonably submitted, despite the fact that he is a registered duly qualified operator of "Teoson Trucking Service," and notwithstanding his compliance with all the rules and requirements on public bidding; that, instead, aforecited respondents illegally and irregularly awarded said contract to Cesar Tabiliran, an associate of respondent Governor Bienvenido Ebarle; and 2. That in truth and in fact, aforesaid "bidding" was really simulated and papers were falsified or otherwise "doctored" to favor respondent Cesar Tabiliran thereby giving him wholly unwarranted advantage, preference and benefits by means of manifest partiality; and that there is a statutory presumption of interest for personal gain because the transaction and award were manifestly

3 irregular and contrary to applicable law, rules and regulations. 4 xxx xxx xxx The petitioner initially moved to dismiss the aforesaid preliminary investigations, but the same having been denied, he went to the respondent Court of First Instance of Zamboanga del Sur, the Honorable Melquiades Sucaldito presiding, on prohibition and mandamus (Special Case No. 1000) praying at the same time, for a writ of preliminary injunction to enjoin further proceedings therein. The court granted preliminary injunctive relief (restraining order) for which the Anti-Graft League filed a motion to have the restraining order lifted and to have the petition itself dismissed. On May 14, 1971, the respondent, Judge Sucaldito, handed down the first of the two challenged orders, granting Anti-Graft League's motion and dismissing Special Case No. 1000. On June 11, 1971, the petitioner came to this Court on certiorari with prayer for a temporary restraining order (G.R. No. 33628). As we said, we issued a temporary restraining order on June 16, 1971. Meanwhile, and in what would begin yet another series of criminal prosecutions, the private respondent, on April 26, 1971, filed three complaints, subsequently docketed as Criminal Cases Nos. CCC XVI-4-ZDS, CCC XVI-6-ZDS, and CCC XVI-8-ZDS of the Circuit Criminal Court of Pagadian City for violation of various provisions of the Anti-Graft Law as well as Article 171(4) of the Revised Penal Code, as follows: xxx xxx xxx That on or about December 18, 1969, in Pagadian City, and within the jurisdiction of this Honorable Court, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga

del Sur, did then and there unlawfully and feloniously extended and gave ELIZABETH EBARLE MONTESCLAROS, daughter of his brother, his relative by consanguinity within the third degree, and appointment as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well know that the latter is related with him within the third degree by consanguinity.

xxx xxx xxx

CONTRARY TO LAW. 5

c. That the provisions of law and rules on promotion, seniority and nepotism have been observed.

xxx xxx xxx xxx xxx xxx That on or about December 18, 1969, in Pagadian City, and within the jurisdiction of this Honorable Court, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statements in a narration of facts by accomplishing and issuing a certificate, to wit: ,

That on or about December 18, 1969, in Pagadian City, and within the jurisdiction of this Honorable Court, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statements in a narration of facts by accomplishing and issuing a certificate, to wit:

required by law in such cases, in support of the appointment he extended to TERESITO MONTESCLAROS, husband of his niece Elizabeth Ebarle, as Motor Pool Dispatcher, Office of the Provincial Engineer of Zamboanga del Sur, although he well knew that the latter is related with him within the third degree affinity. CONTRARY TO LAW. 7

c. That the provisions of law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to ELIZABETH EBARLE-MONTESCLAROS as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well know that the latter is related with him within the third degree of consanguinity. CONTRARY TO LAW. 6 xxx xxx xxx

xxx xxx xxx Subsequently, on August 23, 1971, the private respondent brought I.S. No. 6-71 of the respondent Pagadian City Fiscal against the petitioner, still another proceeding for violation of Republic Act No. 3019 and Article 171 (4) of the Revised Penal Code, thus: xxx xxx xxx First Count. That on or about December 1, 1969, in Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur,

4 did then and there unlawfully and feloniously extended and gave MARIO EBARLE, son of his brother, his relative by consanguinity within the third degree, an appointment as SECURITY GUARD in the Office of the Provincial Engineer of Zamboanga del Sur although he well knew that the latter is related with him in the third degree by consanguinity and is not qualified under the Civil Service Law. Second Count. That in January, 1970, at Pagadian City, Gov. BIENVENIDO A. EBARLE replaced JOHNNY ABABON who was then the incumbent Motor Pool Dispatcher in the Office of the Provincial Engineer of Zamboanga del Sur with his nephew-in-law TERESITO MONTESCLAROS relative by affinity within the third Civil degree, in violation of the Civil Service Law, this knowingly causing undue injury in the discharge of his administrative function through manifest partiality against said complaining employee. Third Count: That on or about December 18, 1969, in Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave ELIZABETH EBARLE MONTESCLAROS, daughter of his brother, his relative by consanguinity within the third degree, an appointment as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well know that the latter is related with him within the third degree of consanguinity, and said

appointment is in violation of the Civil Service Law. Fourth Count. That on or about January 22, 1970, in Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave ZACARIAS UGSOD, JR., son of the younger sister of Governor Ebarle, his relative by consanguinity within the third degree, an appointment as Architectural Draftsman in the Office of the Provincial Engineer of Zamboanga del Sur although he well know that the latter is related with him in the third degree of consanguinity. Fifth Count. That on February 5, 1970, at Pagadian City, BIENVENIDO A. EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extended and gave TERESITO MONTESCLAROS, husband of his niece ELIZABETH EBARLE, his relative by affinity within the third degree, an appointment as Motor Pool Dispatcher, Office of the Provincial Engineer of Zamboanga del Sur, although he wen knew then that the latter was not qualified to such appointment as it was in violation of the Civil Service Law, thereby knowingly granting and giving unwarranted advantage and preference in the discharge of his administrative function through manifest partiality. II. SPECIFICATION FOR VIOLATION OF SECTION 4 (b), R.A. 3019

That on August 19, 1967, respondent BIENVENIDO A. EBARLE, Governor of Zamboanga del Sur, taking advantage of his position caused, persuaded, induced, or influence the Presiding Judge to perform irregular and felonious act in violation of applicable law or constituting an offense into awarding and decreeing Lot 2645 of the Pagadian Public Lands subdivision to him who, according to the records of the case, failed to establish his rights of ownership pursuant to the provisions of the Land Registration law and the Public Land Act, it appearing that the Provincial Government of Zamboanga del Sur as and is a claimant and in adverse possession of Lot 2545 whereon the Provincial Jail Building thereon still stands. III. SPECIFICATION FOR VIOLATION OF ARTICLE 171 (4), REVISED PENAL CODE First Count. That on or about December 18, 1969, in Pagadian City, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statement in a narration of facts by accomplishing and issuing a certificate, to wit: c. That the provisions of law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to TERESITO MONTESCLAROS, husband of his niece ELIZABETH EBARLE, as Motor Pool Dispatcher, Office of the Provincial Engineer of Zamboanga del Sur, although he wen knew that the latter is related with him within the

5 third degree of affinity and is in violation of the Civil Service Law. Second Count. That on or about December 18, 1969, in Pagadian City, BIENVENIDO A. EBARLE, then and there unlawfully and feloniously made untruthful statements a certificate, to wit: c. That the provisions of the law and rules on promotion, seniority and nepotism have been observed. required by law in such cases, in support of the appointment he extended to ELIZABETH EBARLE-MONTESCLAROS as Private Secretary in the Office of the Provincial Governor of Zamboanga del Sur, although he well knew that the latter is related with him within the third degree of consanguinity, and is in violation of the Civil Service Law. CONTRARY to aforecited laws. 8 xxx xxx xxx On September 21, 1971, the private respondent instituted I.S. No. 7-71 of the said City Fiscal, again charging the petitioner with further violations of Republic Act No. 3019 thus: xxx xxx xxx First Count. That on or about December 2, 1969, in Pagadian City, BIENVENIDO EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extend and give unwarranted benefits and privileges BONINDA EBARLE, wife of his

brother Bertuldo Ebarle, the former being his relative by affinity within the second civil degree, an appointment as LABORATORY TECHNICIAN in Pagadian City, although he well knew that the latter is related to him in the second degree by affinity and is not qualified under the Civil Service Law.

Please give due course to the above complaint and please set the case for immediate preliminary investigation pursuant to the First Indorsement dated August 27, 1971 of the Secretary of Justice, and in the paramount interest of good government. 9 xxx xxx xxx

Second Count. That on or about January 1, 1970, at Pagadian City, BIENVENIDO EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extend and give unwarranted benefits and privileges JESUS EBARLE, nephew of said respondent, an appointment as DRIVER of the Provincial Engineer's Office, Pagadian City, although he well knew that Jesus Ebarle is related to him within the third civil degree by consanguinity and is not qualified under the Civil Service Law. Third Count. That on or about November 1, 1969, at Pagadian City, BIENVENIDO EBARLE, Provincial Governor of Zamboanga del Sur, did then and there unlawfully and feloniously extend and give unwarranted benefits and privileges PHENINA CODINERA, sister-in-law of said respondent, an appointment as CONFIDENTIAL ASSISTANT in the Office of the Provincial Governor, Pagadian City, although he well knew that Phenina Codinera is related to him in the second civil degree of consanguinity and is not qualified under the Civil Service Law. ALL CONTRARY TO AFORECITED LAW.

The petitioner thereafter went to the respondent Court of First Instance of Zamboanga del Sur, the Honorable Asaali Isnani presiding, on a special civil action (Special Civil Case No. 1048) for prohibition and certiorari with preliminary injunction. The respondent Court issued a restraining order. The respondent Anti-Graft League moved to have the same lifted and the case itself dismissed. On September 27, 1971, Judge Isnani issued an order, dismissing the case. On October 6, 1971, the petitioner instituted G.R. No. 34162 of this Court, a special civil action for certiorari with preliminary injunction. As earlier noted, we on October 8, 1971, stayed the implementation of dismissal order. Subsequently, we consolidated both petitions and considered the same submitted for decision. Principally, the petitioner relies (in both petitions) on the failure of the respondents City Fiscal and the Anti-Graft League to comply with the provisions of Executive Order No. 264, "OUTLINING THE PROCEDUE BY WHICH COMPLAINANTS CHARGING GOVERNMENT OFFICIALS AND EMPLOYEES WITH COMMISSION OF IRREGULARITIES SHOULD BE GUIDED," 10 preliminary to their criminal recourses. At the same time, he assails the standing of the respondent Anti-Graft League to commence the series of prosecutions below (G.R. No. 33628). He likewise contends that the respondent Fiscal (in G.R. No. 34162), in giving due course to the complaints notwithstanding the restraining order we had issued (in G.R. No. 33628), which he

6 claims applies as well thereto, committed a grave abuse of discretion. He likewise submits that the prosecutions in question are politically motivated, initiated by his rivals, he being, as we said, a candidate for reelection as Governor of Zamboanga del Sur. We dismiss these petitions. The petitioner's reliance upon the provisions of Executive Order No. 264 has no merit. We reproduce the Order in toto: MALACAÑANG RESIDENCE OF THE PRESIDENT OF THE PHILIPPINES MANILA BY THE PRESIDENT OF THE PHILIPPINES EXECUTIVE ORDER NO. 264 OUTLINING THE PROCEDURE BY WHICH COMPLAINANTS CHARGING GOVERNMENT OFFICIALS AND EMPLOYEES WITH COMMISSION OF IRREGULARITIES SHOULD BE GUIDED. WHEREAS, it is necessary that the general public be duly informed or reminded of the procedure provided by law and regulations by which complaints against public officials and employees should be presented and prosecuted. WHEREAS, actions on complaints are at times delayed because of the failure to observe the

form.91 requisites therefor, to indicate with sufficient clearness and particularity the charges or offenses being aired or denounced, and to file the complaint with the proper office or authority; WHEREAS, without in any way curtailing the constitutional guarantee of freedom of expression, the Administration believes that many complaints or grievances could be resolved at the lower levels of government if only the provisions of law and regulations on the matter are duly observed by the parties concerned; and WHEREAS, while all sorts of officials misconduct should be eliminated and punished, it is equally compelling that public officials and employees be given opportunity afforded them by the constitution and law to defend themselves in accordance with the procedure prescribed by law and regulations; NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by law, do hereby order: 1. Complaints against public officials and employees shall be in writing, subscribed and sworn to by the complainants, describing in sufficient detail and particularity the acts or conduct complained of, instead of generalizations. 2. Complaints against presidential appointees shag be filed with the Office of the President or the Department Head having direct supervision or control over the official involved.

3. Those against subordinate officials and employees shall be lodged with the proper department or agency head. 4. Those against elective local officials shall be filed with the Office of the President in case of provincial and city officials, with the provincial governor or board secretary in case of municipal officials, and with the municipal or city mayor or secretary in case of barrio officials. 5. Those against members of police forces shall be filed with the corresponding local board of investigators headed by the city or municipal treasurer, except in the case of those appointed by the President which should be filed with the Office of the President. 6. Complaints against public officials and employees shall be promptly acted upon and disposed of by the officials or authorities concerned in accordance with pertinent laws and regulations so that the erring officials or employees can be soonest removed or otherwise disciplined and the innocent, exonerated or vindicated in like manner, and to the end also that other remedies, including court action, may be pursued forthwith by the interested parties after administrative remedies shall have been exhausted. Done in the City of Manila, this 6th day of October, in the year of Our Lord, nineteen hundred and seventy.

7 . ) F E R President: By the D I N A N D E . M A R C O S

n e s

P r e s i d e n t o f t h e P h i l i p p i

( S g It is plain from the verydwording of the Order that it has exclusive application to administrative, not criminal complaints. The Order . itself shows why. ) A The very title speaks ofL"COMMISSION OF IRREGULARITIES." There is no mention, not E even by implication, of criminal "offenses," that is to say, J "crimes." While "crimes" amount to "irregularities," the Executive A Order could have very well referred to the more specific term N had it intended to make itself applicable thereto. D R The first perambulatoryOclause states the necessity for informing M the public "of the procedure provided by law and regulations by E public officials and employees should which complaints against L be presented and prosecuted. 12 To our mind, the "procedure C provided by law and regulations" referred to pertains to existing H procedural rules with respect to the presentation of administrative charges O against erring government officials. And in R fact, the aforequoted paragraphs are but restatements thereof. That presidential appointees are subject to the disciplinary jurisdiction of the President, for instance, isEa reecho of the longstanding doctrine that the President exercises x the power of control over his appointees. 13 Paragraph 3, e on the other hand, regarding subordinate officials, is a mere reiteration c of Section 33 of Republic Act No. 2260, the Civil Service Act u (of 1959) then in force, placing jurisdiction upon "the propert Head of Department, the chief of a bureau or office" 14 to investigate i and decide on matters involving disciplinary action. v e S against elective Paragraph 4, which refers to complaints filed local officials, reiterates, on the other hand,e the Decentralization Act of 1967, providing that "charges againstc any elective

8 provincial and city officials shall be preferred before the President of the Philippines; against any elective municipal official before the provincial governor or the secretary of the provincial board concerned; and against any elective barrio official before the municipal or secretary concerned. 15 Paragraph 5, meanwhile, is a reproduction of the provisions of the Police Act of 1966, vesting upon a "Board of Investigators" 16 the jurisdiction to try and decide complaints against members of the Philippine police. Clearly, the Executive Order simply consolidates these existing rules and streamlines the administrative apparatus in the matter of complaints against public officials. Furthermore, the fact is that there is no reference therein to judicial or prejudicial (like a preliminary investigation conducted by the fiscal) recourse, not because it makes such a resort a secondary measure, but because it does not intend to serve as a condition precedent to, much less supplant, such a court resort. To be sure, there is mention therein of "court action[s] [being] pursued forthwith by the interested parties, " 17 but that does not, so we hold, cover proceedings such as criminal actions, which do not require a prior administrative course of action. It will indeed be noted that the term is closely shadowed by the qualification, "after administrative remedies shall have been exhausted," 18 which suggests civil suits subject to previous administrative action. It is moreover significant that the Executive Order in question makes specific reference to "erring officials or employees ... removed or otherwise vindicated. 19 If it were intended to apply to criminal prosecutions, it would have employed such technical terms as "accused", "convicted," or "acquitted." While this is not necessarily a controlling parameter for all cases, it is here material in construing the intent of the measure. What is even more compelling is the Constitutional implications if the petitioner's arguments were accepted. For Executive Order No. 264 was promulgated under the 1935 Constitution in which legislative power was vested exclusively in Congress. The regime

of Presidential lawmaking was to usher in yet some seven years later. If we were to consider the Executive Order law, we would be forced to say that it is an amendment to Republic Act No. 5180, the law on preliminary investigations then in effect, a situation that would give rise to a Constitutional anomaly. We cannot accordingly countenace such a view. The challenge the petitioner presents against the personality of the Anti-Graft League of the Philippines to bring suit is equally without merit. That the Anti-Graft League is not an "offended party" within the meaning of Section 2, Rule 110, of the Rules of Court (now Section 3 of the 1985 Rules on Criminal Procedure), cannot abate the complaints in question. A complaint for purposes of preliminary investigation by the fiscal need not be filed by the "offended party." The rule has been that, unless the offense subject thereof is one that cannot be prosecuted de oficio, the same may be filed, for preliminary investigation purposes, by any competent person. 20 The "complaint" referred to in the Rule 110 contemplates one filed in court, not with the fiscal, In that case, the proceeding must be started by the aggrieved party himself. 21 For as a general rule, a criminal action is commenced by complaint or information, both of which are filed in court. In case of a complaint, it must be filed by the offended party; with respect to an information, it is the fiscal who files it. But a "complaint" filed with the fiscal prior to a judicial action may be filed by any person. The next question is whether or not the temporary restraining order we issued in G.R. No. 33628 embraced as well the complaint subject of G.R. No. 34162. It is noteworthy that the charges levelled against the petitioner — whether in G.R. No. 33628 or 34162 — refer invariably to violations of the Anti-Graft Law or the Revised Penal Code. That does not, however, make such charges Identical to one another.

The complaints involved in G.R. No. 34162 are, in general, nepotism under Sections 3(c) and (j) of Republic Act No. 3019; exerting influence upon the presiding Judge of the Court of First Instance of Zamboanga del Sur to award a certain parcel of land in his favor, over which the provincial government itself lays claims, contrary to the provisions of Section 4(b) of Republic Act No. 3019; and making untruthful statements in the certificates of appointment of certain employees in his office. On the other hand, the complaints subject matter of G.R. No. 33628 involve charges of simulating bids for the supply of gravel and sand for certain public works projects, in breach of Section 3 of the AntiGraft statute; manipulating bids with respect to the construction of the capitol building; testifying falsely in connection with Cadastral Case No. N-17, LRC Cad. Rec. N-468, in which the petitioner alleged that he was the owner of a piece of land, in violation of Articles 182, 183, and 318 of the Revised Penal Code; and simulating bids for the supply of gravel and sand in connection with another public works project. It is clear that the twin sets of complaints are characterized by major differences. When, therefore, we restrained further proceedings in I.S. Nos. 1-71, 2-71, and 4-71, subject of G.R. No. 33628. we did not consequently stay the proceedings in CCC-XVI4-ZDS, CCC XVI-6-ZDS, CCC XVI-8-ZDS, and I.S. Nos. 6-71 and 7-71, the same proceedings we did restrain in G.R. No. 34162. This brings us to the last issue: whether or not the complaints in question are tainted with a political color. It is not our business to resolve complaints the disposition of which belongs to another agency, in this case, the respondent Fiscal. But more than that, and as a general rule, injunction does not lie to enjoin criminal prosecutions. 22 The rule is subject to exceptions, to wit: (1) for the orderly administration of justice; (2) to prevent the use of the strong arm of the law in an oppressive and vindictive manner; (3) to avoid multiplicity of actions; (4) to afford adequate protection to constitutional rights; and (5) because the statute relied on is constitutionally infirm or otherwise void. 23 We cannot perceive any of the exceptions applicable here. The petitioner cries foul, in a manner of speaking, with respect to the deluge of complaints commenced

9 by the private respondent below, but whether or not they were filed for harassment purposes is a question we are not in a position to decide. The proper venue, we believe, for the petitioner's complaint is precisely in the preliminary investigations he wishes blocked here.

ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO VERSOZA, respondents. G.R. No. L-46313-16 November 20, 1978

It is so ORDERED.

THE PEOPLE OF THE PHILIPPINES, petitioner, vs. JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and JUANITO DE LA CRUZ Y NUNEZ, SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO and BEN CASTILLO Y UBALDO, respondents.

Yap (Chairman), Melencio-Herrera, Paras, and Padilla, JJ., concur.

G.R. No. L-46997 November 20, 1978

WHEREFORE, the petitions are DISMISSED. The temporary restraining orders are LIFTED and SET ASIDE. Costs against the petitioners.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-42050-66 November 20, 1978 THE PEOPLE OF THE PHILIPPINES, petitioner, vs. HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST INSTANCE OF MANILA, BRANCH VII, and PORFIRIO CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON BUNDALIAN, JR., JOSEPH C. MAISO, EDUARDO A. LIBORDO, ROMEO L. SUGAY, FEDERICO T. DIZON, GEORGE M. ALBINO, MARIANO COTIA, JR., ARMANDO L. DIZON, ROGELIO B. PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A. BACARRA, REYNALDO BOGTONG, and EDGARDO M. MENDOZA, respondents. G.R. No. L-46229-32 November 20, 1978 THE PEOPLE OF THE PHILIPPINES, petitioner, vs. JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and REYNALDO LAQUI Y AQUINO,

THE PEOPLE OF THE PHILIPPINES, petitioner, vs. THE HONORABLE WENCESLAO M. POLO, Judge of the Court of First Instance of Samar, and PANCHITO REFUNCION, respondents. Jose L. Gamboa, Fermin Martin, Jr. & Jose D. Cajucom, Office of the City of Fiscal of Manila and the Office of Provincial Fiscal of Samar for petitioners. Norberto Parto for respondents Candelosas, Baes and Garcia. Amado C. de la Marced for respondents Simeon Bundalian Jr., et al.

These twenty-six (26) Petitions for Review filed by the People of the Philippines represented, respectively, by the Office of the City Fiscal of Manila, the Office of the Provincial Fiscal of Samar, and joined by the Solicitor General, are consolidated in this one Decision as they involve one basic question of law. These Petitions or appeals involve three Courts of First Instance, namely: the Court of First Instance of Manila, Branch VII, presided by Hon. Amante P. Purisima (17 Petitions), the Court of First Instance of Manila, Branch XVIII, presided by Hon. Maximo A. Maceren (8 Petitions) and, the Court of First Instance of Samar, with Hon. Wenceslao M. Polo, presiding, (1 Petition). Before those courts, Informations were filed charging the respective accused with "illegal possession of deadly weapon" in violation of Presidential Decree No. 9. On a motion to quash filed by the accused, the three Judges mentioned above issued in the respective cases filed before them — the details of which will be recounted below — an Order quashing or dismissing the Informations, on a common ground, viz, that the Information did not allege facts which constitute the offense penalized by Presidential Decree No. 9 because it failed to state one essential element of the crime. Thus, are the Informations filed by the People sufficient in form and substance to constitute the offense of "illegal possession of deadly weapon" penalized under Presidential Decree (PD for short) No. 9? This is the central issue which we shall resolve and dispose of, all other corollary matters not being indispensable for the moment.

Manuel F. de Jesus for all the respondents in L-46229-32 and L46313-16.

A — The Information filed by the People —

Norberto L. Apostol for respondent Panchito Refuncion.

1. In L-42050-66, one typical Information filed with the Court presided by Judge Purisima follows:

Hon. Amante P. Purisima for and in his own behalf. THE PEOPLE OF THE PHILIPPINES, plaintiff, versus PORFIRIO CANDELOSAS Y DURAN, accused. MUÑOZ PALMA, J.:

10 Crim. Case No. 19639

I M . C A S E N O . 2 9 6 7 7

VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF PROCLAMATION 1081 INFORMATION The undersigned accuses PORFIRIO CANDELOSAS Y DURAN of a violation of paragraph 3, Presidential Decree No. 9 of Proclamation 1081, committed as follows: That on or about the 14 th day of December, 1974, in the City of Manila, Philippines, the said accused did then and there wilfully, unlawfully, feloniously and knowingly have in his possession and under his custody and control one (1) carving knife with a blade of 6-½ inches and a wooden handle of 5-1/4 inches, or an overall length of 11-¾ inches, which the said accused carried outside of his residence, the said weapon not being used as a tool or implement necessary to earn his livelihood nor being used in connection therewith.

V I O L . O F P A R . 3 ,

Contrary to law. (p. 32, rollo of L-42050-66) The other Informations are similarly worded except for the name of the accused, the date and place of the commission of the crime, and the kind of weapon involved. 2. In L-46229-32 and L-46313-16, the Information filed with the Court presided by Judge Maceren follows: THE PEOPLE OF THE PHILIPPINES, plaintiff, versus REYNALDO LAQUI Y AQUINO, accused. C R

P D 9 I N R E L . T O L

11 9 7 5

. C A S E N O . 9 3 3

INFORMATION The undersigned accuses REYNALDO LAQUI Y AQUINO of a VIOLATION OF PARAGRAPH 3, PRESIDENTIAL DECREE NO. 9 in relation to Letter of Instruction No. 266 of the Chief Executive dated April 1, 1975, committed as follows:

F o r :

That on or about the 28 th day of January, 1977, in the City of Manila, Philippines, the said accused did then and there wilfully, unlawfully and knowingly carry outside of his residence a bladed and pointed weapon, to wit: an ice pick with an overall length of about 8½ inches, the same not being used as a necessary tool or implement to earn his livelihood nor being used in connection therewith.

I L L E G A L P O S S E INFORMATION S S I The undersigned First Assistant Provincial Fiscal of Samar, accusesOPANCHITO N of ILLEGAL REFUNCION of the crime POSSESSION OF DEADLYO WEAPON or VIOLATION OF PD NO. 9F issued by the

Contrary to law. (p. 14, rollo of L-46229-32) The other Informations are likewise similarly worded except for the name of the accused, the date and place of the commission of the crime, and the kind of weapon involved. 3. In L-46997, the Information before the Court of First Instance of Samar is quoted hereunder: PEOPLE OF THE PHILIPPINES, complainant, versus PANCHITO REFUNCION, accused. C R I M

President of the Philippines on Oct. 2, 1972, pursuant to Proclamation D No. 1081 dated Sept. 21 and 23, 1972, committed E as follows: A D

12 That on or about the 6th day of October, 1976, in the evening at Barangay Barruz, Municipality of Matuginao, Province of Samar Philippines, and within the jurisdiction of this Honorabe Court, the abovenamed accused, knowingly, wilfully, unlawfully and feloniously carried with him outside of his residence a deadly weapon called socyatan, an instrument which from its very nature is no such as could be used as a necessary tool or instrument to earn a livelihood, which act committed by the accused is a Violation of Presidential Decree No. 9. CONTRARY TO LAW. (p. 8, rollo of L-46997) B. — The Orders of dismissal — In dismissing or quashing the Informations the trial courts concurred with the submittal of the defense that one essential element of the offense charged is missing from the Information, viz: that the carrying outside of the accused's residence of a bladed, pointed or blunt weapon is in furtherance or on the occasion of, connected with or related to subversion, insurrection, or rebellion, organized lawlessness or public disorder. 1. Judge Purisima reasoned out, inter alia, in this manner: ... the Court is of the opinion that in order that possession of bladed weapon or the like outside residence may be prosecuted and tried under P.D. No. 9, the information must specifically allege that the possession of bladed weapon charged was for the purpose of abetting, or in furtherance of the conditions of rampant criminality, organized lawlessness, public disorder, etc. as are contemplated and recited in Proclamation No. 1081, as justification therefor. Devoid of this specific allegation, not necessarily in the same words, the information is not complete,

as it does not allege sufficient facts to constitute the offense contemplated in P.D. No. 9. The information in these cases under consideration suffer from this defect.

prompted by the desire of this Court to apply said checkvalves. (pp. 55-57, rollo of L-4205066) 2. Judge Maceren in turn gave his grounds for dismissing the charges as follows:

xxx xxx xxx And while there is no proof of it before the Court, it is not difficult to believe the murmurings of detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No. 9, that more than ever before, policemen - of course not all can be so heartless — now have in their hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which only God knows where it came from. Whereas before martial law an extortion-minded peace officer had to have a stock of the cheapest paltik, and even that could only convey the coercive message of one year in jail, now anything that has the semblance of a sharp edge or pointed object, available even in trash cans, may already serve the same purpose, and yet five to ten times more incriminating than the infamous paltik. For sure, P.D. No. 9 was conceived with the best of intentions and wisely applied, its necessity can never be assailed. But it seems it is back-firing, because it is too hot in the hands of policemen who are inclined to backsliding. The checkvalves against abuse of P.D. No. 9 are to be found in the heart of the Fiscal and the conscience of the Court, and hence this resolution, let alone technical legal basis, is

xxx xxx xxx As earlier noted the "desired result" sought to be attained by Proclamation No. 1081 is the maintenance of law and order throughout the Philippines and the prevention and suppression of all forms of lawless violence as well as any act of insurrection or rebellion. It is therefore reasonable to conclude from the foregoing premises that the carrying of bladed, pointed or blunt weapons outside of one's residence which is made unlawful and punishable by said par. 3 of P.D. No. 9 is one that abets subversion, insurrection or rebellion, lawless violence, criminality, chaos and public disorder or is intended to bring about these conditions. This conclusion is further strengthened by the fact that all previously existing laws that also made the carrying of similar weapons punishable have not been repealed, whether expressly or impliedly. It is noteworthy that Presidential Decree No. 9 does not contain any repealing clause or provisions. xxx xxx xxx The mere carrying outside of one's residence of these deadly weapons if not concealed in one's person and if not carried in any of the aforesaid specified places, would appear to be not unlawful and punishable by law.

13 With the promulgation of Presidential Decree No. 9, however, the prosecution, through Assistant Fiscal Hilario H. Laqui, contends in his opposition to the motion to quash, that this act is now made unlawful and punishable, particularly by paragraph 3 thereof, regardless of the intention of the person carrying such weapon because the law makes it "mala prohibita". If the contention of the prosecution is correct, then if a person happens to be caught while on his way home by law enforcement officers carrying a kitchen knife that said person had just bought from a store in order that the same may be used by one's cook for preparing the meals in one's home, such person will be liable for punishment with such a severe penalty as imprisonment from five to ten years under the decree. Such person cannot claim that said knife is going to be used by him to earn a livelihood because he intended it merely for use by his cook in preparing his meals.

rebellion, insurrection, lawless violence, criminality, chaos and public disorder. (pp. 28-30, rollo of L-46229-32) 3. Judge Polo of the Court of First Instance of Samar expounded his order dismissing the Information filed before him, thus: ... We believe that to constitute an offense under the aforcited Presidential decree, the same should be or there should be an allegation that a felony was committed in connection or in furtherance of subversion, rebellion, insurrection, lawless violence and public disorder. Precisely Proclamation No. 1081 declaring a state of martial law throughout the country was issued because of wanton destruction to lives and properties widespread lawlessness and anarchy. And in order to restore the tranquility and stability of the country and to secure the people from violence anti loss of lives in the quickest possible manner and time, carrying firearms, explosives and deadly weapons without a permit unless the same would fall under the exception is prohibited. This conclusion becomes more compelling when we consider the penalty imposable, which is from five years to ten years. A strict enforcement of the provision of the said law would mean the imposition of the Draconian penalty upon the accused.

This possibility cannot be discounted if Presidential Decree No. 9 were to be interpreted and applied in the manner that that the prosecution wants it to be done. The good intentions of the President in promulgating this decree may thus be perverted by some unscrupulous law enforcement officers. It may be used as a tool of oppression and tyranny or of extortion.

would arise specially in going to and from their farm. (pp. 18-19, rollo of L-46997) In most if not all of the cases, the orders of dismissal were given before arraignment of the accused. In the criminal case before the Court of (First Instance of Samar the accused was arraigned but at the same time moved to quash the Information. In all the cases where the accused were under arrest, the three Judges ordered their immediate release unless held on other charges. C. — The law under which the Informations in question were filed by the People. As seen from the Informations quoted above, the accused are charged with illegal possession of deadly weapon in violation of Presidential Decree No. 9, Paragraph 3. We quote in full Presidential Decree No. 9, to wit: PRESIDENTIAL DECREE NO. 9 DECLARING VIOLATIONS OF GENERAL ORDERS NO. 6 and NO. 7 DATED SEPTEMBER 22, 1972, AND SEPTEMBER 23, 1972, RESPECTIVELY, TO BE UNLAWFUL AND PROVIDING PENALTIES THEREFORE. WHEREAS, pursuant to Proclamation No. 1081 dated September 21, 1972, the Philippines has been placed under a state of martial law;

xxx xxx xxx

xxx xxx xxx It is therefore the considered and humble view of this Court that the act which the President intended to make unlawful and punishable by Presidential Decree No. 9, particularly by paragraph 3 thereof, is one that abets or is intended to abet subversion,

It is public knowledge that in rural areas, even before and during martial law, as a matter of status symbol, carrying deadly weapons is very common, not necessarily for committing a crime nor as their farm implement but for self-preservation or self-defense if necessity

WHEREAS, by virtue of said Proclamation No. 1081, General Order No. 6 dated September 22, 1972 and General Order No. 7 dated September 23, 1972, have been promulgated by me; WHEREAS, subversion, rebellion, insurrection, lawless violence, criminality, chaos and public

14 disorder mentioned in the aforesaid Proclamation No. 1081 are committed and abetted by the use of firearms, explosives and other deadly weapons; NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed Forces of the Philippines, in older to attain the desired result of the aforesaid Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree that: 1. Any violation of the aforesaid General Orders Nos. 6 and 7 is unlawful and the violator shall, upon conviction suffer: (a) The mandatory penalty of death by a firing squad or electrocution as a Military, Court/Tribunal/Commission may direct, it the firearm involved in the violation is unlicensed and is attended by assault upon, or resistance to persons in authority or their agents in the performance of their official functions resulting in death to said persons in authority or their agent; or if such unlicensed firearm is used in the commission of crimes against persons, property or chastity causing the death of the victim used in violation of any other General Orders and/or Letters of Instructions promulgated under said Proclamation No. 1081: (b) The penalty of imprisonment ranging from twenty years to life imprisonment as a Military Court/Tribunal/commission may direct, when the violation is not attended by any of the circumstances enumerated under the preceding paragraph; (c) The penalty provided for in the preceding paragraphs shall be imposed upon the owner,

president, manager, members of the board of directors or other responsible officers of any public or private firms, companies, corporations or entities who shall willfully or knowingly allow any of the firearms owned by such firm, company, corporation or entity concerned to be used in violation of said General Orders Nos. 6 and 7.

4. When the violation penalized in the preceding paragraphs 2 and 3 is committed during the commission of or for the purpose of committing, any other crime, the penalty shall be imposed upon the offender in its maximum extent, in addition to the penalty provided for the particular offenses committed or intended to be committed.

2. It is unlawful to posses deadly weapons, including hand grenades, rifle grenades and other explosives, including, but not limited to, "pill box bombs," "molotov cocktail bombs," "fire bombs," or other incendiary device consisting of any chemical, chemical compound, or detonating agents containing combustible units or other ingredients in such proportion, quantity, packing, or bottling that ignites by fire, by friction, by concussion, by percussion, or by detonation of all or part of the compound or mixture which may cause such a sudden generation of highly heated gases that the resultant gaseous pressures are capable of producing destructive effects on continguous objects or of causing injury or death of a person; and any person convicted thereof shall be punished by imprisonment ranging from ten to fifteen years as a Military Court/Tribunal/Commission may direct.

Done in the City of Manila, this 2nd day of October in the year of Our Lord, nineteen hundred and seventy-two.

3. It is unlawful to carry outside of residence any bladed, pointed or blunt weapon such as "fan knife," "spear," "dagger," "bolo," "balisong," "barong," "kris," or club, except where such articles are being used as necessary tools or implements to earn a livelihood and while being used in connection therewith; and any person found guilty thereof shall suffer the penalty of imprisonment ranging from five to ten years as a Military Court/Tribunal/Commission may direct.

(SGD) FERDINAND E. MARCOS

D. — The arguments of the People — In the Comment filed in these cases by the Solicitor General who as stated earlier joins the City Fiscal of Manila and the Provincial Fiscal of Samar in seeking the setting aside of the questioned orders of dismissal, the main argument advanced on the issue now under consideration is that a perusal of paragraph 3 of P.D. 9 'shows that the prohibited acts need not be related to subversive activities; that the act proscribed is essentially a malum prohibitum penalized for reasons of public policy. 1 The City Fiscal of Manila in his brief adds further that in statutory offenses the intention of the accused who commits the act is immaterial; that it is enough if the prohibited act is voluntarily perpetuated; that P.D. 9 provides and condemns not only the carrying of said weapon in connection with the commission of the crime of subversion or the like, but also that of criminality in general, that is, to eradicate lawless violence which characterized pre-martial law days. It is also argued that the real nature of the criminal charge is determined not from the caption or preamble of the information nor from the specification of the provision of law alleged to have been violated but by the actual recital of facts in the complaint or information. 2

15 E. — Our Ruling on the matter — 1. It is a constitutional right of any person who stands charged in a criminal prosecution to be informed of the nature and cause of the accusation against him. 3 Pursuant to the above, Section 5, Rule 110 of the Rules of Court, expressly requires that for a complaint or information to be sufficient it must, inter alia state the designation of the offense by the statute, and the acts or omissions complained of as constituting the offense. This is essential to avoid surprise on the accused and to afford him the opportunity to prepare his defense accordingly. 4 To comply with these fundamental requirements of the Constitution and the Rules on Criminal Procedure, it is imperative for the specific statute violated to be designated or mentioned 4 in the charge. In fact, another compelling reason exists why a specification of the statute violated is essential in these cases. As stated in the order of respondent Judge Maceren the carrying of so-called "deadly weapons" is the subject of another penal statute and a Manila city ordinance. Thus, Section 26 of Act No. 1780 provides: Section 26. It should be unlawful for any person to carry concealed about his person any bowie knife, dirk dagger, kris, or other deadly weapon: ... Any person violating the provisions of this section shall, upon conviction in a court of competent jurisdiction, be punished by a fine not exceeding five hundred pesos, or by imprisonment for a period not exceeding six months, or both such fine and imprisonment, in the discretion of the court. Ordinance No. 3820 of the City of Manila as amended by Ordinance No. 3928 which took effect on December 4, 1957, in turn penalizes with a fine of not more than P200.00 or imprisonment for not more than one months, or both, at the discretion of the court, anyone who shall carry concealed in his

person in any manner that would disguise its deadly character any kind of firearm, bowie knife, or other deadly weapon ... in any public place. Consequently, it is necessary that the particular law violated be specified as there exists a substantial difference between the statute and city ordinance on the one hand and P.D. 9 (3) on the other regarding the circumstances of the commission of the crime and the penalty imposed for the offense. We do not agree with petitioner that the above-mentioned statute and the city ordinance are deemed repealed by P.D. 9 (3). 5 P. D. 9(3) does not contain any repealing clause or provision, and repeal by implication is not favored. 6 This principle holds true with greater force with regards to penal statutes which as a rule are to be construed strictly against the state and liberally in favor of the accused. 7 In fact, Article 7 of the New Civil Code provides that laws are repealed only by subsequent ones and their violation or non- observance shall not be excused by disuse, or custom or practice to the contrary. Thus we are faced with the situation where a particular act may be made to fall, at the discretion of a police officer or a prosecuting fiscal, under the statute, or the city ordinance, or the presidential decree. That being the case, the right becomes more compelling for an accused to be confronted with the facts constituting the essential elements of the offense charged against him, if he is not to become an easy pawn of oppression and harassment, or of negligent or misguided official action — a fear understandably shared by respondent Judges who by the nature of their judicial functions are daily exposed to such dangers.

rebellion, insurrection, lawless violence, criminality, chaos, or public disorder. It is the second element which removes the act of carrying a deadly weapon, if concealed, outside of the scope of the statute or the city ordinance mentioned above. In other words, a simple act of carrying any of the weapons described in the presidential decree is not a criminal offense in itself. What makes the act criminal or punishable under the decree is the motivation behind it. Without that motivation, the act falls within the purview of the city ordinance or some statute when the circumstances so warrant. Respondent Judges correctly ruled that this can be the only reasonably, logical, and valid construction given to P.D. 9(3). 3. The position taken by petitioner that P.D. 9(3) covers one and all situations where a person carries outside his residence any of the weapons mentioned or described in the decree irrespective of motivation, intent, or purpose, converts these cases into one of "statutory construction." That there is ambiguity in the presidential decree is manifest from the conflicting views which arise from its implementation. When ambiguity exists, it becomes a judicial task to construe and interpret the true meaning and scope of the measure, guided by the basic principle that penal statutes are to be construed and applied liberally in favor of the accused and strictly against the state.

2. In all the Informations filed by petitioner the accused are charged in the caption as well as in the body of the Information with a violation of paragraph 3, P.D. 9. What then are the elements of the offense treated in the presidential decree in question?

4. In the construction or interpretation of a legislative measure — a presidential decree in these cases — the primary rule is to search for and determine the intent and spirit of the law. Legislative intent is the controlling factor, for in the words of this Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio Teehankee, whatever is within the spirit of a statute is within the statute, and this has to be so if strict adherence to the letter would result in absurdity, injustice and contradictions. 8

We hold that the offense carries two elements: first, the carrying outside one's residence of any bladed, blunt, or pointed weapon, etc. not used as a necessary tool or implement for a livelihood; and second, that the act of carrying the weapon was either in furtherance of, or to abet, or in connection with subversion,

There are certain aids available to Us to ascertain the intent or reason for P.D. 9(3).

16 First, the presence of events which led to or precipitated the enactment of P.D. 9. These events are clearly spelled out in the "Whereas" clauses of the presidential decree, thus: (1) the state of martial law in the country pursuant to Proclamation 1081 dated September 21, 1972; (2) the desired result of Proclamation 1081 as well as General Orders Nos. 6 and 7 which are particularly mentioned in P.D. 9; and (3) the alleged fact that subversion, rebellion, insurrection, lawless violence, criminality, chaos, aid public disorder mentioned in Proclamation 1081 are committed and abetted by the use of firearms and explosives and other deadly weapons. The Solicitor General however contends that a preamble of a statute usually introduced by the word "whereas", is not an essential part of an act and cannot enlarge or confer powers, or cure inherent defects in the statute (p. 120, rollo of L-42050-66); that the explanatory note or enacting clause of the decree, if it indeed limits the violation of the decree, cannot prevail over the text itself inasmuch as such explanatory note merely states or explains the reason which prompted the issuance of the decree. (pp. 114-115, rollo of 46997) We disagree with these contentions. Because of the problem of determining what acts fall within the purview of P.D. 9, it becomes necessary to inquire into the intent and spirit of the decree and this can be found among others in the preamble or, whereas" clauses which enumerate the facts or events which justify the promulgation of the decree and the stiff sanctions stated therein. A "preamble" is the key of the statute, to open the minds of the makers as to the mischiefs which are to be remedied, and objects which are to be accomplished, by the provisions of the statute." (West Norman Timber v. State, 224 P. 2d 635, 639, cited in Words and Phrases, "Preamble"; emphasis supplied) While the preamble of a statute is not strictly a part thereof, it may, when the statute is in

itself ambiguous and difficult of interpretation, be resorted to, but not to create a doubt or uncertainty which otherwise does not exist." (James v. Du Bois, 16 N.J.L. (1 Har.) 285, 294, cited in Words and Phrases, "Preamble")

blunt or bladed weapons. With respect to Proclamation 1081 some of the underlying reasons for its issuance are quoted hereunder: WHEREAS, these lawless elements having taken up arms against our duly constituted government and against our people, and having committed and are still committing acts of armed insurrection and rebellion consisting of armed raids, forays, sorties, ambushes, wanton acts of murders, spoilage, plunder, looting, arsons, destruction of public and private buildings, and attacks against innocent and defenseless civilian lives and property, all of which activities have seriously endangered and continue to endanger public order and safety and the security of the nation, ...

In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al. this Court had occasion to state that '(L)egislative intent must be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular provision alone. This is a cardinal rule of statutory construction. For taken in the abstract, a word or phrase might easily convey a meaning quite different from the one actually intended and evident when the word or phrase is considered with those with which it is associated. Thus, an apparently general provision may have a limited application if read together with other provisions. 9 Second, the result or effects of the presidential decree must be within its reason or intent. xxx xxx xxx In the paragraph immediately following the last "Whereas" clause, the presidential decree states: NOW, THEREFORE, I , FERDINAND E. MARCOS, Commander-in-Chief of an the Armed Forces of the Philippines, in order to attain the desired result of the aforesaid Proclamation No. 1081 and General Orders Nos. 6 and 7, do hereby order and decree that: xxx xxx xxx From the above it is clear that the acts penalized in P.D. 9 are those related to the desired result of Proclamation 1081 and General Orders Nos. 6 and 7. General Orders Nos. 6 and 7 refer to firearms and therefore have no relevance to P.D. 9(3) which refers to

WHEREAS, it is evident that there is throughout the land a state of anarchy and lawlessness, chaos and disorder, turmoil and destruction of a magnitude equivalent to an actual war between the forces of our duly constituted government and the New People's Army and their satellite organizations because of the unmitigated forays, raids, ambuscades, assaults, violence, murders, assassinations, acts of terror, deceits, coercions, threats, intimidations, treachery, machinations, arsons, plunders and depredations committed and being committed by the aforesaid lawless elements who have pledged to the whole nation that they will not stop their dastardly effort and scheme until and unless they have fully attained their primary and ultimate purpose of forcibly seizing political and state power in

17 this country by overthrowing our present duly constituted government, ... (See Book I, Vital Documents on the Declaration of Martial Law in the Philippines by the Supreme Court of the Philippines, pp. 13-39) It follows that it is only that act of carrying a blunt or bladed weapon with a motivation connected with or related to the aforequoted desired result of Proclamation 1081 that is within the intent of P.D. 9(3), and nothing else. Statutes are to be construed in the light of purposes to be achieved and the evils sought to be remedied. (U.S. v. American Tracking Association, 310 U.S. 534, cited in LVN Pictures v. Philippine Musicians Guild, 110 Phil. 725, 731; emphasis supplied) When construing a statute, the reason for its enactment should be kept in mind, and the statute should be construed with reference to its intended scope and purpose. (Statutory Construction by E.T. Crawford, pp. 604-605, cited in Commissioner of Internal Revenue v. Filipinas Compania de Seguros, 107 Phil. 1055, 1060; emphasis supplied) 5. In the construction of P.D. 9(3) it becomes relevant to inquire into the consequences of the measure if a strict adherence to the letter of the paragraph is followed. It is a salutary principle in statutory construction that there exists a valid presumption that undesirable consequences were never intended by a legislative measure, and that a construction of which the statute is fairly susceptible is favored, which will avoid all objectionable, mischievous, indefensible, wrongful, evil, and injurious consequences. 9-a It is to be presumed that when P.D. 9 was promulgated by the President of the Republic there was no intent to work a hardship

or an oppressive result, a possible abuse of authority or act of oppression, arming one person with a weapon to impose hardship on another, and so on. 10 At this instance We quote from the order of Judge Purisima the following: And while there is no proof of it before the Court, it is not difficult to believe the murmurings of detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No. 9, that more than ever before, policemen - of course not all can be so heartless — now have in their hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which only God knows where it came from. Whereas before martial law an extortion-minded peace officer had to have a stock of the cheapest paltik, and even that could only convey the coercive message of one year in jail, now anything that has the semblance of a sharp edge or pointed object, available even in trash cans, may already serve the same purpose, and yet five to ten times more incriminating than the infamous paltik. (pp. 72-73, rollo L-42050-66) And as respondent Judge Maceren points out, the people's interpretation of P.D. 9(3) results in absurdity at times. To his example We may add a situation where a law-abiding citizen, a lawyer by profession, after gardening in his house remembers to return the bolo used by him to his neighbor who lives about 30 meters or so away and while crossing the street meets a policeman. The latter upon seeing the bolo being carried by that citizen places him under arrest and books him for a violation of P.D. 9(3). Could the presidential decree have been conceived to produce such absurd, unreasonable, and insensible results?

6. Penal statutes are to be construed strictly against the state and liberally in favor of an accused. American jurisprudence sets down the reason for this rule to be "the tenderness of the law of the rights of individuals; the object is to establish a certain rule by conformity to which mankind would be safe, and the discretion of the court limited." 11 The purpose is not to enable a guilty person to escape punishment through a technicality but to provide a precise definition of forbidden acts. 12 Our own decisions have set down the same guidelines in this manner, viz: Criminal statutes are to be construed strictly. No person should be brought within their terms who is not clearly within them, nor should any act be pronounced criminal which is not made clearly so by the statute. (U.S. v. Abad Santos, 36 Phil. 243, 246) The rule that penal statutes are given a strict construction is not the only factor controlling the interpretation of such laws, instead, the rule merely serves as an additional, single factor to be considered as an aid in determining the meaning of penal laws. (People v. Manantan, 5 SCRA 684, 692) F. The Informations filed by petitioner are fatally defective. The two elements of the offense covered by P.D. 9(3) must be alleged in the Information in order that the latter may constitute a sufficiently valid charged. The sufficiency of an Information is determined solely by the facts alleged therein. 13 Where the facts are incomplete and do not convey the elements of the crime, the quashing of the accusation is in order.

18 Section 2(a), Rule 117 of the Rules of Court provides that the defendant may move to quash the complaint or information when the facts charged do not constitute an offense. In U.S.U. Gacutan, 1914, it was held that where an accused is charged with knowingly rendering an unjust judgment under Article 204 of the Revised Penal Code, failure to allege in the Information that the judgment was rendered knowing it to be unjust, is fatal. 14 In People v. Yadao, 1954, this Court through then Justice Cesar Bengzon who later became Chief Justice of the Court affirmed an order of the trial court which quashed an Information wherein the facts recited did not constitute a public offense as defined in Section 1, Republic Act 145. 15 G. The filing of these Petitions was unnecessary because the People could have availed itself of other available remedies below. Pertinent provisions of the Rules of Court follow: Rule 117, Section 7. Effect of sustaining the motion to quash. — If the motion to quash is sustained the court may order that another information be filed. If such order is made the defendant, if in custody, shall remain so unless he shall be admitted to bail. If such order is not made or if having been made another information is not filed withuntime to be specified in the order, or within such further time as the court may allow for good cause shown, the defendant, if in custody, shall be discharged therefrom, unless he is in custody on some other charge. Rule 110, Section 13. Amendment. — The information or complaint may be amended, in substance or form, without leave of court, at any time before the defendant pleads; and

thereafter and during the trial as to all matters of form, by leave and at the discretion of the court, when the same can be done without prejudice to the rights of the defendant. xxx xxx xxx Two courses of action were open to Petitioner upon the quashing of the Informations in these cases, viz: First, if the evidence on hand so warranted, the People could have filed an amended Information to include the second element of the offense as defined in the disputed orders of respondent Judges. We have ruled that if the facts alleged in the Information do not constitute a punishable offense, the case should not be dismissed but the prosecution should be given an opportunity to amend the Information. 16 Second, if the facts so justified, the People could have filed a complaint either under Section 26 of Act No. 1780, quoted earlier, or Manila City Ordinance No. 3820, as amended by Ordinance No. 3928, especially since in most if not all of the cases, the dismissal was made prior to arraignment of the accused and on a motion to quash. Section 8. Rule 117 states that: An order sustaining the motion to quash is not a bar to another prosecution for the same offense unless the motion was based on the grounds specified in section 2, subsections (f) and (h) of this rule. Under the foregoing, the filing of another complaint or Information is barred only when the criminal action or liability had been extinguished (Section 2[f]) or when the motion to quash was granted for reasons of double jeopardy. (ibid., [h])

As to whether or not a plea of double jeopardy may be successfully invoked by the accused in all these cases should new complaints be filed against them, is a matter We need not resolve for the present. H. — We conclude with high expectations that police authorities and the prosecuting arm of the government true to the oath of office they have taken will exercise utmost circumspection and good faith in evaluating the particular circumstances of a case so as to reach a fair and just conclusion if a situation falls within the purview of P.D. 9(3) and the prosecution under said decree is warranted and justified. This obligation becomes a sacred duty in the face of the severe penalty imposed for the offense. On this point, We commend the Chief State Prosecutor Rodolfo A. Nocon on his letter to the City Fiscal of Manila on October 15, 1975, written for the Secretary, now Minister of Justice, where he stated the following: In any case, please study well each and every case of this nature so that persons accused of carrying bladed weapons, specially those whose purpose is not to subvert the duly constituted authorities, may not be unduly indicted for the serious offenses falling under P.D. No. 9. 17 Yes, while it is not within the power of courts of justice to inquire into the wisdom of a law, it is however a judicial task and prerogative to determine if official action is within the spirit and letter of the law and if basic fundamental rights of an individual guaranteed by the Constitution are not violated in the process of its implementation. We have to face the fact that it is an unwise and unjust application of a law, necessary and justified under prevailing circumstances, which renders the measure an instrument of oppression and evil and leads the citizenry to lose their faith in their government. WHEREFORE, We DENY these 26 Petitions for Review and We AFFIRM the Orders of respondent Judges dismissing or quashing the Information concerned, subject however to Our observations

19 made in the preceding pages 23 to 25 of this Decision regarding the right of the State or Petitioner herein to file either an amended Information under Presidential Decree No. 9, paragraph 3, or a new one under other existing statute or city ordinance as the facts may warrant.

I concur with the additional observation that accused could properly be convicted of a violation of Act 1780 of the Philippine Commission or of the ordinance.

Without costs. Separate Opinions

Fernando, Teehankee, Santos, Fernandez and Guerrero, JJ., concur.

BARREDO, J., concurring.

Aquino, J, took no part.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need of amending the information, for violation of other laws or ordinances on concealment of deadly weapons.

CONCEPCION, JR., J, concurring: I concur with the additional observation that accused could properly be convicted of a violation of Act 1780 of the Philippine Commission or of the ordinance. Republic of the Philippines SUPREME COURT Manila

BARREDO, J., concurring. I concur with the qualification that under existing jurisprudence conviction is possible, without the need of amending the information, for violation of other laws or ordinances on concealment of deadly weapons.

EN BANC

Makasiar, J, concurs. G.R. No. 83736 January 15, 1992 CONCEPCION, JR., J, concurring: COMMISSIONER OF INTERNAL REVENUE, petitioner, vs.

In a case involving corporate quarterly income tax, does the twoyear prescriptive period to claim a refund of erroneously collected tax provided for in Section 292 (now Section 230) of the National Internal Revenue Code commence to run from the date the quarterly income tax was paid, as contended by the petitioner, or from the date of filing of the Final Adjustment Return (final payment), as claimed by the private respondent? Section 292 (now Section 230) of the National Internal Revenue Code provides:

Makasiar, J, concurs.

Separate Opinions

F.R. Quiogue for private respondent.

GUTIERREZ, JR., J.:

SO ORDERED.

Castro, C.J. and Antonio, J, concur in the result.

TMX SALES, INC. and THE COURT OF TAX APPEALS, respondents.

Sec. 292. Recovery of tax 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 excessive or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner of Internal Revenue; 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 begun after the expiration of two years from the date of payment of that tax or penalty regardless of any supervening cause that may arise after payment: . . . (Emphasis supplied)

20 The facts of this case are uncontroverted. Private respondent TMX Sales, Inc., a domestic corporation, filed its quarterly income tax return for the first quarter of 1981, declaring an income of P571,174.31, and consequently paying an income tax thereon of P247,010.00 on May 15, 1981. During the subsequent quarters, however, TMX Sales, Inc. suffered losses so that when it filed on April 15, 1982 its Annual Income Tax Return for the year ended December 31, 1981, it declared a gross income of P904,122.00 and total deductions of P7,060,647.00, or a net loss of P6,156,525.00 (CTA Decision, pp. 1-2; Rollo, pp. 4546). Thereafter, on July 9, 1982, TMX Sales, Inc. thru its external auditor, SGV & Co. filed with the Appellate Division of the Bureau of Internal Revenue a claim for refund in the amount of P247,010.00 representing overpaid income tax. (Rollo, p. 30) This claim was not acted upon by the Commissioner of Internal Revenue. On March 14, 1984, TMX Sales, Inc. filed a petition for review before the Court of Tax Appeals against the Commissioner of Internal Revenue, praying that the petitioner, as private respondent therein, be ordered to refund to TMX Sales, Inc. the amount of P247,010.00, representing overpaid income tax for the taxable year ended December 31, 1981. In his answer, the Commissioner of Internal Revenue averred that "granting, without admitting, the amount in question is refundable, the petitioner (TMX Sales, Inc.) is already barred from claiming the same considering that more than two (2) years had already elapsed between the payment (May 15, 1981) and the filing of the claim in Court (March 14, 1984). (Sections 292 and 295 of the Tax Code of 1977, as amended)." On April 29, 1988, the Court of Tax Appeals rendered a decision granting the petition of TMX Sales, Inc. and ordering the Commissioner of Internal Revenue to refund the amount claimed.

The Tax Court, in granting the petition, viewed the quarterly income tax paid as a portion or installment of the total annual income tax due. Said the Tax Court in its assailed decision: xxx xxx xxx When a tax is paid in installments, the prescriptive period of two years provided in Section 306 (now Section 292) of the Revenue Code should be counted from the date of the final payment or last installment. . . . This rule proceeds from the theory that in contemplation of tax laws, there is no payment until the whole or entire tax liability is completely paid. Thus, a payment of a part or portion thereof, cannot operate to start the commencement of the statute of limitations. In this regard the word "tax" or words "the tax" in statutory provisions comparable to section 306 of our Revenue Code have been uniformly held to refer to the entire tax and not a portion thereof (Clark v. U.S., 69 F. 2d 748; A.S. Kriedner Co. v. U.S., 30 F Supp. 274; Hills v. U.S., 50 F 2d 302, 55 F 2d 1001), and the vocable "payment of tax" within statutes requiring refund claim, refer to the date when all the tax was paid, not when a portion was paid (Braun v. U.S., 8 F supp. 860, 863; Collector of Internal Revenue v. Prieto, 2 SCRA 1007; Commissioner of Internal Revenue v. Palanca, 18 SCRA 496). Petitioner Commissioner of Internal Revenue is now before this Court seeking a reversal of the above decision. Thru the Solicitor General, he contends that the basis in computing the two-year period of prescription provided for in Section 292 (now Section 230) of the Tax Code, should be May 15, 1981, the date when the quarterly income tax was paid and not April 15, 1982, when the Final Adjustment Return for the year ended December 31, 1981 was filed.

He cites the case of Pacific Procon Limited v. Commissioner of Internal Revenue (G.R. No. 68013, November 12, 1984) involving a similar set of facts, wherein this Court in a minute resolution affirmed the Court of Appeals' decision denying the claim for refund of the petitioner therein for being barred by prescription. A re-examination of the aforesaid minute resolution of the Court in the Pacific Procon case is warranted under the circumstances to lay down a categorical pronouncement on the question as to when the two-year prescriptive period in cases of quarterly corporate income tax commences to run. A full-blown decision in this regard is rendered more imperative in the light of the reversal by the Court of Tax Appeals in the instant case of its previous ruling in the Pacific Procon case. Section 292 (now Section 230) of the National Internal Revenue Code should be interpreted in relation to the other provisions of the Tax Code in order to give effect to legislative intent and to avoid an application of the law which may lead to inconvenience and absurdity. In the case of People vs. Rivera (59 Phil 236 [1933]), this Court stated that statutes should receive a sensible construction, such as will give effect to the legislative intention and so as to avoid an unjust or an absurd conclusion. INTERPRETATIO TALIS IN AMBIGUIS SEMPER FRIENDA EST, UT EVITATUR INCONVENIENS ET ABSURDUM. Where there is ambiguity, such interpretation as will avoid inconvenience and absurdity is to be adopted. Furthermore, courts must give effect to the general legislative intent that can be discovered from or is unraveled by the four corners of the statute, and in order to discover said intent, the whole statute, and not only a particular provision thereof, should be considered. (Manila Lodge No. 761, et al. v. Court of Appeals, et al., 73 SCRA 162 [1976]) Every section, provision or clause of the statute must be expounded by reference to each other in order to arrive at the effect contemplated by the legislature. The intention of the legislator must be ascertained from the whole text of the law and every part of the act is to be taken into view. (Chartered Bank v. Imperial, 48 Phil. 931 [1921]; Lopez v. El Hogar Filipino, 47 Phil. 249, cited in Aboitiz Shipping Corporation v. City of Cebu, 13 SCRA 449 [1965]).

21 Thus, in resolving the instant case, it is necessary that we consider not only Section 292 (now Section 230) of the National Internal Revenue Code but also the other provisions of the Tax Code, particularly Sections 84, 85 (now both incorporated as Section 68), Section 86 (now Section 70) and Section 87 (now Section 69) on Quarterly Corporate Income Tax Payment and Section 321 (now Section 232) on keeping of books of accounts. All these provisions of the Tax Code should be harmonized with each other. Section 292 (now Section 230) provides a two-year prescriptive period to file a suit for a refund of a tax erroneously or illegally paid, counted from the tile the tax was paid. But a literal application of this provision in the case at bar which involves quarterly income tax payments may lead to absurdity and inconvenience. Section 85 (now Section 68) provides for the method of computing corporate quarterly income tax which is on a cumulative basis, to wit: Sec. 85. Method of computing corporate quarterly income tax. — Every corporation shall file in duplicate a quarterly summary declaration of its gross income and deductions on a cumulative basis for the preceding quarter or quarters upon which the income tax, as provided in Title II of this Code shall be levied, collected and paid. The tax so computed shall be decreased by the amount of tax previously paid or assessed during the preceding quarters and shall be paid not later than sixty (60) days from the close of each of the first three (3) quarters of the taxable year, whether calendar or fiscal year. (Emphasis supplied) while Section 87 (now Section 69) requires the filing of an adjustment returns and final payment of income tax, thus:

Sec. 87. Filing of adjustment returns final payment of income tax. — On or before the fifteenth day of April or on or before the fifteenth day of the fourth month following the close of the fiscal year, every taxpayer covered by this Chapter shall file an Adjustment Return covering the total net taxable income of the preceding calendar or fiscal year and if the sum of the quarterly tax payments made during that year is not equal to the tax due on the entire net taxable income of that year the corporation shall either (a) pay the excess tax still due or (b) be refunded the excess amount paid as the case may be. . . . (Emphasis supplied) In the case at bar, the amount of P247,010.00 claimed by private respondent TMX Sales, Inc. based on its Adjustment Return required in Section 87 (now Section 69), is equivalent to the tax paid during the first quarter. A literal application of Section 292 (now Section 230) would thus pose no problem as the two-year prescriptive period reckoned from the time the quarterly income tax was paid can be easily determined. However, if the quarter in which the overpayment is made, cannot be ascertained, then a literal application of Section 292 (Section 230) would lead to absurdity and inconvenience. The following application of Section 85 (now Section 68) clearly illustrates this point:

========= Tax Due & Paid [Sec. 24 NIRC (25%)] 12,500.00 ========= SECOND QUARTER: Gross Income 1st Quarter 100,000.00 2nd Quarter 50,000.00 150,000.00 ————— Less: Deductions 1st Quarter 50,000.00 2nd Quarter 75,000.00 125,000.00 ————— Net Taxable Income 25,000.00 ========= Tax Due Thereon 6,250.00

FIRST QUARTER:

Less: Tax Paid 1st Quarter 12,500.00

Gross Income 100,000.00

—————

Less: Deductions 50,000.00

Creditable Income Tax (6,250.00)

—————

—————

Net Taxable Income 50,000.00

THIRD QUARTER:

22 Gross Income 1st Quarter 100,000.00

4th Quarter 75,000.00 325,000.00

2nd Quarter 50,000.00

————— —————

3rd Quarter 100,000.00 250,000.00

Less: Deductions 1st Quarter 50,000.00

—————

2nd Quarter 75,000.00

Less: Deductions 1st Quarter 50,000.00

3rd Quarter 25,000.00

2nd Quarter 75,000.00

4th Quarter 100,000.00 250,000.00

3rd Quarter 25,000.00 150,000.00

————— —————

————— —————

Net Taxable Income 75,000.00

100,000.00

=========

=========

Tax Due Thereon 18,750.00

Tax Due Thereon 25,000.00

Less: Tax Paid 1st Quarter 12,500.00

Less: Tax Paid 1st Quarter 12,500.00

2nd Quarter —

2nd Quarter — 12,500.00

3rd Quarter 12,500.00 25,000.00

————— =========

————— —————

FOURTH QUARTER: (Adjustment Return required in Sec. 87)

Creditable Income Tax (to be REFUNDED) (6,250.00)

Gross Income 1st Quarter 100,000.00

=========

2nd Quarter 50,000.00 3rd Quarter 100,000.00

Based on the above hypothetical data appearing in the Final Adjustment Return, the taxpayer is entitled under Section 87 (now Section 69) of the Tax Code to a refund of P6,250.00. If Section 292 (now Section 230) is literally applied, what then is the reckoning date in computing the two-year prescriptive

period? Will it be the 1st quarter when the taxpayer paid P12,500.00 or the 3rd quarter when the taxpayer also paid P12,500.00? Obviously, the most reasonable and logical application of the law would be to compute the two-year prescriptive period at the time of filing the Final Adjustment Return or the Annual Income Tax Return, when it can be finally ascertained if the taxpayer has still to pay additional income tax or if he is entitled to a refund of overpaid income tax. Furthermore, Section 321 (now Section 232) of the National Internal Revenue Code requires that the books of accounts of companies or persons with gross quarterly sales or earnings exceeding Twenty Five Thousand Pesos (P25,000.00) be audited and examined yearly by an independent Certified Public Accountant and their income tax returns be accompanied by certified balance sheets, profit and loss statements, schedules listing income producing properties and the corresponding incomes therefrom and other related statements. It is generally recognized that before an accountant can make a certification on the financial statements or render an auditor's opinion, an audit of the books of accounts has to be conducted in accordance with generally accepted auditing standards. Since the audit, as required by Section 321 (now Section 232) of the Tax Code is to be conducted yearly, then it is the Final Adjustment Return, where the figures of the gross receipts and deductions have been audited and adjusted, that is truly reflective of the results of the operations of a business enterprise. Thus, it is only when the Adjustment Return covering the whole year is filed that the taxpayer would know whether a tax is still due or a refund can be claimed based on the adjusted and audited figures. Therefore, the filing of quarterly income tax returns required in Section 85 (now Section 68) and implemented per BIR Form 1702-Q and payment of quarterly income tax should only be considered mere installments of the annual tax due. These quarterly tax payments which are computed based on the cumulative figures of gross receipts and deductions in order to arrive at a net taxable income, should be treated as advances or

23 portions of the annual income tax due, to be adjusted at the end of the calendar or fiscal year. This is reinforced by Section 87 (now Section 69) which provides for the filing of adjustment returns and final payment of income tax. Consequently, the twoyear prescriptive period provided in Section 292 (now Section 230) of the Tax Code should be computed from the time of filing the Adjustment Return or Annual Income Tax Return and final payment of income tax. In the case of Collector of Internal Revenue v. Antonio Prieto (2 SCRA 1007 [1961]), this Court held that when a tax is paid in installments, the prescriptive period of two years provided in Section 306 (Section 292) of the National internal Revenue Code should be counted from the date of the final payment. This ruling is reiterated in Commission of Internal Revenue v. Carlos Palanca (18 SCRA 496 [1966]), wherein this Court stated that where the tax account was paid on installment, the computation of the twoyear prescriptive period under Section 306 (Section 292) of the Tax Code, should be from the date of the last installment. In the instant case, TMX Sales, Inc. filed a suit for a refund on March 14, 1984. Since the two-year prescriptive period should be counted from the filing of the Adjustment Return on April 15, 1982, TMX Sales, Inc. is not yet barred by prescription. WHEREFORE, IN VIEW OF THE FOREGOING, the petition is hereby DENIED. The decision of the Court of Tax Appeals dated April 29, 1988 is AFFIRMED. No costs. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. L-21734 September 5, 1975

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ABELARDO SUBlDO, defendant-appellant. Office of the Solicitor General Edilberto Barot and Solicitor Ceferino Padua for plaintiff-appellee. Estanislao A. Fernandez for defendant-appellant.

both fine and imprisonment are to be imposed upon the offender. In the instant case, we believe, considering the attendant circumstances of the case that the imposition of the corresponding penalty should be tempered with judicial discretion. For this reason, we impose upon accused-appellant a fine of P500.00. Similarly, the amount of the indemnity to be paid by appellant to the offended party is reduced to P5,000.00.

MARTIN, J.: Appeal on questions of law from the Orders of the Court of First Instance of Manila in Criminal Case No. 23041, entitled People of the Philippines versus Abelardo Subido, denying defendantappellant's motion for the cancellation of his appeal bond and declaring him to suffer subsidiary imprisonment in case of failure to pay the fine and indemnity. From an adverse decision in said case, the dispositive portion of which reads: From the facts above stated the Court finds the accused guilty of libel and he is hereby sentenced to three (3) months of arresto mayor with the accessory penalties of the law, to pay a fine of five hundred (P500.00) pesos, to indemnify the offended party, Mayor Arsenio Lacson in the sum of ten thousand (P10,000.00) pesos, with subsidiary imprisonment in case of insolvency, and to pay the costs. defendant-appellant Abelardo Subido has taken an appeal to the Court of Appeals, which modified the said judgment in the following tenor: However, in the application of the penalty provided for the violation of the libel law, the courts are given discretion of whether or not

WHEREFORE, with the modifications above indicated, the appealed judgment is hereby affirmed at appellant's costs. In due time the case was remanded to the trial court for execution of the judgment. On September 27, 1958, the accused-appellant filed a motion with the trial court praying that (1) the court enter of record that the judgment of the Court of Appeals has been promulgated and (2) that his appeal bond be cancelled. Accused-appellant argued that although he could not pay the fine and the indemnity prescribed in the judgment of the Court of Appeals, he could not be required to serve the amount of fine and indemnity in the form of subsidiary imprisonment because said judgment did not expressly and specifically provide that he should serve the fine and indemnity in form of subsidiary imprisonment in case of insolvency. On December 20, 1958, upon motion of the offended party the lower court issued a writ of execution of its judgment. However, the writ was returned unsatisfied. On February 25, 1959, the Sheriff of the City of Manila, armed with an alias writ of execution, attached "whatever rights, interests, or participation, if any, defendant Abelardo Subido may have" in a two-storey building situated at No. 2313 Suter, Sta.

24 Ana, Manila, covered by Transfer Certificate of Title No. 54170 of the Register of Deeds of Manila. However, it turned out that the property levied upon be the sheriff was registered in the name of Agapito Subido who, upon learning of the levy, immediately filed a Third party claim with the sheriff's office and instituted an action in the lower court (Civil Case No. 41731) to enjoin the Sheriff of Manila from proceeding with the sale of his property. In the meantime the lower court issued a writ of preliminary injunction enjoining the sale of property levied upon by the sheriff. On December 10, 1959, the offended party registered its opposition to accused-appellant's motion for cancellation of appeal bond and asked the lower court to require accusedappellant to pay the fine of P500.00 and the indemnity of P5,000.00 with subsidiary imprisonment in case of insolvency. On December 19, 1959, the lower court issued an order denying the accused-appellant's motion and declared that in accordance with the terms of the judgment of the Court of Appeals the accused-appellant has to suffer subsidiary imprisonment in case he could not pay the fine and indemnity prescribed in the decision. Accused-appellant moved for reconsideration, but the same was denied on December 26, 1959. Hence this appeal from the lower court's orders of December 19 and 26. In his appeal, accused-appellant presses that the lower court erred I IN HOLDING THAT UNDER THE TERMS OF THE DECISION OF THE COURT OF APPEALS ACCUSED-APPELLANT IS LIABLE TO SUBSIDIARY IMPRISONMENT IN CASE OF INSOLVENCY. II

IN NOT HOLDING THAT THE CIVIL LIABILITY OF ACCUSED-APPELLANT HAS BEEN SATISFIED WITH THE ATTACHMENT SECURED BY THE OFFENDED PARTY. 1 The threshold issue in this appeal is whether or not the accusedappellant can be required to serve the fine and indemnity prescribed in the judgment of the Court of Appeals in form of subsidiary imprisonment in case of insolvency. Under Article 355 of the Revised Penal Code "a libel committed by means of writing, printing, litography, engraving, radio, phonograph, paintings, theatrical exhibition, cinematographic exhibition or any similar means, shall be punished by prision correccional in its minimum and medium period or a fine ranging from 200 to 6000 pesos or both, in addition to the civil action which may be brought by the offended party". It is evident from the foregoing provision that the court is given the discretion to impose the penalty of imprisonment or fine or both for the crime of libel. It will be noted that the lower court chose to impose upon the accused: three months of arresto mayor; a fine of P500.00; indemnification of the offended party in the sum of P10,000.00; subsidiary imprisonment in case of insolvency; and the payment of the costs. On the other hand, the Court of Appeals in the exercise of its discretion decided to eliminate the penalty of three (3) months arresto mayor and to reduce the indemnity of P10,000.00 to P5,000.00. Thus the Court of Appeals resolved: However, in the application of the penalty provided for in the violation of the libel law, the courts are given discretion of whether or not both fine and imprisonment are to be imposed upon the offender. In the instant case, we believe, considering the attendant circumstances of the same, that the imposition of the corresponding penalty should be tempered with judicial discretion. For this reason we impose the accused a fine of P500.00.

Similarly, the amount of the indemnity to be paid by appellant to the offended party is reduced to P5,000.00. WHEREUPON, with the modifications above indicated, the appealed judgment is hereby affirmed at appellant's cost. To Us it is clear that when the Court of Appeals provided in the concluding portion of its decision: WHEREUPON, with the modifications above indicated, the appealed judgment is hereby affirmed at appellant's costs the alluded modifications could mean no less than the elimination of the three months of arresto mayor and the reduction of the indemnity to the offended party, Mayor Arsenio Lacson, from P10,000.00 to P5,000.00. All the rest of the punishment remains including the subsidiary imprisonment in case of insolvency. Had the Court wanted to do away with the subsidiary imprisonment in case of insolvency of accusedappellant to pay the fine and the indemnity it would have so expressly provided. A careful scrutiny of the decision of the trial court reveals that the clause "with subsidiary imprisonment in case of insolvency" is separated by a comma (,) from the preceding clause" is hereby sentenced to three months of arresto mayor with the accessory penalties of the law, to pay a fine of five hundred (P500.00) pesos, to indemnify the offended party, Mayor Arsenio Lacson, in the sum of Ten Thousand Pesos (P10,000.00) pesos." The use of a comma (,) in the part of the sentence is to make "the subsidiary imprisonment in case of insolvency" refer not only to nonpayment of the indemnity, but also to non-payment of the fine. If the lower court intended to make the phrase "with subsidiary imprisonment in case of insolvency" refer to non-payment of indemnity only and not to the non-payment of the fine, it would have omitted the comma (,), after the phrase "to indemnify the

25 offended party, Mayor Arsenio Lacson in the amount of P10,000.00 pesos," so that the decision of the lower court would read: From the facts above stated the Court finds the accused guilty of libel and he is hereby sentenced to three (3) months of arresto mayor, to pay a fine of five hundred (P500.00) pesos, to indemnify the offended party, Mayor Arsenio Lacson, in the sum of ten thousand (P10,000.00) pesos with subsidiary imprisonment in case of insolvency, and to pay the costs. As thus worded and punctuated there would be no doubt that the lower court would want to make accused-appellant serve the subsidiary imprisonment in case of non-payment of the indemnity only. Besides, We see no plausible reason why the lower court would want accused-appellant to suffer subsidiary imprisonment in case of insolvency to pay the indemnity only and not to suffer subsidiary imprisonment in case of non-payment of the fine. Accordingly if according to the lower court's decision, the accused-appellant should suffer subsidiary imprisonment in case of insolvency to pay the fine and the indemnity and the only modifications made by the Court of Appeals are to eliminate the three (3) months of arresto mayor and to reduce the indemnity to the offended party, Mayor Arsenio Lacson, from P10,000.00 to P5,000.00, then by force of logic and reason, the fine of P5000.00, the reduced indemnity of P5,000.00 and the subsidiary imprisonment in case of insolvency should stand. Fortunately, however, accused-appellant is favored by the retroactive force of Article 39 of the Revised Penal Code, as amended by Republic Act No. 5465 which exempts an accused person from subsidiary imprisonment in case of insolvency to pay his civil liability. 2 It is a well known rule of legal hermeneutics that penal statutes are to be strictly construed against the government and liberally

in favor of the accused. 3 In the interpretation of a penal statute, the tendency is to give it careful scrutiny, and to construe it with such strictness as to safeguard the rights of the defendant. 4 Considering that Article 39 of the Revised Penal Code, as amended, is favorable to the accused-appellant, the same should be made applicable to him. It is so provided in Article 22 of the Revised Penal Code that: Penal laws shall have a retroactive effect in so far as they favor the person guilty of a felony, who is not a habitual criminal, as this term is defined in Rule 5 of Article 62 of this Code, although at the time of the publication of such laws a final sentence has been pronounced and the convict is serving sentence. Thus applying Article 39 of the Revised Penal Code, as amended, to the accused-appellant, he cannot also be required to serve his civil liability to the offended party in form of subsidiary imprisonment in case of insolvency because this is no longer required by the aforesaid article. Accused-appellant contends that he cannot be made to suffer subsidiary imprisonment because his civil liability has been satisfied with the attachment secured by the offended party on the property of Agapito Subido, wherein he is supposed to have an interest. He therefore argues that until the final determinations of Civil Case No. 71731 which Agapito Subido filed to enjoin the Sheriff of Manila from proceeding with the sale of his property, accused-appellant's liability for subsidiary imprisonment cannot attach as the determination of whether the accused is solvent or not is a prejudicial question which must first be determined before subsidiary imprisonment may be imposed. We cannot agree. Attachment does not operate as a satisfaction of the judgment on civil liability and the accused must suffer subsidiary imprisonment in case of non-payment thereof. Subsidiary imprisonment applies when the offender is insolvent as shown in the present case. There is nothing in the law that before subsidiary imprisonment may attach, there must be prior

determination of the question of solvency of the accused. The moment he cannot pay the fine, that means he is insolvent and he must serve the same in form of subsidiary imprisonment. So accused-appellant has to choose to pay the fine or serve in jail. IN VIEW OF THE FOREGOING except with the modification that accused-appellant may no longer be required to suffer subsidiary imprisonment in case of insolvency to pay the indemnity provided for in the judgment below, the Orders of the lower court dated December 19 and 26, 1959 denying defendantappellant's motion for cancellation of appeal bond and sentencing him to suffer the subsidiary imprisonment in case of insolvency to pay the fine imposed by said judgment, are hereby affirmed. SO ORDERED. Republic of the Philippines SUPREME COURT Manila EN BANC

G.R. No. L-25326 May 29, 1970 IGMIDIO HIDALGO and MARTINA ROSALES, petitioners, vs. POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS, respondents. G.R. No. L-25327 May 29, 1970 HILARIO AGUILA and ADELA HIDALGO, petitioners,

26 vs. POLICARPIO HIDALGO, SERGIO DIMAANO, MARIA ARDE, SATURNINO HIDALGO, BERNARDINA MARQUEZ, VICENTE DIMAANO, ARCADIA DIMAANO, TEODULA DIMAANO, THE REGISTER OF DEEDS and THE PROVINCIAL ASSESSOR OF THE PROVINCE OF BATANGAS, respondents. Jose O. Lara for petitioners. Pedro Panganiban y Tolentino for respondents.

TEEHANKEE, J.: Two petitions for review of decisions of the Court of Agrarian Relations dismissing petitioners' actions as share tenants for the enforcerment of the right to redeem agricultural lands, under the provisions of section 12 of the Agricultural Land Reform Code. As the same issue of law is involved and the original landowner and vendees in both cases are the same, the two cases are herein jointly decided. Respondent-vendor Policarpio Hidalgo was until the time of the execution of the deeds of sale on September 27, 1963 and March 2, 1964 in favor of his seven above-named private corespondents, the owner of the 22,876-square meter and 7,638square meter agricultural parcels of land situated in Lumil, San Jose, Batangas, described in the decisions under review. In Case L-25326, respondent-vendor sold the 22,876-square meter parcel of land, together with two other parcels of land for P4,000.00. Petitioners-spouses Igmidio Hidalgo and Martina Resales, as tenants thereof, alleging that the parcel worked by them as tenants is fairly worth P1,500.00, "taking into account the respective areas, productivities, accessibilities, and assessed values of three lots, seek by way of redemption the execution of a deed of sale for the same amount of P1,500.00 by respondentsvendees 1 in their favor.

In Case L-25327, respondent-vendor sold the 7,638-square meter parcel of land for P750.00, and petitioners-spouses Hilario Aguila and Adela Hidalgo as tenants thereof, seek by way of redemption the execution of a deed of sale for the same price of P750.00 by respondents-vendees in their favor. As stated in the decisions under review, since the parties stipulated on the facts in both cases, petitioners-tenants have for several years been working on the lands as share tenants. No 90day notice of intention to sell the lands for the exercise of the right of pre-emption prescribed by section 11 of the Agricultural Land Reform Code (Republic Act No. 3844, enacted on August 8, 1963) was given by respondent-vendor to petitioners-tenants. Subsequently, the deeds of sale executed by respondent-vendor were registered by respondents register of deeds and provincial assessor of Batangas in the records of their respective offices notwithstanding the non-execution by respondent-vendor of the affidavit required by section 13 of the Land Reform Code. 2 The actions for redemption were timely filled on March 26, 1965 by petitioners-tenants within the two-year prescriptive period from registration of the sale, prescribed by section 12 of the said Code. The agrarian court rendered on July 19, 1965 two identical decisions dismissing the petitions for redemption. It correctly focused on the sole issue of law as follows: "(T)he only issue in this case is whether or not plaintiffs, as share tenants, are entitled to redeem the parcel of land they are working from the purchasers thereof, where no notice was previously given to them by the vendor, who was their landholder, of the latter's intention to sell the property and where the vendor did not execute the affidavit required by Sec. 13 of Republic Act No. 3844 before the registration of the deed of sale. In other words, is the right of redemption granted by Sec. 12 of Republic Act No. 3844 applicable to share tenants?" But proceeding from several erroneous assumptions and premises, it arrived at its erroneous conclusion that the right of redemption granted by section 12 of the Land Reform Code is available to leasehold tenants only but not to share tenants, and thus dismissed the petitions: "(S)ec 12 of Republic Act No. 3844,

which comes under Chapter I of said Act, under the heading 'Agricultural Leasehold System,' reads as follows: 'SEC. 12. Lessee's Right of Redemption. — In case the landholding is sold to a third person without the knowledge of the agricultural lessee, the latter shall have the right to redeem the same at a reasonable price and consideration: Provided: further, That where there are two or more agricultural lessees, each shall be entitled to said right of redemption only to the extent of the area actually cultivated by him. The right of redemption under this Section may be exercised within two years from the registration of the sale, and shall have priority over any other right of legal redemption.' The systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leasehold tenancy. (Sec. 4, Republic Act No. 1199; Sec. 4, Republic Act No. 3844). A share tenant is altogether different from a leasehold tenant and their respective rights and obligations are not coextensive or co-equal. (See Secs. 22 to 41, inclusive, and Secs. 42 to 48, inclusive, of Republic Act No. 1199; see also Secs. 4 to 38, inclusive, of Republic Act No. 3844). It is our considered view that the right of redemption granted by Section 12 of Republic Act No. 3844 is applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else. In enacting the Agricultural Land Reform Code, Congress was fully aware of the existence of share tenancy and in fact

27 provided for the abolition of the agricultural share tenancy system. (Sec. 4, Republic Act No. 3844.) If it were the intention of Congress to grant the right of redemption to share tenants, it would have unmistakably and unequivocally done so. We cannot extend said right to share tenants through judicial legislation, wherever our sympathies may lie. The agrarian court fell into several erroneous assumptions and premises in holding that agricultural share tenancy remains recognized in this jurisdiction; that "a share tenant is altogether different from a leasehold tenant and their respective rights and obligations are not co-extensive or co-equal"; and that the right of redemption granted by section 12 of the Land Reform Code" is applicable to leasehold tenants only, but not to share tenants, because said provision of law clearly, definitely, and unequivocally grants said right to the 'agricultural lessee,' and to nobody else." 1. The very essence of the Agricultural Land Reform Code is the abolition of agricultural share tenancy as proclaimed in its title. Section 4 of the Code expressly outlaws agricultural share tenancy as "contrary to public policy" and decrees its abolition. 3 Section 2 of the Code expressly declares it to be the policy of the State, inter alia, "to establish owner cultivatorship and the economic family-size farm as the basis of Philippine agriculture and, as a consequence, divert landlord capital in agriculture to industrial development; to achieve a dignified existence for the small farmers free from pernicious institutional restraints and practices; ... and to make the small farmers more independent, self-reliant and responsible citizens, and a source of strength in our democratic society." 4 It was error, therefore, for the agrarian court to state the premise after the Land Reform Code had already been enacted, that "the systems of agricultural tenancy recognized in this jurisdiction are share tenancy and leasehold tenancy." A more accurate statement of the premise is that based on the transitory provision in the first proviso of section 4 of the Code, i.e. that existing share tenancy contracts are allowed to continue temporarily in force and effect, notwithstanding their express abolition, until whichever of the following events occurs earlier: (a) the end of the agricultural year when the National

Land Reform Council makes the proclamation declaring the region or locality a land reform area; or (b) the shorter period provided in the share tenancy contracts expires; or (c) the share tenant sooner exercises his option to elect the leasehold system. In anticipation of the expiration of share tenancy contracts — whether by contractual stipulation or the tenant's exercise of his option to elect the leasehold system instead or by virtue of their nullity — occuring before the proclamation of the locality as a land reform area, the same section 4 has further declared in the third proviso thereof that in such event, the tenant shall continue in possession of the land for cultivation and "there shall be presumed to exist a leasehold relationship under the provisions of this Code." 2. The foregoing exposes the error of the agrarian court's corollary premise that "a share tenant is altogether different from a leasehold tenant." The agrarian court's dictum that "their respective rights and obligations are not co-extensive or co-equal "refer to their contractual relations with the landowner, with respect to the contributions given, management, division or payment of the produce. 5 But the Land Reform Code forges by operation of law, between the landowner and the farmer — be a leasehold tenant or temporarily a share tenant — a vinculum juris with certain vital juridical consequences, such as security of tenure of the tenant and the tenant's right to continue in possession of the land he works despite the expiration of the contract or the sale or transfer of the land to third persons, and now, more basically, the farmer's pre-emptive right to buy the land he cultivates under section 11 of the Code 6 as well as the right to redeem the land, if sold to a third person without his knowledge, under section 12 of the Code. This is an essential and indispensable mandate of the Code to implement the state's policy of establishing owner-cultivatorship and to achieve a dignified and self-reliant existence for the small farmers that would make them a pillar of strength of our Republic. Aside from expropriation by the Land Authority of private agricultural land for resale in economic family-size farm

units "to bona fide tenants, occupants and qualified farmers," 7 the purchase by farmers of the lands cultivated by them, when the owner decides to sell the same — through rights of preemption and redemption — are the only means prescribed by the Code to achieve the declared policy of the State. 3. The agrarian court therefore facilely let itself fall into the error of concluding that the right of redemption (as well as necessarily the right of pre-emption) imposed by the Code is available to leasehold tenants only and excludes share tenants for the literal reason that the Code grants said rights only to the "agricultural lessee and to nobody else." For one, it immediately comes to mind that the Code did not mention tenants, whether leasehold or share tenants, because it outlaws share tenancy and envisions the agricultural leasehold system as its replacement. Thus, Chapter I of the Code, comprising sections 4 to 38, extensively deals with the establishment of "agricultural leasehold relation," defines the parties thereto and the rights and obligations of the "agricultural lessor" and of the "agricultural lessee" (without the slightest mention of leasehold tenants) and the statutory consideration or rental for the leasehold to be paid by the lessee. There is a studied omission in the Code of the use of the term tenant in deference to the "abolition of tenancy" as proclaimed in the very title of the Code, and the elevation of the tenant's status to that of lessee. Then, the terms "agricultural lessor" and "agricultural lessee" are consistently used throughout the Chapter and carried over the particular sections (11 and 12) on pre-emption and redemption. The agrarian court's literal construction would wreak havoc on and defeat the proclaimed and announced legislative intent and policy of the State of establishing owner-cultivatorship for the farmers, who invariably were all share tenants before the enactment of the Code and whom the Code would now uplift to the status of lessees. A graphic instance of this fallacy would be found in section 11 providing that "In case the agricultural lessor decides to sell the landholding the agricultural lessee shall have the preferential right to buy the same under reasonable terms and conditions." It will be seen that the term "agricultural lessor" is here used

28 interchangeably with the term "landowner"; which conflicts with the Code's definition of "agricultural lessor" to mean "a person natural or juridical, who, either as owner, civil law lessee, usufructuary, or legal possessor, lets or grants to another the cultivation and use of his land for a price certains." 8 Obviously, the Code precisely referred to the "agricultural lessor (who) decides to sell the landholding," when it could have more precisely referred to the "landowner," who alone as such, rather than a civil law lessee, usufructuary or legal possessor, could sell the landholding, but it certainly cannot be logically contended that the imprecision should defeat the clear spirit and intent of the provision. 4. We have, here, then a case of where the true intent of the law is clear that calls for the application of the cardinal rule of statutory construction that such intent or spirit must prevail over the letter thereof, for whatever is within the spirit of a statute is within the statute, since adherence to the letter would result in absurdity, injustice and contradictions and would defeat the plain and vital purpose of the statute. Section 11 of the Code providing for the "agricultural lessee's" preferential right to buy the land he cultivates provides expressly that "the entire landholding offered for sale must be pre-empted by the Land Authority if the landowner so desires, unless the majority of the lessees object to such acquisition," presumably for being beyond their capabilities. Taken together with the provisions of Chapter III of the Code on the organization and functions of the Land Authority and Chapter VII on the Land Project Administration and the creation and functions of the National Land Reform Council, (in which chapters the legislature obviously was not laboring under the inhibition of referring to the term tenants as it was in Chapter I establishing the agricultural leasehold system and decreeing the abolition of share tenancy, 9 the Code's intent, policy and objective to give both agricultural lessees and farmers who transitionally continue to be share tenants notwithstanding the Code's enactment, the same priority and preferential rights over the lands under their cultivation, in the event of acquisition of the lands, by expropriation or voluntary sale, for distribution or resale that may be initiated by the Land Authority or the National Land Reform Council, are clearly and expressly stated.

Thus Chapter III, section 51 of the Code decrees it the responsibility of the Land Authority "(1) To initiate and prosecute expropriation proceedings for the acquisition of private agricultural lands as defined in Section one hundred sixty-six of chapter XI of this Code for the purpose of subdivision into economic family — size farm units and resale of said farm units to bona fide tenants, occupants and qualified farmers ... and "(2) To help bona fide farmers without lands of agricultural ownercultivators of uneconomic-size farms to acquire and own economic family-size farm units ...." Similarly, Chapter VII, section 128 of the Code, in enjoining the National Land Reform Council to formulate the necessary rules and regulations to implement the Code's provisions for selection of agricultural land to be acquired and distributed and of the beneficiaries of the family farms, ordains the giving of the same priority "to the actual occupants personally cultivating the land either as agricultural lessees or otherwise with respect to the area under their cultivation." 5. It would certainly result in absurdity, contradictions and injustice if a share tenant would be denied the rights of preemption and redemption which he seeks to exercise on his own resources, notwithstanding that the National Land Reform Council has not yet proclaimed that all the government machineries and agencies in the region or locality envisioned in the Code are operating — which machineries and agencies, particularly, the Land Bank were precisely created "to finance the acquisition by the Government of landed estates for division and resale to small landholders, as well as the purchase of the landholding by the agricultural lessee from the landowner." 10 The non-operation in the interval of the Land Bank and the government machineries and agencies in the region which are envisioned in the Code to assist the share tenant in shedding off the yoke of tenancy and afford him the financial assistance to exercise his option of electing the leasehold system and his preferential right of purchasing the land cultivated by him could not possibly have been intended by Congress to prevent the exercise of any of these vital rights by a share tenant who is able to do so, e.g. to purchase the land, on his own and without government assistance. It would be absurd and unjust that while the government is unable to render such assistance, the share

tenant would be deemed deprived of the very rights granted him by the Code which he is in a position to exercise even without government assistance. 6. Herein lies the distinction between the present case and Basbas vs. Entena 11 where the Court upheld the agrarian court's dismissal of the therein tenant's action to redeem the landholding sold to a third party by virtue of the tenant's failure to tender payment or consign the purchase price of the property. There, the tenant-redemptioner was shown by the evidence to have no funds and had merely applied for them to the Land Authority which was not yet operating in the locality and hence, the Court held that no part of the Code "indicates or even hints that the 2-year redemption period will not commence to run (indefinitely) until the tenant obtains financing from the Land Bank, or stops the tenant from securing redemption funds from some other source." 12 In the present case, the petitionerstenants' possession of funds and compliance with the requirements of redemption are not questioned, the case having been submitted and decided on the sole legal issue of the right of redemption being available to them as share tenants. The clear and logical implication of Basbas is where the tenant has his own resources or secures redemption funds from sources other than the Land Bank or government agencies under the Code, the fact that the locality has not been proclaimed a land reform area and that such government machineries and agencies are not operating therein is of no relevance and cannot prejudice the tenant's rights under the Code to redeem the landholding. 7. Even from the landowner's practical and equitable viewpoint, the landowner is not prejudiced in the least by recognizing the share tenant's right of redemption. The landowner, having decided to sell his land, has gotten his price therefor from his vendees. (The same holds true in case of the tenant's exercise of the pre-emptive right by the tenant who is called upon to pay the landowner the price, if reasonable, within ninety days from the landowner's written notice.) As for the vendees, neither are they prejudiced for they will get back from the tenant-redemptioner the price that they paid the vendor, if reasonable, since the Code grants the agricultural lessee or tenant the top priority of redemption of the landholding cultivated by him and expressly decrees that the same "shall have priority over any other right of

29 legal redemption." In the absence of any provision in the Code as to manner of and amounts payable on redemption, the pertinent provisions of the Civil Code apply in a suppletory character. 13 Hence, the vendees would be entitled to receive from the redemptioners the amount of their purchase besides "(1) the expenses of the contract, and any other legitimate payments made by reason of the sale; (and) (2) the necessary and useful expenses made on the thing sold." 14 8. The historical background for the enactment of the Code's provisions on pre-emption and redemption further strengthens the Court's opinion. It is noted by Dean Montemayor 15 that "(T)his is a new right which has not been granted to tenants under the Agricultural Tenancy Act. It further bolsters the security of tenure of the agricultural lessee and further encourages agricultural lessees to become owner-cultivators. In the past, a landlord often ostensibly sold his land being cultivated by his tenant to another tenant, who in turn filed a petition for ejectment against the first tenant on the ground of personal cultivation. While many of such sales were simulated, there was a formal transfer of title in every case, and the first tenant was invariably ordered ejected. There is indication in this case of the same pattern of sale by the landowner to another tenant, 16 in order to effect the ejectment of petitioners-tenants. This is further bolstered by the fact that the sales were executed by respondent-vendor on September 27, 1963 and March 2, 1954 shortly after the enactment on August 8, 1963 of the Land Reform Code — which furnishes still another reason for upholding ... petitioners-tenants' right of redemption, for certainly a landowner cannot be permitted to defeat the Code's clear intent by precipitately disposing of his lands, even before the tenant has been given the time to exercise his newly granted option to elect the new agricultural leasehold system established by the Code as a replacement for the share tenancy outlawed by it.

9. Clearly then, the Code intended, as above discussed, to afford the farmers' who transitionally continued to be share tenants after its enactment but who inexorably would be agricultural lessees by virtue of the Code's proclaimed abolition of tenancy, the same priority and preferential right as those other share tenants, who upon the enactment of the Code or soon thereafter were earlier converted by fortuitous circumstance into agricultural lessees, to acquire the lands under their cultivation in the event of their voluntary sale by the owner or of their acquisition, by expropriation or otherwise, by the Land Authority. It then becomes the court's duty to enforce the intent and will of the Code, for "... (I)n fact, the spirit or intention of a statute prevails over the letter thereof.' (Tañada vs. Cuenco, L-10520, Feb. 23, 1957, citing 82 C.J.S., p. 526.) A statute 'should be construed according to its spirit or intention, disregarding as far as necessary, the letter of the law.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 855.) By this, we do not correct the act of the Legislature, but rather ... carry out and give due course to 'its intent.' (Lopez & Sons, Inc. vs. Court of Tax Appeals, 100 Phil. 850)." 17 The Court has consistently held in line with authoritative principles of statutory construction that, it will reject a narrow and literal interpretation, such as that given by the agrarian court, that would defeat and frustrate rather than foster and give life to the law's declared policy and intent. 18 Finally, under the established jurisprudence of the Court, in the interpretation of tenancy and labor legislation, it will be guided by more than just an inquiry into the letter of the law as against its spirit and will ultimately resolve grave doubts in favor of the tenant and worker. 19 The agrarian court's dismissal of the cases at bar should therefore be reversed and petitioners-tenants' right to redeem the landholdings recognized section 12 of the Code. In Case L-25326, however, the deed of sale executed by respondent-vendor in favor of respondents-vendees for the price of P4,000.00 covers three parcels of land, while what is sought to be redeemed is only the first parcel of land of 22,876 square meters, described in the deed. Petitioners-tenants' allegation that the proportionate worth of said parcel "taking into account the respective areas, productivities, accessibilities and assessed values of the three lots," is P1,500.00, was traversed by

respondents in their answer, with the claim that "the said land is fairly worth P20,000.00. 20 While the vendor would be bound by, and cannot claim more than, the price stated in the deed, and the Code precisely provides that the farmer shall have "the preferential right to buy the (landholding) under reasonable terms and conditions" or "redeem the same at a reasonable price and consideration" 21 with a view to affording the farmer the right to seek judicial assistance and relief to fix such reasonable price and terms when the landowner places in the notice to sell or deed an excessive or exorbitant amount in collusion with the vendee, we note that in this case the deed of sale itself acknowledged that the selling price of P4,000.00 therein stated was not the fair price since an additional consideration therein stated was that the vendees would support the vendor during his lifetime and take care of him, should he fall ill, and even assumed the expenses of his burial upon his death: Ang halagang P4,000.00 ay hindi kaulat sa tunay na halaga ng mga lupa subalit ang mga bumili ay may katungkulan na sostentohin ako habang ako'y nabubuhay, ipaanyo at ipagamot ako kung ako ay may sakit, saka ipalibing ako kung ako ay mamatay sa kanilang gastos at ito ay isa sa alang-alang o consideracion ng bilihang ito. Under these circumstances, since the agrarian court did not rule upon conflicting claims of the parties as to what was the proportionate worth of the parcel of land in the stated price of P4,000.00 — whether P1,500.00 as claimed by petitioners or a little bit more, considering the proportionate values of the two other parcels, but the whole total is not to exceed the stated price of P4,000.00, since the vendor is bound thereby — and likewise, what was the additional proportionate worth of the expenses assumed by the vendees, assuming that petitioners are not willing to assume the same obligation, the case should be remanded to the agrarian court solely for the purpose of determining the reasonable price and consideration to be paid by petitioners for redeeming the landholding, in accordance with these observations.

30 In Case L-25327, there is no question as to the price of P750.00 paid by the vendees and no additional consideration or expenses, unlike in Case L-25326, supra, assumed by the vendees. Hence, petitioners therein are entitled to redeem the landholding for the same stated price. ACCORDINGLY, the decisions appealed from are hereby reversed, and the petitions to redeem the subject landholdings are granted. In Case L-25326, however, the case is remanded to the agrarian court solely for determining the reasonable price to be paid by petitioners therein to respondents-vendees for redemption of the landholding in accordance with the observations hereinabove made. No pronouncement as to costs. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-8888

November 29, 1957

SONG KIAT CHOCOLATE FACTORY, plaintiff-appellant, vs. CENTRAL BANK OF THE PHILIPPINES and VICENTE GELLA, in his capacity as Treasurer of the Philippines, defendants-appellees. Rogelio M. Jalandoni for appellant. Office of the Solicitor General Ambrosio Padilla and Solicitor Jose P. Alejandro for appellee, Vicente Gella. Nat. M. Balbao and F. E. Evangelista for appellee, Central Bank of the Philippines. BENGZON, J.:

The question in this appeal is whether cocoa beans may be considered as "chocolate" for the purposes of exemption from the foreign exchange tax imposed by Republic Act No. 601 as amended. During the period from January 8, 1953 to October 9, 1953, the plaintiff appellant imported sun dried cocoa beans for which it paid the foreign exchange tax of 17 per cent totalling P74,671.04. Claiming exemption from said tax under section 2 of same Act, it sued the Central Bank that had exacted payment; and in its amended complaint it included the Treasurer of the Philippines. The suit was filed in the Manila Court of First Instance, wherein defendants submitted in due time a motion to dismiss on the grounds: first, the complaint stated no cause of action because cocoa beans were not "chocolate"; and second, it was a suit against the Government without the latter's consent. . The Hon. Gregorio S. Narvasa, Judge, sustained the motion, and dismissed the case by his order of November 19, 1954. Hence this appeal. The lower court, appellant contends, erred in dismissing the case and in holding that the term "chocolate" does not include sun dried cocoa beans. SEC. 2 of the aforesaid Act provides that "the tax collected or foreign exchange used for the payment of costs transportation and/or other charges incident to importation into the Philippines of rice, flour ..soya beans, butterfat, chocolate, malt syrup .. shall be refunded to any importer making application therefor, upon satisfactory proof of actual importation . . ." In support of its contention appellant quotes from dictionaries and encyclopedias interchangeably using the words "chocolate", "cacao" and "cocoa". Yet we notice that the quotations refer to "cocoa" as chocolate nut" "chocolate bean" or "chocolate tree." And the legal exemption refers to "chocolate" not the bean, nor the nut nor the tree. We agree with the Solicitor General and the other counsel of respondents that in common parlance the law is presumed to refer to it1 — chocolate is a manufactured or finished product made out of cocoa beans, or "cacao" beans as

they are locally known. We may take notice of the fact that grocery stores sell powdered cocoa beans as chocolate, labeled "cocoa powder", or simply "cocoa". They are, however, really chocolate; they are not cocoa beans. The manufacture of chocolate involves several processes, such as selecting and drying the cocoa beans, then roasting, grinding, sieving and blending.2 Cocoa beans do not become chocolate unless and until they have undergone the manufacturing processes above described. The first is raw material, the other finished product. The courts regard "chocolate" as "Chocolate" is a preparation of roasted cacao beans without the abstraction of the butter and always contains sugar and added cacao butter. Rockwood & Co., vs. American President Lines, D. C. N. J., 68 F. Supp. 224, 226. Chocolate is a cocoa bean roasted, cracked, shelled, crushed, ground, and molded in cakes. It contains no sugar, and is in general use in families. Sweetened chocolate is manufactured in the same way but the paste is mixed wit sugar, and is used by confectioners in making chocolate confections. In re Schiling, 53 F. 81, 82, 3 C. C. A. 440. In view of the foregoing, and having in mind the principle of strict construction of statutes exempting from taxation,3 we are of the opinion and so hold, that the exemption for "chocolate" in the above section 2 does not include "cocoa beans". The one is raw material, the other manufactured consumer product; the latter is ready for human consumption; the former is not. However, we cannot stop here, because in August 1954 — suit was brought in May 1954 — Congress approved Republic Act 1197 amending section 2 by substituting "cocoa beans" for "chocolate." This shows, maintains the appellant, the Legislature's intention to include cocoa beans in the word "chocolate." In fact, it goes on, the Committee Chairman who reported House Bill No. 2676 which became Republic Act 1197, declared before the House.

31 Mr. ROCES: Mr. SPEAKER, on line 8 page 1, after the word 'canned', strike out the words, 'fresh, frozen and' and also the words 'other beef', on line 9 and on the same line, line 9, after the word 'chocolate', insert the words '(COCOA BEANS)' in parenthesis ( ). I am proposing to insert the words '(COCOA BEANS)' in parenthesis ( ) after the word chocolate, Mr. Speaker, in order to clarify any doubt and manifest the intention of the past Congress that the word 'chocolate' should mean 'cocoa beans. In reply to this, appellees point out that said chairman could not have spoken of the Congressional intention in approving Republic Act 601 because he was not a member of the Congress that passed said Act. Naturally, all he could state was his own interpretation of such piece of legislation. Courts do not usually give decisive weight to one legislator's opinion, expressed in Congressional debates concerning the application of existing laws.4 Yet even among the legislators taking part in the consideration of the amendatory statute (Republic Act 1197) the impression prevailed that, as the law then stood5 chocolate candy or chocolate bar was exempted, but cocoa beans were not. Here are Senator Peralta's statements during the discussion of the same House Bill No. 2576: SENATOR PERALTA: I signed that conference report and I am really bound by it, but, Mr. President, a few hours ago I received some information which maybe the chairman would like to know, to the effect that we allow chocolate bar, chocolate candy to come this country except from the 17 per cent tax when we do not allow cocoa beans, out of which our local manufacturers can make chocolate candy, exempted. So why do we not take off that exemption for chocolate and instead put 'cocoa beans' so as to benefit our manufacturers of chocolate candy? xxx xxx xxx. Senator PERALTA: Yes, I agree with the chairman, only I was just wondering if the chairman, might not consider

the fact that in view of the information, this seems to be inconsistent we allow chocolate to come here exempt and not exempt cocoa beans which is used by our manufacturers in making chocolate candy.

The order of dismissal is affirmed, with costs against appellant. Republic of the Philippines SUPREME COURT Manila

And Senator Puyat is quoted as saying, in the same connection: EN BANC MR. PRESIDENT, On the same page (page 1), line 9, delete "cocoa beans". The text as it came to the Senate was misleading. In the original law the exemption is for chocolate and the version that we got from the Lower House is "(cocoa beans)" giving the impression that chocolate and cocoa beans are synonymous. Now I think this is a sort of a rider, so your committee recommends the deletion of those words. (Journal of the Senate, July 30, 1954, re H. B. No. 2576, Emphasis ours.) Other parts of the Congressional record quoted in the briefs would seem to show that in approving House Bill No. 2576, the Congress agreed to exempt "cocoa beans" instead of chocolate with a view to favoring local manufacturers of chocolate products.6 A change of legislative policy, as appellees contend7 — not a declaration or clarification of previous Congressional purpose. In fact, as indicating, the Government's new policy of exempting for the first time importations of "cocoa beans," there is the President's proclamation No. 62 of September 2, 1954 issued in accordance with Republic Act No. 1197 specifying that said exemption (of cocoa beans) shall operate from and after September 3, 1954 — not before. As a general rule, it may be added, statutes operate prospectively. Observe that appellant's cocoa beans had been imported during January-October 1953, i.e. before the exemption decree. After the foregoing discussion, it is hardly necessary to express our approval of the lower court's opinion about plaintiff's cause of action, or the lack of it. And it becomes unnecessary to consider the other contention of defendants that this is a suit against the Government without its consent.

G.R. No. 106719 September 21, 1993 DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO REY MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners, vs. SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH NURSES ASSOCIATION, represented by RAOULITO GAYUTIN, respondents. Renato J. Dilag and Benjamin C. Santos for petitioners. Danilo C. Cunanan for respondent Ombudsman. Crispin T. Reyes and Florencio T. Domingo for private respondent.

QUIASON, J.: This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary Injunction or Temporary Restraining Order, under Rule 65 of the Revised Rules of Court. Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992, directing the preventive suspension of petitioners, Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer III; Conrado Rey Matias, Technical

32 Assistant to the Chief of Hospital; Cora C. Solis, Accountant III; and Enya N. Lopez, Supply Officer III, all of the National Center for Mental Health. The petition also asks for an order directing the Ombudsman to disqualify Director Raul Arnaw and Investigator Amy de Villa-Rosero, of the Office of the Ombudsman, from participation in the preliminary investigation of the charges against petitioner (Rollo, pp. 2-17; Annexes to Petition, Rollo, pp. 19-21). The questioned order was issued in connection with the administrative complaint filed with the Ombudsman (OBM-ADM0-91-0151) by the private respondents against the petitioners for violation of the Anti-Graft and Corrupt Practices Act. According to the petition, the said order was issued upon the recommendation of Director Raul Arnaw and Investigator Amy de Villa-Rosero, without affording petitioners the opportunity to controvert the charges filed against them. Petitioners had sought to disqualify Director Arnaw and Investigator Villa-Rosero for manifest partiality and bias (Rollo, pp. 4-15). On September 10, 1992, this Court required respondents' Comment on the petition. On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp. 124-130); Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental Manifestation" (Rollo, pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively, averring developments that transpired after the filing of the petition and stressing the urgency for the issuance of the writ of preliminary injunction or temporary restraining order. On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN in the meantime, the STATUS QUO pending filing of comments by said respondents on the original supplemental manifestation" (Rollo, p. 177).

On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to comply with the Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192203). In a Resolution dated October 1, 1992, this Court required respondent Secretary of Health to comment on the said motion. On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH Nurses Association submitted its Comment to the Petition, Supplemental Petition and Urgent Supplemental Manifestation. Included in said pleadings were the motions to hold the lawyers of petitioners in contempt and to disbar them (Rollo, pp. 210-267). Attached to the "Omnibus Submission" as annexes were the orders and pleadings filed in Administrative Case No. OBM-ADM-0-91-1051 against petitioners (Rollo, pp. 268-480). The Motion for Disbarment charges the lawyers of petitioners with: (1) unlawfully advising or otherwise causing or inducing their clients — petitioners Buenaseda, et al., to openly defy, ignore, disregard, disobey or otherwise violate, maliciously evade their preventive suspension by Order of July 7, 1992 of the Ombudsman . . ."; (2) "unlawfully interfering with and obstructing the implementation of the said order (Omnibus Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of the Canons of the Code of Professional Responsibility and of unprofessional and unethical conduct "by foisting blatant lies, malicious falsehood and outrageous deception" and by committing subornation of perjury, falsification and fabrication in their pleadings (Omnibus Submission, pp. 52-54; Rollo, pp. 261263). On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct Respondent Secretary of Health to Comply with 22 September 1992 Resolution'" (Manifestation attached to Rollo without pagination between pp. 613 and 614 thereof). On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992, alleging that: (a) "despite the issuance of the September 22, 1992 Resolution directing

respondents to maintain the status quo, respondent Secretary refuses to hold in abeyance the implementation of petitioners' preventive suspension; (b) the clear intent and spirit of the Resolution dated September 22, 1992 is to hold in abeyance the implementation of petitioners' preventive suspension, the status quo obtaining the time of the filing of the instant petition; (c) respondent Secretary's acts in refusing to hold in abeyance implementation of petitioners' preventive suspension and in tolerating and approving the acts of Dr. Abueva, the OIC appointed to replace petitioner Buenaseda, are in violation of the Resolution dated September 22, 1992; and (d) therefore, respondent Secretary should be directed to comply with the Resolution dated September 22, 1992 immediately, by restoring the status quo ante contemplated by the aforesaid resolution" (Comment attached to Rollo without paginations between pp. 613-614 thereof). In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply with the aforestated status quo order, stating inter alia, that: It appearing that the status quo ante litem motam, or the last peaceable uncontested status which preceded the present controversy was the situation obtaining at the time of the filing of the petition at bar on September 7, 1992 wherein petitioners were then actually occupying their respective positions, the Court hereby ORDERS that petitioners be allowed to perform the duties of their respective positions and to receive such salaries and benefits as they may be lawfully entitled to, and that respondents and/or any and all persons acting under their authority desist and refrain from performing any act in violation of the aforementioned Resolution of September 22, 1992 until further orders from the Court (Attached to Rollo after p. 615 thereof).

33 On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition and Supplemental Manifestation, stated that (a) "The authority of the Ombudsman is only to recommend suspension and he has no direct power to suspend;" and (b) "Assuming the Ombudsman has the power to directly suspend a government official or employee, there are conditions required by law for the exercise of such powers; [and] said conditions have not been met in the instant case" (Attached to Rollo without pagination). In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General that the Ombudsman can only suspend government officials or employees connected with his office. Petitioners also refuted private respondents' motion to disbar petitioners' counsel and to cite them for contempt (Attached to Rollo without pagination). The crucial issue to resolve is whether the Ombudsman has the power to suspend government officials and employees working in offices other than the Office of the Ombudsman, pending the investigation of the administrative complaints filed against said officials and employees. In upholding the power of the Ombudsman to preventively suspend petitioners, respondents (Urgent Motion to Lift Status Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No. 6770, which provides: Sec. 24. Preventive Suspension. — The Ombudsman or his Deputy may preventively suspend any officer or employee under his authority pending an investigation, if in his judgment the evidence of guilt is strong, and (a) the charge against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (b) the charge would warrant removal from the service; or (c) the respondent's continued stay in office may prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of Ombudsman but not more than six months, without pay, except when the delay in the disposition of the case by the Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the period of such delay shall not be counted in computing the period of suspension herein provided. Respondents argue that the power of preventive suspension given the Ombudsman under Section 24 of R.A. No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987 Constitution, which provides that the Ombudsman shall exercise such other power or perform such functions or duties as may be provided by law." On the other hand, the Solicitor General and the petitioners claim that under the 1987 Constitution, the Ombudsman can only recommend to the heads of the departments and other agencies the preventive suspension of officials and employees facing administrative investigation conducted by his office. Hence, he cannot order the preventive suspension himself. They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the Ombudsman shall have inter alia the power, function, and duty to: Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure or prosecution, and ensure compliance therewith. The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has three distinct powers, namely: (1) direct the officer concerned to take appropriate action against public officials or employees at fault; (2) recommend their removal, suspension, demotion fine, censure,

or prosecution; and (3) compel compliance with the recommendation (Comment dated December 3, 1992, pp. 9-10). The line of argument of the Solicitor General is a siren call that can easily mislead, unless one bears in mind that what the Ombudsman imposed on petitioners was not a punitive but only a preventive suspension. When the constitution vested on the Ombudsman the power "to recommend the suspension" of a public official or employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure. All the words associated with the word "suspension" in said provision referred to penalties in administrative cases, e.g. removal, demotion, fine, censure. Under the rule of Noscitor a sociis, the word "suspension" should be given the same sense as the other words with which it is associated. Where a particular word is equally susceptible of various meanings, its correct construction may be made specific by considering the company of terms in which it is found or with which it is associated (Co Kim Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247 [1966]). Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend public officials and employees facing administrative charges before him, is a procedural, not a penal statute. The preventive suspension is imposed after compliance with the requisites therein set forth, as an aid in the investigation of the administrative charges. Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate official the discipline or prosecution of erring public officials or employees. In order to make an intelligent determination whether to recommend such actions, the Ombudsman has to conduct an investigation. In turn, in order for him to conduct such investigation in an expeditious and efficient manner, he may need to suspend the respondent. The need for the preventive suspension may arise from several causes, among them, the danger of tampering or destruction of evidence in the possession of respondent; the intimidation of witnesses, etc. The Ombudsman should be given the discretion

34 to decide when the persons facing administrative charges should be preventively suspended. Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford, Statutory Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]). The test in determining if a statute is penal is whether a penalty is imposed for the punishment of a wrong to the public or for the redress of an injury to an individual (59 Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp. 496497). A Code prescribing the procedure in criminal cases is not a penal statute and is to be interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644). The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform efficiently the task committed to him by the Constitution. Such being the case, said statute, particularly its provisions dealing with procedure, should be given such interpretation that will effectuate the purposes and objectives of the Constitution. Any interpretation that will hamper the work of the Ombudsman should be avoided. A statute granting powers to an agency created by the Constitution should be liberally construed for the advancement of the purposes and objectives for which it was created (Cf. Department of Public Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]). In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not a penalty, said: Suspension is a preliminary step in an administrative investigation. If after such investigation, the charges are established and the person investigated is found guilty of acts warranting his removal, then he is removed or dismissed. This is the penalty.

To support his theory that the Ombudsman can only preventively suspend respondents in administrative cases who are employed in his office, the Solicitor General leans heavily on the phrase "suspend any officer or employee under his authority" in Section 24 of R.A. No. 6770. The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which dealt with preventive suspension and which authorized the chief of a bureau or office to "suspend any subordinate or employee in his bureau or under his authority pending an investigation . . . ." Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of the Revised Administrative Code also authorized the chief of a bureau or office to "suspend any subordinate officer or employees, in his bureau or under his authority." However, when the power to discipline government officials and employees was extended to the Civil Service Commission by the Civil Service Law of 1975 (P.D. No. 805), concurrently with the President, the Department Secretaries and the heads of bureaus and offices, the phrase "subordinate officer and employee in his bureau" was deleted, appropriately leaving the phrase "under his authority." Therefore, Section 41 of said law only mentions that the proper disciplining authority may preventively suspend "any subordinate officer or employee under his authority pending an investigation . . ." (Sec. 41). The Administrative Code of 1987 also empowered the proper disciplining authority to "preventively suspend any subordinate officer or employee under his authority pending an investigation" (Sec. 51). The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the phrase to read "suspend any officer or employee under his authority pending an investigation . . . ." The conclusion that can be deduced from the deletion of the word "subordinate" before and the words "in his bureau" after "officer or employee" is that the Congress intended to empower the Ombudsman to preventively suspend all officials

and employees under investigation by his office, irrespective of whether they are employed "in his office" or in other offices of the government. The moment a criminal or administrative complaint is filed with the Ombudsman, the respondent therein is deemed to be "in his authority" and he can proceed to determine whether said respondent should be placed under preventive suspension. In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion amounting to lack of jurisdiction when he issued the suspension order without affording petitioners the opportunity to confront the charges against them during the preliminary conference and even after petitioners had asked for the disqualification of Director Arnaw and Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the Solicitor General contends that assuming arguendo that the Ombudsman has the power to preventively suspend erring public officials and employees who are working in other departments and offices, the questioned order remains null and void for his failure to comply with the requisites in Section 24 of the Ombudsman Law (Comment dated December 3, 1992, pp. 1119). Being a mere order for preventive suspension, the questioned order of the Ombudsman was validly issued even without a fullblown hearing and the formal presentation of evidence by the parties. In Nera, supra, petitioner therein also claimed that the Secretary of Health could not preventively suspend him before he could file his answer to the administrative complaint. The contention of petitioners herein can be dismissed perfunctorily by holding that the suspension meted out was merely preventive and therefore, as held in Nera, there was "nothing improper in suspending an officer pending his investigation and before tho charges against him are heard . . . (Nera v. Garcia., supra). There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the preventive suspension of a respondent unless the evidence of guilt is strong and (1) the charts against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (2) the charge would warrant removal from the service; or

35 (3) the respondent's continued stay in office may prejudice the case filed against him. The same conditions for the exercise of the power to preventively suspend officials or employees under investigation were found in Section 34 of R.A. No. 2260. The import of the Nera decision is that the disciplining authority is given the discretion to decide when the evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which expressly left such determination of guilt to the "judgment" of the Ombudsman on the basis of the administrative complaint. In the case at bench, the Ombudsman issued the order of preventive suspension only after: (a) petitioners had filed their answer to the administrative complaint and the "Motion for the Preventive Suspension" of petitioners, which incorporated the charges in the criminal complaint against them (Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex 4, Rollo, pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23 cases of harassment by petitioners of the members of the private respondent (Annex 6, Omnibus Submission, Rollo, pp. 309-333); and (c) a preliminary conference wherein the complainant and the respondents in the administrative case agreed to submit their list of witnesses and documentary evidence. Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus Submission, Rollo, pp. 336-337) while private respondents submitted their list of exhibits (Annex 9 of Omnibus Submission, Rollo, pp. 338-348). Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de Villa-Rosero acted with manifest partiality and bias in recommending the suspension of petitioners. Neither can it be said that the Ombudsman had acted with grave abuse of discretion in acting favorably on their recommendation.

clients to openly defy and disobey the preventive suspension as ordered by the Ombudsman and the Secretary of Health can not prosper (Rollo, pp. 259-261). The Motion should be filed, as in fact such a motion was filed, with the Ombudsman. At any rate, we find that the acts alleged to constitute indirect contempt were legitimate measures taken by said lawyers to question the validity and propriety of the preventive suspension of their clients.

Feliciano, J., is on leave.

On the other hand, we take cognizance of the intemperate language used by counsel for private respondents hurled against petitioners and their counsel (Consolidated: (1) Comment on Private Respondent" "Urgent Motions, etc.; (2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and Supplemental Comment, pp. 4-5). A lawyer should not be carried away in espousing his client's cause. The language of a lawyer, both oral or written, must be respectful and restrained in keeping with the dignity of the legal profession and with his behavioral attitude toward his brethren in the profession (Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of abusive language by counsel against the opposing counsel constitutes at the same time a disrespect to the dignity of the court of justice. Besides, the use of impassioned language in pleadings, more often than not, creates more heat than light. The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which is confined to questions of jurisdiction or abuse of discretion for the purpose of relieving persons from the arbitrary acts of judges and quasi-judicial officers. There is a set of procedure for the discipline of members of the bar separate and apart from the present special civil action. WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the Resolution dated September 22, 1992 is LIFTED and SET ASIDE. SO ORDERED.

The Motion for Contempt, which charges the lawyers of petitioners with unlawfully causing or otherwise inducing their

Narvasa, C.J., Cruz, Padilla, Bidin, Griño-Aquino, Regalado, Davide, Jr., Romero, Nocon, Melo, Puno and Vitug, JJ., concur.

Separate Opinions

BELLOSILLO, J., concurring: I agree that the Ombudsman has the authority, under Sec. 24 of R.A. No. 6770, to preventively suspend any government official or employee administratively charged before him pending the investigation of the complaint, the reason being that respondent's continued stay in office may prejudice the prosecution of the case. However, in the case before us, I am afraid that the facts thus far presented may not provide adequate basis to reasonably place petitioners under preventive suspension. For, it is not enough to rule that the Ombudsman has authority to suspend petitioners preventively while the case is in progress before him. Equally important is the determination whether it is necessary to issue the preventive suspension under the circumstances. Regretfully, I cannot see any sufficient basis to justify the preventive suspension. That is why, I go for granting oral argument to the parties so that we can truthfully determine whether the preventive suspension of respondents are warranted by the facts. We may be suspending key government officials and employees on the basis merely of speculations which may not serve the ends of justice but which, on the other hand, deprive them of their right to due process. The simultaneous preventive

36 suspension of top officials and employees of the National Center for Mental Health may just disrupt, the hospital's normal operations, much to the detriment of public service. We may safely assume that it is not easy to replace them in their respective functions as those substituting them may be taking over for the first time. The proper care of mental patients may thus be unduly jeopardized and their lives and limbs imperilled. I would be amenable to holding oral argument to hear the parties if only to have enough factual and legal bases to justify the preventive suspension of petitioners.

them of their right to due process. The simultaneous preventive suspension of top officials and employees of the National Center for Mental Health may just disrupt, the hospital's normal operations, much to the detriment of public service. We may safely assume that it is not easy to replace them in their respective functions as those substituting them may be taking over for the first time. The proper care of mental patients may thus be unduly jeopardized and their lives and limbs imperilled. I would be amenable to holding oral argument to hear the parties if only to have enough factual and legal bases to justify the preventive suspension of petitioners. Republic of the Philippines SUPREME COURT Manila

# Separate Opinions BELLOSILLO, J., concurring: I agree that the Ombudsman has the authority, under Sec. 24 of R.A. No. 6770, to preventively suspend any government official or employee administratively charged before him pending the investigation of the complaint, the reason being that respondent's continued stay in office may prejudice the prosecution of the case. However, in the case before us, I am afraid that the facts thus far presented may not provide adequate basis to reasonably place petitioners under preventive suspension. For, it is not enough to rule that the Ombudsman has authority to suspend petitioners preventively while the case is in progress before him. Equally important is the determination whether it is necessary to issue the preventive suspension under the circumstances. Regretfully, I cannot see any sufficient basis to justify the preventive suspension. That is why, I go for granting oral argument to the parties so that we can truthfully determine whether the preventive suspension of respondents are warranted by the facts. We may be suspending key government officials and employees on the basis merely of speculations which may not serve the ends of justice but which, on the other hand, deprive

EN BANC March 30, 1954 G.R. No. L-6835 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellant, vs. FAUSTO YADAO, ET AL., defendants-appellees.

Administration, who shall, directly or indirectly, solicit, contract, for charge, or receive, or who shall attempt to solicit, contract for, charge, or receive any fee or compensation exceeding twenty pesos in any one claim, or who shall collect his fee before the claim is actually paid to a beneficiary or claimant, shall be deemed guilty of an offense and upon conviction thereof shall for every offense be fined not exceeding one thousand pesos or imprisoned not exceeding two years, or both, in the discretion of the court. Said information alleges that defendants conspiring together, willfully did "offer to assist one Floverto Jazmin in the prosecution and expeditious approval of his legitimate claim of $2,207 for benefits under the laws of the United States administered in the Philippines by the United States Veterans Administration, and as consideration for which, said accused directly solicited and/or charged said Floverto Jazmin as fee or compensation the sum of P800 which is in excess of the lawful charge of P20 in any one claim." The Honorable Julio Villamor, Judge, upheld a motion to quash, on the ground that the facts charged did not constitute a public offense. Hence this appeal by the prosecution, raising the juridical issue above stated. It is clear, in our opinion, that section 1 of Republic Act 145 punishes: (a) Any person assisting a claimant etc., . . . who shall directly or indirectly solicit . . . a fee exceeding twenty pesos;

Office of the Solicitor General Juan R. Liwag and Solicitor Augusto M. Luciano for appellant. Jose T. Cajulis for appellees.

(b) Any person assisting a claimant . . . who shall attempt to solicit, . . . a fee exceeding twenty pesos; and

BENGZON, J.:

(c) Any person assisting a claimant . . . who shall collect his fee before the claim is actually paid.

The sole question for decision is whether the information filed against defendant-appellees in the Court of First Instance of Rizal sufficiently describes a violation of section 1 of Republic Act No. 145, which reads as follows: Any person assisting a claimant in the preparation, presentation and prosecution of his claim for benefits under the laws of the United States administered by the United States Veterans

In all the three instances the person must be one "assisting" the claimant.[[1]] The principle "assisting" and the clause "assisting a claimant in the preparation etc." qualify "any person" as antecedent of the pronoun "who" in the phrases, "who shall solicit", "who shall attempt to solicit" or "who shall collect".

37 Examining the information, we find it does not aver that the defendants assisted or were assisting the claimant for veterans benefits. It merely asserts they offered to assist, and it is evident that violation is committed only when a person receives or attempts to solicit etc. more than is permitted by law. One who offers to assist, but does not assist, is not included within the penal prohibition, which by its nature must be restrictively interpreted, or strictly construed against the government.[[2]] Of course there was an attempt to commit the offense described by Republic Act No. 145. But the said statute does not expressly punish attempts to commit the offense, and the provisions of the Penal Code about attempts (tentativas) do not apply.[[3]]

G.R. No. 86738 November 13, 1991 NESTLE PHILIPPINES, INC., petitioner, vs. COURT OF APPEALS and SECURITIES AND EXCHANGE COMMISSION, respondents. Nepomuceno, Hofilena & Guingona for petitioner.

FELICIANO, J.:p The prosecution relies upon Sanchez vs. U.S. 134 Fed. (2nd) 279, 63 S. Ct. 1325, 319 U.S. 768 wherein this was said: A showing that an excessive fee was solicited, contracted for, charged or received for assistance in preparation and execution of necessary papers in any application to Veterans' Administration will support a conviction of violation of fee limitation for assistance in such application regardless of whether such assistance was in fact rendered. But such adjudication is not conclusive, because the statute therein construed differs materially from ours. It punishes "any person who shall directly or indirectly contract for, charge or receive, or who shall attempt to solicit, contract for excessive compensation." The section does not contain the phrase "assisting a claimant" after the words "any person" and before the words "who shall etc". That phrase conditions each and every violation of section 1 of Republic Act No. 145. The appealed decision quashing the indictment is, therefore, affirmed, without costs. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

Sometime in February 1983, the authorized capital stock of petitioner Nestle Philippines Inc. ("Nestle") was increased from P300 million divided into 3 million shares with a par value of P100.00 per share, to P600 million divided into 6 million shares with a par value of P100.00 per share. Nestle underwent the necessary procedures involving Board and stockholders approvals and effected the necessary filings to secure the approval of the increase of authorized capital stock by respondent Securities and Exchange Commission ("SEC"), which approval was in fact granted. Nestle also paid to the SEC the amount of P50,000.00 as filing fee in accordance with the Schedule of Fees and Charges being implemented by the SEC under the Corporation Code. 1 Nestle has only two (2) principal stockholders: San Miguel Corporation and Nestle S.A. The other stockholders, who are individual natural persons, own only one (1) share each, for qualifying purposes, i.e., to qualify them as members of the Board of Directors being elected thereto on the strength of the votes of one or the other principal shareholder.

completely paid up 168,800 shares, while Nestle S.A. subscribed to and paid up the balance of 175,700 shares of stock. On 28 March 1985, petitioner Nestle filed a letter signed by its Corporate Secretary, M.L. Antonio, with the SEC seeking exemption of its proposed issuance of additional shares to its existing principal shareholders, from the registration requirement of Section 4 of the Revised Securities Act and from payment of the fee referred to in Section 6(c) of the same Act. In that letter, Nestle requested confirmation of the correctness of two (2) propositions submitted by it: 1. That there is no need to file a petition for exemption under Section 6(b) of the Revised Securities Act with respect to the issuance of the said 344,600 additional shares to our existing stockholders out of our unissued capital stock; and 2. That the fee provided in Section 6(c) of [the Revised Securities] Act is not applicable to the said issuance of additional shares. 2 The principal, indeed the only, argument presented by Nestlewas that Section 6(a) (4) of the Revised Securities Act which provides as follows: Sec. 6. Exempt transactions. — a) The requirement of registration under subsection (a) of Section four of this Act shall not apply to the sale of any security in any of the following transactions: xxx xxx xxx

On 16 December 1983, the Board of Directors and stockholders of Nestle approved resolutions authorizing the issuance of 344,500 shares out of the previously authorized but unissued capital stock of Nestle, exclusively to San Miguel Corporation and to Nestle S.A. San Miguel Corporation subscribed to and

(4) The distribution by a corporation, actively engaged in the business authorized by its articles of incorporation, of securities to its stockholders or other security holders as a stock dividend or other distribution out of

38 surplus; or the issuance of securities to the security holder or other creditors of a corporation in the process of a bona fide reorganization of such corporation made in good faith and not for the purpose of avoiding the provisions of this Act, either in exchange for the securities of such security holders or claims of such creditors or partly for cash and partly in exchange for the securities or claims of such security holders or creditors; or the issuance of additional capital stock of a corporation sold or distributed by it among its own stockholders exclusively, where no commission or other remuneration is paid or given directly or indirectly in connection with the sale or distribution of such increased capital stock. (Emphasis supplied) embraces "not only an increase in the authorized capital stock but also the issuance of additional shares to existing stockholders of the unissued portion of the unissued capital stock". 3 Nestle urged that interpretation upon the following argument. The use of the term "increased capital stock" should be interpreted to refer to additional capital stock or equity participation of the existing stockholders as a consequence of either an increase of the authorized capital stock or the issuance of unissued capital stock. If the intention of the pertinent legal provision [were] to limit the exemption to subscription to proposed increases in the authorized capital stock of a corporation, we see no reason why the law should not have been more specific or accurate about it. It certainly should have mentioned "increase in the authorized capital stock of the corporation" rather than merely the expression "the issuance of additional capital stock 4 (Emphasis supplied)

Nestle expressly represented in the same letter that all the additional shares proposed to be issued would be issued only to San Miguel Corporation and Nestle S.A. and that no commission or other form of remuneration had been given, directly or indirectly, in connection with the issuance or distribution of such additional shares of stock. In respect of its claimed exemption from the fee provided for in Section 6(c) of the Revised Securities Act, Nestle contended that since Section 6 (a) (4) of the statute declares (in Nestle's view) the proposed issuance of 344,500 previously authorized but unissued shares of Nestle's capital stock to its existing shareholders as an exempt transaction, the SEC could not collect fees for "the same transaction" twice. Nestle adverted to its payment back in 21 February 1983 of the amount of P50,000.00 as filing fees to the SEC when it applied for and eventually received approval of the increase of its authorized capital stock effected by Board and shareholder action last 16 December 1983. In a letter dated 26 June 1986, the SEC through its then Chairman Julio A. Sulit, Jr. responded adversely to petitioner's requests and ruled that the proposed issuance of shares did not fall under Section 6 (a) (4) of the Revised Securities Act, since Section 6 (a) (4) is applicable only where there is an increase in the authorized capital stock of a corporation. Chairman Sulit held, however, that the proposed transaction could be considered by the Commission under the provisions of Section 6 (b) of the Revised Securities Act which reads as follows: (b) The Commission may, from time to time and subject to such terms and conditions as it may prescribe, exempt transactions other than those provided in the preceding paragraph, if it finds that the enforcement of the requirements of registration under this Act with respect to such transactions is not necessary in the public interest and for the protection of the investors by reason of the small amount involved or the limited character of the public offering.

The Commission then advised petitioner to file the appropriate request for exemption and to pay the fee required under Section 6 (c) of the statute, which provides: (c) A fee equivalent to one-tenth of one per centum of the maximum aggregate price or issued value of the securities shall be collected by the Commission for granting a general or particular exemption from the registration requirements of this Act. Petitioner moved for reconsideration of the SEC ruling, without success. On 3 July 1987, petitioner sought review of the SEC ruling before this Court which, however, referred the petition to the Court of Appeals. In a decision dated 13 January 1989, the Court of Appeals sustained the ruling of the SEC. Dissatisfied with the Decision of the Court of Appeals, Nestle is now before this Court on a Petition for Review, raising the very same issues that it had raised before the SEC and the Court of Appeals. Examining the words actually used in Section 6 (a) (4) of the Revised Securities Act, and bearing in mind common corporate usage in this jurisdiction, it will be seen that the statutory phrase "issuance of additional capital stock" is indeed infected with a certain degree of ambiguity. This phrase may refer either to: a) the issuance of capital stock as part of and in the course of increasing the authorized capital stock of a corporation; or (b) issuance of already authorized but still unissued capital stock. By the same token, the phrase "increased capital stock" found at the end of Section 6 (a) (4), may refer either: 1) to newly or contemporaneously authorized capital stock issued in the course of increasing the authorized capital stock of a corporation; or 2) to previously authorized but unissued capital stock.

39 Under Section 38 of the Corporation Code, a corporation engaged in increasing its authorized capital stock, with the required vote of its Board of Directors and of its stockholders, must file a sworn statement of the treasurer of the corporation showing that at least twenty-five percent (25%) of "such increased capital stock" has been subscribed and that at least twenty-five percent (25%) of the amount subscribed has been paid either in actual cash or in property transferred to the corporation. In other words, the corporation must issue at least twenty-five percent (25%) of the newly or contemporaneously authorized capital stock in the course of complying with the requirements of the Corporation Code for increasing its authorized capital stock. In contrast, after approval by the SEC of the increase of its authorized capital stock, and from time to time thereafter, the corporation, by a vote of its Board of Directors, and without need of either stockholder or SEC approval, may issue and sell shares of its already authorized but still unissued capital stock to existing shareholders or to members of the general public. 5 Both the SEC and the Court of Appeals resolved the ambiguity by construing Section 6 (a) (4) as referring only to the issuance of shares of stock as part of and in the course of increasing the authorized capital stock of Nestle. In the case at bar, since the 344,500 shares of Nestle capital stock are proposed to be issued from already authorized but still unissued capital stock and since the present authorized capital stock of 6,000,000 shares with a par value of P100.00 per share is not proposed to be further increased, the SEC and the Court of Appeals rejected Nestle's petition. We believe and so hold that the construction thus given by the SEC and the Court of Appeals to Section 6 (a) (4) of the Revised Securities Act must be upheld. In the first place, it is a principle too well established to require extensive documentation that the construction given to a statute by an administrative agency charged with the interpretation and application of that statute is entitled to great respect and should be accorded great weight by the courts, unless such construction

is clearly shown to be in sharp conflict with the governing statute or the Constitution and other laws. As long ago as 1903, this Court said in In re Allen 6 that [t]he principle that the contemporaneous construction of a statute by the executive officers of the government, whose duty is to execute it, is entitled to great respect, and should ordinarily control the construction of the statute by the courts, is so firmly embedded in our jurisdiction that no authorities need be cited to support it. 7 The rationale for this rule relates not only to the emergence of the multifarious needs of a modern or modernizing society and the establishment of diverse administrative agencies for addressing and satisfying those needs; it also relates to accumulation of experience and growth of specialized capabilities by the administrative agency charged with implementing a particular statute. 8 In Asturias Sugar Central, Inc. v. Commissioner of Customs 9 the Court stressed that executive officials are presumed to have familiarized themselves with all the considerations pertinent to the meaning and purpose of the law, and to have formed an independent, conscientious and competent expert opinion thereon. The courts give much weight to contemporaneous construction because of the respect due the government agency or officials charged with the implementation of the law, their competence, expertness, experience and informed judgment, and the fact that they frequently are the drafters of the law they interpret. 10 In the second place, and more importantly, consideration of the underlying statutory purpose of Section 6(a) (4) compels us to sustain the view taken by the SEC and the Court of Appeals. The reading by the SEC of the scope of application of Section 6(a) (4) permits greater opportunity for the SEC to implement the statutory objective of protecting the investing public by requiring proposed issuers of capital stock to inform such public of the true financial conditions and prospects of the corporation. By limiting the class of exempt transactions contemplated by the last clause of Section 6(a) (4) to issuances of stock done in the course of and

as part of the process of increasing the authorized capital stock of a corporation, the SEC is enabled to examine issuances by a corporation of previously authorized but theretofore unissued capital stock, on a case-to-case basis, under Section 6(b); and thereunder, to grant or withhold exemption from the normal registration requirements depending upon the perceived level of need for protection by the investing public in particular cases. When capital stock is issued in the course of and in compliance with the requirements of increasing its authorized capital stock under Section 38 of the Corporation Code, the SEC as a matter of course examines the financial condition of the corporation, and hence there is no real need for exercise of SEC authority under the Revised Securities Act. Thus, one of the multiple documentation requirements under the current regulations of the SEC in respect of filing a certificate of increase of authorized capital stock, is submission of "a financial statement duly certified by an independent Certified Public Accountant (CPA) as of the latest date possible or as of the date of the meeting when stockholders approved the increase/decrease in capital stock or thereabouts. 11 When all or part of the newly authorized capital stock is proposed to be issued as stock dividends, the SEC requirements are even more exacting; they require, in addition to the regular audited financial statements, the submission by the corporation of a "detailed or Long Form Report of the certifying Auditor." Moreover, since approval of an increase in authorized capital stock by the stockholders holding two-thirds (2/3) of the outstanding capital stock is required by Section 38 of the Corporation Code, at a stockholders meeting held for that purpose, the directors and officers of the corporation may be expected to take pains to inform the shareholders of the financial condition and prospects of the corporation and of the proposed utilization of the fresh capital sought to be raised. Upon the other hand, as already noted, issuance of previously authorized but theretofore unissued capital stock by the corporation requires only Board of Directors approval. Neither notice to nor approval by the shareholders or the SEC is required for such issuance. There would, accordingly, under the view taken by petitioner Nestle, no opportunity for the SEC to see to it that shareholders (especially the small stockholders) have a reasonable opportunity to inform themselves about the very fact

40 of such issuance and about the condition of the corporation and the potential value of the shares of stock being offered. Under the reading urged by petitioner Nestle of the reach and scope of the third clause of Section 6(a) (4), the issuance of previously authorized but unissued capital stock would automatically constitute an exempt transaction, without regard to the length of time which may have intervened between the last increase in authorized capital stock and the proposed issuance during which time the condition of the corporation may have substantially changed, and without regard to whether the existing stockholders to whom the shares are proposed to be issued are only two giant corporations as in the instant case, or are individuals numbering in the hundreds or thousands. In contrast, under the ruling issued by the SEC, an issuance of previously authorized but still unissued capital stock may, in a particular instance, be held to be an exempt transaction by the SEC under Section 6(b) so long as the SEC finds that the requirements of registration under the Revised Securities Act are "not necessary in the public interest and for the protection of the investors" by reason, inter alia, of the small amount of stock that is proposed to be issued or because the potential buyers are very limited in number and are in a position to protect themselves. In fine, petitioner Nestle's proposed construction of Section 6(a) (4) would establish an inflexible rule of automatic exemption of issuances of additional, previously authorized but unissued, capital stock. We must reject an interpretation which may disable the SEC from rendering protection to investors, in the public interest, precisely when such protection may be most needed. Petitioner Nestle's second claim for exemption is from payment of the fee provided for in Section 6 (c) of the Revised Securities Act, a claim based upon petitioner's contention that Section 6 (a) (4) covers both issuance of stock in the course of complying with the statutory requirements of increase of authorized capital stock and issuance of previously authorized and unissued capital stock. Petitioner claims that to require it now to pay one-tenth of one percent (1%) of the issued value of the 344,500 shares of stock proposed to be issued, is to require it to pay a second time for the same service on the part of the SEC. Since we have above

rejected petitioner's reading of Section 6 (a) (4), last clause, petitioner's claim about the additional fee of one-tenth of one percent (1%) of the issue value of the proposed issuance of stock (amounting to P34,450 plus P344.50 for other fees or a total of P37,794.50) need not detain us for long. We think it clear that the fee collected in 21 February 1983 by the SEC was assessed in connection with the examination and approval of the certificate of increase of authorized capital stock then submitted by petitioner. The fee, upon the other hand, provided for in Section 6 (c) which petitioner will be required to pay if it does file an application for exemption under Section 6 (b), is quite different; this is a fee specifically authorized by the Revised Securities Act, (not the Corporation Code) in connection with the grant of an exemption from normal registration requirements imposed by that Act. We do not find such fee either unreasonable or exorbitant. WHEREFORE, for all the foregoing, the Petition for Review on Certiorari is hereby DENIED for lack of merit and the Decision of the Court of Appeals dated 13 January 1989 in C.A.-G.R. No. SP13522, is hereby AFFIRMED. Costs against petitioner. SO ORDERED.

The instant petition for certiorari seeks to nullify the Decision of the National Labor Relations Commissionii[2] promulgated January 10, 1991, in NLRC Case No. 00-05-02236-89, entitled “Porping Regalado vs. Phil. Scout Veterans Security & Investigation Agency, Inc. and/or Col. Cesar Sa Macalalad”, affirming the labor arbiter’siii[3] award of retirement pay to private respondent. The Antecedent Facts Private respondent worked for the petitioner as a security guard since September 1963 until his retirement at the age of 60 on March 20, 1989, with a monthly salary of P1,480.00. He formally requested petitioner for payment of his retirement pay, but petitioner refused, stating that it would give him financial assistance instead, without specifying the amount, which offer was refused by the private respondent. On May 11, 1989, private respondent filed a complaint for nonpayment of retirement benefits against petitioner, docketed as NLRC Case No. 00-05-02236-89. Petitioner, in its position paper, alleged that private respondent was not entitled to retirement pay since there was no company policy which provided for nor any collective bargaining agreement granting it.

THIRD DIVISION [G.R. No. 99859. September 20, 1996] PHILIPPINE SCOUT VETERANS SECURITY & INVESTIGATION AGENCY, INC., petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION and PORPING REGALADO, respondents. DECISION PANGANIBAN, J.: Does the Labor Code, prior to its amendment by Republic Act No. 7641,i[1] authorize the payment of retirement pay in the absence of a provision therefor in a collective bargaining agreement or other applicable employment contract?

On September 19, 1989, the arbiter rendered his decision in favor of private respondent.iv[4] Inasmuch as his ratiocination may be indicative of the mind-set of our labor officialdom, we quote the same below: “It is admitted that it is provided in Article 287 of the Labor Code that in case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any CBA or other agreement. Since there is no CBA nor company policy granting the same, we have to look into other articles of the Labor Code. Article 283 of the Labor Code requires employer to give separation pay to employees who were retrenched at the rate of one month salary for every year of service when the termination is a result of installation of labor saving device and one-half month pay for every year of service in case of retrenchment due to prevent losses (sic), closure or

41 cessation of operations of establishment or undertaking not due to serious business losses or financial reverses. Article 284 of the Labor Code also requires employer to pay an employee his separation pay at the rate of one-half month salary for every year of service when terminated due to incurable disease. An analysis of this article will reveal that it is the intention of the Code to provide same financial assistance to these people who are dislocated either because of loss of employment or due to disease and yet, an employee who retires and ironically whose company does not have any CBA nor policy providing for retirement pay will not receive any retirement pay for him to augment and supply his needs during his old age. This matter has to be correct(ed) and it will be an injustice if such retirement pay will be denied to complainant. After all, the company has benefitted from the service of the employee, hence, it is only fitting for the company to provide him some funds for his old age. Also, equity demands that in cases where there is no CBA nor company policy providing a retirement pay, an employer must pay its employee the needed retirement pay. WHEREFORE, judgment is hereby rendered ordering the respondent Phil. Scout Veterans Security and Investigation Agency, Inc. to pay complainant his retirement pay at the rate of one-half month salary for every year of service, a fraction of at least six (6) months considered as one year of service.” Petitioner appealed to the respondent National Labor Relations Commission, which in its now-assailed Decisionv[5] affirmed the arbiter: “An employee is entitled to retirement benefits even in the absence of a company retirement plan or collective bargaining agreement. This is the import of Article 287 of the Labor Code, as amended, and implemented by Sections 13 and 14, Rule I, Book V (sic) of the Rules Implementing the Labor Code. Thus in a case, this Commission (1st Division) ruled: ‘With respect to the award of retirement benefits, the contention of respondent-appellant that complainant is not entitled to his claim of retirement benefits or to his termination or separation pay because he was not retired under the bonafide retirement

plan or under an individual or collective bargaining agreement or under company policy, is highly untenable because Rule I, Sections 13 and 14, Book VI of the Rules Implementing the Labor Code taken together clearly states that, with or without a retirement plan, individual or collective bargaining agreement or company policy, an employee who retires or is retired at the age of sixty (60) or over, is entitled to termination pay equivalent to one-half month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Moreover, if social justice and compassion to labor demand that termination pay be granted to victims of mechanization, redundancy, retrenchment to avoid losses and which are, from the standpoint of affected employees usually temporary contingency that do not prevent them from sooner or later being gainfully employed again, we feel that there is far greater need to cushion retired employees from the difficulties attendant to old age and permanent idleness. And in protecting retired employees, we are also protecting their dependents. This is the essence of social justice. (Angel T. Tolentino vs. Standard Wood Products Company, Inc., NLRC Case No. NCR-5-3847-82, NLRC First Division, Promulgated July 8, 1987.)’” Petitioner moved for reconsideration but respondent Commission denied the same for lack of merit. Hence, this recourse. This Court issued a temporary restraining order on June 10, 1991, enjoining respondent Commission and its representatives from enforcing its January 10, 1991 Decision. In a Manifestation in Lieu of Comment dated July 25, 1991, the Solicitor General agreed with the petitioner’s position. The Issues

“x x x IN APPLYING THE PROVISIONS OF ARTICLE 283 AND ARTICLE 284 OF THE LABOR CODE OF THE PHILIPPINES, AS AMENDED, AS THE LAW THAT PROVIDE FOR RETIREMENT PAY TO PRIVATE RESPONDENT. B x x x IN ISSUING THE QUESTIONED RESOLUTION WHICH RESULTED IN ADMINISTRATIVE LEGISLATION.” In a nutshell, the issue here is whether or not private respondent is legally entitled to retirement benefits. The Court’s Ruling The main contention of both petitioner and the Solicitor General is that there is no contractual nor statutory basis for the grant of retirement pay, hence, said award is improper. The petition is impressed with merit. The applicable provisions of the Labor Code on the matter of retirement are Art. 287 of the Labor Code, and Sections 13 and 14(a) of Rule I, Book VI of the Implementing Rules, which read as follows: “Article 287. Retirement. Any employee may be retired upon reaching the retirement age established in the collective bargaining agreement or other applicable employment contract. In case of retirement, the employee shall be entitled to receive such retirement benefits as he may have earned under existing laws and any collective bargaining or other agreement.”

Petitioner alleges that respondent Commission acted with grave abuse of discretion:

xxx

A

“Sec. 13. Retirement. In the absence of any collective bargaining agreement or other applicable agreement concerning terms and conditions of employment which provides for retirement at an

xxx

xxx

42 older age, an employee may be retired upon reaching the age of sixty (60) years. Sec. 14. Retirement Benefits. (a) An employee who is retired pursuant to a bona-fide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy shall be entitled to all the retirement benefits provided therein or to termination pay equivalent at least to onehalf month salary for every year of service, whichever is higher, a fraction of at least six (6) months being considered as one whole year.” It is at once apparent from a cursory reading of the arbiter’s decision that, in making the award of retirement pay, he was confronted by the lack of contractual or statutory basis therefor. Undaunted, he scavenged for a basis from among the other provisions of the Labor Code. Seizing upon Articles 283 and 284, he concluded that it is ironical and unjust that some financial assistance is provided for people who are dismissed from their jobs and who can presumably still find other work and continue to earn a livelihood, but not for those who are retired and facing the difficulties attendant to old age and permanent idleness. This reflection exudes wisdom; unfortunately, it lacks legal basis. Going even deeper, respondent Commission, instead of clearing up the confusion, added to it by construing Sections 13 and 14(a) of Rule I, Book VI of the Implementing Rules in relation to Art. 287 as basis for the grant of retirement benefits to private respondent. But far from being novel, this issue had already been settled in Abaquin Security and Detective Agency, Inc. vs. Atienza,vi[6] where this Court held: “Construing these provisions in relation to the same issue presented in this petition, this Court in the case of Llora Motors, Inc., and/or Constantino Carlota, Jr. vs. Hon. Franklin Drilon, et al., (G.R. No. 82895, November 7, 1989) clarified that Article 288 (now 287) ‘does not itself purport to impose any obligation upon employers to set up a retirement scheme for their employees over and above that already established under existing laws. In

other words, Article 287 recognizes that existing laws already provide for a scheme by which retirement benefits may be earned or accrue in favor of employees, as part of a broader social security system that provides not only for retirement benefits but also death and funeral benefits, permanent disability benefits, sickness benefits and maternity leave benefits.” In Llora Motors, Inc. vs. Drilon,vii[7] this Court sought to end the confusion caused by the wording of Section 14 abovequoted, and differentiated between the concepts of “termination pay” and “retirement benefits”. We clarified that the phrase “pay equivalent at least one-half month salary for every year of service, whichever is higher” pertains to termination pay: “x x x Section 14 (a) refers to ‘termination pay equivalent to at least one-half (1/2) month for every year of service’ while Section 14 (b) mentions ‘termination pay to which the employee would have been entitled had there been no such retirement fund’ as well as ‘termination pay the employee is entitled to receive.’ It should be recalled that Sections 13 and 14 are found in Implementing Rule I which deals with both ‘termination of employment’ and ‘retirement.’ It is important to keep the two (2) concepts of ‘termination pay’ and ‘retirement benefits’ separate and distinct from each other. Termination pay or separation pay is required to be paid by an employer in particular situations identified by the Labor Code itself or by Implementing Rule I. Termination pay where properly due and payable under some applicable provision of the Labor Code or under Section 4 (b) of Implementing Rule I, must be paid whether or not an additional retirement plan has been set up under an agreement with the employer or under an ‘established employer policy.’ What needs to be stressed, however, is that Section 14 of Implementing Rule I, like Article 287 of the Labor Code, does not purport to require ‘termination pay’ to be paid to an employee who may want to retire but for whom no additional retirement plan had been set up by prior agreement with the employer. Thus, Section 14 itself speaks of an employee ‘who is retired pursuant to a bonafide retirement plan or in accordance with the applicable individual or collective agreement or established employer policy’ x x x.” (italics in the original text.)

Consequently, the Decision in question has to be struck down for being legally indefensible. While Article 287 has since been amended by Republic Act No. 7641 (approved on December 9, 1992) to read as follows: “x x x

xxx

xxx

In the absence of a retirement plan or agreement providing for retirement benefits of employees in the establishment, an employee upon reaching the age of sixty (60) years or more, but not beyond sixty-five (65) years which is hereby declared the compulsory retirement age, who has served at least five (5) years in the said establishment, may retire and shall be entitled to retirement pay equivalent to at least one-half (1/2) month salary for every year of service, a fraction of at least six (6) months being considered as one whole year. Unless the parties provide for broader inclusions, the term ‘one half (1/2) month salary’ shall mean fifteen (15) days plus onetwelfth (1/12) of the 13th month pay and the cash equivalent of not more than five (5) days of service incentive leaves. xxx

xxx

x x x”

nevertheless, the aforequoted provisions, which could have saved the day for the private respondent, cannot be applied in this case, since private respondent retired on March 20, 1989, or about three years prior to the approval of the new retirement law. RA 7641 is to be effective prospectively, absent a clear intention on the part of the legislature to give it retroactivity.viii[8] “It is a rule of statutory construction that all statutes are to be construed as having only a prospective operation unless the purpose and intention of the Legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In every case of doubt, the doubt must be resolved against the retrospective effect.”ix[9]

43 The fact that respondent Commission had a prior ruling in a similar casex[10]granting retirement benefits is of no moment. Although it may be true that the contemporaneous construction of a statute by executive officers tasked to enforce and implement said statute should be given great weight by the courts, nevertheless, if such construction is erroneousxi[11] or is clearly shown to be in conflict with the governing statute or the Constitution or other laws,xii[12] the same must be declared null and void. “It is the role of the Judiciary to refine and, when necessary, correct constitutional (and/or statutory) interpretation, in the context of the interactions of the three branches of the government.”xiii[13] Had respondent Commission simply followed our ruling in Llora Motors, this problem would not have reached this far. Besides, with Llora’s promulgation in 1989, the ruling in the Tolentino case was effectively superseded. It has been held that “(i)t is axiomatic that retirement laws are liberally construed and administered in favor of the persons intended to be benefited. All doubts as to the intent of the law should be resolved in favor of the retiree to achieve its humanitarian purposes.”xiv[14] The intention is to provide for the retiree’s sustenance and hopefully even comfort, when he no longer has the stamina to continue earning his livelihood. Unfortunately, such interpretation cannot be made in this case in the light of the clear lack of consensual and statutory basis of the grant of retirement benefits to private respondent. In all, it has been sufficiently shown that respondent Commission acted in grave abuse of discretion by affirming the grant of retirement benefits to private respondent despite our pronouncements on the matter. WHEREFORE, the instant petition is hereby GRANTED and the assailed Decision SET ASIDE. No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila

On 23 March 2001, petitioner filed a counter-affidavit admitting that she received and encashed the two checks issued in favor of respondent.

THIRD DIVISION

In her Supplemental Affidavit filed on 29 March 2001, petitioner, however, recanted and alleged instead that it was a certain Bebie Correa who received the two checks which are the subject matter of the complaints and encashed the same; and that said Bebie Correa left the country after misappropriating the proceeds of the checks.

G.R. No. 168617

February 19, 2007

BERNADETTE L. ADASA, petitioner, vs. CECILLE S. ABALOS, Respondent. DECISION CHICO-NAZARIO, J.: This Petition for Review under Rule 45 of the Rules of Court, filed by petitioner Bernadette L. Adasa, seeks to nullify and set aside the 21 July 2004 Decision1 and 10 June 2005 Resolution2 of the Court of Appeals in CA-G.R. SP No. 76396 which nullified the Resolutions of the Department of Justice (DOJ). The Resolutions of the DOJ reversed and set aside the Resolution of the Office of the City Prosecutor of Iligan City, which found on reinvestigation probable cause against petitioner, and directed the Office of the City Prosecutor of Iligan City to withdraw the information for Estafa against petitioner. The instant case emanated from the two complaints-affidavits filed by respondent Cecille S. Abalos on 18 January 2001 before the Office of the City Prosecutor of Iligan City, against petitioner for Estafa. Respondent alleged in the complaints-affidavits that petitioner, through deceit, received and encashed two checks issued in the name of respondent without respondent’s knowledge and consent and that despite repeated demands by the latter, petitioner failed and refused to pay the proceeds of the checks.

On 25 April 2001, a resolution was issued by the Office of the City Prosecutor of Iligan City finding probable cause against petitioner and ordering the filing of two separate Informations for Estafa Thru Falsification of Commercial Document by a Private Individual, under Article 315 in relation to Articles 171 and 172 of the Revised Penal Code, as amended. Consequently, two separate criminal cases were filed against petitioner docketed as Criminal Cases No. 8781 and No. 8782, raffled to Branches 4 and 5, Regional Trial Court of Iligan City, respectively. This instant petition pertains only to Criminal Case No. 8782. On 8 June 2001, upon motion of the petitioner, the trial court in Criminal Case No. 8782 issued an order directing the Office of the City Prosecutor of Iligan City to conduct a reinvestigation. After conducting the reinvestigation, the Office of the City Prosecutor of Iligan City issued a resolution dated 30 August 2001, affirming the finding of probable cause against petitioner. Meanwhile, during her arraignment on 1 October 2001 in Criminal Case No. 8782, petitioner entered an unconditional plea of not guilty.3 Dissatisfied with the finding of the Office of the City Prosecutor of Iligan City, petitioner filed a Petition for Review before the DOJ on 15 October 2001.

44 In a Resolution dated 11 July 2002, the DOJ reversed and set aside the 30 August 2001 resolution of the Office of the City Prosecutor of Iligan City and directed the said office to withdraw the Information for Estafa against petitioner.

1. Whether or not the Department of Justice gravely abused its discretion in giving due course to petitioner’s petition for review despite its having been filed after the latter had already been arraigned;

The said DOJ resolution prompted the Office of the City Prosecutor of Iligan City to file a "Motion to Withdraw Information" on 25 July 2002.

2. Whether or not there is probable cause that the crime of estafa has been committed and that petitioner is probably guilty thereof;

On 26 July 2002, respondent filed a motion for reconsideration of said resolution of the DOJ arguing that the DOJ should have dismissed outright the petition for review since Section 7 of DOJ Circular No. 70 mandates that when an accused has already been arraigned and the aggrieved party files a petition for review before the DOJ, the Secretary of Justice cannot, and should not take cognizance of the petition, or even give due course thereto, but instead deny it outright. Respondent claimed Section 12 thereof mentions arraignment as one of the grounds for the dismissal of the petition for review before the DOJ.

3. Whether or not the petition before the Court of Appeals has been rendered moot and academic by the order of the Regional Trial Court dismissing Criminal Case No. 8782.

In a resolution dated 30 January 2003, the DOJ denied the Motion for Reconsideration opining that under Section 12, in relation to Section 7, of DOJ Circular No. 70, the Secretary of Justice is not precluded from entertaining any appeal taken to him even where the accused has already been arraigned in court. This is due to the permissive language "may" utilized in Section 12 whereby the Secretary has the discretion to entertain an appealed resolution notwithstanding the fact that the accused has been arraigned. Meanwhile, on 27 February 2003, the trial court issued an order granting petitioner’s "Motion to Withdraw Information" and dismissing Criminal Case No. 8782. No action was taken by respondent or any party of the case from the said order of dismissal. Aggrieved by the resolution of the DOJ, respondent filed a Petition for Certiorari before the Court of Appeals. Respondent raised the following issues before the appellate court:

The Court of Appeals in a Decision dated 21 July 2004 granted respondent’s petition and reversed the Resolutions of the DOJ dated 11 July 2002 and 30 January 2003. In resolving the first issue, the Court of Appeals, relying heavily on Section 7 of DOJ Circular No. 70 which states "[i]f an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned," ruled that since petitioner was arraigned before she filed the petition for review with the DOJ, it was imperative for the DOJ to dismiss such petition. It added that when petitioner pleaded to the charge, she was deemed to have waived her right to reinvestigation and right to question any irregularity that surrounds it. Anent the second issue, the Court of Appeals declared that the existence of probable cause or the lack of it, cannot be dealt with by it since factual issues are not proper subjects of a Petition for Certiorari. In disposing of the last issue, the Court of Appeals held that the order of the trial court dismissing the subject criminal case pursuant to the assailed resolutions of the DOJ did not render the petition moot and academic. It said that since the trial court’s order relied solely on the resolutions of the DOJ, said order is void as it violated the rule which enjoins the trial court to assess

the evidence presented before it in a motion to dismiss and not to rely solely on the prosecutor’s averment that the Secretary of Justice had recommended the dismissal of the case. Dissatisfied by the Court of Appeals’ ruling, petitioner filed a Motion for Reconsideration setting forth the following grounds: 1. that the over-all language of Sections 7 and 12 of Department Circular No. 70 is permissive and directory such that the Secretary of Justice may entertain an appeal despite the fact that the accused had been arraigned; 2. that the contemporaneous construction by the Secretary of Justice should be given great weight and respect; 3. that Section 7 of the Circular applies only to resolutions rendered pursuant to a preliminary investigation, not on a reinvestigation; 4. that the trial court’s order of dismissal of the criminal case has rendered the instant petition moot and academic; 5. that her arraignment was null and void it being conducted despite her protestations; and 6. that despite her being arraigned, the supposed waiver of her right to preliminary investigation has been nullified or recalled by virtue of the trial court’s order of reinvestigation.4 The Court of Appeals stood firm by its decision. This time, however, it tried to construe Section 7 side by side with Section 12 of DOJ Circular No. 70 and attempted to reconcile these two provisions. According to the appellate court, the phrase "shall not" in paragraph two, first sentence of Section 7 of subject circular, to wit:

45 If an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned. x x x. (Emphasis supplied.) employed in the circular denotes a positive prohibition. Applying the principle in statutory construction - that when a statute or provision contains words of positive prohibition, such as "shall not," "cannot," or "ought not" or which is couched in negative terms importing that the act shall not be done otherwise than designated, that statute or provision is mandatory, thus rendering the provision mandatory – it opined that the subject provision simply means that the Secretary of Justice has no other course of action but to deny or dismiss a petition before him when arraignment of an accused had already taken place prior to the filing of the petition for review. On the other hand, reading Section 12 of the same circular which reads: The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: xxxx (e) That the accused had already been arraigned when the appeal was taken; x x x. the Court of Appeals opined that the permissive word "may" in Section 12 would seem to imply that the Secretary of Justice has discretion to entertain an appeal notwithstanding the fact that the accused has been arraigned. This provision should not be treated separately, but should be read in relation to Section 7. The two provisions, taken together, simply meant that when an accused was already arraigned when the aggrieved party files a petition for review, the Secretary of Justice cannot, and should not take cognizance of the petition, or even give due course thereto, but instead dismiss or deny it outright. The appellate court added that the word "may" in Section 12 should be read as "shall" or "must" since such construction is absolutely necessary

to give effect to the apparent intention of the rule as gathered from the context. As to the contemporaneous construction of the Secretary of Justice, the Court of Appeals stated that the same should not be given weight since it was erroneous. Anent petitioner’s argument that Section 7 of the questioned circular applies only to original resolutions that brought about the filing of the corresponding informations in court, but not to resolutions rendered pursuant to a motion for reinvestigation, the appellate court simply brushed aside such contention as having no basis in the circular questioned. It also rejected petitioner’s protestation that her arraignment was forced upon her since she failed to present any evidence to substantiate the same. It is petitioner’s contention that despite her being arraigned, the supposed waiver of her right to preliminary investigation has been nullified by virtue of the trial court’s order or reinvestigation. On this score, the Court of Appeals rebuffed such argument stating that there was no "supposed waiver of preliminary investigation" to speak of for the reason that petitioner had actually undergone preliminary investigation. Petitioner remained unconvinced with the explanations of the Court of Appeals.

The rule therefore in this jurisdiction is that once a complaint or information is filed in Court any disposition of the case as to its dismissal or the conviction or acquittal of the accused rests in the sound discretion of the Court. Although the fiscal retains the direction and control of the prosecution of criminal cases even while the case is already in Court he cannot impose his opinion on the trial court. The Court is the best and sole judge on what to do with the case before it. The determination of the case is within its exclusive jurisdiction and competence. A motion to dismiss the case filed by the fiscal should be addressed to the Court who has the option to grant or deny the same. It does not matter if this is done before or after the arraignment of the accused or that the motion was filed after a reinvestigation or upon instructions of the Secretary of Justice who reviewed the records of the investigation. (Emphasis supplied.) To bolster her position, petitioner cites Roberts v. Court of Appeals,6 which stated: There is nothing in Crespo vs. Mogul which bars the DOJ from taking cognizance of an appeal, by way of a petition for review, by an accused in a criminal case from an unfavorable ruling of the investigating prosecutor. It merely advised the DOJ to, "as far as practicable, refrain from entertaining a petition for review or appeal from the action of the fiscal, when the complaint or information has already been filed in Court. x x x. (Emphasis supplied.) Petitioner likewise invokes Marcelo v. Court of Appeals7 where this Court declared:

Hence, the instant petition. Again, petitioner contends that the DOJ can give due course to an appeal or petition for review despite its having been filed after the accused had already been arraigned. It asserts that the fact of arraignment of an accused before the filing of an appeal or petition for review before the DOJ "is not at all relevant" as the DOJ can still take cognizance of the appeal or Petition for Review before it. In support of this contention, petitioner set her sights on the ruling of this Court in Crespo v. Mogul,5 to wit:

Nothing in the said ruling forecloses the power or authority of the Secretary of Justice to review resolutions of his subordinates in criminal cases. The Secretary of Justice is only enjoined to refrain as far as practicable from entertaining a petition for review or appeal from the action of the prosecutor once a complaint or information is filed in court. In any case, the grant of a motion to dismiss, which the prosecution may file after the Secretary of Justice reverses an appealed resolution, is subject to the discretion of the court.

46 The Court is unconvinced. A cursory reading of Crespo v. Mogul reveals that the ruling therein does not concern the issue of an appeal or petition for review before the DOJ after arraignment. Verily, the pronouncement therein has to do with the filing of a motion to dismiss and the court’s discretion to deny or grant the same. As correctly pointed out by respondent, the emphasized portion in the Crespo ruling is a parcel of the entire paragraph which relates to the duty and jurisdiction of the trial court to determine for itself whether or not to dismiss a case before it, and which states that such duty comes into play regardless of whether such motion is filed before or after arraignment and upon whose instructions. The allusion to the Secretary of Justice as reviewing the records of investigation and giving instructions for the filing of a motion to dismiss in the cited ruling does not take into consideration of whether the appeal or petition before the Secretary of Justice was filed after arraignment. Significantly, in the Crespo case, the accused had not yet been arraigned when the appeal or petition for review was filed before the DOJ. Undoubtedly, petitioner’s reliance on the said case is misplaced. Also unavailing is petitioner’s invocation of the cases of Roberts v. Court of Appeals and Marcelo v. Court of Appeals. As in Crespo v. Mogul, neither Roberts v. Court of Appeals nor Marcelo v. Court of Appeals took into account of whether the appeal or petition before the Secretary of Justice was filed after arraignment. Just like in the Crespo case, the accused in both Roberts v. Court of Appeals and Marcelo v. Court of Appeals had not yet been arraigned when the appeal or petition for review was filed before the DOJ. Moreover, petitioner asserts that the Court of Appeals’ interpretation of the provisions of DOJ Circular No. 70 violated three basic rules in statutory construction. First, the rule that the provision that appears last in the order of position in the rule or regulation must prevail. Second, the rule that the contemporaneous construction of a statute or regulation by the officers who enforce it should be given weight. Third, petitioner lifted a portion from Agpalo’s Statutory Construction8 where the

word "shall" had been construed as a permissive, and not a mandatory language.

(b) That the procedure or any of the requirements herein provided has not been complied with;

The all too-familiar rule in statutory construction, in this case, an administrative rule9 of procedure, is that when a statute or rule is clear and unambiguous, interpretation need not be resorted to.10 Since Section 7 of the subject circular clearly and categorically directs the DOJ to dismiss outright an appeal or a petition for review filed after arraignment, no resort to interpretation is necessary.

(c) That there is no showing of any reversible error;

Petitioner’s reliance to the statutory principle that "the last in order of position in the rule or regulation must prevail" is not applicable. In addition to the fact that Section 7 of DOJ Circular No. 70 needs no construction, the cited principle cannot apply because, as correctly observed by the Court of Appeals, there is no irreconcilable conflict between Section 7 and Section 12 of DOJ Circular No. 70. Section 7 of the circular provides: SECTION 7. Action on the petition. – The Secretary of Justice may dismiss the petition outright if he finds the same to be patently without merit or manifestly intended for delay, or when the issues raised therein are too unsubstantial to require consideration. If an information has been filed in court pursuant to the appealed resolution, the petition shall not be given due course if the accused had already been arraigned. Any arraignment made after the filing of the petition shall not bar the Secretary of Justice from exercising his power of review. (Italics supplied.) On the other hand, Section 12 of the same circular states: SECTION 12. Disposition of the Appeal. – The Secretary may reverse, affirm or modify the appealed resolution. He may, motu proprio or upon motion, dismiss the petition for review on any of the following grounds: (a) That the petition was filed beyond the period prescribed in Section 3 hereof;

(d) That the appealed resolution is interlocutory in nature, except when it suspends the proceedings based on the alleged existence of a prejudicial question; (e) That the accused had already been arraigned when the appeal was taken; (f) That the offense has already prescribed; and (g) That other legal or factual grounds exist to warrant a dismissal. (Emphases supplied.) It is noteworthy that the principle cited by petitioner reveals that, to find application, the same presupposes that "one part of the statute cannot be reconciled or harmonized with another part without nullifying one in favor of the other." In the instant case, however, Section 7 is neither contradictory nor irreconcilable with Section 12. As can be seen above, Section 7 pertains to the action on the petition that the DOJ must take, while Section 12 enumerates the options the DOJ has with regard to the disposition of a petition for review or of an appeal. As aptly observed by respondent, Section 7 specifically applies to a situation on what the DOJ must do when confronted with an appeal or a petition for review that is either clearly without merit, manifestly intended to delay, or filed after an accused has already been arraigned, i.e., he may dismiss it outright if it is patently without merit or manifestly intended to delay, or, if it was filed after the acccused has already been arraigned, the Secretary shall not give it due course. Section 12 applies generally to the disposition of an appeal. Under said section, the DOJ may take any of four actions when disposing an appeal, namely:

47 1. reverse the appealed resolution; 2. modify the appealed resolution; 3. affirm the appealed resolution; 4. dismiss the appeal altogether, depending on the circumstances and incidents attendant thereto. As to the dismissal of a petition for review or an appeal, the grounds are provided for in Section 12 and, consequently, the DOJ must evaluate the pertinent circumstances and the facts of the case in order to determine which ground or grounds shall apply. Thus, when an accused has already been arraigned, the DOJ must not give the appeal or petition for review due course and must dismiss the same. This is bolstered by the fact that arraignment of the accused prior to the filing of the appeal or petition for review is set forth as one of the grounds for its dismissal. Therefore, in such instance, the DOJ, noting that the arraignment of an accused prior to the filing of an appeal or petition for review is a ground for dismissal under Section 12, must go back to Section 7 and act upon as mandated therein. In other words, the DOJ must not give due course to, and must necessarily dismiss, the appeal. Likewise, petitioner’s reliance on the principle of contemporary construction, i.e., the DOJ is not precluded from entertaining appeals where the accused had already been arraigned, because it exercises discretionary power, and because it promulgated itself the circular in question, is unpersuasive. As aptly ratiocinated by the Court of Appeals: True indeed is the principle that a contemporaneous interpretation or construction by the officers charged with the enforcement of the rules and regulations it promulgated is entitled to great weight by the court in the latter’s construction of such rules and regulations. That does not, however, make such a construction necessarily controlling or binding. For equally

settled is the rule that courts may disregard contemporaneous construction in instances where the law or rule construed possesses no ambiguity, where the construction is clearly erroneous, where strong reason to the contrary exists, and where the court has previously given the statute a different interpretation. If through misapprehension of law or a rule an executive or administrative officer called upon to implement it has erroneously applied or executed it, the error may be corrected when the true construction is ascertained. If a contemporaneous construction is found to be erroneous, the same must be declared null and void. Such principle should be as it is applied in the case at bar.11 Petitioner’s posture on a supposed exception to the mandatory import of the word "shall" is misplaced. It is petitioner’s view that the language of Section 12 is permissive and therefore the mandate in Section 7 has been transformed into a matter within the discretion of the DOJ. To support this stance, petitioner cites a portion of Agpalo’s Statutory Construction which reads: For instance, the word "shall" in Section 2 of Republic Act 304 which states that "banks or other financial institutions owned or controlled by the Government shall, subject to availability of funds xxx, accept at a discount at not more than two per centum for ten years such (backpay) certificate" implies not a mandatory, but a discretionary, meaning because of the phrase "subject to availability of funds." Similarly, the word "shall" in the provision to the effect that a corporation violating the corporation law "shall, upon such violation being proved, be dissolved by quo warranto proceedings" has been construed as "may."12 After a judicious scrutiny of the cited passage, it becomes apparent that the same is not applicable to the provision in question. In the cited passage, the word "shall" departed from its mandatory import connotation because it was connected to certain provisos/conditions: "subject to the availability of funds" and "upon such violation being proved." No such proviso/condition, however, can be found in Section 7 of the

subject circular. Hence, the word "shall" retains its mandatory import. At this juncture, the Court of Appeals’ disquisition in this matter is enlightening: Indeed, if the intent of Department Circular No. 70 were to give the Secretary of Justice a discretionary power to dismiss or to entertain a petition for review despite its being outrightly dismissible, such as when the accused has already been arraigned, or where the crime the accused is being charged with has already prescribed, or there is no reversible error that has been committed, or that there are legal or factual grounds warranting dismissal, the result would not only be incongruous but also irrational and even unjust. For then, the action of the Secretary of Justice of giving due course to the petition would serve no purpose and would only allow a great waste of time. Moreover, to give the second sentence of Section 12 in relation to its paragraph (e) a directory application would not only subvert the avowed objectives of the Circular, that is, for the expeditious and efficient administration of justice, but would also render its other mandatory provisions - Sections 3, 5, 6 and 7, nugatory.13 In her steadfast effort to champion her case, petitioner contends that the issue as to whether the DOJ rightfully entertained the instant case, despite the arraignment of the accused prior to its filing, has been rendered moot and academic with the order of dismissal by the trial court dated 27 February 2003. Such contention deserves scant consideration. It must be stressed that the trial court dismissed the case precisely because of the Resolutions of the DOJ after it had, in grave abuse of its discretion, took cognizance of the petition for review filed by petitioner. Having been rendered in grave abuse of its discretion, the Resolutions of the DOJ are void. As the order of dismissal of the trial court was made pursuant to the void Resolutions of the DOJ, said order was likewise void. The rule in this jurisdiction is that a void judgment is a complete nullity and without legal effect, and that all proceedings or actions founded thereon are themselves regarded as invalid and ineffective for

48 any purpose.14 That respondent did not file a motion for reconsideration or appeal from the dismissal order of the trial court is of no moment. Since the dismissal was void, there was nothing for respondent to oppose. Petitioner further asserts that Section 7 of DOJ Circular No. 70 applies only to appeals from original resolution of the City Prosecutor and does not apply in the instant case where an appeal is interposed by petitioner from the Resolution of the City Prosecutor denying her motion for reinvestigation. This claim is baseless.1avvphi1.net A reading of Section 7 discloses that there is no qualification given by the same provision to limit its application to appeals from original resolutions and not to resolutions on reinvestigation. Hence, the rule stating that "when the law does not distinguish, we must not distinguish"15 finds application in this regard. Petitioner asserts that her arraignment was null and void as the same was improvidently conducted. Again, this contention is without merit. Records reveal that petitioner’s arraignment was without any restriction, condition or reservation.16 In fact she was assisted by her counsels Atty. Arthur Abudiente and Atty. Maglinao when she pleaded to the charge.17 Moreover, the settled rule is that when an accused pleads to the charge, he is deemed to have waived the right to preliminary investigation and the right to question any irregularity that surrounds it.18 This precept is also applicable in cases of reinvestigation as well as in cases of review of such reinvestigation. In this case, when petitioner unconditionally pleaded to the charge, she effectively waived the reinvestigation of the case by the prosecutor as well as the right to appeal the result thereof to the DOJ Secretary. Thus, with the arraignment of the petitioner, the DOJ Secretary can no longer entertain the appeal or petition for review because petitioner had already waived or abandoned the same. Lastly, while there is authority19 permitting the Court to make its own determination of probable cause, such, however, cannot be

made applicable in the instant case. As earlier stated, the arraignment of petitioner constitutes a waiver of her right to preliminary investigation or reinvestigation. Such waiver is tantamount to a finding of probable cause. For this reason, there is no need for the Court to determine the existence or nonexistence of probable cause. Besides, under Rule 45 of the Rules of Court, only questions of law may be raised in, and be subject of, a petition for review on certiorari since this Court is not a trier of facts. This being the case, this Court cannot review the evidence adduced by the parties before the prosecutor on the issue of the absence or presence of probable cause.20 WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals dated 21 July 2004 and its Resolution dated 10 June 2005 in CA-G.R. SP No. 76396 are AFFIRMED. Costs against petitioner. SO ORDERED. SECOND DIVISION [G.R. No. 98239. April 25, 1996] CONSUELO VALDERRAMA, petitioner, vs. NATIONAL LABOR RELATIONS COMMISSION, FIRST DIVISION AND MARIA ANDREA SAAVEDRA, respondents. SYLLABUS 1. REMEDIAL LAW; CIVIL PROCEDURE; RULE ON FINALITY OF JUDGMENTS; EXCEPTIONS; WHERE CIRCUMSTANCES RENDER ITS EXECUTION IMPOSSIBLE. - The rule that once a judgment becomes final it can no longer be disturbed, altered, or modified is not an inflexible one. It admits of exceptions, as where facts and circumstances transpire after a judgment has become final and executory which render its execution impossible or unjust. In such a case the modification of the decision may be sought by the interested party and the court will

modify and alter the judgment to harmonize it with justice and the facts. 2. ID.; ID.; ID.; ID.; MODIFICATION OF JUDGMENT IN LABOR CASE APPROPRIATE AS WHERE CLAIM IN COMPANY NO LONGER FEASIBLE, EMPLOYEE CAN GO AFTER ITS OFFICERS. Modification of the judgment is appropriate considering that the company is no longer in operation and there is no showing that it has filed bankruptcy proceedings in which private respondent might file a claim and pursue her remedy under Article 110 of the Labor Code. Holding petitioner officer personally liable for the judgment in this case is eminently just and proper considering that, although the dispositive portion of the decision mentions only the “respondent company,” the text repeatedly mentions “respondents” in assessing liability for the illegal dismissal of private respondent. There can be no doubt of their personal liability. The mere happenstance that only the company is mentioned should not, therefore, be allowed to obscure the fact that in the text of the decision petitioner and her corespondents below were found guilty of having illegally dismissed private respondent and of claiming that private respondent’s employment was terminated because of retrenchment, when the truth was that she was dismissed for pregnancy. Hence they should be held personally liable for private respondent’s reinstatement with backwages. “Indeed it is well said that to get the true intent and meaning of a decision, no specific portion thereof should be resorted to but same must be considered in its entirety. 3. LABOR LAW AND SOCIAL LEGISLATION; EMPLOYER CORPORATION AND ITS OFFICERS; LIABILITY. - Under the Labor Code, petitioner officer is herself considered an employer. In A. C. Ransom Labor Union-CCLU v. NLRC, we held: “Employer” includes any person acting in the interest of an employer, directly or indirectly. Since RANSOM is an artificial person, it must have an officer who can be presumed to be the employer, being the “person acting in the interest of (the) employer.” The corporation, only in the technical sense, is the employer. The responsible officer of an employer corporation can be held personally, not to say even criminally, liable for the non-payment of backwages. A corporation can only act through its officers and agents. Any decision against the company can be enforced

49 against the officers in their personal capacities should the corporation fail to satisfy the judgment against it. “Where the employer corporation is no longer existing and [is] unable to satisfy the judgment in favor of the employee, the officer should be held liable for acting on behalf of the corporation.” In this case, documents show that petitioner controlled the company owning 1,993 of its 2,000 shares. 4. ID.; TECHNICAL RULES OF PROCEDURE MAY BE DISREGARDED FOR THE PROTECTION OF LABOR. - There was really no amendment of the decision but only a clarification. But even if appeal was required in order to correct the error, in the interest of substantial justice, especially in cases involving rights of workers, the procedural lapse in this case may be disregarded. APPEARANCES OF COUNSEL Chaves Hechanova Lim Law Offices for petitioner. Ramon A. Gonzales for private respondent.

WHEREFORE, judgment is hereby rendered ordering respondent company:

3. to pay complainant attorney’s fee equivalent to ten (10%) percent of the total award.

1. to reinstate complainant to her former position with full backwages at the rate of P1,474.00 per month from the date she was illegally dismissed on 16 March 1983 until actually reinstated without loss of seniority right and other benefits which she could have earned were it not for her illegal dismissal;

Private respondent contended that the body of the decision clearly held the petitioner and her corespondents therein to be liable and that

2. to pay complainant moral and exemplary damages in the amount of P20,000.00 and P5,000.00, respectively; and, 3. to pay complainant attorney’s fees equivalent to ten (10%) percent of the total award. A writ of execution was granted, but it was returned unsatisfied.xvii[3] The sheriff reported that COMMODEX had ceased operation, while the individual officers, who were corespondents in the case, took the position that the writ could not be enforced against them on the ground that the dispositive portion of the decision mentioned only COMMODEX.

DECISION MENDOZA, J.: On October 27, 1983, Maria Andrea Saavedra, herein private respondent, filed a complaint against the COMMODEX (Phils.), Inc., petitioner Consuelo Valderrama as owner, Tranquilino Valderrama as executive vice president and Jose Ma. Togle as vice president and general manager, for reinstatement and backwages.xv[1] On December 2, 1986, the Labor Arbiter rendered a decision, finding private respondent to have been illegally dismissed and holding the respondent COMMODEX liable. It was shown that private respondent had been dismissed from her employment due to her pregnancy, contrary to allegations of petitioner and her corespondents therein that the termination of her employment was due to redundancy and retrenchment.xvi[2] The dispositive portion of the Labor Arbiter’s decision reads:

Private respondent filed a Motion for Clarification in which she prayed: WHEREFORE, it is most respectfully prayed that the dispositive part of the decision be clarified to read as follows: WHEREFORE, judgment is hereby rendered ordering respondents jointly and severally: 1. to reinstate complainant to her former position with full backwages at the rate of P 1,474.00 per month from the date she was illegally dismissed on 16 March 1983 until actually reinstated without loss of seniority right and other benefits which she could have earned were it not for her illegal dismissal; 2. to pay complainant moral and exemplary damages in the amount of P20,000.00 and P5,000.00, respectively; and

[t]herefore, this Office is not precluded from correcting the inadvertence by clarifying the words “respondent company” which ought to have been “respondents jointly and severally” in order to make the fallo or dispositive part correspond or correlate with the body of the final decision, considering that the unjust dismissal of the complainant constitutes tort or quasidelict. (Article 2176, New Civil Code). Petitioner and her corespondents therein filed an opposition to the motion for clarification. They contended that the decision of the Labor Arbiter had become final and executory and could no longer be amended.xviii[4] In reply private respondent argued that no amendment of a final decision was being sought but only the correction of a mistake or a clarification of an ambiguity because “the exclusion [of the other respondents] in the dispositive part of the decision is merely a clerical error or mistake, since in the body of the decision they [petitioner and corespondents therein] were included, hence said error or mistake can yet be corrected even if the decision is already final.”xix[5] On April 12, 1988, the Labor Arbiter, citing our ruling in A. C. Ransom Labor Union-CCLU v. NLRC,xx[6] which held the president of a corporation responsible and personally liable for payment of backwages, granted the private respondent’s motion and set it for hearing for reception of evidence of the relationship of the petitioner and her corespondents therein to COMMODEX. Private respondent then presented the Articles of Incorporation, List of Stockholders and the General Information Sheet of COMMODEX,xxi[7] which showed that of the 2,000 shares of stocks of the corporation, Consuelo Valderrama owned 1,993xxii[8] and that she was chairman of the board and president of respondent company.xxiii[9]

50 On July 25, 1988, the Labor Arbiter declared petitioner Consuelo Valderrama liable for the payment of the monetary awards contained in the dispositive portion of the decision dated December 2, 1986,xxiv[10] thus: WHEREFORE, respondent Consuelo Valderrama, as Chairman of the Board and President of respondent COMMODEX (Phils.), Inc. who is originally impleaded is hereby deemed included as party respondent and she should, as she is hereby held liable for the awards to complainant Maria Andrea L. Saavedra. To obviate the further issuance of a Writ of Execution against her, she should, as she is hereby ordered to pay aforenamed complainant the monetary awards ordained in the Decision herein. SO ORDERED. Petitioner appealed to the NLRC. In a resolution dated February 26, 1991, the First Division of the NLRC affirmed the Labor Arbiter’s order and dismissed the appeal for lack of merit.xxv[11] Hence, this petition. Petitioner alleges that: 1. The Decision dated 02 December 1986 has become final and executory, and, hence, can no longer be substantially amended as to include liability on the part of herein Petitioner, who was originally not named as liable in the dispositive portion of the said Decision; and 2. Petitioner cannot and should not be held personally liable jointly and severally with Commodex (Phils.), Inc. for the awards adjudged in favor of herein Private Respondent Saavedra. We find these contentions to be without merit. First. The rule that once a judgment becomes final it can no longer be disturbed, altered, or modified is not an inflexible one. It admits of exceptions, as where facts and circumstances transpire after a judgment has become final and executory which render its execution impossible or unjust. In such a case the

modification of the decision may be sought by the interested party and the court will modify and alter the judgment to harmonize it with justice and the facts.xxvi[12]

Any worker whose employment has been terminated as a consequence of an unlawful lockout shall be entitled to reinstatement with full backwages.

In the case at bar, modification of the judgment is appropriate considering that the company is no longer in operation and there is no showing that it has filed bankruptcy proceedings in which private respondent might file a claim and pursue her remedy under Article 110 of the Labor Code. Holding petitioner personally liable for the judgment in this case is eminently just and proper considering that, although the dispositive portion of the decision mentions only the “respondent company,” the text repeatedly mentions “respondents” in assessing liability for the illegal dismissal of private respondent. For indeed petitioner and others were respondents below and there can be no doubt of their personal liability. The mere happenstance that only the company is mentioned should not, therefore, be allowed to obscure the fact that in the text of the decision petitioner and her corespondents below were found guilty of having illegally dismissed private respondent and of claiming that private respondent’s employment was terminated because of retrenchment, when the truth was that she was dismissed for pregnancy. Hence they should be held personally liable for private respondent’s reinstatement with backwages.xxvii[13]

Article 273 of the Code provides that:

“Indeed it is well said that to get the true intent and meaning of a decision, no specific portion thereof should be resorted to but same must be considered in its entirety (Escarella vs. Director of Lands, 83 Phil. 491; 46 Off. Gaz. No. 11 p. 5487; I Moran’s Comments on the Rules of Court, 1957 ed., p. 478).”xxviii[14] Second. Not only is it clear by reference to the text of the decision of the Labor Arbiter that COMMODEX as well as its officers were being held liable so that no substantial amendment of the decision was really made by the Labor Arbiter in ordering petitioner to comply with that decision, but under the Labor Code, petitioner is herself considered an employer. In A. C. Ransom Labor Union-CCLU v. NLRC,xxix[15] we held: (a) Article 265 of the Labor Code, in part, expressly provides:

Any person violating any of the provisions of Article 265 of this Code shall be punished by a fine of not exceeding five hundred pesos and/or imprisonment for not less than one (1) day nor more than six (6) months. (b) How can the foregoing provisions be implemented when the employer is a corporation? The answer is found in Article 212 (c) of the Labor Code which provides: (c) “Employer” includes any person acting in the interest of an employer, directly or indirectly. The term shall not include any labor organization or any of its officers or agents except when acting as employer. The foregoing was culled from Section 2 of RA 602, the Minimum Wage Law. Since RANSOM is an artificial person, it must have an officer who can be presumed to be the employer, being the “person acting in the interest of (the) employer” RANSOM. The corporation, only in the technical sense, is the employer. The responsible officer of an employer corporation can be held personally, not to say even criminally, liable for the non-payment of back wages. That is the policy of the law. In the Minimum Wage Law, Section 15 (b) provided: (b) If any violation of this Act is committed by a corporation, trust, partnership or association, the manager or in his default, the person acting as such when the violation took place, shall be responsible. In the case of a government corporation, the managing head shall be made responsible, except when shown that the violation was due to an act or commission of some other person, over whom he has no control, in which case the latter shall be held responsible.

51 In P.D. 525, where a corporation fails to pay the emergency allowance therein provided, the prescribed penalty “shall be imposed upon the guilty officer or officers” of the corporation. (c) If the policy of the law were otherwise, the corporation employer can have devious ways for evading payment of backwages. In the instant case, it would appear that RANSOM, in 1969, forseeing the possibility or probability of payment of backwages to the 22 strikers, organized ROSARIO to replace RANSOM, with the latter to be eventually phased out if the 22 strikers win their case. RANSOM actually ceased operations on May 1, 1973, after the December 19, 1972 Decision of the Court of Industrial Relations was promulgated against RANSOM. (d) The record does not clearly identify “the officer or officers” of RANSOM directly responsible for failure to pay the back wages of the 22 strikers: In the absence of definite proof in that regard, we believe it should be presumed that the responsible officer is the President of the corporation who can be deemed the chief operation officer thereof. Thus, in R.A. 602, criminal responsibility is with the “Manager or in his default, the person acting as such.” In RANSOM, the President appears to be the Manager. (e) Considering that non-payment of the back wages of the 22 strikers has been a continuing situation, it is our opinion that the personal liability of the RANSOM President, at the time the back wages were ordered to be paid should also be a continuing joint and several personal liabilities of all who may have thereafter succeeded to the office of president; otherwise the 22 strikers may be deprived of their rights by the election of a president without leviable assets. Petitioner seeks to distinguish that case from the one at bar on the ground that the dispositive portion of the decision in that case actually ordered the “officers and agents” of A. C. Ransom to cease and desist from committing further acts of certain labor practice thus:

IN VIEW OF ALL THE FOREGOING, . . . the A. C. Ransom Philippine Corporation is guilty of unfair labor practice of interference and discrimination hereinabove held and specified, ordering its officers and agents to cease and desist from committing the same, finding the strike legal and justified; and to reinstate immediately . . . to their respective positions with backwages from July 25, 1969 until actually reinstated, without loss of seniority rights and other privileges appurtenant to their employment.xxx[16] A corporation can only act through its officers and agents. That is why the cease and desist order was directed to the “officers and agents” of A. C. Ransom, which was actually found guilty of unfair labor practice. But that case clearly also holds that any decision against the company can be enforced against the officers in their personal capacities should the corporation fail to satisfy the judgment against it. The quoted portion of that decision explaining the basis for such ruling makes that clear. Agreeably with the ruling in A. C. Ransom Labor Union-CCLU it was held in another case that “where the Employer corporation is no longer existing and [is] unable to satisfy the judgment in favor of the employee, the officer should be held liable for acting on behalf of the corporation.”xxxi[17] Similarly it was held in Carmeicraft Corp. v. NLRC:xxxii[18] We also find untenable the contention of Carmen Yulo that she is not liable for the acts of the petitioner company, assuming it had acted illegally, because the Carmelcraft Corporation is a distinct and separate entity with a legal personality of its own. Yulo claims she is only an agent of the company carrying out the decisions of its board of directors. We do not agree. Our finding is that she is in fact and legal effect the corporation, being not only its president and general manager but also its owner. In this case, the documents presented by the private respondent show that petitioner controlled the company owning 1,993 of its 2,000 shares, with the rest of the stockholders owning only nominal amounts.

Third. Petitioner says the failure of private respondent to make a timely appeal bars her from enforcing the decision in her favor against her (petitioner) and the officers of the corporation because the decision of December 2, 1986 of the Labor Arbiter is now final and can no longer be amended. We have already explained that there was really no amendment of the decision but only a clarification. But even if appeal was required in order to correct the error, in the interest of substantial justice, especially in cases involving rights of workers, the procedural lapse in this case may be disregarded. As held in General Baptist Bible College v. NLRC:xxxiii[19] Technicalities have no room in labor cases, where the Rules of Court are applicable only in order to effectuate the objectives of the Labor Code and not to defeat them. The pertinent provisions of the Revised Rules of Court of the Philippines and prevailing jurisprudence may be applied by analogy or in a suppletory character to effect an expeditious resolution of labor controversies in a practical and convenient manner. We are inclined to overlook a procedural defect if only to promote substantial justice. General rules of procedure are merely suppletory in character vis-a-vis labor disputes which are primarily governed by labor laws.xxxiv[20] Furthermore, as provided in Art. 4 of the Labor Code, “all doubts in the implementation and interpretation of this code, including its implementing rules and regulations shall be rendered in favor of labor.”xxxv[21] The rule that the NLRC may disregard technical rules of procedure in order to give life to the constitutional mandate for the protection of labor is well settled.xxxvi[22] WHEREFORE, the petition is DISMISSED for lack of merit. SO ORDERED.

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