STATCON CASE READINGS No. 06 TABLE OF CONTENTS:

1. Aquino vs Quezon City (GR No. 137534, August 3, 2006)…………………………………………………………………… 2-5

2. Nuñez, et. al., vs GSIS Family Bank (GR No. 163988, Nov. 17, 2005) ………………………………………………….. 6-10

3. Philippine National Bank vs. Cruz (GR No. 80593, Dec. 18, 1989) ………………………………………………………. 11-13

4. Magtajas vs Pryce Properties Corp. Inc., (GR No. 111097, July 10, 1994) …………………….…………………….. 14-19

5. City of Manila vs. Teotico (GR No. L-23052, January 29, 1968) …………………………………………………………… 20-21

6. Vinzons-Chato vs Fortune Tobacco Corporation (GR No.141309, June 19, 2007) ……………………………….. 22-26

7. Remo vs Secretary of Foreign Affairs (GR No. 169202, March 5, 2010) ………………………………………………. 27-29

8. People vs Simon (GR No. 93028, July 29, 1994) …………………………………………………………….......................... 30-37

2 AQUINO

EFREN AQUINO and ANGELICA AQUINO, Petitioners,

- versus - QUEZON CITY, represented by G.R. No. 137534 its OIC, BRIGIDO SIMON, ANSELMO O. REGIS, VICENTE N. COLOYAN, as the Acting Register of Deeds of Quezon City, and AIDA LINAO, accompanied by her husband PETE LINAO, Respondents. x --------------------------------------------- x SOLOMON TORRADO, represented herein by his heirs, namely: VICTOR SILVANO TORRADO, MONALISA TORRADO CARLET, CELIA G.R. No. 138624 TORRADO APTER, ROBERTO SILVANO TORRADO, SOLOMON Present: SILVANO TORRADO, TITA SILVANO TORRADO, HILARIO PUNO, J., Chairperson, SILVANO TORRADO, EMMANUEL SANDOVAL-GUTIERREZ, SILVANO TORRADO, and CORONA, AUGUSTUS CAESAR SILVANO AZCUNA, and TORRADO, GARCIA, JJ. Petitioners, - versus - Promulgated: VERONICA BALUYOT and August 3, 2006 RUPERTO BALUYOT, CORAZON and MAXIMO UY, DNX DEVELOPMENT CORP., CITY TREASURER OF QUEZON CITY, REGISTER OF DEEDS OF QUEZON CITY, AND THE HONORABLE COURT OF APPEALS, Respondents. X -------------------------------------------------------------------------------------------- X DECISION AZCUNA, J.:

In an order issued by this Court dated October 18, 2000, two petitions for review on certiorari involving the decisions of the Court of Appeals in CA-G.R. CV Nos. 37487 and 49241, declaring valid the auction sales of two real properties by theQuezon City local government for failure to pay real property taxes, were consolidated for the Courts consideration. G.R. No. 137534

The first case, docketed as G.R. No. 137534, deals with a 612-square meter lot in East Avenue Subdivision, Diliman,Quezon City. The lot was formerly owned by petitioner spouses Efren and Angelica Aquino (Petitioners Aquino) under Transfer Certificate of Title (TCT) No. 260878. By their own admission, Petitioners Aquino withheld payment of the real property taxes thereto from 1975 to 1982 as a form of protest against the government of then President Marcos. As a result of the nonpayment, the property was sold by the Quezon City local government, through the Treasurers Office, at public auction on February 29, 1984 to private respondent Aida Linao, the highest bidder. Aida Linao eventually consolidated her ownership under a petition granted by the Regional Trial Court (RTC) of Quezon City on September 25, 1985.[1] Accordingly, TCT No. 260878 was cancelled and a new one was issued under TCT No. 339476 in the name of Aida Linao.[2]

Petitioners Aquino claimed that they learned of the sale only in April 1987 after they were informed by people squatting on

the property that Aida Linao was taking steps to eject them. They then filed an action for annulment of title, reconveyanceand damages against respondents Quezon City local government, its Treasurer, the Register of Deeds of Quezon City and Aida Linao[3] before the RTC of Quezon City.[4] They charged that the Quezon City local government sold their property without

3 AQUINO

informing them of their tax default, in derogation of the notice requirements of the law. They also impute bad faith upon Aida Linao in buying their property despite knowledge of the infirmities leading to the auction sale.

On February 25, 1995, after the parties presented their case, the RTC of Quezon City rendered a decision dismissing the

complaint. The dismissal was later affirmed by the Court of Appeals on February 3, 1999. In this petition, Petitioners Aquino raise two issues: 1. Whether there was failure on the part of the Quezon City local government to satisfy the notice

requirements before selling the property for tax delinquency; and 2. Whether there was failure on the part of the Quezon City local government to give actual notice of the

impending sale despite knowing that the mailed notices were returned unclaimed. 3. Whether or not Petitioners Aquino were estopped to question the absence of notice given their

admission that they deliberately did not pay their taxes.

G.R. No. 138624

The second case, docketed as G.R. No. 138624, deals with a 407-square meter property located at No. 20 North Road,Cubao, Quezon City under TCT No. 21996 in the name of Solomon Torrado.[5] TCT No. 21996 covers two lots, Lots 7 & 8, but only the latter is the subject of the controversy. According to the Heirs of Solomon Torrado (Petitioner Heirs),[6]Solomon Torrado paid taxes on the improvements on Lot 8 for 1976, 1977, 1978, 1979, 1981 and 1982 but not on the lot itself because the Treasurers Office could not locate the index card for that property. For failure to pay real property taxes onLot 8 from 1976 to 1982, the City Treasurer sent a Notice of Intent to Sell dated October 6, 1982 to Solomon Torrado to his address indicated in the tax register, which simply states as Butuan City. The notice was returned by reason of Insufficient Address. Next sent was a Notice of Sale of Delinquent Property dated December 10, 1982. This was sent to the same address and similarly returned unclaimed.[7] Thereafter, a public auction for Lot 8 was held on February 23, 1983 and the lot was sold to Veronica Baluyot, the winning bidder. A Notice of Sold Property was subsequently sent to Solomon Torrado to ButuanCity, which was returned unclaimed.

On May 29, 1985, a Final Bill of Sale was executed by the City Treasurer. On that basis, TCT No. 21996 was cancelled in part

and TCT No. 355133, covering Lot 8, was issued in the name of Veronica Baluyot. Veronica Baluyot later mortgaged the property to spouses Corazon and Maximino Uy. For failure to pay the mortgage debt, Lot 8 was foreclosed and TCT No. 355133 was cancelled and substituted with TCT No. 45536 in the name of spouses Uy. Spouses Uy then sold the lot to DNX Corporation and TCT No. 45536 was cancelled and substituted with TCT No. N-162170, in the name of DNX Corporation.

Meanwhile, on January 13, 1989, Solomon Torrado commenced an action with the RTC of Quezon City against the

spouses Baluyot, the Quezon City local government, the City Treasurer and Register of Deeds.[8] On March 12, 1992, the RTC of Quezon City dismissed the action. Recourse to the Court of Appeals was made but on March 24, 1998, the appeal was dismissed.

Before this Court, Petitioner Heirs raise the following questions: 1. In the auction sale of tax delinquent property, is constructive notice sufficient? 2. Was the City Treasurer negligent in continuing to send notices to an insufficient address

notwithstanding a tax declaration in the tax records pertaining to another property bearing Solomon Torrados complete address?

3. Was the auction sale conducted in accordance with P.D. 464? 4. Was the title of Veronica Baluyot, the purchaser of the property, void as well as those of the

subsequent transferees? 5. Is DNX Corporation, the subsequent purchaser of the property, a buyer in good faith?

Issues common to both petitions

The Court will first discuss the issues that were raised in common by petitioners. The first issue in common relates to the interpretation of the notice requirements under Sections 65 and 73 of Presidential

Decree (P.D.) No. 464 (the Real Property Tax Code then in force):[9]

x x x SECTION 65. Notice of delinquency in the payment of the real property tax. Upon the real property tax or

any installment thereof becoming delinquent, the provincial or city treasurer shall immediately cause notice of the fact to be posted at the main entrance of the provincial building and of all municipal buildings or municipal or city hall and in a public and conspicuous place in each barrio of the municipality of the province or city as the case may be. The notice of delinquency shall also be published once a week for three consecutive weeks, in a newspaper of

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general circulation in the province or city, if any there be, and announced by a crier at the market place for at least three market days.

Such notice shall specify the date upon which tax became delinquent, and shall state that personal property may be seized to effect payment. It shall also state that, at any time, before the seizure of personal property, payment may be made with penalty in accordance with the next following section, and further, that unless the tax and penalties be paid before the expiration of the year for which the tax is due, or the tax shall have been judicially set aside, the entire delinquent real property will be sold at public auction, and that thereafter the full title to the property will be and remain with the purchaser, subject only to the right of delinquent taxpayer or any other person in his behalf to redeem the sold property within one year from the date of sale.

x x x SECTION 73. Advertisement of sale of real property at public auction. After the expiration of the year for

which the tax is due, the provincial or city treasurer shall advertise the sale at public auction of the entire delinquent real property, except real property mentioned in subsection (a) of Section forty hereof, to satisfy all the taxes and penalties due and the costs of sale. Such advertisement shall be made by posting a notice for three consecutive weeks at the main entrance of the provincial building and of all municipal buildings in the province, or at the main entrance of the city or municipal hall in the case of cities, and in a public and conspicuous place in the barrio or district wherein the property is situated, in English, Spanish and the local dialect commonly used, and by announcement at least three market days at the market by crier, and, in the discretion of the provincial or city treasurer, by publication once a week for three consecutive weeks in a newspaper of general circulation published in the province or city.

The notice, publication, and announcement by crier shall state the amount of the taxes, penalties and costs of sale; the date, hour, and place of sale, the name of the taxpayer against whom the tax was assessed; and the kind or nature of property and, if land, its approximate areas, lot number, and location stating the street and block number, district or barrio, municipality and the province or city where the property to be sold is situated. Copy of the notice shall forthwith be sent either by registered mail or by messenger, or through the barrio captain, to the delinquent taxpayer, at his address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located, or at his residence, if known to said treasurer or barrio captain: Provided, however, That a return of the proof of service under oath shall be filed by the person making the service with the provincial or city treasurer concerned.

Both petitioners construe the above-quoted provisions to mean that two sets of notices, one under Section 65 and the

other under Section 73, are required before a delinquent property could be sold for failure to pay real property taxes. With respect to the first notice under Section 65, the owner of the real property subject to tax is supposed to be given a Notice of Tax Delinquency stating that if the property tax is not paid, the local government would sell the real property to satisfy the tax in arrears. This consists of four separate measures: 1) posting of the notice of tax delinquency at the main entrance of the city hall; 2) posting of the notice of tax delinquency in a public and conspicuous place in each barangay of the city; 3) publication of the notice of tax delinquency once a week for three consecutive weeks in a newspaper of general circulation in the city; and 4) verbal announcement of the existence of the notice of tax delinquency by a crier at the market place for at least three market days.

The second notice under Section 73 pertains to a Notice of Sale at Public Auction notifying the owner of the real property

that since there was failure to heed the first notice, the local government would now be selling his delinquent property at public auction on a specified date to satisfy the tax in arrears.

For Petitioners Aquino, while it seems the Quezon City local government complied with the second set of requirements in

selling their lot, it failed to do the same with the first.[10] The only compliance by the Quezon City local government was the sending of a Notice of Intent to Sell by registered mail to the last known address of Petitioners Aquino. No posting or publication of any kind was done.

Petitioner Heirs, on the other hand, push for the same construction and claim that there was failure on the part of the City

Treasurer to send Solomon Torrado a Notice of Delinquency at all. Respondents, on the other hand, counter with their own interpretation of P.D. No. 464. Instead of a two-step notice

requirement, respondents put forward the view that there are three methods of enforcement on tax delinquent real property provided under P.D. No. 464. The first method is by distraint of personal property under Sections 65, 68, 70, 71 and 72. The second method is by sale of the delinquent real property itself under Sections 73 to 81. The third method is by filing a case in court under Section 82. Respondents submit that the real property in issue was sold under the second method. That being the case, while they admit that there was only partial compliance with the provisions of Section 65[11] this would be relevant had the local government chosen the method of distraint of personal property. In this case, the Quezon City local government chose the second method of sale and there was full compliance with the provisions of Section 73. Hence, the auction sale was valid.

A simple application of the elementary rules of statutory construction provides a straightforward resolution to this conflict.

Section 65 basically provides that upon delinquency of a real property tax, a notice of delinquency shall be given. This is followed by Section 66, penalty for delinquency, and Section 67, application of the remedies. The latter reads in its entirety as follows:

5 AQUINO

SECTION 67. Remedies cumulative, simultaneous and unconditional. Collection of the real property tax may be enforced through any or all of the remedies provided under this Code, and the use or non-use of one remedy shall not be a bar against the institution of the others. Formal demand for the payment of the delinquent taxes and penalties due need not be made before any of such remedies may be resorted to; notice of delinquency as required in Section sixty-five hereof shall be sufficient for the purpose. Following Section 67 are provisions on distraint of personal property (Sections 68, 69, 70, 71 and 72), provisions concerning

the sale of real property (Sections 73 to 81) and the provision on collection of real property tax through the courts (Section 82). A rule of statutory construction is that a statute must be construed as a whole. The meaning of the law is not to be

extracted from a single part, portion or section or from isolated words and phrases, clauses or sentences, but from a general consideration or view of the act as a whole. Every part of the statute must be interpreted with reference to the context. [12] In line with this rule, the Court finds that Section 65s notice of delinquency should be read in line with the Section 67s statement that the different tax remedies do not require a formal demand for the payment but may be substituted by the notice of delinquency. Reference to the notice of delinquency in relation to tax remedies, in general, illustrates the formers function as a prerequisite to all the individual tax remedies subsequently detailed. Also, the phrase notice of delinquency as required in Section sixty-five found on the last part of Section 67 further underscores its mandatory nature and interrelation to the three remedies.

It is incorrect for the respondents to claim that notice of delinquency has limited application only to distraint of personal

property. They mistakenly lumped Section 65 exclusively with Sections 68 to 72 and, in so doing, restricted its application from the other tax remedies. Section 65 is to be construed together with Sections 66 and 78 and all three operate in reference to tax methods in general. Definitely, there is no more logical way to construe the whole chapter on Collection of Real Property Tax (Sections 56 to 85) than to stress that while three methods are provided to enforce collection on real property taxes, a notice of delinquency is a requirement regardless of the method or methods chosen.

Thus, while the Court agrees with the respondents interpretation that there are three methods by which taxes may be

enforced, petitioners are correct in insisting that two notices must be sent to the taxpayer concerned. Nevertheless, respondents still prevail because the Court is satisfied that the two-notice requirement has been complied with by the Treasurers Office.

Contrary to the stand taken by Petitioners Aquino, despite the provisions of Section 65, the local government concerned

need not post and publish the notice of delinquency, it being sufficient that personal service was done. In Talusanv. Tayag,[13] one of the issues raised was the lack of publication of the notice of delinquency. As to this issue the Court said, speaking through now Chief Justice Panganiban:

Petitioners assert that the tax sale should be annulled because of noncompliance with the requirement of

publication prescribed in Section 65 of PD 464. In this regard, we note that unlike land registration proceedings which are in rem, cases involving an

auction sale of land for the collection of delinquent taxes are in personam. Thus, notice by publication, though sufficient in proceedings in rem, does not as a rule satisfy the requirement of proceedings in personam. As such, mere publication of the notice of delinquency would not suffice, considering that the procedure in tax sales is in personam. It was, therefore, still incumbent upon the city treasurer to send the notice of tax delinquency directly to the taxpayer in order to protect the interests of the latter.

In the present case, the notice of delinquency was sent by registered mail to the permanent address of

the registered owner inManila. In that notice, the city treasurer of Baguio City directed him to settle the charges immediately and to protect his interest in the property. Under the circumstances, we hold that the notice sent by registered mail adequately protected the rights of the taxpayer, who was the registered owner of the condominium unit.

Petitioners Aquino admit that notice of delinquency was mailed, hence, they cannot complain that their rights were not

adequately protected. Publication and posting not being indispensable, there was proper compliance with Section 65. Petitioner Heirs, on the other hand, made no such admission but, on the contrary, argued that no notice of delinquency was

prepared by the City Treasurer much less sent to Solomon Torrado. The Court holds, for one, that this is a question of fact that will generally not be resolved on a petition for review.[14] Second, records bear out that a Notice of Intent to Sell dated October 6, 1982 was sent by the Treasurers Office to Solomon Torrado. While this was not captioned as a Notice of Delinquency, its contents sufficiently inform the recipient of the deficiency in real property taxes, and this notice is apart from the subsequent Notice of Sale sent immediately prior to the auction sale.

Hence, on the common issue concerning compliance with P.D. No. 464, the Court rules in favor of respondents. The Court proceeds to the common issue of actual versus constructive notice of sale. Petitioners Aquino argue that actual notice is required and, therefore, the mailing of the Notice of Sale to their last known

address, which they had abandoned, did not constitute valid notice under the law. Petitioner Heirs likewise argue that constructive

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notice to the delinquent owner of the real property by mailing is not sufficient, especially when the local government concerned is aware that the mailed notices have not reached the owner.

The applicable provision in regard to this issue is found in the last paragraph of Section 73, quoted above. Under said

provision, notices of the sale at public auction may be sent to the delinquent taxpayer, either (i) at the address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located or (ii) at his residence, if known to such treasurer or barrio captain. Plainly, Section 73 gives the treasurer the option of where to send the notice of sale. In giving the treasurer the option, nowhere in the wordings is there an indication of a requirement that notice must actually be received by the intended recipient. Compliance by the treasurer is limited to strictly following the provisions of the statute: he may send it at the address of the delinquent taxpayer as shown in the tax rolls or tax records or to the residence if known by him or the barrio captain.

In both petitions, the City Treasurer opted to comply with the first option. Petitioners Aquino and Petitioner Heirs do not

deny that notices were sent to their or their predecessors address, as shown in the tax records. The named persons in the notices sent by City Treasurer were the correct delinquent taxpayers and were the registered owners of the property subject to tax, albeit the mailing addresses were not to their actual residences. Therefore, the prescribed procedure in auction sales of property for tax delinquency was followed punctiliously. Had the City Treasurer sent the notices to an address other than the one indicated in the tax records, and such address is not the residence known to the treasurer or barangay captain, or if sent to a person who is not the registered owner of the property, then the Court would be able to declare non-compliance with the law. But the fact that petitioners were not able to read their notices is of no consequence to the annulment of the auction sale.

Additionally, Petitioner Heirs maintain that the Treasurers Office was already aware that Solomon Torrados address stated in the tax records as Butuan City was insufficient so that the notices could not possibly be sufficient for the notices to reach the recipient. There was however a more complete address indicated in the tax records for the improvements to Lot 8, which was No. 20 North Road, Cubao, Quezon City. Petitioner Heirs argue that the City Treasurer could have used this address instead of repeatedly sending notice to an insufficient address which for certain would be returned unclaimed.

The fault herein lies with Solomon Torrado and not with the City Treasurer. Solomon Torrados use in his tax declarations

for Lot 8, as well as in TCT No. 21996, the minimal address of Butuan City, is further compounded by the fact that he can no longer be found in Butuan City as he had moved to Quezon City since 1959.[15] He, therefore, had more than 25 years, or 25 opportunities, to amend his address and provide the City Treasurer of a more complete and reliable one. By neglecting to do so, he was aware of the chances he was taking should notices be sent to him by the Treasurers Office. Instead, he maintained the terse address of Butuan City.

In contrast, the Treasurers Office cannot be faulted for not sending the notices to Solomon Torrados address at No. 20

North Road, Cubao, Quezon City, which was indicated in his tax declarations to his other properties. As discussed, the last paragraph of Section 73 instructs the treasurer on where to send the notice of sale: either at the address as shown in the tax rolls or property tax record cards of the municipality or city where the property is located or at his residence, if known to such treasurer or barrio captain. Petitioner Heirs have not shown that the City Treasurer or barrio captain actually knew that Solomon Torrados residence was No. 20 North Road, Cubao, Quezon City. Therefore, the City Treasurer could not be blamed for having mailed the notices to the address shown in the tax records, which was in conformity with Section 73.

In disposing of these two issues, there is no further need to discuss the issues of estoppel and good faith. WHEREFORE, both petitions are DENIED and the decisions of the Court of Appeals in CA-G.R. CV Nos. 37487 and 49241

are AFFIRMED. No costs. SO ORDERED.

7 NUÑEZ

VALENTINA A. NUEZ, FELIX A. NUEZ, FELIXITA A. NUEZ, LEONILO A. NUEZ, JR., ELIZA A. NUEZ, EMMANUEL A. NUEZ and DIVINA A. NUEZ as heirs of LEONILO S. NUEZ,** Petitioners, - versus - GSIS FAMILY BANK (Formerly COMSAVINGS BANK) and the COURT OF APPEALS, Respondents.

G.R. No. 163988 Present:

PANGANIBAN, J., Chairman, SANDOVAL-GUTIERREZ,* CORONA, CARPIO MORALES, and GARCIA, JJ.

Promulgated: November 17, 2005

CARPIO MORALES, J.: The facts are not disputed: Petitioners are the heirs of Leonilo S. Nuez (Leonilo) who, during his lifetime, obtained three loans from the GSIS Family Bank, formerly ComSavings Bank which in turn was formerly known as Royal Savings and Loan Association (the bank). The first loan, contracted on April 6, 1976 in the amount of P55,900.00, was secured by a mortgage over a parcel of land covered by TCT NT-139575-A whereon the mortgage was annotated on April 8, 1976.[1] The second loan, obtained on July 7, 1976 in the amount of P127,000.00, was secured by mortgage of properties covered by TCT Nos. NT-143002, 143003 and 139575.[2] The third loan, obtained also on July 7, 1976 in the amount of P105, 900.00, actually amended the first loan of P55,900.00 to secure which amended loan the same property covered by TCT No. NT-139575-A[3] was mortgaged. The amended loan, no copy of which forms part of the records, was admitted by the parties during the pre-trial.[4] On June 30, 1978, when the three loans were maturing, Leonilo purportedly obtained a fourth loan in the amount ofP1,539,135.00 to secure which he executed a Real Estate Mortgage antedated June 28, 1978 over properties covered by TCT Nos. NT-145734, 143001, 143004, 143005, 143006, 143007.[5] On the maturity of the three loans or on June 30, 1978, Leonilo executed a Promissory Note[6] in the amount ofP1,539,135.00, due and payable on December 27, 1978.

The details of the loans secured by Leonilo including the purported fourth loan are shown in the following table:

Loan Date Contracted

Amount Maturity Titled subject of the Real Estate

Mortgages

First Loan April 6, 1976 P 55,900.00 June 30, 1978 NT- 139575-A

Second Loan July 7, 1976 P127,000.00 June 30, 1978 NT-143002; NT-143003; NT-139575

Third Loan (amended the first loan)

July 7, 1976 P105,900.00 June 30, 1978 NT-139575-A

Fourth Loan June 30, 1978

P1,539,135.00 December 27, 1978

NT-145734; NT-143001; NT-143004; NT-143005; NT-143006; NT-143007.

More than nineteen (19) years after Leonilos June 30, 1978 Promissory Note matured or on December 11, 1997, the bank undertook to extrajudicially foreclose[7] the properties covered by TCT Nos. NT-143002, 143003, 139575 and 139575-A which secured the first two loans.

In its petition for extrajudicial foreclosure, the bank alleged that Leonilo violated the terms and conditions of the loans secured by the Real Estate Mortgages since June 30, 1978 when he failed, despite repeated demands, to pay his principal obligations, and interest due thereon from December 27, 1978, up to the time that the petition was filed.[8]

Acting on the banks petition for Extra-judicial Foreclosure of Mortgage, the Ex-Officio Sheriff of Gapan, Nueva Ecija issued a

Notice of Extra-judicial Sale[9] setting the sale of the properties involved at public auction on January 9, 1998.

8 NUÑEZ

The auction took place as scheduled, with the bank as the highest and only bidder in the amount of P33,026,100.00. A

Certificate of Sale[10] was thus issued in favor of the bank. On September 1, 1999, on petition of the bank, the mortgage over properties covered by TCT Nos. 143001 and 143007, two

of the six parcels of land which secured the fourth loan that matured on December 27, 1978, was extrajudicially foreclosed. At the public auction, the bank was the highest bidder and a Certificate of Sale[11] dated February 18, 2000 was issued in its name.

Leonilo later filed on June 20, 2000 before the Regional Trial Court (RTC) of Gapan, Nueva Ecija a complaint against the GSIS

Family Bank,[12] docketed as Civil Case No. 2269, for Annulment of Extrajudicial Foreclosure Sale, Reconveyance and Cancellation of Encumbrances.

In his complaint, Leonilo denied securing a fourth loan but nevertheless alleged that for purposes of the action, the same

shall be assumed to have been validly secured. Invoking prescription, he citing Articles 1142[13] and 1144[14] of the Civil Code, Leonilo contended that his first three loans

and the fourth loan matured on June 30, 1978 and December 27, 1978, hence, they had prescribed on June 28, 1988 and December 25, 1988, respectively.[15] When, on December 11, 1997 and September 1, 1999 then, the bank filed the Petitions for Extrajudicial Foreclosure of Mortgage, Leonilo concluded that it no longer had any right as prescription had set in.

Leonilo invited the attention of the court to the fact that although six titles secured the purported fourth loan of P1,539,

135.00, only two, TCT Nos. NT-143001 and NT-143007, were the subject of foreclosure sale on September 1, 1999 and the mortgage was not annotated on the four other mortgaged titles, TCT Nos. NT-143004, 143005, 143006 and 145734.[16]Moreover, he pointed out that the record[17] shows that the Real Estate Mortgage dated June 28, 1978 purportedly securing the fourth loan was annotated on NT-143001 and NT-143007 subject of the September 1, 1999 foreclosure only on August 31, 1999 or more than 11 years after the prescriptive period to foreclose had set in.[18]

By Decision dated August 9, 2002, Branch 34 of the Gapan RTC found for Leonilo who died during the pendency of the trial

of the case, hence, his substitution by his heirs - herein petitioners, declaring that the banks cause of action over the loans had prescribed and, therefore, the proceedings for extrajudicial foreclosure of real estate mortgages were null and void.

The bank filed a motion for reconsideration[19] on September 20, 2002, the last of the 15-day period within which it could interpose an appeal, but it did not comply with the provision of Section 4, Rule 15[20] of the Rules of Court on notice of hearing, prompting herein petitioners to file a Motion to Strike Out Motion for Reconsideration with Motion for the issuance of a writ of execution.[21]

The bank filed an Opposition with Motion to Admit[22] (the Motion for Reconsideration), attributing its failure to incorporate

the notice of hearing to inadvertent deletion from its computer file of standard clauses for pleadings the required notice of hearing and to the heavy workload of the handling counsel, Atty. George Garvida.

The trial court denied the banks Motion for Reconsideration by Order[23] of November 18, 2002 and accordingly ordered it

stricken off the record: After a serious evaluation of the arguments for/and against the instant Motion for Reconsideration, the

Court believes and so-holds that, while it is true that the high Court has set aside technicality in order not to defeat the ends of justice in appropriate cases, it is likewise true that litigations at some point of time must end otherwise, litigation of cases will be endless.

WHEREFORE, given the foregoing, the instant Motion for Reconsideration is hereby DENIED, for failure

to comply with Rule 15, Section 4, of the 1997 Rules on Civil Procedures (sic).

x x x[24] The bank filed a Notice of Appeal[25] to which petitioners filed a Motion to Dismiss for being filed late,[26] which motion was

granted by the trial court by Order[27] of February 10, 2003.

The bank thereupon elevated via petition for certiorari[28] the case before the Court of Appeals (CA) faulting the trial court to have

I. . . . COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK AND/OR EXCESS OF JURISDICTION IN ISSUING THE HEREIN ASSAILED ORDER DATED 10 FEBRUARY 2003 CONSIDERING THAT THE TRIAL COURT HAD ALREADY LOST JURISDICTION OF THE CASE IN VIEW OF THE PERFECTION OF THE PETITIONERS APPEAL ON DECEMBER 11, 2002.

II. . . . COMMITTED GRAVE ABUSE OF DISCRETION TANTAMOUNT TO LACK AND/OR EXCESS OF

JURISDICTION WHEN IT DENIED HEREIN PETITIONERS MOTION FOR RECONSIDERATION IN ITS ORDER DATED 18 NOVEMBER 2002, THERE BEING STRONG AND COMPELLING REASONS TO ADMIT SAID MOTION AND TO CONSIDER THE ERRONEOUS CONCLUSIONS OF FACT AND LAW ON WHICH THE DECISION OF THE TRIAL COURT WAS BASED.

9 NUÑEZ

The bank, which is owned by the Government Service Insurance System, argued that to rigidly and strictly apply the rules of procedure would result to injustice and irreparable damage to the government as it stands to lose a substantial amount if not allowed to recover the proceeds of the loans.[30] The appellate court, by February 23, 2004 Decision,[31] found for the bank. Citing Labad v. University of Southeastern Philippines,[32] it ruled that while the right to appeal is a statutory and not a natural right, it is nevertheless an essential part of the judicial system, hence, courts should be cautious not to deprive a party of the right to appeal; and in the exercise of its equity jurisdiction, the trial court should have given the banks Notice of Appeal due course to better serve the ends, and prevent a miscarriage of justice. Petitioners Motion for Reconsideration having been denied by Resolution[33] of May 25, 2004, the present Petition for Certiorari under Rule 65 was filed, raising these issues:

1. Whether or not the public respondent committed grave abuse of discretion in reversing the order of the Regional

Trial Court denying the notice of appeal and in giving due course to the notice of appeal. 2. Whether the private respondent could still appeal a judgment which has become final and executory.[34]

At the outset, clarification on petitioners mode of appeal is in order. Petitioners and counsel confuse their petition as one Petition for Review under Rule 45[35] with a Petition for Certiorari under Rule 65.[36] For while they treat it as one for Review on Certiorari, they manifest that it is filed pursuant to Rule 65 of the 1997 Rules of Civil Procedure in relation to Rule 45 of the New Rules of Court.[37] In Ligon v. Court of Appeals[38] where the therein petitioner described her petition as an appeal under Rule 45 and at the same time as a special civil action of certiorari under Rule 65 of the Rules of Court, this Court, in frowning over what it described as a chimera, reiterated that the remedies of appeal and certiorari are mutually exclusive and not alternative nor successive.[39] To be sure, the distinctions between Rules 45 and 65 are far and wide. However, the most apparent is that errors of jurisdiction are best reviewed in a special civil action for certiorari under Rule 65 while errors of judgment can only be corrected by appeal in a petition for review under Rule 45.[40] This Court, however, in accordance with the liberal spirit which pervades the Rules of Court and in the interest of justice may treat a petition for certiorari as having filed under Rule 45, more so if the same was filed within the reglementary period for filing a petition for review.[41] The records show that the petition was filed on time both under Rules 45 and 65.[42] Following Delsan Transport, the petition,

stripped of allegations of grave abuse of discretion, actually avers errors of judgment which are the subject of a petition for review.[43]

This Court finds the petition impressed with merit. Rule 41 of the 1997 Rules of Civil Procedure which governs appeals from Regional Trial Courts provides: SEC. 2. Modes of appeal. (a) Ordinary appeal. The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its

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

x x x SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from notice of the judgment or final

order appealed from. Where a record on appeal is required, the appellants shall file a notice of appeal and a record on appeal within thirty (30) days from notice of the judgment or final order. However, on appeal in habeas corpus cases shall be taken within forty-eight (48) hours from notice of the judgment or final order appealed from.

The period of appeal shall be interrupted by a timely motion for new trial or reconsideration. No motion for extension of time to file a motion for new trial or reconsideration shall be allowed. (Underscoring supplied).

On the other hand, Rule 22 provides for the manner of computing time and the effect of interruption: SEC. 1. How to compute time. In computing any period of time prescribed or allowed by these Rules, or by order of the

court, or by any applicable statute, the day of the act or event from which the designated period of time begins to run is to be excluded and the date of performance included. If the last day of the period, as thus computed, falls on a Saturday, a Sunday or a legal holiday in the place where the court sits, the time shall not run until the next working day.

10 NUÑEZ

SEC. 2. Effect of interruption. Should an act be done which effectively interrupts the running of the period, the allowable

period after such interruption shall start to run on the day after notice of the cessation of the cause thereof. The day of the act that caused the interruption shall be excluded in the computation of the period. (Emphasis and

underscoring supplied). The requirement of notice under Sections 4 and 5[44] of Rule 15 in connection with Section 2, Rule 37 of the Rules of Court is

mandatory.[45] Absence of the mandatory requirement renders the motion a worthless piece of paper which the clerk of court has no right to receive and which the court has no authority to act upon.[46] Being a fatal defect, in cases of motions to reconsider a decision, the running of the period to appeal is not tolled by their filing or pendency.[47]

When the bank then filed its Motion for Reconsideration on the last of the 15-day period for taking an appeal and it was

subsequently denied, the bank had only one (1) day from December 9, 2002 when it received a copy of the order denying the motion or until December 10, 2002 within which to perfect its appeal.[48]

It filed the Notice of Appeal, however, on December 11, 2002, hence, out of time, and the decision of the trial court had become

final and executory. While Rules may be relaxed when the party invoking liberality adequately explains his failure to abide therewith, the bank failed to

do so. The explanations[49] proffered by the bank behind its failure to incorporate a notice of hearing of the Motion for Reconsideration

inadvertent deletion from its computer file of the standard clauses for pleadings during the printing of the finalized draft of the motion and the handling counsels heavy workload are unsatisfactory.

To credit the foregoing explanations would render the mandatory rule on notice of hearing meaningless and nugatory as lawyers would simply invoke these grounds should they fail to comply with the rules. As to the claim that the government would suffer loss of substantial amount if not allowed to recover the proceeds of the loans, this

Court finds that any loss was caused by respondents own doing or undoing. In fine, the failure to timely perfect an appeal cannot simply be dismissed as a mere technicality, for it is jurisdictional.[50] Nor can petitioner invoke the doctrine that rules of technicality must yield to the broader interest of substantial justice.

While every litigant must be given the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities, the failure to perfect an appeal within the reglementary period is not a mere technicality. It raises a jurisdictional problem as it deprives the appellate court of jurisdiction over the appeal. The failure to file the notice of appeal within the reglementary period is akin to the failure to pay the appeal fee within the prescribed period. In both cases, the appeal is not perfected in due time. As we held in Pedrosa v. Hill, the requirement of an appeal fee is by no means a mere technicality of law or procedure, but an essential requirement without which the decision appealed from would become final and executory. The same can be said about the late filing of a notice of appeal. (Emphasis and underscoring supplied).[51]

Jurisdictional issue aside, upon the ground of prescription, the banks case would just the same fail. An action to foreclose a real estate mortgage

prescribes in ten years.[52] The running of the period, however, may be interrupted.[53] A review of the records of the case shows that, as correctly claimed by petitioners, no letter of demand, court action, or foreclosure proceeding

was undertaken prior to December 11, 1997 and September 1, 1999. While the bank included in its Formal Offer of Evidence[54] Exhibits E and H which are the Petitions for Extra-Judicial Foreclosure alleging that

repeated demands for payment were made after Leonilo defaulted and failed to pay the loan obligations, allegations are not proofs. Unless a demand is proven, one cannot be held in default.[55]

In justifying its failure to file a collection suit, the bank contended that it would have amounted to a waiver of its right to foreclose. But if early on it

opted to foreclose the mortgages, why it waited until 1997 and 1999, more than nineteen years after the right to do so arose, the bank is glaringly mute.

Clutching at straws, the bank argues that the applicable provision is Article 1141,[56] not Article 1142[57] of the Civil Code. Article 1141 of the Civil Code speaks of real actions over immovables or rights. Article 1142 of the Civil Code speaks of a mortgage action which

prescribes in ten years. The strategic location of Article 1142 immediately right after Article 1141 of the same Code, which speaks of real actions, indicates that it is an exception to the rule in the previous article.

That an action for foreclosure of mortgage over real property prescribes in ten years is in fact settled. In Buhat, et al. v. Besana, etc., et al.[58] where an action was instituted on December 6, 1952 for the foreclosure of mortgage over real property to secure an obligation payable on or before May 31, 1930, this Court affirmed the dismissal of the action by the then Court of First Instance as the action was filed more than ten years from May 31, 1930 or some 22 years after the obligation had become due and demandable.

WHEREFORE, the petition is GRANTED. The assailed Court of Appeals decision dated February 23, 2004 and Resolution dated May 25, 2004 are REVERSED and SET ASIDE. The Decision dated August 9, 2002 of the Regional Trial Court of Gapan, Nueva Ecija, Branch 34, which had become final and executory, stands.

SO ORDERED.

11 PNB vs CRUZ

G.R. No. 80593 December 18, 1989

PHILIPPINE NATIONAL BANK, petitioner, vs. TERESITA CRUZ, JOSE AGRIPINO, BERNARDO BAUZON, LUCRECIA BILBAO, MA. LUISA CABRERA, FRANCIS BAACLO GUADALUPE CAMACHO, LUZ DE LEON, MIKE VILLAVERDE, NEPOMUCENO MEDINA, EDGARDO MENDOZA, JENNIFER VELEZ, AMELIA MEDINA, EDUARDO ESPEJO and RICARDO BATTO respondents.

GANCAYCO, J.:

The focus of the instant petition for certiorari is the application of Article 110 of the Labor Code. The said article provides that workers shall enjoy first preference with regard to wages due them in cases of bankruptcy or liquidation of an employer's business.

The antecedent facts of the case are as follows:

Sometime in 1980 Aggregate Mining Exponents (AMEX) laid-off about seventy percent (70%) of its employees because it was experiencing business reverses. The retained employees constituting thirty percent (30%) of the work force however, were not paid their wages. This non-payment of salaries went on until July 1982 when AMEX completely ceased operations and instead entered into an operating agreement with T.M. San Andres Development Corporation whereby the latter would be leasing the equipment and machineries of AMEX.

The unpaid employees sought redress from the Labor Arbiter 1 who, on August 27,1986 rendered a decision finding their claim valid and meritorious. The dispositive part of the said decision, reads:

WHEREFORE, finding the claims of complainants for payment of unpaid wages and separation pay to be valid and meritorious, respondents Aggregate Mining Exponent and its president Luis Tirso Revilla should, as they are hereby ordered to pay the same to said complainants in the following amounts:

Employees Yrs. of Service Rate Separation Pay Backwages

1. Jose Agripino 8 P1,300.00 P5,200.00 P6,174.96

2.Bernardo Bauzon 9 1,900.00 8,550.00 11,712.85

3. Lucresia Bilbao 7 2,300.00 8,050.00 19,247.00

4. Teresita S. Cruz 12 2,700.00 16,200.00 23,485.70

5. Ma. Luisa Cabrera 3 1,800.00 2,700.00 5,004.35

6. Francis Baaclo 7 3,500.00 12,550.00 32,986.90

7. Guadalupe Camacho 6 1,300.00 3,900.00 3,227.15

8. Luz de Leon 5 1,300.00 3,250.00 3,110.85

9. Mike Villaverde 6 1,500.00 4,500.00 4,793.80

10. Nepomuceno Medina 5 1,200.00 3,000.00 4,287.10

11. Edgardo Mendoza 4 920.00 1,840.00 832.10

12. Jennifer Velez 2 740.00 740.00 4,287.66

13. Amelia Medina 2 740.00 740.00 6,822.81

14. Eduardo Espejo 4 970.00 1,940.00 234.10

15. Ricardo Batto 7 3,000.00 10,500.00 9,874.70

TOTAL 83,360.00 136,092.03

in the total amount of P219,452.03. To properly effectuate the payment of the same, the necessary arrangement should be made between respondents Amex and T.M. San Andres Development Corp. and Philippine National Bank (PNB) on their respective role and participation herein. For should the principal respondent be unable to satisfy these Awards, the same can be satisfied from the proceeds or fruits of its machineries and equipment being operated by respondent T.M. San Andres Dev. Corp. either by operating agreement with respondent Amex or thru lease of the same from PNB.

12 PNB vs CRUZ

To obviate any further differences between complainants and their counsel to the latter's attorney's fees which seems to be the cause of their earlier misunderstanding, as can be gleaned from the Charging Lien filed by said counsel, respondents are, moreover, ordered to segregate and pay the same directly to said counsel, the amount of which is to be computed pursuant to their agreement on July 14, 1983 (Annex A of Position to Enter Attorney's Charging Lien in the Record of the Case). 2

AMEX and its President, Tirso Revilla did not appeal from this decision. But PNB, in its capacity as mortgagee-creditor of AMEX interposed an appeal with the respondent Commission, not being satisfied with the outcome of the case. The appeal was primarily based on the allegation that the workers' lien covers unpaid wages only and not the termination or severance pay which the workers likewise claimed they were entitled to. In a resolution 3dated October 27, 1987, the National Labor Relations Commission affirmed the decision appealed from. Hence the instant petition filed by the petitioner bank based on the following grounds:

I. ARTICLE 110 OF THE LABOR CODE MUST BE READ IN RELATION TO ARTICLES 2241, 2242, 2243, 2244 AND 2245 OF THE CIVIL CODE CONCERNING THE CLASSIFICATION, CONCURRENCE AND PREFERENCE OF CREDITS.

II. ARTICLE 110 OF THE LABOR CODE DOES NOT PURPORT TO CREATE A LIEN IN FAVOR OF WORKERS OR EMPLOYEES FOR UNPAID WAGES EITHER UPON ALL OF THE PROPERTIES OR UPON ANY PARTICULAR PROPERTY OWNED BY THEIR EMPLOYER. 4

The petition is devoid of merit.

At the outset, petitioner PNB did not question the validity of the workers' claim for unpaid wages with respect to the mortgaged properties of AMEX, provided that the same be limited to the unpaid wages, and to the exclusion of termination pay. In the instant petition however, PNB starts off with the question of whether or not the workers' lien take precedence over any other claim considering that this Court has ruled otherwise in Republic vs. Peralta. 5

This Court cannot allow the petitioner to alter its stance at this stage inasmuch as it is deemed to have acquiesced in the decision of the labor arbiter concerning payment of unpaid wages. The records reveal that the petitioner failed to question the same on appeal. Hence, it is now barred from claiming that the workers' lien applies only to the products of their labor and not to other properties of the employer which are encumbered by mortgage contracts or otherwise.

Notwithstanding the foregoing, an attempt on the part of the petitioner to seek relief from that portion of the decision would still be in vain.

Article 110 of the Labor Code provides that:

Art. 110. Worker preference in case of bankruptcy. In the event of bankcruptcy or liquidation of an employer's business - his workers shall enjoy first preference as regards their unpaid wages and other monetary claims, any provision of law to the contrary notwithstanding. Such unpaid wages and monetary claims, shall be paid in full before claims of the government and other creditors may be paid. 6

This Court must uphold the preference accorded to the private respondents in view of the provisions of Article 110 of the Labor Code which are clear and which admit of no other interpretation. The phrase "any provision of law to the contrary notwithstanding" indicates that such preference shall prevail despite the order set forth in Articles 2241 to 2245 of the Civil Code. 6-a No exceptions were provided under the said article, henceforth, none shall be considered. Furthermore, the Labor Code was signed into Law decades after the Civil Code took effect.

In Herman vs. Radio Corporation of the Philippines, 7 this Court declared that whenever two statutes of different dates and of contrary tenor are of equal theoretical application to a particular case, the statute of later date must prevail being a later expression of legislative will. Applying the aforecited case in the instant petition, the Civil Code provisions cited by the petitioner must yield to Article 110 of the Labor Code.

Moreover, Our pronouncement in A. C. Ransom Labor Union-CCLU vs. NLRC, 8 reinforces the above-mentioned interpretation where this Court, speaking through Associate Justice Melencio-Herrera, explicitly stated that "(t)he worker preference applies even if the employer's properties are encumbered by means of a mortgage contract ... So that, when (the) machinery and equipment of RANSOM were sold to Revelations Manufacturing Corporation for P2M in 1975, the right of the 22 laborers to be paid from the proceeds should have been recognized ... " 9

Reliance by the petitioners on Republic vs. Peralta is without basis. The said case involved a question of workers' preference as against the tax claims of the State. In the said case the Court held that the State must prevail in that instance since "it has been frequently said that taxes are the very lifeblood of government. The effective collection of taxes is a task of highest importance for the sovereign. It is critical indeed for its own survival ." 10

Nevertheless, under Article 110 of the Labor Code as amended, the unpaid wages and other monetary claims of workers should be paid in full before the claims of the Government and other creditors. Thus not even tax claims could have preference over the workers' claim.

13 PNB vs CRUZ

Consistent with the ruling of this Court in Volkschel Labor Union vs. Bureau of Labor Relations, 11 this court adopts the doctrine that "(i)n the implementation and interpretation of the provisions of the Labor Code and its implementing regulations, the workingman's welfare should be the primordial and paramount consideration." 12 Bearing this in mind, this Court must reiterate the dictum laid down in A.C. Ransom that the conflict between Article 110 of the Labor Code and Article 2241 to 2245 of the Civil Code must be resolved in favor of the former. A contrary ruling would defeat the purpose for which Article 110 was intended; that is, for the protection of the working class, pursuant to the never-ending quest for social justice.

Petitioner next advances the theory that "even if the worker's lien applies in the instant case, the same should cover only unpaid wages excluding termination or severance pay. 13 To support this contention, petitioner cites Section 7, Rule 1, Book VI of the Rules and Regulations implementing the Labor Code which provides that:

The just causes for terminating the services of an employee shall be those provided under article 283 of the Code. The separation from work of an employee for a just cause does not entitle him to termination pay provided in the Code, emphasis supplied)

Based on that premise, petitioner contends that the claim for termination pay should not be enforced against AMEX properties mortgaged to petitioner PNB because Article 110 of the Labor Code refers only to "wages due them for services rendered during the period prior to bankcruptcy or liquidation." 14 Citing serious financial losses as the basis for the termination of the private respondents, petitioner alleges that the employees are not entitled to the termination pay which they claim.

This contention is, again, bereft of merit.

The respondent Commission noted that "AMEX failed to adduce convincing evidence to prove that the financial reverses were indeed serious." 15 After a careful study of the records of the case, this Court finds no reason to alter the findings of the respondent Commission.

In Garcia vs. National Labor Relations Commission , 16 it was held that "it is essentially required that the alleged losses in business operations must be proved. " 17 This policy was adopted to obviate the possibility of an employer fabricating business reverses in order to ease out employees for no apparent reason. Hence, no departure shall be made by this Court from the ruling in Philippine Commercial and Industrial Bank vs. National Mines and Allied Workers Union (NAMAWU-MIF)18 where it was categorically stated that the term "wages" includes not only remunerations or earnings payable by an employer for services rendered or to be rendered, but also covers all benefits of the employees under a Collective Bargaining Agreement like severance pay, educational allowance, accrued vacation leave earned but not enjoyed, as well as workmen's compensation awards and unpaid salaries for services rendered. All of these benefits fall under the term "wages" which enjoy first preference over all other claims against the employer. 19

Furthermore, in Peralta, this Court held that for purposes of the application of Article 110, "termination pay is reasonably regarded as forming part of the remuneration or other money benefits accruing to employees or workers by reason of their having previously rendered services..." 20 Hence, separation pay must be considered as part of remuneration for services rendered or to be rendered.

Indeed Article 110 of the Labor Code, as amended, aforecited, now provides that the workers' preference covers not only unpaid wages but also other monetary claims.

The respondent Commission was, therefore, not in error when it awarded the termination pay claimed by the private respondents. As far as the latter are concerned, the termination pay which they so rightfully claim is an additional remuneration for having rendered services to their employer for a certain period of time. Noteworthy also is the relationship between termination pay and services rendered by an employee, that in computing the amount to be given to an employee as termination pay, the length of service of such employee is taken into consideration such that the former must be considered as part and parcel of wages. Under these circumstances then, this Court holds that the termination or severance pay awarded by the respondent Commission to the private respondents is proper and should be sustained.

Lastly, it must be noted that the amount claimed by petitioner PNB for the satisfaction of the obligations of AMEX is relatively insubstantial and is not significant enough as to drain its coffers. By contrast, that same amount could mean subsistence or starvation for the workingman. Quoting further from Philippine Commercial and Industrial Bank, this Court supports the equitable principle that "it is but humane and partakes of the divine that labor, as human beings, must be treated over and above chattels, machineries and other kinds of properties and the interests of the employer who can afford and survive the hardships of life better than their workers. Universal sense of human justice, not to speak of our specific social justice and protection to labor constitutional injunctions dictate the preferential lien that the above provision accord to labor. 21 In line with this policy, measures must be undertaken to ensure that such constitutional mandate on protection to labor is not rendered meaningless by an erroneous interpretation of the applicable laws.

WHEREFORE, premises considered, the petition is hereby DISMISSED for lack of merit. No costs.

SO ORDERED.

14 MAGTAJAS vs PRYCE

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners, vs. PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING CORPORATION,respondents.

CRUZ, J.:

There was instant opposition when PAGCOR announced the opening of a casino in Cagayan de Oro City. Civic organizations angrily denounced the project. The religious elements echoed the objection and so did the women's groups and the youth. Demonstrations were led by the mayor and the city legislators. The media trumpeted the protest, describing the casino as an affront to the welfare of the city.

The trouble arose when in 1992, flush with its tremendous success in several cities, PAGCOR decided to expand its operations to Cagayan de Oro City. To this end, it leased a portion of a building belonging to Pryce Properties Corporation, Inc., one of the herein private respondents, renovated and equipped the same, and prepared to inaugurate its casino there during the Christmas season.

The reaction of the Sangguniang Panlungsod of Cagayan de Oro City was swift and hostile. On December 7, 1992, it enacted Ordinance No. 3353 reading as follows:

ORDINANCE NO. 3353

AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND CANCELLING EXISTING BUSINESS PERMIT TO ANY ESTABLISHMENT FOR THE USING AND ALLOWING TO BE USED ITS PREMISES OR PORTION THEREOF FOR THE OPERATION OF CASINO.

BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in session assembled that:

Sec. 1. — That pursuant to the policy of the city banning the operation of casino within its territorial jurisdiction, no business permit shall be issued to any person, partnership or corporation for the operation of casino within the city limits.

Sec. 2. — That it shall be a violation of existing business permit by any persons, partnership or corporation to use its business establishment or portion thereof, or allow the use thereof by others for casino operation and other gambling activities.

Sec. 3. — PENALTIES. — Any violation of such existing business permit as defined in the preceding section shall suffer the following penalties, to wit:

a) Suspension of the business permit for sixty (60) days for the first offense and a fine of P1,000.00/day

b) Suspension of the business permit for Six (6) months for the second offense, and a fine of P3,000.00/day

c) Permanent revocation of the business permit and imprisonment of One (1) year, for the third and subsequent offenses.

Sec. 4. — This Ordinance shall take effect ten (10) days from publication thereof.

Nor was this all. On January 4, 1993, it adopted a sterner Ordinance No. 3375-93 reading as follows:

ORDINANCE NO. 3375-93

AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING PENALTY FOR VIOLATION THEREFOR.

WHEREAS, the City Council established a policy as early as 1990 against CASINO under its Resolution No. 2295;

WHEREAS, on October 14, 1992, the City Council passed another Resolution No. 2673, reiterating its policy against the establishment of CASINO;

WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353, prohibiting the issuance of Business Permit and to cancel existing Business Permit to any establishment for the using and allowing to be used its premises or portion thereof for the operation of CASINO;

15 MAGTAJAS vs PRYCE

WHEREAS, under Art. 3, section 458, No. (4), sub paragraph VI of the Local Government Code of 1991 (Rep. Act 7160) and under Art. 99, No. (4), Paragraph VI of the implementing rules of the Local Government Code, the City Council as the Legislative Body shall enact measure to suppress any activity inimical to public morals and general welfare of the people and/or regulate or prohibit such activity pertaining to amusement or entertainment in order to protect social and moral welfare of the community;

NOW THEREFORE,

BE IT ORDAINED by the City Council in session duly assembled that:

Sec. 1. — The operation of gambling CASINO in the City of Cagayan de Oro is hereby prohibited.

Sec. 2. — Any violation of this Ordinance shall be subject to the following penalties:

a) Administrative fine of P5,000.00 shall be imposed against the proprietor, partnership or corporation undertaking the operation, conduct, maintenance of gambling CASINO in the City and closure thereof;

b) Imprisonment of not less than six (6) months nor more than one (1) year or a fine in the amount of P5,000.00 or both at the discretion of the court against the manager, supervisor, and/or any person responsible in the establishment, conduct and maintenance of gambling CASINO.

Sec. 3. — This Ordinance shall take effect ten (10) days after its publication in a local newspaper of general circulation.

Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their enforcement. 1 Reconsideration of this decision was denied on July 13, 1993. 2

Cagayan de Oro City and its mayor are now before us in this petition for review under Rule 45 of the Rules of Court. 3 They aver that the respondent Court of Appeals erred in holding that:

1. Under existing laws, the Sangguniang Panlungsod of the City of Cagayan de Oro does not have the power and authority to prohibit the establishment and operation of a PAGCOR gambling casino within the City's territorial limits.

2. The phrase "gambling and other prohibited games of chance" found in Sec. 458, par. (a), sub-par. (1) — (v) of R.A. 7160 could only mean "illegal gambling."

3. The questioned Ordinances in effect annul P.D. 1869 and are therefore invalid on that point.

4. The questioned Ordinances are discriminatory to casino and partial to cockfighting and are therefore invalid on that point.

5. The questioned Ordinances are not reasonable, not consonant with the general powers and purposes of the instrumentality concerned and inconsistent with the laws or policy of the State.

6. It had no option but to follow the ruling in the case of Basco, et al. v. PAGCOR, G.R. No. 91649, May 14, 1991, 197 SCRA 53 in disposing of the issues presented in this present case.

PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines. In Basco v. Philippine Amusements and Gaming Corporation, 4 this Court sustained the constitutionality of the decree and even cited the benefits of the entity to the national economy as the third highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.

Cagayan de Oro City, like other local political subdivisions, is empowered to enact ordinances for the purposes indicated in the Local Government Code. It is expressly vested with the police power under what is known as the General Welfare Clause now embodied in Section 16 as follows:

Sec. 16. — General Welfare. — Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary, appropriate, or incidental for its efficient and effective governance, and those which are essential to the promotion of the general welfare. Within their respective territorial jurisdictions, local government units shall ensure and support, among other things, the preservation and enrichment of culture, promote health and safety, enhance the right of the people to a balanced ecology, encourage and support the development of appropriate and self-reliant scientific and technological capabilities,

16 MAGTAJAS vs PRYCE

improve public morals, enhance economic prosperity and social justice, promote full employment among their residents, maintain peace and order, and preserve the comfort and convenience of their inhabitants.

In addition, Section 458 of the said Code specifically declares that:

Sec. 458. — Powers, Duties, Functions and Compensation. — (a) The Sangguniang Panlungsod, as the legislative body of the city, shall enact ordinances, approve resolutions and appropriate funds for the general welfare of the city and its inhabitants pursuant to Section 16 of this Code and in the proper exercise of the corporate powers of the city as provided for under Section 22 of this Code, and shall:

(1) Approve ordinances and pass resolutions necessary for an efficient and effective city government, and in this connection, shall:

xxx xxx xxx

(v) Enact ordinances intended to prevent, suppress and impose appropriate penalties for habitual drunkenness in public places, vagrancy, mendicancy, prostitution, establishment and maintenance of houses of ill repute,gambling and other prohibited games of chance, fraudulent devices and ways to obtain money or property, drug addiction, maintenance of drug dens, drug pushing, juvenile delinquency, the printing, distribution or exhibition of obscene or pornographic materials or publications, and such other activities inimical to the welfare and morals of the inhabitants of the city;

This section also authorizes the local government units to regulate properties and businesses within their territorial limits in the interest of the general welfare. 5

The petitioners argue that by virtue of these provisions, the Sangguniang Panlungsod may prohibit the operation of casinos because they involve games of chance, which are detrimental to the people. Gambling is not allowed by general law and even by the Constitution itself. The legislative power conferred upon local government units may be exercised over all kinds of gambling and not only over "illegal gambling" as the respondents erroneously argue. Even if the operation of casinos may have been permitted under P.D. 1869, the government of Cagayan de Oro City has the authority to prohibit them within its territory pursuant to the authority entrusted to it by the Local Government Code.

It is submitted that this interpretation is consonant with the policy of local autonomy as mandated in Article II, Section 25, and Article X of the Constitution, as well as various other provisions therein seeking to strengthen the character of the nation. In giving the local government units the power to prevent or suppress gambling and other social problems, the Local Government Code has recognized the competence of such communities to determine and adopt the measures best expected to promote the general welfare of their inhabitants in line with the policies of the State.

The petitioners also stress that when the Code expressly authorized the local government units to prevent and suppress gambling and other prohibited games of chance, like craps, baccarat, blackjack and roulette, it meant allforms of gambling without distinction. Ubi lex non distinguit, nec nos distinguere debemos. 6 Otherwise, it would have expressly excluded from the scope of their power casinos and other forms of gambling authorized by special law, as it could have easily done. The fact that it did not do so simply means that the local government units are permitted to prohibit all kinds of gambling within their territories, including the operation of casinos.

The adoption of the Local Government Code, it is pointed out, had the effect of modifying the charter of the PAGCOR. The Code is not only a later enactment than P.D. 1869 and so is deemed to prevail in case of inconsistencies between them. More than this, the powers of the PAGCOR under the decree are expressly discontinued by the Code insofar as they do not conform to its philosophy and provisions, pursuant to Par. (f) of its repealing clause reading as follows:

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly.

It is also maintained that assuming there is doubt regarding the effect of the Local Government Code on P.D. 1869, the doubt must be resolved in favor of the petitioners, in accordance with the direction in the Code calling for its liberal interpretation in favor of the local government units. Section 5 of the Code specifically provides:

Sec. 5. Rules of Interpretation. — In the interpretation of the provisions of this Code, the following rules shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted in its favor, and in case of doubt, any question thereon shall be resolved in favor of devolution of powers and of the lower local government

17 MAGTAJAS vs PRYCE

unit. Any fair and reasonable doubt as to the existence of the power shall be interpreted in favor of the local government unit concerned;

xxx xxx xxx

(c) The general welfare provisions in this Code shall be liberally interpreted to give more powers to local government units in accelerating economic development and upgrading the quality of life for the people in the community; . . . (Emphasis supplied.)

Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the Constitution and several decisions of this Court expressive of the general and official disapprobation of the vice. They invoke the State policies on the family and the proper upbringing of the youth and, as might be expected, call attention to the old case of U.S. v. Salaveria, 7 which sustained a municipal ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling. They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in creating PAGCOR and authorizing it to operate casinos "on land and sea within the territorial jurisdiction of the Philippines."

This is the opportune time to stress an important point.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally considered inimical to the interests of the people, there is nothing in the Constitution categorically proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its own wisdom, which this Court has no authority to review, much less reverse. Well has it been said that courts do not sit to resolve the merits of conflicting theories. 8 That is the prerogative of the political departments. It is settled that questions regarding the wisdom, morality, or practicibility of statutes are not addressed to the judiciary but may be resolved only by the legislative and executive departments, to which the function belongs in our scheme of government. That function is exclusive. Whichever way these branches decide, they are answerable only to their own conscience and the constituents who will ultimately judge their acts, and not to the courts of justice.

The only question we can and shall resolve in this petition is the validity of Ordinance No. 3355 and Ordinance No. 3375-93 as enacted by the Sangguniang Panlungsod of Cagayan de Oro City. And we shall do so only by the criteria laid down by law and not by our own convictions on the propriety of gambling.

The tests of a valid ordinance are well established. A long line of decisions 9 has held that to be valid, an ordinance must conform to the following substantive requirements:

1) It must not contravene the constitution or any statute.

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

5) It must be general and consistent with public policy.

6) It must not be unreasonable.

We begin by observing that under Sec. 458 of the Local Government Code, local government units are authorized to prevent or suppress, among others, "gambling and other prohibited games of chance." Obviously, this provision excludes games of chance which are not prohibited but are in fact permitted by law. The petitioners are less than accurate in claiming that the Code could have excluded such games of chance but did not. In fact it does. The language of the section is clear and unmistakable. Under the rule of noscitur a sociis, a word or phrase should be interpreted in relation to, or given the same meaning of, words with which it is associated. Accordingly, we conclude that since the word "gambling" is associated with "and other prohibited games of chance," the word should be read as referring to only illegal gambling which, like the other prohibited games of chance, must be prevented or suppressed.

We could stop here as this interpretation should settle the problem quite conclusively. But we will not. The vigorous efforts of the petitioners on behalf of the inhabitants of Cagayan de Oro City, and the earnestness of their advocacy, deserve more than short shrift from this Court.

The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public policy embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it to operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this misgiving. They deny that it is the ordinances that have changed P.D. 1869 for an ordinance admittedly cannot prevail against a statute. Their theory is that the change has been made by the Local Government Code itself, which was also

18 MAGTAJAS vs PRYCE

enacted by the national lawmaking authority. In their view, the decree has been, not really repealed by the Code, but merely "modified pro tanto" in the sense that PAGCOR cannot now operate a casino over the objection of the local government unit concerned. This modification of P.D. 1869 by the Local Government Code is permissible because one law can change or repeal another law.

It seems to us that the petitioners are playing with words. While insisting that the decree has only been "modifiedpro tanto," they are actually arguing that it is already dead, repealed and useless for all intents and purposes because the Code has shorn PAGCOR of all power to centralize and regulate casinos. Strictly speaking, its operations may now be not only prohibited by the local government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the Code if the word "shall" as used therein is to be given its accepted meaning. Local government units have now no choice but to prevent and suppress gambling, which in the petitioners' view includes both legal and illegal gambling. Under this construction, PAGCOR will have no more games of chance to regulate or centralize as they must all be prohibited by the local government units pursuant to the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot continue to exist except only as a toothless tiger or a white elephant and will no longer be able to exercise its powers as a prime source of government revenue through the operation of casinos.

It is noteworthy that the petitioners have cited only Par. (f) of the repealing clause, conveniently discarding the rest of the provision which painstakingly mentions the specific laws or the parts thereof which are repealed (or modified) by the Code. Significantly, P.D. 1869 is not one of them. A reading of the entire repealing clause, which is reproduced below, will disclose the omission:

Sec. 534. Repealing Clause. — (a) Batas Pambansa Blg. 337, otherwise known as the "Local Government Code," Executive Order No. 112 (1987), and Executive Order No. 319 (1988) are hereby repealed.

(b) Presidential Decree Nos. 684, 1191, 1508 and such other decrees, orders, instructions, memoranda and issuances related to or concerning the barangay are hereby repealed.

(c) The provisions of Sections 2, 3, and 4 of Republic Act No. 1939 regarding hospital fund; Section 3, a (3) and b (2) of Republic Act. No. 5447 regarding the Special Education Fund; Presidential Decree No. 144 as amended by Presidential Decree Nos. 559 and 1741; Presidential Decree No. 231 as amended; Presidential Decree No. 436 as amended by Presidential Decree No. 558; and Presidential Decree Nos. 381, 436, 464, 477, 526, 632, 752, and 1136 are hereby repealed and rendered of no force and effect.

(d) Presidential Decree No. 1594 is hereby repealed insofar as it governs locally-funded projects.

(e) The following provisions are hereby repealed or amended insofar as they are inconsistent with the provisions of this Code: Sections 2, 16, and 29 of Presidential Decree No. 704; Sections 12 of Presidential Decree No. 87, as amended; Sections 52, 53, 66, 67, 68, 69, 70, 71, 72, 73, and 74 of Presidential Decree No. 463, as amended; and Section 16 of Presidential Decree No. 972, as amended, and

(f) All general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this Code are hereby repealed or modified accordingly.

Furthermore, it is a familiar rule that implied repeals are not lightly presumed in the absence of a clear and unmistakable showing of such intention. In Lichauco & Co. v. Apostol, 10 this Court explained:

The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of later date clearly reveals an intention on the part of the lawmaking power to abrogate the prior law, this intention must be given effect; but there must always be a sufficient revelation of this intention, and it has become an unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the Legislature when it appears that the two statutes, or provisions, with reference to which the question arises bear to each other the relation of general to special.

There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the benefit of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes. This would show that the PAGCOR charter has not been repealed by the Local Government Code but has in fact been improved as it were to make the entity more responsive to the fiscal problems of the government.

It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably destructive confrontation, courts must exert every effort to reconcile them, remembering that both laws deserve a becoming respect as the handiwork of a coordinate branch of the government. On the assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one and annul the other but to give effect to both by harmonizing them if possible. This is possible in the case before us. The proper resolution of the problem at hand is to hold that under the Local Government Code, local government units may (and indeed must) prevent and suppress all kinds of gambling within their territories except only those allowed by statutes like P.D. 1869. The

19 MAGTAJAS vs PRYCE

exception reserved in such laws must be read into the Code, to make both the Code and such laws equally effective and mutually complementary.

This approach would also affirm that there are indeed two kinds of gambling, to wit, the illegal and those authorized by law. Legalized gambling is not a modern concept; it is probably as old as illegal gambling, if not indeed more so. The petitioners' suggestion that the Code authorizes them to prohibit all kinds of gambling would erase the distinction between these two forms of gambling without a clear indication that this is the will of the legislature. Plausibly, following this theory, the City of Manila could, by mere ordinance, prohibit the Philippine Charity Sweepstakes Office from conducting a lottery as authorized by R.A. 1169 and B.P. 42 or stop the races at the San Lazaro Hippodrome as authorized by R.A. 309 and R.A. 983.

In light of all the above considerations, we see no way of arriving at the conclusion urged on us by the petitioners that the ordinances in question are valid. On the contrary, we find that the ordinances violate P.D. 1869, which has the character and force of a statute, as well as the public policy expressed in the decree allowing the playing of certain games of chance despite the prohibition of gambling in general.

The rationale of the requirement that the ordinances should not contravene a statute is obvious. Municipal governments are only agents of the national government. Local councils exercise only delegated legislative powers conferred on them by Congress as the national lawmaking body. The delegate cannot be superior to the principal or exercise powers higher than those of the latter. It is a heresy to suggest that the local government units can undo the acts of Congress, from which they have derived their power in the first place, and negate by mere ordinance the mandate of the statute.

Municipal corporations owe their origin to, and derive their powers and rights wholly from the legislature. It breathes into them the breath of life, without which they cannot exist. As it creates, so it may destroy. As it may destroy, it may abridge and control. Unless there is some constitutional limitation on the right, the legislature might, by a single act, and if we can suppose it capable of so great a folly and so great a wrong, sweep from existence all of the municipal corporations in the State, and the corporation could not prevent it. We know of no limitation on the right so far as to the corporation themselves are concerned. They are, so to phrase it, the mere tenants at will of the legislature. 11

This basic relationship between the national legislature and the local government units has not been enfeebled by the new provisions in the Constitution strengthening the policy of local autonomy. Without meaning to detract from that policy, we here confirm that Congress retains control of the local government units although in significantly reduced degree now than under our previous Constitutions. The power to create still includes the power to destroy. The power to grant still includes the power to withhold or recall. True, there are certain notable innovations in the Constitution, like the direct conferment on the local government units of the power to tax, 12which cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the principal of the local government units, which cannot defy its will or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their constituents and their apprehensions that the welfare of Cagayan de Oro City will be endangered by the opening of the casino. We share the view that "the hope of large or easy gain, obtained without special effort, turns the head of the workman"13 and that "habitual gambling is a cause of laziness and ruin." 14 In People v. Gorostiza, 15 we declared: "The social scourge of gambling must be stamped out. The laws against gambling must be enforced to the limit." George Washington called gambling "the child of avarice, the brother of iniquity and the father of mischief." Nevertheless, we must recognize the power of the legislature to decide, in its own wisdom, to legalize certain forms of gambling, as was done in P.D. 1869 and impliedly affirmed in the Local Government Code. That decision can be revoked by this Court only if it contravenes the Constitution as the touchstone of all official acts. We do not find such contravention here.

We hold that the power of PAGCOR to centralize and regulate all games of chance, including casinos on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D. 1869 has not been modified by the Local Government Code, which empowers the local government units to prevent or suppress only those forms of gambling prohibited by law.

Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy announced therein and are therefore ultra vires and void.

WHEREFORE, the petition is DENIED and the challenged decision of the respondent Court of Appeals is AFFIRMED, with costs against the petitioners. It is so ordered.

20 CITY OF MANILA

G.R. No. L-23052 January 29, 1968

CITY OF MANILA, petitioner, vs. GENARO N. TEOTICO and COURT OF APPEALS, respondents.

CONCEPCION, C.J.:

Appeal by certiorari from a decision of the Court of Appeals.

On January 27, 1958, at about 8:00 p.m., Genaro N. Teotico was at the corner of the Old Luneta and P. Burgos Avenue, Manila, within a "loading and unloading" zone, waiting for a jeepney to take him down town. After waiting for about five minutes, he managed to hail a jeepney that came along to a stop. As he stepped down from the curb to board the jeepney, and took a few steps, he fell inside an uncovered and unlighted catch basin or manhole on P. Burgos Avenue. Due to the fall, his head hit the rim of the manhole breaking his eyeglasses and causing broken pieces thereof to pierce his left eyelid. As blood flowed therefrom, impairing his vision, several persons came to his assistance and pulled him out of the manhole. One of them brought Teotico to the Philippine General Hospital, where his injuries were treated, after which he was taken home. In addition to the lacerated wound in his left upper eyelid, Teotico suffered contusions on the left thigh, the left upper arm, the right leg and the upper lip apart from an abrasion on the right infra-patella region. These injuries and the allergic eruption caused by anti-tetanus injections administered to him in the hospital, required further medical treatment by a private practitioner who charged therefor P1,400.00.

As a consequence of the foregoing occurrence, Teotico filed, with the Court of First Instance of Manila, a complaint — which was, subsequently, amended — for damages against the City of Manila, its mayor, city engineer, city health officer, city treasurer and chief of police. As stated in the decision of the trial court, and quoted with approval by the Court of Appeals,

At the time of the incident, plaintiff was a practicing public accountant, a businessman and a professor at the University of the East. He held responsible positions in various business firms like the Philippine Merchandising Co., the A.U. Valencia and Co., the Silver Swan Manufacturing Company and the Sincere Packing Corporation. He was also associated with several civic organizations such as the Wack Wack Golf Club, the Chamber of Commerce of the Philippines, Y's Men Club of Manila and the Knights of Rizal. As a result of the incident, plaintiff was prevented from engaging in his customary occupation for twenty days. Plaintiff has lost a daily income of about P50.00 during his incapacity to work. Because of the incident, he was subjected to humiliation and ridicule by his business associates and friends. During the period of his treatment, plaintiff was under constant fear and anxiety for the welfare of his minor children since he was their only support. Due to the filing of this case, plaintiff has obligated himself to pay his counsel the sum of P2,000.00.

On the other hand, the defense presented evidence, oral and documentary, to prove that the Storm Drain Section, Office of the City Engineer of Manila, received a report of the uncovered condition of a catchbasin at the corner of P. Burgos and Old Luneta Streets, Manila, on January 24, 1958, but the same was covered on the same day (Exhibit 4); that again the iron cover of the same catch basin was reported missing on January 30, 1958, but the said cover was replaced the next day (Exhibit 5); that the Office of the City Engineer never received any report to the effect that the catchbasin in question was not covered between January 25 and 29, 1968; that it has always been a policy of the said office, which is charged with the duty of installation, repair and care of storm drains in the City of Manila, that whenever a report is received from whatever source of the loss of a catchbasin cover, the matter is immediately attended to, either by immediately replacing the missing cover or covering the catchbasin with steel matting that because of the lucrative scrap iron business then prevailing, stealing of iron catchbasin covers was rampant; that the Office of the City Engineer has filed complaints in court resulting from theft of said iron covers; that in order to prevent such thefts, the city government has changed the position and layout of catchbasins in the City by constructing them under the sidewalks with concrete cement covers and openings on the side of the gutter; and that these changes had been undertaken by the city from time to time whenever funds were available.

After appropriate proceedings the Court of First Instance of Manila rendered the aforementioned decision sustaining the theory of the defendants and dismissing the amended complaint, without costs.

On appeal taken by plaintiff, this decision was affirmed by the Court of Appeals, except insofar as the City of Manila is concerned, which was sentenced to pay damages in the aggregate sum of P6,750.00. 1 Hence, this appeal by the City of Manila.

The first issue raised by the latter is whether the present case is governed by Section 4 of Republic Act No. 409 (Charter of the City of Manila) reading:

The city shall not be liable or held for damages or injuries to persons or property arising from the failure of the Mayor, the Municipal Board, or any other city officer, to enforce the provisions of this chapter, or any other law or ordinance, or from negligence of said Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions.

or by Article 2189 of the Civil Code of the Philippines which provides:

Provinces, cities and municipalities shall be liable for damages for the death of, or injuries suffered by, any person by reason of defective conditions of road, streets, bridges, public buildings, and other public works under their control or supervision.

Manila maintains that the former provision should prevail over the latter, because Republic Act 409, is a special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines.

21 CITY OF MANILA

The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the subject-matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for: "damages or injury to persons or property arising from the failure of" city officers "to enforce the provisions of" said Act "or any other law or ordinance, or from negligence" of the city "Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions." Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making "provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by any person by reason" — specifically — "of the defective condition of roads, streets, bridges, public buildings, and other-public works under their control or supervision." In other words, said section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to "defective streets," in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.

It is urged that the City of Manila cannot be held liable to Teotico for damages: 1) because the accident involving him took place in a national highway; and 2) because the City of Manila has not been negligent in connection therewith.

As regards the first issue, we note that it is based upon an allegation of fact not made in the answer of the City. Moreover, Teotico alleged in his complaint, as well as in his amended complaint, that his injuries were due to the defective condition of a street which is "under the supervision and control" of the City. In its answer to the amended complaint, the City, in turn, alleged that "the streets aforementioned were and have been constantly kept in good condition and regularly inspected and the storm drains and manholes thereof covered by the defendant City and the officers concerned" who "have been ever vigilant and zealous in the performance of their respective functions and duties as imposed upon them by law." Thus, the City had, in effect, admitted that P. Burgos Avenue was and is under its control and supervision.

Moreover, the assertion to the effect that said Avenue is a national highway was made, for the first time, in its motion for reconsideration of the decision of the Court of Appeals. Such assertion raised, therefore, a question of fact, which had not been put in issue in the trial court, and cannot be set up, for the first time, on appeal, much less after the rendition of the decision of the appellate court, in a motion for the reconsideration thereof.

At any rate, under Article 2189 of the Civil Code, it is not necessary for the liability therein established to attach that the defective roads or streets belong to the province, city or municipality from which responsibility is exacted. What said article requires is that the province, city or municipality have either "control or supervision" over said street or road. Even if P. Burgos Avenue were, therefore, a national highway, this circumstance would not necessarily detract from its "control or supervision" by the City of Manila, under Republic Act 409. In fact Section 18(x) thereof provides:

Sec. 18. Legislative powers. — The Municipal Board shall have the following legislative powers: x x x x x x x x x

(x) Subject to the provisions of existing law to provide for the laying out, construction and improvement, and to regulate the use of streets, avenues, alleys, sidewalks, wharves, piers, parks, cemeteries, and other public places; to provide for lighting, cleaning, and sprinkling of streets and public places; . . . to provide for the inspection of, fix the license fees for and regulate the openings in the same for the laying of gas, water, sewer and other pipes, the building and repair of tunnels, sewers, and drains, and all structures in and under the same and the erecting of poles and the stringing of wires therein; to provide for and regulate cross-works, curbs, and gutters therein, . . . to regulate traffic and sales upon the streets and other public places; to provide for the abatement of nuisances in the same and punish the authors or owners thereof; to provide for the construction and maintenance, and regulate the use, of bridges, viaducts and culverts; to prohibit and regulate ball playing, kite-flying, hoop rolling, and other amusements which may annoy persons using the streets and public places, or frighten horses or other animals; to regulate the speed of horses and other animals, motor and other vehicles, cars, and locomotives within the limits of the city; to regulate the lights used on all vehicles, cars, and locomotives; . . . to provide for and change the location, grade, and crossing of railroads, and compel any such railroad to raise or lower its tracks to conform to such provisions or changes; and to require railroad companies to fence their property, or any part thereof, to provide suitable protection against injury to persons or property, and to construct and repair ditches, drains, sewers, and culverts along and under their tracks, so that the natural drainage of the streets and adjacent property shall not be obstructed.

This authority has been neither withdrawn nor restricted by Republic Act No. 917 and Executive Order No. 113, dated May 2, 1955, upon which the City relies. Said Act governs the disposition or appropriation of the highway funds and the giving of aid to provinces, chartered cities and municipalities in the construction of roads and streets within their respective boundaries, and Executive Order No. 113 merely implements the provisions of said Republic Act No. 917, concerning the disposition and appropriation of the highway funds. Moreover, it provides that "the construction, maintenance and improvement of national primary, national secondary and national aid provincial and city roads shall be accomplished by the Highway District Engineers and Highway City Engineers under the supervision of the Commissioner of Public Highways and shall be financed from such appropriations as may be authorized by the Republic of the Philippines in annual or special appropriation Acts."

Then, again, the determination of whether or not P. Burgos Avenue is under the control or supervision of the City of Manila and whether the latter is guilty of negligence, in connection with the maintenance of said road, which were decided by the Court of Appeals in the affirmative, is one of fact, and the findings of said Court thereon are not subject to our review.

WHEREFORE, the decision appealed from should be as it is hereby affirmed, with costs against the City of Manila. It is so ordered.1äw

22 VINZONS-CHATO

LIWAYWAY VINZONS-CHATO, G.R. No. 141309 Petitioner, Present:

- versus - Ynares-Santiago, J. (Chairperson), Austria-Martinez,

Chico-Nazario, and Nachura, JJ.

FORTUNE TOBACCO CORPORATION, Promulgated: Respondent. June 19, 2007 x ---------------------------------------------------------------------------------------- x

DECISION YNARES-SANTIAGO, J.:

Petitioner assails the May 7, 1999 Decision[1] of the Court of Appeals in CA-G.R. SP No. 47167, which affirmed the September 29, 1997 Order[2] of the Regional Trial Court (RTC) of Marikina, Branch 272, in Civil Case No. 97-341-MK, denying petitioners motion to dismiss. The complaint filed by respondent sought to recover damages for the alleged violation of its constitutional rights arising from petitioners issuance of Revenue Memorandum Circular No. 37-93 (RMC 37-93), which the Court declared invalid in Commissioner of Internal Revenue v. Court of Appeals.[3]

Petitioner Liwayway Vinzons-Chato was then the Commissioner of Internal Revenue while respondent Fortune Tobacco

Corporation is an entity engaged in the manufacture of different brands of cigarettes, among which are Champion, Hope, and More cigarettes.

On June 10, 1993, the legislature enacted Republic Act No. 7654 (RA 7654), which took effect on July 3, 1993. Prior to its

effectivity, cigarette brands Champion, Hope, and More were considered local brands subjected to an ad valorem tax at the rate of 20-45%. However, on July 1, 1993, or two days before RA 7654 took effect, petitioner issued RMC 37-93 reclassifying Champion, Hope, and More as locally manufactured cigarettes bearing a foreign brand subject to the 55% ad valorem tax.[4] RMC 37-93 in effect subjected Hope, More, and Champion cigarettes to the provisions of RA 7654, specifically, to Sec. 142,[5] (c)(1) on locally manufactured cigarettes which are currently classified and taxed at 55%, and which imposes an ad valorem tax of 55% provided that the minimum tax shall not be less than Five Pesos (P5.00) per pack.[6]

On July 2, 1993, at about 5:50 p.m., BIR Deputy Commissioner Victor A. Deoferio, Jr. sent via telefax a copy of RMC 37-93 to

Fortune Tobacco but it was addressed to no one in particular. On July 15, 1993, Fortune Tobacco received, by ordinary mail, a certified xerox copy of RMC 37-93. On July 20, 1993, respondent filed a motion for reconsideration requesting the recall of RMC 37-93, but was denied in a letter dated July 30, 1993.[7] The same letter assessed respondent forad valorem tax deficiency amounting to P9,598,334.00 (computed on the basis of RMC 37-93) and demanded payment within 10 days from receipt thereof.[8] On August 3, 1993, respondent filed a petition for review with the Court of Tax Appeals (CTA), which on September 30, 1993, issued an injunction enjoining the implementation of RMC 37-93.[9] In its decision dated August 10, 1994, the CTA ruled that RMC 37-93 is defective, invalid, and unenforceable and further enjoined petitioner from collecting the deficiency tax assessment issued pursuant to RMC No. 37-93. This ruling was affirmed by the Court of Appeals, and finally by this Court in Commissioner of Internal Revenue v. Court of Appeals.[10] It was held, among others, that RMC 37-93, has fallen short of the requirements for a valid administrative issuance.

On April 10, 1997, respondent filed before the RTC a complaint[11] for damages against petitioner in her private

capacity. Respondent contended that the latter should be held liable for damages under Article 32 of the Civil Code considering that the issuance of RMC 37-93 violated its constitutional right against deprivation of property without due process of law and the right to equal protection of the laws.

Petitioner filed a motion to dismiss[12] contending that: (1) respondent has no cause of action against her because she

issued RMC 37-93 in the performance of her official function and within the scope of her authority. She claimed that she acted merely as an agent of the Republic and therefore the latter is the one responsible for her acts; (2) the complaint states no cause of action for lack of allegation of malice or bad faith; and (3) the certification against forum shopping was signed by respondents counsel in violation of the rule that it is the plaintiff or the principal party who should sign the same.

On September 29, 1997, the RTC denied petitioners motion to dismiss holding that to rule on the allegations of petitioner

would be to prematurely decide the merits of the case without allowing the parties to present evidence. It further held that the defect in the certification against forum shopping was cured by respondents submission of the corporate secretarys certificate authorizing its counsel to execute the certification against forum shopping. The dispositive portion thereof, states:

WHEREFORE, foregoing premises considered, the motion to dismiss filed by the defendant Liwayway

Vinzons-Chato and the motion to strike out and expunge from the record the said motion to dismiss filed by plaintiff Fortune Tobacco Corporation are both denied on the grounds aforecited. The defendant is ordered to file her answer to the complaint within ten (10) days from receipt of this Order.

SO ORDERED.[13]

23 VINZONS-CHATO

The case was elevated to the Court of Appeals via a petition for certiorari under Rule 65. However, same was dismissed on

the ground that under Article 32 of the Civil Code, liability may arise even if the defendant did not act with malice or bad faith. The appellate court ratiocinated that Section 38, Book I of the Administrative Code is the general law on the civil liability of public officers while Article 32 of the Civil Code is the special law that governs the instant case.Consequently, malice or bad faith need not be alleged in the complaint for damages. It also sustained the ruling of the RTC that the defect of the certification against forum shopping was cured by the submission of the corporate secretarys certificate giving authority to its counsel to execute the same.

Undaunted, petitioner filed the instant recourse contending that the suit is grounded on her acts done in the performance of her functions as a public officer, hence, it is Section 38, Book I of the Administrative Code which should be applied.Under this provision, liability will attach only when there is a clear showing of bad faith, malice, or gross negligence. She further averred that the Civil Code, specifically, Article 32 which allows recovery of damages for violation of constitutional rights, is a general law on the liability of public officers; while Section 38, Book I of the Administrative Code is a special law on the superior public officers liability, such that, if the complaint, as in the instant case, does not allege bad faith, malice, or gross negligence, the same is dismissible for failure to state a cause of action. As to the defect of the certification against forum shopping, she urged the Court to strictly construe the rules and to dismiss the complaint.

Conversely, respondent argued that Section 38 which treats in general the public officers acts from which civil liability may

arise, is a general law; while Article 32 which deals specifically with the public officers violation of constitutional rights, is a special provision which should determine whether the complaint states a cause of action or not. Citing the case of Lim v. Ponce de Leon,[14] respondent alleged that under Article 32 of the Civil Code, it is enough that there was a violation of the constitutional rights of the plaintiff and it is not required that said public officer should have acted with malice or in bad faith.Hence, it concluded that even granting that the complaint failed to allege bad faith or malice, the motion to dismiss for failure to state a cause of action should be denied inasmuch as bad faith or malice are not necessary to hold petitioner liable.

The issues for resolution are as follows:

(1) May a public officer be validly sued in his/her private capacity for acts done in connection with the

discharge of the functions of his/her office? (2) Which as between Article 32 of the Civil Code and Section 38, Book I of the Administrative Code should

govern in determining whether the instant complaint states a cause of action? (3) Should the complaint be dismissed for failure to comply with the rule on certification against forum

shopping? (4) May petitioner be held liable for damages?

On the first issue, the general rule is that a public officer is not liable for damages which a person may suffer arising from the just performance of his official duties and within the scope of his assigned tasks.[15] An officer who acts within his authority to administer the affairs of the office which he/she heads is not liable for damages that may have been caused to another, as it would virtually be a charge against the Republic, which is not amenable to judgment for monetary claims without its consent.[16] However, a public officer is by law not immune from damages in his/her personal capacity for acts done in bad faith which, being outside the scope of his authority, are no longer protected by the mantle of immunity for official actions.[17]

Specifically, under Section 38, Book I of the Administrative Code, civil liability may arise where there is bad faith, malice, or

gross negligence on the part of a superior public officer. And, under Section 39 of the same Book, civil liability may arise where the subordinate public officers act is characterized by willfulness or negligence. Thus

Sec. 38. Liability of Superior Officers. (1) A public officer shall not be civilly liable for acts done in the

performance of his official duties, unless there is a clear showing of bad faith, malice or gross negligence. x x x x Section 39. Liability of Subordinate Officers. No subordinate officer or employee shall be civilly liable for

acts done by him in good faith in the performance of his duties. However, he shall be liable for willful or negligent acts done by him which are contrary to law, morals, public policy and good customs even if he acts under orders or instructions of his superior. In addition, the Court held in Cojuangco, Jr. v. Court of Appeals,[18] that a public officer who directly or indirectly violates the

constitutional rights of another, may be validly sued for damages under Article 32 of the Civil Code even if his acts were not so tainted with malice or bad faith.

Thus, the rule in this jurisdiction is that a public officer may be validly sued in his/her private capacity for acts done in the

course of the performance of the functions of the office, where said public officer: (1) acted with malice, bad faith, or negligence; or (2) where the public officer violated a constitutional right of the plaintiff.

Anent the second issue, we hold that the complaint filed by respondent stated a cause of action and that the decisive

provision thereon is Article 32 of the Civil Code.

24 VINZONS-CHATO

A general statute is one which embraces a class of subjects or places and does not omit any subject or place naturally

belonging to such class. A special statute, as the term is generally understood, is one which relates to particular persons or things of a class or to a particular portion or section of the state only.[19]

A general law and a special law on the same subject are statutes in pari materia and should, accordingly, be read together

and harmonized, if possible, with a view to giving effect to both. The rule is that where there are two acts, one of which is special and particular and the other general which, if standing alone, would include the same matter and thus conflict with the special act, the special law must prevail since it evinces the legislative intent more clearly than that of a general statute and must not be taken as intended to affect the more particular and specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order to give its words any meaning at all.[20]

The circumstance that the special law is passed before or after the general act does not change the principle. Where the

special law is later, it will be regarded as an exception to, or a qualification of, the prior general act; and where the general act is later, the special statute will be construed as remaining an exception to its terms, unless repealed expressly or by necessary implication.[21]

Thus, in City of Manila v. Teotico,[22] the Court held that Article 2189 of the Civil Code which holds provinces, cities, and

municipalities civilly liable for death or injuries by reason of defective conditions of roads and other public works, is a special provision and should prevail over Section 4 of Republic Act No. 409, the Charter of Manila, in determining the liability for defective street conditions. Under said Charter, the city shall not be held for damages or injuries arising from the failure of the local officials to enforce the provision of the charter, law, or ordinance, or from negligence while enforcing or attempting to enforce the same. As explained by the Court:

Manila maintains that the former provision should prevail over the latter, because Republic Act 409 is a

special law, intended exclusively for the City of Manila, whereas the Civil Code is a general law, applicable to the entire Philippines.

The Court of Appeals, however, applied the Civil Code, and, we think, correctly. It is true that, insofar as its

territorial application is concerned, Republic Act No. 409 is a special law and the Civil Code a general legislation; but, as regards the subject matter of the provisions above quoted, Section 4 of Republic Act 409 establishes a general rule regulating the liability of the City of Manila for damages or injury to persons or property arising from the failure of city officers to enforce the provisions of said Act or any other law or ordinance, or from negligence of the city Mayor, Municipal Board, or other officers while enforcing or attempting to enforce said provisions. Upon the other hand, Article 2189 of the Civil Code constitutes a particular prescription making provinces, cities and municipalities . . . liable for damages for the death of, or injury suffered by, any person by reason specifically of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. In other words, said section 4 refers to liability arising from negligence, in general, regardless of the object thereof, whereas Article 2189 governs liability due to defective streets, in particular. Since the present action is based upon the alleged defective condition of a road, said Article 2189 is decisive thereon.[23] In the case of Bagatsing v. Ramirez,[24] the issue was which law should govern the publication of a tax ordinance, the City

Charter of Manila, a special act which treats ordinances in general and which requires their publication before enactment and after approval, or the Tax Code, a general law, which deals in particular with ordinances levying or imposing taxes, fees or other charges, and which demands publication only after approval. In holding that it is the Tax Code which should prevail, the Court elucidated that:

There is no question that the Revised Charter of the City of Manila is a special act since it relates only to

the City of Manila, whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone defines general law as a universal rule affecting the entire community and special law as one relating to particular persons or things of a class. And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general law. The fact that one is special and the other general creates a presumption that the special is to be considered as remaining an exception of the general, one as a general law of the land, the other as the law of a particular case. However, the rule readily yields to a situation where the special statute refers to a subject in general, which the general statute treats in particular. Th[is] exactly is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the City of Manila speaks of ordinance in general, i.e., irrespective of the nature and scope thereof, whereas, Section 43 of the Local Tax Code relates to ordinances levying or imposing taxes, fees or other charges in particular.In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless dominant, but, that dominant force loses its continuity when it approaches the realm of ordinances levying or imposing taxes, fees or other charges in particular. There, the Local Tax Code controls. Here, as always, a general provision must give way to a particular provision. Special provision governs.

Let us examine the provisions involved in the case at bar. Article 32 of the Civil Code provides: ART. 32. Any public officer or employee, or any private individual, who directly or indirectly obstructs,

defeats, violates, or in any manner impedes or impairs any of the following rights and liberties of another person shall be liable to the latter for damages:

x x x x

25 VINZONS-CHATO

(6) The right against deprivation of property without due process of law; x x x x (8) The right to the equal protection of the laws; x x x x

The rationale for its enactment was explained by Dean Bocobo of the Code Commission, as follows:

DEAN BOCOBO. Article 32, regarding individual rights, Attorney Cirilo Paredes proposes that Article 32 be

so amended as to make a public official liable for violation of another persons constitutional rights only if the public official acted maliciously or in bad faith. The Code Commission opposes this suggestion for these reasons:

The very nature of Article 32 is that the wrong may be civil or criminal. It is not necessary therefore that

there should be malice or bad faith. To make such a requisite would defeat the main purpose of Article 32 which is the effective protection of individual rights. Public officials in the past have abused their powers on the pretext of justifiable motives or good faith in the performance of their duties. Precisely, the object of the Article is to put an end to official abuse by the plea of good faith. In the United States this remedy is in the nature of a tort.

Mr. Chairman, this article is firmly one of the fundamental articles introduced in the New Civil Code to

implement democracy. There is no real democracy if a public official is abusing and we made the article so strong and so comprehensive that it concludes an abuse of individual rights even if done in good faith, that official is liable. As a matter of fact, we know that there are very few public officials who openly and definitely abuse the individual rights of the citizens. In most cases, the abuse is justified on a plea of desire to enforce the law to comply with ones duty. And so, if we should limit the scope of this article, that would practically nullify the object of the article. Precisely, the opening object of the article is to put an end to abuses which are justified by a plea of good faith, which is in most cases the plea of officials abusing individual rights.[25]

The Code Commission deemed it necessary to hold not only public officers but also private individuals civilly liable for

violation of the rights enumerated in Article 32 of the Civil Code. It is not necessary that the defendant under this Article should have acted with malice or bad faith, otherwise, it would defeat its main purpose, which is the effective protection of individual rights. It suffices that there is a violation of the constitutional right of the plaintiff.[26]

Article 32 was patterned after the tort in American law.[27] A tort is a wrong, a tortious act which has been defined as the

commission or omission of an act by one, without right, whereby another receives some injury, directly or indirectly, in person, property, or reputation.[28] There are cases in which it has been stated that civil liability in tort is determined by the conduct and not by the mental state of the tortfeasor, and there are circumstances under which the motive of the defendant has been rendered immaterial. The reason sometimes given for the rule is that otherwise, the mental attitude of the alleged wrongdoer, and not the act itself, would determine whether the act was wrongful.[29] Presence of good motive, or rather, the absence of an evil motive, does not render lawful an act which is otherwise an invasion of anothers legal right; that is, liability in tort is not precluded by the fact that defendant acted without evil intent.[30]

The clear intention therefore of the legislature was to create a distinct cause of action in the nature of tort for violation of

constitutional rights, irrespective of the motive or intent of the defendant.[31] This is a fundamental innovation in the Civil Code, and in enacting the Administrative Code pursuant to the exercise of legislative powers, then President Corazon C. Aquino, could not have intended to obliterate this constitutional protection on civil liberties.

In Aberca v. Ver,[32] it was held that with the enactment of Article 32, the principle of accountability of public officials under

the Constitution acquires added meaning and assumes a larger dimension. No longer may a superior official relax his vigilance or abdicate his duty to supervise his subordinates, secure in the thought that he does not have to answer for the transgressions committed by the latter against the constitutionally protected rights and liberties of the citizen. Part of the factors that propelled people power in February 1986 was the widely held perception that the government was callous or indifferent to, if not actually responsible for, the rampant violations of human rights. While it would certainly be too naive to expect that violators of human rights would easily be deterred by the prospect of facing damage suits, it should nonetheless be made clear in no uncertain terms that Article 32 of the Civil Code makes the persons who are directly, as well as indirectly, responsible for the transgression, joint tortfeasors.

On the other hand, Sections 38 and 39, Book I of the Administrative Code, laid down the rule on the civil liability of superior

and subordinate public officers for acts done in the performance of their duties. For both superior and subordinate public officers, the presence of bad faith, malice, and negligence are vital elements that will make them liable for damages.Note that while said provisions deal in particular with the liability of government officials, the subject thereof is general, i.e.,acts done in the performance of official duties, without specifying the action or omission that may give rise to a civil suit against the official concerned.

Contrarily, Article 32 of the Civil Code specifies in clear and unequivocal terms a particular specie of an act that may give

rise to an action for damages against a public officer, and that is, a tort for impairment of rights and liberties. Indeed, Article 32 is the special provision that deals specifically with violation of constitutional rights by public officers. All other actionable acts of public officers are governed by Sections 38 and 39 of the Administrative Code. While the Civil Code, specifically, the Chapter on Human

26 VINZONS-CHATO

Relations is a general law, Article 32 of the same Chapter is a special and specific provision that holds a public officer liable for and allows redress from a particular class of wrongful acts that may be committed by public officers. Compared thus with Section 38 of the Administrative Code, which broadly deals with civil liability arising from errors in the performance of duties, Article 32 of the Civil Code is the specific provision which must be applied in the instant case precisely filed to seek damages for violation of constitutional rights.

The complaint in the instant case was brought under Article 32 of the Civil Code. Considering that bad faith and malice are

not necessary in an action based on Article 32 of the Civil Code, the failure to specifically allege the same will not amount to failure to state a cause of action. The courts below therefore correctly denied the motion to dismiss on the ground of failure to state a cause of action, since it is enough that the complaint avers a violation of a constitutional right of the plaintiff.

Anent the issue on non-compliance with the rule against forum shopping, the subsequent submission of the secretarys

certificate authorizing the counsel to sign and execute the certification against forum shopping cured the defect of respondents complaint. Besides, the merits of the instant case justify the liberal application of the rules.[33]

WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals dated May 7, 1999

which affirmed the Order of the Regional Trial Court of Marikina, Branch 272, denying petitioners motion to dismiss, is AFFIRMED. The Presiding Judge, Regional Trial Court of Marikina, Branch 272, is hereby DIRECTED to continue with the proceedings in Civil Case No. 97-341-MK with dispatch.

With costs. SO ORDERED.

27 REMO vs SEC. OF FOREIGN AFFAIRS

MARIA VIRGINIA V. REMO, Petitioner, G.R. No. 169202, March 5, 2010 -versus- THE HONORABLE SECRETARY OF FOREIGN AFFAIRS, Respondent.

D E C I S I O N CARPIO, J.:

The Case

Before the Court is a petition for review[1] of the 27 May 2005 Decision[2] and 2 August 2005 Resolution[3] of the Court of Appeals in CA-G.R. SP No. 87710. The Court of Appeals affirmed the decision of the Office of the President, which in turn affirmed the decision of the Secretary of Foreign Affairs denying petitioners request to revert to the use of her maiden name in her replacement passport.

The Facts

Petitioner Maria Virginia V. Remo is a married Filipino citizen whose Philippine passport was then expiring on 27 October 2000. Petitioner being married to Francisco R. Rallonza, the following entries appear in her passport: Rallonza as her surname, Maria Virginia as her given name, and Remo as her middle name. Prior to the expiry of the validity of her passport, petitioner, whose marriage still subsists, applied for the renewal of her passport with the Department of Foreign Affairs (DFA) office in Chicago, Illinois, U.S.A., with a request to revert to her maiden name and surname in the replacement passport. Petitioners request having been denied, Atty. Manuel Joseph R. Bretana III, representing petitioner, wrote then Secretary of Foreign Affairs Domingo Siason expressing a similar request. On 28 August 2000, the DFA, through Assistant Secretary Belen F. Anota, denied the request, stating thus:

This has reference to your letter dated 17 August 2000 regarding one Ms. Maria Virginia V. Remo who is applying for renewal of her passport using her maiden name.

This Office is cognizant of the provision in the law that it is not obligatory for a married woman to use her husbands name. Use of maiden name is allowed in passport application only if the married name has not been used in previous application. The Implementing Rules and Regulations for Philippine Passport Act of 1996 clearly defines the conditions when a woman applicant may revert to her maiden name, that is, only in cases of annulment of marriage, divorce and death of the husband. Ms. Remos case does not meet any of these conditions.[4] (Emphasis supplied) Petitioners motion for reconsideration of the above-letter resolution was denied in a letter dated 13 October 2000.[5] On 15 November 2000, petitioner filed an appeal with the Office of the President. On 27 July 2004, the Office of the President dismissed the appeal[6] and ruled that Section 5(d) of Republic Act No. 8239 (RA 8239) or the Philippine Passport Act of 1996 offers no leeway for any other interpretation than that only in case of divorce, annulment, or declaration [of nullity] of marriage may a married woman revert to her maiden name for passport purposes. The Office of the President further held that in case of conflict between a general and special law, the latter will control the former regardless of the respective dates of passage. Since the Civil Code is a general law, it should yield to RA 8239. On 28 October 2004, the Office of the President denied the motion for reconsideration.[7] Petitioner filed with the Court of Appeals a petition for review under Rule 43 of the Rules of Civil Procedure. In its Decision of 27 May 2005, the Court of Appeals denied the petition and affirmed the ruling of the Office of the President.The dispositive portion of the Court of Appeals decision reads:

WHEREFORE, premises considered, the petition is DENIED, and the resolution dated July 27, 2004, and the order dated October 28, 2004 of the Office of the President in O.P. Case No. 001-A-9344 are hereby AFFIRMED.

SO ORDERED.[8] Petitioner moved for reconsideration which the Court of Appeals denied in its Resolution dated 2 August 2005. Hence, this petition.

The Court of Appeals Ruling

The Court of Appeals found no conflict between Article 370 of the Civil Code[9] and Section 5(d) of RA 8239.[10] The Court of Appeals held that for passport application and issuance purposes, RA 8239 limits the instances when a married woman applicant may exercise the option to revert to the use of her maiden name such as in a case of a divorce decree, annulment or declaration of nullity of marriage. Since there was no showing that petitioner's marriage to Francisco Rallonza has been annulled, declared void or a divorce decree has been granted to them, petitioner cannot simply revert to her maiden name in the replacement passport after she

28 REMO vs SEC. OF FOREIGN AFFAIRS

had adopted her husbands surname in her old passport. Hence, according to the Court of Appeals, respondent was justified in refusing the request of petitioner to revert to her maiden name in the replacement passport.

The Issue

The sole issue in this case is whether petitioner, who originally used her husbands surname in her expired passport, can revert to the use of her maiden name in the replacement passport, despite the subsistence of her marriage.

The Ruling of the Court

The petition lacks merit.

Title XIII of the Civil Code governs the use of surnames. In the case of a married woman, Article 370 of the Civil Code provides:

ART. 370. A married woman may use:

(1) HER MAIDEN FIRST NAME AND SURNAME AND ADD HER HUSBANDS SURNAME, OR (2) HER MAIDEN FIRST NAME AND HER HUSBAND'S SURNAME, OR

(3) HER HUSBANDS FULL NAME, BUT PREFIXING A WORD INDICATING THAT SHE IS HIS WIFE, SUCH AS MRS.

We agree with petitioner that the use of the word may in the above provision indicates that the use of the husbands surname by the wife is permissive rather than obligatory. This has been settled in the case of Yasin v. Honorable Judge Sharia District Court.[11] In Yasin,[12] petitioner therein filed with the Sharia District Court a Petition to resume the use of maiden name in view of the dissolution of her marriage by divorce under the Code of Muslim Personal Laws of the Philippines, and after marriage of her former husband to another woman. In ruling in favor of petitioner therein, the Court explained that:

When a woman marries a man, she need not apply and/or seek judicial authority to use her husbands name by prefixing the word Mrs. before her husbands full name or by adding her husbands surname to her maiden first name. The law grants her such right (Art. 370, Civil Code). Similarly, when the marriage ties or vinculum no longer exists as in the case of death of the husband or divorce as authorized by the Muslim Code, the widow or divorcee need not seek judicial confirmation of the change in her civil status in order to revert to her maiden name as use of her former husbands is optional and not obligatory for her (Tolentino, Civil Code, p. 725, 1983 ed.; Art. 373, Civil Code). When petitioner married her husband, she did not change her but only her civil status. Neither was she required to secure judicial authority to use the surname of her husband after the marriage as no law requires it. (Emphasis supplied)

Clearly, a married woman has an option, but not a duty, to use the surname of the husband in any of the ways provided by Article 370 of the Civil Code.[13] She is therefore allowed to use not only any of the three names provided in Article 370, but also her maiden name upon marriage. She is not prohibited from continuously using her maiden name once she is married because when a woman marries, she does not change her name but only her civil status. Further, this interpretation is in consonance with the principle that surnames indicate descent.[14] In the present case, petitioner, whose marriage is still subsisting and who opted to use her husbands surname in her old passport, requested to resume her maiden name in the replacement passport arguing that no law prohibits her from using her maiden name. Petitioner cites Yasin as the applicable precedent. However, Yasin is not squarely in point with this case. Unlike in Yasin, which involved a Muslim divorcee whose former husband is already married to another woman, petitioners marriage remains subsisting. Another point, Yasin did not involve a request to resume ones maiden name in a replacement passport, but a petition to resume ones maiden name in view of the dissolution of ones marriage.

The law governing passport issuance is RA 8239 and the applicable provision in this case is Section 5(d), which states: Sec. 5. Requirements for the Issuance of Passport. No passport shall be issued to an applicant unless the Secretary or his duly authorized representative is satisfied that the applicant is a Filipino citizen who has complied with the following requirements: x x x

(D) IN CASE OF A WOMAN WHO IS MARRIED, SEPARATED, DIVORCED OR WIDOWED OR WHOSE

MARRIAGE HAS BEEN ANNULLED OR DECLARED BY COURT AS VOID, A COPY OF THE CERTIFICATE OF MARRIAGE, COURT DECREE OF SEPARATION, DIVORCE OR ANNULMENT OR CERTIFICATE OF DEATH OF THE DECEASED SPOUSE DULY ISSUED AND AUTHENTICATED BY THE OFFICE OF THE CIVIL REGISTRAR GENERAL: PROVIDED, THAT IN CASE OF A DIVORCE DECREE, ANNULMENT OR DECLARATION OF MARRIAGE AS VOID, THE WOMAN APPLICANT MAY REVERT TO THE USE OF HER MAIDEN NAME: PROVIDED, FURTHER, THAT SUCH DIVORCE IS RECOGNIZED UNDER EXISTING LAWS OF THE PHILIPPINES; X X X (EMPHASIS SUPPLIED)

The Office of the Solicitor General (OSG), on behalf of the Secretary of Foreign Affairs, argues that the highlighted proviso in Section 5(d) of RA 8239 limits the instances when a married woman may be allowed to revert to the use of her maiden name in her passport. These instances are death of husband, divorce decree, annulment or nullity of marriage. Significantly, Section 1, Article 12 of the Implementing Rules and Regulations of RA 8239 provides:

29 REMO vs SEC. OF FOREIGN AFFAIRS

The passport can be amended only in the following cases:

A) AMENDMENT OF WOMANS NAME DUE TO MARRIAGE; B) AMENDMENT OF WOMANS NAME DUE TO DEATH OF SPOUSE, ANNULMENT OF MARRIAGE OR DIVORCE INITIATED BY A

FOREIGN SPOUSE; OR C) CHANGE OF SURNAME OF A CHILD WHO IS LEGITIMATED BY VIRTUE OF A SUBSEQUENT MARRIAGE OF HIS

PARENTS. Since petitioners marriage to her husband subsists, placing her case outside of the purview of Section 5(d) of RA 8239 (as to the instances when a married woman may revert to the use of her maiden name), she may not resume her maiden name in the replacement passport.[15] This prohibition, according to petitioner, conflicts with and, thus, operates as an implied repeal of Article 370 of the Civil Code. PETITIONER IS MISTAKEN. THE CONFLICT BETWEEN ARTICLE 370 OF THE CIVIL CODE AND SECTION 5(D) OF RA 8239 IS MORE IMAGINED THAN REAL. RA 8239, INCLUDING ITS IMPLEMENTING RULES AND REGULATIONS, DOES NOT PROHIBIT A MARRIED WOMAN FROM USING HER MAIDEN NAME IN HER PASSPORT. IN FACT, IN RECOGNITION OF THIS RIGHT, THE DFA ALLOWS A MARRIED WOMAN WHO APPLIES FOR A PASSPORT FOR THE FIRST TIME TO USE HER MAIDEN NAME. SUCH AN APPLICANT IS NOT REQUIRED TO ADOPT HER HUSBAND'S SURNAME.[16] In the case of renewal of passport, a married woman may either adopt her husbands surname or continuously use her maiden name. If she chooses to adopt her husbands surname in her new passport, the DFA additionally requires the submission of an authenticated copy of the marriage certificate. Otherwise, if she prefers to continue using her maiden name, she may still do so. The DFA will not prohibit her from continuously using her maiden name.[17]

HOWEVER, ONCE A MARRIED WOMAN OPTED TO ADOPT HER HUSBANDS SURNAME IN HER PASSPORT, SHE MAY NOT REVERT TO THE USE OF HER MAIDEN NAME, EXCEPT IN THE CASES ENUMERATED IN SECTION 5(D) OF RA 8239. THESE INSTANCES ARE: (1) DEATH OF HUSBAND, (2) DIVORCE, (3) ANNULMENT, OR (4) NULLITY OF MARRIAGE. SINCE PETITIONERS MARRIAGE TO HER HUSBAND SUBSISTS, SHE MAY NOT RESUME HER MAIDEN NAME IN THE REPLACEMENT PASSPORT. OTHERWISE STATED, A MARRIED WOMAN'S REVERSION TO THE USE OF HER MAIDEN NAME MUST BE BASED ONLY ON THE SEVERANCE OF THE MARRIAGE. EVEN ASSUMING RA 8239 CONFLICTS WITH THE CIVIL CODE, THE PROVISIONS OF RA 8239 WHICH IS A SPECIAL LAW SPECIFICALLY DEALING WITH PASSPORT ISSUANCE MUST PREVAIL OVER THE PROVISIONS OF TITLE XIII OF THE CIVIL CODE WHICH IS THE GENERAL LAW ON THE USE OF SURNAMES.A BASIC TENET IN STATUTORY CONSTRUCTION IS THAT A SPECIAL LAW PREVAILS OVER A GENERAL LAW,[18] THUS:

[I]t is a familiar rule of statutory construction that to the extent of any necessary repugnancy between a general and a special law or provision, the latter will control the former without regard to the respective dates of passage.

Moreover, petitioners theory of implied repeal must fail. Well-entrenched is the rule that an implied repeal is disfavored. T he apparently conflicting provisions of a law or two laws should be harmonized as much as possible, so that each shall be effective.[20] For a law to operate to repeal another law, the two laws must actually be inconsistent. The former must be so repugnant as to be irreconcilable with the latter act.[21] This petitioner failed to establish. The Court notes that petitioner would not have encountered any problems in the replacement passport had she opted to continuously and consistently use her maiden name from the moment she was married and from the time she first applied for a Philippine passport. However, petitioner consciously chose to use her husbands surname before, in her previous passport application, and now desires to resume her maiden name. If we allow petitioners present request, definitely nothing prevents her in the future from requesting to revert to the use of her husbands surname. Such unjustified changes in one's name andidentity in a passport, which is considered superior to all other official documents,[22] cannot be countenanced. Otherwise, undue confusion and inconsistency in the records of passport holders will arise. Thus, for passport issuance purposes, a married woman, such as petitioner, whose marriage subsists, may not change her family name at will.

THE ACQUISITION OF A PHILIPPINE PASSPORT IS A PRIVILEGE. THE LAW RECOGNIZES THE PASSPORT APPLICANTS CONSTITUTIONAL RIGHT TO TRAVEL. HOWEVER, THE STATE IS ALSO MANDATED TO PROTECT AND MAINTAIN THE INTEGRITY AND CREDIBILITY OF THE PASSPORT AND TRAVEL DOCUMENTS PROCEEDING FROM IT[23] AS A PHILIPPINE PASSPORT REMAINS AT ALL TIMES THE PROPERTY OF THE GOVERNMENT. THE HOLDER IS MERELY A POSSESSOR OF THE PASSPORT AS LONG AS IT IS VALID AND THE SAME MAY NOT BE SURRENDERED TO ANY PERSON OR ENTITY OTHER THAN THE GOVERNMENT OR ITS REPRESENTATIVE.[24]

As the OSG correctly pointed out:

[T]he issuance of passports is impressed with public interest. A passport is an official document of identity and nationality issued to a person intending to travel or sojourn in foreign countries. It is issued by the Philippine government to its citizens requesting other governments to allow its holder to pass safely and freely, and in case of need, to give him/her aid and protection. x x x

Viewed in the light of the foregoing, it is within respondents competence to regulate any amendments intended to be made therein, including the denial of unreasonable and whimsical requests for amendments such as in the instant case.[25] WHEREFORE, we DENY the petition. We AFFIRM the 27 May 2005 Decision and 2 August 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 87710.

30 PP vs SIMON

G.R. No. 93028 July 29, 1994

PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. MARTIN SIMON y SUNGA, respondent.

REGALADO, J.:

Herein accused-appellant Martin Simon y Sunga was charged on November 10, 1988 with a violation of Section 4, Article II of Republic Act No. 6425, as amended, otherwise known as the Dangerous Drugs Act of 1972, under an indictment alleging that on or about October 22, 1988, at Barangay Sto. Cristo, Guagua, Pampanga, he sold four tea bags of marijuana to a Narcotics Command (NARCOM) poseur-buyer in consideration of the sum of P40.00, which tea bags, when subjected to laboratory examination, were found positive for marijuana.

Eventually arraigned with the assistance of counsel on March 2, 1989, after his rearrest following his escape from Camp Olivas, San Fernando, Pampanga where he was temporarily detained, 2 he pleaded not guilty. He voluntarily waived his right to a pre-trial conference, 3 after which trial on the merits ensued and was duly concluded.

I The evidence on record shows that a confidential informant, later identified as a NARCOM operative, informed the police unit at Camp Olivas, San Fernando, Pampanga, of the illegal drug activities of a certain "Alyas Pusa" at Sto. Cristo, Guagua, Pampanga. Capt. Francisco Bustamante, Commanding Officer of the 3rd Narcotics Regional Unit in the camp, then formed a buy-bust team composed of Sgt. Buenaventura Lopez, Pfc. Virgilio Villaruz and Sgt. Domingo Pejoro, all members of the same unit. After securing marked money from Bustamante, the team, together with their informant, proceeded to Sto. Cristo after they had coordinated with the police authorities andbarangay officers thereof. When they reached the place, the confidential informer pointed out appellant to Lopez who consequently approached appellant and asked him if he had marijuana. Appellant answered in the affirmative and Lopez offered to buy two tea bags. Appellant then left and, upon returning shortly thereafter, handed to Lopez two marijuana tea bags and Lopez gave him the marked money amounting to P40.00 as payment. Lopez then scratched his head as a pre-arranged signal to his companions who were stationed around ten to fifteen meters away, and the team closed in on them. Thereupon, Villaruz, who was the head of the back-up team, arrested appellant. The latter was then brought by the team to the 3rd Narcotics Regional Unit at Camp Olivas on board a jeep and he was placed under custodial investigation, with Sgt. Pejoro as the investigator. 4

Pfc. Villaruz corroborated Lopez' testimony, claiming that he saw the deal that transpired between Lopez and the appellant. He also averred that he was the one who confiscated the marijuana and took the marked money from appellant. 5

Sgt. Domingo Pejoro, for his part, declared that although he was part of the buy-bust team, he was stationed farthest from the rest of the other members, that is, around two hundred meters away from his companions. He did not actually see the sale that transpired between Lopez and appellant but he saw his teammates accosting appellant after the latter's arrest. He was likewise the one who conducted the custodial investigation of appellant wherein the latter was apprised of his rights to remain silent, to information and to counsel. Appellant, however, orally waived his right to counsel. 6

Pejoro also claimed having prepared Exhibit "G", the "Receipt of Property Seized/Confiscated" which appellant signed, admitting therein the confiscation of four tea bags of marijuana dried leaves in his possession. Pejoro likewise informed the court below that, originally, what he placed on the receipt was that only one marijuana leaf was confiscated in exchange for P20.00. However, Lopez and Villaruz corrected his entry by telling him to put "two", instead of "one" and "40", instead of "20". He agreed to the correction since they were the ones who were personally and directly involved in the purchase of the marijuana and the arrest of appellant. 7

Dr. Pedro S. Calara, a medical officer at Camp Olivas, examined appellant at 5:30 p.m. of the day after the latter's apprehension, and the results were practically normal except for his relatively high blood pressure. The doctor also did not find any trace of physical injury on the person of appellant. The next day, he again examined appellant due to the latter's complaint of gastro-intestinal pain. In the course of the examination, Dr. Calara discovered that appellant has a history of peptic ulcer, which causes him to experience abdominal pain and consequently vomit blood. In the afternoon, appellant came back with the same complaint but, except for the gastro-intestinal pain, his physical condition remained normal. 8

As expected, appellant tendered an antipodal version of the attendant facts, claiming that on the day in question, at around 4:30 p.m., he was watching television with the members of his family in their house when three persons, whom he had never met before suddenly arrived. Relying on the assurance that they would just inquire about something from him at their detachment, appellant boarded a jeep with them. He was told that they were going to Camp Olivas, but he later noticed that they were taking a different route. While on board, he was told that he was a pusher so he attempted to alight from the jeep but he was handcuffed instead. When they finally reached the camp, he was ordered to sign some papers and, when he refused, he was boxed in the stomach eight or nine times by Sgt. Pejoro. He was then compelled to affix his signature and fingerprints on the documents presented to him. He denied knowledge of the P20.00 or the dried marijuana leaves, and insisted that the twenty-peso bill came from the pocket of Pejoro. Moreover, the reason why he vomited blood was because of the blows he suffered at the hands of Pejoro. He admitted having escaped from the NARCOM office but claimed that he did so since he could no longer endure the maltreatment to which he was being subjected. After escaping, he proceeded to the house of his uncle, Bienvenido Sunga, at San Matias, Guagua, reaching the

31 PP vs SIMON

place at around 6:30 or 7:30 p.m. There, he consulted a quack doctor and, later, he was accompanied by his sister to the Romana Pangan District Hospital at Floridablanca, Pampanga where he was confined for three days. 9

Appellant's brother, Norberto Simon, testified to the fact that appellant was hospitalized at Floridablanca, Pampanga after undergoing abdominal pain and vomiting of blood. He likewise confirmed that appellant had been suffering from peptic ulcer even before the latter's arrest. 10 Also, Dr. Evelyn Gomez-Aguas, a resident physician of Romana Pangan District Hospital, declared that she treated appellant for three days due to abdominal pain, but her examination revealed that the cause for this ailment was appellant's peptic ulcer. She did not see any sign of slight or serious external injury, abrasion or contusion on his body. 11

On December 4, 1989, after weighing the evidence presented, the trial court rendered judgment convicting appellant for a violation of Section 4, Article II of Republic Act No. 6425, as amended, and sentencing him to suffer the penalty of life imprisonment, to pay a fine of twenty thousand pesos and to pay the costs. The four tea bags of marijuana dried leaves were likewise ordered confiscated in favor of the Government. 12

Appellant now prays the Court to reverse the aforementioned judgment of the lower court, contending in his assignment of errors that the latter erred in (1) not upholding his defense of "frame-up", (2) not declaring Exhibit "G" (Receipt of Property Seized/Confiscated) inadmissible in evidence, and (3) convicting him of a violation of the Dangerous Drugs Act. 13

At the outset, it should be noted that while the People's real theory and evidence is to the effect the appellant actually sold only two tea bags of marijuana dried leaves, while the other two tea bags were merely confiscated subsequently from his possession, 14 the latter not being in any way connected with the sale, the information alleges that he sold and delivered four tea bags of marijuana dried leaves. 15 In view thereof, the issue presented for resolution in this appeal is merely the act of selling the two tea bags allegedly committed by appellant, and does not include the disparate and distinct issue of illegal possession of the other two tea bags which separate offense is not charged herein. 16

To sustain a conviction for selling prohibited drugs, the sale must be clearly and unmistakably established. 17 To sell means to give, whether for money or any other material consideration. 18 It must, therefore, be established beyond doubt that appellant actually sold and delivered two tea bags of marijuana dried leaves to Sgt. Lopez, who acted as the poseur-buyer, in exchange for two twenty-peso bills.

After an assiduous review and calibration of the evidence adduced by both parties, we are morally certain that appellant was caught in flagrante delicto engaging in the illegal sale of prohibited drugs. The prosecution was able to prove beyond a scintilla of doubt that appellant, on October 22, 1988, did sell two tea bags of marijuana dried leaves to Sgt. Lopez. The latter himself creditably testified as to how the sale took place and his testimony was amply corroborated by his teammates. As between the straightforward, positive and corroborated testimony of Lopez and the bare denials and negative testimony of appellant, the former undeniably deserves greater weight and is more entitled to credence.

We are aware that the practice of entrapping drug traffickers through the utilization of poseur-buyers is susceptible to mistake, harassment, extortion and abuse. 19 Nonetheless, such causes for judicial apprehension and doubt do not obtain in the case at bar. Appellant's entrapment and arrest were not effected in a haphazard way, for a surveillance was conducted by the team before the buy-bust operation was effected. 20 No ill motive was or could be attributed to them, aside from the fact that they are presumed to have regularly performed their official duty. 21 Such lack of dubious motive coupled with the presumption of regularity in the performance of official duty, as well as the findings of the trial court on the credibility of witnesses, should prevail over the self-serving and uncorroborated claim of appellant of having been framed, 22 erected as it is upon the mere shifting sands of an alibi. To top it all, appellant was caught red-handed delivering prohibited drugs, and while there was a delimited chance for him to controvert the charge, he does not appear to have plausibly done so.

When the drug seized was submitted to the Crime Laboratory Service of the then Philippine Constabulary-Integrated National Police (PC-INP) at Camp Olivas for examination, P/Cpl. Marlyn Salangad, a forensic chemist therein, 23 confirmed in her Technical Report No. NB-448-88 that the contents of the four tea bags confiscated from appellant were positive for and had a total weight of 3.8 grams of marijuana. 24 Thus, the corpus delicti of the crime had been fully proved with certainty and conclusiveness. 25

Appellant would want to make capital of the alleged inconsistencies and improbabilities in the testimonies of the prosecution witnesses. Foremost, according to him, is the matter of who really confiscated the marijuana tea bags from him since, in open court, Pejoro asserted that he had nothing to do with the confiscation of the marijuana, but in the aforementioned "Receipt of Property Seized/Confiscated," he signed it as the one who seized the same. 26

Suffice it to say that whether it was Villaruz or Pejoro who confiscated the marijuana will not really matter since such is not an element of the offense with which appellant is charged. What is unmistakably clear is that the marijuana was confiscated from the possession of appellant. Even, assuming arguendo that the prosecution committed an error on who actually seized the marijuana from appellant, such an error or discrepancy refers only to a minor matter and, as such, neither impairs the essential integrity of the prosecution evidence as a whole nor reflects on the witnesses' honesty. 27 Besides, there was clearly a mere imprecision of language since Pejoro obviously meant that he did not take part in the physical taking of the drug from the person of appellant, but he participated in the legalseizure or confiscation thereof as the investigator of their unit.

32 PP vs SIMON

Next, appellant adduces the argument that the twenty-peso bills allegedly confiscated from him were not powdered for finger-printing purposes contrary to the normal procedure in buy-bust operations. 28 This omission has been satisfactorily explained by Pfc. Virgilio Villaruz in his testimony, as follows:

Q: Is it the standard operating procedure of your unit that in conducting such operation you do not anymore provide a powder (sic) on the object so as to determine the thumbmark or identity of the persons taking hold of the object?

A: We were not able to put powder on these denominations because we are lacking that kind of material in our office since that item can be purchased only in Manila and only few are producing that, sir.

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Q: Is it not a fact that your office is within (the) P.C. Crime Laboratory, CIS, as well as the office of NICA?

A: Our office is only adjacent to those offices but we cannot make a request for that powder because they, themselves, are using that in their own work, sir. 29

The foregoing explanation aside, we agree that the failure to mark the money bills used for entrapment purposes can under no mode of rationalization be fatal to the case of the prosecution because the Dangerous Drugs Act punishes "any person who, unless authorized by law, shall sell, administer, deliver, give away to another, distribute, dispatch in transit or transport any prohibited drug, or shall act as a broker in any of such transactions."30 The dusting of said bills with phosphorescent powder is only an evidentiary technique for identification purposes, which identification can be supplied by other species of evidence.

Again, appellant contends that there was neither a relative of his nor any barangay official or civilian to witness the seizure. He decries the lack of pictures taken before, during and after his arrest. Moreover, he was not reported to or booked in the custody of any barangay official or police authorities. 31 These are absurd disputations. No law or jurisprudence requires that an arrest or seizure, to be valid, be witnessed by a relative, a barangay official or any other civilian, or be accompanied by the taking of pictures. On the contrary, the police enforcers having caught appellant inflagrante delicto, they were not only authorized but were also under the obligation to effect a warrantless arrest and seizure.

Likewise, contrary to appellant's contention, there was an arrest report prepared by the police in connection with his apprehension. Said Booking Sheet and Arrest Report 32 states, inter alia, that "suspect was arrested for selling two tea bags of suspected marijuana dried leaves and the confiscation of another two tea bags of suspected marijuana dried leaves." Below these remarks was affixed appellant's signature. In the same manner, the receipt for the seized property, hereinbefore mentioned, was signed by appellant wherein he acknowledged the confiscation of the marked bills from him. 33

However, we find and hereby declare the aforementioned exhibits inadmissible in evidence. Appellant's conformance to these documents are declarations against interest and tacit admissions of the crime charged. They were obtained in violation of his right as a person under custodial investigation for the commission of an offense, there being nothing in the records to show that he was assisted by counsel. 34 Although appellant manifested during the custodial investigation that he waived his right to counsel, the waiver was not made in writing and in the presence of counsel, 35 hence whatever incriminatory admission or confession may be extracted from him, either verbally or in writing, is not allowable in evidence. 36 Besides, the arrest report is self-serving and hearsay and can easily be concocted to implicate a suspect.

Notwithstanding the objectionability of the aforesaid exhibits, appellant cannot thereby be extricated from his predicament since his criminal participation in the illegal sale of marijuana has been sufficiently proven. The commission of the offense of illegal sale of prohibited drugs requires merely the consummation of the selling transaction 37 which happens the moment the buyer receives the drug from the seller. 38 In the present case, and in light of the preceding discussion, this sale has been ascertained beyond any peradventure of doubt.

Appellant then asseverates that it is improbable that he would sell marijuana to a total stranger. 39 We take this opportunity to once again reiterate the doctrinal rule that drug-pushing, when done on a small scale as in this case, belongs to that class of crimes that may be committed at any time and in any place. 40 It is not contrary to human experience for a drug pusher to sell to a total stranger, 41 for what matters is not an existing familiarity between the buyer and seller but their agreement and the acts constituting the sale and delivery of the marijuana leaves. 42 While there may be instances where such sale could be improbable, taking into consideration the diverse circumstances of person, time and place, as well as the incredibility of how the accused supposedly acted on that occasion, we can safely say that those exceptional particulars are not present in this case.

Finally, appellant contends that he was subjected to physical and mental torture by the arresting officers which caused him to escape from Camp Olivas the night he was placed under custody. 43 This he asserts to support his explanation as to how his signatures on the documents earlier discussed were supposedly obtained by force and coercion.

33 PP vs SIMON

The doctrine is now too well embedded in our jurisprudence that for evidence to be believed, it must not only proceed from the mouth of a credible witness but must be credible in itself such as the common experience and observation of mankind can approve as probable under the circumstances. 44 The evidence on record is bereft of any support for appellant's allegation of maltreatment. Two doctors, one for the prosecution 45 and the other for the defense, 46testified on the absence of any tell-tale sign or indication of bodily injury, abrasions or contusions on the person of appellant. What is evident is that the cause of his abdominal pain was his peptic ulcer from which he had been suffering even before his arrest. 47 His own brother even corroborated that fact, saying that appellant has had a history of bleeding peptic ulcer. 48

Furthermore, if it is true that appellant was maltreated at Camp Olivas, he had no reason whatsoever for not divulging the same to his brother who went to see him at the camp after his arrest and during his detention there.49 Significantly, he also did not even report the matter to the authorities nor file appropriate charges against the alleged malefactors despite the opportunity to do so 50 and with the legal services of counsel being available to him. Such omissions funnel down to the conclusion that appellant's story is a pure fabrication.

These, and the events earlier discussed, soundly refute his allegations that his arrest was baseless and premeditated for the NARCOM agents were determined to arrest him at all costs. 51 Premeditated or not, appellant's arrest was only the culmination, the final act needed for his isolation from society and it was providential that it came about after he was caught in the very act of illicit trade of prohibited drugs. Accordingly, this opinion could have concluded on a note of affirmance of the judgment of the trial court. However, Republic Act No. 6425, as amended, was further amended by Republic Act No. 7659 effective December 31, 1993, 52 which supervenience necessarily affects the original disposition of this case and entails additional questions of law which we shall now resolve.

II

The provisions of the aforesaid amendatory law, pertinent to the adjudication of the case at bar, are to this effect:

Sec. 13. Sections 3, 4, 5, 7, 8 and 9 of Art. II of Republic Act No. 6425, as amended, known as the Dangerous Drugs Act of 1972, are hereby amended to read as follows:

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Sec. 4. Sale, Administration, Delivery, Distribution and Transportation of Prohibited Drugs. — The penalty of reclusion perpetua to death and a fine ranging from five hundred thousand pesos to ten million pesos shall be imposed upon any person who, unless authorized by law, shall sell, administer, deliver, give away to another, distribute, dispatch in transit or transport any prohibited drug, or shall act as a broker in any of such transactions.

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Sec. 17. Section 20, Article IV of Republic Act No. 6425, as amended, known as the Dangerous Drugs Act of 1972, is hereby amended to read as follows:

Sec. 20. Application of Penalties, Confiscation and Forfeiture of the Proceeds or Instrument of the Crime. — The penalties for offenses under Sections 3, 4, 7, 8 and 9 of Article II and Sections 14, 14-A, 15 and 16 of Article III of this Act shall be applied if the dangerous drugs involved is in any of the following quantities:

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5. 750 grams or more of indian hemp or marijuana

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Otherwise, if the quantity involved is less than the foregoing quantities, the penalty shall range from prision correccional to reclusion perpetua depending upon the quantity.

1. Considering that herein appellant is being prosecuted for the sale of four tea bags of marijuana with a total weight of only 3.8 grams and, in fact, stands to be convicted for the sale of only two of those tea bags, the initial inquiry would be whether the patently favorable provisions of Republic Act No. 7659 should be given retroactive effect to entitle him to the lesser penalty provided thereunder, pursuant to Article 22 of the Revised Penal Code.

Although Republic Act No. 6425 was enacted as a special law, albeit originally amendatory and in substitution of the previous Articles 190 to 194 of the Revised Penal Code, 53 it has long been settled that by force of Article 10 of said Code the beneficient provisions of Article 22 thereof applies to and shall be given retrospective effect to crimes punished by special laws. 54 The execution

34 PP vs SIMON

in said article would not apply to those convicted of drug offenses since habitual delinquency refers to convictions for the third time or more of the crimes of serious or less serious physical injuries, robo, hurto, estafa or falsification. 55

Since, obviously, the favorable provisions of Republic Act No. 7659 could neither have then been involved nor invoked in the present case, a corollary question would be whether this court, at the present stage, can sua sponte apply the provisions of said Article 22 to reduce the penalty to be imposed on appellant. That issue has likewise been resolved in the cited case of People vs. Moran, et al., ante., thus:

. . . . The plain precept contained in article 22 of the Penal Code, declaring the retroactivity of penal laws in so far as they are favorable to persons accused of a felony, would be useless and nugatory if the courts of justice were not under obligation to fulfill such duty, irrespective of whether or not the accused has applied for it, just as would also all provisions relating to the prescription of the crime and the penalty.

If the judgment which could be affected and modified by the reduced penalties provided in Republic Act No. 7659 has already become final and executory or the accused is serving sentence thereunder, then practice, procedure and pragmatic considerations would warrant and necessitate the matter being brought to the judicial authorities for relief under a writ of habeas corpus. 56

2. Probably through oversight, an error on the matter of imposable penalties appears to have been committed in the drafting of the aforesaid law; thereby calling for and necessitating judicial reconciliation and craftsmanship.

As applied to the present case, Section 4 of Republic Act No. 6425, as now further amended, imposes the penalty of reclusion perpetua to death and a fine ranging from P500,000.00 to P10,000,000.00 upon any person who shall unlawfully sell, administer, deliver, give away, distribute, dispatch in transit or transport any prohibited drug. That penalty, according to the amendment to Section 20 of the law, shall be applied if what is involved is 750 grams or more of indian hemp or marijuana; otherwise, if the quantity involved is less, the penalty shall range from prision correccional to reclusion perpetua depending upon the quantity.

In other words, there is here an overlapping error in the provisions on the penalty of reclusion perpetua by reason of its dual imposition, that is, as the maximum of the penalty where the marijuana is less than 750 grams, and also as the minimum of the penalty where the marijuana involved is 750 grams or more. The same error has been committed with respect to the other prohibited and regulated drugs provided in said Section 20. To harmonize such conflicting provisions in order to give effect to the whole law, 57 we hereby hold that the penalty to be imposed where the quantity of the drugs involved is less than the quantities stated in the first paragraph shall range from prision correccional to reclusion temporal, and not reclusion perpetua. This is also concordant with the fundamental rule in criminal law that all doubts should be construed in a manner favorable to the accused.

3. Where, as in this case, the quantity of the dangerous drug is only 3.8 grams, hence covered by the imposable range of penalties under the second paragraph of Section 20, as now modified, the law provides that the penalty shall be taken from said range "depending upon the quantity" of the drug involved in the case. The penalty in said second paragraph constitutes a complex one composed of three distinct penalties, that is, prision correccional,prision mayor, and reclusion temporal. In such a situation, the Code provides that each one shall form a period, with the lightest of them being the minimum, the next as the medium, and the most severe as the maximum period.58

Ordinarily, and pursuant to Article 64 of the Code, the mitigating and aggravating circumstances determine which period of such complex penalty shall be imposed on the accused. The peculiarity of the second paragraph of Section 20, however, is its specific mandate, above quoted, that the penalty shall instead depend upon the quantity of the drug subject of the criminal transaction. 59 Accordingly, by way of exception to Article 77 of the Code and to subserve the purpose of Section 20 of Republic Act No. 7659, each of the aforesaid component penalties shall be considered as a principal imposable penalty depending on the quantity of the drug involved. Thereby, the modifying circumstances will not altogether be disregarded. Since each component penalty of the total complex penalty will have to be imposed separately as determined by the quantity of the drug involved, then the modifying circumstances can be used to fix the proper period of that component penalty, as shall hereafter be explained.

It would, therefore, be in line with the provisions of Section 20 in the context of our aforesaid disposition thereon that, unless there are compelling reasons for a deviation, the quantities of the drugs enumerated in its second paragraph be divided into three, with the resulting quotient, and double or treble the same, to be respectively the bases for allocating the penalty proportionately among the three aforesaid periods according to the severity thereof. Thus, if the marijuana involved is below 250 grams, the penalty to be imposed shall be prision correccional; from 250 to 499 grams, prision mayor; and 500 to 749 grams, reclusion temporal. Parenthetically, fine is imposed as a conjunctive penalty only if the penalty is reclusion perpetua to death.

Now, considering the minimal quantity of the marijuana subject of the case at bar, the penalty of prision correccional is consequently indicated but, again, another preliminary and cognate issue has first to be resolved.

4. Prision correccional has a duration of 6 months and 1 day to 6 years and, as a divisible penalty, it consists of three periods as provided in the text of and illustrated in the table provided by Article 76 of the Code. The question is whether or not in determining the penalty to be imposed, which is here to be taken from the penalty of prision correccional, the presence or absence of mitigating, aggravating or other circumstances modifying criminal liability should be taken into account.

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We are not unaware of cases in the past wherein it was held that, in imposing the penalty for offenses under special laws, the rules on mitigating or aggravating circumstances under the Revised Penal Code cannot and should not be applied. A review of such doctrines as applied in said cases, however, reveals that the reason therefor was because the special laws involved provided their own specific penalties for the offenses punished thereunder, and which penalties were not taken from or with reference to those in the Revised Penal Code. Since the penalties then provided by the special laws concerned did not provide for the minimum, medium or maximum periods, it would consequently be impossible to consider the aforestated modifying circumstances whose main function is to determine the period of the penalty in accordance with the rules in Article 64 of the Code.

This is also the rationale for the holding in previous cases that the provisions of the Code on the graduation of penalties by degrees could not be given supplementary application to special laws, since the penalties in the latter were not components of or contemplated in the scale of penalties provided by Article 71 of the former. The suppletory effect of the Revised Penal Code to special laws, as provided in Article 10 of the former, cannot be invoked where there is a legal or physical impossibility of, or a prohibition in the special law against, such supplementary application.

The situation, however, is different where although the offense is defined in and ostensibly punished under a special law, the penalty therefor is actually taken from the Revised Penal Code in its technical nomenclature and, necessarily, with its duration, correlation and legal effects under the system of penalties native to said Code. When, as in this case, the law involved speaks of prision correccional, in its technical sense under the Code, it would consequently be both illogical and absurd to posit otherwise. More on this later.

For the nonce, we hold that in the instant case the imposable penalty under Republic Act No. 6425, as amended by Republic Act No. 7659, is prision correccional, to be taken from the medium period thereof pursuant to Article 64 of the Revised Penal Code, there being no attendant mitigating or aggravating circumstance.

5. At this juncture, a clarificatory discussion of the developmental changes in the penalties imposed for offenses under special laws would be necessary.

Originally, those special laws, just as was the conventional practice in the United States but differently from the penalties provided in our Revised Penal Code and its Spanish origins, provided for one specific penalty or a range of penalties with definitive durations, such as imprisonment for one year or for one to five years but without division into periods or any technical statutory cognomen. This is the special law contemplated in and referred to at the time laws like the Indeterminate Sentence Law 61 were passed during the American regime.

Subsequently, a different pattern emerged whereby a special law would direct that an offense thereunder shall be punished under the Revised Penal Code and in the same manner provided therein. Inceptively, for instance, Commonwealth Act No. 303 62 penalizing non-payment of salaries and wages with the periodicity prescribed therein, provided:

Sec. 4. Failure of the employer to pay his employee or laborer as required by section one of this Act, shall prima facie be considered a fraud committed by such employer against his employee or laborer by means of false pretenses similar to those mentioned in article three hundred and fifteen, paragraph four, sub-paragraph two (a) of the Revised Penal Code and shall be punished in the same manner as therein provided. 63

Thereafter, special laws were enacted where the offenses defined therein were specifically punished by the penalties as technically named and understood in the Revised Penal Code. These are exemplified by Republic Act No. 1700 (Anti-Subversion Act) where the penalties ranged from arresto mayor to death; 64 Presidential Decree No. 1612 (Anti-Fencing Decree) where the penalties run from arresto mayor to prision mayor; and Presidential Decree No. 1866 (illegal possession and other prohibited acts involving firearms), the penalties wherefor may involve prision mayor, reclusion temporal, reclusion perpetua or death.

Another variant worth mentioning is Republic Act No. 6539 (Anti-Carnapping Act of 1972) where the penalty is imprisonment for not less than 14 years and 8 months and not more than 17 years and 4 months, when committed without violence or intimidation of persons or force upon things; not less than 17 years and 4 months and not more than 30 years, when committed with violence against or intimidation of any person, or force upon things; and life imprisonment to death, when the owner, driver or occupant of the carnapped vehicle is killed.

With respect to the first example, where the penalties under the special law are different from and are without reference or relation to those under the Revised Penal Code, there can be no suppletory effect of the rules for the application of penalties under said Code or by other relevant statutory provisions based on or applicable only to said rules for felonies under the Code. In this type of special law, the legislative intendment is clear.

The same exclusionary rule would apply to the last given example, Republic Act No. 6539. While it is true that the penalty of 14 years and 8 months to 17 years and 4 months is virtually equivalent to the duration of the medium period of reclusion temporal, such technical term under the Revised Penal Code is not given to that penalty for carnapping. Besides, the other penalties for carnapping attended by the qualifying circumstances stated in the law do not correspond to those in the Code. The rules on penalties in the Code, therefore, cannot suppletorily apply to Republic Act No. 6539 and special laws of the same formulation.

36 PP vs SIMON

On the other hand, the rules for the application of penalties and the correlative effects thereof under the Revised Penal Code, as well as other statutory enactments founded upon and applicable to such provisions of the Code, have suppletory effect to the penalties under the former Republic Act No. 1700 and those now provided under Presidential Decrees Nos. 1612 and 1866. While these are special laws, the fact that the penalties for offenses thereunder are those provided for in the Revised Penal code lucidly reveals the statutory intent to give the related provisions on penalties for felonies under the Code the corresponding application to said special laws, in the absence of any express or implicit proscription in these special laws. To hold otherwise would be to sanction an indefensible judicial truncation of an integrated system of penalties under the Code and its allied legislation, which could never have been the intendment of Congress.

In People vs. Macatanda, 65 a prosecution under a special law (Presidential Decree No. 533, otherwise known as the Anti-Cattle Rustling Law of 1974), it was contended by the prosecution that Article 64, paragraph 5, of the Revised Penal Code should not apply to said special law. We said therein that —

We do not agree with the Solicitor General that P.D. 533 is a special law entirely distinct from and unrelated to the Revised Penal Code. From the nature of the penalty imposed which is in terms of the classification and duration of penalties as prescribed in the Revised Penal Code, which is not for penalties as are ordinarily imposed in special laws, the intent seems clear that P.D. 533 shall be deemed as an amendment of the Revised Penal Code, with respect to the offense of theft of large cattle (Art. 310) or otherwise to be subject to applicable provisions thereof such as Article 104 of the Revised Penal Code . . . . Article 64 of the same Code should, likewise, be applicable, . . . . (Emphasis supplied.)

More particularly with regard to the suppletory effect of the rules on penalties in the Revised Penal Code to Republic Act No. 6425, in this case involving Article 63(2) of the Code, we have this more recent pronouncement:

. . . Pointing out that as provided in Article 10 the provisions of the Revised Penal Code shall be "supplementary" to special laws, this Court held that where the special law expressly grants to the court discretion in applying the penalty prescribed for the offense, there is no room for the application of the provisions of the Code . . . .

The Dangerous Drugs Act of 1972, as amended by P.D. No. 1623, contains no explicit grant of discretion to the Court in the application of the penalty prescribed by the law. In such case, the court must be guided by the rules prescribed by the Revised Penal Code concerning the application of penalties which distill the "deep legal thought and centuries of experience in the administration of criminal laws." (Emphasis ours.) 66

Under the aforestated considerations, in the case of the Dangerous Drugs Act as now amended by Republic Act No. 7659 by the incorporation and prescription therein of the technical penalties defined in and constituting integral parts of the three scales of penalties in the Code, 67 with much more reason should the provisions of said Code on the appreciation and effects of all attendant modifying circumstances apply in fixing the penalty. Likewise, the different kinds or classifications of penalties and the rules for graduating such penalties by degrees should have supplementary effect on Republic Act No. 6425, except if they would result in absurdities as will now be explained.

While not squarely in issue in this case, but because this aspect is involved in the discussion on the role of modifying circumstances, we have perforce to lay down the caveat that mitigating circumstances should be considered and applied only if they affect the periods and the degrees of the penalties within rational limits.

Prefatorily, what ordinarily are involved in the graduation and consequently determine the degree of the penalty, in accordance with the rules in Article 61 of the Code as applied to the scale of penalties in Article 71, are the stage of execution of the crime and the nature of the participation of the accused. However, under paragraph 5 of Article 64, when there are two or more ordinary mitigating circumstances and no aggravating circumstance, the penalty shall be reduced by one degree. Also, the presence of privileged mitigating circumstances, as provided in Articles 67 and 68, can reduce the penalty by one or two degrees, or even more. These provisions of Articles 64(5), 67 and 68 should not apply in toto in the determination of the proper penalty under the aforestated second paragraph of section 20 of Republic Act No. 6425, to avoid anomalous results which could not have been contemplated by the legislature.

Thus, paragraph 5 of Article 61 provides that when the law prescribes a penalty in some manner not specially provided for in the four preceding paragraphs thereof, the courts shall proceed by analogy therewith. Hence, when the penalty prescribed for the crime consists of one or two penalties to be imposed in their full extent, the penalty next lower in degree shall likewise consist of as many penalties which follow the former in the scale in Article 71. If this rule were to be applied, and since the complex penalty in this case consists of three discrete penalties in their full extent, that is, prision correccional, prision mayor and reclusion temporal, then one degree lower would be arresto menor,destierro and arresto mayor. There could, however, be no further reduction by still one or two degrees, which must each likewise consist of three penalties, since only the penalties of fine and public censure remain in the scale.

The Court rules, therefore, that while modifying circumstances may be appreciated to determine the periods of the corresponding penalties, or even reduce the penalty by degrees, in no case should such graduation of penalties reduce the imposable penalty beyond or lower than prision correccional. It is for this reason that the three component penalties in the second paragraph of

Section 20 shall each be considered as an independent principal penalty, and that the lowest penalty should in any event be prision correccional in order not to depreciate the seriousness of drug offenses. Interpretatio fienda est ut res magis valeat quam pereat.

37 PP vs SIMON

Such interpretation is to be adopted so that the law may continue to have efficacy rather than fail. A perfect judicial solution cannot be forged from an imperfect law, which impasse should now be the concern of and is accordingly addressed to Congress.

6. The final query is whether or not the Indeterminate Sentence Law is applicable to the case now before us. Apparently it does, since drug offenses are not included in nor has appellant committed any act which would put him within the exceptions to said law and the penalty to be imposed does not involve reclusion perpetua or death, provided, of course, that the penalty as ultimately resolved will exceed one year of imprisonment. 68 The more important aspect, however, is how the indeterminate sentence shall be ascertained.

It is true that Section 1 of said law, after providing for indeterminate sentence for an offense under the Revised Penal Code, states that "if the offense is punished by any other law, the court shall sentence the accused to an indeterminate sentence, the maximum term of which shall not exceed the maximum fixed by said law and the minimum shall not be less than the minimum term prescribed by the same." We hold that this quoted portion of the section indubitably refers to an offense under a special law wherein the penalty imposed was not taken from and is without reference to the Revised Penal Code, as discussed in the preceding illustrations, such that it may be said that the "offense is punished" under that law.

There can be no sensible debate that the aforequoted rule on indeterminate sentence for offenses under special laws was necessary because of the nature of the former type of penalties under said laws which were not included or contemplated in the scale of penalties in Article 71 of the Code, hence there could be no minimum "within the range of the penalty next lower to that prescribed by the Code for the offense," as is the rule for felonies therein. In the illustrative examples of penalties in special laws hereinbefore provided, this rule applied, and would still apply, only to the first and last examples. Furthermore, considering the vintage of Act No. 4103 as earlier noted, this holding is but an application and is justified under the rule of contemporanea expositio. 69

We repeat, Republic Act No. 6425, as now amended by Republic Act No. 7659, has unqualifiedly adopted the penalties under the Revised Penal Code in their technical terms, hence with their technical signification and effects. In fact, for purposes of determining the maximum of said sentence, we have applied the provisions of the amended Section 20 of said law to arrive at prision correccional and Article 64 of the Code to impose the same in the medium period. Such offense, although provided for in a special law, is now in effect punished by and under the Revised Penal Code. Correlatively, to determine the minimum, we must apply the first part of the aforesaid Section 1 which directs that "in imposing a prison sentence for an offense punished by the Revised Penal Code, or its amendments, the court shall sentence the accused to an indeterminate sentence the maximum term of which shall be that which, in view of the attending circumstances, could be properly imposed under the rules of said Code, and the minimum which shall be within the range of the penalty next lower to that prescribed by the Code for the offense." (Emphasis ours.)

A divergent pedantic application would not only be out of context but also an admission of the hornbook maxim that qui haeret in litera haeret in cortice. Fortunately, this Court has never gone only skin-deep in its construction of Act. No. 4103 by a mere literal appreciation of its provisions. Thus, with regard to the phrase in Section 2 thereof excepting from its coverage "persons convicted of offenses punished with death penalty or life imprisonment," we have held that what is considered is the penalty actually imposed and not the penalty imposable under the law, 70 and that reclusion perpetua is likewise embraced therein although what the law states is "life imprisonment".

What irresistibly emerges from the preceding disquisition, therefore, is that under the concurrence of the principles of literal interpretation, which have been rationalized by comparative decisions of this Court; of historical interpretation, as explicated by the antecedents of the law and related contemporaneous legislation; and of structural interpretation, considering the interrelation of the penalties in the Code as supplemented by Act No. 4103 in an integrated scheme of penalties, it follows that the minimum of the indeterminate sentence in this case shall be the penalty next lower to that prescribed for the offense. Thereby we shall have interpreted the seeming ambiguity in Section 1 of Act No. 4103 in such a way as to harmonize laws with laws, which is the best mode of interpretation. 71

The indeterminate Sentence Law is a legal and social measure of compassion, and should be liberally interpreted in favor of the accused. 72 The "minimum" sentence is merely a period at which, and not before, as a matter of grace and not of right, the prisoner may merely be allowed to serve the balance of his sentence outside of his confinement. 73 It does not constitute the totality of the penalty since thereafter he still has to continue serving the rest of his sentence under set conditions. That minimum is only the period when the convict's eligibility for parole may be considered. In fact, his release on parole may readily be denied if he is found unworthy thereof, or his reincarceration may be ordered on legal grounds, even if he has served the minimum sentence.

It is thus both amusing and bemusing if, in the case at bar, appellant should be begrudged the benefit of a minimum sentence within the range of arresto mayor, the penalty next lower to prision correccional which is the maximum range we have fixed through the application of Articles 61 and 71 of the Revised Penal Code. For, with fealty to the law, the court may set the minimum sentence at 6 months of arresto mayor, instead of 6 months and 1 day of prision correccional. The difference, which could thereby even involve only one day, is hardly worth the creation of an overrated tempest in the judicial teapot.

ACCORDINGLY, under all the foregoing premises, the judgment of conviction rendered by the court a quo against accused-appellant Martin Simon y Sunga is AFFIRMED, but with the MODIFICATION that he should be, as he hereby is, sentenced to serve an

indeterminate penalty of six (6) months of arresto mayor, as the minimum, to six (6) years of prision correccional, as the maximum thereof. SO ORDERED.