Common meaning rule.........................................................................................................1[G.R. No. L-8888. November 29, 1957.]........................................................................1

SONG KIAT CHOCOLATE FACTORY, plaintiff-appellant, vs. CENTRAL BANK OF THE PHILIPPINES and VICENTE GELLA, in his capacity as Treasurer of the Philippines, defendants-appellees................................................................................1

[G.R. No. 8373. October 15, 1915.]................................................................................5KUENZLE & STREIFF, plaintiff-appellee, vs. THE INSULAR COLLECTOR OF CUSTOMS, defendant-appellant.................................................................................5

[G.R. No. 115507. May 19, 1998.].................................................................................7ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO, petitioners, vs. THE PEOPLE OF THE PHILIPPINES and THE COURT OF APPEALS, respondents..................................................................................................................7

Terms with legal meaning..................................................................................................16[G.R. No. L-5872. November 29, 1954.]......................................................................16

ENRIQUE BERNARDO, ET AL., petitioners, vs. CRISOSTOMO S. BERNARDO and the COURT OF APPEALS, respondents............................................................16

[G.R. No. 131787. May 19, 1999.]...............................................................................20CHINA BANKING CORPORATION AND CBC PROPERTIES AND COMPUTER CENTER, INC., petitioners, vs. THE MEMBERS OF THE BOARD OF TRUSTEES, HOME DEVELOPMENT MUTUAL FUND (HDMF); HDMF PRESIDENT; AND THE HOME MUTUAL DEVELOPMENT FUND, respondents................................................................................................................20

Terms with multiple meaning............................................................................................32[G.R. No. L-8238. May 25, 1955.]...............................................................................32

CESAR M. CARANDANG, petitioner, vs. VICENTE SANTIAGO, in his capacity as Judge of the Court of First Instance of Manila and TOMAS VALENTON, Sr. and TOMAS VALENTON, Jr., respondents....................................................................32

[G.R. No. L-56028. July 30, 1981.]..............................................................................35NILO A. MALANYAON, petitioner-appellant, vs. HON. ESTEBAN M. LISING, as Judge of the CFI of Camarines Sur, Br. VI, and CESARIO GOLETA, as Municipal Treasurer of Bula, Camarines Sur, respondents-appellees.......................35

Common meaning rule

EN BANC

[G.R. No. L-8888. November 29, 1957.]

SONG KIAT CHOCOLATE FACTORY, plaintiff-appellant, vs. CENTRAL BANK OF THE PHILIPPINES and VICENTE GELLA, in his capacity as Treasurer of the Philippines, defendants-appellees.

Rodegelio M. Jalandoni for appellant.

Solicitor General Ambrosio Padilla and Solicitor Jose P. Alejandro for appellee, Vicente Gella.

Nat. M. Balbao and F.E. Evangelista for appellee, Central Bank of the Philippines.

SYLLABUS

1. TAXATION; FOREIGN EXCHANGE TAX; EXEMPTION OF CHOCOLATE FROM TAXATION, CONSTRUED. — The exemption from taxation provided in Section 2 of Republic Act No. 601 refers to "chocolate" as a manufactured or finished product. It does not include "cocoa beans".

2. STATUTES; INTERPRETATION OF LAWS IS FOR THE COURTS. — The interpretation of laws is for the courts. The courts are not bound by one legislator's opinion, expressed in Congressional dewbates, concerning the application of existing laws.

D E C I S I O N

BENGZON, J p:

The question in this appeal is whether cocoa beans may be considered as "chocolate" for the purposes of exemption from the foreign exchange tax imposed by Republic Act No. 601 as amended.

During the period from January 8, 1953 to October 9, 1953, the plaintiff-appellant imported sun-dried cocoa beans for which it paid the foreign exchange tax of 17 per cent totalling P74,671.04. Claiming exemption from said tax under section 2 of same Act, it sued the Central Bank that had exacted payment; and in its amended complaint it included the Treasurer of the Philippines. The suit was filed in the Manila Court of First Instance, wherein defendants submitted in due time a motion to dismiss on the grounds: first, the complaint stated no cause of action because cocoa beans were not "chocolate"; and second, it was a suit against the Government without the latter's consent.

The Hon. Gregorio S. Narvasa, Judge, sustained the motion, and dismissed the case by his order of November 19, 1954. Hence this appeal.

The lower court, appellant contends, erred in dismissing the case and in holding that the term "chocolate" does not include sun-dried cocoa beans.

SEC. 2 of the aforesaid Act provides that "the tax collected or foreign exchange used for the payment of costs transportation and/or other charges incident to importation into the Philippines of rice, flour . . . soya beans, butterfat, chocolate, malt syrup . . . shall be refunded to any importer making application therefor, upon satisfactory proof of actual importation . . .."

In support of its contention appellant quotes from dictionaries and encyclopedias interchangeably using the words "chocolate", "cacao" and "cocoa". Yet we notice that the

quotations refer to "cocoa" as chocolate nut" "chocolate bean" or "chocolate tree." And the legal exemption refers to "chocolate" — not the bean, nor the nut nor the tree. We agree with the Solicitor General and the other counsel of respondents that in common parlance the law is presumed to refer to it 1 — chocolate is a manufactured or finished product made out of cocoa beans, or "cacao" beans as they are locally known. We may take notice of the fact that grocery stores sell powdered cocoa beans as chocolate, labeled "cocoa powder", or simply "cocoa". They are, however, really chocolate; they are not cocoa beans. The manufacture of chocolate involves several processes, such as selecting and drying the cocoa beans, then roasting, grinding, sieving and blending. 2 Cocoa beans do not become chocolate unless and until they have undergone the manufacturing processes above described. The first is raw material, the other finished product.

The courts regard "chocolate" as

"Chocolate" is a preparation of roasted cacao beans without the abstraction of the butter and always contains sugar and added cacao butter. Rockwood & Co., vs. American President Lines, D.C.N.J., 68 F. Supp. 224, 226.

Chocolate is a cocoa bean roasted, cracked, shelled, crushed, ground, and molded in cakes. It contains no sugar, and is in general use in families. Sweetened chocolate is manufactured in the same way but the paste is mixed with sugar, and is used by confectioners in making chocolate confections. In re Schiling, 53 F. 81, 82, 3 C.C.A. 440.

In view of the foregoing, and having in mind the principle of strict construction of statutes exempting from taxation, 3 we are of the opinion and so hold, that the exemption for "chocolate" in the above section 2 does not include "cocoa beans". The one is raw material, the other manufactured consumer product; the latter is ready for human consumption; the former is not.

However, we cannot stop here, because in August 1954 — suit was brought in May 1954 — Congress approved Republic Act 1197 amending section 2 by substituting "cocoa beans" for "chocolate." This shows, maintains the appellant the Legislature's intention to include cocoa beans in the word "chocolate." In fact, it goes on, the Committee Chairman who reported House Bill No. 2576 which became Republic Act 1197, declared before the House:

"Mr. ROCES: Mr. SPEAKER, on line 8 page 1, after the word 'canned', strike out the words, 'fresh, frozen and' and also the words 'other beef', on line 9 and on the same line, line 9, after the word 'chocolate', insert the words '(COCOA BEANS)' in parenthesis ( ). I am proposing to insert the words '(COCOA BEANS)' in parenthesis ( ) after the word "chocolate", Mr. Speaker, in order to clarify any doubt and manifest the intention of the past Congress that the word 'chocolate' should mean 'cocoa beans.'

In reply to this, appellees point out that said chairman could not have spoken of the Congressional intention in approving Republic Act 601 because he was not a member of the Congress that passed said Act. Naturally, all he could state was his own interpretation of such piece of legislation. Courts do not usually give decisive weight to one legislator's

opinion, expressed in Congressional debates concerning the application of existing laws. 4 Yet even among the legislators taking part in the consideration of the amendatory statute (Republic Act 1197) the impression prevailed that, as the law then stood 5 chocolate candy or chocolate bar was exempted, but cocoa beans were not. Here are Senator Peralta's statements during the discussion of the same House Bill No. 2576:

"SENATOR PERALTA: I signed that conference report and I am really bound by it, but, Mr. President, a few hours ago I received some information which maybe the chairman would like to know, to the effect that we allow chocolate bar, chocolate candy to come into this country exempt from the 17 per cent tax when we do not allow cocoa beans, out of which our local manufacturers can make chocolate candy, exempted. So why do we not take off that exemption for chocolate and instead put 'cocoa beans' so as to benefit our manufacturers of chocolate candy?

xxx xxx xxx

Senator PERALTA: Yes, I agree with the chairman, only I was just wondering if the chairman, might not consider the fact that in view of the information, this seems to be inconsistent — we allow chocolate to come here exempt and not exempt cocoa beans which is used by our manufacturers in making chocolate candy.

And Senator Puyat is quoted as saying in the same connection:

"Mr. PRESIDENT, on the same page (page 1), line 9, delete "cocoa beans". The text as it came to the Senate was misleading. In the original law the exemption is for chocolate, and the version that we got from the Lower House is "(cocoa beans)" giving the impression that chocolate and cocoa beans are synonymous. Now I think this is a sort of a rider, so your committee recommends the deletion of those words." (Journal of the Senate, July 30, 1954, re H.B. No. 2576, italics ours.)

Other parts of the Congressional record quoted in the briefs would seem to show that in approving House Bill No. 2576, the Congress agreed to exempt "cocoa beans" instead of chocolate with a view to favoring local manufacturers of chocolate products. 6 A change of legislative policy, as appellees contend 7 — not a declaration or clarification of previous Congressional purpose. In fact, as indicating the Government's new policy of exempting for the first time importations of "cocoa beans," there is the President's proclamation No. 62 of September 2, 1954 issued in accordance with Republic Act No. 1197 specifying that said exemption (of cocoa beans) shall operate from and after September 3, 1954 — not before. As a general rule, it may be added, statutes operate prospectively.

Observe that appellant's cocoa beans had been imported during January-October 1953, i.e. before the exemption decree.

After the foregoing discussion, it is hardly necessary to express our approval of the lower court's opinion about plaintiff's cause of action, or the lack of it. And it becomes unnecessary to consider the other contention of defendants that this is a suit against the Government without its consent.

The order of dismissal is affirmed, with costs against appellant.

Paras, C. J., Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia and Felix, JJ., concur.

[G.R. No. 8373. October 15, 1915.]

KUENZLE & STREIFF, plaintiff-appellee, vs. THE INSULAR COLLECTOR OF CUSTOMS, defendant-appellant.

Solicitor-General Harvey, for appellant.

Hartford Beaumont, for appellee.

SYLLABUS

1. CUSTOMS ADMINISTRATIVE ACT; PROTESTS; APPOINTMENT OF AGENTS. — There is nothing in section 286 of Act No. 355, nor in Customs Administrative Circular No. 652 which requires that the agent named in said Act shall be appointed with any particular formality. In the absence of such requirement, it would seem that the principal might appoint his agent in any form which might suit his convenience or that of the agent.

D E C I S I O N

JOHNSON, J p:

From the facts it appears that the plaintiff imported certain goods, wares, and merchandise into the Philippine Islands. The Collector of Customs appraised said merchandise and imposed a duty thereon. A protest against the appraisement and valuation was presented by the plaintiff, through its alleged agent. Upon a consideration of the protest, the Insular Collector of Customs denied the same for the reason that it was not signed by the owner, importer, consignee, or agent of the merchandise, or by the duly authorized agent of either of such persons, as required by section 286 of Act No. 355 and by Customs Administrative Circular No. 652.

Against the denial of the protest, the plaintiff appealed to the Court of First Instance. Upon a consideration of the question, the Honorable Charles S. Lobingier, judge, reached the conclusion that the protest had been made by the agent of the plaintiff, in accordance with section 286 of Act No. 355 and Customs Administrative Circular No. 652, and held that the overruling of the protest was not tenable.

The facts in the present case are as follows:

First. That sometime prior to the 6th day of January, 1912, the plaintiff brought into the Philippine Islands certain merchandise.

Second. That the Collector of Customs at the port of Manila appraised said merchandise and fixed its value, for the purpose of collecting the duty thereon.

Third. That on the 6th day of January, 1912, the plaintiff, in a letter to Hartford Beaumont, requested him to file a protest in their behalf with the Collector of Customs, against the appraisement of the merchandise in question.

Fourth. That on the 17th of January, 1912, Hartford Beaumont presented a protest in the following form:

"INSULAR COLLECTOR OF CUSTOMS,

"Manila, P. I.

"SIR: I have to protest against the 5 per cent increase in value made by the appraiser on the goods covered by the entry below identified. This addition is not warranted by the law and the goods should have been passed at the invoice figures without any increase thereon.

"Respectfully submitted.

(Signed) "KUENZLE & STREIFF,

"Importer.

"Per HARTFORD BEAUMONT."

Fifth. Later, on January 25, the plaintiff wrote a letter to the Collector of Customs, which is as follows:

"SIR: We have the honor to inform you that Mr. Hartford Beaumont is authorized to sign all protests and appeals filed with the customhouse in our name.

"Very respectfully,

"KUENZLE & STREIFF, LTD.

"By PAUL HUBE, General Manager."

Upon the foregoing facts, the Collector of Customs rendered the following decision, on the 14th of March, 1912:

"This protest is denied for the reason that it is not signed by the owner, importer, consignee, or agent of the merchandise, or by the duly authorized agent of either of such persons, as required by section 286 of Act No. 355, and by Customs Administrative Circular No. 652.

"Protest No. 9066 is therefore for the foregoing reasons overruled and denied.

(Signed) "H. B. McCoY,

"Insular Collector of Customs."

From the decision of the lower court, holding that Hartford Beaumont was the agent of Kuenzle & Streiff, and had entered said protest as such agent, the Collector of Customs appealed to this court, and assigned as error that the lower court committed an error in revoking the decision of the Collector of Customs.

The only question presented is whether or not Hartford Beaumont was the agent of the plaintiff within the meaning of section 286 of Act No. 355, in relation with Customs Administrative Circular No. 652.

From the letter of January 25, above cited, by the plaintiffs to the Collector of Customs, they expressly informed the latter that Beaumont was authorized to sign all protests and appeals filed in the customhouse in their name. There is nothing in section 286 of Act No. 355, nor in Customs Administrative Circular No. 652, which requires that the agent named in said Act shall be appointed with any particular formality. In the absence of such requirement, it would seem that the principal might appoint his agent in any form which might suit his convenience or that of the agent. Circular No. 652 does require that the protest shall be signed in the name of the person, or by his duly authorized agent or broker, in accord with the power of attorney duly filed and recorded in the office of the Collector of Customs, etc. It would seem that, for the purpose of said Customs Administrative Act it would be sufficient if the appointment of the agent clearly indicates that the person so appointed is the agent, with the necessary powers. There is no suggestion in said circular that the authority of the agent should be acknowledged before a notary public. The letter of January 25, above-cited, was delivered to the Collector of Customs before his decision denying the protest upon the ground that Beaumont was not the agent of the plaintiff. Said letter would seem to have been sufficient for the appointment of Beaumont as agent, and a sufficient compliance with said Act and the administrative circular. We find no reason sufficient to justify a modification or reversal of the judgment of the lower court. The same is therefore hereby affirmed, with costs. So ordered.

Arellano, C.J., Torres, Carson and Araullo, JJ., concur.

FIRST DIVISION

[G.R. No. 115507. May 19, 1998.]

ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO, petitioners, vs. THE PEOPLE OF THE PHILIPPINES and THE COURT OF APPEALS, respondents.

Rolando P. Quimbo for petitioners.

SYNOPSIS

Petitioners were caught in possession of lumber without the legal documents as required under existing forest laws and regulations. Consequently, the petitioners were charged with violation of Section 68, Presidential Decree No. 705 (Forestry Reform Code), as amended by Executive Order No 277. After trial, the Regional Trial Court of Romblon found petitioners guilty as charged. On appeal, the Court of Appeals affirmed the judgment of the trial court. Hence, this petition. Petitioners contended that only the cutting, gathering, collecting and/or possession, without license, of timber and other forest products are prohibited under the Forestry Reform Code, as amended, and as expressly defined under Section 3(q) of PD 705, lumber is not timber or a forest product. Thus, petitioners submitted that courts should not construe lumber as timber. Moreover, petitioners claimed that said Executive Order is not applicable to them. aITECA

In affirming the decision of the Court of Appeals, the Supreme Court reiterated that the gathering, collection and/or possession, without license, of lumber, which is considered timber or forest product, are prohibited and penalized under the Forestry Reform Code, as amended. The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in the case of Mustang Lumber Inc. vs. Court of Appeals (257 SCRA 430), in which the Supreme Court expressly ruled that "lumber is included in the term timber." Consistent with Mustang, the Court found no error in the holding of both lower courts. Moreover, the Court found no merit in petitioners' insistence that EO 277 is not applicable to them. Petitioners' unlawful possession of the subject lumber occurred in October 1989 and EO 277 which specifically included possession of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them.

SYLLABUS

1. POLITICAL LAW; STATUTES; CONSTITUTIONALITY; NULLIFICATION OF PROVISION NOT JUSTIFIED IN THE ABSENCE OF UNEQUIVOCAL BREACH OF THE CONSTITUTION; JUDICIAL INQUIRY NOT PROPER WHEN IT DOES NOT APPEAR THAT A PARTY IS ASSERTING A RIGHT FOR WHICH HE IS LAWFULLY ENTITLED TO. — One of the essential requisites for a successful judicial inquiry into the constitutionality of a law is the existence of an actual case or controversy involving a conflict of legal rights susceptible of judicial determination. As Respondent Court of Appeals correctly pointed out, petitioners were not "charged with the [unlawful] possession of 'firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish"; thus, the inclusion of any of these enumerated items in EO 277 "is absolutely of no concern" to petitioners. They are not asserting a legal right for which they are entitled to a judicial determination at this time. Besides, they did not present any convincing evidence of a clear and unequivocal breach of the Constitution that would justify the nullification of said provision. A statute is always presumed to be

constitutional, and one who attacks it on the ground of unconstitutionality must convincingly prove its invalidity. cdphil

2. ID.; ADMINISTRATIVE LAW; PRESIDENTIAL DECREE NO. 705, AS AMENDED BY EXECUTIVE ORDER NO. 277; SECTION 68 THEREOF; RULING IN MUSTANG CASE (257 SCRA 430) AND LALICAN CASE (G.R. NO. 108619, JULY 31, 1997) TERM "TIMBER", CONSTRUED. — The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in Mustang Lumber, Inc. vs. Court of Appeals, in which this Court expressly ruled that "lumber is included in the term timber." Mustang was recently reiterated in Lalican vs. Vergara, where we also said that '[t]o exclude possession of 'lumber' from the acts penalized in Sec. 68 would certainly emasculate the law itself. . . . After all, the phrase 'forest products' is broad enough to encompass lumber which, to reiterate, is manufactured timber." Indeed, to mention lumber in the aforesaid section would simply result in tautology.

3. ID.; ID.; ID.; TERM "LUMBER"; DEFINITION UNDER AMERICAN JURISPRUDENCE. — Under American jurisprudence, lumber has been legally accepted as a term referring to the manufactured product of logs or to timber sawed or split into marketable form, especially for use in buildings. CSAaDE

4. ID.; ID.; ID.; VIOLATION THEREOF, ESTABLISHED IN CASE AT BAR. — Petitioners insist that EO 277 is not applicable to them, because the seized lumber had been lawfully possessed by Cajidiocan Trading since March 1987, while the amendatory law was issued only on July 25, 1987, and took effect fifteen days after publication. This strained reasoning deserves scant consideration. First, at no time during the apprehensions did petitioners claim that the lumber belonged to Cajidiocan Trading. In fact, Petitioner Ramilo and the drivers openly claimed that the lumber and the trucks belonged to A & E Construction which was, in turn, owned by Petitioner Tan. It was only during the course of the trial, through the testimony of Prisco Marin (characterized by the appellate court as "anything but credible"), that the alleged ownership thereof by Cajidiocan Trading was brought out. Second, the supposed sale of the subject lumber by Matzhou to Cajidiocan Trading, as evidenced by the auxiliary invoice, occurred in March 1987, or more than two and a half years prior to the apprehension and seizure that gave rise to this case. It is highly doubtful if the lumber bought at the earlier date was the very same lumber confiscated in October 1989. No evidence was presented to overcome this veritable doubt. Third and most important, assuming that indeed they were the very same lumber, forest laws and regulations also require the following documents: (1) certificate of lumber origin, (2) sales invoice, (3) delivery receipt, (4) tally sheet, and (5) certificate of transport agreement. None of these documents were proffered in court or elsewhere.

5. ID.; ID.; ID.; VIOLATION THEREOF, A MALUM PROHIBITUM .— Petitioners' unlawful possession of the subject lumber occurred in October 1989. EO 277, which specifically included "possession" of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited

act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them. DASCIc

D E C I S I O N

PANGANIBAN, J p:

In denying this petition, the Court reiterates that the gathering, collection and/or possession, without license, of lumber, which is considered timber or forest product, are prohibited and penalized under the Forestry Reform Code, as amended. LLcd

The Case

In this petition for review on certiorari under Rule 45 of the Rules of Court, petitioners seek to set aside the Decision 1 of the Court of Appeals 2 in CA-GR No. CR-12815 promulgated on July 30, 1993, and its Resolution 3 promulgated on April 28, 1994. The assailed Decision affirmed the judgment 4 of the Regional Trial Court of Romblon, Branch 81, 5 which, in the complaint against petitioners for violation of Section 68, PD 705 (Forestry Reform Code) as amended, disposed as follows:

"WHEREFORE, this Court finds:

a) the accused ALEJANDRO TAN, ISMAEL RAMILO and FRED MORENO GUILTY beyond reasonable doubt of the crime of illegal possession of lumber under the Information, dated March 16, 1990, under Section 68, P.D. No. 705, as amended by Executive Order No. 277, and sentences each of them to an indeterminate sentence of SIX (6) MONTHS, as minimum, to FOUR (4) YEARS and TWO (2) MONTHS, as maximum, with the accessory penalties of the law, and to pay the costs, and

b) the accused ALEJANDRO TAN, ISMAEL RAMILO and CRISPIN CABUDOL GUILTY beyond reasonable doubt of the crime of illegal possession of lumber under the Information, dated March 16, 1990, under Section 68, P.D. No. 705, as amended by Executive Order No. 277, and sentences each of them to an indeterminate sentence of SIX (6) MONTHS, as minimum, to FOUR (4) YEARS and TWO (2) MONTHS, as maximum, with the accessory penalties of the law, and to pay the costs.

The two (2) terms of imprisonment of each of the accused shall be served successively under Article 70, RPC.

The preventive imprisonment which any of the accused may have suffered is credited in his favor to its full extent.

The Court further orders the confiscation of the lumber described in the aforesaid Informations in favor of the government.

SO ORDERED."

The Facts

On October 26, 1989, about 6:30 p.m., in the town proper of Cajidiocan, Sibuyan Island, Romblon, Forest Guards Joseph Panadero and Eduardo Rabino intercepted a dump truck loaded with narra and white lauan lumber. The truck was driven by Petitioner Fred Moreno, an employee of A & E Construction. Again, about 8:00 p.m. on October 30, 1989, this time in Barangay Cambajao, Forest Guards Panadero and Rabino apprehended another dump truck with Plate No. DEK-646 loaded with tanguile lumber. Said truck was driven by Crispin Cabudol, also an employee of A & E Construction. Both motor vehicles, as well as the construction firm, were owned by Petitioner Alejandro Tan. In both instances, no documents showing legal possession of the lumber were, upon demand, presented to the forest guards; thus, the pieces of lumber were confiscated.

On March 16, 1990, Tan and Moreno, together with Ismael Ramilo, caretaker and timekeeper of A & E Construction, were charged by First Assistant Provincial Prosecutor Felix R. Rocero with violation of Section 68, 6 PD No. 705, as amended by EO No. 277, in an Information 7 which reads:

"That on or about the 26th day of October, 1989, at around 6:30 o'clock in the evening, in the Poblacion, municipality of Cajidiocan, province of Romblon, Philippines, and within the jurisdiction of this Honorable Court, the said accused, conspiring, confederating and mutually helping one another, with intent of gain and without the legal documents as required under existing forest laws and regulations, did then and there wilfully, unlawfully and feloniously have in their possession and under their custody and control 13 pieces narra lumber about 171 board feet and 41 pieces tanguile lumber about 834 board feet valued at P8,724.00, Philippine currency, to the damage and prejudice of the government in the aforestated amount."

In another Information, 8 Tan and Ramilo, together with Crispin Cabudol, were also charged for the same violation in connection with the October 30, 1989 incident.

On April 26, 1990, all the accused, assisted by counsel, were arraigned on the basis of the aforementioned Informations; each pleaded not guilty. 9 The cases were thence jointly tried, pursuant to Section 14, Rule 119 of the Rules of Court. 10

During the trial, the defense did not contest the above factual circumstances except to deny that the forest guards demanded, on either of the two occasions, papers or documents showing legal possession of the lumber. Additionally, Prisco Marin, who claimed to have been the officer-in-charge (OIC) of the Bureau of Forest Development of Sibuyan, testified that the seized pieces of lumber were bought by Tan's Cajidiocan Trading, one of the licensed lumber dealers in the island, from Matzhou Development Corporation ("Matzhou") which thus delivered to the former Auxiliary Invoice No. 763850 11 dated March 19, 1987 issued by the Bureau of Internal Revenue office in Romblon. According to Marin, the director of forestry had granted Matzhou a Tree Recovery Permit covering the entire island of Sibuyan. He added that he had inspected the lumber in question in the compound of A & E Construction or Cajidiocan Trading, where he was shown the auxiliary invoice covering the subject. 12

Ruling of the Trial Court

The trial court brushed aside the version of the defense and ruled that the confiscated pieces of lumber which were admittedly owned by Accused Tan were not legitimate deliveries but aborted nocturnal haulings. It convicted all the accused as charged, for their failure to comply with the Forestry Reform Code, which requires the following legal documents: (1) an auxiliary invoice, (2) a certificate of origin, (3) a sales invoice, (4) scale/tally sheets and (5) a lumber dealer permit.

Ruling of Respondent Court of Appeals

On appeal, the accused assigned to the trial court these ten errors: (1) holding them liable under Section 68 of EO 277; (2) ruling that their possession of the lumber were unauthorized or illegal; (3) retroactively applying E.O. 277; (4) ruling that the accused did not have the necessary documents to make their possession legal; (5) convicting them despite the absence of the corpus delicti; (6) admitting in evidence the alleged seizure receipts or, assuming their admissibility, considering them as evidence of corpus delicti; (7) finding that the deliveries were aborted nocturnal haulings; (8) convicting Alejandro Tan on the ground of conspiracy; (9) ruling that the guilt of the accused was proved beyond reasonable doubt; and (10) sustaining the constitutionality of EO 277. 13

As regards the first assigned error, the Court of Appeals held petitioners' "artful distinction between timber and lumber" "to be fallacious and utterly unmeritorious." It thereby upheld the solicitor general's manifestation that "forest products" include "wood" which is defined by Webster's Dictionary as "the hard fibrous substance beneath the back of trees and shrubs." Respondent Court succinctly ruled that to construe "sawn lumber" as not covered by "sawn timber" would defeat the evident intent and purpose of the law, for "what would prevent an illegal logger [from bringing] with him a portable saw and having the timber illegally cut/gathered [and] sawn right on the spot, thus gaining immunity for himself[?]" 14

As to the next three assigned errors which relied heavily on Prisco Marin's testimony, Respondent Court dismissed the said witness' account as "anything but credible." It added that Marin's testimony largely focused on a certification he made stating that, five years ago, he inspected the same confiscated lumber which were to be used for the repair of school buildings by A & E Construction in Sibuyan. But during the cross-examination, he admitted that he made the inspection in December 1989. The appellate tribunal noted that, by then, he had already been relieved of his position as OIC of the Bureau of Forest Development in Romblon; hence, he had no business inspecting the lumberyard of Petitioner Tan. In fact, he admitted that in December 1989, it was Romulae Gadaoni who was already the highest forest officer in the island. 15

As to the fifth and sixth alleged errors, Respondent Court ruled that corpus delicti does not refer literally to the object of the crime — in this case, the forest products possessed without the required legal documents. The fact that the crimes charged were perpetrated by the petitioners was credibly and amply proven by the detailed testimonies of the prosecution witnesses, including the admission of Defense Witness Ismael Ramilo. The seizure receipts merely served to corroborate their testimonies. 16

The seventh and ninth assigned errors were deemed answered in the foregoing discussions. As to the eighth, no other than the admission of his caretaker or katiwala, Co-Accused Ramilo, proved that Tan was involved in the conspiracy. Ramilo testified that the deliveries of lumber on the subject dates (October 26 and 30, 1989) were made pursuant to the instruction of Tan; and that the latter owned said lumber, the trucks and the construction firm. The two accused truck drivers who were caught in flagrante delicto were mere employees of Tan. 17

The last assigned error was set aside by Respondent Court as unnecessary. Absolutely of no concern to the petitioners, who were caught in possession of lumber without the required legal documents, was the alleged unconstitutionality of the inclusion of "firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish" in EO 277. There being other grounds to resolve the case, the constitutionality of said phrase was not passed upon. 18

In their motion for reconsideration, petitioners raised these additional grounds: (1) the Forestry Reform Code and the laws and regulations of the Department of Environment and Natural Resources (DENR) distinguish between timber and lumber and between lumber and other forest products; (2) the Informations alleged and the facts proved that lumber is not covered by the provision supposedly violated; (3) judicial interpretation or construction may not be resorted to in order to fill a gap or clear an ambiguity in penal statutes and, assuming the propriety thereof, construction should be in favor of the accused; (4) lack of documents for possession of lumber is not punishable under the law; and (5) the perceived weakness in the testimony of Defense Witness Prisco Marin should not strengthen the case for the prosecution. In its April 28, 1994 Resolution, Respondent Court found "no cogent reason for the reversal or modification" of its Decision. Hence, this petition. 19

The Issues

Petitioners now ask this Court to likewise pass upon their foregoing submissions. Many of the errors raised, however, involve factual questions, the review of which is not within the ambit of this Court's functions, particularly in this case where the findings of the trial court were affirmed by the appellate court and where petitioners failed to show any misappreciation of the evidence presented. 20 We shall therefore limit our review only to questions of law. LLcd

Accordingly, we shall rule on the following legal issues: (1) the constitutionality of Section 68 of EO 277, (2) the treatment by the lower courts of lumber as timber and/or forest product within the contemplation of PD 705, as amended, and (3) the alleged retroactive application of EO 277.

The Court's Ruling

The petition is not meritorious.

Preliminary Issue:

Constitutionality of Sec. 68, E.O. 277

The impugned legal provision reads:

"Sec. 68. Cutting, Gathering and/or Collecting Timber, or other Forest Products Without License. — Any person who shall cut, gather, collect, remove timber or other forest products from any forest land, or timber from alienable or disposable public land, or from private land without any authority, or possess timber or other forest products without the legal documents as required under existing forest laws and regulations, shall be punished with the penalties imposed under Articles 309 and 310 of the Revised Penal Code: Provided, That in the case of partnerships, associations or corporations, the officers who ordered the cutting, gathering, collection or possession shall be liable and if such officers are aliens, they shall, in addition to the penalty, be deported without further proceedings on the part of the Commission on Immigration and Deportation.

The Court shall further order the confiscation in favor of the government of the timber or any forest products cut, gathered, collected, removed, or possessed, as well as the machinery, equipment, implements and tools illegally used in the area where the timber or forest products are found."

Petitioners aver that the above provision is violative of substantive due process, because it requires the possession of certain legal documents to justify "mere possession" of forest products which, under Section 3(q) of PD 705, includes, among others, "firewood, bark, honey, beeswax, and even grass, shrub, flowering plant, 'the associated water' or fish" and penalizes failure to present such required documents.

One of the essential requisites for a successful judicial inquiry into the constitutionality of a law is the existence of an actual case or controversy involving a conflict of legal rights susceptible of judicial determination. 21 As Respondent Court of Appeals correctly pointed out, petitioners were not "charged with the [unlawful] possession of 'firewood, bark, honey, beeswax, and even grass, shrub, 'the associated water' or fish"; thus, the inclusion of any of these enumerated items in EO 277 "is absolutely of no concern" to petitioners. They are not asserting a legal right for which they are entitled to a judicial determination at this time. Besides, they did not present any convincing evidence of a clear and unequivocal breach of the Constitution that would justify the nullification of said provision. 22 A statute is always presumed to be constitutional, and one who attacks it on the ground of unconstitutionality must convincingly prove its invalidity. 23

Main Issue: Under PD 705 and EO 277, Is Lumber Considered Timber or Forest Product?

Petitioners contend that possession of manufactured lumber is not punishable under the Forestry Reform Code, as amended. As explicitly provided in Section 68 of both PD 705 and EO 277 (the law that amended the former), only the cutting, gathering, collecting and/or possession, without license, of timber and other forest products are prohibited. As expressly defined under Section 3(q) of PD 705, lumber is not timber or a forest product. It is only in Section 79 of the same law where the sale of lumber, without compliance

with established grading rules and standards, is prohibited. Petitioners submit that the forest laws and regulations sufficiently differentiate between timber and lumber; therefore, courts should not construe lumber as timber.

The question of whether lumber is excluded from the coverage of Section 68 of PD 705, as amended, has been settled in Mustang Lumber, Inc. vs. Court of Appeals, 24 in which this Court expressly ruled that "lumber is included in the term timber." 25 We quote at length the Court's discussion:

"The Revised Forestry Code contains no definition of either timber or lumber. While the former is included in forest products as defined in paragraph (q) of Section 3, the latter is found in paragraph (aa) of the same section in the definition of 'Processing plant,' which reads:

(aa) Processing plant is any mechanical set-up, machine or combination of machine used for the processing of logs and other forest raw materials into lumber, veneer, plywood, wallboard, blackboard, paper board, pulp, paper or other finished wood products. LLcd

This simply means that lumber is a processed log or processed forest raw material. Clearly, the Code uses the term lumber in its ordinary or common usage. In the 1993 copyright edition of Webster's Third New International Dictionary, lumber is defined, inter alia, as 'timber or logs after being prepared for the market.' Simply put, lumber is a processed log or timber.

It is settled that in the absence of legislative intent to the contrary, words and phrases used in a statute should be given their plain, ordinary, and common usage meaning. And insofar as possession of timber without the required legal documents is concerned, Section 68 of P.D. No. 705, as amended, makes no distinction between raw or processed timber. Neither do we. Ubi lex non distinguit nec nos distinguire debemus." 26

Mustang was recently reiterated in Lalican vs. Vergara, 27 where we also said that '[t]o exclude possession of 'lumber' from the acts penalized in Sec. 68 would certainly emasculate the law itself. . . . After all, the phrase 'forest products' is broad enough to encompass lumber which, to reiterate, is manufactured timber." Indeed, to mention lumber in the aforesaid section would simply result in tautology.

In addition, under American Jurisprudence, lumber has been legally accepted as a term referring to the manufactured product of logs 28 or to timber sawed or split into marketable form, especially for use in buildings. 29

Consistent with Mustang, we find no error in the holding of both lower courts. Clearly, petitioners are liable for violation of Section 68 of the Forestry Reform Code, as amended.

Corollary Issue: No Retroactive Application of EO 277

Petitioners insist that EO 277 is not applicable to them, because the seized lumber had been lawfully possessed by Cajidiocan Trading since March 1987, while the amendatory law was issued only on July 25, 1987, and took effect fifteen days after publication. This strained reasoning deserves scant consideration. First, at no time during the apprehensions did petitioners claim that the lumber belonged to Cajidiocan Trading. In fact, Petitioner Ramilo and the drivers openly claimed that the lumber and the trucks belonged to A & E Construction which was, in turn, owned by Petitioner Tan. It was only during the course of the trial, through the testimony of Prisco Marin (characterized by the appellate court as "anything but credible"), that the alleged ownership thereof by Cajidiocan Trading was brought out. Second, the supposed sale of the subject lumber by Matzhou to Cajidiocan Trading, as evidence by the auxillary invoice, occurred in March 1987, or more than two and a half years prior to the apprehension and seizure that gave rise to this case. It is highly doubtful if the lumber bought at the earlier date was the very same lumber confiscated in October 1989. No evidence was presented to overcome this veritable doubt. Third and most important, assuming that indeed they were the very same lumber, forest laws and regulations also require the following documents: (1) certificate of lumber origin, (2) sales invoice, (3) delivery receipt, (4) tally sheet, and (5) certificate of transport agreement. 30 None of these documents were proffered in court or elsewhere.

Petitioners' unlawful possession of the subject lumber occurred in October 1989. EO 277, which specifically included "possession" of timber and other forest products within the contemplation of PD 705, had already been issued and in effect more than two years previous thereto. Nothing will prevent the indictment of petitioners for violation of EO 277 at the time they were caught by the forest guards in flagrante delicto. The prohibited act is a malum prohibitum, and absence of malice or criminal intent will not save the day for them. 31

WHEREFORE, the petition is DENIED for utter lack of merit. The questioned Decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.

SO ORDERED. LLcd

Davide, Jr., Bellosillo, Vitug and Quisumbing, JJ ., concur.

Terms with legal meaning

SECOND DIVISION

[G.R. No. L-5872. November 29, 1954.]

ENRIQUE BERNARDO, ET AL., petitioners, vs. CRISOSTOMO S. BERNARDO and the COURT OF APPEALS, respondents.

Cornelio R. Magsarili for petitioners.

De los Santos & De los Santos for respondents.

Alfonso S. Borja, as amicus curiae.

SYLLABUS

1. EMINENT DOMAIN; "BONA FIDE" OCCUPANT HAS PREFERENTIAL RIGHT TO BUY LANDS; MERE LICENSE OF LESSEE IS NOT "BONA FIDE" OCCUPANT. — Any person who, at the time of the acquisition of the estate by the Government, has been gratuitously occupying a lot therein by mere tolerance of its lessee, and who does not own the house erected on such lot, is not a "bona fide occupant," entitled to its acquisition, as the term is used in Commonwealth Act No. 539.

2. ID.; ID.; ID.; ESSENCE OF TERM "BONA FIDE." — The essence of bona fide or good faith lies in honest belief in the validity of one's right, ignorance of a superior claim, and absence of intention to overreach another.

D E C I S I O N

REYES, J.B.L., J p:

Enrique Bernardo, his wife and children, petition this Court for a review of the decision of the Court of Appeals (in its case No. 6677-R), declaring the respondent Crisostomo R. Bernardo entitled to preference under Commonwealth Acts Nos. 20 and 539, in the acquisition of lot No. 462-A of the "Capellanía de Concepción", also known as lot No. 4, block No. 26, of the Tambobong Estate plan, located in Malabon, Rizal, and having an area of 208 square meters.

It is uncontested fact that on December 31, 1947, the Republic of the Philippines purchased from the Roman Catholic Church the estate known as the "Capellania de Tambobong" in Malabon, Rizal, under the provisions of section 1, of Commonwealth Act No. 539. Said Act authorizes the expropriation or purchase of private lands and that lands acquired thereunder should be subdivided into lots, for resale at reasonable prices to "their bona fide tenants or occupants." Crisostomo R. Bernardo, respondent herein, applied to the Rural Progress Administration for the purchase of the lot in question. Petitioners Enrique Bernardo, et al., contested the application and claimed preferential right to such purchase, and on January 12, 1948, the Rural Progress Administration resolved to recognize the petitioners as entitled to preference. The respondents then appealed to the Court of First Instance of Rizal, and the latter upheld their claim, and the decision was affirmed by the Court of Appeals.

The decision of the Court of Appeals expressly finds that:

". . . It has been incontestably proven that the disputed lot had been held under lease by appellee's deceased parents and later by him (appellee) continuously from 1912 to 1947. The appellee's predecessors paid the rentals due on the said lot from the commencement of their leasehold rights up to 1936, when Teodora Santos died. The appellee continued paying the rents on the same lot from 1936 to December 31, 1947, when the Government acquired the entire Capellania de Concepción estate. Since 1912 the values of the leasehold right of appellee amounts to about P4,000.00.

The alleged preferential right of the appellants to the purchase of the disputed lot, which was also the main basis of the decision of the Rural Progress Administration, is their claim of actual occupation of the lot for many years before the acquisition of the Concepción estate by the Government. The appellants' occupation of the premises is not denied by the appellee. Appellee's witness Otilia Santos, however, said that the late Romulo Bernardo had allowed his uncle, appellant Enrique Bernardo, to stay in the premises since the year 1918. (Petitioner's Brief, pp. 72-73).

The Court of Appeals also found that the house standing on the lot had been since July 13, 1944, sold by petitioner Enrique Bernardo to the respondent, who thereby became its owner; that because of family relationship, the petitioners "were able to remain in the premises due to the tolerance of, and out of charity from, the appellee (respondent Crisostomo Bernardo) and his deceased parents who were the rightful lessees of the lot in question."

The Court of Appeals likewise found and declared in its decision that since February 1, 1945, the respondent Crisostomo Bernardo required the petitioner to vacate the premises. Finally, we understand that in Case No. 6734-R, the Court of Appeals declared valid the sale of the house on the lot in question made in 1944 by petitioner Enrique Bernardo in favor of respondent Crisostomo R. Bernardo, and that the aforesaid judgment is now final.

There are thus before us, disputing the right of preference to the acquisition of the lot, the respondent who is the owner of the house standing on said lot since 1944, and has held the land in lawful tenancy since 1912, paying rents and taxes thereon; and the petitioner, who was allowed by respondent, out of deference and charity, to gratuitously occupy the lot and live therein since 1918. Upon the facts on record, we are of the opinion that petitioner does not come under the description "bona fide tenant or occupant" employed in the statute (C. A. 539).

The term "bona fide occupant" (admittedly petitioner is not a tenant) has been defined as "one who supposes he has a good title and knows of no adverse claim" (Philips vs. Stroup, 17 Atl. 220, 221); "one who not only honestly supposes himself to be vested with true title but is ignorant that the title is contested by any other person claiming a superior right to it" (Gresham vs. Ware, 79 Ala. 192, 199); definitions that correspond closely to that of a possessor in good faith in our Civil Law (Civil Code of 1889, art. 433; new Civil Code, art. 526). The essence of the bona fides or good faith, therefore, lies in honest belief in the validity of one's right, ignorance of a superior claim, and absence of intention to overreach another. The petitioner Enrique Bernardo falls short of this standard: for the precarious nature of his occupancy, as mere licensee of respondents, duty bound to protect and restore that possession to its real and legitimate holders upon demand, could never be hidden from him. Moreover, at the time the Government acquired the Tambobong Estate, petitioner had already parted with the house that was his remaining link with the occupancy of the lot; and since 1945, even before the Government's purchase, he had been required to vacate. Thus bereft of all stable interest in the land, petitioner nevertheless seeks to turn respondent's past deferential regard to his own advantage, and to exploit his gratuitous stay at respondent's expense for the purpose

of ousting his benefactors and wiping out the investment that the latter, and their predecessors in interest, had established and preserved by faithful payment for thirty years of the rental charged for the lot in question. That the law, in preferring "bona fide occupants,' intended to protect or sanction such utter disregard of fair dealing may well be doubted.

The petitioner seeks to justify his stand by claiming that the policy of the government, ever since the start of the American sovereignty, had been to acquire the landed estates for the benefit of their "actual occupants," as allegedly exemplified in Acts 1170 and 1933 (Friar Lands' Acts), and Commonwealth Acts Nos. 20, 260, 378, and 539 (Homesite Acts); that the words "bona fide occupants" employed in the Commonwealth Acts are equivalent to "actual" occupants. Two powerful reasons nullify this contention. The first is that section 7 of Act 1170 of the old Philippine Legislature, employs the terms "actual bona fide settlers and occupants", plainly indicating that "actual" and "bona fide" are not synonymous, while the Commonwealth acts deleted the term "actual" and solely used the words "bona fide occupants", thereby emphasizing the requirement that the prospective beneficiaries of the acts should be endowed with legitimate tenure. The second reason is that in carrying out its social readjustment policies, the government could not simply lay aside moral standards, and arm to favor usurpers, squatters, and intruders, unmindful of the lawful or unlawful origin and character of their occupancy. Such a policy would perpetuate conflicts instead of attaining their just solution. It is safe to say that the term "bona fide occupants" was not designed to cloak and protect violence, strategy, double dealing, or breach of trust.

That the underlying motive behind the Homesite Acts is the desire that "the heads of the families concerned be given opportunity to become the owners of their homes and residential lots in which they and their forbears have been raised and born" (Messages of the President, Vol. 4, pp. 288-290), favors the respondents rather than the petitioner, for it is an inalterable fact on record that the rentals and taxes on the lot in question were always paid by the parents of respondent Crisostomo Bernardo and continued by the latter upon his parents' death, to the exclusion of herein respondent.

As pointed out by the decision under review, had not the respondents taken and maintained sincere and affirmative steps to own their lands through a continuous and faithful payment of their obligations, the chances are that the petitioner would have been long ago speedily ejected from the premises of the former landowners. To which may be added that at present, not being the lessee of the lot, nor the owner of the house standing thereon, the petitioner's interest in this particular lot appears to be a purely speculative one.

We therefore rule that a person who, at the time of the acquisition of the Tambobong Estate by the Government, has been gratuitously occupying a lot therein by mere tolerance of its lessee, and who does not own the house erected on such lot, is not a "bona fide occupant" entitled to its acquisition, as the term is used in Commonwealth Act No. 539. Whether or not the situation would be different if the occupant were a sublessee of the lot, need not be decided in this case, the issue not being involved.

Wherefore, the decision appealed from is affirmed, with costs against the petitioner.

Bengzon, Padilla, Montemayor, Reyes, A., and Jugo, JJ., concur.

THIRD DIVISION

[G.R. No. 131787. May 19, 1999.]

CHINA BANKING CORPORATION AND CBC PROPERTIES AND COMPUTER CENTER, INC., petitioners, vs. THE MEMBERS OF THE BOARD OF TRUSTEES, HOME DEVELOPMENT MUTUAL FUND (HDMF); HDMF PRESIDENT; AND THE HOME MUTUAL DEVELOPMENT FUND, respondents.

Lim, Vigilia, Alcala, Dumlao & Orencia for petitioners.

Ma. Teresa A. Ramirez for private respondents.

SYNOPSIS

Petitioners applied for the renewal of waiver of Fund coverage for the year 1996. However, their applications were disapproved by the respondent HDMF Board on ground that their retirement plan is not superior to Pag-ibig Fund. Further, Section 1, Rule VII of the Rules and Regulations Implementing R.A. 7742, and the HDMF Circular No. 124-B prescribing the Revised Guidelines and Procedure for Filing Applications for Waiver or Suspension of Fund Coverage under P.D. 1752, as amended by R.A. 7742 provides that to qualify for waiver or suspension of fund coverage, a company must have provident and housing plan which are both superior to Pag-ibig Funds. Petitioners thus filed a petition for certiorari and prohibition before the Regional Trial Court of Makati seeking to annul and declare void the aforesaid Amendment and Guidelines claiming that respondents exceeded its limit. Furthermore, the law provides as a condition for exemption from coverage, the existence of either a superior (retirement) plan, and/or a superior housing plan, and not the existence of both plans. On the other hand, respondents claimed that the use of the words "and/or" in Section 19 of P.D. No. 1752 can only be used interchangeably and not together, and the option of making it either both or any one belongs to the Board of Trustees of HDMF, which has the power and authority to issue rules and regulations for the effective implementation of the Pag-ibig Fund Law, and the guidelines for the grant of waiver or suspension of coverage. Respondents filed a motion to dismiss, which was subsequently granted by the trial court. Petitioners filed a petition for certiorari which, however, was dismissed by the trial court ruling that respondents did not exceed its jurisdiction and petitioners have lost their right to appeal. In addition, the trial court ruled that certiorari will not lie as a substitute for a lost remedy of appeal. Petitioner's motion for reconsideration was likewise denied. Hence, this instant petition. cdasia

Certiorari is an appropriate remedy to question the validity of the challenged issuances of the HDMF. It seems clear from the language of the enabling law that Section 19 of P.D. No. 1752 intended that an employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from coverage. If the law had intended that the employer should have both a superior provident plan and a housing plan in order to qualify for exemption, it would have used the words "and" instead of "and/or." Paragraph (a) of Section 19 requires for annual certification of waiver or suspension, that the features of the plan or plans are superior to the fund or continue to be so. The law obviously contemplates that the existence of either plan is considered as sufficient basis for the grant of an exemption. To require the existence of both plans would impose a more stringent condition for waiver, which was not clearly envisioned by the basic law.

By removing the disjunctive word "or" in the implementing rules, the respondent Board has exceeded its authority. Consequently, the Supreme Court declared null and void the assailed Amendment and Guidelines. THDIaC

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; CERTIORARI; APPROPRIATE REMEDY TO QUESTION VALIDITY OF THE AMENDMENTS AND GUIDELINES ISSUED BY THE HDMF IN CASE AT BAR. — We hold that it was an error for the court a quo to rule that the petitioners should have exhausted its remedy of appeal from the orders denying their application for waiver/suspension to the Board of Trustees and thereafter to the Court of Appeals pursuant to the Rules. Certiorari is an appropriate remedy to question the validity of the challenged issuances of the HDMF which are alleged to have been issued with grave abuse of discretion amounting to lack of jurisdiction. cdasia

2. ID.; ID.; ID.; NOT A SUBSTITUTE FOR A LOST APPEAL; EXCEPTIONS. — Among the accepted exceptions to the rule on exhaustion of administrative remedies are: (1) where the question in dispute is purely a legal one; and (2) where the controverted act is patently illegal or was performed without jurisdiction or in excess of jurisdiction. Moreover, while certiorari as a remedy may not be used as a substitute for an appeal, especially for a lost appeal, this rule should not be strictly enforced if the petition is genuinely meritorious. It has been said that where the rigid application of the rules would frustrate substantial justice, or bar the vindication of a legitimate grievance, the courts are justified in exempting a particular case from the operation of the rules. We vote to give the petition due course. The assailed Amendment to the Rules and Regulations and the Revised Guidelines suffer from a legal infirmity and should be set aside.

3. ADMINISTRATIVE LAW; ADMINISTRATIVE AGENCY; HDMF; P.D. No. 1752; SECTION 19 THEREOF; CONSTRUED. — It is seems to us clear from the language of the enabling law that Section 19 of P.D. No. 1752, intended that an employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from coverage. If the law had intended that the employee should have both a superior provident plan and a housing plan in order to qualify for exemption, it would have used the words "and" instead of "and/or". Notably, paragraph (a) of Section 19

requires for annual certification of waiver or suspension, that the features of the plan or plans are superior to the fund or continue to be so. The law obviously contemplates that the existence of either plan is considered as sufficient basis for the grant of an exemption; needless to state, the concurrence of both plans is more than sufficient. To require the existence of both plans would radically impose a more stringent condition for waiver which was not clearly envisioned by the basic law. By removing the disjunctive word "or" in the implementing rules the respondent Board has exceeded its authority.

4. ID.; ID.; ID.; ID.; ID.; ADMINISTRATIVE RULES AND REGULATIONS ISSUED TO IMPLEMENT THE BASIC LAW CANNOT GO BEYOND ITS TERMS AND PROVISIONS. — It is well settled that the rules and regulations which are the product of a delegated power to create new or additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. "Department zeal may not be permitted to outrun the authority conferred by statute." While it may be conceded that the requirement of the concurrence of both plans to qualify for exemption would strengthen the Home Development Mutual Fund and make it more effective both as a savings generation and a house building program, the basic law should prevail as the embodiment of the legislative purpose, and the rules and regulations issued to implement said law cannot go beyond its terms and provisions. CacHES

5. ID.; ID.; ID.; SECTION 1, RULE VII OF THE RULES AND REGULATIONS IMPLEMENTING R.A. 7742; HDMF CIRCULAR NO. 124-B; REQUIRING EMPLOYER TO HAVE BOTH A SUPERIOR PROVIDENT PLAN AND HOUSING PLAN TO QUALIFY FOR EXCEPTION FROM FUND COVERAGE, DECLARED INVALID. — We accordingly find merit in petitioner's contention that Section 1, Rule VII of the Rules and Regulations Implementing R.A. 7742, and HDMF Circular No. 124-B and the Revised Guidelines and Procedure for Filing Application for Waiver or Suspension of Fund Coverage under P.D. 1752, as amended R.A. 7742, should be declared invalid insofar as they require that an employer must have both a superior retirement/provident plan and a superior employee housing plan in order to be entitled to a certificate of waiver and suspension of coverage from the HDMF.

6. STATUTORY CONSTRUCTION; WORDS "AND/OR" CONSTRUED. — The controversy lies in the legal signification of the words "and/or". In the instant case, the legal meaning of the words "and/or" should be taken in its ordinary signification, i.e., "either and or"; e.g., butter and/or eggs means butter and eggs or butter or eggs. "The term "and/or" means that effect shall be given to both the conjunctive "and" and the disjunctive "or;" or that one word or the other may be taken accordingly as one or the other will best effectuate the purpose intended by the legislature as gathered from the whole statute. The term is used to avoid a construction which by the use of the disjunctive "or" alone will exclude the combination of several of the alternatives or by the use of the conjunctive "and" will exclude the efficacy of any one of the alternatives standing alone." It is accordingly ordinarily held that the intention of the legislature in using the term "and/or" is that the word "and" and the word "or" are to be used interchangeably. aDSAEI

D E C I S I O N

GONZAGA-REYES, J p:

This is an appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure "on pure questions of law" from the Order of the Regional Trial Court of Makati, Branch 59 dated October 10, 1997 and from the Order of the same court dated December 19, 1997 denying petitioners' motion for reconsideration.

Briefly, petitioners China Banking Corporation (CBC) and CBC Properties and Computer Center Inc. (CBC-PCCI) are both employers who were granted by the Home Development Mutual Fund (HDMF) certificates of waiver dated July 7, 1995 and January 19, 1996 (covering respectively the periods of July 1, 1995 to June 30, 1996 for CBC and January 1 to December 31, 1995 for CBC-PCCI) for the identical reason of "Superior Retirement Plan" pursuant to Section 19 of P.D. 1752 otherwise known as the Home Development Mutual Fund Law of 1980 whereunder employers who have their own existing provident and/or employees-housing plans may register for annual certification for waiver or suspension from coverage or participation in the Home Development Mutual Fund created under said law. cdasia

It appears that in June 1994, Republic Act No. 7742, amending P.D. 1752 was approved. 1 On September 1, 1995, respondent HDMF Board issued an Amendment to the Rules and Regulations Implementing R.A. 7742 ("The Amendment") and pursuant to said Amendment, the said Board issued on October 23, 1995 HDMF Circular No. 124-B or the Revised Guidelines and Procedure for filing Application for Waiver or Suspension of Fund Coverage under P.D. 1752 ("Guidelines"). Under the Amendment and the Guidelines, a company must have a provident/retirement and housing plan superior to that provided under the Pag-IBIG Fund to be entitled to exemption/waiver from fund coverage.

CBC and CBC-PCCI applied for renewal of waiver of coverage from the fund for the year 1996, but the applications were disapproved for the identical reason that:

"Our evaluation of your company's application indicates that your retirement plan is not superior to Pag-IBIG Fund. Further, the amended Implementing Rules and Regulations of R.A. 7742 provides that to qualify for waiver, a company must have retirement/provident and housing plans which are both superior to Pag-IBIG Funds."

Petitioners thus filed a petition for certiorari and prohibition before the Regional Trial Court of Makati seeking to annul and declare void the Amendment and the Guidelines for having been issued in excess of jurisdiction and with grave abuse of discretion amounting to lack of jurisdiction alleging that in requiring the employer to have both a retirement/provident plan and an employee housing plan in order to be entitled to a certificate of waiver or suspension of coverage from the HDMF, the HDMF Board exceeded its rule-making power.

Respondent Board filed a Motion to Dismiss and the court a quo, in its first challenged order dated October 10, 1997 granted the same. The Court dismissed the petition for

certiorari on the grounds (1) that the denial or grant of an application for waiver/coverage is within the power and authority of the HDMF Board, and the said Board did not exceed its jurisdiction or act with grave abuse of discretion in denying the applications; and (2) the petitioners have lost their right to appeal by failure to appeal within the periods provided in the Rules for appealing from the order of denial to the HDMF Board of Trustees, and thereafter, to the court of Appeals. The Court stated that certiorari will not lie as a substitute for a lost remedy of appeal.

Motion for reconsideration of the above-Order having been denied in the Order of December 19, 1997, this petition for review was filed under Rule 45 alleging that:

"1. The court a quo erred in the appreciation of the issue, as it mistakenly noted that petitioner is contesting the authority of respondent to issue rules pursuant to its rule-making power;

"2. The court a quo erred in observing that the matter being assailed by the petitioners were the denial of their application for waiver (Annexes "H" and "I"), and therefore, appeal is the proper remedy."

Essentially, petitioners contend that it does not question the power of respondent HDMF, as an administrative agency, to issue rules and regulations to implement P.D. 1752 and Section 5 of R.A. 7742; however, the subject Amendment and Guidelines issued by it should be set aside and declared null and void for being irrev.ocably inconsistent with the enabling law, P.D. 1752, as amended by R.A. 7742, which merely requires as a pre-condition for exemption for coverage, the existence of either a superior provident (retirement) plan or a superior housing plan, and not the concurrence of both plans.

Petitioners claim that certiorari is the proper remedy as what are being questioned are not the orders denying petitioners' application for renewal of waiver for coverage which were admittedly issued in the exercise of a quasi-judicial function, but rather the validity of the subject Amendment and Guidelines, which are a "patent nullity"; hence the doctrine of exhaustion of administrative remedies does not apply.

In their comment, respondents contend that there is no question of law involved. The interpretation of the phrase "and/or" is not purely a legal question and it is susceptible of administrative determination. In denying petitioners' application for waiver of coverage under Republic Act No. 7742 the respondent Board was exercising its quasi-judicial function and its findings are generally accorded not only respect but even finality. Moreover, the Amendment and the Guidelines are consistent with the enabling law, which is a piece of social legislation intended to provide both a savings generation and a house building program.

We find merit in the petition.

The core issue posed in the court below and in this Court is whether the respondents acted in excess of jurisdiction or with grave abuse of discretion amounting to lack of jurisdiction in issuing the Amendment to the Rules and Regulations Implementing R.A. 7742 and HDMF Circular No. 124-B on the Revised Guidelines and Procedure for Filing

Application for Waiver or Suspension of Fund Coverage under P.D. 1752, as amended by R.A. 7742, insofar as said Amendment and Guidelines impose as a requirement for exemption from coverage or participation in the Home Development Mutual Fund the existence of both a superior housing plan and a provident plan.

The procedural issue raised in the petition as to the propriety of certiorari in lieu of appeal has not been traversed by the respondents. Suffice it to note that the petitioners sought to annul or declare null and void the questioned Amendment and Guidelines and not merely the denial by the respondent Board of petitioners' application for waiver or exemption from coverage of the fund. As noted by the court a quo, the petition below squarely raised in issue the validity of the Amendment to the Rules and Regulations and of HDMF Circular No. 124-B insofar as these require the existence of both provident/retirement and housing plans for the grant of waiver/suspension by the Board and prayed that the same be declared void for want of jurisdiction. aisadc

We hold that it was an error for the court a quo to rule that the petitioners should have exhausted its remedy of appeal from the orders denying their application for waiver/suspension to the Board of Trustees and thereafter to the Court of Appeals pursuant to the Rules. Certiorari is an appropriate remedy to question the validity of the challenged issuances of the HDMF which are alleged to have been issued with grave abuse of discretion amounting to lack of jurisdiction. 2

Moreover, among the accepted exceptions to the rule on exhaustion of administrative remedies are: (1) where the question in dispute is purely a legal one; and (2) where the controverted act is patently illegal or was performed without jurisdiction or in excess of jurisdiction. 3 Moreover, while certiorari as a remedy may not be used as a substitute for an appeal, especially for a lost appeal, this rule should not be strictly enforced if the petition is genuinely meritorious. 4 It has been said that where the rigid application of the rules would frustrate substantial justice, or bar the vindication of a legitimate grievance, the courts are justified in exempting a particular case from the operation of the rules. 5

We vote to give the petition due course. The assailed Amendment to the Rules and Regulations and the Revised Guidelines suffer from a legal infirmity and should be set aside.

The law pertinent to the Home Development Mutual Fund, otherwise known as the Pag-IBIG Fund, should be revisited.

The Human Development Mutual Funds were created by Presidential Decree No. 1530, promulgated on June 11, 1978. The said funds, one for government employees and another for private employees, were to be established and maintained from contributions by the employees and counterpart contributions by their employers. P.D. No. 1752, enacted on December 13, 1980, amended P.D. 1530 to make the Home Development Mutual Fund a body corporate and to make its coverage mandatory upon all employers covered by the Social Security System and the Government Service Insurance System. Section 19 of P.D. No. 1752 provides for waiver or suspension from coverage or participation in the fund, thus:

"SECTION 19. Existing Provident/Housing Plans. — An employer and/or employee-group who, at the time this Decree becomes effective have their own provident and/or employee-housing plans, may register with the Fund, for any of the following purposes:

(a) For annual certification of waiver or suspension from coverage or participation in the Fund, which shall be granted on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining agreement and that the features of the plan or plans are superior to the Fund or continue to be so; or

(b) For integration with the Fund, either fully or partially.

The establishment of a separate provident and/or housing plan after the effectivity of this Decree shall not be a ground for waiver of coverage in the Fund; nor shall such coverage bar any employer and/or employee-group from establishing separate provident and/or housing plans." (emphasis ours)

On June 17, 1994, Republic Act No. 7742, amending certain sections of P.D. 1752 was approved. Section 5 of the said statute provides "that within sixty (60) days from the approval of the Act, the Board of Trustees of the Home Development Mutual Fund shall promulgate the rules and regulations necessary for the effective implementation of (this) Act."

Pursuant to the above authority the Home Development Mutual Fund Board of Trustees promulgated The Implementing Rules and Regulations of Republic Act 7742 amending Presidential Decree No. 1752, Executive Order Nos. 35 and 90, which was published on August 1, 1994. Rule VII thereof reads:

"RULE VII

WAIVER OR SUSPENSION

SECTION 1. Waiver or Suspension-Existing Provident or Retirement Plan.

An employer and/or employee group who has an existing provident or retirement plan as of the effectivity of Republic Act No. 7742, qualified under Republic Act No. 4917 and actuarially determined to be sound and reasonable by an independent actuary duly accredited by the Insurance Commission, may apply with the Fund for waiver or suspension of coverage. Such waiver or suspension may be granted by the President of the Fund on the basis of verification that the waiver or suspension does not contravene any effective collective bargaining or other existing agreement and that the features of the plan or plans are superior to the Fund and continue to be so. The certificate of waiver or suspension of coverage issued herein shall only be for a period of one (1) year but the same may be renewed for another year upon the filing of a proper application within a period of sixty (60) days prior to the expiration of the existing waiver or suspension.

SECTION 2. Waiver or Suspension-Existing Housing Plan.

An employer and/or employee group who has an existing housing plan as of the effectivity of Republic Act No. 7742 may apply with the fund for waiver or suspension of coverage. Such waiver or suspension of coverage may be granted by the President of the Fund on the basis of verification that the waiver or suspension of coverage does not contravene any effective collective bargaining or other existing agreement and that the features of the plan or plans are superior to the Fund and continue to be so. The certificate of waiver or suspension of coverage issued herein shall only be for a period of one (1) year but the same may be renewed for another year upon the filing of a proper application within a period of sixty (60) days prior to the expiration of the existing waiver or suspension."

Subsequently, the HDMF Board adopted in its Special Board Meeting held on September 1, 1995, Amendments to the Rules and Regulations Implementing Republic Act 7742. As amended, Rule VII on "Waiver or Suspension" now reads:

"RULE VII

WAIVER OF SUSPENSION

SECTION 1. Waiver or Suspension Because of Existing Provident/Retirement and Housing Plan.

Any employer with a plan providing both for a provident/retirement and housing benefits for all his employees and existing as of December 14, 1980, the effectivity date of Presidential Decree No. 1752, may apply with the Fund for waiver or suspension of coverage. The provident/retirement aspect of the plan must be qualified under R.A. 4917 and actuarially determined to be sound and reasonable by an independent, actuary duly accredited by the Insurance Commission. The provident/retirement and housing benefits as provided for under the plan must be superior to the provident/retirement and housing benefits offered by the Fund.

Such waiver or suspension may be granted by the Fund on the basis of actual verification that the waiver or suspension does not contravene any collective bargaining agreement, any other existing agreement or clearly spelled out management policy and that the features of the plan or plans are superior to the Fund and continue to be so.

Provided further that the application must be endorsed by the labor union representing a majority of the employees or in the absence thereof by at least a majority vote of all the employees in the said establishment in a meeting specifically called for the purpose. Provided, furthermore that such a meeting be held or be conducted under the supervision of an authorized representative from the Fund.

The certificate of waiver or suspension of coverage issued herein shall only be for a period of one (1) year effective upon issuance thereof. No certificate of waiver issued by the President of the Fund shall have retroactive effect. Application for renewal must be filled within-sixty (60) days prior to the expiration of the existing waiver or suspension and such application for renewal shall only granted based on the same conditions and requirements under which the original application was approved. Pending the approval of

the application for waiver or suspension of coverage or the application for renewal, the employer and his covered employees shall continue to be mandatorily covered by the Fund as provided for under R.A. 7742." (emphasis ours).

On October 23, 1995, HDMF Circular No. 124-B entitled "Revised Guidelines and Procedure for Filing Applications for Waiver or Suspension of Fund Coverage" under P. D. No. 1752, as amended by Republic Act No. 7742, was promulgated. The Circular pertinently provides:

"I. GROUNDS FOR WAIVER OR SUSPENSION OF FUND COVERAGE

A. SUPERIOR PROVIDENT/RETIREMENT PLAN AND HOUSING PLAN

ANY EMPLOYER WHO HAS A PROVIDENT, RETIREMENT, GRATUITY OR PENSION PLAN AND A HOUSING PLAN, EXISTING AS OF DECEMBER 14, 1980, THE EFFECTIVITY OF P.D. NO. 1752, may file an application for waiver or suspension from Fund coverage, provided, that —

1. The retirement/provident plan is qualified as such under Republic Act No. 4917 (An Act Providing That Retirement Benefits of Employees of Private Firms Shall Not Be Subject to Attachment, Levy, or Execution or Any Tax Whatsoever), as certified by the Bureau of Internal Revenue;

2. The retirement/provident plan is actuarially determined to be financially sound and reasonable by an independent actuary duly accredited by the Insurance Commission;

3. The retirement/provident plan is superior to the retirement/provident benefits offered by the Fund in terms of:

• vesting features

— full and immediate crediting of employer's contribution to the employee's account, the TAV of which the employee carries with him in the event he transfers to another employer; or he becomes self-employed or unemployed;

• employer's contribution (*For provident plans)

— must be equal to or higher than two percent (2%) of employee's monthly compensation, defined in the HDMF Implementing Rules and Regulations as the employee's basic monthly salary plus Cost of Living Allowance;

• retirement age and years of service required to avail of plan benefits

— 85 or lower

— 10 years of service or less

• amount of benefits extended to EEs (* For retirement plans)

— at least fifty (50%) of monthly compensation, as defined in the HDMF IRR, for every year of service.

4. The housing plan must be superior to the PAG-IBIG Housing Loan Program in terms of:

• residency requirement as employee of the company or member of the plan to avail of housing loan under the plan

— six (6) months or less;

• interest rates

— equal to or lower than the prescribed rates under the PAG-IBIG Expanded Housing Loan Program (EHLP);

• repayment period

— 25 years or more;

• loanable amount

— equal to or greater than the maximum loan amount under the PAG-IBIG Expanded Housing Loan Program; and

• percentage of covered EEs benefited by the Housing Plan

— EEs who have availed of the Housing Plan benefits as of date of waiver application must be no less than five (5%) of the total.

5. The application for waiver or suspension, based on actual verification of the Fund, does not contravene any effective collective bargaining or any other agreement existing between the employer and his employees.

6. The application must be endorsed by the labor union representing a majority of the employees, or, in the absence thereof, at least a majority vote of all company employees in a meeting specifically called for the purpose and conducted under the supervision of an authorized representative of the Fund."

As above stated, when petitioners CBC and CBC-PCCI applied for the renewal of waiver of Fund coverage for the year 1996, the applications were disapproved on identical grounds namely, that the retirement plan is not superior to Pag-IBIG Fund and that the amended Implementing Rules and Regulations of R.A. 7742 provides that to qualify for waiver, a company must have retirement/provident and housing plan which are both superior to Pag-IBIG Funds.

Petitioner contends that respondent, in the exercise of its rule making power has "overstepped the bounds and exceeded its limit." The law provides as a condition for

exemption from coverage, the existence of either a superior provident (retirement) plan, and/or a superior housing plan, and not the existence of both plans. LLjur

On the other hand, respondents claim that the use of the words "and/or" in Section 19 of P. D. No. 1752, which words are "diametrically opposed in meaning," can only be used interchangeably and not together, and the option of making it either both or any one belongs to the Board of Trustees of HDMF, which has the power and authority to issue rules and regulations for the effective implementation of the Pag-IBIG Fund Law, and the guidelines for the grant of waiver or suspension of coverage.

There is no question that the HDMF Board has rule-making powers. Section 5 of R. A. No. 7742 states that the said Board shall promulgate the rules and regulations necessary for the effective implementation of said Act. Its rule-making power is also provided in Section 13 of P. D. No. 1752 which states insofar as pertinent that the Board is authorized to make and change needful rules and regulations to provide for, among others,

"a. the effective administration, custody, development, utilization and disposition of the Fund or parts thereof including payment of amounts credited to members or to their beneficiaries or estates;

b. Extension of Fund coverage to other working groups and waiver or suspension of coverage or its enforcement for reasons therein stated.

xxx xxx xxx

i. Other matters that, by express or implied provisions of this Act, shall require implementation by appropriate policies, rules and regulations."

The controversy lies in the legal signification of the words "and/or."

In the instant case, the legal meaning of the words "and/or" should be taken in its ordinary signification, i.e., "either and or"; e. g. butter and/or eggs means butter and eggs or butter or eggs. 6

"The term "and/or" means that effect shall be given to both the conjunctive "and" and the disjunctive "or"; or that one word or the other may be taken accordingly as one or the other will best effectuate the purpose intended by the legislature as gathered from the whole statute. The term is used to avoid a construction which by the use of the disjunctive "or" alone will exclude the combination of several of the alternatives or by the use of the conjunctive "and" will exclude the efficacy of any one of the alternatives standing alone." 7

It is accordingly ordinarily held that the intention of the legislature in using the term "and/or" is that the word "and" and the word "or" are to be used interchangeably. 8

It seems clear to us from the language of the enabling law that Section 19 of P.D. No. 1752, intended that an employer with a provident plan or an employee housing plan superior to that of the fund may obtain exemption from coverage. If the law had intended

that the employer should have both a superior provident plan and a housing plan in order to qualify for exemption, it would have used the words "and" instead of "and/or". Notably, paragraph (a) of Section 19 requires for annual certification of waiver or suspension, that the features of the plan or plans are superior to the fund or continue to be so. The law obviously contemplates that the existence of either plan is considered as sufficient basis of the grant of an exemption; needless to state, the concurrence of both plans is more than sufficient. To require the existence of both plans would radically imposed a more stringent condition for waiver which was not clearly envisioned by the basic law. By removing the disjunctive word "or" in the implementing rules the respondent Board has exceeded its authority.

It is well settled that the rules and regulations which are the product of a delegated power to create new or additional legal provisions that have the effect of law, should be within the scope of the statutory authority granted by the legislature to the administrative agency. 9 "Department zeal may not be permitted to outrun the authority conferred by statute." 10 As aptly observed in People vs. Maceren: 11

"Administrative regulations adopted under legislative authority by a particular department must be in harmony with the provisions of the law, and should be for the sole purpose of carrying into effect its general provisions. By such regulations, of course, the law itself cannot be extended. U.S. vs. Tupasi Molina, supra). An administrative agency cannot amend an act of Congress (Santos vs. Estenzo, 109 Phil. 419 422; Teoxon vs. Members of the Board of Administrators, L-25619, June 30, 1970, 33 SCRA 585; Manuel vs. General Auditing Office, L-28952, December 29, 1971, 42 SCRA 660; Deluao vs. Casteel, L-21906, August 29, 1969 SCRA 350).

The rule making power must be confined to details for regulating the mode or proceeding to carry into effect the law as it has been enacted. The power cannot be extended to amending or expanding the statutory requirements or to embrace matters not covered by the statute. Rules that subvert the statute cannot be sanctioned. (University of Santo Tomas vs. Board of Tax Appeals, 93 Phil. 376, 382, citing 12 C. J. 845-46. As to invalid regulations, see Collector of Internal Revenue vs. Villaflor, 69 Phil. 319; Wise & Co. vs. Meer, 78 Phil. 655, 676; Del Mar vs. Phil. Veterans Administration, L-27299, June 27, 1973, 51 SCRA 340, 349)."

While it may be conceded that the requirement of the concurrence of both plans to qualify for exemption would strengthen the Home Development Mutual Fund and make it more effective both as a savings generation and a house building program, the basic law should prevail as the embodiment of the legislative purpose, and the rules and regulations issued to implement said law cannot go beyond its terms and provisions.

We accordingly find merit in petitioner's contention that Section 1, Rule VII of the Rules and Regulations Implementing R. A. 7742, and HDMF Circular No. 124-B and the Revised Guidelines and Procedure for Filing Application for Waiver or Suspension of Fund Coverage Under P.D. 1752, as amended by R.A. 7742, should be declared invalid insofar as they require that an employer must have both a superior retirement/provident plan and a superior employee housing plan in order to be entitled to a certificate of waiver and suspension of coverage from the HDMF.

WHEREFORE, the petition is given due course and the assailed Orders of the court a quo dated October 10, 1997 and December 19, 1997 are hereby set aside. Section 1 of Rule VII of the Amendments to the Rules and Regulations Implementing R. A. 7742, and HDMF Circular No. 124-B prescribing the Revised Guidelines and Procedure for Filing Applications for Waiver or Suspension of Fund Coverage under P.D. 1752, as amended by R.A. No. 7742, insofar as they require that an employer should have both a provident/retirement plan superior to the retirement/provident benefits offered by the Fund and a housing plan superior to the Pag-IBIG housing loan program in order to qualify for waiver or suspension of fund coverage, are hereby declared null and void. cda

SO ORDERED.

Romero, Vitug and Panganiban, JJ ., concur.

Terms with multiple meaning

FIRST DIVISION

[G.R. No. L-8238. May 25, 1955.]

CESAR M. CARANDANG, petitioner, vs. VICENTE SANTIAGO, in his capacity as Judge of the Court of First Instance of Manila and TOMAS VALENTON, Sr. and TOMAS VALENTON, Jr., respondents.

S. Mejia-Panganiban for petitioner.

Evangelista & Valenton for respondents.

SYLLABUS

1. CRIMINAL LAW; TERM "PHYSICAL INJURIES" EXPLAINED. — Articles 33 of the new Civil Code uses the words "defamation", "fraud" and "physical injuries." Defamation and fraud are used in their ordinary sense because there are no specific provisions in the Revised Penal Code using these terms as names of offenses defined therein. With this apparent circumstances in mind, it is evident that the term "physical injuries" could not have been used in its specific sense as a crime defined in the Revised

Penal Code, for it is difficult to believe that the Code Commission would have used terms in the same article — some in their general and another in its technical sense. In other words, the term "physical injuries" should be understood to mean bodily injury, not the crime of physical injuries as defined in the Revised Penal Code.

2. ID.; ID.; CIVIL ACTION FOR DAMAGES WILL LIE WHETHER BODILY INJURY WAS INFLICTED WITH TO KILL OR NOT. — The Code Commission recommended that the civil action for physical injuries be similar to the civil action for assault and battery in American Law, and his recommendation must have been accepted by the Legislation when it approved the article intact as recommended. If the intent has been to establish a civil action for the bodily harm received by the complainant similar to be civil action for assault and battery as the Code Commission states, the civil action should lie whether the offense committed is that of physical injuries, or frustrated homicide, or attempted homicide, or even death.

3. CRIMINAL PROCEDURE; SUSPENSION OF CIVIL ACTION PENDING CRIMINAL PROSECUTION; EXCEPTION. — The civil action for damages founded on injury to the person may be brought by the injured party and the trial court may proceed with the trial of the case without awaiting the result of the pending criminal case. (Article 33 of the new Civil Code.)

D E C I S I O N

LABRADOR, J p:

This is a petition for certiorari against Honorable Vicente Santiago, Judge of the Court of First Instance of Manila, to annul his order in Civil Case No. 21173, entitled Cesar M. Carandang vs. Tomas Valenton, Sr. et al., suspending the trial of said civil case to await the result of the criminal Case No. 534, Court of First Instance of Batangas. In this criminal case, Tomas Valenton, Jr. was found guilty of the crime of frustrated homicide committed against the person of Cesar Carandang, petitioner herein. Tomas Valenton, Jr. appealed the decision to the Court of Appeals where the case is now pending.

The decision of the Court of First Instance of Batangas in the criminal case was rendered on September 1, 1953 and petitioner herein filed a complaint in the Court of First Instance of Manila to recover from the defendant Tomas Valenton, Jr. and his parents, damages, both actual and moral, for the bodily injuries received by him on occasion of the commission of the crime of frustrated homicide by said accused Tomas Valenton, Jr. After the defendants submitted their answer, they presented a motion to suspend the trial of the civil case, pending the termination of the criminal case against Tomas Valenton, Jr. in the Court of Appeals. The judge ruled that the trial of the civil action must await the result of the criminal case on appeal. A motion for reconsideration was submitted, but the court denied the same; hence this petition for certiorari.

Petitioner invokes Article 33 of the new Civil Code, which is as follows:

"In cases of defamation, fraud, and physical injuries, a civil action for damages, entirely separate and distinct from the criminal action, may be brought by the injured party. Such

civil action shall proceed independently of the criminal prosecution, and shall require only a preponderance of evidence."

The Code Commission itself states that the civil action allowed (under Article 33) is similar to the action in tort for libel or slander and assault and battery under American law (Report of the Code Commission, pp. 46-47). But respondents argue that the term "physical injuries" is used to designate a specific crime defined in the Revised Penal Code, and therefore said term should be understood in its peculiar and technical sense, in accordance with the rules statutory construction (Sec. 578, 59 C. J. 979).

In the case at bar, the accused was charged with and convicted of the crime of frustrated homicide, and while it was found in the criminal case that a wound was inflicted by the defendant on the body of the petitioner herein Cesar Carandang, which wound is a bodily injury, the crime committed is not physical injuries but frustrated homicide, for the reason that the infliction of the wound is attended by the intent to kill. So the question arises whether the term "physical injuries" used in Article 33 means physical injuries in the Revised Penal Code only, or any physical injury or bodily injury, whether inflicted with intent to kill or not.

The Article in question uses the words "defamation", "fraud" and "physical injuries." Defamation and fraud are used in their ordinary sense because there are no specific provisions in the Revised Penal Code using these terms as means of offenses defined therein, so that these two terms defamation and fraud must have been used not to impart to them any technical meaning in the laws of the Philippines, but in their generic sense. With this apparent circumstance in mind, it is evident that the term "physical injuries" could not have been used in its specific sense as a crime defined in the Revised Penal Code, for it is difficult to believe that the Code Commission would have used terms in the same article — some in their general and another in its technical sense. In other words, the term "physical injuries" should be understood to mean bodily injury, not the crime of physical injuries, because the terms used with the latter are general terms. In any case the Code Commission recommended that the civil action for physical injuries be similar to the civil action for assault and battery in American Law, and this recommendation must have been accepted by the Legislature when it approved the article intact as recommended. If the intent has been to establish a civil action for the bodily harm received by the complainant similar to the civil action for assault and battery, as the Code Commission states, the civil action should lie whether the offense committed is that of physical injuries, or frustrated homicide, or attempted homicide, or even death.

A parallel case arose in that of Bixby vs. Sioux City, 164 N.W. 641, 643. In that case, the appellant sought to take his case from the scope of the statute by pointing out that inasmuch as notice is required where the cause of action is founded on injury to the person, it has no application when the damages sought are for the death of the person. The court ruled that a claim to recover for death resulting from personal injury is as certainly "founded on injury to the person" as would be a claim to recover damages for a non-fatal injury resulting in a crippled body.

For the foregoing considerations, we find that the respondent judge committed an error in suspending the trial of the civil case, and his order to that effect is hereby revoked, and he is hereby ordered to proceed with the trial of said civil case without awaiting the result of the pending criminal case. With costs against the defendant-appellees.

Pablo, Acting C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Concepcion and Reyes, J.B.L., JJ., concur.

SECOND DIVISION

[G.R. No. L-56028. July 30, 1981.]

NILO A. MALANYAON, petitioner-appellant, vs. HON. ESTEBAN M. LISING, as Judge of the CFI of Camarines Sur, Br. VI, and CESARIO GOLETA, as Municipal Treasurer of Bula, Camarines Sur, respondents-appellees.

Nilo A. Malanyaon for petitioner-appellant.

Jose V. Nepomuceno Jr. for respondents-appellees.

SYNOPSIS

A case for violation of the Anti-Graft and Corrupt Practices Act against the late Mayor Pontanal who was suspended from office, was dismissed for reason of his death during incumbency. Petitioner, a former member of the Sangguniang Bayan of Hula, Camarines Sur, filed an action to declare illegal the disbursement made by the municipal treasurer of Bula, Camarines Sur to the widow of the late mayor Pontanal in the amount of P5,000.00 representing a portion of the salary of the late mayor during the period of his suspension and to restrain or prevent the respondent municipal treasurer from further paying or disbursing the balance of the claim, being contrary to the provision of Section 13 of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act), because said late mayor Pontanal was not acquitted of the charge against him. The respondent Judge dismissed the action ruling that the dismissal of the criminal case against the late mayor due to his death amounted to acquittal.

On review, the Court ruled that when the law speaks of the suspended officer being "acquitted", it means that after due hearing and consideration of the evidence against him, the court is of the opinion that his guilt has not been proved beyond reasonable doubt; hence, dismissal of the case against the suspended officer in view of his death will not suffice because such dismissal does not amount to acquittal.

Petition granted as prayed for, and order of the court a quo set aside.

SYLLABUS

1. STATUTORY CONSTRUCTION; ANTI-GRAFT AND CORRUPT PRACTICES ACT; MEANING OF THE TERM "ACQUITTED", CONSTRUED. — It is obvious that when the statute speaks of the suspended officer being "acquitted", it means that after due hearing and consideration of the evidence against him the court is of the opinion that his guilt has not been proved beyond reasonable doubt. Dismissal of the case against the suspended officer will not suffice because dismissal does not amount to acquittal.

2. ID.; ID.; MEANING OF THE TERMS "ACQUITTAL" AND "DISMISSAL", DISTINGUISHED. — "Acquittal is always based on the merits, that is the defendant is acquitted because the evidence does not show that defendant's guilt is beyond reasonable doubt; but dismissal does not decide the case on the merits or that the defendant is not guilty. Dismissal terminates the proceeding, either because the court is not a court of competent jurisdiction, or the evidence does not show that the offense was committed within the territorial jurisdiction of the court, or the complaint or information is not valid or sufficient in form and substance, etc. The only case in which the word dismissal is commonly but not correctly used, instead of the proper term acquittal, is when after the prosecution has presented all its evidence, the defendant moves for the dismissal and the court dismisses the case on the ground that the evidence fails to show beyond reasonable doubt that the defendant is guilty; for in such case the dismissal is in reality an acquittal because the case is decided on the merits." (People vs. Salico, 84 Phil. 722, 732-733 [1949).

D E C I S I O N

ABAD SANTOS, J p:

The question which is presented to Us for resolution in this petition for review concerns the interpretation of Section 13 of R.A. No. 3019, otherwise known as the Anti-Graft and Corrupt Practices Act which stipulates:

"Sec. 13. Suspension and loss of benefits. — Any public officer against whom any criminal prosecution under a valid information under this Act or under the provisions of the Revised Penal Code on bribery is pending in court, shall be suspended from office. Should he be convicted by final judgment, he shall lose all retirement or gratuity benefits under any law, but if he is acquitted, he shall be entitled to reinstatement and to the salaries and benefits which he failed to receive during suspension, unless in the meantime administrative proceedings have been filed against him."

The facts are stated in the Order dated October 3, 1980, of the respondent judge:

"The late Mayor S.B. Pontanal is one of the accused in Criminal Case No. P-339 for Violation of the Anti-Graft and Corrupt Practices Act. Upon the filing of the case against him in court and after hearing, he was suspended from office and during his incumbency he died. Due to his death the charge against him in Criminal Case No. P-339 was dismissed. Petitioner now contends that any disbursement of funds by the respondent, Cesario Goleta, in his capacity as Municipal Treasurer in favor of the heirs of the late

Mayor for salaries corresponding to the period he was under suspension and other benefits will be illegal and contrary to the provisions of Section 13 because said late Mayor S.B. Pontanal was not acquitted of the charge against him."

Nilo A. Malanyaon, the petitioner, was formerly a member of the Sangguniang Bayan of Bula, Camarines Sur. He filed an action "to declare illegal the disbursement made by Cesario Goleta as Municipal Treasurer of the Municipality of Bula, Camarines Sur, to Venancia Pontanal, widow of the late Mayor S.B. Pontanal, in the amount of P5,000.00 representing a portion of the salary of the late Mayor as such mayor of said municipality during the period of his suspension from August 16, 1977 up to November 28, 1979, and to restrain or prevent respondent Cesario Goleta as such Municipal Treasurer of the aforementioned municipality from further paying or disbursing the balance of the claim." (Par. 1 of the Order, supra.) However, the respondent judge dismissed the action on the ground that "the criminal case against the late Mayor S.B. Pontanal due to his death amounted to acquittal."

We grant the petition and set aside the Order of the court a quo.

It is obvious that when the statute speaks of the suspended officer being "acquitted" it means that after due hearing and consideration of the evidence against him the court is of the opinion that his guilt has not been proved beyond reasonable doubt. Dismissal of the case against the suspended officer will not suffice because dismissal does not amount to acquittal. As aptly stated in People v. Salico, 84 Phil. 722, 732-733[1949]:

"Acquittal is always based on the merits, that is, the defendant is acquitted because the evidence does not show that defendant's guilt is beyond a reasonable doubt; but dismissal does not decide the case on the merits or that the defendant is not guilty. Dismissal terminates the proceeding, either because the court is not a court of competent jurisdiction, or the evidence does not show that the offense was committed within the territorial jurisdiction of the court, or the complaint or information is not valid or sufficient in form and substance, etc. The only case in which the word dismissal is commonly but not correctly used, instead of the proper term acquittal, is when, after the prosecution has presented all its evidence, the defendant moves for the dismissal and the court dismisses the case on the ground that the evidence fails to show beyond a reasonable doubt that the defendant is guilty; for in such case the dismissal is in reality an acquittal because the case is decided on the merits. If the prosecution fails to prove that the offense was committed within the territorial jurisdiction of the court and the case is dismissed, the dismissal is not an acquittal, inasmuch as if it were so the defendant could not be again prosecuted before the court of competent jurisdiction; and it is elemental that in such case the defendant may again be prosecuted for the same offense before a court of competent jurisdiction."

Respondents invoke Art. 81, No. 1 of the Revised Penal Code which provides that "Death of the accused pending appeal extinguishes his criminal and civil liability." We do not see the relevance of this provision to the case at bar. For one thing the case against Mayor Pontanal was not on appeal but on trial. For another thing the claim for back salaries is neither a criminal nor a civil liability. It is in fact a right provided the conditions of the law are present. Cdpr

WHEREFORE, finding the petition to be well-taken, the same is hereby granted, the order of the court a quo is hereby set aside and another one is entered declaring illegal the payment of municipal funds for the salaries of the late Mayor S.B. Pontanal during his suspension from office and ordering the respondent treasurer to retrieve payments so far disbursed. No pronouncement as to costs.

SO ORDERED.

Barredo (Chairman), Aquino, Concepcion, Jr. and De Castro, JJ., concur.