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G.R. No. L-19617            October 31, 1969

UNIVERSITY OF THE PHILIPPINES BOARD OF REGENTS and CRISTINO JAMIAS, petitioners, vs.AUDITOR GENERAL and the GOVERNMENT SERVICE INSURANCE SYSTEM, respondents.

Crispen D. Baizas and Perfecto V. Fernandez for petitioners.Leovigildo Monasterial, Rodolfo R. Magsarili, V. B. Magadia and Samson G. Binag for respondent Government Service Insurance System.Office of the Solicitor General Arturo A. Alafriz and Solicitor Conrado T. Limcaoco for respondent Auditor General.

SANCHEZ, J.:

The question of power this original action for prohibition presents is whether or not the Board of Regents of the University of the Philippines (U.P.) may extend the tenure of a professor beyond the retirement age by law fixed at 65 years. Respondents answered in the negative. Petitioners came to this Court.

Petitioner Cristino Jamias started service in U.P. on June 26, 1924. At the time the present petition was filed in this Court on April 3, 1962, he was a Professor of English Language and Literature and concurrently Head of the University Publications Department. His service had been unquestionably continuous for more than fifteen years before he reached the age of 65 years on July 20, 1961.

Prior thereto, on June 12, 1961, Dean (now Regent) Tomas S. Fonacier of the U.P. College of Arts and Sciences — the immediate superior of Prof. Jamias — having first obtained the latter's consent, wrote U.P. President Vicente G. Sinco with the request that Jamias' service be extended for one academic year ending April 15, 1962. Fonacier's reasons were that Prof. Jamias was still quite healthy; that he had been commissioned to write the history of U.P. but had just finished half of it, i.e., from U.P.'s establishment to the Benton era that he could continue to act as Head of the University Publications until the administration would find someone to take his place; that Dr. Dionisia Rola who would take over the courses of Prof. Jamias had been assigned to the U.P. College in Baguio; and that the extension would enable the discipline of English to adjust itself to the teaching of Prof. Jamias' courses.

On June 20, 1961, President Sinco favorably endorsed Dean Fonacier's request to the Board of Regents. On July 27, 1961, said board resolved to approve the extension of Prof. Jamias' services until April 15, 1962.

The present controversy started on December 28, 1961 when Auditor Alfredo Liboro, the Auditor General's representative at U.P., questioned the legality of the July 27, 1961 resolution of the Board of Regents just adverted to. U.P. sought reconsideration by the Auditor General. On February 1, 1962, Auditor General Pedro M. Gimenez affirmed the U.P. Auditor's ruling. The Auditor General, citing Opinion 117, dated September 1, 1961, of the Secretary of Justice, held that the Board of Regents was without power to extend the services of U.P. professors beyond the compulsory limit of 65 years.

The Government Service Insurance System (GSIS) joined hands with the Auditor General. Accordingly, on January 5, 1962, GSIS wrote Prof. Jamias that his services rendered after the compulsory retirement age were illegal; and that he (Jamias) was not entitled to compensation. The GSIS letter to Prof. Jamias concluded: "Thus, if you were paid salary for services rendered after you became due for compulsory retirement, the same should be refunded to the University of the Philippines; otherwise, it will be deducted from the annuity due you under CA 186, as amended, pursuant to a ruling of the Auditor General in a similar case and turned over to the University of the Philippines." Prof. Jamias sought reconsideration. GSIS turned it down.

Then followed the directive of U.P. Auditor Alfredo Liboro that Prof. Jamias' salary be withheld beginning with the weekly salary due on March 7, 1962.

It was upon the foregoing backdrop that petitioners U.P. Board of Regents and Cristino Jamias came to this Court on an original petition for prohibition against respondents Auditor General and GSIS. They seek to stop the Auditor General and his men from withholding Prof. Jamias' salary and to restrain GSIS from deducting any amount from his five-year lump sum retirement annuity upon retirement on April 16, 1962. We declined to issue the preliminary injunctive writ prayed for in the petition.

As adverted to at the start of this opinion, the core of the case is this: May the U.P. Board of Regents extend the tenure of a professor beyond retirement age?

1. It is undisputed that U.P. employees, including its professors, are employees of the Government.

The U.P. charter entrusts the university with the duty "to provide advanced instruction in literature, philosophy, the sciences, and arts, and to give professional and technical training."1 This is in line with the obligation expressly imposed upon the State by the Constitution of the Philippines.2 Intrinsically valid then is the holding in University of the Philippines vs. Court of Industrial Relations 107 Phil. 848, 850, that U.P. performs a "legitimate governmental function, ... is maintained by the Government, ... declares no dividends, and is, obviously, not a corporation created for profit but an institution of higher education and therefore not an industrial or business organization."

As government employees, U.P. professors are compulsorily covered by the Retirement Law, Commonwealth Act 186, as amended, which creates a uniform retirement system for all members of the GSIS. It does not take much thought to come to this conclusion. The applicable retirement law at the time Prof. Jamias reached retirement age of 65 years on July 20, 1961 was Section 4 (a), Commonwealth Act 186, as successively amended by Republic Acts 660 (approved June 16, 1951), 1573 (approved June 16, 1956) and 1820 (approved June 22, 1957). Section 4, as amended by said Acts, then read:

SEC. 4. Scope of application of System. — (a) Membership in the System shall be compulsory upon all regularly and permanently appointed employees, including judges of the Courts of First Instance and those whose tenure of office is fixed or limited by law; upon all teachers except only those who are substitutes; upon all regular

employees of the Philippine Tuberculosis Society, and upon all regular officers and enlisted men of the Armed Forces of the Philippines.3

The view that U.P. is definitely governed by Commonwealth Act 186, as amended, is not without support. A rundown of the genealogy of the law gives this thesis a lift. Originally, Section 4 of the law (Commonwealth Act 186, which took effect on November 14, 1936) reads:

Sec. 4. Scope of application of System. — Regular membership in the system shall be compulsory upon —

xxx           xxx           xxx

(f) Regular and permanent employees of other Government boards or agencies, except the University of the Philippines and the Government-owned or controlled, business corporations; ... .

To be noted is that in the early 1936 statute just quoted, Congress did expressly exclude U.P. from the operation of the Retirement Law. But then Section 4 (g) of the same original law gave U.P. the option to join GSIS, viz.:

(g) ... Provided, That any provincial, city or municipal, government, or the University of the Philippines or any other corporation owned or controlled by the Government, shall have the option of joining the System, and if it so joins, the membership shall be compulsory upon all its permanent and regular employees, . . .

The option spoken of by the above-quoted provision was taken advantage of by U.P. when it chose to participate in the GSIS.4

But as the law stood in 1961, the provisions exempting U.P. from GSIS coverage and granting it the option to join GSIS were eliminated by Republic Act 660 which took effect on June 16, 1951 and succeeding acts. Section 4(a) of Republic Act 660 approved June 16, 1951 provided that:

(a) Membership in the System shall be compulsory upon all regularly and permanently appointed employees, including those whose tenure of office is fixed or limited by law; upon all teachers except only those who are substitutes; and upon all regular officers and enlisted men of the Armed Forces of the Philippines.5

It makes eminent sense to say that the deletion of the University of the Philippines from the exception cannot be ofde minimis effect. That omission is not elusive of exact comprehension either. The plain and natural impact thereof is that U.P. became covered by the System. Because, the option to join or not to join was left solely and exclusively to be exercised by "an elective official of the National Government or of a local government that is a member of the System" — and by no other.6 The ineluctable conclusion that follows is that since U.P. is not within the limited limits of the exception, it is a compulsory member of the System.

2. Let us now take a look at the law decisive of the present question — the Board of Regents' power to extend appointment of U.P. professors. It may perhaps be conducive to better analysis if we go into the history of that law. Initially, the power to extend service was lodged solely with the President of the Philippines.

Section 12 (c) of Commonwealth Act 186, as amended by Republic Act 660, read as follows:

(c) Retirement shall be automatic and compulsory at the age of sixty-five years, if he has completed fifteen years of service, and if he has not, he shall be allowed to continue in the service until he shall have completed fifteen years unless he is otherwise eligible for disability retirement. This clause shall not apply to members of the judiciary and constitutional officers whose tenure of office is guaranteed. Upon specific approval of the President of the Philippines, an employee may be allowed to continue to serve after the age of sixty-five years if he possesses special qualifications and his services are needed. It shall be the duty of the employer concerned to notify each such employee under its direction of the date of his automatic separation from the service at least sixty days in advance thereof.

By Republic Act 728 (approved June 18, 1952) which amended Section 12 (c), that power to extend service was expanded to include the President of the Senate, the Speaker of the House of Representatives, and the Chief Justice of the Supreme Court, viz.:

(c) ... Upon specific approval of the President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, or the Chief Justice of the Supreme Court, as the case may be, an employee may be allowed to continue to serve in the Executive, Legislative, or Judicial Branch of the Government after the age of sixty-five years if he possesses special qualifications and his services are needed. ... .

The above provision later became section 12 (e) because Republic Act 1616 (approved May 31, 1957) added paragraphs (b) and (c) to Section 12.

Then came Republic Act 3096, effective June 17, 1961, which displaced Section 12 (e), thus —

(e) Retirement shall be automatic and compulsory at the age of sixty-five years, and optional retirement at the age of sixty-three shall be allowed with lump sum payment of present value of annuity for first five years, and future annuity to be paid monthly, and other benefits given to a compulsorily retired member as provided for in Republic Act Numbered Six hundred sixty, as amended, if he has completed fifteen years of service and if he has not been separated from the service during the last three years of service prior to retirement; otherwise he shall be allowed to continue in the service until he shall have completed the required length of service unless he is otherwise eligible for disability retirement. This clause shall not apply to members of the judiciary and constitutional officers whose tenure of office is guaranteed. It shall be the duty of the employer concerned to notify each such employee under its direction of the date of his automatic separation from the service at least sixty days in advance thereof.

Not escaping notice is that the power to extend service of an employee beyond retirement age — previously given to the President of the Philippines, the Senate President, the Speaker, or the Chief Justice — was expressly deleted from the law. The directive that retirement "shall be automatic and compulsory" is imperative. The law does not admit of exception. Such was the legal provision actually in force at the time Prof. Jamias reached 65 years of age.7

In summary, it may be said that in accordance with Republic Act 660, retirement was automatically compulsory at age 65 if the employee had completed 15 years of service; except that upon specific approval by the President of the Philippines, an employee might be allowed to continue to serve after the age of 65 years if he possessed special qualifications and his services were needed. This power given to the President by Republic Act 660 was granted also by Republic Act 728 to the President of the Senate, the Speaker of the House of Representatives and the Chief Justice of the Supreme Court. However, when Republic Act 3096 (the law here applicable) took effect on June 17, 1961, this grant of power to extend the service of an employee beyond the age of 65 was eliminated. Such elimination operates to repeal the eliminated provision.8

There can be no mistake as to this. Both the language of the statute (Republic Act 3096) and the express legislative intent deleted the power to grant extension of service. House Bill 1224 which became Republic Act 3096 specifically wrote off the power of the President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, and the Chief Justice of the Supreme Court to extend services of government employees beyond the age of 65 years.9 Needless it is to deeply explore the underlying rationale of this particular amendment. The explanatory note is there. It reads in part:

In the course of operations of the Government Service Insurance System, it has been found that Commonwealth Act No. 186, as amended, still requires further improvement in order that the life and retirement insurance provided therein may be more responsive to the needs of government employees. To attain this end, the following changes are necessary:

xxx           xxx           xxx

3. To realize the purpose behind requiring that retirement be compulsory upon attainment of age 65, the continuance in the service of those who are already eligible to compulsory retirement should no longer be allowed.10

Taking stock of the prohibition in Republic Act 3096, the executive department of the government made the impact of the law — which bans extension of service after retirement age — clear to its different agencies. This was when the Office of the President of the Philippines issued Memorandum Circular 30 dated September 15, 1961 "enjoining against the continuance in the service of officials and employees beyond the due date of their automatic and compulsory retirement." That circular called attention to the fact that Section 12(e) of Commonwealth Act 186, as amended by Republic Act 3096, "no longer contains the provisions empowering the President of the Philippines, the President of the Senate, the Speaker of the House of Representatives, and the Chief Justice of the Supreme Court to continue an employee in the service in the Executive, Legislative or Judicial Branch of the Government, as the case may be, after reaching the automatic and compulsory retirement age of 65 years." The circular directed strict compliance with the last portion of said Section 12(e) which makes it a duty on the part of the employer concerned to notify the employee of the date of his automatic separation at least 60 days in advance thereof.

Prof. Cristino Jamias reached 65 years of age on July 20, 1961. At that time, Republic Act 3096 — enacted on June 17, 1961 — was in force. No power or authority there was then to extend the service of a government employee beyond 65 years of age. Prohibition to extend is patent and clear. The retirement of Prof. Jamias became automatic and compulsory. The Board of Regents is powerless to extend his service beyond July 20, 1961. And, its resolution now under consideration is null and void.

3. But petitioners would want to anchor the power of the Board of Regents to so extend upon Section 6(e) of the U.P. Charter, Act 1870, as amended, in which the language is —

SEC 6. The Board of Regents shall have the following powers and duties, in addition to its general powers of administration and the exercise of the powers of the corporation:

xxx           xxx           xxx

(e) To appoint, on the recommendation of the President of the University, professors, instructors, lecturers and other employees of the University; to fix their compensations, hours of service, and such other duties and conditions as it may deem proper; to grant to them in its discretion leave of absence under such regulations as it may promulgate, any other provisions of law to the contrary notwithstanding, and to remove them for cause after an investigation and hearing shall have been had. 11

Petitioners' trenchant claim is that the foregoing gives the Board of Regents plenary power to deal with all aspects of service or employment in the university. Their position is that legislative intention there is to free U.P.'s academicians from control and interference by other bureaus and offices of the government. They aver that the board is with power to fix conditions of employment "as it may deem proper."

We are thus required to pit Section 6(e) of the U.P. Charter against Section 12(e) of the Retirement Law, as amended by Republic Act 3096. As we do so, we find that the Board of Regents' power to fix conditions of service "as it may deem proper" is but a general statement. It lacks that illuminating specific authority to place the Board of Regents beyond the reach of Republic Act 3096, which in letter and legislative intent proscribed extension of service. We are hard pressed to understand how the cited provision in the U.P. Charter could give the Board of Regents power to extend where none was theretofore granted, and given the fact that even the President of the Philippines who previously had that authority was shorn of it by law. Absent an express congressional direction that the Board of Regents may so extend, we are unprepared to indulge in unbridled expansive construction and to say that U.P. is beyond the reach of that positive and unambiguous law, Commonwealth Act 186, as amended by Republic Act 3096, on the retirement of government employees which include U.P. professors.

The cited provisions of Act 1870 (the U.P. Charter) must be deemed restricted or limited by Commonwealth Act 186, as amended by Republic Act 3096, which makes 65 the automatic and compulsory age for retirement, the conditions set forth by the law being present. The Board of Regents was not, by the applicable statute, Republic Act 3096, singled out as an exception, one with sole authority to grant extension of service. In fact, even the President of the Philippines, to repeat, was divested of that power. It is because of this that we would rather adhere, than depart, from the rule that courts may not introduce exceptions or conditions by construction from considerations of convenience, public welfare, or for any other laudable purpose. 12

This should dispose then of petitioners' contention that policy considerations behind compulsory retirement in the government service are not applicable to U.P. by the very nature of the conditions of the service rendered therein — and these conditions are even debatable — viz.: U.P. faculty members for the most part lead sheltered quiet lives; that owing to the leisurely pace of academic work the faculty members normally are spared the rigors of an eight-hour day, their duties being within their energies as a whole; that they perform their work with like efficiency as before the age of 65; and that unlike regular bureaus and offices of the government where old age decreases efficiency by the very nature of the work, U.P. calls for special services and qualifications, not necessarily affected by age. On the other side of the coin, of course, is the thought quite often expressed that no man — not even one with the learning and wisdom of a 65-year old — is indispensable. Anyway, whether or not as a rule the university professors maintain, increase or diminish their efficiency as they reach 65 years, is a consideration which would not give this Court a desirable approach to the problem before us. Policy that is proper for legislation is beyond the ambit of court powers. Suffice it to say that these suasions are best addressed to Congress. Because courts cannot simply melt and recast a statute.

4. Petitioners next assert that their theory that a retired employee may be retained in the government beyond 65 years of age finds support from Section 12(d) of Commonwealth Act 186, as amended. This section reads:

(d) An employee separated from the service who is receiving an annuity described under section eleven shall not be eligible again to appointment to any appointive position or employment under any 'employer' unless the appointing authority determines that he is possessed of special qualifications and his medical examination has been approved by the System, in which event he shall not be entitled to payments of his annuity during the period of his new employment: Provided, however, That nothing in this Act shall be so construed as to affect the rights of the annuitant's beneficiary if the annuitant has been receiving or had elected, and was otherwise entitled to, a reduced annuity under subsection (a) of section eleven: Provided, further, That upon the termination of his new appointment, the payments of the annuity which were discontinued shall be resumed: And provided, finally, That if the annuitant's salary in his new position is less than the annuity granted to him under this Act, he shall be entitled to receive the difference. 13

To be observed is that under the above provision, an employee separated from the service who is receiving an annuity may be eligible again to another appointment in the government if the appointing authority determines that he is possessed of special qualifications and his medical examination has been approved by the GSIS. This provision of law must be viewed in the context of other provisions of Commonwealth Act 186 and in accordance with the history of the law.

Section 12(e), as we have seen, expressly exacts automatic and compulsory retirement at age 65 if the conditions therein stated are met; that while previous amendments have granted the power of extension of service of retirable employees to the four top officials of the government, Republic Act 3096 (the law which here governs) eliminated such power. To adopt petitioners' view then in reference to Section 12(d) above-quoted would be to make the provisions of Section 12(e) conflict with those of Section 12(d) of the law. The former would be rendered nugatory by the latter. This is an effect that should be avoided. Consistency in statutes is of prime importance. All laws are presumed to be consistent with each other. In interpreting laws, courts are hidebound by the rule that theirs is to reconcile and to harmonize; and, if possible, to avoid inconsistency and repugnancy; to give the laws a conjoint not discordant effect. As we said in a previous case,14 "[w]e have to take the thought conveyed by the statute as a whole; construe the constituent parts together; ascertain the legislative intent from the whole act; consider each and every provision thereof in the light of the general purpose of the statute; and endeavour to make every part effective, harmonious, sensible."

To harmonize Section 12(d) with Section 12(e) — as it stood amended by Republic Act 3096 — is to hold that a retired employee who is receiving annuity from the GSIS may be reappointed to the government service only if he has not yet reached the age of 65 years. The prohibition in Section 12(e) against the extension of the service of a retirable government employee where the conditions for automatic and compulsory retirement exist is so patent and so clear that it will not admit of any other construction that would violate legislative intent.

5. Petitioners bring in the concept of academic freedom. Their argument is that the law as we now interpret it would trench upon the academic freedom enjoyed by the university as guaranteed by the Constitution. Petitioners refer to Section 5, Article XIV of the Constitution, which provides that "[u]niversities established by the State shall enjoy academic freedom." Petitioners mention the concurring opinion of Justice Frankfurter, whom Justice Harlan joins, in Sweezy vs. New Hampshire, 354 U.S. 234, 1 L. Ed. 2d. 1311, 1327, 1332. This concurring opinion quotes a passage from a report entitled "The Open Universities in South Africa" where statement was made that academic freedom of a university consists of four essential freedoms — "to determine for itself on academic grounds who may teach, what may be taught, how it shall be taught, and who may be admitted to study." Petitioners insist that Commonwealth Act 186, as amended, would trample upon U.P.'s freedom to decide who may teach.

We do not discern in the statute just referred to a meaning violative of U.P.'s academic freedom. It does not erode the substance of the freedom in any way. It must be stressed that what we are concerned with here is retirement, not appointment. We hold that the law here involved is a reasonable regulation. It is an expression by Congress of sound judgment on when an employee shall, because of age, stop. The purpose was summed up in the explanatory note to the bill that "continuance in the service of those who are already eligible to compulsory retirement should no longer be allowed."15 That law lays down the rule that at the age of 65, a person is ripe for retirement. There is no discrimination. All government employees who are members of the System and similarly situated are governed thereby. U.P. professors are not exempt therefrom.

Barenblatt vs. U.S.16 is illuminating. It was there held that the academic freedom of a university has not been violated because the congressional investigation into communist infiltration into the field of education is not shown to be directed at controlling what has been taught at the university. Pertinent is the following passage found in said case: "The claims of academic freedom cannot be asserted unqualifiedly. The social interest it embodies is but one of the larger set, within which the interest in national self-preservation and enlightened and well-informed lawmaking also prominently appeal. When two major interests collide, as they do in the present case, neither the one nor the other can claim a priori supremacy. But it is in the nature of our system of laws that there must be demonstrable justification for an action by the Government which endangers or denies the freedom guaranteed by the Constitution."17

We accordingly, hold that the constitutionally-guaranteed academic freedom has not been here violated.

6. Having reached the conclusion that the Board of Regents was bereft of authority to extend Prof. Jamias' tenure for one school year, there remains for consideration this last question: Is Prof. Jamias to be compensated during the extended period in which he worked?

The obligation to compensate may not perhaps be fully comprehended unless we view the case in the environment in which Prof. Jamias' service was extended.

At the time Prof. Jamias reached 65 years, he was assigned a specific job, namely, to write the history of the University of the Philippines. Retirement age caught him half through with this undertaking. There is the desirability of having Prof. Jamias complete this assignment which he started. Besides, Prof. Jamias was then the head of the University Publications. Retirement would create a vacuum. U.P. had yet to find a qualified fill up. Then, also, Dr. Dionisia Rola, who was to relieve Prof. Jamias of his teaching courses, was still assigned to Baguio. The discipline of English had yet to adjust itself to the teaching of the courses he handled. Again, Prof. Jamias had to stay. The interests of the students so demanded.

It is in this factual configuration that the university authorities took it upon themselves to engage the services of Prof. Jamias until the termination of the school year, which was April 15, 1962. The unique and peculiar circumstances under which Prof. Jamias' services were sought, engaged and harnessed anew, sufficiently justified a special contract of services up to April 15, 1962. This the Board of Regents had authority to do, even as it had no power to extend his original term. The questioned resolution must be viewed in this sense. He is thus entitled to payment of his salary up to the last named date.

Upon the view we take of this case —

(1) We vote to grant the writ of prohibition prayed for by petitioners;

(2) Respondent Auditor General and his representatives are hereby permanently enjoined from withholding the salary of petitioner Cristino Jamias corresponding to the extended period of service from July 20, 1961 to April 15, 1962; and, in the event the Auditor General and his representatives have already done so, they are hereby directed to return to petitioner Jamias the compensation due the latter for the said period; and

(3) Respondent Government Service Insurance System is hereby permanently enjoined from deducting any amount from petitioner Jamias' five-year retirement annuity; and if said System has already done so, it is hereby directed to return to petitioner Jamias what it has already deducted.

No costs allowed. So ordered.

G.R. No. L-19337             September 30, 1969

ASTURIAS SUGAR CENTRAL, INC., petitioner, vs.COMMISSIONER OF CUSTOMS and COURT OF TAX APPEALS, respondents.

Laurea, Laurea and Associates for petitioner.Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Esmeraldo Umali and Solicitor Sumilang V. Bernardo for respondents.

 

CASTRO, J.:

This is a petition for review of the decision of the Court of Tax Appeals of November 20, 1961, which denied recovery of the sum of P28,629.42, paid by the petitioner, under protest, in the concept of customs duties and special import tax, as well as the petitioner's alternative remedy to recover the said amount minus one per cent thereof by way of a drawback under sec. 106 (b) of the Tariff and Customs Code.

The petitioner Asturias Sugar Central, Inc. is engaged in the production and milling of centrifugal sugar for exert, the sugar so produced being placed in containers known as jute bags. In 1957 it made two importations of jute bags. The first shipment consisting of 44,800 jute bags and declared under entry 48 on January 8, 1967, entered free of customs duties and special import tax upon the petitioner's filing of Re-exportation and Special Import Tax Bond no. 1 in the amounts of P25,088 and P2,464.50, conditioned upon the exportation of the jute bags within one year from the date of importation. The second shipment consisting of 75,200 jute bags and declared under entry 243 on February 8, 1957, likewise entered free of customs duties and special import tax upon the petitioner's filing of Re-exportation and Special Import Tax Bond no. 6 in the amounts of P42,112 and P7,984.44, with the same conditions as stated in bond no. 1.

Of the 44,800 jute bags declared under entry 48, only 8,647 were exported within one year from the date of importation as containers of centrifugal sugar. Of the 75,200 jute bags declared under entry 243, only 25,000 were exported within the said period of one year. In other words, of the total number of imported jute bags only 33,647 bags were exported within one year after their importation. The remaining 86,353 bags were exported after the expiration of the one-year period but within three years from their importation.

On February 6, 1958 the petitioner, thru its agent Theo. H. Davies & Co., Far East, Ltd., requested the Commissioner of Customs for a week's extension of Re-exportation and Special Import Tax Bond no. 6 which was to expire the following day, giving the following as the reasons for its failure to export the remaining jute bags within the period of one year: (a) typhoons and severe floods; (b) picketing of the Central railroad line from November 6 to December 21, 1957 by certain union elements in the employ of the Philippine Railway Company, which hampered normal operations; and (c) delay in the arrival of the vessel aboard which the petitioner was to ship its sugar which was then ready for loading. This request was denied by the Commissioner per his letter of April 15, 1958.

Due to the petitioner's failure to show proof of the exportation of the balance of 86,353 jute bags within one year from their importation, the Collector of Customs of Iloilo, on March 17, 1958, required it to pay the amount of P28,629.42 representing the customs duties and special import tax due thereon, which amount the petitioner paid under protest.

In its letter of April 10, 1958, supplemented by its letter of May 12, 1958, the petitioner demanded the refund of the amount it had paid, on the ground that its request for extension of the period of one year was filed on time, and that its failure to export the jute bags within the required one-year period was due to delay in the arrival of the vessel on which they were to be loaded and to the picketing of the Central railroad line. Alternatively, the petitioner asked for refund of the same amount in the form of a drawback under section 106(b) in relation to section 105(x) of the Tariff and Customs Code.

After hearing, the Collector of Customs of Iloilo rendered judgment on January 21, 1960 denying the claim for refund. From his action, appeal was taken to the Commissioner of Customs who upheld the decision of the Collector. Upon a petition for review the Court of Tax Appeals affirmed the decision of the Commissioner of Customs.

The petitioner imputes three errors to the Court of Tax Appeals, namely:

1. In not declaring that force majeure and/or fortuitous event is a sufficient justification for the failure of the petitioner to export the jute bags in question within the time required by the bonds.

2. In not declaring that it is within the power of the Collector of Customs and/or the Commissioner of Customs to extend the period of one (1) year within which the jute bags should be exported.

3. In not declaring that the petitioner is entitled to a refund by way of a drawback under the provisions of section 106, par. (b), of the Tariff and Customs Code.

1. The basic issue tendered for resolution is whether the Commissioner of Customs is vested, under the Philippine Tariff Act of 1909, the then applicable law, with discretion to extend the period of one year provided for in section 23 of the Act. Section 23 reads:

SEC. 23. That containers, such as casks, large metal, glass, or other receptacles which are, in the opinion of the collector of customs, of such a character as to be readily identifiable may be delivered to the importer thereof upon identification and the giving of a bond with sureties satisfactory to the collector of customs in an amount equal to

double the estimated duties thereon, conditioned for the exportation thereof or payment of the corresponding duties thereon within one year from the date of importation, under such rules and regulations as the Insular Collector of Customs shall provide.1

To implement the said section 23, Customs Administrative Order 389 dated December 6, 1940 was promulgated, paragraph XXVIII of which provides that "bonds for the re-exportation of cylinders and other containers are good for 12 months without extension," and paragraph XXXI, that "bonds for customs brokers, commercial samples, repairs and those filed to guarantee the re-exportation of cylinders and other containers are not extendible."

And insofar as jute bags as containers are concerned, Customs Administrative Order 66 dated August 25, 1948 was issued, prescribing rules and regulations governing the importation, exportation and identification thereof under section 23 of the Philippine Tariff Act of 1909. Said administrative order provides:

That importation of jute bags intended for use as containers of Philippine products for exportation to foreign countries shall be declared in a regular import entry supported by a surety bond in an amount equal to double the estimated duties, conditioned for the exportation or payment of the corresponding duties thereon within one year from the date of importation.

It will be noted that section 23 of the Philippine Tariff Act of 1909 and the superseding sec. 105(x) of the Tariff and Customs Code, while fixing at one year the period within which the containers therein mentioned must be exported, are silent as to whether the said period may be extended. It was surely by reason of this silence that the Bureau of Customs issued Administrative Orders 389 and 66, already adverted to, to eliminate confusion and provide a guide as to how it shall apply the law, 2 and, more specifically, to make officially known its policy to consider the one-year period mentioned in the law as non-extendible.

Considering that the statutory provisions in question have not been the subject of previous judicial interpretation, then the application of the doctrine of "judicial respect for administrative construction,"  3 would, initially, be in order.

Only where the court of last resort has not previously interpreted the statute is the rule applicable that courts will give consideration to construction by administrative or executive departments of the state.4

1awphîl.nèt

The formal or informal interpretation or practical construction of an ambiguous or uncertain statute or law by the executive department or other agency charged with its administration or enforcement is entitled to consideration and the highest respect from the courts, and must be accorded appropriate weight in determining the meaning of the law, especially when the construction or interpretation is long continued and uniform or is contemporaneous with the first workings of the statute, or when the enactment of the statute was suggested by such agency.5

The administrative orders in question appear to be in consonance with the intention of the legislature to limit the period within which to export imported containers to one year, without extension, from the date of importation. Otherwise, in enacting the Tariff and Customs Code to supersede the Philippine Tariff Act of 1909, Congress would have amended section 23 of the latter law so as to overrule the long-standing view of the Commissioner of Customs that the one-year period therein mentioned is not extendible.

Implied legislative approval by failure to change a long-standing administrative construction is not essential to judicial respect for the construction but is an element which greatly increases the weight given such construction.6

The correctness of the interpretation given a statute by the agency charged with administering its provision is indicated where it appears that Congress, with full knowledge of the agency's interpretation, has made significant additions to the statute without amending it to depart from the agency's view.7

Considering that the Bureau of Customs is the office charged with implementing and enforcing the provisions of our Tariff and Customs Code, the construction placed by it thereon should be given controlling weight. 1awphîl.nèt

In applying the doctrine or principle of respect for administrative or practical construction, the courts often refer to several factors which may be regarded as bases of the principle, as factors leading the courts to give the principle controlling weight in particular instances, or as independent rules in themselves. These factors are the respect due the governmental agencies charged with administration, their competence, expertness, experience, and informed judgment and the fact that they frequently are the drafters of the law they interpret; that the agency is the one on which the legislature must rely to advise it as to the practical working out of the statute, and practical application of the statute presents the agency with unique opportunity and experiences for discovering deficiencies, inaccuracies, or improvements in the statute; ...  8

If it is further considered that exemptions from taxation are not favored, 9 and that tax statutes are to be construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority, 10 then we are hard put to sustain the petitioner's stand that it was entitled to an extension of time within which to export the jute bags and, consequently, to a refund of the amount it had paid as customs duties.

In the light of the foregoing, it is our considered view that the one-year period prescribed in section 23 of the Philippine Tariff Act of 1909 is non-extendible and compliance therewith is mandatory.

The petitioner's argument that force majeure and/or fortuitous events prevented it from exporting the jute bags within the one-year period cannot be accorded credit, for several reasons. In the first place, in its decision of November 20, 1961, the Court of Tax Appeals made absolutely no mention of or reference to this argument of the petitioner, which can only be interpreted to mean that the court did not believe that the "typhoons, floods and picketing" adverted to by the petitioner in its brief were of such magnitude or nature as to effectively prevent the exportation of the jute bags within the required one-year period. In point of fact nowhere in the record does the petitioner convincingly show that the so-called fortuitous events or force majeure referred to by it precluded the timely exportation of the jute bags. In the second place, assuming, arguendo, that the one-year period is extendible, the jute bags were not actually exported within the one-week extension the petitioner sought. The record shows that although of the remaining 86,353 jute bags 21,944 were exported within the period of one week after the request for extension was filed, the rest of the bags, amounting to a total of 64,409, were actually exported only during the period from February 16 to May 24, 1958, long after the expiration of the one-week extension sought by the petitioner. Finally, it is clear from the record that the typhoons and floods which, according to the petitioner, helped render impossible the fulfillment of its obligation to export within the one-year period, assuming that they may be placed in the category of fortuitous events or force majeure, all occurred prior to the execution of the bonds in question, or prior to the commencement of the one-year period within which the petitioner was in law required to export the jute bags.

2. The next argument of the petitioner is that granting that Customs Administrative Order 389 is valid and binding, yet "jute bags" cannot be included in the phrase "cylinders and other containers" mentioned therein. It will be noted, however, that the Philippine Tariff Act of 1909 and the Tariff and Customs Code, which Administrative Order 389 seeks to implement, speak of "containers" in general. The enumeration following the word "containers" in the said statutes serves merely to give examples of containers and not to specify the particular kinds thereof. Thus, sec. 23 of the Philippine Tariff Act states, "containers such as casks large metals, glass or other receptacles," and sec. 105 (x) of the Tariff and Customs Code mentions "large containers," giving as examples "demijohn cylinders, drums, casks and other similar receptacles of metal, glass or other materials." (emphasis supplied) There is, therefore, no reason to suppose that the customs authorities had intended, in Customs Administrative Order 389 to circumscribe the scope of the word "container," any more than the statures sought to be implemented actually intended to do.

3. Finally, the petitioner claims entitlement to a drawback of the duties it had paid, by virtue of section 106 (b) of the Tariff and Customs Code, 11 which reads:

SEC. 106. Drawbacks: ...

b. On Articles Made from Imported Materials or Similar Domestic Materials and Wastes Thereof. — Upon the exportation of articles manufactured or produced in the Philippines, including the packing, covering, putting up, marking or labeling thereof, either in whole or in part of imported materials, or from similar domestic materials of equal quantity and productive manufacturing quality and value, such question to be determined by the Collector of Customs, there shall be allowed a drawback equal in amount to the duties paid on the imported materials so used, or where similar domestic materials are used, to the duties paid on the equivalent imported similar materials, less one per cent thereof: Provided, That the exportation shall be made within three years after the importation of the foreign material used or constituting the basis for drawback ... .

The petitioner argues that not having availed itself of the full exemption granted by sec. 105(x) of the Tariff and Customs Code due to its failure to export the jute bags within one year, it is nevertheless, by authority of the above-quoted provision, entitled to a 99% drawback of the duties it had paid, averring further that sec. 106(b) does not presuppose immediate payment of duties and taxes at the time of importation.

The contention is palpably devoid of merit.

The provisions invoked by the petitioner (to sustain his claim for refund) offer two options to an importer. The first, under sec. 105 (x), gives him the privilege of importing, free from import duties, the containers mentioned therein as long as he exports them within one year from the date of acceptance of the import entry, which period as shown above, is not extendible. The second, presented by sec. 106 (b), contemplates a case where import duties are first paid, subject to refund to the extent of 99% of the amount paid, provided the articles mentioned therein are exported within three years from importation.

It would seem then that the Government would forego collecting duties on the articles mentioned in section 105(x) of Tariff and Customs Code as long as it is assured, by the filing of a bond, that the same shall be exported within the relatively short period of one year from the date of acceptance of the import entry. Where an importer cannot provide such assurance, then the Government, under sec. 106(b) of said Code, would require payment of the corresponding duties first. The basic purpose of the two provisions is the same, which is, to enable a local manufacturer to compete in foreign markets, by relieving him of the disadvantages resulting from having to pay duties on imported merchandise, thereby building up export trade and encouraging manufacture in the country. 12But there is a difference, and it is this: under section 105(x) full exemption is granted to an importer who justifies the grant of exemption by exporting within one-year. The petitioner, having opted to take advantage of the provisions of section 105(x), may not, after having failed to comply with the conditions imposed thereby, avoid the consequences of such failure by being allowed a drawback under section 106(b) of the same Act without having complied with the conditions of the latter section.

For it is not to be supposed that the legislature had intended to defeat compliance with the terms of section 105(x) thru a refuge under the provisions of section 106(b). A construction should be avoided which affords an opportunity to defeat compliance with the terms of a statute. 13 Rather courts should proceed on the theory that parts of a statute may be harmonized and reconciled with each other.

A construction of a statute which creates an inconsistency should be avoided when a reasonable interpretation can be adopted which will not do violence to the plain words of the act and will carry out the intention of Congress.

In the construction of statutes, the courts start with the assumption that the legislature intended to enact an effective law, and the legislature is not to be presumed to have done a vain thing in the enactment of a statute. Hence, it is a general principle, embodied in the maxim, "ut res magis valeat quam pereat," that the courts should, if reasonably possible to do so without violence to the spirit and language of an act, so interpret the statute to give it efficient operation and effect as a whole. An interpretation should, if possible, be avoided under which a statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative, or nugatory. 14

ACCORDINGLY, the judgment of the Court of Tax Appeals of November 20, 1961 is affirmed, at petitioner's cost.

G.R. No. L-32717 November 26, 1970

AMELITO R. MUTUC, petitioner, vs.COMMISSION ON ELECTIONS, respondent.

Amelito R. Mutuc in his own behalf.

Romulo C. Felizmena for respondent.

 

FERNANDO, J.:

The invocation of his right to free speech by petitioner Amelito Mutuc, then a candidate for delegate to the Constitutional Convention, in this special civil action for prohibition to assail the validity of a ruling of respondent Commission on Elections enjoining the use of a taped jingle for campaign purposes, was not in vain. Nor could it be considering the conceded absence of any express power granted to respondent by the Constitutional Convention Act to so require and the bar to any such implication arising from any provision found therein, if deference be paid to the principle that a statute is to be construed consistently with the fundamental law, which accords the utmost priority to freedom of expression, much more so when utilized for electoral purposes. On November 3, 1970, the very same day the case was orally argued, five days after its filing, with the election barely a week away, we issued a minute resolution granting the writ of prohibition prayed for. This opinion is intended to explain more fully our decision.

In this special civil action for prohibition filed on October 29, 1970, petitioner, after setting forth his being a resident of Arayat, Pampanga, and his candidacy for the position of delegate to the Constitutional Convention, alleged that respondent Commission on Elections, by a telegram sent to him five days previously, informed him that his certificate of candidacy was given due course but prohibited him from using jingles in his mobile units equipped with sound systems and loud speakers, an order which, according to him, is "violative of [his] constitutional right ... to freedom of speech."  1 There being no plain, speedy and adequate remedy, according to petitioner, he would seek a writ of prohibition, at the same time praying for a preliminary injunction. On the very next day, this Court adopted a resolution requiring respondent Commission on Elections to file an answer not later than November 2, 1970, at the same time setting the case for hearing for Tuesday November 3, 1970. No preliminary injunction was issued. There was no denial in the answer filed by respondent on November 2, 1970, of the factual allegations set forth in the petition, but the justification for the prohibition was premised on a provision of the Constitutional Convention Act, 2which made it unlawful for candidates "to purchase, produce, request or distribute sample ballots, or electoral propaganda gadgets such as pens, lighters, fans (of whatever nature), flashlights, athletic goods or materials, wallets, bandanas, shirts, hats, matches, cigarettes, and the like, whether of domestic or foreign origin." 3It was its contention that the jingle proposed to be used by petitioner is the recorded or taped voice of a singer and therefore a tangible propaganda material, under the above statute subject to confiscation. It prayed that the petition be denied for lack of merit. The case was argued, on November 3, 1970, with petitioner appearing in his behalf and Attorney Romulo C. Felizmena arguing in behalf of respondent.

This Court, after deliberation and taking into account the need for urgency, the election being barely a week away, issued on the afternoon of the same day, a minute resolution granting the writ of prohibition, setting forth the absence of statutory authority on the part of respondent to impose such a ban in the light of the doctrine ofejusdem generis as well as the principle that the construction placed on the statute by respondent Commission on Elections would raise serious doubts about its validity, considering the infringement of the right of free speech of petitioner. Its concluding portion was worded thus: "Accordingly, as prayed for, respondent Commission on Elections is permanently restrained and prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of political jingles by candidates. This resolution is immediately executory." 4

1. As made clear in our resolution of November 3, 1970, the question before us was one of power. Respondent Commission on Elections was called upon to justify such a prohibition imposed on petitioner. To repeat, no such authority was granted by the Constitutional Convention Act. It did contend, however, that one of its provisions referred to above makes unlawful the distribution of electoral propaganda gadgets, mention being made of pens, lighters, fans, flashlights, athletic goods or materials, wallets, bandanas, shirts, hats, matches, and cigarettes, and concluding with the words "and the like."  5 For respondent Commission, the last three words sufficed to justify such an order. We view the matter differently. What was done cannot merit our approval under the well-known principle of ejusdem generis, the general words following any enumeration being applicable only to things of the same kind or class as those specifically referred to. 6 It is quite apparent that what was contemplated in the Act was the distribution of gadgets of the kind referred to as a means of inducement to obtain a favorable vote for the candidate responsible for its distribution.

The more serious objection, however, to the ruling of respondent Commission was its failure to manifest fealty to a cardinal principle of construction that a statute should be interpreted to assure its being in consonance with, rather than repugnant to, any constitutional command or prescription. 7 Thus, certain Administrative Code provisions were given a "construction which should be more in harmony with the tenets of the fundamental law."  8 The desirability of removing in that fashion the taint of constitutional infirmity from legislative enactments has always commended itself. The judiciary may even strain the ordinary meaning of words to avert any collision between what a statute provides and what the Constitution requires. The objective is to reach an interpretation rendering it free from constitutional defects. To paraphrase Justice Cardozo, if at all

possible, the conclusion reached must avoid not only that it is unconstitutional, but also grave doubts upon that score. 9

2. Petitioner's submission of his side of the controversy, then, has in its favor obeisance to such a cardinal precept. The view advanced by him that if the above provision of the Constitutional Convention Act were to lend itself to the view that the use of the taped jingle could be prohibited, then the challenge of unconstitutionality would be difficult to meet. For, in unequivocal language, the Constitution prohibits an abridgment of free speech or a free press. It has been our constant holding that this preferred freedom calls all the more for the utmost respect when what may be curtailed is the dissemination of information to make more meaningful the equally vital right of suffrage. What respondent Commission did, in effect, was to impose censorship on petitioner, an evil against which this constitutional right is directed. Nor could respondent Commission justify its action by the assertion that petitioner, if he would not resort to taped jingle, would be free, either by himself or through others, to use his mobile loudspeakers. Precisely, the constitutional guarantee is not to be emasculated by confining it to a speaker having his say, but not perpetuating what is uttered by him through tape or other mechanical contrivances. If this Court were to sustain respondent Commission, then the effect would hardly be distinguishable from a previous restraint. That cannot be validly done. It would negate indirectly what the Constitution in express terms assures. 10

3. Nor is this all. The concept of the Constitution as the fundamental law, setting forth the criterion for the validity of any public act whether proceeding from the highest official or the lowest functionary, is a postulate of our system of government. That is to manifest fealty to the rule of law, with priority accorded to that which occupies the topmost rung in the legal hierarchy. The three departments of government in the discharge of the functions with which it is entrusted have no choice but to yield obedience to its commands. Whatever limits it imposes must be observed. Congress in the enactment of statutes must ever be on guard lest the restrictions on its authority, whether substantive or formal, be transcended. The Presidency in the execution of the laws cannot ignore or disregard what it ordains. In its task of applying the law to the facts as found in deciding cases, the judiciary is called upon to maintain inviolate what is decreed by the fundamental law. Even its power of judicial review to pass upon the validity of the acts of the coordinate branches in the course of adjudication is a logical corollary of this basic principle that the Constitution is paramount. It overrides any governmental measure that fails to live up to its mandates. Thereby there is a recognition of its being the supreme law.

To be more specific, the competence entrusted to respondent Commission was aptly summed up by the present Chief Justice thus: "Lastly, as the branch of the executive department — although independent of the President — to which the Constitution has given the 'exclusive charge' of the 'enforcement and administration of all laws relative to the conduct of elections,' the power of decision of the Commission is limited to purely 'administrative questions.'"11 It has been the constant holding of this Court, as it could not have been otherwise, that respondent Commission cannot exercise any authority in conflict with or outside of the law, and there is no higher law than the Constitution. 12 Our decisions which liberally construe its powers are precisely inspired by the thought that only thus may its responsibility under the Constitution to insure free, orderly and honest elections be adequately fulfilled. 13 There could be no justification then for lending approval to any ruling or order issuing from respondent Commission, the effect of which would be to nullify so vital a constitutional right as free speech. Petitioner's case, as was obvious from the time of its filing, stood on solid footing.

WHEREFORE, as set forth in our resolution of November 3, 1970, respondent Commission is permanently restrained and prohibited from enforcing or implementing or demanding compliance with its aforesaid order banning the use of political taped jingles. Without pronouncement as to costs.

Concepcion, C.J., Reyes, J.B.L., Makalintal, Zaldivar, Castro, Barredo and Villamor, JJ., concur.

G.R. No. L-55230 November 8, 1988

HON. RICHARD J. GORDON, in his capacity as City Mayor of Olongapo, petitioner, vs.JUDGE REGINO T. VERIDIANO II and Spouses EDUARDO and ROSALINDA YAMBAO, respondents.

 

CRUZ, J.:

The issue before the Court is the conflict between the Food and Drug Administration and the mayor of Olongapo City over the power to grant and revoke licenses for the operation of drug stores in the said city. While conceding that the FDA possesses such power, the mayor claims he may nevertheless, in the exercise of his own power, prevent the operation of drug stores previously permitted by the former.

There are two drug stores involved in this dispute, to wit, the San Sebastian Drug Store and the Olongapo City Drug Store, both owned by private respondent Rosalinda Yambao. 1 They are located a few meters from each other in the same building on Hospital Road, Olongapo City. 2 They were covered by Mayor's Permits Nos. 1954 and 1955, respectively, issued for the year 1980, 3 and licenses to operate issued by the FDA for the same year. 4

This case arose when on March 21, 1980, at about 5:00 o'clock in the afternoon, a joint team composed of agents from the FDA and narcotics agents from the Philippine Constabulary conducted a "test buy" at San Sebastian Drug Store and was sold 200 tablets of Valium 10 mg. worth P410.00 without a doctor's prescription.. 5

A report on the operation was submitted to the petitioner, as mayor of Olongapo City, on April 9, 1980. 6 On April 17, 1980, he issued a letter summarily revoking Mayor's Permit No. 1954, effective April 18, 1980, "for rampant violation of R.A. 5921, otherwise known as the Pharmacy Law and R.A. 6425 or the Dangerous Drugs Act of 1972." 7 Later, when the petitioner went to Singapore, Vice-Mayor Alfredo T. de Perio, Jr. caused the posting of a signboard at the San Sebastian Drug Store announcing its permanent closure. 8

Acting on the same investigation report of the "test-buy," and after hearing, FDA Administrator Arsenio Regala, on April 25, 1980, directed the closure of the drug store for three days and its payment of a P100.00 fine for violation of R.A. No. 3720. He also issued a stern warning to Yambao against a repetition of the infraction. 9 On April 29, 1980, the FDA lifted its closure order after noting that the penalties imposed had already been discharged and allowed the drug store to resume operations. 10

On April 30, 1980, Yambao, through her counsel, wrote a letter to the petitioner seeking reconsideration of the revoca tion of Mayor's Permit No. 1954. 11 On May 7, 1980, having received no reply, she and her husband filed with the Regional Trial Court of Olongapo City a complaint for mandamus and damages, with a prayer for a writ of preliminary injunction, against the petitioner and Vice-Mayor de Perio. 12

On the same date, Yambao requested permission from the FDA to exchange the locations of the San Sebastian Drug Store and the Olongapo City Drug Store for reasons of "business preference." 13

The request was granted. 14 But when informed of this action, the petitioner, in a letter to the private respondent dated May 13, 1980, disapproved the transfers and suspended Mayor's Permit No. 1955 for the Olongapo City Drug Store. 15

The Yambaos then filed on May 15, 1980, a supplemental complaint questioning the said suspension and praying for the issuance of a preliminary writ of prohibitory injunction. 16 On the same day, the respondent judge issued an order directing the maintenance of the status quo with respect to the Olongapo City Drug Store pending resolution of the issues. 17

On May 21, 1980, the petitioner wrote the FDA requesting reconsideration of its order of April 29, 1980, allowing resumption of the operation of the San Sebastian Drug Store. 18 The request was denied by the FDA in its reply dated May 27, 1980. 19

A motion for reconsideration of the status quo order had earlier been filed on May 1, 1980 by the petitioner. After a joint hearing and an exchange of memoranda thereon, the respondent judge issued an order on July 16, 1980,20 the dispositive portion of which read as follows:

WHEREFORE, the defendants' motion for reconsideration of the status quo order dated May 15, 1980, is hereby DENIED and the letter of the defendant city mayor dated April 17, 1980, for the revocation of Mayor's Permit No. 1954 for the San Sebastian Drug Store is declared null and void.

Accordingly, a writ of preliminary prohibitory injunction is heretofore issued enjoining defendants from doing acts directed towards the closure of the San Sebastian Drug Store and the suspension of the Olongapo City Drug Store both situated at Hospital Road, Olongapo City. Further, the signboard posted at San Sebastian Drug Store by the defendants is ordered removed in order that the said drug store will resume its normal business operation.

The hearing of the main petition for damages is set on August 14, 1980, at 1:30 o'clock in the afternoon.

The petitioner's motion for reconsideration of the above stated order was denied in an order dated September 4, 1980. 21 The petitioner thereupon came to this Court in this petition for certiorari and prohibition with preliminary, injunction, to challenge the aforesaid orders.

We issued a temporary restraining order against the respondent judge on October 2 7, 1980, 22 but lifted it on December 10, 1980, for failure of the petitioner to file his comment on the private respondents' motion to lift the said order and/or for issuance of a counter restraining order. 23

First, let us compare the bases of the powers and functions respectively claimed by the FDA and the petitioner as mayor of Olongapo City.

The task of drug inspection was originally lodged with the Board of Pharmaceutical Examiners pursuant to Act 2762, as amended by Act 4162. By virtue of Executive Order No. 392 dated January 1, 1951 (mandating reorganization of various departments and agencies), this was assumed by the Department of Health and exercised through an office in the Bureau of Health known as the Drug Inspection Section. This section was empowered "to authorize the opening of pharmacies, drug stores and dispensaries, and similar establishments after inspection by persons authorized by law."

The Food and Drug Administration was created under R.A. No. 3720 (otherwise known as the Food, Drug and Cosmetic Act), approved on June 22, 1963, and vested with all drug inspection functions in line with "the policy of the State to insure safe and good quality supply of food, drug and cosmetics, and to regulate the production, sale and traffic of the same to protect the health of the people." Section 5 of this Act specifically empowers it:

(e) to issue certificates of compliance with technical requirements to serve as basis for the issuance of license and spotcheck for compliance with regulations regarding operation of food, drug and cosmetic manufacturers and establishments.

For a more effective exercise of this function, the Department of Health issued on March 5, 1968, Administrative Order No. 60, series of 1968, laying down the requirements for the application to be filed with the FDA for authorization to operate or establish a drug establishment. The order provides that upon approval of the application, the FDA shall issue to the owner or administrator of the drug store or similar establishment a "License to Operate" which "shall be renewed within the first 3 months of each year upon payment of the required fees." This license contains the following reservation:

However, should during the period of issue, a violation of any provisions of the Food, Drug and Cosmetic Act and/or the regulations issued thereunder be committed, this License shall be subject to suspension or revocation.

When the drug addiction problem continued to aggravate, P.D. No. 280 was promulgated on August 27, 1973, to give more teeth to the powers of the FDA, thus:

Section 1. Any provision of law to the contrary notwithstanding, the Food and Drug Administrator is hereby authorized to order the closure, or suspend or revoke the license of any drug establishment which after administrative investigation is found guilty of selling or dispensing drugs medicines and other similar substances in violation of the Food, Drug and Cosmetic Act, and Dangerous Drugs Act of 1972, or other laws regulating the sale or dispensation of drugs, or rules and regulations issued pursuant thereto.

Sec. 2. The administrative investigation shall be summary in character. The owner of the drug store shall be given an opportunity to be heard. (P.D. 280, emphasis supplied.)

For his part, the petitioner, traces his authority to the charter of Olongapo City, R.A. No. 4645, which inter aliaempowers the city mayor under Section 10 thereof:

k. to grant or refuse municipal licenses to operate or permits of all classes and to revoke the same for violation of the conditions upon which they were granted, or if acts prohibited by law or city ordinances are being committed under protection of such licenses or in the premises in which the business for which the same have been granted is carried on, or for any other good reason of general interest.

The charter also provides, in connection with the powers of the city health officer, that:

Sec. 6 (k). He and his representatives shall have the power to arrest violators of health laws, ordinances, rules and regulations and to recommend the revocation or suspension of the permits of the different establishments to the City Mayor for violation of health laws, ordinances, rules and regulations. (Emphasis supplied.)

An application to establish a drug store in Olongapo City must be filed with the Office of the Mayor and must show that the applicant has complied with the existing ordinances on health and sanitation, location or zoning, fire or building, and other local requirements. If the application is approved, the applicant is granted what is denominated a "Mayor's Permit" providing inter alia that it "is valid only at the place stated above and until (date), unless sooner revoked for cause." 24

Courts of justice, when confronted with apparently conflicting statutes, should endeavor to reconcile the same instead of declaring outright the invalidity of one as against the other. Such alacrity should be avoided. The wise policy is for the judge to harmonize them if this is possible, bearing in mind that they are equally the handiwork of the same legislature, and so give effect to both while at the same time also according due respect to a coordinate department of the government. It is this policy the Court will apply in arriving at the interpretation of the laws above-cited and the conclusions that should follow therefrom.

A study of the said laws will show that the authorization to operate issued by the FDA is a condition precedent to the grant of a mayor's permit to the drug store seeking to operate within the limits of the city. This requirement is imperative. The power to determine if the opening of the drug store is conformable to the national policy and the laws on the regulation of drug sales belongs to the FDA. Hence, a permit issued by the mayor to a drug store not previously cleared with and licensed by the said agency will be a nullity.

This is not to say, however, that the issuance of the mayor's permit is mandatory once it is shown that the FDA has licensed the operation of the applicant drug store. This is not a necessary consequence. For while it may appear that the applicant has complied with the pertinent national laws and policies, this fact alone will not signify compliance with the particular conditions laid down by the local authorities like zoning, building, health, sanitation, and safety regulations, and other municipal ordinances enacted under the general welfare clause. This compliance still has to be ascertained by the mayor if the permit is to be issued by his office. Should he find that the local requirements have not been observed, the mayor must then, in the exercise of his own authority under the charter, refuse to grant the permit sought.

The power to approve a license includes by implication,. even if not expressly granted, the power to revoke it. By extension, the power to revoke is limited by the authority to grant the license, from which it is derived in the first place. Thus, if the FDA grants a license upon its finding that the applicant drug store has complied with the requirements of the general laws and the implementing administrative rules and regulations, it is only for their violation that the FDA may revoke the said license. By the same token, having granted the permit upon his ascertainment that the conditions thereof as applied particularly to Olongapo City have been complied with, it is only for the violation of such conditions that the mayor may revoke the said permit.

Conversely, the mayor may not revoke his own permit on the ground that the compliance with the conditions laid down and found satisfactory by the FDA when it issued its license is in his own view not acceptable. This very same principle also operates on the FDA. The FDA may not revoke its license on the ground that the conditions laid down in the mayor's permit have been violated notwithstanding that no such finding has been made by the mayor.

In the present case, the closure of the San Sebastian Drug Store was ordered by the FDA for violation of its own conditions, which it certainly had the primary power to enforce. By revoking the mayor's permit on the same ground for which the San Sebastian Drug Store had already been penalized by the FDA, the mayor was in effect reversing the derision of the latter on a matter that came under its jurisdiction. As the infraction involved the pharmacy and drug laws which the FDA had the direct responsibility to execute, the mayor had no authority to interpose his own findings on the matter and substitute them for the decision already made by the FDA.

It would have been different if the offense condoned by the FDA was a violation of, say, a city ordinance requiring buildings to be provided with safety devices or equipment, like fire extinguishers. The city executive may ignore such condonation and revoke the mayor's permit just the same. In this situation, he would be acting properly because the enforcement of the city ordinance is his own prerogative. In the present case, however, the condition allegedly violated related to a national law, not to a matter of merely local concern, and so came under the 'jurisdiction of the FDA.

Settled is the rule that the factual findings of administrative authorities are accorded great respect because of their acknowledged expertise in the fields of specialization to which they are assigned. 25 Even the courts of justice, including this Court, are concluded by such findings in the absence of a clear showing of a grave abuse of discretion, which is not present in the case at bar. For all his experience in the enforcement of city ordinances, the petitioner cannot claim the superior aptitudes of the FDA in the enforcement of the pharmacy and drug addiction laws. He should therefore also be prepared, like the courts of justice themselves, to accept its decisions on this matter.

The petitioner magnifies the infraction committed by the San Sebastian Drug Store but the FDA minimizes it. According to the FDA Administrator, Valium is not even a prohibited drug, which is why the penalty imposed was only a 3-day closure of the drug store and a fine of P100.00. 26 Notably, the criminal charges filed against the private respondent for the questioned transaction were dismissed by the fiscal's office. 27

It is also worth noting that the San Sebastian Drug Store was penalized by the FDA only after a hearing held on April 25, 1980, at which private respondent Yambao, assisted by her lawyer-husband, appeared and testified. 28 By contrast, the revocation of the mayor's permit was communicated to her in a letter 29 reading simply as follows:

April 17, 1980

Rosalinda Yambaoc/o San Sebastian Drug StoreHospital Road, Olongapo City

Madame:

Based on a report submitted by PC Major Virtus V. Gil, Chief 3 RFO, Dis. B, Task Force "Bagong Buhay," "you are rampantly violating the provisions of Republic Act 5921 otherwise known as the 'Pharmacy Law."

Aside from this, there is evidence that you are dispensing regulated drugs contrary to the provisions of R.A. 6425 otherwise known as the Dangerous Drugs Act of 1972.

In view of the above, Mayors Permit No. 1954 heretofore issued in your name for the operation of a drug store (San Sebastian) at the Annex Building of the Fil-Am (IYC), along Hospital Road, this City, is REVOKED effective April 18, 1980.

PLEASE BE GUIDED ACCORDINGLY.

Very truly yours,

(SGD.) RICHARD J. GORDONCity Mayor

If only for the violation of due process which is manifest from this letter, the mayor's arbitrary action can be annulled.

The indefinite suspension of the mayor's permit for Olongapo City Drug Store was based on the transfer thereof to the site of the San Sebastian Drug Store as approved by the FDA but without permission from the petitioner. On this matter, the Court believes that the final decision rested with the mayor. The condition violated related more to the location in Olongapo City of business establishments in general than to the regulation of drug stores in particular. It therefore came under the petitioner's jurisdiction.

The FDA would have the right to disapprove the site of the drug store only if it would impair the health or other interests of the customers in contravention of the national laws or policies, as where the drug store is located in an unsanitary site. But the local executive would have reason to object to the location, even if approved by the FDA, where it does not conform to, say, a zoning ordinance intended to promote the comfort and convenience of the city residents.

The reason given by the petitioner in disapproving the transfer was violation of Mayor's Permit No. 1955, which by its terms was valid only at the place stated therein. In the letter of May 13, 1980 30 the private respondent was clearly informed that for violation of the condition of Mayor's Permit No. 1955 granting her the of operating the Olongapo City Drug Store at No. 1-B Fil-Am Bldg., Hospital Road, the said permit was "hereby suspended." We find that that reason was valid enough. The permit clearly allowed the drug store to operate in the address given and not elsewhere. No hearing was necessary because the transfer without the mayor's permission is not disputed and was in fact impliedly admitted by the private respondent.

If the private respondent wanted to transfer her drug store, what she should have done was to secure the approval not only of the FDA but also, and especially, of the mayor. Merely notifying the petitioner of the change in the location of her drug stores as allowed by the FDA was not enough. The FDA had no authority to revoke that particular condition of the mayor's permits indicating the sites of the two drug stores as approved by the mayor in the light of the needs of the city. Only the mayor could.

We assume that Mayor's Permit No. 1954 could also have been validly suspended for the same reason (as the sites of the two drug stores were exchanged without amendment of their respective permits) were it not for the fact that such permit was

revoked by the petitioner on the more serious ground of violation of the Pharmacy Law and the Dangerous Drugs Act of 1972.

It is understood, however, that the suspension should be deemed valid only as the two drug stores have not returned to their original sites as specified in their respective permits. Indefinite suspension will amount to a permanent revocation, which will not be a commensurate penalty with the degree of the violation being penalized.

The Court adds that denial of the request for transfer, if properly made by the private respondents, may not be validly denied by the judge in the absence of a clear showing that the transfer sought will prejudice the residents of the city. As the two drug stores are only a few meters from each other, and in the same building, there would seem to be no reason why the mere exchange of their locations should not be permitted. Notably, the location of the two drug stores had previously been approved in Mayor's Permit Nos. 1954 and 1955.

Our holding is that the petitioner acted invalidly in revoking Mayor's Permit No. 1954 after the FDA had authorized the resumption of operations of the San Sebastian Drug Store following the enforcement of the penalties imposed upon it. However, it was competent for the petitioner to suspend Mayor's Permit No. 1955 for the transfer of the Olongapo City Drug Store in violation of the said permit. Such suspension should nevertheless be effective only pending the return of the drug store to its authorized original site or the eventual approval by the mayor of the requested transfer if found to be warranted.

The petitioner is to be commended for his zeal in the promotion of the campaign against drug addiction, which has sapped the vigor and blighted the future of many of our people, especially the youth. The legal presumption is that he acted in good faith and was motivated only by his concern for the residents of Olongapo City when he directed the closure of the first drug store and the suspension of the permit of the other drug store. It appears, though, that he may have overreacted and was for this reason properly restrained by the respondent judge.

WHEREFORE, the challenged Orders of July 6, 1980 and September 4, 1980, are MODIFIED in the sense that the suspension of Mayor's Permit No. 1955 shall be considered valid but only until the San Sebastian Drug Store and the Olongapo City Drug Store return to their original sites as specified in the FDA licenses and the mayor's permits or until the request for transfer, if made by the private respondents, is approved by the petitioner. The rest of the said Orders are AFFIRMED, with costs against the petitioner. SO ORDERED.

G.R. No. L-36049 May 31, 1976

CITY OF NAGA, VICENTE P. SIBULO, as Mayor, and JOAQUIN C. CLEOPE, as Treasurer of the City of Naga, petitioners, vs.CATALINO AGNA, FELIPE AGNA and SALUD VELASCO, respondents.

Ernesto A. Miguel for petitioners.

Bonot, Cledera & Associates for respondents.

 

MARTIN, J.:

Petition for review on certiorari, which We treat as special civil action, of the decision of the Court of First Instance of Camarines Sur in Civil Case No. 7084, entitled Agna, et al. versus City of Naga, et al., declaring Ordinance No. 360 of the City of Naga enforceable in 1971 the year following its approval and requiring petitioners to pay to private respondents the amounts sought for in their complaint plus attorney's fees and costs. Included in the present controversy as proper parties are Vicente P. Sibulo and Joaquin C. Cleope, the City Mayor and City Treasurer of the City of Naga, respectively.

On June 15, 1970, the City of Naga enacted Ordinance No. 360 changing and amending the graduated tax on quarterly gross sales of merchants prescribed in Section 3 of Ordinance No. 4 of the City of Naga to percentage tax on gross sales provided for in Section 2 thereof. Pursuant to said ordinance, private respondents paid to the City of Naga the following taxes on their gross sales for the quarter from July 1, 1970 to September 30, 1970, as follows:

Catalino Agna paid P1,805.17 as per Official Receipt No. 1826591;

Felipe Agna paid P625.00 as per Official Receipt No. 1826594; and

Salud Velasco paid P129.81 as per Official Receipt No. 1820339.

On February 13, 1971, private respondents filed with the City Treasurer of the City of Naga a claim for refund of the following amounts, together with interests thereon from the date of payments: To Catalino Agna, P1,555.17; to Felipe Agna, P560.00; and to Salud Velasco, P127.81, representing the difference between the amounts they paid under Section 3, Ordinance No. 4 of the City of Naga, i.e., P250.00; P65.00 and P12.00 respectively. They alleged that under existing law, Ordinance No. 360, which amended Section 3, Ordinance No. 4 of the City of Naga, did not take effect in 1970, the year it was approved but in the next succeeding year after the year of its approval, or in 1971, and that therefore, the taxes they paid in 1970 on their gross sales for the quarter from July 1, 1970 to September 30, 1970 were illegal and should be refunded to them by the petitioners.

The City Treasurer denied the claim for refund of the amounts in question. So private respondents filed a complaint with the Court of First Instance of Naga (Civil Case No. 7084), seeking to have Ordinance No. 360 declared effective only in the year following the year of its approval, that is, in 1971; to have Sections 4, 6 and 8 of Ordinance No. 360 declared unjust, oppressive and arbitrary, and therefore, null and void; and to require petitioners to refund the sums being claimed with interests thereon from the date the taxes complained of were paid and to pay all legal costs and attorney's fees in the sum of P1,000.00. Private respondents further prayed that the petitioners be enjoined from enforcing Ordinance No. 360.

In their answer, the petitioners among other things, claimed that private respondents were not "compelled" but voluntarily made the payments of their taxes under Ordinance No. 360; that the said ordinance was published in accordance with law; that in accordance with Republic Act No. 305 (Charter of the City of Naga) an ordinance takes effect after the tenth day following its passage unless otherwise stated in said ordinance; that under existing law the City of Naga is authorized to impose certain conditions to secure and accomplish the collection of sales taxes in the most effective manner. As special and affirmative defenses, the petitioners allege that the private respondents have no cause of action against them; that granting that the collection of taxes can be enjoined. the complaint does not allege facts sufficient to justify the issuance of a writ of preliminary injunction; that the refund prayed for by the private respondents is untenable; that petitioners Vicente P. Sibulo and Joaquin C. Cleope, the City Mayor and Treasurer of the City of Naga, respectively are not proper parties in interest; that the private respondents are estopped from questioning the validity and/or constitutionality of the provisions of Ordinance No. 360. Petitioners counterclaimed for P20,000.00 as exemplary damages, for the alleged unlawful and malicious filing of the claim against them, in such amount as the court may determine.

During the hearing of the petition for the issuance of a writ of preliminary injunction and at the pre-trial conference as well as at the trial on the merits of the case, the parties agreed on the following stipulation of facts: That on June 15, 1970, the City Board of the City of Naga enacted Ordinance No. 360 entitled "An ordinance repealing Ordinance No. 4, as amended, imposing a sales tax on the quarterly sales or receipts on all businesses in the City of Naga," which ordinance was transmitted to the City Mayor for approval or veto on June 25, 1970; that the ordinance was duly posted in the designated places by the Secretary of the Municipal Board; that private respondents voluntarily paid the gross sales tax, pursuant to Ordinance No. 360, but that on February 15, 1971, they filed a claim for refund with the City Treasurer who denied the same.

On October 9, 1971, the respondent Judge rendered judgment holding that Ordinance No. 360, series of 1970 of the City of Naga was enforceable in the year following the date of its approval, that is, in 1971 and required the petitioners to reimburse the following sums, from the date they paid their taxes to the City of Naga: to Catalino Agna, the sum of P1,555.17; to Felipe Agna, P560.00; and to Salud Velasco, P127.81 and the corresponding interests from the filing of the complaint up to the reimbursement of the amounts plus the sum of P500.00 as attorney's fees and the costs of the proceedings.

Petitioners' submit that Ordinance No. 360, series of 1970 of the City of Naga, took effect in the quarter of the year of its approval, that is in July 1970, invoking Section 14 of Republic Act No. 305, 1 as amended, otherwise known as the Charter of the City of Naga, which, among others, provides that "Each approved ordinance ... shall take effect and be enforced on and after the 10th day following its passage unless otherwise stated in said ordinance ... ". They contend that Ordinance No. 360 was enacted by the Municipal Board of the City of Naga on June 15, 1970 2 and was transmitted to the City Mayor for his approval or veto on June 25, 1970 3 but it was not acted upon by the City Mayor until August 4, 1970. Ordinarily, pursuant to Section 14 of Republic Act No. 305, said ordinance should have taken effect after the 10th day following its passage on June 15, 1970, or on June 25, 1970. But because the ordinance itself provides that it shall take effect upon its approval, it becomes necessary to determine when Ordinance No. 360 was deemed approved. According to the same Section 14 of Republic Act No. 305, "if within 10 days after receipt of the ordinance the Mayor does not return it with his veto or approval 4 the ordinance is deemed approved." Since the ordinance in question was not returned by the City Mayor with his veto or approval within 10 days after he

received it on June 25, 1970, the same was deemed approved after the lapse of ten (10) days from June 25, 1970 or on July 6, 1970. On this date, the petitioners claim that Ordinance No. 360 became effective. They further contend that even under Section 2, of Republic Act No. 2264 (Local Autonomy Acts) 5 which expressly provides: "A tax ordinance shall go into effect on the fifteenth day after its passage unless the ordinance shall provide otherwise', Ordinance No. 360 could have taken effect on June 30, 1970, which is the fifteenth day after its passage by the Municipal Board of the City of Naga on June 15, 1970, or as earlier explained, it could have taken effect on July 6, 1970, the date the ordinance was deemed approved because the ordinance itself provides that it shall take effect upon its approval. Of the two provisions invoked by petitioners to support their stand that the ordinance in question took effect in the year of its approval, it is Section 2 of Republic Act No. 2264 (Local Autonomy Act) that is more relevant because it is the provision that specifically refers to effectivity of a tax ordinance and being a provision of much later law it is deemed to have superseded Section 14 of Republic Act No. 305 (Charter of the City of Naga) in so far as effectivity of a tax ordinance is concerned.

On the other hand, private respondents contend that Ordinance No. 360 became effective and enforceable in 1971, the year following the year of its approval, invoking Section 2309 of the Revised Administrative Code which provides:

Section 2309. Imposition of tax and duration of license.—A municipal license tax already in existence shall be subject to change only by ordinance enacted prior to the 15th day of December of any year after the next succeeding year, but an entirely new tax may be created by any ordinance enacted during the quarter year effective at the beginning of any subsequent quarter.

They submit that since Ordinance No. 360, series of 1970 of the City of Naga, is one which changes the existing graduated sales tax on gross sales or receipts of dealers of merchandise and sari-sari merchants provided for in Ordinance No. 4 of the City of Naga to a percentage tax on their gross sales prescribed in the questioned ordinance, the same should take effect in the next succeeding year after the year of its approval or in 1971.

Evidently, the divergence of opinion as to when Ordinance No. 360 took effect and became enforceable is mainly due to the seemingly apparent conflict between Section 2309 of the Revised Administrative Code and Section 2 of Republic Act No. 2264 (Local Autonomy Act). Is there really such a conflict in the above-mentioned provisions? It will be easily noted that Section 2309 of the Revised Administrative Code contemplates of two types of municipal ordinances, namely: (1) a municipal ordinance which changes a municipal license tax already in existence and (2) an ordinance which creates an entirely new tax. Under the first type, a municipal license tax already in existence shall be subject to change only by an ordinance enacted prior to the 15th day of December of any year after the next succeeding year. This means that the ordinance enacted prior to the 15th day of December changing or repealing a municipal license tax already in existence will have to take effect in next succeeding year. The evident purpose of the provision is to enable the taxpayers to adjust themselves to the new charge or burden brought about by the new ordinance. This is different from the second type of a municipal ordinance where an entirely new tax may be created by any ordinance enacted during the quarter year to be effective at the beginning of any subsequent quarter. We do not find any such distinction between an ordinance which changes a municipal license tax already in existence and an ordinance creating an entirely new tax in Section 2 of Republic Act No. 2264 (Local Autonomy Act) which merely refers to a "tax ordinance" without any qualification whatsoever.

Now to the meat of the problem in this petition. Is not Section 2309 of the Revised Administrative Code deemed repealed or abrogated by Section 2 of Republic Act No. 2264 (Local Autonomy Act) in so far as effectivity of a tax ordinance is concerned? An examination of Republic Act No. 2264 (Local Autonomy Act) fails to show any provision expressly repealing Section 2309 of the Revised Administrative Code. All that is mentioned therein is Section 9 which reads:

Section 9 — All acts, executive orders, administrative orders, proclamations or parts thereof, inconsistent with any of the provisions of this Act are hereby repealed and modified accordingly.

The foregoing provision does not amount to an express repeal of Section 2309 of the Revised Administrative Code. It is a well established principle in statutory construction that a statute will not be construed as repealing prior acts on the same subject in the absence of words to that effect unless there is an irreconcilable repugnancy between them, or unless the new law is evidently intended to supersede all prior acts on the matter in hand and to comprise itself the sole and complete system of legislation on that subject. Every new statute should be construed in connection with those already existing in relation to the same subject matter and all should be made to harmonize and stand together, if they can be done by any fair and reasonable interpretation ... . 6 It will also be noted that Section 2309 of the Revised Administrative Code and Section 2 of Republic Act No. 2264 (Local Autonomy Act) refer to the same subject matter-enactment and effectivity of a tax ordinance. In this respect they can be considered in pari materia. Statutes are said to be in pari materia when they relate to the same person or thing, or to the same class of persons or

things, or have the same purpose or object. 7 When statutes are in pari materia, the rule of statutory construction dictates that they should be construed together. This is because enactments of the same legislature on the same subject matter are supposed to form part of one uniform system; that later statutes are supplementary or complimentary to the earlier enactments and in the passage of its acts the legislature is supposed to have in mind the existing legislation on the same subject and to have enacted its new act with reference thereto. 8 Having thus in mind the previous statutes relating to the same subject matter, whenever the legislature enacts a new law, it is deemed to have enacted the new provision in accordance with the legislative policy embodied in those prior statutes unless there is an express repeal of the old and they all should be construed together. 9 In construing them the old statutes relating to the same subject matter should be compared with the new provisions and if possible by reasonable construction, both should be so construed that effect may be given to every provision of each. However, when the new provision and the old relating to the same subject cannot be reconciled the former shall prevail as it is the latter expression of the legislative will. 10 Actually we do not see any conflict between Section 2309 of the Revised Administrative Code and Section 2 of the Republic Act No. 2264 (Local Autonomy Act). The conflict, if any, is more apparent than real. It is one that is not incapable of reconciliation. And the two provisions can be reconciled by applying the first clause of Section 2309 of the Revised Administrative Code when the problem refers to the effectivity of an ordinance changing or repealing a municipal license tax already in existence. But where the problem refers to effectivity of an ordinance creating an entirely new tax, let Section 2 of Republic Act No. 2264 (Local Autonomy Act) govern.

In the case before Us, the ordinance in question is one which changes the graduated sales tax on gross sales or receipts of dealers of merchandise and sari-sari merchants prescribed in Section 3 of Ordinance No. 4 of the City of Naga to percentage tax on their gross sale-an ordinance which definitely falls within the clause of Section 2309 of the Revised Administrative Code. Accordingly it should be effective and enforceable in the next succeeding year after the year of its approval or in 1971 and private respondents should be refunded of the taxes they have paid to the petitioners on their gross sales for the quarter from July 1, 1970 to September 30, 1970 plus the corresponding interests from the filing of the complaint until reimbursement of the amount.

IN VIEW OF THE FOREGOING, the instant petition is hereby dismissed. SO ORDERED.

G.R. No. L-61998 February 22, 1983

ROGELIO DE JESUS, petitioner, vs.PEOPLE OF THE PHILIPPINES, et al., respondents.

Jaime G. Fortes for petitioner.

The Solicitor General for respondents.

 

ESCOLIN, J.:

The question of law posed for determination in this petition for review on certiorari of the resolution of the Sandiganbayan may be propounded thus: Which of these entities have the power to investigate, prosecute and try election offenses committed by a public officer in relation to his office — the Commission on Elections and the Court of First Instance [now the regional trial court] or the Tanodbayan and the Sandiganbayan?

After the local elections of January 18, 1980, Ananias Hibo defeated candidate of the Nacionalista Party for the office of mayor of the Municipality of Casiguran, Sorsogon filed with the COMELEC a complaint charging petitioner Rogelio de Jesus, then COMELEC registrar of Casiguran, with violation of the 1978 Election Code. Copy of the complaint was sent to the Ministry of Justice which endorsed the same to the Provincial Fiscal of Sorsogon for investigation. Noting that petitioner was being charged in relation to his office, Asst. Fiscals Manuel Genova and Delfin Tarog in their capacity as deputized Tanodbayan prosecutors, conducted an investigation. Thereafter Fiscal Genova issued a resolution finding the existence of a prima facie case against petitioner for violation of section 89 1 and sub-sections [x] 2 and [mm] 3 of Section 178 of

the Election Code of 1978. After approval thereof by the Tanodbayan, the following information, dated January 27, 1982, was filed before the Sandiganbayan:

That on or about January 30, 1980 and sometime thereafter to February 6, 1980, in the Municipality of Casiguran Province of Sorsogon, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused while discharging the Office of the Election Registrar in the Municipality of Casiguran, Province of Sorsogon, taking advantage and abusing his official position, did there and there wilfully unlawfully and feloniously by reason of his being a registrar knowingly registered persons in order to vote on January 30, 1980 being an election day and at the same time issuing Identification cards during election day, thereby violating the provision of the Election Code of 1978 and at the same time tampering with the election reports by mag it appear that 10,727 persons were the total number of registered voters for the election of January 30, 1980, when in truth and in fact the actual total number of voters as - sported on January 27, 1980 by the accused was only 10,532 but then changed to 10,727, thereby violating the provisions of Section '89' and Section.'178' under Article XVI specifically sub- section 'X' and sub-section 'MM' which is a violation of the Election Code of 1978 to the erosion of public faith and confidence.

The case, docketed as SB Criminal Case No. 5054, was raffled to the Second Division of the Sandiganbayan.

Petitioner filed a motion to quash the information, contending that neither the Tanodbayan nor the Sandiganbayan has the authority to investigate, prosecute and try the offense

xxx xxx xxx

[x] Any election registrar or any person acting in his behalf who issues or causes the issuance of a voter's certificate of registration or cancels or causes the cancellation thereof the violation of the provisions of this Code.

xxx xxx xxx

[mm] Any person who, without authority, acts as, or assumes r performs any -function of a member of the election committee, or the board of canvassers, or deputy of representative of the Commission.

charged in the information, the same being an election offense over which the power to investigate, prosecute and try is lodged by law in the COMELEC and the Court of First Instance. In its opposition, the prosecution maintained the Tanodbayan's exclusive authority to investigate and prosecute offenses committed by public officers and employees in relation to their office, and consequently, the Sandiganbayan's jurisdiction to try and decide the charges against petitioner.

The COMELEC, having learned of the pendency of the case, entered its appearance as amicus curiae, and through its law department manager, Atty. Zoilo Gomez, Jr., submitted a memorandum supporting petitioner's stand. 4

On August 13, 1982, the Sandiganbayan issued the questioned resolution denying the motion to quash. Petitioner's motion for reconsideration was likewise denied. Hence, this petition for review on certiorari.

The legal question posed being one of first impression, this, Court resolved to give due course to the petition, treating the same as an original petition for certiorari under Rule 65 of the Rules of Court, the proper mode by which relief from the resolution of the Sandiganbayan could be obtained from this Tribunal. Petitioner and respondents rely on different provisions of the 1973 Constitution as bases for their respective contentions. Petitioner invokes Section 2 of Article XII[c] of the 1973 Constitution which vests upon the COMELEC the power "to enforce and administer all laws relative to the conduct of elections," and its implementing legislation, Section 182 of the 1978 Election Code, which provides the following:

Section 182 — Prosecution. The Commission shall, thru its duly authorized legal officer, have the power to conduct preliminary investigation of all election offenses punishable under this Code and to prosecute the same. The Commission may avail of the assistance of other prosecuting arms of the government.

Petitioner further cites Section 184 of the same Code which invests the court of first instance with "exclusive original jurisdiction to try and decide any criminal action or proceedings for violation of this code except those relating to the offense of failure to register or failure to vote which shall be under the jurisdiction of the city or municipal courts. ... The Solicitor General supports the petitioner's views. 5

Upon the other hand, the Sandiganbayan, in its resolution of August 13, 1982, 6 asserts its jurisdiction over Criminal Case No. 5054 on the authority of Section 5, Article XIII of the Constitution, which mandated the creation by the Batasan Pambansa of "a special court, to be known as Sandiganbayan, which shall have jurisdiction over criminal and civil cases involving graft and corrupt practices, and such other offenses committed by public officers and employees, including those in government-owned and controlled corporations, in relation to their office as may be determined by law."

To the Sandiganbayan, as set forth in the challenged resolution, ... the key phrase in the determination as to which of the Sandiganbayan or the regular courts of first instance should take cognizance of an election offense, is the phrase, 'in relation to their office'." Thus, it would distinguish between election offenses committed by public officers and employees in relation to their office and those committed not in relation to their office, in this manner:

If the election offense is committed by a public officer or employee NOT in relation to their office, generally, jurisdiction will be assumed by the regular courts. If, on the other hand, the offense was committed by a public officer or employee in relation to their office, then there is no other tribunal vested with jurisdiction to try such offense but this court, in consonance with the mandate of the Constitution that the Sandiganbayan has jurisdiction, lover ... offenses committed by public officers and employees in relation to their office.

We find the position of the Sandiganbayan devoid of merit.

The grant to the COMELEC of the power, among others, to enforce and administer all laws relative to the conduct of election and the concomittant authority to investigate and prosecute election offenses is not without compelling reason. The evident constitutional intendment in bestowing this power to the COMELEC is to insure the free, orderly and honest conduct of elections, failure of which would result in the frustration of the true will of the people and make a mere Idle ceremony of the sacred right and duty of every qualified citizen to vote. To divest the COMELEC of the authority to investigate and prosecute offenses committed by public officials in relation to their office would thus seriously impair its effectiveness in achieving this clear constitutional mandate.

From a careful scrutiny of the constitutional provisions relied upon by the Sandiganbayan, We perceive neither explicit nor implicit grant to it and its prosecuting arm, the Tanodbayan, of the authority to investigate, prosecute and hear election offenses committed by public officers in relation to their office, as contra-distinguished from the clear and categorical bestowal of said authority and jurisdiction upon the COMELEC and the courts of first instance under Sections 182 and 184, respectively, of the Election Code of 1978.

Under the Constitution, the Sandiganbayan shall have jurisdiction over ... offenses committed by public officers ... in relation to their office as may be determined by law" [Sec. 5, Art. XIII]; while the Office of the Tanodbayan shall "receive and investigate complaints relative to public office." [Sec. 6, Art. XIII]. The clause, "as may be determined by law" is, to Our mind imbued with grave import. It called for a legislation that would define and delineate the power and jurisdiction of both the Tanodbayan and the Sandiganbayan, as what, in fact had been provided for in Presidential Decree Nos. 1606 and 1607, creating the said entities.

Thus, under Section 4 of P.D. No. 1606, the Sandiganbayan shall have jurisdiction over:

[a] Violations of Republic Act No. 3019, as amended, otherwise known as the Anti-Graft and Corrupt Practices Act, and Republic Act No. 1379;

[b] Crimes committed by public officers and employees, including those employed in government-owned or controlled corporations, embraced in Title VII of the Revised Penal Code, whether simple or complexed with other crimes; and,

[c] Other crimes or offenses committed by public officers or employees, including those employed in government-owned or controlled corporations, in relation to their office.

Plainly, the above quoted paragraph [c] is but a re-statement of the constitutional provision relating to the Sandiganbayan. It is also to be noted that it is phased in terms so broad and general that it cannot be legitimately construed to vest said entity with exclusive jurisdiction over election offenses committed by public officers in relation to their office. Neither can it be interpreted to impliedly repeal the exclusive and original jurisdiction granted by Section 184 of the Election Code of 1978 to the court of first instance to hear and decide all election offenses, without qualification as to the status of the accused.

Apart from the fact that repeals by implication are not favored. it is noted that while Section 184 of the Election Code deals specifically with election offenses, Section 4[c] of P.D. No, 1606 speaks generally of "other crimes or offenses committed by public officers ... in relation to their office." Needless to state, as between specific and general statute, the former must prevail since it evinces the legislative intent more clearly than a general statute does. 7 And where a reconciliation between the statute is possible, as in the case at bar, the former should be deemed an exception to the latter. 8

The same principle of statutory construction should be applied with respect to the powers vested upon the COMELEC and the Tanodbayan in so far as election offenses are concerned.

Moreover, as aptly observed by the COMELEC as well as the Solicitor General, splitting the jurisdiction over election offenses would serve no beneficial purpose but would rather spawn much controversy — "complaints about unequal protection, about inconsistent decisions, etc. (which are) not conducive to a fair and speedy administration of justice." [p. 17, Comment, Solicitor General].

WHEREFORE, the resolution of the Sandiganbayan Second Division dated August 13, 1982 is hereby set aside and Criminal Case No. 5054. entitled "People of the Philippines versus Rogelio de Jesus" is ordered dismissed. The COMELEC is hereby directed to forthwith conduct an investigation, and if the evidence so warrants, to prosecute the complaint against petitioner before the proper court of first instance. No costs.

SO ORDERED.

G.R. No. L-41631 December 17, 1976

HON. RAMON D. BAGATSING, as Mayor of the City of Manila; ROMAN G. GARGANTIEL, as Secretary to the Mayor; THE MARKET ADMINISTRATOR; and THE MUNICIPAL BOARD OF MANILA, petitioners, vs.HON. PEDRO A. RAMIREZ, in his capacity as Presiding Judge of the Court of First Instance of Manila, Branch XXX and the FEDERATION OF MANILA MARKET VENDORS, INC., respondents.

Santiago F. Alidio and Restituto R. Villanueva for petitioners.

Antonio H. Abad, Jr. for private respondent.

Federico A. Blay for petitioner for intervention.

 

MARTIN, J.:

The chief question to be decided in this case is what law shall govern the publication of a tax ordinance enacted by the Municipal Board of Manila, the Revised City Charter (R.A. 409, as amended), which requires publication of the ordinance before its enactment and after its approval, or the Local Tax Code (P.D. No. 231), which only demands publication after approval.

On June 12, 1974, the Municipal Board of Manila enacted Ordinance No. 7522, "AN ORDINANCE REGULATING THE OPERATION OF PUBLIC MARKETS AND PRESCRIBING FEES FOR THE RENTALS OF STALLS AND PROVIDING PENALTIES FOR VIOLATION THEREOF AND FOR OTHER PURPOSES." The petitioner City Mayor, Ramon D. Bagatsing, approved the ordinance on June 15, 1974.

On February 17, 1975, respondent Federation of Manila Market Vendors, Inc. commenced Civil Case 96787 before the Court of First Instance of Manila presided over by respondent Judge, seeking the declaration of nullity of Ordinance No. 7522 for the reason that (a) the publication requirement under the Revised Charter of the City of Manila has not been complied with; (b) the Market Committee was not given any participation in the enactment of the ordinance, as envisioned by Republic Act 6039; (c) Section 3 (e) of the Anti-Graft and Corrupt Practices Act has been violated; and (d) the ordinance would violate Presidential Decree No. 7 of September 30, 1972 prescribing the collection of fees and charges on livestock and animal products.

Resolving the accompanying prayer for the issuance of a writ of preliminary injunction, respondent Judge issued an order on March 11, 1975, denying the plea for failure of the respondent Federation of Manila Market Vendors, Inc. to exhaust the administrative remedies outlined in the Local Tax Code.

After due hearing on the merits, respondent Judge rendered its decision on August 29, 1975, declaring the nullity of Ordinance No. 7522 of the City of Manila on the primary ground of non-compliance with the requirement of publication under the Revised City Charter. Respondent Judge ruled:

There is, therefore, no question that the ordinance in question was not published at all in two daily newspapers of general circulation in the City of Manila before its enactment. Neither was it published in the same manner after approval, although it was posted in the legislative hall and in all city public markets and city public libraries. There being no compliance with the mandatory requirement of publication before and after approval, the ordinance in question is invalid and, therefore, null and void.

Petitioners moved for reconsideration of the adverse decision, stressing that (a) only a post-publication is required by the Local Tax Code; and (b) private respondent failed to exhaust all administrative remedies before instituting an action in court.

On September 26, 1975, respondent Judge denied the motion.

Forthwith, petitioners brought the matter to Us through the present petition for review on certiorari.

We find the petition impressed with merits.

1. The nexus of the present controversy is the apparent conflict between the Revised Charter of the City of Manila and the Local Tax Code on the manner of publishing a tax ordinance enacted by the Municipal Board of Manila. For, while Section 17 of the Revised Charter provides:

Each proposed ordinance shall be published in two daily newspapers of general circulation in the city, and shall not be discussed or enacted by the Board until after the third day following such publication. * * * Each approved ordinance * * * shall be published in two daily newspapers of general circulation in the city, within ten days after its approval; and shall take effect and be in force on and after the twentieth day following its publication, if no date is fixed in the ordinance.

Section 43 of the Local Tax Code directs:

Within ten days after their approval, certified true copies of all provincial, city, municipal and barrioordinances levying or imposing taxes, fees or other charges shall be published for three consecutive days in a newspaper or publication widely circulated within the jurisdiction of the local government, or posted in the local legislative hall or premises and in two other conspicuous places within the territorial jurisdiction of the local government. In either case, copies of all provincial, city, municipal and barrio ordinances shall be furnished the treasurers of the respective component and mother units of a local government for dissemination.

In other words, while the Revised Charter of the City of Manila requires publication before the enactment of the ordinance and after the approval thereof in two daily newspapers of general circulation in the city, the Local Tax Code only prescribes for publication after the approval of "ordinances levying or imposing taxes, fees or other charges" either in a newspaper or publication widely circulated within the jurisdiction of the local government or by posting the ordinance in the local legislative hall or premises and in two other conspicuous places within the territorial jurisdiction of the local government. Petitioners' compliance with the Local Tax Code rather than with the Revised Charter of the City spawned this litigation.

There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the City of Manila, whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone defines general law as a universal rule affecting the entire community and special law as one relating to particular persons or things of a class. 1 And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent general law. The fact that one is special and the other general creates a presumption that the special is to be considered as remaining an exception of the general, one as a general law of the land, the other as the law of a particular case. 2 However, the rule readily yields to a situation where the special statute refers to a subject in general, which the general statute treats in particular. The exactly is the circumstance obtaining in the case at bar. Section 17 of the Revised Charter of the City of Manila speaks of "ordinance" in general, i.e., irrespective of the nature and scope thereof,whereas, Section 43 of the Local Tax Code relates to "ordinances levying or imposing taxes, fees or other charges" in particular. In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless dominant, but, that dominant force loses its continuity when it approaches the realm of "ordinances levying or imposing taxes, fees or other charges" in particular. There, the Local Tax Code controls. Here, as always, a general provision must give way to a particular provision. 3 Special provision governs. 4 This is especially true where the law containing the particular provision was enacted later than the one containing the general provision. The City Charter of Manila was promulgated on June 18, 1949 as against the Local Tax Code which was decreed on June 1, 1973. The law-making power cannot be said to have intended the establishment of conflicting and hostile systems upon the same subject, or to leave in force provisions of a prior law by which the new will of the legislating power may be thwarted and overthrown. Such a result would render legislation a useless and Idle ceremony, and subject the law to the reproach of uncertainty and unintelligibility. 5

The case of City of Manila v. Teotico 6 is opposite. In that case, Teotico sued the City of Manila for damages arising from the injuries he suffered when he fell inside an uncovered and unlighted catchbasin or manhole on P. Burgos Avenue. The City of Manila denied liability on the basis of the City Charter (R.A. 409) exempting the City of Manila from any liability for damages or injury to persons or property arising from the failure of the city officers to enforce the provisions of the charter or any other law or ordinance, or from negligence of the City Mayor, Municipal Board, or other officers while enforcing or attempting to enforce the provisions of the charter or of any other law or ordinance. Upon the other hand, Article 2189 of the Civil Code makes cities liable for damages for the death of, or injury suffered by any persons by reason of the defective condition of roads, streets, bridges, public buildings, and other public works under their control or supervision. On review, the Court held the Civil Code controlling. It is true that, insofar as its territorial application is concerned, the Revised City Charter is a special law and the subject matter of the two laws, the Revised City Charter establishes a general rule of liability arising from negligence in general, regardless of the object thereof, whereas the Civil Code constitutes a particular prescription for liability due to defective streets in particular. In the same manner, the Revised Charter of the City prescribes a rule for the publication of "ordinance" in general, while the Local Tax Code establishes a rule for the publication of "ordinance levying or imposing taxes fees or other charges in particular.

In fact, there is no rule which prohibits the repeal even by implication of a special or specific act by a general or broad one. 7 A charter provision may be impliedly modified or superseded by a later statute, and where a statute is controlling, it must be read into the charter notwithstanding any particular charter provision. 8 A subsequent general law similarly applicable to all cities prevails over any conflicting charter provision, for the reason that a charter must not be inconsistent with the general laws and public policy of the state. 9 A chartered city is not an independent sovereignty. The state remains supreme in all matters not purely local. Otherwise stated, a charter must yield to the constitution and general laws of the state, it is to have read into it that general law which governs the municipal corporation and which the corporation cannot set aside but to which it must yield. When a city adopts a charter, it in effect adopts as part of its charter general law of such character. 10

2. The principle of exhaustion of administrative remedies is strongly asserted by petitioners as having been violated by private respondent in bringing a direct suit in court. This is because Section 47 of the Local Tax Code provides that any question or issue raised against the legality of any tax ordinance, or portion thereof, shall be referred for opinion to the city fiscal in the case of tax ordinance of a city. The opinion of the city fiscal is appealable to the Secretary of Justice, whose decision shall be final and executory unless contested before a competent court within thirty (30) days. But, the petition below plainly shows that the controversy between the parties is deeply rooted in a pure question of law: whether it is the

Revised Charter of the City of Manila or the Local Tax Code that should govern the publication of the tax ordinance. In other words, the dispute is sharply focused on the applicability of the Revised City Charter or the Local Tax Code on the point at issue, and not on the legality of the imposition of the tax. Exhaustion of administrative remedies before resort to judicial bodies is not an absolute rule. It admits of exceptions. Where the question litigated upon is purely a legal one, the rule does not apply. 11 The principle may also be disregarded when it does not provide a plain, speedy and adequate remedy. It may and should be relaxed when its application may cause great and irreparable damage. 12

3. It is maintained by private respondent that the subject ordinance is not a "tax ordinance," because the imposition of rentals, permit fees, tolls and other fees is not strictly a taxing power but a revenue-raising function, so that the procedure for publication under the Local Tax Code finds no application. The pretense bears its own marks of fallacy. Precisely, the raising of revenues is the principal object of taxation. Under Section 5, Article XI of the New Constitution, "Each local government unit shall have the power to create its own sources of revenue and to levy taxes, subject to such provisions as may be provided by law." 13 And one of those sources of revenue is what the Local Tax Code points to in particular: "Local governments may collect fees or rentals for the occupancy or use of public markets and premises * * *." 14 They can provide for and regulate market stands, stalls and privileges, and, also, the sale, lease or occupancy thereof. They can license, or permit the use of, lease, sell or otherwise dispose of stands, stalls or marketing privileges. 15

It is a feeble attempt to argue that the ordinance violates Presidential Decree No. 7, dated September 30, 1972, insofar as it affects livestock and animal products, because the said decree prescribes the collection of other fees and charges thereon "with the exception of ante-mortem and post-mortem inspection fees, as well as the delivery, stockyard and slaughter fees as may be authorized by the Secretary of Agriculture and Natural Resources." 16Clearly, even the exception clause of the decree itself permits the collection of the proper fees for livestock. And the Local Tax Code (P.D. 231, July 1, 1973) authorizes in its Section 31: "Local governments may collect fees for the slaughter of animals and the use of corrals * * * "

4. The non-participation of the Market Committee in the enactment of Ordinance No. 7522 supposedly in accordance with Republic Act No. 6039, an amendment to the City Charter of Manila, providing that "the market committee shall formulate, recommend and adopt, subject to the ratification of the municipal board, and approval of the mayor, policies and rules or regulation repealing or maneding existing provisions of the market code" does not infect the ordinance with any germ of invalidity. 17 The function of the committee is purely recommendatory as the underscored phrase suggests, its recommendation is without binding effect on the Municipal Board and the City Mayor. Its prior acquiescence of an intended or proposed city ordinance is not a condition sine qua non before the Municipal Board could enact such ordinance. The native power of the Municipal Board to legislate remains undisturbed even in the slightest degree. It can move in its own initiative and the Market Committee cannot demur. At most, the Market Committee may serve as a legislative aide of the Municipal Board in the enactment of city ordinances affecting the city markets or, in plain words, in the gathering of the necessary data, studies and the collection of consensus for the proposal of ordinances regarding city markets. Much less could it be said that Republic Act 6039 intended to delegate to the Market Committee the adoption of regulatory measures for the operation and administration of the city markets. Potestas delegata non delegare potest.

5. Private respondent bewails that the market stall fees imposed in the disputed ordinance are diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection of said fees had been let by the City of Manila to the said corporation in a "Management and Operating Contract." The assumption is of course saddled on erroneous premise. The fees collected do not go direct to the private coffers of the corporation. Ordinance No. 7522 was not made for the corporation but for the purpose of raising revenues for the city. That is the object it serves. The entrusting of the collection of the fees does not destroy the public purpose of the ordinance. So long as the purpose is public, it does not matter whether the agency through which the money is dispensed is public or private. The right to tax depends upon the ultimate use, purpose and object for which the fund is raised. It is not dependent on the nature or character of the person or corporation whose intermediate agency is to be used in applying it. The people may be taxed for a public purpose, although it be under the direction of an individual or private corporation. 18

Nor can the ordinance be stricken down as violative of Section 3(e) of the Anti-Graft and Corrupt Practices Act because the increased rates of market stall fees as levied by the ordinance will necessarily inure to the unwarranted benefit and advantage of the corporation. 19 We are concerned only with the issue whether the ordinance in question is intra vires. Once determined in the affirmative, the measure may not be invalidated because of consequences that may arise from its enforcement. 20

ACCORDINGLY, the decision of the court below is hereby reversed and set aside. Ordinance No. 7522 of the City of Manila, dated June 15, 1975, is hereby held to have been validly enacted. No. costs.

SO ORDERED.

G.R. No. L-52306 October 12, 1981

ABS-CBN BROADCASTING CORPORATION, petitioner, vs.COURT OF TAX APPEALS and THE COMMISSIONER OF INTERNAL REVENUE, respondents.

 

MELENCIO-HERRERA, J.:

This is a Petition for Review on certiorari of the Decision of the Court of Tax Appeals in C.T.A. Case No. 2809, dated November 29, 1979, which affirmed the assessment by the Commissioner of Internal Revenue, dated April 16, 1971, of a deficiency withholding income tax against petitioner, ABS-CBN Broadcasting Corporation, for the years 1965, 1966, 1967 and 1968 in the respective amounts of P75,895.24, P99,239.18, P128,502.00 and P222, 260.64, or a total of P525,897.06.

During the period pertinent to this case, petitioner corporation was engaged in the business of telecasting local as well as foreign films acquired from foreign corporations not engaged in trade or business within the Philippines. for which petitioner paid rentals after withholding income tax of 30%of one-half of the film rentals.

In so far as the income tax on non-resident corporations is concerned, section 24 (b) of the National Internal Revenue Code, as amended by Republic Act No. 2343 dated June 20, 1959, used to provide:

(b) Tax on foreign corporations.—(1) Non-resident corporations.— There shall be levied, collected, and paid for each taxable year, in lieu of the tax imposed by the preceding paragraph, upon the amount received by every foreign corporation not engaged in trade or business within the Philippines, from an sources within the Philippines, as interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, a tax equal to thirty per centum of such amount. (Emphasis supplied)

On April 12, 1961, in implementation of the aforequoted provision, the Commissioner of Internal Revenue issued General Circular No. V-334 reading thus:

In connection with Section 24 (b) of Tax Code, the amendment introduced by Republic Act No. 2343, under which an income tax equal to 30% is levied upon the amount received by every foreign corporation not engaged in trade or business within the Philippines from all sources within this country as interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, it has been determined that the tax is still imposed on income derived from capital, or labor, or both combined, in accordance with the basic principle of income taxation (Sec. 39, Income Tax Regulations), and that a mere return of capital or investment is not income (Par. 5,06, 1 Mertens Law of Federal 'Taxation). Since according to the findings of the Special Team who inquired into business of the non-resident foreign film distributors, the distribution or exhibition right on a film is invariably acquired for a consideration, either for a lump sum or a percentage of the film rentals, whether from a parent company or an independent outside producer, apart of the receipts of a non-resident foreign film distributor derived from said film represents, therefore, a return of investment.

xxx xxx xxx

4. The local distributor should withhold 30% of one-half of the film rentals paid to the non-resident foreign film distributor and pay the same to this office in accordance with law unless the non- resident foreign film distributor makes a prior settlement of its income tax liability. (Emphasis ours).

Pursuant to the foregoing, petitioner dutifully withheld and turned over to the Bureau of Internal Revenue the amount of 30% of one-half of the film rentals paid by it to foreign corporations not engaged in trade or business within the Philippines. The last year that petitioner withheld taxes pursuant to the foregoing Circular was in 1968.

On June 27, 1968, Republic Act No. 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30 % to 35 % and revising the tax basis from "such amount" referring to rents, etc. to "gross income," as follows:

(b) Tax on foreign corporations.—(1) Non-resident corporations.—A foreign corporation not engaged in trade or business in the Philippines including a foreign life insurance company not engaged in the life insurance business in the Philippines shall pay a tax equal to thirty-five per cent of the gross income received during each taxable year from all sources within the Philippines, as interests, dividends, rents, royalties, salaries, wages, premiums, annuities, compensations, remunerations for technical services or otherwise, emoluments or other fixed or determinable annual, periodical or casual gains, profits, and income, and capital gains, Provided however, That premiums shah not include reinsurance premiums. (Emphasis supplied)

On February 8, 1971, the Commissioner of Internal Revenue issued Revenue Memorandum Circular No. 4-71, revoking General Circular No. V-334, and holding that the latter was "erroneous for lack of legal basis," because "the tax therein prescribed should be based on gross income without deduction whatever," thus:

After a restudy and analysis of Section 24 (b) of the National Internal Revenue Code, as amended by Republic Act No. 5431, and guided by the interpretation given by tax authorities to a similar provision in the Internal Revenue Code of the United States, on which the aforementioned provision of our Tax Code was patterned, this Office has come to the conclusion that the tax therein prescribed should be based on gross income without t deduction whatever. Consequently, the ruling in General Circular No. V-334, dated April 12, 1961, allowing the deduction of the proportionate cost of production or exhibition of motion picture films from the rental income of non- resident foreign corporations, is erroneous for lack of legal basis.

In view thereof, General Circular No. V-334, dated April 12, 1961, is hereby revoked and henceforth, local films distributors and exhibitors shall deduct and withhold 35% of the entire amount payable by them to non-resident foreign corporations, as film rental or royalty, or whatever such payment may be denominated, without any deduction whatever, pursuant to Section 24 (b), and pay the withheld taxes in accordance with Section 54 of the Tax Code, as amended.

All rulings inconsistent with this Circular is likewise revoked. (Emphasis ours)

On the basis of this new Circular, respondent Commissioner of Internal Revenue issued against petitioner a letter of assessment and demand dated April 15, 1971, but allegedly released by it and received by petitioner on April 12, 1971, requiring them to pay deficiency withholding income tax on the remitted film rentals for the years 1965 through 1968 and film royalty as of the end of 1968 in the total amount of P525,897.06 computed as follows:

1965

Total amount remitted P 511,059.48

Withholding tax due thereon 153,318.00

Less: Amount already assessed 89,000.00

Balance P64,318.00

Add: 1/2% mo. int. fr. 4-16-66 to 4-16-69

11,577.24

Total amount due & collectible P 75,895.24

1966

Total amount remitted P373,492.24

Withholding tax due thereon 112,048.00

Less: Amount already assessed

27,947.00

Balance 84,101.00

Add: 11/2%mo. int. fr. 4-16-67 to 4-116-70

15,138.18

Total amount due & collectible P99,239.18

1967

Total amount remitted P601,160.65

Withholding tax due thereon

180,348.00

Less: Amount already assessed

71,448.00

Balance 108,900.00

Add: 1/2% mo. int. fr. 4-16-68 to 4-16-71

19,602.00

Total amount due & collectible

P128,502.00

1968

Total amount remitted P881,816.92

Withholding tax due thereon 291,283.00

Less: Amount already assessed

92,886.00

Balance P198,447.00

Add: 1/2% mo. int. fr. 4-16-69 to 4-29-71

23,813.64

Total amount due & collectible

P222,260.44 1

On May 5, 1971, petitioner requested for a reconsideration and withdrawal of the assessment. However, without acting thereon, respondent, on April 6, 1976, issued a warrant of distraint and levy over petitioner's personal as well as real properties. The petitioner then filed its Petition for Review with the Court of Tax Appeals whose Decision, dated November 29, 1979, is, in turn, the subject of this review. The Tax Court held:

For the reasons given, the Court finds the assessment issued by respondent on April 16, 1971 against petitioner in the amounts of P75,895.24, P 99,239.18, P128,502.00 and P222,260.64 or a total of P525,897.06 as deficiency withholding income tax for the years 1965, 1966, 1967 and 1968, respectively, in accordance with law. As prayed for, the petition for review filed in this case is dismissed, and petitioner ABS-CBN Broadcasting Corporation is hereby ordered to pay the sum of P525,897.06 to respondent Commissioner of Internal Revenue as deficiency withholding income tax for the taxable years 1965 thru 1968, plus the surcharge and interest which have accrued thereon incident to delinquency pursuant to Section 51 (e) of the National Internal Revenue Code, as amended.

WHEREFORE, the decision appealed from is hereby affirmed at petitioner's cost.

SO ORDERED. 2

The issues raised are two-fold:

I. Whether or not respondent can apply General Circular No. 4-71 retroactively and issue a deficiency assessment against petitioner in the amount of P 525,897.06 as deficiency withholding income tax for the years 1965, 1966, 1967 and 1968.

II. Whether or not the right of the Commissioner of Internal Revenue to assess the deficiency withholding income tax for the year 196,5 has prescribed. 3

Upon the facts and circumstances of the case, review is warranted.

In point is Sec. 338-A (now Sec. 327) of the Tax Code. As inserted by Republic Act No. 6110 on August 9, 1969, it provides:

Sec. 338-A. Non-retroactivity of rulings. — Any revocation, modification, or reversal of and of the rules and regulations promulgated in accordance with the preceding section or any of the rulings or circulars promulgated by the Commissioner of Internal Revenue shall not be given retroactive application if the relocation, modification, or reversal will be prejudicial to the taxpayers, except in the following cases: (a) where the taxpayer deliberately mis-states or omits material facts from his return or any document required of him by the Bureau of Internal Revenue: (b) where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based; or (c) where the taxpayer acted in bad faith. (italics for emphasis)

It is clear from the foregoing that rulings or circulars promulgated by the Commissioner of Internal Revenue have no retroactive application where to so apply them would be prejudicial to taxpayers. The prejudice to petitioner of the retroactive application of Memorandum Circular No. 4-71 is beyond question. It was issued only in 1971, or three years after 1968, the last year that petitioner had withheld taxes under General Circular No. V-334. The assessment and demand on petitioner to pay deficiency withholding income tax was also made three years after 1968 for a period of time commencing in 1965. Petitioner was no longer in a position to withhold taxes due from foreign corporations because it had already remitted all film

rentals and no longer had any control over them when the new Circular was issued. And in so far as the enumerated exceptions are concerned, admittedly, petitioner does not fall under any of them.

Respondent claims, however, that the provision on non-retroactivity is inapplicable in the present case in that General Circular No. V-334 is a nullity because in effect, it changed the law on the matter. The Court of Tax Appeals sustained this position holding that: "Deductions are wholly and exclusively within the power of Congress or the law-making body to grant, condition or deny; and where the statute imposes a tax equal to a specified rate or percentage of the gross or entire amount received by the taxpayer, the authority of some administrative officials to modify or change, much less reduce, the basis or measure of the tax should not be read into law." 4 Therefore, the Tax Court concluded, petitioner did not acquire any vested right thereunder as the same was a nullity.

The rationale behind General Circular No. V-334 was clearly stated therein, however: "It ha(d) been determined that the tax is still imposed on income derived from capital, or labor, or both combined, in accordance with the basic principle of income taxation ...and that a mere return of capital or investment is not income ... ." "A part of the receipts of a non-resident foreign film distributor derived from said film represents, therefore, a return of investment." The Circular thus fixed the return of capital at 50% to simplify the administrative chore of determining the portion of the rentals covering the return of capital." 5

Were the "gross income" base clear from Sec. 24 (b), perhaps, the ratiocination of the Tax Court could be upheld. It should be noted, however, that said Section was not too plain and simple to understand. The fact that the issuance of the General Circular in question was rendered necessary leads to no other conclusion than that it was not easy of comprehension and could be subjected to different interpretations.

In fact, Republic Act No. 2343, dated June 20, 1959, supra, which was the basis of General Circular No. V-334, was just one in a series of enactments regarding Sec. 24 (b) of the Tax Code. Republic Act No. 3825 came next on June 22, 1963 without changing the basis but merely adding a proviso (in bold letters).

(b) Tax on foreign corporation.—(1) Non-resident corporations. — There shall be levied, collected and paid for each taxable year, in lieu of the tax imposed by the preceding paragraph, upon the amount received by every foreign corporation not engaged in trade or business within the Philippines, from all sources within the Philippines, as interest, dividends, rents, salaries, wages, premiums annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical gains, profits, and income, a tax equal to thirty per centum of such amount: PROVIDED, HOWEVER, THAT PREMIUMS SHALL NOT INCLUDE REINSURANCE PREMIUMS. (double emphasis ours).

Republic Act No. 3841, dated likewise on June 22, 1963, followed after, omitting the proviso and inserting some words (also in bold letters).

(b) Tax on foreign corporations.—(1) Non-resident corporations.—There shall be levied, collected and paid for each taxable year, in lieu of the tax imposed by the preceding paragraph, upon the amount received by every foreign corporation not engaged in trade or business within the Philippines, from all sources within the Philippines, as interest, dividends, rents, salaries, wages, premiums, annuities, compensations, remunerations, emoluments, or other fixed or determinable annual or periodical OR CASUAL gains, profits and income, AND CAPITAL GAINS, a tax equal to thirty per centum of such amount. 6 (double emphasis supplied)

The principle of legislative approval of administrative interpretation by re-enactment clearly obtains in this case. It provides that "the re-enactment of a statute substantially unchanged is persuasive indication of the adoption by Congress of a prior executive construction. 7 Note should be taken of the fact that this case involves not a mere opinion of the Commissioner or ruling rendered on a mere query, but a Circular formally issued to "all internal revenue officials" by the then Commissioner of Internal Revenue.

It was only on June 27, 1968 under Republic Act No. 5431, supra, which became the basis of Revenue Memorandum Circular No. 4-71, that Sec. 24 (b) was amended to refer specifically to 35% of the "gross income."

This Court is not unaware of the well-entrenched principle that the Government is never estopped from collecting taxes because of mistakes or errors on the part of its agents. 8 In fact, utmost caution should be taken in this regard. 9 But, like other principles of law, this also admits of exceptions in the interest of justice and fairplay. The insertion of Sec. 338-A into the National Internal Revenue Code, as held in the case of Tuason, Jr. vs. Lingad, 10 is indicative of legislative intention to support the principle of good faith. In fact, in the United States, from where Sec. 24 (b) was patterned, it

has been held that the Commissioner of Collector is precluded from adopting a position inconsistent with one previously taken where injustice would result therefrom, 11 or where there has been a misrepresentation to the taxpayer. 12

We have also noted that in its Decision, the Court of Tax Appeals further required the petitioner to pay interest and surcharge as provided for in Sec. 51 (e) of the Tax Code in addition to the deficiency withholding tax of P 525,897.06. This additional requirement is much less called for because the petitioner relied in good faith and religiously complied with no less than a Circular issued "to all internal revenue officials" by the highest official of the Bureau of Internal Revenue and approved by the then Secretary of Finance. 13

With the foregoing conclusions arrived at, resolution of the issue of prescription becomes unnecessary.

WHEREFORE, the judgment of the Court of Tax Appeals is hereby reversed, and the questioned assessment set aside. No costs.

SO ORDERED.

G.R. No. 106719 September 21, 1993

DRA. BRIGIDA S. BUENASEDA, Lt. Col. ISABELO BANEZ, JR., ENGR. CONRADO REY MATIAS, Ms. CORA S. SOLIS and Ms. ENYA N. LOPEZ, petitioners, vs.SECRETARY JUAN FLAVIER, Ombudsman CONRADO M. VASQUEZ, and NCMH NURSES ASSOCIATION, represented by RAOULITO GAYUTIN, respondents.

Renato J. Dilag and Benjamin C. Santos for petitioners.

Danilo C. Cunanan for respondent Ombudsman.

Crispin T. Reyes and Florencio T. Domingo for private respondent.

 

QUIASON, J.:

This is a Petition for Certiorari, Prohibition and Mandamus, with Prayer for Preliminary Injunction or Temporary Restraining Order, under Rule 65 of the Revised Rules of Court.

Principally, the petition seeks to nullify the Order of the Ombudsman dated January 7, 1992, directing the preventive suspension of petitioners, Dr. Brigida S. Buenaseda, Chief of Hospital III; Isabelo C. Banez, Jr., Administrative Officer III; Conrado Rey Matias, Technical Assistant to the Chief of Hospital; Cora C. Solis, Accountant III; and Enya N. Lopez, Supply Officer III, all of the National Center for Mental Health. The petition also asks for an order directing the Ombudsman to disqualify Director Raul Arnaw and Investigator Amy de Villa-Rosero, of the Office of the Ombudsman, from participation in the preliminary investigation of the charges against petitioner (Rollo, pp. 2-17; Annexes to Petition, Rollo, pp. 19-21).

The questioned order was issued in connection with the administrative complaint filed with the Ombudsman (OBM-ADM-0-91-0151) by the private respondents against the petitioners for violation of the Anti-Graft and Corrupt Practices Act.

According to the petition, the said order was issued upon the recommendation of Director Raul Arnaw and Investigator Amy de Villa-Rosero, without affording petitioners the opportunity to controvert the charges filed against them. Petitioners had sought to disqualify Director Arnaw and Investigator Villa-Rosero for manifest partiality and bias (Rollo, pp. 4-15).

On September 10, 1992, this Court required respondents' Comment on the petition.

On September 14 and September 22, 1992, petitioners filed a "Supplemental Petition (Rollo, pp. 124-130); Annexes to Supplemental Petition; Rollo pp. 140-163) and an "Urgent Supplemental Manifestation" (Rollo, pp. 164-172; Annexes to Urgent Supplemental Manifestation; Rollo, pp. 173-176), respectively, averring developments that transpired after the filing of the petition and stressing the urgency for the issuance of the writ of preliminary injunction or temporary restraining order.

On September 22, 1992, this Court ". . . Resolved to REQUIRE the respondents to MAINTAIN in the meantime, theSTATUS QUO pending filing of comments by said respondents on the original supplemental manifestation" (Rollo, p. 177).

On September 29, 1992, petitioners filed a motion to direct respondent Secretary of Health to comply with the Resolution dated September 22, 1992 (Rollo, pp. 182-192, Annexes, pp. 192-203). In a Resolution dated October 1, 1992, this Court required respondent Secretary of Health to comment on the said motion.

On September 29, 1992, in a pleading entitled "Omnibus Submission," respondent NCMH Nurses Association submitted its Comment to the Petition, Supplemental Petition and Urgent Supplemental Manifestation. Included in said pleadings were the motions to hold the lawyers of petitioners in contempt and to disbar them (Rollo, pp. 210-267). Attached to the "Omnibus Submission" as annexes were the orders and pleadings filed in Administrative Case No. OBM-ADM-0-91-1051 against petitioners (Rollo, pp. 268-480).

The Motion for Disbarment charges the lawyers of petitioners with: (1) unlawfully advising or otherwise causing or inducing their clients — petitioners Buenaseda, et al., to openly defy, ignore, disregard, disobey or otherwise violate, maliciously evade their preventive suspension by Order of July 7, 1992 of the Ombudsman . . ."; (2) "unlawfully interfering with and obstructing the implementation of the said order (Omnibus Submission, pp. 50-52; Rollo, pp. 259-260); and (3) violation of the Canons of the Code of Professional Responsibility and of unprofessional and unethical conduct "by foisting blatant lies, malicious falsehood and outrageous deception" and by committing subornation of perjury, falsification and fabrication in their pleadings (Omnibus Submission, pp. 52-54; Rollo, pp. 261-263).

On November 11, 1992, petitioners filed a "Manifestation and Supplement to 'Motion to Direct Respondent Secretary of Health to Comply with 22 September 1992 Resolution'" (Manifestation attached to Rollo without pagination between pp. 613 and 614 thereof).

On November 13, 1992, the Solicitor General submitted its Comment dated November 10, 1992, alleging that: (a) "despite the issuance of the September 22, 1992 Resolution directing respondents to maintain the status quo, respondent Secretary refuses to hold in abeyance the implementation of petitioners' preventive suspension; (b) the clear intent and spirit of the Resolution dated September 22, 1992 is to hold in abeyance the implementation of petitioners' preventive suspension, the status quo obtaining the time of the filing of the instant petition; (c) respondent Secretary's acts in refusing to hold in abeyance implementation of petitioners' preventive suspension and in tolerating and approving the acts of Dr. Abueva, the OIC appointed to replace petitioner Buenaseda, are in violation of the Resolution dated September 22, 1992; and (d) therefore, respondent Secretary should be directed to comply with the Resolution dated September 22, 1992 immediately, by restoring the status quo ante contemplated by the aforesaid resolution" (Comment attached toRollo without paginations between pp. 613-614 thereof).

In the Resolution dated November 25, 1992, this Court required respondent Secretary to comply with the aforestated status quo order, stating inter alia, that:

It appearing that the status quo ante litem motam, or the last peaceable uncontested status which preceded the present controversy was the situation obtaining at the time of the filing of the petition at bar on September 7, 1992 wherein petitioners were then actually occupying their respective positions, the Court hereby ORDERS that petitioners be allowed to perform the duties of their respective positions and to receive such salaries and benefits as they may be lawfully entitled to, and that respondents and/or any and all persons acting under their authority desist and refrain from performing any act in violation of the

aforementioned Resolution of September 22, 1992 until further orders from the Court (Attached to Rollo after p. 615 thereof).

On December 9, 1992, the Solicitor General, commenting on the Petition, Supplemental Petition and Supplemental Manifestation, stated that (a) "The authority of the Ombudsman is only to recommend suspension and he has no direct power to suspend;" and (b) "Assuming the Ombudsman has the power to directly suspend a government official or employee, there are conditions required by law for the exercise of such powers; [and] said conditions have not been met in the instant case" (Attached to Rollo without pagination).

In the pleading filed on January 25, 1993, petitioners adopted the position of the Solicitor General that the Ombudsman can only suspend government officials or employees connected with his office. Petitioners also refuted private respondents' motion to disbar petitioners' counsel and to cite them for contempt (Attached to Rollowithout pagination).

The crucial issue to resolve is whether the Ombudsman has the power to suspend government officials and employees working in offices other than the Office of the Ombudsman, pending the investigation of the administrative complaints filed against said officials and employees.

In upholding the power of the Ombudsman to preventively suspend petitioners, respondents (Urgent Motion to LiftStatus Quo, etc, dated January 11, 1993, pp. 10-11), invoke Section 24 of R.A. No. 6770, which provides:

Sec. 24. Preventive Suspension. — The Ombudsman or his Deputy may preventively suspend any officer or employee under his authority pending an investigation, if in his judgment the evidence of guilt is strong, and (a) the charge against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (b) the charge would warrant removal from the service; or (c) the respondent's continued stay in office may prejudice the case filed against him.

The preventive suspension shall continue until the case is terminated by the Office of Ombudsman but not more than six months, without pay, except when the delay in the disposition of the case by the Office of the Ombudsman is due to the fault, negligence or petition of the respondent, in which case the period of such delay shall not be counted in computing the period of suspension herein provided.

Respondents argue that the power of preventive suspension given the Ombudsman under Section 24 of R.A. No. 6770 was contemplated by Section 13 (8) of Article XI of the 1987 Constitution, which provides that the Ombudsman shall exercise such other power or perform such functions or duties as may be provided by law."

On the other hand, the Solicitor General and the petitioners claim that under the 1987 Constitution, the Ombudsman can only recommend to the heads of the departments and other agencies the preventive suspension of officials and employees facing administrative investigation conducted by his office. Hence, he cannot order the preventive suspension himself.

They invoke Section 13(3) of the 1987 Constitution which provides that the Office of the Ombudsman shall haveinter alia the power, function, and duty to:

Direct the officer concerned to take appropriate action against a public official or employee at fault, and recommend his removal, suspension, demotion, fine, censure or prosecution, and ensure compliance therewith.

The Solicitor General argues that under said provision of the Constitutions, the Ombudsman has three distinct powers, namely: (1) direct the officer concerned to take appropriate action against public officials or employees at fault; (2) recommend their removal, suspension, demotion fine, censure, or prosecution; and (3) compel compliance with the recommendation (Comment dated December 3, 1992, pp. 9-10).

The line of argument of the Solicitor General is a siren call that can easily mislead, unless one bears in mind that what the Ombudsman imposed on petitioners was not a punitive but only a preventive suspension.

When the constitution vested on the Ombudsman the power "to recommend the suspension" of a public official or employees (Sec. 13 [3]), it referred to "suspension," as a punitive measure. All the words associated with the word "suspension" in said provision referred to penalties in administrative cases, e.g. removal, demotion, fine, censure. Under the rule of Noscitor a sociis, the word "suspension" should be given the same sense as the other words with which it is associated. Where a particular word is equally susceptible of various meanings, its correct construction may be made

specific by considering the company of terms in which it is found or with which it is associated (Co Kim Chan v. Valdez Tan Keh, 75 Phil. 371 [1945]; Caltex (Phils.) Inc. v. Palomar, 18 SCRA 247 [1966]).

Section 24 of R.A. No. 6770, which grants the Ombudsman the power to preventively suspend public officials and employees facing administrative charges before him, is a procedural, not a penal statute. The preventive suspension is imposed after compliance with the requisites therein set forth, as an aid in the investigation of the administrative charges.

Under the Constitution, the Ombudsman is expressly authorized to recommend to the appropriate official the discipline or prosecution of erring public officials or employees. In order to make an intelligent determination whether to recommend such actions, the Ombudsman has to conduct an investigation. In turn, in order for him to conduct such investigation in an expeditious and efficient manner, he may need to suspend the respondent.

The need for the preventive suspension may arise from several causes, among them, the danger of tampering or destruction of evidence in the possession of respondent; the intimidation of witnesses, etc. The Ombudsman should be given the discretion to decide when the persons facing administrative charges should be preventively suspended.

Penal statutes are strictly construed while procedural statutes are liberally construed (Crawford, Statutory Construction, Interpretation of Laws, pp. 460-461; Lacson v. Romero, 92 Phil. 456 [1953]). The test in determining if a statute is penal is whether a penalty is imposed for the punishment of a wrong to the public or for the redress of an injury to an individual (59 Corpuz Juris, Sec. 658; Crawford, Statutory Construction, pp. 496-497). A Code prescribing the procedure in criminal cases is not a penal statute and is to be interpreted liberally (People v. Adler, 140 N.Y. 331; 35 N.E. 644).

The purpose of R.A. No. 6770 is to give the Ombudsman such powers as he may need to perform efficiently the task committed to him by the Constitution. Such being the case, said statute, particularly its provisions dealing with procedure, should be given such interpretation that will effectuate the purposes and objectives of the Constitution. Any interpretation that will hamper the work of the Ombudsman should be avoided.

A statute granting powers to an agency created by the Constitution should be liberally construed for the advancement of the purposes and objectives for which it was created (Cf. Department of Public Utilities v. Arkansas Louisiana Gas. Co., 200 Ark. 983, 142 S.W. (2d) 213 [1940]; Wallace v. Feehan, 206 Ind. 522, 190 N.E., 438 [1934]).

In Nera v. Garcia, 106 Phil. 1031 [1960], this Court, holding that a preventive suspension is not a penalty, said:

Suspension is a preliminary step in an administrative investigation. If after such investigation, the charges are established and the person investigated is found guilty of acts warranting his removal, then he is removed or dismissed. This is the penalty.

To support his theory that the Ombudsman can only preventively suspend respondents in administrative cases who are employed in his office, the Solicitor General leans heavily on the phrase "suspend any officer or employee under his authority" in Section 24 of R.A. No. 6770.

The origin of the phrase can be traced to Section 694 of the Revised Administrative Code, which dealt with preventive suspension and which authorized the chief of a bureau or office to "suspend any subordinate or employee in his bureau or under his authority pending an investigation . . . ."

Section 34 of the Civil Service Act of 1959 (R.A. No. 2266), which superseded Section 694 of the Revised Administrative Code also authorized the chief of a bureau or office to "suspend any subordinate officer or employees, in his bureau or under his authority."

However, when the power to discipline government officials and employees was extended to the Civil Service Commission by the Civil Service Law of 1975 (P.D. No. 805), concurrently with the President, the Department Secretaries and the heads of bureaus and offices, the phrase "subordinate officer and employee in his bureau" was deleted, appropriately leaving the phrase "under his authority." Therefore, Section 41 of said law only mentions that the proper disciplining authority may preventively suspend "any subordinate officer or employee under his authority pending an investigation . . ." (Sec. 41).

The Administrative Code of 1987 also empowered the proper disciplining authority to "preventively suspend any subordinate officer or employee under his authority pending an investigation" (Sec. 51).

The Ombudsman Law advisedly deleted the words "subordinate" and "in his bureau," leaving the phrase to read "suspend any officer or employee under his authority pending an investigation . . . ." The conclusion that can be deduced from the

deletion of the word "subordinate" before and the words "in his bureau" after "officer or employee" is that the Congress intended to empower the Ombudsman to preventively suspend all officials and employees under investigation by his office, irrespective of whether they are employed "in his office" or in other offices of the government. The moment a criminal or administrative complaint is filed with the Ombudsman, the respondent therein is deemed to be "in his authority" and he can proceed to determine whether said respondent should be placed under preventive suspension.

In their petition, petitioners also claim that the Ombudsman committed grave abuse of discretion amounting to lack of jurisdiction when he issued the suspension order without affording petitioners the opportunity to confront the charges against them during the preliminary conference and even after petitioners had asked for the disqualification of Director Arnaw and Atty. Villa-Rosero (Rollo, pp. 6-13). Joining petitioners, the Solicitor General contends that assuming arguendo that the Ombudsman has the power to preventively suspend erring public officials and employees who are working in other departments and offices, the questioned order remains null and void for his failure to comply with the requisites in Section 24 of the Ombudsman Law (Comment dated December 3, 1992, pp. 11-19).

Being a mere order for preventive suspension, the questioned order of the Ombudsman was validly issued even without a full-blown hearing and the formal presentation of evidence by the parties. In Nera, supra, petitioner therein also claimed that the Secretary of Health could not preventively suspend him before he could file his answer to the administrative complaint. The contention of petitioners herein can be dismissed perfunctorily by holding that the suspension meted out was merely preventive and therefore, as held in Nera, there was "nothing improper in suspending an officer pending his investigation and before tho charges against him are heard . . . (Nera v. Garcia., supra).

There is no question that under Section 24 of R.A. No. 6770, the Ombudsman cannot order the preventive suspension of a respondent unless the evidence of guilt is strong and (1) the charts against such officer or employee involves dishonesty, oppression or grave misconduct or neglect in the performance of duty; (2) the charge would warrant removal from the service; or (3) the respondent's continued stay in office may prejudice the case filed against him.

The same conditions for the exercise of the power to preventively suspend officials or employees under investigation were found in Section 34 of R.A. No. 2260.

The import of the Nera decision is that the disciplining authority is given the discretion to decide when the evidence of guilt is strong. This fact is bolstered by Section 24 of R.A. No. 6770, which expressly left such determination of guilt to the "judgment" of the Ombudsman on the basis of the administrative complaint. In the case at bench, the Ombudsman issued the order of preventive suspension only after: (a) petitioners had filed their answer to the administrative complaint and the "Motion for the Preventive Suspension" of petitioners, which incorporated the charges in the criminal complaint against them (Annex 3, Omnibus Submission, Rollo, pp. 288-289; Annex 4, Rollo, pp. 290-296); (b) private respondent had filed a reply to the answer of petitioners, specifying 23 cases of harassment by petitioners of the members of the private respondent (Annex 6, Omnibus Submission, Rollo, pp. 309-333); and (c) a preliminary conference wherein the complainant and the respondents in the administrative case agreed to submit their list of witnesses and documentary evidence.

Petitioners herein submitted on November 7, 1991 their list of exhibits (Annex 8 of Omnibus Submission, Rollo, pp. 336-337) while private respondents submitted their list of exhibits (Annex 9 of Omnibus Submission, Rollo, pp. 338-348).

Under these circumstances, it can not be said that Director Raul Arnaw and Investigator Amy de Villa-Rosero acted with manifest partiality and bias in recommending the suspension of petitioners. Neither can it be said that the Ombudsman had acted with grave abuse of discretion in acting favorably on their recommendation.

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

On the other hand, we take cognizance of the intemperate language used by counsel for private respondents hurled against petitioners and their counsel (Consolidated: (1) Comment on Private Respondent" "Urgent Motions, etc.; (2) Adoption of OSG's Comment; and (3) Reply to Private Respondent's Comment and Supplemental Comment, pp. 4-5).

A lawyer should not be carried away in espousing his client's cause. The language of a lawyer, both oral or written, must be respectful and restrained in keeping with the dignity of the legal profession and with his behavioral attitude toward his brethren in the profession (Lubiano v. Gordolla, 115 SCRA 459 [1982]). The use of abusive language by counsel against the

opposing counsel constitutes at the same time a disrespect to the dignity of the court of justice. Besides, the use of impassioned language in pleadings, more often than not, creates more heat than light.

The Motion for Disbarment (Rollo, p. 261) has no place in the instant special civil action, which is confined to questions of jurisdiction or abuse of discretion for the purpose of relieving persons from the arbitrary acts of judges and quasi-judicial officers. There is a set of procedure for the discipline of members of the bar separate and apart from the present special civil action.

WHEREFORE, the petition is DISMISSED and the Status quo ordered to be maintained in the Resolution dated September 22, 1992 is LIFTED and SET ASIDE.

SO ORDERED.