Republic of the Philippines

SUPREME COURT
Manila

EN BANC

G.R. No. L-28463 May 31, 1971

REPUBLIC FLOUR MILLS INC., petitioner,

vs.
THE COMMISSIONER OF CUSTOMS and THE COURT OF TAX APPEALS, respondents.

Agrava & Agrava for petitioner.

Office of the Solicitor General Antonio P. Barredo, Assistant Solicitor General Pacifico P. de Castro
and Solicitor Santiago M. Kapunan for respondents.

FERNANDO, J.:

It is a novel question that this petition for the review of a decision of respondent Court of Tax
Appeals presents. Petitioner Republic Flour Mills, Inc. would have this Court construe the words
"products of the Philippines" found in Section 2802 of the Tariff and Custom Code as excluding bran
1

(ipa) and pollard (darak) on the ground that, coming as they do from wheat grain which is imported in
the Philippines, they are merely waste and not the products, which is the flour produced. That way,
2

it would not be liable at all for the wharfage dues assessed under such section by respondent
Commission of Customs. It elevated the matter to respondent Court, as the construction it would
place on the aforesaid section appears too strained and far remote from the ordinary meaning of the
text, not to mention the policy of the Act. We affirm.

In the decision of respondent Court now sought to be reviewed, after stating that what was before it
was an appeal from a decision of the Commissioner of Customs holding petitioner liable for the sum
of P7,948.00 as wharfage due the facts were set forth as follows: "Petitioner, Republic Flour Mills,
Inc., is a domestic corporation, primarily engaged in the manufacture of wheat flour, and produces
pollard (darak) and bran (ipa) in the process of milling. During the period from December, 1963 to
July, 1964, inclusive, petitioner exported Pollard and/or bran which was loaded from lighters
alongside vessels engaged in foreign trade while anchored near the breakwater The respondent
assessed the petitioner by way of wharfage dues on the said exportations in the sum of P7,948.00,
which assessment was paid by petitioner under protest." The only issue, in the opinion of
3

respondent Court, is whether or not such collection of wharfage dues was in accordance with law.
The main contention before respondent Court of petitioner was "that inasmuch as no government or
private wharves or government facilities [were] utilized in exporting the pollard and/or bran, the
collection of wharfage dues is contrary to law." On the other hand, the stand of respondent
4

Commissioner of Customs was that petitioner was liable for wharfage dues "upon receipt or
discharge of the exported goods by a vessel engaged in foreign trade regardless of the non-use of
government-owned or private wharves." Respondent Court of Tax Appeals sustained the action
5

taken by the Commissioner of Customs under the appropriate provision of the Tariff and Customs
Code, relying on our decision in Procter & Gamble Phil. Manufacturing Corp. v. Commissioner of
Customs. It did not feel called upon to answer the question now before us as, in its opinion,
6

petitioner only called its attention to it for the first time in its memorandum.

Hence, this petition for review. The sole error assigned by petitioner is that it should not, under its
construction of the Act, be liable for wharfage dues on its exportation of bran and pollard as they are
not "products of the Philippines", coming as they did from wheat grain which were imported from
abroad, and being "merely parts of the wheat grain milled by Petitioner to produce flour which had
become waste." We find, to repeat, such contention unpersuasive and affirm the decision of
7

respondent Court of Tax Appeals.

1. The language of Section 2802 appears to be quite explicit: "There shall be levied, collected and
paid on all articles imported or brought into the Philippines, and on products of the Philippines ...
exported from the Philippines, a charge of two pesos per gross metric ton as a fee for wharfage ...."
One category refers to what is imported. The other mentions products of the Philippines that are
exported. Even without undue scrutiny, it does appear quite obvious that as long as the goods are
produced in the country, they fall within the terms of the above section. Petitioner appeared to have
entertained such a nation. In its petition for review before respondent Court, it categorically asserted:
"Petitioner is primarily engaged in the manufacture of flour from wheat grain. In the process of milling
the wheat grain into flour, petitioner also produces 'bran' and 'pollard' which it exports abroad." It
8

does take a certain amount of hair-splitting to exclude from its operation what petitioner calls "waste"
resulting from the production of flour processed from the wheat grain in petitioner's flour mills in the
Philippines. It is always timely to remember that, as stressed by Justice Moreland: "The first and
fundamental duty of courts, in our judgment, is to apply the law. Construction and interpretation
come only after it has been demonstrated that application is impossible or inadequate without
them." Petitioner ought to have been aware that deference to such a doctrine precludes an
9

affirmative response to its contention. The law is clear; it must be obeyed. It is as simple, as that.10

2. There is need of confining familiar language of a statute to its usual signification. While statutory
construction involves the exercise of choice, the temptation to roam at will and rely on one's
predilections as to what policy should prevail is to be resisted. The search must be for a reasonable
interpretation. It is best to keep in mind the reminder from Holmes that "there is no canon against
using common sense in construing laws as saying what obviously means." To paraphrase
11

Frankfurter, interpolation must be eschewed but evisceration avoided. Certainly, the utmost effort
should be exerted lest the interpretation arrived at does violence to the statutory language in its total
context. It would be then to ignore what has been stressed time and time again as to limits of judicial
freedom in the construction of statutes to accept their view advanced by petitioner.

3. Then, again, there is the fundamental postulate in statutory construction requiring fidelity to the
legislative purpose. What Congress intended is not to be frustrates. Its objective must be carried out.
Even if there be doubt as to the meaning of the language employed, the interpretation should not be
at war with the end sought to be attained. No undue reflection is needed to show that if through an
ingenious argument, the scope of a statute may be contracted, the probability that other exceptions
may be thought of is not remote. If petitioner were to prevail, subsequent pleas motivated by the
same desire to be excluded from the operation of the Tariff and Customs Code would likewise be
entitled to sympathetic consideration. It is desirable then that the gates to such efforts at undue
restriction of the coverage of the Act be kept closed. Otherwise, the end result would be not respect
for, but defiance of, a clear legislative mandate. That kind of approach in statutory construction has
never recommended itself. It does not now. 12

WHEREFORE, the decision of respondent Court of Tax Appeals of November 27, 1967 is affirmed.
With costs against petitioner.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Villamor and Makasiar, JJ., concur.

Castro, Teehankee and Barredo, JJ., took no part.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 92163 June 5, 1990

IN THE MATTER OF THE PETITION FOR HABEAS CORPUS. JUAN PONCE ENRILE, petitioner
vs.
JUDGE JAIME SALAZAR (Presiding Judge of the Regional Trial Court of Quezon City [Br.
103], SENIOR STATE PROSECUTOR AURELIO TRAMPE, PROSECUTOR FERDINAND R.
ABESAMIS, AND CITY ASSISTANT CITY PROSECUTOR EULOGIO MANANQUIL, NATIONAL
BUREAU OF INVESTIGATION DIRECTOR ALFREDO LIM, BRIG. GEN. EDGAR DULA TORRES
(Superintendent of the Northern Police District) AND/ OR ANY AND ALL PERSONS WHO MAY
HAVE ACTUAL CUSTODY OVER THE PERSON OF JUAN PONCE ENRILE, respondents.

G.R. No. 92164 June 5, 1990

SPS. REBECCO E. PANLILIO AND ERLINDA E. PANLILIO, petitioners,

vs.
PROSECUTORS FERNANDO DE LEON, AURELIO C. TRAMPE, FFRDINAND R. ABESAMIS,
AND EULOGIO C. MANANQUIL, and HON. JAIME W. SALAZAR, JR., in his capacity as
Presiding Judge, Regional Trial Court, Quezon City, Branch 103, respondents.

NARVASA, J.:

Thirty-four years after it wrote history into our criminal jurisprudence, People vs. Hernandez 1 once more takes center stage as the focus of a
confrontation at law that would re-examine, if not the validity of its doctrine, the limits of its applicability. To be sure, the intervening period
saw a number of similar cases 2 that took issue with the ruling-all with a marked lack of success-but none, it would Beem, where season and
circumstance had more effectively conspired to attract wide public attention and excite impassioned debate, even among laymen; none,
certainly, which has seen quite the kind and range of arguments that are now brought to bear on the same question.

The facts are not in dispute. In the afternoon of February 27, 1990, Senate Minority Floor Leader
Juan Ponce Enrile was arrested by law enforcement officers led by Director Alfredo Lim of the
National Bureau of Investigation on the strength of a warrant issued by Hon. Jaime Salazar of the
Regional Trial Court of Quezon City Branch 103, in Criminal Case No. 9010941. The warrant had
issued on an information signed and earlier that day filed by a panel of prosecutors composed of
Senior State Prosecutor Aurelio C. Trampe, State Prosecutor Ferdinand R. Abesamis and Assistant
City Prosecutor Eulogio Mananquil, Jr., charging Senator Enrile, the spouses Rebecco and Erlinda
Panlilio, and Gregorio Honasan with the crime of rebellion with murder and multiple frustrated
murder allegedly committed during the period of the failed coup attempt from November 29 to
December 10, 1990. Senator Enrile was taken to and held overnight at the NBI headquarters on Taft
Avenue, Manila, without bail, none having been recommended in the information and none fixed in
the arrest warrant. The following morning, February 28, 1990, he was brought to Camp Tomas
Karingal in Quezon City where he was given over to the custody of the Superintendent of the
Northern Police District, Brig. Gen. Edgardo Dula Torres. 3

On the same date of February 28, 1990, Senator Enrile, through counsel, filed the petition
for habeas corpus herein (which was followed by a supplemental petition filed on March 2, 1990),
alleging that he was deprived of his constitutional rights in being, or having been:

(a) held to answer for criminal offense which does not exist in the statute books;

(b) charged with a criminal offense in an information for which no complaint was
initially filed or preliminary investigation was conducted, hence was denied due
process;

(c) denied his right to bail; and

(d) arrested and detained on the strength of a warrant issued without the judge who
issued it first having personally determined the existence of probable cause. 4

The Court issued the writ prayed for, returnable March 5, 1990 and set the plea for hearing on March
6, 1990. On March 5, 1990, the Solicitor General filed a consolidated return for the respondents in
5 6

this case and in G.R. No. 92164 Which had been contemporaneously but separately filed by two of
7

Senator Enrile's co-accused, the spouses Rebecco and Erlinda Panlilio, and raised similar
questions. Said return urged that the petitioners' case does not fall within the Hernandez ruling
because-and this is putting it very simply-the information in Hernandez charged murders and other
common crimes committed as a necessary means for the commission of rebellion, whereas the
information against Sen. Enrile et al. charged murder and frustrated murder committed on the
occasion, but not in furtherance, of rebellion. Stated otherwise, the Solicitor General would
distinguish between the complex crime ("delito complejo") arising from an offense being a necessary
means for committing another, which is referred to in the second clause of Article 48, Revised Penal
Code, and is the subject of the Hernandez ruling, and the compound crime ("delito compuesto")
arising from a single act constituting two or more grave or less grave offenses referred to in the first
clause of the same paragraph, with which Hernandez was not concerned and to which, therefore, it
should not apply.

The parties were heard in oral argument, as scheduled, on March 6, 1990, after which the Court
issued its Resolution of the same date granting Senator Enrile and the Panlilio spouses provisional
8

liberty conditioned upon their filing, within 24 hours from notice, cash or surety bonds of P100,000.00
(for Senator Enrile) and P200,000.00 (for the Panlilios), respectively. The Resolution stated that it
was issued without prejudice to a more extended resolution on the matter of the provisional liberty of
the petitioners and stressed that it was not passing upon the legal issues raised in both cases. Four
Members of the Court voted against granting bail to Senator Enrile, and two against granting bail
9 10

to the Panlilios.

The Court now addresses those issues insofar as they are raised and litigated in Senator Enrile's
petition, G.R. No. 92163.

The parties' oral and written pleas presented the Court with the following options:

(a) abandon Hernandez and adopt the minority view expressed in the main dissent of
Justice Montemayor in said case that rebellion cannot absorb more serious crimes,
and that under Article 48 of the Revised Penal Code rebellion may properly be
complexed with common offenses, so-called; this option was suggested by the
Solicitor General in oral argument although it is not offered in his written pleadings;

(b) hold Hernandez applicable only to offenses committed in furtherance, or as a

necessary means for the commission, of rebellion, but not to acts committed in the
course of a rebellion which also constitute "common" crimes of grave or less grave
character;

(c) maintain Hernandez as applying to make rebellion absorb all other offenses
committed in its course, whether or not necessary to its commission or in furtherance
thereof.

On the first option, eleven (11) Members of the Court voted against abandoning Hernandez. Two (2)
Members felt that the doctrine should be re-examined. -A In the view of the majority, the ruling
10

remains good law, its substantive and logical bases have withstood all subsequent challenges and
no new ones are presented here persuasive enough to warrant a complete reversal. This view is
reinforced by the fact that not too long ago, the incumbent President, exercising her powers under
the 1986 Freedom Constitution, saw fit to repeal, among others, Presidential Decree No. 942 of the
former regime which precisely sought to nullify or neutralize Hernandez by enacting a new provision
(Art. 142-A) into the Revised Penal Code to the effect that "(w)hen by reason, or on the occasion, of
any of the crimes penalized in this Chapter (Chapter I of Title 3, which includes rebellion), acts which
constitute offenses upon which graver penalties are imposed by law are committed, the penalty for
the most serious offense in its maximum period shall be imposed upon the offender."' In thus
11

acting, the President in effect by legislative flat reinstated Hernandez as binding doctrine with the
effect of law. The Court can do no less than accord it the same recognition, absent any sufficiently
powerful reason against so doing.

On the second option, the Court unanimously voted to reject the theory that Hernandez is, or should
be, limited in its application to offenses committed as a necessary means for the commission of
rebellion and that the ruling should not be interpreted as prohibiting the complexing of rebellion with
other common crimes committed on the occasion, but not in furtherance, thereof. While four
Members of the Court felt that the proponents' arguments were not entirely devoid of merit, the
consensus was that they were not sufficient to overcome what appears to be the real thrust
of Hernandez to rule out the complexing of rebellion with any other offense committed in its course
under either of the aforecited clauses of Article 48, as is made clear by the following excerpt from the
majority opinion in that case:

There is one other reason-and a fundamental one at that-why Article 48 of our Penal
Code cannot be applied in the case at bar. If murder were not complexed with
rebellion, and the two crimes were punished separately (assuming that this could be
done), the following penalties would be imposable upon the movant, namely: (1) for
 the crime of rebellion, a fine not exceeding P20,000 and prision mayor, in the
corresponding period, depending upon the modifying circumstances present, but
never exceeding 12 years of prision mayor, and (2) for the crime of murder, reclusion
temporal in its maximum period to death, depending upon the modifying
circumstances present. in other words, in the absence of aggravating
circumstances, the extreme penalty could not be imposed upon him. However, under
Article 48 said penalty would have to be meted out to him, even in the absence of a
single aggravating circumstance. Thus, said provision, if construed in conformity with
the theory of the prosecution, would be unfavorable to the movant.

Upon the other hand, said Article 48 was enacted for the purpose of favoring the
culprit, not of sentencing him to a penalty more severe than that which would be
proper if the several acts performed by him were punished separately. In the words
of Rodriguez Navarro:

La unificacion de penas en los casos de concurso de delitos a que

hace referencia este articulo (75 del Codigo de 1932), esta basado
francamente en el principio pro reo.' (II Doctrina Penal del Tribunal
Supremo de Espana, p. 2168.)

We are aware of the fact that this observation refers to Article 71 (later 75) of the
Spanish Penal Code (the counterpart of our Article 48), as amended in 1908 and
then in 1932, reading:

Las disposiciones del articulo anterior no son aplicables en el caso

de que un solo hecho constituya dos o mas delitos, o cuando el uno
de ellos sea medio necesario para cometer el otro.

En estos casos solo se impondra la pena correspondiente al delito

mas grave en su grado maximo, hasta el limite que represents la
suma de las que pudieran imponerse, penando separadamente los
delitos.

Cuando la pena asi computada exceda de este limite, se

sancionaran los delitos por separado. (Rodriguez Navarro, Doctrina
Penal del Tribunal Supremo, Vol. II, p. 2163)

and that our Article 48 does not contain the qualification inserted in said amendment,
restricting the imposition of the penalty for the graver offense in its maximum period
to the case when it does not exceed the sum total of the penalties imposable if the
acts charged were dealt with separately. The absence of said limitation in our Penal
Code does not, to our mind, affect substantially the spirit of said Article 48. Indeed, if
one act constitutes two or more offenses, there can be no reason to inflict a
punishment graver than that prescribed for each one of said offenses put together. In
directing that the penalty for the graver offense be, in such case, imposed in its
maximum period, Article 48 could have had no other purpose than to prescribe a
penalty lower than the aggregate of the penalties for each offense, if imposed
separately. The reason for this benevolent spirit of article 48 is readily discernible.
When two or more crimes are the result of a single act, the offender is deemed less
perverse than when he commits said crimes thru separate and distinct acts. Instead
of sentencing him for each crime independently from the other, he must suffer the
maximum of the penalty for the more serious one, on the assumption that it is less
grave than the sum total of the separate penalties for each offense. 12

The rejection of both options shapes and determines the primary ruling of the Court, which is
that Hernandez remains binding doctrine operating to prohibit the complexing of rebellion with any
other offense committed on the occasion thereof, either as a means necessary to its commission or
as an unintended effect of an activity that constitutes rebellion.

This, however, does not write finis to the case. Petitioner's guilt or innocence is not here inquired
into, much less adjudged. That is for the trial court to do at the proper time. The Court's ruling merely
provides a take-off point for the disposition of other questions relevant to the petitioner's complaints
about the denial of his rights and to the propriety of the recourse he has taken.

The Court rules further (by a vote of 11 to 3) that the information filed against the petitioner does in
fact charge an offense. Disregarding the objectionable phrasing that would complex rebellion with
murder and multiple frustrated murder, that indictment is to be read as charging simple rebellion.
Thus, in Hernandez, the Court said:
 In conclusion, we hold that, under the allegations of the amended information against
defendant-appellant Amado V. Hernandez, the murders, arsons and robberies
described therein are mere ingredients of the crime of rebellion allegedly committed
by said defendants, as means "necessary" (4) for the perpetration of said offense of
rebellion; that the crime charged in the aforementioned amended information is,
therefore, simple rebellion, not the complex crime of rebellion with multiple murder,
arsons and robberies; that the maximum penalty imposable under such charge
cannot exceed twelve (12) years of prision mayor and a fine of P2H,HHH; and that,
in conformity with the policy of this court in dealing with accused persons amenable
to a similar punishment, said defendant may be allowed bail. 13

The plaint of petitioner's counsel that he is charged with a crime that does not exist in the statute
books, while technically correct so far as the Court has ruled that rebellion may not be complexed
with other offenses committed on the occasion thereof, must therefore be dismissed as a mere flight
of rhetoric. Read in the context of Hernandez, the information does indeed charge the petitioner with
a crime defined and punished by the Revised Penal Code: simple rebellion.

Was the petitioner charged without a complaint having been initially filed and/or preliminary
investigation conducted? The record shows otherwise, that a complaint against petitioner for simple
rebellion was filed by the Director of the National Bureau of Investigation, and that on the strength of
said complaint a preliminary investigation was conducted by the respondent prosecutors,
culminating in the filing of the questioned information. There is nothing inherently irregular or
14

contrary to law in filing against a respondent an indictment for an offense different from what is
charged in the initiatory complaint, if warranted by the evidence developed during the preliminary
investigation.

It is also contended that the respondent Judge issued the warrant for petitioner's arrest without
first personally determining the existence of probable cause by examining under oath or affirmation
the complainant and his witnesses, in violation of Art. III, sec. 2, of the Constitution. This Court has
15

already ruled, however, that it is not the unavoidable duty of the judge to make such a personal
examination, it being sufficient that he follows established procedure by personally evaluating the
report and the supporting documents submitted by the prosecutor. Petitioner claims that the warrant
16

of arrest issued barely one hour and twenty minutes after the case was raffled off to the respondent
Judge, which hardly gave the latter sufficient time to personally go over the voluminous records of
the preliminary investigation. Merely because said respondent had what some might consider only
17

a relatively brief period within which to comply with that duty, gives no reason to assume that he had
not, or could not have, so complied; nor does that single circumstance suffice to overcome the legal
presumption that official duty has been regularly performed.

Petitioner finally claims that he was denied the right to bail. In the light of the Court's reaffirmation
of Hernandez as applicable to petitioner's case, and of the logical and necessary corollary that the
information against him should be considered as charging only the crime of simple rebellion, which is
bailable before conviction, that must now be accepted as a correct proposition. But the question
remains: Given the facts from which this case arose, was a petition for habeas corpus in this Court
the appropriate vehicle for asserting a right to bail or vindicating its denial?

The criminal case before the respondent Judge was the normal venue for invoking the petitioner's
right to have provisional liberty pending trial and judgment. The original jurisdiction to grant or deny
bail rested with said respondent. The correct course was for petitioner to invoke that jurisdiction by
filing a petition to be admitted to bail, claiming a right to bail per se by reason of the weakness of the
evidence against him. Only after that remedy was denied by the trial court should the review
jurisdiction of this Court have been invoked, and even then, not without first applying to the Court of
Appeals if appropriate relief was also available there.

Even acceptance of petitioner's premise that going by the Hernandez ruling, the information charges
a non-existent crime or, contrarily, theorizing on the same basis that it charges more than one
offense, would not excuse or justify his improper choice of remedies. Under either hypothesis, the
obvious recourse would have been a motion to quash brought in the criminal action before the
respondent Judge. 18

There thus seems to be no question that All the grounds upon which petitioner has founded the
present petition, whether these went into the substance of what is charged in the information or
imputed error or omission on the part of the prosecuting panel or of the respondent Judge in dealing
with the charges against him, were originally justiciable in the criminal case before said Judge and
should have been brought up there instead of directly to this Court.

There was and is no reason to assume that the resolution of any of these questions was beyond the
ability or competence of the respondent Judge-indeed such an assumption would be demeaning and
less than fair to our trial courts; none whatever to hold them to be of such complexity or
transcendental importance as to disqualify every court, except this Court, from deciding them; none,
in short that would justify by passing established judicial processes designed to orderly move
litigation through the hierarchy of our courts. Parenthentically, this is the reason behind the vote of
four Members of the Court against the grant of bail to petitioner: the view that the trial court should
not thus be precipitately ousted of its original jurisdiction to grant or deny bail, and if it erred in that
matter, denied an opportunity to correct its error. It makes no difference that the respondent Judge
here issued a warrant of arrest fixing no bail. Immemorial practice sanctions simply following the
prosecutor's recommendation regarding bail, though it may be perceived as the better course for the
judge motu proprio to set a bail hearing where a capital offense is charged. It is, in any event,
19

incumbent on the accused as to whom no bail has been recommended or fixed to claim the right to a
bail hearing and thereby put to proof the strength or weakness of the evidence against him.

It is apropos to point out that the present petition has triggered a rush to this Court of other parties in
a similar situation, all apparently taking their cue from it, distrustful or contemptuous of the efficacy of
seeking recourse in the regular manner just outlined. The proliferation of such pleas has only
contributed to the delay that the petitioner may have hoped to avoid by coming directly to this Court.

Not only because popular interest seems focused on the outcome of the present petition, but also
because to wash the Court's hand off it on jurisdictional grounds would only compound the delay that
it has already gone through, the Court now decides the same on the merits. But in so doing, the
Court cannot express too strongly the view that said petition interdicted the ordered and orderly
progression of proceedings that should have started with the trial court and reached this Court only if
the relief appealed for was denied by the former and, in a proper case, by the Court of Appeals on
review.

Let it be made very clear that hereafter the Court will no longer countenance, but will give short shrift
to, pleas like the present, that clearly short-circuit the judicial process and burden it with the
resolution of issues properly within the original competence of the lower courts. What has thus far
been stated is equally applicable to and decisive of the petition of the Panlilio spouses (G.R. No.
92164) which is virtually Identical to that of petitioner Enrile in factual milieu and is therefore
determinable on the same principles already set forth. Said spouses have uncontestedly
pleaded that warrants of arrest issued against them as co-accused of petitioner Enrile in Criminal
20

Case No. 90-10941, that when they appeared before NBI Director Alfredo Lim in the afternoon of
March 1, 1990, they were taken into custody and detained without bail on the strength of said
warrants in violation-they claim-of their constitutional rights.

It may be that in the light of contemporary events, the act of rebellion has lost that quitessentiany
quixotic quality that justifies the relative leniency with which it is regarded and punished by law, that
present-day rebels are less impelled by love of country than by lust for power and have become no
better than mere terrorists to whom nothing, not even the sanctity of human life, is allowed to stand
in the way of their ambitions. Nothing so underscores this aberration as the rash of seemingly
senseless killings, bombings, kidnappings and assorted mayhem so much in the news these days,
as often perpetrated against innocent civilians as against the military, but by and large attributable
to, or even claimed by so-called rebels to be part of, an ongoing rebellion.

It is enough to give anyone pause-and the Court is no exception-that not even the crowded streets of
our capital City seem safe from such unsettling violence that is disruptive of the public peace and
stymies every effort at national economic recovery. There is an apparent need to restructure the law
on rebellion, either to raise the penalty therefor or to clearly define and delimit the other offenses to
be considered as absorbed thereby, so that it cannot be conveniently utilized as the umbrella for
every sort of illegal activity undertaken in its name. The Court has no power to effect such change,
for it can only interpret the law as it stands at any given time, and what is needed lies beyond
interpretation. Hopefully, Congress will perceive the need for promptly seizing the initiative in this
matter, which is properly within its province.

WHEREFORE, the Court reiterates that based on the doctrine enunciated in People vs.
Hernandez, the questioned information filed against petitioners Juan Ponce Enrile and the spouses
Rebecco and Erlinda Panlilio must be read as charging simple rebellion only, hence said petitioners
are entitled to bail, before final conviction, as a matter of right. The Court's earlier grant of bail to
petitioners being merely provisional in character, the proceedings in both cases are ordered
REMANDED to the respondent Judge to fix the amount of bail to be posted by the petitioners. Once
bail is fixed by said respondent for any of the petitioners, the corresponding bail bond flied with this
Court shall become functus oficio. No pronouncement as to costs.

SO ORDERED.

Cruz, Gancayco and Regalado, JJ., concur.

Medialdea, J., concurs in G.R. No. 92164 but took no part in G.R. No. 92163.
Cortes and Griño-Aquino, JJ., are on leave.

Separate Opinions

MELENCIO-HERRERA, J., concurring:

I join my colleagues in holding that the Hernandez doctrine, which has been with us for the past
three decades, remains good law and, thus, should remain undisturbed, despite periodic challenges
to it that, ironically, have only served to strengthen its pronouncements.

I take exception to the view, however, that habeas corpus was not the proper remedy.

Had the Information filed below charged merely the simple crime of Rebellion, that proposition could
have been plausible. But that Information charged Rebellion complexed with Murder and Multiple
Frustrated Murder, a crime which does not exist in our statute books. The charge was obviously
intended to make the penalty for the most serious offense in its maximum period imposable upon the
offender pursuant to Article 48 of the Revised Penal Code. Thus, no bail was recommended in the
Information nor was any prescribed in the Warrant of Arrest issued by the Trial Court.

Under the attendant circumstances, therefore, to have filed a Motion to Quash before the lower
Court would not have brought about the speedy relief from unlawful restraint that petitioner was
seeking. During the pendency of said Motion before the lower Court, petitioner could have continued
to languish in detention. Besides, the Writ of Habeas Corpus may still issue even if another remedy,
which is less effective, may be availed of (Chavez vs. Court of Appeals, 24 SCRA 663).

It is true that habeas corpus would ordinarily not he when a person is under custody by virtue of a
process issued by a Court.

The Court, however, must have jurisdiction to issue the process. In this case, the Court below must
be deemed to have been ousted of jurisdiction when it illegally curtailed petitioner's liberty. Habeas
corpus is thus available.

The writ of habeas corpus is available to relieve persons from unlawful restraint. But
where the detention or confinement is the result of a process issued by the court or
judge or by virtue of a judgment or sentence, the writ ordinarily cannot be availed
of. It may still be invoked though if the process, judgment or sentence proceeded
from a court or tribunal the jurisdiction of which may be assailed. Even if it had
authority to act at the outset, it is now the prevailing doctrine that a deprivation of
constitutional right, if shown to exist, would oust it of jurisdiction. In such a case,
habeas corpus could be relied upon to regain one's liberty (Celeste vs. People, 31
SCRA 391) [Emphasis emphasis].

The Petition for habeas corpus was precisely premised on the violation of petitioner's constitutional
right to bail inasmuch as rebellion, under the present state of the law, is a bailable offense and the
crime for which petitioner stands accused of and for which he was denied bail is non-existent in law.

While litigants should, as a rule, ascend the steps of the judicial ladder, nothing should stop this
Court from taking cognizance of petitions brought before it raising urgent constitutional issues, any
procedural flaw notwithstanding.

The rules on habeas corpus are to be liberally construed (Ganaway v. Quilen, 42

Phil. 805), the writ of habeas corpus being the fundamental instrument for
safeguarding individual freedom against arbitrary and lawless state action. The
scope and flexibility of the writ-its capacity to reach all manner of illegal detention-its
ability to cut through barriers of form and procedural mazes-have always been
emphasized and jealously guarded by courts and lawmakers (Gumabon v. Director
of Bureau of Prisons, 37 SCRA 420) [emphasis supplied].

The proliferation of cases in this Court, which followed in the wake of this Petition, was brought
about by the insistence of the prosecution to charge the crime of Rebellion complexed with other
common offenses notwithstanding the fact that this Court had not yet ruled on the validity of that
charge and had granted provisional liberty to petitioner.
If, indeed, it is desired to make the crime of Rebellion a capital offense (now punishable by reclusion
perpetua), the remedy lies in legislation. But Article 142-A of the Revised Penal Code, along with
1

P.D. No. 942, were repealed, for being "repressive," by EO No. 187 on 5 June 1987. EO 187 further
explicitly provided that Article 134 (and others enumerated) of the Revised Penal Code was
"restored to its full force and effect as it existed before said amendatory decrees." Having been so
repealed, this Court is bereft of power to legislate into existence, under the guise of re-examining a
settled doctrine, a "creature unknown in law"- the complex crime of Rebellion with Murder. The
remand of the case to the lower Court for further proceedings is in order. The Writ of Habeas
Corpus has served its purpose.

GUTIERREZ, JR., J., concurring:

I join the Court's decision to grant the petition. In reiterating the rule that under existing law rebellion
may not be complexed with murder, the Court emphasizes that it cannot legislate a new-crime into
existence nor prescribe a penalty for its commission. That function is exclusively for Congress.

I write this separate opinion to make clear how I view certain issues arising from these cases,
especially on how the defective informations filed by the prosecutors should have been treated.

I agree with the ponente that a petition for habeas corpus is ordinarily not the proper procedure to
assert the right to bail. Under the special circumstances of this case, however, the petitioners had no
other recourse. They had to come to us.

First, the trial court was certainly aware of the decision in People v. Hernandez, 99 Phil. 515 (1956)
that there is no such crime in our statute books as rebellion complexed with murder, that murder
committed in connection with a rebellion is absorbed by the crime of rebellion, and that a resort to
arms resulting in the destruction of life or property constitutes neither two or more offenses nor a
complex crime but one crime-rebellion pure and simple.

Second, Hernandez has been the law for 34 years. It has been reiterated in equally sensational
cases. All lawyers and even law students are aware of the doctrine. Attempts to have the doctrine
re-examined have been consistently rejected by this Court.

Third, President Marcos through the use of his then legislative powers, issued Pres. Decree 942,
thereby installing the new crime of rebellion complexed with offenses like murder where graver
penalties are imposed by law. However, President Aquino using her then legislative powers
expressly repealed PD 942 by issuing Exec. Order 187. She thereby erased the crime of rebellion
complexed with murder and made it clear that the Hernandez doctrine remains the controlling rule.
The prosecution has not explained why it insists on resurrecting an offense expressly wiped out by
the President. The prosecution, in effect, questions the action of the President in repealing a
repressive decree, a decree which, according to the repeal order, is violative of human rights.

Fourth, any re-examination of the Hernandez doctrine brings the ex post facto principle into the
picture. Decisions of this Court form part of our legal system. Even if we declare that rebellion may
be complexed with murder, our declaration can not be made retroactive where the effect is to
imprison a person for a crime which did not exist until the Supreme Court reversed itself.

And fifth, the attempts to distinguish this case from the Hernandez case by stressing that the killings
charged in the information were committed "on the occasion of, but not a necessary means for, the
commission of rebellion" result in outlandish consequences and ignore the basic nature of rebellion.
Thus, under the prosecution theory a bomb dropped on PTV-4 which kills government troopers
results in simple rebellion because the act is a necessary means to make the rebellion succeed.
However, if the same bomb also kills some civilians in the neighborhood, the dropping of the bomb
becomes rebellion complexed with murder because the killing of civilians is not necessary for the
success of a rebellion and, therefore, the killings are only "on the occasion of but not a 'necessary
means for' the commission of rebellion.

This argument is puerile.

The crime of rebellion consists of many acts. The dropping of one bomb cannot be isolated as a
separate crime of rebellion. Neither should the dropping of one hundred bombs or the firing of
thousands of machine gun bullets be broken up into a hundred or thousands of separate offenses, if
each bomb or each bullet happens to result in the destruction of life and property. The same act
cannot be punishable by separate penalties depending on what strikes the fancy of prosecutors-
punishment for the killing of soldiers or retribution for the deaths of civilians. The prosecution also
loses sight of the regrettable fact that in total war and in rebellion the killing of civilians, the laying
waste of civilian economies, the massacre of innocent people, the blowing up of passenger
airplanes, and other acts of terrorism are all used by those engaged in rebellion. We cannot and
should not try to ascertain the intent of rebels for each single act unless the act is plainly not
connected to the rebellion. We cannot use Article 48 of the Revised Penal Code in lieu of still-to- be-
enacted legislation. The killing of civilians during a rebel attack on military facilities furthers the
rebellion and is part of the rebellion.

The trial court was certainly aware of all the above considerations. I cannot understand why the trial
Judge issued the warrant of arrest which categorically states therein that the accused was not
entitled to bail. The petitioner was compelled to come to us so he would not be arrested without
bail for a nonexistent crime. The trial court forgot to apply an established doctrine of the Supreme
Court. Worse, it issued a warrant which reversed 34 years of established procedure based on a well-
known Supreme Court ruling.

All courts should remember that they form part of an independent judicial system; they do not belong
to the prosecution service. A court should never play into the hands of the prosecution and blindly
comply with its erroneous manifestations. Faced with an information charging a manifestly non-
existent crime, the duty of a trial court is to throw it out. Or, at the very least and where possible,
make it conform to the law.

A lower court cannot re-examine and reverse a decision of the Supreme Court especially a decision
consistently followed for 34 years. Where a Judge disagrees with a Supreme Court ruling, he is free
to express his reservations in the body of his decision, order, or resolution. However, any judgment
he renders, any order he prescribes, and any processes he issues must follow the Supreme Court
precedent. A trial court has no jurisdiction to reverse or ignore precedents of the Supreme Court. In
this particular case, it should have been the Solicitor General coming to this Court to question the
lower court's rejection of the application for a warrant of arrest without bail. It should have been the
Solicitor-General provoking the issue of re-examination instead of the petitioners asking to be freed
from their arrest for a non-existent crime.

The principle bears repeating:

Respondent Court of Appeals really was devoid of any choice at all. It could not have
ruled in any other way on the legal question raised. This Tribunal having spoken, its
duty was to obey. It is as simple as that. There is relevance to this excerpt from
Barrera v. Barrera. (L-31589, July 31, 1970, 34 SCRA 98) 'The delicate task of
ascertaining the significance that attaches to a constitutional or statutory provision,
an executive order, a procedural norm or a municipal ordinance is committed to the
judiciary. It thus discharges a role no less crucial than that appertaining to the other
two departments in the maintenance of the rule of law. To assure stability in legal
relations and avoid confusion, it has to speak with one voice. It does so with finality,
logically and rightly, through the highest judicial organ, this Court. What it says then
should be definitive and authoritative, binding on those occupying the lower ranks in
the judicial hierarchy. They have to defer and to submit.' (Ibid, 107. The opinion of
Justice Laurel in People v. Vera, 65 Phil. 56 [1937] was cited). The ensuing
paragraph of the opinion in Barrera further emphasizes the point: Such a thought
was reiterated in an opinion of Justice J.B.L. Reyes and further emphasized in these
words: 'Judge Gaudencio Cloribel need not be reminded that the Supreme Court, by
tradition and in our system of judicial administration, has the last word on what the
law is; it is the final arbiter of any justifiable controversy. There is only one Supreme
Court from whose decisions all other courts should take their bearings. (Ibid. Justice
J.B.L. Reyes spoke thus in Albert v. Court of First Instance of Manila (Br. VI), L-
26364, May 29, 1968, 23 SCRA 948, 961. (Tugade v. Court of Appeals, 85 SCRA
226 [1978]. See also Albert v. Court of First Instance, 23 SCRA 948 [1968] and Vir-
Jen Shipping and Marine Services, Inc. v. NLRC, 125 SCRA 577 [1983])

I find the situation in Spouses Panlilio v. Prosecutors Fernando de Leon, et al. even more
inexplicable. In the case of the Panlilios, any probable cause to commit the non- existent crime of
rebellion complexed with murder exists only in the minds of the prosecutors, not in the records of the
case.

I have gone over the records and pleadings furnished to the members of the Supreme Court. I
listened intently to the oral arguments during the hearing and it was quite apparent that the
constitutional requirement of probable cause was not satisfied. In fact, in answer to my query for any
other proofs to support the issuance of a warrant of arrest, the answer was that the evidence would
be submitted in due time to the trial court.

The spouses Panlilio and one parent have been in the restaurant business for decades. Under the
records of these petitions, any restaurant owner or hotel manager who serves food to rebels is a co-
conspirator in the rebellion. The absurdity of this proposition is apparent if we bear in mind that
rebels ride in buses and jeepneys, eat meals in rural houses when mealtime finds them in the
vicinity, join weddings, fiestas, and other parties, play basketball with barrio youths, attend masses
and church services and otherwise mix with people in various gatherings. Even if the hosts
recognize them to be rebels and fail to shoo them away, it does not necessarily follow that the
former are co-conspirators in a rebellion.

The only basis for probable cause shown by the records of the Panlilio case is the alleged fact that
the petitioners served food to rebels at the Enrile household and a hotel supervisor asked two or
three of their waiters, without reason, to go on a vacation. Clearly, a much, much stronger showing
of probable cause must be shown.

In Salonga v. Cruz Paño, 134 SCRA 438 (1985), then Senator Salonga was charged as a
conspirator in the heinous bombing of innocent civilians because the man who planted the bomb
had, sometime earlier, appeared in a group photograph taken during a birthday party in the United
States with the Senator and other guests. It was a case of conspiracy proved through a group
picture. Here, it is a case of conspiracy sought to proved through the catering of food.

The Court in Salonga stressed:

The purpose of a preliminary investigation is to secure the innocent against hasty,

malicious and oppressive prosecution, and to protect him from an open and public
accusation of crime, from the trouble, expense and anxiety of a public trial, and also
to protect the state from useless and expensive trials. (Trocio v. Manta, 118 SCRA
241; citing Hashimn v. Boncan, 71 Phil. 216). The right to a preliminary investigation
is a statutory grant, and to withhold it would be to transgress constitutional due
process. (See People v. Oandasa, 25 SCRA 277) However, in order to satisfy the
due process clause it is not enough that the preliminary investigation is conducted in
the sense of making sure that a transgressor shall not escape with impunity. A
preliminary investigation serves not only the purposes of the State. More important, it
is a part of the guarantees of freedom and fair play which are birthrights of all who
live in our country. It is, therefore, imperative upon the fiscal or the judge as the case
may be, to relieve the accused from the pain of going through a trial once it is
ascertained that the evidence is insufficient to sustain a prima facie case or that no
probable cause exists to form a sufficient belief as to the guilt of the accused.
Although there is no general formula or fixed rule for the determination of probable
cause since the same must be decided in the light of the conditions obtaining in
given situations and its existence depends to a large degree upon the finding or
opinion of the judge conducting the examination, such a finding should not disregard
the facts before the judge nor run counter to the clear dictates of reason (See La
Chemise Lacoste, S.A. v. Fernandez, 129 SCRA 391). The judge or fiscal, therefore,
should not go on with the prosecution in the hope that some credible evidence might
later turn up during trial for this would be a flagrant violation of a basic right which the
courts are created to uphold. It bears repeating that the judiciary lives up to its
mission by vitalizing and not denigrating constitutional rights. So it has been before. It
should continue to be so. (id., pp. 461- 462)

Because of the foregoing, I take exception to that part of the ponencia which will read the
informations as charging simple rebellion. This case did not arise from innocent error. If an
information charges murder but its contents show only the ingredients of homicide, the Judge may
rightly read it as charging homicide. In these cases, however, there is a deliberate attempt to charge
the petitioners for an offense which this Court has ruled as non-existent. The prosecution wanted
Hernandez to be reversed. Since the prosecution has filed informations for a crime which, under our
rulings, does not exist, those informations should be treated as null and void. New informations
charging the correct offense should be filed. And in G.R. No. 92164, an extra effort should be made
to see whether or not the Principle in Salonga v. Cruz Patio, et al. (supra) has been violated.

The Court is not, in any way, preventing the Government from using more effective weapons to
suppress rebellion. If the Government feels that the current situation calls for the imposition of more
severe penalties like death or the creation of new crimes like rebellion complexed with murder, the
remedy is with Congress, not the courts.

I, therefore, vote to GRANT the petitions and to ORDER the respondent court to DISMISS the void
informations for a non-existent crime.

FELICIANO, J., concurring:

I concur in the result reached by the majority of the Court.

I believe that there are certain aspects of the Hernandez doctrine that, as an abstract question of
law, could stand reexamination or clarification. I have in mind in particular matters such as the
correct or appropriate relationship between Article 134 and Article 135 of the Revised Penal Code.
This is a matter which relates to the legal concept of rebellion in our legal system. If one examines
the actual terms of Article 134 (entitled: "Rebellion or Insurrection-How Committed"), it would appear
that this Article specifies both the overt acts and the criminal purpose which, when put together,
would constitute the offense of rebellion. Thus, Article 134 states that "the crime of rebellion is
committed by rising publicly and taking arms against the Government "(i.e., the overt acts comprising
rebellion), "for the purpose of (i.e., the specific criminal intent or political objective) removing from the
allegiance to said government or its laws the territory of the Republic of the Philippines or any part
thereof, or any body of land, naval or other armed forces, or depriving the Chief Executive or the
Legislature, wholly or partially, of their powers or prerogatives." At the same time, Article 135
(entitled: "Penalty for Rebellion or Insurrection.") sets out a listing of acts or particular measures
which appear to fall under the rubric of rebellion or insurrection: "engaging in war against the forces
of the Government, destroying property or committing serious violence, exacting contributions or
diverting public funds from the lawful purpose for which they have been appropriated." Are these
modalities of rebellion generally? Or are they particular modes by which those "who promote [ ],
maintain [ ] or head [ ] a rebellion or insurrection" commit rebellion, or particular modes of
participation in a rebellion by public officers or employees? Clearly, the scope of the legal concept of
rebellion relates to the distinction between, on the one hand, the indispensable acts or ingredients of
the crime of rebellion under the Revised Penal Code and, on the other hand, differing optional
modes of seeking to carry out the political or social objective of the rebellion or insurrection.

The difficulty that is at once raised by any effort to examine once more even the above threshold
questions is that the results of such re-examination may well be that acts which under
the Hernandez doctrine are absorbed into rebellion, may be characterized as separate or discrete
offenses which, as a matter of law, can either be prosecuted separately from rebellion or prosecuted
under the provisions of Article 48 of the Revised Penal Code, which (both Clause 1 and Clause 2
thereof) clearly envisage the existence of at least two (2) distinct offenses. To reach such a
conclusion in the case at bar, would, as far as I can see, result in colliding with the fundamental non-
retroactivity principle (Article 4, Civil Code; Article 22, Revised Penal Code; both in relation to Article
8, Civil Code).

The non-retroactivity rule applies to statutes principally. But, statutes do not exist in the abstract but
rather bear upon the lives of people with the specific form given them by judicial decisions
interpreting their norms. Judicial decisions construing statutory norms give specific shape and
content to such norms. In time, the statutory norms become encrusted with the glosses placed upon
them by the courts and the glosses become integral with the norms (Cf Caltex v. Palomar, 18 SCRA
247 [1966]). Thus, while in legal theory, judicial interpretation of a statute becomes part of the law as
of the date that the law was originally enacted, I believe this theory is not to be applied rigorously
where a new judicial doctrine is announced, in particular one overruling a previous existing doctrine
of long standing (here, 36 years) and most specially not where the statute construed is criminal in
nature and the new doctrine is more onerous for the accused than the pre-existing one (People v.
Jabinal, 55 SCRA 607 [1974]; People v. Licera, 65 SCRA 270 [1975]; Gumabon v. Director of
Prisons, 37 SCRA 420 [1971]). Moreover, the non-retroactivity rule whether in respect of legislative
acts or judicial decisions has constitutional implications. The prevailing rule in the United States is
that a judicial decision that retroactively renders an act criminal or enhances the severity of the
penalty prescribed for an offense, is vulnerable to constitutional challenge based upon the rule
against ex post facto laws and the due process clause (Bouie v. City of Columbia, 378 US 347,12 L.
Ed. 2d 894 [1964]; Marks v. U.S., 43 US 188, 51 L. Ed. 2d 260 [1977]; Devine v. New Mexico
Department of Corrections, 866 F. 2d 339 [1989]).

It is urged by the Solicitor General that the non-retroactivity principle does not present any real
problem for the reason that the Hernandez doctrine was based upon Article 48, second clause, of
the Revised Penal Code and not upon the first clause thereof, while it is precisely the first clause of
Article 48 that the Government here invokes. It is, however, open to serious doubt
whether Hernandez can reasonably be so simply and sharply characterized. And assuming
the Hernandez could be so characterized, subsequent cases refer to the Hernandez doctrine in
terms which do not distinguish clearly between the first clause and the second clause of Article 48
(e.g., People v. Geronimo, 100 Phil. 90 [1956]; People v. Rodriguez, 107 Phil. 659 [1960]). Thus, it
appears to me that the critical question would be whether a man of ordinary intelligence would have
necessarily read or understood the Hernandez doctrine as referring exclusively to Article 48, second
clause. Put in slightly different terms, the important question would be whether the new doctrine here
proposed by the Government could fairly have been derived by a man of average intelligence (or
counsel of average competence in the law) from an examination of Articles 134 and 135 of the
Revised Penal Code as interpreted by the Court in the Hernandez and subsequent cases. To
formulate the question ill these terms would almost be to compel a negative answer, especially in
view of the conclusions reached by the Court and its several Members today.
Finally, there appears to be no question that the new doctrine that the Government would have us
discover for the first time since the promulgation of the Revised Penal Code in 1932, would be more
onerous for the respondent accused than the simple application of the Hernandez doctrine that
murders which have been committed on the occasion of and in furtherance of the crime of rebellion
must be deemed absorbed in the offense of simple rebellion.

I agree therefore that the information in this case must be viewed as charging only the crime of
simple rebellion.

FERNAN, C.J., concurring and dissenting:

I am constrained to write this separate opinion on what seems to be a rigid adherence to the 1956
ruling of the Court. The numerous challenges to the doctrine enunciated in the case of People vs.
Hernandez, 99 Phil. 515 (1956) should at once demonstrate the need to redefine the applicability of
said doctrine so as to make it conformable with accepted and well-settled principles of criminal law
and jurisprudence.

To my mind, the Hernandez doctrine should not be interpreted as an all-embracing authority for the
rule that all common crimes committed on the occasion, or in furtherance of, or in connection with,
rebellion are absorbed by the latter. To that extent, I cannot go along with the view of the majority in
the instant case that 'Hernandez remains binding doctrine operating to prohibit the complexing of
rebellion with any other offense committed on the occasion thereof, either as a means necessary to
its commission or as an unintended effect of an activity that constitutes rebellion" (p. 9, Decision).

The Hernandez doctrine has served the purpose for which it was appealed by the Court in 1956
during the communist-inspired rebellion of the Huks. The changes in our society in the span of 34
years since then have far-reaching effects on the all-embracing applicability of the doctrine
considering the emergence of alternative modes of seizing the powers of the duly constituted
Government not contemplated in Articles 134 and 135 of the Revised Penal Code and their
consequent effects on the lives of our people. The doctrine was good law then, but I believe that
there is a certain aspect of the Hernandez doctrine that needs clarification.

With all due respect to the views of my brethren in the Court, I believe that the Court, in the instant
case, should have further considered that distinction between acts or offenses which
are indispensable in the commission of rebellion, on the one hand, and those acts or offenses that
are merely necessary but not indispensable in the commission of rebellion, on the other. The
majority of the Court is correct in adopting, albeit impliedly, the view in Hernandez case that when an
offense perpetrated as a necessary means of committing another, which is an element of the latter,
the resulting interlocking crimes should be considered as only one simple offense and must be
deemed outside the operation of the complex crime provision (Article 48) of the Revised Penal
Code. As in the case of Hernandez, the Court, however, failed in the instant case to distinguish what
is indispensable from what is merely necessary in the commission of an offense, resulting thus in the
rule that common crimes like murder, arson, robbery, etc. committed in the course or on the
occasion of rebellion are absorbed or included in the latter as elements thereof.

The relevance of the distinction is significant, more particularly, if applied to contemporaneous

events happening in our country today. Theoretically, a crime which is indispensable in the
commission of another must necessarily be an element of the latter; but a crime that is merely
necessary but not indispensable in the commission of another is not an element of the latter, and if
and when actually committed, brings the interlocking crime within the operation of the complex crime
provision (Art. 48) of the Revised Penal Code. With that distinction, common crimes committed
against Government forces and property in the course of rebellion are properly considered
indispensable overt acts of rebellion and are logically absorbed in it as virtual ingredients or
elements thereof, but common crimes committed against the civilian population in the course or on
the occasion of rebellion and in furtherance thereof, may be necessary but not indispensable in
committing the latter, and may, therefore, not be considered as elements of the said crime of
rebellion. To illustrate, the deaths occurring during armed confrontation or clashes between
government forces and the rebels are absorbed in the rebellion, and would be those resulting from
the bombing of military camps and installations, as these acts are indispensable in carrying out the
rebellion. But deliberately shooting down an unarmed innocent civilian to instill fear or create chaos
among the people, although done in the furtherance of the rebellion, should not be absorbed in the
crime of rebellion as the felonious act is merely necessary, but not indispensable. In the latter case,
Article 48 of the Revised Penal Code should apply.

The occurrence of a coup d' etat in our country as a mode of seizing the powers of the duly-
constituted government by staging surprise attacks or occupying centers of powers, of which this
Court should take judicial notice, has introduced a new dimension to the interpretation of the
provisions on rebellion and insurrection in the Revised Penal Code. Generally, as a mode of seizing
the powers of the duly constituted government, it falls within the contemplation of rebellion under the
Revised Penal Code, but, strictly construed, a coup d'etat per se is a class by itself. The manner of
its execution and the extent and magnitude of its effects on the lives of the people distinguish a coup
d'etat from the traditional definition and modes of commission attached by the Revised Penal Code
to the crime of rebellion as applied by the Court to the communist-inspired rebellion of the 1950's. A
coup d'etat may be executed successfully without its perpetrators resorting to the commission of
other serious crimes such as murder, arson, kidnapping, robbery, etc. because of the element of
surprise and the precise timing of its execution. In extreme cases where murder, arson, robbery, and
other common crimes are committed on the occasion of a coup d' etat, the distinction referred to
above on what is necessary and what is indispensable in the commission of the coup d'etat should
be painstakingly considered as the Court should have done in the case of herein petitioners.

I concur in the result insofar as the other issues are resolved by the Court but I take exception to the
vote of the majority on the broad application of the Hernandez doctrine.

BIDIN, J., concurring and dissenting:

I concur with the majority opinion except as regards the dispositive portion thereof which orders the
remand of the case to the respondent judge for further proceedings to fix the amount of bail to be
posted by the petitioner.

I submit that the proceedings need not be remanded to the respondent judge for the purpose of
fixing bail since we have construed the indictment herein as charging simple rebellion, an offense
which is bailable. Consequently, habeas corpus is the proper remedy available to petitioner as an
accused who had been charged with simple rebellion, a bailable offense but who had been denied
his right to bail by the respondent judge in violation of petitioner's constitutional right to bail. In view
thereof, the responsibility of fixing the amount of bail and approval thereof when filed, devolves upon
us, if complete relief is to be accorded to petitioner in the instant proceedings.

It is indubitable that before conviction, admission to bail is a matter of right to the defendant, accused
before the Regional Trial Court of an offense less than capital (Section 13 Article III, Constitution and
Section 3, Rule 114). Petitioner is, before Us, on a petition for habeas corpus praying, among others,
for his provisional release on bail. Since the offense charged (construed as simple rebellion) admits
of bail, it is incumbent upon us m the exercise of our jurisdiction over the petition for habeas
corpus (Section 5 (1), Article VIII, Constitution; Section 2, Rule 102), to grant petitioner his right to
bail and having admitted him to bail, to fix the amount thereof in such sums as the court deems
reasonable. Thereafter, the rules require that "the proceedings together with the bond" shall forthwith
be certified to the respondent trial court (Section 14, Rule 102).

Accordingly, the cash bond in the amount of P 100,000.00 posted by petitioner for his provisional
release pursuant to our resolution dated March 6, 1990 should now be deemed and admitted as his
bail bond for his provisional release in the case (simple rebellion) pending before the respondent
judge, without necessity of a remand for further proceedings, conditioned for his (petitioner's)
appearance before the trial court to abide its order or judgment in the said case.

SARMIENTO, J., concurring and dissenting:

I agree that People v. Hernandez should abide. More than three decades after which it was
1

penned, it has firmly settled in the tomes of our jurisprudence as correct doctrine.

As Hernandez put it, rebellion means "engaging m war against the forces of the
government," which implies "resort to arms, requisition of property and services, collection of taxes
2

and contributions, restraint of liberty, damage to property, physical injuries and loss of life, and the
hunger, illness and unhappiness that war leaves in its wake. ..." whether committed in furtherance,
3

of as a necessary means for the commission, or in the course, of rebellion. To say that rebellion may
be complexed with any other offense, in this case murder, is to play into a contradiction in terms
because exactly, rebellion includes murder, among other possible crimes.

I also agree that the information may stand as an accusation for simple rebellion. Since the acts
complained of as constituting rebellion have been embodied in the information, mention therein of
murder as a complexing offense is a surplusage, because in any case, the crime of rebellion is left
fully described. 4

At any rate, the government need only amend the information by a clerical correction, since an
amendment will not alter its substance.
I dissent, however, insofar as the majority orders the remand of the matter of bail to the lower court. I
take it that when we, in our Resolution of March 6, 1990, granted the petitioner "provisional liberty"
upon the filing of a bond of P100,000.00, we granted him bail. The fact that we gave him "provisional
liberty" is in my view, of no moment, because bail means provisional liberty. It will serve no useful
purpose to have the trial court hear the incident again when we ourselves have been satisfied that
the petitioner is entitled to temporary freedom.

PADILLA, J., dissenting:

I concur in the majority opinion insofar as it holds that the ruling in People vs. Hernandez, 99 Phil.
515 "remains binding doctrine operating to prohibit the complexing of rebellion with any other offense
committed on the occasion thereof, either as a means necessary to its commission or as an
unintended effect of an activity that constitutes rebellion."

I dissent, however, from the majority opinion insofar as it holds that the information in question, while
charging the complex crime of rebellion with murder and multiple frustrated murder, "is to be read as
charging simple rebellion."

The present cases are to be distinguished from the Hernandez case in at least one (1) material
respect. In the Hernandez case, this Court was confronted with an appealed case, i.e., Hernandez
had been convicted by the trial court of the complex crime of rebellion with murder, arson and
robbery, and his plea to be released on bail before the Supreme Court, pending appeal, gave birth to
the now celebrated Hernandez doctrine that the crime of rebellion complexed with murder, arson
and robbery does not exist. In the present cases, on the other hand, the Court is confronted with
an original case, i.e., where an information has been recently filed in the trial court and the
petitioners have not even pleaded thereto.

Furthermore, the Supreme Court, in the Hernandez case, was "ground-breaking" on the issue of
whether rebellion can be complexed with murder, arson, robbery, etc. In the present cases, on the
other hand, the prosecution and the lower court, not only had the Hernandez doctrine (as case law),
but Executive Order No. 187 of President Corazon C. Aquino dated 5 June 1987 (as statutory law) to
bind them to the legal proposition that the crime of rebellion complexed with murder, and multiple
frustrated murder does not exist.

And yet, notwithstanding these unmistakable and controlling beacon lights-absent when this Court
laid down the Hernandez doctrine-the prosecution has insisted in filing, and the lower court has
persisted in hearing, an information charging the petitioners with rebellion complexed with murder an
multiple frustrated murder. That information is clearly a nullity and plainly void ab initio. Its head
should not be allowed to surface. As a nullity in substantive law, it charges nothing; it has given rise
to nothing. The warrants of arrest issued pursuant thereto are as null and void as the information on
which they are anchored. And, since the entire question of the information's validity is before the
Court in these habeas corpus cases, I venture to say that the information is fatally defective, even
under procedural law, because it charges more than one (1) offense (Sec. 13, Rule 110, Rules of
Court).

I submit then that it is not for this Court to energize a dead and, at best, fatally decrepit information
by labelling or "baptizing" it differently from what it announces itself to be. The prosecution must file
an entirely new and proper information, for this entire exercise to merit the serious consideration of
the courts.

ACCORDINGLY, I vote to GRANT the petitions, QUASH the warrants of arrest, and ORDER the
information for rebellion complexed with murder and multiple frustrated murder in Criminal Case
Nos. 90-10941, RTC of Quezon City, DISMISSED.

Consequently, the petitioners should be ordered permanently released and their bails cancelled.

Paras, J., concurs.

Separate Opinions

MELENCIO-HERRERA, J., concurring:

I join my colleagues in holding that the Hernandez doctrine, which has been with us for the past
three decades, remains good law and, thus, should remain undisturbed, despite periodic challenges
to it that, ironically, have only served to strengthen its pronouncements.

I take exception to the view, however, that habeas corpus was not the proper remedy.

Had the Information filed below charged merely the simple crime of Rebellion, that proposition could
have been plausible. But that Information charged Rebellion complexed with Murder and Multiple
Frustrated Murder, a crime which does not exist in our statute books. The charge was obviously
intended to make the penalty for the most serious offense in its maximum period imposable upon the
offender pursuant to Article 48 of the Revised Penal Code. Thus, no bail was recommended in the
Information nor was any prescribed in the Warrant of Arrest issued by the Trial Court.

Under the attendant circumstances, therefore, to have filed a Motion to Quash before the lower
Court would not have brought about the speedy relief from unlawful restraint that petitioner was
seeking. During the pendency of said Motion before the lower Court, petitioner could have continued
to languish in detention. Besides, the Writ of Habeas Corpus may still issue even if another remedy,
which is less effective, may be availed of (Chavez vs. Court of Appeals, 24 SCRA 663).

It is true that habeas corpus would ordinarily not he when a person is under custody by virtue of a
process issued by a Court.

The Court, however, must have jurisdiction to issue the process. In this case, the Court below must
be deemed to have been ousted of jurisdiction when it illegally curtailed petitioner's liberty. Habeas
corpus is thus available.

The writ of habeas corpus is available to relieve persons from unlawful restraint. But
where the detention or confinement is the result of a process issued by the court or
judge or by virtue of a judgment or sentence, the writ ordinarily cannot be availed
of. It may still be invoked though if the process, judgment or sentence proceeded
from a court or tribunal the jurisdiction of which may be assailed. Even if it had
authority to act at the outset, it is now the prevailing doctrine that a deprivation of
constitutional right, if shown to exist, would oust it of jurisdiction. In such a case,
habeas corpus could be relied upon to regain one's liberty (Celeste vs. People, 31
SCRA 391) [Emphasis emphasis].

The Petition for habeas corpus was precisely premised on the violation of petitioner's constitutional
right to bail inasmuch as rebellion, under the present state of the law, is a bailable offense and the
crime for which petitioner stands accused of and for which he was denied bail is non-existent in law.

While litigants should, as a rule, ascend the steps of the judicial ladder, nothing should stop this
Court from taking cognizance of petitions brought before it raising urgent constitutional issues, any
procedural flaw notwithstanding.

The rules on habeas corpus are to be liberally construed (Ganaway v. Quilen, 42

Phil. 805), the writ of habeas corpus being the fundamental instrument for
safeguarding individual freedom against arbitrary and lawless state action. The
scope and flexibility of the writ-its capacity to reach all manner of illegal detention-its
ability to cut through barriers of form and procedural mazes-have always been
emphasized and jealously guarded by courts and lawmakers (Gumabon v. Director
of Bureau of Prisons, 37 SCRA 420) [emphasis supplied].

The proliferation of cases in this Court, which followed in the wake of this Petition, was brought
about by the insistence of the prosecution to charge the crime of Rebellion complexed with other
common offenses notwithstanding the fact that this Court had not yet ruled on the validity of that
charge and had granted provisional liberty to petitioner.

If, indeed, it is desired to make the crime of Rebellion a capital offense (now punishable by reclusion
perpetua), the remedy lies in legislation. But Article 142-A of the Revised Penal Code, along with
1

P.D. No. 942, were repealed, for being "repressive," by EO No. 187 on 5 June 1987. EO 187 further
explicitly provided that Article 134 (and others enumerated) of the Revised Penal Code was
"restored to its full force and effect as it existed before said amendatory decrees." Having been so
repealed, this Court is bereft of power to legislate into existence, under the guise of re-examining a
settled doctrine, a "creature unknown in law"- the complex crime of Rebellion with Murder. The
remand of the case to the lower Court for further proceedings is in order. The Writ of Habeas
Corpus has served its purpose.
GUTIERREZ, JR., J., concurring:

I join the Court's decision to grant the petition. In reiterating the rule that under existing law rebellion
may not be complexed with murder, the Court emphasizes that it cannot legislate a new-crime into
existence nor prescribe a penalty for its commission. That function is exclusively for Congress.

I write this separate opinion to make clear how I view certain issues arising from these cases,
especially on how the defective informations filed by the prosecutors should have been treated.

I agree with the ponente that a petition for habeas corpus is ordinarily not the proper procedure to
assert the right to bail. Under the special circumstances of this case, however, the petitioners had no
other recourse. They had to come to us.

First, the trial court was certainly aware of the decision in People v. Hernandez, 99 Phil. 515 (1956)
that there is no such crime in our statute books as rebellion complexed with murder, that murder
committed in connection with a rebellion is absorbed by the crime of rebellion, and that a resort to
arms resulting in the destruction of life or property constitutes neither two or more offenses nor a
complex crime but one crime-rebellion pure and simple.

Second, Hernandez has been the law for 34 years. It has been reiterated in equally sensational
cases. All lawyers and even law students are aware of the doctrine. Attempts to have the doctrine
re-examined have been consistently rejected by this Court.

Third, President Marcos through the use of his then legislative powers, issued Pres. Decree 942,
thereby installing the new crime of rebellion complexed with offenses like murder where graver
penalties are imposed by law. However, President Aquino using her then legislative powers
expressly repealed PD 942 by issuing Exec. Order 187. She thereby erased the crime of rebellion
complexed with murder and made it clear that the Hernandez doctrine remains the controlling rule.
The prosecution has not explained why it insists on resurrecting an offense expressly wiped out by
the President. The prosecution, in effect, questions the action of the President in repealing a
repressive decree, a decree which, according to the repeal order, is violative of human rights.

Fourth, any re-examination of the Hernandez doctrine brings the ex post facto principle into the
picture. Decisions of this Court form part of our legal system. Even if we declare that rebellion may
be complexed with murder, our declaration can not be made retroactive where the effect is to
imprison a person for a crime which did not exist until the Supreme Court reversed itself.

And fifth, the attempts to distinguish this case from the Hernandez case by stressing that the killings
charged in the information were committed "on the occasion of, but not a necessary means for, the
commission of rebellion" result in outlandish consequences and ignore the basic nature of rebellion.
Thus, under the prosecution theory a bomb dropped on PTV-4 which kills government troopers
results in simple rebellion because the act is a necessary means to make the rebellion succeed.
However, if the same bomb also kills some civilians in the neighborhood, the dropping of the bomb
becomes rebellion complexed with murder because the killing of civilians is not necessary for the
success of a rebellion and, therefore, the killings are only "on the occasion of but not a 'necessary
means for' the commission of rebellion.

This argument is puerile.

The crime of rebellion consists of many acts. The dropping of one bomb cannot be isolated as a
separate crime of rebellion. Neither should the dropping of one hundred bombs or the firing of
thousands of machine gun bullets be broken up into a hundred or thousands of separate offenses, if
each bomb or each bullet happens to result in the destruction of life and property. The same act
cannot be punishable by separate penalties depending on what strikes the fancy of prosecutors-
punishment for the killing of soldiers or retribution for the deaths of civilians. The prosecution also
loses sight of the regrettable fact that in total war and in rebellion the killing of civilians, the laying
waste of civilian economies, the massacre of innocent people, the blowing up of passenger
airplanes, and other acts of terrorism are all used by those engaged in rebellion. We cannot and
should not try to ascertain the intent of rebels for each single act unless the act is plainly not
connected to the rebellion. We cannot use Article 48 of the Revised Penal Code in lieu of still-to- be-
enacted legislation. The killing of civilians during a rebel attack on military facilities furthers the
rebellion and is part of the rebellion.

The trial court was certainly aware of all the above considerations. I cannot understand why the trial
Judge issued the warrant of arrest which categorically states therein that the accused was not
entitled to bail. The petitioner was compelled to come to us so he would not be arrested without
bail for a nonexistent crime. The trial court forgot to apply an established doctrine of the Supreme
Court. Worse, it issued a warrant which reversed 34 years of established procedure based on a well-
known Supreme Court ruling.
All courts should remember that they form part of an independent judicial system; they do not belong
to the prosecution service. A court should never play into the hands of the prosecution and blindly
comply with its erroneous manifestations. Faced with an information charging a manifestly non-
existent crime, the duty of a trial court is to throw it out. Or, at the very least and where possible,
make it conform to the law.

A lower court cannot re-examine and reverse a decision of the Supreme Court especially a decision
consistently followed for 34 years. Where a Judge disagrees with a Supreme Court ruling, he is free
to express his reservations in the body of his decision, order, or resolution. However, any judgment
he renders, any order he prescribes, and any processes he issues must follow the Supreme Court
precedent. A trial court has no jurisdiction to reverse or ignore precedents of the Supreme Court. In
this particular case, it should have been the Solicitor General coming to this Court to question the
lower court's rejection of the application for a warrant of arrest without bail. It should have been the
Solicitor-General provoking the issue of re-examination instead of the petitioners asking to be freed
from their arrest for a non-existent crime.

The principle bears repeating:

Respondent Court of Appeals really was devoid of any choice at all. It could not have
ruled in any other way on the legal question raised. This Tribunal having spoken, its
duty was to obey. It is as simple as that. There is relevance to this excerpt from
Barrera v. Barrera. (L-31589, July 31, 1970, 34 SCRA 98) 'The delicate task of
ascertaining the significance that attaches to a constitutional or statutory provision,
an executive order, a procedural norm or a municipal ordinance is committed to the
judiciary. It thus discharges a role no less crucial than that appertaining to the other
two departments in the maintenance of the rule of law. To assure stability in legal
relations and avoid confusion, it has to speak with one voice. It does so with finality,
logically and rightly, through the highest judicial organ, this Court. What it says then
should be definitive and authoritative, binding on those occupying the lower ranks in
the judicial hierarchy. They have to defer and to submit.' (Ibid, 107. The opinion of
Justice Laurel in People v. Vera, 65 Phil. 56 [1937] was cited). The ensuing
paragraph of the opinion in Barrera further emphasizes the point: Such a thought
was reiterated in an opinion of Justice J.B.L. Reyes and further emphasized in these
words: 'Judge Gaudencio Cloribel need not be reminded that the Supreme Court, by
tradition and in our system of judicial administration, has the last word on what the
law is; it is the final arbiter of any justifiable controversy. There is only one Supreme
Court from whose decisions all other courts should take their bearings. (Ibid. Justice
J.B.L. Reyes spoke thus in Albert v. Court of First Instance of Manila (Br. VI), L-
26364, May 29, 1968, 23 SCRA 948, 961. (Tugade v. Court of Appeals, 85 SCRA
226 [1978]. See also Albert v. Court of First Instance, 23 SCRA 948 [1968] and Vir-
Jen Shipping and Marine Services, Inc. v. NLRC, 125 SCRA 577 [1983])

I find the situation in Spouses Panlilio v. Prosecutors Fernando de Leon, et al. even more
inexplicable. In the case of the Panlilios, any probable cause to commit the non- existent crime of
rebellion complexed with murder exists only in the minds of the prosecutors, not in the records of the
case.

I have gone over the records and pleadings furnished to the members of the Supreme Court. I
listened intently to the oral arguments during the hearing and it was quite apparent that the
constitutional requirement of probable cause was not satisfied. In fact, in answer to my query for any
other proofs to support the issuance of a warrant of arrest, the answer was that the evidence would
be submitted in due time to the trial court.

The spouses Panlilio and one parent have been in the restaurant business for decades. Under the
records of these petitions, any restaurant owner or hotel manager who serves food to rebels is a co-
conspirator in the rebellion. The absurdity of this proposition is apparent if we bear in mind that
rebels ride in buses and jeepneys, eat meals in rural houses when mealtime finds them in the
vicinity, join weddings, fiestas, and other parties, play basketball with barrio youths, attend masses
and church services and otherwise mix with people in various gatherings. Even if the hosts
recognize them to be rebels and fail to shoo them away, it does not necessarily follow that the
former are co-conspirators in a rebellion.

The only basis for probable cause shown by the records of the Panlilio case is the alleged fact that
the petitioners served food to rebels at the Enrile household and a hotel supervisor asked two or
three of their waiters, without reason, to go on a vacation. Clearly, a much, much stronger showing
of probable cause must be shown.

In Salonga v. Cruz Paño, 134 SCRA 438 (1985), then Senator Salonga was charged as a
conspirator in the heinous bombing of innocent civilians because the man who planted the bomb
had, sometime earlier, appeared in a group photograph taken during a birthday party in the United
States with the Senator and other guests. It was a case of conspiracy proved through a group
picture. Here, it is a case of conspiracy sought to proved through the catering of food.

The Court in Salonga stressed:

The purpose of a preliminary investigation is to secure the innocent against hasty,

malicious and oppressive prosecution, and to protect him from an open and public
accusation of crime, from the trouble, expense and anxiety of a public trial, and also
to protect the state from useless and expensive trials. (Trocio v. Manta, 118 SCRA
241; citing Hashimn v. Boncan, 71 Phil. 216). The right to a preliminary investigation
is a statutory grant, and to withhold it would be to transgress constitutional due
process. (See People v. Oandasa, 25 SCRA 277) However, in order to satisfy the
due process clause it is not enough that the preliminary investigation is conducted in
the sense of making sure that a transgressor shall not escape with impunity. A
preliminary investigation serves not only the purposes of the State. More important, it
is a part of the guarantees of freedom and fair play which are birthrights of all who
live in our country. It is, therefore, imperative upon the fiscal or the judge as the case
may be, to relieve the accused from the pain of going through a trial once it is
ascertained that the evidence is insufficient to sustain a prima facie case or that no
probable cause exists to form a sufficient belief as to the guilt of the accused.
Although there is no general formula or fixed rule for the determination of probable
cause since the same must be decided in the light of the conditions obtaining in
given situations and its existence depends to a large degree upon the finding or
opinion of the judge conducting the examination, such a finding should not disregard
the facts before the judge nor run counter to the clear dictates of reason (See La
Chemise Lacoste, S.A. v. Fernandez, 129 SCRA 391). The judge or fiscal, therefore,
should not go on with the prosecution in the hope that some credible evidence might
later turn up during trial for this would be a flagrant violation of a basic right which the
courts are created to uphold. It bears repeating that the judiciary lives up to its
mission by vitalizing and not denigrating constitutional rights. So it has been before. It
should continue to be so. (id., pp. 461- 462)

Because of the foregoing, I take exception to that part of the ponencia which will read the
informations as charging simple rebellion. This case did not arise from innocent error. If an
information charges murder but its contents show only the ingredients of homicide, the Judge may
rightly read it as charging homicide. In these cases, however, there is a deliberate attempt to charge
the petitioners for an offense which this Court has ruled as non-existent. The prosecution wanted
Hernandez to be reversed. Since the prosecution has filed informations for a crime which, under our
rulings, does not exist, those informations should be treated as null and void. New informations
charging the correct offense should be filed. And in G.R. No. 92164, an extra effort should be made
to see whether or not the Principle in Salonga v. Cruz Patio, et al. (supra) has been violated.

The Court is not, in any way, preventing the Government from using more effective weapons to
suppress rebellion. If the Government feels that the current situation calls for the imposition of more
severe penalties like death or the creation of new crimes like rebellion complexed with murder, the
remedy is with Congress, not the courts.

I, therefore, vote to GRANT the petitions and to ORDER the respondent court to DISMISS the void
informations for a non-existent crime.

FELICIANO, J., concurring:

I concur in the result reached by the majority of the Court.

I believe that there are certain aspects of the Hernandez doctrine that, as an abstract question of
law, could stand reexamination or clarification. I have in mind in particular matters such as the
correct or appropriate relationship between Article 134 and Article 135 of the Revised Penal Code.
This is a matter which relates to the legal concept of rebellion in our legal system. If one examines
the actual terms of Article 134 (entitled: "Rebellion or Insurrection-How Committed"), it would appear
that this Article specifies both the overt acts and the criminal purpose which, when put together,
would constitute the offense of rebellion. Thus, Article 134 states that "the crime of rebellion is
committed by rising publicly and taking arms against the Government "(i.e., the overt acts comprising
rebellion), "for the purpose of (i.e., the specific criminal intent or political objective) removing from the
allegiance to said government or its laws the territory of the Republic of the Philippines or any part
thereof, or any body of land, naval or other armed forces, or depriving the Chief Executive or the
Legislature, wholly or partially, of their powers or prerogatives." At the same time, Article 135
(entitled: "Penalty for Rebellion or Insurrection.") sets out a listing of acts or particular measures
which appear to fall under the rubric of rebellion or insurrection: "engaging in war against the forces
of the Government, destroying property or committing serious violence, exacting contributions or
diverting public funds from the lawful purpose for which they have been appropriated." Are these
modalities of rebellion generally? Or are they particular modes by which those "who promote [ ],
maintain [ ] or head [ ] a rebellion or insurrection" commit rebellion, or particular modes of
participation in a rebellion by public officers or employees? Clearly, the scope of the legal concept of
rebellion relates to the distinction between, on the one hand, the indispensable acts or ingredients of
the crime of rebellion under the Revised Penal Code and, on the other hand, differing optional
modes of seeking to carry out the political or social objective of the rebellion or insurrection.

The difficulty that is at once raised by any effort to examine once more even the above threshold
questions is that the results of such re-examination may well be that acts which under
the Hernandez doctrine are absorbed into rebellion, may be characterized as separate or discrete
offenses which, as a matter of law, can either be prosecuted separately from rebellion or prosecuted
under the provisions of Article 48 of the Revised Penal Code, which (both Clause 1 and Clause 2
thereof) clearly envisage the existence of at least two (2) distinct offenses. To reach such a
conclusion in the case at bar, would, as far as I can see, result in colliding with the fundamental non-
retroactivity principle (Article 4, Civil Code; Article 22, Revised Penal Code; both in relation to Article
8, Civil Code).

The non-retroactivity rule applies to statutes principally. But, statutes do not exist in the abstract but
rather bear upon the lives of people with the specific form given them by judicial decisions
interpreting their norms. Judicial decisions construing statutory norms give specific shape and
content to such norms. In time, the statutory norms become encrusted with the glosses placed upon
them by the courts and the glosses become integral with the norms (Cf Caltex v. Palomar, 18 SCRA
247 [1966]). Thus, while in legal theory, judicial interpretation of a statute becomes part of the law as
of the date that the law was originally enacted, I believe this theory is not to be applied rigorously
where a new judicial doctrine is announced, in particular one overruling a previous existing doctrine
of long standing (here, 36 years) and most specially not where the statute construed is criminal in
nature and the new doctrine is more onerous for the accused than the pre-existing one (People v.
Jabinal, 55 SCRA 607 [1974]; People v. Licera, 65 SCRA 270 [1975]; Gumabon v. Director of
Prisons, 37 SCRA 420 [1971]). Moreover, the non-retroactivity rule whether in respect of legislative
acts or judicial decisions has constitutional implications. The prevailing rule in the United States is
that a judicial decision that retroactively renders an act criminal or enhances the severity of the
penalty prescribed for an offense, is vulnerable to constitutional challenge based upon the rule
against ex post facto laws and the due process clause (Bouie v. City of Columbia, 378 US 347,12 L.
Ed. 2d 894 [1964]; Marks v. U.S., 43 US 188, 51 L. Ed. 2d 260 [1977]; Devine v. New Mexico
Department of Corrections, 866 F. 2d 339 [1989]).

It is urged by the Solicitor General that the non-retroactivity principle does not present any real
problem for the reason that the Hernandez doctrine was based upon Article 48, second clause, of
the Revised Penal Code and not upon the first clause thereof, while it is precisely the first clause of
Article 48 that the Government here invokes. It is, however, open to serious doubt
whether Hernandez can reasonably be so simply and sharply characterized. And assuming
the Hernandez could be so characterized, subsequent cases refer to the Hernandez doctrine in
terms which do not distinguish clearly between the first clause and the second clause of Article 48
(e.g., People v. Geronimo, 100 Phil. 90 [1956]; People v. Rodriguez, 107 Phil. 659 [1960]). Thus, it
appears to me that the critical question would be whether a man of ordinary intelligence would have
necessarily read or understood the Hernandez doctrine as referring exclusively to Article 48, second
clause. Put in slightly different terms, the important question would be whether the new doctrine here
proposed by the Government could fairly have been derived by a man of average intelligence (or
counsel of average competence in the law) from an examination of Articles 134 and 135 of the
Revised Penal Code as interpreted by the Court in the Hernandez and subsequent cases. To
formulate the question ill these terms would almost be to compel a negative answer, especially in
view of the conclusions reached by the Court and its several Members today.

Finally, there appears to be no question that the new doctrine that the Government would have us
discover for the first time since the promulgation of the Revised Penal Code in 1932, would be more
onerous for the respondent accused than the simple application of the Hernandez doctrine that
murders which have been committed on the occasion of and in furtherance of the crime of rebellion
must be deemed absorbed in the offense of simple rebellion.

I agree therefore that the information in this case must be viewed as charging only the crime of
simple rebellion.

FERNAN, C.J., concurring and dissenting:

I am constrained to write this separate opinion on what seems to be a rigid adherence to the 1956
ruling of the Court. The numerous challenges to the doctrine enunciated in the case of People vs.
Hernandez, 99 Phil. 515 (1956) should at once demonstrate the need to redefine the applicability of
said doctrine so as to make it conformable with accepted and well-settled principles of criminal law
and jurisprudence.

To my mind, the Hernandez doctrine should not be interpreted as an all-embracing authority for the
rule that all common crimes committed on the occasion, or in furtherance of, or in connection with,
rebellion are absorbed by the latter. To that extent, I cannot go along with the view of the majority in
the instant case that 'Hernandez remains binding doctrine operating to prohibit the complexing of
rebellion with any other offense committed on the occasion thereof, either as a means necessary to
its commission or as an unintended effect of an activity that constitutes rebellion" (p. 9, Decision).

The Hernandez doctrine has served the purpose for which it was appealed by the Court in 1956
during the communist-inspired rebellion of the Huks. The changes in our society in the span of 34
years since then have far-reaching effects on the all-embracing applicability of the doctrine
considering the emergence of alternative modes of seizing the powers of the duly constituted
Government not contemplated in Articles 134 and 135 of the Revised Penal Code and their
consequent effects on the lives of our people. The doctrine was good law then, but I believe that
there is a certain aspect of the Hernandez doctrine that needs clarification.

With all due respect to the views of my brethren in the Court, I believe that the Court, in the instant
case, should have further considered that distinction between acts or offenses which
are indispensable in the commission of rebellion, on the one hand, and those acts or offenses that
are merely necessary but not indispensable in the commission of rebellion, on the other. The
majority of the Court is correct in adopting, albeit impliedly, the view in Hernandez case that when an
offense perpetrated as a necessary means of committing another, which is an element of the latter,
the resulting interlocking crimes should be considered as only one simple offense and must be
deemed outside the operation of the complex crime provision (Article 48) of the Revised Penal
Code. As in the case of Hernandez, the Court, however, failed in the instant case to distinguish what
is indispensable from what is merely necessary in the commission of an offense, resulting thus in the
rule that common crimes like murder, arson, robbery, etc. committed in the course or on the
occasion of rebellion are absorbed or included in the latter as elements thereof.

The relevance of the distinction is significant, more particularly, if applied to contemporaneous

events happening in our country today. Theoretically, a crime which is indispensable in the
commission of another must necessarily be an element of the latter; but a crime that is merely
necessary but not indispensable in the commission of another is not an element of the latter, and if
and when actually committed, brings the interlocking crime within the operation of the complex crime
provision (Art. 48) of the Revised Penal Code. With that distinction, common crimes committed
against Government forces and property in the course of rebellion are properly considered
indispensable overt acts of rebellion and are logically absorbed in it as virtual ingredients or
elements thereof, but common crimes committed against the civilian population in the course or on
the occasion of rebellion and in furtherance thereof, may be necessary but not indispensable in
committing the latter, and may, therefore, not be considered as elements of the said crime of
rebellion. To illustrate, the deaths occurring during armed confrontation or clashes between
government forces and the rebels are absorbed in the rebellion, and would be those resulting from
the bombing of military camps and installations, as these acts are indispensable in carrying out the
rebellion. But deliberately shooting down an unarmed innocent civilian to instill fear or create chaos
among the people, although done in the furtherance of the rebellion, should not be absorbed in the
crime of rebellion as the felonious act is merely necessary, but not indispensable. In the latter case,
Article 48 of the Revised Penal Code should apply.

The occurrence of a coup d' etat in our country as a mode of seizing the powers of the duly-
constituted government by staging surprise attacks or occupying centers of powers, of which this
Court should take judicial notice, has introduced a new dimension to the interpretation of the
provisions on rebellion and insurrection in the Revised Penal Code. Generally, as a mode of seizing
the powers of the duly constituted government, it falls within the contemplation of rebellion under the
Revised Penal Code, but, strictly construed, a coup d'etat per se is a class by itself. The manner of
its execution and the extent and magnitude of its effects on the lives of the people distinguish a coup
d'etat from the traditional definition and modes of commission attached by the Revised Penal Code
to the crime of rebellion as applied by the Court to the communist-inspired rebellion of the 1950's. A
coup d'etat may be executed successfully without its perpetrators resorting to the commission of
other serious crimes such as murder, arson, kidnapping, robbery, etc. because of the element of
surprise and the precise timing of its execution. In extreme cases where murder, arson, robbery, and
other common crimes are committed on the occasion of a coup d' etat, the distinction referred to
above on what is necessary and what is indispensable in the commission of the coup d'etat should
be painstakingly considered as the Court should have done in the case of herein petitioners.

I concur in the result insofar as the other issues are resolved by the Court but I take exception to the
vote of the majority on the broad application of the Hernandez doctrine.
BIDIN, J., concurring and dissenting:

I concur with the majority opinion except as regards the dispositive portion thereof which orders the
remand of the case to the respondent judge for further proceedings to fix the amount of bail to be
posted by the petitioner.

I submit that the proceedings need not be remanded to the respondent judge for the purpose of
fixing bail since we have construed the indictment herein as charging simple rebellion, an offense
which is bailable. Consequently, habeas corpus is the proper remedy available to petitioner as an
accused who had been charged with simple rebellion, a bailable offense but who had been denied
his right to bail by the respondent judge in violation of petitioner's constitutional right to bail. In view
thereof, the responsibility of fixing the amount of bail and approval thereof when filed, devolves upon
us, if complete relief is to be accorded to petitioner in the instant proceedings.

It is indubitable that before conviction, admission to bail is a matter of right to the defendant, accused
before the Regional Trial Court of an offense less than capital (Section 13 Article III, Constitution and
Section 3, Rule 114). Petitioner is, before Us, on a petition for habeas corpus praying, among others,
for his provisional release on bail. Since the offense charged (construed as simple rebellion) admits
of bail, it is incumbent upon us m the exercise of our jurisdiction over the petition for habeas
corpus (Section 5 (1), Article VIII, Constitution; Section 2, Rule 102), to grant petitioner his right to
bail and having admitted him to bail, to fix the amount thereof in such sums as the court deems
reasonable. Thereafter, the rules require that "the proceedings together with the bond" shall forthwith
be certified to the respondent trial court (Section 14, Rule 102).

Accordingly, the cash bond in the amount of P 100,000.00 posted by petitioner for his provisional
release pursuant to our resolution dated March 6, 1990 should now be deemed and admitted as his
bail bond for his provisional release in the case (simple rebellion) pending before the respondent
judge, without necessity of a remand for further proceedings, conditioned for his (petitioner's)
appearance before the trial court to abide its order or judgment in the said case.

SARMIENTO, J., concurring and dissenting:

I agree that People v. Hernandez should abide. More than three decades after which it was
1

penned, it has firmly settled in the tomes of our jurisprudence as correct doctrine.

As Hernandez put it, rebellion means "engaging m war against the forces of the
government," which implies "resort to arms, requisition of property and services, collection of taxes
2

and contributions, restraint of liberty, damage to property, physical injuries and loss of life, and the
hunger, illness and unhappiness that war leaves in its wake. ..." whether committed in furtherance,
3

of as a necessary means for the commission, or in the course, of rebellion. To say that rebellion may
be complexed with any other offense, in this case murder, is to play into a contradiction in terms
because exactly, rebellion includes murder, among other possible crimes.

I also agree that the information may stand as an accusation for simple rebellion. Since the acts
complained of as constituting rebellion have been embodied in the information, mention therein of
murder as a complexing offense is a surplusage, because in any case, the crime of rebellion is left
fully described. 4

At any rate, the government need only amend the information by a clerical correction, since an
amendment will not alter its substance.

I dissent, however, insofar as the majority orders the remand of the matter of bail to the lower court. I
take it that when we, in our Resolution of March 6, 1990, granted the petitioner "provisional liberty"
upon the filing of a bond of P100,000.00, we granted him bail. The fact that we gave him "provisional
liberty" is in my view, of no moment, because bail means provisional liberty. It will serve no useful
purpose to have the trial court hear the incident again when we ourselves have been satisfied that
the petitioner is entitled to temporary freedom.

PADILLA, J., dissenting:

I concur in the majority opinion insofar as it holds that the ruling in People vs. Hernandez, 99 Phil.
515 "remains binding doctrine operating to prohibit the complexing of rebellion with any other offense
committed on the occasion thereof, either as a means necessary to its commission or as an
unintended effect of an activity that constitutes rebellion."
I dissent, however, from the majority opinion insofar as it holds that the information in question, while
charging the complex crime of rebellion with murder and multiple frustrated murder, "is to be read as
charging simple rebellion."

The present cases are to be distinguished from the Hernandez case in at least one (1) material
respect. In the Hernandez case, this Court was confronted with an appealed case, i.e., Hernandez
had been convicted by the trial court of the complex crime of rebellion with murder, arson and
robbery, and his plea to be released on bail before the Supreme Court, pending appeal, gave birth to
the now celebrated Hernandez doctrine that the crime of rebellion complexed with murder, arson
and robbery does not exist. In the present cases, on the other hand, the Court is confronted with
an original case, i.e., where an information has been recently filed in the trial court and the
petitioners have not even pleaded thereto.

Furthermore, the Supreme Court, in the Hernandez case, was "ground-breaking" on the issue of
whether rebellion can be complexed with murder, arson, robbery, etc. In the present cases, on the
other hand, the prosecution and the lower court, not only had the Hernandez doctrine (as case law),
but Executive Order No. 187 of President Corazon C. Aquino dated 5 June 1987 (as statutory law) to
bind them to the legal proposition that the crime of rebellion complexed with murder, and multiple
frustrated murder does not exist.

And yet, notwithstanding these unmistakable and controlling beacon lights-absent when this Court
laid down the Hernandez doctrine-the prosecution has insisted in filing, and the lower court has
persisted in hearing, an information charging the petitioners with rebellion complexed with murder an
multiple frustrated murder. That information is clearly a nullity and plainly void ab initio. Its head
should not be allowed to surface. As a nullity in substantive law, it charges nothing; it has given rise
to nothing. The warrants of arrest issued pursuant thereto are as null and void as the information on
which they are anchored. And, since the entire question of the information's validity is before the
Court in these habeas corpus cases, I venture to say that the information is fatally defective, even
under procedural law, because it charges more than one (1) offense (Sec. 13, Rule 110, Rules of
Court).

I submit then that it is not for this Court to energize a dead and, at best, fatally decrepit information
by labelling or "baptizing" it differently from what it announces itself to be. The prosecution must file
an entirely new and proper information, for this entire exercise to merit the serious consideration of
the courts.

ACCORDINGLY, I vote to GRANT the petitions, QUASH the warrants of arrest, and ORDER the
information for rebellion complexed with murder and multiple frustrated murder in Criminal Case
Nos. 90-10941, RTC of Quezon City, DISMISSED.

Consequently, the petitioners should be ordered permanently released and their bails cancelled.

Paras, J., concurs.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-30642 April 30, 1985

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and
NESTOR S. FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR.,
CELSO S. FLORESCA, MELBA S. FLORESCA, JUDITH S. FLORESCA and CARMEN S.
FLORESCA;

LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children
LINDA, ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ
and TOMAS MARTINEZ;

SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children
JOSE, ESTELA, JULITA SALUD and DANILO, all surnamed OBRA;

LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children
EDNA, GEORGE and LARRY III, all surnamed VILLAR;

DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor
children EDITHA, ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed
LANUZA;

EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children
JOSE, LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA, petitioners,
vs.
PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII,
Court of First Instance of Manila, respondents.

Rodolfo C. Pacampara for petitioners.

Tito M. Villaluna for respondents.

MAKASIAR, J.:

This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII,
dated December 16, 1968 dismissing petitioners' complaint for damages on the ground of lack of
jurisdiction.

Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter
referred to as Philex), who, while working at its copper mines underground operations at Tuba,
Benguet on June 28, 1967, died as a result of the cave-in that buried them in the tunnels of the
mine. Specifically, the complaint alleges that Philex, in violation of government rules and regulations,
negligently and deliberately failed to take the required precautions for the protection of the lives of its
men working underground. Portion of the complaint reads:

xxx xxx xxx

9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with
gross and reckless negligence and imprudence and deliberate failure to take the
required precautions for the due protection of the lives of its men working
underground at the time, and in utter violation of the laws and the rules and
regulations duly promulgated by the Government pursuant thereto, allowed great
amount of water and mud to accumulate in an open pit area at the mine above Block
43-S-1 which seeped through and saturated the 600 ft. column of broken ore and
rock below it, thereby exerting tremendous pressure on the working spaces at its
4300 level, with the result that, on the said date, at about 4 o'clock in the afternoon,
with the collapse of all underground supports due to such enormous pressure,
approximately 500,000 cubic feet of broken ores rocks, mud and water, accompanied
by surface boulders, blasted through the tunnels and flowed out and filled in, in a
matter of approximately five (5) minutes, the underground workings, ripped timber
supports and carried off materials, machines and equipment which blocked all
 avenues of exit, thereby trapping within its tunnels of all its men above referred to,
including those named in the next preceding paragraph, represented by the plaintiffs
herein;

10. That out of the 48 mine workers who were then working at defendant PHILEX's
mine on the said date, five (5) were able to escape from the terrifying holocaust; 22
were rescued within the next 7 days; and the rest, 21 in number, including those
referred to in paragraph 7 hereinabove, were left mercilessly to their fate,
notwithstanding the fact that up to then, a great many of them were still alive,
entombed in the tunnels of the mine, but were not rescued due to defendant
PHILEX's decision to abandon rescue operations, in utter disregard of its bounden
legal and moral duties in the premises;

xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations
duly promulgated by the duly constituted authorities as set out by the Special
Committee above referred to, in their Report of investigation, pages 7-13, Annex 'B'
hereof, but also failed completely to provide its men working underground the
necessary security for the protection of their lives notwithstanding the fact that it had
vast financial resources, it having made, during the year 1966 alone, a total operating
income of P 38,220,254.00, or net earnings, after taxes of P19,117,394.00, as per its
llth Annual Report for the year ended December 31, 1966, and with aggregate assets
totalling P 45,794,103.00 as of December 31, 1966;

xxx xxx xxx

(pp. 42-44, rec.)

A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of
petitioners based on an industrial accident are covered by the provisions of the Workmen's
Compensation Act (Act 3428, as amended by RA 772) and that the former Court of First Instance
has no jurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to the said
motion to dismiss claiming that the causes of action are not based on the provisions of the
Workmen's Compensation Act but on the provisions of the Civil Code allowing the award of actual,
moral and exemplary damages, particularly:

Art. 2176. Whoever by act or omission causes damage to another, there being fault
or negligence, is obliged to pay for the damage done. Such fault or negligence, if
there is no pre- existing contractual relation between the parties, is called a quasi-
delict and is governed by the provisions of this Chapter.

Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-
delict.

(b) Art. 1173—The fault or negligence of the obligor consists in the omission of that
diligence which is required by the nature of the obligation and corresponds with the
circumstances of the persons, of the time and of the place. When negligence shows
bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply.

Art. 2201. x x x x x x x x x

In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible
for all damages which may be reasonably attributed to the non-performance of the
obligation.

Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant

acted with gross negligence.

After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27,
1968 dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen's
Compensation Commission. On petitioners' motion for reconsideration of the said order, respondent
Judge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed
Philex to file an answer to the complaint. Philex moved to reconsider the aforesaid order which was
opposed by petitioners.

On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that
in accordance with the established jurisprudence, the Workmen's Compensation Commission has
exclusive original jurisdiction over damage or compensation claims for work-connected deaths or
injuries of workmen or employees, irrespective of whether or not the employer was negligent, adding
that if the employer's negligence results in work-connected deaths or injuries, the employer shall,
pursuant to Section 4-A of the Workmen's Compensation Act, pay additional compensation equal to
50% of the compensation fixed in the Act.

Petitioners thus filed the present petition.

In their brief, petitioners raised the following assignment of errors:

THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS'

COMPLAINT FOR LACK OF JURISDICTION.

II

THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR

DISTINCTION BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL CODE
AND CLAIMS FOR COMPENSATION UNDER THE WORKMEN'S
COMPENSATION ACT.

In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause
of action since the complaint is based on the provisions of the Civil Code on damages, particularly
Articles 2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen's
Compensation Act. They point out that the complaint alleges gross and brazen negligence on the
part of Philex in failing to take the necessary security for the protection of the lives of its employees
working underground. They also assert that since Philex opted to file a motion to dismiss in the
court a quo, the allegations in their complaint including those contained in the annexes are deemed
admitted.

In the second assignment of error, petitioners asseverate that respondent Judge failed to see the
distinction between the claims for compensation under the Workmen's Compensation Act and the
claims for damages based on gross negligence of Philex under the Civil Code. They point out that
workmen's compensation refers to liability for compensation for loss resulting from injury, disability or
death of the working man through industrial accident or disease, without regard to the fault or
negligence of the employer, while the claim for damages under the Civil Code which petitioners
pursued in the regular court, refers to the employer's liability for reckless and wanton negligence
resulting in the death of the employees and for which the regular court has jurisdiction to adjudicate
the same.

On the other hand, Philex asserts that work-connected injuries are compensable exclusively under
the provisions of Sections 5 and 46 of the Workmen's Compensation Act, which read:

SEC. 5. Exclusive right to compensation.—The rights and remedies granted by this

Act to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury ...

SEC. 46. Jurisdiction.— The Workmen's Compensation Commissioner shall have

exclusive jurisdiction to hear and decide claims for compensation under the
Workmen's Compensation Act, subject to appeal to the Supreme Court, ...

Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that "all
claims of workmen against their employer for damages due to accident suffered in the course of
employment shall be investigated and adjudicated by the Workmen's Compensation Commission,"
subject to appeal to the Supreme Court.

Philex maintains that the fact that an employer was negligent, does not remove the case from the
exclusive character of recoveries under the Workmen's Compensation Act; because Section 4-A of
the Act provides an additional compensation in case the employer fails to comply with the
requirements of safety as imposed by law to prevent accidents. In fact, it points out that Philex
voluntarily paid the compensation due the petitioners and all the payments have been accepted in
behalf of the deceased miners, except the heirs of Nazarito Floresca who insisted that they are
entitled to a greater amount of damages under the Civil Code.
In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara,
now President of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and
Assistant General Manager of the GSIS Legal Affairs Department, and Commissioner on Elections,
formerly UP Law Center Director Froilan Bacungan, appeared as amici curiae and thereafter,
submitted their respective memoranda.

The issue to be resolved as WE stated in the resolution of November 26, 1976, is:

Whether the action of an injured employee or worker or that of his heirs in case of his
death under the Workmen's Compensation Act is exclusive, selective or cumulative,
that is to say, whether his or his heirs' action is exclusively restricted to seeking the
limited compensation provided under the Workmen's Compensation Act or whether
they have a right of selection or choice of action between availing of the worker's
right under the Workmen's Compensation Act and suing in the regular courts under
the Civil Code for higher damages (actual, moral and/or exemplary) from the
employer by virtue of negligence (or fault) of the employer or of his other employees
or whether they may avail cumulatively of both actions, i.e., collect the limited
compensation under the Workmen's Compensation Act and sue in addition for
damages in the regular courts.

There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee
or worker, or the heirs in case of his death, may initiate a complaint to recover damages (not
compensation under the Workmen's Compensation Act) with the regular court on the basis of
negligence of an employer pursuant to the Civil Code provisions. Atty. Angara believes otherwise.
He submits that the remedy of an injured employee for work-connected injury or accident is
exclusive in accordance with Section 5 of the Workmen's Compensation Act, while Atty. Bacungan's
position is that the action is selective. He opines that the heirs of the employee in case of his death
have a right of choice to avail themselves of the benefits provided under the Workmen's
Compensation Act or to sue in the regular court under the Civil Code for higher damages from the
employer by virtue of negligence of the latter. Atty. Bocobo's stand is the same as that of Atty.
Bacungan and adds that once the heirs elect the remedy provided for under the Act, they are no
longer entitled to avail themselves of the remedy provided for under the Civil Code by filing an action
for higher damages in the regular court, and vice versa.

On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to

dismiss on the ground that they have amicably settled their claim with respondent Philex. In the
resolution of September 7, 1978, WE dismissed the petition only insofar as the aforesaid petitioners
are connected, it appearing that there are other petitioners in this case.

WE hold that the former Court of First Instance has jurisdiction to try the case,

It should be underscored that petitioners' complaint is not for compensation based on the Workmen's
Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of
eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of
the Workmen's Compensation Act to entitle them to compensation thereunder. In fact, no allegation
appeared in the complaint that the employees died from accident arising out of and in the course of
their employments. The complaint instead alleges gross and reckless negligence and deliberate
failure on the part of Philex to protect the lives of its workers as a consequence of which a cave-in
occurred resulting in the death of the employees working underground. Settled is the rule that in
ascertaining whether or not the cause of action is in the nature of workmen's compensation claim or
a claim for damages pursuant to the provisions of the Civil Code, the test is the averments or
allegations in the complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil. 100).

In the present case, there exists between Philex and the deceased employees a contractual
relationship. The alleged gross and reckless negligence and deliberate failure that amount to bad
faith on the part of Philex, constitute a breach of contract for which it may be held liable for damages.
The provisions of the Civil Code on cases of breach of contract when there is fraud or bad faith,
read:

Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages
if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner.

Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who
acted in good faith is able shall be those that are the natural and probable
consequences of the breach of the obligation, and which the parties have foreseen or
could have reasonably foreseen at the time the obligation was constituted.
 In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be
responsible for all damages which may be reasonably attributed to the non-
performance of the obligation.

Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as
assessed by the court.

The rationale in awarding compensation under the Workmen's Compensation Act differs from that in
giving damages under the Civil Code. The compensation acts are based on a theory of
compensation distinct from the existing theories of damages, payments under the acts being made
as compensation and not as damages (99 C.J.S. 53). Compensation is given to mitigate the
harshness and insecurity of industrial life for the workman and his family. Hence, an employer is
liable whether negligence exists or not since liability is created by law. Recovery under the Act is not
based on any theory of actionable wrong on the part of the employer (99 C.J.S. 36).

In other words, under the compensation acts, the employer is liable to pay compensation benefits for
loss of income, as long as the death, sickness or injury is work-connected or work-aggravated, even
if the death or injury is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On
the other hand, damages are awarded to one as a vindication of the wrongful invasion of his rights. It
is the indemnity recoverable by a person who has sustained injury either in his person, property or
relative rights, through the act or default of another (25 C.J.S. 452).

The claimant for damages under the Civil Code has the burden of proving the causal relation
between the defendant's negligence and the resulting injury as well as the damages suffered. While
under the Workmen's Compensation Act, there is a presumption in favor of the deceased or injured
employee that the death or injury is work-connected or work-aggravated; and the employer has the
burden to prove otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551;
Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228).

The claim of petitioners that the case is not cognizable by the Workmen's Compensation
Commission then, now Employees Compensation Commission, is strengthened by the fact that
unlike in the Civil Code, the Workmen's Compensation Act did not contain any provision for an
award of actual, moral and exemplary damages. What the Act provided was merely the right of the
heirs to claim limited compensation for the death in the amount of six thousand (P6,000.00) pesos
plus burial expenses of two hundred (P200.00) pesos, and medical expenses when incurred
(Sections 8, 12 and 13, Workmen's Compensation Act), and an additional compensation of only 50%
if the complaint alleges failure on the part of the employer to "install and maintain safety appliances
or to take other precautions for the prevention of accident or occupational disease" (Section 4-A,
Ibid.). In the case at bar, the amount sought to be recovered is over and above that which was
provided under the Workmen's Compensation Act and which cannot be granted by the Commission.

Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an
employee who suffered an accident not due to the facilities or lack of facilities in the industry of his
employer but caused by factors outside the industrial plant of his employer. Under the Civil Code,
the liability of the employer, depends on breach of contract or tort. The Workmen's Compensation
Act was specifically enacted to afford protection to the employees or workmen. It is a social
legislation designed to give relief to the workman who has been the victim of an accident causing his
death or ailment or injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).

WE now come to the query as to whether or not the injured employee or his heirs in case of death
have a right of selection or choice of action between availing themselves of the worker's right under
the Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher
damages (actual, moral and exemplary) from the employers by virtue of that negligence or fault of
the employers or whether they may avail themselves cumulatively of both actions, i.e., collect the
limited compensation under the Workmen's Compensation Act and sue in addition for damages in
the regular courts.

In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442,
ruled that an injured worker has a choice of either to recover from the employer the fixed amounts
set by the Workmen's Compensation Act or to prosecute an ordinary civil action against the
tortfeasor for higher damages but he cannot pursue both courses of action simultaneously.

In Pacaña WE said:

In the analogous case of Esguerra vs. Munoz Palma, involving the application of
Section 6 of the Workmen's Compensation Act on the injured workers' right to sue
third- party tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again speaking
for the Court, pointed out that the injured worker has the choice of remedies but
cannot pursue both courses of action simultaneously and thus balanced the relative
 advantage of recourse under the Workmen's Compensation Act as against an
ordinary action.

As applied to this case, petitioner Esguerra cannot maintain his action for damages
against the respondents (defendants below), because he has elected to seek
compensation under the Workmen's Compensation Law, and his claim (case No.
44549 of the Compensation Commission) was being processed at the time he filed
this action in the Court of First Instance. It is argued for petitioner that as the
damages recoverable under the Civil Code are much more extensive than the
amounts that may be awarded under the Workmen's Compensation Act, they should
not be deemed incompatible. As already indicated, the injured laborer was initially
free to choose either to recover from the employer the fixed amounts set by the
Compensation Law or else, to prosecute an ordinary civil action against the
tortfeasor for higher damages. While perhaps not as profitable, the smaller indemnity
obtainable by the first course is balanced by the claimant's being relieved of the
burden of proving the causal connection between the defendant's negligence and the
resulting injury, and of having to establish the extent of the damage suffered; issues
that are apt to be troublesome to establish satisfactorily. Having staked his fortunes
on a particular remedy, petitioner is precluded from pursuing the alternate course, at
least until the prior claim is rejected by the Compensation Commission. Anyway,
under the proviso of Section 6 aforequoted, if the employer Franklin Baker Company
recovers, by derivative action against the alleged tortfeasors, a sum greater than the
compensation he may have paid the herein petitioner, the excess accrues to the
latter.

Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party
tortfeasor, said rule should likewise apply to the employer-tortfeasor.

Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been
dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by
Philex and the said heirs.

With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14,
1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry
Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for
compensation to the Regional Office No. 1 of the then Department of Labor and all of them have
been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be
paid in installments (pp. 106-107, rec.). Such allegation was admitted by herein petitioners in their
opposition to the motion to dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but
they set up the defense that the claims were filed under the Workmen's Compensation Act before
they learned of the official report of the committee created to investigate the accident which
established the criminal negligence and violation of law by Philex, and which report was forwarded
by the Director of Mines to the then Executive Secretary Rafael Salas in a letter dated October 19,
1967 only (p. 76, rec.).

WE hold that although the other petitioners had received the benefits under the Workmen's
Compensation Act, such may not preclude them from bringing an action before the regular court
because they became cognizant of the fact that Philex has been remiss in its contractual obligations
with the deceased miners only after receiving compensation under the Act. Had petitioners been
aware of said violation of government rules and regulations by Philex, and of its negligence, they
would not have sought redress under the Workmen's Compensation Commission which awarded a
lesser amount for compensation. The choice of the first remedy was based on ignorance or a
mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should
therefore be remanded to the lower court for further proceedings. However, should the petitioners be
successful in their bid before the lower court, the payments made under the Workmen's
Compensation Act should be deducted from the damages that may be decreed in their favor.

Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case.
The Court merely applies and gives effect to the constitutional guarantees of social justice then
secured by Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by
Sections 6, 7, and 9 of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of
the 1973 Constitution, as amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201,
2216, 2231 and 2232 of the New Civil Code of 1950.

To emphasize, the 1935 Constitution declares that:

 Sec. 5. The promotion of social justice to insure the well-being and economic security
of all the people should be the concern of the State (Art. II).

Sec. 6. The State shall afford protection to labor, especially to working women, and
minors, and shall regulate the relations between landowner and tenant, and between
labor and capital in industry and in agriculture. The State may provide for compulsory
arbitration (Art. XIV).

The 1973 Constitution likewise commands the State to "promote social justice to insure the dignity,
welfare, and security of all the people "... regulate the use ... and disposition of private property and
equitably diffuse property ownership and profits "establish, maintain and ensure adequate social
services in, the field of education, health, housing, employment, welfare and social security to
guarantee the enjoyment by the people of a decent standard of living" (Sections 6 and 7, Art. II,
1973 Constitution); "... afford protection to labor, ... and regulate the relations between workers and
employers ..., and assure the rights of workers to ... just and humane conditions of work" (Sec. 9,
Art. II, 1973 Constitution, emphasis supplied).

The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of

the 1973 Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor
Code, thus:

Art. 3. Declaration of basic policy.—The State shall afford protection to labor,

promote full employment, ensure equal work opportunities regardless of sex, race or
creed, and regulate the relations between workers and employers. The State
shall assure the rights of workers to self-organization, collective bargaining, security
of tenure, and just and humane conditions of work. (emphasis supplied).

The aforestated constitutional principles as implemented by the aforementioned articles of the New
Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor
Code. Section 5 of the Workmen's Compensation Act (before it was amended by R.A. No. 772 on
June 20, 1952), predecessor of Article 173 of the New Labor Code, has been superseded by the
aforestated provisions of the New Civil Code, a subsequent law, which took effect on August 30,
1950, which obey the constitutional mandates of social justice enhancing as they do the rights of the
workers as against their employers. Article 173 of the New Labor Code seems to diminish the rights
of the workers and therefore collides with the social justice guarantee of the Constitution and the
liberal provisions of the New Civil Code.

The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution
are statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert
Jackson in the case of West Virginia State Board of Education vs. Barnette, with characteristic
eloquence, enunciated:

The very purpose of a Bill of Rights was to withdraw certain subjects from the
vicissitudes of political controversy, to place them beyond the reach of majorities and
officials and to establish them as legal principles to be applied by the courts. One's
right to life, liberty, and property, to free speech, a free press, freedom of worship
and assembly, and other fundamental rights may not be submitted to vote; they
depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis
supplied).

In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New
Labor Code and the Civil Code direct that the doubts should be resolved in favor of the workers and
employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as
amended, promulgated on May 1, 1974, but which took effect six months thereafter, provides that
"all doubts in the implementation and interpretation of the provisions of this Code, including its
implementing rules and regulations, shall be resolved in favor of labor" (Art. 2, Labor Code).

Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of laws, it
is presumed that the law-making body intended right and justice to prevail. "

More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all labor
legislation and all labor contracts shall be construed in favor of the safety and decent living of the
laborer."

Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the
Workmen's Compensation Act provided:
 Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act
to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury (emphasis supplied).

Employers contracting laborecsrs in the Philippine Islands for work outside the same
may stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment; and all service
contracts made in the manner prescribed in this section shall be presumed to include
such agreement.

Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was
amended by Commonwealth Act No. 772 on June 20, 1952, thus:

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act
to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws, because of said injury.

Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
to injuries received outside the Island through accidents happening in and during the
performance of the duties of the employment. Such stipulation shall not prejudice the
right of the laborers to the benefits of the Workmen's Compensation Law of the place
where the accident occurs, should such law be more favorable to them (As amended
by section 5 of Republic Act No. 772).

Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions
of the New Civil Code, because said Article 173 provides:

Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the
State Insurance Fund under this Title shall be exclusive and in place of all other
liabilities of the employer to the employee, his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents. The
payment of compensation under this Title shall bar the recovery of benefits as
provided for in Section 699 of the Revised Administrative Code, Republic Act
Numbered Eleven hundred sixty-one, as amended, Commonwealth Act Numbered
One hundred eighty- six, as amended, Commonwealth Act Numbered Six hundred
ten, as amended, Republic Act Numbered Forty-eight hundred Sixty-four, as
amended, and other laws whose benefits are administered by the System during the
period of such payment for the same disability or death, and conversely (emphasis
supplied).

As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the
Revised Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No.
610, as amended, R.A. No. 4864, as amended, and all other laws whose benefits are administered
by the System (referring to the GSIS or SSS).

Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New Labor
Code does not even remotely, much less expressly, repeal the New Civil Code provisions heretofore
quoted.

It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence,
is not barred by Article 173 of the New Labor Code. And the damages recoverable under the New
Civil Code are not administered by the System provided for by the New Labor Code, which defines
the "System" as referring to the Government Service Insurance System or the Social Security
System (Art. 167 [c], [d] and [e] of the New Labor Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the
law of the land.

Article 8 of the New Civil Code provides:

Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall
form a part of the legal system of the Philippines.
The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:

Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying
or interpreting the laws or the Constitution form part of this jurisdiction's legal system.
These decisions, although in themselves not laws, constitute evidence of what the
laws mean. The application or interpretation placed by the Court upon a law is part of
the law as of the date of the enactment of the said law since the Court's application
or interpretation merely establishes the contemporaneous legislative intent that the
construed law purports to carry into effect" (65 SCRA 270, 272-273 [1975]).

WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute
itself (Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763).

The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it
was amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor
of the deceased, ailing or injured employee to the compensation provided for therein. Said Section 5
was not accorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu
Autobus Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either to
recover from the employer the fixed amount set by the Workmen's Compensation Act or to
prosecute an ordinary civil action against the tortfeasor for greater damages; but he cannot pursue
both courses of action simultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied
Article 1711 of the Civil Code as against the Workmen's Compensation Act, reiterating the 1969
ruling in the case of Valencia vs. Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958
case of Esguerra vs. Munoz Palma (104 Phil. 582), both penned by Justice J.B.L. Reyes. Said
Pacana case was concurred in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar, Castro,
Fernando and Villamor.

Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first
paragraph of Section 5 of the Workmen's Compensation Act, as amended, and does not even refer,
neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen's Compensation Act
did, with greater reason said Article 173 must be subject to the same interpretation adopted in the
cases of Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3)
cases is faithful to and advances the social justice guarantees enshrined in both the 1935 and 1973
Constitutions.

It should be stressed likewise that there is no similar provision on social justice in the American
Federal Constitution, nor in the various state constitutions of the American Union. Consequently, the
restrictive nature of the American decisions on the Workmen's Compensation Act cannot limit the
range and compass of OUR interpretation of our own laws, especially Article 1711 of the New Civil
Code, vis-a-vis Article 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6
of Article XIV of the 1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of
Principles and State Policies of Article II of the 1973 Constitution.

The dissent seems to subordinate the life of the laborer to the property rights of the employer. The
right to life is guaranteed specifically by the due process clause of the Constitution. To relieve the
employer from liability for the death of his workers arising from his gross or wanton fault or failure to
provide safety devices for the protection of his employees or workers against the dangers which are
inherent in underground mining, is to deprive the deceased worker and his heirs of the right to
recover indemnity for the loss of the life of the worker and the consequent loss to his family without
due process of law. The dissent in effect condones and therefore encourages such gross or wanton
neglect on the part of the employer to comply with his legal obligation to provide safety measures for
the protection of the life, limb and health of his worker. Even from the moral viewpoint alone, such
attitude is un-Christian.

It is therefore patent that giving effect to the social justice guarantees of the Constitution, as
implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making,
but is rendering obedience to the mandates of the fundamental law and the implementing legislation
aforementioned.

The Court, to repeat, is not legislating in the instant case.

It is axiomatic that no ordinary statute can override a constitutional provision.

The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New Labor
Code subvert the rights of the petitioners as surviving heirs of the deceased mining employees.
Section 5 of the Workmen's Compensation Act and Article 173 of the New Labor Code are
retrogressive; because they are a throwback to the obsolete laissez-faire doctrine of Adam Smith
enunciated in 1776 in his treatise Wealth of Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964),
which has been discarded soon after the close of the 18th century due to the Industrial Revolution
that generated the machines and other mechanical devices (beginning with Eli Whitney's cotton gin
of 1793 and Robert Fulton's steamboat of 1807) for production and transportation which are
dangerous to life, limb and health. The old socio-political-economic philosophy of live-and-let-live is
now superdesed by the benign Christian shibboleth of live-and-help others to live. Those who
profess to be Christians should not adhere to Cain's selfish affirmation that he is not his brother's
keeper. In this our civilization, each one of us is our brother's keeper. No man is an island. To assert
otherwise is to be as atavistic and ante-deluvian as the 1837 case of Prisley vs. Fowler (3 MN 1,150
reprint 1030) invoked by the dissent, The Prisley case was decided in 1837 during the era of
economic royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoistic
reactionaries continue to pay obeisance to such un-Christian doctrine. The Prisley rule humiliates
man and debases him; because the decision derisively refers to the lowly worker as "servant" and
utilizes with aristocratic arrogance "master" for "employer." It robs man of his inherent dignity and
dehumanizes him. To stress this affront to human dignity, WE only have to restate the quotation
from Prisley, thus: "The mere relation of the master and the servant never can imply an obligation on
the part of the master to take more care of the servant than he may reasonably be expected to do
himself." This is the very selfish doctrine that provoked the American Civil War which generated so
much hatred and drew so much precious blood on American plains and valleys from 1861 to 1864.

"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law
insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth;
its spirit giveth life."

It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.

That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge or
court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws.
"

Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain
instances, the court, in the language of Justice Holmes, "do and must legislate" to fill in the gaps in
the law; because the mind of the legislator, like all human beings, is finite and therefore cannot
envisage all possible cases to which the law may apply Nor has the human mind the infinite capacity
to anticipate all situations.

But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American
Constitution foresaw and recognized the eventuality that the courts may have to legislate to supply
the omissions or to clarify the ambiguities in the American Constitution and the statutes.

'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies
that the power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist,
Modern Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is
even independent of the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538).

Many of the great expounders of the American Constitution likewise share the same view. Chief
Justice Marshall pronounced: "It is emphatically the province and duty of the Judicial department to
say what the law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice
Hughes when he said that "the Constitution is what the judge says it is (Address on May 3, 1907,
quoted by President Franklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice
Cardozo who pronounced that "No doubt the limits for the judge are narrower. He legislates only
between gaps. He fills the open spaces in the law. " (The Nature of the Judicial Process, p. 113). In
the language of Chief Justice Harlan F. Stone, "The only limit to the judicial legislation is the restraint
of the judge" (U.S. vs. Butler 297 U.S. 1 Dissenting Opinion, p. 79), which view is also entertained by
Justice Frankfurter and Justice Robert Jackson. In the rhetoric of Justice Frankfurter, "the courts
breathe life, feeble or strong, into the inert pages of the Constitution and all statute books."

It should be stressed that the liability of the employer under Section 5 of the Workmen's
Compensation Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused
by the nature of the work, without any fault on the part of the employers. It is correctly termed no
fault liability. Section 5 of the Workmen's Compensation Act, as amended, or Article 173 of the New
Labor Code, does not cover the tortious liability of the employer occasioned by his fault or culpable
negligence in failing to provide the safety devices required by the law for the protection of the life,
limb and health of the workers. Under either Section 5 or Article 173, the employer remains liable to
pay compensation benefits to the employee whose death, ailment or injury is work-connected, even
if the employer has faithfully and diligently furnished all the safety measures and contrivances
decreed by the law to protect the employee.
The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr. Justice
Cardozo, "the law has outgrown its primitive stage of formalism when the precise word was the
sovereign talisman, and every slip was fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The
Nature of the Judicial Process 100). Justice Cardozo warned that: "Sometimes the conservatism of
judges has threatened for an interval to rob the legislation of its efficacy. ... Precedents established
in those items exert an unhappy influence even now" (citing Pound, Common Law and Legislation
21 Harvard Law Review 383, 387).

Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a
cautionary undertone: "that judges do and must legislate, but they can do so only interstitially they
are confined from molar to molecular motions" (Southern Pacific Company vs. Jensen, 244 US 204
1917). And in the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845,
852- 853), Justice Holmes pronounced:

The great ordinances of the Constitution do not establish and divide fields of black
and white. Even the more specific of them are found to terminate in a penumbra
shading gradually from one extreme to the other. x x x. When we come to the
fundamental distinctions it is still more obvious that they must be received with a
certain latitude or our government could not go on.

To make a rule of conduct applicable to an individual who but for such action would
be free from it is to legislate yet it is what the judges do whenever they determine
which of two competing principles of policy shall prevail.

xxx xxx xxx

It does not seem to need argument to show that however we may disguise it by
veiling words we do not and cannot carry out the distinction between legislative and
executive action with mathematical precision and divide the branches into waterlight
compartments, were it ever so desirable to do so, which I am far from believing that it
is, or that the Constitution requires.

True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly
concede that in certain cases judges do legislate. They criticize the assumption by the courts of such
law-making power as dangerous for it may degenerate into Judicial tyranny. They include
Blackstone, Jeremy Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer,
Ronald Dworkin, Rolf Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or
legal commentators, who either deny the power of the courts to legislate in-between gaps of the law,
or decry the exercise of such power, have not pointed to examples of the exercise by the courts of
such law-making authority in the interpretation and application of the laws in specific cases that gave
rise to judicial tyranny or oppression or that such judicial legislation has not protected public interest
or individual welfare, particularly the lowly workers or the underprivileged.

On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory
enactments expanding the scope of such provisions to protect human rights. Foremost among them
is the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372
US 335), Escubedo vs. Illinois (378 US 478), which guaranteed the accused under custodial
investigation his rights to remain silent and to counsel and to be informed of such rights as even as it
protects him against the use of force or intimidation to extort confession from him. These rights are
not found in the American Bill of Rights. These rights are now institutionalized in Section 20, Article
IV of the 1973 Constitution. Only the peace-and-order adherents were critical of the activism of the
American Supreme Court led by Chief Justice Earl Warren.

Even the definition of Identical offenses for purposes of the double jeopardy provision was
developed by American judicial decisions, not by amendment to the Bill of Rights on double jeopardy
(see Justice Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial decisions have
been re-stated in Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure, as well as in
Section 9 of Rule 117 of the 1964 Revised Rules of Court. In both provisions, the second offense is
the same as the first offense if the second offense is an attempt to commit the first or frustration
thereof or necessarily includes or is necessarily included in the first offense.

The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed
by judicial decisions in the United States and in the Philippines even before people vs. Ylagan (58
Phil. 851-853).

Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537)
as securing to the Negroes equal but separate facilities, which doctrine was revoked in the case of
Brown vs. Maryland Board of Education (349 US 294), holding that the equal protection clause
means that the Negroes are entitled to attend the same schools attended by the whites-equal
facilities in the same school-which was extended to public parks and public buses.

De-segregation, not segregation, is now the governing principle.

Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46
Phil. 440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working
women-according primacy to property rights over human rights. The case of People vs. Pomar is no
longer the rule.

As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice
Holmes had been railing against the conservatism of Judges perverting the guarantee of due
process to protect property rights as against human rights or social justice for the working man. The
law fixing maximum hours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in
the case of West Coast Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American
Supreme Court upheld the rights of workers to social justice in the form of guaranteed minimum
wage for women and minors, working hours not exceeding eight (8) daily, and maternity leave for
women employees.

The power of judicial review and the principle of separation of powers as well as the rule on political
questions have been evolved and grafted into the American Constitution by judicial decisions
(Marbury vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs.
Government, 277 US 210-212, 72 L. ed. 852, 853).

It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate
concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political
question as beyond the ambit of judicial review. There is nothing in both the American and Philippine
Constitutions expressly providing that the power of the courts is limited by the principle of separation
of powers and the doctrine on political questions. There are numerous cases in Philippine
jurisprudence applying the doctrines of separation of powers and political questions and invoking
American precedents.

Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in
the Supreme Court the power to review the validity or constitutionality of any legislative enactment or
executive act.

WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET
ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A
GREATER AMOUNT OF DAMAGES BE DECREED IN FAVOR OF HEREIN PETITIONERS, THE
PAYMENTS ALREADY MADE TO THEM PURSUANT TO THE WORKMEN'S COMPENSATION
ACT SHALL BE DEDUCTED. NO COSTS.

SO ORDERED.

Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ., concur.

Concepcion, Jr., J., is on leave.

Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides
for its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found
in Title XVIII-Damages that:
 COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF
DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.

Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et al., 104 Phil.
582, 586, Justice J.B.L. Reyes had said:

Petitioner also avers that compensation is not damages. This argument is but a play
on words. The term compensation' is used in the law (Act 3812 and Republic Act
772) in the sense of indemnity for damages suffered, being awarded for a personal
injury caused or aggravated by or in the course of employment. ...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply
to the complaint involved in the instant case. That "special law", in reference to the complaint, can be
no other than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will
preclude the exercise of the other. The petitioners had already exercised their option to come under
the Workmen's Compensation Act, and they have already received compensation payable to them
under that Act. Stated differently, the remedy under the Workmen's Compensation Act had already
become a "finished transaction".

There are two considerations why it is believed petitioners should no longer be allowed to exercise
the option to sue under the Civil Code. In the first place, the proceedings under the Workmen's
Compensation Act have already become the law in regards to" the "election of remedies", because
those proceedings had become a "finished transaction".

In the second place, it should be plainly equitable that, if a person entitled to an "election of
remedies" makes a first election and accepts the benefits thereof, he should no longer be allowed to
avail himself of the second option. At the very least, if he wants to make a second election, in
disregard of the first election he has made, when he makes the second election he should surrender
the benefits he had obtained under the first election, This was not done in the case before the Court.

B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding
"the exclusory provision of the Workmen's Compensation Act." I may further add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took
effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.

Act No. 3428 was adopted by the Philippine legislature, in Spanish and some
sections of the law were taken from the statutes of Minnesota and Hawaii, (Chapter
209 of the Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's
Compensation Act, p. 2]

Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under
the Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266,
267.

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial

employment' and employees of the territory and its political subdivisions. (Sections
7480-7481, S.S., Vol. 1, p. 713.)

Compensation is not payable when injury is due to employee's willful intention to

injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p.
714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this

Act to an employee
 by reason of a personal injury entitling him to compensation

shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer

under the Civil Code and other laws, because of said injury (Paragraphing and
emphasis supplied)

In regards to the intent of the Legislature under the foregoing provision:

A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read
and considered in their natural, ordinary, commonly-accepted and most obvious
significations, according to good and approved usage and without resorting to forced
or subtle construction Courts, therefore, as a rule, cannot presume that the law-
making body does not know the meaning of words and the rules of grammar.
Consequently, the grammatical reading of a statute must be presumed to yield its
correct sense. (Espino vs. Cleofe 52 SCRA 92, 98) [Italics supplied]

3. The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment. (Italics supplied)

The use of the word "exclusively is a further confirmation of the exclusory provision of the Act,
subject only to exceptions which may be provided in the Act itself.

4. It might be mentioned that, within the Act itself, provision is made for remedies other than within
the Act itself. Thus, Section 6, in part, provides:

SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it
shall be optional with such injured employee either to claim compensation from his
employer, under this Act, or sue such other person for damages, in accordance with
law; ... (Emphasis supplied)

If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to
sue his employer under the Civil Code, the legislator could very easily have formulated the said first
paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the
legislative intent not to allow any option to an employee to sue the employer under the Civil Code for
injuries compensable under the Act.

5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code
nor to any other law relative to the liability of the employer. After 1927, there were occasions when
the legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies
under the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the
legislatives continuing intent to maintain the exclusory provision of the first paragraph of Section 5
unless otherwise provided in the Act itself.

(a) The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment (and all service
contracts made in the manner prescribed in this section be presumed to include such
agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the
elimination of the underlined words in parentheses, and the addition of this sentence at the end of
the paragraph:

Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such
law be more favorable to them. (Emphasis supplied)
It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that
time, if he had so desired, the legislator could have amended the first paragraph of Section 5 so that
the employee would have the option to sue the employer under the Act, or under the Civil Code,
should the latter be more favorable to him.

(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured
employee without regard to the presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).

In time, it must have been thought that it was inequitable to have the amount of compensation,
caused by negligence on the part of the employer, to be the same amount payable when the
employer was not negligent. Based on that thinking, Section 4-A was included into the Act, on June
1

20, 1952, through RA 772. Said Section 4-A increased the compensation payable by 50% in case
there was negligence on the part of the employer. That additional section evidenced the intent of the
legislator not to give an option to an employee, injured with negligence on the part of the employer,
to sue the latter under the provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again
given the opportunity to provide, but he did not, the option to an employee to sue under the Act or
under the Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court
is unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.

GUTIERREZ, JR., J., dissenting:

To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's
Compensation Act but a departure from the principles evolved in the long history of workmen's
compensation. At the very least, it should be the legislature and not this Court which should remove
the exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present
Labor Code on employees' compensation.

Workmen's compensation evolved to remedy the evils associated with the situation in the early years
of the industrial revolution when injured workingmen had to rely on damage suits to get recompense.

Before workmen's compensation, an injured worker seeking damages would have to prove in a tort
suit that his employer was either negligent or in bad faith, that his injury was caused by the employer
and not a fellow worker, and that he was not guilty of contributory negligence. The employer could
employ not only his wealth in defeating the claim for damages but a host of common law defenses
available to him as well. The worker was supposed to know what he entered into when he accepted
employment. As stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030)
decided in 1837 "the mere relation of the master and the servant never can imply an obligation on
the part of the master to take more care of the servant than he may reasonably be expected to do of
himself." By entering into a contract of employment, the worker was deemed to accept the risks of
employment that he should discover and guard against himself.

The problems associated with the application of the fellow servant rule, the assumption of risk
doctrine, the principle of contributory negligence, and the many other defenses so easily raised in
protracted damage suits illustrated the need for a system whereby workers had only to prove the fact
of covered employment and the fact of injury arising from employment in order to be compensated.

The need for a compensation scheme where liability is created solely by statute and made
compulsory and where the element of fault-either the fault of the employer or the fault of the
employee-disregarded became obvious. Another objective was to have simplified, expeditious,
inexpensive, and non-litigious procedures so that victims of industrial accidents could more readily, if
not automatically, receive compensation for work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a
major step in the desired direction. However, employers liability legislation proved inadequate.
Legislative reform led to the workmen's compensation.

I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the
right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only
disregards the element of fault but it is also a pre- determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the
total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer
is required to act swiftly on compensation claims. An administrative agency supervises the program.
And because the overwhelming mass of workingmen are benefited by the compensation system,
individual workers who may want to sue for big amounts of damages must yield to the interests of
their entire working class.

The nature of the compensation principle is explained as follows:

An appreciation of the nature of the compensation principle is essential to an

understanding of the acts and the cases interpreting them.

By the turn of the century it was apparent that the toll of industrial accidents of both
the avoidable and unavoidable variety had become enormous, and government was
faced with the problem of who was to pay for the human wreckage wrought by the
dangers of modern industry. If the accident was avoidable and could be attributed to
the carelessness of the employer, existing tort principles offered some measure of
redress. Even here, however, the woeful inadequacy of the fault principle was
manifest. The uncertainty of the outcome of torts litigation in court placed the
employee at a substantial disadvantage. So long as liability depended on fault there
could be no recovery until the finger of blame had been pointed officially at the
employer or his agents. In most cases both the facts and the law were uncertain. The
witnesses, who were usually fellow workers of the victim, were torn between
friendship or loyalty to their class, on the one hand, and fear of reprisal by the
employer, on the other. The expense and delay of litigation often prompted the
injured employee to accept a compromise settlement for a fraction of the full value of
his claim. Even if suit were successfully prosecuted, a large share of the proceeds of
the judgment were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill, while only a
part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or services-
should ultimately bear the cost of the injuries or deaths that are incident to the
manufacture, preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among
the ultimate consumers. So long as each competing unit in a given industry is
uniformly affected, no producer can gain any substantial competitive advantage or
suffer any appreciable loss by reason of the general adoption of the compensation
principle.

In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be
fixed at a figure that will not disrupt too violently the traffic in the product of the
industry affected. Thus predictability and moderateness of cost are necessary from
the broad economic viewpoint. ....

Compensation, then, differs from the conventional damage suit in two important
respects: Fault on the part of either employer or employee is eliminated; and
compensation payable according to a definitely limited schedule is substituted for
damages. All compensation acts alike work these two major changes, irrespective of
how they may differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee

represents a compromise in which each party surrenders certain advantages in order
to gain others which are of more importance both to him and to society. The
employer gives up the immunity he otherwise would enjoy in cases where he is not at
fault, and the employee surrenders his former right to full damages and accepts
instead a more modest claim for bare essentials, represented by compensation.
 The importance of the compromise character of compensation cannot be
overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced
greatly by the court's reaction to the basic point of compromise established in the
Act. If the court feels that the basic compromise unduly favors the employer, it will be
tempted to restore what it regards as a proper balance by adopting an interpretation
that favors the worker. In this way, a compensation act drawn in a spirit of extreme
conservatism may be transformed by a sympathetic court into a fairly liberal
instrument; and conversely, an act that greatly favors the laborer may be so
interpreted by the courts that employers can have little reason to complain. Much of
the unevenness and apparent conflict in compensation decisions throughout the
various jurisdictions must be attributed to this." (Malone & Plant, Workmen's
Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many
other interrelated parts have all been carefully studied before the integrated scheme was enacted in
to law. We have a system whose parts must mesh harmonious with one another if it is to succeed.
The basic theory has to be followed.

If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of
the system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive
employment compensation, can still elect to file damage suits for industrial accidents. It was
precisely for this reason that Section 5 of the Workmen's Compensation Act, which reads:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this

Act to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury. ...

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the

State Insurance Fund under this Title shall be exclusive and in place of all other
liabilities of the employer to the employee his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents.

I am against the Court assuming the role of legislator in a matter calling for actuarial studies and
public hearings. If employers already required to contribute to the State Insurance Fund will still have
to bear the cost of damage suits or get insurance for that purpose, a major study will be necessary.
The issue before us is more far reaching than the interests of the poor victims and their families. All
workers covered by workmen's compensation and all employers who employ covered employees
are affected. Even as I have deepest sympathies for the victims, I regret that I am constrained to
dissent from the majority opinion.

Separate Opinions

MELENCIO-HERRERA, J., dissenting:

This case involves a complaint for damages for the death of five employees of PHILEX Mining
Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides
for its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found
in Title XVIII-Damages that:
 COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF
DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS.

Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et al., 104 Phil.
582, 586, Justice J.B.L. Reyes had said:

Petitioner also avers that compensation is not damages. This argument is but a play
on words. The term compensation' is used in the law (Act 3812 and Republic Act
772) in the sense of indemnity for damages suffered, being awarded for a personal
injury caused or aggravated by or in the course of employment. ...

By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply
to the complaint involved in the instant case. That "special law", in reference to the complaint, can be
no other than the Workmen's Compensation

Even assuming, without conceding, that an employee is entitled to an election of remedies, as the
majority rules, both options cannot be exercised simultaneously, and the exercise of one will
preclude the exercise of the other. The petitioners had already exercised their option to come under
the Workmen's Compensation Act, and they have already received compensation payable to them
under that Act. Stated differently, the remedy under the Workmen's Compensation Act had already
become a "finished transaction".

There are two considerations why it is believed petitioners should no longer be allowed to exercise
the option to sue under the Civil Code. In the first place, the proceedings under the Workmen's
Compensation Act have already become the law in regards to" the "election of remedies", because
those proceedings had become a "finished transaction".

In the second place, it should be plainly equitable that, if a person entitled to an "election of
remedies" makes a first election and accepts the benefits thereof, he should no longer be allowed to
avail himself of the second option. At the very least, if he wants to make a second election, in
disregard of the first election he has made, when he makes the second election he should surrender
the benefits he had obtained under the first election, This was not done in the case before the Court.

B.

'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding
"the exclusory provision of the Workmen's Compensation Act." I may further add:

1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took
effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes.

Act No. 3428 was adopted by the Philippine legislature, in Spanish and some
sections of the law were taken from the statutes of Minnesota and Hawaii, (Chapter
209 of the Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's
Compensation Act, p. 2]

Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under
the Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266,
267.

Sec. 112. Hawaii

Statutory Synopsis. The act is compulsory as to employees in 'all industrial

employment' and employees of the territory and its political subdivisions. (Sections
7480-7481, S.S., Vol. 1, p. 713.)

Compensation is not payable when injury is due to employee's willful intention to

injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.)

When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p.
714.)

2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the
Philippine Legislature worded the first paragraph of Section 5 of the Act as follows:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this

Act to an employee
 by reason of a personal injury entitling him to compensation

shall exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer

under the Civil Code and other laws, because of said injury (Paragraphing and
emphasis supplied)

In regards to the intent of the Legislature under the foregoing provision:

A cardinal rule in the interpretation of statutes is that the meaning and intention of the
law-making body must be sought, first of all in the words of the statute itself, read
and considered in their natural, ordinary, commonly-accepted and most obvious
significations, according to good and approved usage and without resorting to forced
or subtle construction Courts, therefore, as a rule, cannot presume that the law-
making body does not know the meaning of words and the rules of grammar.
Consequently, the grammatical reading of a statute must be presumed to yield its
correct sense. (Espino vs. Cleofe 52 SCRA 92, 98) [Italics supplied]

3. The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
exclusively to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment. (Italics supplied)

The use of the word "exclusively is a further confirmation of the exclusory provision of the Act,
subject only to exceptions which may be provided in the Act itself.

4. It might be mentioned that, within the Act itself, provision is made for remedies other than within
the Act itself. Thus, Section 6, in part, provides:

SEC. 6. Liability of third parties.-In case an employee suffers an injury for which
compensation is due under this Act by any other person besides his employer, it
shall be optional with such injured employee either to claim compensation from his
employer, under this Act, or sue such other person for damages, in accordance with
law; ... (Emphasis supplied)

If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to
sue his employer under the Civil Code, the legislator could very easily have formulated the said first
paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the
legislative intent not to allow any option to an employee to sue the employer under the Civil Code for
injuries compensable under the Act.

5. There should be no question but that the original first paragraph of Section 5 of the Workmen's
Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if
entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code
nor to any other law relative to the liability of the employer. After 1927, there were occasions when
the legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies
under the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the
legislatives continuing intent to maintain the exclusory provision of the first paragraph of Section 5
unless otherwise provided in the Act itself.

(a) The original second paragraph of Section 5 provided:

Employers contracting laborers in the Philippine Islands for work outside the same
shall stipulate with such laborers that the remedies prescribed by this Act shall apply
(exclusively) to injuries received outside the Islands through accidents happening in
and during the performance of the duties of the employment (and all service
contracts made in the manner prescribed in this section be presumed to include such
agreement).

On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the
elimination of the underlined words in parentheses, and the addition of this sentence at the end of
the paragraph:

Such stipulation shall not prejudice the right of the laborers to the benefits of the
Workmen's Compensation Law of the place where the accident occurs, should such
law be more favorable to them. (Emphasis supplied)
It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that
time, if he had so desired, the legislator could have amended the first paragraph of Section 5 so that
the employee would have the option to sue the employer under the Act, or under the Civil Code,
should the latter be more favorable to him.

(b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured
employee without regard to the presence or absence of negligence on the part of the employer. The
compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689
[1938]).

In time, it must have been thought that it was inequitable to have the amount of compensation,
caused by negligence on the part of the employer, to be the same amount payable when the
employer was not negligent. Based on that thinking, Section 4-A was included into the Act, on June
1

20, 1952, through RA 772. Said Section 4-A increased the compensation payable by 50% in case
there was negligence on the part of the employer. That additional section evidenced the intent of the
legislator not to give an option to an employee, injured with negligence on the part of the employer,
to sue the latter under the provisions of the Civil Code.

On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again
given the opportunity to provide, but he did not, the option to an employee to sue under the Act or
under the Civil Code.

When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court
is unjustifiably legislating.

It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint.

GUTIERREZ, JR., J., dissenting:

To grant the petition and allow the victims of industrial accidents to file damages suits based on torts
would be a radical innovation not only contrary to the express provisions of the Workmen's
Compensation Act but a departure from the principles evolved in the long history of workmen's
compensation. At the very least, it should be the legislature and not this Court which should remove
the exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present
Labor Code on employees' compensation.

Workmen's compensation evolved to remedy the evils associated with the situation in the early years
of the industrial revolution when injured workingmen had to rely on damage suits to get recompense.

Before workmen's compensation, an injured worker seeking damages would have to prove in a tort
suit that his employer was either negligent or in bad faith, that his injury was caused by the employer
and not a fellow worker, and that he was not guilty of contributory negligence. The employer could
employ not only his wealth in defeating the claim for damages but a host of common law defenses
available to him as well. The worker was supposed to know what he entered into when he accepted
employment. As stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030)
decided in 1837 "the mere relation of the master and the servant never can imply an obligation on
the part of the master to take more care of the servant than he may reasonably be expected to do of
himself." By entering into a contract of employment, the worker was deemed to accept the risks of
employment that he should discover and guard against himself.

The problems associated with the application of the fellow servant rule, the assumption of risk
doctrine, the principle of contributory negligence, and the many other defenses so easily raised in
protracted damage suits illustrated the need for a system whereby workers had only to prove the fact
of covered employment and the fact of injury arising from employment in order to be compensated.

The need for a compensation scheme where liability is created solely by statute and made
compulsory and where the element of fault-either the fault of the employer or the fault of the
employee-disregarded became obvious. Another objective was to have simplified, expeditious,
inexpensive, and non-litigious procedures so that victims of industrial accidents could more readily, if
not automatically, receive compensation for work-related injuries.

Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a
major step in the desired direction. However, employers liability legislation proved inadequate.
Legislative reform led to the workmen's compensation.

I cite the above familiar background because workmen's compensation represents a compromise. In
return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the
right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only
disregards the element of fault but it is also a pre- determined amount based on the wages of the
injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the
total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer
is required to act swiftly on compensation claims. An administrative agency supervises the program.
And because the overwhelming mass of workingmen are benefited by the compensation system,
individual workers who may want to sue for big amounts of damages must yield to the interests of
their entire working class.

The nature of the compensation principle is explained as follows:

An appreciation of the nature of the compensation principle is essential to an

understanding of the acts and the cases interpreting them.

By the turn of the century it was apparent that the toll of industrial accidents of both
the avoidable and unavoidable variety had become enormous, and government was
faced with the problem of who was to pay for the human wreckage wrought by the
dangers of modern industry. If the accident was avoidable and could be attributed to
the carelessness of the employer, existing tort principles offered some measure of
redress. Even here, however, the woeful inadequacy of the fault principle was
manifest. The uncertainty of the outcome of torts litigation in court placed the
employee at a substantial disadvantage. So long as liability depended on fault there
could be no recovery until the finger of blame had been pointed officially at the
employer or his agents. In most cases both the facts and the law were uncertain. The
witnesses, who were usually fellow workers of the victim, were torn between
friendship or loyalty to their class, on the one hand, and fear of reprisal by the
employer, on the other. The expense and delay of litigation often prompted the
injured employee to accept a compromise settlement for a fraction of the full value of
his claim. Even if suit were successfully prosecuted, a large share of the proceeds of
the judgment were exacted as contingent fees by counsel. Thus the employer
against whom judgment was cast often paid a substantial damage bill, while only a
part of this enured to the benefit of the injured employee or his dependents. The
employee's judgment was nearly always too little and too late.

xxx xxx xxx

Workmen's Compensation rests upon the economic principle that those persons who
enjoy the product of a business- whether it be in the form of goods or services-
should ultimately bear the cost of the injuries or deaths that are incident to the
manufacture, preparation and distribution of the product. ...

xxx xxx xxx

Under this approach the element of personal fault either disappears entirely or is
subordinated to broader economic considerations. The employer absorbs the cost of
accident loss only initially; it is expected that this cost will eventually pass down the
stream of commerce in the form of increase price until it is spread in dilution among
the ultimate consumers. So long as each competing unit in a given industry is
uniformly affected, no producer can gain any substantial competitive advantage or
suffer any appreciable loss by reason of the general adoption of the compensation
principle.

In order that the compensation principle may operate properly and with fairness to all
parties it is essential that the anticipated accident cost be predictable and that it be
fixed at a figure that will not disrupt too violently the traffic in the product of the
industry affected. Thus predictability and moderateness of cost are necessary from
the broad economic viewpoint. ....

Compensation, then, differs from the conventional damage suit in two important
respects: Fault on the part of either employer or employee is eliminated; and
compensation payable according to a definitely limited schedule is substituted for
damages. All compensation acts alike work these two major changes, irrespective of
how they may differ in other particulars.

Compensation, when regarded from the viewpoint of employer and employee

represents a compromise in which each party surrenders certain advantages in order
to gain others which are of more importance both to him and to society. The
employer gives up the immunity he otherwise would enjoy in cases where he is not at
fault, and the employee surrenders his former right to full damages and accepts
instead a more modest claim for bare essentials, represented by compensation.
 The importance of the compromise character of compensation cannot be
overemphasized. The statutes vary a great deal with reference to the proper point of
balance. The amount of weekly compensation payments and the length of the period
during which compensation is to be paid are matters concerning which the acts differ
considerably. The interpretation of any compensation statute will be influenced
greatly by the court's reaction to the basic point of compromise established in the
Act. If the court feels that the basic compromise unduly favors the employer, it will be
tempted to restore what it regards as a proper balance by adopting an interpretation
that favors the worker. In this way, a compensation act drawn in a spirit of extreme
conservatism may be transformed by a sympathetic court into a fairly liberal
instrument; and conversely, an act that greatly favors the laborer may be so
interpreted by the courts that employers can have little reason to complain. Much of
the unevenness and apparent conflict in compensation decisions throughout the
various jurisdictions must be attributed to this." (Malone & Plant, Workmen's
Compensation American Casebook Series, pp. 63-65).

The schedule of compensation, the rates of payments, the compensable injuries and diseases, the
premiums paid by employers to the present system, the actuarial stability of the trust fund and many
other interrelated parts have all been carefully studied before the integrated scheme was enacted in
to law. We have a system whose parts must mesh harmonious with one another if it is to succeed.
The basic theory has to be followed.

If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of
the system without touching the related others, the entire structure is endangered. For instance, I am
personally against stretching the law and allowing payment of compensation for contingencies never
envisioned to be compensable when the law was formulated. Certainly, only harmful results to the
principle of workmen's compensation can arise if workmen, whom the law allows to receive
employment compensation, can still elect to file damage suits for industrial accidents. It was
precisely for this reason that Section 5 of the Workmen's Compensation Act, which reads:

SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this

Act to an employee by reason of a personal injury entitling him to compensation shall
exclude all other rights and remedies accruing to the employee, his personal
representatives, dependents or nearest of kin against the employer under the Civil
Code and other laws because of said injury. ...

Article 173 of the labor Code also provides:

ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the

State Insurance Fund under this Title shall be exclusive and in place of all other
liabilities of the employer to the employee his dependents or anyone otherwise
entitled to receive damages on behalf of the employee or his dependents.

I am against the Court assuming the role of legislator in a matter calling for actuarial studies and
public hearings. If employers already required to contribute to the State Insurance Fund will still have
to bear the cost of damage suits or get insurance for that purpose, a major study will be necessary.
The issue before us is more far reaching than the interests of the poor victims and their families. All
workers covered by workmen's compensation and all employers who employ covered employees
are affected. Even as I have deepest sympathies for the victims, I regret that I am constrained to
dissent from the majority opinion.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 72005 May 29, 1987

PHILIPPINE BRITISH ASSURANCE CO., INC., petitioner,

vs.
HONORABLE INTERMEDIATE APPELLATE COURT; SYCWIN COATING & WIRES, INC., and
DOMINADOR CACPAL, CHIEF DEPUTY SHERRIF OF MANILA, respondents.

GANCAYCO, J.:

This is a Petition for Review on certiorari of the Resolution dated September 12, 1985 of the
Intermediate Appellate Court in AC-G.R. No. CR-05409 1 granting private respondent's motion for execution pending
appeal and ordering the issuance of the corresponding writ of execution on the counterbond to lift attachment filed by petitioner. The focal
issue that emerges is whether an order of execution pending appeal of a judgment maybe enforced on the said bond. In the Resolution of
September 25, 1985 2 this Court as prayed for, without necessarily giving due course to the petition, issued a temporary restraining order
enjoining the respondents from enforcing the order complaint of.

The records disclose that private respondent Sycwin Coating & Wires, Inc., filed a complaint for
collection of a sum of money against Varian Industrial Corporation before the Regional Trial Court of
Quezon City. During the pendency of the suit, private respondent succeeded in attaching some of
the properties of Varian Industrial Corporation upon the posting of a supersedeas bond. The latter 3

in turn posted a counterbond in the sum of P1,400, 000.00 thru petitioner Philippine British
4

Assurance Co., Inc., so the attached properties were released.

On December 28, 1984, the trial court rendered a Decision, the dispositive portion of which reads:

WHEREFORE, plaintiff's Motion for Summary Judgment is hereby GRANTED, and

judgment is rendered in favor of the plaintiff and against the defendant Varian
Industrial Corporation, and the latter is hereby ordered:

1. To pay plaintiff the amount of P1,401,468.00, the principal obligation with 12%
interest per annum from the date of default until fully paid;

2. To pay plaintiff 5% of the principal obligation as liquidated damages;

3. To pay plaintiff P30,000.00 as exemplary damages;

4. To pay plaintiff 15% of P1,401,468.00, the principal obligation, as and for

attorney's fees; and

5. To pay the costs of suit.

Accordingly, the counterclaim of the defendant is hereby DISMISSED for lack of

merit.

SO ORDERED. 5

Varian Industrial Corporation appealed the decision to the respondent Court. Sycwin then filed a
petition for execution pending appeal against the properties of Varian in respondent Court. Varian
was required to file its comment but none was filed. In the Resolution of July 5, 1985, respondent
Court ordered the execution pending appeal as prayed for. However, the writ of execution was
6

returned unsatisfied as Varian failed to deliver the previously attached personal properties upon
demand. In a Petition dated August 13, 1985 filed with respondent Court Sycwin prayed that the
surety (herein petitioner) be ordered to pay the value of its bond. In compliance with the Resolution
7

of August 23, 1985 of the respondent Court herein petitioner filed its comment. In the Resolution of 8

September 12, 1985, the respondent Court granted the petition. Hence this action.
9
It is the submission of private respondent Sycwin that without a previous motion for reconsideration
of the questioned resolution, certiorari would not lie. While as a general rule a motion for
reconsideration has been considered a condition sine qua non for the granting of a writ of certiorari,
this rule does not apply when special circumstances warrant immediate or more direct action. 10 It has
been held further that a motion for reconsideration may be dispensed with in cases like this where execution had been ordered and the need
for relief was extremely urgent. 11

The counterbond provides:

WHEREAS, in the above-entitled case pending in the Regional Trial Court, National
Capital Judicial Region, Branch LXXXV, Quezon City, an order of Attachment was
issued against abovenamed Defendant;

WHEREAS, the Defendant, for the purpose of lifting and/or dissolving the order of
attachment issued against them in the above-en-titled case, have offered to file a
counterbond in the sum of PESOS ONE MILLION FOUR HUNDRED THOUSAND
ONLY (P1,400,000.00), Philippine Currency, as provided for in Section 5, Rule 57 of
the Revised Rules of Court.

NOW, THEREFORE, we, VARIAN INDUSTRIAL CORPORATION, as Principal and

the PHILIPPINE BRITISH ASSURANCE COMPANY, INC., a corporation duly
organized and existing under and by virtue of the laws of the Philippines, as Surety,
in consideration of the above and of the lifting or dissolution of the order of
attachment, hereby jointly and severally, bind ourselves in favor of the above Plaintiff
in the sum of PESOS ONE MILLION FOUR HUNDRED THOUSAND ONLY
(P1,400,000.00), Philippine Currency, under the condition that in case the Plaintiff
recovers judgment in the action, and Defendant will, on demand, re-deliver the
attached property so released to the Officer of the Court and the same shall be
applied to the payment of the judgment, or in default thereof, the defendant and
Surety will, on demand, pay to the Plaintiff the full value of the property released.

EXECUTED at Manila, Philippines, this 28th day of June, 1984. 12

Sections 5, 12, and 17 of Rule 57 of the Revised Rules of Court also provide:

SEC. 5. Manner of attaching property. — The officer executing the order shall without
delay attach, to await judgment and execution in the action, all the properties of the
party against whom the order is issued in the province, not exempt from execution, or
so much thereof as may be sufficient to satisfy the applicant's demand, unless the
former makes a deposit with the clerk or judge of the court from which the order
issued, or gives a counter-bond executed to the applicant, in an amount sufficient to
satisfy such demand besides costs, or in an amount equal to the value of the
property which is about to be attached, to secure payment to the applicant of any
judgement ment which he may recover in the action. The officer shall also forthwith
serve a copy of the applicant's affidavit and bond, and of the order of attachment, on
the adverse party, if he be found within the province.

SEC. 12. Discharge of attachment upon giving counterbond. — At any time after an
order of attachment has been granted, the party whose property has been attached,
or the person appearing on his behalf, may, upon reasonable notice to the applicant,
apply to the judge who granted the order, or to the judge of the court in which the
action is pending, for an order discharging the attachment wholly or in part on the
security given. The judge shall, after hearing, order the discharge of the attachment if
a cash deposit is made, or a counter-bond executed to the attaching creditor is filed,
on behalf of the adverse party, with the clerk or judge of the court where the
application is made, in an amount equal to the value of the property attached as
determined by the judge, to secure the payment of any judgment that the attaching
creditor may recover in the action. Upon the filing of such counter-bond, copy thereof
shall forthwith be served on the attaching creditor or his lawyer. Upon the discharge
of an attachment in accordance with the provisions of this section the property
attached, or the proceeds of any sale thereof, shall be delivered to the party making
the deposit or giving the counterbond aforesaid standing in place of the property so
released. Should such counterbond for any reason be found to be, or become,
insufficient, and the party furnishing the same fail to file an additional counterbond,
the attaching creditor may apply for a new order of attachment.

SEC. 17. When execution returned unsatisfied, recovery had upon bond. — If the
execution be returned unsatisfied in whole or in part, the surety or sureties on any
counter-bond given pursuant to the provisions of this rule to secure the payment of
the judgment shall become charged on such counter- bond, and bound to pay to the
 judgement creditor upon demand, the amount due under the judgment, which
amount may be recovered from such surety or sureties after notice and summary
hearing in the same action. (Emphasis supplied.)

Under Sections 5 and 12, Rule 57 above reproduced it is provided that the counterbond is intended
to secure the payment of "any judgment" that the attaching creditor may recover in the action. Under
Section 17 of same rule it provides that when "the execution be returned unsatisfied in whole or in
part" it is only then that "payment of the judgment shall become charged on such counterbond."

The counterbond was issued in accordance with the provisions of Section 5, Rule 57 of the Rules of
Court as provided in the second paragraph aforecited which is deemed reproduced as part of the
counterbond. In the third paragraph it is also stipulated that the counterbond is to be "applied for the
payment of the judgment." Neither the rules nor the provisions of the counterbond limited its
application to a final and executory judgment. Indeed, it is specified that it applies to the payment
of any judgment that maybe recovered by plaintiff. Thus, the only logical conclusion is that an
execution of any judgment including one pending appeal if returned unsatisfied maybe charged
against such a counterbond.

It is well recognized rule that where the law does not distinguish, courts should not distinguish. Ubi
lex non distinguish nec nos distinguere debemos. 13 "The rule, founded on logic, is a corollary of the principle that
general words and phrases in a statute should ordinarily be accorded their natural and general significance. 14 The rule requires that a
general term or phrase should not be reduced into parts and one part distinguished from the other so as to justify its exclusion from the
operation of the law. 15 In other words, there should be no distinction in the application of a statute where none is indicated.16 For courts are
not authorized to distinguish where the law makes no distinction. They should instead administer the law not as they think it ought to be but
as they find it and without regard to consequences. 17

A corollary of the principle is the rule that where the law does not make any exception, courts may
not except something therefrom, unless there is compelling reason apparent in the law to justify
it.18 Thus where a statute grants a person against whom possession of "any land" is unlawfully withheld the right to bring an action for
unlawful detainer, this Court held that the phrase "any land" includes all kinds of land, whether agricultural, residential, or mineral.19 Since
the law in this case does not make any distinction nor intended to make any exception, when it speaks of "any judgment" which maybe
charged against the counterbond, it should be interpreted to refer not only to a final and executory judgment in the case but also a judgment
pending appeal.

All that is required is that the conditions provided for by law are complied with, as outlined in the
case of Towers Assurance Corporation v. Ororama Supermart, 20

Under Section 17, in order that the judgment creditor might recover from the surety
on the counterbond, it is necessary (1) that the execution be first issued against the
principal debtor and that such execution was returned unsatisfied in whole or in part;
(2) that the creditor make a demand upon the surety for the satisfaction of the
judgment, and (3) that the surety be given notice and a summary hearing on the
same action as to his liability for the judgment under his counterbond.

The rule therefore, is that the counterbond to lift attachment that is issued in accordance with the
provisions of Section 5, Rule 57, of the Rules of Court, shall be charged with the payment of any
judgment that is returned unsatisfied. It covers not only a final and executory judgement but also the
execution of a judgment pending appeal.

WHEREFORE, the petition is hereby DISMISSED for lack of merit and the restraining order issued
on September 25, 1985 is hereby dissolved with costs against petitioner.

SO ORDERED.

Yap (Chairman), Narvasa, Melencio-Herrera, Cruz and Sarmiento, JJ., concur.

Feliciano, J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 74917 January 20, 1988

BANCO DE ORO SAVINGS AND MORTGAGE BANK, petitioner,

vs.
EQUITABLE BANKING CORPORATION, PHILIPPINE CLEARING HOUSE CORPORATION, AND
REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH XCII (92), respondents.

GANCAYCO, J.:

This is a petition for review on certiorari of a decision of the Regional Trial Court of Quezon City promulgated on March 24, 1986 in Civil
Case No. Q-46517 entitled Banco de Oro Savings and Mortgage Bank versus Equitable Banking Corporation and the Philippine Clearing
House Corporation after a review of the Decision of the Board of Directors of the Philippine Clearing House Corporation (PCHC) in the case
of Equitable Banking Corporation (EBC) vs. Banco de Oro Savings and Mortgage (BCO), ARBICOM Case No. 84033.

The undisputed facts are as follows:

It appears that some time in March, April, May and August 1983, plaintiff through its
Visa Card Department, drew six crossed Manager's check (Exhibits "A" to "F", and
herein referred to as Checks) having an aggregate amount of Forty Five Thousand
Nine Hundred and Eighty Two & 23/100 (P45,982.23) Pesos and payable to certain
member establishments of Visa Card. Subsequently, the Checks were deposited with
the defendant to the credit of its depositor, a certain Aida Trencio.

Following normal procedures, and after stamping at the back of the Checks the usual
endorsements. All prior and/or lack of endorsement guaranteed the defendant sent
the checks for clearing through the Philippine Clearing House Corporation (PCHC).
Accordingly, plaintiff paid the Checks; its clearing account was debited for the value
of the Checks and defendant's clearing account was credited for the same amount,

Thereafter, plaintiff discovered that the endorsements appearing at the back of the
Checks and purporting to be that of the payees were forged and/or unauthorized or
otherwise belong to persons other than the payees.

Pursuant to the PCHC Clearing Rules and Regulations, plaintiff presented the
Checks directly to the defendant for the purpose of claiming reimbursement from the
latter. However, defendant refused to accept such direct presentation and to
reimburse the plaintiff for the value of the Checks; hence, this case.

In its Complaint, plaintiff prays for judgment to require the defendant to pay the
plaintiff the sum of P45,982.23 with interest at the rate of 12% per annum from the
date of the complaint plus attorney's fees in the amount of P10,000.00 as well as the
cost of the suit.

In accordance with Section 38 of the Clearing House Rules and Regulations, the
dispute was presented for Arbitration; and Atty. Ceasar Querubin was designated as
the Arbitrator.

After an exhaustive investigation and hearing the Arbiter rendered a decision in favor
of the plaintiff and against the defendant ordering the PCHC to debit the clearing
account of the defendant, and to credit the clearing account of the plaintiff of the
amount of P45,982.23 with interest at the rate of 12% per annum from date of the
complaint and Attorney's fee in the amount of P5,000.00. No pronouncement as to
cost was made. 1
In a motion for reconsideration filed by the petitioner, the Board of Directors of the PCHC affirmed
the decision of the said Arbiter in this wise:

In view of all the foregoing, the decision of the Arbiter is confirmed; and the Philippine
Clearing House Corporation is hereby ordered to debit the clearing account of the
defendant and credit the clearing account of plaintiff the amount of Forty Five
Thousand Nine Hundred Eighty Two & 23/100 (P45,982.23) Pesos with interest at
the rate of 12% per annum from date of the complaint, and the Attorney's fee in the
amount of Five Thousand (P5,000.00) Pesos.

Thus, a petition for review was filed with the Regional Trial Court of Quezon City, Branch XCII,
wherein in due course a decision was rendered affirming in toto the decision of the PCHC.

Hence this petition.

The petition is focused on the following issues:

1. Did the PCHC have any jurisdiction to give due course to and adjudicate Arbicom Case No.
84033?

2. Were the subject checks non-negotiable and if not, does it fall under the ambit of the power of the
PCHC?

3. Is the Negotiable Instrument Law, Act No. 2031 applicable in deciding controversies of this nature
by the PCHC?

4. What law should govern in resolving controversies of this nature?

5. Was the petitioner bank negligent and thus responsible for any undue payment?

Petitioner maintains that the PCHC is not clothed with jurisdiction because the Clearing House Rules
and Regulations of PCHC cover and apply only to checks that are genuinely negotiable. Emphasis is
laid on the primary purpose of the PCHC in the Articles of Incorporation, which states:

To provide, maintain and render an effective, convenient, efficient, economical and

relevant exchange and facilitate service limited to check processing and sorting by
way of assisting member banks, entities in clearing checks and other clearing
items as defined in existing and in future Central Bank of the Philippines circulars,
memoranda, circular letters, rules and regulations and policies in pursuance to the
provisions of Section 107 of R.A. 265. ...

and Section 107 of R.A. 265 which provides:

xxx xxx xxx

The deposit reserves maintained by the banks in the Central Bank, in accordance
with the provisions of Section 1000 shall serve as a basis for the clearing of checks,
and the settlement of interbank balances ...

Petitioner argues that by law and common sense, the term check should be interpreted as one that
fits the articles of incorporation of the PCHC, the Central Bank and the Clearing House Rules stating
that it is a negotiable instrument citing the definition of a "check" as basically a "bill of exchange"
under Section 185 of the NIL and that it should be payable to "order" or to "bearer" under Section
126 of game law. Petitioner alleges that with the cancellation of the printed words "or bearer from the
face of the check, it becomes non-negotiable so the PCHC has no jurisdiction over the case.

The Regional Trial Court took exception to this stand and conclusion put forth by the herein
petitioner as it held:

Petitioner's theory cannot be maintained. As will be noted, the PCHC makes no

distinction as to the character or nature of the checks subject of its jurisdiction. The
pertinent provisions quoted in petitioners memorandum simply refer to check(s).
Where the law does not distinguish, we shall not distinguish.

In the case of Reyes vs. Chuanico (CA-G.R. No. 20813 R, Feb. 5, 1962) the
Appellate Court categorically stated that there are four kinds of checks in this
jurisdiction; the regular check; the cashier's check; the traveller's check; and the
crossed check. The Court, further elucidated, that while the Negotiable Instruments
 Law does not contain any provision on crossed checks, it is coon practice in
commercial and banking operations to issue checks of this character, obviously in
accordance with Article 541 of the Code of Commerce. Attention is likewise called to
Section 185 of the Negotiable Instruments Law:

Sec. 185. Check defined. — A check is a bill of exchange drawn on a

bank payable on demand. Except as herein otherwise provided, the
provisions of this act applicable to a bill of exchange payable on
demand apply to a check

and the provisions of Section 61 (supra) that the drawer may insert in the instrument
an express stipulation negating or limiting his own liability to the holder.
Consequently, it appears that the use of the term "check" in the Articles of
Incorporation of PCHC is to be perceived as not limited to negotiable checks only,
but to checks as is generally known in use in commercial or business transactions.

Anent Petitioner's liability on said instruments, this court is in full accord with the
ruling of the PCHC Board of Directors that:

In presenting the Checks for clearing and for payment, the defendant
made an express guarantee on the validity of "all prior
endorsements." Thus, stamped at the back of the checks are the
defendant's clear warranty; ALL PRIOR ENDORSEMENTS AND/OR
LACK OF ENDORSEMENTS GUARANTEED. With. out such
warranty, plaintiff would not have paid on the checks.

No amount of legal jargon can reverse the clear meaning of

defendant's warranty. As the warranty has proven to be false and
inaccurate, the defendant is liable for any damage arising out of the
falsity of its representation.

The principle of estoppel, effectively prevents the defendant from

denying liability for any damage sustained by the plaintiff which,
relying upon an action or declaration of the defendant, paid on the
Checks. The same principle of estoppel effectively prevents the
defendant from denying the existence of the Checks. (Pp. 1011
Decision; pp. 4344, Rollo)

We agree.

As provided in the aforecited articles of incorporation of PCHC its operation extend to "clearing
checks and other clearing items." No doubt transactions on non-negotiable checks are within the
ambit of its jurisdiction.

In a previous case, this Court had occasion to rule: "Ubi lex non distinguish nec nos distinguere
debemos." It was enunciated in Loc Cham v. Ocampo, 77 Phil. 636 (1946):
2

The rule, founded on logic is a corollary of the principle that general words and
phrases in a statute should ordinarily be accorded their natural and general
significance. In other words, there should be no distinction in the application of a
statute where none is indicated.

There should be no distinction in the application of a statute where none is indicated for courts are
not authorized to distinguish where the law makes no distinction. They should instead administer the
law not as they think it ought to be but as they find it and without regard to consequences. 3

The term check as used in the said Articles of Incorporation of PCHC can only connote checks in
general use in commercial and business activities. It cannot be conceived to be limited to negotiable
checks only.

Checks are used between banks and bankers and their customers, and are designed to facilitate
banking operations. It is of the essence to be payable on demand, because the contract between the
banker and the customer is that the money is needed on demand. 4

The participation of the two banks, petitioner and private respondent, in the clearing operations of
PCHC is a manifestation of their submission to its jurisdiction. Sec. 3 and 36.6 of the PCHC-CHRR
clearing rules and regulations provide:
 SEC. 3. AGREEMENT TO THESE RULES. — It is the general agreement and
understanding that any participant in the Philippine Clearing House Corporation,
MICR clearing operations by the mere fact of their participation, thereby manifests its
agreement to these Rules and Regulations and its subsequent amendments."

Sec 36.6. (ARBITRATION) — The fact that a bank participates in the clearing
operations of the PCHC shall be deemed its written and subscribed consent to the
binding effect of this arbitration agreement as if it had done so in accordance with
section 4 of the Republic Act No. 876, otherwise known as the Arbitration Law.

Further Section 2 of the Arbitration Law mandates:

Two or more persons or parties may submit to the arbitration of one or more
arbitrators any controversy existing between them at the time of the submission and
which may be the subject of an action, or the parties of any contract may in such
contract agree to settle by arbitration a controversy thereafter arising between them.
Such submission or contract shall be valid and irrevocable, save upon grounds as
exist at law for the revocation of any contract.

Such submission or contract may include question arising out of valuations,

appraisals or other controversies which may be collateral, incidental, precedent or
subsequent to any issue between the parties. ...

Sec. 21 of the same rules, says:

Items which have been the subject of material alteration or items bearing forged
endorsement when such endorsement is necessary for negotiation shall be returned
by direct presentation or demand to the Presenting Bank and not through the regular
clearing house facilities within the period prescribed by law for the filing of a legal
action by the returning bank/branch, institution or entity sending the same.
(Emphasis supplied)

Viewing these provisions the conclusion is clear that the PCHC Rules and Regulations should not be
interpreted to be applicable only to checks which are negotiable instruments but also to non-
negotiable instruments and that the PCHC has jurisdiction over this case even as the checks subject
of this litigation are admittedly non-negotiable.

Moreover, petitioner is estopped from raising the defense of non-negotiability of the checks in
question. It stamped its guarantee on the back of the checks and subsequently presented these
checks for clearing and it was on the basis of these endorsements by the petitioner that the
proceeds were credited in its clearing account.

The petitioner by its own acts and representation can not now deny liability because it assumed the
liabilities of an endorser by stamping its guarantee at the back of the checks.

The petitioner having stamped its guarantee of "all prior endorsements and/or lack of endorsements"
(Exh. A-2 to F-2) is now estopped from claiming that the checks under consideration are not
negotiable instruments. The checks were accepted for deposit by the petitioner stamping thereon its
guarantee, in order that it can clear the said checks with the respondent bank. By such deliberate
and positive attitude of the petitioner it has for all legal intents and purposes treated the said cheeks
as negotiable instruments and accordingly assumed the warranty of the endorser when it stamped
its guarantee of prior endorsements at the back of the checks. It led the said respondent to believe
that it was acting as endorser of the checks and on the strength of this guarantee said respondent
cleared the checks in question and credited the account of the petitioner. Petitioner is now barred
from taking an opposite posture by claiming that the disputed checks are not negotiable instrument.

This Court enunciated in Philippine National Bank vs. Court of Appeals a point relevant to the issue
5

when it stated the doctrine of estoppel is based upon the grounds of public policy, fair dealing, good
faith and justice and its purpose is to forbid one to speak against his own act, representations or
commitments to the injury of one to whom they were directed and who reasonably relied thereon.

A commercial bank cannot escape the liability of an endorser of a check and which may turn out to
be a forged endorsement. Whenever any bank treats the signature at the back of the checks as
endorsements and thus logically guarantees the same as such there can be no doubt said bank has
considered the checks as negotiable.

Apropos the matter of forgery in endorsements, this Court has succinctly emphasized that the
collecting bank or last endorser generally suffers the loss because it has the duty to ascertain the
genuineness of all prior endorsements considering that the act of presenting the check for payment
to the drawee is an assertion that the party making the presentment has done its duty to ascertain
the genuineness of the endorsements. This is laid down in the case of PNB vs. National City
Bank. In another case, this court held that if the drawee-bank discovers that the signature of the
6

payee was forged after it has paid the amount of the check to the holder thereof, it can recover the
amount paid from the collecting bank. 7

A truism stated by this Court is that — "The doctrine of estoppel precludes a party from repudiating
an obligation voluntarily assumed after having accepted benefits therefrom. To countenance such
repudiation would be contrary to equity and put premium on fraud or misrepresentation". 8

We made clear in Our decision in Philippine National Bank vs. The National City Bank of NY & Motor
Service Co. that:

Where a check is accepted or certified by the bank on which it is drawn, the bank is
estopped to deny the genuineness of the drawers signature and his capacity to issue
the instrument.

If a drawee bank pays a forged check which was previously accepted or certified by
the said bank, it can not recover from a holder who did not participate in the forgery
and did not have actual notice thereof.

The payment of a check does not include or imply its acceptance in the sense that
this word is used in Section 62 of the Negotiable Instruments Act. 9

The point that comes uppermost is whether the drawee bank was negligent in failing to discover the
alteration or the forgery. Very akin to the case at bar is one which involves a suit filed by the drawer
of checks against the collecting bank and this came about in Farmers State Bank where it was
10

held:

A cause of action against the (collecting bank) in favor of the appellee (the drawer)
accrued as a result of the bank breaching its implied warranty of the genuineness of
the indorsements of the name of the payee by bringing about the presentation of the
checks (to the drawee bank) and collecting the amounts thereof, the right to enforce
that cause of action was not destroyed by the circumstance that another cause of
action for the recovery of the amounts paid on the checks would have accrued in
favor of the appellee against another or to others than the bank if when the checks
were paid they have been indorsed by the payee. (United States vs. National
Exchange Bank, 214 US, 302, 29 S CT665, 53 L. Ed 1006, 16 Am. Cas. 11 84;
Onondaga County Savings Bank vs. United States (E.C.A.) 64 F 703)

Section 66 of the Negotiable Instruments ordains that:

Every indorser who indorsee without qualification, warrants to all subsequent holders
in due course' (a) that the instrument is genuine and in all respects what it purports to
be; (b) that he has good title to it; (c) that all prior parties have capacity to contract;
and (d) that the instrument is at the time of his indorsement valid and subsisting. 11

It has been enunciated in an American case particularly in American Exchange National Bank vs.
Yorkville Bank that: "the drawer owes no duty of diligence to the collecting bank (one who had
12

accepted an altered check and had paid over the proceeds to the depositor) except of seasonably
discovering the alteration by a comparison of its returned checks and check stubs or other
equivalent record, and to inform the drawee thereof." In this case it was further held that:

The real and underlying reasons why negligence of the drawer constitutes no
defense to the collecting bank are that there is no privity between the drawer and the
collecting bank (Corn Exchange Bank vs. Nassau Bank, 204 N.Y.S. 80) and the
drawer owe to that bank no duty of vigilance (New York Produce Exchange Bank vs.
Twelfth Ward Bank, 204 N.Y.S. 54) and no act of the collecting bank is induced by
any act or representation or admission of the drawer (Seaboard National Bank vs.
Bank of America (supra) and it follows that negligence on the part of the drawer
cannot create any liability from it to the collecting bank, and the drawer thus is neither
a necessary nor a proper party to an action by the drawee bank against such bank. It
is quite true that depositors in banks are under the obligation of examining their
passbooks and returned vouchers as a protection against the payment by the
depository bank against forged checks, and negligence in the performance of that
obligation may relieve that bank of liability for the repayment of amounts paid out on
forged checks, which but for such negligence it would be bound to repay. A leading
case on that subject is Morgan vs. United States Mortgage and Trust Col. 208 N.Y.
218, 101 N.E. 871 Amn. Cas. 1914D, 462, L.R.A. 1915D, 74.
Thus We hold that while the drawer generally owes no duty of diligence to the collecting bank, the
law imposes a duty of diligence on the collecting bank to scrutinize checks deposited with it for the
purpose of determining their genuineness and regularity. The collecting bank being primarily
engaged in banking holds itself out to the public as the expert and the law holds it to a high standard
of conduct.

And although the subject checks are non-negotiable the responsibility of petitioner as indorser
thereof remains.

To countenance a repudiation by the petitioner of its obligation would be contrary to equity and
would deal a negative blow to the whole banking system of this country.

The court reproduces with approval the following disquisition of the PCHC in its decision —

II. Payments To Persons Other

Than The Payees Are Not Valid

And Give Rise To An Obligation

To Return Amounts Received

Nothing is more clear than that neither the defendant's depositor nor the defendant is
entitled to receive payment payable for the Checks. As the checks are not payable to
defendant's depositor, payments to persons other than payees named therein, their
successor-in-interest or any person authorized to receive payment are not valid.
Article 1240, New Civil Code of the Philippines unequivocably provides that:

"Art. 1240. Payment shall be made to the person in whose favor the
obligation has been constituted, or his successo-in-interest, or any
person authorized to receive it. "

Considering that neither the defendant's depositor nor the defendant is entitled to
receive payments for the Checks, payments to any of them give rise to an obligation
to return the amounts received. Section 2154 of the New Civil Code mandates that:

Article 2154. If something is received when there is no right to

demand it, and it was unduly delivered through mistake, the
obligation to return it arises.

It is contended that plaintiff should be held responsible for issuing the Checks
notwithstanding that the underlying transactions were fictitious This contention has
no basis in our jurisprudence.

The nullity of the underlying transactions does not diminish, but in fact strengthens,
plaintiffs right to recover from the defendant. Such nullity clearly emphasizes the
obligation of the payees to return the proceeds of the Checks. If a failure of
consideration is sufficient to warrant a finding that a payee is not entitled to payment
or must return payment already made, with more reason the defendant, who is
neither the payee nor the person authorized by the payee, should be compelled to
surrender the proceeds of the Checks received by it. Defendant does not have any
title to the Checks; neither can it claim any derivative title to them.

III. Having Violated Its Warranty

On Validity Of All Endorsements,

Collecting Bank Cannot Deny

liability To Those Who Relied

On Its Warranty

In presenting the Checks for clearing and for payment, the defendant made an
express guarantee on the validity of "all prior endorsements." Thus, stamped at the
bank of the checks are the defendant's clear warranty: ALL PRIOR
ENDORSEMENTS AND/OR LACK OF ENDORSEMENTS GUARANTEED. Without
such warranty, plaintiff would not have paid on the checks.
 No amount of legal jargon can reverse the clear meaning of defendant's warranty. As
the warranty has proven to be false and inaccurate, the defendant is liable for any
damage arising out of the falsity of its representation.

The principle of estoppel effectively prevents the defendant from denying liability for
any damages sustained by the plaintiff which, relying upon an action or declaration of
the defendant, paid on the Checks. The same principle of estoppel effectively
prevents the defendant from denying the existence of the Checks.

Whether the Checks have been issued for valuable considerations or not is of no
serious moment to this case. These Checks have been made the subject of contracts
of endorsement wherein the defendant made expressed warranties to induce
payment by the drawer of the Checks; and the defendant cannot now refuse liability
for breach of warranty as a consequence of such forged endorsements. The
defendant has falsely warranted in favor of plaintiff the validity of all endorsements
and the genuineness of the cheeks in all respects what they purport to be.

The damage that will result if judgment is not rendered for the plaintiff is irreparable.
The collecting bank has privity with the depositor who is the principal culprit in this
case. The defendant knows the depositor; her address and her history, Depositor is
defendant's client. It has taken a risk on its depositor when it allowed her to collect on
the crossed-checks.

Having accepted the crossed checks from persons other than the payees, the
defendant is guilty of negligence; the risk of wrongful payment has to be assumed by
the defendant.

On the matter of the award of the interest and attorney's fees, the Board of Directors
finds no reason to reverse the decision of the Arbiter. The defendant's failure to
reimburse the plaintiff has constrained the plaintiff to regular the services of counsel
in order to protect its interest notwithstanding that plaintiffs claim is plainly valid just
and demandable. In addition, defendant's clear obligation is to reimburse plaintiff
upon direct presentation of the checks; and it is undenied that up to this time the
defendant has failed to make such reimbursement.

WHEREFORE, the petition is DISMISSED for lack of merit without pronouncement as to costs. The
decision of the respondent court of 24 March 1986 and its order of 3 June 1986 are hereby declared
to be immediately executory.

SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Paras, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 78687 January 31, 1989

ELENA SALENILLAS AND BERNARDINO SALENILLAS, petitioners,

vs.
HONORABLE COURT OF APPEALS and HONORABLE RAYMUNDO SEVA, JUDGE OF
BRANCH 38 OF THE REGIONAL TRIAL COURT OF CAMARINES NORTE and WILLIAM
GUERRA, respondents.

Jose L. Lapak for petitioners.

Jose T. Atienza for private respondent.

SARMIENTO, J.:

This petition for review on certiorari which seeks the reversal and setting aside of the decision of
1

the Court of Appeals dismissing the petition for certiorari against Judge Raymundo Seva of the
2

Regional Trial Court of Camarines Norte and the private respondent, William Guerra, involves a pure
question of law i.e., the coverage and application of Section 119 of Commonwealth Act No. 141, as
amended, known otherwise as the Public Land Act.

The facts are undisputed.

The property subject matter of the case was formerly covered by Original Certificate of Title No. P-
1248, issued by virtue of Free Patent Application No. 192765, in favor of the spouses, Florencia H.
de Enciso and Miguel Enciso. The said original certificate of title was inscribed in the Registration
Book for the Province of Camarines Norte on December 10, 1961. On February 28, 1970, the
patentees, the Enciso spouses, by an Absolute Deed of Sale, sold the property in favor of the
petitioners, the spouses Elena Salenillas and Bernardino Salenillas for a consideration of P900.00.
Petitioner Elena Salenillas is a daughter of the Encisos. As a result of the aforementioned sale,
Transfer Certificate of Title No. T-8104 of the Register of Deeds of Camarines Norte was issued in
the name of the Salenillas, cancelling Original Certificate of Title No. P-1248. On June 30, 1971, the
petitioners mortgaged the property now covered by T.C.T. No. T-8104 with the Rural Bank of Daet,
Inc. The mortgage was subsequently released on November 22, 1973 after the petitioners paid the
amount of P1,000.00. Later, or on December 4, 1975, the petitioners again mortgaged the property,
this time in favor of the Philippine National Bank Branch, Daet, Camarines Norte as security for a
loan of P2,500.00.

For failure of the petitioners to pay their loan, extrajudicial foreclosure proceeding, pursuant to Act
No. 3135, was instituted by the Philippine National Bank against the mortgage and the property was
sold at a public auction held on February 27, 1981. The private respondent, William Guerra,
emerged as the highest bidder in the said public auction and as a result thereof a "Certificate of
Sale" was issued to him by the Ex Officio Provincial Sheriff of Camarines Norte. Ultimately, on July
12, 1983, a "Sheriff's Final Deed" was executed in favor of the private respondent.

On August 17,1983, the Philippine National Bank filed with the Regional Trial Court of Camarines
Norte at Daet, a motion for a writ of possession. The public respondent, Judge Raymundo Seva of
the trial court, acting on the motion, issued on September 22, 1983 an order for the issuance of a
writ of possession in favor of the private respondent. When the deputy sheriff of Camarines Norte
however, attempted on November 17, 1983, to place the property in the possession of the private
respondent, the petitioners refused to vacate and surrender the possession of the same and instead
offered to repurchase it under Section 119 of the Public Land Act. On August 15, 1984, another
motion, this time for the issuance of an alias writ of possession was filed by the private respondent
with the trial court. The petitioners, on August 31, 1984, opposed the private respondents' motion
and instead made a formal offer to repurchase the property. Notwithstanding the petitioners'
opposition and formal offer, the trial court judge on October 12, 1984 issued the alias writ of
possession prayed for the private respondent. The petitioners moved for a reconsideration of the
order but their motion was denied.

Undeterred by their initial setback, the petitioners elevated the case to the respondent Court of
Appeals by way of a petition for certiorari claiming that the respondent trial court judge acted with
grave abuse of discretion in issuing the order dated October 12, 1984 granting the writ of
possession, and the order dated October 22, 1984, denying their motion for reconsider
consideration.

In a resolution dated January 23, 1985, the respondent appellate court gave due course to the
petition; required the parties to submit simultaneous memoranda in support to their respective
positions; and restrained the trial court and the private respondent from executing, implementing or
otherwise giving effect to the assailed writ of possession until further orders from the
court. However, in a decision promulgated on September 17, 1986, the respondent Court of
3

Appeals dismissed the case for lack of merit. According to the appellate court:

It must be noted that when the original owner, Florencia H. Enciso whose title, OCT
No. P-1248, was issued on August 9, 1961, executed a deed of absolute sale on
February 28, 1970 of the property covered by said title to spouses Elena Salenillas
and Bernardino Salenillas, the five year period to repurchase the property provided
for in Section 119 of Commonwealth Act No. 141 as amended could have already
started. Prom this fact alone, the petition should have been dismissed. However,
granting that the transfer from parent to child for a nominal sum may not be the
"conveyance" contemplated by the law. We will rule on the issue raised by the
petitioners. 4

xxx xxx xxx

Applying the case of Monge, et al. vs. Angeles, et al., the appellate court went on to hold that the
5

five-year period of the petitioners to repurchase under Section 119 of the Public Land Act had
already prescribed. The point of reckoning, ruled the respondent court in consonance with Monge is
from the date the petitioners mortgaged the property on December 4, 1973. Thus, when the
petitioners made their formal offer to repurchase on August 31, 1984, the period had clearly expired.

In an effort to still overturn the decision, the petitioners moved for reconsideration. Their motion
apparently went for naught because on May 7, 1987, the respondent appellate court resolved to
deny the same. Hence, this petition.

Before us, the petitioners maintain that contrary to the rulings of the courts below, their right to
repurchase within five years under Section 119 of the Public Land Act has not yet prescribed. To
support their contention, the petitioners cite the cases of Paras vs. Court of Appeals and Manuel
6

vs. Philippine National Bank, et al.7

On the other side, the private respondent, in support of the appellate court's decision, states that the
sale of the contested property by the patentees to the petitioners disqualified the latter from being
legal heirs vis-a-vis the said property. As such, they (the petitioners) no longer enjoy the right
granted to heirs under the provisions of Section 119 of the Public Land Act. 8

In fine, what need be determined and resolved here are: whether or not the petitioners have the right
to repurchase the contested property under Section 119 of the Public Land Act; and assuming the
answer to the question is in the affirmative, whether or not their right to repurchase had already
prescribed.

We rule for the petitioners. They are granted by the law the right to repurchase their property and
their right to do so subsists.

Section 119 of the Public Land Act, as amended, provides in full:

Sec. 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow,
or legal heirs within a period of five years from the date of the conveyance.

From the foregoing legal provision, it is explicit that only three classes of persons are bestowed the
right to repurchase — the applicant-patentee, his widow, or other legal heirs. Consequently, the
contention of the private respondent sustained by the respondent appellate court that the petitioners
do not belong to any of those classes of repurchasers because they acquired the property not
through inheritance but by sale, has no legal basis. The petitioners-spouses are the daughter and
son-in-law of the Encisos, patentees of the contested property. At the very least, petitioner Elena
Salenillas, being a child of the Encisos, is a "legal heir" of the latter. As such, and even on this score
alone, she may therefore validly repurchase. This must be so because Section 119 of the Public
Land Act, in speaking of "legal heirs," makes no distinction. Ubi lex non distinguit nec nos
distinguere debemos.

Moreover, to indorse the distinction made by the private respondent and the appellate court would
be to contravene the very purpose of Section 119 of the Public Land Act which is to give the
homesteader or patentee every chance to preserve for himself and his family the land that the State
had gratuitously given him as a reward for his labor in clearing and cultivating it. Considering that
9

petitioner Salenillas is a daughter of the spouses Florencia H. Enciso and Miguel Enciso, there is no
gainsaying that allowing her (Elena) and her husband to repurchase the property would be more in
keeping with the spirit of the law. We have time and again said that between two statutory
interpretations, that which better serves the purpose of the law should prevail.

Guided by the same purpose of the law, and proceeding to the other issue here raised, we rule that
the five-year period for the petitioners to repurchase their property had not yet prescribed.

The case of Monge et al. vs. Angeles, et al., cited as authority by the respondent Court of Appeals
10

is inapplicable to the present controversy. The facts obtaining there are substantially different from
those in this case. In Monge the conveyance involved was a pacto de retro sale and not a
foreclosure sale. More importantly, the question raised there was whether the five-year period
provided for in Section 119 "should be counted from the date of the sale even if the same is with an
option to repurchase or from the date the ownership of the land has become consolidated in favor of
the purchaser because of the homesteader's failure to redeem it. It is therefore understandable
11

why the Court ruled there as it did. A sale on pacto de retro immediately vests title, ownership, and,
generally possession over the property on the vendee a retro, subject only to the right of the
vendor a retro to repurchase within the stipulated period. It is an absolute sale with a resolutory
condition.

The cases pointed to by the petitioner in support of their position, on the other hand, present facts
12

that are quite identical to those in the case at bar. Both cases involved properties the titles over
which were obtained either through homestead or free patent. These properties were mortgaged to a
bank as collateral for loans, and, upon failure of the owners to pay their indebtedness, the
mortgages were foreclosed. In both instances, the Court ruled that the five-year period to.
repurchase a homestead sold at public auction or foreclosure sale under Act 3135 begins on the day
after the expiration of the period of redemption when the deed of absolute sale is executed thereby
formally transferring the property to the purchaser, and not otherwise. Taking into account that the
mortgage was foreclosed and the mortgaged property sold at a public auction to the private
respondent on February 27, 1981, with the "Sheriff's Final Deed" issued on July 12, 1983, the two
offers of the petitioners to repurchase the first on November 17, 1983, and the second, formally, on
August 31, 1984 were both made within the prescribed five-year period.

Now, as regards the redemption price, applying Sec. 30 of Rule 39 of the Revised Rules of Court,
the petitioners should reimburse the private respondent the amount of the purchase price at the
public auction plus interest at the rate of one per centum per month up to November 17, 1983,
together with the amounts of assessments and taxes on the property that the private respondent
might have paid after purchase and interest on the last named amount at the same rate as that on
the purchase price. 13

WHEREFORE, the petition is GRANTED. The Decision dated September 17, 1986, and the
Resolution dated May 7, 1987 of the Court of Appeals, and the Orders dated September 22, 1983,
October 12, 1984, and October 22, 1984 of the Regional Trial Court of Daet, Camarines Norte, are
hereby REVERSED and SET ASIDE, and another one ENTERED directing the private respondent
to reconvey the subject property and to execute the corresponding deed of reconveyance therefor in
favor of the petitioners upon the return to him by the latter of the purchase price and the amounts, if
any, of assessments or taxes he paid plus interest of one (1%) per centum per month on both
amounts up to November 17, 1983.

No costs.

SO ORDERED.

Melencio-Herrera (Chairperson), Paras, Padilla and Regalado, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-2873 February 28, 1950

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
EUGENIO GARCIA Y MADRIGAL, defendant-appellant.

Dominador A. Alafriz for appellant.

First Assistant Solicitor General Roberto A. Gianzon and Solicitor Rafael P. Cañiza for appellee.

TUASON, J.:

The sole question presented on this appeal is whether the appellant, being 17 years of age at the
time of at the time of the commission of the crime, was entitled to the privileged mitigating
circumstance of article 68, paragraph 2, of the Revised Penal Code. The lower court, ignoring
defendant's minority, sentenced him to an indeterminate penalty of from 4 years, 2 months and 1
day of prision correccional to 8 years of prision mayor for the crime of robbery of which he was
found guilty. He was also sentenced to pay the offended party, jointly and severally with the other
accused, the sum of P85 as indemnity.

Republic Act No. 47, which amended article 80 of the Revised Penal Code by reducing from 18 to 16
the age below which accused have to "be committed to the custody or care of a public or private,
benevolent or charitable institution," instead of being convicted and sentenced to prison, has given
rise to the controversy. The Solicitor General believes that the amendment by implication has also
amended paragraph 2 of article 68 of the Revised Pena Code, which provides that when the
offender is over fifteen and under eighteen years age, "The penalty next lower than that prescribed
by law shall be imposed, but always in the proper period."

There are well recognized rules of statutory construction which are against the Government's
contention.

One of these rules is that all parts of a statute are to be harmonized and reconciled so that effect
may be given to each and every part thereof, and that conflicting intention in the same statute are
never to be supposed or so regarded, unless forced upon the court by an unambiguous language.
(59 C. J., 999.)

This rule applies in the construction of a statute and its amendment, both being read together as
whole. "An amended act is ordinarily to be construed as if the original statute has been repealed,
and a new and independent act in the amended form had been adopted in its stead; or, as frequently
stated by the courts, so far as regards any action after the adoption of the amendment, as if the
statute had been originally enacted in its amended form the amendment becomes a part of the
original statute as if it had always been contained therein, unless such amendment involves the
abrogation of contractual relations between the state and others. Where an amendment leaves
certain portions of the original act unchanged, such portions are continued in force, with the same
meaning and effect they had before the amendment. So where an amendatory act provides that an
existing statute shall be amended to read as recited in the amendatory act, such portions of the
existing law as are retained, either literally or substantially, are regarded as a continuation of the
existing law, and not as a new enactment." (59 C. J., 1096, 1097.)

We find no irreconcilable conflict between article 68, paragraph 2, as it nowstands and article 80 as
amended. There is no incompatibility between granting accused of the ages of 15 to 18 a privileged
mitigating circumstance and fixing at 16 the maximum age of persons who are to be placed in a
reformatory institution. In other words, there is no inconsistency between sending defendants of
certain ages to prison and giving them a penalty lower than the imposable one on adults under the
same or similar circumstances. Let it be remember that the privilege of article 68, supra, is not by its
nature inherent in age but purely statutory and conventional, and that this privilege is granted adult
offenders under given conditions.
At least there is no clear intention on the part of the Congress to amend article 68. Indeed the
rational presumption is that if there had been such an intention the lawmakers should have said so
expressly, instead of leaving the change to inference.

One other rule of interpretation that quarrels with the theory of implied repeal or amendment is that
penal law is to be construed, in case of doubt, strictly against the state. "Criminal and penal statutes
must be strictly construed, that is, they cannot be enlarged or extended by intendment, implication,
or by any equitable considerations. In other words, the language cannot be enlarged beyond the
ordinary meaning of its terms in order to carry into effect the general purpose for which the statute
was enacted. Only those persons, offenses, and penalties, clearly included, beyond any reasonable
doubt, will be considered within the statute's operation. They must come clearly within both the spirit
and the letter of the statute, and where there is any reasonable doubt, it must be resolved in favor of
the person accused of violating the statute; that is, all questions in doubt will be resolved in favor of
those from whom the penalty is sought." (Statutory Construction, Crawford, pp. 460-462.)

The offense charged in the information of which the appellant was found guilty is punishable under
article 294, case No. 5, of the Revised Penal Code, as amended by section 6 of Republic Act No.
18, with prision correccional in its maximum period to prision mayor in its medium period. The
penalty one degree lower than this is arresto mayor in its maximum period to prision correccional in
its medium period. There being no modifying circumstance, the appropriate penalty in the present
case is from 6 months and 1 day of arresto mayor to 2 years and 4 months of prision
correccional. Being entitled to an indeterminate penalty as provided in section 1 of Act No. L-4103 as
amended, the accused should be, and he is hereby sentenced to imprisonment of not less than 4
months of arresto mayor and not more than 2 years and 4 months of prision correccional. In all other
respect the appealed judgment is affirmed. The appellant will pay the costs of this appeal.

Moran, C.J., Ozaeta, Pablo, Bengzon, Padilla, Montemayor, Reyes and Torres, JJ., concur.

RESOLUTION ON MOTION FOR RECONSIDERATION

April 12, 1950

TUASON, J.:

This is a motion for reconsideration of our decision.

The main theme of the Solicitor General's argument is that articles 13 (2) and 68 (2) of the Revised
Penal code "complement each other;" that "the application of article 68 takes place only when the
court has to render judgment and impose a penalty upon a minor who has been proceeded against
in accordance with article 80 and who had misbehaved or is found incorrigible," and that "article 80
must be applied first before article 68 can come into operation, and the court can not apply the latter
article in total disregard of the former." In short, as we infer from this line of reasoning, what article
80 does not touch, article 68 can not touch.

We do not think the premise and conclusion of the motion are correct. There seems to be a
confusion of ideas.

It may do us well to make brief review of the legislation, past and present, relative to juvenile
offenders and dissect and analyze its various provisions and the differences between them and the
role assigned to each. .

Article 68 of the Revised Penal code provides:.

Penalty to be imposed upon a person under eighteen years of age. — When the offender is
a minor under eighteen years and his case is one coming under the provisions of the
paragraph next to the last of article 80 of this Code, the following rules shall be observed:

1. Upon a person under fifteen but over nine years of age, who is not exempted from liability
by reason of the court having declared that he acted with discernment, a discretionary
penalty shall be imposed, but always lower by two degrees at least than that prescribed by
law for the crime which he committed.

2. Upon a person over fifteen and under eighteen years of the penalty next lower than that
prescribed by law shall be imposed but always in the proper period.
Sub-paragraph 1 and 2 of the foregoing article are a reproduction of article 85 of the Spanish Penal
Code.

Into the Revised Penal Code, the Juvenile Delinquency Act was incorporated. It has become in the
new code article 80, the first paragraph of which provides that "whenever a minor under 18 years of
age, of either sex, be accused of a crime, the court . . . shall commit such minor to the custody or
care of a public or private, benevolent or charitable, institution, etc." And in the paragraph
immediately preceding the last, it is further provided that "In case the minor fails to behave properly
or to comply with the regulation of the institution to which he has been committed, or with the
conditions imposed upon him when he was committed to the care of a responsible person, or in case
he should be found incorrigible or his continued stay in such institution should be inadvisable, he
shall be returned to the court in order that the same may render the judgment corresponding to the
crime committed by him."

The latest legislation on the subject was Republic Act No. 47, which amended article 80 of the
Revised Penal Code so as to reduce to below 16 the age of minors coming within its purview.

A close examination of articles 68 and 80 will disclose that article 68, according to its main
paragraph, is to lay off and watch while the minor is in the hands of a charitable institution or person
mentioned in article 80 trying to reform him or her. This has to be so because article 68 is a rule for
the application of penalties, and there is no penalty when there is no judgment when the delinquent
is in Welfareville or other place of similar character or entrusted to the care of a private person.
However, if and when the minor turns out to be hopeless or incorrigible, he is returned to the proper
court and the court passes sentence on him or her. In other words, article 80 withdraws, as it were,
and sub-paragraph 1 and 2, as the case maybe, of article 68 takes control.

From this it will be seen that article 68 is not dependent on article 80, nor do these articles
complement each other if by complement is meant that they are two mutually completing parts so
that article 68 could not stand without article 80. It is more appropriate to say that article 68 merely
adjusts itself to article 80 but is, in all other respects, self-sufficient and independent of the latter.
Parts of one system of penology and working in coordination with each other, they pursue different
ends. It is to be noticed that article 68 falls under section 2 of Chapter IV entitled "Application of
Penalties," while article 80 comes under section 1 of Chapter V entitled "Execution and Service of
Penalties." Two different subjects, these.

It will also be seen that article 68, sub-paragraphs 1 and 2, and article 80 of the Revised Penal Code
do not function at the same time and are designed for different purposes. Each has its assigned,
separate sphere of action without in any way intermingling with the other. When article 80 operates,
article 68 keeps out of the way; article 68 steps in when article 80 steps out.

While a minor is in the process of being reformed he is, in a manner of speaking, in an intermediate
or indeterminate state, neither in prison nor free. Through repentance and by observing good
conduct, he is rewarded with freedom, released upon reaching the age of majority or before, but if he
shows no promise of turning a new leaf, Bilibid claims him.

It is the minors so situated; it is selection of two should be committed to are formatory school or to
the custody of a private person with which article 80 has to do, and no more. Article 80 does not
concern itself with what should be done with minors when they are consigned to jail because of
misbehavior; much less is it concerned over minors who, after the passage of Republic Act No. 47,
are condemned to prison without having been under the custody of a benevolent institution or private
person like youths between 16 and 18. On the other hand, article 68 is intended for minors who are
sent to jail, a matter foreign to the province of article 80.

To press the argument further, article 85 of the original Penal Code conferred upon minors under 18
the right to a penalty. Then came the Juvenile Delinquency Act giving additional concession to
juvenile delinquents. When, later, Republic Act No. 47 amended article 80 so as to eliminate from its
beneficent provisions minor of the age of 16 or over and under 18, the logical effect of the
amendment can no other than to correspondingly reduce the age of minors regarding whom the
suspensory inhibition on article 68 is to be confined. Only to the extent and within the limits that
article 80 applies is article 68 bound to defer to that article. Where article 80 does not apply article 68
is supreme. When article 80 says that it will deal only with minors below 16, it relinquishes authority
over minors above that age in favor of article 68. When and if article 80 should by amendment
further reduce the age to 15, to that extent the operation of article 68 will be correspondingly
enlarged.

In fact, if Republic Act No. 47, instead of limiting the operation of article 80 to minors under 16, had
totally abolished the scheme of juvenile reformation, sub-paragraphs 1 and 2 of article 68 of the
Revised Penal Code would, in our opinion, remain intact, with the only difference that, as before,
they would have full sway, unhampered by any consideration of suspended judgment. The
predecessor of article 68 was in the original Penal Code since that code was put in force in Spain in
1870 and in the Philippines in 1884, long before the idea embodied in article 80 was conceived.
Before the Revised Penal Code went into effect, article 85 of the old Penal Code and the Juvenile
Delinquency Act worked in the manner herein set forth although there was not any express provision
coordinating their operation. It can safely be said that the main paragraph of article 68 was inserted
merely to explain in clear and express terms when it should stand aloof and when it should play its
role. The Revised Penal Code merely states the obvious as befits a scientific system of law.

In conclusion, when Republic Act No. 47 amended article 80 of the Revised Penal Code by reducing
the age of persons who may be placed on probation under that article, the amendment did not
change in any form or manner the degree of punishment that should be meted out to those who are
to be committed to jail or how they are to treated. After the minor is turned over to the court for
sentence, article 80 ceases to have any interest in him or her. In saying that the 16-and 18-year old
should no longer be given a trial or placed on probation in a reformatory institution but should go
straight to prison upon conviction, Republic Act No. 47 does not, by implication or otherwise,
connote that such minors should also be deprived of a reduced penalty. In no standard of statutory
construction is there support for the proposition that the mitigating circumstance which minors
between 16 and 18 enjoyed before Republic Act No. 47 came into being, notwithstanding the fact
that they had shown evidence of incorrigibility, should be denied them now for no other reason than
that the right to be committed to a reformatory school has been taken away from them; now that they
are confined in jail without having committed any fault other than the crime for which they were
prosecuted in the first instance.

Let it be remembered that by virtue of the amendment minors between 16 and 18 do not now come
under the provisions of the paragraph next to the last of article 80.

Of course, the effect of a law amendment would different if the amendatory law had absorbed the
law which it had amended. In that case, the original law become part and parcel of the new law, with
the result that if the amendatory law be later repealed, both that law and the law which it had
superseded or amended would be considered abrogated. There was no law of its own force could
survive. But, as we have indicated, article 68 as well as its predecessor is an independent provision
and has not been merged with article 80 or any other article of the Revised Penal code. It is an
independent provision inoperative only during the suspension of the sentence but possessing all the
vigor which article 85 of Spanish Code had, when the minors are sentenced to jail.

In the decision sought to be reconsidered, we emphasize the rule of statutory construction to the
effect that all parts of a statute are to be harmonized and reconciled so that effect may be given to
each and every part thereof, and that conflicting intentions in the same statute are never to be
supposed or so regarded, unless forced upon the court by an unambiguous language. (59 C. J.,
999.) The motion for reconsideration has not pointed to any conflict, and we can not find any,
between the retention of the privileged or special mitigating circumstance in favor of minors below 18
and over 16 and the fact that such minors are not entitled to the benefits of article 80 under any
circumstances. The motion for reconsideration is conspicuous for its silence on any incongruity or
absurdity that might result from our ruling on the scope and extent of Republic Act No. 47.

The sole consideration that might commend itself in favor of the Government's position is the general
welfare. For the good of society it may have been better if Republic Act No. 47 had amended articles
13 and 68 also by correspondingly reducing the age of accused minors entitled to a mitigating
circumstance by reason of age. But it is write to say that we are not authorized to insert into a law
what we think should be in it or to supply what we think the legislature would have supplied if its
attention had been called to the omission. This is specially true in penal legislation which, as we
have repeatedly stressed in our decision, has to be construed strictly. But there is not even room for
construction in this case. The preamble or explanatory note to Republic Act No. 47 can not be used
as basis for giving it an meaning not apparent on its face. A preamble or explanatory not is resorted
to only for clarification in cases of doubt. There is no ambiguity in Republic Act No. 47.

The motion and the request to set it for oral argument are denied.

Moran, C.J., Ozaeta, Pablo, Bengzon, Montemayor, Reyes and Torres, JJ., concur.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-7995 May 31, 1957

LAO H. ICHONG, in his own behalf and in behalf of other alien residents, corporations and
partnerships adversely affected. by Republic Act No. 1180, petitioner,
vs.
JAIME HERNANDEZ, Secretary of Finance, and MARCELINO SARMIENTO, City Treasurer of
Manila, respondents.

Ozaeta, Lichauco and Picazo and Sycip, Quisumbing, Salazar and Associates for petitioner.
Office of the Solicitor General Ambrosio Padilla and Solicitor Pacifico P. de Castro for respondent
Secretary of Finance.
City Fiscal Eugenio Angeles and Assistant City Fiscal Eulogio S. Serrano for respondent City
Treasurer.
Dionisio Reyes as Amicus Curiae.
Marcial G. Mendiola as Amicus Curiae.
Emiliano R. Navarro as Amicus Curiae.

LABRADOR, J.:

I. The case and issue, in general

This Court has before it the delicate task of passing upon the validity and constitutionality of a
legislative enactment, fundamental and far-reaching in significance. The enactment poses questions
of due process, police power and equal protection of the laws. It also poses an important issue of
fact, that is whether the conditions which the disputed law purports to remedy really or actually exist.
Admittedly springing from a deep, militant, and positive nationalistic impulse, the law purports to
protect citizen and country from the alien retailer. Through it, and within the field of economy it
regulates, Congress attempts to translate national aspirations for economic independence and
national security, rooted in the drive and urge for national survival and welfare, into a concrete and
tangible measures designed to free the national retailer from the competing dominance of the alien,
so that the country and the nation may be free from a supposed economic dependence and
bondage. Do the facts and circumstances justify the enactment?

II. Pertinent provisions of Republic Act No. 1180

Republic Act No. 1180 is entitled "An Act to Regulate the Retail Business." In effect it nationalizes
the retail trade business. The main provisions of the Act are: (1) a prohibition against persons, not
citizens of the Philippines, and against associations, partnerships, or corporations the capital of
which are not wholly owned by citizens of the Philippines, from engaging directly or indirectly in the
retail trade; (2) an exception from the above prohibition in favor of aliens actually engaged in said
business on May 15, 1954, who are allowed to continue to engaged therein, unless their licenses are
forfeited in accordance with the law, until their death or voluntary retirement in case of natural
persons, and for ten years after the approval of the Act or until the expiration of term in case of
juridical persons; (3) an exception therefrom in favor of citizens and juridical entities of the United
States; (4) a provision for the forfeiture of licenses (to engage in the retail business) for violation of
the laws on nationalization, control weights and measures and labor and other laws relating to trade,
commerce and industry; (5) a prohibition against the establishment or opening by aliens actually
engaged in the retail business of additional stores or branches of retail business, (6) a provision
requiring aliens actually engaged in the retail business to present for registration with the proper
authorities a verified statement concerning their businesses, giving, among other matters, the nature
of the business, their assets and liabilities and their offices and principal offices of judicial entities;
and (7) a provision allowing the heirs of aliens now engaged in the retail business who die, to
continue such business for a period of six months for purposes of liquidation.
 III. Grounds upon which petition is based-Answer thereto

Petitioner, for and in his own behalf and on behalf of other alien residents corporations and
partnerships adversely affected by the provisions of Republic Act. No. 1180, brought this action to
obtain a judicial declaration that said Act is unconstitutional, and to enjoin the Secretary of Finance
and all other persons acting under him, particularly city and municipal treasurers, from enforcing its
provisions. Petitioner attacks the constitutionality of the Act, contending that: (1) it denies to alien
residents the equal protection of the laws and deprives of their liberty and property without due
process of law ; (2) the subject of the Act is not expressed or comprehended in the title thereof; (3)
the Act violates international and treaty obligations of the Republic of the Philippines; (4) the
provisions of the Act against the transmission by aliens of their retail business thru hereditary
succession, and those requiring 100% Filipino capitalization for a corporation or entity to entitle it to
engage in the retail business, violate the spirit of Sections 1 and 5, Article XIII and Section 8 of
Article XIV of the Constitution.

In answer, the Solicitor-General and the Fiscal of the City of Manila contend that: (1) the Act was
passed in the valid exercise of the police power of the State, which exercise is authorized in the
Constitution in the interest of national economic survival; (2) the Act has only one subject embraced
in the title; (3) no treaty or international obligations are infringed; (4) as regards hereditary
succession, only the form is affected but the value of the property is not impaired, and the institution
of inheritance is only of statutory origin.

IV. Preliminary consideration of legal principles involved

a. The police power. —

There is no question that the Act was approved in the exercise of the police power, but petitioner
claims that its exercise in this instance is attended by a violation of the constitutional requirements of
due process and equal protection of the laws. But before proceeding to the consideration and
resolution of the ultimate issue involved, it would be well to bear in mind certain basic and
fundamental, albeit preliminary, considerations in the determination of the ever recurrent conflict
between police power and the guarantees of due process and equal protection of the laws. What is
the scope of police power, and how are the due process and equal protection clauses related to it?
What is the province and power of the legislature, and what is the function and duty of the courts?
These consideration must be clearly and correctly understood that their application to the facts of the
case may be brought forth with clarity and the issue accordingly resolved.

It has been said the police power is so far - reaching in scope, that it has become almost impossible
to limit its sweep. As it derives its existence from the very existence of the State itself, it does not
need to be expressed or defined in its scope; it is said to be co-extensive with self-protection and
survival, and as such it is the most positive and active of all governmental processes, the most
essential, insistent and illimitable. Especially is it so under a modern democratic framework where
the demands of society and of nations have multiplied to almost unimaginable proportions; the field
and scope of police power has become almost boundless, just as the fields of public interest and
public welfare have become almost all-embracing and have transcended human foresight.
Otherwise stated, as we cannot foresee the needs and demands of public interest and welfare in this
constantly changing and progressive world, so we cannot delimit beforehand the extent or scope of
police power by which and through which the State seeks to attain or achieve interest or welfare. So
it is that Constitutions do not define the scope or extent of the police power of the State; what they
do is to set forth the limitations thereof. The most important of these are the due process clause and
the equal protection clause.

b. Limitations on police power. —

The basic limitations of due process and equal protection are found in the following provisions of our
Constitution:

SECTION 1.(1) No person shall be deprived of life, liberty or property without due process of
law, nor any person be denied the equal protection of the laws. (Article III, Phil. Constitution)

These constitutional guarantees which embody the essence of individual liberty and freedom in
democracies, are not limited to citizens alone but are admittedly universal in their application, without
regard to any differences of race, of color, or of nationality. (Yick Wo vs. Hopkins, 30, L. ed. 220,
226.)

c. The, equal protection clause. —

The equal protection of the law clause is against undue favor and individual or class privilege, as
well as hostile discrimination or the oppression of inequality. It is not intended to prohibit legislation,
which is limited either in the object to which it is directed or by territory within which is to operate. It
does not demand absolute equality among residents; it merely requires that all persons shall be
treated alike, under like circumstances and conditions both as to privileges conferred and liabilities
enforced. The equal protection clause is not infringed by legislation which applies only to those
persons falling within a specified class, if it applies alike to all persons within such class, and
reasonable grounds exists for making a distinction between those who fall within such class and
those who do not. (2 Cooley, Constitutional Limitations, 824-825.)

d. The due process clause. —

The due process clause has to do with the reasonableness of legislation enacted in pursuance of the
police power. Is there public interest, a public purpose; is public welfare involved? Is the Act
reasonably necessary for the accomplishment of the legislature's purpose; is it not unreasonable,
arbitrary or oppressive? Is there sufficient foundation or reason in connection with the matter
involved; or has there not been a capricious use of the legislative power? Can the aims conceived
be achieved by the means used, or is it not merely an unjustified interference with private interest?
These are the questions that we ask when the due process test is applied.

The conflict, therefore, between police power and the guarantees of due process and equal
protection of the laws is more apparent than real. Properly related, the power and the guarantees
are supposed to coexist. The balancing is the essence or, shall it be said, the indispensable means
for the attainment of legitimate aspirations of any democratic society. There can be no absolute
power, whoever exercise it, for that would be tyranny. Yet there can neither be absolute liberty, for
that would mean license and anarchy. So the State can deprive persons of life, liberty and property,
provided there is due process of law; and persons may be classified into classes and groups,
provided everyone is given the equal protection of the law. The test or standard, as always, is
reason. The police power legislation must be firmly grounded on public interest and welfare, and a
reasonable relation must exist between purposes and means. And if distinction and classification
has been made, there must be a reasonable basis for said distinction.

e. Legislative discretion not subject to judicial review. —

Now, in this matter of equitable balancing, what is the proper place and role of the courts? It must
not be overlooked, in the first place, that the legislature, which is the constitutional repository of
police power and exercises the prerogative of determining the policy of the State, is by force of
circumstances primarily the judge of necessity, adequacy or reasonableness and wisdom, of any law
promulgated in the exercise of the police power, or of the measures adopted to implement the public
policy or to achieve public interest. On the other hand, courts, although zealous guardians of
individual liberty and right, have nevertheless evinced a reluctance to interfere with the exercise of
the legislative prerogative. They have done so early where there has been a clear, patent or
palpable arbitrary and unreasonable abuse of the legislative prerogative. Moreover, courts are not
supposed to override legitimate policy, and courts never inquire into the wisdom of the law.

V. Economic problems sought to be remedied

With the above considerations in mind, we will now proceed to delve directly into the issue involved.
If the disputed legislation were merely a regulation, as its title indicates, there would be no question
that it falls within the legitimate scope of legislative power. But it goes further and prohibits a group of
residents, the aliens, from engaging therein. The problem becomes more complex because its
subject is a common, trade or occupation, as old as society itself, which from the immemorial has
always been open to residents, irrespective of race, color or citizenship.

a. Importance of retail trade in the economy of the nation. —

In a primitive economy where families produce all that they consume and consume all that they
produce, the dealer, of course, is unknown. But as group life develops and families begin to live in
communities producing more than what they consume and needing an infinite number of things they
do not produce, the dealer comes into existence. As villages develop into big communities and
specialization in production begins, the dealer's importance is enhanced. Under modern conditions
and standards of living, in which man's needs have multiplied and diversified to unlimited extents
and proportions, the retailer comes as essential as the producer, because thru him the infinite variety
of articles, goods and needed for daily life are placed within the easy reach of consumers. Retail
dealers perform the functions of capillaries in the human body, thru which all the needed food and
supplies are ministered to members of the communities comprising the nation.

There cannot be any question about the importance of the retailer in the life of the community. He
ministers to the resident's daily needs, food in all its increasing forms, and the various little gadgets
and things needed for home and daily life. He provides his customers around his store with the rice
or corn, the fish, the salt, the vinegar, the spices needed for the daily cooking. He has cloths to sell,
even the needle and the thread to sew them or darn the clothes that wear out. The retailer,
therefore, from the lowly peddler, the owner of a small sari-sari store, to the operator of a department
store or, a supermarket is so much a part of day-to-day existence.

b. The alien retailer's trait. —

The alien retailer must have started plying his trades in this country in the bigger centers of
population (Time there was when he was unknown in provincial towns and villages). Slowly but
gradually be invaded towns and villages; now he predominates in the cities and big centers of
population. He even pioneers, in far away nooks where the beginnings of community life appear,
ministering to the daily needs of the residents and purchasing their agricultural produce for sale in
the towns. It is an undeniable fact that in many communities the alien has replaced the native
retailer. He has shown in this trade, industry without limit, and the patience and forbearance of a
slave.

Derogatory epithets are hurled at him, but he laughs these off without murmur; insults of ill-bred and
insolent neighbors and customers are made in his face, but he heeds them not, and he forgets and
forgives. The community takes note of him, as he appears to be harmless and extremely useful.

c. Alleged alien control and dominance. —

There is a general feeling on the part of the public, which appears to be true to fact, about the
controlling and dominant position that the alien retailer holds in the nation's economy. Food and
other essentials, clothing, almost all articles of daily life reach the residents mostly through him. In
big cities and centers of population he has acquired not only predominance, but apparent control
over distribution of almost all kinds of goods, such as lumber, hardware, textiles, groceries, drugs,
sugar, flour, garlic, and scores of other goods and articles. And were it not for some national
corporations like the Naric, the Namarco, the Facomas and the Acefa, his control over principal
foods and products would easily become full and complete.

Petitioner denies that there is alien predominance and control in the retail trade. In one breath it is
said that the fear is unfounded and the threat is imagined; in another, it is charged that the law is
merely the result of radicalism and pure and unabashed nationalism. Alienage, it is said, is not an
element of control; also so many unmanageable factors in the retail business make control virtually
impossible. The first argument which brings up an issue of fact merits serious consideration. The
others are matters of opinion within the exclusive competence of the legislature and beyond our
prerogative to pass upon and decide.

The best evidence are the statistics on the retail trade, which put down the figures in black and
white. Between the constitutional convention year (1935), when the fear of alien domination and
control of the retail trade already filled the minds of our leaders with fears and misgivings, and the
year of the enactment of the nationalization of the retail trade act (1954), official statistics
unmistakably point out to the ever-increasing dominance and control by the alien of the retail trade,
as witness the following tables:

Assets Gross Sales

Year and No.- Per cent
Per cent
Retailers Establishment Pesos Distributio Pesos
Distribution
Nationality s n
1941:
Filipino ..... 106,671 200,323,138 55.82 174,181,924 51.74
.....
Chinese ... 15,356 118,348,692 32.98 148,813,239 44.21
........
Others ...... 1,646 40,187,090 11.20 13,630,239 4.05
......
1947:
Filipino ..... 111,107 208,658,946 65.05 279,583,333 57.03
.....
Chinese ... 13,774 106,156,218 33.56 205,701,134 41.96
........
Others ...... 354 8,761,260 .49 4,927,168 1.01
.....
1948: (Census)
Filipino ..... 113,631 213,342,264 67.30 467,161,667 60.51
.....
 Chinese ... 12,087 93,155,459 29.38 294,894,227 38.20
.......
Others ...... 422 10,514,675 3.32 9,995,402 1.29
....
1949:
Filipino ..... 113,659 213,451,602 60.89 462,532,901 53.47
.....
Chinese ... 16,248 125,223,336 35.72 392,414,875 45.36
.......
Others ...... 486 12,056,365 3.39 10,078,364 1.17
....
1951:
Filipino ..... 119,352 224,053,620 61.09 466,058,052 53.07
....
Chinese ... 17,429 134,325,303 36.60 404,481,384 46.06
.......
Others ...... 347 8,614,025 2.31 7,645,327 87
....

AVERAGE
ASSETS AND GROSS SALES PER ESTABLISHMENT
Item Gross
Year and Retailer's
Assets Sales
Nationality
(Pesos) (Pesos)
1941:
Filipino ............................................. 1,878 1,633
Chinese ............................................. 7,707 9,691
.
Others ............................................... 24,415 8,281
1947:
Filipino ............................................. 1,878 2,516
Chinese ........................................... 7,707 14,934
Others .............................................. 24,749 13,919
1948: (Census)
Filipino ............................................. 1,878 4,111
Chinese ............................................. 7,707 24,398
Others .............................................. 24,916 23,686
1949:
Filipino ............................................. 1,878 4,069
Chinese ............................................. 7,707 24,152
.
Others .............................................. 24,807 20,737
1951:
Filipino ............................................. 1,877 3,905
Chinese ............................................. 7,707 33,207
Others ............................................... 24,824 22,033

(Estimated Assets and Gross Sales of Retail Establishments, By Year and Nationality of
Owners, Benchmark: 1948 Census, issued by the Bureau of Census and Statistics,
Department of Commerce and Industry; pp. 18-19 of Answer.)

The above statistics do not include corporations and partnerships, while the figures on Filipino
establishments already include mere market vendors, whose capital is necessarily small..
The above figures reveal that in percentage distribution of assests and gross sales, alien
participation has steadily increased during the years. It is true, of course, that Filipinos have the
edge in the number of retailers, but aliens more than make up for the numerical gap through their
assests and gross sales which average between six and seven times those of the very many Filipino
retailers. Numbers in retailers, here, do not imply superiority; the alien invests more capital, buys and
sells six to seven times more, and gains much more. The same official report, pointing out to the
known predominance of foreign elements in the retail trade, remarks that the Filipino retailers were
largely engaged in minor retailer enterprises. As observed by respondents, the native investment is
thinly spread, and the Filipino retailer is practically helpless in matters of capital, credit, price and
supply.

d. Alien control and threat, subject of apprehension in Constitutional convention. —

It is this domination and control, which we believe has been sufficiently shown to exist, that is the
legislature's target in the enactment of the disputed nationalization would never have been adopted.
The framers of our Constitution also believed in the existence of this alien dominance and control
when they approved a resolution categorically declaring among other things, that "it is the sense of
the Convention that the public interest requires the nationalization of the retail trade; . . . ." (II
Aruego, The Framing of the Philippine Constitution, 662-663, quoted on page 67 of Petitioner.) That
was twenty-two years ago; and the events since then have not been either pleasant or comforting.
Dean Sinco of the University of the Philippines College of Law, commenting on the patrimony clause
of the Preamble opines that the fathers of our Constitution were merely translating the general
preoccupation of Filipinos "of the dangers from alien interests that had already brought under their
control the commercial and other economic activities of the country" (Sinco, Phil. Political Law, 10th
ed., p. 114); and analyzing the concern of the members of the constitutional convention for the
economic life of the citizens, in connection with the nationalistic provisions of the Constitution, he
says:

But there has been a general feeling that alien dominance over the economic life of the
country is not desirable and that if such a situation should remain, political independence
alone is no guarantee to national stability and strength. Filipino private capital is not big
enough to wrest from alien hands the control of the national economy. Moreover, it is but of
recent formation and hence, largely inexperienced, timid and hesitant. Under such
conditions, the government as the instrumentality of the national will, has to step in and
assume the initiative, if not the leadership, in the struggle for the economic freedom of the
nation in somewhat the same way that it did in the crusade for political freedom. Thus . . . it
(the Constitution) envisages an organized movement for the protection of the nation not only
against the possibilities of armed invasion but also against its economic subjugation by alien
interests in the economic field. (Phil. Political Law by Sinco, 10th ed., p. 476.)

Belief in the existence of alien control and predominance is felt in other quarters. Filipino
businessmen, manufacturers and producers believe so; they fear the dangers coming from alien
control, and they express sentiments of economic independence. Witness thereto is Resolution No.
1, approved on July 18, 1953, of the Fifth National convention of Filipino Businessmen, and a similar
resolution, approved on March 20, 1954, of the Second National Convention of Manufacturers and
Producers. The man in the street also believes, and fears, alien predominance and control; so our
newspapers, which have editorially pointed out not only to control but to alien stranglehold. We,
therefore, find alien domination and control to be a fact, a reality proved by official statistics, and felt
by all the sections and groups that compose the Filipino community.

e. Dangers of alien control and dominance in retail. —

But the dangers arising from alien participation in the retail trade does not seem to lie in the
predominance alone; there is a prevailing feeling that such predominance may truly endanger the
national interest. With ample capital, unity of purpose and action and thorough organization, alien
retailers and merchants can act in such complete unison and concert on such vital matters as the
fixing of prices, the determination of the amount of goods or articles to be made available in the
market, and even the choice of the goods or articles they would or would not patronize or distribute,
that fears of dislocation of the national economy and of the complete subservience of national
economy and of the consuming public are not entirely unfounded. Nationals, producers and
consumers alike can be placed completely at their mercy. This is easily illustrated. Suppose an
article of daily use is desired to be prescribed by the aliens, because the producer or importer does
not offer them sufficient profits, or because a new competing article offers bigger profits for its
introduction. All that aliens would do is to agree to refuse to sell the first article, eliminating it from
their stocks, offering the new one as a substitute. Hence, the producers or importers of the
prescribed article, or its consumers, find the article suddenly out of the prescribed article, or its
consumers, find the article suddenly out of circulation. Freedom of trade is thus curtailed and free
enterprise correspondingly suppressed.
We can even go farther than theoretical illustrations to show the pernicious influences of alien
domination. Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact
within judicial notice, which courts of justice may not properly overlook or ignore in the interests of
truth and justice, that there exists a general feeling on the part of the public that alien participation in
the retail trade has been attended by a pernicious and intolerable practices, the mention of a few of
which would suffice for our purposes; that at some time or other they have cornered the market of
essential commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to
unreasonable proportions; that they have hoarded essential foods to the inconvenience and
prejudice of the consuming public, so much so that the Government has had to establish the
National Rice and Corn Corporation to save the public from their continuous hoarding practices and
tendencies; that they have violated price control laws, especially on foods and essential
commodities, such that the legislature had to enact a law (Sec. 9, Republic Act No. 1168),
authorizing their immediate and automatic deportation for price control convictions; that they have
secret combinations among themselves to control prices, cheating the operation of the law of supply
and demand; that they have connived to boycott honest merchants and traders who would not cater
or yield to their demands, in unlawful restraint of freedom of trade and enterprise. They are believed
by the public to have evaded tax laws, smuggled goods and money into and out of the land, violated
import and export prohibitions, control laws and the like, in derision and contempt of lawful authority.
It is also believed that they have engaged in corrupting public officials with fabulous bribes, indirectly
causing the prevalence of graft and corruption in the Government. As a matter of fact appeals to
unscrupulous aliens have been made both by the Government and by their own lawful diplomatic
representatives, action which impliedly admits a prevailing feeling about the existence of many of the
above practices.

The circumstances above set forth create well founded fears that worse things may come in the
future. The present dominance of the alien retailer, especially in the big centers of population,
therefore, becomes a potential source of danger on occasions of war or other calamity. We do not
have here in this country isolated groups of harmless aliens retailing goods among nationals; what
we have are well organized and powerful groups that dominate the distribution of goods and
commodities in the communities and big centers of population. They owe no allegiance or loyalty to
the State, and the State cannot rely upon them in times of crisis or emergency. While the national
holds his life, his person and his property subject to the needs of his country, the alien may even
become the potential enemy of the State.

f. Law enacted in interest of national economic survival and security. —

We are fully satisfied upon a consideration of all the facts and circumstances that the disputed law is
not the product of racial hostility, prejudice or discrimination, but the expression of the legitimate
desire and determination of the people, thru their authorized representatives, to free the nation from
the economic situation that has unfortunately been saddled upon it rightly or wrongly, to its
disadvantage. The law is clearly in the interest of the public, nay of the national security itself, and
indisputably falls within the scope of police power, thru which and by which the State insures its
existence and security and the supreme welfare of its citizens.

VI. The Equal Protection Limitation

a. Objections to alien participation in retail trade. — The next question that now poses solution is,
Does the law deny the equal protection of the laws? As pointed out above, the mere fact of alienage
is the root and cause of the distinction between the alien and the national as a trader. The alien
resident owes allegiance to the country of his birth or his adopted country; his stay here is for
personal convenience; he is attracted by the lure of gain and profit. His aim or purpose of stay, we
admit, is neither illegitimate nor immoral, but he is naturally lacking in that spirit of loyalty and
enthusiasm for this country where he temporarily stays and makes his living, or of that spirit of
regard, sympathy and consideration for his Filipino customers as would prevent him from taking
advantage of their weakness and exploiting them. The faster he makes his pile, the earlier can the
alien go back to his beloved country and his beloved kin and countrymen. The experience of the
country is that the alien retailer has shown such utter disregard for his customers and the people on
whom he makes his profit, that it has been found necessary to adopt the legislation, radical as it may
seem.

Another objection to the alien retailer in this country is that he never really makes a genuine
contribution to national income and wealth. He undoubtedly contributes to general distribution, but
the gains and profits he makes are not invested in industries that would help the country's economy
and increase national wealth. The alien's interest in this country being merely transient and
temporary, it would indeed be ill-advised to continue entrusting the very important function of retail
distribution to his hands.

The practices resorted to by aliens in the control of distribution, as already pointed out above, their
secret manipulations of stocks of commodities and prices, their utter disregard of the welfare of their
customers and of the ultimate happiness of the people of the nation of which they are mere guests,
which practices, manipulations and disregard do not attend the exercise of the trade by the
nationals, show the existence of real and actual, positive and fundamental differences between an
alien and a national which fully justify the legislative classification adopted in the retail trade
measure. These differences are certainly a valid reason for the State to prefer the national over the
alien in the retail trade. We would be doing violence to fact and reality were we to hold that no
reason or ground for a legitimate distinction can be found between one and the other.

b. Difference in alien aims and purposes sufficient basis for distinction. —

The above objectionable characteristics of the exercise of the retail trade by the aliens, which are
actual and real, furnish sufficient grounds for legislative classification of retail traders into nationals
and aliens. Some may disagree with the wisdom of the legislature's classification. To this we answer,
that this is the prerogative of the law-making power. Since the Court finds that the classification is
actual, real and reasonable, and all persons of one class are treated alike, and as it cannot be said
that the classification is patently unreasonable and unfounded, it is in duty bound to declare that the
legislature acted within its legitimate prerogative and it can not declare that the act transcends the
limit of equal protection established by the Constitution.

Broadly speaking, the power of the legislature to make distinctions and classifications among
persons is not curtailed or denied by the equal protection of the laws clause. The legislative power
admits of a wide scope of discretion, and a law can be violative of the constitutional limitation only
when the classification is without reasonable basis. In addition to the authorities we have earlier
cited, we can also refer to the case of Linsey vs. Natural Carbonic Fas Co. (1911), 55 L. ed., 369,
which clearly and succinctly defined the application of equal protection clause to a law sought to be
voided as contrary thereto:

. . . . "1. The equal protection clause of the Fourteenth Amendment does not take from the
state the power to classify in the adoption of police laws, but admits of the exercise of the
wide scope of discretion in that regard, and avoids what is done only when it is without any
reasonable basis, and therefore is purely arbitrary. 2. A classification having some
reasonable basis does not offend against that clause merely because it is not made with
mathematical nicety, or because in practice it results in some inequality. 3. When the
classification in such a law is called in question, if any state of facts reasonably can be
conceived that would sustain it, the existence of that state of facts at the time the law was
enacted must be assumed. 4. One who assails the classification in such a law must carry the
burden of showing that it does not rest upon any reasonable basis but is essentially
arbitrary."

c. Authorities recognizing citizenship as basis for classification. —

The question as to whether or not citizenship is a legal and valid ground for classification has
already been affirmatively decided in this jurisdiction as well as in various courts in the United
States. In the case of Smith Bell & Co. vs. Natividad, 40 Phil. 136, where the validity of Act No. 2761
of the Philippine Legislature was in issue, because of a condition therein limiting the ownership of
vessels engaged in coastwise trade to corporations formed by citizens of the Philippine Islands or
the United States, thus denying the right to aliens, it was held that the Philippine Legislature did not
violate the equal protection clause of the Philippine Bill of Rights. The legislature in enacting the law
had as ultimate purpose the encouragement of Philippine shipbuilding and the safety for these
Islands from foreign interlopers. We held that this was a valid exercise of the police power, and all
presumptions are in favor of its constitutionality. In substance, we held that the limitation of domestic
ownership of vessels engaged in coastwise trade to citizens of the Philippines does not violate the
equal protection of the law and due process or law clauses of the Philippine Bill of Rights. In
rendering said decision we quoted with approval the concurring opinion of Justice Johnson in the
case of Gibbons vs. Ogden, 9 Wheat., I, as follows:

"Licensing acts, in fact, in legislation, are universally restraining acts; as, for example, acts
licensing gaming houses, retailers of spirituous liquors, etc. The act, in this instance, is
distinctly of that character, and forms part of an extensive system, the object of which is to
encourage American shipping, and place them on an equal footing with the shipping of other
nations. Almost every commercial nation reserves to its own subjects a monopoly of its
coasting trade; and a countervailing privilege in favor of American shipping is contemplated,
in the whole legislation of the United States on this subject. It is not to give the vessel an
American character, that the license is granted; that effect has been correctly attributed to
the act of her enrollment. But it is to confer on her American privileges, as contra
distinguished from foreign; and to preserve the Government from fraud by foreigners; in
surreptitiously intruding themselves into the American commercial marine, as well as frauds
upon the revenue in the trade coastwise, that this whole system is projected."

The rule in general is as follows:

 Aliens are under no special constitutional protection which forbids a classification otherwise
justified simply because the limitation of the class falls along the lines of nationality. That
would be requiring a higher degree of protection for aliens as a class than for similar classes
than for similar classes of American citizens. Broadly speaking, the difference in status
between citizens and aliens constitutes a basis for reasonable classification in the exercise
of police power. (2 Am., Jur. 468-469.)

In Commonwealth vs. Hana, 81 N. E. 149 (Massachusetts, 1907), a statute on the licensing of

hawkers and peddlers, which provided that no one can obtain a license unless he is, or has declared
his intention, to become a citizen of the United States, was held valid, for the following reason: It
may seem wise to the legislature to limit the business of those who are supposed to have regard for
the welfare, good order and happiness of the community, and the court cannot question this
judgment and conclusion. In Bloomfield vs. State, 99 N. E. 309 (Ohio, 1912), a statute which
prevented certain persons, among them aliens, from engaging in the traffic of liquors, was found not
to be the result of race hatred, or in hospitality, or a deliberate purpose to discriminate, but was
based on the belief that an alien cannot be sufficiently acquainted with "our institutions and our life
as to enable him to appreciate the relation of this particular business to our entire social fabric", and
was not, therefore, invalid. In Ohio ex rel. Clarke vs. Deckebach, 274 U. S. 392, 71 L. ed. 115
(1926), the U.S. Supreme Court had under consideration an ordinance of the city of Cincinnati
prohibiting the issuance of licenses (pools and billiard rooms) to aliens. It held that plainly irrational
discrimination against aliens is prohibited, but it does not follow that alien race and allegiance may
not bear in some instances such a relation to a legitimate object of legislation as to be made the
basis of permitted classification, and that it could not state that the legislation is clearly wrong; and
that latitude must be allowed for the legislative appraisement of local conditions and for the
legislative choice of methods for controlling an apprehended evil. The case of State vs. Carrol, 124
N. E. 129 (Ohio, 1919) is a parallel case to the one at bar. In Asakura vs. City of Seattle, 210 P. 30
(Washington, 1922), the business of pawn brooking was considered as having tendencies injuring
public interest, and limiting it to citizens is within the scope of police power. A similar statute denying
aliens the right to engage in auctioneering was also sustained in Wright vs. May, L.R.A., 1915 P. 151
(Minnesota, 1914). So also in Anton vs. Van Winkle, 297 F. 340 (Oregon, 1924), the court said that
aliens are judicially known to have different interests, knowledge, attitude, psychology and loyalty,
hence the prohibitions of issuance of licenses to them for the business of pawnbroker, pool, billiard,
card room, dance hall, is not an infringement of constitutional rights. In Templar vs. Michigan State
Board of Examiners, 90 N.W. 1058 (Michigan, 1902), a law prohibiting the licensing of aliens as
barbers was held void, but the reason for the decision was the court's findings that the exercise of
the business by the aliens does not in any way affect the morals, the health, or even the
convenience of the community. In Takahashi vs. Fish and Game Commission, 92 L. ed. 1479
(1947), a California statute banning the issuance of commercial fishing licenses to person ineligible
to citizenship was held void, because the law conflicts with Federal power over immigration, and
because there is no public interest in the mere claim of ownership of the waters and the fish in them,
so there was no adequate justification for the discrimination. It further added that the law was the
outgrowth of antagonism toward the persons of Japanese ancestry. However, two Justices
dissented on the theory that fishing rights have been treated traditionally as natural resources.
In Fraser vs. McConway & Tarley Co., 82 Fed. 257 (Pennsylvania, 1897), a state law which imposed
a tax on every employer of foreign-born unnaturalized male persons over 21 years of age, was
declared void because the court found that there was no reason for the classification and the tax
was an arbitrary deduction from the daily wage of an employee.

d. Authorities contra explained. —

It is true that some decisions of the Federal court and of the State courts in the United States hold
that the distinction between aliens and citizens is not a valid ground for classification. But in this
decision the laws declared invalid were found to be either arbitrary, unreasonable or capricious, or
were the result or product of racial antagonism and hostility, and there was no question of public
interest involved or pursued. In Yu Cong Eng vs. Trinidad, 70 L. ed. 1059 (1925), the United States
Supreme Court declared invalid a Philippine law making unlawful the keeping of books of account in
any language other than English, Spanish or any other local dialect, but the main reasons for the
decisions are: (1) that if Chinese were driven out of business there would be no other system of
distribution, and (2) that the Chinese would fall prey to all kinds of fraud, because they would be
deprived of their right to be advised of their business and to direct its conduct. The real reason for
the decision, therefore, is the court's belief that no public benefit would be derived from the
operations of the law and on the other hand it would deprive Chinese of something indispensable for
carrying on their business. In Yick Wo vs. Hopkins, 30 L. ed 220 (1885) an ordinance conferring
powers on officials to withhold consent in the operation of laundries both as to persons and place,
was declared invalid, but the court said that the power granted was arbitrary, that there was no
reason for the discrimination which attended the administration and implementation of the law, and
that the motive thereof was mere racial hostility. In State vs. Montgomery, 47 A. 165 (Maine, 1900),
a law prohibiting aliens to engage as hawkers and peddlers was declared void, because the
discrimination bore no reasonable and just relation to the act in respect to which the classification
was proposed.
The case at bar is radically different, and the facts make them so. As we already have said, aliens
do not naturally possess the sympathetic consideration and regard for the customers with whom
they come in daily contact, nor the patriotic desire to help bolster the nation's economy, except in so
far as it enhances their profit, nor the loyalty and allegiance which the national owes to the land.
These limitations on the qualifications of the aliens have been shown on many occasions and
instances, especially in times of crisis and emergency. We can do no better than borrow the
language of Anton vs. Van Winkle, 297 F. 340, 342, to drive home the reality and significance of the
distinction between the alien and the national, thus:

. . . . It may be judicially known, however, that alien coming into this country are without the
intimate knowledge of our laws, customs, and usages that our own people have. So it is
likewise known that certain classes of aliens are of different psychology from our fellow
countrymen. Furthermore, it is natural and reasonable to suppose that the foreign born,
whose allegiance is first to their own country, and whose ideals of governmental environment
and control have been engendered and formed under entirely different regimes and political
systems, have not the same inspiration for the public weal, nor are they as well disposed
toward the United States, as those who by citizenship, are a part of the government itself.
Further enlargement, is unnecessary. I have said enough so that obviously it cannot be
affirmed with absolute confidence that the Legislature was without plausible reason for
making the classification, and therefore appropriate discriminations against aliens as it
relates to the subject of legislation. . . . .

VII. The Due Process of Law Limitation.

a. Reasonability, the test of the limitation; determination by legislature decisive. —

We now come to due process as a limitation on the exercise of the police power. It has been stated
by the highest authority in the United States that:

. . . . And the guaranty of due process, as has often been held, demands only that the law
shall not be unreasonable, arbitrary or capricious, and that the means selected shall have a
real and substantial relation to the subject sought to be attained. . . . .

xxx xxx xxx

So far as the requirement of due process is concerned and in the absence of other
constitutional restriction a state is free to adopt whatever economic policy may reasonably be
deemed to promote public welfare, and to enforce that policy by legislation adapted to its
purpose. The courts are without authority either to declare such policy, or, when it is declared
by the legislature, to override it. If the laws passed are seen to have a reasonable relation to
a proper legislative purpose, and are neither arbitrary nor discriminatory, the requirements of
due process are satisfied, and judicial determination to that effect renders a court functus
officio. . . . (Nebbia vs. New York, 78 L. ed. 940, 950, 957.)

Another authority states the principle thus:

. . . . Too much significance cannot be given to the word "reasonable" in considering the
scope of the police power in a constitutional sense, for the test used to determine the
constitutionality of the means employed by the legislature is to inquire whether the restriction
it imposes on rights secured to individuals by the Bill of Rights are unreasonable, and not
whether it imposes any restrictions on such rights. . . .

xxx xxx xxx

. . . . A statute to be within this power must also be reasonable in its operation upon the
persons whom it affects, must not be for the annoyance of a particular class, and must not
be unduly oppressive. (11 Am. Jur. Sec. 302., 1:1)- 1074-1075.)

In the case of Lawton vs. Steele, 38 L. ed. 385, 388. it was also held:

. . . . To justify the state in thus interposing its authority in behalf of the public, it must appear,
first, that the interests of the public generally, as distinguished from those of a particular
class, require such interference; and second, that the means are reasonably necessary for
the accomplishment of the purpose, and not unduly oppressive upon individuals. . . .

Prata Undertaking Co. vs. State Board of Embalming, 104 ALR, 389, 395, fixes this test of
constitutionality:
 In determining whether a given act of the Legislature, passed in the exercise of the police
power to regulate the operation of a business, is or is not constitutional, one of the first
questions to be considered by the court is whether the power as exercised has a sufficient
foundation in reason in connection with the matter involved, or is an arbitrary, oppressive,
and capricious use of that power, without substantial relation to the health, safety, morals,
comfort, and general welfare of the public.

b. Petitioner's argument considered. —

Petitioner's main argument is that retail is a common, ordinary occupation, one of those privileges
long ago recognized as essential to the orderly pursuant of happiness by free men; that it is a gainful
and honest occupation and therefore beyond the power of the legislature to prohibit and penalized.
This arguments overlooks fact and reality and rests on an incorrect assumption and premise, i.e.,
that in this country where the occupation is engaged in by petitioner, it has been so engaged by him,
by the alien in an honest creditable and unimpeachable manner, without harm or injury to the
citizens and without ultimate danger to their economic peace, tranquility and welfare. But the
Legislature has found, as we have also found and indicated, that the privilege has been so grossly
abused by the alien, thru the illegitimate use of pernicious designs and practices, that he now enjoys
a monopolistic control of the occupation and threatens a deadly stranglehold on the nation's
economy endangering the national security in times of crisis and emergency.

The real question at issue, therefore, is not that posed by petitioner, which overlooks and ignores the
facts and circumstances, but this, Is the exclusion in the future of aliens from the retail trade
unreasonable. Arbitrary capricious, taking into account the illegitimate and pernicious form and
manner in which the aliens have heretofore engaged therein? As thus correctly stated the answer is
clear. The law in question is deemed absolutely necessary to bring about the desired legislative
objective, i.e., to free national economy from alien control and dominance. It is not necessarily
unreasonable because it affects private rights and privileges (11 Am. Jur. pp. 1080-1081.) The test
of reasonableness of a law is the appropriateness or adequacy under all circumstances of the
means adopted to carry out its purpose into effect (Id.) Judged by this test, disputed legislation,
which is not merely reasonable but actually necessary, must be considered not to have infringed the
constitutional limitation of reasonableness.

The necessity of the law in question is explained in the explanatory note that accompanied the bill,
which later was enacted into law:

This bill proposes to regulate the retail business. Its purpose is to prevent persons who are
not citizens of the Philippines from having a strangle hold upon our economic life. If the
persons who control this vital artery of our economic life are the ones who owe no allegiance
to this Republic, who have no profound devotion to our free institutions, and who have no
permanent stake in our people's welfare, we are not really the masters of our destiny. All
aspects of our life, even our national security, will be at the mercy of other people.

In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who
are not citizens of the Philippines of their means of livelihood. While this bill seeks to take
away from the hands of persons who are not citizens of the Philippines a power that can be
wielded to paralyze all aspects of our national life and endanger our national security it
respects existing rights.

The approval of this bill is necessary for our national survival.

If political independence is a legitimate aspiration of a people, then economic independence is none

the less legitimate. Freedom and liberty are not real and positive if the people are subject to the
economic control and domination of others, especially if not of their own race or country. The
removal and eradication of the shackles of foreign economic control and domination, is one of the
noblest motives that a national legislature may pursue. It is impossible to conceive that legislation
that seeks to bring it about can infringe the constitutional limitation of due process. The attainment of
a legitimate aspiration of a people can never be beyond the limits of legislative authority.

c. Law expressly held by Constitutional Convention to be within the sphere of legislative action. —

The framers of the Constitution could not have intended to impose the constitutional restrictions of
due process on the attainment of such a noble motive as freedom from economic control and
domination, thru the exercise of the police power. The fathers of the Constitution must have given to
the legislature full authority and power to enact legislation that would promote the supreme
happiness of the people, their freedom and liberty. On the precise issue now before us, they
expressly made their voice clear; they adopted a resolution expressing their belief that the legislation
in question is within the scope of the legislative power. Thus they declared the their Resolution:
 That it is the sense of the Convention that the public interest requires the nationalization of
retail trade; but it abstain from approving the amendment introduced by the Delegate for
Manila, Mr. Araneta, and others on this matter because it is convinced that the National
Assembly is authorized to promulgate a law which limits to Filipino and American citizens the
privilege to engage in the retail trade. (11 Aruego, The Framing of the Philippine
Constitution, quoted on pages 66 and 67 of the Memorandum for the Petitioner.)

It would do well to refer to the nationalistic tendency manifested in various provisions of the
Constitution. Thus in the preamble, a principle objective is the conservation of the patrimony of the
nation and as corollary the provision limiting to citizens of the Philippines the exploitation,
development and utilization of its natural resources. And in Section 8 of Article XIV, it is provided that
"no franchise, certificate, or any other form of authorization for the operation of the public utility shall
be granted except to citizens of the Philippines." The nationalization of the retail trade is only a
continuance of the nationalistic protective policy laid down as a primary objective of the Constitution.
Can it be said that a law imbued with the same purpose and spirit underlying many of the provisions
of the Constitution is unreasonable, invalid and unconstitutional?

The seriousness of the Legislature's concern for the plight of the nationals as manifested in the
approval of the radical measures is, therefore, fully justified. It would have been recreant to its duties
towards the country and its people would it view the sorry plight of the nationals with the
complacency and refuse or neglect to adopt a remedy commensurate with the demands of public
interest and national survival. As the repository of the sovereign power of legislation, the Legislature
was in duty bound to face the problem and meet, through adequate measures, the danger and threat
that alien domination of retail trade poses to national economy.

d. Provisions of law not unreasonable. —

A cursory study of the provisions of the law immediately reveals how tolerant, how reasonable the
Legislature has been. The law is made prospective and recognizes the right and privilege of those
already engaged in the occupation to continue therein during the rest of their lives; and similar
recognition of the right to continue is accorded associations of aliens. The right or privilege is denied
to those only upon conviction of certain offenses. In the deliberations of the Court on this case,
attention was called to the fact that the privilege should not have been denied to children and heirs
of aliens now engaged in the retail trade. Such provision would defeat the law itself, its aims and
purposes. Beside, the exercise of legislative discretion is not subject to judicial review. It is well
settled that the Court will not inquire into the motives of the Legislature, nor pass upon general
matters of legislative judgment. The Legislature is primarily the judge of the necessity of an
enactment or of any of its provisions, and every presumption is in favor of its validity, and though the
Court may hold views inconsistent with the wisdom of the law, it may not annul the legislation if not
palpably in excess of the legislative power. Furthermore, the test of the validity of a law attacked as
a violation of due process, is not its reasonableness, but its unreasonableness, and we find the
provisions are not unreasonable. These principles also answer various other arguments raised
against the law, some of which are: that the law does not promote general welfare; that thousands of
aliens would be thrown out of employment; that prices will increase because of the elimination of
competition; that there is no need for the legislation; that adequate replacement is problematical; that
there may be general breakdown; that there would be repercussions from foreigners; etc. Many of
these arguments are directed against the supposed wisdom of the law which lies solely within the
legislative prerogative; they do not import invalidity.

VIII. Alleged defect in the title of the law

A subordinate ground or reason for the alleged invalidity of the law is the claim that the title thereof is
misleading or deceptive, as it conceals the real purpose of the bill which is to nationalize the retail
business and prohibit aliens from engaging therein. The constitutional provision which is claimed to
be violated in Section 21 (1) of Article VI, which reads:

No bill which may be enacted in the law shall embrace more than one subject which shall be
expressed in the title of the bill.

What the above provision prohibits is duplicity, that is, if its title completely fails to appraise the
legislators or the public of the nature, scope and consequences of the law or its operation (I
Sutherland, Statutory Construction, Sec. 1707, p. 297.) A cursory consideration of the title and the
provisions of the bill fails to show the presence of duplicity. It is true that the term "regulate" does not
and may not readily and at first glance convey the idea of "nationalization" and "prohibition", which
terms express the two main purposes and objectives of the law. But "regulate" is a broader term
than either prohibition or nationalization. Both of these have always been included within the term
regulation.
 Under the title of an act to "regulate", the sale of intoxicating liquors, the Legislature may
prohibit the sale of intoxicating liquors. (Sweet vs. City of Wabash, 41 Ind., 7; quoted in page
41 of Answer.)

Within the meaning of the Constitution requiring that the subject of every act of the
Legislature shall be stated in the tale, the title to regulate the sale of intoxicating liquors, etc."
sufficiently expresses the subject of an act prohibiting the sale of such liquors to minors and
to persons in the habit of getting intoxicated; such matters being properly included within the
subject of regulating the sale. (Williams vs. State, 48 Ind. 306, 308, quoted in p. 42 of
Answer.)

The word "regulate" is of broad import, and necessarily implies some degree of restraint and
prohibition of acts usually done in connection with the thing to be regulated. While word
regulate does not ordinarily convey meaning of prohibit, there is no absolute reason why it
should not have such meaning when used in delegating police power in connection with a
thing the best or only efficacious regulation of which involves suppression. (State vs. Morton,
162 So. 718, 182 La. 887, quoted in p. 42 of Answer.)

The general rule is for the use of general terms in the title of a bill; it has also been said that the title
need not be an index to the entire contents of the law (I Sutherland, Statutory Construction, See.
4803, p. 345.) The above rule was followed the title of the Act in question adopted the more general
term "regulate" instead of "nationalize" or "prohibit". Furthermore, the law also contains other rules
for the regulation of the retail trade which may not be included in the terms "nationalization" or
"prohibition"; so were the title changed from "regulate" to "nationalize" or "prohibit", there would have
been many provisions not falling within the scope of the title which would have made the Act invalid.
The use of the term "regulate", therefore, is in accord with the principle governing the drafting of
statutes, under which a simple or general term should be adopted in the title, which would include all
other provisions found in the body of the Act.

One purpose of the constitutional directive that the subject of a bill should be embraced in its title is
to apprise the legislators of the purposes, the nature and scope of its provisions, and prevent the
enactment into law of matters which have received the notice, action and study of the legislators or
of the public. In the case at bar it cannot be claimed that the legislators have been appraised of the
nature of the law, especially the nationalization and the prohibition provisions. The legislators took
active interest in the discussion of the law, and a great many of the persons affected by the
prohibitions in the law conducted a campaign against its approval. It cannot be claimed, therefore,
that the reasons for declaring the law invalid ever existed. The objection must therefore, be
overruled.

IX. Alleged violation of international treaties and obligations

Another subordinate argument against the validity of the law is the supposed violation thereby of the
Charter of the United Nations and of the Declaration of the Human Rights adopted by the United
Nations General Assembly. We find no merit in the Nations Charter imposes no strict or legal
obligations regarding the rights and freedom of their subjects (Hans Kelsen, The Law of the United
Nations, 1951 ed. pp. 29-32), and the Declaration of Human Rights contains nothing more than a
mere recommendation or a common standard of achievement for all peoples and all nations (Id. p.
39.) That such is the import of the United Nations Charter aid of the Declaration of Human Rights
can be inferred the fact that members of the United Nations Organizations, such as Norway and
Denmark, prohibit foreigners from engaging in retail trade, and in most nations of the world laws
against foreigners engaged in domestic trade are adopted.

The Treaty of Amity between the Republic of the Philippines and the Republic of China of April 18,
1947 is also claimed to be violated by the law in question. All that the treaty guarantees is equality of
treatment to the Chinese nationals "upon the same terms as the nationals of any other country." But
the nationals of China are not discriminating against because nationals of all other countries, except
those of the United States, who are granted special rights by the Constitution, are all prohibited from
engaging in the retail trade. But even supposing that the law infringes upon the said treaty, the treaty
is always subject to qualification or amendment by a subsequent law (U. S. vs. Thompson, 258, Fed.
257, 260), and the same may never curtail or restrict the scope of the police power of the State
(plaston vs. Pennsylvania, 58 L. ed. 539.)

X. Conclusion

Resuming what we have set forth above we hold that the disputed law was enacted to remedy a real
actual threat and danger to national economy posed by alien dominance and control of the retail
business and free citizens and country from dominance and control; that the enactment clearly falls
within the scope of the police power of the State, thru which and by which it protects its own
personality and insures its security and future; that the law does not violate the equal protection
clause of the Constitution because sufficient grounds exist for the distinction between alien and
citizen in the exercise of the occupation regulated, nor the due process of law clause, because the
law is prospective in operation and recognizes the privilege of aliens already engaged in the
occupation and reasonably protects their privilege; that the wisdom and efficacy of the law to carry
out its objectives appear to us to be plainly evident — as a matter of fact it seems not only
appropriate but actually necessary — and that in any case such matter falls within the prerogative of
the Legislature, with whose power and discretion the Judicial department of the Government may
not interfere; that the provisions of the law are clearly embraced in the title, and this suffers from no
duplicity and has not misled the legislators or the segment of the population affected; and that it
cannot be said to be void for supposed conflict with treaty obligations because no treaty has actually
been entered into on the subject and the police power may not be curtailed or surrendered by any
treaty or any other conventional agreement.

Some members of the Court are of the opinion that the radical effects of the law could have been
made less harsh in its impact on the aliens. Thus it is stated that the more time should have been
given in the law for the liquidation of existing businesses when the time comes for them to close. Our
legal duty, however, is merely to determine if the law falls within the scope of legislative authority
and does not transcend the limitations of due process and equal protection guaranteed in the
Constitution. Remedies against the harshness of the law should be addressed to the Legislature;
they are beyond our power and jurisdiction.

The petition is hereby denied, with costs against petitioner.

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

Separate Opinions

PADILLA, J., concurring and dissenting:

I agree to the proposition, principle or rule that courts may not inquire into the wisdom of an the Act
passed by the Congress and duly approved by the President of the Republic. But the rule does not
preclude courts from inquiring and determining whether the Act offends against a provision or
provisions of the Constitution. I am satisfied that the Act assailed as violative of the due process of
law and the equal protection of the laws clauses of the Constitution does not infringe upon them,
insofar as it affects associations, partnership or corporations, the capital of which is not wholly
owned by the citizens of the Philippines, and aliens, who are not and have not been engaged in the
retail business. I am, however, unable to persuade myself that it does not violate said clauses
insofar as the Act applies to associations and partnerships referred to in the Act and to aliens, who
are and have heretofore been engaged in said business. When they did engage in the retail
business there was no prohibition on or against them to engage in it. They assumed and believed in
good faith they were entitled to engaged in the business. The Act allows aliens to continue in
business until their death or voluntary retirement from the business or forfeiture of their license; and
corporations, associations or partnership, the capital of which is not wholly owned by the citizens of
the Philippines to continue in the business for a period of ten years from the date of the approval of
the Act (19 June 1954) or until the expiry of term of the existence of the association or partnership or
corporation, whichever event comes first. The prohibition on corporations, the capital of which is not
wholly owned by citizens of the Philippines, to engage in the retail business for a period of more than
ten years from the date of the approval of the Act or beyond the term of their corporate existence,
whichever event comes first, is valid and lawful, because the continuance of the existence of such
corporations is subject to whatever the Congress may impose reasonably upon them by subsequent
legislation.1 But the prohibition to engage in the retail business by associations and partnerships, the
capital of which is not wholly owned by citizen of the Philippines, after ten years from the date of the
approval of the Act, even before the end of the term of their existence as agreed upon by the
associates and partners, and by alien heirs to whom the retail business is transmitted by the death of
an alien engaged in the business, or by his executor or administrator, amounts to a deprivation of
their property without due process of law. To my mind, the ten-year period from the date of the
approval of the Act or until the expiration of the term of the existence of the association and
partnership, whichever event comes first, and the six-month period granted to alien heirs of a
deceased alien, his executor or administrator, to liquidate the business, do not cure the defect of the
law, because the effect of the prohibition is to compel them to sell or dispose of their business. The
price obtainable at such forced sale of the business would be inadequate to reimburse and
compensate the associates or partners of the associations or partnership, and the alien heirs of a
deceased alien, engaged in the retail business for the capital invested in it. The stock of
merchandise bought and sold at retail does not alone constitute the business. The goodwill that the
association, partnership and the alien had built up during a long period of effort, patience and
perseverance forms part of such business. The constitutional provisions that no person shall be
deprived of his property without due process of law2 and that no person shall be denied the equal
protection of the laws3 would have no meaning as applied to associations or partnership and alien
heirs of an alien engaged in the retail business if they were to be compelled to sell or dispose of their
business within ten years from the date of the approval of the Act and before the end of the term of
the existence of the associations and partnership as agreed upon by the associations and partners
and within six months after the death of their predecessor-in-interest.

The authors of the Constitution were vigilant, careful and zealous in the safeguard of the ownership
of private agricultural lands which together with the lands of the public domain constitute the
priceless patrimony and mainstay of the nation; yet, they did not deem it wise and prudent to deprive
aliens and their heirs of such lands.4

For these reasons, I am of the opinion that section 1 of the Act, insofar as it compels associations
and partnership referred to therein to wind up their retail business within ten years from the date of
the approval of the Act even before the expiry of the term of their existence as agreed upon by the
associates and partners and section 3 of the Act, insofar as it compels the aliens engaged in the
retail business in his lifetime his executor or administrator, to liquidate the business, are invalid, for
they violate the due process of law and the equal protection of the laws clauses of the Constitution.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-44143 August 31, 1988

THE PEOPLE OF THE PHILIPPINES, plaintiff,

vs.
EUSEBIO NAZARIO, accused-appellant.

The Solicitor General for plaintiff-appellee.

Teofilo Ragodon for accused-appellant.

SARMIENTO, J.:

The petitioner was charged with violation of certain municipal ordinances of the municipal council of Pagbilao, in Quezon province. By way of
confession and avoidance, the petitioner would admit having committed the acts charged but would claim that the ordinances are
unconstitutional, or, assuming their constitutionality, that they do not apply to him in any event.

The facts are not disputed:

This defendant is charged of the crime of Violation of Municipal Ordinance in an

information filed by the provincial Fiscal, dated October 9, 1968, as follows:

That in the years 1964, 1965 and 1966, in the Municipality of

Pagbilao, Province of Quezon, Philippines, and within the jurisdiction
of this Honorable Court, the above-named accused, being then the
owner and operator of a fishpond situated in the barrio of
Pinagbayanan, of said municipality, did then and there willfully,
unlawfully and feloniously refuse and fail to pay the municipal taxes in
the total amount of THREE HUNDRED SIXTY TWO PESOS AND
SIXTY TWO CENTAVOS (P362.62), required of him as fishpond
operator as provided for under Ordinance No. 4, series of 1955, as
amended, inspite of repeated demands made upon him by the
Municipal Treasurer of Pagbilao, Quezon, to pay the same.

Contrary to law.

For the prosecution the following witnesses testified in substance as follows;

MIGUEL FRANCIA, 39 years of age, married, farmer and resident of Lopez, Quezon
—

In 1962 to 1967, I resided at Pinagbayanan, Pagbilao, Quezon. I know the accused

as I worked in his fishpond in 1962 to 1964. The fishpond of Nazario is at
Pinagbayanan, Pagbilao, Quezon. I worked in the clearing of the fishpond, the
construction of the dikes and the catching of fish.

On cross-examination, this witness declared:

I worked with the accused up to March 1964.

NICOLAS MACAROLAY, 65 years of age, married, copra maker and resident of
Pinagbayanan, Pagbilao, Quezon —

I resided at Pinagbayanan, Pagbilao, Quezon since 1959 up to the present. I know

the accused since 1959 when he opened a fishpond at Pinagbayanan, Pagbilao,
Quezon. He still operates the fishpond up to the present and I know this fact as I am
the barrio captain of Pinagbayanan.

On cross-examination, this witness declared:

I came to know the accused when he first operated his fishpond since 1959.

On re-direct examination, this witness declared:

I was present during the catching of fish in 1967 and the accused was there.

On re-cross examination, this witness declared:

I do not remember the month in 1962 when the accused caught fish.

RODOLFO R. ALVAREZ, 45 years old, municipal treasurer of Pagbilao, Quezon,

married —

As Municipal Treasurer I am in charge of tax collection. I know the accused even

before I was Municipal Treasurer of Pagbilao. I have written the accused a letter
asking him to pay his taxes (Exhibit B). Said letter was received by the accused as
per registry return receipt, Exhibit B-1. The letter demanded for payment of P362.00,
more or less, by way of taxes which he did not pay up to the present. The former
Treasurer, Ceferino Caparros, also wrote a letter of demand to the accused (Exhibit
C). On June 28, 1967, I sent a letter to the Fishery Commission (Exhibit D),
requesting information if accused paid taxes with that office. The Commission sent
me a certificate (Exhibits D-1, D-2 & D-3). The accused had a fishpond lease
agreement. The taxes unpaid were for the years 1964, 1965 and 1966.

On cross-examination, this witness declared:

I have demanded the taxes for 38.10 hectares.

On question of the court, this witness declared:

What I was collecting from the accused is the fee on fishpond operation, not rental.

The prosecution presented as part of their evidence Exhibits A, A-1, A-2, B, B-2, C,
D, D-1, D-2, D-3, E, F, F-1 and the same were admitted by the court, except Exhibits
D, D-1, D-2 and D-3 which were not admitted for being immaterial.

For the defense the accused EUSEBIO NAZARIO, 48 years of age, married, owner
and general manager of the ZIP Manufacturing Enterprises and resident of 4801 Old
Sta. Mesa, Sampaloc, Manila, declared in substance as follows:

I have lived in Sta. Mesa, Manila, since 1949. I buy my Residence Certificates at
Manila or at San Juan. In 1964, 1965 and 1966, I was living in Manila and my
business is in Manila and my family lives at Manila. I never resided at Pagbilao,
Quezon. I do not own a house at Pagbilao. I am a lessee of a fishpond located at
Pagbilao, Quezon, and I have a lease agreement to that effect with the Philippine
Fisheries Commission marked as Exhibit 1. In 1964, 1965 and 1966, the contract of
lease, Exhibit 1, was still existing and enforceable. The Ordinances Nos. 4, 15 and
12, series of 1955, 1965 and 1966, were translated into English by the Institute of
National Language to better understand the ordinances. There were exchange of
letters between me and the Municipal Treasurer of Pagbilao regarding the payment
of the taxes on my leased fishpond situated at Pagbilao. There was a letter of
demand for the payment of the taxes by the treasurer (Exhibit 3) which I received by
mail at my residence at Manila. I answered the letter of demand, Exhibit 3, with
Exhibit 3-A. I requested an inspection of my fishpond to determine its condition as it
was not then in operation. The Municipal Treasurer Alvarez went there once in 1967
and he found that it was destroyed by the typhoon and there were pictures taken
marked as Exhibits 4, 4-A, 4-B and 4C. I received another letter of demand, Exhibit
5, and I answered the same (Exhibit 5-A). I copied my reference quoted in Exhibit 5-
 A from Administrative Order No. 6, Exhibit 6. I received another letter of demand
from Tomas Ornedo, Acting Municipal Treasurer of Pagbilao, dated February 16,
1966, Exhibit 7, and I answered the same with the letter marked as Exhibit 7-A,
dated February 26, 1966. I received another letter of demand from Treasurer Alvarez
of Pagbilao, Exhibit 8, and I answered the same (Exhibit 8-A). In 1964, I went to
Treasurer Caparros to ask for an application for license tax and he said none and he
told me just to pay my taxes. I did not pay because up to now I do not know whether I
am covered by the Ordinance or not. The letters of demand asked me to pay
different amounts for taxes for the fishpond. Because under Sec. 2309 of the
Revised Administrative Code, municipal taxes lapse if not paid and they are
collecting on a lapsed ordinance. Because under the Tax Code, fishermen are
exempted from percentage tax and privilege tax. There is no law empowering the
municipality to pass ordinance taxing fishpond operators.

The defense presented as part of their evidence Exhibits 1, 2, 3, 3-A, 4, 4-B, 4-B, 4-
C, 5, 5-A, 6, 6-A, 6-B, 6-C, 7, 7-A, 8 and 8-A and the same were admitted by the
court.

From their evidence the prosecution would want to show to the court that the
accused, as lessee or operator of a fishpond in the municipality of Pagbilao, refused,
and still refuses, to pay the municipal taxes for the years 1964, 1965 and 1966, in
violation of Municipal Ordinance No. 4, series of 1955, as amended by Municipal
Ordinance No. 15, series of 1965, and finally amended by Municipal Ordinance No.
12, series of 1966.

On the other hand, the accused, by his evidence, tends to show to the court that the
taxes sought to be collected have already lapsed and that there is no law
empowering municipalities to pass ordinances taxing fishpond operators. The
defense, by their evidence, tried to show further that, as lessee of a forest land to be
converted into a fishpond, he is not covered by said municipal ordinances; and finally
that the accused should not be taxed as fishpond operator because there is no
fishpond yet being operated by him, considering that the supposed fishpond was
under construction during the period covered by the taxes sought to be collected.

Finally, the defendant claims that the ordinance in question is ultra vires as it is
outside of the power of the municipal council of Pagbilao, Quezon, to enact; and that
the defendant claims that the ordinance in question is ambiguous and uncertain.

There is no question from the evidences presented that the accused is a lessee of a
parcel of forest land, with an area of 27.1998 hectares, for fishpond purposes, under
Fishpond Lease Agreement No. 1066, entered into by the accused and the
government, through the Secretary of Agriculture and Natural Resources on August
21, 1959.

There is no question from the evidences presented that the 27.1998 hectares of land
leased by the defendant from the government for fishpond purposes was actually
converted into fishpond and used as such, and therefore defendant is an operator of
a fishpond within the purview of the ordinance in question. 1

The trial Court returned a verdict of guilty and disposed as follows:

2

VIEWED IN THE LIGHT OF ALL THE FOREGOING, the Court finds the accused guilty beyond
reasonable doubt of the crime of violation of Municipal Ordinance No. 4, series of 1955, as amended
by Ordinance No. 15, series of 1965 and further amended by Ordinance No. 12, series of 1966, of
the Municipal Council of Pagbilao, Quezon; and hereby sentences him to pay a fine of P50.00, with
subsidiary imprisonment in case of insolvency at the rate of P8.00 a day, and to pay the costs of this
proceeding.

SO ORDERED. 3

In this appeal, certified to this Court by the Court of Appeals, the petitioner alleges that:

I.

THE LOWER COURT ERRED IN NOT DECLARING THAT ORDINANCE NO. 4, SERIES OF 1955,
AS AMENDED BY ORDINANCE NO. 15, SERIES OF 1965, AND AS FURTHER AMENDED BY
ORDINANCE NO. 12, SERIES OF 1966, OF THE MUNICIPALITY OF PAGBILAO, QUEZON, IS
NULL AND VOID FOR BEING AMBIGUOUS AND UNCERTAIN.
II.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION, AS
AMENDED, IS UNCONSTITUTIONAL FOR BEING EX POST FACTO.

III.

THE LOWER COURT ERRED IN NOT HOLDING THAT THE ORDINANCE IN QUESTION
COVERS ONLY OWNERS OR OVERSEER OF FISHPONDS OF PRIVATE OWNERSHIP AND
NOT TO LESSEES OF PUBLIC LANDS.

IV.

THE LOWER COURT ERRED IN NOT FINDING THAT THE QUESTIONED ORDINANCE, EVEN IF
VALID, CANNOT BE ENFORCED BEYOND THE TERRITORIAL LIMITS OF PAGBILAO AND
DOES NOT COVER NON-
RESIDENTS. 4

The ordinances in question are Ordinance No. 4, series of 1955, Ordinance No. 15, series of 1965,
and Ordinance No. 12, series of 1966, of the Municipal Council of Pagbilao. Insofar as pertinent to
this appeal, the salient portions thereof are hereinbelow quoted:

Section 1. Any owner or manager of fishponds in places within the territorial limits of
Pagbilao, Quezon, shall pay a municipal tax in the amount of P3.00 per hectare of
fishpond on part thereof per annum. 5

xxx xxx xxx

Sec. l (a). For the convenience of those who have or owners or managers of
fishponds within the territorial limits of this municipality, the date of payment of
municipal tax relative thereto, shall begin after the lapse of three (3) years starting
from the date said fishpond is approved by the Bureau of Fisheries. 6

xxx xxx xxx

Section 1. Any owner or manager of fishponds in places within the territorial limits of
Pagbilao shall pay a municipal tax in the amount of P3.00 per hectare or any fraction
thereof per annum beginning and taking effect from the year 1964, if the fishpond
started operating before the year 1964. 7

The first objection refers to the ordinances being allegedly "ambiguous and uncertain." The 8

petitioner contends that being a mere lessee of the fishpond, he is not covered since the said
ordinances speak of "owner or manager." He likewise maintains that they are vague insofar as they
reckon the date of payment: Whereas Ordinance No. 4 provides that parties shall commence
payment "after the lapse of three (3) years starting from the date said fishpond is approved by the
Bureau of Fisheries." Ordinance No. 12 states that liability for the tax accrues "beginning and taking
9

effect from the year 1964 if the fishpond started operating before the year 1964." 10

As a rule, a statute or act may be said to be vague when it lacks comprehensible standards that men
"of common intelligence must necessarily guess at its meaning and differ as to its application." It is 11

repugnant to the Constitution in two respects: (1) it violates due process for failure to accord
persons, especially the parties targetted by it, fair notice of the conduct to avoid; and (2) it leaves law
enforcers unbridled discretion in carrying out its provisions and becomes an arbitrary flexing of the
Government muscle.

But the act must be utterly vague on its face, that is to say, it cannot be clarified by either a saving
clause or by construction. Thus, in Coates v. City of Cincinnati, the U.S. Supreme Court struck
12

down an ordinance that had made it illegal for "three or more persons to assemble on any sidewalk
and there conduct themselves in a manner annoying to persons passing by." Clearly, the
13

ordinance imposed no standard at all "because one may never know in advance what 'annoys some
people but does not annoy others.' " 14

Coates highlights what has been referred to as a "perfectly vague" act whose obscurity is evident
15

on its face. It is to be distinguished, however, from legislation couched in imprecise language — but
which nonetheless specifies a standard though defectively phrased — in which case, it may be
"saved" by proper construction.
It must further be distinguished from statutes that are apparently ambiguous yet fairly applicable to
certain types of activities. In that event, such statutes may not be challenged whenever directed
against such activities. In Parker v. Levy, a prosecution originally under the U.S. Uniform Code of
16

Military Justice (prohibiting, specifically, "conduct unbecoming an officer and gentleman"), the
defendant, an army officer who had urged his men not to go to Vietnam and called the Special
Forces trained to fight there thieves and murderers, was not allowed to invoke the void for
vagueness doctrine on the premise that accepted military interpretation and practice had provided
enough standards, and consequently, a fair notice that his conduct was impermissible.

It is interesting that in Gonzales v. Commission on Elections, a divided Court sustained an act of

17

Congress (Republic Act No. 4880 penalizing "the too early nomination of candidates" limiting the
18

election campaign period, and prohibiting "partisan political activities"), amid challenges of
vagueness and overbreadth on the ground that the law had included an "enumeration of the acts
deemed included in the terms 'election campaign' or 'partisan political activity" that would supply
19

the standards. "As thus limited, the objection that may be raised as to vagueness has been
minimized, if not totally set at rest." In his opinion, however, Justice Sanchez would stress that the
20

conduct sought to be prohibited "is not clearly defined at all." "As worded in R.A 4880, prohibited
21

discussion could cover the entire spectrum of expression relating to candidates and political
parties." He was unimpressed with the "restrictions" Fernando's opinion had relied on: " 'Simple
22

expressions of opinions and thoughts concerning the election' and expression of 'views on current
political problems or issues' leave the reader conjecture, to guesswork, upon the extent of protection
offered, be it as to the nature of the utterance ('simple expressions of opinion and thoughts') or the
subject of the utterance ('current political problems or issues')." 23

The Court likewise had occasion to apply the "balancing-of-interests" test, insofar as the statute's
24

ban on early nomination of candidates was concerned: "The rational connection between the
prohibition of Section 50-A and its object, the indirect and modest scope of its restriction on the
rights of speech and assembly, and the embracing public interest which Congress has found in the
moderation of partisan political activity, lead us to the conclusion that the statute may stand
consistently with and does not offend the Constitution." In that case, Castro would have the
25

balance achieved in favor of State authority at the "expense" of individual liberties.

In the United States, which had ample impact on Castro's separate opinion, the balancing test finds
a close kin, referred to as the "less restrictive alternative " doctrine, under which the court searches
26

for alternatives available to the Government outside of statutory limits, or for "less drastic
means" open to the State, that would render the statute unnecessary. In United States v.
27

Robel, legislation was assailed, banning members of the (American) Communist Party from
28

working in any defense facility. The U.S. Supreme Court, in nullifying the statute, held that it
impaired the right of association, and that in any case, a screening process was available to the
State that would have enabled it to Identify dangerous elements holding defense positions. In that
29

event, the balance would have been struck in favor of individual liberties.

It should be noted that it is in free expression cases that the result is usually close. It is said,
however, that the choice of the courts is usually narrowed where the controversy involves say,
economic rights, or as in the Levy case, military affairs, in which less precision in analysis is
30

required and in which the competence of the legislature is presumed.

In no way may the ordinances at bar be said to be tainted with the vice of vagueness. It is
unmistakable from their very provisions that the appellant falls within its coverage. As the actual
operator of the fishponds, he comes within the term " manager." He does not deny the fact that he
financed the construction of the fishponds, introduced fish fries into the fishponds, and had
employed laborers to maintain them. While it appears that it is the National Government which
31

owns them, the Government never shared in the profits they had generated. It is therefore only
32

logical that he shoulders the burden of tax under the said ordinances.

We agree with the trial court that the ordinances are in the character of revenue
measures designed to assist the coffers of the municipality of Pagbilao. And obviously, it cannot be
33

the owner, the Government, on whom liability should attach, for one thing, upon the ancient principle
that the Government is immune from taxes and for another, since it is not the Government that had
been making money from the venture.

Suffice it to say that as the actual operator of the fishponds in question, and as the recipient of profits
brought about by the business, the appellant is clearly liable for the municipal taxes in question. He
cannot say that he did not have a fair notice of such a liability to make such ordinances vague.

Neither are the said ordinances vague as to dates of payment. There is no merit to the claim that
"the imposition of tax has to depend upon an uncertain date yet to be determined (three years after
the 'approval of the fishpond' by the Bureau of Fisheries, and upon an uncertain event (if the
fishpond started operating before 1964), also to be determined by an uncertain individual or
individuals." Ordinance No. 15, in making the tax payable "after the lapse of three (3) years starting
34
from the date said fishpond is approved by the Bureau of Fisheries," is unequivocal about the date
35

of payment, and its amendment by Ordinance No. 12, reckoning liability thereunder "beginning and
taking effect from the year 1964 if the fishpond started operating before the year 1964 ," does not
36

give rise to any ambiguity. In either case, the dates of payment have been definitely established. The
fact that the appellant has been allegedly uncertain about the reckoning dates — as far as his
liability for the years 1964, 1965, and 1966 is concerned — presents a mere problem in computation,
but it does not make the ordinances vague. In addition, the same would have been at most a difficult
piece of legislation, which is not unfamiliar in this jurisdiction, but hardly a vague law.

As it stands, then, liability for the tax accrues on January 1, 1964 for fishponds in operation prior
thereto (Ordinance No. 12), and for new fishponds, three years after their approval by the Bureau of
Fisheries (Ordinance No. 15). This is so since the amendatory act (Ordinance No. 12) merely
granted amnesty unto old, delinquent fishpond operators. It did not repeal its mother ordinances
(Nos. 4 and 15). With respect to new operators, Ordinance No. 15 should still prevail.

To the Court, the ordinances in question set forth enough standards that clarify imagined
ambiguities. While such standards are not apparent from the face thereof, they are visible from the
intent of the said ordinances.

The next inquiry is whether or not they can be said to be ex post facto measures. The appellant
argues that they are: "Amendment No. 12 passed on September 19, 1966, clearly provides that the
payment of the imposed tax shall "beginning and taking effect from the year 1964, if the fishpond
started operating before the year 1964.' In other words, it penalizes acts or events occurring before
its passage, that is to say, 1964 and even prior thereto." 37

The Court finds no merit in this contention. As the Solicitor General notes, "Municipal Ordinance No.
4 was passed on May 14, 1955. Hence, it cannot be said that the amendment (under Ordinance
38

No. 12) is being made to apply retroactively (to 1964) since the reckoning period is 1955 (date of
enactment). Essentially, Ordinances Nos. 12 and 15 are in the nature of curative measures intended
to facilitate and enhance the collection of revenues the originally act, Ordinance No. 4, had
prescribed. Moreover, the act (of non-payment of the tax), had been, since 1955, made
39

punishable, and it cannot be said that Ordinance No. 12 imposes a retroactive penalty. As we have
noted, it operates to grant amnesty to operators who had been delinquent between 1955 and 1964.
It does not mete out a penalty, much less, a retrospective one.

The appellant assails, finally, the power of the municipal council of Pagbilao to tax "public forest
land." In Golden Ribbon Lumber Co., Inc. v. City of Butuan we held that local governments'
40 41

taxing power does not extend to forest products or concessions under Republic Act No. 2264, the
Local Autonomy Act then in force. (Republic Act No. 2264 likewise prohibited municipalities from
imposing percentage taxes on sales.)

First of all, the tax in question is not a tax on property, although the rate thereof is based on the area
of fishponds ("P3.00 per hectare" ). Secondly, fishponds are not forest lands, although we have
42

held them to the agricultural lands. By definition, "forest" is "a large tract of land covered with a
43

natural growth of trees and underbush; a large wood." (Accordingly, even if the challenged taxes
44

were directed on the fishponds, they would not have been taxes on forest products.)

They are, more accurately, privilege taxes on the business of fishpond maintenance. They are not
charged against sales, which would have offended the doctrine enshrined by Golden Ribbon
Lumber, but rather on occupation, which is allowed under Republic Act No. 2264. They are what
45 46

have been classified as fixed annual taxes and this is obvious from the ordinances themselves.

There is, then, no merit in the last objection.

WHEREFORE, the appeal is DISMISSED. Costs against the appellant.

Fernan, C.J., Narvasa, Gutierrez, Jr., Cruz, Paras, Feliciano, Padilla, Bidin, Cortes, Griño-Aquino
and Medialdea, JJ., concur.

Melencio-Herrera, and Regalado, J., took no part.

Gancayco, J., is on leave.

 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 111097 July 20, 1994

MAYOR PABLO P. MAGTAJAS & THE CITY OF CAGAYAN DE ORO, petitioners,

vs.
PRYCE PROPERTIES CORPORATION, INC. & PHILIPPINE AMUSEMENT AND GAMING
CORPORATION, respondents.

Aquilino G. Pimentel, Jr. and Associates for petitioners.

R.R. Torralba & Associates for private respondent.

CRUZ, J.:

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

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

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

ORDINANCE NO. 3353

AN ORDINANCE PROHIBITING THE ISSUANCE OF BUSINESS PERMIT AND

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

BE IT ORDAINED by the Sangguniang Panlungsod of the City of Cagayan de Oro, in

session assembled that:

Sec. 1. — That pursuant to the policy of the city banning the operation of casino
within its territorial jurisdiction, no business permit shall be issued to any person,
partnership or corporation for the operation of casino within the city limits.
 Sec. 2. — That it shall be a violation of existing business permit by any persons,
partnership or corporation to use its business establishment or portion thereof, or
allow the use thereof by others for casino operation and other gambling activities.

Sec. 3. — PENALTIES. — Any violation of such existing business permit as defined

in the preceding section shall suffer the following penalties, to wit:

a) Suspension of the business permit for sixty (60)

days for the first offense and a fine of P1,000.00/day

b) Suspension of the business permit for Six (6)

months for the second offense, and a fine of
P3,000.00/day

c) Permanent revocation of the business permit and

imprisonment of One (1) year, for the third and
subsequent offenses.

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

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

ORDINANCE NO. 3375-93

AN ORDINANCE PROHIBITING THE OPERATION OF CASINO AND PROVIDING

PENALTY FOR VIOLATION THEREFOR.

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

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

WHEREAS, subsequently, thereafter, it likewise passed Ordinance No. 3353,

prohibiting the issuance of Business Permit and to cancel existing Business Permit to
any establishment for the using and allowing to be used its premises or portion
thereof for the operation of CASINO;

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

NOW THEREFORE,

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

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

hereby prohibited.

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

a) Administrative fine of P5,000.00 shall be imposed against the proprietor,

partnership or corporation undertaking the operation, conduct, maintenance of
gambling CASINO in the City and closure thereof;

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

Sec. 3. — This Ordinance shall take effect ten (10) days after its publication in a local
newspaper of general circulation.
Pryce assailed the ordinances before the Court of Appeals, where it was joined by PAGCOR as
intervenor and supplemental petitioner. Their challenge succeeded. On March 31, 1993, the Court of
Appeals declared the ordinances invalid and issued the writ prayed for to prohibit their
enforcement. Reconsideration of this decision was denied on July 13, 1993.
1 2

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

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

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

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

4. The questioned Ordinances are discriminatory to casino and partial to cockfighting

and are therefore invalid on that point.

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

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

PAGCOR is a corporation created directly by P.D. 1869 to help centralize and regulate all games of
chance, including casinos on land and sea within the territorial jurisdiction of the Philippines.
In Basco v. Philippine Amusements and Gaming Corporation, this Court sustained the
4

constitutionality of the decree and even cited the benefits of the entity to the national economy as the
third highest revenue-earner in the government, next only to the BIR and the Bureau of Customs.

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

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

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

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

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

xxx xxx xxx

(v) Enact ordinances intended to prevent, suppress

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

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

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

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

The petitioners also stress that when the Code expressly authorized the local government units to
prevent and suppress gambling and other prohibited games of chance, like craps, baccarat,
blackjack and roulette, it meant all forms of gambling without distinction. Ubi lex non distinguit, nec
nos distinguere debemos. Otherwise, it would have expressly excluded from the scope of their
6

power casinos and other forms of gambling authorized by special law, as it could have easily done.
The fact that it did not do so simply means that the local government units are permitted to prohibit
all kinds of gambling within their territories, including the operation of casinos.

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

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

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

Sec. 5. Rules of Interpretation. — In the interpretation of the provisions of this Code,

the following rules shall apply:

(a) Any provision on a power of a local government unit shall be liberally interpreted
in its favor, and in case of doubt, any question thereon shall be resolved in favor of
devolution of powers and of the lower local government unit. Any fair and reasonable
doubt as to the existence of the power shall be interpreted in favor of the local
government unit concerned;

xxx xxx xxx

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

Finally, the petitioners also attack gambling as intrinsically harmful and cite various provisions of the
Constitution and several decisions of this Court expressive of the general and official disapprobation
of the vice. They invoke the State policies on the family and the proper upbringing of the youth and,
as might be expected, call attention to the old case of U.S. v. Salaveria, which sustained a municipal
7

ordinance prohibiting the playing of panguingue. The petitioners decry the immorality of gambling.
They also impugn the wisdom of P.D. 1869 (which they describe as "a martial law instrument") in
creating PAGCOR and authorizing it to operate casinos "on land and sea within the territorial
jurisdiction of the Philippines."

This is the opportune time to stress an important point.

The morality of gambling is not a justiciable issue. Gambling is not illegal per se. While it is generally
considered inimical to the interests of the people, there is nothing in the Constitution categorically
proscribing or penalizing gambling or, for that matter, even mentioning it at all. It is left to Congress
to deal with the activity as it sees fit. In the exercise of its own discretion, the legislature may prohibit
gambling altogether or allow it without limitation or it may prohibit some forms of gambling and allow
others for whatever reasons it may consider sufficient. Thus, it has prohibited jueteng and monte but
permits lotteries, cockfighting and horse-racing. In making such choices, Congress has consulted its
own wisdom, which this Court has no authority to review, much less reverse. Well has it been said
that courts do not sit to resolve the merits of conflicting theories. That is the prerogative of the
8

political departments. It is settled that questions regarding the wisdom, morality, or practicibility of
statutes are not addressed to the judiciary but may be resolved only by the legislative and executive
departments, to which the function belongs in our scheme of government. That function is exclusive.
Whichever way these branches decide, they are answerable only to their own conscience and the
constituents who will ultimately judge their acts, and not to the courts of justice.

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

The tests of a valid ordinance are well established. A long line of decisions has held that to be valid,
9

an ordinance must conform to the following substantive requirements:

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

2) It must not be unfair or oppressive.

3) It must not be partial or discriminatory.

4) It must not prohibit but may regulate trade.

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

6) It must not be unreasonable.

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

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

The apparent flaw in the ordinances in question is that they contravene P.D. 1869 and the public
policy embodied therein insofar as they prevent PAGCOR from exercising the power conferred on it
to operate a casino in Cagayan de Oro City. The petitioners have an ingenious answer to this
misgiving. They deny that it is the ordinances that have changed P.D. 1869 for an ordinance
admittedly cannot prevail against a statute. Their theory is that the change has been made by the
Local Government Code itself, which was also enacted by the national lawmaking authority. In their
view, the decree has been, not really repealed by the Code, but merely "modified pro tanto" in the
sense that PAGCOR cannot now operate a casino over the objection of the local government unit
concerned. This modification of P.D. 1869 by the Local Government Code is permissible because
one law can change or repeal another law.
It seems to us that the petitioners are playing with words. While insisting that the decree has only
been "modified pro tanto," they are actually arguing that it is already dead, repealed and useless for
all intents and purposes because the Code has shorn PAGCOR of all power to centralize and
regulate casinos. Strictly speaking, its operations may now be not only prohibited by the local
government unit; in fact, the prohibition is not only discretionary but mandated by Section 458 of the
Code if the word "shall" as used therein is to be given its accepted meaning. Local government units
have now no choice but to prevent and suppress gambling, which in the petitioners' view includes
both legal and illegal gambling. Under this construction, PAGCOR will have no more games of
chance to regulate or centralize as they must all be prohibited by the local government units
pursuant to the mandatory duty imposed upon them by the Code. In this situation, PAGCOR cannot
continue to exist except only as a toothless tiger or a white elephant and will no longer be able to
exercise its powers as a prime source of government revenue through the operation of casinos.

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

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

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

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

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

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

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

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

explained:

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

There is no sufficient indication of an implied repeal of P.D. 1869. On the contrary, as the private
respondent points out, PAGCOR is mentioned as the source of funding in two later enactments of
Congress, to wit, R.A. 7309, creating a Board of Claims under the Department of Justice for the
benefit of victims of unjust punishment or detention or of violent crimes, and R.A. 7648, providing for
measures for the solution of the power crisis. PAGCOR revenues are tapped by these two statutes.
This would show that the PAGCOR charter has not been repealed by the Local Government Code
but has in fact been improved as it were to make the entity more responsive to the fiscal problems of
the government.
It is a canon of legal hermeneutics that instead of pitting one statute against another in an inevitably
destructive confrontation, courts must exert every effort to reconcile them, remembering that both
laws deserve a becoming respect as the handiwork of a coordinate branch of the government. On
the assumption of a conflict between P.D. 1869 and the Code, the proper action is not to uphold one
and annul the other but to give effect to both by harmonizing them if possible. This is possible in the
case before us. The proper resolution of the problem at hand is to hold that under the Local
Government Code, local government units may (and indeed must) prevent and suppress all kinds of
gambling within their territories except only those allowed by statutes like P.D. 1869. The exception
reserved in such laws must be read into the Code, to make both the Code and such laws equally
effective and mutually complementary.

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

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

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

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

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

cannot now be withdrawn by mere statute. By and large, however, the national legislature is still the
principal of the local government units, which cannot defy its will or modify or violate it.

The Court understands and admires the concern of the petitioners for the welfare of their
constituents and their apprehensions that the welfare of Cagayan de Oro City will be endangered by
the opening of the casino. We share the view that "the hope of large or easy gain, obtained without
special effort, turns the head of the workman" and that "habitual gambling is a cause of laziness
13

and ruin." In People v. Gorostiza, we declared: "The social scourge of gambling must be stamped
14 15

out. The laws against gambling must be enforced to the limit." George Washington called gambling
"the child of avarice, the brother of iniquity and the father of mischief." Nevertheless, we must
recognize the power of the legislature to decide, in its own wisdom, to legalize certain forms of
gambling, as was done in P.D. 1869 and impliedly affirmed in the Local Government Code. That
decision can be revoked by this Court only if it contravenes the Constitution as the touchstone of all
official acts. We do not find such contravention here.

We hold that the power of PAGCOR to centralize and regulate all games of chance, including
casinos on land and sea within the territorial jurisdiction of the Philippines, remains unimpaired. P.D.
1869 has not been modified by the Local Government Code, which empowers the local government
units to prevent or suppress only those forms of gambling prohibited by law.
Casino gambling is authorized by P.D. 1869. This decree has the status of a statute that cannot be
amended or nullified by a mere ordinance. Hence, it was not competent for the Sangguniang
Panlungsod of Cagayan de Oro City to enact Ordinance No. 3353 prohibiting the use of buildings for
the operation of a casino and Ordinance No. 3375-93 prohibiting the operation of casinos. For all
their praiseworthy motives, these ordinances are contrary to P.D. 1869 and the public policy
announced therein and are therefore ultra vires and void.

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

Narvasa, C.J., Feliciano, Bidin, Regalado, Romero, Bellosillo, Melo, Quiason, Puno, Vitug,
Kapunan and Mendoza, JJ., concur.

Separate Opinions

PADILLA, J., concurring:

I concur with the majority holding that the city ordinances in question cannot modify much less
repeal PAGCOR's general authority to establish and maintain gambling casinos anywhere in the
Philippines under Presidential Decree No. 1869.

In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a
separate opinion that:

. . . I agree with the decision insofar as it holds that the prohibition, control, and
regulation of the entire activity known as gambling properly pertain to "state policy". It
is, therefore, the political departments of government, namely, the legislative and the
executive that should decide on what government should do in the entire area of
gambling, and assume full responsibility to the people for such policy." (Emphasis
supplied)

However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by
respondent PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the
government's own efforts to re-establish and resurrect the Filipino moral character which is generally
perceived to be in a state of continuing erosion.

It is in the light of this alarming perspective that I call upon government to carefully weigh the
advantages and disadvantages of setting up more gambling facilities in the country.

That the PAGCOR contributes greatly to the coffers of the government is not enough reason for
setting up more gambling casinos because, undoubtedly, this will not help improve, but will cause a
further deterioration in the Filipino moral character.

It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do
not always justify the means.

As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the
former will not render it any less reprehensible even if substantial revenue for the government can
be realized from it. The same is true of gambling.

In the present case, it is my considered view that the national government (through PAGCOR)
should re-examine and re-evaluate its decision of imposing the gambling casino on the residents of
Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it,
and again the question must be seriously deliberated: will the prospects of revenue to be realized
from the casino outweigh the further destruction of the Filipino sense of values?

DAVIDE, JR., J., concurring:

While I concur in part with the majority, I wish, however, to express my views on certain aspects of
this case.

I.

It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed
with the Court of Appeals its so-called petition for prohibition, thereby invoking the said court's
original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it,
however, the principal cause of action therein is one for declaratory relief: to declare null and
unconstitutional — for, inter alia, having been enacted without or in excess of jurisdiction, for
impairing the obligation of contracts, and for being inconsistent with public policy — the challenged
ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The
intervention therein of public respondent Philippine Amusement and Gaming Corporation (PAGCOR)
further underscores the "declaratory relief" nature of the action. PAGCOR assails the ordinances for
being contrary to the non-impairment and equal protection clauses of the Constitution, violative of
the Local Government Code, and against the State's national policy declared in P.D. No. 1869.
Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even
assuming arguendo that the case is one for prohibition, then, under this Court's established policy
relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of
Cagayan de Oro City. I find no special or compelling reason why it was not filed with the said court. I
do not wish to entertain the thought that PRYCE doubted a favorable verdict therefrom, in which
case the filing of the petition with the Court of Appeals may have been impelled by tactical
considerations. A dismissal of the petition by the Court of Appeals would have been in order
pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago
vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:

A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not
exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of
First Instance), which may issue the writ, enforceable in any part of their respective
regions. It is also shared by this court, and by the Regional Trial Court, with the Court
of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity
of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue
the extraordinary writs was restricted by those "in aid of its appellate jurisdiction."
This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to
which application therefor will be directed. There is after all a hierarchy of courts.
That hierarchy is determinative of the revenue of appeals, and should also serve as a
general determinant of the appropriate forum for petitions for the extraordinary writs.
A becoming regard for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Court's original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is established policy. It is a policy
that is necessary to prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further over-crowding of the Court's docket. Indeed, the removal of the
restriction of the jurisdiction of the Court of Appeals in this regard, supra — resulting
from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was
evidently intended precisely to relieve this Court pro tanto of the burden of dealing
with applications for extraordinary writs which, but for the expansion of the Appellate
Court's corresponding jurisdiction, would have had to be filed with it. (citations
omitted)

And in Vasquez, this Court said:

One final observation. We discern in the proceedings in this case a propensity on the
part of petitioner, and, for that matter, the same may be said of a number of litigants
who initiate recourses before us, to disregard the hierarchy of courts in our judicial
system by seeking relief directly from this Court despite the fact that the same is
available in the lower courts in the exercise of their original or concurrent jurisdiction,
or is even mandated by law to be sought therein. This practice must be stopped, not
only because of the imposition upon the previous time of this Court but also because
of the inevitable and resultant delay, intended or otherwise, in the adjudication of the
case which often has to be remanded or referred to the lower court as the proper
forum under the rules of procedure, or as better equipped to resolve the issues since
this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this
Court will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts or where exceptional and compelling
 circumstances justify availment of a remedy within and calling for the exercise of our
primary jurisdiction.

II.

The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the
Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for the
Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b)
Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing
Penalty for Violation Therefor." They were enacted to implement Resolution No. 2295 entitled,
"Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the
Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19 November 1990 —
nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the latter
leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino — which
resolution was vigorously reiterated in Resolution No. 2673 of 19 October 1992.

The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express
powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and
(vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the
general welfare clause) which reads:

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

The issue that necessarily arises is whether in granting local governments (such as the City of
Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto,
repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling
casinos anywhere in the Philippines is concerned.

I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.

III.

The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily
because it is in contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not
necessarily a contravention of the constitution. In any case, the ordinances can still stand even if
they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to
do. So reconciled, the ordinances should be construed as not applying to PAGCOR.

IV.

From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are,
for obvious reasons, strongly against the opening of the gambling casino in their city. Gambling,
even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any
place for that matter. The PAGCOR, as a government-owned corporation, must consider the valid
concerns of the people of the City of Cagayan de Oro and should not impose its will upon them in an
arbitrary, if not despotic, manner.

# Separate Opinions

PADILLA, J., concurring:

I concur with the majority holding that the city ordinances in question cannot modify much less
repeal PAGCOR's general authority to establish and maintain gambling casinos anywhere in the
Philippines under Presidential Decree No. 1869.
In Basco v. Philippine Amusement and Gaming Corporation (PAGCOR), 197 SCRA 52, I stated in a
separate opinion that:

. . . I agree with the decision insofar as it holds that the prohibition, control, and
regulation of the entire activity known as gambling properly pertain to "state policy". It
is, therefore, the political departments of government, namely, the legislative and the
executive that should decide on what government should do in the entire area of
gambling, and assume full responsibility to the people for such policy. (emphasis
supplied)

However, despite the legality of the opening and operation of a casino in Cagayan de Oro City by
respondent PAGCOR, I wish to reiterate my view that gambling in any form runs counter to the
government's own efforts to re-establish and resurrect the Filipino moral character which is generally
perceived to be in a state of continuing erosion.

It is in the light of this alarming perspective that I call upon government to carefully weigh the
advantages and disadvantages of setting up more gambling facilities in the country.

That the PAGCOR contributes greatly to the coffers of the government is not enough reason for
setting up more gambling casinos because, undoubtedly, this will not help improve, but will cause a
further deterioration in the Filipino moral character.

It is worth remembering in this regard that, 1) what is legal is not always moral and 2) the ends do
not always justify the means.

As in Basco, I can easily visualize prostitution at par with gambling. And yet, legalization of the
former will not render it any less reprehensible even if substantial revenue for the government can
be realized from it. The same is true of gambling.

In the present case, it is my considered view that the national government (through PAGCOR)
should re-examine and re-evaluate its decision of imposing the gambling casino on the residents of
Cagayan de Oro City; for it is abundantly clear that public opinion in the city is very much against it,
and again the question must be seriously deliberated: will the prospects of revenue to be realized
from the casino outweigh the further destruction of the Filipino sense of values?

DAVIDE, JR., J., concurring:

While I concur in part with the majority, I wish, however, to express my views on certain aspects of
this case.

I.

It must at once be noted that private respondent Pryce Properties Corporation (PRYCE) directly filed
with the Court of Appeals its so-called petition for prohibition, thereby invoking the said court's
original jurisdiction to issue writs of prohibition under Section 9(1) of B.P. Blg. 129. As I see it,
however, the principal cause of action therein is one for declaratory relief: to declare null and
unconstitutional — for, inter alia, having been enacted without or in excess of jurisdiction, for
impairing the obligation of contracts, and for being inconsistent with public policy — the challenged
ordinances enacted by the Sangguniang Panglungsod of the City of Cagayan de Oro. The
intervention therein of public respondent Philippine Amusement and Gaming Corporation (PAGCOR)
further underscores the "declaratory relief" nature of the action. PAGCOR assails the ordinances for
being contrary to the non-impairment and equal protection clauses of the Constitution, violative of
the Local Government Code, and against the State's national policy declared in P.D. No. 1869.
Accordingly, the Court of Appeals does not have jurisdiction over the nature of the action. Even
assuming arguendo that the case is one for prohibition, then, under this Court's established policy
relative to the hierarchy of courts, the petition should have been filed with the Regional Trial Court of
Cagayan de Oro City. I find no special or compelling reason why it was not filed with the said court. I
do not wish to entertain the thought that PRYCE doubted a favorable verdict therefrom, in which
case the filing of the petition with the Court of Appeals may have been impelled by tactical
considerations. A dismissal of the petition by the Court of Appeals would have been in order
pursuant to our decisions in People vs. Cuaresma (172 SCRA 415, [1989]) and Defensor-Santiago
vs. Vasquez (217 SCRA 633 [1993]). In Cuaresma, this Court stated:

A last word. This court's original jurisdiction to issue writs of certiorari (as well as
prohibition, mandamus, quo warranto, habeas corpus and injunction) is not
exclusive. It is shared by this Court with Regional Trial Courts (formerly Courts of
First Instance), which may issue the writ, enforceable in any part of their respective
regions. It is also shared by this court, and by the Regional Trial Court, with the Court
of Appeals (formerly, Intermediate Appellate Court), although prior to the effectivity
 of Batas Pambansa Bilang 129 on August 14, 1981, the latter's competence to issue
the extraordinary writs was restricted by those "in aid of its appellate jurisdiction."
This concurrence of jurisdiction is not, however, to be taken as according to parties
seeking any of the writs an absolute, unrestrained freedom of choice of the court to
which application therefor will be directed. There is after all a hierarchy of courts.
That hierarchy is determinative of the revenue of appeals, and should also serve as a
general determinant of the appropriate forum for petitions for the extraordinary writs.
A becoming regard for that judicial hierarchy most certainly indicates that petitions for
the issuance of extraordinary writs against first level ("inferior") courts should be filed
with the Regional Trial Court, and those against the latter, with the Court of Appeals.
A direct invocation of the Supreme Court's original jurisdiction to issue these writs
should be allowed only when there are special and important reasons therefor,
clearly and specifically set out in the petition. This is established policy. It is a policy
that is necessary to prevent inordinate demands upon the Court's time and attention
which are better devoted to those matters within its exclusive jurisdiction, and to
prevent further over-crowding of the Court's docket. Indeed, the removal of the
restriction of the jurisdiction of the Court of Appeals in this regard, supra — resulting
from the deletion of the qualifying phrase, "in aid of its appellate jurisdiction" — was
evidently intended precisely to relieve this Court pro tanto of the burden of dealing
with applications for extraordinary writs which, but for the expansion of the Appellate
Court's corresponding jurisdiction, would have had to be filed with it. (citations
omitted)

And in Vasquez, this Court said:

One final observation. We discern in the proceedings in this case a propensity on the
part of petitioner, and, for that matter, the same may be said of a number of litigants
who initiate recourses before us, to disregard the hierarchy of courts in our judicial
system by seeking relief directly from this Court despite the fact that the same is
available in the lower courts in the exercise of their original or concurrent jurisdiction,
or is even mandated by law to be sought therein. This practice must be stopped, not
only because of the imposition upon the previous time of this Court but also because
of the inevitable and resultant delay, intended or otherwise, in the adjudication of the
case which often has to be remanded or referred to the lower court as the proper
forum under the rules of procedure, or as better equipped to resolve the issues since
this Court is not a trier of facts. We, therefore, reiterate the judicial policy that this
Court will not entertain direct resort to it unless the redress desired cannot be
obtained in the appropriate courts or where exceptional and compelling
circumstances justify availment of a remedy within and calling for the exercise of our
primary jurisdiction.

II.

The challenged ordinances are (a) Ordinance No. 3353 entitled, "An Ordinance Prohibiting the
Issuance of Business Permit and Canceling Existing Business Permit To Any Establishment for the
Using and Allowing to be Used Its Premises or Portion Thereof for the Operation of Casino," and (b)
Ordinance No. 3375-93 entitled, "An Ordinance Prohibiting the Operation of Casino and Providing
Penalty for Violation Therefor." They were enacted to implement Resolution No. 2295 entitled,
"Resolution Declaring As a Matter of Policy to Prohibit and/or Not to Allow the Establishment of the
Gambling Casino in the City of Cagayan de Oro," which was promulgated on 19 November 1990 —
nearly two years before PRYCE and PAGCOR entered into a contract of lease under which the latter
leased a portion of the former's Pryce Plaza Hotel for the operation of a gambling casino — which
resolution was vigorously reiterated in Resolution No. 2673 of 19 October 1992.

The challenged ordinances were enacted pursuant to the Sangguniang Panglungsod's express
powers conferred by Section 458, paragraph (a), subparagraphs (1)-(v), (3)-(ii), and (4)-(i), (iv), and
(vii), Local Government Code, and pursuant to its implied power under Section 16 thereof (the
general welfare clause) which reads:

Sec. 16. General Welfare. — Every local government unit shall exercise the powers
expressly granted, those necessarily implied therefrom, as well as powers
necessary, appropriate, or incidental for its efficient and effective governance, and
those which are essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall ensure and support,
among other things, the preservation and enrichment of culture, promote health and
safety, enhance the right of the people to a balanced ecology, encourage and
support the development of appropriate and self-reliant scientific and technological
capabilities, improve public morals, enhance economic prosperity and social justice,
promote full employment among their residents, maintain peace and order, and
preserve the comfort and convenience of their inhabitants.
The issue that necessarily arises is whether in granting local governments (such as the City of
Cagayan de Oro) the above powers and functions, the Local Government Code has, pro tanto,
repealed P.D. No. 1869 insofar as PAGCOR's general authority to establish and maintain gambling
casinos anywhere in the Philippines is concerned.

I join the majority in holding that the ordinances cannot repeal P.D. No. 1869.

III.

The nullification by the Court of Appeals of the challenged ordinances as unconstitutional primarily
because it is in contravention to P.D. No. 1869 is unwarranted. A contravention of a law is not
necessarily a contravention of the constitution. In any case, the ordinances can still stand even if
they be conceded as offending P.D. No. 1869. They can be reconciled, which is not impossible to
do. So reconciled, the ordinances should be construed as not applying to PAGCOR.

IV.

From the pleadings, it is obvious that the government and the people of Cagayan de Oro City are,
for obvious reasons, strongly against the opening of the gambling casino in their city. Gambling,
even if legalized, would be inimical to the general welfare of the inhabitants of the City, or of any
place for that matter. The PAGCOR, as a government-owned corporation, must consider the valid
concerns of the people of the City of Cagayan de Oro and should not impose its will upon them in an
arbitrary, if not despotic, manner.