Lito Cruz vs People GR #180016, April 2014

Republic of the Philippines

SUPREME COURT
Baguio City

EN BANC

G.R. No. 180016 April 29, 2014

LITO CORPUZ, Petitioner,

vs.
PEOPLE OF THE PHILIPPINES, Respondent.

DECISION

PERALTA, J.:

This is to resolve the Petition for Review on Certiorari, under Rule 45 of the
Rules of Court, dated November 5, 2007, of petitioner Lito Corpuz
(petitioner), seeking to reverse and set aside the Decision1 dated March 22,
2007 and Resolution2 dated September 5, 2007 of the Court of Appeals
(CA), which affirmed with modification the Decision3 dated July 30, 2004 of
the Regional Trial Court (RTC), Branch 46, San Fernando City, finding the
petitioner guilty beyond reasonable doubt of the crime of Estafa under Article
315, paragraph (1), sub-paragraph (b) of the Revised Penal Code.

The antecedent facts follow.

Private complainant Danilo Tangcoy and petitioner met at the Admiral

Royale Casino in Olongapo City sometime in 1990. Private complainant was
then engaged in the business of lending money to casino players and, upon
hearing that the former had some pieces of jewelry for sale, petitioner
approached him on May 2, 1991 at the same casino and offered to sell the
said pieces of jewelry on commission basis. Private complainant agreed, and
as a consequence, he turned over to petitioner the following items: an 18k
diamond ring for men; a woman's bracelet; one (1) men's necklace and
another men's bracelet, with an aggregate value of ₱98,000.00, as
evidenced by a receipt of even date. They both agreed that petitioner shall
remit the proceeds of the sale, and/or, if unsold, to return the same items,
within a period of 60 days. The period expired without petitioner remitting the
proceeds of the sale or returning the pieces of jewelry. When private
complainant was able to meet petitioner, the latter promised the former that
he will pay the value of the said items entrusted to him, but to no avail.

Thus, an Information was filed against petitioner for the crime of estafa,
which reads as follows:

That on or about the fifth (5th) day of July 1991, in the City of Olongapo,
Philippines, and within the jurisdiction of this Honorable Court, the above-
named accused, after having received from one Danilo Tangcoy, one (1)
men's diamond ring, 18k, worth ₱45,000.00; one (1) three-baht men's
bracelet, 22k, worth ₱25,000.00; one (1) two-baht ladies' bracelet, 22k,
worth ₱12,000.00, or in the total amount of Ninety-Eight Thousand Pesos
(₱98,000.00), Philippine currency, under expressed obligation on the part of
said accused to remit the proceeds of the sale of the said items or to return
the same, if not sold, said accused, once in possession of the said items,
with intent to defraud, and with unfaithfulness and abuse of confidence, and
far from complying with his aforestated obligation, did then and there wilfully,
unlawfully and feloniously misappropriate, misapply and convert to his own
personal use and benefit the aforesaid jewelries (sic) or the proceeds of the
sale thereof, and despite repeated demands, the accused failed and refused
to return the said items or to remit the amount of Ninety- Eight Thousand
Pesos (₱98,000.00), Philippine currency, to the damage and prejudice of
said Danilo Tangcoy in the aforementioned amount.

CONTRARY TO LAW.

On January 28, 1992, petitioner, with the assistance of his counsel, entered
a plea of not guilty. Thereafter, trial on the merits ensued.

The prosecution, to prove the above-stated facts, presented the lone

testimony of Danilo Tangcoy. On the other hand, the defense presented the
lone testimony of petitioner, which can be summarized, as follows:
Petitioner and private complainant were collecting agents of Antonio
Balajadia, who is engaged in the financing business of extending loans to
Base employees. For every collection made, they earn a commission.
Petitioner denied having transacted any business with private complainant.

However, he admitted obtaining a loan from Balajadia sometime in 1989 for

which he was made to sign a blank receipt. He claimed that the same receipt
was then dated May 2, 1991 and used as evidence against him for the
supposed agreement to sell the subject pieces of jewelry, which he did not
even see.

After trial, the RTC found petitioner guilty beyond reasonable doubt of the
crime charged in the Information. The dispositive portion of the decision
states:

WHEREFORE, finding accused LITO CORPUZ GUILTY beyond reasonable

doubt of the felony of Estafa under Article 315, paragraph one (1),
subparagraph (b) of the Revised Penal Code;

there being no offsetting generic aggravating nor ordinary mitigating

circumstance/s to vary the penalty imposable;

accordingly, the accused is hereby sentenced to suffer the penalty of

deprivation of liberty consisting of an imprisonment under the Indeterminate
Sentence Law of FOUR (4) YEARS AND TWO (2) MONTHS of Prision
Correccional in its medium period AS MINIMUM, to FOURTEEN (14)
YEARS AND EIGHT (8) MONTHS of Reclusion Temporal in its minimum
period AS MAXIMUM; to indemnify private complainant Danilo Tangcoy the
amount of ₱98,000.00 as actual damages, and to pay the costs of suit.

SO ORDERED.

The case was elevated to the CA, however, the latter denied the appeal of
petitioner and affirmed the decision of the RTC, thus:

WHEREFORE, the instant appeal is DENIED. The assailed Judgment dated

July 30, 2004 of the RTC of San Fernando City (P), Branch 46, is hereby
AFFIRMED with MODIFICATION on the imposable prison term, such that
accused-appellant shall suffer the indeterminate penalty of 4 years and 2
months of prision correccional, as minimum, to 8 years of prision mayor, as
maximum, plus 1 year for each additional ₱10,000.00, or a total of 7 years.
The rest of the decision stands.

SO ORDERED.

Petitioner, after the CA denied his motion for reconsideration, filed with this
Court the present petition stating the following grounds:

A. THE HONORABLE COURT OF APPEALS ERRED IN CONFIRMING

THE ADMISSION AND APPRECIATION BY THE LOWER COURT OF
PROSECUTION EVIDENCE, INCLUDING ITS EXHIBITS, WHICH ARE
MERE MACHINE COPIES, AS THIS VIOLATES THE BEST EVIDENCE
RULE;

B. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE

LOWER COURT'S FINDING THAT THE CRIMINAL INFORMATION FOR
ESTAFA WAS NOT FATALLY DEFECTIVE ALTHOUGH THE SAME DID
NOT CHARGE THE OFFENSE UNDER ARTICLE 315 (1) (B) OF THE
REVISED PENAL CODE IN THAT -

1. THE INFORMATION DID NOT FIX A PERIOD WITHIN WHICH

THE SUBJECT [PIECES OF] JEWELRY SHOULD BE
RETURNED, IF UNSOLD, OR THE MONEY TO BE REMITTED,
IF SOLD;

2. THE DATE OF THE OCCURRENCE OF THE CRIME

ALLEGED IN THE INFORMATION AS OF 05 JULY 1991 WAS
MATERIALLY DIFFERENT FROM THE ONE TESTIFIED TO BY
THE PRIVATE COMPLAINANT WHICH WAS 02 MAY 1991;

C. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE

LOWER COURT'S FINDING THAT DEMAND TO RETURN THE SUBJECT
[PIECES OF] JEWELRY, IF UNSOLD, OR REMIT THE PROCEEDS, IF
SOLD – AN ELEMENT OF THE OFFENSE – WAS PROVED;

D. THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING THE

LOWER COURT'S FINDING THAT THE PROSECUTION'S CASE WAS
PROVEN BEYOND REASONABLE DOUBT ALTHOUGH -

1. THE PRIVATE COMPLAINANT TESTIFIED ON TWO (2)

VERSIONS OF THE INCIDENT;

2. THE VERSION OF THE PETITIONER – ACCUSED IS MORE

STRAIGHTFORWARD AND LOGICAL, CONSISTENT WITH
HUMAN EXPERIENCE;

3. THE EQUIPOISE RULE WAS NOT APPRECIATED IN AND

APPLIED TO THIS CASE;

4. PENAL STATUTES ARE STRICTLY CONSTRUED AGAINST

THE STATE.

In its Comment dated May 5, 2008, the Office of the Solicitor General (OSG)
stated the following counter-arguments:

The exhibits were properly admitted inasmuch as petitioner failed to object to

their admissibility.

The information was not defective inasmuch as it sufficiently established the

designation of the offense and the acts complained of.

The prosecution sufficiently established all the elements of the crime

charged.

This Court finds the present petition devoid of any merit.

The factual findings of the appellate court generally are conclusive, and carry
even more weight when said court affirms the findings of the trial court,
absent any showing that the findings are totally devoid of support in the
records, or that they are so glaringly erroneous as to constitute grave abuse
of discretion.4 Petitioner is of the opinion that the CA erred in affirming the
factual findings of the trial court. He now comes to this Court raising both
procedural and substantive issues.

According to petitioner, the CA erred in affirming the ruling of the trial court,
admitting in evidence a receipt dated May 2, 1991 marked as Exhibit "A" and
its submarkings, although the same was merely a photocopy, thus, violating
the best evidence rule. However, the records show that petitioner never
objected to the admissibility of the said evidence at the time it was identified,
marked and testified upon in court by private complainant. The CA also
correctly pointed out that petitioner also failed to raise an objection in his
Comment to the prosecution's formal offer of evidence and even admitted
having signed the said receipt. The established doctrine is that when a party
failed to interpose a timely objection to evidence at the time they were
offered in evidence, such objection shall be considered as waived.5

Another procedural issue raised is, as claimed by petitioner, the formally

defective Information filed against him. He contends that the Information
does not contain the period when the pieces of jewelry were supposed to be
returned and that the date when the crime occurred was different from the
one testified to by private complainant. This argument is untenable. The CA
did not err in finding that the Information was substantially complete and in
reiterating that objections as to the matters of form and substance in the
Information cannot be made for the first time on appeal. It is true that the
gravamen of the crime of estafa under Article 315, paragraph 1,
subparagraph (b) of the RPC is the appropriation or conversion of money or
property received to the prejudice of the owner6 and that the time of
occurrence is not a material ingredient of the crime, hence, the exclusion of
the period and the wrong date of the occurrence of the crime, as reflected in
the Information, do not make the latter fatally defective. The CA ruled:

x x x An information is legally viable as long as it distinctly states the

statutory designation of the offense and the acts or omissions constitutive
thereof. Then Section 6, Rule 110 of the Rules of Court provides that a
complaint or information is sufficient if it states the name of the accused;

the designation of the offense by the statute; the acts or omissions

complained of as constituting the offense; the name of the offended party;
the approximate time of the commission of the offense, and the place
wherein the offense was committed. In the case at bar, a reading of the
subject Information shows compliance with the foregoing rule. That the time
of the commission of the offense was stated as " on or about the fifth (5th)
day of July, 1991" is not likewise fatal to the prosecution's cause considering
that Section 11 of the same Rule requires a statement of the precise time
only when the same is a material ingredient of the offense. The gravamen of
the crime of estafa under Article 315, paragraph 1 (b) of the Revised Penal
Code (RPC) is the appropriation or conversion of money or property
received to the prejudice of the offender. Thus, aside from the fact that the
date of the commission thereof is not an essential element of the crime
herein charged, the failure of the prosecution to specify the exact date does
not render the Information ipso facto defective. Moreover, the said date is
also near the due date within which accused-appellant should have delivered
the proceeds or returned the said [pieces of jewelry] as testified upon by
Tangkoy, hence, there was sufficient compliance with the rules. Accused-
appellant, therefore, cannot now be allowed to claim that he was not properly
apprised of the charges proferred against him.7

It must be remembered that petitioner was convicted of the crime of Estafa

under Article 315, paragraph 1 (b) of the RPC, which reads:

ART. 315. Swindling (estafa). – Any person who shall defraud another by
any of the means mentioned hereinbelow.

1. With unfaithfulness or abuse of confidence, namely:

xxxx

(b) By misappropriating or converting, to the prejudice of another, money,

goods, or any other personal property received by the offender in trust or on
commission, or for administration, or under any other obligation involving the
duty to make delivery of or to return the same, even though such obligation
be totally or partially guaranteed by a bond; or by denying having received
such money, goods, or other property; x x x

The elements of estafa with abuse of confidence are as follows: (a) that
money, goods or other personal property is received by the offender in trust,
or on commission, or for administration, or under any other obligation
involving the duty to make delivery of, or to return the same; (b) that there be
misappropriation or conversion of such money or property by the offender or
denial on his part of such receipt; (c) that such misappropriation or
conversion or denial is to the prejudice of another; and (d) that there is a
demand made by the offended party on the offender.8

Petitioner argues that the last element, which is, that there is a demand by
the offended party on the offender, was not proved. This Court disagrees. In
his testimony, private complainant narrated how he was able to locate
petitioner after almost two (2) months from the time he gave the pieces of
jewelry and asked petitioner about the same items with the latter promising
to pay them. Thus:

PROS. MARTINEZ

q Now, Mr. Witness, this was executed on 2 May 1991, and this transaction
could have been finished on 5 July 1991, the question is what happens (sic)
when the deadline came?

a I went looking for him, sir.

q For whom?

a Lito Corpuz, sir.

q Were you able to look (sic) for him?

a I looked for him for a week, sir.

q Did you know his residence?

a Yes, sir.

q Did you go there?

a Yes, sir.

q Did you find him?

a No, sir.

q Were you able to talk to him since 5 July 1991?

a I talked to him, sir.

q How many times?

a Two times, sir.

q What did you talk (sic) to him?

a About the items I gave to (sic) him, sir.

q Referring to Exhibit A-2?

a Yes, sir, and according to him he will take his obligation and I asked him
where the items are and he promised me that he will pay these amount, sir.

q Up to this time that you were here, were you able to collect from him
partially or full?

a No, sir.9

No specific type of proof is required to show that there was

demand.10 Demand need not even be formal; it may be verbal.11 The specific
word "demand" need not even be used to show that it has indeed been
made upon the person charged, since even a mere query as to the
whereabouts of the money [in this case, property], would be tantamount to a
demand.12 As expounded in Asejo v. People:13

With regard to the necessity of demand, we agree with the CA that demand
under this kind of estafa need not be formal or written. The appellate court
observed that the law is silent with regard to the form of demand in estafa
under Art. 315 1(b), thus:

When the law does not qualify, We should not qualify. Should a written
demand be necessary, the law would have stated so. Otherwise, the word
"demand" should be interpreted in its general meaning as to include both
written and oral demand. Thus, the failure of the prosecution to present a
written demand as evidence is not fatal.

In Tubb v. People, where the complainant merely verbally inquired about the
money entrusted to the accused, we held that the query was tantamount to a
demand, thus:

x x x [T]he law does not require a demand as a condition precedent to the

existence of the crime of embezzlement. It so happens only that failure to
account, upon demand for funds or property held in trust, is circumstantial
evidence of misappropriation. The same way, however, be established by
other proof, such as that introduced in the case at bar.14

In view of the foregoing and based on the records, the prosecution was able
to prove the existence of all the elements of the crime. Private complainant
gave petitioner the pieces of jewelry in trust, or on commission basis, as
shown in the receipt dated May 2, 1991 with an obligation to sell or return
the same within sixty (60) days, if unsold. There was misappropriation when
petitioner failed to remit the proceeds of those pieces of jewelry sold, or if no
sale took place, failed to return the same pieces of jewelry within or after the
agreed period despite demand from the private complainant, to the prejudice
of the latter.

Anent the credibility of the prosecution's sole witness, which is questioned by

petitioner, the same is unmeritorious. Settled is the rule that in assessing the
credibility of witnesses, this Court gives great respect to the evaluation of the
trial court for it had the unique opportunity to observe the demeanor of
witnesses and their deportment on the witness stand, an opportunity denied
the appellate courts, which merely rely on the records of the case.15 The
assessment by the trial court is even conclusive and binding if not tainted
with arbitrariness or oversight of some fact or circumstance of weight and
influence, especially when such finding is affirmed by the CA.16 Truth is
established not by the number of witnesses, but by the quality of their
testimonies, for in determining the value and credibility of evidence, the
witnesses are to be weighed not numbered.17

As regards the penalty, while this Court's Third Division was deliberating on
this case, the question of the continued validity of imposing on persons
convicted of crimes involving property came up. The legislature apparently
pegged these penalties to the value of the money and property in 1930 when
it enacted the Revised Penal Code. Since the members of the division
reached no unanimity on this question and since the issues are of first
impression, they decided to refer the case to the Court en banc for
consideration and resolution. Thus, several amici curiae were invited at the
behest of the Court to give their academic opinions on the matter. Among
those that graciously complied were Dean Jose Manuel Diokno, Dean
Sedfrey M. Candelaria, Professor Alfredo F. Tadiar, the Senate President,
and the Speaker of the House of Representatives. The parties were later
heard on oral arguments before the Court en banc, with Atty. Mario L.
Bautista appearing as counsel de oficio of the petitioner.

After a thorough consideration of the arguments presented on the matter,

this Court finds the following:

There seems to be a perceived injustice brought about by the range of

penalties that the courts continue to impose on crimes against property
committed today, based on the amount of damage measured by the value of
money eighty years ago in 1932. However, this Court cannot modify the said
range of penalties because that would constitute judicial legislation. What the
legislature's perceived failure in amending the penalties provided for in the
said crimes cannot be remedied through this Court's decisions, as that would
be encroaching upon the power of another branch of the government. This,
however, does not render the whole situation without any remedy. It can be
appropriately presumed that the framers of the Revised Penal Code (RPC)
had anticipated this matter by including Article 5, which reads:

ART. 5. Duty of the court in connection with acts which should be repressed
but which are not covered by the law, and in cases of excessive penalties. -
Whenever a court has knowledge of any act which it may deem proper to
repress and which is not punishable by law, it shall render the proper
decision, and shall report to the Chief Executive, through the Department of
Justice, the reasons which induce the court to believe that said act should be
made the subject of penal legislation.

In the same way, the court shall submit to the Chief Executive, through the
Department of Justice, such statement as may be deemed proper, without
suspending the execution of the sentence, when a strict enforcement of the
provisions of this Code would result in the imposition of a clearly excessive
penalty, taking into consideration the degree of malice and the injury caused
by the offense.18

The first paragraph of the above provision clearly states that for acts bourne
out of a case which is not punishable by law and the court finds it proper to
repress, the remedy is to render the proper decision and thereafter, report to
the Chief Executive, through the Department of Justice, the reasons why the
same act should be the subject of penal legislation. The premise here is that
a deplorable act is present but is not the subject of any penal legislation,
thus, the court is tasked to inform the Chief Executive of the need to make
that act punishable by law through legislation. The second paragraph is
similar to the first except for the situation wherein the act is already
punishable by law but the corresponding penalty is deemed by the court as
excessive. The remedy therefore, as in the first paragraph is not to suspend
the execution of the sentence but to submit to the Chief Executive the
reasons why the court considers the said penalty to be non-commensurate
with the act committed. Again, the court is tasked to inform the Chief
Executive, this time, of the need for a legislation to provide the proper
penalty.

In his book, Commentaries on the Revised Penal Code,19 Guillermo B.

Guevara opined that in Article 5, the duty of the court is merely to report to
the Chief Executive, with a recommendation for an amendment or
modification of the legal provisions which it believes to be harsh. Thus:

This provision is based under the legal maxim "nullum crimen, nulla poena
sige lege," that is, that there can exist no punishable act except those
previously and specifically provided for by penal statute.

No matter how reprehensible an act is, if the law-making body does not
deem it necessary to prohibit its perpetration with penal sanction, the Court
of justice will be entirely powerless to punish such act.

Under the provisions of this article the Court cannot suspend the execution
of a sentence on the ground that the strict enforcement of the provisions of
this Code would cause excessive or harsh penalty. All that the Court could
do in such eventuality is to report the matter to the Chief Executive with a
recommendation for an amendment or modification of the legal provisions
which it believes to be harsh.20

Anent the non-suspension of the execution of the sentence, retired Chief

Justice Ramon C. Aquino and retired Associate Justice Carolina C. Griño-
Aquino, in their book, The Revised Penal Code,21 echoed the above-cited
commentary, thus:

The second paragraph of Art. 5 is an application of the humanitarian

principle that justice must be tempered with mercy. Generally, the courts
have nothing to do with the wisdom or justness of the penalties fixed by law.
"Whether or not the penalties prescribed by law upon conviction of violations
of particular statutes are too severe or are not severe enough, are questions
as to which commentators on the law may fairly differ; but it is the duty of the
courts to enforce the will of the legislator in all cases unless it clearly
appears that a given penalty falls within the prohibited class of excessive
fines or cruel and unusual punishment." A petition for clemency should be
addressed to the Chief Executive.22

There is an opinion that the penalties provided for in crimes against property
be based on the current inflation rate or at the ratio of ₱1.00 is equal to
₱100.00 . However, it would be dangerous as this would result in
uncertainties, as opposed to the definite imposition of the penalties. It must
be remembered that the economy fluctuates and if the proposed imposition
of the penalties in crimes against property be adopted, the penalties will not
cease to change, thus, making the RPC, a self-amending law. Had the
framers of the RPC intended that to be so, it should have provided the same,
instead, it included the earlier cited Article 5 as a remedy. It is also improper
to presume why the present legislature has not made any moves to amend
the subject penalties in order to conform with the present times. For all we
know, the legislature intends to retain the same penalties in order to deter
the further commission of those punishable acts which have increased
tremendously through the years. In fact, in recent moves of the legislature, it
is apparent that it aims to broaden the coverage of those who violate penal
laws. In the crime of Plunder, from its original minimum amount of
₱100,000,000.00 plundered, the legislature lowered it to ₱50,000,000.00. In
the same way, the legislature lowered the threshold amount upon which the
Anti-Money Laundering Act may apply, from ₱1,000,000.00 to ₱500,000.00.

It is also worth noting that in the crimes of Theft and Estafa, the present
penalties do not seem to be excessive compared to the proposed imposition
of their corresponding penalties. In Theft, the provisions state that:

Art. 309. Penalties. — Any person guilty of theft shall be punished by:

1. The penalty of prision mayor in its minimum and medium periods, if

the value of the thing stolen is more than 12,000 pesos but does not
exceed 22,000 pesos, but if the value of the thing stolen exceeds the
latter amount the penalty shall be the maximum period of the one
prescribed in this paragraph, and one year for each additional ten
thousand pesos, but the total of the penalty which may be imposed
shall not exceed twenty years. In such cases, and in connection with
 the accessory penalties which may be imposed and for the purpose of
the other provisions of this Code, the penalty shall be termed prision
mayor or reclusion temporal, as the case may be.

2. The penalty of prision correccional in its medium and maximum

periods, if the value of the thing stolen is more than 6,000 pesos but
does not exceed 12,000 pesos.

3. The penalty of prision correccional in its minimum and medium

periods, if the value of the property stolen is more than 200 pesos but
does not exceed 6,000 pesos.

4. Arresto mayor in its medium period to prision correccional in its

minimum period, if the value of the property stolen is over 50 pesos but
does not exceed 200 pesos.

5. Arresto mayor to its full extent, if such value is over 5 pesos but does
not exceed 50 pesos.

6. Arresto mayor in its minimum and medium periods, if such value

does not exceed 5 pesos.

7. Arresto menor or a fine not exceeding 200 pesos, if the theft is

committed under the circumstances enumerated in paragraph 3 of the
next preceding article and the value of the thing stolen does not exceed
5 pesos. If such value exceeds said amount, the provision of any of the
five preceding subdivisions shall be made applicable.

8. Arresto menor in its minimum period or a fine not exceeding 50

pesos, when the value of the thing stolen is not over 5 pesos, and the
offender shall have acted under the impulse of hunger, poverty, or the
difficulty of earning a livelihood for the support of himself or his family.

In a case wherein the value of the thing stolen is ₱6,000.00, the above-
provision states that the penalty is prision correccional in its minimum and
medium periods (6 months and 1 day to 4 years and 2 months). Applying the
proposal, if the value of the thing stolen is ₱6,000.00, the penalty is
imprisonment of arresto mayor in its medium period to prision correccional
minimum period (2 months and 1 day to 2 years and 4 months). It would
seem that under the present law, the penalty imposed is almost the same as
the penalty proposed. In fact, after the application of the Indeterminate
Sentence Law under the existing law, the minimum penalty is still lowered by
one degree; hence, the minimum penalty is arresto mayor in its medium
period to maximum period (2 months and 1 day to 6 months), making the
offender qualified for pardon or parole after serving the said minimum period
and may even apply for probation. Moreover, under the proposal, the
minimum penalty after applying the Indeterminate Sentence Law is arresto
menor in its maximum period to arresto mayor in its minimum period (21
days to 2 months) is not too far from the minimum period under the existing
law. Thus, it would seem that the present penalty imposed under the law is
not at all excessive. The same is also true in the crime of Estafa.23

Moreover, if we apply the ratio of 1:100, as suggested to the value of the

thing stolen in the crime of Theft and the damage caused in the crime of
Estafa, the gap between the minimum and the maximum amounts, which is
the basis of determining the proper penalty to be imposed, would be too
wide and the penalty imposable would no longer be commensurate to the act
committed and the value of the thing stolen or the damage caused:

I. Article 309, or the penalties for the crime of Theft, the value would be
modified but the penalties are not changed:

1. ₱12,000.00 to ₱22,000.00 will become ₱1,200,000.00 to

₱2,200,000.00, punished by prision mayor minimum to prision mayor
medium (6 years and 1 day to 10 years).

2. ₱6,000.00 to ₱12,000.00 will become ₱600,000.00 to

₱1,200,000.00, punished by prision correccional medium and to prision
correccional maximum (2 years, 4 months and 1 day to 6 years).24

3. ₱200.00 to ₱6,000.00 will become ₱20,000.00 to ₱600,000.00,

punishable by prision correccional minimum to prision correccional
medium (6 months and 1 day to 4 years and 2 months).
 4. ₱50.00 to ₱200.00 will become ₱5,000.00 to ₱20,000.00, punishable
by arresto mayor medium to prision correccional minimum (2 months
and 1 day to 2 years and 4 months).

5. ₱5.00 to ₱50.00 will become ₱500.00 to ₱5,000.00, punishable by

arresto mayor (1 month and 1 day to 6 months).

6. ₱5.00 will become ₱500.00, punishable by arresto mayor minimum

to arresto mayor medium.

x x x x.

II. Article 315, or the penalties for the crime of Estafa, the value would also
be modified but the penalties are not changed, as follows:

1st. ₱12,000.00 to ₱22,000.00, will become ₱1,200,000.00 to

₱2,200,000.00, punishable by prision correccional maximum to prision
mayor minimum (4 years, 2 months and 1 day to 8 years).25

2nd. ₱6,000.00 to ₱12,000.00 will become ₱600,000.00 to

₱1,200,000.00, punishable by prision correccional minimum to prision
correccional medium (6 months and 1 day to 4 years and 2 months).26

3rd. ₱200.00 to ₱6,000.00 will become ₱20,000.00 to ₱600,000.00,

punishable by arresto mayor maximum to prision correccional minimum
(4 months and 1 day to 2 years and 4 months).

4th. ₱200.00 will become ₱20,000.00, punishable by arresto mayor

maximum (4 months and 1 day to 6 months).

An argument raised by Dean Jose Manuel I. Diokno, one of our esteemed

amici curiae, is that the incremental penalty provided under Article 315 of the
RPC violates the Equal Protection Clause.

The equal protection clause requires equality among equals, which is

determined according to a valid classification. The test developed by
jurisprudence here and yonder is that of reasonableness,27 which has four
requisites:

(1) The classification rests on substantial distinctions;

(2) It is germane to the purposes of the law;

(3) It is not limited to existing conditions only; and

(4) It applies equally to all members of the same class.28

According to Dean Diokno, the Incremental Penalty Rule (IPR) does not rest
on substantial distinctions as ₱10,000.00 may have been substantial in the
past, but it is not so today, which violates the first requisite; the IPR was
devised so that those who commit estafa involving higher amounts would
receive heavier penalties; however, this is no longer achieved, because a
person who steals ₱142,000.00 would receive the same penalty as someone
who steals hundreds of millions, which violates the second requisite; and,
the IPR violates requisite no. 3, considering that the IPR is limited to existing
conditions at the time the law was promulgated, conditions that no longer
exist today.

Assuming that the Court submits to the argument of Dean Diokno and
declares the incremental penalty in Article 315 unconstitutional for violating
the equal protection clause, what then is the penalty that should be applied
in case the amount of the thing subject matter of the crime exceeds
₱22,000.00? It seems that the proposition poses more questions than
answers, which leads us even more to conclude that the appropriate remedy
is to refer these matters to Congress for them to exercise their inherent
power to legislate laws.

Even Dean Diokno was of the opinion that if the Court declares the IPR
unconstitutional, the remedy is to go to Congress. Thus:

xxxx

JUSTICE PERALTA:
Now, your position is to declare that the incremental penalty should be struck
down as unconstitutional because it is absurd.

DEAN DIOKNO:

Absurd, it violates equal protection, Your Honor, and cruel and unusual
punishment.

JUSTICE PERALTA:

Then what will be the penalty that we are going to impose if the amount is
more than Twenty-Two Thousand (₱22,000.00) Pesos.

DEAN DIOKNO:

Well, that would be for Congress to ... if this Court will declare the
incremental penalty rule unconstitutional, then that would ... the void should
be filled by Congress.

JUSTICE PERALTA:

But in your presentation, you were fixing the amount at One Hundred
Thousand (₱100,000.00) Pesos ...

DEAN DIOKNO:

Well, my presen ... (interrupted)

JUSTICE PERALTA:

For every One Hundred Thousand (₱100,000.00) Pesos in excess of

Twenty-Two Thousand (₱22,000.00) Pesos you were suggesting an
additional penalty of one (1) year, did I get you right?

DEAN DIOKNO:

Yes, Your Honor, that is, if the court will take the route of statutory
interpretation.
JUSTICE PERALTA:

Ah ...

DEAN DIOKNO:

If the Court will say that they can go beyond the literal wording of the law...

JUSTICE PERALTA:

But if we de ... (interrupted)

DEAN DIOKNO:

....then....

JUSTICE PERALTA:

Ah, yeah. But if we declare the incremental penalty as unsconstitutional, the

court cannot fix the amount ...

DEAN DIOKNO:

No, Your Honor.

JUSTICE PERALTA:

... as the equivalent of one, as an incremental penalty in excess of Twenty-

Two Thousand (₱22,000.00) Pesos.

DEAN DIOKNO:

No, Your Honor.

JUSTICE PERALTA:

The Court cannot do that.

DEAN DIOKNO:
Could not be.

JUSTICE PERALTA:

The only remedy is to go to Congress...

DEAN DIOKNO:

Yes, Your Honor.

JUSTICE PERALTA:

... and determine the value or the amount.

DEAN DIOKNO:

Yes, Your Honor.

JUSTICE PERALTA:

That will be equivalent to the incremental penalty of one (1) year in excess of
Twenty-Two Thousand (₱22,000.00) Pesos.

DEAN DIOKNO:

Yes, Your Honor.

JUSTICE PERALTA:

The amount in excess of Twenty-Two Thousand (₱22,000.00) Pesos.

Thank you, Dean.

DEAN DIOKNO:

Thank you.

x x x x29
Dean Diokno also contends that Article 315 of the Revised Penal Code
constitutes cruel and unusual punishment. Citing Solem v. Helm,30 Dean
Diokno avers that the United States Federal Supreme Court has expanded
the application of a similar Constitutional provision prohibiting cruel and
unusual punishment, to the duration of the penalty, and not just its form. The
court therein ruled that three things must be done to decide whether a
sentence is proportional to a specific crime, viz.; (1) Compare the nature and
gravity of the offense, and the harshness of the penalty; (2) Compare the
sentences imposed on other criminals in the same jurisdiction, i.e., whether
more serious crimes are subject to the same penalty or to less serious
penalties; and (3) Compare the sentences imposed for commission of the
same crime in other jurisdictions.

However, the case of Solem v. Helm cannot be applied in the present case,
because in Solem what respondent therein deemed cruel was the penalty
imposed by the state court of South Dakota after it took into account the
latter’s recidivist statute and not the original penalty for uttering a "no
account" check. Normally, the maximum punishment for the crime would
have been five years imprisonment and a $5,000.00 fine. Nonetheless,
respondent was sentenced to life imprisonment without the possibility of
parole under South Dakota’s recidivist statute because of his six prior felony
convictions. Surely, the factual antecedents of Solem are different from the
present controversy.

With respect to the crime of Qualified Theft, however, it is true that the
imposable penalty for the offense is high. Nevertheless, the rationale for the
imposition of a higher penalty against a domestic servant is the fact that in
the commission of the crime, the helper will essentially gravely abuse the
trust and confidence reposed upon her by her employer. After accepting and
allowing the helper to be a member of the household, thus entrusting upon
such person the protection and safekeeping of the employer’s loved ones
and properties, a subsequent betrayal of that trust is so repulsive as to
warrant the necessity of imposing a higher penalty to deter the commission
of such wrongful acts.
There are other crimes where the penalty of fine and/or imprisonment are
dependent on the subject matter of the crime and which, by adopting the
proposal, may create serious implications. For example, in the crime of
Malversation, the penalty imposed depends on the amount of the money
malversed by the public official, thus:

Art. 217. Malversation of public funds or property; Presumption of

malversation. — Any public officer who, by reason of the duties of his office,
is accountable for public funds or property, shall appropriate the same or
shall take or misappropriate or shall consent, through abandonment or
negligence, shall permit any other person to take such public funds, or
property, wholly or partially, or shall otherwise be guilty of the
misappropriation or malversation of such funds or property, shall suffer:

1. The penalty of prision correccional in its medium and maximum

periods, if the amount involved in the misappropriation or malversation
does not exceed two hundred pesos.

2. The penalty of prision mayor in its minimum and medium periods, if

the amount involved is more than two hundred pesos but does not
exceed six thousand pesos.

3. The penalty of prision mayor in its maximum period to reclusion

temporal in its minimum period, if the amount involved is more than six
thousand pesos but is less than twelve thousand pesos.

4. The penalty of reclusion temporal, in its medium and maximum

periods, if the amount involved is more than twelve thousand pesos but
is less than twenty-two thousand pesos. If the amount exceeds the
latter, the penalty shall be reclusion temporal in its maximum period to
reclusion perpetua.

In all cases, persons guilty of malversation shall also suffer the penalty of
perpetual special disqualification and a fine equal to the amount of the funds
malversed or equal to the total value of the property embezzled.
The failure of a public officer to have duly forthcoming any public funds or
property with which he is chargeable, upon demand by any duly authorized
officer, shall be prima facie evidence that he has put such missing funds or
property to personal use.

The above-provisions contemplate a situation wherein the Government loses

money due to the unlawful acts of the offender. Thus, following the proposal,
if the amount malversed is ₱200.00 (under the existing law), the amount now
becomes ₱20,000.00 and the penalty is prision correccional in its medium
and maximum periods (2 years 4 months and 1 day to 6 years). The penalty
may not be commensurate to the act of embezzlement of ₱20,000.00
compared to the acts committed by public officials punishable by a special
law, i.e., Republic Act No. 3019 or the Anti-Graft and Corrupt Practices Act,
specifically Section 3,31 wherein the injury caused to the government is not
generally defined by any monetary amount, the penalty (6 years and 1
month to 15 years)32 under the Anti-Graft Law will now become higher. This
should not be the case, because in the crime of malversation, the public
official takes advantage of his public position to embezzle the fund or
property of the government entrusted to him.

The said inequity is also apparent in the crime of Robbery with force upon
things (inhabited or uninhabited) where the value of the thing unlawfully
taken and the act of unlawful entry are the bases of the penalty imposable,
and also, in Malicious Mischief, where the penalty of imprisonment or fine is
dependent on the cost of the damage caused.

In Robbery with force upon things (inhabited or uninhabited), if we increase

the value of the thing unlawfully taken, as proposed in the ponencia, the sole
basis of the penalty will now be the value of the thing unlawfully taken and
no longer the element of force employed in entering the premises. It may
likewise cause an inequity between the crime of Qualified Trespass to
Dwelling under Article 280, and this kind of robbery because the former is
punishable by prision correccional in its medium and maximum periods (2
years, 4 months and 1 day to 6 years) and a fine not exceeding ₱1,000.00
(₱100,000.00 now if the ratio is 1:100) where entrance to the premises is
with violence or intimidation, which is the main justification of the penalty.
Whereas in the crime of Robbery with force upon things, it is punished with a
penalty of prision mayor (6 years and 1 day to 12 years) if the intruder is
unarmed without the penalty of Fine despite the fact that it is not merely the
illegal entry that is the basis of the penalty but likewise the unlawful taking.

Furthermore, in the crime of Other Mischiefs under Article 329, the highest
penalty that can be imposed is arresto mayor in its medium and maximum
periods (2 months and 1 day to 6 months) if the value of the damage caused
exceeds ₱1,000.00, but under the proposal, the value of the damage will
now become ₱100,000.00 (1:100), and still punishable by arresto mayor (1
month and 1 day to 6 months). And, if the value of the damaged property
does not exceed ₱200.00, the penalty is arresto menor or a fine of not less
than the value of the damage caused and not more than ₱200.00, if the
amount involved does not exceed ₱200.00 or cannot be estimated. Under
the proposal, ₱200.00 will now become ₱20,000.00, which simply means
that the fine of ₱200.00 under the existing law will now become ₱20,000.00.
The amount of Fine under this situation will now become excessive and
afflictive in nature despite the fact that the offense is categorized as a light
felony penalized with a light penalty under Article 26 of the RPC.33 Unless
we also amend Article 26 of the RPC, there will be grave implications on the
penalty of Fine, but changing the same through Court decision, either
expressly or impliedly, may not be legally and constitutionally feasible.

There are other crimes against property and swindling in the RPC that may
also be affected by the proposal, such as those that impose imprisonment
and/or Fine as a penalty based on the value of the damage caused, to wit:
Article 311 (Theft of the property of the National Library and National
Museum), Article 312 (Occupation of real property or usurpation of real rights
in property), Article 313 (Altering boundaries or landmarks), Article 316
(Other forms of swindling), Article 317 (Swindling a minor), Article 318 (Other
deceits), Article 328 (Special cases of malicious mischief) and Article 331
(Destroying or damaging statues, public monuments or paintings). Other
crimes that impose Fine as a penalty will also be affected, such as: Article
213 (Frauds against the public treasury and similar offenses), Article 215
(Prohibited Transactions),

Article 216 (Possession of prohibited interest by a public officer), Article 218

(Failure of accountable officer to render accounts), Article 219 (Failure of a
responsible public officer to render accounts before leaving the country).

In addition, the proposal will not only affect crimes under the RPC. It will also
affect crimes which are punishable by special penal laws, such as Illegal
Logging or Violation of Section 68 of Presidential Decree No. 705, as
amended.34 The law treats cutting, gathering, collecting and possessing
timber or other forest products without license as an offense as grave as and
equivalent to the felony of qualified theft.35 Under the law, the offender shall
be punished with the penalties imposed under Articles 309 and 31036 of the
Revised Penal Code, which means that the penalty imposable for the
offense is, again, based on the value of the timber or forest products
involved in the offense. Now, if we accept the said proposal in the crime of
Theft, will this particular crime of Illegal Logging be amended also in so far
as the penalty is concerned because the penalty is dependent on Articles
309 and 310 of the RPC? The answer is in the negative because the
soundness of this particular law is not in question.

With the numerous crimes defined and penalized under the Revised Penal
Code and Special Laws, and other related provisions of these laws affected
by the proposal, a thorough study is needed to determine its effectivity and
necessity. There may be some provisions of the law that should be
amended; nevertheless, this Court is in no position to conclude as to the
intentions of the framers of the Revised Penal Code by merely making a
study of the applicability of the penalties imposable in the present times.
Such is not within the competence of the Court but of the Legislature which
is empowered to conduct public hearings on the matter, consult legal
luminaries and who, after due proceedings, can decide whether or not to
amend or to revise the questioned law or other laws, or even create a new
legislation which will adopt to the times.
Admittedly, Congress is aware that there is an urgent need to amend the
Revised Penal Code. During the oral arguments, counsel for the Senate
informed the Court that at present, fifty-six (56) bills are now pending in the
Senate seeking to amend the Revised Penal Code,37 each one proposing
much needed change and updates to archaic laws that were promulgated
decades ago when the political, socio-economic, and cultural settings were
far different from today’s conditions.

Verily, the primordial duty of the Court is merely to apply the law in such a
way that it shall not usurp legislative powers by judicial legislation and that in
the course of such application or construction, it should not make or
supervise legislation, or under the guise of interpretation, modify, revise,
amend, distort, remodel, or rewrite the law, or give the law a construction
which is repugnant to its terms.38 The Court should apply the law in a
manner that would give effect to their letter and spirit, especially when the
law is clear as to its intent and purpose. Succinctly put, the Court should shy
away from encroaching upon the primary function of a co-equal branch of
the Government; otherwise, this would lead to an inexcusable breach of the
doctrine of separation of powers by means of judicial legislation.

Moreover, it is to be noted that civil indemnity is, technically, not a penalty or

a Fine; hence, it can be increased by the Court when appropriate. Article
2206 of the Civil Code provides:

Art. 2206. The amount of damages for death caused by a crime or quasi-
delict shall be at least three thousand pesos, even though there may have
been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of
the deceased, and the indemnity shall be paid to the heirs of the latter;
such indemnity shall in every case be assessed and awarded by the
court, unless the deceased on account of permanent physical disability
not caused by the defendant, had no earning capacity at the time of his
death;
 (2) If the deceased was obliged to give support according to the
provisions of Article 291, the recipient who is not an heir called to the
decedent's inheritance by the law of testate or intestate succession,
may demand support from the person causing the death, for a period
not exceeding five years, the exact duration to be fixed by the court;

(3) The spouse, legitimate and illegitimate descendants and

ascendants of the deceased may demand moral damages for mental
anguish by reason of the death of the deceased.

In our jurisdiction, civil indemnity is awarded to the offended party as a kind

of monetary restitution or compensation to the victim for the damage or
infraction that was done to the latter by the accused, which in a sense only
covers the civil aspect. Precisely, it is civil indemnity. Thus, in a crime where
a person dies, in addition to the penalty of imprisonment imposed to the
offender, the accused is also ordered to pay the victim a sum of money as
restitution. Clearly, this award of civil indemnity due to the death of the victim
could not be contemplated as akin to the value of a thing that is unlawfully
taken which is the basis in the imposition of the proper penalty in certain
crimes. Thus, the reasoning in increasing the value of civil indemnity
awarded in some offense cannot be the same reasoning that would sustain
the adoption of the suggested ratio. Also, it is apparent from Article 2206 that
the law only imposes a minimum amount for awards of civil indemnity, which
is ₱3,000.00. The law did not provide for a ceiling. Thus, although the
minimum amount for the award cannot be changed, increasing the amount
awarded as civil indemnity can be validly modified and increased when the
present circumstance warrants it. Corollarily, moral damages under Article
222039 of the Civil Code also does not fix the amount of damages that can
be awarded. It is discretionary upon the court, depending on the mental
anguish or the suffering of the private offended party. The amount of moral
damages can, in relation to civil indemnity, be adjusted so long as it does not
exceed the award of civil indemnity.

In addition, some may view the penalty provided by law for the offense
committed as tantamount to cruel punishment. However, all penalties are
generally harsh, being punitive in nature. Whether or not they are excessive
or amount to cruel punishment is a matter that should be left to lawmakers. It
is the prerogative of the courts to apply the law, especially when they are
clear and not subject to any other interpretation than that which is plainly
written.

Similar to the argument of Dean Diokno, one of Justice Antonio Carpio’s

opinions is that the incremental penalty provision should be declared
unconstitutional and that the courts should only impose the penalty
corresponding to the amount of ₱22,000.00, regardless if the actual amount
involved exceeds ₱22,000.00. As suggested, however, from now until the
law is properly amended by Congress, all crimes of Estafa will no longer be
punished by the appropriate penalty. A conundrum in the regular course of
criminal justice would occur when every accused convicted of the crime of
estafa will be meted penalties different from the proper penalty that should
be imposed. Such drastic twist in the application of the law has no legal
basis and directly runs counter to what the law provides.

It should be noted that the death penalty was reintroduced in the

dispensation of criminal justice by the Ramos Administration by virtue of
Republic Act No. 765940 in December 1993. The said law has been
questioned before this Court. There is, arguably, no punishment more cruel
than that of death. Yet still, from the time the death penalty was re-imposed
until its lifting in June 2006 by Republic Act No. 9346,41 the Court did not
impede the imposition of the death penalty on the ground that it is a "cruel
punishment" within the purview of Section 19 (1),42 Article III of the
Constitution. Ultimately, it was through an act of Congress suspending the
imposition of the death penalty that led to its non-imposition and not via the
intervention of the Court.

Even if the imposable penalty amounts to cruel punishment, the Court

cannot declare the provision of the law from which the proper penalty
emanates unconstitutional in the present action. Not only is it violative of due
process, considering that the State and the concerned parties were not given
the opportunity to comment on the subject matter, it is settled that the
constitutionality of a statute cannot be attacked collaterally because
constitutionality issues must be pleaded directly and not collaterally,43 more
so in the present controversy wherein the issues never touched upon the
constitutionality of any of the provisions of the Revised Penal Code.

Besides, it has long been held that the prohibition of cruel and unusual
punishments is generally aimed at the form or character of the punishment
rather than its severity in respect of duration or amount, and applies to
punishments which public sentiment has regarded as cruel or obsolete, for
instance, those inflicted at the whipping post, or in the pillory, burning at the
stake, breaking on the wheel, disemboweling, and the like. Fine and
imprisonment would not thus be within the prohibition.44

It takes more than merely being harsh, excessive, out of proportion, or

severe for a penalty to be obnoxious to the Constitution. The fact that the
punishment authorized by the statute is severe does not make it cruel and
unusual. Expressed in other terms, it has been held that to come under the
ban, the punishment must be "flagrantly and plainly oppressive," "wholly
disproportionate to the nature of the offense as to shock the moral sense of
the community."45

Cruel as it may be, as discussed above, it is for the Congress to amend the
law and adapt it to our modern time.

The solution to the present controversy could not be solved by merely

adjusting the questioned monetary values to the present value of money
based only on the current inflation rate. There are other factors and variables
that need to be taken into consideration, researched, and deliberated upon
before the said values could be accurately and properly adjusted. The
effects on the society, the injured party, the accused, its socio-economic
impact, and the likes must be painstakingly evaluated and weighed upon in
order to arrive at a wholistic change that all of us believe should be made to
our existing law. Dejectedly, the Court is ill-equipped, has no resources, and
lacks sufficient personnel to conduct public hearings and sponsor studies
and surveys to validly effect these changes in our Revised Penal Code. This
function clearly and appropriately belongs to Congress. Even Professor
Tadiar concedes to this conclusion, to wit:

xxxx

JUSTICE PERALTA:

Yeah, Just one question. You are suggesting that in order to determine the
value of Peso you have to take into consideration several factors.

PROFESSOR TADIAR:

Yes.

JUSTICE PERALTA:

Per capita income.

PROFESSOR TADIAR:

Per capita income.

JUSTICE PERALTA:

Consumer price index.

PROFESSOR TADIAR:

Yeah.

JUSTICE PERALTA:

Inflation ...

PROFESSOR TADIAR:

Yes.

JUSTICE PERALTA:
... and so on. Is the Supreme Court equipped to determine those factors?

PROFESSOR TADIAR:

There are many ways by which the value of the Philippine Peso can be
determined utilizing all of those economic terms.

JUSTICE PERALTA:

Yeah, but ...

PROFESSOR TADIAR:

And I don’t think it is within the power of the Supreme Court to pass upon
and peg the value to One Hundred (₱100.00) Pesos to ...

JUSTICE PERALTA:

Yeah.

PROFESSOR TADIAR:

... One (₱1.00.00) Peso in 1930.

JUSTICE PERALTA:

That is legislative in nature.

PROFESSOR TADIAR:

That is my position that the Supreme Court ...

JUSTICE PERALTA:

Yeah, okay.

PROFESSOR TADIAR:
... has no power to utilize the power of judicial review to in order to adjust, to
make the adjustment that is a power that belongs to the legislature.

JUSTICE PERALTA:

Thank you, Professor.

PROFESSOR TADIAR:

Thank you.46

Finally, the opinion advanced by Chief Justice Maria Lourdes P. A. Sereno

echoes the view that the role of the Court is not merely to dispense justice,
but also the active duty to prevent injustice. Thus, in order to prevent
injustice in the present controversy, the Court should not impose an obsolete
penalty pegged eighty three years ago, but consider the proposed ratio of
1:100 as simply compensating for inflation. Furthermore, the Court has in the
past taken into consideration "changed conditions" or "significant changes in
circumstances" in its decisions.

Similarly, the Chief Justice is of the view that the Court is not delving into the
validity of the substance of a statute. The issue is no different from the
Court’s adjustment of indemnity in crimes against persons, which the Court
had previously adjusted in light of current times, like in the case of People v.
Pantoja.47 Besides, Article 10 of the Civil Code mandates a presumption that
the lawmaking body intended right and justice to prevail.

With due respect to the opinions and proposals advanced by the Chief
Justice and my Colleagues, all the proposals ultimately lead to prohibited
judicial legislation. Short of being repetitious and as extensively discussed
above, it is truly beyond the powers of the Court to legislate laws, such
immense power belongs to Congress and the Court should refrain from
crossing this clear-cut divide. With regard to civil indemnity, as elucidated
before, this refers to civil liability which is awarded to the offended party as a
kind of monetary restitution. It is truly based on the value of money. The
same cannot be said on penalties because, as earlier stated, penalties are
not only based on the value of money, but on several other factors. Further,
since the law is silent as to the maximum amount that can be awarded and
only pegged the minimum sum, increasing the amount granted as civil
indemnity is not proscribed. Thus, it can be adjusted in light of current
conditions.

Now, with regard to the penalty imposed in the present case, the CA
modified the ruling of the RTC. The RTC imposed the indeterminate penalty
of four (4) years and two (2) months of prision correccional in its medium
period, as minimum, to fourteen (14) years and eight (8) months of reclusion
temporal in its minimum period, as maximum. However, the CA imposed the
indeterminate penalty of four (4) years and two (2) months of prision
correccional, as minimum, to eight (8) years of prision mayor, as maximum,
plus one (1) year for each additional ₱10,000.00, or a total of seven (7)
years.

In computing the penalty for this type of estafa, this Court's ruling in Cosme,
Jr. v. People48 is highly instructive, thus:

With respect to the imposable penalty, Article 315 of the Revised Penal
Code provides:

ART. 315 Swindling (estafa). - Any person who shall defraud another by any
of the means mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision

mayor in its minimum period, if the amount of the fraud is over 12,000 but
does not exceed 22,000 pesos, and if such amount exceeds the latter sum,
the penalty provided in this paragraph shall be imposed in its maximum
period, adding one year for each additional 10,000 pesos; but the total
penalty which may be imposed shall not exceed twenty years. In such case,
and in connection with the accessory penalties which may be imposed and
for the purpose of the other provisions of this Code, the penalty shall be
termed prision mayor or reclusion temporal, as the case may be.
The penalty prescribed by Article 315 is composed of only two, not three,
periods, in which case, Article 65 of the same Code requires the division of
the time included in the penalty into three equal portions of time included in
the penalty prescribed, forming one period of each of the three portions.
Applying the latter provisions, the maximum, medium and minimum periods
of the penalty prescribed are:

Maximum - 6 years, 8 months, 21 days to 8 years

Medium - 5 years, 5 months, 11 days to 6 years, 8 months, 20 days

Minimum - 4 years, 2 months, 1 day to 5 years, 5 months, 10 days49

To compute the maximum period of the prescribed penalty, prisión

correccional maximum to prisión mayor minimum should be divided into
three equal portions of time each of which portion shall be deemed to form
one period in accordance with Article 6550 of the RPC.51 In the present case,
the amount involved is ₱98,000.00, which exceeds ₱22,000.00, thus, the
maximum penalty imposable should be within the maximum period of 6
years, 8 months and 21 days to 8 years of prision mayor. Article 315 also
states that a period of one year shall be added to the penalty for every
additional ₱10,000.00 defrauded in excess of ₱22,000.00, but in no case
shall the total penalty which may be imposed exceed 20 years.

Considering that the amount of ₱98,000.00 is ₱76,000.00 more than the

₱22,000.00 ceiling set by law, then, adding one year for each additional
₱10,000.00, the maximum period of 6 years, 8 months and 21 days to 8
years of prision mayor minimum would be increased by 7 years. Taking the
maximum of the prescribed penalty, which is 8 years, plus an additional 7
years, the maximum of the indeterminate penalty is 15 years.

Applying the Indeterminate Sentence Law, since the penalty prescribed by

law for the estafa charge against petitioner is prision correccional maximum
to prision mayor minimum, the penalty next lower would then be prision
correccional in its minimum and medium periods.
Thus, the minimum term of the indeterminate sentence should be anywhere
from 6 months and 1 day to 4 years and 2 months.

One final note, the Court should give Congress a chance to perform its
primordial duty of lawmaking. The Court should not pre-empt Congress and
usurp its inherent powers of making and enacting laws. While it may be the
most expeditious approach, a short cut by judicial fiat is a dangerous
proposition, lest the Court dare trespass on prohibited judicial legislation.

WHEREFORE, the Petition for Review on Certiorari dated November 5,

2007 of petitioner Lito Corpuz is hereby DENIED. Consequently, the
Decision dated March 22, 2007 and Resolution dated September 5, 2007 of
the Court of Appeals, which affirmed with modification the Decision dated
July 30, 2004 of the Regional Trial Court, Branch 46, San Fernando City,
finding petitioner guilty beyond reasonable doubt of the crime of Estafa
under Article 315, paragraph (1), sub-paragraph (b) of the Revised Penal
Code, are hereby AFFIRMED with MODIFICATION that the penalty imposed
is the indeterminate penalty of imprisonment ranging from THREE (3)
YEARS, TWO (2) MONTHS and ELEVEN DAYS of prision correccional, as
minimum, to FIFTEEN (15) YEARS of reclusion temporal as maximum.

Pursuant to Article 5 of the Revised Penal Code, let a Copy of this Decision
be furnished the President of the Republic of the Philippines, through the
Department of Justice.

Also, let a copy of this Decision be furnished the President of the Senate and
the Speaker of the House of Representatives.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:
 See Concurring and Dissenting Opinion
MARIA LOURDES P.A. SERENO
Chief Justice

See Dissenting Opinion PRESBITERO J. VELASCO,

ANTONIO T. CARPIO JR.
Associate Justice Associate Justice
TERESITA J. LEONARDO-DE See: Concurring Opinion
CASTRO ARTURO D. BRION
Associate Justice Associate Justice
I take no part due to prior action
I join the Dissent of J. Abad
in the CA
MARIANO C. DEL CASTILLO
LUCAS P. BERSAMIN*
Associate Justice
Associate Justice
See Dissenting Opinion
MARTIN S. VILLARAMA, JR.
ROBERTO A. ABAD
Associate Justice
Associate Justice
JOSE PORTUGAL PEREZ JOSE CATRAL MENDOZA
Associate Justice Associate Justice
No Part
BVIENVENIDO L. REYES ESTELA M. PERLAS-
Associate Justice BERNABE*
Associate Justice

MARVIC MARIO VICTOR F. LEONEN

Associate Justice

CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision were reached in consultation before the
case was assigned to the writer of the opinion of the Court.

MARIA LOURDES P. A. SERENO

Chief Justice

Footnotes

* No part.
1
Penned by Associate Justice Estela M. Perlas-Bernabe (now a
member of the Supreme Court), with Associate Justices Rodrigo V.
Cosico and Lucas P. Bersamin (now a member of the Supreme Court),
concurring; rollo, pp. 31-41.
2
Rollo, p. 43.
3
Id. at 48-52.
4
Libuit v. People, 506 Phil. 591, 599 (2005).
5
Blas v. Angeles- Hutalla, 482 Phil. 485, 501 (2004).
6
Quinto v. People, 365 Phil. 259, 270 (1999).
7
Rollo, p. 37. (Citations omitted.)
8
Diaz v. People, 585 Phil. 318, 332 (2008), citing Pangilinan v. Court of
Appeals, 378 Phil. 670, 675 (1999).
9
TSN, December 17, 1992, pp. 9-10. (Emphasis supplied.)
10
Tan v. People, 542 Phil. 188, 201 (2007).
 11
Id., citing Lee v. People, 495 Phil. 239, 250 (2005).
12
Id.
13
555 Phil. 106 (2007).
14
Id. at 114. (Citations omitted.)
15
Cosme, Jr. v. People, 538 Phil. 52, 66 (2006), citing People v. Garillo,
446 Phil. 163, 174-175 (2003).
16
Id., citing Sullon v. People, 500 Phil. 39, 45 (2005) ; People v. Bulan,
498 Phil. 586, 598 (2005).
17
Id. at 67, citing People v. Gaspar, 376 Phil. 762, 779 (1999).
18
Emphasis supplied.
19
Third Edition, 1940.
20
Id. at 16. (Emphasis supplied)
21
1997 Edition.
22
Id. at 93, citing United States v. Valera Ang Y, 26 Phil. 598 (1914);
People v. Salazar y Gabriel, 102 Phil. 1184 (1958); Tiu Ua, 51 O.G.
1863; Limaco, 99 Phil. 35 (1956), and People v. Del Rosario y
Natividad, 62 Phil. 824 (1936). (Emphasis supplied.)
23
Art. 315. Swindling (estafa). — Any person who shall defraud another
by any of the means mentioned hereinbelow shall be punished by:

1st. The penalty of prision correccional in its maximum period to prision

mayor in its minimum period, if the amount of the fraud is over 12,000 pesos
but does not exceed 22,000 pesos, and if such amount exceeds the latter
sum, the penalty provided in this paragraph shall be imposed in its
maximum period, adding one year for each additional 10,000 pesos; but the
total penalty which may be imposed shall not exceed twenty years. In such
cases, and in connection with the accessory penalties which may be
imposed under the provisions of this Code, the penalty shall be termed
prision mayor or reclusion temporal, as the case may be.

2nd. The penalty of prision correccional in its minimum and medium periods,
if the amount of the fraud is over 6,000 pesos but does not exceed 12,000
pesos;

3rd. The penalty of arresto mayor in its maximum period to prision

correccional in its minimum period if such amount is over 200 pesos but
does not exceed 6,000 pesos; and

4th. By arresto mayor in its maximum period, if such amount does not
exceed 200 pesos, provided that in the four cases mentioned, the fraud be
committed by any of the following means:

1. With unfaithfulness or abuse of confidence, namely:

(a) By altering the substance, quantity, or quality or anything of value which

the offender shall deliver by virtue of an obligation to do so, even though
such obligation be based on an immoral or illegal consideration.

(b) By misappropriating or converting, to the prejudice of another, money,

goods, or any other personal property received by the offender in trust or
on commission, or for administration, or under any other obligation
involving the duty to make delivery of or to return the same, even though
such obligation be totally or partially guaranteed by a bond; or by denying
having received such money, goods, or other property.

(c) By taking undue advantage of the signature of the offended party in

blank, and by writing any document above such signature in blank, to the
prejudice of the offended party or of any third person.

2. By means of any of the following false pretenses or fraudulent acts

executed prior to or simultaneously with the commission of the fraud:
(a) By using fictitious name, or falsely pretending to possess power,
influence, qualifications, property, credit, agency, business or imaginary
transactions, or by means of other similar deceits.

(b) By altering the quality, fineness or weight of anything pertaining to his

art or business.

(c) By pretending to have bribed any Government employee, without

prejudice to the action for calumny which the offended party may deem
proper to bring against the offender. In this case, the offender shall be
punished by the maximum period of the penalty.

(d) [By post-dating a check, or issuing a check in payment of an obligation

when the offender therein were not sufficient to cover the amount of the
check. The failure of the drawer of the check to deposit the amount
necessary to cover his check within three (3) days from receipt of notice
from the bank and/or the payee or holder that said check has been
dishonored for lack of insufficiency of funds shall be prima facie evidence of
deceit constituting false pretense or fraudulent act. (As amended by R.A.
4885, approved June 17, 1967.)]

(e) By obtaining any food, refreshment or accommodation at a hotel, inn,

restaurant, boarding house, lodging house, or apartment house and the like
without paying therefor, with intent to defraud the proprietor or manager
thereof, or by obtaining credit at hotel, inn, restaurant, boarding house,
lodging house, or apartment house by the use of any false pretense, or by
abandoning or surreptitiously removing any part of his baggage from a
hotel, inn, restaurant, boarding house, lodging house or apartment house
after obtaining credit, food, refreshment or accommodation therein without
paying for his food, refreshment or accommodation.

3. Through any of the following fraudulent means:

(a) By inducing another, by means of deceit, to sign any

document.
 (b) By resorting to some fraudulent practice to insure success in a
gambling game.

(c) By removing, concealing or destroying, in whole or in part, any

court record, office files, document or any other papers.
24
May be entitled to Probation.
25
May be entitled to Probation if the maximum penalty imposed is 6
years.
26
May be entitled to Probation.
27
Quinto v. Commission on Elections, G.R. No. 189698, February 22,
2010, 613 SCRA 385, 414.
28
People v. Cayat, 68 Phil. 12, 18 (1939).
29
TSN, Oral Arguments, February 25, 2014, pp. 192-195.
30
463 U.S. 277 (1983)
31
Section 3. Corrupt practices of public officers. - In addition to acts or
omissions of public officers already penalized by existing law, the following
shall constitute corrupt practices of any public officer and are hereby
declared to be unlawful:

(a) Persuading, inducing or influencing another public officer to perform an

act constituting a violation of rules and regulations duly promulgated by
competent authority or an offense in connection with the official duties of
the latter, or allowing himself to be persuaded, induced, or influenced to
commit such violation or offense.

(b) Directly or indirectly requesting or receiving any gift, present, share,

percentage, or benefit, for himself or for any other person, in connection
with any contract or transaction between the Government and any other
part, wherein the public officer in his official capacity has to intervene under
the law.

(c) Directly or indirectly requesting or receiving any gift, present or

other pecuniary or material benefit, for himself or for another, from
any person for whom the public officer, in any manner or capacity,
has secured or obtained, or will secure or obtain, any Government
permit or license, in consideration for the help given or to be given,
without prejudice to Section thirteen of this Act.

(d) Accepting or having any member of his family accept

employment in a private enterprise which has pending official
business with him during the pendency thereof or within one year
after its termination.

(e) Causing any undue injury to any party, including the

Government, or giving any private party any unwarranted benefits,
advantage or preference in the discharge of his official
administrative or judicial functions through manifest partiality,
evident bad faith or gross inexcusable negligence. This provision
shall apply to officers and employees of offices or government
corporations charged with the grant of licenses or permits or other
concessions.

(f) Neglecting or refusing, after due demand or request, without

sufficient justification, to act within a reasonable time on any
matter pending before him for the purpose of obtaining, directly or
indirectly, from any person interested in the matter some
pecuniary or material benefit or advantage, or for the purpose of
favoring his own interest or giving undue advantage in favor of or
discriminating against any other interested party.

(g) Entering, on behalf of the Government, into any contract or

transaction manifestly and grossly disadvantageous to the same,
whether or not the public officer profited or will profit thereby.
(h) Director or indirectly having financing or pecuniary interest in any
business, contract or transaction in connection with which he intervenes
or takes part in his official capacity, or in which he is prohibited by the
Constitution or by any law from having any interest.

(i) Directly or indirectly becoming interested, for personal gain, or having a

material interest in any transaction or act requiring the approval of a
board, panel or group of which he is a member, and which
exercises discretion in such approval, even if he votes against the
same or does not participate in the action of the board, committee,
panel or group.

Interest for personal gain shall be presumed against those public officers
responsible for the approval of manifestly unlawful, inequitable, or
irregular transaction or acts by the board, panel or group to which
they belong.

(j) Knowingly approving or granting any license, permit, privilege or benefit

in favor of any person not qualified for or not legally entitled to such
license, permit, privilege or advantage, or of a mere representative
or dummy of one who is not so qualified or entitled.

(k) Divulging valuable information of a confidential character, acquired by

his office or by him on account of his official position to
unauthorized persons, or releasing such information in advance of
its authorized release date.

The person giving the gift, present, share, percentage or benefit referred to
in subparagraphs (b) and (c); or offering or giving to the public
officer the employment mentioned in subparagraph (d); or urging
the divulging or untimely release of the confidential information
referred to in subparagraph (k) of this section shall, together with
the offending public officer, be punished under Section nine of this
Act and shall be permanently or temporarily disqualified in the
discretion of the Court, from transacting business in any form with
the Government.
32
R.A. No. 3019, Sec. 9.
33
Art. 26. When afflictive, correctional, or light penalty. — A fine,
whether imposed as a single of as an alternative penalty, shall be
considered an afflictive penalty, if it exceeds 6,000 pesos; a
correctional penalty, if it does not exceed 6,000 pesos but is not less
than 200 pesos; and a light penalty if it less than 200 pesos.
34
Revised Forestry Code, as amended by E.O. No. 277, Series of
1987.
35
Taopa v. People, 592 Phil. 341, 345 (2005).
36
Art. 310. Qualified theft. — The crime of theft shall be punished by
the penalties next higher by two degrees than those respectively
specified in the next preceding article, if committed by a domestic
servant, or with grave abuse of confidence, or if the property stolen is
motor vehicle, mail matter or large cattle or consists of coconuts taken
from the premises of the plantation or fish taken from a fishpond or
fishery, or if property is taken on the occasion of fire, earthquake,
typhoon, volcanic erruption, or any other calamity, vehicular accident or
civil disturbance.
37
TSN, Oral Arguments, February 25, 2014, p. 167.
38
People v. Quijada, 328 Phil. 505, 548 (1996).
39
Art. 2220. Willful injury to property may be a legal ground for
awarding moral damages if the court should find that, under the
circumstances, such damages are justly due. The same rule applies to
breaches of contract where the defendant acted fraudulently or in bad
faith.
40
AN ACT TO IMPOSE THE DEATH PENALTY ON CERTAIN
HEINOUS CRIMES, AMENDING FOR THAT PURPOSE THE
REVISED PENAL LAWS, AS AMENDED, OTHER SPECIAL PENAL
LAWS, AND FOR OTHER PURPOSES.
41
AN ACT PROHIBITING THE IMPOSITION OF DEATH PENALTY IN
THE PHILIPPINES.
42
Section 19.

1. Excessive fines shall not be imposed, nor cruel, degrading or

inhuman punishment inflicted. x x x.
43
Gutierrez v. Department of Budget and Management, G.R. No.
153266, 159007, 159029, 170084, 172713, 173119, 176477, 177990,
A.M. No. 06-4-02-SB, March 18, 2010, 616 SCRA 1, 25.
44
People v. De la Cruz, 92 Phil. 906, 908 (1953); People v. Tongko,
353 Phil. 37, 43 (1998).
45
People v. Estoista, 93 Phil. 647, 655 (1953); People v. Dionisio, No.
L-15513, March 27, 1968, 22 SCRA 1299, 1301-1302.
46
TSN, Oral Arguments, February 25, 2014, pp. 183-185.
47
No. L-18793, October 11, 1968, 25 SCRA 468.
48
Supra note 15.
49
Id. at 71-72.
50
ART. 65. Rule in Cases in Which the Penalty is Not Composed of
Three Periods. – In cases in which the penalty prescribed by law is not
composed of three periods, the courts shall apply the rules contained in
the foregoing articles, dividing into three equal portions the time
included in the penalty prescribed, and forming one period of each of
the three portions.
51
People v. Temporada, G.R. No. 173473, December 17, 2008, 574
SCRA 258, 284.
Director of Lands vs CA GR #102858, July 28, 1997

THIRD DIVISION

[G.R. No. 102858. July 28, 1997]

THE DIRECTOR OF LANDS, Petitioner, v. COURT OF APPEALS

and TEODORO ABISTADO, substituted by MARGARITA,
MARISSA, MARIBEL, ARNOLD and MARY ANN, all surnamed
ABISTADO, Respondents.

DECISION

PANGANIBAN, J.:

Is newspaper publication of the notice of initial hearing in an

original land registration case mandatory or directory?

Statement of the Case

The Court of Appeals ruled that it was merely procedural and that
the failure to cause such publication did not deprive the trial court
of its authority to grant the application. But the Solicitor General
disagreed and thus filed this petition to set aside the
Decision1 promulgated on July 3, 1991 and the subsequent
Resolution2 promulgated on November 19, 1991 by Respondent
Court of Appeals3 in CA-G.R. CV No. 23719. The dispositive portion
of the challenged Decision reads:4chanroblesvirtuallawlibrary

"WHEREFORE, premises considered, the judgment of dismissal

appealed from is hereby set aside, and a new one entered
confirming the registration and title of applicant, Teodoro Abistado,
Filipino, a resident of Barangay 7, Poblacion Mamburao, Occidental
Mindoro, now deceased and substituted by Margarita, Marissa,
Maribel, Arnold and Mary Ann, all surnamed Abistado, represented
by their aunt, Miss Josefa Abistado, Filipinos, residents of Poblacion
Mamburao, Occidental Mindoro, to the parcel of land covered
under MSI (IV-A-8) 315-D located in Poblacion Mamburao,
Occidental Mindoro.

The oppositions filed by the Republic of the Philippines and private

oppositor are hereby dismissed for want of evidence.

Upon the finality of this decision and payment of the corresponding

taxes due on this land, let an order for the issuance of a decree be
issued."

The Facts

On December 8, 1986, Private Respondent Teodoro Abistado filed

a petition for original registration of his title over 648 square
meters of land under Presidential Decree (PD) No. 1529.5 The
application was docketed as Land Registration Case (LRC) No. 86
and assigned to Branch 44 of the Regional Trial Court of
Mamburao, Occidental Mindoro.6 However, during the pendency of
his petition, applicant died. Hence, his heirs -- Margarita, Marissa,
Maribel, Arnold and Mary Ann, all surnamed Abistado --
represented by their aunt Josefa Abistado, who was appointed
their guardian ad litem, were substituted as applicants.

The land registration court in its decision dated June 13, 1989
dismissed the petition for want of jurisdiction. However, it found
that the applicants through their predecessors-in-interest had been
in open, continuous, exclusive and peaceful possession of the
subject land since 1938.
In dismissing the petition, the trial court
reasoned:7chanroblesvirtuallawlibrary

"x x x. However, the Court noted that applicants failed to comply

with the provisions of Section 23 (1) of PD 1529, requiring the
Applicants to publish the notice of Initial Hearing (Exh. `E') in a
newspaper of general circulation in the Philippines. Exhibit `E' was
only published in the Official Gazette (Exhibits `F' and `G').
Consequently, the Court is of the well considered view that it has
not legally acquired jurisdiction over the instant application for
want of compliance with the mandatory provision requiring
publication of the notice of initial hearing in a newspaper of
general circulation."

The trial court also cited Ministry of Justice Opinion No. 48, Series
of 1982, which in its pertinent portion
provides:8chanroblesvirtuallawlibrary

It bears emphasis that the publication requirement under Section

23 [of PD 1529] has a two-fold purpose; the first, which is
mentioned in the provision of the aforequoted provision refers to
publication in the Official Gazette, and is jurisdictional; while the
second, which is mentioned in the opening clause of the same
paragraph, refers to publication not only in the Official Gazette but
also in a newspaper of general circulation, and is procedural.
Neither one nor the other is dispensable. As to the first, publication
in the Official Gazette is indispensably necessary because without
it, the court would be powerless to assume jurisdiction over a
particular land registration case. As to the second, publication of
the notice of initial hearing also in a newspaper of general
circulation is indispensably necessary as a requirement of
procedural due process; otherwise, any decision that the court
may promulgate in the case would be legally infirm.
Unsatisfied, private respondents appealed to Respondent Court of
Appeals which, as earlier explained, set aside the decision of the
trial court and ordered the registration of the title in the name of
Teodoro Abistado.

The subsequent motion for reconsideration was denied in the

challenged CA Resolution dated November 19, 1991.

The Director of Lands represented by the Solicitor General thus

elevated this recourse to us. This Court notes that the petitioners
counsel anchored his petition on Rule 65. This is an error. His
remedy should be based on Rule 45 because he is appealing a final
disposition of the Court of Appeals. Hence, we shall treat his
petition as one for review under Rule 45, and not for certiorari
under Rule 65.9chanroblesvirtuallawlibrary

The Issue

Petitioner alleges that Respondent Court of Appeals committed

grave abuse of discretion10 in holding

x x x that publication of the petition for registration of title in LRC

Case No. 86 need not be published in a newspaper of general
circulation, and in not dismissing LRC Case No. 86 for want of such
publication.

Petitioner points out that under Section 23 of PD 1529, the notice

of initial hearing shall be published both in the Official
Gazette and in a newspaper of general circulation. According to
petitioner, publication in the Official Gazette is necessary to confer
jurisdiction upon the trial court, and xxx in xxx a newspaper of
general circulation to comply with the notice requirement of due
process.11chanroblesvirtuallawlibrary
Private respondents, on the other hand, contend that failure to
comply with the requirement of publication in a newspaper of
general circulation is a mere procedural defect. They add that
publication in the Official Gazette is sufficient to confer
jurisdiction.12chanroblesvirtuallawlibrary

In reversing the decision of the trial court, Respondent Court of

Appeals ruled:13chanroblesvirtuallawlibrary

x x x although the requirement of publication in the Official

Gazette and in a newspaper of general circulation is couched in
mandatory terms, it cannot be gainsaid that the law also mandates
with equal force that publication in the Official Gazette shall be
sufficient to confer jurisdiction upon the court.

Further, Respondent Court found that the oppositors were afforded

the opportunity to explain matters fully and present their side.
Thus, it justified its disposition in this
wise:14chanroblesvirtuallawlibrary

x x x We do not see how the lack of compliance with the required

procedure prejudiced them in any way. Moreover, the other
requirements of: publication in the Official Gazette, personal notice
by mailing, and posting at the site and other conspicuous places,
were complied with and these are sufficient to notify any party
who is minded to make any objection of the application for
registration.

The Courts Ruling

We find for petitioner.

Newspaper Publication Mandatory

The pertinent part of Section 23 of Presidential Decree No. 1529
requiring publication of the notice of initial hearing reads as
follows:

Sec. 23. Notice of initial hearing, publication, etc. -- The court

shall, within five days from filing of the application, issue an order
setting the date and hour of the initial hearing which shall not be
earlier than forty-five days nor later than ninety days from the
date of the order.

The public shall be given notice of initial hearing of the application

for land registration by means of (1) publication; (2) mailing; and
(3) posting.

1. By publication. --

Upon receipt of the order of the court setting the time for initial
hearing, the Commissioner of Land Registration shall cause a
notice of initial hearing to be published once in the Official Gazette
and once in a newspaper of general circulation in the Philippines:
Provided, however, that the publication in the Official Gazette shall
be sufficient to confer jurisdiction upon the court. Said notice shall
be addressed to all persons appearing to have an interest in the
land involved including the adjoining owners so far as known, and
`to all whom it may concern.' Said notice shall also require all
persons concerned to appear in court at a certain date and time to
show cause why the prayer of said application shall not be
granted.

xxx xxx xxx

Admittedly, the above provision provides in clear and categorical

terms that publication in the Official Gazette suffices to confer
jurisdiction upon the land registration court. However, the question
boils down to whether, absent any publication in a newspaper of
general circulation, the land registration court can validly confirm
and register the title of private respondents.

We answer this query in the negative. This answer is impelled by

the demands of statutory construction and the due process
rationale behind the publication requirement.

The law used the term shall in prescribing the work to be done by
the Commissioner of Land Registration upon the latters receipt of
the court order setting the time for initial hearing. The said word
denotes an imperative and thus indicates the mandatory character
of a statute.15 While concededly such literal mandate is not an
absolute rule in statutory construction, as its import ultimately
depends upon its context in the entire provision, we hold that in
the present case the term must be understood in its normal
mandatory meaning. In Republic vs. Marasigan,16 the Court
through Mr. Justice Hilario G. Davide, Jr. held that Section 23 of
PD 1529 requires notice of the initial hearing by means of (1)
publication, (2) mailing and (3) posting, all of which must be
complied with. If the intention of the law were otherwise, said
section would not have stressed in detail the requirements of
mailing of notices to all persons named in the petition who, per
Section 15 of the Decree, include owners of adjoining properties,
and occupants of the land. Indeed, if mailing of notices is
essential, then by parity of reasoning, publication in a newspaper
of general circulation is likewise imperative since the law included
such requirement in its detailed provision.

It should be noted further that land registration is a proceeding in

rem.17 Being in rem, such proceeding requires constructive seizure
of the land as against all persons, including the state, who have
rights to or interests in the property. An in rem proceeding is
validated essentially through publication. This being so, the
process must strictly be complied with. Otherwise, persons who
may be interested or whose rights may be adversely affected
would be barred from contesting an application which they had no
knowledge of. As has been ruled, a party as an owner seeking the
inscription of realty in the land registration court must prove by
satisfactory and conclusive evidence not only his ownership thereof
but the identity of the same, for he is in the same situation as one
who institutes an action for recovery of realty.18 He must prove his
title against the whole world. This task, which rests upon the
applicant, can best be achieved when all persons concerned -- nay,
the whole world -- who have rights to or interests in the subject
property are notified and effectively invited to come to court and
show cause why the application should not be granted. The
elementary norms of due process require that before the claimed
property is taken from concerned parties and registered in the
name of the applicant, said parties must be given notice and
opportunity to oppose.

It may be asked why publication in a newspaper of general

circulation should be deemed mandatory when the law already
requires notice by publication in the Official Gazette as well as by
mailing and posting, all of which have already been complied with
in the case at hand. The reason is due process and the reality that
the Official Gazette is not as widely read and circulated as
newspapers and is oftentimes delayed in its circulation, such that
the notices published therein may not reach the interested parties
on time, if at all. Additionally, such parties may not be owners of
neighboring properties, and may in fact not own any other real
estate. In sum, the all-encompassing in rem nature of land
registration cases, the consequences of default orders issued
against the whole world and the objective of disseminating the
notice in as wide a manner as possible demand a mandatory
construction of the requirements for publication, mailing and
posting.
Admittedly, there was failure to comply with the explicit
publication requirement of the law. Private respondents did not
proffer any excuse; even if they had, it would not have mattered
because the statute itself allows no excuses. Ineludibly, this Court
has no authority to dispense with such mandatory requirement.
The law is unambiguous and its rationale clear. Time and again,
this Court has declared that where the law speaks in clear and
categorical language, there is no room for interpretation,
vacillation or equivocation; there is room only for
application.19 There is no alternative. Thus, the application for land
registration filed by private respondents must be dismissed without
prejudice to reapplication in the future, after all the legal requisites
shall have been duly complied with.

WHEREFORE, the petition is GRANTED and the assailed Decision

and Resolution are REVERSED and SET ASIDE. The application of
private respondent for land registration is DISMISSED without
prejudice. No costs.

SO ORDERED.

Davide, Jr., Melo, and Francisco, JJ., concur.

Narvasa, C.J., (Chairman), on leave.

Endnotes:

1
Rollo, pp. 29-36.
2
Ibid., p. 37.
3
Seventh Division composed of Justice Celso L. Magsino, ponente,
and Justices Serafin E. Camilon, Chairman, and Artemon D. Luna,
concurring.
4
Ibid., p. 35.
5
Known as the Property Registration Decree.
6
Presided by Judge Niovady M. Marin.
7
Rollo, p. 41.
8
Ibid., pp. 41-42.
9
The Solicitor General asked for and was granted an extension of
30 days within which to file a petition for review on certiorari. It is
thus strange why the OSG described its petition as one
for certiorari under Rule 65 of the Rules of Court. In any event, the
Court, in its Resolution dated March 9, 1992 admitted the OSGs
petition for review on certiorari, clearly ruling that the petition was
one for review, and not one for certiorari.
10
Ibid., p. 21. This should really read reversible error since as
already explained, the petition should be treated as one for review
under Rule 45.
11
Ibid., pp. 22-23.
12
Ibid., pp. 56-57.
13
Ibid., p. 34; Decision, p. 6.
14
Ibid.
15
Bersabal vs. Salvador, 84 SCRA 176, 179-180, July 21, 1978,
citing Dizon vs. Encarnacion, 9 SCRA 714, 716-717, December 24,
1963.
16
198 SCRA 219, 227-228, June 6, 1991.
17
Grey Alba vs. De la Cruz, 17 Phil. 49, September 16, 1910.
18
Archbishop of Manila vs. Arnedo, 30 Phil. 593, March 31, 1915.
19
Cebu Portland Cement Company vs. Municipality of Naga, Cebu,
24 SCRA 708, 712, August 22, 1968 citing Lizarraga
Hermanos vs. Yap Tico, 24 Phil. 504, 1913; People vs. Mapa, L-
22301, August 30, 1967; Pacific Oxygen and Acetylene
Co. vs. Central Bank, L-21881, March 1, 1968; Dequito vs. Lopez,
L-27757, March 28, 1968.

Case Digest

DIRECTOR OF LANDS v. ABISTADO, GR No. 102858, 1997-07-28

Facts:
On December 8, 1986, Private Respondent Teodoro Abistado filed a petition
for original registration of his title over 648 square meters of land under
Presidential Decree (PD) No. 1529.[5] The application was docketed as Land
Registration Case (LRC) No. 86... and assigned to Branch 44 of the Regional
Trial Court of Mamburao, Occidental Mindoro.[6] However, during the
pendency of his petition, applicant died. Hence, his heirs -- Margarita,
Marissa, Maribel, Arnold and Mary Ann, all surnamed Abistado --...
represented by their aunt Josefa Abistado, who was appointed their guardian
ad litem, were substituted as applicants.
The land registration court in its decision dated June 13, 1989 dismissed the
petition "for want of jurisdiction." However, it found that the applicants
through their predecessors-in-interest had been in open, continuous,
exclusive and peaceful possession of the subject land... since 1938.
Issues:
Is newspaper publication of the notice of initial hearing in an original land
registration case mandatory or directory?
Ruling:
Principles:
The law is unambiguous and its rationale clear. Time and again, this Court has
declared that where the law speaks in clear and categorical language, there is
no room for interpretation, vacillation or equivocation; there is room only
for... application.
Rodolfo Soque VS CA GR # L-56989, Sept 4,1981

SECOND DIVISION

[G.R. No. L-56989. September 4, 1981.]

RODOLFO B. SOQUE, Petitioner, v. COURT OF APPEALS and

SULPUCIO LIBUTON, Respondents.

Rodolfo B. Garbanzos, Jr. for Petitioner.

Romulo A. Deles for Private Respondents.

SYNOPSIS
Eighteen days after the decision of the Court of Appeals on an
agrarian case, was served on the petitioner, he filed a motion for
reconsideration which was not acted upon by the Court of Appeals
for the reason that Section 18 of Presidential Decree No. 946 does
not allow a motion for rehearing or reconsideration of the decision
of the Court of Appeals in agrarian cases. Entry of judgment was
made sixteen days after service thereon on the defeated party.
Petitioner filed in the Supreme Court an urgent motion for an
extension of thirty days within which to file a petition for review
where he inaccurately alleged that his motion for reconsideration
was "denied." The extension was erroneously granted through
oversight and the petition was mailed within the extension period
requested.

The Supreme Court ruled that the provision of Section 18 of

Presidential Decree No. 946 giving the petitioner a "non-extendible
period of thirty (30) days" from notice of the decision within which
 to file an appeal to this Court by means of a petition for review
on certiorari is peremptory or mandatory in character. Pursuant
thereto, the entry of judgment made in the Court of Appeals is
erroneous while the petition filed in this Court should be dismissed
because it was filed out of time.

Petition dismissed.

SYLLABUS

1. REMEDIAL LAW; APPEALS; AGRARIAN CASES; FINALITY; WHEN

ENTRY OF JUDGMENT SHOULD BE MADE; CASE AT BAR. — Section
18 of Presidential Decree No. 946 gives the petitioner a "non-
extendible period of thirty (30) days "from notice of the decision
within which to file an appeal to the Supreme Court by means of a
petition for review on certiorari. Hence, the entry of judgment
made by the Clerk of Court of the Court of Appeals in the case at
bar on the assumption that the decision became final and
executory on February 7, 1981, sixteen days after the service
thereof on Soque, the defeated party, is erroneous, because the
judgment became final on February 23, or after thirty days from
notice to Soque’s counsel. In agrarian cases, the Court of Appeals
should enter judgment on the thirty-first day or thereafter, that is,
after the expiration of the thirty-day period within which to appeal
to this Court and no appeal is interposed.

2. ID.; ID.; ID.; MOTION FOR REHEARING OR RECONSIDERATION

OF THE DECISION OF THE COURT OF APPEALS; NOT ALLOWED
UNDER PRESIDENTIAL DECREE NO. 946; CASE AT BAR. — In the
instant case, Soque mailed to this Court on March 19, 1981 an
urgent motion for extension of time within which to file a petition
for review where he inaccurately alleged that his counsel received
on March 10 a copy of the Appellate Court’s resolution of February
13, "denying" his motion for reconsideration. His motion was not
denied. It was simply "noted" because that motion was out of
order as it was not authorized by section 18 of Presidential Decree
No. 946.

3. ID.; ID.; ID.; PERIOD TO FILE A PETITION FOR REVIEW ON

CERTIORARI IN THE SUPREME COURT; NON- EXTENDIBLE. —
Where petitioner was served with a copy of the decision of the
Court of Appeals on January 22, 1981, his petition for review
on certiorari of said decision should have been filed within the non-
extendible period of thirty days from notice thereof, or on or
before February 21. The thirty-day extension to file said petition
was granted by this Court through oversight and the resolution
granting it is hereby set aside. The petition having been mailed on
April 14, 1981, the same should be dismissed because it was filed
out of time.

4. ID.; ID.; ID.; ID.; ID.; NATURE OF THE PROVISION OF

PRESIDENTIAL DECREE NO. 946, SECTION 18, INTENTION OF THE
LAWMAKER. — The provision of Section 18 of Presidential Decree
No. 946 that the thirty-day period is non-extendible is peremptory
or mandatory in character. The obvious intent of the lawmaker is
to avoid delays in the disposition of agrarian cases. Dura lex, sed
lex. (Caparas, v. Court of Appeals, G.R. Nos. 56772-84, July 9,
1981 (thirteen cases). That intention is evident in another
provision of section 18, directing that the complete records of the
Agrarian Court should be forwarded to the Court of Appeals "within
a non-extendible period of fifteen (15) days from receipt of a
notice of appeal."

RESOLUTION
 AQUINO, J.:

The decision of the Court of Appeals in Libuton v. Soque, CA-G.R.

No. SP-11252-CAR, January 13, 1981, an agrarian case, was
served on January 22, 1981 upon the counsel for the landowner,
Rodolfo B. Soque.

Eighteen days thereafter or on February 9, Soque filed a motion

for reconsideration. That motion was not acted upon because, as
stated by the Court of Appeals in its resolution of February 12,
1981, section 18 of Presidential Decree No. 946 does not allow a
motion for rehearing or reconsideration of the decision of the Court
of Appeals in agrarian cases.

On March 17, 1981, the Clerk of Court of the Court of Appeals

entered judgment in the said case on the assumption that the
decision became final and executory on February 7, 1981, sixteen
days after the service thereof on Soque, the defeated party. The
record was remanded on March 20, 1981 to the Agrarian Court in
Bacolod City.

The entry of judgment is erroneous because the judgment did not

become final on February 7. It became final on February 22 or
after thirty days from notice to Soque’s counsel. Section 18 gives
Soque a "non-extendible period of thirty (30) days" from notice of
the decision within which to file an appeal to this Court by means
of a petition for review on certiorari.

In ordinary cases or non-agrarian cases, the reglementary period

for appealing to this Court from the decision of the Court of
Appeals is fifteen days. So, if there is no appeal within that period,
the judgment becomes final on the sixteenth day. In agrarian
cases, the Court of Appeals should enter judgment on the thirty-
first day or thereafter, that is, after the expiration of the thirty-day
period within which to appeal to this Court and no appeal is
interposed.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph

In the instant case, Soque mailed to this Court on March 19, 1981
an urgent motion for extension of time within which to file a
petition for review. He inaccurately alleged that his counsel
received on March 10 a copy of the Appellate Court’s resolution of
February 12, "denying" his motion for reconsideration.

His motion was not denied. It was simply "noted" because that
motion was out of order. It was not authorized by section 18.

This Court in its resolution of June 5, 1981 erroneously granted

Soque an extension of thirty days from March 15 within which to
file his petition for review on certiorari. The petition was mailed on
April 14, 1981.

We hold that the petition should be dismissed because it was filed

out of time. It should have been filed within the non-extendible
period of thirty days from January 22, when Soque was served
with a copy of the decision, or on or before February 21.

The thirty-day extension was granted to Soque through oversight.

The resolution granting it is hereby set aside. He was not entitled
to that extension.

As held in Caparas v. Court of Appeals, G.R. Nos. 56772-84, July

9, 1981 (thirteen cases), the provision of section 18 that the
thirty-day period is non-extendible is peremptory or mandatory in
character. The obvious intent of the lawmaker is to avoid delays in
the disposition of agrarian cases. Dura lex, sed lex.chanrobles.com
: virtual law library

That intention is evident in another provision of Section 18,

directing that the complete records of the Agrarian Court should be
forwarded to the Court of Appeals "within a non-extendible period
of fifteen (15) days from receipt of a notice of appeal."cralaw
virtua1aw library

WHEREFORE, the petition in this case is dismissed. No costs.

SO ORDERED.

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

Abad Santos, J., is on leave.

Fernandez, J., was designated to sit in the Second Division.

Gedgeon Quijano VS DBP GR # L-26419, Oct 16, 1970
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-26419 October 16, 1970

GEDEON G. QUIJANO and EUGENIA T. QUIJANO, petitioners-appellants,

vs.
THE DEVELOPMENT BANK OF THE PHILIPPINES and THE EX-
OFICIO SHERIFF OF MISAMIS OCCIDENTAL, respondents-appellees.

J. Alaric P. Acosta for petitioners-appellant.

Esperanza Valenzoga for respondents-appellees.

BARREDO, J.:.

Appeal from the decision of the Court of First Instance of Misamis Occidental
in its Special Civil Case No. 2519, dismissing the petition for mandamus with
prayer for a writ of preliminary injunction filed therein by the herein
petitioners-appellants Gedeon G. Quijano and Eugenio T. Quijano to compel
the herein respondent-appellee Development Bank of the Philippines to
accept said petitioners-appellants' back pay certificate payment of their loan
from the said appellee Bank, and to restrain the herein respondent-
appellee ex-oficio sheriff of the province of Misamis Occidental from
proceeding with the scheduled foreclosure sale of the real properties the
above-named appellant spouses had mortgaged with the Development Bank
of the Philippines to secure the loan aforementioned.
The said appealed decision was based on the following:

STIPULATION OF FACTS.

The undersigned parties, thru counsels, hereby submit the

foregoing stipulation of facts, to wit:

I. That the petitioners filed an application for an urban estate loan

with the Rehabilitation Finance Corporation (RFC), predecessor-
in-interest of the herein respondent-bank, in the amount of
P19,500.00;

II. That the petitioners' urban real estate loan was approved per
RFC Board Resolution No. 2533 on April 30, 1953;

III. That the mortgage contract was executed by the petitioners in

favor of the respondent-bank on March 23, 1954;

IV. That the said loan of P19,500.00 was to be received by the

petitioners in several releases, subject among others, to the
following conditions:.

"(1) That the amount of P4,200.00 shall be released

only after:.

"(a) the execution and registration of the

mortgage contract;

"(b) the presentation of a duly approved

building permit;

"(c) the construction has been started and the

value of the work done amounted to
P6,500.00;.
 "(d) the submission of the certificate of title
covering Psu-136173, free form any
encumbrance and

"(e) the submission of evidence showing full

payment of current estate taxes;

(2) That the subsequent releases shall not be more than

100% of the value of the construction completed in
excess of P6,500.00; that all releases shall be made
against the payroll of workers engaged in the project,
receipts of all materials used and that there are no
unpaid labor or unpaid materials;

(3) That a sufficient amount may be withheld until the

building is completed and painted and found in
accordance with the plans and specifications submitted;

(4) That the amount of insurance of the building, when

completed, shall not be less than P18,000.00, which
shall be secured by the mortgagee, in accordance with
its Board Resolution No. 3395, series of 1947;

(5) That the construction and painting of the building

shall be completed within 120 days from the date of the
mortgage contract;

(6) That the release of this loan is subject to the

availability of funds;

(7) That the lien appearing on the face of the title shall
be cancelled, otherwise, Luciana Jimenez shall sign as
co-mortgagor; that this mortgage contract was
registered on March 23, 1954 with the Register of
Deeds of Misamis Occidental at Oroquieta;
 "V. That the first release of P4,200 was made on April 29, 1954,
and the other releases were made subsequent thereafter;

"VI. That as of July 31, 1965, the outstanding obligation of the

petitioners with the respondent-bank, including interests, was
P13,983.59;

"VII. That on July 27, 1965, petitioner Gedeon Quijano, as holder

of Acknowledgment No. 10181, wrote the respondent-bank in
Manila offering to pay in the amount of P14,000.00 for his
outstanding obligation with the respondent-bank, out of the
proceeds of his back pay pursuant to Republic Act No. 897;

"VIII. That the respondent-bank, thru its Ozamis Branch advised

the petitioners of the non-acceptance of his offer on the ground
that the loan was not incurred before or subsisting on June 20,
1953 when Republic Act 897 was approved;

"IX. That the respondent-bank, thru its Ozamis City Branch, filed
on October 14, 1965, an application for the foreclosure of real
estate mortgage executed by the petitioners, and that acting on
the application of the respondent-bank, the Provincial Sheriff, thru
his deputies, scheduled the public auction sale for January 18,
1966, after advising petitioner Gedeon Quijano of the application
for foreclosure filed by the respondent-bank;

"X. That the parties herein agree to transfer the auction sale
scheduled for January 16, 1966 to February 18, 1966, without the
necessity of republication of the notice of sale."

Upon these facts and the submission of the parties that the only issue is
whether or not the obligation of the petitioners was subsisting at the time of
the approval of Republic Act No. 897, the Amendatory Act of Julie 20, 1953
to Republic Act 304, the original back pay law, the trial court dismissed the
petition, as already stated, and directed respondent sheriff to proceed and
continue with the public auction sale of the property mortgaged in
accordance with the foreclosure application of respondent Development
Bank of the Philippines after due notice to petitioners. In their appeal,
petitioners' sole assignment of error is that: "The trial court erred in declaring
that the loan of the petitioners-appellants was not subsisting when Republic
Act No. 897 was enacted on June 20, 1953."

The appeal has no merit.

The pertinent portions of the controlling provisions of the aforementioned

Back Pay Law, as amended by Republic Act No. 897 on June 20,
1953,1 read as follows:.

SEC. 2. The Treasurer of the Philippines shall, upon application of

all persons specified in section one hereof and within one year
from the approval of this Amendatory Act, and under such rules
and regulations as may be promulgated by the Secretary of
Finance, acknowledge and file requests for the recognition of the
right to the Salaries and wages as provided in section one hereof
and notice of such acknowledgment shall be issued to the
applicant which shall state the total amount of such salaries or
wages due the applicant, and certify that it shall be redeemed by
the Government of the Philippines within ten years from the date
of their issuance without interests: Provided, That upon application
and subject to such rules and regulations as may be approved by
the Secretary of Finance a certificate of indebtedness may be
issued by the Treasurer of the Philippines covering the whole or a
part of the total salaries and wages the right to which has been
duly acknowledged and recognized, provided that the face value
of such certificate of indebtedness shall not exceed the amount
that the applicant may need for the payment of (1) obligations
subsisting at the time of the approval of this Amendatory Act for
which the applicant may directly be liable to the government or to
any of its branches or instrumentalities, or the corporations owned
or controlled by the Government, or to any citizen of the
Philippines, or to any association or corporation organized under
 the laws of the Philippines, who may be willing to accept the same
for such settlement; ...

It is indeed settled that under the above provisions, the Government or any
of its agencies does not have any discretion in the acceptance of back pay
certificates, 2 when they are used by the applicants or original holders
themselves for the settlement of any of the obligations or liabilities
specifically enumerated in the law.3 It is equally clear, however, that the
same provisions expressly require that the obligations — for which
certificates of indebtedness may be accepted as payments of — must
be subsisting at the time of the approval of Republic Act No. 897; hence
when, as in the instant case, such back pay certificates are offered in
payment to a government-owned corporation of an obligation thereto which
was not subsisting at the time of the enactment of said amendatory Act on
June 20, 1953, which corporation may not, legally be compelled to accept
the certificates.

It is true that appellants' application for an urban real estate loan was
approved by appellee bank on April 80, 1953. It appears, however, that
appellants did not avail of it until much later, as in fact, they executed the
mortgage contract only on March 23, 1954, and furthermore, that the release
of the amount of the said loan of P19,500.00 was to be made in installments
and subject to compliance with certain conditions by said appellants. Under
these circumstances, Our ruling in the case of Rodriguez vs. Development
Bank of the Philippines 4 is controlling.

In that case, Rodriguez obtained a loan from the said Development Bank of
the Philippines to be received by him in several releases and to be paid later
in installments, under the terms and conditions specified in the loan
agreement. Pursuant to said agreement, Rodriguez received the first release
in the sum of P5,000.00 on May 27, 1953, while the subsequent releases
covering the P9,000.00 — balance of the loan were all availed of and
received by him later than June, 1953. Later, Rodriguez paid the installments
as they fell due. When a balance of about P10,000.00 remained unpaid,
Rodriguez offered to pay the said outstanding balance of the loan with his
back pay certificate. The Bank refused at first to accept the said tender of
payment in certificate, and when it accepted the same later, it limited its
acceptance only to the amount of P5,000.00 representing the portion of the
loan released before the passage of Republic Act No. 897, although the
amount of the back pay certificate offered by Rodriguez was more than
sufficient to cover the total unpaid balance of the loan. So, Rodriguez
instituted an action for mandamus in the Court of First Instance of Davao to
compel the Bank to accept his back pay certificate in payment of his whole
outstanding obligation or, in other words, even for the portions of the loan
corresponding to the releases made after June 20, 1953. This action was
dismissed by the trial court and upon appeal to this Court, the dismissal was
affirmed upon the following rationale:.

It can not be said that appellant became indebted to the Bank for
the total amount of P14,000.00 from the date of the agreement.
The releases of the balance of the agreed loan were made
dependent on certain conditions (see additional conditions
mentioned in paragraph 4 of the stipulation of facts, supra) among
which is the availability of funds. Non-compliance with any of these
conditions will not entitle the appellant to the release of the
balance of the agreed loan and conversely, will not entitle the bank
to hold the appellant liable for the unreleased amounts.
Consequently, we hold, as did the trial court, that:.

"... the amounts released in July, 1953 and thereafter

cannot be considered as obligations subsisting in June,
1953. The defendant may be compelled to accept a
back pay certificate in payment of obligations subsisting
when the Amendatory Act was approved (Sec. 2,
Republic Act 897).têñ.£îhqw⣠Republic Act 897 was
approved on June 20, 1953. The defendant may not be
compelled to accept plaintiff's back pay certificate in
payment of the amounts released after June 20, 1953."
 The case of Sabelino v. RFC (G.R. No. L-11790, Sept. 30, 1958)
relied upon by appellant is irrelevant, as the mortgage
indebtedness sought to be paid with appellee's back pay
certificate therein, appears to have subsisted prior to the approval
of Republic Act No. 897. ...

Herein appellants' situation is even worse than that of Rodriguez. Here

appellants actually availed of their approved loan only about nine (9) months
after the enactment of Republic Act 897 and the corresponding releases
thereof were received by appellants only after the execution of the mortgage
contract on March 23, 1954. Undoubtedly, notwithstanding the approval by
the appellee Development Bank of the Philippines (RFC) of appellants' loan
application on April 30, 1953, appellants did not thereby incur any obligation
to pay the same; only after the corresponding amounts were released to
appellants after March 23, 1954 did such obligation attach; and it cannot,
therefore, be said that the said loan was an obligation subsisting at the time
of the approval of Republic Act No. 897 on June 20, 1953.

It may be truly said, as contended by appellants, that when their application

for the loan was approved by the appellee Bank on April 30, 1953, an
agreement was perfected between them and said Bank, but it should be
noted that under such agreement the only enforceable obligation that was
created was that of the Bank to grant the loan applied for, whereas the
obligation of appellants to pay the same could not have arisen until after the
amount of the loan has been actually released to them; and said release was
even subject to their compliance with certain conditions specified in the
mortgage contract executed after the approval already of Republic Act 897.
Appellants' appeal that a more liberal construction of the law would enable
"many crippled or disabled veterans, or their wives and orphans, or those
who had in one way or another unselfishly sacrificed or contributed to the
cause of the last war" to take advantage of their back pay certificates, does
deserve sympathy, for indeed, among the avowed purposes of the said law
are: "First, to serve as a source of financial aid to needy veterans, like
crippled or disabled veterans, and to their wives and orphans. Secondly, to
give recognition to the sacrifices of those who joined the last war, and
particularly to those who have given their all for the cause of the last war."
(Congressional Record No. 61, 2nd Congress, 4th Regular Session, May 6,
1953, page 74, as quoted in Florentino, et al. vs. PNB, 98 Phil. 959, 961-
963).têñ.£îhqw⣠On the other hand, however, We cannot see any room for
interpretation or construction in the clear and unambiguous language of the
above-quoted provision of law. This Court has steadfastly adhered to the
doctrine that its first and fundamental duty is the application of the law
according to its express terms, interpretation being called for only when such
literal application is impossible.5 No process of interpretation or construction
need be resorted to here a provision of law peremptorily calls for application.
Where a requirement or condition is made in explicit and unambiguous
terms, no discretion is left to the judiciary. It must see to it that its mandate is
obeyed.6 Thus, even before the amendment of the Back Pay Law, when said
law limited the applicability of back pay certificates to "obligations subsisting
at the time of the approval of this Act," this Court has ruled that obligations
contracted after its enactment on June 18, 1948 cannot come within its
purview.

Since the debt of appellants was contracted on November 24,

1948, they could not validly seek to discharge it by application of
their back pay certificate under Republic Act 304, on June 18,
1948, because that Act, in terms, limited any such application to
"obligations subsisting at the time of the approval of this Act".
(Sec. 2)7

WHEREFORE, the judgment of the trial court is affirmed. No costs.

Reyes, J.B.L., Act. C.J., Dizon, Makalintal, Zaldivar, Castro, Fernando,

Teehankee, Villamor and Makasiar, JJ., concur.

# Footnotes.
1 On June 22, 1957, the law was further amended by Republic Act
1853 to read, among others, and so far as pertinent to this case as
follows:

"(1) obligations subsisting at the time of the approval of this

amendatory act for which the applicant may directly be liable to the
Government or to any of its branches and instrumentalities, or the
corporations owned or controlled by the Government, the
provisions of their charters, articles of incorporation, by-laws or
rules and regulations to the contrary notwithstanding, or to any
citizen of the Philippines, or to any association or corporation
organized under the laws of the Philippines, who may be willing to
accept the same for such settlement;

(2) ...

2 Tirona vs. City Treasurer of Manila, L-24607, January 29, 1968;

Florentino vs. PNB, 98 Phil. 959.

3 Republic vs. Herras, L-26742, April 30, 1970. See also, Republic
vs. Phil. Rabbit Bus Lines, Inc., L-26862, March 30, 1970.

4 L-19771, February 27, 1964.

5 See, Pacific Oxygen & Acetylene Co. vs. Central Bank, L-21881,
March 1, 1968.

6 Luzon Surety Co., Inc. vs. De Garcia, et al., L-256559, Oct. 31,
1969. See also, United Christian Missionary Society vs. Social
Security Commission, et al., L-26712-16, Dec. 27, 1969.

7 PNB vs. Ruperto, et al., 108 Phil. 810.

Luzon Surety Co VS Josefa Aguirre GR # L-25659, Oct 31,1966

EN BANC

[G.R. No. L-25659. October 31, 1969.]

LUZON SURETY CO., INC., Petitioner, v. JOSEFA AGUIRRE DE

GARCIA, VICENTE GARCIA and the FOURTH DIVISION OF
THE COURT OF APPEALS, Respondents.

Tolentino & Garcia and D. R. Cruz for Petitioner.

Rodolfo J. Herman for Respondents.

SYLLABUS

1. CIVIL LAW; PERSONS AND FAMILY RELATIONS; CONJUGAL

PARTNERSHIP; ARTICLE 161 OF THE NEW CIVIL CODE. — A
conjugal partnership under Article 161 of the New Civil Code is
liable only for such "debts and obligations contracted by the
husband for the benefit of the conjugal partnership.’’ There must
be the requisite showing then of some advantage which clearly
accrued to the welfare of the spouses.

2. ID.; ID.; ID.; ID.; CONJUGAL PARTNERSHIP NOT LIABLE IN

INSTANT CASE. — Where in an indemnity agreement executed by
the husband to accommodate a third party in favor of a surety
company, there is absence of any showing of benefit to the
conjugal partnership, the same cannot be liable for such
obligation. While the husband by thus signing the agreement may
be said to have added to his reputation or esteem and to have
earned the confidence of the business community, such benefit,
even if hypothetically accepted, is too remote and fanciful to come
within the express terms of Article 161 of the New Civil Code.

3. ID.; ID.; ID.; HUSBAND AS ADMINISTRATOR THEREOF;

RESPONSIBILITIES. — Article 165 of the New Civil Code
emphasizes the responsibility of the husband as administrator. He
is supposed to conserve and, if possible, augment the funds of the
conjugal partnership, not dissipate them. If out of friendship or
misplaced generosity on his part the conjugal partnership would be
saddled with financial burden, then the family stands to suffer. No
objection need arise of the obligation thus contracted by him could
be shown to be for the benefit of the wife and the progeny if any
there be. That is but fair and just. Certainly, however, to make a
conjugal partnership respond for a liability that should appertain to
the husband alone is to defeat and frustrate the avowed objective
of the new Civil Code to show the utmost concern for the solidarity
and well-being of the family as a unit. The husband, therefore, as
is wisely thus made certain, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the
conjugal partnership.

4. STATUTES; INTERPRETATION AND CONSTRUCTION; DUTY OF

COURT WHERE REQUIREMENT IN STATUTE IS CLEAR. — Where a
requirement is made in explicit and unambiguous terms, no
discretion is left to the judiciary. It must see to it that its mandate
is obeyed. So it is in this case.

5. REMEDIAL LAW; APPEALS; QUESTION NOT RAISED IN THE

LOWER COURT CANNOT BE RAISED FOR THE FIRST TIME ON
APPEAL. — The Court of AppeaLs did not commit an error when it
refused to consider a question raised for the first time on appeal.
 DECISION

FERNANDO, J.:

The crucial question in this petition for the review of a decision of

the Court of Appeals, to be passed upon for the first time, is
whether or not a conjugal partnership, in the absence of any
showing of benefits received, could be held liable on an indemnity
agreement executed by the husband to accommodate a third party
in favor of a surety company. The Court of Appeals held that it
could not. Petitioner Luzon Surety Co., Inc., dissatisfied with such
a judgment, which was an affirmance of a lower court decision,
would have us reverse. We do not see it that way. The Court of
Appeals adjudicated the matter in accordance with law. We affirm
what it did.

As noted in the brief of petitioner Luzon Surety Co., Inc., on

October 18, 1960, a suit for injunction was filed in the Court of
First Instance of Negros Occidental against its Provincial Sheriff by
respondents-spouses, Josefa Aguirre de Garcia and Vicente Garcia
"to enjoin [such Sheriff] from selling the sugar allegedly owned by
their conjugal partnership, pursuant to a writ of garnishment
issued by virtue of a writ of execution issued in Civil Case No. 3893
of the same Court of First Instance . . . against the respondent
Vicente Garcia . . ." 1

There was a stipulation of facts submitted. There is no question as

to one Ladislao Chavez, as principal, and petitioner Luzon Surety
Co., Inc., executing a surety bond in favor of the Philippine
National Bank, Victorias Branch, to guaranty a crop loan granted
by the latter to Ladislao Chavez in the sum of P9,000.00. On or
about the same date, Vicente Garcia, together with the said
Ladislao Chavez and one Ramon B. Lacson, as guarantors, signed
an indemnity agreement wherein they bound themselves, jointly
and severally, to indemnify now petitioner Luzon Surety Co., Inc.
against any and all damages, losses, costs, stamps, taxes,
penalties, charges and expenses of whatsoever kind and nature
which the petitioner may at any time sustain or incur in
consequence of having become guarantor upon said bond, to pay
interest at the rate of 12% per annum, computed and
compounded quarterly until fully paid; and to pay 15% of the
amount involved in any litigation or other matters growing out of
or connected therewith for attorney’s fees.

It was likewise stipulated that on or about April 27, 1956, the

Philippine National Bank filed a complaint before the Court of First
Instance of Negros Occidental, docketed as its Civil Case No. 3893,
against Ladislao Chavez and Luzon Surety Co., Inc. to recover the
amount of P4,577.95, in interest, attorney’s fees, and costs of the
suit. On or about August 8, 1957, in turn, a third-party complaint
against Ladislao Chavez. Ramon B. Lacson and Vicente Garcia,
based on the indemnity agreement, was instituted by Luzon Surety
Co., Inc.

Then, as set forth by the parties, on September 17, 1958, the

lower court rendered a decision condemning Ladislao Chavez and
Luzon Surety Co., Inc., to pay the plaintiff jointly and severally the
amount of P4,577.95 representing the principal and accrued
interest of the obligation at the rate of 6% per annum as of
January 6, 1956, with a daily interest of P0.7119 on P4, 330.91
from January 6, 1956, until fully paid, plus the sum of P100.00 as
attorney’s fees, and to pay the costs. The same decision likewise
ordered the third party defendants, Ladislao Chavez, Vicente
Garcia, and Ramon B. Lacson, to pay Luzon Surety Co., Inc., the
total amount to be paid by it to the plaintiff Philippine National
Bank.

On July 30, 1960, pursuant to the aforesaid decision, the Court of

First Instance of Negros Occidental issued a writ of execution
against Vicente Garcia for the satisfaction of the claim of petitioner
in the sum of P8,839.97. Thereafter, a writ of garnishment was
issued by the Provincial Sheriff of Negros Occidental dated August
9, 1960, levying and garnishing the sugar quedans of the now
respondent-spouses, the Garcias, from their sugar plantation,
registered in the names of both of them. 2 The suit for Injunction
filed by the Garcia spouses was the result.

As noted, the lower court found in their favor. In its decision of

April 30, 1962, it declared that the garnishment in question was
contrary to Article 161 of the Civil Code and granted their petition,
making the writ of preliminary injunction permanent. Luzon
Surety, Inc. elevated the matter to the Court of Appeals, which, as
mentioned at the outset, likewise reached the same result. Hence
this petition for review.

We reiterate what was set forth at the opening of this opinion.

There is no reason for a reversal of the judgment. The decision
sought to be reviewed is in accordance with law.

As explained in the decision now under review: "It is true that the
husband is the administrator of the conjugal property pursuant to
the provisions of Art. 163 of the new Civil Code. However, as such
administrator the only obligations incurred by the husband that are
chargeable against the conjugal property are those incurred in the
legitimate pursuit of his career, profession or business with the
honest belief that he is doing right for the benefit of the family.
This is not true in the case at bar for we believe that the husband
in acting as guarantor or surety for another in an indemnity
agreement as that involved in this case did not act for the benefit
of the conjugal partnership. Such inference is more emphatic in
this case, when no proof is presented that Vicente Garcia in acting
as surety or guarantor received consideration therefor, which may
redound to the benefit of the conjugal partnership." 3

In the decision before us, the principal error assigned is the above
holding of the Court of Appeals that under Article 161 of the Civil
Code no liability was incurred by the conjugal partnership. While
fully conscious of the express language of Article 161 of the Civil
Code, Petitioner, in its well-written brief submitted by its counsel,
would impress on us that in this case it could not be said that no
benefit was received by the conjugal partnership. It sought to lend
some semblance of plausibility to this view thus: "The present case
involves a contract of suretyship entered into by the husband, the
respondent Vicente Garcia, in behalf of a third person. A
transaction based on credit through which, by our given
definitions, respondent Vicente Garcia, by acting as guarantor and
making good his guaranty, acquires the capacity of being trusted,
adds to his reputation or esteem, enhances his standing as a
citizen in the community in which he lives, and earns the
confidence of the business community. He can thus secure money
with which to carry on the purposes of their conjugal partnership."
4

While not entire]y without basis, such an argument does not carry
conviction. Its acceptance would negate the plain meaning of what
is expressly provided for in Article 161. In the most categorical
language, a conjugal partnership under that provision is liable only
for such "debts and obligations contracted by the husband for the
benefit of the conjugal partnership." There must be the requisite
showing then of some advantage which clearly accrued to the
welfare of the spouses. There is none in this case. Nor could there
be, considering that the benefit was clearly intended for a third
party, one Ladislao Chavez. While the husband by thus signing the
indemnity agreement may be said to have added to his reputation
or esteem and to have earned the confidence of the business
community, such benefit, even if hypothetically accepted, is too
remote and fanciful to come within the express, terms of the
provision.

Its language is clear; it does not admit of doubt. No process of

interpretation or construction need be resorted to. It peremptorily
calls for application. Where a requirement is made in explicit and
unambiguous terms, no discretion is left to the judiciary. It must
see to it that its mandate is obeyed. So it is in this case. That is
how the Court of Appeals acted, and what it did cannot be
impugned for being contrary to law. 5

Moreover, it would negate the plain object of the additional

requirement in the present Civil Code that a debt contracted by the
husband to bind a conjugal partnership must redound to its
benefit. That is still another provision indicative of the solicitude
and tender regard that the law manifests for the family as a unit.
Its interest is paramount; its welfare uppermost in the minds of
the codifiers and legislators.

This particular codal provision in question rightfully emphasizes the

responsibility of the husband as administrator. 6 He is supposed to
conserve and, if possible, augment the funds of the conjugal
partnership, not dissipate them. If out of friendship or misplaced
generosity on his part the conjugal partnership would be saddled
with financial burden, then the family stands to suffer. No
objection need arise if the obligation thus contracted by him could
be shown to be for the benefit of the wife and the progeny if any
there be. That is but fair and just. Certainly, however, to make a
conjugal partnership respond for a liability that should appertain to
the husband alone is to defeat and frustrate the avowed objective
of the new Civil Code to show the utmost concern for the solidarity
and well-being of the family as a unit. 7 The husband, therefore,
as is wisely thus made certain, is denied the power to assume
unnecessary and unwarranted risks to the financial stability of the
conjugal partnership.

No useful purpose would be served by petitioner assigning as one

of the errors the observation made by the Court of Appeals as to
the husband’s interest in the conjugal property being merely
inchoate or a mere expectancy in view of the conclusion thus
reached as to the absence of any liability on the part of the
conjugal partnership. Nor was it error for the Court of Appeals to
refuse to consider a question raised for the first time on appeal.
Now as to the question of jurisdiction of the lower court to
entertain this petition for injunction against the Provincial Sheriff,
to which our attention is invited, neither the Court of Appeals nor
the lower court having been asked to pass upon it. Of course, if
raised earlier, it ought to have been seriously inquired into. We
feel, however, that under all the circumstances of the ease,
substantial justice would be served if petitioner be held as
precluded from now attempting to interpose such a barrier. The
conclusion that thereby laches had intervened is not unreasonable.
Such a response on our part can be predicated on the authoritative
holding in Tijam v. Sibonghanoy. 8

WHEREFORE, the decision of the Court of Appeals of December 17,

1965, now under review, is affirmed with costs against petitioner
Luzon Surety Co., Inc.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro,
Teehankee and Barredo, JJ., concur.
Separate Opinions

REYES, J., concurring:chanrob1es virtual 1aw library

I concur in the result, but would like to make of record that, in my

opinion, the words "all debts and obligations contracted by the
husband for the benefit of the conjugal partnership" used in Article
161 of the Civil Code of the Philippines in describing the charges
and obligations for which the conjugal partnership is liable, do not
require that actual profit or benefit must accrue to the conjugal
partnership from the husband’s transactions; but that it suffices
that the transaction should be one that normally would produce
such benefit for the partnership. This is the ratio behind our ruling
in Javier v. Osmeña, 34 Phil. 336, that obligations incurred by the
husband in the practice of his profession are collectible from the
conjugal partnership.
Endnotes:

1. Brief for Petitioner, p. 3.

2. Ibid., Appendix, pp. 39-42.

3. Ibid., pp. 46-47.

4. Ibid., pp. 24-25.

5. Cf. People v. Mapa, 20 SCRA 1164 (1967); Pacific Oxygen &

Acetylene Co. v. Central Bank, 22 SCRA 917 (1968); Dequito v.
Lopez, 22 SCRA 1352 (1968); Padilla v. City of Pasay, 23 SCRA
1349 (1968); Garcia v. Vasquez, 27 SCRA 505 (1969); La Perla
Cigar & Cigarette Factory v. Capapas, L-27948 & 28001-11, July
31, 1969; Mobil Oil Philippines v. Diocares, L-26371, Sept. 30,
1969.

6. Article 165, New Civil Code.

7. Cf. Report of the Code Commission, p. 17 (1948).

8. 23 SCRA 29 (1968). Cf. Carillo v. Allied Workers’ Association, 24

SCRA 566 (1968).

Case Digest

LUZON SURETY CO. v. JOSEFA AGUIRRE DE GARCIA, GR No. L-25659,

1969-10-31
Facts:
As noted in the brief of petitioner Luzon Surety Co., Inc., on October 18,
1960, a suit for injunction was filed in the Court of First Instance of Negros
Occidental against its Provincial Sheriff by respondent-spouses, Josefa
Aguirre de Garcia and
Vicente Garcia "to enjoin [such Sheriff] from selling the sugar allegedly
owned by their conjugal partnership, pursuant to a writ of garnishment issued
by virtue of a writ of execution issued in Civil Case No. 3893 of the same
Court of First Instance * * * against the... respondent Vicente Garcia
There is no question as to one Ladislao Chavez, as principal, and petitioner
Luzon Surety Co., Inc., executing a surety bond in favor of the Philippine
National Bank,... Victorias Branch, to guaranty a crop loan granted by the
latter to Ladislao Chavez in the sum of P9,000.00. On or about the same
date, Vicente Garcia, together with the said Ladislao Chavez and one Ramon
B.
Lacson, as guarantors, signed an indemnity agreement wherein they bound
themselves, jointly and severally, to indemnify now petitioner Luzon Surety
Co., Inc. against any and all damages, losses, costs, stamps, taxes, penalties,
charges and expenses of whatsoever... kind and nature which the petitioner
may at any time sustain or incur in consequence of having become guarantor
upon said bond, to pay interest at the rate of 12% per annum, computed and
compounded quarterly until fully paid; and to pay 15% of the amount
involved in any... litigation or other matters growing out of or connected
therewith for attorney's fees.
It was likewise stipulated that on or about April 27, 1956, the Philippine
National Bank filed a complaint before the Court of First Instance of Negros
Occidental, docketed as its Civil Case No. 3893, against Ladislao Chavez and
Luzon Surety Co.,... Inc. to recover the amount of P4,577.95, in interest,
attorney's fees, and costs of the suit. On or about August 8, 1957, in turn, a
third-party complaint against Ladislao Chavez, Ramon B. Lacson and Vicente
Garcia, based on the... indemnity agreement, was instituted by Luzon Surety
Co., Inc.
Issues:
whether or not a conjugal partnership, in the absence of any showing of
benefits received, could be held liable on an indemnity agreement... executed
by the husband to accommodate a third party in favor of a surety company.
Ruling:
"It is true that the husband is the administrator of the conjugal property
pursuant to the provisions of Art.163 of the new Civil Code.
However, as such administrator the only obligations... incurred by the
husband that are chargeable against the conjugal property are those incurred
in the legitimate pursuit of his career, profession or business with the honest
belief that he is doing right for the benefit of the family.
This is not true in the... case at bar for we believe that the husband in acting
as guarantor or surety for another in an indemnity agreement as that
involved in this case did not act for the benefit of the conjugal partnership.
In the most categorical language, a conjugal partnership... under that
provision is liable only for such "debts and obligations contracted by the
husband for the benefit of the conjugal partnership."
There must be the requisite showing then of some advantage which clearly
accrued to the welfare of the spouses. There... is none in this case. Nor
could there be, considering that the benefit was clearly intended for a third
party, one Ladislao Chavez. While the husband by thus signing the indemnity
agreement may be said to have added to his... reputation or esteem and to
have earned the confidence of the business community, such benefit, even if
hypothetically accepted, is too remote and fanciful to come within the
express terms of the provision
Its language is clear; it does not admit of doubt. No process of interpretation
or construction need be resorted to. It peremptorily calls for
application. Where a requirement is made in explicit and unambiguous...
terms, no discretion is left to the judiciary.
Moreover, it would negate the plain object of the additional requirement in
the present Civil Code that a debt contracted by the husband to bind a
conjugal partnership must redound to its benefit.
This particular codal provision in question rightfully emphasizes the
responsibility of the husband as administrator.[6] He is supposed to conserve
and, if possible, augment the funds of the... conjugal partnership, not
dissipate them.
Certainly, however, to make a conjugal partnership respond for a liability that
should appertain to the... husband alone is to defeat and frustrate the
avowed objective of the new Civil Code to show the utmost concern for the
solidarity and well-being of the family as a unit.[7]
Caltex vs Palomar GR # L-19650, Sept 29,1966
EN BANC

G.R. No. L-19650 September 29, 1966

CALTEX (PHILIPPINES), INC., petitioner-appellee,

vs.
ENRICO PALOMAR, in his capacity as THE POSTMASTER
GENERAL, respondent-appellant.

Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J.:

In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as

Caltex) conceived and laid the groundwork for a promotional scheme
calculated to drum up patronage for its oil products. Denominated "Caltex
Hooded Pump Contest", it calls for participants therein to estimate the actual
number of liters a hooded gas pump at each Caltex station will dispense
during a specified period. Employees of the Caltex (Philippines) Inc., its
dealers and its advertising agency, and their immediate families excepted,
participation is to be open indiscriminately to all "motor vehicle owners
and/or licensed drivers". For the privilege to participate, no fee or
consideration is required to be paid, no purchase of Caltex products required
to be made. Entry forms are to be made available upon request at each
Caltex station where a sealed can will be provided for the deposit of
accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level,

called "Dealer Contest", the contestant whose estimate is closest to the
actual number of liters dispensed by the hooded pump thereat is to be
awarded the first prize; the next closest, the second; and the next, the third.
Prizes at this level consist of a 3-burner kerosene stove for first; a thermos
bottle and a Ray-O-Vac hunter lantern for second; and an Everready
Magnet-lite flashlight with batteries and a screwdriver set for third. The first-
prize winner in each station will then be qualified to join in the "Regional
Contest" in seven different regions. The winning stubs of the qualified
contestants in each region will be deposited in a sealed can from which the
first-prize, second-prize and third-prize winners of that region will be drawn.
The regional first-prize winners will be entitled to make a three-day all-
expenses-paid round trip to Manila, accompanied by their respective Caltex
dealers, in order to take part in the "National Contest". The regional second-
prize and third-prize winners will receive cash prizes of P500 and P300,
respectively. At the national level, the stubs of the seven regional first-prize
winners will be placed inside a sealed can from which the drawing for the
final first-prize, second-prize and third-prize winners will be made. Cash
prizes in store for winners at this final stage are: P3,000 for first; P2,000 for
second; Pl,500 for third; and P650 as consolation prize for each of the
remaining four participants.

Foreseeing the extensive use of the mails not only as amongst the media for
publicizing the contest but also for the transmission of communications
relative thereto, representations were made by Caltex with the postal
authorities for the contest to be cleared in advance for mailing, having in
view sections 1954(a), 1982 and 1983 of the Revised Administrative Code,
the pertinent provisions of which read as follows:

SECTION 1954. Absolutely non-mailable matter. — No matter

belonging to any of the following classes, whether sealed as first-class
matter or not, shall be imported into the Philippines through the mails,
or to be deposited in or carried by the mails of the Philippines, or be
delivered to its addressee by any officer or employee of the Bureau of
Posts:
Written or printed matter in any form advertising, describing, or in any
manner pertaining to, or conveying or purporting to convey any
information concerning any lottery, gift enterprise, or similar scheme
depending in whole or in part upon lot or chance, or any scheme,
device, or enterprise for obtaining any money or property of any kind by
means of false or fraudulent pretenses, representations, or promises.

"SECTION 1982. Fraud orders.—Upon satisfactory evidence that any

person or company is engaged in conducting any lottery, gift enterprise,
or scheme for the distribution of money, or of any real or personal
property by lot, chance, or drawing of any kind, or that any person or
company is conducting any scheme, device, or enterprise for obtaining
money or property of any kind through the mails by means of false or
fraudulent pretenses, representations, or promises, the Director of
Posts may instruct any postmaster or other officer or employee of the
Bureau to return to the person, depositing the same in the mails, with
the word "fraudulent" plainly written or stamped upon the outside cover
thereof, any mail matter of whatever class mailed by or addressed to
such person or company or the representative or agent of such person
or company.

SECTION 1983. Deprivation of use of money order system and

telegraphic transfer service.—The Director of Posts may, upon
evidence satisfactory to him that any person or company is engaged in
conducting any lottery, gift enterprise or scheme for the distribution of
money, or of any real or personal property by lot, chance, or drawing of
any kind, or that any person or company is conducting any scheme,
device, or enterprise for obtaining money or property of any kind
through the mails by means of false or fraudulent pretenses,
representations, or promise, forbid the issue or payment by any
postmaster of any postal money order or telegraphic transfer to said
person or company or to the agent of any such person or company,
whether such agent is acting as an individual or as a firm, bank,
corporation, or association of any kind, and may provide by regulation
for the return to the remitters of the sums named in money orders or
 telegraphic transfers drawn in favor of such person or company or its
agent.

The overtures were later formalized in a letter to the Postmaster General,

dated October 31, 1960, in which the Caltex, thru counsel, enclosed a copy
of the contest rules and endeavored to justify its position that the contest
does not violate the anti-lottery provisions of the Postal Law. Unimpressed,
the then Acting Postmaster General opined that the scheme falls within the
purview of the provisions aforesaid and declined to grant the requested
clearance. In its counsel's letter of December 7, 1960, Caltex sought a
reconsideration of the foregoing stand, stressing that there being involved no
consideration in the part of any contestant, the contest was not, under
controlling authorities, condemnable as a lottery. Relying, however, on an
opinion rendered by the Secretary of Justice on an unrelated case seven
years before (Opinion 217, Series of 1953), the Postmaster General
maintained his view that the contest involves consideration, or that, if it does
not, it is nevertheless a "gift enterprise" which is equally banned by the
Postal Law, and in his letter of December 10, 1960 not only denied the use
of the mails for purposes of the proposed contest but as well threatened that
if the contest was conducted, "a fraud order will have to be issued against it
(Caltex) and all its representatives".

Caltex thereupon invoked judicial intervention by filing the present petition for
declaratory relief against Postmaster General Enrico Palomar, praying "that
judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be
violative of the Postal Law, and ordering respondent to allow petitioner the
use of the mails to bring the contest to the attention of the public". After
issues were joined and upon the respective memoranda of the parties, the
trial court rendered judgment as follows:

In view of the foregoing considerations, the Court holds that the

proposed 'Caltex Hooded Pump Contest' announced to be conducted
by the petitioner under the rules marked as Annex B of the petitioner
does not violate the Postal Law and the respondent has no right to bar
the public distribution of said rules by the mails.
The respondent appealed.

The parties are now before us, arrayed against each other upon two basic
issues: first, whether the petition states a sufficient cause of action for
declaratory relief; and second, whether the proposed "Caltex Hooded Pump
Contest" violates the Postal Law. We shall take these up in seriatim.

1. By express mandate of section 1 of Rule 66 of the old Rules of Court,

which was the applicable legal basis for the remedy at the time it was
invoked, declaratory relief is available to any person "whose rights are
affected by a statute . . . to determine any question of construction or validity
arising under the . . . statute and for a declaration of his rights thereunder"
(now section 1, Rule 64, Revised Rules of Court). In amplification, this Court,
conformably to established jurisprudence on the matter, laid down certain
conditions sine qua non therefor, to wit: (1) there must be a justiciable
controversy; (2) the controversy must be between persons whose interests
are adverse; (3) the party seeking declaratory relief must have a legal
interest in the controversy; and (4) the issue involved must be ripe for judicial
determination (Tolentino vs. The Board of Accountancy, et al., G.R. No. L-
3062, September 28, 1951; Delumen, et al. vs. Republic of the Philippines,
50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R. No. L-
8964, July 31, 1956). The gravamen of the appellant's stand being that the
petition herein states no sufficient cause of action for declaratory relief, our
duty is to assay the factual bases thereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present

controversy, a number of significant points stand out in bold relief. The
appellee (Caltex), as a business enterprise of some consequence,
concededly has the unquestioned right to exploit every legitimate means,
and to avail of all appropriate media to advertise and stimulate increased
patronage for its products. In contrast, the appellant, as the authority
charged with the enforcement of the Postal Law, admittedly has the power
and the duty to suppress transgressions thereof — particularly thru the
issuance of fraud orders, under Sections 1982 and 1983 of the Revised
Administrative Code, against legally non-mailable schemes. Obviously
pursuing its right aforesaid, the appellee laid out plans for the sales
promotion scheme hereinbefore detailed. To forestall possible difficulties in
the dissemination of information thereon thru the mails, amongst other
media, it was found expedient to request the appellant for an advance
clearance therefor. However, likewise by virtue of his jurisdiction in the
premises and construing the pertinent provisions of the Postal Law, the
appellant saw a violation thereof in the proposed scheme and accordingly
declined the request. A point of difference as to the correct construction to
be given to the applicable statute was thus reached. Communications in
which the parties expounded on their respective theories were exchanged.
The confidence with which the appellee insisted upon its position was
matched only by the obstinacy with which the appellant stood his ground.
And this impasse was climaxed by the appellant's open warning to the
appellee that if the proposed contest was "conducted, a fraud order will have
to be issued against it and all its representatives."

Against this backdrop, the stage was indeed set for the remedy prayed for.
The appellee's insistent assertion of its claim to the use of the mails for its
proposed contest, and the challenge thereto and consequent denial by the
appellant of the privilege demanded, undoubtedly spawned a live
controversy. The justiciability of the dispute cannot be gainsaid. There is an
active antagonistic assertion of a legal right on one side and a denial thereof
on the other, concerning a real — not a mere theoretical — question or
issue. The contenders are as real as their interests are substantial. To the
appellee, the uncertainty occasioned by the divergence of views on the issue
of construction hampers or disturbs its freedom to enhance its business. To
the appellant, the suppression of the appellee's proposed contest believed to
transgress a law he has sworn to uphold and enforce is an unavoidable duty.
With the appellee's bent to hold the contest and the appellant's threat to
issue a fraud order therefor if carried out, the contenders are confronted by
the ominous shadow of an imminent and inevitable litigation unless their
differences are settled and stabilized by a tranquilizing declaration (Pablo y
Sen, et al. vs. Republic of the Philippines, G.R. No. L-6868, April 30, 1955).
And, contrary to the insinuation of the appellant, the time is long past when it
can rightly be said that merely the appellee's "desires are thwarted by its
own doubts, or by the fears of others" — which admittedly does not confer a
cause of action. Doubt, if any there was, has ripened into a justiciable
controversy when, as in the case at bar, it was translated into a positive
claim of right which is actually contested (III Moran, Comments on the Rules
of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast
Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no

question of construction because the said appellant "simply applied the clear
provisions of the law to a given set of facts as embodied in the rules of the
contest", hence, there is no room for declaratory relief. The infirmity of this
pose lies in the fact that it proceeds from the assumption that, if the
circumstances here presented, the construction of the legal provisions can
be divorced from the matter of their application to the appellee's contest.
This is not feasible. Construction, verily, is the art or process of discovering
and expounding the meaning and intention of the authors of the law with
respect to its application to a given case, where that intention is rendered
doubtful, amongst others, by reason of the fact that the given case is not
explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This is
precisely the case here. Whether or not the scheme proposed by the
appellee is within the coverage of the prohibitive provisions of the Postal Law
inescapably requires an inquiry into the intended meaning of the words used
therein. To our mind, this is as much a question of construction or
interpretation as any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on

the matter at hand can amount to nothing more than an advisory opinion the
handing down of which is anathema to a declaratory relief action. Of course,
no breach of the Postal Law has as yet been committed. Yet, the
disagreement over the construction thereof is no longer nebulous or
contingent. It has taken a fixed and final shape, presenting clearly defined
legal issues susceptible of immediate resolution. With the battle lines drawn,
in a manner of speaking, the propriety — nay, the necessity — of setting the
dispute at rest before it accumulates the asperity distemper, animosity,
passion and violence of a full-blown battle which looms ahead (III Moran,
Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot
but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh 59
Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d.,
p. 869, to deny declaratory relief to the appellee in the situation into which it
has been cast, would be to force it to choose between undesirable
alternatives. If it cannot obtain a final and definitive pronouncement as to
whether the anti-lottery provisions of the Postal Law apply to its proposed
contest, it would be faced with these choices: If it launches the contest and
uses the mails for purposes thereof, it not only incurs the risk, but is also
actually threatened with the certain imposition, of a fraud order with its
concomitant stigma which may attach even if the appellee will eventually be
vindicated; if it abandons the contest, it becomes a self-appointed censor, or
permits the appellant to put into effect a virtual fiat of previous censorship
which is constitutionally unwarranted. As we weigh these considerations in
one equation and in the spirit of liberality with which the Rules of Court are to
be interpreted in order to promote their object (section 1, Rule 1, Revised
Rules of Court) — which, in the instant case, is to settle, and afford relief
from uncertainty and insecurity with respect to, rights and duties under a law
— we can see in the present case any imposition upon our jurisdiction or any
futility or prematurity in our intervention.

The appellant, we apprehend, underrates the force and binding effect of the
ruling we hand down in this case if he believes that it will not have the final
and pacifying function that a declaratory judgment is calculated to subserve.
At the very least, the appellant will be bound. But more than this, he
obviously overlooks that in this jurisdiction, "Judicial decisions applying or
interpreting the law shall form a part of the legal system" (Article 8, Civil
Code of the Philippines). In effect, judicial decisions assume the same
authority as the statute itself and, until authoritatively abandoned,
necessarily become, to the extent that they are applicable, the criteria which
must control the actuations not only of those called upon to abide thereby
but also of those in duty bound to enforce obedience thereto. Accordingly,
we entertain no misgivings that our resolution of this case will terminate the
controversy at hand.
It is not amiss to point out at this juncture that the conclusion we have herein
just reached is not without precedent. In Liberty Calendar Co. vs. Cohen, 19
N.J., 399, 117 A. 2d., 487, where a corporation engaged in promotional
advertising was advised by the county prosecutor that its proposed sales
promotion plan had the characteristics of a lottery, and that if such sales
promotion were conducted, the corporation would be subject to criminal
prosecution, it was held that the corporation was entitled to maintain a
declaratory relief action against the county prosecutor to determine the
legality of its sales promotion plan. In pari materia, see also: Bunis vs.
Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh,
supra; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.

In fine, we hold that the appellee has made out a case for declaratory relief.

2. The Postal Law, chapter 52 of the Revised Administrative Code, using

almost identical terminology in sections 1954(a), 1982 and 1983
thereof, supra, condemns as absolutely non-mailable, and empowers the
Postmaster General to issue fraud orders against, or otherwise deny the use
of the facilities of the postal service to, any information concerning "any
lottery, gift enterprise, or scheme for the distribution of money, or of any real
or personal property by lot, chance, or drawing of any kind". Upon these
words hinges the resolution of the second issue posed in this appeal.

Happily, this is not an altogether untrodden judicial path. As early as in 1922,

in "El Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly
dwelt on the power of the postal authorities under the abovementioned
provisions of the Postal Law, this Court declared that —

While countless definitions of lottery have been attempted, the

authoritative one for this jurisdiction is that of the United States
Supreme Court, in analogous cases having to do with the power of the
United States Postmaster General, viz.: The term "lottery" extends to all
schemes for the distribution of prizes by chance, such as policy playing,
gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of
gambling. The three essential elements of a lottery are: First,
consideration; second, prize; and third, chance. (Horner vs. States
 [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194
U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs.
Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39
Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p.
233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize
and chance are too obvious in the disputed scheme to be the subject of
contention. Consequently as the appellant himself concedes, the field of
inquiry is narrowed down to the existence of the element of consideration
therein. Respecting this matter, our task is considerably lightened inasmuch
as in the same case just cited, this Court has laid down a definitive yard-stick
in the following terms —

In respect to the last element of consideration, the law does not

condemn the gratuitous distribution of property by chance, if no
consideration is derived directly or indirectly from the party receiving the
chance, but does condemn as criminal schemes in which a valuable
consideration of some kind is paid directly or indirectly for the chance to
draw a prize.

Reverting to the rules of the proposed contest, we are struck by the clarity of
the language in which the invitation to participate therein is couched. Thus —

No puzzles, no rhymes? You don't need wrappers, labels or boxtops?

You don't have to buy anything? Simply estimate the actual number of
liter the Caltex gas pump with the hood at your favorite Caltex dealer
will dispense from — to —, and win valuable prizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any
merchandise be bought, any service be rendered, or any value whatsoever
be given for the privilege to participate. A prospective contestant has but to
go to a Caltex station, request for the entry form which is available on
demand, and accomplish and submit the same for the drawing of the winner.
Viewed from all angles or turned inside out, the contest fails to exhibit any
discernible consideration which would brand it as a lottery. Indeed, even as
we head the stern injunction, "look beyond the fair exterior, to the substance,
in order to unmask the real element and pernicious tendencies which the law
is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra, p. 291), we find
none. In our appraisal, the scheme does not only appear to be, but actually
is, a gratuitous distribution of property by chance.

There is no point to the appellant's insistence that non-Caltex customers

who may buy Caltex products simply to win a prize would actually be
indirectly paying a consideration for the privilege to join the contest. Perhaps
this would be tenable if the purchase of any Caltex product or the use of any
Caltex service were a pre-requisite to participation. But it is not. A
contestant, it hardly needs reiterating, does not have to buy anything or to
give anything of value.1awphîl.nèt

Off-tangent, too, is the suggestion that the scheme, being admittedly for
sales promotion, would naturally benefit the sponsor in the way of increased
patronage by those who will be encouraged to prefer Caltex products "if only
to get the chance to draw a prize by securing entry blanks". The required
element of consideration does not consist of the benefit derived by the
proponent of the contest. The true test, as laid down in People vs. Cardas,
28 P. 2d., 99, 137 Cal. App. (Supp.) 788, is whether the participant pays a
valuable consideration for the chance, and not whether those conducting the
enterprise receive something of value in return for the distribution of the
prize. Perspective properly oriented, the standpoint of the contestant is all
that matters, not that of the sponsor. The following, culled from Corpus Juris
Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in
fact does receive, some benefit in the way of patronage or otherwise,
as a result of the drawing; does not supply the element of
consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98
S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded
Pump Contest" proposed by the appellee is not a lottery that may be
administratively and adversely dealt with under the Postal Law.
But it may be asked: Is it not at least a "gift enterprise, or scheme for the
distribution of money, or of any real or personal property by lot, chance, or
drawing of any kind", which is equally prescribed? Incidentally, while the
appellant's brief appears to have concentrated on the issue of consideration,
this aspect of the case cannot be avoided if the remedy here invoked is to
achieve its tranquilizing effect as an instrument of both curative and
preventive justice. Recalling that the appellant's action was predicated,
amongst other bases, upon Opinion 217, Series 1953, of the Secretary of
Justice, which opined in effect that a scheme, though not a lottery for want of
consideration, may nevertheless be a gift enterprise in which that element is
not essential, the determination of whether or not the proposed contest —
wanting in consideration as we have found it to be — is a prohibited gift
enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be

spelled out in explicit words, there appears to be a consensus among
lexicographers and standard authorities that the term is commonly applied to
a sporting artifice of under which goods are sold for their market value but by
way of inducement each purchaser is given a chance to win a prize (54
C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817;
Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section
of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb.
13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37
Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly
cannot embrace the scheme at bar. As already noted, there is no sale of
anything to which the chance offered is attached as an inducement to the
purchaser. The contest is open to all qualified contestants irrespective of
whether or not they buy the appellee's products.

Going a step farther, however, and assuming that the appellee's contest can
be encompassed within the broadest sweep that the term "gift enterprise" is
capable of being extended, we think that the appellant's pose will gain no
added comfort. As stated in the opinion relied upon, rulings there are indeed
holding that a gift enterprise involving an award by chance, even in default of
the element of consideration necessary to constitute a lottery, is prohibited
(E.g.: Crimes vs. States, 235 Ala 192, 178 So. 73; Russell vs. Equitable
Loan & Sec. Co., 129 Ga. 154, 58 S.E., 88; State ex rel. Stafford vs. Fox-
Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52).
But this is only one side of the coin. Equally impressive authorities declare
that, like a lottery, a gift enterprise comes within the prohibitive statutes only
if it exhibits the tripartite elements of prize, chance and consideration (E.g.:
Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275
P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City
and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo., 20, 7 L.R.A.,
N.S., 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193
S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp.
590-594). The apparent conflict of opinions is explained by the fact that the
specific statutory provisions relied upon are not identical. In some cases, as
pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are
used interchangeably (Bills vs. People, supra); in others, the necessity for
the element of consideration or chance has been specifically eliminated by
statute. (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel.
Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we
derive from this state of the pertinent jurisprudence is, therefore, that every
case must be resolved upon the particular phraseology of the applicable
statutory provision.

Taking this cue, we note that in the Postal Law, the term in question is used
in association with the word "lottery". With the meaning of lottery settled, and
consonant to the well-known principle of legal hermeneutics noscitur a sociis
— which Opinion 217 aforesaid also relied upon although only insofar as the
element of chance is concerned — it is only logical that the term under a
construction should be accorded no other meaning than that which is
consistent with the nature of the word associated therewith. Hence, if lottery
is prohibited only if it involves a consideration, so also must the term "gift
enterprise" be so construed. Significantly, there is not in the law the slightest
indicium of any intent to eliminate that element of consideration from the "gift
enterprise" therein included.
This conclusion firms up in the light of the mischief sought to be remedied by
the law, resort to the determination thereof being an accepted extrinsic aid in
statutory construction. Mail fraud orders, it is axiomatic, are designed to
prevent the use of the mails as a medium for disseminating printed matters
which on grounds of public policy are declared non-mailable. As applied to
lotteries, gift enterprises and similar schemes, justification lies in the
recognized necessity to suppress their tendency to inflame the gambling
spirit and to corrupt public morals (Com. vs. Lund, 15 A. 2d., 839, 143 Pa.
Super. 208). Since in gambling it is inherent that something of value be
hazarded for a chance to gain a larger amount, it follows ineluctably that
where no consideration is paid by the contestant to participate, the reason
behind the law can hardly be said to obtain. If, as it has been held —

Gratuitous distribution of property by lot or chance does not constitute

"lottery", if it is not resorted to as a device to evade the law and no
consideration is derived, directly or indirectly, from the party receiving
the chance, gambling spirit not being cultivated or stimulated thereby.
City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and
Phrases, perm. ed., p. 695, emphasis supplied).

we find no obstacle in saying the same respecting a gift enterprise. In the

end, we are persuaded to hold that, under the prohibitive provisions of the
Postal Law which we have heretofore examined, gift enterprises and similar
schemes therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding none in the contest here in
question, we rule that the appellee may not be denied the use of the mails
for purposes thereof.

Recapitulating, we hold that the petition herein states a sufficient cause of

action for declaratory relief, and that the "Caltex Hooded Pump Contest" as
described in the rules submitted by the appellee does not transgress the
provisions of the Postal Law.

ACCORDINGLY, the judgment appealed from is affirmed. No costs.

Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal,
Bengzon, J.P., Zaldivar and Sanchez, JJ., concur.

Spouses Plopemio VS Dept of Agrarian Reform GR # 161090, July

4,2012

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 161090 July 4, 2012

SPOUSES ROMEO LL. PLOPENIO and ROSIELINDA PLOPENIO

represented by GAVINO PLOPENIO, Petitioners,
vs.
DEPARTMENT OF AGRARIAN REFORM and LAND BANK OF THE
PHILIPPINES, Respondents.

x-----------------------x

G.R. No. 161092

EDUARDO LL. PLOPENIO represented by GAVINO

PLOPENIO, Petitioner,
vs.
DEPARTMENT OF AGRARIAN REFORM and LAND BANK OF THE
PHILIPPINES, Respondents.

DECISION

SERENO, J.:
In these consolidated Rule 45 Petitions, we rule on the proper mode of
appeal from the decision of a Regional Trial Court (RTC) designated as a
Special Agrarian Court (SAC).

In G.R. No. 161090, petitioner-spouses Romeo Ll. Plopenio and Rosielinda

Plopenio assail the Decision1 and Order2 of the SAC-RTC Branch 23, Naga
City, in Civil Case No. 2003-007.

In G.R. No. 161092, petitioner Eduardo Ll. Plopenio (Eduardo) questions the
Decision3 and Order4 of the same court in Civil Case No. 2003-004.

THE FACTS

Petitioner-spouses own 11.8643 hectares of coconut land in Caramoan,

Camarines Sur, while petitioner Eduardo owns 22.8349 hectares of coconut
land in the same locality. In 2000, the land of their brother Gavino Plopenio,
likewise located in Caramoan, Camarines Sur, was valued by the
Department of Agrarian Reform Adjudication Board (DARAB) at P51,125.60
per hectare in DARAB Case No. V-LV-040-CS-00. On this basis, petitioners
offered their entire landholdings to the Department of Agrarian Reform
(DAR) for acquisition and distribution pursuant to Republic Act No. (R.A.)
6657, or the Comprehensive Agrarian Reform Law.5

On 26 October 2001, public respondent Land Bank sent a Notice of

Valuation and Adjudication valuing the land of petitioner-spouses at

P23,485.00 per hectare6 and that of petitioner Eduardo at P22,856.62 per

hectare.7 Dissatisfied with Land Bank’s offer, petitioners rejected the Notice
of Valuation and Acquisition and referred the matter to the Provincial
Agrarian Reform Adjudicator (PARAD) of Camarines Sur for summary
administrative proceedings.8

The PARAD affirmed the valuation made by Land Bank in a Decision dated
5 September 2002, a copy of which petitioners received on 27 September
2002.9
On 11 October 2002, or 14 days thereafter, petitioners filed their Motion for
Reconsideration.10 The PARAD denied their Motion in an Order dated 20
November 2002, which petitioners received on 21 December 2002.11

Petitioners then filed separate Petitions before the SAC-RTC on 6 January

2003, or 16 days after their receipt of the PARAD’s Order. They explained
that they were allowed to file their appeal 15 days from the receipt of the
Order of denial of their Motion for Reconsideration. Since the 15th day fell on
a Sunday, they reasoned that they should be allowed to file their appeal until
6 January 2003.12

In its Answer, Land Bank alleged that the Decision of the PARAD had
already attained finality after the lapse of the 15-day period, counted from
petitioners’ receipt of the PARAD’s Decision. Thus, it argued that the SAC-
RTC should no longer entertain the Petitions.13

In its assailed Decisions, the SAC-RTC ruled that the Decision of the
PARAD had already attained finality because petitioners failed to file their
Petitions on time. The lower court thus dismissed the appeal in this wise:

WHEREFORE, with all the foregoing this court finds merit in [respondent
Land Bank’s] special and affirmative defense, that the filing of these petitions
is now barred by prior final and executory judgment hence wanting of a valid
cause of action.

The petitions therefore are hereby ordered dismissed for lack of valid cause
of action.

SO ORDERED.14

Petitioners moved for reconsideration of the SAC-RTC’s Decision, but their

motions were denied for lack of merit.15

From the Decisions and Orders of the SAC-RTC, petitioners then filed the
instant Petitions for Review directly before this Court. On 24 July 2006, we
resolved to consolidate the cases at bar, considering that the factual milieu
and legal issues involved in both cases are similar in nature.
THE COURT’S RULING

At the outset, we rule that the consolidated Petitions are immediately

dismissible because petitioners resorted to a wrongful mode of appeal by
filing the instant Rule 45 Petitions directly with this Court.

Section 60 of the Comprehensive Agrarian Reform Law provides:

Section 60. Appeals. – An appeal may be taken from the decision of the
Special Agrarian Courts by filing a petition for review with the Court of
Appeals within fifteen (15) days from receipt of notice of the decision;
otherwise, the decision shall become final.

An appeal from the decision of the Court of Appeals, or from any order,
ruling or decision of the DAR, as the case may be, shall be by a petition for
review with the Supreme Court within a non-extendible period of fifteen (15)
days from receipt of a copy of said decision. (Emphasis supplied)

Clearly, following the letter of the Comprehensive Agrarian Reform Law,

petitioners should have appealed the SAC-RTC Decision to the Court of
Appeals.

Petitioners propose to carve out an exception to this rule by arguing that

because the instant Petitions raise only pure questions of law, the proper
mode of appeal is via a Rule 45 Petition to this Court.16

We do not agree. While the general rule is that appeals raising pure
questions of law from decisions of RTCs are taken to this Court via a Rule
45 petition, decisions of trial courtsdesignated as SACs are only appealable
to the Court of Appeals.

We have repeatedly ruled that the right to appeal is a remedy of statutory

origin. As such, this right must be exercised only in the manner and in
accordance with the provisions of the law authorizing its exercise.17 The
special jurisdiction of the SAC-RTC is conferred and regulated by the
Comprehensive Agrarian Reform Law, and appeals therefrom are governed
by Section 60 thereof. That law expressly states that appeals from SACs
must be taken to the Court of Appeals without making a distinction between
appeals raising questions of fact and those dealing purely with questions of
law. Ubi lex non distinguit nec nos distinguere debemus. Where the law does
not distinguish, neither should we. Consequently, we rule that the only mode
of appeal from decisions of the SAC-RTC is via a Rule 42 petition for
review18 to the Court of Appeals, without any distinction as to whether the
appeal raises questions of fact, questions of law, or mixed questions of fact
and law.

Furthermore, even if we were to allow the appeals to prosper, we find that

the Petitions before the SAC-RTC were filed out of time.

Under the 1994 DARAB Rules of Procedure (1994 DARAB Rules), which
were effective during the pendency of this case before the PARAD, the
decision of the adjudicator on land valuation and on the preliminary
determination and payment of just compensation shall be brought directly to
the SAC within 15 days from receipt of the notice thereof.19 Parties aggrieved
by the adjudicator’s decision are allowed to file one motion for
reconsideration.20

In the event of a denial of the motion for reconsideration, the 1994 DARAB
Rules provide:

SECTION 12. x x x. The filing of a motion for reconsideration shall suspend

the running of the period within which the appeal must be perfected. If a
motion for reconsideration is denied, the movant shall have the right to
perfect his appeal during the remainder of the period for appeal, reckoned
from receipt of the resolution of denial. If the decision is reversed on
reconsideration, the aggrieved party shall have fifteen (15) days from receipt
of the resolution of reversal within which to perfect his appeal. 21

While a petition for the fixing of just compensation filed with the RTC-SAC is
not an appeal from the PARAD’s decision, but an original action before the
court a quo,22 the rule in Section 12 of the 1994 DARAB Rules should find
analogous application. A party aggrieved by the PARAD’s decision is given
15 days to file the original petition before the SAC-RTC. The pendency of a
motion for reconsideration of the decision suspends the running of the period
within which the petition may be filed before the RTC-SAC. Consequently,
upon receipt of the order denying the motion for reconsideration, the
reglementary period for filing the petition before the

RTC-SAC again commences to run.

In this case, petitioners received a copy of the PAIZAD Decision on 27

September 2002. 23

They filed their Motion for Reconsideration thereof on 11 October 2002, or

14 days from their receipt of a copy of the Decision. 24 On 21 December
2002, they received the Order denying their motion. 25 Hence, petitioners
only had one more day within which to file their Petitions with the SAC-RTC
for the determination of just compensation for their respective properties.
Since 22 December 2002 tell on a Sunday, they had until 23 December 2002
to file their Petitions. However, they only filed their Petitions on 6 January
2001, or 16 days after they received the Order denying their Motion for
Reconsideration. Clea1ly, the Petitions before the SAC-RTC were filed out of
time.

From the foregoing discussion, \W therefore find that the instant Petitions
should be denied.

WHEREFORE, in view of the foregoing, the consolidated Petitions for

Review are hereby DENIED, and the assailed Decisions and Orders of the
Special Agrarian Court-Regional Trial Court, Branch 23, Naga City in Civil
Case Nos. 2003-007 and 2003-2004 are hereby AFFIRMED.

SO ORDERED.

MARIA LOURDES P.A. SERENO

Associate justice

WE CONCUR:
 ANTONIO T. CARPIO
Senior Associate Justice
Chairperson

ARTURO D. BRION JOSE PORTUGAL PEREZ

Associate Justice Associate Justice

BIENVENIDO L. REYES
Associate Justice

CERTIFICATION

I certify that the conclusion in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

ANTONIO T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296, The Judiciary Act of 1948, as amended)

Footnotes
1
Rollo (G.R. No. 161090), pp. 24-27, RTC Decision dated 7 October
2003, penned by Judge Pablo M. Paqueo, Jr.
2
Id. at 28, Order dated 14 November 2003, penned by Judge Pablo M.
Paqueo, Jr..
3
Rollo (G.R. No. 161092), pp. 24-27, RTC Decision dated 7 October
2003, penned by Judge Pablo M. Paqueo, Jr.
4
Id. at 28, Order dated 14 November 2003, penned by Judge Pablo M.
Paqueo, Jr.
5
Rollo (G.R. No. 161090), p. 11, Petition dated 28 December 2003;
Rollo (G.R. No. 161092), p. 11, Petition dated 28 December 2003.
6
Rollo (G.R. No. 161090), p. 11, Petition dated 28 December 2003.
7
Rollo (G.R. No. 161092), p. 11, Petition dated 28 December 2003.
8
Rollo (G.R. No. 161090), p. 11, Petition dated 28 December 2003;
Rollo (G.R. No. 161092), p. 11, Petition dated 28 December 2003.
9
Rollo (G.R. No. 161090), p. 24, RTC Decision in Civil Case No. 2003-
007; Rollo (G.R. No. 161092), p. 24, RTC Decision in Civil Case No.
2003-004.
10
Id.
11
Rollo (G.R. No. 161090), p. 11, Petition dated 28 December 2003;
Rollo (G.R. No. 161092), p. 11, Petition dated 28 December 2003.
12
Rollo (G.R. No. 161090), pp. 11-12, Petition dated 28 December
2003; Rollo (G.R. No. 161092), p. 11, Petition dated 28 December
2003.
13
Rollo (G.R. No. 161090), p. 12, Petition dated 28 December 2003;
Rollo (G.R. No. 161092), p. 12, Petition dated 28 December 2003.
14
Rollo (G.R. No. 161090), p. 27, RTC Decision in Civil Case No. 2003-
007; Rollo (G.R. No. 161092), p. 27, RTC Decision in Civil Case No.
2003-004.
15
Rollo (G.R. No. 161090), p. 28, Order in Civil Case No. 2003-007;
Rollo (G.R. No. 161092), p. 28, Order in Civil Case No. 2003-004.
16
Rollo (G.R. No. 161090), pp. 53-54, Reply dated 9 July 2004; Rollo
(G.R. No. 161092), p. 98, Reply dated 9 May 2006.
17
Oro v. Diaz, 413 Phil. 416 (2001).
18
Land Bank of the Philippines v. De Leon, 437 Phil. 347 (2002).
19
1994 DARAB RULES OF PROCEDURE, Rule XIII, Section 11.
20
Id.
21
1994 DARAB RULES OF PROCEDURE, Rule VIII, Section 12.
22
Land Bank of the Philippines v. Martinez, G.R. No. 169008, 31 July
2008, 560 SCRA 776.
23
Rollo (G.R. No. 161090), p. 24, RTC Decision in Civil Case No. 2003-
007; Rollo (G.R. No. 161092), p. 24, RTC Decision in Civil Case No.
2003-004.
24
ld.
25
Rollo (G.R. No. 161090), p. II, Petition dated 28 Decc'mber 200\;
Rollo (G.R. No. 161092), p. 11, Petition dated 28 December 2003.