SPECIAL SECOND DIVISION

FIL-ESTATE PROPERTIES, INC. G.R. No. 173942

and FAIRWAYS AND BLUE-WATERS
RESORT AND COUNTRY CLUB,
INC., Present:
Petitioners,
QUISUMBING, J.,
Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
HON. MARIETTA J. HOMENAVALENCIA, in her capacity as
Presiding Judge of Branch 1, Promulgated:
Regional Trial Court, Kalibo,
Aklan, and SULLIAN SY NAVAL, June 25, 2008
Respondents.
x-----------------------------------------------------------------------------------x
RESOLUTION
TINGA, J.:
For resolution is a Motion for Reconsideration [1] dated 19 November
2007 filed by petitioners Fil-Estate Properties, Inc. and Blue-waters
Resort and Country Club, seeking reconsideration of the Decision[2] of
this Court dated 15 October 2007 which denied their petition.
A brief recapitulation of the relevant facts, even though they have
already been narrated in the Decision, is in order.
In 1998, private respondent Sullian Sy Naval filed a
complaint[3] against petitioners, seeking the recovery of a parcel of
land which petitioners had allegedly taken possession of by

constructing a golf course within the vicinity of her property. Counsel

for petitioners failed to attend the pre-trial, and only private
respondent presented evidence before the Regional Trial Court (RTC)
of Aklan which heard the complaint. The RTC rendered a decision [4] in
favor of private respondent of which petitioners moved for
reconsideration.
The crux of the present matter lies with the facts surrounding the
motion for reconsideration. The motion was filed on 10 May 2000,
[5]
thirteen (13) days after petitioners received their copy of the RTCs
decision. On 26 July 2000, the RTC issued an order[6] of even date
denying the motion. Petitioners alleged in their petition that
they received the order denying the motion for reconsideration on 9
August 2000. They filed a Notice of Appeal on 11 August 2000,[7] but
the postal money orders purchased and obtained to pay the filing fee
were posted
only on 25 August 2000, or beyond the reglementary period to perfect
the appeal. Consequently, the RTC denied the appeal[8] and such
denial was sustained by the Court of Appeals after petitioners filed a
special civil action for certiorari[9] assailing the RTCs refusal to give
due course to the appeal.
The Petition[10] before this Court relied on a rather idiosyncratic theory
that only upon the adoption of the amendments to Section 13, Rule 41
of the Rules of Civil Procedure effective 1 May 2000 did it become
obligatory on the part of trial courts to dismiss appeals on account of
the failure to pay the full docket fees. The Court, in its 15 October
2007Decision,[11] rejected this theory and reaffirmed the rule ordaining
the disallowance of the appeal or notice of appeal when the docket
fee is not paid in full within the period for taking the appeal.
The present Motion for Reconsideration[12] centers on a different line
of argument: that following our 2005 decision in Neypes v. Court of
Appeals,[13] their Notice of Appeal was perfected on time as the full
docket fees were paid within fifteen (15) days from their receipt of the
RTCs order denying their motion for reconsideration. Neypes has
established a new rule whereby an appellant is granted a fresh 15-day
period, reckoned from receipt of the order denying the motion for
reconsideration, within which to perfect the appeal.
Petitioners clarify that they received the RTCs order denying their
motion for reconsideration on 11 August 2005,[14] a fact which is

confirmed by the case records even though the petition had misstated
that said order was received on 9 August 2005. Petitioners argue that
following Neypes, they were entitled to a new 15-day period, i.e.,
until 26 August 2005 or one (1) day after they had posted the full
appellate docket fees, to perfect the appeal.
Most vitally, petitioners point out that on 10 October 2007, or just five
(5) days before the promulgation of the assailed Decision, the Court
through the Third Division rendered a decision in Sps. De
los Santos v. Vda. De Mangubat[15] declaring that the Neypes ruling
indeed can be retroactively applied to prior instances.
Private respondent filed her Comment[16] on the Motion for
Reconsideration. She insists that Neypes should not be retroactively
applied, but she fails to cite any authority on that argument or
otherwise contend with the ruling in Sps. De los Santos.
The determinative issue is whether the fresh period rule announced
in Neypes could retroactively apply in cases where the period for
appeal had lapsed prior to 14 September 2005 when Neypes was
promulgated. That question may be answered with the guidance of
the general rule that procedural laws may be given retroactive effect
to actions pending and undetermined at the time of their passage,
there being no vested rights in the rules of procedure. [17] Amendments
to procedural rules are procedural or remedial in character as they do
not create new or remove vested rights, but only operate in
furtherance of the remedy or confirmation of rights already existing.[18]
Sps. De los Santos reaffirms these principles and categorically
warrants that Neypes bears the quested retroactive effect, to wit:
Procedural law refers to the adjective law which
prescribes rules and forms of procedure in order that courts
may be able to administer justice. Procedural laws do not
come within the legal conception of a retroactive law, or the
general rule against the retroactive operation of statues
they may be given retroactive effect on actions pending and
undetermined at the time of their passage and this will not
violate any right of a person who may feel that he is
adversely affected, insomuch as there are no vested rights in
rules of procedure.
The fresh period rule is a procedural law as it
prescribes a fresh period of 15 days within which an appeal

may be made in the event that the motion for reconsideration

is denied by the lower court. Following the rule on
retroactivity of procedural laws, the fresh period rule should
be applied to pending actions, such as the present case.
Also, to deny herein petitioners the benefit of the
fresh period rule will amount to injustice, if not absurdity,
since the subject notice of judgment and final order were
issued two years later or in the year 2000, as compared to
the notice of judgment and final order in Neypes which were
issued in 1998. It will be incongruous and illogical that
parties receiving notices of judgment and final orders issued
in the year 1998 will enjoy the benefit of the fresh period
rule while those later rulings of the lower courts such as in
the instant case, will not.[19]

Notably, the subject incidents in Sps. De los Santos occurred in

August 2000, at the same month as the relevant incidents at bar.
There is no reason to adopt herein a rule that is divergent from that
in Sps. De los Santos.
We have reexamined the petition to ascertain whether there is any
other impediment to granting favorable relief to petitioners based
on the retroactive application of the Neypesdoctrine.
Private respondent does argue in her comment on the
petition[20] and on the motion for reconsideration[21] that petitioners
special civil action for certiorari before the Court of Appeals was not
timely lodged. This argument is premised on petitioners requested
relief that direct that proceedings de novo be had starting from pretrial, by annulling the RTCs decision and the courts ruling on the
motion for reconsideration, which was filed by petitioners beyond the
60-day period mandated by Section 4, Rule 65 of the Rules of Court
for filing a special civil action for certiorari.
Petitioners, in their Reply,[22] argue that the certiorari action
was timely filed since the RTC had disallowed the notice of appeal in
its 13 September 2000 Order, a copy of which was received by
petitioners on 22 September 2000 or within the 60-day period prior to
the filing of their certiorari petition.
Certainly, the RTCs order denying the notice of appeal was timely
assailed by petitioners via a special civil action filed with the Court of
Appeals. Granting positive relief on that point would have the effect of
giving due course to the notice of appeal. But is there basis for this

Court to take the extra step as requested by petitioners and go as far

as to annul the RTCs rulings that granted the complaint filed by
private respondent?
We deem the challenges raised by petitioners against the correctness
of the RTCs decision and its subsequent resolution on the motion for
reconsideration as inappropriate for this Court to decide. Such issues
may very well be tackled in petitioners appeal before the Court of
Appeals. After all, as is now conceded, the appeal was timely filed and
the existence of such appeal would, per Section 1, Rule 65, bar the
certiorari action from correcting errors which may be reversed on
appeal. Besides, the resolution of such issues requires a certain level
of factual determination, especially as to the circumstances
surrounding the resignation of the counsel who had initially appeared
in behalf of the petitioners, the service of the order resetting the pretrial and all subsequent notices of trial to petitioners after private
respondent had been allowed to present evidence ex parte. Unlike the
Court of Appeals, this Court is not a trier of facts.[23]
WHEREFORE, the motion for reconsideration is GRANTED and the
instant petition is GRANTED IN PART. The assailed rulings of the
Court of Appeals and the RTC Order dated 13 September 2000 are
SET ASIDE. The Court of Appeals is DIRECTED to give due course to
petitioners appeal in Civil Case No. 5626, and to hear and decide
such appeal with deliberate dispatch. No pronouncement as to costs.

Associate Justice
ATTESTATION
I attest that the conclusions in the above Resolution had been
reached in consultation before the case was assigned to the writer of
the opinion of the Courts Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson, Special Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, and the
Division Chairpersons Attestation, it is hereby certified that the
conclusions in the above Resolution had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts
Division.
REYNATO S. PUNO
Chief Justice

SO ORDERED.
[1]

DANTE O. TINGA
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate Justice Associate Justice
PRESBITERO J. VELASCO, JR.

Rollo, pp. 424-436.

Id. at 406-423.
Id. at 72-77.
[4]
Id. at 99-108.
[5]
Id. at 109-111.
[6]
Id. at 118-121.
[7]
Id. at 122-123.
[8]
Id. at 124-125.
[9]
Id. at 126-153.
[10]
Id. at 10-56.
[11]
Supra note 2.
[12]
Supra note 1.
[13]
G.R. No. 141524, 14 September 2005, 469 SCRA 633.
[14]
Rollo, pp. 432-433. Petitioners support this assertion by attaching to their Motion for
Reconsideration a copy of the registry receipt which indicated that its then counsel, Atty. Uytiepo,
received the order on 8/11/00. See id. at 438.
[15]
G.R. No. 149508, 10 October 2007, 535 SCRA 411.
[16]
Rollo, pp. 446-455.
[2]

[3]

[23]

[17]

Pfizer,Inc. v. Galan, 410 Phil. 483, 491 (2001).

[18]

Id.

[19]

De los Santos v. Vda. De Mangubat, supra note 15, at 422-423.

[20]

Rollo, pp. 337-353.

[21]

Id. at 446-456.

[22]

Id. at 358-373.

See, e.g., Naguiat v. Court of Appeals, 459 Phil. 237, 241-242 (2003).

Fil-Estate Properties, Inc. vs. Homena-Valencia,

G.R. No. 173942, June 25, 2008

2.) Adjudging Section 113 of Central Bank Circular

No. 960 as contrary to the provision of the
Constitution, hence void; because its provision that
Foreign currency deposits shall be exempt from
attachment, garnishment, or any other order to
process of any court, legislative body, government
agency or any administrative body whatsoever

EN BANC
[G.R. No. 94723. August 21, 1997]

KAREN E. SALVACION, minor, thru Federico N. Salvacion,

Jr., father and Natural Guardian, and Spouses
FEDERICO N. SALVACION, JR., and EVELINA E.
SALVACION, petitioners, vs. CENTRAL BANK OF
THE PHILIPPINES, CHINA BANKING CORPORATION
and GREG BARTELLI y NORTHCOTT,respondents.
DECISION
TORRES, JR., J.:

In our predisposition to discover the original intent of a statute,

courts become the unfeeling pillars of the status quo. Little do we
realize that statutes or even constitutions are bundles of compromises
thrown our way by their framers. Unless we exercise vigilance, the
statute may already be out of tune and irrelevant to our day.
The petition is for declaratory relief. It prays for the following
reliefs:

a.) Immediately upon the filing of this petition, an Order be

issued restraining the respondents from applying and
enforcing Section 113 of Central Bank Circular No. 960;
b.) After hearing, judgment be rendered:
1.) Declaring the respective rights and duties of
petitioners and respondents;

i.) has taken away the right of petitioners to

have the bank deposit of defendant Greg Bartelli
y Northcott garnished to satisfy the judgment
rendered in petitioners favor in violation of
substantive due process guaranteed by the
Constitution;
ii.) has given foreign currency depositors an
undue favor or a class privilege in violation of
the equal protection clause of the Constitution;
iii.) has provided a safe haven for criminals like
the herein respondent Greg Bartelli y Northcott
since criminals could escape civil liability for
their wrongful acts by merely converting their
money to a foreign currency and depositing it in
a foreign currency deposit account with an
authorized bank.
The antecedents facts:
On February 4, 1989, Greg Bartelli y Northcott, an American
tourist, coaxed and lured petitioner Karen Salvacion, then 12 years
old to go with him to his apartment. Therein, Greg Bartelli detained
Karen Salvacion for four days, or up to February 7, 1989 and was
able to rape the child once on February 4, and three times each day
on February 5, 6, and 7, 1989. On February 7, 1989, after policemen
and people living nearby, rescued Karen, Greg Bartelli was arrested
and detained at the Makati Municipal Jail. The policemen recovered
from Bartelli the following items: 1.) Dollar Check No. 368, Control No.
021000678-1166111303, US 3,903.20; 2.) COCOBANK Bank Book
No. 104-108758-8 (Peso Acct.); 3.) Dollar Account China Banking
Corp., US $/A#54105028-2; 4.) ID-122-30-8877; 5.) Philippine Money

(P234.00) cash; 6.) Door Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear)
used in seducing the complainant.
On February 16, 1989, Makati Investigating Fiscal Edwin G.
Condaya filed against Greg Bartelli, Criminal Case No. 801 for
Serious Illegal Detention and Criminal Cases Nos. 802, 803, 804, and
805 for four (4) counts of Rape. On the same day, petitioners filed with
the Regional Trial Court of Makati Civil Case No. 89-3214 for
damages with preliminary attachment against Greg Bartelli. On
February 24, 1989, the day there was a scheduled hearing for
Bartellis petition for bail the latter escaped from jail.
On February 28, 1989, the court granted the fiscals Urgent ExParte Motion for the Issuance of Warrant of Arrest and Hold Departure
Order. Pending the arrest of the accused Greg Bartelli y Northcott, the
criminal cases were archived in an Order dated February 28, 1989.

has been repealed or amended since said section has rendered

nugatory the substantive right of the plaintiff to have the claim sought
to be enforced by the civil action secured by way of the writ of
preliminary attachment as granted to the plaintiff under Rule 57 of the
Revised Rules of Court. The Central Bank responded as follows:

May 26, 1989

Ms. Erlinda S. Carolino
12 Pres. Osmea Avenue
South Admiral Village
Paranaque, Metro Manila
Dear Ms. Carolino:

Meanwhile, in Civil Case No. 89-3214, the Judge issued an Order

dated February 22, 1989 granting the application of herein petitioners,
for the issuance of the writ of preliminary attachment. After petitioners
gave Bond No. JCL (4) 1981 by FGU Insurance Corporation in the
amount P100,000.00, a Writ of Preliminary Attachment was issued by
the trial court on February 28, 1989.

This is in reply to your letter dated April 25, 1989 regarding

your inquiry on Section 113, CB Circular No. 960 (1983).

On March 1, 1989, the Deputy Sheriff of Makati served a Notice

of Garnishment on China Banking Corporation. In a letter dated March
13, 1989 to the Deputy Sheriff of Makati, China Banking Corporation
invoked Republic Act No. 1405 as its answer to the notice of
garnishment served on it. On March 15, 1989, Deputy Sheriff of
Makati Armando de Guzman sent his reply to China Banking
Corporation saying that the garnishment did not violate the secrecy of
bank deposits since the disclosure is merely incidental to a
garnishment properly and legally made by virtue of a court order
which has placed the subject deposits in custodia legis. In answer to
this letter of the Deputy Sheriff of Makati, China Banking Corporation,
in a letter dated March 20, 1989, invoked Section 113 of Central Bank
Circular No. 960 to the effect that the dollar deposits of defendant
Greg Bartelli are exempt from attachment, garnishment, or any other
order or process of any court, legislative body, government agency or
any administrative body, whatsoever.

The purpose of the law is to encourage dollar accounts within

the countrys banking system which would help in the
development of the economy. There is no intention to render
futile the basic rights of a person as was suggested in your
subject letter. The law may be harsh as some perceive it, but it
is still the law. Compliance is, therefore, enjoined.

This prompted the counsel for petitioners to make an inquiry with

the Central Bank in a letter dated April 25, 1989 on whether Section
113 of CB Circular No. 960 has any exception or whether said section

The cited provision is absolute in application. It does not

admit of any exception, nor has the same been repealed nor
amended.

Very truly yours,

(SGD) AGAPITO S. FAJARDO
Director
[1]

Meanwhile, on April 10, 1989, the trial court granted petitioners

motion for leave to serve summons by publication in the Civil Case
No. 89-3214 entitled Karen Salvacion. et al. vs. Greg Bartelli y
Northcott. Summons with the complaint was published in the Manila
Times once a week for three consecutive weeks. Greg Bartelli failed
to file his answer to the complaint and was declared in default on
August 7, 1989. After hearing the case ex-parte, the court rendered

judgment in favor of petitioners on March 29, 1990, the dispositive

portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of

plaintiffs and against defendant, ordering the latter:
1. To pay plaintiff Karen E. Salvacion the amount
of P500,000.00 as moral damages;

and plaintiffs were authorized to present their evidence ex

parte.
In support of the complaint, plaintiffs presented as witness the
minor Karen E. Salvacion, her father, Federico N. Salacion,
Jr., a certain Joseph Aguilar and a certain Liberato Mandulio,
who gave the following testimony:

2. To pay her parents, plaintiffs spouses Federico N.

Salvacion, Jr., and Evelina E. Salvacion the amount
of P150,000.00 each or a total of P300,000.00 for both of
them;

Karen took her first year high school in St. Marys Academy in Pasay
City but has recently transferred to Arellano University for her second
year.

3. To pay plaintiffs exemplary damages of P100,000.00; and

In the afternoon of February 4, 1989, Karen was at the Plaza Fair

Makati Cinema Square, with her friend Edna Tangile whiling away her
free time. At about 3:30 p.m. while she was finishing her snack on a
concrete bench in front of Plaza Fair, an American approached her. She
was then alone because Edna Tangile had already left, and she was
about to go home. (TSN, Aug. 15, 1989, pp. 2 to 5)

4. To pay attorneys fees in an amount equivalent to 25% of the

total amount of damages herein awarded;
5. To pay litigation expenses of P10,000.00; plus
6. Costs of the suit.
SO ORDERED.
The heinous acts of respondents Greg Bartelli which gave rise to
the award were related in graphic detail by the trial court in its
decision as follows:

The defendant in this case was originally detained in the

municipal jail of Makati but was able to escape therefrom on
February 24, 1989 as per report of the Jail Warden of Makati
to the Presiding Judge, Honorable Manuel M. Cosico of the
Regional Trial Court of Makati, Branch 136, where he was
charged with four counts of Rape and Serious Illegal
Detention (Crim. Cases Nos. 802 to 805).Accordingly, upon
motion of plaintiffs, through counsel, summons was served
upon defendant by publication in the Manila Times, a
newspaper of general circulation as attested by the Advertising
Manager of the Metro Media Times, Inc., the publisher of the
said newspaper. Defendant, however, failed to file his answer
to the complaint despite the lapse of the period of sixty (60)
days from the last publication; hence, upon motion of the
plaintiffs through counsel, defendant was declared in default

The American asked her name and introduced himself as Greg

Bartelli. He sat beside her when he talked to her. He said he was a
Math teacher and told her that he has a sister who is a nurse in New
York. His sister allegedly has a daughter who is about Karens age and
who was with him in his house along Kalayaan Avenue. (TSN, Aug.
15, 1989, pp. 4-5).
The American asked Karen what was her favorite subject and she told
him its Pilipino. He then invited her to go with him to his house where
she could teach Pilipino to his niece. He even gave her a stuffed toy to
persuade her to teach his niece. (Id., pp.5-6)
They walked from Plaza Fair along Pasong Tamo, turning right to
reach the defendants house along Kalayaan Avenue. (Id., p.6)
When they reached the apartment house, Karen notices that defendants
alleged niece was not outside the house but defendant told her maybe
his niece was inside. When Karen did not see the alleged niece inside
the house, defendant told her maybe his niece was upstairs, and invited
Karen to go upstairs. (Id., p. 7)

Upon entering the bedroom defendant suddenly locked the door. Karen
became nervous because his niece was not there. Defendant got a piece
of cotton cord and tied Karens hands with it, and then he undressed
her. Karen cried for help but defendant strangled her. He took a
packing tape and he covered her mouth with it and he circled it around
her head. (Id., p. 7)

coke. She was raped for the second time at about 12:00 to 2:00 p.m. In
the evening, they had rice for dinner which defendant had stored
downstairs; it was he who cooked the rice that is why it looks like
lugaw. For the third time, Karen was raped again during the
night. During those three times defendant succeeded in inserting his
sex organ but she could not say whether the organ was inserted wholly.

Then, defendant suddenly pushed Karen towards the bed which was
just near the door. He tied her feet and hands spread apart to the bed
posts. He knelt in front of her and inserted his finger in her sex
organ.She felt severe pain. She tried to shout but no sound could come
out because there were tapes on her mouth. When defendant withdrew
his finger it was full of blood and Karen felt more pain after the
withdrawal of the finger. (Id., p.8)

Karen did not see any firearm or any bladed weapon. The defendant
did not tie her hands and feet nor put a tape on her mouth anymore but
she did not cry for help for fear that she might be killed; besides, all
those windows and doors were closed. And even if she shouted for
help, nobody would hear her. She was so afraid that if somebody
would hear her and would be able to call a police, it was still possible
that as she was still inside the house, defendant might kill her. Besides,
the defendant did not leave that Sunday, ruling out her chance to call
for help. At nighttime he slept with her again. (TSN, Aug. 15, 1989,
pp. 12-14)

He then got a Johnsons Baby Oil and he applied it to his sex organ as
well as to her sex organ. After that he forced his sex organ into her but
he was not able to do so. While he was doing it, Karen found it
difficult to breathe and she perspired a lot while feeling severe
pain. She merely presumed that he was able to insert his sex organ a
little, because she could not see. Karen could not recall how long the
defendant was in that position. (Id., pp. 8-9)
After that, he stood up and went to the bathroom to wash. He also told
Karen to take a shower and he untied her hands. Karen could only hear
the sound of the water while the defendant, she presumed, was in the
bathroom washing his sex organ. When she took a shower more blood
came out from her. In the meantime, defendant changed the mattress
because it was full of blood. After the shower, Karen was allowed by
defendant to sleep. She fell asleep because she got tired crying. The
incident happened at about 4:00 p.m. Karen had no way of
determining the exact time because defendant removed her
watch.Defendant did not care to give her food before she went to
sleep. Karen woke up at about 8:00 oclock the following morning. (Id.,
pp. 9-10)
The following day, February 5, 1989, a Sunday, after breakfast of
biscuit and coke at about 8:30 to 9:00 a.m. defendant raped Karen
while she was still bleeding. For lunch, they also took biscuit and

On February 6, 1989, Monday, Karen was raped three times, once in

the morning for thirty minutes after breakfast of biscuits; again in the
afternoon; and again in the evening. At first, Karen did not know that
there was a window because everything was covered by a carpet, until
defendant opened the window for around fifteen minutes or less to let
some air in, and she found that the window was covered by styrofoam
and plywood. After that, he again closed the window with a hammer
and he put the styrofoam, plywood, and carpet back. (Id., pp. 14-15)
That Monday evening, Karen had a chance to call for help, although
defendant left but kept the door closed. She went to the bathroom and
saw a small window covered by styrofoam and she also spotted a small
hole. She stepped on the bowl and she cried for help through the
hole. She cried: Maawa na po kayo sa akin. Tulungan nyo akong
makalabas dito. Kinidnap ako! Somebody heard her. It was a woman,
probably a neighbor, but she got angry and said she was istorbo. Karen
pleaded for help and the woman told her to sleep and she will call the
police. She finally fell asleep but no policeman came. (TSN, Aug. 15,
1989, pp. 15-16)

She woke up at 6:00 oclock the following morning, and she saw
defendant in bed, this time sleeping. She waited for him to wake
up. When he woke up, he again got some food but he always kept the
door locked. As usual, she was merely fed with biscuit and coke. On
that day, February 7, 1989, she was again raped three times. The first
at about 6:30 to 7:00 a.m., the second at about 8:30 9:00, and the third
was after lunch at 12:00 noon. After he had raped her for the second
time he left but only for a short while. Upon his return, he caught her
shouting for help but he did not understand what she was shouting
about.After she was raped the third time, he left the house. (TSN, Aug.
15, 1989, pp. 16-17) She again went to the bathroom and shouted for
help. After shouting for about five minutes, she heard many
voices. The voices were asking for her name and she gave her name as
Karen Salvacion. After a while, she heard a voice of a woman saying
they will just call the police. They were also telling her to change her
clothes.She went from the bathroom to the room but she did not
change her clothes being afraid that should the neighbors call the
police and the defendant see her in different clothes, he might kill
her. At that time she was wearing a T-shirt of the American bacause the
latter washed her dress. (Id., p. 16)
Afterwards, defendant arrived and opened the door. He asked her if
she had asked for help because there were many policemen outside
and she denied it. He told her to change her clothes, and she did
change to the one she was wearing on Saturday. He instructed her to
tell the police that she left home and willingly; then he went
downstairs but he locked the door. She could hear people conversing
but she could not understand what they were saying. (Id., p. 19)

They went out of the house and she saw some of her neighbors in front
of the house. They rode the car of a certain person she called Kuya
Boy together with defendant, the policeman, and two of her neighbors
whom she called Kuya Bong Lacson and one Ate Nita. They were
brought to Sub-Station I and there she was investigated by a
policeman. At about 2:00 a.m., her father arrived, followed by her
mother together with some of their neighbors. Then they were brought
to the second floor of the police headquarters. (Id., p. 21)
At the headquarters, she was asked several questions by the
investigator. The written statement she gave to the police was marked
Exhibit A. Then they proceeded to the National Bureau of
Investigation together with the investigator and her parents. At the
NBI, a doctor, a medico-legal officer, examined her private parts. It
was already 3:00 in early morning, of the following day when they
reached the NBI, (TSN, Aug. 15, 1989, p. 22) The findings of
the medico-legal officer has been marked as Exhibit B.
She was studying at the St. Marys Academy in Pasay City at the time
of the Incident but she subsequently transferred to Apolinario Mabini,
Arellano University, situated along Taft Avenue, because she was
ashamed to be the subject of conversation in the school. She first
applied for transfer to Jose Abad Santos, Arellano University along
Taft Avenue near the Light Rail Transit Station but she was denied
admission after she told the school the true reason for her transfer. The
reason for their denial was that they might be implicated in the
case. (TSN, Aug. 15, 1989, p. 46)
xxx xxx xxx

When she heard the voices of many people who were conversing
downstairs, she knocked repeatedly at the door as hard as she
could. She heard somebody going upstairs and when the door was
opened, she saw a policeman. The policeman asked her name and the
reason why she was there. She told him she was
kidnapped. Downstairs, he saw about five policemen in uniform and
the defendant was talking to them. Nakikipag-areglo po sa mga
pulis, Karen added. The policeman told him to just explain at the
precinct. (Id., p. 20)

After the incident, Karen has changed a lot. She does not play with her
brother and sister anymore, and she is always in a state of shock; she
has been absent-minded and is ashamed even to go out of the
house. (TSN, Sept. 12, 1989, p. 10) She appears to be restless or
sad. (Id., p. 11) The father prays for P500,000.00 moral damages for
Karen for this shocking experience which probably, she would always
recall until she reaches old age, and he is not sure if she could ever
recover from this experience. (TSN, Sept. 24, 1989, pp. 10-11)

Pursuant to an Order granting leave to publish notice of decision,

said notice was published in the Manila Bulletin once a week for three
consecutive weeks. After the lapse of fifteen (15) days from the date
of the last publication of the notice of judgment and the decision of the
trial court had become final, petitioners tried to execute on Bartellis
dollar deposit with China Banking Corporation. Likewise, the bank
invoked Section 113 of Central Bank Circular No. 960.
Thus, petitioners decided to seek relief from this Court.
The issues raised and the arguments articulated by the parties
boil down to two:
May this Court entertain the instant petition despite the fact that
original jurisdiction in petitions for declaratory relief rests with the
lower court? She Section 113 of Central Bank Circular No. 960 and
Section 8 of R.A. 6426, as amended by P.D. 1246, otherwise known
as the Foreign Currency Deposit Act be made applicable to a foreign
transient?
Petitioners aver as heretofore stated that Section 113 of Central
Bank Circular No. 960 providing that Foreign currency deposits shall
be exempt from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any
administrative body whatsoever. should be adjudged as
unconstitutional on the grounds that: 1.) it has taken away the right of
petitioners to have the bank deposit of defendant Greg Bartelli y
Northcott garnished to satisfy the judgment rendered in petitioners
favor in violation of substantive due process guaranteed by the
Constitution; 2.) it has given foreign currency depositors an undue
favor or a class privilege n violation of the equal protection clause of
the Constitution; 3.) it has provided a safe haven for criminals like the
herein respondent Greg Bartelli y Northcott since criminal could
escape civil liability for their wrongful acts by merely converting their
money to a foreign currency and depositing it in a foreign currency
deposit account with an authorized bank; and 4.) The Monetary
Board, in issuing Section 113 of Central Bank Circular No. 960 has
exceeded its delegated quasi- legislative power when it took
away: a.) the plaintiffs substantive right to have the claim sought to be
enforced by the civil action secured by way of the writ of preliminary
attachment as granted by Rule 57 of the Revised Rules of
Court; b.) the plaintiffs substantive right to have the judgment credit
satisfied by way of the writ of execution out of the bank deposit of the

judgment debtor as granted to the judgment creditor by Rule 39 of the

Revised Rules of Court, which is beyond its power to do so.
On the other hand, respondent Central Bank, in its Comment
alleges that the Monetary Board in issuing Section 113 of CB Circular
No. 960 did not exceed its power or authority because the subject
Section is copied verbatim from a portion of R.A. No. 6426 as
amended by P.D. 1246. Hence, it was not the Monetary Board that
grants exemption from attachment or garnishment to foreign currency
deposits, but the law (R.A. 6426 as amended) itself; that it does not
violate the substantive due process guaranteed by the Constitution
because a.) it was based on a law; b.) the law seems to be
reasonable; c.) it is enforced according to regular methods of
procedure; and d.) it applies to all members of a class.
Expanding, the Central Bank said; that one reason for exempting
the foreign currency deposits from attachment, garnishment or any
other order process of any court, is to assure the development and
speedy growth of the Foreign Currency Deposit System and the
Offshore Banking System in the Philippines; that another reason is to
encourage the inflow of foreign currency deposits into the banking
institutions thereby placing such institutions more in a position to
properly channel the same to loans and investments in the
Philippines, thus directly contributing to the economic development of
the country; that the subject section is being enforced according to the
regular methods of procedure; and that it applies to all currency
deposits made by any person and therefore does not violate the equal
protection clause of the Constitution.

Respondent Central Bank further avers that the questioned

provision is needed to promote the public interest and the general
welfare; that the State cannot just stand idly by while a considerable
segment of the society suffers from economic distress; that the State
had to take some measures to encourage economic development;
and that in so doing persons and property may be subjected to some
kinds of restraints or burdens to secure the general welfare or public
interest. Respondent Central Bank also alleges that Rule 39 and Rule
57 of the Revised Rules of Court provide that some properties are
exempted from execution/attachment especially provided by law and
R.A. No. 6426 as amended is such a law, in that it specifically
provides, among others, that foreign currency deposits shall be
exempted from attachment, garnishment, or any other order or
process of any court, legislative body, government agency or any
administrative body whatsoever.
For its part, respondent China Banking Corporation, aside from
giving reasons similar to that of respondent Central Bank, also stated
that respondent China Bank is not unmindful of the inhuman
sufferings experienced by the minor Karen E. Salvacion from the
beastly hands of Greg Bartelli; that it is not only too willing to release
the dollar deposit of Bartelli which may perhaps partly mitigate the
sufferings petitioner has undergone; but it is restrained from doing so
in view of R.A. No. 6426 and Section 113 of Central Bank Circular No.
960; and that despite the harsh effect to these laws on petitioners,
CBC has no other alternative but to follow the same.
This court finds the petition to be partly meritorious.

raped by said American tourist Greg Bartelli. Not once, but ten
times. She was detained therein for four (4) days. This American
tourist was able to escape from the jail and avoid punishment. On the
other hand, the child, having received a favorable judgment in the
Civil Case for damages in the amount of more than P1,000,000.00,
which amount could alleviate the humiliation, anxiety, and besmirched
reputation she had suffered and may continue to suffer for a long,
long time; and knowing that this person who had wronged her has the
money, could not, however get the award of damages because of this
unreasonable law. This questioned law, therefore makes futile the
favorable judgment and award of damages that she and her parents
fully deserve. As stated by the trial court in its decision,

Indeed, after hearing the testimony of Karen, the Court

believes that it was indoubtedly a shocking and traumatic
experience she had undergone which could haunt her mind for
a long, long time, the mere recall of which could make her
feel so humiliated, as in fact she had been actually humiliated
once when she was refused admission at the Abad Santos
High School, Arellano University, where she sought to
transfer from another school, simply because the school
authorities of the said High School learned about what
happened to her and allegedly feared that they might be
implicated in the case.
xxx

The Court has no original and exclusive jurisdiction over a petition

for declatory relief. However, exceptions to this rule have been
recognized. Thus, where the petition has far-reaching implications and
raises questions that should be resolved, it may be treated as one for
mandamus.

The reason for imposing exemplary or corrective damages is

due to the wanton and bestial manner defendant had
committed the acts of rape during a period of serious illegal
detention of his hapless victim, the minor Karen Salvacion
whose only fault was in her being so naive and credulous to
believe easily that defendant, an American national, could not
have such a bestial desire on her nor capable of committing
such heinous crime. Being only 12 years old when that
unfortunate incident happened, she has never heard of an old
Filipino adage that in every forest there is a snake, xxx.

Here is a child, a 12-year old girl, who in her belief that all
Americans are good and in her gesture of kindness by teaching his
alleged niece the Filipino language as requested by the American,
trustingly went with said stranger to his apartment, and there she was

If Karens sad fate had happened to anybodys own kin, it would

be difficult for him to fathom how the incentive for foreign currency
deposit could be more important than his childs right to said award of
damages; in this case, the victims claim for damages from this alien

Petitioner deserves to receive the damages awarded to her by

the court. But this petition for declaratory relief can only be entertained
and treated as a petition for mandamus to require respondents to
honor and comply with the writ of execution in Civil Case No. 89-3214.
[2]

[3]

[4]

who had the gall to wrong a child of tender years of a country where
he is mere visitor. This further illustrates the flaw in the questioned
provisions.

The resolution of this question is important for the protection

of nationals who are victimized in the forum by foreigners
who are merely passing through.

It is worth mentioning that R.A. No. 6426 was enacted in 1983 or

at a time when the countrys economy was in a shambles; when
foreign investments were minimal and presumably, this was the
reason why said statute was enacted. But the realities of the present
times show that the country has recovered economically; and even if
not, the questioned law still denies those entitled to due process of
law for being unreasonable and oppressive. The intention of the
questioned law may be good when enacted. The law failed to
anticipate the inquitous effects producing outright injustice and
inequality such as as the case before us.

xxx

It has thus been said that-

But I also know, that laws and institutions must go hand in

hand with the progress of the human mind. As that becomes
more developed, more enlightened, as new discoveries are
made, new truths are disclosed and manners and opinions
change with the change of circumstances, institutions must
advance also, and keep pace with the times We might as well
require a man to wear still the coat which fitted him when a
boy, as civilized society to remain ever under the regimen of
their barbarous ancestors.

xxx Respondents China Banking Corporation and Central

Bank of the Philippines refused to honor the writ of execution
issued in Civil Case No. 89-3214 on the strength of the
following provision of Central Bank Circular No. 960:
Sec. 113 Exemption from attachment. Foreign
currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any
court, legislative body, government agency or any
administrative body whatsoever.

[5]

In his comment, the Solicitor General correctly opined, thus:

"The present petition has far-reaching implications on the

right of a national to obtain redress for a wrong committed by
an alien who takes refuge under a law and regulation
promulgated for a purpose which does not contemplate the
application thereof envisaged by the allien. More specifically,
the petition raises the question whether the protection against
attachment, garnishment or other court process accorded to
foreign currency deposits PD No. 1246 and CB Circular No.
960 applies when the deposit does not come from a lender or
investor but from a mere transient who is not expected to
maintain the deposit in the bank for long.

Central Bank Circular No. 960 was issued pursuant to Section 7 of

Republic Act No. 6426:
Sec. 7. Rules and Regulations. The Monetary Board
of the Central Bank shall promulgate such rules and
regulations as may be necessary to carry out the
provisions of this Act which shall take effect after
the publication of such rules and regulations in the
Official Gazette and in a newspaper of national
circulation for at least once a week for three
consecutive weeks. In case the Central Bank
promulgates new rules and regulations decreasing
the rights of depositors, the rules and regulations at
the time the deposit was made shall govern.
The aforecited Section 113 was copied from Section 8 of
Republic Act No. 6426. As amended by P.D. 1246, thus:
Sec. 8. Secrecy of Foreign Currency Deposits. -- All
foreign currency deposits authorized under this Act,
as amended by Presidential Decree No. 1035, as
well as foreign currency deposits authorized under
Presidential Decree No. 1034, are hereby declared
as and considered of an absolutely confidential

nature and, except upon the written permission of

the depositor, in no instance shall such foreign
currency deposits be examined, inquired or looked
into by any person, government official, bureau or
office whether judicial or administrative or
legislative or any other entity whether public or
private: Provided, however, that said foreign
currency deposits shall be exempt from attachment,
garnishment, or any other order or process of any
court, legislative body, government agency or any
administrative body whatsoever.
The purpose of PD 1246 in according protection against
attachment, garnishment and other court process to foreign
currency deposits is stated in its whereases, viz.:
WHEREAS, under Republic Act No. 6426, as
amended by Presidential Decree No. 1035, certain
Philippine banking institutions and branches of
foreign banks are authorized to accept deposits in
foreign currency;
WHEREAS, under provisions of Presidential
Decree No. 1034 authorizing the establishment of
an offshore banking system in the Philippines,
offshore banking units are also authorized to receive
foreign currency deposits in certain cases;
WHEREAS, in order to assure the development and
speedy growth of the Foreign Currency Deposit
System and the Offshore Banking System in the
Philippines, certain incentives were provided for
under the two Systems such as confidentiality
subject to certain exceptions and tax exemptions on
the interest income of depositors who are
nonresidents and are not engaged in trade or
business in the Philippines;
WHEREAS, making absolute the protective cloak
of confidentiality over such foreign currency
deposits, exempting such deposits from tax, and

guaranteeing the vested right of depositors would

better encourage the inflow of foreign currency
deposits into the banking institutions authorized to
accept such deposits in the Philippines thereby
placing such institutions more in a position to
properly channel the same to loans and investments
in the Philippines, thus directly contributing to the
economic development of the country;
Thus, one of the principal purposes of the protection accorded
to foreign currency deposits is to assure the development and
speedy growth of the Foreign Currency Deposit system and
the Offshore Banking in the Philippines (3 Whereas).
rd

The Offshore Banking System was established by PD No.

1034. In turn, the purposes of PD No. 1034 are as follows:
WHEREAS, conditions conducive to the
establishment of an offshore banking system, such
as political stability, a growing economy and
adequate communication facilities, among others,
exist in the Philippines;
WHEREAS, it is in the interest of developing
countries to have as wide access as possible to the
sources of capital funds for economic development;
WHEREAS, an offshore banking system based in
the Philippines will be advantageous and beneficial
to the country by increasing our links with foreign
lenders, facilitating the flow of desired investments
into the Philippines, creating employment
opportunities and expertise in international finance,
and contributing to the national development effort.
WHEREAS, the geographical location, physical and
human resources, and other positive factors provide
the Philippines with the clear potential to develop as
another financial center in Asia;
On the other hand, the Foreign Currency Deposit system was
created by PD No. 1035. Its purpose are as follows:

WHEREAS, the establishment of an offshore

banking system in the Philippines has been
authorized under a separate decree;
WHEREAS, a number of local commercial banks,
as depository bank under the Foreign Currency
Deposit Act (RA No. 6426), have the resources and
managerial competence to more actively engage in
foreign exchange transactions and participate in the
grant of foreign currency loans to resident
corporations and firms;
WHEREAS, it is timely to expand the foreign
currency lending authority of the said depository
banks under RA 6426 and apply to their transactions
the same taxes as would be applicable to transaction
of the proposed offshore banking units;
It is evident from the above [Whereas clauses] that the
Offshore Banking System and the Foreign Currency Deposit
System were designed to draw deposits from
foreign lenders and investors (Vide second Whereas of PD
No. 1034; third Whereas of PD No. 1035). It is these
depositors that are induced by the two laws and given
protection and incentives by them.
Obviously, the foreign currency deposit made by a transient or
a tourist is not the kind of deposit encourage by PD Nos. 1034
and 1035 and given incentives and protection by said laws
because such depositor stays only for a few days in the
country and, therefore, will maintain his deposit in the bank
only for a short time.
Respondent Greg Bartelli, as stated, is just a tourist or a
transient. He deposited his dollars with respondent China
Banking Corporation only for safekeeping during his
temporary stay in the Philippines.
For the reasons stated above, the Solicitor General thus
submits that the dollar deposit of respondent Greg Bartelli is
not entitled to the protection of Section 113 of Central Bank

Circular No. 960 and PD No. 1246 against attachment,

garnishment or other court processes.
[6]

In fine, the application of the law depends on the extent of its

justice. Eventually, if we rule that the questioned Section 113 of
Central Bank Circular No. 960 which exempts from attachment,
garnishment, or any other order or process of any court. Legislative
body, government agency or any administrative body whatsoever, is
applicable to a foreign transient, injustice would result especially to a
citizen aggrieved by a foreign guest like accused Greg Bartelli. This
would negate Article 10 of the New Civil Code which provides that in
case of doubt in the interpretation or application of laws, it is
presumed that the lawmaking body intended right and justice to
prevail. Ninguno non deue enriquecerse tortizerzmente con damo de
otro.Simply stated, when the statute is silent or ambiguous, this is one
of those fundamental solutions that would respond to the vehement
urge of conscience. (Padilla vs. Padilla, 74 Phil. 377)
It would be unthinkable, that the questioned Section 113 of
Central Bank No. 960 would be used as a device by accused Greg
Bartelli for wrongdoing, and in so doing, acquitting the guilty at the
expense of the innocent.
Call it what it may but is there no conflict of legal policy
here? Dollar against Peso? Upholding the final and executory
judgment of the lower court against the Central Bank Circular
protecting the foreign depositor? Shielding or protecting the dollar
deposit of a transient alien depositor against injustice to a national
and victim of a crime? This situation calls for fairness legal tyranny.
We definitely cannot have both ways and rest in the belief that we
have served the ends of justice.
IN VIEW WHEREOF, the provisions of Section 113 of CB Circular
No. 960 and PD No. 1246, insofar as it amends Section 8 of R.A.
6426 are hereby held to be INAPPLICABLE to this case because of
its peculiar circumstances. Respondents are hereby REQUIRED to
COMPLY with the writ of execution issued in Civil Case No. 89-3214,
Karen Salvacion, et al. vs. Greg Bartelli y Northcott, by Branch CXLIV,
RTC Makati and to RELEASE to petitioners the dollar deposit of
respondent Greg Bartelli y Northcott in such amount as would satisfy
the judgment.
SO ORDERED.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo,

Puno, Vitug, Kapunan, Francisco, and Panganiban, JJ., concur.
Padilla, J., no part.
Mendoza, and Hermosisima, Jr., JJ., on leave.

SALVACION, JR., and EVELINA E. SALVACION vs. CENTRAL

BANK OF THE PHILIPPINES, CHINA BANKING CORPORATION
and GREG BARTELLI y NORTHCOTT
G.R. No. 94723 August 21, 1997

[1]

Annex R, Petition.

[2]

Alliance of Government Workers (AGW) v. Ministry of Labor and Employment, 124

SCRA 1.

[3]

Nationalista Party vs. Angelo Bautista, 85 Phil. 101; Aquino vs. Comelec, 62 SCRA
275; and Alliance of Government Workers vs. Minister of Labor and
Employment, supra.

[4]

Decision, Regional Trial Court, Civil Case No. 89-3214, pp. 9 &12; Rollo, pp. 66 &
69.

Thomas Jefferson, Democracy, ed. Saul K. Padover. (New York, Penguin, 1946) p.
171.
[5]

[6]

Comment of the Solicitor General, Rollo, pp. 128 129; 135-136.

Salvacion vs. Central Bank of the Philippines,

G.R. No. 94723, August 21, 1997.
A foreign transient who raped a minor, escaped and was
made liable for damages to the victim cannot invoke the
exemption from court process of foreign currency deposits
under R.A. No. 6426. The garnishment of his foreign currency
deposit should be allowed by reason of equity and to prevent
injustice; moreover, the purpose of the law is to encourage
foreign currency deposits and not to benefit a wrongdoer.
(Salvacion vs. Central Bank of the Philippines, G.R. No.
94723, August 21, 1997)

KAREN E. SALVACION, minor, thru Federico N. Salvacion, Jr.,

father and Natural Guardian, and Spouses FEDERICO N.

FACTS: Greg Bartelli, an American tourist, was arrested for

committing four counts of rape and serious illegal detention
against Karen Salvacion. Police recovered from him several
dollar checks and a dollar account in the China Banking Corp.
He was, however, able to escape from prison. In a civil case
filed against him, the trial court awarded Salvacion moral,
exemplary and attorneys fees amounting to almost
P1,000,000.00.
Salvacion tried to execute the judgment on the dollar deposit
of Bartelli with the China Banking Corp. but the latter refused
arguing that Section 11 of Central Bank Circular No. 960
exempts foreign currency deposits from attachment,
garnishment, or any other order or process of any court,
legislative body, government agency or any administrative
body whatsoever. Salvacion therefore filed this action for
declaratory relief in the Supreme Court.

ISSUE: Should Section 113 of Central Bank Circular No. 960

and Section 8 of Republic Act No. 6426, as amended by PD
1246, otherwise known as the Foreign Currency Deposit Act
be made applicable to a foreign transient?
HELD: NO.
The provisions of Section 113 of Central Bank Circular No.
960 and PD No. 1246, insofar as it amends Section 8 of
Republic Act No. 6426, are hereby held to be INAPPLICABLE
to this case because of its peculiar circumstances.
Respondents are hereby required to comply with the writ of
execution issued in the civil case and to release to petitioners

the dollar deposit of Bartelli in such amount as would satisfy

the judgment.
Supreme Court ruled that the questioned law makes futile
the favorable judgment and award of damages that Salvacion
and her parents fully deserve. It then proceeded to show that
the economic basis for the enactment of RA No. 6426 is not
anymore present; and even if it still exists, the questioned
law still denies those entitled to due process of law for being
unreasonable and oppressive. The intention of the law may
be good when enacted. The law failed to anticipate the
iniquitous effects producing outright injustice and inequality
such as the case before us.
The SC adopted the comment of the Solicitor General who
argued that the Offshore Banking System and the Foreign
Currency Deposit System were designed to draw deposits
from foreign lenders and investors and, subsequently, to give
the latter protection. However, the foreign currency deposit
made by a transient or a tourist is not the kind of deposit
encouraged by PD Nos. 1034 and 1035 and given incentives
and protection by said laws because such depositor stays
only for a few days in the country and, therefore, will
maintain his deposit in the bank only for a short time.
Considering that Bartelli is just a tourist or a transient, he is
not entitled to the protection of Section 113 of Central Bank
Circular No. 960 and PD No. 1246 against attachment,
garnishment or other court processes.
Further, the SC said: In fine, the application of the law
depends on the extent of its justice. Eventually, if we rule
that the questioned Section 113 of Central Bank Circular No.
960 which exempts from attachment, garnishment, or any
other order or process of any court, legislative body,
government agency or any administrative body whatsoever,
is applicable to a foreign transient, injustice would result
especially to a citizen aggrieved by a foreign guest like

accused Greg Bartelli. This would negate Article 10 of the

New Civil Code which provides that in case of doubt in the
interpretation or application of laws, it is presumed that the
lawmaking body intended right and justice to prevail.
___________

NOTES:

On February 4, 1989, Greg Bartelli y Northcott, an

American tourist, coaxed and lured petitioner Karen
Salvacion, then 12 years old to go with him to his
apartment. Therein, Greg Bartelli detained Karen
Salvacion for four days, or up to February 7, 1989 and
was able to rape the child once on February 4, and
three times each day on February 5, 6, and 7, 1989.
On February 7, 1989, after policemen and people living
nearby, rescued Karen, Greg Bartelli was arrested and
detained at the Makati Municipal Jail. The policemen
recovered from Bartelli the following items: 1.) Dollar
Check No. 368, Control No. 021000678-1166111303,
US 3,903.20; 2.) COCOBANK Bank Book No. 104108758-8 (Peso Acct.); 3.) Dollar Account China
Banking Corp., US$/A#54105028-2; 4.) ID-122-308877; 5.) Philippine Money (P234.00) cash; 6.) Door
Keys 6 pieces; 7.) Stuffed Doll (Teddy Bear) used in
seducing the complainant.

KAREN E. SALVACION, minor, thru Federico N.

Salvacion, Jr., father and Natural Guardian, and
Spouses FEDERICO N. SALVACION, JR., and EVELINA E.
SALVACION, petitioners,
vs.
CENTRAL BANK OF THE PHILIPPINES, CHINA BANKING
CORPORATION and GREG BARTELLI y
NORTHCOTT,respondents.

Ponente: TORRES, JR.

FACTS:
Respondent Greg Bartelli y Northcott, an American tourist,
coaxed and lured the 12-year old petitioner Karen Salvacion
to go with him in his apartment where the former repeatedly
raped latter. After the rescue, policemen recovered dollar and
peso checks including a foreign currency deposit from China
Banking Corporation (CBC). Writ of preliminary attachment
and hold departure order were issued. Notice of Garnishment
was served by the Deputy Sheriff to CBC which later invoked
R.A. No. 1405 as its answer to it. Deputy Sheriff sent his reply
to CBC saying that the garnishment did not violate the
secrecy of bank deposits since the disclosure is merely
incidental to a garnishment properly and legally made by
virtue of a court order which has placed the subject deposits
in custodia legis. CBC replied and invoked Section 113 of
Central Bank Circular No. 960 to the effect that the dollar
deposits of Greg Bartelli are exempt from attachment,

garnishment, or any other order or process of any court,

legislative body, government agency or any administrative
body, whatsoever. Central Bank of the Philippines affirmed
the defense of CBC.
ISSUE:
Whether or not Sec. 113 of Central Bank Circular 960 and
Sec. 8 of RA 6426 amended by PD 1246 otherwise known as
the Foreign Currency Deposit Act be made applicable to a
foreign transient.
HELD:
NO. The provisions of Section 113 of CB Circular No. 960 and
PD No. 1246, insofar as it amends Section 8 of R.A. No. 6426
are hereby held to be INAPPLICABLE to this case because of
its peculiar circumstances.

to the vehement urge of conscience. It would be unthinkable,

that the questioned Section 113 of Central Bank No. 960
would be used as a device by accused Greg Bartelli for
wrongdoing, and in so doing, acquitting the guilty at the
expense of the innocent.

Call it what it may but is there no conflict of legal policy

here? Dollar against Peso? Upholding the final and executory
judgment of the lower court against the Central Bank Circular
protecting the foreign depositor? Shielding or protecting the
dollar deposit of a transient alien depositor against injustice
to a national and victim of a crime? This situation calls for
fairness against legal tyranny.
Republic of the Philippines
SUPREME COURT
Manila

RATIO:
T]he application of the law depends on the extent of its
justice. Eventually, if we rule that the questioned Section 113
of Central Bank Circular No. 960 which exempts from
attachment, garnishment, or any other order or process of
any court, legislative body, government agency or any
administrative body whatsoever, is applicable to a foreign
transient, injustice would result especially to a citizen
aggrieved by a foreign guest like accused Greg Bartelli. This
would negate Article 10 of the New Civil Code which provides
that in case of doubt in the interpretation or application of
laws, it is presumed that the lawmaking body intended right
and justice to prevail.

Ninguno non deue enriquecerse tortizeramente con dano de

otro. Simply stated, when the statute is silent or ambiguous,
this is one of those fundamental solutions that would respond

THIRD DIVISION
G.R. No. 157020

June 19, 2013

REINIER PACIFIC INTERNATIONAL SHIPPING, INC. and NEPTUNE

SHIP MANAGEMENT SVCS., PTE., LTD.,Petitioners,
vs.
CAPTAIN FRANCISCO B. GUEVARRA, Respondents.
DECISION
ABAD, J.:
This petition for review concerns the reckoning of the extended period for
the tiling of a pleading that ends on a Saturday, Sunday, or legal holiday.
May the pleading be filed on the following working day?
The Facts and the Case

On May 3, 2000 petitioner Reinier Pacitic International Shipping, Inc.

(Reinier Shipping), as agent of Neptune Ship Management Services,
PTE, Limited, hired respondent Captain Francisco B. Guevarra to work
as master of MY NOL SHEDAR. In the course of his work on board,
Reinier Shipping sent him Notice, relieving him of command of the vessel
upon the insistence of its chatterers and owners. As a result, Guevarra
tiled a case for illegal dismissal and damages against Reinier Shipping
and its principal.
Reinier Shipping countered that Guevarra had been negligent in the
discharge of his duties as ship master. One of the vessels hatch covers
was damaged when it was discharging coal in Alabama, U.S.A. As a
result, the charterers were forced to shoulder the repair costs. Reinier
had no choice but yield to the demands of the chatterers for Guevarras
replacement.
The Labor Arbiter found Guevarras dismissal illegal and ordered Reinier
Shipping and its principal to jointly and severally pay him the
US$11,316.00 that represent his salaries for the remaining balance of the
contract plus attorneys fees of US$1,131.60. The Labor Arbiter found
that Reinier Shipping denied Guevarra his right to due process since it
did not give him the opportunity to be heard. Guevarra claims that the
damage to the vessel had been caused by cargo-handling stevedores.
Reinier Shipping did not bother to ascertain his guilt; it merely invoked
the demand of the chatterers and vessel owners that he be replaced.
Reinier Shipping appealed to the National Labor Relations Commission
(NLRC) but on February 22, 2002 the latter affirmed the Labor Arbiters
decision.
The due date to file a petition for special civil action of certiorari before
the Court of Appeals (CA) fell on July 26, 2002, a Friday, but Reinier
Shipping succeeded in obtaining an extension of 15 days, which period
counted from July 26 began to run on July 27, a Saturday, and fell due on
August 10, a Saturday. Reinier Shipping filed its petition on the following
Monday, August 12, 2002.
On November 11, 2002 the CA dismissed the petition for having been
filed out of time.1 The CA ruled that Reinier Shipping violated Supreme
Courts A.M. 00-2-14-SC. Since August 10, 2002, the last day of the
extended period, fell on a Saturday, automatic deferment to the next
working day did not apply and Reinier Shipping should have filed its

petition before August 10, a Saturday, considering that the court is closed
on Saturdays.
Issue Presented
Reinier Shipping filed the present petition raising the issue of whether or
not the CA erred in dismissing its petition for having been filed out of
time.
The Courts Ruling
A.M. 00-2-14-SC clarifies the application of Section 1, Rule 22 of the
Rules of Court when the last day on which a pleading is due falls on a
Saturday, Sunday, or legal holiday and the original period is
extended.2 The clarification states:
Whereas, the aforecited provision applies in the matter of filing of
pleadings in courts when the due date falls on a Saturday, Sunday, or
legal holiday, in which case, the filing of the said pleading on the next
working day is deemed on time;
Whereas, the question has been raised if the period is extended ipso jure
to the next working day immediately following where the last day of the
period is a Saturday, Sunday or legal holiday so that when a motion for
extension of time is filed, the period of extension is to be reckoned from
the next working day and not from the original expiration of the period;
NOW THEREFORE, the Court Resolves, for the guidance of the Bench
and the Bar, to declare that Section 1, Rule 22 speaks only of "the last
day of the period" so that when a party seeks an extension and the same
is granted, the due date ceases to be the last day and hence, the
provision no longer applies. Any extension of time to file the required
pleading should therefore be counted from the expiration of the period
regardless of the fact that said due date is a Saturday, Sunday or legal
holiday. (Emphasis supplied)
Reinier Shippings last day for filing its petition fell on July 26, a Friday. It
asked for a 15-day extension before the period lapsed and this was
granted. As it happened, 15 days from July 26 fell on August 10, a
Saturday. The CA held that Reinier Shipping should have filed its petition
before August 10 (Saturday) or at the latest on August 9 (Friday) since, in
an extended period, the fact that the extended due date (August 10) falls
on a Saturday is to be "disregarded." Reinier Shipping has no right to
1wphi1

move the extended due date to the next working day even if such due
date fell on a Saturday. Since the courts were closed on August 10
(Saturday), Reinier Shipping should have filed its petition, according to
the CA, not later than Friday, August 9.
But this is obviously wrong since it would mean compelling Reinier
Shipping to file its petition one day short of the 15-day extension granted
it. That would unjustly deprive it of the full benefit of that extension. Since
its new due date fell on a Saturday when courts are close, however, the
clear language of Section 1, Rule 21, applies. This gives Reinier Shipping
up to Monday (August 12), the next working day, within which to file its
petition.
The clarification provided in A.M. 00-2-14-SC actually covers a situation
where the due date falls on a Saturday, Sunday, or holiday. Precisely,
what such clarification wanted to address is the erroneous claim that "the
period of extension" in such a case "is to be reckoned from the next
working day and not from the original expiration of the period." The
correct rule, according to the clarification, is that "any extension of time to
file the required pleading should x x x be counted from the expiration of
the period regardless of the fact that said due date is a Saturday, Sunday
or legal holiday."
For example, if a pleading is due on July 10 and this happens to be a
Saturday, the time for filing it shall not run, applying Section 1 of Rule 21,
on July 1 0 (Saturday) nor on July 11 (Sunday) but will resume to run on
the next working day, which is July 12 (Monday). The pleading will then
be due on the latter date. If the period is extended by 10 days, such 10
days will be counted, not from July 12 (Monday) but from the original due
date, July 10 (Saturday) "regardless of the fact that said due date is a
Saturday." Consequently, the new due date will be 10 days from July 10
or precisely on July 20. As stated above, the situation of Reinier Shipping
is different.
WHEREFORE, the Court REVERSES and SETS ASIDE the Court of
Appeals' Resolutions in CA-G.R. SP 71861 dated November 11, 2002
and January 23, 2003 and DIRECTS it to give due course to petitioner
Reinier Pacific International Shipping, Inc.'s petition before it.

WE CONCUR:
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson
DIOSDADO M. PERALTA
Associate Justice

MARVIC MARIO VICTOR F. LEONEN

Associate Justice
ATT E S TATI O N
I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of e opinion of
the Courts Division.
PRESBITERO J. VELASCO, JR.
Associate Justice
Chairperson, Third Division
C E R TI F I C ATI O N
Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions 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.
MARIA LOURDES P. A. SERENO
Chief Justice

Footnotes
CA-G.R. SP 71861; Resolution penned by now Supreme Court
Associate Justice Martin S. Villarama, Jr. and concurred in by
Associate Justices Godardo A. Jacinto and Mario L. Guaria III.
1

SO ORDERED.
ROBERTO A. ABAD
Associate Justice

JOSE CATRAL MENDOZA

Associate Justice

In computing any period of time prescribed or allowed by these

Rules, or by order of the court, or by any applicable statute, the
day of the act or event from which the designated period of time
begins to run is to be excluded and the date of performance
included. If the last day of the period, as thus computed, falls on a
Saturday a Sunday, or a legal holiday in the place where the court
sits, the time shall not run until the next working day.
2

Reinier Pacific vs. Guevarra,

G.R. No. 157020, June 19, 2013

Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 132497 November 16, 1999

LUIS MIGUEL YSMAEL and JOHANN C.F. KASTEN V, petitioners,
vs.
COURT OF APPEALS and Spouses PACIFICO LEJANO and
ANASTACIA LEJANO, respondents.

MENDOZA, J.:
This is a petition for review of the decision of the Court of Appeals, 1 dated
January 26, 1998, dismissing the petition for certiorari and mandamus to set

aside an order of the Regional Trial Court, Branch 70, Pasig City, which
allowed private respondents to redeem certain parcels of land sold to satisfy
the judgment rendered against them and in favor of petitioners.

The facts are not in dispute. They are as follows:

Petitioners brought suit for sum of money against private respondents in
the then Court of First Instance of Rizal, Branch 29, and obtained
judgment in their favor on October 2, 1980. The dispositive portion of the
trial court's decision, dated October 2, 1980, reads: 2
WHEREFORE, judgment is rendered directing
defendants (herein private respondents) Pacifico Lejano
and Anastacia Lejano to pay, jointly and severally, each of
the plaintiffs (herein petitioners) the following:
1. P120,000.00 with interest at 12% per
annum from November 25, 1975, until fully
paid;
2. P120,000.00 with interest at 12% per
annum from November 25, 1976, until fully
paid;

The decision remained unexecuted for a long time as petitioners were

unable to locate property belonging to private respondents. However, in
1989, before the right of action upon the judgment could prescribe,
petitioners filed a case for the revival of the judgment in the Regional Trial
Court, Branch 70, Pasig City, which on March 14, 1990, rendered a
decision reviving the judgment in Civil Case No. 3039.
Private respondents appealed to the Court of Appeals, but their appeal
was dismissed in a resolution dated October 8, 1992 of the appellate
court. Private respondents brought the matter to this Court which likewise
dismissed private respondents' petition on January 11, 1993.
Accordingly, on September 9, 1993, the trial court issued a writ of
execution, as a result of which the rights, interests, and participation of
private respondents in several parcels of lands, covered by TCT Nos. T47699, T-50009, T-54010, T-50011, T-50391, T-50392, T-50393, T-50394,
and 16274 of the Register of Deeds of Batangas, were levied on
execution. On March 15, 1995, private respondents' rights, interests, and
participation in said lands were sold at public auction to petitioners,
represented by their counsel of record Atty. Fernando R. Arguelles, Jr.,
who offered the highest bid for P700,000.00. The sale to petitioners was
registered in the Office of the Register of Deeds of Nasugbu, Batangas
on July 25, 1995. The certificate of sale stated in pertinent parts: 3

3. P120,000.00 with interest at 12% per

annum from November 25, 1977, until fully
paid;

The period of redemption of the real properties described

above will expire one (1) year from and after the date of
registration of this Certificate of Sale.

4. P115,620.00 with interest at 12% per

annum from November 25, 1978 until fully
paid;

It is hereby required of said highest bidder, that a

statement of any amount of assessment or taxes which
may have been paid on account of this purchase and
such other liens chargeable to the redemptioners, with
PROOF hereof, be submitted within thirty (30) days
immediately preceding the expiration of the period of
redemption, furnishing the defendants a copy thereof, as
required by law, for purposes of computing the actual
amount payable by the defendants in case of redemption.

5. P50,000.00 for moral damages;

6. P40,000.00 as exemplary damages;
and
7. P25,000.00 as attorney's fees and the
costs of suit.

On July 16, 1996, private respondents' counsel wrote to petitioners'

counsel Atty. Fernando R. Arguelles, Jr. and Deputy Sheriff Sofronio M.
Villarin, informing them that private respondents were exercising their
right of redemption. Private respondents asked petitioners for a
computation of the redemption price. The letter stated in pertinent parts:

their right of redemption. Atty. Arguelles, however, refused to accept the

payment. In a note to private respondent Pacifico Lejano, Atty. Arguelles
claimed he had no authority to receive payment for petitioner Luis
Ysmael.
4

In behalf of the co-owners of defendant Pacifico

Lejano, et al., namely: Juliet Lejano-Lagarijos, Amparo
Lejano and Leopoldo Lejano, et al., of the parcels of land
subject of public auction sale in the above entitled case,
we are exercising the right of redemption pursuant to
Section 30, Rule 39, Revised Rules of Court. We are,
therefore, requesting that compliance be made with
respect to the last paragraph of the Certificate of Sale
with respect to the "actual amount payable by the
defendants in the above entitled case in case of
redemption."
We understand that the period of redemption will expire
on 25 July 1996. Hence, immediately upon receipt of this
letter, please furnish us with the requested total
redemption price of the subject property.
Deputy Sheriff Villarin received the letter on July 16, 1996 while Atty.
Arguelles received the same on July 17, 1996, 5 but they did not bother to
reply.
The twelve-month period of redemption expired on July 19, 1996.
Although the certificate of sale was registered on July 25, 1995, the
twelve-month period ended on July 19, 1996, considering that the latter
year was a leap year. However, thinking that the last day of the period of
redemption was on July 25, 1996, private respondent Pacifico Lejano
went to the office of Atty. Arguelles on said date and tendered to him two
cashier's checks drawn on Far East Bank and Trust Company in the
amount of P784,000.00. One check was for P700,000.00, representing
the purchase price at the execution sale, and another was for
P84,000.00, representing 1% interest per month on the purchase price
from July 25, 1995 to July 25, 1996. The checks came with a letter, dated
July 25, 1996, giving notice of private respondents' intention to exercise

Accordingly, private respondent called up petitioner Ysmael's office, but

he was informed that petitioner Ysmael was not in, and it was not known
when he would return. Unable to make a tender of payment, private
respondent filed the next day, July 26, 1996, a motion for consignation in
the trial court. Petitioners opposed the motion, arguing that the period of
redemption had already expired and that there was no valid tender of
payment because the cashier's checks were insufficient to cover the total
redemption price.
In the order dated October 21, 1996, the trial court granted private
respondents' motion for consignation, thus: 6
[I]t is not denied that on July 16, 1996, defendants'
(private respondents') counsel wrote plaintiffs'
(petitioners') counsel and Sheriff Sofronio Villarin, who
conducted the auction sale, requesting for computation of
the redemption price to be paid which letter was received
by the addressees on the same date (Motion for
Consignation, par. 3). This was well within the redemption
period which expired on July 19, 1996 per computation of
the period made by the plaintiffs (Opposition, par. 4).
Plaintiffs or the Sheriff never bothered to answer the
letter. In this regard, plaintiffs further argue that they
cannot be faulted for their failure to give defendants a
statement of the total amount of the redemption price
since that is so provided in Sec. 30, Rule 39 of the Rules
of Court (Rejoinder, par. C). Be that as it may, since the
aforecited section in providing for the amount payable to
the purchaser (herein plaintiffs) by way of redemption
speaks of "the amount of his (their) purchase, with
one per centum per month interest thereon in addition, up
to the time of the redemption, together with the amount of
any assessments or taxes which the purchaser may have

paid thereon after purchase, and interest on such lastnamed amount at the same rate; . . ." (emphasis
supplied), there would appear to be a need for the
judgment debtor or redemptioner to inquire as to the total
amount of redemption money to be paid and, therefore, it
would not be proper to argue that the plaintiffs or the
Sheriff to whom the aforestated letter was addressed
could not be faulted for nor answering the query. Thus the
delay in paying the correct amount of the redemption
price could not be solely attributed to the defendants
since the plaintiffs or the Sheriff are partly to blame. At
least the defendants have shown their good faith in trying
to settle the redemption price within the period provided
by law which was simply ignored by the plaintiffs who
appeared to profit more if the properties are not
redeemed by reason of the higher value of said
properties.
As to the other argument that there was no valid tender of
payment of the redemption price because the cashier's
checks are not considered legal tender, suffice it to state
that in Ramon Tan v. Court of Appeals, et al., (G.R. No.
100555, December 20, 1944), the Supreme Court ruled:
Now, what was presented for deposit in
the instant case was not just an ordinary
check but a cashier's check payable to the
depositor himself. A cashier's check is a
primary obligation of the issuing bank and
accepted in advance by its mere issuance.
By its very nature, a cashier's check is a
bank's order to pay drawn upon itself,
committing in effect its total resources,
integrity and honor behind the check. A
cashier's check by its peculiar character
and general use in the commercial world
is regarded substantially to be as good as
the money which it represents. . . .

Anent the objection that the total amount covered by the

two cashier's checks falls short of the correct amount of
the redemption price tendered by the defendants, the
same should be rectified by requiring them to pay the
right amount.
The dispositive portion of the order reads:
WHEREFORE, the Motion for Consignation is hereby
granted. Defendants are hereby allowed to
consign/deposit the two (2) checks issued by Far East
Bank and Trust Company both dated July 24, 1996 in the
sum of P700,000.00 and P84,000.00 with the Office of the
Clerk of Court, Pasig City. Likewise, plaintiffs are hereby
directed to give a statement of account to the defendants
of their obligation for the latter to be able to settle their
account fully and the same to be likewise deposited with
the Office of the Clerk of Court.
SO ORDERED.
Petitioners filed a motion for reconsideration. As their motion was denied,
they filed a petition for certiorari andmandamus in the Court of Appeals.
However, the appellate court dismissed their petition January 26, 1998.
Hence, this petition for review on certiorari.
Firstly, petitioners argue that the twelve-month period of redemption
expired on July 19, 1996, but that private respondent Pacifico Lejano
tendered payment, to petitioners' counsel only on July 25,
1996. Secondly, they claim that even assuming that the tender of
payment was made on time, the same was invalid because (1) Atty.
Arguelles had no authority to receive payment, and (2) the amount of
P84,000.00 tendered to pay for the 1% interest per month on the
purchase price was insufficient, the actual interest due being
P112,000.00.
We find the foregoing contentions to be without merit.

First. Rule 39, 30 of the 1964 Rules of Court provided that "within twelve
months after the sale," the judgment debtor may redeem the property
sold at public auction, thus:
Sec. 30. Time and manner of, and amounts payable
on, successive redemptions. Notice to be given and filed.
The judgment debtor, or redemptioner, may redeem
the property from the purchaser, at any time within twelve
(12) months after the sale, on paying the purchaser the
amount of his purchase, with one per centum per month
interest thereof in addition, up to the time of redemption,
together with the amount of any assessments or taxes
which the purchaser may have paid thereon after
purchase, and interest on such last named amount at the
same rate. . .
Written notice of any redemption must be given to the
Officer who made the sale and a duplicate filed with the
registrar of deeds of the province, and if any assessments
or taxes are paid by the redemptioner or if he has or
acquires any lien other than that upon which the
redemption was made, notice thereof must in like manner
be given to the officer and filed with the registrar of deeds;
if such notice be not filed, the property may be redeemed
without paying such assessments, taxes, or liens.
Under Art. 13 of the Civil Code, a month, unless designated by name, is
understood to be equivalent to 30 days, while a year is understood to be
of 365 days. Thus, the rulings of this Court under the 1964 Rules stated
that the 12-month period of redemption under Rule 39, 30 is equivalent
to 360 days counted from the registration of the certificate of sale. 7 Within
the said period, the redemptioner must pay the purchaser the full amount of
the redemption price, otherwise the redemption is ineffectual. 8
In the instant case, there is no question that the certificate of sale
registered in the Office of the Register of Deeds of Nasugbu, Batangas
on July 25, 1995. Consequently, the right of redemption should have
been exercised on or before July 19, 1996, the 360th day after July 25,
1995 considering that 1996 was a leap year.

However, apparently equating the phrase "twelve (12) months" in Rule

39, 30 with one year of 365 days, private respondents reckoned the
period of redemption as ending on July 25, 1996 since the sale registered
on July 25, 1995. Indeed, the certificate of sale stated that "the period of
redemption . . . will expire one (1) year from and after the date of
registration . . ." There was thus an honest mistake on a question of law.
Rule 39, 28 of the 1997 Rule of Civil Procedure now provides that the
period of redemption shall be "at any time within one (1) year from the
date of registration of the certificate of sale," so that the period is now to
be understood as composed of 365 days. Neither petitioners nor the
sheriff corrected private respondents' mistaken impression, leading the
latter to believe that July 25, 1996 was indeed the last day of the period
of redemption.
Moreover, private respondents on July 16, 1996 and July 17, 1996, i.e.,
within 12-month period as provided in Rule 39, 30 of the former Rules of
Court, gave notice to Deputy Sheriff Sofronio and petitioner's counsel of
their intention to redeem the lands sold. In the same letter, private
respondents requested a statement of the redemption price which
petitioners and the deputy sheriff chose to ignore. When private
respondent Lejano's tender of payment was refused by Atty. Arguelles,
Jr., private respondents consigned payment in the trial court on July 26,
1996. The combination of these circumstances makes it inequitable to
rule that private respondents lost the right of redemption by his delay of
six days to redeem the property. Both the trial court and the Court of
Appeals correctly held that private respondents had tried in good faith to
exercise their right of redemption. As the appellate court stated:
. . . such special circumstances exist, namely: (1) the
highest bidders (petitioners) did not submit a statement of
"any amount of assessment or taxes which may have
been paid on account of their purchase to be submitted
within 30 days immediately preceding the expiration of the
period of redemption, furnishing the defendants (private
respondents) a copy thereof, as directed in the certificate
of sale;" (2) despite receipt of the letters from private
respondents, petitioners and deputy sheriff Villarin never
made a reply; (3) notwithstanding that petitioners' counsel

was their agent in the auction sale in which the properties

in question were sold to petitioners, said counsel, Atty.
Fernando R. Arguelles, Jr., when private respondents
wanted to exercise their right of redemption went into
technicalities by saying his authority was limited to just
the bidding.
Concurrence of the above circumstances is a good
occasion to remind petitioners that "every person must, in
the exercise of his right and in the performance of his
duty, act with justice, give everyone his due, and observe
honesty and good faith" (Art. 19, Civil Code). Private
respondents wanted to exercise their right of redemption.
Petitioners would do well if they adhere to the teaching of
aforequoted article. The policy of the law is liberality in
favor of redemption.
Although it is required that full payment of the redemption price must be
made within the redemption period, the rule on redemption is actually
liberally construed in favor of the original owner of the property. The
policy of the law is to aid rather than to defeat him in the exercise of his
right of redemption. 9 As the Court of Appeals observed, this Court has
allowed parties in several cases to perfect their right of redemption beyond
the period prescribed therefor. InDelos Reyes v. IAC, 10 for instance, the
amount deposited in the trial court four (4) days after the lapse of the
redemption period was considered an affirmation of the earlier timely offer to
redeem and, thus, a valid payment. On the other hand, inCastillo
v. Nagtalon 11 and Bodiongan v. Court of Appeals, 12 this Court upheld a
redemption made by the judgment debtor or the redemptioner in good faith
even if the payment tendered was less than the redemption price. In these
cases, the judgment debtor was allowed fifteen days from the finality of the
Court's decision to complete the redemption price.
In the case at bar, private respondents seasonably notified petitioners'
counsel and the sheriff on July 16, 1996 that they were redeeming the
property sold on execution and asked for a statement of the redemption
price. There can be no doubt of the earnest intent of private respondents
to exercise their right of redemption. Their tender of payment on July 25,
1996, after petitioners' counsel and the sheriff had ignored their letter,

should therefore be considered an affirmation of the timely notice to

redeem, even if such tender was made six (6) days after the expiration of
the redemption period.
Second. Petitioners also question the validity of the tender of the two
checks to Atty. Arguelles on the ground that the latter had no authority to
accept payment on their behalf and that the interest payment on the
purchase price in the amount of P84,000.00 was insufficient. However, it
appears that the first question was never really raised in the courts below
and, therefore, petitioners cannot now be allowed to raise it for the first
time without offending basic rules of fair play, justice and due
process. 13 Anent the claim that the interest on the purchase price was
insufficient, the Court finds the same to be baseless. The amount of
P84,000.00 is the interest on the purchase price of P7,000.00, computed at
the rate of 1% per month for 12 months.
Third. Nor is there any merit in petitioners' contention that the Court of
Appeals erred in not directing the issuance of a writ of possession in their
favor. Under Rule 39, 35 of the former Rules of Court, the issuance of a
writ of possession is proper only if the ownership of the property sold on
execution has been consolidated in the name of the purchaser, in view of
the redemptioner's failure to exercise the right of redemption.
Sec. 35. Deed and possession to be given at expiration of
redemption period. By whom executed or given. If no
redemption be made within twelve (12) months after the
sale, the purchaser, or his assignee, is entitled to a
conveyance and possession of the property; or, if so
redeemed, whenever sixty (60) days have elapsed and no
other redemption has been made, and notice thereof
given, and the time for redemption has expired, the last
redemption, or his assignee, is entitled to the conveyance
and possession; but in all cases the judgment debtor shall
have the entire period of twelve (12) months from the date
of the sale to redeem the property. . . .
Since we have ruled that private respondents validly exercised their right
of redemption within the prescribed period, petitioners are not entitled to
the writ of possession.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED.

SO ORDERED.
Bellosillo, Quisumbing and De Leon, Jr., JJ., concur.
Buena, J., took no part having concurred in the appealed decision.
Footnotes
1 Per Justice Buenaventura J. Guerrero and concurred in by Justices Arturo B. Buena (now
Associate Justice of the Supreme Court) and Portia Alio-Hormachuelos.
2 Rollo, pp. 30-31.
3 Id., p. 36.
4 Id., p. 60.
5 Id., p. 61.
6 Id., pp. 58-59.
7 See State Investment House, Inc. v. Court of Appeals, 215 SCRA 734 (1992); Go It Bun v. Dizon,
214 SCRA 41 (1992); National Marketing Corp. v. Tecson, 139 Phil. 584 (1969).
8 Bodiongan v. Court of Appeals, 248 SCRA 496 (1995); Belisario v. Intermediate Appellate Court,
165 SCRA 101 (1989).
9 Sulit v. Court of Appeals, 268 SCRA 441 (1997); De los Reyes v. Intermediate Appellate Court,
176 SCRA 394 (1989).
10 Supra.
11 114 Phil. 7 (1962).
12 248 SCRA 496 (1995).
13 Medida v. Court of Appeals, 208 SCRA 887 (1992).

Ysmael vs. Court of Appeals,

G.R. No. 132497, November 16, 1999

Facts: Petitioners brought suit for sum of money against private

respondents and obtained judgment in their favor The decision
remained unexecuted for a long time as petitioners were unable to
locate property belonging to private respondents. Before the right of
action prescribed, petitioner filed a case for the revival judgment. PRs
appealed to the CA, dismissed; appeal to SC dismissed. RTC issued
a writ of execution; lands were sold at public auction. Petitioners won.
On July 16, 1996, PRs informed petitioner that PR was exercising
their right of redemption. The 12-month period of redemption expired
on July 19, 1996, although the certificate of sale was registered on
July 25, 1995, the 12-month period ended on July 19, 1996,
considering that the latter year was a leap year. However, thinking that
the last day of the period of redemption was on July 25, 1996, PR
went to the office of the Atty on said date and tendered to him 2
checks. Petitioner wasnt around, so PRs consigned the amount in
court the next day. Petitioners opposed the motinob, arguing that the
period of redemption had already expired and that there was no valid
tender of payment because the cashiers checks were insufficient to
cover the total redemption price. The consignation was granted,
hence this appeal.
Issue: W/N the redemption period has expired
Held: Rule 3930 of the 1964 Rules of Court provided that within 12
months after the sale, the judgment debtor may redeem the property
sold at public auction. Under Art. 13 of the Civil Code, a month, unless
designated by name, is understood to be equivalent to 30 days, while
a year is understood to be of 365 days. Thus the rulings of this Court
under the 1964 Rules stated that the 12-month period of redemption
under Rule 3930 is equivalent to 360 days counted from the
registration of the certificate of sale. Within the said period, the
redemptioner must pay the purchaser the full amount of the
redemption price, otherwise the redemption is ineffectual.
In the instant case, there is no question that the certificate of
sale was registered in the Office of the Register of Deeds.
Consequently, the right of redemption should have been exercised on
or before July 19,1996, the 360th day after July 25, 1995 considering
that 1996 was a leap year.
BUT, neither petitioners nor the sheriff corrected PRs mistaken
impression, leading the latter to believe the 25 July 1996 was indeed
the last day of the period of redemption.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 124371

November 23, 2000

PAULA T. LLORENTE, petitioner,

vs.
COURT OF APPEALS and ALICIA F. LLORENTE, respondents.

DECISION
PARDO, J.:
The Case
The case raises a conflict of laws issue.
What is before us is an appeal from the decision of the Court of
Appeals1 modifying that of the Regional Trial Court, Camarines Sur,
Branch 35, Iriga City2 declaring respondent Alicia F. Llorente
(herinafter referred to as Alicia), as co-owners of whatever
property she and the deceased Lorenzo N. Llorente (hereinafter
referred to as Lorenzo) may have acquired during the twenty-five
(25) years that they lived together as husband and wife.
The Facts
The deceased Lorenzo N. Llorente was an enlisted serviceman of
the United States Navy from March 10, 1927 to September 30,
1957.3
On February 22, 1937, Lorenzo and petitioner Paula Llorente
(hereinafter referred to as Paula) were married before a parish
priest, Roman Catholic Church, in Nabua, Camarines Sur.4

Before the outbreak of the Pacific War, Lorenzo departed for the
United States and Paula stayed in the conjugal home in barrio
Antipolo, Nabua, Camarines Sur.5
On November 30, 1943, Lorenzo was admitted to United States
citizenship and Certificate of Naturalization No. 5579816 was
issued in his favor by the United States District Court, Southern
District of New York.6
Upon the liberation of the Philippines by the American Forces in
1945, Lorenzo was granted an accrued leave by the U. S. Navy, to
visit his wife and he visited the Philippines. 7 He discovered that his
wife Paula was pregnant and was living in and having an
adulterous relationship with his brother, Ceferino Llorente. 8
On December 4, 1945, Paula gave birth to a boy registered in the
Office of the Registrar of Nabua as Crisologo Llorente, with the
certificate stating that the child was not legitimate and the line for
the fathers name was left blank.9
Lorenzo refused to forgive Paula and live with her. In fact, on
February 2, 1946, the couple drew a written agreement to the
effect that (1) all the family allowances allotted by the United States
Navy as part of Lorenzos salary and all other obligations for
Paulas daily maintenance and support would be suspended; (2)
they would dissolve their marital union in accordance with judicial
proceedings; (3) they would make a separate agreement regarding
their conjugal property acquired during their marital life; and (4)
Lorenzo would not prosecute Paula for her adulterous act since
she voluntarily admitted her fault and agreed to separate from
Lorenzo peacefully. The agreement was signed by both Lorenzo
and Paula and was witnessed by Paulas father and stepmother.
The agreement was notarized by Notary Public Pedro Osabel. 10

Lorenzo returned to the United States and on November 16, 1951

filed for divorce with the Superior Court of the State of California in
and for the County of San Diego. Paula was represented by
counsel, John Riley, and actively participated in the proceedings.
On November 27, 1951, the Superior Court of the State of
California, for the County of San Diego found all factual allegations
to be true and issued an interlocutory judgment of divorce. 11

(2) I give and bequeath exclusively to my wife Alicia R. Fortuno

and to my children, Raul F. Llorente, Luz F. Llorente and Beverly F.
Llorente, in equal shares, all my real properties whatsoever and
wheresoever located, specifically my real properties located at
Barangay Aro-Aldao, Nabua, Camarines Sur; Barangay Paloyon,
Nabua, Camarines Sur; Barangay Baras, Sitio Puga, Nabua,
Camarines Sur; and Barangay Paloyon, Sitio Nalilidong, Nabua,
Camarines Sur;

On December 4, 1952, the divorce decree became final. 12

In the meantime, Lorenzo returned to the Philippines.
On January 16, 1958, Lorenzo married Alicia F. Llorente in
Manila.13 Apparently, Alicia had no knowledge of the first marriage
even if they resided in the same town as Paula, who did not
oppose the marriage or cohabitation.14
From 1958 to 1985, Lorenzo and Alicia lived together as husband
and wife.15 Their twenty-five (25) year union produced three
children, Raul, Luz and Beverly, all surnamed Llorente. 16
On March 13, 1981, Lorenzo executed a Last Will and Testament.
The will was notarized by Notary Public Salvador M. Occiano, duly
signed by Lorenzo with attesting witnesses Francisco Hugo,
Francisco Neibres and Tito Trajano. In the will, Lorenzo
bequeathed all his property to Alicia and their three children, to wit:
(1) I give and bequeath to my wife ALICIA R. FORTUNO
exclusively my residential house and lot, located at San Francisco,
Nabua, Camarines Sur, Philippines, including ALL the personal
properties and other movables or belongings that may be found or
existing therein;

(3) I likewise give and bequeath exclusively unto my wife Alicia R.

Fortuno and unto my children, Raul F. Llorente, Luz F. Llorente and
Beverly F. Llorente, in equal shares, my real properties located in
Quezon City Philippines, and covered by Transfer Certificate of
Title No. 188652; and my lands in Antipolo, Rizal, Philippines,
covered by Transfer Certificate of Title Nos. 124196 and 165188,
both of the Registry of Deeds of the province of Rizal, Philippines;
(4) That their respective shares in the above-mentioned
properties, whether real or personal properties, shall not be
disposed of, ceded, sold and conveyed to any other persons, but
could only be sold, ceded, conveyed and disposed of by and
among themselves;
(5) I designate my wife ALICIA R. FORTUNO to be the sole
executor of this my Last Will and Testament, and in her default or
incapacity of the latter to act, any of my children in the order of
age, if of age;
(6) I hereby direct that the executor named herein or her lawful
substitute should served (sic) without bond;

(7) I hereby revoke any and all my other wills, codicils, or

testamentary dispositions heretofore executed, signed, or
published, by me;

On December 13, 1985, Alicia filed in the testate proceeding (Sp.

Proc. No. IR-755), a petition for the issuance of letters
testamentary.24

(8) It is my final wish and desire that if I die, no relatives of mine in

any degree in the Llorentes Side should ever bother and disturb in
any manner whatsoever my wife Alicia R. Fortunato and my
children with respect to any real or personal properties I gave and
bequeathed respectively to each one of them by virtue of this Last
Will and Testament.17

On October 14, 1985, without terminating the testate proceedings,

the trial court gave due course to Paulas petition in Sp. Proc. No.
IR-888.25

On December 14, 1983, Lorenzo filed with the Regional Trial

Court, Iriga, Camarines Sur, a petition for the probate and
allowance of his last will and testament wherein Lorenzo moved
that Alicia be appointed Special Administratrix of his estate. 18

On May 18, 1987, the Regional Trial Court issued a joint decision,
thus:

On January 18, 1984, the trial court denied the motion for the
reason that the testator Lorenzo was still alive. 19
On January 24, 1984, finding that the will was duly executed, the
trial court admitted the will to probate. 20
On June 11, 1985, before the proceedings could be terminated,
Lorenzo died.21
On September 4, 1985, Paula filed with the same court a
petition22 for letters of administration over Lorenzos estate in her
favor. Paula contended (1) that she was Lorenzos surviving
spouse, (2) that the various property were acquired during their
marriage, (3) that Lorenzos will disposed of all his property in favor
of Alicia and her children, encroaching on her legitime and 1/2
share in the conjugal property.23

On November 6, 13 and 20, 1985, the order was published in the

newspaper Bicol Star.26

Wherefore, considering that this court has so found that the

divorce decree granted to the late Lorenzo Llorente is void and
inapplicable in the Philippines, therefore the marriage he
contracted with Alicia Fortunato on January 16, 1958 at Manila is
likewise void. This being so the petition of Alicia F. Llorente for the
issuance of letters testamentary is denied. Likewise, she is not
entitled to receive any share from the estate even if the will
especially said so her relationship with Lorenzo having gained the
status of paramour which is under Art. 739 (1).
On the other hand, the court finds the petition of Paula Titular
Llorente, meritorious, and so declares the intrinsic disposition of
the will of Lorenzo Llorente dated March 13, 1981 as void and
declares her entitled as conjugal partner and entitled to one-half of
their conjugal properties, and as primary compulsory heir, Paula T.
Llorente is also entitled to one-third of the estate and then one-third
should go to the illegitimate children, Raul, Luz and Beverly, all
surname (sic) Llorente, for them to partition in equal shares and
also entitled to the remaining free portion in equal shares.

Petitioner, Paula Llorente is appointed legal administrator of the

estate of the deceased, Lorenzo Llorente. As such let the
corresponding letters of administration issue in her favor upon her
filing a bond in the amount (sic) of P100,000.00 conditioned for her
to make a return to the court within three (3) months a true and
complete inventory of all goods, chattels, rights, and credits, and
estate which shall at any time come to her possession or to the
possession of any other person for her, and from the proceeds to
pay and discharge all debts, legacies and charges on the same, or
such dividends thereon as shall be decreed or required by this
court; to render a true and just account of her administration to the
court within one (1) year, and at any other time when required by
the court and to perform all orders of this court by her to be
performed.
On the other matters prayed for in respective petitions for want of
evidence could not be granted.
SO ORDERED.27
In time, Alicia filed with the trial court a motion for reconsideration
of the aforequoted decision.28
On September 14, 1987, the trial court denied Alicias motion for
reconsideration but modified its earlier decision, stating that Raul
and Luz Llorente are not children legitimate or otherwise of
Lorenzo since they were not legally adopted by him. 29 Amending its
decision of May 18, 1987, the trial court declared Beverly Llorente
as the only illegitimate child of Lorenzo, entitling her to one-third
(1/3) of the estate and one-third (1/3) of the free portion of the
estate.30

On September 28, 1987, respondent appealed to the Court of

Appeals.31
On July 31, 1995, the Court of Appeals promulgated its decision,
affirming with modification the decision of the trial court in this wise:
WHEREFORE, the decision appealed from is hereby AFFIRMED
with the MODIFICATION that Alicia is declared as co-owner of
whatever properties she and the deceased may have acquired
during the twenty-five (25) years of cohabitation.
SO ORDERED.32
On August 25, 1995, petitioner filed with the Court of Appeals a
motion for reconsideration of the decision. 33
On March 21, 1996, the Court of Appeals, 34 denied the motion for
lack of merit.
Hence, this petition.35
The Issue
Stripping the petition of its legalese and sorting through the various
arguments raised,36 the issue is simple. Who are entitled to inherit
from the late Lorenzo N. Llorente?
We do not agree with the decision of the Court of Appeals. We
remand the case to the trial court for ruling on the intrinsic validity
of the will of the deceased.
The Applicable Law

The fact that the late Lorenzo N. Llorente became an American

citizen long before and at the time of: (1) his divorce from Paula;
(2) marriage to Alicia; (3) execution of his will; and (4) death, is duly
established, admitted and undisputed.
Thus, as a rule, issues arising from these incidents are necessarily
governed by foreign law.

was referred back to the law of the decedents domicile, in this

case, Philippine law.
We note that while the trial court stated that the law of New York
was not sufficiently proven, in the same breath it made the
categorical, albeit equally unproven statement that American law
follows the domiciliary theory hence, Philippine law applies when
determining the validity of Lorenzos will.38

The Civil Code clearly provides:

Art. 15. Laws relating to family rights and duties, or to the status,
condition and legal capacity of persons are binding upon citizens
of the Philippines, even though living abroad.
Art. 16. Real property as well as personal property is subject to
the law of the country where it is situated.
However, intestate and testamentary succession, both with
respect to the order of succession and to the amount of
successional rights and to the intrinsic validity of testamentary
provisions, shall be regulated by the national law of the person
whose succession is under consideration, whatever may be the
nature of the property and regardless of the country wherein said
property may be found. (emphasis ours)
True, foreign laws do not prove themselves in our jurisdiction and
our courts are not authorized to take judicial notice of them. Like
any other fact, they must be alleged and proved. 37
While the substance of the foreign law was pleaded, the Court of
Appeals did not admit the foreign law. The Court of Appeals and
the trial court called to the fore the renvoi doctrine, where the case

First, there is no such thing as one American law. The national

law indicated in Article 16 of the Civil Code cannot possibly apply
to general American law. There is no such law governing the
validity of testamentary provisions in the United States. Each State
of the union has its own law applicable to its citizens and in force
only within the State. It can therefore refer to no other than the law
of the State of which the decedent was a resident. 39 Second, there
is no showing that the application of the renvoi doctrine is called for
or required by New York State law.
The trial court held that the will was intrinsically invalid since it
contained dispositions in favor of Alice, who in the trial courts
opinion was a mere paramour. The trial court threw the will out,
leaving Alice, and her two children, Raul and Luz, with nothing.
The Court of Appeals also disregarded the will. It declared Alice
entitled to one half (1/2) of whatever property she and Lorenzo
acquired during their cohabitation, applying Article 144 of the Civil
Code of the Philippines.
The hasty application of Philippine law and the complete disregard
of the will, already probated as duly executed in accordance with
the formalities of Philippine law, is fatal, especially in light of the
factual and legal circumstances here obtaining.

Validity of the Foreign Divorce

In Van Dorn v. Romillo, Jr.40 we held that owing to the nationality
principle embodied in Article 15 of the Civil Code, only Philippine
nationals are covered by the policy against absolute divorces, the
same being considered contrary to our concept of public policy and
morality. In the same case, the Court ruled that aliens may obtain
divorces abroad, provided they are valid according to their national
law.
Citing this landmark case, the Court held in Quita v. Court of
Appeals,41 that once proven that respondent was no longer a
Filipino citizen when he obtained the divorce from petitioner, the
ruling in Van Dorn would become applicable and petitioner could
very well lose her right to inherit from him.
In Pilapil v. Ibay-Somera,42 we recognized the divorce obtained by
the respondent in his country, the Federal Republic of Germany.
There, we stated that divorce and its legal effects may be
recognized in the Philippines insofar as respondent is concerned in
view of the nationality principle in our civil law on the status of
persons.
For failing to apply these doctrines, the decision of the Court of
Appeals must be reversed.43 We hold that the divorce obtained by
Lorenzo H. Llorente from his first wife Paula was valid and
recognized in this jurisdiction as a matter of comity. Now, the
effects of this divorce (as to the succession to the estate of the
decedent) are matters best left to the determination of the trial
court.
Validity of the Will

The Civil Code provides:

Art. 17. The forms and solemnities of contracts, wills, and other
public instruments shall be governed by the laws of the country in
which they are executed.
When the acts referred to are executed before the diplomatic or
consular officials of the Republic of the Philippines in a foreign
country, the solemnities established by Philippine laws shall be
observed in their execution. (underscoring ours)
The clear intent of Lorenzo to bequeath his property to his second
wife and children by her is glaringly shown in the will he executed.
We do not wish to frustrate his wishes, since he was a foreigner,
not covered by our laws on family rights and duties, status,
condition and legal capacity.44
Whether the will is intrinsically valid and who shall inherit from
Lorenzo are issues best proved by foreign law which must be
pleaded and proved. Whether the will was executed in accordance
with the formalities required is answered by referring to Philippine
law. In fact, the will was duly probated.
As a guide however, the trial court should note that whatever public
policy or good customs may be involved in our system of legitimes,
Congress did not intend to extend the same to the succession of
foreign nationals. Congress specifically left the amount of
successional rights to the decedents national law.45
Having thus ruled, we find it unnecessary to pass upon the other
issues raised.

In Spec. Proc. No. IR-755 (In the Matter of the Probate and Allowance of the Last Will and

Testament of Lorenzo N. Llorente, Lorenzo N. Llorente, Petitioner) and Spec. Proc. No. IR-888

The Fallo

(Petition for the Grant of Letters of Administration for the Estate of Lorenzo N. Llorente, Paula T.

WHEREFORE, the petition is GRANTED. The decision of the

Court of Appeals in CA-G. R. SP No. 17446 promulgated on July
31, 1995 is SET ASIDE.
In lieu thereof, the Court REVERSES the decision of the Regional
Trial Court and RECOGNIZES as VALID the decree of divorce
granted in favor of the deceased Lorenzo N. Llorente by the
Superior Court of the State of California in and for the County of
San Diego, made final on December 4, 1952.
Further, the Court REMANDS the cases to the court of origin for
determination of the intrinsic validity of Lorenzo N. Llorentes will
and determination of the parties successional rights allowing proof
of foreign law with instructions that the trial court shall proceed with
all deliberate dispatch to settle the estate of the deceased within
the framework of the Rules of Court.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and YnaresSantiago, JJ., concur.

Llorente, Petitioner), dated May 18, 1987, Judge Esteban B. Abonal, presiding.

Decision, Court of Appeals, Rollo, p. 51.

Exh. B, Trial Court Folder of Exhibits, p. 61.

Ibid.

This was issued pursuant to Lorenzos petition, Petition No. 4708849, filed with the U.S. Court.

Exhs. H and H-3 Trial Court Folder of Exhibits, p. 157, 159.

Decision, Court of Appeals, Rollo, p. 51; Exh. B, Trial Court Folder of Exhibits, p. 61.

Ibid.

Exh. A, Trial Court Folder of Exhibits, p. 60.

10

Exh. B-1 Trial Court Folder of Exhibits, p. 62.

11

Exh. D, Trial Court Folder of Exhibits, pp. 63-64.

12

Exh. E, Trial Court Folder of Exhibits, p. 69.

13

Exh. F, Trial Court Folder of Exhibits, p. 148.

14

Decision, Court of Appeals, Rollo, p. 52.

15

Comment, Rollo, p. 147.

16

Decision, Court of Appeals, Rollo, p. 52.

Footnotes

In CA-G. R. SP. No. 17446, promulgated on July 31, 1995, Lipana-Reyes , J., ponente, Torres,

Jr. and Hofilena, JJ., concurring.

17

Exh. A, Trial Court Folder of Exhibits, pp. 3-4; Decision, Court of Appeals, Rollo, p. 52.

33

On August 31, 1995, petitioner also filed with this Court a verified complaint against the

members of the Special Thirteenth Division, Court of Appeals, Associate Justices Justo P.
18

Docketed as Spec. Proc. No. IR-755.

19

Decision, RTC, Rollo, p. 37.

20

Ibid.

21

Ibid.

Torres, Jr., Celia Lipana-Reyes + and Hector Hofilena for gross ignorance of the law, manifest
incompetence and extreme bias (Rollo, p. 15).

34

22

23

Docketed as Spec. Proc. No. IR-888.

Decision, RTC, Rollo, p. 38.

24

Decision, Court of Appeals, Rollo, p. 52.

25

Ibid., pp. 52-53.

26

Ibid., p. 53.

27

RTC Decision, Rollo, p. 37.

28

Order, Regional Trial Court in Spec. Proc. Nos. IR-755 and 888, Rollo, p. 46.

29

Citing Article 335 of the Civil Code, which states, The following cannot adopt: xxx

35

Filed on May 10, 1996, Rollo, pp. 9-36.

36

Petitioner alleges (1) That the Court of Appeals lost its jurisdiction over the case when it issued

the resolution denying the motion for reconsideration; (2) That Art. 144 of the Civil Case has
been repealed by Arts. 253 and 147 of the Family Code and (3) That Alicia and her children not
are entitled to any share in the estate of the deceased (Rollo, p. 19).

37

Collector of Internal Revenue v. Fisher, 110 Phil. 686 (1961).

38

Joint Record on Appeal, p. 255; Rollo, p. 40.

39

In Re: Estate of Edward Christensen, Aznar v. Helen Garcia, 117 Phil. 96 (1963).

40

139 SCRA 139 (1985).

41

300 SCRA 406 (1998).

42

174 SCRA 653 (1989).

43

The ruling in the case of Tenchavez v. Escano (122 Phil. 752 [1965]) that provides that a

since the divorce obtained by Lorenzo did not dissolve his first marriage with Paula, then the

30

Order, Regional Trial Court, Rollo, p. 47.

Justo P. Torres, Jr. and Hector Hofilena (Former Special Thirteenth Division).

(3) a married person, without the consent of the other spouse; xxx, the trial court reasoned that

adoption of Raul and Luz was void, as Paula did not give her consent to it.

Again with Associate Justice Celia Lipana-Reyes , ponente, concurred in by Associate Justices

foreign divorce between Filipino citizens sought and decreed after the effectivity of the present
civil code is not entitled to recognition as valid in this jurisdiction is NOT applicable in the case
at bar as Lorenzo was no longer a Filipino citizen when he obtained the divorce.

31

Docketed as CA-G. R. SP No. 17446.

32

Decision, Court of Appeals, Rollo, p. 56.

44

Article 15, Civil Code provides Laws relating to family rights and duties, or to the status,

condition and legal capacity of persons are binding upon citizens of the Philippines, even though
living abroad. (Underscoring ours)

45

Bellis v. Bellis, 126 Phil. 726 (1967).

G.R. No. 124371

November 23, 2000
PAULA T. LLORENTE, petitioner,
vs.
COURT OF APPEALS and ALICIA F. LLORENTE, respondents.
345 SCRA 592 Civil Law Application of Laws Foreign Laws
Nationality Principle Effects of Foreign Divorce
Succession Last Will and Testament of an Alien
In 1927, Lorenzo Llorente, then a Filipino, was enlisted in the U.S.
Navy. In 1937, he and Paula Llorente got married in Camarines
Sur. In 1943, Lorenzo became an American citizen.
In 1945, Lorenzo returned to the Philippines for a vacation. He
discovered that Paula was already living illicitly with Ceferino
Llorente (brother of Lorenzo). Ceferino and Paula even had a son.
Lorenzo then refused to live with Paula. He also refused to give her
monetary support. Eventually, Lorenzo and Paula agreed in writing
Lorenzo shall not criminally charge Paula if the latter agrees to

waive all monetary support from Lorenzo. Later, Lorenzo returned

to the United States.
In 1951, Lorenzo filed a divorce proceeding against Paula in
California. Paula was represented by an American counsel. The
divorce was granted and in 1952, the divorce became final.
Lorenzo returned to the Philippines. In 1958, Lorenzo married
Alicia Fortuno. They had three children.
In 1981, Lorenzo executed his last will and testament where he left
all his estate to Alicia and their children (nothing for Paula). In
1983, he went to court for the wills probate and to have Alicia as
the administratrix of his property. In 1985, before the probate
proceeding can be terminated, Lorenzo died. Later, Paula filed a
petition for letters of administration over Lorenzos estate.
The trial court ruled that Lorenzos marriage with Alicia is void
because the divorce he obtained abroad is void. The trial court
ratiocinated that Lorenzo is a Filipino hence divorce is not
applicable to him. The Court of Appeals affirmed the trial court.
ISSUE: Whether or not Lorenzos divorce abroad should be
recognized.
HELD: Yes. It is undisputed by Paula Llorente that Lorenzo
became an American citizen in 1943. Hence, when he obtained the
divorce decree in 1952, he is already an American citizen. Article
15 of the Civil Code provides:
Laws relating to family rights and duties, or to the status, condition
and legal capacity of persons are binding upon citizens of the
Philippines, even though living abroad.

Since Lorenzo was no longer a Filipino, Philipine laws relating to

family rights, duties, or status are no longer applicable to him.
Therefore, the divorce decree he obtained abroad must be
respected. The rule is: aliens may obtain divorces abroad, provided
they are valid according to their national law.
However, this case was still remanded to the lower court so as for
the latter to determine the effects of the divorce as to the
successional rights of Lorenzo and his heirs.
Anent the issue on Lorenzos last will and testament, it must be
respected. He is an alien and is not covered by our laws on
succession. However, since the will was submitted to our courts for
probate, then the case was remanded to the lower court where the
foreign law must be alleged in order to prove the validity of the will.

LLORENTE vs. CA, G.R. No.

124371. November 23, 2000
PAULA T. LLORENTE, petitioner, VS. COURT OF APPEALS and
ALICIA F. LLORENTE,
respondents
November 23, 2000
FACTS:
Lorenzo Llorente and petitioner Paula Llorente were married in 1937
in the Philippines. Lorenzo was an enlisted serviceman of the US
Navy. Soon after, he left for the US where through naturalization, he
became a US Citizen. Upon his visitation of his wife, he discovered
that she was living with his brother and a child was born. The child
was registered as legitimate but the name of the father was left blank.
Llorente filed a divorce in California, which later on became final. He
married Alicia and they lived together for 25 years bringing 3 children.
He made his last will and testament stating that all his properties will
be given to his second marriage. He filed a petition of probate that
made or appointed Alicia his special administrator of his estate.

Before the
proceeding could be terminated, Lorenzo died. Paula filed a letter of
administration over Llorentes estate. The trial granted the letter and
denied the motion for reconsideration. An appeal was made to the
Court of Appeals, which affirmed and modified the judgment of the
Trial Court that she be declared co-owner of whatever properties, she
and the deceased, may have acquired during their 25 years of
cohabitation.
ISSUE:
Whether or not the National Law shall apply.
RULING:
Lorenzo Llorente was already an American citizen when he divorced
Paula. Such was also the situation when he married Alicia and
executed his will. As stated in Article 15 of the civil code, aliens may
obtain divorces abroad, provided that they are validly required in their
National Law. Thus the divorce obtained by Llorente is valid because
the law that governs him is not Philippine Law but his National Law
since the divorce was contracted after he became an American
citizen. Furthermore, his National Law allowed divorce.
The case was remanded to the court of origin for determination of the
intrinsic validity of Lorenzo Llorentes will and determination of the
parties successional rights allowing proof of foreign law.

235 SCRA 630 (1994) 249 SCRA 635 (1995)

Political Law Origination of Revenue Bills EVAT
Amendment by Substitution
Arturo Tolentino et al are questioning the constitutionality of RA
7716 otherwise known as the Expanded Value Added Tax
(EVAT) Law. Tolentino averred that this revenue bill did not
exclusively originate from the House of Representatives as
required by Section 24, Article 6 of the Constitution. Even
though RA 7716 originated as HB 11197 and that it passed the 3
readings in the HoR, the same did not complete the 3 readings
in Senate for after the 1 st reading it was referred to the Senate
Ways & Means Committee thereafter Senate passed its own
version known as Senate Bill 1630. Tolentino averred that what
Senate could have done is amend HB 11197 by striking out its
text and substituting it with the text of SB 1630 in that way the
bill remains a House Bill and the Senate version just becomes

the text (only the text) of the HB. (Its ironic however to note
that Tolentino and co-petitioner Raul Roco even signed the said
Senate Bill.)
ISSUE: Whether or not the EVAT law is procedurally infirm.
HELD: No. By a 9-6 vote, the Supreme Court rejected the
challenge, holding that such consolidation was consistent with
the power of the Senate to propose or concur with amendments
to the version originated in the HoR. What the Constitution
simply means, according to the 9 justices, is that the initiative
must come from the HoR. Note also that there were several
instances before where Senate passed its own version rather
than having the HoR version as far as revenue and other such
bills are concerned. This practice of amendment by substitution
has always been accepted. The proposition of Tolentino
concerns a mere matter of form. There is no showing that it
would make a significant difference if Senate were to adopt his
over what has been done.

Tolentino vs. Secretary of Finance G.R. No. 115455, August

25, 1994
Facts: The value-added tax (VAT) is levied on the sale, barter or
exchange of goods and properties as well as on the sale or
exchange of services. RA 7716 seeks to widen the tax base of the
existing VAT system and enhance its administration by amending
the National Internal Revenue Code. There are various suits
challenging the constitutionality of RA 7716 on various grounds.
One contention is that RA 7716 did not originate exclusively in the
House of Representatives as required by Art. VI, Sec. 24 of the
Constitution, because it is in fact the result of the consolidation of 2
distinct bills, H. No. 11197 and S. No. 1630. There is also a
contention that S. No. 1630 did not pass 3 readings as required by
the Constitution.
Issue: Whether or not RA 7716 violates Art. VI, Secs. 24 and 26(2)
of the Constitution
Held: The argument that RA 7716 did not originate exclusively in
the House of Representatives as required by Art. VI, Sec. 24 of the
Constitution will not bear analysis. To begin with, it is not the law
but the revenue bill which is required by the Constitution to

originate exclusively in the House of Representatives. To insist that

a revenue statute and not only the bill which initiated the legislative
process culminating in the enactment of the law must substantially
be the same as the House bill would be to deny the Senates
power not only to concur with amendments but also to propose
amendments. Indeed, what the Constitution simply means is that
the initiative for filing revenue, tariff or tax bills, bills authorizing an
increase of the public debt, private bills and bills of local application
must come from the House of Representatives on the theory that,
elected as they are from the districts, the members of the House
can be expected to be more sensitive to the local needs and
problems. Nor does the Constitution prohibit the filing in the Senate
of a substitute bill in anticipation of its receipt of the bill from the
House, so long as action by the Senate as a body is withheld
pending receipt of the House bill.
The next argument of the petitioners was that S. No. 1630 did not
pass 3 readings on separate days as required by the Constitution
because the second and third readings were done on the same
day. But this was because the President had certified S. No. 1630
as urgent. The presidential certification dispensed with the
requirement not only of printing but also that of reading the bill on
separate days. That upon the certification of a bill by the President
the requirement of 3 readings on separate days and of printing and
distribution can be dispensed with is supported by the weight of
legislative practice.

SANIDAD vs. COMELEC

(G.R. No. L-44640, October 12, 1976)

73 SCRA 333 Political Law Constitutional Law Amendment to

the Constitution
On 2 Sept 1976, Marcos issued PD No. 991 calling for a national
referendum on 16 Oct 1976 for the Citizens Assemblies
(barangays) to resolve, among other things, the issues of martial
law, the interim assembly, its replacement, the powers of such
replacement, the period of its existence, the length of the period for
the exercise by the President of his present powers. Twenty days
after, the President issued another related decree, PD No. 1031,
amending the previous PD No. 991, by declaring the provisions of
PD No. 229 providing for the manner of voting and canvass of
votes in barangays applicable to the national referendumplebiscite of Oct 16, 1976. Quite relevantly, PD No. 1031 repealed
inter alia, Sec 4, of PD No. 991. On the same date of 22 Sept
1976, Marcos issued PD No. 1033, stating the questions to he
submitted to the people in the referendum-plebiscite on October
16, 1976. The Decree recites in its whereas clauses that the
peoples continued opposition to the convening of the interim

National Assembly evinces their desire to have such body

abolished and replaced thru a constitutional amendment, providing
for a new interim legislative body, which will be submitted directly
to the people in the referendum-plebiscite of October 16.
On September 27, 1976, Sanidad filed a Prohibition with
Preliminary Injunction seeking to enjoin the Commission on
Elections from holding and conducting the Referendum Plebiscite
on October 16; to declare without force and effect Presidential
Decree Nos. 991 and 1033, insofar as they propose amendments
to the Constitution, as well as Presidential Decree No. 1031,
insofar as it directs the Commission on Elections to supervise,
control, hold, and conduct the Referendum-Plebiscite scheduled on
October 16, 1976.Petitioners contend that under the 1935 and
1973 Constitutions there is no grant to the incumbent President to
exercise the constituent power to propose amendments to the new
Constitution. As a consequence, the Referendum-Plebiscite on
October 16 has no constitutional or legal basis. The Soc-Gen
contended that the question is political in nature hence the court
cannot take cognizance of it.
ISSUE: Whether or not Marcos can validly propose amendments
to the Constitution.
HELD: Yes. The amending process both as to proposal and
ratification raises a judicial question. This is especially true in
cases where the power of the Presidency to initiate the amending
process by proposals of amendments, a function normally
exercised by the legislature, is seriously doubted. Under the terms
of the 1973 Constitution, the power to propose amendments to the
Constitution resides in the interim National Assembly during the
period of transition (Sec. 15, Transitory Provisions). After that
period, and the regular National Assembly in its active session, the

power to propose amendments becomes ipso facto the prerogative

of the regular National Assembly (Sec. 1, pars. 1 and 2 of Art. XVI,
1973 Constitution). The normal course has not been followed.
Rather than calling the interim National Assembly to constitute
itself into a constituent assembly, the incumbent President
undertook the proposal of amendments and submitted the
proposed amendments thru Presidential Decree 1033 to the
people in a Referendum-Plebiscite on October 16. Unavoidably,
the regularity of the procedure for amendments, written in lambent
words in the very Constitution sought to be amended, raises a
contestable issue. The implementing Presidential Decree Nos.
991, 1031, and 1033, which commonly purport to have the force
and effect of legislation are assailed as invalid, thus the issue of
the validity of said Decrees is plainly a justiciable one, within the
competence of this Court to pass upon. Section 2 (2) Article X of
the new Constitution provides: All cases involving the
constitutionality of a treaty, executive agreement, or law shall be
heard and decided by the Supreme Court en banc and no treaty,
executive agreement, or law may be declared unconstitutional
without the concurrence of at least ten Members. . . .. The
Supreme Court has the last word in the construction not only of
treaties and statutes, but also of the Constitution itself. The
amending, like all other powers organized in the Constitution, is in
form a delegated and hence a limited power, so that the Supreme
Court is vested with that authority to determine whether that power
has been discharged within its limits.
This petition is however dismissed. The President can propose
amendments to the Constitution and he was able to present those
proposals to the people in sufficient time. The President at that
time also sits as the legislature.

SANIDAD vs. COMELEC

(G.R. No. L-44640, October 12, 1976)
Facts:
On 2 September 1976, President Ferdinand E. Marcos issued
Presidential Decree 991 calling for a national referendum on 16
October 1976 for the Citizens Assemblies ("barangays") toresolve,
among other things, the issues of martial law, the interim assembly,
its replacement, thepowers of such replacement, the period of its
existence, the length of the period for the exercise bythe President
of his present powers.20 days after or on 22 September 1976, the
President issued another related decree,
Presidential Decree 1031, amending the previous Presidential
Decree 991, by declaring the provisions of Presidential Decree 229
providing for the manner of voting and canvass of votes in
"barangays"(Citizens Assemblies) applicable to the national
referendum-plebiscite of 16 October 1976. Quiterelevantly,
Presidential Decree 1031 repealed inter alia, Section 4, of
Presidential Decree 991.On the same date of 22 September 1976,
the President issued Presidential Decree 1033,
stating thequestions to he submitted to the people in the
referendum-plebiscite on 16 October 1976. TheDecree recites in
its "whereas" clauses that the people's continued opposition to the

convening of the interim National Assembly evinces their desire to

have such body abolished and replaced thru aconstitutional
amendment, providing for a new interim legislative body, which will
be submitteddirectly to the people in the referendum-plebiscite of
October 16.The Commission on Elections was vested with the
exclusive supervision and control of the October 1976 National
Referendum-Plebiscite. On 27 September 1976, Pablo C. Sanidad
and Pablito V.Sanidad, father and son, commenced L-44640 for
Prohibition with Preliminary Injunction seeking toenjoin the
Commission on Elections from holding and conducting the
Referendum Plebiscite onOctober 16; to declare without force and
effect Presidential Decree Nos. 991 and 1033, insofar as they
propose amendments to the Constitution, as well as Presidential
Decree 1031, insofar as itdirects the Commission on Elections to
supervise, control, hold, and conduct the Referendum-Plebiscite
scheduled on 16 October 1976. They contend that under the 1935
and 1973 Constitution there is no grant to the incumbent President
to exercise the constituent power to propose amendments to the
new Constitution. As a consequence, the Referendum-Plebiscite
on October 16 has no constitutional or legal basis.On 30
September 1976, another action for Prohibition with Preliminary
Injunction, docketed as L-44684, was instituted by Vicente M.
Guzman, a delegate to the 1971 Constitutional Convention,
asserting that the power to propose amendments to, or revision of
the Constitution during the transition period is expressly conferred
on the interim National Assembly under action 16, ArticleXVII of the
Constitution. Still another petition for Prohibition with Preliminary
Injunction was filed on 5October 1976 by Raul M. Gonzales, his
son Raul Jr., and Alfredo Salapantan, docketed as L-44714, to
restrain the implementation of Presidential Decrees relative to the
forthcoming Referendum-Plebiscite of October 16.
Issue:
Whether the President may call upon a referendum for the
amendment of the Constitution.

Held:
Section 1 of Article XVI of the 1973 Constitution on Amendments
ordains that "(1) Any amendment to, or revision of, this Constitution
may be proposed by the National Assembly upon a vote of threefourths of all its Members, or by a constitutional convention. (2)
The National Assembly may, by a vote of two-thirds of all its
Members, call a constitutional convention or, by a majority vote of
all its Members, submit the question of calling such a convention to
the electorate in an election. "Section 2 thereof provides that "Any
amendment to, or revision of, this Constitution shall be valid when
ratified by a majority of the votes cast in a plebiscite which shall be
held not later than threemonths a after the approval of such
amendment or revision." In the present period of transition,
theinterim National Assembly instituted in the Transitory Provisions
is conferred with that amendingpower. Section 15 of the Transitory
Provisions reads "The interim National Assembly, upon specialcall
by the interim Prime Minister, may, by a majority vote of all its
Members, propose amendmentsto this Constitution. Such
amendments shall take effect when ratified in accordance with
ArticleSixteen hereof." There are, therefore, two periods
contemplated in the constitutional life of thenation, i.e., period of
normalcy and period of transition. In times of normalcy, the
amending processmay be initiated by the proposals of the (1)
regular National Assembly upon a vote of three-fourths of all its
members; or (2) by a Constitutional Convention called by a vote of
two-thirds of all theMembers of the National Assembly. However
the calling of a Constitutional Convention may besubmitted to the
electorate in an election voted upon by a majority vote of all the
members of theNational Assembly. In times of transition,
amendments may be proposed by a majority vote of all
theMembers of the interim National Assembly upon special call by
the interim Prime Minister. The Courtin Aquino v. COMELEC, had
already settled that the incumbent President is vested with
thatprerogative of discretion as to when he shall initially convene

the interim National Assembly. TheConstitutional Convention

intended to leave to the President the determination of the time
when heshall initially convene the interim National Assembly,
consistent with the prevailing conditions of peace and order in the
country. When the Delegates to the Constitutional Convention
voted on theTransitory Provisions, they were aware of the fact that
under the same, the incumbent President wasgiven the discretion
as to when he could convene the interim National Assembly. The
President'sdecision to defer the convening of the interim National
Assembly soon found support from the peoplethemselves. In the
plebiscite of January 10-15, 1973, at which the ratification of the
1973Constitution was submitted, the people voted against the
convening of the interim NationalAssembly. In the referendum of
24 July 1973, the Citizens Assemblies ("bagangays") reiterated
their sovereign will to withhold the convening of the interim
National Assembly. Again, in the referendumof 27 February 1975,
the proposed question of whether the interim National Assembly
shall beinitially convened was eliminated, because some of the
members of Congress and delegates of theConstitutional
Convention, who were deemed automatically members of the
interim National Assembly, were against its inclusion since in that
referendum of January, 1973 the people hadalready resolved
against it. In sensu striciore, when the legislative arm of the state
undertakes theproposals of amendment to a Constitution, that
body is not in the usual function of lawmaking. It isnot legislating
when engaged in the amending process. Rather, it is exercising a
peculiar power bestowed upon it by the fundamental charter itself.
In the Philippines, that power is provided for inArticle XVI of the
1973 Constitution (for the regular National Assembly) or in Section
15 of theTransitory Provisions (for the interim National Assembly).
While ordinarily it is the business of thelegislating body to legislate
for the nation by virtue of constitutional conferment, amending of
theConstitution is not legislative in character. In political science a
distinction is made betweenconstitutional content of an organic
character and that of a legislative character. The

distinction,however, is one of policy, not of law. Such being the

case, approval of the President of any proposedamendment is a
misnomer. The prerogative of the President to approve or
disapprove applies onlyto the ordinary cases of legislation. The
President has nothing to do with proposition or adoption of
amendments to the Constitution.

G.R. No. L-19650

Caltex Philippines, Inc., petitioner-appellee
Vs.
Enrico Palomar, in his capacity as The Postmaster General,
respondent-appellant
FACTS:
In the year 1960, Caltex Philippines conceived and laid the
ground work for a promotional scheme calculated to drum up
patronage for its oil products. The contest was entitled Caltex
Hooded Pump Contest, which calls for participants to estimate the
actual number of liters as hooded gas pump at each Caltex station
will dispense during a specific period.
Foreseeing the extensive use of the mails not only as
amongst the media for publicizing the contest but also for the
transmission of communications, representations were made by
Caltex with the postal authorities for the contest to be cleared in
advance for mailing. This was formalized in a letter sent by Caltex
to the Post master General, dated October 31, 1960, in which
Caltex, thru its counsel, enclosed a copy of the contest rules and
endeavored to justify its position that the contest does not violate
the The Anti-Lottery Provisions of the Postal Law.

Unfortunately, the Palomar, the acting Postmaster General

denied Caltexs request stating that the contest scheme falls within
the purview of the Anti-lottery Provision and ultimately, declined
Clatexs request for clearance.
Caltex sought reconsideration, stressing that there being no
consideration involved in part of the contestant, the contest was
not commendable as a lottery. However, the Postmaster General
maintained his view that the contest involves consideration, or
even it does not involve any consideration it still falls as Gift
Enterprise, which was equally banned by the Postal Law.

ISSUE:
Whether the petition states a sufficient cause of action for
declaratory relief?
Whether or not the scheme proposed by Caltex the appellee is
within the coverage of the prohibitive provisions of the Postal Law?
HELD:
I. By express mandate of Section 1 of Rule 66 of the old Rules of
Court which deals with the applicability to invoke declaratory relief
which states: Declaratory relief is available to 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 rights
thereunder.
In amplification, conformably established jurisprudence on the
matter, laid down certain conditions:
There must be a justiciable controversy.
The controversy must be between persons whose interests are
adverse.
The party seeking declaratory relief must have a legal interest in
the controversy.
The issue involved must be ripe for judicial determination.

With the appellees bent to hold the contest and the appellants
threat to issue a fraud order if carried out, the contenders are
confronted by an ominous shadow of imminent and inevitable
litigation unless their differences are settled and stabilized by a
declaration. And, contrary to the insinuation of the appellant, the
time is long past when it can rightly be said that merely the
appellees 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.

Construction

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.
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.
II. Is the Contest Scheme a Lottery?
Lottery

Extends to all schemes for the distribution of prizes by

chance

e.g. policy playing, gift exhibitions, prize concerts, raffles and fairs
as well as various forms of gambling.
Three Essential Elements:
1. Consideration
2. Prize
3. Chance
No, according to the Supreme Court, the contest scheme is
not a lottery but it appears to be more of a gratuitous distribution
since nowhere in the rules is any requirements that any fee be
paid, any merchandise be bought, any services be rendered, or
any value whatsoever be given for the privilege to participate.
Since, a prospective contestant has to do is 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.
Because of this, the contest fails to exhibit any discernible
consideration which would brand it as a lottery.
Moreover, 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 it does condemn
as criminal scheme in which a valuable consideration of some kind
is paid directly or indirectly for the chance to draw a prize.
Is the scheme, as sales promotion which would benefit the sponsor
in the way of increased patronage be considered as a
consideration and thus violates the Postal Law?
No, the required element of consideration does not consist
of the benefit derived by the sponsors of the contest. The true test
lies on whether or not the participant pays a valuable consideration
for the chance of winning and not whether or not those conducting
the enterprise receiver something of value for the distribution of the
prize.
Is the Contest Scheme a Gift Enterprise?

Even if the term Gift Enterprise is not yet defined explicitly,

there appears to be a consensus among lexicographers and
standard authorities that the term is common applied to a sporting
artifice of under which goods are sold for their market value but by
way of inducement to purchase the product, the purchaser is given
a chance to win a prize.
And thus, the term of gift enterprise cannot be established
in the case at bar since there is not sale of anything to which the
chance offered is attached as an inducement to the purchaser. The
contest is open to all qualified contestant irrespective of whether or
not they buy the appellees products.
The lesson that we derive from this state of the pertinent
jurisprudence is that every case must be resolved upon the
particular phraseology of the applicable statutory provision. 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.
In the end, the Supreme Court ruled out that under the prohibitive
provision of the Postal Law, gift enterprise and similar schemes
therein contemplated are condemnable only if, like lotteries, they
involve the element of consideration. Finding non in the contest, it
was ruled out that the appellee may not be denied the use of the
mails for the purpose thereof.

18 SCRA 247 Statutory Construction Construction; defined

Noscitur A Sociis
In 1960, Caltex (Philippines), Inc. announced its Caltex Hooded
Pump Contest. The mechanics of the contest were as follows:
1. Participants must estimate the actual number of liters a hooded
gas pump at each Caltex station will dispense during a specified
period;
2. Contest is open to all car owners or licensed drivers;
3. Participants need not buy any Caltex products to be eligible. No
fee is required.
4. Participants just need to fill out a form and drop their entries at
the nearest Caltex station.
To publicize their contest, Caltex sought the assistance of the
Philippine Postal Office. However, then acting Postmaster Enrico
Palomar denied the request of Caltex as Palomar deemed that the
contest is a violation of the Postal Law (Chapter 52 of the Revised
Administrative Code [RAC]).

Palomar cited Section 1954 of the RAC:

SECTION 1954. Absolutely non-mailable matter. No matter
belonging to any of the following classes, whether sealed as firstclass 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:

considered a lottery, the same is considered as a gift enterprise

which is still prohibited by the Postal Law to be mailed.
ISSUES:
1. Whether or not Caltexs petition for declaratory relief is proper.
2. Whether or not the Caltex contest is a lottery/gift enterprise.

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.
HELD:
According to Palomar, the contest is a lottery hence,
communications pertaining thereto cannot be mailed by Caltex via
Philippine Post.
Feeling aggrieved, Caltex brought the issue before the regular
courts thru a petition for declaratory relief. Caltex argued that their
contest is not a lottery; that under prevailing jurisprudence, lottery
consists of the following elements:
A. Consideration;
B. Prize;
C. Chance.
Caltex insists that their contest is not a lottery because the first
element, consideration, is missing. Said element is missing
because participants are not required to pay anything theres no
consideration on the part of the participants.
Palomar assailed the petition as he argued that the same is not
proper. He insisted that he was merely applying the law and that
there is no legal issue at all; that there is no need for the courts to
call for a construction on the statute in question. Palomar further
argued that even if the said contest, assuming arguendo, is not

1. Yes. The petition is proper. Construction of a law is in order if

what is in issue is an inquiry into the intended meaning of the
words used in a certain law. As defined in Blacks Law Dictionary:
Construction 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.
2. No.
The contest is not a lottery. The contention of Caltex is well taken,
i.e., the first element is lacking (no consideration).
The contest is also not a gift enterprise. The Supreme Court went
on to discuss that under prevailing jurisprudence and legal
doctrines as well as definitions provided by legal luminaries, there
is no explicit definition as to what a gift enterprise is. However,
under the Postal Law, the term gift enterprise was used in
association with the term lottery. As such, the principle of noscitur
a sociis, a principle in statutory construction, is applicable. Under
this principle, 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, applying
noscitur a sociis, if lottery is prohibited only if it involves a
consideration, so also must the term gift enterprise be so

construed. Therefore, since the contest does not include a

consideration, it is neither a lottery nor a gift enterprise. Caltex
should be allowed to avail of the Philippine postal service.