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LORENZO M. TAÑADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD, INTEGRITY
AND NATIONALISM, INC. (MABINI), Petitioners, v. HON. JUAN C. TUVERA. in his capacity as Executive Assistant to
the President, HON. JOAQUIN VENUS, in his capacity as Deputy Executive Assistant to the President,
MELQUIADES P. DE LA CRUZ, ETC., ET AL., Respondents.
SYLLABUS
1. CIVIL LAW; EFFECT AND APPLICATION OF LAWS; ARTICLE 2, CIVIL CODE; PUBLICATION OF LAWS MADE TO
ENSURE CONSTITUTIONAL RIGHT TO DUE PROCESS AND TO INFORMATION. — The categorical statement by this
Court on the need for publication before any law be made effective seeks to prevent abuses on the part if the
lawmakers and, at the time, ensure to the people their constitutional right to due process and to information on
matter of public concern.chanroblesvirtuallawlibrary:red
RESOLUTION
CRUZ, J.:
Due process was invoked by the petitioners in demanding the disclosure or a number of presidential decrees
which they claimed had not been published as required by law. The government argued that while publication
was necessary as a rule, it was not so when it was "otherwise provided," as when the decrees themselves
declared that they were to become effective immediately upon their approval. In the decision of this case on
April 24, 1985, the Court affirmed the necessity for the publication of some of these decrees, declaring in the
dispositive portion as follows:jgc:chanrobles.com.ph
"WHEREFORE, the Court hereby orders respondents to publish to the Official Gazette all unpublished presidential
issuances which are of general application, and unless so published, they shall have no binding force and
effect."cralaw virtua1aw library
The petitioners are now before us again, this time to move for reconsideration/clarification of that decision. 1
Specifically, they ask the following questions:chanrob1es virtual 1aw library
2. Must a distinction be made between laws of general applicability and laws which are not?
Resolving their own doubts, the petitioners suggest that there should be no distinction between laws of general
applicability and those which are not; that publication means complete publication; and that the publication
must be made forthwith in the Official Gazette. 2
In the Comment 3 required of the then Solicitor General, he claimed first that the motion was a request for an
advisory opinion and should therefore be dismissed, and, on the merits, that the clause "unless it is otherwise
provided" in Article 2 of the Civil Code meant that the publication required therein was not always imperative;
that publication, when necessary, did not have to be made in the Official Gazette; and that in any case the
subject decision was concurred in only by three justices and consequently not binding. This elicited a Reply 4
refuting these arguments. Came next the February Revolution and the Court required the new Solicitor General
to file a Rejoinder in view of the supervening events, under Rule 3, Section 18, of the Rules of Court. Responding,
he submitted that issuances intended only for the interval administration of a government agency or for
particular persons did not have to be published; that publication when necessary must be in full and in the
Official Gazette; and that, however, the decision under reconsideration was not binding because it was not
supported by eight members of this Court. 5
"ART. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official
Gazette, unless it is otherwise provided. This Code shall take effect one year after such publication."cralaw
virtua1aw library
After a careful study of this provision and of the arguments of the parties, both on the original petition and on
the instant motion, we have come to the conclusion, and so hold, that the clause "unless it is otherwise
provided" refers to the date of effectivity and not to the requirement of publication itself, which cannot in any
event be omitted. This clause does not mean that the legislature may make the law effective immediately
upon approval, or on any other date, without its previous publication.chanrobles virtual lawlibrary
Publication is indispensable in every case, but the legislature may in its discretion provide that the usual fifteen-
day period shall be shortened or extended. An example, as pointed out by the present Chief Justice in his
separate concurrence in the original decision, 6 is the Civil Code which did not become effective after fifteen
days from its publication in the Official Gazette but "one year after such publication." The general rule did not
apply because it was "otherwise provided."cralaw virtua1aw library
It is not correct to say that under the disputed clause publication may be dispensed with altogether. The reason
is that such omission would offend due process insofar as it would deny the public knowledge of the laws that
are supposed to govern it. Surely, if the legislature could validly provide that a law shall become effective
immediately upon its approval notwithstanding the lack of publication (or after an unreasonably short period
after publication), it is not unlikely that persons not aware of it would be prejudiced as a result; and they would
be so not because of a failure to comply with it but simply because they did not know of its existence.
Significantly, this is not true only of penal laws as is commonly supposed. One can think of many non-penal
measures, like a law on prescription, which must also be communicated to the persons they may affect before
they can begin to operate.cralawnad
We note at this point the conclusive presumption that every person knows the law, which of course
presupposes that the law has been published if the presumption is to have any legal justification at all. It is no
less important to remember that Section 6 of the Bill of Rights recognizes "the right of the people to information
on matters of public concern," and this certainly applies to, among others, and indeed especially, the
legislative enactments of the government.
The term "laws" should refer to all laws and not only to those of general application, for strictly speaking all laws
relate to the people in general albeit there are some that do not apply to them directly. An example is a law
granting citizenship to a particular individual, like a relative of President Marcos who was decreed instant
naturalization. It surely cannot be said that such a law does not affect the public although it unquestionably
does not apply directly to all the people. The subject of such law is a matter of public interest which any
member of the body politic may question in the political forums or, if he is a proper party, even in the courts of
justice. In fact, a law without any bearing on the public would be invalid as an intrusion of privacy or as class
legislation or as an ultra vires act of the legislature. To be valid, the law must invariably affect the public interest
even if it might be directly applicable only to one individual, or some of the people only, and not to the public
as a whole.
We hold therefore that all statutes, including those of local application and private laws, shall be published as a
condition for their effectivity, which shall begin fifteen days after publication unless a different effectivity date is
fixed by the legislature.chanrobles.com:cralaw:red
Covered by this rule are presidential decrees and executive orders promulgated by the President in the
exercise of legislative powers whenever the same are validly delegated by the legislature or, at present,
directly conferred by the Constitution. Administrative rules and regulations must also be published if their
purpose is to enforce or implement existing law pursuant also to a valid delegation.
Interpretative regulations and those merely internal in nature, that is, regulating only the personnel of the
administrative agency and not the public, need not be published. Neither is publication required of the so-
called letters of instructions issued by administrative superiors concerning the rules or guidelines to be followed
by their subordinates in the performance of their duties.chanroblesvirtuallawlibrary
Accordingly, even the charter of a city must be published notwithstanding that it applies to only a portion of
the national territory and directly affects only the inhabitants of that place. All presidential decrees must be
published, including even, say, those naming a public place after a favored individual or exempting him from
certain prohibitions or requirements. The circulars issued by the Monetary Board must be published if they are
meant not merely to interpret but to "fill in the details" of the Central Bank Act which that body is supposed to
enforce.
However, no publication is required of the instructions issued by, say, the Minister of Social Welfare on the case
studies to be made in petitions for adoption or the rules laid down by the head of a government agency on the
assignments or workload of his personnel or the wearing of office uniforms. Parenthetically, municipal
ordinances are not covered by this rule but by the Local Government Code.
We agree that the publication must be in full or it is no publication at all since its purpose is to inform the public
of the contents of the laws. As correctly pointed out by the petitioners, the mere mention of the number of the
presidential decree, the title of such decree, its whereabouts (e.g., "with Secretary Tuvera"), the supposed date
of effectivity, and in a mere supplement of the Official Gazette cannot satisfy the publication requirement. This
is not even substantial compliance. This was the manner, incidentally, in which the General Appropriations Act
for FY 1975, a presidential decree undeniably of general applicability and interest, was "published" by the
Marcos administration. 7 The evident purpose was to withhold rather than disclose information on this vital law.
Coming now to the original decision, it is true that only four justices were categorically for publication in the
Official Gazette 8 and that six others felt that publication could be made elsewhere as long as the people were
sufficiently informed. 9 One reserved his vote 10 and another merely acknowledged the need for due
publication without indicating where it should be made, 11 It is therefore necessary for the present membership
of this Court to arrive at a clear consensus on this matter and to lay down a binding decision supported by the
necessary vote.
There is much to be said of the view that the publication need not be made in the Official Gazette, considering
its erratic releases and limited readership. Undoubtedly, newspapers of general circulation could better
perform the function of communicating the laws to the people as such periodicals are more easily available,
have a wider readership, and come out regularly. The trouble, though, is that this kind of publication is not the
one required or authorized by existing law. As far as we know, no amendment has been made of Article 2 of
the Civil Code. The Solicitor General has not pointed to such a law, and we have no information that it exists. If
it does, it obviously has not yet been published.
At any rate, this Court is not called upon to rule upon the wisdom of a law or to repeal or modify it if we find it
impractical. That is not our function. That function belongs to the legislature. Our task is merely to interpret and
apply the law as conceived and approved by the political departments of the government in accordance
with the prescribed procedure. Consequently, we have no choice but to pronounce that under Article 2 of the
Civil Code, the publication of laws must be made in the Official Gazette, and not elsewhere, as a requirement
for their effectivity after fifteen days from such publication or after a different period provided by the
legislature.chanrobles law library
We also hold that the publication must be made forthwith, or at least as soon as possible, to give effect to the
law pursuant to the said Article 2. There is that possibility, of course, although not suggested by the parties that
a law could be rendered unenforceable by a mere refusal of the executive, for whatever reason, to cause its
publication as required. This is a matter, however, that we do not need to examine at this time.
Finally, the claim of the former Solicitor General that the instant motion is a request for an advisory opinion is
untenable, to say the least, and deserves no further comment.
The days of the secret laws and the unpublished decrees are over. This is once again an open society, with all
the acts of the government subject to public scrutiny and available always to public cognizance. This has to be
so if our country is to remain democratic, with sovereignty residing in the people and all government authority
emanating from them.
Although they have delegated the power of legislation, they retain the authority to review the work of their
delegates and to ratify or reject it according to their lights, through their freedom of expression and their right of
suffrage. This they cannot do if the acts of the legislature are concealed.
Laws must come out in the open in the clear light of the sun instead of skulking in the shadows with their dark,
deep secrets. Mysterious pronouncements and rumored rules cannot be recognized as binding unless their
existence and contents are confirmed by a valid publication intended to make full disclosure and give proper
notice to the people. The furtive law is like a scabbarded saber that cannot feint, parry or cut unless the naked
blade is drawn.
WHEREFORE, it is hereby declared that all laws as above defined shall immediately upon their approval, or as
soon thereafter as possible, be published in full in the Official Gazette, to become effective only after fifteen
days from their publication, or on another date specified by the legislature, in accordance with Article 2 of the
Civil Code.chanroblesvirtual|awlibrary
SO ORDERED.
Teehankee, C.J., Feria, Yap, Narvasa, Melencio-Herrera, Alampay, Gutierrez, Jr ., and Paras, JJ., concur.
Separate Opinions
While concurring in the Court’s opinion penned by my distinguished colleague, Mr. Justice Isagani A. Cruz, I
would like to add a few observations. Even as a Member of the defunct Batasang Pambansa, I took a strong
stand against the insidious manner by which the previous dispensation had promulgated and made effective
thousands of decrees, executive orders, letters of instructions, etc. Never has the law-making power which
traditionally belongs to the legislature been used and abused to satisfy the whims and caprices of a one-man
legislative mill as it happened in the past regime. Thus, in those days, it was not surprising to witness the sad
spectacle of two presidential decrees bearing the same number, although covering two different subject
matters. In point is the case of two presidential decrees bearing number 1686 issued on March 19, 1980, one
granting Philippine citizenship to Michael M. Keon, the then President’s nephew and the other imposing a tax
on every motor vehicle equipped with air-conditioner. This was further exacerbated by the issuance of PD No.
1686-A also on March 19, 1980 granting Philippine citizenship to basketball players Jeffrey Moore and Dennis
George Still.chanroblesvirtualawlibrary
The categorical statement by this Court on the need for publication before any law may be made effective
seeks to prevent abuses on the part of the lawmakers and, at the same time, ensures to the people their
constitutional right to due process and to information on matters of public concern.
I agree entirely with the opinion of the court so eloquently written by Mr. Justice Isagani A. Cruz. At the same
time, I wish to add a few statements to reflect my understanding of what the Court is saying.chanrobles virtual
lawlibrary
A statute which by its terms provides for its coming into effect immediately upon approval thereof, is properly
interpreted as coming into effect immediately upon publication thereof in the Official Gazette as provided in
Article 2 of the Civil Code. Such statute, in other words, should not be regarded as purporting literally to come
into effect immediately upon its approval or enactment and without need of publication. For so to interpret
such statute would be to collide with the constitutional obstacle posed by the due process clause. The
enforcement of prescriptions which are both unknown to and unknowable by those subjected to the statute,
has been throughout history a common tool of tyrannical governments. Such application and enforcement
constitutes at bottom a negation of the fundamental principle of legality in the relations between a
government and its people.
At the same time, it is clear that the requirement of publication of a statute in the Official Gazette, as
distinguished from any other medium such as a newspaper of general circulation, is embodied in a statutory
norm and is not a constitutional command. The statutory norm is set out in Article 2 of the Civil Code and is
supported and reinforced by Section 1 of Commonwealth Act No. 638 and Section 35 of the Revised
Administrative Code. A specification of the Official Gazette as the prescribed medium of publication may
therefore be changed. Article 2 of the Civil Code could, without creating a constitutional problem, be
amended by a subsequent statute providing, for instance, for publication either in the Official Gazette or in a
newspaper of general circulation in the country. Until such an amendatory statute is in fact enacted, Article 2
of the Civil Code must be obeyed and publication effected in the Official Gazette and not in any other
medium.chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph
Endnotes:
7. Rollo, p. 246.
8. Justices Venicio Escolin (ponente), Claudio Teehankee, Ameurfina Melencio-Herrera, and Lorenzo Relova.
9. Chief Justice Enrique M. Fernando and Justices Felix V. Makasiar, Vicente Abad-Santos, Efren I. Plana, Serafin
P. Cuevas, and Nestor B. Alampay.
AQUINO, J.:ñé+.£ªwph!1
At issue in this case is the enforceability, before publication in the Official Gazette of June 14, 1982, of
Presidential Executive Order No. 626-A dated October 25, 1980, providing for the confiscation and forfeiture by
the government of carabaos transported from one province to another.
Anselmo L. Pesigan and Marcelo L. Pesigan, carabao dealers, transported in an Isuzu ten-wheeler truck in the
evening of April 2, 1982 twenty-six carabaos and a calf from Sipocot, Camarines Sur with Padre Garcia,
Batangas, as the destination.
They were provided with (1) a health certificate from the provincial veterinarian of Camarines Sur, issued under
the Revised Administrative Code and Presidential Decree No. 533, the Anti-Cattle Rustling Law of 1974; (2) a
permit to transport large cattle issued under the authority of the provincial commander; and (3) three
certificates of inspection, one from the Constabulary command attesting that the carabaos were not included
in the list of lost, stolen and questionable animals; one from the LIvestock inspector, Bureau of Animal Industry of
Libmanan, Camarines Sur and one from the mayor of Sipocot.
In spite of the permit to transport and the said four certificates, the carabaos, while passing at Basud,
Camarines Norte, were confiscated by Lieutenant Arnulfo V. Zenarosa, the town's police station commander,
and by Doctor Bella S. Miranda, provincial veterinarian. The confiscation was basis on the aforementioned
Executive Order No. 626-A which provides "that henceforth, no carabao, regardless of age, sex, physical
condition or purpose and no carabeef shall be transported from one province to another. The carabaos or
carabeef transported in violation of this Executive Order as amended shall be subject to confiscation and
forfeiture by the government to be distributed ... to deserving farmers through dispersal as the Director of
Animal Industry may see fit, in the case of carabaos" (78 OG 3144).
Doctor Miranda distributed the carabaos among twenty-five farmers of Basud, and to a farmer from the
Vinzons municipal nursery (Annex 1).
The Pesigans filed against Zenarosa and Doctor Miranda an action for replevin for the recovery of the
carabaos allegedly valued at P70,000 and damages of P92,000. The replevin order could not be executed by
the sheriff. In his order of April 25, 1983 Judge Domingo Medina Angeles, who heard the case at Daet and who
was later transferred to Caloocan City, dismissed the case for lack of cause of action.
The Pesigans appealed to this Court under Rule 45 of the Rules of Court and section 25 of the Interim Rules and
pursuant to Republic Act No. 5440, a 1968 law which superseded Rule 42 of the Rules of Court.
We hold that the said executive order should not be enforced against the Pesigans on April 2, 1982 because, as
already noted, it is a penal regulation published more than two months later in the Official Gazette dated June
14, 1982. It became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section
11 of the Revised Administrative Code.
The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe
penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said
penalties binding on the persons affected thereby. (People vs. Que Po Lay, 94 Phil. 640; Lim Hoa Ting vs. Central
Bank of the Phils., 104 Phil. 573; Balbuna vs. Secretary of Education, 110 Phil. 150.)
The Spanish Supreme Court ruled that "bajo la denominacion generica de leyes, se comprenden tambien los
reglamentos, Reales decretos, Instrucciones, Circulares y Reales ordenes dictadas de conformidad con las
mismas por el Gobierno en uso de su potestad (1 Manresa, Codigo Civil, 7th Ed., p. 146.)
Thus, in the Que Po Lay case, a person, convicted by the trial court of having violated Central Bank Circular No.
20 and sentenced to six months' imprisonment and to pay a fine of P1,000, was acquitted by this Court
because the circular was published in the Official Gazette three months after his conviction. He was not bound
by the circular.
That ruling applies to a violation of Executive Order No. 626-A because its confiscation and forfeiture provision
or sanction makes it a penal statute. Justice and fairness dictate that the public must be informed of that
provision by means of publication in the Gazette before violators of the executive order can be bound thereby.
The cases of Police Commission vs. Bello, L-29960, January 30, 1971, 37 SCRA 230 and Philippine Blooming Mills
vs. Social Security System, 124 Phil. 499, cited by the respondents, do not involve the enforcement of any penal
regulation.
Commonwealth Act No. 638 requires that all Presidential executive orders having general applicability should
be published in the Official Gazette. It provides that "every order or document which shag prescribe a penalty
shall be deemed to have general applicability and legal effect."
Indeed, the practice has always been to publish executive orders in the Gazette. Section 551 of the Revised
Administrative Code provides that even bureau "regulations and orders shall become effective only when
approved by the Department Head and published in the Official Gazette or otherwise publicly promulgated".
(See Commissioner of Civil Service vs. Cruz, 122 Phil. 1015.)
In the instant case, the livestock inspector and the provincial veterinarian of Camarines Norte and the head of
the Public Affairs Office of the Ministry of Agriculture were unaware of Executive Order No. 626-A. The Pesigans
could not have been expected to be cognizant of such an executive order.
It results that they have a cause of action for the recovery of the carabaos. The summary confiscation was not
in order. The recipients of the carabaos should return them to the Pesigans. However, they cannot transport the
carabaos to Batangas because they are now bound by the said executive order. Neither can they recover
damages. Doctor Miranda and Zenarosa acted in good faith in ordering the forfeiture and dispersal of the
carabaos.
WHEREFORE, the trial court's order of dismissal and the confiscation and dispersal of the carabaos are reversed
and set aside. Respondents Miranda and Zenarosa are ordered to restore the carabaos, with the requisite
documents, to the petitioners, who as owners are entitled to possess the same, with the right to dispose of them
in Basud or Sipocot, Camarines Sur. No costs.
SO ORDERED.1äwphï1.ñët
Makasiar, (Chairman), Concepcion, Jr., Guerrero, and Escolin, JJ., concur.
De Castro, J., took no part.
Separate Opinions
Separate Opinions
ABAD SANTOS, J., concurring:
The Pesigans are entitled to the return of their carabaos or the value of each carabao which is not returned for
any reason. The Pesigans are also entitled to a reasonable rental for each carabao from the twenty six farmers
who used them. The farmers should not enrich themselves at the expense of the Pesigans.
PESIGAN vs. ANGELES, G.R. No. L-64279, April 30, 1984
FACTS:
Petitioners Anselmo and Marcelino Pesigan, carabao dealers, transported in a 10-wheeler truck in April 1982, 26
carabaos and a calf, from Camarines Sur to Batangas. Despite the health certificate, permit to transport, and
certificate of inspection issued to them by the provincial veterinarian, provincial commander and constabulary
command, respectively, while petitioners were negotiating the town of Basud, Camarines Norte, the carabaos
were confiscated by private respondents, Police Station Commander Lt. Zanarosa, and provincial veterinarian
Dr. Miranda. The confiscation was based on Executive Order 626-A which prohibited the transport of carabaos
from one province to another. Pursuant to EO 626-A, Dr Miranda distributed the carabaos to 25 farmers of
Basud. Petitioners filed for recovery of the carabaos and damages, against private respondent Judge Angeles
who heard the case in Daet and later transferred to Caloocan City, and dismissed the case for lack of cause of
action.
ISSUE:
Whether or not EO 626-A be enforced before its publication in the Official Gazette.
HELD:
Said executive order should not be enforced against the Pesigans on April 2, 1982 because, as already noted,
it is a penal regulation published more than two months later in the Official Gazette dated June 14, 1982. It
became effective only fifteen days thereafter as provided in article 2 of the Civil Code and section 11 of the
Revised Administrative Code.
The word "laws" in article 2 (article 1 of the old Civil Code) includes circulars and regulations which prescribe
penalties. Publication is necessary to apprise the public of the contents of the regulations and make the said
penalties binding on the persons affected thereby.
PHILIPPINE NATIONAL BANK, Petitioner, v. OFFICE OF THE PRESIDENT, HOUSING AND LAND USE REGULATORY
BOARD (HLURB), ALFONSO MAGLAYA, ANGELINA MAGLAYA P. REYES, JORGE C. BERNARDINO, CORAZON DE
LEON, VICTORIANO ACAYA, FLORENCIA CULTURA, MARIA CAMPOS, ERNESTO SARMIENTO, SANTIAGO TAMONAN,
APOLONIA TADIAQUE, SIMEON DE LEON, NATIVIDAD J. CRUZ, NATIVIDAD B. LORESCO, FELICIDAD GARCIA, ANA
ANITA TAN, LUCAS SERVILLION, JOSE NARAWAL, represented by their duly authorized Attorney-in-Fact,
CORAZON DE LEON AND SPOUSES LEOPOLDO AND CARMEN
SEBASTIAN, Respondents.chanroblesvirtuallawlibrary
SYLLABUS
1. ADMINISTRATIVE LAW; OFFICE OF THE PRESIDENT- APPEAL THEREFROM MAY BE TAKEN TO THE COURT OF
A~PEALS; SUPREME COURT MAY TAKE COGNIZANCE THEREOF IN THE INTEREST OF SPEEDY JUSTICE. — Under
Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of the . . . Office of the
President . . . may be taken to the Court of Appeals . . ." However, in order to hasten the resolution of this case,
which was deemed submitted for decision three years ago, the Court resolved to make an exception to the
said Circular in the interest of speedy justice.
2. CIVIL LAW; GENERALLY, LAWS HAVE NO RRETROACTIVE EFFECT — Pursuant to Article 4 of the Civil Code,"
(l)aws shall have no retroactive effect, unless the contrary is provided."cralaw virtua1aw library
3. ADMINISTRATIVE LAW; PRESIDENTIAL DECREE NO. 957 (THE SUBDIVISION AND CONDOMINIUM BUYERS’
PROTECTIVE DECREE) WITH RETROACTIVE APPLICATION. — It is obvious and indubitable that P.D. 957 was
intended to cover even those real estate mortgages, like the one at issue here, executed prior to its
enactments, and such intent (as succinctly captured in the preamble) must be given effect if the laudable
purpose of protecting innocent purchasers is to be achieved. While P.D. 957 did not expressly provide for
retroactivity in its entirety, yet the same can be plainly inferred from the unmistakable intent of the law to
protect innocent lot buyers from scheming subdivision developers. As between these small lot buyers and the
gigantic financial institutions which the developers deal with, it is obvious that the law as an instrument of social
justice - must favor the weak. Likewise noteworthy are certain provisions of P.D. 957, which themselves
constitute strong arguments in favor of the retroactivity of P.D. 957 as a whole. These are Sections 20, 21 and 23
thereof, which by their very terms have retroactive effect and will impact upon even those contracts and
transactions entered into prior to P.D. 957’s enactment
4. STATUTORY CONSTRUCTION; INTENT OF THE STATUTE IS THE LAW. — The instent of a statute is the law. If a
statute is valid it is to have effect according to the purpose and intent of the lawmaker. The intent is the vital
part, the essence of the law, and the primary rule of construction is to ascertain and give effect to the intent.
The intention of the legislature in enacting a law is the law itself, and must be enforced when ascertained;
although it may not be consistent with the strict letter of the statute. Courts will not follow the letter of a statute
when it leads away from the true intent and purpose of the legislature and to conclusions inconsistent with the
general purpose of the act. Intent is the spirit which gives life to a legislative enactment. In construing statutes
the proper course is to start out and follow the true intent of the legislature and to adopt that sense which
harmonizes best with the context and promotes in the fullest manner the apparent policy and objects of the
legislature. (Sutherland, in his well-known treatise on Statutory Construction [quoted with approval by this Court
in an old case of consequence, Ongsiako v. Gamboa]).
5. CONSTITUTIONAL LAW; CONSTITUTION, NON-IMPAIRMENT CLAUSE: CAN NOT PREVAIL OVER POLICE POWER OF
THE STATE. — Despite the Impairment clause, a contract valid at the time of its execution may be legally
modified or even completely invalidated by a subsequent law. If the law is a proper exercise of the police
power, it will prevail over the contract. Into each contract are read the provisions of existing law and, always, a
reservation of the police power as long as the agreement deals with a matter affecting the public welfare.
Such a contract, it has been held, suffers a congenital infirmity, and this is its susceptibility to change by the
legislature as a postulate of the legal order.
6. ADMINISTRATIVE LAW PRESIDENTIAL DECREE NO. 957 (THE SUBDIVIION AND CONDOMINIUM BUYERS’ DECREE);
REAL ESTATE MORTGAGE MADE BY THE SUBDIVISION OWNER IN FAVOR OF THE BANK DECLARED NULL AND VOID
WHERE RIGHTS OF SUBDIVISION LOT BUYERS CLASH WITH THE MORTGAGEES BANK’S RIGHT TO FORECLOSE. — The
decision of the Court of Appeals in Breta and Hamor v. Lao, et al, penned by then Court of Appeals Associate
Justice Jose A R. Melo, now a respected member of this Court, is persuasive, the factual circumstances therein
being of great similarity to the antecedent facts of the case at bench. By the foregoing citation, this Court thus
adopts by reference the foregoing as part of this Decision. The real estate mortgage in the above cited case,
although constituted in 1975 and outside the beneficial aegis of P.D. 957,was struck down by the Court of
Appeals which found in favor of subdivision lot buyers when the rights of the latter clashed with the mortgagee
bank’s right to foreclose the property. The Court of Appeals in that case upheld the decision of the trial court
declaring the real estate mortgage as null and void.
7. ID.; ID.; ID.; ID. MORTGAGEE BANK OBLIGED TO ACCEPT PAYMENT OF REAMINING UNPAID AMORTIZATIONS OF
SUBDIVISION LOT BUYERS. — A to the second issue of non-privity, petitioner avers that, in view of the provisions of
Article 1311 of the Civil Code, PNB, being a "total stranger to the land purchase agreement," cannot be made
to take the developer’s place. We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner
Bank to accept the payment of the rernaining unpaid amortizations tendered by private respondents. Privity of
contracts as a defense does not apply in this case for the law explicitly grants to the buyer the option to pay
the installment payment for his lot or unit directly to the mortgagee (petitioner), which is required to apply such
payments to reduce the corresponding portion of the mortgage indebtedness secured by the particular lot or
unit being paid for. And, as stated earlier, this is without prejudice to petitioner Bank’s seeking relief against the
subdivision developer.
RESOLUTION
PANGANIBAN, J.:
May a buyer of a property at a foreclosure sale dispossess prior purchasers on installment of individual lots
therein, or compel them to pay again for the lots which they previously bought from the defaulting mortgagor-
subdivision developer, on the theory that P.D. 957, "The Subdivision and Condominium Buyers’ Protective
Decree", is not applicable to the mortgage contract in question, the same having been executed prior to the
enactment of P.D. 957? This is the question confronting the Court in this Petition challenging the Decision dated
March 10, 1992 of the Office of the President of the Philippines in O.P. Case No. 4249, signed by the Executive
Secretary, Franklin M. Drilon, "by authority of the President."cralaw virtua1aw library
Private respondents were buyers on installment of subdivision lots from Marikina Village, Inc. (represented by
spouses Antonio and Susana Astudillo). Notwithstanding the land purchase agreements it executed over said
lots, the subdivision developer mortgaged the lots in favor of the petitioner, Philippine National Bank. Unaware
of this mortgage, private respondents duly complied with their obligations as lot buyers and constructed their
houses on the lots in question.
Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As highest bidder at
the foreclosure sale, the bank became owner of the lots.chanroblesvirtual|awlibrary
Acting on suits brought by private respondents (which were later consolidated), the HLURB Office of Appeals
Adjudication and Legal Affairs (OAALA) in a decision rendered on October 28, 1988 ruled that PNB — without
prejudice to seeking relief against Marikina Village, Inc. — may collect from private respondents only the
"remaining amortization, in accordance with the land purchase agreements they had previously entered into
with "Marikina Village. Inc., and cannot compel private respondents to pay all over again for the lots they had
already bought from said subdivision developer. On May 2, 1989, the Housing and Land Use Regulatory Board
affirmed this decision. On March 10, 1992, the Office of the President, invoking P.D. 957, likewise concurred with
the HLURB. Hence, the present recourse to this Court.
Under Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of the . . . Office of the
President . . . may be taken to the Court of Appeals . . . ." However, in order to hasten the resolution of this case,
which was deemed submitted for decision three years ago, the Court resolved to make an exception to the
said Circular in the interest of speedy justice.
Petitioner bank raised the following issues:chanroblesvirtuallawlibrary
1. The Office of the President erred in applying P.D. 957 because said law was enacted only on July 12, 1976,
while the subject mortgage was executed on December 18, 1975; and
2. Petitioner Bank is not privy to the contracts between private respondents and mortgagor-subdivision
developer, hence, the Office of the President erred in ordering petitioner Bank to accept private respondents’
remaining amortization and issue the corresponding titles after payment thereof.
Normally, pursuant to Article 4 of the Civil Code." (l)aws shall have no retroactive effect, unless the contrary is
provided." However, it is obvious and indubitable that P.D. 957 was intended to cover even those real estate
mortgages, like the one at issue here, executed prior to its enactment, and such intent (as succinctly captured
in the preamble quoted below) must be given effect if the laudable purpose of protecting innocent purchasers
is to be achieved:chanrobles.com : virtual lawlibrary
"WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human settlement
and to provide them with ample opportunities for improving their quality of life;
"WHEREAS, numerous reports reveal that many real estate subdivision owners, developers, operators, and/or
sellers have reneged on their representations and obligations to provide and maintain properly subdivision
roads, drainage, sewerage, water systems, lighting systems, and other similar basic requirements, thus
endangering the health and safety of home and lot buyers;
"WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent manipulations
perpetrated by unscrupulous subdivision and condominium sellers and operators, such as failure to deliver titles
to the buyers or titles free from liens and encumbrance’ and to pay real estate taxes, and fraudulent sales of
the same subdivision lots to different innocent purchasers for value;" 1 (Emphasis supplied)
While P.D. 957 did not expressly provide for retroactivity in its entirety, yet the same can be plainly inferred from
the unmistakable intent of the law to protect innocent lot buyers from scheming subdivision developers. As
between these small lot buyers and the gigantic financial institutions which the developers deal with, it is
obvious that the law — as an instrument of social justice — must favor the weak. Indeed, the petitioner Bank
had at its disposal vast resources with which it could adequately protect its loan activities, and therefore is
presumed to have conducted the usual "due diligence" checking and ascertained (whether thru ocular
inspection or other modes of investigation) the actual status, condition, utilization and occupancy of the
property offered as collateral. It could not have been unaware that the property had been built on by small lot
buyers. On the other hand, private respondents obviously were powerless to discover the attempt of the land
developer to hypothecate the property being sold to them. It was precisely in order to deal with this kind of
situation that P.D. 957 was enacted, its very essence and intendment being to provide a protective mantle
over helpless citizens who may fall prey to the razzmatazz of what P.D. 957 termed "unscrupulous subdivision
and condominium sellers."cralaw virtua1aw library
The intent of the law, as culled from its preamble and from the situation, circumstances and condition it sought
to remedy, must be enforced. Sutherland, in his well-known treatise on Statutory Construction (quoted with
approval by this Court in an old case of consequence, Ongsiako v. Gamboa 2), says:jgc:chanrobles.com.ph
"The intent of a statute is the law. If a statute is valid it is to have effect according to the purpose and intent of
the lawmaker. The intent is the vital part, the essence of the law, and the primary rule of construction is to
ascertain and give effect to the intent. The intention of the legislature in enacting a law is the law itself, and
must be enforced when ascertained; although it may not be consistent with the strict letter of the statute.
Courts will not follow the letter of a statute when it leads away from the true intent and purpose of the
legislature and to conclusions inconsistent with the general purpose of the act. Intent is the spirit which gives life
to a legislative enactment. In construing statutes, the proper course is to start out and follow the true intent of
the legislature and to adopt that sense which harmonizes best with the context and promotes in the fullest
manner the apparent policy and objects of the legislature." 3chanroblesvirtuallawlibrary
Truly, this Court cannot allow the injustice that will be wrought by a strictly prospective application of the law.
Little people who have toiled for years through blood and tears would be deprived of their homes through no
fault of their own. As the Solicitor General, in his comment, argues:jgc:chanrobles.com.ph
"Verily, if P.D. 957 were to exclude from its coverage the aforecited mortgage contract, the vigorous regulation
which P.D. 957 seeks to impose on unconscientious subdivision sellers will be translated into a feeble exercise of
police power just because the iron hand of the State cannot particularly touch mortgage contracts badged
with the fortunate accident of having been constituted prior to the enactment of P.D. 957. Indeed, it would be
illogical in the extreme if P.D. 957 is to be given full force and effect and yet, the fraudulent practices and
manipulations it seeks to curb in the first instance can nevertheless be liberally perpetrated precisely because
P.D. 957 cannot be applied to existing antecedent mortgage contracts. The legislative intent could not have
conceivably permitted a loophole which all along works to the prejudice of subdivision lot buyers (private
respondents)." 4
Likewise noteworthy are certain provisions of P.D. 957, which themselves constitute strong arguments in favor of
the retroactivity of P.D. 957 as a whole. These are Sections 20, 21 and 23 thereof, which by their very terms have
retroactive effect and will impact upon even those contracts and transactions entered into prior to P.D. 957’s
enactment:chanroblesvirtual|awlibrary
"SEC. 20. Time of Completion. — Every owner or developer shall construct and provide the facilities,
improvements, infrastructures and other forms of development, including water supply and lighting facilities,
which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus,
printed matters, letters or in any form of advertisement, within one year from the date of the issuance of the
license for the subdivision or condominium project or such other period of time as may be fixed by the
Authority.
"SEC. 1. Sales Prior to Decree. — In cases of subdivision lots or condominium units sold or disposed of prior to the
effectivity of this Decree, it shall be incumbent upon the owner or developer of the subdivision or condominium
project to complete compliance with his or its obligations as provided in the preceding section within two years
from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance
bond is filed in accordance with Section 6 hereof.
"Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall
constitute a violation punishable under Section 38 and 39 of this Decree.chanroblesvirtuallawlibrary
As for objections about a possible violation of the impairment clause, we find the following statements of
Justice Isagani Cruz enlightening and pertinent to the case a bench:jgc:chanrobles.com.ph
"Despite the impairment clause, a contract valid at the time of its execution may be legally modified or even
completely invalidated by a subsequent law. If the law is a proper exercise of the police power, it will prevail
over the contract.chanrobles.com : virtual lawlibrary
"Into each contract are read the provisions of existing law and, always, a reservation of the police power as
long as the agreement deals with a matter affecting the public welfare. Such a contract, it has been held,
suffers a congenital infirmity, and this is its susceptibility to change by the legislature as a postulate of the legal
order." 5
This Court ruled along similar lines in Juarez v. Court of Appeals 6:jgc:chanrobles.com.ph
"The petitioner complains that the retroactive application of the law would violate the impairment clause. The
argument does not impress. The impairment clause is now no longer inviolate; in fact, there are many who now
believe it is an anachronism in the present-day society. It was quite useful before in protecting the integrity of
private agreements from government meddling, but that was when such agreements did not affect the
community in general. They were indeed purely private agreements then. Any interference with them at that
time was really an unwarranted intrusion that could properly struck down.
"But things are different now. More and more the interests of the public have become involved in what are
supposed to be still private agreements, which have as a result been removed from the protection of the
impairment clause. These agreements have come within the embrace of the police power, that obtrusive
protector of the public interest. It is a ubiquitous policeman indeed. As long as the contract affects the public
welfare one way or another so as to require the interference of the State, then must the police power be
asserted, and prevail, over the impairment clause."cralaw virtua1aw library
The decision of the Court of Appeals in Breta and Hamor v. Lao, Et. Al. 7, penned by then Court of Appeals
Associate Justice Jose A. R. Melo, now a respected member of this Court is persuasive, the factual
circumstances therein being of great similarity to the antecedent facts of the case at
bench:jgc:chanrobles.com.ph
"Protection must be afforded small homeowners who toil and save if only to purchase on installment a tiny
home lot they can call their own. The consuming dream of every Filipino is to be able to buy a lot, no matter
how small, so that he may somehow build a house. It has, however, been seen of late that these honest, hard-
living individuals are taken advantage of, with the delivery of titles delayed, the subdivision facilities, including
the most essential such as water installations not completed, or worse yet, as in the instant case, after almost
completing the payments for the property and after constructing a house, the buyer is suddenly confronted by
the stark reality, contrived or otherwise, in which another person would now appear to be
owner.chanroblesvirtuallawlibrary
x x x
"We cannot over emphasize the fact that the BANK cannot barefacedly argue that simply because the title or
titles offered as security were clean of any encumbrance or lien, that it was thereby relieved of thing any other
step to verify the over-reaching implications should the subdivision be auctioned on foreclosure. The BANK
could not have closed its eyes that it was dealing over a subdivision where there were already houses
constructed. Did it not enter the mind of the responsible officers of the BANK that there may even be
subdivision residents who have almost completed their installment payments?" (Id., pp. 7 & 9)
By the foregoing citation, this Court thus adopts by reference the foregoing as part of this Decision.
The real estate mortgage in the above cited case although constituted in 1975 and outside the beneficial
aegis of P.D. 957, was struck down by the Court of Appeals which found in favor of subdivision lot buyers when
the rights of the latter clashed with the mortgagee bank’s right to foreclose the property. The Court of Appeals
in that case upheld the decision of the trial court declaring the real estate mortgage as null and
void.chanroblesvirtual|awlibrary
As to the second issue of non-privity, petitioner avers that, in view of the provisions of Article 1311 of the Civil
Code, PNB, being a "total stranger to the land purchase agreement," cannot be made to take the developer’s
place.
We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner Bank to accept the payment
of the remaining unpaid amortization tendered by private respondents.
"SEC. 18. Mortgages. — No mortgage on any unit or lot shall be made by the owner or developer without prior
written approval of the Authority. Such approval shall not be granted unless it is shown that the proceeds of the
mortgage loan shall be used for the development of the condominium or subdivision project and effective
measures have been provided to ensure such utilization. The loan value of each lot or unit covered by the
mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan.
The buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who shall apply the
payments to the corresponding mortgage indebtedness secured by the particular lot or unit being paid for,
with a view to enabling said buyer to obtain title over the lot or unit promptly after full payment thereof ."
(Emphasis supplied)chanroblesvirtuallawlibrary
Privity of contracts as a defense does not apply in this case for the law explicitly grants to the buyer the option
to pay the installment payment for his lot or unit directly to the mortgagee (petitioner, which is required to
apply such payments to reduce the corresponding portion of the mortgage indebtedness secured by the
particular lot or unit being paid for. And, as stated earlier, this is without prejudice to petitioner Bank’s seeking
relief against the subdivision developer.
Finally, before closing this Resolution, we enjoin petitioner Bank to focus not only on the strictly legal issues
involved in this case but also to take another look at the larger issues including social justice and the protection
of human rights as enshrined in the Constitution, firstly, because legal issues are raised and decided not in a
vacuum but within the context of existing social, economic and political conditions, law being merely a brick in
the up-building of the social edifice; and secondly, Petitioner, being THE state bank, is for all intents and
purposes an instrument for the implementation of state policies so cherished in our fundamental law. These
consideration are obviously far more weighty than the winning of any particular suit or the acquisition of any
specific property. Thus, as the country strives to move ahead towards economic self-sufficiency and to achieve
dreams of "NIC-blood" and social well-being for the majority of our countrymen, we hold that petitioner Bank,
the premier bank in the country, which has in recent years made record earnings and acquired an enable
international stature, with branches and subsidiaries in key financial centers around the world, should be
equally as happy with the disposition of this case as the private respondents, who were almost deprived and
dispossessed of their very homes purchased through their hard work and with their meager savings.
WHEREFORE, in view of the foregoing considerations, the petition is hereby DENIED, petitioner having failed to
show any REVERSIBLE ERROR or GRAVE ABUSE OF DISCRETION in the assailed decision. No costs.chanrobles.com
: virtual lawlibrary
SO ORDERED.
4. Comment filed by the Solicitor General on behalf of the public respondent, p. 9; Rollo, p. 78.
5. J. Isagani A. Cruz, Constitutional Law, 1991 edition, p. 242, citing Home Building and Loan Assn. v. Blaisdell,
290 U.S. 398.
Footnotes
1 Entitled People of the Philippines versus Rodolfo C. Salas, alias Commander Bilog, Josefina
and Jose Milo Concepcion, petitioners, versus Hon. Juan Ponce Enrile, et al., respondents.
6 Annex "D" of Petition; Rollo, 32-36.
7 Annex "E" of Petition; Id., 37-45.
8 Annex "F" of Petition; Id., 44-50.
9 Annex "G" of Petition; Id., 51-53.
10 Annex "H" of Petition; Rollo, 54-56.
11 Annex "J" of Petition; Id., 64-70.
12 Annex "K" of Petition; Rollo, 71-74.
13 Annex "L" of Petition; Id., 75-79.
14 Carlson vs. Landon, 342 U.S. 524; 537-542 (1952); Wong Wing vs. U.S., 163 U.S. 228 (1986).
15 Bell vs. Wolfish, 441 U.S. 534.
16 U.S. vs. Anthony Salerno and Vincent Cafaro, No. 86-87, May 26, 1987, decided by the U.S. Court of
opinion of then Justice Teehankee in Garcia-Padilla vs. Enrile, et al., 121 SCRA 472 (1953).
33 Herras-Teehankee vs. Director of Prisons, 76 Phil. 756, 770.
34 Citing 6 C.J., sec. 168, pp. 953, 954; Italics supplied for emphasis.
35 People vs. Sandiego, 26 SCRA 522.
36 Article 22, Revised Penal Code.
37 Petition, 8.
38 Comment, 6-8; Rollo, 94-96.
39 Almeda vs. Villaluz, 66 SCRA 38.
40 Mendoza vs. Court of First Instance of Quezon, et al., 51 SCRA 369.
41 67 C.J. 291.
42 92 C.J.S., 1066-1068; Italics supplied for emphasis.
43 16 A. 2d 50, 57, 340 Pa. 33, cited in note 71 C.J.S., 1068.
44 TOLENTINO, Civil Code of the Philippines, vol. 1, 1985 ed., pp. 31-32, citing Waxman vs. United States,
People vs. Galit, 135 SCRA 465; People vs. Sanchez, 132 SCRA 103 and People vs. Quizon, 142 SCRA 362.
47 Abriol vs. Homeres, 84 Phil. 525; People vs. Dichoso, 96 SCRA 957.
Footnotes
1 As amended by R.A. No. 1232 dated June 7, 1955.
2 Rollo, pp. 26-30.
3 School Dist. No. 45 vs. Board of County of Comira, 141 Kan. 108.
4 AGPALO, STATUTORY CONSTRUCTION 289 (1986).
5 Iloilo Palay and Corn Planters Association, Inc. vs, Feliciano, 13 SCRA 377 (1965).
6 CRAWFORD, CONSTRUCTION OF STATUTE 631 (1940 ed.).
7 Posadas vs. National City Bank, 296 U.S. 497, 80 L. Ed. 351 (1935).
8 Maceda vs. Macaraig, 197 SCRA 771 (1991).
9 Supra, note 7.
10 Supra, note 4.
11 Villegas vs. Subido, 41 SCRA 190 (1971).
12 Valera vs. Tuason, 80 Phil. 823 (1948).
13 Jalandoni vs. Endaya, 55 SCRA 261 (1974).
14 People vs. Almuete, 69 SCRA 410, 414 (1976).
15 People vs. Benuya, 61 Phil. 208 (1916).
16 Supra, note 9.
17 84 SCRA 364 (1978).
18 Jaculina vs. National Police Commission, 200 SCRA 489 (1991); Greenhills Mining Co. vs. Office
of the President, 163 SCRA 350 (1988).
19 Philippine Global Communications, Inc. vs. Relova, 145 SCRA 385 (1986).
20 National Power Corporation vs. Hon. Zain B. Angas, G.R. Nos. 60225-26, May 8, 1992; Maceda
vs. Macaraig, 197 SCRA 771 (1991); Maddumba vs. Government Service Insurance System, 182
SCRA 281 (1990); Larga vs. Ranada, Jr., 164 SCRA 18 (1988); De Jesus vs. People, 120 SCRA 760
(1983).
21 U.S. vs. Palacio, 33 Phil. 208 (1916).
22 Smith, Bell & Co. vs. Estate of Maronilla, 41 Phil. 557 (1916).
[G.R. No. 8769. February 5, 1916. ]
SMITH, BELL & CO., Plaintiff-Appellant, v. THE ESTATE OF MARIANO MARONILLA, deceased, VICENTE VELASCO,
administrator, and VENANCIO CAVADA DIAZ, a creditor of said estate, Defendants-Appellees.
Manly & McMahon and Bruce, Lawrence, Ross & Block for Appellant.
Albert E. Somersille and Rafael de la Sierra for the appellee, Cavada Diaz.
SYLLABUS
1. STATUTES; REPEALS BY IMPLICATION NOT FAVORED. — Repeals by implication are not favored and will not be
decreed, unless it is manifest that the legislator so intended.
2. ID; PRESUMPTION OF KNOWLEDGE BY LEGISLATOR OF EXISTING LAWS ON CERTAIN SUBJECT. — All laws are
presumed to be passed with deliberation and with full knowledge of all existing ones on the subject, and it is
but reasonable to conclude that in passing a statute it was not intended to interfere with or abrogate any
former law relating to the same matter, unless the repugnancy between the two is not only irreconcilable, but
also clear and convincing, and following necessarily from the language used, or unless the latter Act fully
embraces the subject matter of the earlier or the reason for the earlier Act is beyond peradventure removed.
3. EXECUTORS AND ADMINISTRATORS; STATUTORY PREFERENCES; DEATH OF OWNER DOES NOT DESTROY LIENS OR
PREFERENCES. — There is nothing in the language of section 735 of the Code of Civil Procedure which should
justify us in holding that it was the intention of the legislator to provide that, upon the death of the owner of an
insolvent estate, the mere fact of his death has the effect of destroying all liens or preferences (except those
mentioned in that section) created by statute or by act of the parties, and already in existence and affecting
all or any part of his property at the time of his death.
4. ID.; ID.; DEATH OF DEBTOR DOES NOT DEPRIVE CREDIT OF EXISTING SECURITY. — The classification and order of
payment of debts of deceased persons set out in section 735 was intended to include merely debts against the
estate not otherwise accrued, and not to include debts otherwise secured, except perhaps in so far as the
security proves to be insufficient to secure payment in full; and it was not the legislative intent to prescribe that
the death of a debtor will deprive his creditor of any existing security he may have had by way of lien or
preference.
5. ID.; ID.; SUBSECTIONS 1 AND 2, ARTICLE 1924, CIVIL CODE, REPEALED. — The enactment of sections 735 and
736 of the new Code of Civil Procedure treating of the order of payment of the debts of a deceased person if
his estate is insolvent was not intended to destroy or affect, and it does not destroy or affect any recorded or
statutory liens or preferences affecting property at the time of the death of the owner; save only that the
statutory preferences, which formerly attached to such property on the death of the owner in the order set out
in subsections 1 and 2 of article 1924 of the Civil Code, are abolished and replaced by the statutory
preferences created in subsections 1, 2, 3, 4, and 5 of section 735 of the Code of Civil Procedure.
6. ID.; ID.; MORTGAGE LIENS. — Mortgage liens and the like and the statutory preferences which have attached
to the specific property of a debtor at the time of his death are in no wise affected by the classification in
section 735 of the Code of Civil Procedure of "assets which can be appropriated for the payment of debts in
the event of the insolvency of the estate of the deceased person," and may be asserted and enforced without
reference to that classification.
7. ID.; ID.; SUBSECTION 3, ARTICLE 1924, CIVIL CODE, IN FORCE. — Statutory preferences securing the payment of
debts evidenced by "public instruments" and "final judgments" affecting the property of the deceased at the
time of his death under the provisions of subsection 3 of article 1924 of the Civil Code continue in full force and
effect notwithstanding the enactment of section 735 of the Code of Civil Procedure; but subordinated, in the
order of classification for payment, to the preferences established in subdivisions 1, 2, 3, 4, and 5 of that section,
in like manner to that in which they were subordinated to the preferences arising at the death of the debtor,
established in subsections 1 and 2 of article 1924 of the Civil Code, before those latter statutory preferences
were abolished and the preferences mentioned in 1, 2, 3, 4, and 5 of the Code of Civil Procedure substituted in
their place.
8. ID.; ID.; PETERSON VS. NEWBERRY, EXAMINED AND DISTINGUISHED. — The comment in the case of Peterson v.
Newberry (6 Phil., 262), which is set out at length in this opinion, examined and distinguished.
DECISION
CARSON, J. :
Appellant is a creditor of the estate of Mariano Maronilla who died in the year 1908, in the sum of P36,475.55;
the appellee. Venancio Cavada Diaz is also a creditor, in the sum of P8,985.48; both claims were allowed in the
court below, but the administrator of the estate was ordered to give appellee’s claim a preference over that of
the appellant in the distribution of the funds of the estate, on the ground that the claim of the appellee is
evidenced by a public document bearing date of August 29, 1904, and thus entitled to a preference in the
distribution of the assets of decedent’s estate while that of the appellant is merely a general claim against the
estate, unsecured by any lien or mortgage, as to which no claim of preference is advanced under the
provisions of the Civil Code or otherwise.
The ruling of the court below was based on the provisions of articles 1921, 1924, and 1925 of the Civil Code.
These articles are as follows:jgc:chanrobles.com.ph
"Credits shall be classified for their graduation and payment according to the order and manner specified in
this chapter."cralaw virtua1aw library
"With regard to the other personal and real property of the debtor, the following credits are
preferred:jgc:chanrobles.com.ph
"1. Credits in favor of the province or municipality for the taxes of the last year, due and unpaid, not included in
No. 1 of article 1923.
"A. For judicial expenses and those of administration of the bankruptcy for the common interest of the creditors,
made with the proper authorization or approval.
"B. For the funeral expenses of the debtor, according to the customs of the place, and also those of his wife
and of his children, under their parental authority should they have no property of their own.
"C. For expenses of the last illness of said persons, incurred during the last year, counted up to the day of their
death.
"D. For daily wages and salaries of employees and domestic servants for the last year.
"E. For advances made to the debtor for himself and his family, constituted under his authority, in provisions,
clothing or shoes, for the same period of time.
"F. For income for support during the proceedings in bankruptcy unless they are based on mere beneficence.
"B. In a final judgment, should they have been the object of litigation.
"These credits shall have preference among themselves, according to the priority of dates of the instruments
and of the judgments.
"Credits of any other kind or for any other consideration not included in the preceding article shall have no
preference."cralaw virtua1aw library
The contention of the appellant is that article 1924 of the Civil Code was repealed by the enactment of
sections 735 and 736 of the new Code of Civil Procedure and that, under the terms of these latter sections,
appellant and appellee, as well as all other creditors of the estate not included in subsections 1, 2, 3, 4, and 5 of
section 735 should be placed upon an equal footing as to preferences, and that the claims of all alike should
be paid pro rata to the extent of the assets of the estate.
Articles 735 and 736 of the Code of Civil Procedure are as follows:jgc:chanrobles.com.ph
"SEC. 735. Order of Payment if Estate Insolvent. — If the assets which can be appropriated for the payment of
debts are not sufficient for that purpose, the executor or administrator shall, after paying the necessary
expenses of administration; pay the debts against the estate in the following order:jgc:chanrobles.com.ph
"4. Taxes and assessments due to the Government, or any branch or subdivision thereof;
"SEC. 736. Dividends to be paid in proportion to claim. — If there are not assets sufficient to pay the debts of
any one of the aforesaid classes, after paying the preceding ones, each creditor within the class for which
there are not sufficient assets for payment in full, shall be paid a dividend in proportion to his claim. No creditor
of any one class shall receive any payment until those of the preceding class are paid."cralaw virtua1aw library
Counsel for appellant contend that "The section just quoted provides that after the debts of the first five classes
are paid, the appellant and the appellee, and others embraced in the sixth class, shall be paid each a
dividend in proportion to his claim. This provision is obviously inconsistent with the preference established in
article 1924 of the Civil Code, and therefore repeals the Civil Code provision in so far as the estates of
deceased persons are concerned."cralaw virtua1aw library
We cannot agree with this contention in so far as it relates to the preferences established in subsection 3 of
article 1924 of the Civil Code.
It is undoubtedly true that in so far as the provisions of that article are in necessary convict with the provisions of
section 735 of the new Code of Civil Procedure, they must be held to have been repealed by implication; and
there can be no doubt that with relation to the distribution of the assets of insolvent estates of deceased
persons, the classification and preferences set out in subsections one and two of article 1924 have been
repealed by the enactment of section 735 of the later Act. From a comparative analysis of these statutes, it is
impossible to escape the conclusion that it was the intention of the lawmaker to provide a new and a
substantially different classification of the credits and the preferences mentioned in these subsections (1 and 2)
of the earlier statute; but we find nothing in the later statute which is necessarily in conflict with the provisions of
subsection 3 of the earlier statute, except that under the later statute these preferences must be held to be
subordinated in the distribution of the assets of the estates of deceased persons, to classes 1, 2, 3, 4, and 5 of
section 735 of the Code of Civil Procedure, instead of classes 1 and 2 as set forth in article 1924 of the Civil
Code.
"Repeal by implication are not favored and will not be indulged, unless it is manifest that the legislature so
intended. As laws are presumed to be passed with deliberation and with full knowledge of all existing laws on
the subject, it is but reasonable to conclude that in passing a statute it was not intended to interfere with or
abrogate any former law relating to the same matter, unless the later act is either repugnant to the earlier one,
or fully embraces the subject-matter thereof, or unless the reason for the earlier act is beyond peradventure
removed.
x x x
"Hence every effort must be used to make all acts stand, and the later act will not operate as a repeal of the
earlier one, if by any reasonable construction, they can be reconciled." (26 Am. and Eng. Encyc. of Law, pp.
721, 726, and cases there cited.)
There is nothing in the language of section 735 of the Code of Civil Procedure which would justify us in holding
that it was the intention of the legislator to provide that upon the death of the owner of an insolvent estate, the
mere fact of his death has the effect of destroying all liens or preferences (except those mentioned in that
section), created by statute or by act of the parties, and already in existence and affecting all or any part of his
property at the time of his death.
It is urged that the language of the statute, prescribing that creditors within each of the classes mentioned in
section 735 shall be paid a dividend in proportion to his claim must be held to have this effect, since, as it is
said, class 6 includes all debts due to creditors other than those mentioned in the first five classes, whether such
debts are secured or not.
We are of opinion, however, that the classification and order of payment set out in section 735 was intended to
include merely debts against the estate not otherwise secured and not to include debts otherwise secured,
except perhaps in so far as the security proves to be insufficient to secure payment in full; and that it was not
the legislative intent to prescribe that the death of a debtor will deprive his creditor of any existing security he
may have had by way of lien or preference.
But it is said that the language of the statute contains no exception in favor of debts secured by lien or
preference, and that the court should not read such an exception into the statute.
To this we answer: First, that the language of the statute must be construed with relation to the subject-matter
with which it deals, and it is evident that it was intended only to deal with assets of the estate which (in the
opening language of section 735) "can be appropriated for the payment of debts;" and assets affected by
liens or duly asserted preferences cannot properly be said to be "available" for the payment of debts, at least
so far as a particular creditor has a right to have them applied to the payment of a particular claim against the
estate; second, that it is very clear that the sixth class of debts does not include all the debts due by the
deceased, for provision is expressly made elsewhere in the Code for the enforcement of mortgage debts,
wholly independent of the classification of the debts mentioned in section 735; and third, that, by extending
the meaning of the word debts, as used in sections 735 and 736 of the Code, so as to include all debts secured
by liens of asserted preferences, and thus destroy all such liens or preferences, we would impute to the
legislator the wholly unreasonable, unjust, and oppressive intent to deprive the creditors of the deceased of
acquired rights in and to their debtor’s property by virtue of the mere fact of the death of the debtor.
No valid or sufficient reason has been suggested which would justify or necessitate the enactment of a
statutory rule, depriving a creditor by the mere death of his debtor of an acquired statutory preference
securing a duly recorded judgment; or a mechanic’s claim for service rendered; or the claim of a vendor of
specific property for the purchase price; or a credit for transportation; or a credit for agricultural advances; for
rents; or the like. On the contrary, to expose the security upon which such credits are made to the risk of the
debtor’s death would tend very substantially to destroy the very purpose for which the law authorizes or
prescribes the creation of such preferences.
We conclude therefore that the enactment of sections 735, and 736 of the new Code of Civil Procedure was
not intended to destroy or affect, and that it does not destroy or affect any recorded or statutory liens or
preferences affecting property at the time of the death of the owner, save only that the statutory preferences,
which formerly attached to such property on the death of the owner in the order set out in subsections 1 and"
of article 1924 of the Civil Code, are abolished and replaced by the statutory preferences created in
subsections 1, 2, 3, 4, and 5 of section 735 of the Code of Civil Procedure.
It follows that mortgage liens and the like, and the statutory preferences which have attached to specific
property of a debtor at the time of his death, are in no wise affected by the classification in section 735 of the
Code of Civil Procedure of "assets which can be appropriated for the payment of debts" in the event of the
insolvency of the estate of a deceased person, and may be asserted and enforced without reference to that
classification; and that statutory preferences securing the payment of debts evidenced by "public instruments"
and "final judgments" affecting the property of the deceased at the time of his death under the provisions of
subsection 3 of article 1924 of the Civil Code, continue in full force and effect; but subordinated, in the order of
classification for payment, to the preferences established in subdivisions 1, 2, 3, 4, and 5 of section 735 of the
Code of Civil Procedure, in like manner to that in which they were subordinated to the preferences arising at
the death of the debtor established in subsections 1 and 2 of article 1924 of the Civil Code, before those later
statutory preferences were abolished and the preferences mentioned in 1, 2, 3, 4, and 5 of the Code of Civil
Procedure substituted in their place.
Articles 735 and 736 of the Code of Civil Procedure were borrowed from American statutory law (of sections
2503 and 2504 of the Vermont Statutes 1894), and the conclusions at which we have arrived, as to their force
and effect with relation to liens and statutory preferences affecting property at the time of the death of the
owner, are supported by both textbook and judicial authority in the United States.
In the case of Milward v. Shields [(Ky., 1897) 39 L. R. A., 506], in which it was held that a mortgage lien was
entitled to priority over funeral expenses, the court said:jgc:chanrobles.com.ph
"The statute has no reference to, nor any effect upon, bona fide liens secured to creditors of the decedent
under the general law, such as liens by mortgage, or liens acquired — like attachment liens — by operation of
law but regulates priorities in reference only to unsecured liabilities, gives certain liabilities and expenses priority,
and then puts all other debts and liabilities on equal footing . . . ."cralaw virtua1aw library
In Ryker, administrator, vs Vawter (117 Indiana, 425), it was held that a mortgage lien has preference over a
claim for costs of administration, funeral expenses, and expenses of last sickness.
In Pennsylvania, where judgment liens are not expressly subordinated to the statutory liens for funeral expenses
and the like, as is the case in this jurisdiction, the court said in Wade’s Appeal (29 Pa. St.,
328):jgc:chanrobles.com.ph
"It has been the uniform policy of our law to encourage the public ascertainment of liens, and to give him the
preference who first spreads his claim on the record, without regard to the date or the quality of the debt.
Accordingly those preferences created by our intestate laws in favor of funeral expenses, medical attendance,
&c., have never been permitted to postpone record liens . . . . It has been correctly said, and the observation
illustrates the policy of our lien laws, that a man dying the owner of ample real estate might have to be buried
at public expense as a pauper, if he had no personal property, and his realty was encumbered by liens to its full
value."cralaw virtua1aw library
For a general discussion of the doctrine see also 18 Cyc., 557, 558, 559, and cases there cited; Black on
Judgments, pp. 399, 401, 419, 443; Black on Insolvency, chaps. 20 and 30; The American Law of Administration,
Woerner, pp. 369, 371, 404, and 408.
Counsel for the appellant; in support of contentions contrary to these rulings, cites us to the following remark
made in the course of our opinion in the case of Peterson v. Newberry. (6 Phil., 260.)
"It has been said that the provisions of this article were wholly repealed by the enactment of the Code of Civil
Procedure, and it would appear that ’so far as this article is applicable to cases of bankruptcy and estates of
deceased persons it has been rendered obsolete as to the former by section 524, which repeals bankruptcy
laws; and repealed as to the latter by section 735, which gets forth the order of payment in the settlement of
such estates,’ but we are of opinion that its provisions- are not limited to such cases and that it remains in full
force and effect when by intervention or otherwise a judgment creditor is a proper party to distribution
proceedings of the funds or estate of his judgment debtor and duly asserts his right as a preferred
creditor."cralaw virtua1aw library
But it will be observed, first, that the language used clearly discloses that the court did not intend to make an
express holding oœ the propositions set forth in this quotation. The use of the introductory phrase — "and it
would appear that" — clearly indicated that the court did not desire nor intend to rule definitely upon the
propositions set forth in the quotation; second, that in the broad sense in which the quotation was used, article
1924 of the Civil Code was, in fact, repealed by section 735 of the Code of Civil Procedure with relation to the
distribution of the assets of estates of deceased persons. As shown above, all the provisions of subsections 1
and 2 of article 1924 are abrogated in that connection, and in their stead a new classification of debts due by
such estates is prescribed by the later statute; and, further, the debts mentioned in subsection 3 of article 1924
are subordinated under the new statute, not to the two classes of indebtedness set forth in subsections 1 and 2
of article 1924 of the Civil Code, but to the first five classes of indebtedness contained in the classification set
forth in section 735 of the new Code of Civil Procedure; and, third, that to far as the broad general proposition
set forth in the citation from the former opinion may properly be said to be subject to exceptions not there
mentioned, it must be deemed to be modified by our ruling in this decision. An examination of the former
opinion clearly disclosed that the remarks in the course of which the quotation was introduced were mere
obiter dicta, not absolutely necessary to the adjudication of the issues raised by the former appeal, and, as
such, not binding upon us in the present case, wherein we have been compelled to examine the precise
nature and effect of the enactment of sections 735 and 736 of the Code of Civil Procedure with relation to the
provisions of subsection 3 of article 1924 of the Civil Code. The ruling in the former case was not that the later
statute had repealed the former statute, but that, although it appeared to be true that with relation to the
distribution of the assets of the estates of deceased persons the later statute had worked a repeal of the
provisions of the earlier statute, nevertheless such repeal had no effect upon the disposition of the case then
under consideration, in which the debtor was still living. As we have shown in this opinion, while it is true as a
general proposition that the enactment of the later statute worked a repeal of the former statute, nevertheless,
when we come to consider the precise scope and effect of the repeal, the general statement must be
qualified in the manner and form hereinbefore indicated.
What has been said as to the scope and effect of the provisions of sections 735 and 736 of the Code of Civil
Procedure makes it clear that the judgment entered in the court below should be affirmed with the costs of this
instance against the Appellant. It is so ordered.
This case, together with that of Kuenzle & Streiff v. Villanueva (p. 611, post), shows to what extent the court has
gone in extending the operation of the preference. Twice, in my humble judgment; the Legislature has
attempted to destroy the preference or limit its application; and as often the Supreme Court, if I read its
decisions correctly, has not only maintained it in its original position but has enlarged its scope and influence.
While, as I interpret the statutes, the Legislature has been trying to destroy or limit the application of the law of
preferred credits, the court has, in my opinion, not only refused to permit its destruction or limitation but has, by
its decisions, so extended its operation and effect as to have changed the essential nature of the preference.
Although the Legislature has made several attempts to destroy or to limit, nevertheless, the fact remains that,
under the decisions of the court, the so-called preference occupies a larger field than ever before.
As we saw in the dissenting opinion in the case of Kuenzle & Streiff v. Villanueva, above cited, the law of
preference, so often spoken of by the court in its various opinions, is nothing more or less than a law regulating
the order in which credits or claims against a given insolvent debtor shall be paid- We also saw, in that case,
that, generally speaking, there are two kinds of preferred credits: (1) Those which refer to and are a charge
upon specified property, real or personal, clearly described and identified in the instrument recognizing or
creating, the credit, and expressly charged therein with an incumbrance or lien to secure the payment of the
credit; and (2) those which do not affect property of any kind; i. e., those in which the instrument recognizing or
creating the obligation does not describe or even refer to property of any kind; which do not expressly or
impliedly charge or incumber property; which by their express terms create or recognize a personal obligation
only.
In the first class the property is, in legal effect, incumbered — has a lien upon it which follows it wherever it may
go. The creditor has an interest in the property itself. When the instrument creating this class of credits is duly
registered or recorded as required by law, both as to time and place, the debtor cannot transfer the property
free from the charge. All persons dealing with it, by purchase or otherwise, do so subject to the rights of the
person holding the incumbrance.
There is nothing of this in the second class. There is no charge on property. No property of the debtor is affected
in any way. The creditor has absolutely no interest in the debtor’s property. None of his property is even
mentioned in the obligation. Notwithstanding the creation of a credit belonging to this class, the debtor may
dispose of or incumber any of his property or all of it as fully and as freely as if no such obligation existed. He is
entirely free in this regard; and all persons dealing with his property do so in absolute security.
It is obvious from the foregoing that, while the credits falling in the second class are really preferred credits, that
is, preferences in the strict sense of the term, those within the first class are not only preferences but are much
more than preferences. They are charges, liens, incumbrances on specific property. They are, in the main, the
charged liens or incumbrances which American and English law everywhere recognizes and which all
American and English lawyers recognize at a glance. (See dissenting opinion in the Kuenzle & Streiff case.) They
have a dual character. They are not only an incumbrance on the property, but the debt which the
incumbrance secures is, from the standpoint of the creditor, a preferred credit. That fact, however, that the
credit is a preferred one adds nothing, in reality, to the value of the incumbrance as such. The property itself is
always subject to the payment of the obligation; and it can be seized and sold for that purpose by the creditor.
Indeed, under the Philippine law, that is the only source from which it can be paid in the first instance. But this is
so by virtue of the lien or charge and not by virtue of the preference strictly so called. All that the law of
preferred credits, as found in the Civil Code, does is, in case of the insolvency of the debtor (we have seen in
Kuenzle &; Streiff v. Villanueva that the law of preferred credits as set out in the Civil Code was a part of the
general bankruptcy law and operated exclusively in bankruptcy cases), to furnish a method of paying the
obligation without requiring the creditor to foreclose his lien. By virtue of express provisions (Civil Code, articles
1926, 1927, 1928, 1929) the fund obtained from the sale in bankruptcy proceedings of the incumbered
property, which was gold separately and by virtue of the lien although without a real foreclosure, was set aside
by the assignee in bankruptcy and held for the satisfaction of the obligation to secure the payment of which
the property was incumbered; and the obligation must be paid out of that fund. That method of paying the
incumbrance added nothing to the lien which already existed. It gave it no new elements and conferred no
new privileges on the holder. That this is so is clear not only from what has already been said but also from the
fact that it is provided (article 1928, last par., Civil Code) that, where the property sold was insufficient to
discharge the obligation in full, the deficit "shall be paid . . . in the order and place pertaining thereto,
according to their respective characters;" and article 1929 says that those credits "which have a preference for
the amount not collected . . . shall be paid according to the following rules: (1) In the order established in
article 1924. (2) Those preferred by dates, according to their order, and those which have a common date, pro
rata. . . ." That is to say, that if the property charged is insufficient to satisfy the incumbrance, the residue shall
not constitute a credit payable out of other property of the debtor ahead of every other creditor, but shall be
paid in accordance with the provisions of article 1924 which deals exclusively with credits which have no
relation to and in no way affect and of the property of the debtor. The deficit is regarded as a credit and not
as a lien, and takes its place in the class of credits to which it belongs by virtue of its nature as a credit. If it
appeared in a public document it fell within subdivision A of paragraph 3 of article 1924; if it had been reduced
to a judgment it fell in subdivision B of paragraph 3 of that article, and so on.
It is, therefore, clear that the essential element of the credits of the first class is the lien or incumbrance on
specific property; and that the preference given to it as such is, substantially speaking, valueless; while, if we
may be allowed the expression, the essential characteristic of the second class is the entire absence of a lien,
charge or incumbrance on property — the fact that it does not affect property at all. I bring out the
fundamental difference between the two classes of preferred credits, in order to lay the foundation of the
criticism which I shall make of the decision in this case. When these distinctions are clear the error of the court in
giving a credit which does not affect property the same value and legal effect as one that constitutes a
charge on specific property, and the grave results necessarily following such a fundamental error, are evident
This distinction brings out with a clearness especially striking the impossibility, legally speaking, of giving, as the
court in this and the Kuenzle & Streiff case has given, to the credits of the second class that attribute which is so
essentially and distinctively an attribute of the first, namely, the quality of charging or incumbering property. For,
certain it is that, if the deficit resulting from the application of the property to pay the incumbrance in the first
class takes the same position with respect to the debtor’s other property as credits of the second class, as it
does under articles 1928 and 1929, the credits of the second class cannot be equal to credits of the first class as
originally constituted. They are equal to the deficit only; and the deficit has lost the essential and distinctive
element of the original credit, namely, the lien, the interest in the specific property charged. Nevertheless, the
court, in this and the Kuenzle & Streiff case, gives the credits of the second class precisely the same attributes
and qualities as those of the first class — that of "affecting" or charging specific property to the extent of
supplanting other liens on the same property.
We have seen, in the dissenting opinion in the Kuenzle & Streiff case, how the decision resulted in a
fundamental modification, if not a partial destruction, of both the attachment and the preferred credit as they
had theretofore been known. The decision in the present case goes still further. It not only reiterates the
principles enunciated in the former but declares that credits of the second class are not alone charges on
specific property of the debtor, although the instrument creating or recognizing the debt refers to and charges
the payment of the debt on no property whatever, but declares that all the property of the debtor is, in effect,
pledged as security for the payment of the credit. Not only this: it again refuses to permit An Act of the
Legislature (section 735, Code of Civil Procedure) to operate in the very field which, in my humble opinion, it
was intended to occupy and thereby repeals it pro tanto. Ordinarily it is useless to make an argument to
demonstrate the difference between a credit which, by its very definition, is a charge on specific property, and
one which by its very definition is not a charge on any property, specific or otherwise. But the court having
again declared them to be in their main features the same, I have found it necessary in his opinion to adduce
additional reasons against confounding the two credits.
The facts of this case are these: Mariano Maronilla died owing a number of debts. His property was insufficient
to pay them. Both Smith, Bell & Co., appellant, and Venancio Cavada Diaz were creditors. On the settlement
of the estate, in view of the fact that decedent’s property was not sufficient to pay both Smith, Bell & Co. and
Diaz in full, there was engendered a controversy between them as to which was entitled to be paid first. The
probate court found that Cavada Diaz should be first paid; and the Supreme Court affirms that order. Both
decisions are based exclusively and solely upon the provisions of the Civil Code dealing with preferred credits
and not on section 735 of the Code of Civil Procedure, it having been held not applicable.
My contention is that the Civil Code has nothing to do with the determination of the question presented as the
Code of Civil Procedure is applicable and governs. Chapters 29 to 41 of the Code of Civil Procedure have to
do with the estates of deceased persons and contain not only the procedural but the substantive law covering
every phase of the administration of such estates from the probate of the will or the application for the
appointment of an administrator to the final judicial settlement. Among the many chapters is found that
dealing with the "Payment of Debts," Chapter 38. This chapter contains 15 sections all touching the payment of
the debts of the decedent. Section 734 requires that, if the property is sufficient, the debts must be paid in full.
Sections 735 provides for those cages where the estate is insolvent and is as follows:jgc:chanrobles.com.ph
"If the assets which can be appropriated for the payment of debts are not sufficient for that purpose, the
executor or administrator shall, after paying the necessary expenses of administration, pay the debts against
the estate in the following order:jgc:chanrobles.com.ph
"4. Taxes and assessments due to the Government, or any branch or subdivision thereof;
"If there are not assets sufficient to pay the debts of any one of the aforesaid classes, after paying the
preceding ones, each creditor within the class for which there are not sufficient assets for payment in full, shall
be paid a dividend in proportion to his claim. No creditor of any one class shall receive any payment until those
of the preceding class are paid."cralaw virtua1aw library
The court has refused to apply these sections to the case at bar holding that the provisions of the Civil Code
relating to preferred credits govern. I contend that this is error; that it is a repeal of the sections quoted; and is
an extension of the provisions of the Civil Code far beyond their plain meaning.
What is the reason given by the-court for refusing to apply sections 735 and 736 of the Code of Civil Procedure?
It is simply this: That the credit of Diaz is a lien, a charge, an incumbrance, on all the property of the common
debtor, while that of Smith, Bell & Co. is not, and that the sections mentioned do not refer to or include credits
secured by incumbrance or charge. Why does, the court hold that Diaz’s credit is one secured by an
incumbrance or charge on property? Simply and solely because his credit appears in public document. That
this is the position is clear. It is shown in every line of the opinion and the nature of the question involved in the
suit permits no other conclusion. The court says in the opinion:jgc:chanrobles.com.ph
"We are of opinion, however, that the classification and order of payment set out in section 735 was intended
to include merely debts against the estate not otherwise secured and not to include debts otherwise secured,
except perhaps in so far as the security proves to be insufficient to secure payment in full; and that it was not
the legislative intent to prescribe that the death of a debtor will deprive his creditor of any existing security he
may have had by way of lien or preference.
"But it is said that the language of the statute contains no exception in favor of debts secured by lien or
preference, and that the court should not read such an exception into the statute.
"To this we answer: 1st. That the language of the statute must be construed with relation to the subject matter
with which it deals, and it is evident that it was intended only to deal with assets of the estate which (in the
opening language of section 735) ’can be appropriated for the payment of debts;’ and assets affected by
liens or duly asserted preferences cannot properly be said to be ’available’ for the payment of debts, at least
so far as a particular creditor has a right to have them applied to the payment of a particular claim against the
estate; and, that it is very clear that the sixth class of debts does not include all the debts due by the deceased,
for provision is expressly made elsewhere in the code for the enforcement of mortgage debts, wholly
independent of the classification of the debts mentioned in section 735; and, 3d, that, by extending the
meaning of the word debts, as used in sections 735 and 736 of the code, so as to include all debts secured by
liens or asserted preferences, and thus destroy all such liens or preferences, we would impute to the legislator
the wholly unreasonable, unjust and oppressive intent to deprive the creditors of the deceased of acquired
rights in and to their debtor’s property by virtue of the mere fact of the death of the debtor.
"No valid or sufficient reason has been suggested which would justify or necessitate the enactment of a
statutory rule, depriving a creditor by the mere death of his debtor of an acquired statutory preference
securing a duly recorded judgment; or a mechanic’s claim for services rendered or the claim of a vendor of
specific property for the purchase price; or a credit for transportation; or a credit for agricultural advances; or
for rents; or the like. On the contrary, to expose the security upon which such credits are made to the risk of the
debtor’s death would tend very substantially to destroy the very purpose for which the law authorizes or
prescribes the creation of such preferences.
"We conclude therefore that the enactment of sections 735 and 736 of the new Code of Civil Procedure was
not intended to destroy or affect, and that it does not destroy or affect any recorded or statutory liens or
preferences. affecting property at the time of the death of the owner, save only that the statutory preferences,
which formerly attached to such property on the death of the owner in the order set out in subsections 1 and 2
of article 1924 of the Civil Code, are abolished and replaced by the statutory preferences created in
subsections 1, 2, 3, 4, and 5 of section 735 of the Code of Civil Procedure.
"It follows that mortgage liens and the like, and the statutory preferences which have attached to specific
property of a debtor at the time of his death, are in no wise affected by the classification in section 735 of the
Code of Civil Procedure of ’assets which can be appropriated for the payment of debts’ in the event of the
insolvency of the estate of a deceased person, and may be asserted and enforced without reference to that
classification; and that statutory preferences securing the payment of debts evidenced by ’public instruments’
and ’final judgments’ affecting the property of the deceased at the time of his death under the provisions of
subsection 3 of article 1924 of the Civil Code, continue in full force and effect; but subordinated, in the order of
classification for payment, to the preferences established in subdivisions 1, 2, 3, 4, and 6 of section 735 of the
Code of Civil Procedure, in like manner to that in which they were subordinated to the preferences arising at
the death of the debtor established in subsections 1 and 2 of article 1924 of the Civil Code, before those latter
statutory preferences were abolished and the preferences mentioned in 1, 2, 3, 4, and 5 of the Code of Civil
Procedure substituted in their place."cralaw virtua1aw library
This quotation tells the whole story. It is an argument directed against the application of the Code of Civil
Procedure to the case at bar based exclusively on the theory that Diaz’s credit is a secured credit, secured by
an incumbrance or lien on all of the decedent’s property, and that sections 735 and 736 of the Code of Civil
Procedure do not refer to debts secured by incumbrance or charge. This being so it is clear that, if the "public
document" in which the credit of Cavada Diaz appears is not a lien or incumbrance on the property of the
decedent, the whole argument of the court is baseless and falls. Let us see what this public document is which
the court declares to be an incumbrance not on any specific property but on all, on the general, property of
the decedent. It appears from the record that, in the year 1904, the common debtor, Mariano Maronilla, gave
a mortgage to the defendant Diaz on a specific parcel of land to secure the payment of a debt of P6,200. The
debtor died in 1908 still owing the debt. An administrator was duly appointed. In 1910, the mortgage was
foreclosed, and the mortgaged land sold. There remained a deficiency of P7,889.50. This sum, with interest
added, is the claim presented by Diaz in this case, and this is the debt which this court holds takes precedence
over the debt owing to Smith, Bell & Co. because it is evidenced by a public document.
The claim of preference by Diaz is not based on a judgment for the deficiency. So far as the record shows,
there was none. But if there were it would not alter the situation as this court has held on several occasions that
a judgment is not a lien on property but, like debts recognized in public documents, falls within article 1924 of
the Civil Code. (See cases cited in the Kuenzle & Streiff case.) Nor is it based on the mortgage as a lien or
incumbrance. On the contrary, it is founded exclusively in the fact that the mortgage instrument executed in
1904 recognized the debt; that the mortgage instrument was a public document; and that, therefore, the debt
in question is one evidenced by a public document and falls within article 1924, paragraph 3, subdivision A, of
the Civil Code, which gives it preference over a debt, like that of Smith, Bell & Co., which has no element which
entitled it to preference, it falling within article 1925.
Starting, then, with the fact that the claim of Cavada Diaz against the decedent is simply the amount of the
deficiency arising on the foreclosure of a mortgage, let us see what position the court has placed itself in by
holding that such a claim is a lien or charge on the decedent’s property, and, for that reason alone, does not
fall within the provisions of sections 735 and 736 of the Code of Civil Procedure, but is governed by article 1924
of the Civil Code, and must, therefore, be paid ahead of the claim of Smith, Bell & Co.
To begin with, we have in this case the unique holding that a deficiency arising from a mortgage foreclosure is
almost not quite as good security as the mortgage itself. As I have already shown the court gives as the only
season for not applying sections 735 and 736 to the case at bar and thereby treating both claims alike that
they do not apply to "statutory liens or preferences affecting property at the time of the death of the owner"
and "that statutory preferences securing the payment of debts evidenced by ’public instruments’ . . . affecting
the property of the deceased at the time of his death, under the provisions of subsection 3 of article 1924 of the
Civil Code, continue in full force and effect." This being so it necessarily follows that the deficiency, that is, the
claim of the defendant Diaz in this case, is a lien, a charge, in short, an incumbrance on the property of the
deceased; for if it were not sections 735 and 736 of the Code of Civil Procedure would be applicable and the
two claims would be on precisely the same footing, the only reason given by the court for holding them
inapplicable being that they do not include debts secured by a lien or incumbrance. Accepting what the
court says, it is an unavoidable conclusion that the deficiency resulting from, a mortgage foreclosure is a
charge on the property of the debtor — an incumbrance which secures the payment of the deficiency ahead
of the other debts of the decedent.
And starting as this doctrine as stated is, the strangest part is still before us. Not only does the court hold that the
deficiency is an incumbrance, but it also holds that it is an incumbrance on all the property of the deceased. It
is not, like the mortgage itself, a charge on a specified piece of property, but it is a charge on all the property
of the decedent, of every kind, nature, and description. It is not, like the mortgage, a charge on real property
exclusively, but is one which covers personal property as well — everything that the decedent owned at the
time of his death is covered by this strange thing which the decision of the court has brought into existence;
and so thoroughly does it cover everything and with such effect, that every other claim must give way to it.
What is a deficiency that it produces such astonishing results? It is not the mortgage given to secure the debt of
which the deficiency is a part. The mortgage was extinguished and disappeared when it was foreclosed and
the land on which it was a charge sold. It no longer exists. Is this deficiency an instrument? No. Did anybody sign
or execute it? No. Does it describe land or property of any kind? No. Does it charge land or property of any
kind? No. What is it then? Why, it is simply a debt; simply a personal obligation, having not the remotest relation
or connection with property of any kind. How, then, does it become a charge, a lien, an incumbrance on
property so as to take precedence over other person obligations of the decedent? And especially, how can it
be an incumbrance on all the property of the debtor? I do not know. I could not understand why in the case of
Kuenzle & Streiff v. Villanueva, above, and I cannot understand why in this case. If it were a lien, a charge, or
incumbrance on property, it could be foreclosed on failure to pay, could it not? Certainly. Can this deficiency
be foreclosed? Of course not. If it were a lien or incumbrance, the debtor could not sell his property free and
clear of the lien or incumbrance, could he? No. But can the debtor, as matter of fact, sell his property
regardless of the lien or incumbrance of the deficiency and give a good title to the purchaser? Certainly he
can. To be legally effective as a lien or incumbrance it would have to be registered or recorded and public
notice thereof given as required by law, would it not? Yes. But as a matter of fact, is the deficiency registered or
recorded and public notice thereof given as required by law? No. Is it notice, then, to any body of anything?
No. Well if it lacks every known element and characteristic of a lien or incumbrance, how can it be a lien or
incumbrance? I do not know. The court says it is; but I do not know why. I did not understand why in the case of
Kuenzle & Streiff v. Villanueva and I do not understand why in this case. Has the court ever decided heretofore
whether an ordinary debt recognized in a public instrument, or a judgment even, is a lien or incumbrance? Yes,
several times. What did it hold? It held in each case that neither was. (See cases cited in Kuenzle & Streiff v.
Villanueva.) Why does not the court hold the same now? I do not know. I did not know in the Kuenzle & Streiff
case and I do not know in this case. In thus changing the doctrine did the court refer to the cases previously
decided? Some of them; and overruled them. (See majority opinion in the Kuenzle & Streiff case.) What reasons
did it give for overruling them? None.
If the sole reason given by the court for its refusal to apply section 735 of the Code of Civil Procedure fails, then
that section is applicable, is it not? Yes. Why, then, did the court not apply it? I can see no. reason why it did
not. But did not the court give a reason? It says it did; but I cannot, understand it. Why not? The reason it gives is
based wholly upon the same confusion between the so called preference which expressly charges or
incumbers specific property and the preference which by its very definition has no relation to or connection
with any property whatever, that is found and which I discussed in the Kuenzle & Streiff case; and such
confusion existing in the fundamental basis of the court’s position, it is impossible to accept the reasoning by
which the final conclusion is reached.
Do not sections 735 and 736 of the Code of Civil Procedure occupy the same field and cover the same subject
matter as article 1924 and corresponding articles, 1928 among them, of the Civil Code which the court applies
in this case? Yes. I have already shown that chapters 29 to 41 of the Code of Civil Procedure deal with the
estates of deceased persons in every aspect and in every relation; and that, among those chapters, is chapter
28 which has to do with the payment of the debts of a decedent, whether the estate be solvent or insolvent. I
have also shown that section 735 of that chapter treats expressly and exclusively of the order in which debts
shall be paid when the estate is in- solvent. But, when a later statute occupies the same field and covers the
same subject-matter as prior statutes, does not the later repeal or substitute the prior? Yes. Why then, did the
court not hold that the provisions of the Code of Civil Procedure repealed or substituted like provisions in thru
Civil Code? It did not do so, as I have before stated, for the false reason that the debt in the case at bar was a
secured debt and that section 735 did not apply to secured claims. Why is that reason not sound? I have
already given one reason why it is not, namely, that the debt in question is not a secured debt. Is there no other
reason? Yes, several. One is that, even if we admit that it is a secured debt, the court is in no better position
than before the admission as the Code of Civil Procedure has provisions fully and specifically covering the
payment of secured debts, which take the place of like provisions of the Civil Code. Then these latter are
repealed also? Yes. The Code of Civil Procedure covers fully and completely every case that can possibly arise
with respect to the estate of a deceased person from the moment of his death to the final judicial settlement
thereof; and, as a necessary consequence, all prior laws dealing with the same subject-matter are repealed. Is
there any other reason? Yes. The court is in serious error in making a distinction between the payment of
secured debts and payment of unsecured debts. Why? Because neither of the Code of Civil Procedure nor the
Civil Procedure nor the Civil Code makes such distinction. All debts paid in pursuance of section 734 and 735
are unsecured debts. All secured debts pay themselves out of the property charged for such purpose. If the
property so charged pays the incumbrance in full, that is all there is to it. If it is insufficient and there is a
deficiency, such deficiency is an unsecured debt against the estate. Where is that law found? Section 708 of
the Code of Civil Procedure provides:jgc:chanrobles.com.ph
"A creditor holding a claim against the deceased, secured by mortgage or other collateral security, may
abandon the security and prosecute his claim before the committee, and share in the general distribution of
the assets of the estate; or he may foreclose his mortgage or realize upon his security, by ordinary action in
court, making the executor or administrator a party defendant; and if there is a judgment for a deficiency,
after the sale of the mortgage premises, or the property pledged, in the foreclosure or other proceeding to
realize upon the security, he may prove his deficiency judgment before the committee against the estate of
the deceased; or he may rely upon his mortgage or other security close, and foreclose the same at any time,
within the period of the statute of limitation, and in the that event he shall not be admitted as a creditor, and
shall receive no share in the distribution of the other assets of the estate; but nothing herein contained shall
prohibit the executor or administrator from redeeming the property mortgaged or pledged by paying the debt
for which it is held as security under the direction of the court, if the court shall adjudge it to be for the best
interest of the estate that such redemption shall be made."cralaw virtua1aw library
Under this section it is clear that a secured creditor has one of three courses to follow: (1) He may abandon his
security and share in the general distribution. In that case his debt is unsecured debt. (2) He may foreclose his
security and present and prove the deficiency before the commissioners as any other claim is presented and
proved. In such case the deficiency is an unsecured debt. The sum which he receives from the sale of the
property incumbered is not considered as paid on a debt under section 734 or section 735. He simply takes the
property under the incumbrance and pays himself with its value. (3) He may rely exclusively on his security and
waive his right to be "admitted as a creditor." In such case he presents no claim.
It is thus clear that a secured claim is not considered in the first instance as a debt against the estate. The
creditor has to make it such by his own act. But the instant he makes it such it ceases to be a secured debt,
and becomes an unsecured debt payable are all others. It will be observed that the subject of secured claims
is not dealt with by the Code of Civil Procedure in the chapter relating to "claim against the estate" or in that
which deals with "payment of debts;" but in the one treating of "suits by and against executor and
administrator." A secured debt is not considered a debt against the estate but one against the property
incumbered. It becomes a claim against the estate only by virtue of the affirmative act of the creditor; and
when he acts and thereby makes it a claim against the estate, it is, by that very act, reduced to the status of
an unsecured debt. (Section 708 above.)
Is it not, then, a necessary conclusion that sections 734 and 725 cover every claim which, under the law, can
possibly be presented against an estate, whether it be called a secured or unsecured claim? Absolutely every
one. Then there is no provision of law whereby a secured claim can be presented against an estate? None
whatever. In order to be a claim presentable to the estate it must lose its character as a secured claim. Only
unsecured claims can be presented against an estate under the law. So that section 735 covers every possible
claim that can be presented against an estate? Absolutely every one. But if it covers every possible claim, how
can the court say that it does not cover secured claims? It cannot legally say so. It so decides by reason of the
distinction between secured claims and unsecured claims, without realizing that there is no justification in law
for such a distinction, and that it is, therefore; wholly unfounded. But, suppose it was well-founded; what would
be the result? The result would be the same. As I have already shown, section 708 and other sections of the
Code of Civil Procedure fully and completely cover the payment of secured debts — admitting for the
moment that secured claims are really considered debts — as fully and completely as the court admits that
sections 734 and 735 cover the payment of unsecured debts. That being so they repeal all prior provisions
covering the same subject-matter. The court admits that, if the claim at bar were an unsecured claim, it would
be covered by section 735 and would have to be paid in accordance with its provisions as it repeals all
provisions of the Civil Code relating to that subject. But if section 708 and other sections deal as fully and
completely with the payment of secured debts as section 735 does with the payment of unsecured debts, and
if section 735 deals so fully with unsecured debts as to repeal all prior provisions of the Civil Code in the same
subject, why does not section 708 repeal all provisions of the Civil Code dealing with secured debts? It does
unquestionably.
As with the Code of Civil Procedure so with the Civil Code. Under the latter a secured credit was not
considered, in real sense, a debt against the estate of the deceased debtor. The property charged with the
payment of the debt was considered the property of the creditor to the amount of his claim; and he must look
to it first of all for payment. It was only when the property was insufficient to pay the debt that it became a
claim against the estate, and then only to the extent of the deficiency. All of the provisions of the Civil Code as
well as the Code of Civil Procedure relating to the payment of debts against the estate refer to unsecured
debts only. The court has, therefore, made a distinction between the Civil Code and the Code of Civil
Procedure where none exists. They are in all essential respects the same so far as the payment of unsecured
debts is concerned. They part company only in their provisions relating to the payment of deficiencies. The
Code of Civil Procedure declares that a deficiency arising on the foreclosure of a lien is a common debt with
no preference of any kind over the other debts of the deceased debtor; while the Civil Code declares that the
deficiency in such case is not a common debt but is entitled to a preference by virtue of having been
recognized in a public instrument, etc. Where the court errs so strongly is in claiming that the deficiency is still a
secured debt. It was only that portion of the debt actually paid from the proceeds of the foreclosure that was
secured. The balance, by the very nature of things, was not secured. Moreover, the security disappeared with
the foreclosure. That is precisely what was foreclosed and, by the foreclosure, extinguished. The security having
become extinguished it is nonsense to say that the deficiency still remains a secured debt. What secures it?
It necessarily follows that sections 735 and 736 repeal article 1924 and related articles of the Civil Code and
should be applied in this case.
Had not the Supreme Court, prior to the decision in this case, expressed an opinion as to whether section 735
repealed those provisions of the Civil Code which the court applies in this case? Yes. In what case, and what
did it say? In the case of Peterson v. Newberry (6 Phil., 260). At page 262 the court, speaking by Mr. Justice
Carson, said with respect to the status of article 1924 of the Civil Code, the very article which the court applies
in this case:jgc:chanrobles.com.ph
"It has been said that the provisions of this article were wholly repealed by the enactment of the Code of Civil
Procedure, and it would appear that ’so far as this article is applicable to cases of bankruptcy and estates of
deceased persons it has been rendered obsolete as to the former by section 524 which repeals bankruptcy
laws, and repealed as to the latter by section 735, which sets forth the order of payment in the settlement of
such estates. . . .’"
"While article 1924 of the Civil Code was repealed by the enactment of the Code of Civil Procedure in so far as
it is applicable to cases of bankruptcy and estates of deceased persons, its provisions are not limited to such
cases and it remains in full force and effect when by intervention or otherwise a judgment creditor is a proper
party to distribution proceedings of the funds or estate of his judgment debtor and duly asserts his rights as a
preferred creditor."cralaw virtua1aw library
Judge, Willard in his "Notes to the Spanish Civil Code" expresses the same opinion, the quotation in the portion
of the opinion of the court just set forth being the language used by him.
Why has the court changed its opinion on this question? I do not know. Does it not give a reason or reasons for
so doing? Not what I consider a reason. If the court did not intend to have it understood that it held squarely
that section 735 repealed article 1924 of the Civil Code why did it include that declaration in the head notes as
one of the propositions decided by the court in that case? I do not know. The court is silent on that subject.
Did the court, prior to the decision in this case, express its opinion on this subject on any other occasion? In the
case of Santos v. Manarang (27 Phil., 209), the court at page 216, Mr. Justice Trent writing the opinion, speaking
of the debts of a decedent, said:jgc:chanrobles.com.ph
"In case his estate is sufficient they must be paid. (Sec. 734, Code Civ. Proc.) In case the estate is insolvent they
must be paid in the order named in section 735."cralaw virtua1aw library
Was article 1924 of the Civil Code forgotten or overlooked in that case or was it thought to be repealed?
That the court in this case ignored the difference between a secured debt and an unsecured debt, between a
mortgage and the debt which it secures, between a pledge and a naked promise to pay, between security
and no security, is clear from the quotation made from the opinion. Persisting in ignoring this difference the
court has in this case declared that the two great classes of preferences are substantially the same in that both
charge and incumber property. In spite of the fact that the debt under consideration is a mere unsecured
personal promise to pay, note the confusion which exist in the following paragraph between a secured and an
unsecured claim, and between that class of preference in which there is an incumbrance, a charge on
specific property and that class where there is no such charge or incumbrance but a personal obligation
only:jgc:chanrobles.com.ph
"No valid or sufficient reason has been suggested which would justify or necessitate the enactment of a
statutory rule, depriving a creditor by the mere death of his debtor of an acquired statutory preference
securing a duly recorded judgment; or a mechanic’s claim for services rendered; or the claim of a vendor of
specific property for the purchase price; or a credit for transportation; or a credit for agricultural advances; or
for rents; or the like. On the contrary, to expose the security upon which such credits are made to the risk of the
debtor’s death would tend very substantially to destroy the very purpose for which the law authorizes or
prescribes the creation of such preferences."cralaw virtua1aw library
The mere preferences given by article 1924 of the Civil Code is here put on precisely the same footing as a lien
or charge on specific property created by articles 1922 and 1923 of the same code; whereas they are as
distinct and different as language can make them. Let me quote these articles so that we may have them
before us. They deal with the classification of credits:jgc:chanrobles.com.ph
"ART. 1922. With regard to specified personal property of the debtor, the following are
preferred:jgc:chanrobles.com.ph
"1. Credits for the construction, repair, preservation or for the amount of the sale of personal property which
may be in the possession of the debtor to the extent of the value of the same.
"2. Those secured by a pledge which may be in the possession of the creditor, with regard to the thing pledged
and to the extent of its value.
"3. Those guaranteed by a security of goods or securities constituted in a public or commercial establishment
with regard to the security and for the value of the same.
"4. Credits for transportation, with regard to the goods transported, for the amount of said transportation,
expenses and rates of carriage and preservation, until the time of the delivery and for a period of thirty days
afterwards.
"5. Expenses of boarding with regard to the personal property of the debtor remaining in inns.
"6 Credits for seeds and expenses of cultivation and harvesting, advanced to the debtor, with regard to the
fruits of the crops to which they were applied.
"7. Credits for rents and leases for one year with regard to the personal property of the lessee existing on the
estate leased and on the fruits thereof.
"If the personal property, with regard to which the preference is allowed, has been surreptitiously removed, the
creditor may claim it from the person who has the same, within the term of thirty days counted from the time it
was so removed.
"ART. 1923. With regard to determined real property and property rights of the debtor, the following are
preferred:jgc:chanrobles.com.ph
"1. The credits in favor of the State, with regard to the property of taxpayers for the amounts of the last annual
assessments, due and not paid, of the taxes which burden the same.
"2. The credits of insurers, with regard to the property insured, for the insurance premium for two years, and
should the insurance be mutual for the last two dividends declared.
"3. Mortgage and agricultural credits (refaccionarios) entered and recorded in the registry of property, with
regard to the property mortgaged, or which has been the object of the agricultural loan (refaccion).
"4. Credits, of which a cautionary notice has been made in the registry of property by virtue of a judicial
mandate, by reason of attachments, sequestrations, or execution of judgments, with regard to the property
entered therein and only with regard to subsequent credits.
"5. Agricultural credits not entered nor recorded with regard to the real estate to which the agricultural loan
(refaccion) relates, and only with regard to other credits different from those mentioned in the four preceding
numbers.
"ART. 1924. With regard to the other personal and real property of the debtor, the following credits are
preferred:jgc:chanrobles.com.ph
"1. Credits in favor of the province or municipality for the taxes of the last year, due and unpaid, not included in
No. 1 of article 1923.
"A. For judicial expenses and those of administration of the bankruptcy for the common interest of the creditors,
made with the proper authorization or approval.
"B. For the funeral expenses of the debtor, according to the customs of the place, and also those of his wife
and of his children, under their parental authority should they have no property of their own.
"C. For expenses of the last illness of said persons, incurred during the last year, counted up to the day of their
death.
"D. For daily wages and salaries of employee domestic servants for the last year.
"E. For advances made to the debtor for himself and his family, constituted under his authority, in provision
clothing, or shoes for the same period of time.
"F. For income for support during the proceedings in bankruptcy unless they are based on mere beneficence
"B. In a final judgment, should they have been the object of litigation.
"These credits shall have preference among themselves according to the priority of dates of the instruments
and of the judgments.
"ART. 1925. Credits of any other kind or for any other consideration not included in the preceding article shall
have no preference."cralaw virtua1aw library
Most of the cases referred to in articles 1922 and 1923 are those of liens which are familiar to all students of the
common law. Some of them are, perhaps, peculiar to the Spanish law. But they are all with the exception of
the preferences mentioned in article 1924, liens, charges or incumbrances on specific property. They create in
favor of the creditors an interest in the property to which his credit relates. The property is expressly reserved to
the payment of the creditor and, in the first instance, to nothing else. The owner cannot, except by payment,
rid his property of the charge. It is an incumbrance which follows the ownership wherever it goes. The credit
enjoys what the Civil Code calls a "special privilege" with regard to the particular property to which it refers.
Now let us look at paragraph 3 of article 1924, which I mentioned; as an exception and which is the paragraph
which the court applies in the case before us for the purpose of proving that the credit is a secured credit, i. e.,
a charge or lien upon the debtor’s property and takes preference for that reason. That paragraph speaks, not
of credits which enjoy a "special privilege" with regard to "specified" property, i. e., the privilege of a lien or
incumbrance, but those which do not enjoy such a privilege. It says:jgc:chanrobles.com.ph
"B. In a final judgment, should they have been the object of litigation."cralaw virtua1aw library
Note that this is the very paragraph which the court applies in the case at bar, and is the very preference
which the court says is equal, in legal effect, to the charges and incumbrances created by articles 1922 and
1923. It is the thing which the court says is equal to a credit which has "special privilege with regard to the
specified property, both real and personal, although the express provision of the law is that it shall be "without a
special privilege" as to property of any kind. Whether the credit of Diaz be called "a final judgment" or a credit
which appears "in a public instrument," it still falls within paragraph 3 of article 1924, and, accordingly, is not a
charge or incumbrance on property. Therefore, when the court, in the paragraph of its opinion last quoted,
gives to Diaz’s credit the high-sounding title of a "duly recorded judgment," it added absolutely nothing to its
legal significance. And, besides, the phrase "duly recorded judgment" is not only meaningless, but misleading,
when applied to the credits at bar as there is no law of the Philippine Islands providing for the "recording" of
money judgments, no law permitting such judgment to be recorded, no place provided in which they may be
recorded and no law giving the recording of such a judgment any effect whatever. A money judgment in the
Philippine Islands has absolutely no effect on property. That has been held uniformly by this court. (Rubert &
Guamis v. Luengo & Martinez, 8 Phil., 554; Molina Salvador v. Somes, 31 Phil., 76; Peterson v. Newberry, 6 Phil.,
260.) It is simply a credit "without a special privilege" (Par. 3, article 1924) as to property. Indeed, as a credit it is
inferior to one which appears "in a public instrument," which has never even been sued upon. How much more
inferior must it be to those credits mentioned in the preceding articles which are charges and incumbrances on
specified property either real or personal? How then, is that portion of the opinion of the court justified which
maintains that the credit mentioned in paragraph 3 is a secured credit?
Let us now look at those articles of the Civil Code immediately following those governing the classification of
credits — those which relate to the order of payment of credits;
"ART. 1926. Credits which enjoy preference with regard to certain personal property exclude all the others to
the extent of the value of the personal property to which the preference refers.
"When two or more creditors claim preference with regard to certain personal property, the following rules shall
be observed as to priority of payment:jgc:chanrobles.com.ph
"1. Credits secured by a pledge exclude all others to the extent of the value of the thing given in pledge.
"2. In case there is a security, should the latter be legally constituted in favor of more than one creditor, the
priority between them shall be determined by the order of the dates of the execution of the guaranty.
"3. Credits for advances for seeds, expenses of cultivation, and harvesting, shall be preferred over those for
rents and leases, with regard to the fruits of the crop for which they were incurred.
"4. In all other cases the value of the personal property shall be distributed pro rata among the credits which
enjoy special preference with regard to the same property.
"ART. 1927. Credits which enjoy preference with regard to certain real property or property rights exclude all
others for their amounts to the extent of the value of the real estate or property rights to which the preference
refers.
"If two or more credits affecting certain real property or property rights should concur, the following rules shall
observed with regard to their priority:jgc:chanrobles.com.ph
"1. Those mentioned in Nos. 1 and 2 of article 1923 shall be preferred, according to their order, to those
included n the other numbers of the same article.
"2. Mortgages and agricultural credits entered or recorded, mentioned in No. 3 of said article 1923, and those
included in No. 4 of the same, shall enjoy priority among themselves according to the priority of the respective
entries or record in the registry of property.
"3. Agricultural credits not recorded or entered in the registry, referred to in No. 5 of article 1923, shall enjoy
preference among themselves in the inverse order of their priority.
"ART. 1928. The residue of the estate of a debtor, after the credits which enjoy preference with regard to certain
property, personal or real, have been paid, shall become part of the free property which he may possess for
the payment of the other credits.
"Those which enjoy preference with regard to certain property, personal or real, and which should not have
been totally paid with the amount of such property, shall be paid with regard to the deficit in the order and
place pertaining thereto, according to their respective characters.
"ART. 1929. Credits which have no preference with regard to certain property, and those which have
preference for the amount not collected, or when the right of preference should have prescribed, shall be paid
according to the following rules:jgc:chanrobles.com.ph
"2. Those preferred by dates, according to their order, and those which have a common date, pro rata.
"3. Common credits, referred to in article 1925, without consideration of their dates."cralaw virtua1aw library
These articles, constituting chapter third of the Civil Code, may be studied, so far as the case at bar is
concerned, with two purposes. In the first place, they deal with the order of payment of the debts of a person,
dead or alive in this connection they cover the same ground as sections 734, 735, and 736 of the Code of Civil
Procedure, and also those provisions of that code which have to do with the payment of secured obligations,
notably section 708. This fact presents the reason why I maintain that the sections of the Code of Civil
Procedure referred to repeal the articles of the Civil Code quoted.
In the second place, these articles show affirmatively and expressly that the credit in the case under
consideration is not a secured claim as the court holds it to be, or one which "affects" any property of the
debtor, as the court holds it does. Article 1927 provides for and gives the order in which credits shall be paid
"which have no preference with regard to specified property." That is, it provides the order of payments of
credits which are not secured. All the articles of chapter third which immediately precede article 1929, deal
with secured credits — those which are a charge on the property of the debtor and which require that the
property charged shall be dedicated to the payment of the credit which gives rise to the charge Articles 1926-
1928 having dealt completely with the order of payment of secured credits, article 1929 was reserved for the
treatment of unsecured credits; and it treats of them exclusively. Now, the credit in the case at bar is, by
language and definition, excluded from the credits treated in articles 1926-1928. It therefore falls in article 1929.
And, strange to say, the credit at bar is named by name in that article. It is one of those credits "which have
preference for the amount not collected." The condition which might arise in case the property mortgaged, for
example, should be insufficient to pay the credit in full is anticipated in the last paragraph of article 1928 where
it is provided that "those (credits) which enjoy preference with regard to specified property, personal or real,
and which should not have been totally paid with the amount of such property, shall be paid with regard to
the deficit in the order and place pertaining thereto, according to their respective characters." The "order and
place pertaining thereto" is mentioned and described in article 1929 where it expressly names those credits,
"which have a preference for the amount not collected;" and states in what order they shall be paid. The credit
in suit was "the amount not collected" when the mortgage held by Diaz was foresclosed. Article 1929 provides
for the payment of such a credit in express terms, as we have seen. It shall be paid "in the order established in
article 1924," the very article and the only article which establishes the order of preference among unsecured
credits — credits which do not charge or incumber or "affect" property of any kind.
With those articles before me, I am unable to justify the opinion of the court to the effect that the credit at bar is
a secured credit. Even admitting that the Civil Code and not the Code of Civil Procedure is applicable to the
case in hand, the court is wrong in its interpretation and application thereof.
The same confusion referred to as existing in the paragraph of the opinion last quoted is found all through the
opinion. (See dissenting opinion in the Kuenzle & Streiff case.) Can any one give me a definition of "any
recorded or statutory lien or preference," so often mentioned by the court in its opinion, or tell me where such a
thing may be found in the law of the Philippine Islands? What statute is it which creates a "recorded or statutory
lien or preference? Has the court called attention to any? No such thing exists. It is a nondescript — a
combination of words which expresses no legal idea or conception. Such expressions, as this and others, such
as "statutory preference securing the payment of debts," "statutory preference securing a duly recorded
judgment," "statutory liens or preferences affecting property," "statutory preferences which formerly attached to
such property," "debts secured by liens or asserted preferences," "statutory preferences which have attached to
specific property," all show, as I view the law, a failure to grasp the subject either as a whole or in its parts, or to
obtain a clear conception what a preference or a lien or incumbrance really is.
I believe also, that the failure of the court to distinguish between the subject matter of chapters second and
third of the Civil Code assisted the court to the error which I believe it has committed in this case. Chapter
second has to do exclusively with the "classification of credits;" which I chapter third deals as exclusively with
the "order of payment of creditors." The court, for the purpose of arriving at what should be the order of
payment in the case at bar confines its consideration of the Civil Code to that chapter which deals, not with
the order of payment, but to that which relates to the classification of credits. For this reason it missed article
1928 which, if [it] had been taken into account, would have demonstrated to the court not only the nature of
the very credit which is the subject-matter of this appeal but also in what order it should be paid. If any part of
the Civil Code is applicable to this case it is chapter third and not chapter second, and article 1928 and not,
1924 except in so far as the former article is reached through and by virtue of the latter.
I am of the opinion, therefore, that the credits at bar are on an equal footing by virtue of the provisions of
article 735 of the Code of Civil Procedure, and that they should be paid in pursuance of that section and
section 736, the provisions of the Civil Code touching the same matter having by said sections been repealed,
as the court has already held, effect, in two cases.
STREET, J.:
This is an original petition for the writs of mandamus and injunction, filed in this court by Lichauco & Company
against the respondents, Silverio Apostol, as Director of Agriculture, and Rafael Corpus, as Secretary of
Agriculture and Natural Resources. An order having been issued by this court requiring the respondents to
appear and show cause why the relief prayed for should not be granted, the Attorney-General presented a
return, in the nature of a demurrer, in their behalf; and the cause is now before us for the determination of the
questions thus presented.
It is alleged in the complaint that the petitioner is a corporation duly organized under the laws of the Philippine
Islands and that it has been engaged for several years in the business of importing carabao and other draft
animals into the Philippine Islands and that it is now desirous of importing from Pnom-Pehn, in French Indo-
China, a shipment of draft cattle and bovine cattle for the manufacture of serum but that the respondent
Director of Agriculture refuses to admit said cattle, except upon the condition, stated in Administrative Order
No. 21 of the Bureau of Agriculture, that said cattle shall have been immunized from rinderpest before
embarcation at Pnom-Pehn. The petitioner therefore asks for an order requiring the respondents to admit the
contemplated importation of cattle into the Islands and enjoining them from the enforcement of said
administrative order in the future.
The petitioner asserts that under the first proviso to section 1762 of the Administrative Code, as amended by Act
No. 3052 of the Philippine Legislature, it has "an absolute and unrestricted right to import carabao and other
draft animals and bovine cattle for the manufacture of serum from Pnom-Pehn, Indo-China, into the Philippine
Islands" and that the respondents have no authority to impose upon the petitioner the restriction referred to
above, requiring the immunization of the cattle before shipment.
The respondents, on the other hand, rely upon section 1770 of the Administrative Code and upon
Administrative Order No. 21 of the Bureau of Agriculture, promulgated on July 29, 1922, by the Director of
Agriculture, in relation with Department Order No. 6, promulgated on July 28, 1922, by the Secretary of
Agriculture and Natural Resources, as supplying authority for the action taken.
Such portions of the laws above-mentioned as are material to the present controversy will be set out in full,
preceded by section 1762 of the Administrative Code, as originally enacted, to which will be appended the
pertinent parts of the orders referred to and the communication of the Director of Agriculture of August 31,
1922.
1. First paragraph of section 1762 of Administrative Code in original form:
SEC. 1762. Bringing of diseased animal into Islands forbidden. — Except upon permission of the
Director of Agriculture, with the approval of the head of Department first had, it shall be unlawful
for any person knowingly to ship or otherwise bring into the Philippine Islands any animal suffering
from, infected with, or dead of any dangerous communicable disease, or any effects pertaining
to such animal which are liable to introduce such disease into the Philippine Islands.
2. First paragraph of section 1762 of Administrative Code, as amended by Act No. 3052 of the Philippine
Legislature:
SEC. 1762. Bringing of animals imported from foreign countries into the Philippine Islands. — It
shall be unlawful for any person or corporation to import, bring or introduce live cattle into the
Philippine Islands from any foreign country. The Director of Agriculture may, with the approval of
the head of the department first had, authorize the importation, bringing or introduction of
various classes of thoroughbred cattle from foreign countries for breeding the same to the
native cattle of these Islands, and such as may be necessary for the improvement of the breed,
not to exceed five hundred head per annum: Provided, however, That the Director of
Agriculture shall in all cases permit the importation, bringing or introduction of draft cattle and
bovine cattle for the manufacture of serum: Provided, further, That all live cattle from foreign
countries the importation, bringing or introduction of which into the Islands is authorized by this
Act, shall be submitted to regulations issued by the Director of Agriculture, with the approval of
the head of the department, prior to authorizing its transfer to other provinces.
3. Section 1770 of Administrative Code:
SEC. 1770. Prohibition against bringing of animals from infected foreign countries. — When the
Department Head shall by general order declare that a dangerous communicable animal
disease prevails in any foreign country, port, or place and that there is danger of spreading such
disease by the importation of domestic animals therefrom, it shall be unlawful for any person
knowingly to ship or bring into the Philippine Islands any such animal, animal effects, parts, or
products from such place, unless the importation thereof shall be authorized under the
regulation of the Bureau of Agriculture.
4. Department Order No. 6, promulgated on July 28, 1922, by Secretary of Agriculture and Natural
Resources:
DEPARTMENT ORDER }
}Series of 1922.
NO. 6. }
Owing to the fact that a dangerous communicable disease known as rinderpest exist in
Hongkong, French Indo-China and British India, it is hereby declared, in accordance with the
provisions of section 1770 of Act No. 2711 (Administrative Code of the Philippine Islands of 1917),
that rinderpest prevails in said countries, and as there is danger of spreading such disease by the
importation of cattle, carabaos, and pigs therefrom, it shall be unlawful for any person knowingly
to ship or bring into the Philippine Islands any such animal, animal effects, parts, or products from
Hongkong, French Indo-China and British India, unless the importation thereof shall be authorized
under the regulations of the Bureau of Agriculture.
The provisions of this order shall take effect on and after August 1, 1922.
5. Administrative Order No. 21, of the Bureau of Agriculture, promulgated July 29, 1922, by the Director
of Agriculture:
ADMINISTRATIVE ORDER }
}
NO. 21 }
Re importation of cattle, carabaos, and pigs from French Indo-China, Hongkong and India.
1. Pursuant to the provisions of Department Order No. 6, series of 1922, of the Department of
Agriculture and Natural Resources, the present regulations of the Bureau of Agriculture
governing the importation of livestock from French Indo-China and Hongkong are hereby
amended to the effect that the importation of livestock of the species named in the
aforementioned Department Order is hereby prohibited from French Indo-China, Hongkong and
India. However, animals immunized against rinderpest, for which the importer before placing his
order shall have obtained from the Director of Agriculture a written permit to import them from
the above named countries, may be allowed entrance into the Philippine Islands.
2. This order shall take effect on and after August 1, 1922.
6. Communication of August 31, 1922, from the Acting Director of Agriculture to Faustino Lichauco (in
part):
SIR: In reply to your application for permission to import from 300 to 400 carabaos immunized
against rinderpest from Pnom-Pehn, French Indo-China, I have the honor to inform you that the
permission is hereby granted, under the following conditions:
1. Animals must be immunized by the simultaneous method before shipment. At least 10 c.c. of
good virulent blood must be injected at the first injection simultaneously with the serum. Ten days
after the simultaneous inoculation all non-reactors must receive another injection of not less than
10 c.c. of virulent blood (alone).
2. The immunization must be done by a veterinarian designated by the French Government for
the purpose, who must issue a certificate stating the fact that the animal has been immunized
according to the requirements in number 1 and it must not be embarked until ten days after the
second injection of virulent blood.
xxx xxx xxx
Very respectfully,
SILVERIO APOSTOL,
Acting Director of Agriculture.
Upon glancing over the matter above collated, it will be seen at once that section 1770 of the Administrative
Code on its face authorizes the action taken by the Secretary of Agriculture and Natural Resources in closing
our ports (in the manner and to the extent indicated in Department Order No. 6) to the importation of cattle
and carabao from French Indo-China, supposing of course, as everybody knows and as the petitioner does not
deny, that the disease of rinderpest exists in that country.
It is claimed, however, that section 1762 of the Administrative Code, so far as it authorizes restriction upon the
importation of draft cattle and bovine cattle for the manufacture of serum, has been impliedly repealed by the
amendatory Act No. 3052, which is of later enactment that the Administrative Code; and in this connection
reliance is chiefly placed on the first proviso to section 1762, as amended by said Act No. 3052, which is in these
words: "Provided, however, That the Director of Agriculture shall in all cases permit the importation, bringing or
introduction of draft cattle and bovine cattle for the manufacture of serum." This then is the first and principal
question in the case, namely, whether section 1770 has been repealed by implication, in so far as it relates to
draft animals and bovine cattle for the manufacture of serum. We say repealed by implication, for it will be
noted that that Act No. 3052 has no repealing clause, and it contains only one section, i. e., that amending
section 1762 of the Administrative Code.
We are of the opinion that the contention of the petitioner is untenable, for the reason that section 1762, as
amended, is obviously of a general nature, while section 1770 deals with a particular contingency not made
the subject of legislation in section 1762. Section 1770 is therefore not to be considered as inconsistent with
section 1762, as amended; on the other hand, it must be treated as a special qualification of section 1762. Of
course the two provisions are different, in the sense that if section 1762, as amended, is considered alone, the
cattle which the petitioner wishes to bring in can be imported without restriction, while if section 1770 is still in
force the cattle, under the conditions stated in the petition, can be brought in only upon compliance with the
requirements of Administrative Order No. 21. But this difference between the practical effect of the two
provisions does not make then inconsistent in the sense that the earlier provision (sec. 1770) should be deemed
repealed by the amendatory Act (3052).
That section 1770 is special, in the sense of dealing with a special contingency not dealt with in section 1762, is
readily apparent upon comparing the two provisions. Thus, we find that while section 1762 relates generally to
the subject of the bringing of animals into the Island at any time and from any place, section 1770 confers on
the Department Head a special power to deal with the situation which arises when a dangerous
communicable disease prevails in some defined foreign country, and the provision is intended to operate only
so long as that situation continues. Section 1770 is the backbone of the power to enforce animal quarantine in
these Islands in the special emergency therein contemplated; and if that section should be obliterated, the
administrative authorities here would be powerless to protect the agricultural industry of the Islands from the
spread of animal infection originating abroad.
We note that the argument for unrestricted importation extends only to the importation of cattle for draft
purposes and bovine cattle for the manufacture of serum, leaving section 1770 theoretically in full effect as
regards the importation of cattle for other purposes, as where they are imported for slaughter; but the
importation of cattle for draft purposes is the principal thing, and unless that can be regulated under the
conditions and to the extent attempted by the respondents in this case, the power given in section 1770 is
obviously worthless.
In our opinion section 1762, as amended, and section 1770 must be construed in pari materia as harmonious
parts of the law dealing with animal quarantine; and section 1762, as amended, can be given effect only in so
far as it is not restricted by section 1770. Here, as always, the general must yield to the particular.
If the Congress of the United States should this day repeal the Chinese Exclusion Law so far as it affects these
Islands, and should declare that all persons of Chinese nationality shall be at liberty to enter the Philippine
Islands without restriction, would anybody suppose that such enactment would have the effect of abolishing
the power to maintain quarantine against any Chinese port where cholera or bubonic plaque might hereafter
be raging in epidemic form? Yet the question now before us is not fundamentally different from the one thus
supposed.
The judicial precedents are conclusive to the effect that no implied repeal of a special provisions of the
character of the one now under consideration will result from the enactment of broader provision of a general
nature. In other words, a general statute without negative words does not repeal a previous statute which is
particular, even though the provisions of one be different from the other. (Rymer vs. Luzerne County, 12 L. R. A.,
192; Petri vs. F. E. Creelman Lumber Co., 199 U. S., 487; 50 L. ed., 281.)
Wherever there is a particular enactment and a general enactment in the same statute, and the latter, taken
in its most comprehensive sense, would overrule the former, the particular enactment must be operative, and
the general enactment must be taken to affect only the other parts of the statute to which it may properly
apply. (Sir John Romilly, Master of the Rolls, in Pretty vs. Solly, 26 Beav., 606, 610.)
The additional words of qualification needed to harmonize a general and a prior special provision in the same
statute should be added to the general provision, rather than to the special one. (Rodgers vs. United States, 185
U. S., 82; 46 L. ed., 816.)
Specific legislation upon a particular subject is not affected by a general law upon the same subject unless it
clearly appears that the provision of the two laws are so repugnant that the legislature must have intended by
the later to modify or repeal the earlier legislation. The special act and the general law must stand together,
the one as the law of the particular subject and the other as the general law of the land. (Ex Parte United
States, 226 U. S., 420; 57 L. ed., 281; Ex Parte Crow Dog, 109 U. S., 556; 27 L. ed., 1030; Partee vs. St. Louis & S. F. R.
Co., 204 Fed. Rep., 970.)
Where there are two acts or provisions, one of which is special and particular, and certainly includes the matter
in question, and the other general, which, if standing alone, would include the same matter and thus conflict
with the special act or provision, the special must be taken as intended to constitute an exception to the
general act or provision, especially when such general and special acts or provisions are contemporaneous, as
the Legislature is not to be presumed to have intended a conflict. (Crane vs. Reeder and Reeder, 22 Mich., 322,
334; University of Utah vs. Richards, 77 Am. St. Rep., 928.)
It is well settled that repeals by implication are not to be favored. And where two statutes cover, in whole or in
part, the same matter, and are not absolutely irreconcilable, the duty of the court — no purpose to repeal
being clearly expressed or indicated — is, if possible, to give effect to both. In other words, it must not be
supposed that the Legislature intended by a latter statute to repeal a prior one on the same subject, unless the
last statute is so broad in its terms and so clear and explicit in its words as to show that it was intended to cover
the whole subject, and therefore to displace the prior statute. (Frost vs. Wenie, 157 U. S., 46; 39 L. ed., 614, 619.)
As stated in the pages of the two most authoritative legal encyclopedias, the rule is that a prior legislative act
will not be impliedly repealed by a later act unless there is a plain, unavoidable and irreconcilable repugnancy
between the two. If both acts can by any reasonable construction stand together, both will be sustained. (36
Cyc., 1074- 1076; 26 Am. & Eng. Encyc. Law, 2d ed., 725-726.)
A masterly analysis of the decisions of the United States Courts pertinent to the matter now in hand will be
found in the monographic article on "Statutes and Statutory Construction," written by Chas. C. Moore and
prefixed as a General Introduction to Federal Statutes Annotated. The discussion there given is too lengthy to
be here reproduced in full, but some of the observations of the learned author are so appropriate to the case
before us that we cannot forego the temptation to include the same in this opinion. Says the writer: "The various
provisions of an act should be read so that all may, if possible, have their due and conjoint effect without
repugnancy or inconsistency. The sections of a code relative to any subject must be harmonized and to that
end the letter of any section may sometimes be disregarded. But where absolute harmony between parts of a
statute is demonstrably non-existent, the court must reject that one which is least in accord with the general
plan of the whole, or if there be no such ground for choice between inharmonious section, the later section
being the last expression of the legislative mind must, in construction, vacate the former to the extent of the
repugnancy." (1 Fed. Stat. Ann., 2d ed., 49-50.)
And speaking with reference to the rule by which special provisions are held to dominate over general
provisions in the same or later laws, the author proceeds: " 'it is an old and familiar rule,' said Mr. Justice Lamar,
'that where there is in the same statute a particular enactment, and also a general one, which in its most
comprehensive sense would include what is embraced in the former, the particular enactment must be
operative, and the general enactment must be taken to affect only such cases within its general language as
are not within the provisions of the particular enactment.' And the Justice proceeded to apply that rule in the
construction of a statute upon which there had been much ingenious argument and a decided conflict of
authority in the inferior federal courts. The stature was an act of Congress of 1876, declaring nonmailable 'every
obscene . . . book, pamphlet, paper, writing, print, or other publication of an indecent character,' and other
enumerated articles, and making it a misdemeanor to deposit any of them for mailing. In a prosecution under
the act, the Circuit Court certified to the Supreme Court the following question: 'Is the knowingly depositing in
the mails of an obscene letter, inclosed in an envelope or wrapper upon which there is nothing but the name
and address of the person to whom the letter is written, an offense within the act?' On behalf of the
government it was contended that the word 'writing' comprehended such a letter, but the Supreme Court held
otherwise. In the course of his argument in support of the view of the court, Justice Lamar pointed out that the
statute, after enumeration what articles shall be nonmailable, adds a separate and distinct clause declaring
that 'every letter upon the envelope of which . . . indecent, lewd, obscene, or lascivious delineations, epithets,
terms, or language may be written or printed . . . shall not be conveyed in the mails,' and the person knowingly
or willfully depositing the same in the mails 'shall be deemed guilty of a misdemeanor,' etc. 'This distinctly
additional clause,' continued the Justice, 'specifically designating and describing the particular class of letters
which shall be nonmailable, clearly limits the inhibitions of the statute to that class of letters alone whose
indecent matter is exposed on the envelope.' " (1 Fed. Stat. Ann., 2d ed., 50-51; also at pp. 164-166.)
The cases relating to the subject of repeal by implication all proceed on the assumption that if the act of latter
date clearly reveals an intention on the part of the lawmaking power to abrogate the prior law, this intention
must be given effect; but there must always be a sufficient revelation of this intention, and it has become an
unbending rule of statutory construction that the intention to repeal a former law will not be imputed to the
Legislature when it appears that the two statute, or provisions, with reference to which the question arises bear
to each other the relation of general to special. It is therefore idle to speculate whether in the case before us
the Philippine Legislature may or may not have intended to modify or abrogate section 1770 of the
Administrative Code at the time the amendment to section 1762 was enacted, for if any such intention was
entertained, it was not revealed in a way that would justify a court in giving this intention effect. We may add,
however, that, in the opinion of the majority of the Justices participating in this decision, the Legislature in
amending section 1762 could not possibly have entertained a design to modify section 1770; for, as we have
already shown, the abrogation of that provision, even as regards draft animals alone, would leave the animal
industry of the Islands exposed to the danger incident to the unrestricted importation of infected animals from
districts where rinderpest prevails. The unreasonableness of this interpretation of the amendatory law alone
supplies sufficient warrant for rejecting it. The Legislature could not possibly have intended to destroy the
effectiveness of quarantine as regards imported animals.
Our conclusion then is that section 1770 of the Administrative Code remains in full force; and the determination
of this question is we think necessarily fatal to the petitioner's case.
It is insisted, however, that even supposing section 1770 of the Administrative Code to be in force, nevertheless,
the requirement of immunization at the port of embarcation is unreasonable, inasmuch as the immunization of
the cattle at that port, under the supervision of the Government veterinarians of French Indo-China, is not
unconditionally accepted as efficacious by the Philippine authorities, as shown by the fact that the latter
further require tests to be made upon the arrival of the cattle here, consisting of inoculation with virulent blood
of animals suffering from rinderpest — which involves additional expenses and exposes the importer to the loss
of his entire herd.
Considerations of this nature are we think more proper to be addressed to the authorities responsible for the
regulations than to this court. About the principal fact that rinderpest exists in the regions referred to in
Department Order No. 6, there is, and can be no dispute; and when the Department Head declared that the
disease prevails in those regions and that there is danger of spreading it by the importation of cattle and
carabao into this country, he was acting upon a matter within his province, and we are not disposed to review
the conclusion.
It has been suggested that the regulative power vested in the Director of Agriculture under section 1770 of the
Administrative Code with respect to the admission of cattle into the Philippine Islands attaches only when the
importation has been effected; and that the said Director has no authority to dictate the measures to be taken
by the importer before the cattle are embarked for transportation to these Islands. This contention, in our
opinion, reflects a mistaken point of view with reference to the effect of the regulations; and the answer is to be
found in the consideration that the regulation in question has prospective reference to the condition of the
cattle upon their arrival here. In other words, the prior immunization of the cattle is made a condition
precedent to the right to bring them in; as much as to say, that only animals conforming to the required type
will be admitted. The importer is thus left at entire liberty in respect to the taking of the necessary measures to
gain admittance for his cattle in our ports; and if he fails to do so, the penalty merely is that the cattle are not
admitted.
Upon the whole we are of the opinion that the petition does not show sufficient ground for granting the writs
of mandamus and injunction. The demurrer interposed thereto by the respondents in their return to the order to
show cause, dated October 7, 1922, is therefore sustained, and the temporary restraining order heretofore
promulgated in this cause, dated September 21, 1922, is dissolved; and unless within five days after notification
hereof the petitioner shall so amend his petition as to show a sufficient cause of action, an order absolute will
be entered, dismissing the same, with costs. So ordered.
Malcolm, Avanceña, Villamor, and Ostrand, JJ., concur.
Separate Opinions
# Footnotes
1 As found by the Court of Appeals, the agreement was between Co, representing Mayflower
Shipping Corporation, and Geronimo B. Bella, representing Tans-Pacific Towage, Inc. The
expenses for refloating were apportioned chiefly between FGU Insurance and Development
Bank of the Philippines, which respectively contributed P2,329,022.00 and P1,579,000.00.
SEE Rollo, pp. 9, 20-21.
2 Otherwise known as the "Bouncing Checks Law".
3 The ruling is contained in an extended resolution on a motion for reconsideration, promulgated
by the Special Former Second Division of the Court on September 21, 1987, written for the
division by Paras,J., with whom concurred Fernan, Gutierrez, Jr., Padilla, Bidin and Cortes, JJ. In
that resolution, the Court gave its "stamp of approval" on the decision of the Court of Appeals
holding inter alia that "It is now settled that Batas Pambansa Bilang 22 applies even in cases
where dishonored checks are issued merely in the form of a deposit or a guarantee."
4 Emphasis supplied.
5 Exceptions to the rule of prospectivity are collated, e.g., in the textbook of retired Justice
Edgardo A. Paras (Civil Code of the Philippines Annotated, 1984 ed., Vol. 1, pp. 22-23) viz : 1)
laws remedial in nature; 2) penal law favorable to accused, if ; after not habitual delinquent; 3)
laws of emergency nature under police power : e.g., tenancy relations (Vda. de Ongsiako v.
Gamboa, 47 O.G. 4259, Valencia et al. v. Surtida et al., May 31, 1961); 4) curative laws; 5)
substantive right declared for first time unless vested rights impaired (Unson v. del Rosario, Jan.
29, 1953; Belen v. Belen, 49 O.G. 997; Peo v. Alejaga, 49 OG 2833).
6 106 Phil. 713 and 103 Phil. 500, respectively, both involving prosecutions for illegal possession of
firearms, and both holding that appointment by the Provincial Governor or Provincial
Commander of a person as a "secret agent" or "confidential agent" "sufficiently placed him
under the category of a 'peace officer' . . . who under section 879 of the Revised Administrative
Code is exempted from the requirements relating to the issuance of license to possess firearm.
7 SEE Ilagan v. People, Jan. 29, 1974, 55 SCRA 361.
8 The title of the cited Monge case is Monge, et al. v. Angeles, et al., and is reported in 101 Phil.,
563 [1957], while that of the cited Tupas case is Tupas v. Damasco, et al., reported in 132 SCRA
593 [1984].
9 136 SCRA 27, 40-41.
10 And several other rulings set forth in a corresponding footnote in the text of the decision.
11 SEE also Olaguer v. Military Commission No. 34, 150 SCRA 144 (1987) (Citing Municipality of
Malabang v. Benito, 27 SCRA 533 where the question arose as to whether the judicial
nullification of an executive order creating a municipality wiped out all the acts of the local
government abolished); Tan v. Barrios, 190 SCRA 686 (1990); Drilon v. Court of Appeals, 202 SCRA
378 (1991); Union of Filipino Employees v. Vivar, Jr., 205 SCRA 200 (1992); Peralta v. Civil Service
Commission, 212 SCRA 425.
12 150 SCRA 144 (1987).
13 SEE also Cruz v. Enrile, 160 SCRA 700 [1988] and Res. of February 26, 1991; and Drilon v. Court
of Appeals, 202 SCRA 378 [1991].
14 SEE footnote 3, supra.
15 Act No. 1696 of the Philippine Commission punishing any person who shall expose, or cause or
permit to be exposed, to public view . . . any flag, banner, emblem, or device used during the
late insurrection in the Philippine Islands to designate or identify those in armed rebellion against
the United States, . . .
16 14 Phil. 128, 133-134.
17 Estrella vs. Orendain, 37 SCRA 640; Noblejas vs. Salas, 67 SCRA 47.
EXECUTIVE ORDER NO. 292
INSTITUTING THE "ADMINISTRATIVE CODE OF 1987"
WHEREAS, the Administrative Code currently in force was first forged in 1917 when the relationship between the
people and the government was defined by the colonial order then prevailing;
WHEREAS, efforts to achieve an integrative and over-all recodification of its provisions resulted in the
Administrative Code of 1978 which, however, was never published and later expressly repealed;
WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code which
incorporates in a unified document the major structural, functional and procedural principles and rules of
governance; and
WHEREAS, a new Administrative Code will be of optimum benefit to the people and Government officers and
employees as it embodies changes in administrative structures and procedures designed to serve the people;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, by virtue of the powers vested in me by
the Constitution, do hereby promulgate the Administrative Code of 1987, as follows:
INTRODUCTORY PROVISIONS
Section 1. Title. - This Act shall be known as the "Administrative Code of 1987."
Section 2. General Terms Defined. - Unless the specific words of the text, or the context as a whole, or a
particular statute, shall require a different meaning:
(1) Government of the Republic of the Philippines refers to the corporate governmental entity through
which the functions of government are exercised throughout the Philippines, including, save as the
contrary appears from the context, the various arms through which political authority is made effective
in the Philippines, whether pertaining to the autonomous regions, the provincial, city, municipal or
barangay subdivisions or other forms of local government.
(2) National Government refers to the entire machinery of the central government, as distinguished from
the different forms of local governments.
(3) Local Government refers to the political subdivisions established by or in accordance with the
Constitution.
(4) Agency of the Government refers to any of the various units of the Government, including a
department, bureau, office, instrumentality, or government-owned or controlled corporations, or a local
government or a distinct unit therein.
(5) National Agency refers to a unit of the National Government.
(6) Local Agency refers to a local government or a distinct unit therein.
(7) Department refers to an executive department created by law. For purposes of Book IV, this shall
include any instrumentality, as herein defined, having or assigned the rank of a department, regardless
of its name or designation.
(8) Bureau refers to any principal subdivision or unit of any department. For purposes of Book IV, this shall
include any principal subdivision or unit of any instrumentality given or assigned the rank of a bureau,
regardless of actual name or designation, as in the case of department-wide regional offices.
(9) Office refers, within the framework of governmental organization, to any major functional unit of a
department or bureau including regional offices. It may also refer to any position held or occupied by
individual persons, whose functions are defined by law or regulation.
(10) Instrumentality refers to any agency of the National Government, not integrated within the
department framework vested within special functions or jurisdiction by law, endowed with some if not
all corporate powers, administering special funds, and enjoying operational autonomy, usually through
a charter. This term includes regulatory agencies, chartered institutions and government-owned or
controlled corporations.
(11) Regulatory agency refers to any agency expressly vested with jurisdiction to regulate, administer or
adjudicate matters affecting substantial rights and interests of private persons, the principal powers of
which are exercised by a collective body, such as a commission, board or council.
(12) Chartered institution refers to any agency organized or operating under a special charter, and
vested by law with functions relating to specific constitutional policies or objectives. This term includes
the state universities and colleges and the monetary authority of the State.
(13) Government-owned or controlled corporation refers to any agency organized as a stock or non-
stock corporation, vested with functions relating to public needs whether governmental or proprietary in
nature, and owned by the Government directly or through its instrumentalities either wholly, or, where
applicable as in the case of stock corporations, to the extent of at least fifty-one (51) per cent of its
capital stock: Provided, That government-owned or controlled corporations may be further categorized
by the Department of the Budget, the Civil Service Commission, and the Commission on Audit for
purposes of the exercise and discharge of their respective powers, functions and responsibilities with
respect to such corporations.
(14) "Officer" as distinguished from "clerk" or "employee", refers to a person whose duties, not being of a
clerical or manual nature, involves the exercise of discretion in the performance of the functions of the
government. When used with reference to a person having authority to do a particular act or perform a
particular function in the exercise of governmental power, "officer" includes any government employee,
agent or body having authority to do the act or exercise that function.
(15) "Employee", when used with reference to a person in the public service, includes any person in the
service of the government or any of its agencies, divisions, subdivisions or instrumentalities.
BOOK I
SOVEREIGNTY AND GENERAL ADMINISTRATION
CHAPTER 1
THE NATIONAL TERRITORY
Section 3. What Comprises National Territory. - The national territory comprises the Philippine archipelago, with
all the islands and waters embraced therein, and all other territories over which the Philippines has sovereignty
or jurisdiction, consisting of its terrestrial, fluvial, and aerial domains, including its territorial sea, the seabed, the
subsoil, the insular shelves, and other submarine areas. The waters around, between, and connecting the
islands of the archipelago, regardless of their breadth and dimensions, form part of the internal waters of the
Philippines.
Section 4. Territorial Subdivision of the Philippines. - The territorial and political subdivisions of the Philippines are
the autonomous regions, provinces, subprovinces, cities, municipalities and barangays.
CHAPTER 2
THE PEOPLE
Section 5. Who are Citizens. - The following are the citizens of the Philippines:
(1) Those who are citizens of the Philippines at the time of the adoption of the Constitution;
(2) Those whose fathers or mothers are citizens of the Philippines;
(3) Those born before January 17, 1973, of Filipino mothers, who elect Philippine citizenship, unless by the
act or omission they are deemed, under the law, to have renounced it.
(4) Those who are naturalized in accordance with law.
Section 6. Effect of Marriage. - Citizens of the Philippines who marry aliens shall retain their citizenship, unless by
their act or omission they are deemed, under the law, to have renounced it.
Section 7. Natural-born Citizen. - Natural-born citizens are those who are citizens of the Philippines from birth
without having to perform any act to acquire or perfect their Philippine citizenship. Those who elect Philippine
citizenship in accordance with the Constitution shall be deemed natural-born citizens.
Section 8. Loss or Reacquisition of Citizenship. - Philippine citizenship may be lost or reacquired in the manner
provided by law.
Section 9. Dual Allegiance. - Dual allegiance is inimical to the national interest and shall be dealt with by law.
CHAPTER 3
STATE IMMUNITY FROM SUIT
Section 10. Non-suability of the State. - No suit shall lie against the State except with its consent as provided by
law.
Section 11. The State's Responsibility for Acts of Agents. -
(1) The State shall be legally bound and responsible only through the acts performed in accordance
with the Constitution and the laws by its duly authorized representatives.
(2) The State shall not be bound by the mistakes or errors of its officers or agents in the exercise of their
functions.
CHAPTER 4
NATIONAL SYMBOLS AND OFFICIAL LANGUAGES
Section 12. National Flag. -
(1) The flag of the Philippines shall be red, white and blue, with a sun and three stars, as consecrated
and honored by the people and recognized by law.
(2) The custody, ceremonial use, occasion and manner of display, and the proper care and disposition
of the flag shall be governed by appropriate rules and regulations.
Section 13. National Anthem. - Until otherwise provided by law, the musical arrangement and composition of
Julian Felipe is adopted as the national anthem. It shall be sung or played upon the opening or start of all state
celebrations or gatherings and on such other occasions as may be prescribed by appropriate rules and
regulations.
Section 14. Arms and Great Seal of the Republic of the Philippines. -
(1) The Arms shall have paleways of two (2) pieces, azure and gules; a chief argent studded with three
mullets equidistant from each other; and, in point of honor, ovoid argent over all the sun rayonnant with
eight minor and lesser rays. Beneath shall be a scroll with the words "Republic of the Philippines, " or its
equivalent in the national language, inscribed thereon.
(2) The Great Seal shall be circular in form, with the arms as described in the preceding paragraph, but
without the scroll and the inscription thereon, and surrounding the whole, a double marginal circle
within which shall appear the words "Republic of the Philippines," or its equivalent in the national
language. For the purpose of placing the Great Seal, the color of the arms shall not be deemed
essential.
Section 15. Use and Custody of Great Seal. - The Great Seal shall be affixed to or placed upon all commissions
signed by the President and upon such other official documents and papers of the Republic of the Philippines
as may be required by custom and usage. The President shall have custody of the Great Seal.
Section 16. Arms, Seals and Banners of Government Offices. - The various offices of government may adopt
appropriate coats-of-arms, seals and banners.
Section 17. Official Languages. - Until otherwise provided by law, Pilipino and English shall be the official
languages.
CHAPTER 5
OPERATION AND EFFECT OF LAWS
Section 18. When Laws Take Effect. - Laws shall take effect after fifteen (15) days following the completion of
their publication in the Official Gazette or in a newspaper of general circulation, unless it is otherwise provided.
Section 19. Prospectivity. - Laws shall have prospective effect unless the contrary is expressly provided.
Section 20. Interpretation of Laws and Administrative Issuances. - In the interpretation of a law or administrative
issuance promulgated in all the official languages, the English text shall control, unless otherwise specifically
provided. In case of ambiguity, omission or mistake, the other texts may be consulted.
Section 21. No Implied Revival of Repealed Law.- When a law which expressly repeals a prior law itself
repealed, the law first repealed shall not be thereby revived unless expressly so provided.
Section 22. Revival of Law Impliedly Repealed. - When a law which impliedly repeals a prior law is itself
repealed, the prior law shall thereby be revived, unless the repealing law provides otherwise.
Section 23. Ignorance of the Law. - Ignorance of the law excuses no one from compliance therewith.
CHAPTER 6
OFFICIAL GAZETTE
Section 24. Contents. - There shall be published in the Official Gazette all legislative acts and resolutions of a
public nature; all executive and administrative issuances of general application; decisions or abstracts of
decisions of the Supreme Court and the Court of Appeals, or other courts of similar rank, as may be deemed by
said courts of sufficient importance to be so published; such documents or classes of documents as may be
required so to be published by law; and such documents or classes of documents as the President shall
determine from time to time to have general application or which he may authorize so to be published.
The publication of any law, resolution or other official documents in the Official Gazette shall be prima facie
evidence of its authority. lawphi1.net
Section 25. Editing and Publications. - The Official Gazette shall be edited in the Office of the President and
published weekly in Pilipino or in the English language. It shall be sold and distributed by the National Printing
Office which shall promptly mail copies thereof to subscribers free of postage.
CHAPTER 7
REGULAR HOLIDAYS AND NATIONWIDE SPECIAL DAYS
Section 26. Regular Holidays and Nationwide Special Days. -
1. Unless otherwise modified by law, order or proclamation, the following regular holidays and
special days shall be observed in this country:
(A) Regular Holidays
RULE 22
Computation of Time
Section 1. How to compute time. — 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. (a)
Section 2. Effect of interruption. — Should an act be done which effectively interrupts the running of the period,
the allowable period after such interruption shall start to run on the day after notice of the cessation of the
cause thereof.
The day of the act that caused the interruption shall be excluded in the computation of the period. (n)
G.R. No. 162155 August 28, 2007
COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO in his official capacity as Revenue District
Officer of Revenue District No. 049 (Makati), Petitioners,
vs.
PRIMETOWN PROPERTY GROUP, INC., Respondent.
DECISION
CORONA, J.:
This petition for review on certiorari1 seeks to set aside the August 1, 2003 decision2 of the Court of Appeals (CA)
in CA-G.R. SP No. 64782 and its February 9, 2004 resolution denying reconsideration.3
On March 11, 1999, Gilbert Yap, vice chair of respondent Primetown Property Group, Inc., applied for the
refund or credit of income tax respondent paid in 1997. In Yap's letter to petitioner revenue district officer Arturo
V. Parcero of Revenue District No. 049 (Makati) of the Bureau of Internal Revenue (BIR), 4 he explained that the
increase in the cost of labor and materials and difficulty in obtaining financing for projects and collecting
receivables caused the real estate industry to slowdown.5 As a consequence, while business was good during
the first quarter of 1997, respondent suffered losses amounting to ₱71,879,228 that year.6
According to Yap, because respondent suffered losses, it was not liable for income taxes.7 Nevertheless,
respondent paid its quarterly corporate income tax and remitted creditable withholding tax from real estate
sales to the BIR in the total amount of ₱26,318,398.32.8 Therefore, respondent was entitled to tax refund or tax
credit.9
On May 13, 1999, revenue officer Elizabeth Y. Santos required respondent to submit additional documents to
support its claim.10 Respondent complied but its claim was not acted upon. Thus, on April 14, 2000, it filed a
petition for review11 in the Court of Tax Appeals (CTA).
On December 15, 2000, the CTA dismissed the petition as it was filed beyond the two-year prescriptive period
for filing a judicial claim for tax refund or tax credit.12 It invoked Section 229 of the National Internal Revenue
Code (NIRC):
Sec. 229. Recovery of Taxes Erroneously or Illegally Collected. -- No suit or proceeding shall be maintained in
any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or
illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any
sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit
has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not
such tax, penalty, or sum has been paid under protest or duress.
In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of
payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided,
however, That the Commissioner may, even without a claim therefor, refund or credit any tax, where on the
face of the return upon which payment was made, such payment appears clearly to have been erroneously
paid. (emphasis supplied)
The CTA found that respondent filed its final adjusted return on April 14, 1998. Thus, its right to claim a refund or
credit commenced on that date.13
The tax court applied Article 13 of the Civil Code which states:
Art. 13. When the law speaks of years, months, days or nights, it shall be understood that years are of three
hundred sixty-five days each; months, of thirty days; days, of twenty-four hours, and nights from sunset to
sunrise.
If the months are designated by their name, they shall be computed by the number of days which they
respectively have.
In computing a period, the first day shall be excluded, and the last included. (emphasis supplied)
Thus, according to the CTA, the two-year prescriptive period under Section 229 of the NIRC for the filing of
judicial claims was equivalent to 730 days. Because the year 2000 was a leap year, respondent's petition, which
was filed 731 days14 after respondent filed its final adjusted return, was filed beyond the reglementary period.15
Respondent moved for reconsideration but it was denied.16 Hence, it filed an appeal in the CA.17
On August 1, 2003, the CA reversed and set aside the decision of the CTA. 18 It ruled that Article 13 of the Civil
Code did not distinguish between a regular year and a leap year. According to the CA:
The rule that a year has 365 days applies, notwithstanding the fact that a particular year is a leap year.19
In other words, even if the year 2000 was a leap year, the periods covered by April 15, 1998 to April 14, 1999
and April 15, 1999 to April 14, 2000 should still be counted as 365 days each or a total of 730 days. A statute
which is clear and explicit shall be neither interpreted nor construed.20
Petitioners moved for reconsideration but it was denied.21 Thus, this appeal.
Petitioners contend that tax refunds, being in the nature of an exemption, should be strictly construed against
claimants.22 Section 229 of the NIRC should be strictly applied against respondent inasmuch as it has been
consistently held that the prescriptive period (for the filing of tax refunds and tax credits) begins to run on the
day claimants file their final adjusted returns.23 Hence, the claim should have been filed on or before April 13,
2000 or within 730 days, reckoned from the time respondent filed its final adjusted return.
The conclusion of the CA that respondent filed its petition for review in the CTA within the two-year prescriptive
period provided in Section 229 of the NIRC is correct. Its basis, however, is not.
The rule is that the two-year prescriptive period is reckoned from the filing of the final adjusted return.24 But how
should the two-year prescriptive period be computed?
As already quoted, Article 13 of the Civil Code provides that when the law speaks of a year, it is understood to
be equivalent to 365 days. In National Marketing Corporation v. Tecson, 25 we ruled that a year is equivalent to
365 days regardless of whether it is a regular year or a leap year.26
However, in 1987, EO27 292 or the Administrative Code of 1987 was enacted. Section 31, Chapter VIII, Book I
thereof provides:
Sec. 31. Legal Periods. — "Year" shall be understood to be twelve calendar months; "month" of thirty days, unless
it refers to a specific calendar month in which case it shall be computed according to the number of days the
specific month contains; "day", to a day of twenty-four hours and; "night" from sunrise to sunset. (emphasis
supplied)
A calendar month is "a month designated in the calendar without regard to the number of days it may
contain."28 It is the "period of time running from the beginning of a certain numbered day up to, but not
including, the corresponding numbered day of the next month, and if there is not a sufficient number of days in
the next month, then up to and including the last day of that month." 29 To illustrate, one calendar month from
December 31, 2007 will be from January 1, 2008 to January 31, 2008; one calendar month from January 31,
2008 will be from February 1, 2008 until February 29, 2008.30
A law may be repealed expressly (by a categorical declaration that the law is revoked and abrogated by
another) or impliedly (when the provisions of a more recent law cannot be reasonably reconciled with the
previous one).31Section 27, Book VII (Final Provisions) of the Administrative Code of 1987 states:
Sec. 27. Repealing clause. — All laws, decrees, orders, rules and regulation, or portions thereof, inconsistent with
this Code are hereby repealed or modified accordingly.
A repealing clause like Sec. 27 above is not an express repealing clause because it fails to identify or designate
the laws to be abolished.32 Thus, the provision above only impliedly repealed all laws inconsistent with the
Administrative Code of 1987.1avvphi1
Implied repeals, however, are not favored. An implied repeal must have been clearly and unmistakably
intended by the legislature. The test is whether the subsequent law encompasses entirely the subject matter of
the former law and they cannot be logically or reasonably reconciled.33
Both Article 13 of the Civil Code and Section 31, Chapter VIII, Book I of the Administrative Code of 1987 deal
with the same subject matter — the computation of legal periods. Under the Civil Code, a year is equivalent to
365 days whether it be a regular year or a leap year. Under the Administrative Code of 1987, however, a year is
composed of 12 calendar months. Needless to state, under the Administrative Code of 1987, the number of
days is irrelevant.
There obviously exists a manifest incompatibility in the manner of computing legal periods under the Civil Code
and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the
Administrative Code of 1987, being the more recent law, governs the computation of legal periods. Lex
posteriori derogat priori.
Applying Section 31, Chapter VIII, Book I of the Administrative Code of 1987 to this case, the two-year
prescriptive period (reckoned from the time respondent filed its final adjusted return 34 on April 14, 1998)
consisted of 24 calendar months, computed as follows:
Year 1st calendar April 15, 1998 to May 14, 1998
1 month
Guia-Salvador and Jose C. Mendoza of the Special Fifteenth Division of the Court of Appeals. Rollo, pp.
21-25.
3 Penned by Associate Justice Marina L. Buzon and concurred in by Associate Justices Rebecca de
Guia-Salvador and Jose C. Mendoza of the Former Special Fifteenth Division of the Court of Appeals.
Id., pp. 26-28.
4 Id., pp. 37-42.
5 Id., pp. 39-40.
6 Id. This was the period of economic slowdown known as the "Asian (Financial) Crisis" which started in
mid-1997.
7 Id., p. 41.
8 Summary of Tax/Payments for 1997:
Creditable
Corporate
Quarter Withholding TOTAL
Income Tax
Tax
Saga (retired) and Ramon O. de Veyra (retired). Dated December 15, 2000. Id., pp. 187-190.
13 CIR v. CA, 361 Phil. 359, 364-365 (1999).
14 The computation was as follows:
April 15, 1999 to April 14, 2000 (leap year) ---------- 366 days
No. 96322, 20 December 1991, 204 SCRA 957. See also CIR v. Philippine American Life Insurance
Co., G.R. No. 105208, 29 May 1995, 244 SCRA 446.
25 139 Phil. 584 (1969).
26 Id., pp. 588-589 citing People v. del Rosario, 97 Phil 70, 71 (1955).
27 Executive Order
28 Gutierrez v. Carpio, 53 Phil. 334, 335-336 (1929).
29 Section 9, Time, 74 AmJur 2d 593 citing Re Lynch's Estate, 123 Utah 57, 254 P2d 454.
30 This is pursuant to Article 13(3) of the Civil Code which provides that "[i]n computing a period, the first
For example, suppose that A who has a French nationality and residence in Germany, corresponds with B who
has American nationality, domicile in Arizona, and residence in Austria, over the internet. They agree the joint
purchase of land in Switzerland, currently owned by C who is a Swiss national, but they never physically meet,
executing initial contract documents by using fax machines, followed by a postal exchange of hard copies. A
pays his share of the deposit but, before the transaction is completed, B admits that although he has capacity
to buy land under his lex domicilii and the law of his residence, he is too young to own land under Swiss law. The
rules to determine which courts would have jurisdiction and which laws would be applied to each aspect of
the case are defined in each state's laws so, in theory, no matter which court in which country actually accepts
the case, the outcome will be the same (albeit that the measure of damages might differ from country to
country which is why forum shopping is such a problem). In reality, however, moves to harmonise the conflictual
system have not reached the point where standardization of outcome can be guaranteed. The status of
foreign law.
Generally, when the court is to apply a foreign law, it must be proved by foreign law experts. It cannot merely
be pleaded, as the court has no expertise in the laws of foreign countries nor in how they might be applied in a
foreign court. Such foreign law may be considered no more than evidence, rather than law because of the
issue of sovereignty. If the local court is actually giving extraterritorial effect to a foreign law, it is less than
sovereign and so acting in a way that is potentially unconstitutional.
(b) that the local court creates a right in its own laws to match that available under the foreign law. This
explanation is sustainable because, even in states which apply a system of binding legal precedents, any
precedent emerging from a conflicts case can only apply to future conflicts cases. There will be no ratio
decidendi that binds future litigants in entirely local cases.
Once the lex causae has been selected, it will be respected except when it appears to contravene an
overriding mandatory rule of the lex fori. Each judge is the guardian of his or her own principles of ordre public
(public policy) and the parties cannot, by their own act, oust the fundamental principles of the local municipal
law which generally underpin areas such as labour law, insurance, competition regulation, agency rules,
embargoes, import-export regulations, and securities exchange regulations. Furthermore, the lex fori will prevail
in cases where an application of the lex causae would otherwise result in a fundamentally immoral outcome,
or give extraterritorial effect to confiscatory or other territorially limited laws.
In some countries, there is occasional evidence of parochialism when courts have determined that if the
foreign law cannot be proved to a "satisfactory standard", then local law may be applied. Similarly, judges
might assume in default of express evidence to the contrary that the place where the cause of action arose
would provide certain basic protections, e.g. that the foreign court would provide a remedy to someone who
was injured due to the negligence of another. Finally, some American courts have held that local law will be
applied if the injury occurred in an "uncivilized place that has no law or legal system." See Walton v. Arabian
American Oil Co., 233 F.2d 541 (2d Cir. 1956). If the case has been submitted to arbitration rather than a
national court, say because of a forum selection clause, an arbitrator may decide not to apply local
mandatory policies in the face of a choice of law by the parties if this would defeat their commercial
objectives. However, the arbitral award may be challenged in the country where it was made or where
enforcement is sought by one of the parties on the ground that the relevant order public should have been
applied. If the lex loci arbitri has been ignored, but there was no real and substantial connection between the
place of arbitration and the agreement made by the parties, a court in which enforcement is sought may well
accept the tribunal's decision. But if the appeal is to the courts in the state where the arbitration was held, the
judge cannot ignore the mandatory provisions of the lex fori.
Choice of Law
Choice of law is a procedural stage in the litigation of a case involving the conflict of laws when it is necessary
to reconcile the
differences between the laws of different states, and in the United States between individual federated states.
The outcome of this process is potentially to require the courts of one jurisdiction to apply the law of a different
jurisdiction in lawsuits arising from, say, family law, tort or contract.
1. Jurisdiction. The court selected by the plaintiff must decide both whether it has the jurisdiction to hear the
case and, if it has, whether it is the most convenient forum (the forum non conveniens issue relates to the
problem of forum shopping) for the disposition of the case. Naturally, a plaintiff with appropriate knowledge
and finance will always commence proceedings in the court most likely to give a favourable outcome. This is
called forum shopping and whether a court will accept such cases is always determined by the local law.
2. Characterization. The court then allocates each aspect of the case as pleaded to its appropriate legal
classification. Each such classification has it own choice of law rules but distinguishing between procedural and
substantive rules requires care.
3. The court then applies the relevant choice of law rules. It should be noted that in a few cases, usually
involving Family Law, an incidental question can arise which will complicate this process.
The rules of private international law which are explained herein below are incidental to law and do not decide
the law. In other words these are connecting rules which help the courts to decide which law law should be
applied when a party is a foreign party.
Status
Status is relevant for a wide array of issues. Self-evidently, unless the proposed litigant has legal personality,
there will be no jurisdiction. It will also be relevant to immigration, entitlement to social security and similar
benefits, family law, contract, etc. The choice of law rule is the law of the domicile (lex domicilii) if the forum is
common law, or law of nationality (lex patriae) or habitual residence if the forum is civil law applies to
determine all question of status and its legal attributes. The lex fori determines the domicile, nationality or
habitual residence, and applies that law to establish an in rem set of rights and capacities. Thus, under some
laws, the status of illegitimate affects the rights of inheritance in the case of an intestacy, etc. As to
corporations, the choice of law rule is the law of incorporation (the lex incorporationis) for all matters of
capacity,
Lex Domiclii
The lex domicilii is the Latin term for "law of the domicile" in the Conflict of Laws. Conflict is the branch of public
law regulating all lawsuits involving a "foreign" law element where a difference in result will occur depending on
which laws are applied.
When a case comes before a court and all the main features of the case are local, the court will apply the lex
fori, the prevailing municipal law, to decide the case.
But if there are "foreign" elements to the case, the forum court may be obliged under the Conflict of Laws
system to consider:
# whether the forum court has jurisdiction to hear the matter or not;
# it must then characterize the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide the lex causae, i.e. which law is to be applied to each class.
The lex domicilii is a common law choice of law rule applied to cases testing the status and capacity of the
parties to the case. The civil law states use a test of either lex patriae (the law of nationality) or the law of
habitual residence to determine status and capacity.
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide which law is to be applied to each class.
The lex loci contractus is one of the possible choice of law rules applied to cases testing the validity of a
contract. For ex, suppose that a person domiciled in Canada and a person habitually resident in France, make
a contract by e-mail. They agree to meet in New York State to record a CD of hip hop music.
# then apply the choice of law rules to decide which law is to be applied to each class.
The lex loci solutionis is one of the possible choice of law rules applied to cases testing the validity of a contract
and in tort cases. For example, suppose that a person domiciled in Bolivia and a person habitually resident in
Germany, make a contract by e-mail. They agree to meet in Arizona to research a book. The possibly relevant
choice of law rules would be:
# the lex domicilii, lex patriae or the law of habitual residence to determine whether the parties had the
capacity to enter into the contract;
# the lex loci contractus which could be difficult to establish since neither party left their own states (reliance on
postal rules for offer and acceptance in the several putative lex causae might produce different results);
# the lex loci solutionis might be the most relevant since Arizona is the most closely connected to the substance
of the obligations assumed;
# the proper law; and
# the lex fori which might have public policy issues if, say, one of the parties was an infant.
# then apply the choice of law rules to decide which law is to be applied to each class.
The lex loci celebrationis is a choice of law rule applied to cases testing the validity of a marriage. For example,
suppose that a person domiciled in Scotland and a person habitually resident in France, both being of the
Islamic faith, go through an Islamic marriage ceremony in Pakistan where their respective families originated.
This ceremony is not registered with the Pakistani authorities but they initially establish a matrimonial home in
Karachi. After a year, they return to Europe. For immigration and other purposes, whether they are now
husband and wife would be referred to the law of Pakistan because that is the most immediately relevant law
by which to decide precisely the nature of the ceremony they went through and the effect of failing to register
it. If the ceremony was in fact sufficient to create a valid marriage under Pakistani law and there are no public
policy issues raised under their personal laws of lex domicilii or habitual residence, and under the lex fori, they
will be treated a validly married for all purposes, i.e. it will be an in rem outcome.
The lex loci delicti commissi is one of the possible choice of law rules applied to cases arising from an alleged
tort. For example, suppose that a person domiciled in Australia and a person habitually resident in Albania,
exchange correspondence by e-mail that is alleged to defame a group of Kurds resident in Turkey. The possibly
relevant choice of law rules would be:
# the lex loci solutionis might be the most relevant but this might be difficult because three laws might equally
apply, i.e. the parties themselves corresponded from two states but the damage was not sustained until the
correspondence was published in Turkey;
# he proper law which is the law which has the closest connection with the substance of the wrong alleged to
have been committed; &
# the lex fori which might have public policy issues if, say, one of the parties was an infant or there was the
possibility of multiple jurisdictions having involvement over a world-wide internet issue.
Lex Patriae
The term lex patriae is Latin for the law of nationality in the Conflict of Laws which is the system of public law
applied to any lawsuit where there is a choice to be made between several possibly relevant laws and a
different result will be achieved depending on which law is selected. When a case comes before a court and
all the main features of the case are local, the court will apply the lex fori, the prevailing municipal law, to
decide the case. But if there are "foreign" elements to the case, the forum court may be obliged under the
Conflict of Laws system to consider:
# whether the forum court has jurisdiction to hear the case;
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide the lex causae, i.e. which law is to be applied to each class.
The lex patriae is a civil law choice of law rule (in some states, the law of habitual residence is used) to test the
status and capacity of the parties to the case. For example, suppose that a person with a nationality in
Denmark decides to take a "round-the-world" trip. It would be inconvenient if this person's legal status and
capacities changed every time he or she entered a new state, e.g. that he or she might be considered an
infant or an adult, married or free to marry, bankrupt or creditworthy, etc., depending on the nature of the laws
of the place where he or she happened to be. Assuming that there are no public policy issues raised under the
relevant lex fori, the lex patriae should apply to define all major issues and so produce an in rem outcome no
matter where the case might be litigated. The common law states use a test of lex domicilii (the law of
domicile) to determine status and capacity. Because the lex patriae choice of law rule may select the law of a
country that contains more than one legal system, there must be rules to determine which of the several
possible laws might apply (e.g. a reference to the law of the United States is actually a reference to one of the
U.S. states). A supranational example of this selection process is contained in Article 19 of the Rome
Convention:
Lex Situs
The term lex situs (Latin) refers to the law of the place in which property is situated for the purposes of the
Conflict of laws. For
example, property may subject to tax pursuant to the law of the place of the property or by virtue of the
domicile of its owner. Conflict is the branch of public law regulating all lawsuits involving a "foreign" law element
where a difference in result will occur depending on which laws are applied. When a case comes before a
court and all the main features of the case are local, the court will apply the lex fori, the prevailing municipal
law, to decide the case. But if there are "foreign" elements
to the case, the forum court may be obliged under the Conflict of Laws system to consider:
# whether the forum court has jurisdiction to hear the case (see the problem of forum shopping);
# it must then characterise the issues, i.e. allocate the factual basis of the case to its relevant legal classes; and
# then apply the choice of law rules to decide which law is to be applied to each class.
The lex situs is a choice of law rule applied to identify the lex causae for cases involving title to, or the possession
and use of property.
# All other property is considered personal property or personalty in common law systems (movables in civil law
systems and the Conflict of Laws), and this property is either tangible or intangible, i.e. it is either physical
property that can be touched like a computer, or it is an enforceable right like a patent or other form of
intellectual property.
The term ulex sits is applied only to immovable property and lex loci rei sitae ought to be used when referring to
the law of the situs of movable property but this distinction is less common today and is ignored for the purposes
of the Conflict pages on the Wikipedia. Land has traditionally represented one of the most important cultural
and economic forms of wealth in society. Because of this historical significance, it is vital that any judgment
affecting title to or the use of the land should be enforceable with the minimum of difficulty. Hence,
compliance with the lex situs should produce a judgment in rem.
Lex Fori
In Conflict of Laws, the Latin term lex fori literally means the "law of the forum" and it is distinguished from the lex
causae which is the law the forum actually applies to resolve the particular case. Sovereignty comes into being
through a process of recognition by the international community in which a de facto state is formally accepted
as a de jure state and so becomes the legitimate government with territorial control over a defined area of
land and all the people who reside within its borders. One of the most important sovereign powers of any
government is to enact laws and to define the extent of their application.
Some laws will apply to all the land and its peoples. Others will be of more limited application. These laws will be
applied through different bodies and institutions. Some will be formally constituted as courts. Other bodies will
exercise specific functions within quasi-judicial, adminsitrative, religious or other frameworks. When a lawsuit is
instituted and the court has accepted that it has jurisdiction, the parties will normally expect the local laws to
apply, reflecting a presumption of territoriality ? that each state is sovereign within its own borders and the laws
of no other state or international body will apply extraterritorially or supranationally. If foreign laws did apply, the
state would be less than sovereign within its own borders. However, as social mobility has increased and the
internet encourages people to trade across national boundaries, a need to recognise the relevance and
importance of foreign laws to dispute resolution has arisen. Hence, within the precise limits set by the lex fori,
local courts may sometimes apply one or more foreign laws as the lex causae if the local politics, public policy
and the dictates of justice require it. For a more complete explanation, refer to the pages on characterisation,
and choice of law.
(c) There are exceptions to (b), i.e. some of the bases of jurisdiction under the Convention {Articles 16 and 17)
will apply to defendants, even though they are not domiciled in a Contracting State.
(a) Where the defendant is domiciled in a Contracting State: Article 2 in Section 1 contains the most important
basis of jurisdiction under the Convention, that a defendant domiciled in a Contracting State is subject to the
jurisdiction of the courts of that State. If the defendant is to be sued in the courts of a Contracting State other
than that of his domicile, Article 3 provides that this can only be done by virtue of the bases of jurisdiction set
out in Sections 2 to 6. This prevents national courts from using their traditional rules on jurisdiction, including their
exorbitant rules, against a defendant who is domiciled in a Contracting State. In the United Kingdom's case it is
specifically provided in Article 3 that, against such a defendant, jurisdiction can no longer be founded on
presence of the defendant in the forum. Article 3 does not refer to the domicile of the claimant: It follows that,
for example, a Japanese domiciliary, although not domiciled in a Contracting State, would have to use the
bases of jurisdiction under the Convention if he wished to sue in a Contracting State a defendant who was so
domiciled.
Articles 2 and 3 require courts to decide whether a defendant is domiciled in a Contracting State. Section 41 of
the 1982 Act contains a provision for determining when an individual is domiciled in the United Kingdom. He is
so domiciled, if and only if: (a) he is resident in the United Kingdom; and (b) the nature and circumstances of his
residence indicate that he has a substantial connection with the United Kingdom. The latter requirement shall
be presumed to be fulfilled, unless the contrary is proved, if the individual has been resident in the United
Kingdom, or part thereof, for the last three months or more. If the individual is not domiciled in the United
Kingdom it then has to be seen whether he is domiciled in another Contracting State. Section 41 has no
provisions for determining this. This is consistent with Article 52 of the Convention, which, it will be recalled,
provides that, in order to determine whether a party is domiciled in another Contracting State, the courts shall
apply the law of that State.
(b) The defendant is not domiciled in a Contracting State: Where the defendant is not domiciled in a
Contracting State, Article 4 states that the jurisdiction of the courts of each Contracting State shall, subject to
the provisions of Article 16, be determined by the law of that State. If, to take an example, an Englishman
wishes to sue a Californian domiciliary in England, he would have to do so under the traditional English rules on
jurisdiction, which are, by and large, more generous to the claimant than their equivalent under the
Convention. Article 4 therefore, recognizes the use of exorbitant jurisdiction by Contracting States in certain
circumstances. This has far reaching consequences when it comes to enforcing judgments and declining
jurisdiction in cases of lis pendens. Article 4 requires the courts of Contracting States to ascertain when a
defendant is not domiciled in a Contracting State. Having decided that an individual defendant is not
domiciled in the United Kingdom (under the United Kingdom definition), and is not domiciled in another
Contracting State (under. that State's definition), the defendant must be domiciled in a non-Contracting State.
A person must have a domicile in one State or another for the purposes of the Convention and the 1982 Act. In
the rare situations where the particular non-Contracting State which the defendant is domiciled has to be
ascertained, this is done by applying section 41 (7) of the 1982 Act, which provides that an individual is
domiciled in a State other than a Contracting State if and only if (a) he is resident in that State; and
(b) the nature and circumstances of the residence indicate that he has a substantial connection with that
State. In this particular context there is no resumption to aid in showing the required substantial connection,
and it is possible, in rare cases, that an individual may not have a substantial connection with anyone State at
all. Where this happens one would have to be resigned to lying that the individual is domiciled in a non-
Contracting State but it is not clear in which particular one. As regards corporate defendants, section 42(6) will
be applied to determine whether a company has its seat in a non-Contracting State.
(c) The exceptions: Article 4 mentions just one exception to the rule that national bases of jurisdiction apply
where the defendant is not domiciled in a Contracting State; it is contained in Article 16. This gives exclusive
jurisdiction in certain circumstances, regardless of the defendant's domicile. Although Article 4 does not
mention it, there is another exception to the rule; this is Article 17 (agreements on jurisdiction). This article is
drafted in such a way that the defendant is not required to be domiciled in a Contracting State. Other possible
exceptions under Article 18 (submission), Article 12 (an agreement in a
matter relating to insurance) and Article 15 (an agreement in a consumer contract) are discussed later.
The defendant must be domiciled in the United Kingdom or the proceedings must be of a kind mentioned in
Article 16 of the 1968 Convention. The Modified Convention is only concerned in Brussels Convention cases with
proceedings where jurisdiction is allocated to the United Kingdom under Article 2 (the defendant is domiciled in
a Contracting State) or
under Article 16 of the 1968 Convention (exclusive jurisdiction regardless of domicile). With both of these articles
the Convention confers international jurisdiction (i.e. on the United Kingdom) and not local jurisdiction (i.e. on a
part of the United Kingdom). Where the Convention assigns jurisdiction to the courts in the United Kingdom
under other articles, it is necessary to regard it as allocating jurisdiction to the courts in a part of the United
Kingdom. In general, there is no problem where Article 5 applies, as this is designed to give local jurisdiction.
Most of the heads of Article 5 are phrased in terms of the courts for a "place" in a Contracting State having
jurisdiction. For example, Article 5(3) refers to the courts for the place where, the harmful event occurred;
ascertaining the "place" where the harmful event, occurred inevitably pinpoints a part of the United Kingdom
whose courts are to have jurisdiction. Where Articles 17 and 18 apply, as has already been seen, there may be
more difficulty in allocating jurisdiction to a part of the United Kingdom.
The requirement under section 16(I)(b) that the defendant be domiciled in the United Kingdom causes the
usual definitional problems. In principle, a person is domiciled in England, Scotland, or Northern Ireland, not in
the United Kingdom. Section 41(2) of the 1982 Act solves this difficulty by defining for the purposes of the Act
whether an individual is domiciled in the United Kingdom.
This is only so if:
(a) he is resident in the United Kingdom; and
(b) the nature and circumstances of his residence indicate that he has a substantial connection with the United
Kingdom.
Showing this substantial connection is made easier by the introduction of a presumption under section 41(6),
according to which, where an individual (a) is resident in the United Kingdom, or in a particular part; and (b)
has been so resident for the last three' months or more, the requirement as to a substantial connection is
presumed to: have been fulfilled, unless the contrary is shown. With corporations, section 42(3) basically
provides that a corporation has its seat in the United Kingdom if (a) it was incorporated and has its registered
office in the United Kingdom; or (b) its central management and control is exercised in the United Kingdom.
This section confined to torts committed in India an d to defendants residing in India. It does not include within
its ambit the suits in respect of foreign torts. Such cases are covered by section 20, which overlaps this section.
This section deals with inter partes suits.
Thus, it is submitted that Indian Courts should not construe strictly the requirement of residence in private
international law cases, nor should it exercise jurisdiction over persons on whom process has not bee served just
because cause of action arises within jurisdiction. The Indian rules of Private International Law are identical to
the rules of English Private International Law. Submission to the Court. Under English Law, A person may submit
to the jurisdiction of the Court either under an express agreement or by conduct. If a person to the court
submits to the jurisdiction then the court gets the jurisdiction to try the action and a decree or an order is
passed in such action will be valid internationally. The submission to jurisdiction cannot bring those cases within
the jurisdiction, which are otherwise outside the jurisdiction. A person may submit to the court either by his/her
conduct (conduct which is voluntary) or by a contract (by way of express stipulation in the contract).
Where as the Indian Law of submission, it closely follows English Law. If a person is outside the jurisdiction, the
court will have the jurisdiction on him only if he submits to the jurisdiction of the court. In case, the foreign
defendant does not submit to the jurisdiction of the court, then the judgment delivered in his absence would
be null and void. Mere appearance in the court amounts to submission.
If the relevant states are not parties to the Hague Convention on Foreign Judgments in Civil and Commercial
Matters, the EC Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters
or a similar treaty or convention providing for the routine of registration and enforcement between states, the
courts of most states will accept jurisdiction to hear cases for the recognition and enforcement of judgments
awarded by the courts of another state if the defendant or relevant assets are physically located within their
territorial boundaries. Whether recognition will be given is determined by the lex fori, i.e. the domestic law of the
local court and the principles of comity. The following issues are considered:· whether the foreign court properly
accepted personal jurisdiction over the defendant;
· whether the defendant was properly served with notice of the proceedings and given a reasonable
opportunity to be heard which raises general principles of natural justice and will frequently be judged by
international standards (hence, the rules for service on a non-resident defendant outside the jurisdiction must
match general standards and the fact that the first instance court's rules were followed will be irrelevant if the
international view is that the local system is unjust);
Sections 13 and 14 enact a rule of res judicata in case of foreign judgments. These provisions embody the
principle of private international law that a judgment delivered by a foreign court of competent jurisdiction
can be enforced by an Indian court and will operate as res judicata between the parties thereto except in the
cases mentioned in Section 13.
Object of Section.13 And 14 is that The judgment of a foreign court is enforced on the principle that where a
court of competent jurisdiction has adjudicated upon a claim, a legal obligation arises to satisfy that claim. The
rules of private international law of each State must in the very nature of things differ, but by the comity of
nations certain rules are recognized as common to civilized jurisdictions. Through part of the judicial system of
each State these common rules have been adopted to adjudicate upon disputes involving a foreign element
and to effectuate judgments of foreign courts in certain matters, or as a result of international conventions.
Such recognition is accorded not as an act of courtesy but on considerations of justice, equity and good
conscience. An awareness of foreign law in a parallel jurisdiction would be a useful guideline in determining our
notions of justice and public policy. We are sovereign within our territory but "it is no derogation of sovereignty
to take account of foreign law."
As has been rightly observed by a great jurist: "We are not so provincial as to say that every solution of a
problem is wrong because we deal with it otherwise at home"; and we shall not brush aside foreign judicial
process unless doing so "would violate some fundamental principle of justice, some prevalent conception of
good morals, some deep-rooted tradition of the common weal."
The Code of Civil Procedure provides that a foreign judgment shall be conclusive as to any matter thereby
directly adjudicated upon between the same parties pr between parties under whom they or any of them
claim litigating under the same title except -
a) Where it has not been pronounced by court of competent jurisdiction;
b) Where it has not been given on the merits of the case;
c) Where it appears on the face of the proceeding to be founded on an incorrect view of international law or
a refusal to recognize the law of India in cases in which such law is applicable;
d) Where the proceeding in which the judgment was obtained or opposed to natural justice;
e) Where it has been obtained by fraud;
f) Where it sustains a claim founded on a breach of any law in force in India
Thus if A sues B in a foreign court, and if the suit is dismissed, the decision will operate as a bar to a fresh suit by A
in India on the same cause of action. On the other hand, if a decree is passed in favor of A by a foreign court
against B and he sues B on the judgment in India, B will be precluded from putting in issue the same matters
that were directly and substantially in issue in the suit and adjudicated upon by the foreign court.
# Foreign Judgment Against International Or Indian Law. A judgment based upon an incorrect view of
international law or a refusal to recognize the law of India where such law is applicable is not conclusive. But
the mistake must be apparent on the face of the proceedings. Thus, where in a suit instituted in England on the
basis of a contract made in India, the English court erroneously applied English law, the judgment of the court is
covered by this clause in as much as it is a general principle of Private International Law that the rights and
liabilities of the parties to a contract are governed by the place where the contract is made (lex loci
contractus). "When a foreign judgment is founded on a jurisdiction or on a ground not recognized by Indian
law or International Law, it is a judgment which is in defiance pf the law. Hence, it is not conclusive of the
matter adjudicated therein and, therefore, unenforceable in this country."
Thus a judgment given without notice of the suit to the defendant or without affording a reasonable
opportunity of representing his case is opposed to natural justice. Similarly, a judgment against a party not
properly represented in the proceedings or where the judge was biased is contrary to natural justice and,
therefore, does not operate as res judicata.
But the expression "natural justice" in clause (d) of Section 13 relates to the irregularities in procedure rather than
to the merits of the case. A foreign judgment of a competent court, therefore, is conclusive even if it proceeds
on an erroneous view of the evidence or the law, if the minimum requirements of the judicial process are
assured; correctness of the judgment in law or evidence is not predicated as a condition for recognition of its
conclusiveness by the municipal court. Thus, a foreign judgment is not open to attack on the ground that the
law of domicile had not been properly applied in deciding the validity of adoption or that the court disagrees
with the conclusion of the foreign court, if otherwise the principles of natural justice have been complied with.
Lord Denning observed: " No judgment of a court, no order of a Minister, can be allowed to stand, if it has been
obtained by fraud." Cheshire rightly states: "It is firmly established that a foreign judgment is impeachable for
fraud in the sense that upon proof of fraud it cannot be enforced by action in England." All judgments whether
pronounced by domestic or foreign courts are void if obtained by fraud, for fraud vitiates the most solemn
proceeding of a court of justice. In the leading case of Satya v. Teja Singh , where a husband obtained a
decree of divorce against his wife from an American Court averring that he was domiciled in America.
Observing that the husband was not a bonafide resident or domicile of America, and he had played fraud on
a foreign court falsely representing to it incorrect jurisdictional fact, the Supreme Court held that the decree
was without jurisdiction and a nullity.
Again, in Narsimha Rao v. Venkata Kakshmi, A husband obtained a decree of divorce against his wife B again
from an American High Court on the ground that he was a resident of America. Then he remarried C. B filed a
criminal complaint against A and C for bigamy. A and C filed an application for discharge.
The fraud may be either fraud on the part of the party invalidating a foreign judgment in whose favor the
judgment is given or fraud on the court pronouncing the judgment. Such fraud, however, should not be merely
constructive, but must be actual fraud consisting of representations designed and intended to mislead; a mere
concealment of fact is not sufficient to avoid a foreign judgment.
Section 14 of the Code declares that the court shall presume, upon the production of any document
purporting to be a certified copy of a foreign judgment, that such judgment was pronounced by a court of
competent jurisdiction, unless the contrary appears on the record, or is proved. However, if for admissibility of
such copy any further condition is required to be fulfilled, it can be admitted in evidence only if that condition is
satisfied.
2. Execution Proceedings
A foreign judgment may also be enforced by proceedings in execution in certain specified cases mentioned in
Section 44-A of the Code. The said section provides that where a certified copy of a decree if any of the
superior courts of any reciprocating territory has been filed in a District Court, the decree may be executed in
India as if it had been passed by the District Court. When a foreign judgment is sought to be executed under
Section 44-A, it will be open to the judgment-debtor to rake all objections, which would have been open to him
under Section 13 if a suit had been filed on such judgment. The fact that out of six exceptions there has been
due compliance with some of the exceptions is of no avail. The decree can be executed under Section 44-A
only if all the conditions of Section 13 (a) to (f) are satisfied.
Conclusion
In case a party is a foreign party the party has to submit to the jurisdiction the court first. And the jurisdiction is
decided with the
help of certain rules of Private International Law which are the connecting rules which help the courts in
deciding what law should be applied to decide the case. Then, the foreign party is required to submit to the
court that has jurisdiction i.e. he/she accept the decision of that court. After the court gives the decision, in
order to enforce it in the foreign state, the foreign court need to recognize it and then it will be enforced. For
Recognition and enforcement of foreign decrees and orders every country has its own rules/Laws. Thus, the
Indian rules of Private International Law are identical to the rules of English Private International Law.
The author can be reached at: tanvikapoor@legalserviceindia.com / Print This Article
Facts:
Amos G. Bellis was a citizen and resident of Texas at the time of his death. Before he died, he made
two wills, one disposing his Texas properties, the other disposing his Philippine properties. In both wills, the
recognized illegitimate children were not given any share. Texas has no conflict rule (Rule of Private
International Law) governing successional rights. Furthermore, under Texas law, there are no compulsory heirs.
Issue:
Held:
The said illegitimate children are not entitled to their legitimes. Under Texas law, there are no legitimes.
Even if the other will was executed in the Philippines, his national law, still, will govern the properties for
succession even if it is stated in his testate that it shall be governed by the Philippine law.
3. ISSUE:WON anyforeign divorce, relatingto citizens of the Philippine Islands, will be recognizedinthis
jurisdiction, except it be for a cause, andunder conditions for whichthe courts of the Philippine Islands
would grant a divorce.
4. HELD: NO. The lower court erredingrantingthe reliefas prayedfor ongranting the divorce, because: • The
court said that securingthe jurisdictionof the courts to recognize & approve the divorce done inReno,
Nevada cannot be done accordingto the public policyin this jurisdictionon the questionof divorce. • It’s
clear in Act No. 2710 & court decisions on cases such as Goitia VS. Campos Rueda that the entire
conduct of the parties from the time of their separation untilthe case was submittedpraying the
ratificationof the Reno Divorce wasclearlya circumventionof the law regarding divorce & will be done
under conditions not authorized byour laws. • The matrimonial domicile of the couple had always been
the Philippines& the residence acquired bythe husbandin Reno, Nevada was a bona fide residence &
didnot confer jurisdictionuponthe court of that state to dissolve the matrimonial bonds inwhichhe had
entered in 1919. • Art 9 & Art 11 of the Civil Code & The Divorce Lawof the Philippines does not
allowsuchto be done, the effect of foreigndivorce inthe Philippines says that litigants cannot compel
the courts to approve oftheir ownactions or permit the personal relations of the Citizens of the
Philippines to be affectedbydecrees ofdivorce of foreigncourts in manner whichout government
believes is contraryto public order & good morals. SC RULING:The decisionof CFI-Manila was REVERSED &
Defendant is absolvedfrom the demands made against himinthis action. CONNECTION TO PERSONS,
FAMILY RELATION/ CIVIL CODE:
5. 3. 3 • Article 9 of the Old CivilCode, nowinArt 15 says that “Laws relating to familyrights & duties or to
status, condition, and legal capacityof persons, are binding upon Spaniards even though theyreside in
a foreigncountry” • The last part ofArt 11 of the Old CivilCode, nowinArt 17 alsostates “...the prohibitive
laws concerningpersons, their acts & their property, andthose intendedto promote public order & good
morals, shall not be rendered without effect byanyforeignlaws or judgements or by anythingdone or
anyagreements entered into ina foreign country.” Divorce Laws of the Philippines—The hardships
ofexistingdivorce laws ofthe Philippine Islands are well known to the members ofthe Legislature. It is the
dutyof the courts to enforce the laws of divorce as writtenbythe Legislature if theyconstitutional. Courts
have no right to saysuchlaws are too strict or too liberal. • At the time thisdecisionwas renderedthere
was stillabsolute divorce inthe Philippines on the groundof Adulteryon the part of the wife,
andConcubinage on the part of the husband; the divorce, however, couldbe
grantedonlyuponshowing that the defendant hadbeen convictedbyfinal judgement for the adulteryor
concubinage as the case maybe. The new Civil Code hasabolishedabsolute divorce, leaving
onlylegalseparation, which is equivalent to relative divorce.
Facts:
Edward S. Christensen, though born in New York, migrated to California where he resided and
consequently was considered a California Citizen for a period of nine years to 1913. He came to the Philippines
where he became a domiciliary until the time of his death. However, during the entire period of his residence in
In his will, executed on March 5, 1951, he instituted an acknowledged natural daughter, Maria Lucy
Christensen as his only heir but left a legacy of some money in favor of Helen Christensen Garcia who, in a
decision rendered by the Supreme Court had been declared as an acknowledged natural daughter of his.
Counsel of Helen claims that under Art. 16 (2) of the civil code, California law should be applied, the matter is
returned back to the law of domicile, that Philippine law is ultimately applicable, that the share of Helen must
be increased in view of successional rights of illegitimate children under Philippine laws. On the other hand,
counsel for daughter Maria , in as much that it is clear under Art, 16 (2) of the Mew Civil Code, the national of
the deceased must apply, our courts must apply internal law of California on the matter. Under California law,
there are no compulsory heirs and consequently a testator should dispose any property possessed by him in
absolute dominion.
Issue:
Held:
The Supreme Court deciding to grant more successional rights to Helen Christensen Garcia said in
1. The conflict rule which should apply to Californian’s outside the California, and
The California conflict rule, found on Art. 946 of the California Civil code States that “if there is no law to
the contrary in the place where personal property is situated, it is deemed to follow the decree of its owner and
Christensen being domiciled outside california, the law of his domicile, the Philippines is ought to be
followed.
Wherefore, the decision appealed is reversed and case is remanded to the lower court with instructions
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, Plaintiff-Appellee, vs. GEORGE I. FRANK, Defendant-Appellant.
DECISION
JOHNSON, J.:
Judgment was rendered in the lower court on the 5th day of September, 1905. the Defendantappealed. On
the 12th day of October, 1905, the Appellant filed his printed bill of exceptions with the clerk of the Supreme
Court. On the 5th day of December, 1905, the Appellant filed his brief with the clerk of the Supreme Court. On
the 19th day of January, 1906, the Attorney-General filed his brief in said cause. Nothing further was done in
said cause until on about the 30th day of January, 1909, when the respective parties were requested by this
court to prosecute the appeal under penalty of having the same dismissed for failure so to do; whereupon
the Appellant, by petition, had the cause placed upon the calendar and the same was heard on the 2d day
of February, 1909.
The facts from the record appear to be as follows: chanrobles virtualawlibrary
First. That on or about the 17th day of April, 1903, in the city of Chicago, in the State of Illinois, in the United
States, the Defendant, through a representative of the Insular Government of the Philippine Islands, entered
into a contract for a period of two years with the Plaintiff, by which the Defendant was to receive a salary of
1,200 dollars per year as a stenographer in the service of the said Plaintiff, and in addition thereto was to be
paid in advance the expenses incurred in traveling from the said city of Chicago to Manila, and one-half salary
during said period of travel.
Second. Said contract contained a provision that in case of a violation of its terms on the part of
the Defendant, he should become liable to the Plaintiff for the amount expended by the Government by way
of expenses incurred in traveling from Chicago to Manila and the one-half salary paid during such period.
Third. The Defendant entered upon the performance of his contract upon the 30th day of April, 1903, and was
paid half-salary from the date until June 4, 1903, the date of his arrival in the Philippine Islands.
Fourth. That on the 11th day of February, 1904, the Defendant left the service of the Plaintiff and refused to
make a further compliance with the terms of the contract.
Fifth. On the 3d day of December, 1904, the Plaintiff commenced an action in the Court of First Instance of the
city of Manila to recover from the Defendant the sum of 269. 23 dollars, which amount the Plaintiff claimed had
been paid to the Defendant as expenses incurred in traveling from Chicago to Manila, and as half-salary for
the period consumed in travel.
Sixth. It was expressly agreed between the parties to said contract that Laws No. 80 and No. 224 should
constitute a part of said contract.
To the complaint of the Plaintiff the Defendant filed a general denial and a special defense, alleging in his
special defense that the Government of the Philippine Islands had amended Laws No. 80 and No. 224 and had
thereby materially altered the said contract, and also that he was a minor at the time the contract was
entered into and was therefore not responsible under the law.
To the special defense of the Defendant the Plaintiff filed a demurrer, which demurrer the court sustained.
Upon the issue thus presented, and after hearing the evidence adduced during the trial of the cause, the lower
court rendered a judgment against the Defendant and in favor of the Plaintiff for the sum of 265. 90 dollars. The
lower court found that at the time the Defendant quit the service of the Plaintiff there was due him from the
said Plaintiff the sum of 3. 33 dollars, leaving a balance due the Plaintiff in the sum of 265. 90 dollars. From this
judgment the Defendant appealed and made the following assignments of error: chanrobles virtualawlibrary
1. The court erred in sustaining Plaintiff’s demurrer to Defendant’s special defenses.
2. The court erred in rendering judgment against the Defendant on the facts.
With reference to the above assignments of error, it may be said that the mere fact that the legislative
department of the Government of the Philippine Islands had amended said Acts No. 80 and No. 224 by Acts
No. 643 and No. 1040 did not have the effect of changing the terms of the contract made between
the Plaintiff and the Defendant. The legislative department of the Government is expressly prohibited by section
5 of the Act of Congress of 1902 from altering or changing the terms of a contract. The right which
the Defendant had acquired by virtue of Acts No. 80 and No. 224 had not been changed in any respect by
the fact that said laws had been amended. These acts, constituting the terms of the contract, still constituted a
part of said contract and were enforceable in favor of the Defendant.
The Defendant alleged in his special defense that he was a minor and therefore the contract could not be
enforced against him. The record discloses that, at the time the contract was entered into in the State of Illinois,
he was an adult under the laws of that State and had full authority to contract. The Plaintiff [the Defendant]
claims that, by reason of the fact that, under that laws of the Philippine Islands at the time the contract was
made, made persons in said Islands did not reach their majority until they had attained the age of 23 years, he
was not liable under said contract, contending that the laws of the Philippine Islands governed. It is not
disputed — upon the contrary the fact is admitted — that at the time and place of the making of the contract
in question the Defendant had full capacity to make the same. No rule is better settled in law than that matters
bearing upon the execution, interpretation and validity of a contract are determined b the law of the place
where the contract is made. (Scudder vs. Union National Bank, 91 U. S., 406.) cralaw Matters connected with its
performance are regulated by the law prevailing at the place of performance. Matters respecting a remedy,
such as the bringing of suit, admissibility of evidence, and statutes of limitations, depend upon the law of the
place where the suit is brought. (Idem.) cralaw
The Defendant’s claim that he was an adult when he left Chicago but was a minor when he arrived at Manila;
that he was an adult a the time he made the contract but was a minor at the time the Plaintiff attempted to
enforce the contract, more than a year later, is not tenable.
Our conclusions with reference to the first above assignment of error are, therefore.
First. That the amendments to Acts No. 80 and No. 224 in no way affected the terms of the contract in question;
and
Second. The Plaintiff [Defendant] being fully qualified to enter into the contract at the place and time the
contract was made, he cannot plead infancy as a defense at the place where the contract is being enforced.
We believe that the above conclusions also dispose of the second assignment of error.
For the reasons above stated, the judgment of the lower court is affirmed, with costs.
Arellano, C.J., Torres, Mapa, Carson and Willard, JJ., concur.
GERMANN & CO., Plaintiffs-Appellees, v. DONALDSON, SIM & CO., Defendants-Appellants.
SYLLABUS
1. CONTRACT; CONFLICT OF LAWS. — The validity of a power of attorney executed in Germany between
German subjects should considered according to the laws of that country.
2. AGENCY; POWER OF ATTORNEY. — The right to commence action for collection of debts owing to principal is
not an incident of strict ownership, which must be conferred in express terms.
3. POWER OF ATTORNEY; RIGHT TO SUE. — The power to "legally compel" the payment of debts owing to the
principal is an express grant of the right to bring suit for the collection of such debts.
DECISION
LADD, J. :
This is an incident of want of personality of the plaintiff’s attorney. The action is to recover a sum claimed to be
due for freight under a charter party. It was brought by virtue of a general power for suits, executed in Manila
October 27, 1900, by Fernando Kammerzell, and purporting to be a substitution in favor of several attorneys of
powers conferred upon Kammerzell in an instrument executed in Berlin, Germany, February 5, 1900, by Max
Leonard Tornow, the sole owner of the business carried on in Berlin and Manila under the name of Germann &
Co. The first-named instrument was authenticated by a notary with the formalities required by the domestic
laws. The other was not so authenticated. Both Tornow and Kammerzell are citizens of Germany. Tornow is a
resident of Berlin and Kammerzell of Manila.
The defendants claim that the original power is invalid under article 1280, No. 5, of the Civil Code, which
provides that powers for suits must be contained in a public instrument. No claim is made that the document
was not executed with the formalities required by the German law in the case of such an instrument. We see no
reason why the general principle that the formal validity of contracts is to be tested by the laws of the country
where they are executed should not apply. (Civil Code, art. 11.)
The defendants also claim that the original power can not be construed as conferring upon Kammerzell
authority to institute or defend suits, from which contention, if correct, it would of course follow that the
delegated power is invalid. In support of this contention reliance is placed upon article 1713 of the Civil Code,
by which it is provided that "an agency stated in general terms only includes acts of administration," and that
"in order to compromise, alienate, mortgage, or to execute any other act of strict ownership an express
commission is required."cralaw virtua1aw library
It has been argued by counsel for the plaintiffs that these provisions of the domestic law are not applicable to
the case of an agency conferred, as was that in question, by one foreigner upon another in an instrument
executed in the country of which both were citizens. We shall not pass upon this question, since we are clearly
of opinion that the instrument contains an explicit grant of a power broad enough to authorize the bringing of
the present action, even assuming the applicability of the domestic law as claimed by the defendants.
By this instrument Tornow constitutes Kammerzell his "true and lawful attorney with full power to enter the firm
name of Germann & Co. in the Commercial Registry of the city of Manila as a branch of the house of Germann
& Co. in Berlin, it being the purpose of this power to invest said attorney with full legal powers and authorization
to direct and administer in the city of Manila for us and in our name a branch of our general commercial
business of importation and exportation, for which purpose he may make contracts of lease and employ
suitable assistants, as well as sign every kind of documents, accounts, and obligations connected with the
business which may be necessary, take charge in general of the receipt and delivery of merchandise
connected with the business, sign all receipts for sums of money and collect them and exact their payment by
legal means, and in general execute all the acts and things necessary for the perfect carrying on of the
business committed to his charge in the same manner as we could do ourselves if we were present in the same
place."cralaw virtua1aw library
We should not be inclined to regard the institution of a suit like the present, which appears to be brought to
collect a claim accruing in the ordinary course of the plaintiff’s business, as properly belonging to the class of
acts described in article 1713 of the Civil Code as acts "of strict ownership." It seems rather to be something
which is necessarily a part of the mere administration of such a business as that described in the instrument in
question and only incidentally, if at all, involving a power to dispose of the title to property.
But whether regarded as an act of strict ownership or not, it appears to be expressly and specially authorized
by the clause conferring the power to "exact the payment" of sums of money "by legal means." This must mean
the power to exact the payment of debts due the concern by means of the institution of suits for their recovery.
If there could be any doubt as to the meaning of this language taken by itself, it would be removed by a
consideration of the general scope and purpose of the instrument in which it occurs. (See Civil Code, art. 1286.)
The main object of the instrument is clearly to make Kammerzell the manager of the Manila branch of the
plaintiff’s business, with the same general authority with reference to its conduct which his principal would
himself possess if he were personally directing it. It can not be reasonably supposed, in the absence of very
clear language to that effect, that it was the intention of the principal to withhold from his agent a power so
essential to the efficient management of the business entrusted to his control as that to sue for the collection of
debts.
Footnotes:
1 Rollo, pp. 34-44. The CA Decision was penned by Justice Roberto A. Barrios, with the concurrence of
Respondents' Memorandum signed by Attys. Romeo B. Igot and Liberato F. Mojica. Filed earlier was
petitioner's Memorandum, signed by Atty. Gelacio C. Mamaril and Roberto B. Arca.
7 Rollo, pp. 180-210
8 Ibid., p. 192. Upper case used in the original.
9 Custodio v. Court of Appeals, 253 SCRA 483, February 9, 1996; China Banking Corporation v. Court of
Appeals, 231 SCRA 472, March 28, 1994; Sba v. Court of Appeals, 189 SCRA 50, Auguts 24, 1990; ilocos
Norte Electric Company v. Court of Appeals, 179 SCRA 5, November 6, 1989; Auyong Hian v. CTA,
59 SCRA 110, September 12, 1974.
10 CA Decision, pp. 6-7; rollo, pp. 39-40.
11 TSN, February 12, 1991, pp. 14-15
12 Alicia Gonzales-Decano, Notes on Torts and Damages, p. 97.
13 217 SCRA 16, 24-25, January 11, 1993, per Bidin, J.
14 Globe Mackay Cable and Radio Corp. v. Cout of Appeals, 176 SCRA 778, August 25, 1989.
15 Occena v. Icamina, 181 SCRA 328, January 22, 1990
FACTS: In the evening of October 13, 1994, while drinking coffee at the lobby of Hotel Nikko, respondent was
invited by a friend, Dr. Filart to join her in a party in celebration of the birthday of the hotel’s manager. During
the party and when respondent was lined-up at the buffet table, he was stopped by Ruby Lim, the Executive
Secretary of the hotel, and asked to leave the party. Shocked and embarrassed, he tried to explain that he
was invited by Dr. Filart, who was herself a guest. Not long after, a Makati policeman approached him and
escorted him out of her party.
Ms. Lim admitted having asked respondent to leave the party but not under the ignominious circumstances
painted by Mr. Reyes, that she did the act politely and discreetly. Mindful of the wish of the celebrant to keep
the party intimate and exclusive, she spoke to the respondent herself when she saw him by the buffet table
with no other guests in the immediate vicinity. She asked him to leave the party after he finished eating. After
she had turned to leave, the latter screamed and made a big scene.
Dr. Filart testified that she did not want the celebrant to think that she invited Mr. Reyes to the party.
Respondent filed an action for actual, moral and/or exemplary damages and attorney’s fees. The lower court
dismissed the complaint. On appeal, the Court of Appeals reversed the ruling of the trial court, consequently
imposing upon Hotel Nikko moral and exemplary damages and attorney’s fees. On motion for reconsideration,
the Court of Appeals affirmed its decision. Thus, this instant petition for review.
ISSUES: Whether or not Ms. Ruby Lim is liable under Articles 19 and 21 of the Civil Code in asking Mr. Reyes to
leave the party as he was not invited by the celebrant thereof and whether or not Hotel Nikko, as the employer
of Ms. Lim, be solidarily liable with her.
RULING: The Court found more credible the lower court’s findings of facts. There was no proof of motive on the
part of Ms. Lim to humiliate Mr. Reyes and to expose him to ridicule and shame. Mr. Reyes’ version of the story
was unsupported, failing to present any witness to back his story. Ms. Lim, not having abused her right to ask Mr.
Reyes to leave the party to which he was not invited, cannot be made liable for damages under Articles 19
and 21 of the Civil Code. Necessarily, neither can her employer, Hotel Nikko, be held liable as its liability springs
from that of its employees.
When a right is exercised in a manner which does not conform with the norms enshrined in Article 19 and results
in damage to another, a legal wrong is thereby committed for which the wrongdoer must be responsible.
Article 21 states that any person who willfully causes loss or injury to another in a manner that is contrary to
morals, good customs or public policy shall compensate the latter for the damage.
Without proof of any ill-motive on her part, Ms. Lim’s act cannot amount to abusive conduct.
The maxim “Volenti Non Fit Injuria” (self-inflicted injury) was upheld by the Court, that is, to which a person
assents is not esteemed in law as injury, that consent to injury precludes the recovery of damages by one who
has knowingly and voluntarily exposed himself to danger.
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Topic: DEFENSES: ASSUMPTION OF RISK Digested by: Aubrey Case #7 G.R. No. 154259 February 28, 2005 NIKKO
HOTEL MANILA GARDEN and RUBY LIM, petitioners, vs. ROBERTO REYES, a.k.a. "AMAY BISAYA," respondent.
Facts: The cause of action before the trial court was one for damages brought under the human relations
provisions of the New Civil Code. Respondent Reyes’ Version: Mrs. Filart invited and assured that she can
vouched for him in the birthday party of the hotel’s manager, Mr. Masakazu at the penthouse. When the buffet
dinner was ready, Reyes lined up but, to his great shock, shame and embarrassment, he was stopped by Lim
(Exec. Sec. of Nikko Hotel), and in a loud voice w/in the presence and hearing of the other guests, told him to
leave the party. Reyes tried to explain that he was invited by Dr. Filart, but the latter completely ignored him
adding to his shame and humiliation. Not long after, policemen approached him and asked him to step out of
the hotel. He now claims P1M for actual damagaes, P1M moral and/or exemplary damages and P200k for
atty’s fees. Lim’s version: At the party she noticed Reyes at the bar counter ordering a drink. Mindful of Mr.
Tsuruoka’s wishes to keep the party intimate, she approached the captain waiter to inquire as to the presence
of Reyes who was uninvited. The waiter said that he saw Reyes came in w/ the group of Dr. Filart. Lim inquired
Dr Filart’s sister about Reyes and the sister said the latter was not invited by Dr. Filart. Lim requested the sister to
tell Reyes to leave but the latter just lingered. The same happened when one Capt. Batung asked Reyes to
leave. When Lim spotted Reyes by the buffet table, she decided to speak to him herself as there were no guest
in the immediate vicinity. However, as Reyes was already helping himself to the food, she decided to wait.
When Reyes went to a corner and started to eat, Lim approached him and said: "alam ninyo, hindo ho kayo
dapat nandito. Pero total nakakuha na ho kayo ng pagkain, ubusin na lang ninyo at pagkatapos kung pwede
lang po umalis na kayo." She then turned around trusting that Reyes would show enough decency to leave,
but to her surprise, he began screaming and making a big scene, and even threatened to dump food on her.
Dr. Filart’s version: According to her, it was Reyes who volunteered to carry the basket of fruits intended for the
celebrant as he was likewise going to take the elevator, not to the penthouse but to Altitude 49. When they
reached the penthouse, she reminded Reyes to go down as he was not properly dressed and was not invited.
All the while, she thought that Reyes already left the place. Then there was a commotion and she saw Reyes
shouting. She ignored Reyes. She was embarrassed and did not want the celebrant to think that she invited
him. RTC Ruling: After trial on the merits, the court a quo dismissed the complaint, giving more credence to the
testimony of Ms. Lim that she was discreet in asking Mr. Reyes to leave the party. The trial court likewise
ratiocinated that Mr. Reyes assumed the risk of being thrown out of the party as he was uninvited. CA Ruling:
On appeal, CA reversed the ruling of the trial court as it found more commanding of belief the testimony of
Reyes that Lim ordered him to leave in a loud voice within hearing distance of several guests. It likewise ruled
that the actuation of Lim in approaching several people to inquire into the presence of Reyes exposed the
latter to ridicule and was uncalled for as she should have approached Dr. Filart first and both of them should
have talked to Reyes in private. Consequently, CA imposed upon Hotel Nikko, Lim and Dr. Filart the solidary
obligation to pay Reyes (1) exemplary damages in the amount of Two Hundred Thousand Pesos (P200,000); (2)
moral damages in the amount of Two Hundred Thousand Pesos (P200,000); and (3) attorney’s fees in the
amount of Ten Thousand Pesos (P10,000). On motion for reconsideration, the Court of Appeals affirmed its
earlier decision as the argument raised in the motion had "been amply discussed and passed upon in the
decision sought to be reconsidered. Hotel Nikko and Ruby Lim contend that the Court of Appeals seriously
erred in not applying the Doctrine of Volenti Non Fit Injuria considering that by its own findings, Reyes was a
great crasher. Issue and Ruling: 1) Won the Doctrine of Volenti Non Fit Injuria is applicable in the case at bar.
Petitioners Lim and Hotel Nikko contend that pursuant to the doctrine of volenti non fit injuria, they cannot be
made liable for damages as respondent Reyes assumed the risk of being asked to leave (and being
embarrassed and humiliated in the process) as he was a "gate-crasher."
The doctrine of volenti non fit injuria ("to which a person assents is not esteemed in law as injury" ) refers to self-
inflicted injury or to the consent to injury which precludes the recovery of damages by one who has knowingly
and voluntarily exposed himself to danger, even if he is not negligent in doing so. As formulated by petitioners,
however, this doctrine does not find application to the case at bar because even if respondent Reyes assumed
the risk of being asked to leave the party, petitioners, under Articles 19 and 21 of the New Civil Code, were still
under obligation to treat him fairly in order not to expose him to unnecessary ridicule and shame. 2) Won Lim
acted abusively in asking Reyes, a.k.a. "Amay Bisaya," to leave the party where he was not invited by the
celebrant thereof thereby becoming liable under Articles 19 and 21 of the Civil Code. No. In the absence of
any proof of motive on the part of Ms. Lim to humiliate Mr. Reyes and expose him to ridicule and shame, it is
highly unlikely that she would shout at him from a very close distance. Ms. Lim having been in the hotel business
for twenty years wherein being polite and discreet are virtues to be emulated, the testimony of Mr. Reyes that
she acted to the contrary does not inspire belief and is indeed incredible. Thus, the lower court was correct in
observing that – Considering the closeness of defendant Lim to plaintiff when the request for the latter to leave
the party was made such that they nearly kissed each other, the request was meant to be heard by him only
and there could have been no intention on her part to cause embarrassment to him. It was plaintiff’s reaction
to the request that must have made the other guests aware of what transpired between them. Had plaintiff
simply left the party as requested, there was no need for the police to take him out. Moreover, another
problem with Reyes’s version of the story is that it is unsupported. It is a basic rule in civil cases that he who
alleges proves. Reyes, however, had not presented any witness to back his story up. All his witnesses – Danny
Rodinas, Pepito Guerrero and Alexander Silva - proved only that it was Dr. Filart who invited him to the party.
Lim, not having abused her right to ask Mr. Reyes to leave the party to which he was not invited, cannot be
made liable to pay for damages under Articles 19 and 21 of the Civil Code. Necessarily, neither can her
employer, Hotel Nikko, be held liable as its liability springs from that of its employee. Article 19, known to contain
what is commonly referred to as the principle of abuse of rights, is not a panacea for all human hurts and social
grievances. Art. 19. Every person must, in the exercise of his rights and in the performance of his duties, act with
justice, give everyone his due, and observe honesty and good faith. The object of this article, therefore, is to set
certain standards which must be observed not only in the exercise of one’s rights but also in the performance of
one’s duties. These standards are the following: act with justice, give everyone his due and observe honesty
and good faith. Its antithesis, necessarily, is any act evincing bad faith or intent to injure. Its elements are the
following: (1) There is a legal right or duty; (2) which is exercised in bad faith; (3) for the sole intent of prejudicing
or injuring another. When Article 19 is violated, an action for damages is proper under Articles 20 or 21 of the
Civil Code. Article 20 pertains to damages arising from a violation of law which does not obtain herein as Lim
was perfectly within her right to ask Mr. Reyes to leave. Parenthetically, the manner by which Lim asked Reyes
to leave was likewise acceptable and humane under the circumstances. In this regard, we cannot put our
imprimatur on the appellate court’s declaration that Lim’s act of personally approaching Mr. Reyes (without
first verifying from Filart if indeed she invited. Reyes) gave rise to a cause of action "predicated upon mere
rudeness or lack of consideration of one person, which calls not only protection of human dignity but respect of
such dignity." Without proof of any ill-motive on her part, Lim’s act of by-passing Filart cannot amount to
abusive conduct especially because she did inquire from Mrs. Filart’s companion who told her that Filart did not
invite Reyes. If at all, Lim is guilty only of bad judgment which, if done with good intentions, cannot amount to
bad faith. Not being liable for both actual and moral damages, neither can petitioners Lim and Hotel Nikko be
made answerable for exemplary damages especially for the reason stated by the CA.
ARELLANO, C.J.:
The following facts have been proven: (1) That the accused Ponciano Limcangco, had a considerable time
courted Urbana del Rosario, a young woman under 20 years of age; (2) that he had carnal intercourse with
her; (3) that he had promised to marry her; (4) that about the month of September, 1906, she had been
pregnant for some five months.
The entire defense consisted in that the promise of marriage was subsequent, and not prior to the carnal
knowledge, and that therefore there was no deceit employed in the seduction of the girl.
One of the conclusions of the judgment appealed from is that —
According to the letters offered in evidence, both from those written by the accused to Urbana del
Rosario, and from such as the latter wrote to the accused, there can be no doubt whatever that the
promise of marriage was made before any carnal communication between them had taken place.
Another conclusion is that —
From the time when the accused became aware that Urbana del Rosario was pregnant he
abandoned her and refused to fulfill his promise to marry her.
The lower court sentenced Ponciano Limcangco to four months of arresto mayor and to pay the costs,
reserving "the plaintiff's right to recover for damages suffered by reason of the nonfulfillment of the
promise of marriage, and for subsistence.
Both parties, the plaintiff and the defendant, appealed from the above judgment.
This court, upon appeal, does not find any proof of the alleged error in the judgment based upon the fact that
the court considered that, in the commission of the crime, deceit had been employed; rather, on the contrary,
the opinion of the trial court appears to have been correctly founded upon the statements made in the letters
of the accused and of the injured party as well as from the testimony of the accused himself.
The defendant testified that his intimacy with Urbana del Rosario began in February, 1905, and that in July or
August he had carnal communication with her. Although the latter be the true date, and not that of January,
1906, as stated by the young girl, Del Rosario, it appears to be proven, not that the promise of marriage was
made after the seduction, as the accused claims, but previous thereto according to the result of the following
question put to Urbana del Rosario by her attorney:
Q. Is it not true that the first promise of marriage that he made you was towards the end of February or
the beginning of March 1905? — A. No, sir; it was made since January and February.
And as to the deceit, the accused has made it evident by his declaration:
Q. Did you not tell her that you loved her before you had any carnal communication with her? — A.
Yes, sir.
Q. Did you expect her to believe that you loved her, and that you courted her with the idea of marrying
her? — A. Yes, sir.
The decision in cassation of October 2, 1888, is as follows:
A promise of marriage, in order to constitute that deceit which leads to the consummation of the crime
of seduction, requires no solemnity whatever nor any other formality except that of making it in such
manner that it may reasonably be believed by the injured party, considering the antecedents of the
case, the persistence and repetition of the offer, and other similar circumstances which give to the offer
the appearance of sincerity.lawphil.net
The decision in cassation of April 26, 1886, is as follows:
In view of the personal circumstances of both the accused and injured party, their uninterrupted love
affair prior to the carnal communication, the progress of the affection they professed for each other, as
inferred from the insinuating phrases and suggestions revealed in the letters written by the former to the
latter for the purpose of obtaining her favor, as well as the fact that the intercourse was preceded by
her belief in his assurance of a more or less proximate marriage, it can not be doubted that all of the
said facts taken together constitute the deceit which led to the seduction.
Although the appeal of the plaintiff can not be the subject of consideration by this court, yet as the accused
has appealed, it is the duty of this court to see that the final judgment is in accordance with the law. For this
purpose the provisions of article 449 of the Penal Code should be applied.
Therefore, the judgment appealed from should be affirmed, although only three months of arresto mayor with
the accessories thereof are imposed on the defendant; and we further sentence Ponciano Limcangco to
indemnify Urbana del Rosario in the sum of P500, to recognize the offspring, and to pay the costs of both
instances. So ordered.
Torres, Johnson, Willard and Tracey, JJ., concur.
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.
Facts:
Plaintiff and defendant Bunag, Jr. were sweethearts, he invited her to take their merienda at the Aristocrat
Restaurant in Manila, to which plaintiff obliged. But instead to Aristocrat he brought plaintiff to a motel or hotel
where he raped her. Later that evening, defendant brought plaintiff to the house of his grandmother Juana de
Leon in Pamplona, Las Piñas, Metro Manila, where they lived together as husband and wife for 21 days.
Defendant-appellant Bunag, Jr. and plaintiff-appellant filed their respective applications for a marriage license
with the Office of the Local Civil Registrar of Bacoor, Cavite. October 1, 1973 Defendant-appellant Bunag, Jr.
filed an affidavit withdrawing his application for a marriage license.
Defendant Bunag, Jr. left and never returned, humiliating plaintiff and compelled her to go back to her
parents. Plaintiff was ashamed when she went home and could not sleep and eat because of the deception
done against her by defendants-appellants. Petitioner filed a complaint for damages for alleged breach of
promise to marry.
The trial court ruled in favor of the plaintiff and against petitioner, but absolved his father.
Issue:
Whether or not the failure to comply with the promise of marriage of the defendant considered contrary to
morals, good custom or public policy.
Held:
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to
marry has no standing in the civil law, apart from the right to recover money or property advanced by the
plaintiff upon the faith of such promise. Generally, therefore, a breach of promise to marry per se is not
actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary
incidents thereof.
G.R. No. 101749 July 10, 1992
CONRADO BUNAG, JR., petitioner,
vs.
HON. COURT OF APPEALS, First Division, and ZENAIDA B. CIRILO, respondents.
REGALADO, J.:
Petitioner appeals for the reversal of the decision 1 of respondent Court of Appeals promulgated on May 17,
1991 in CA-G.R. CV No. 07054, entitled "Zenaida B. Cirilo vs. Conrado Bunag, Sr. and Conrado Bunag, Jr.," which
affirmed in toto the decision of the Regional Trial Court, Branch XI at Bacoor, Cavite, and, implicitly, respondent
court's resolution of September 3, 1991 2 denying petitioner's motion for reconsideration.
Respondent court having assiduously discussed the salient antecedents of this case, vis-a-vis the factual
findings of the court below, the evidence of record and the contentions of the parties, it is appropriate that its
findings, which we approve and adopt, be extensively reproduced hereunder:
Based on the evidence on record, the following facts are considered indisputable: On the
afternoon of September 8, 1973, defendant-appellant Bunag, Jr. brought plaintiff-appellant to a
motel or hotel where they had sexual intercourse. Later that evening, said defendant-appellant
brought plaintiff-appellant to the house of his grandmother Juana de Leon in Pamplona, Las
Piñas, Metro Manila, where they lived together as husband and wife for 21 days, or until
September 29, 1973. On September 10, 1973, defendant-appellant Bunag, Jr. and plaintiff-
appellant filed their respective applications for a marriage license with the Office of the Local
Civil Registrar of Bacoor, Cavite. On October 1, 1973, after leaving plaintiff-appellant,
defendant-appellant Bunag, Jr. filed an affidavit withdrawing his application for a marriage
license.
Plaintiff-appellant contends that on the afternoon of September 8, 1973, defendant-appellant
Bunag, Jr., together with an unidentified male companion, abducted her in the vicinity of the
San Juan de Dios Hospital in Pasay City and brought her to a motel where she was raped. The
court a quo, which adopted her evidence, summarized the same which we paraphrased as
follows:
Plaintiff was 26 years old on November 5, 1974 when she testified, single and had
finished a college course in Commerce (t.s.n., p. 4, Nov. 5, 1974). It appears that
on September 8, 1973, at about 4:00 o'clock in the afternoon, while she was
walking along Figueras Street, Pasay City on her way to the San Juan de Dios
Canteen to take her snack, defendant, Conrado Bunag, Jr., came riding in a car
driven by a male companion. Plaintiff and defendant Bunag, Jr. were
sweethearts, but two weeks before September 8, 1973, they had a quarrel, and
Bunag, Jr. wanted to talk matters over with plaintiff, so that he invited her to take
their merienda at the Aristocrat Restaurant in Manila instead of at the San Juan
de Dios Canteen, to which plaintiff obliged, as she believed in his sincerity (t.s.n.,
pp. 8-10, Nov. 5, 1974).
Plaintiff rode in the car and took the front seat beside the driver while Bunag, Jr.
seated himself by her right side. The car travelled north on its way to the Aristocrat
Restaurant but upon reaching San Juan Street in Pasay City, it turned abruptly to
the right, to which plaintiff protested, but which the duo ignored and instead
threatened her not to make any noise as they were ready to die and would
bump the car against the post if she persisted. Frightened and silenced, the car
travelled its course thru F.B. Harrison Boulevard until they reached a motel. Plaintiff
was then pulled and dragged from the car against her will, and amidst her cries
and pleas. In spite of her struggle she was no match to the joint strength of the
two male combatants because of her natural weakness being a woman and her
small stature. Eventually, she was brought inside the hotel where the defendant
Bunag, Jr. deflowered her against her will and consent. She could not fight back
and repel the attack because after Bunag, Jr. had forced her to lie down and
embraced her, his companion held her two feet, removed her panty, after which
he left. Bunag, Jr. threatened her that he would ask his companion to come back
and hold her feet if she did not surrender her womanhood to him, thus he
succeeded in feasting on her virginity. Plaintiff described the pains she felt and
how blood came out of her private parts after her vagina was penetrated by the
penis of the defendant Bunag, Jr. (t.s.n. pp. 17-24, Nov. 5, 1974).
After that outrage on her virginity, plaintiff asked Bunag, Jr. once more to allow
her to go home but the latter would not consent and stated that he would only
let her go after they were married as he intended to marry her, so much so that
she promised not to make any scandal and to marry him. Thereafter, they took a
taxi together after the car that they used had already gone, and proceeded to
the house of Juana de Leon, Bunag, Jr.'s grandmother in Pamplona, Las Piñas,
Metro Manila where they arrived at 9:30 o'clock in the evening (t.s.n., p. 26, Nov.
5, 1974). At about ten (10) o'clock that same evening, defendant Conrado
Bunag, Sr., father of Bunag, Jr. arrived and assured plaintiff that the following day
which was a Monday, she and Bunag, Jr. would go to Bacoor, to apply for a
marriage license, which they did. They filed their applications for marriage license
(Exhibits "A" and "C") and after that plaintiff and defendant Bunag, Jr. returned to
the house of Juana de Leon and lived there as husband and wife from
September 8, 1973 to September 29, 1973.
On September 29, 1973 defendant Bunag, Jr. left and never returned, humiliating
plaintiff and compelled her to go back to her parents on October 3, 1973. Plaintiff
was ashamed when she went home and could not sleep and eat because of the
deception done against her by defendants-appellants (t.s.n., p. 35, Nov. 5, 1974).
The testimony of plaintiff was corroborated in toto by her uncle, Vivencio
Bansagan who declared that on September 8, 1973 when plaintiff failed to arrive
home at 9:00 o'clock in the evening, his sister who is the mother of plaintiff asked
him to look for her but his efforts proved futile, and he told his sister that plaintiff
might have married (baka nag-asawa, t.s.n., pp. 5-6, March 18, 1976). However,
in the afternoon of the next day (Sunday), his sister told him that Francisco
Cabrera, accompanied by barrio captain Jacinto Manalili of Ligas, Bacoor,
Cavite, informed her that plaintiff and Bunag, Jr. were in Cabrera's house, so that
her sister requested him to go and see the plaintiff, which he did, and at the
house of Mrs. Juana de Leon in Pamplona, Las Piñas, Metro Manila he met
defendant Conrado Bunag, Sr., who told him, "Pare, the children are here
already. Let us settle the matter and have them married."
He conferred with plaintiff who told him that as she had already lost her honor, she would bear
her sufferings as Boy Bunag, Jr. and his father promised they would be married.
Defendants-appellants, on the other hand, deny that defendant-appellant Conrado Bunag, Jr.
abducted and raped plaintiff-appellant on September 8, 1973. On the contrary, plaintiff-
appellant and defendant-appellant Bunag, Jr. eloped on that date because of the opposition
of the latter's father to their relationship.
Defendant-appellants claim that defendant-appellant Bunag, Jr. and plaintiff-appellant had
earlier made plans to elope and get married, and this fact was known to their friends, among
them, Architect Chito Rodriguez. The couple made good their plans to elope on the afternoon
of September 8, 1973, when defendant-appellant Bunag, Jr., accompanied by his friend
Guillermo Ramos, Jr., met plaintiff-appellant and her officemate named Lydia in the vicinity of
the San Juan de Dios Hospital. The foursome then proceeded to (the) aforesaid hospital's
canteen where they had some snacks. Later, Guillermo Ramos, Jr. took Lydia to Quirino Avenue
where she could get a ride home, thereby leaving the defendant-appellant Bunag, Jr. and
plaintiff-appellant alone. According to defendant-appellant Bunag, Jr., after Guillermo Ramos,
Jr. and Lydia left, he and plaintiff-appellant took a taxi to the Golden Gate and Flamingo Hotels
where they tried to get a room, but these were full. They finally got a room at the Holiday Hotel,
where defendant-appellant registered using his real name and residence certificate number.
Three hours later, the couple check out of the hotel and proceeded to the house of Juana de
Leon at Pamplona, Las Piñas, where they stayed until September 19, 1873. Defendant-appellant
claims that bitter disagreements with the plaintiff-appellant over money and the threats made
to his life prompted him to break off their plan to get married.
During this period, defendant-appellant Bunag, Sr. denied having gone to the house of Juan de
Leon and telling plaintiff-appellant that she would be wed to defendant-appellant Bunag, Jr. In
fact, he phoned Atty. Conrado Adreneda, member of the board of directors of Mandala
Corporation, defendant-appellant Bunag, Jr.'s employer, three times between the evening of
September 8, 1973 and September 9, 1973 inquiring as to the whereabouts of his son. He came
to know about his son's whereabouts when he was told of the couple's elopement late in the
afternoon of September 9, 1973 by his mother Candida Gawaran. He likewise denied having
met relatives and emissaries of plaintiff-appellant and agreeing to her marriage to his son. 3
A complaint for damages for alleged breach of promise to marry was filed by herein private respondent
Zenaida B. Cirilo against petitioner Conrado Bunag, Jr. and his father, Conrado Bunag, Sr., as Civil Case No. N-
2028 of the Regional Trial Court, Branch XIX at Bacoor, Cavite. On August 20, 1983, on a finding, inter alia, that
petitioner had forcibly abducted and raped private respondent, the trial court rendered a decision 4ordering
petitioner Bunag, Jr. to pay private respondent P80,000.00 as moral damages, P20,000.00 as exemplary
damages, P20,000.00 by way of temperate damages, and P10,000.00 for and as attorney's fees, as well as the
costs of suit. Defendant Conrado Bunag, Sr. was absolved from any and all liability.
Private respondent appealed that portion of the lower court's decision disculpating Conrado Bunag, Sr. from
civil liability in this case. On the other hand, the Bunags, as defendants-appellants, assigned in their appeal
several errors allegedly committed by trial court, which were summarized by respondent court as follows: (1) in
finding that defendant-appellant Conrado Bunag, Jr. forcibly abducted and raped plaintiff-appellant; (2) in
finding that defendants-appellants promised plaintiff-appellant that she would be wed to defendant-appellant
Conrado Bunag, Jr.; and (3) in awarding plaintiff-appellant damages for the breach of defendants-appellants'
promise of marriage. 5
As stated at the outset, on May 17, 1991 respondent Court of Appeals rendered judgment dismissing both
appeals and affirming in toto the decision of the trial court. His motion for reconsideration having been denied,
petitioner Bunag, Jr. is before us on a petition for review, contending that (1) respondent court failed to
consider vital exhibits, testimonies and incidents for petitioner's defense, resulting in the misapprehensions of
facts and violative of the law on preparation of judgment; and (2) it erred in the application of the proper law
and jurisprudence by holding that there was forcible abduction with rape, not just a simple elopement and an
agreement to marry, and in the award of excessive damages. 6
Petitioner Bunag, Jr. first contends that both the trial and appellate courts failed to take into consideration the
alleged fact that he and private respondent had agreed to marry, and that there was no case of forcible
abduction with rape, but one of simple elopement and agreement to marry. It is averred that the agreement
to marry has been sufficiently proven by the testimonies of the witnesses for both parties and the exhibits
presented in court.
This submission, therefore, clearly hinges on the credibility of the witnesses and evidence presented by the
parties and the weight accorded thereto in the factual findings of the trial court and the Court of Appeals. In
effect, what petitioner would want this Court to do is to evaluate and analyze anew the evidence, both
testimonial and documentary, presented before and calibrated by the trial court, and as further meticulously
reviewed and discussed by respondent court.
The issue raised primarily and ineluctably involves questions of fact. We are, therefore, once again constrained
to stress the well-entrenched statutory and jurisprudential mandate that findings of fact of the Court of Appeals
are, as a rule, conclusive upon this Court. Only questions of law, distinctly set forth, may be raised in a petition
for review on certiorari under Rule 45 of the Rules of Court, subject to clearly settled exceptions in case law.
Our jurisdiction in cases brought to us from the Court of Appeals is limited to reviewing and revising the errors of
law imputed to the latter, its findings of fact being conclusive. This Court has emphatically declared that it is not
its function to analyze or weigh such evidence all over again, its jurisdiction being limited to reviewing errors of
law that might have been committed by the lower court. Barring, therefore, a showing that the findings
complained of are totally devoid of support in the record, or that they are so glaringly erroneous as to
constitute serious abuse of discretion, such findings must stand, for this Court is not expected or required to
examine or contrast the oral and documentary evidence submitted by the parties. 7 Neither does the instant
case reveal any feature falling within, any of the exceptions which under our decisional rules may warrant a
review of the factual findings of the Court of Appeals. On the foregoing considerations and our review of the
records, we sustain the holding of respondent court in favor of private respondent.
Petitioner likewise asserts that since action involves a breach of promise to marry, the trial court erred in
awarding damages.
It is true that in this jurisdiction, we adhere to the time-honored rule that an action for breach of promise to
marry has no standing in the civil law, apart from the right to recover money or property advanced by the
plaintiff upon the faith of such promise. 8 Generally, therefore, a breach of promise to marry per se is not
actionable, except where the plaintiff has actually incurred expenses for the wedding and the necessary
incidents thereof.
However, the award of moral damages is allowed in cases specified in or analogous to those provided in
Article 2219 of the Civil Code. Correlatively, under Article 21 of said Code, in relation to paragraph 10 of said
Article 2219, any person who wilfully causes loss or injury to another in a manner that is contrary to morals, good
customs or public policy shall compensate the latter for moral damages. 9 Article 21 was adopted to remedy
the countless gaps in the statutes which leave so many victims of moral wrongs helpless even though they have
actually suffered material and moral injury, and is intended to vouchsafe adequate legal remedy for that
untold number of moral wrongs which is impossible for human foresight to specifically provide for in the
statutes. 10
Under the circumstances obtaining in the case at bar, the acts of petitioner in forcibly abducting private
respondent and having carnal knowledge with her against her will, and thereafter promising to marry her in
order to escape criminal liability, only to thereafter renege on such promise after cohabiting with her for
twenty-one days, irremissibly constitute acts contrary to morals and good customs. These are grossly insensate
and reprehensible transgressions which indisputably warrant and abundantly justify the award of moral and
exemplary damages, pursuant to Article 21 in relation to paragraphs 3 and 10, Article 2219, and Article 2229
and 2234 of Civil Code.
Petitioner would, however, belabor the fact that said damages were awarded by the trial court on the basis of
a finding that he is guilty of forcible abduction with rape, despite the prior dismissal of the complaint therefor
filed by private respondent with the Pasay City Fiscal's Office.
Generally, the basis of civil liability from crime is the fundamental postulate of our law that every person
criminally liable for a felony is also civilly liable. In other words, criminal liability will give rise to civil liability ex
delicto only if the same felonious act or omission results in damage or injury to another and is the direct and
proximate cause thereof. 11 Hence, extinction of the penal action does not carry with it the extinction of civil
liability unless the extinction proceeds from a declaration in a final judgment that the fact from which the civil
might arise did not exist. 12
In the instant case, the dismissal of the complaint for forcible abduction with rape was by mere resolution of the
fiscal at the preliminary investigation stage. There is no declaration in a final judgment that the fact from which
the civil case might arise did not exist. Consequently, the dismissal did not in any way affect the right of herein
private respondent to institute a civil action arising from the offense because such preliminary dismissal of the
penal action did not carry with it the extinction of the civil action.
The reason most often given for this holding is that the two proceedings involved are not between the same
parties. Furthermore, it has long been emphasized, with continuing validity up to now, that there are different
rules as to the competency of witnesses and the quantum of evidence in criminal and civil proceedings. In a
criminal action, the State must prove its case by evidence which shows the guilt of the accused beyond
reasonable doubt, while in a civil action it is sufficient for the plaintiff to sustain his cause by preponderance of
evidence only. 13 Thus, in Rillon, et al. vs. Rillon, 14 we stressed that it is not now necessary that a criminal
prosecution for rape be first instituted and prosecuted to final judgment before a civil action based on said
offense in favor of the offended woman can likewise be instituted and prosecuted to final judgment.
WHEREFORE, the petition is hereby DENIED for lack of merit, and the assailed judgment and resolution are
hereby AFFIRMED.
SO ORDERED.
Narvasa, C.J. and Padilla, J., concur.
Nocon, J., took no part.
Footnotes
1 Penned by Presiding Justice Rodolfo A. Nocon, with Associate Justices Antonio M. Martinez
and Asaali S. Isnani, concurring; Annex A, Petition; Rollo, 14.
2 Rollo, 24-26.
3 Ibid., 15-19.
4 Ibid., 27-57; Annex C, Petition; per Executive Judge Ildefonso M. Bleza.
5 Ibid., 15.
6 Ibid., 7.
7 Morales vs. Court of Appeals, et al., 197 SCRA 391 (1991).
8 De Jesus, et al. vs. Syquia, 58 Phil. 866 (1933).
9 Ford vs. Court of Appeals, et al., 186 SCRA 21 (1990).
10 Globe Mackay Cable and Radio Corp., et al. vs. Court of Appeals, et al., 176 SCRA 778
(1989).
11 Calalang, et al. vs. Intermediate Appellate Court, et al., 194 SCRA 514 (1991).
12 Sec. 2(b), Rule 111, 1985 Rules of Criminal Procedure; Faraon, et al. vs. Prieta, 24 SCRA 582
(1968).
13 Ocampo, et al. vs. Jenkins, et al., 14 Phil. 681 (1909).
14 107 Phil. 783 (1960).
SPOUSES BILL AND VICTORIA HING,Petitioners, v. ALEXANDER CHOACHUY, SR. and ALLAN CHOACHUY,
Respondents.
FACTS:
On August 23, 2005, petitioner-spouses Bill and Victoria Hing filed with the Regional Trial Court (RTC) of Mandaue
City a Complaintfor Injunction and Damages with prayer for issuance of a Writ of Preliminary Mandatory
Injunction/Temporary Restraining Order (TRO), docketed as Civil Case MAN-5223 and raffled to Branch 28,
against respondents Alexander Choachuy, Sr. and Allan Choachuy.
Petitioners alleged that they are the registered owners of a parcel of land (Lot 1900-B) covered by Transfer
Certificate of Title (TCT) No. 42817 situated in Barangay Basak, City of Mandaue, Cebu;that respondents are the
owners of Aldo Development & Resources, Inc. (Aldo) located at Lots 1901 and 1900-C, adjacent to the
property of petitioners;that respondents constructed an auto-repair shop building (Aldo Goodyear Servitec) on
Lot 1900-C; that in April 2005, Aldo filed a case against petitioners for Injunction and Damages with Writ of
Preliminary Injunction/TRO, docketed as Civil Case No. MAN-5125;that in that case, Aldo claimed that
petitioners were constructing a fence without a valid permit and that the said construction would destroy the
wall of its building, which is adjacent to petitioners property;that the court, in that case, denied Aldos
application for preliminary injunction for failure to substantiate its allegations;that, in order to get evidence to
support the said case, respondents on June 13, 2005 illegally set-up and installed on the building of Aldo
Goodyear Servitec two video surveillance cameras facing petitioners property;that respondents, through their
employees and without the consent of petitioners, also took pictures of petitioners on-going construction;and
that the acts of respondents violate petitioners right to privacy.Thus, petitioners prayed that respondents be
ordered to remove the video surveillance cameras and enjoined from conducting illegal surveillance.
In their Answer with Counterclaim,respondents claimed that they did not install the video surveillance
cameras,nor did they order their employees to take pictures of petitioners construction.They also clarified that
they are not the owners of Aldo but are mere stockholders.
On October 18, 2005, the RTC issued an Ordergranting the application for a TRO.
Respondents moved for a reconsiderationbut the RTC denied the same in its Orderdated February 6, 2006.
Aggrieved, respondents filed with the CA a Petition for Certiorariunder Rule 65 of the Rules of Court with
application for a TRO and/or Writ of Preliminary Injunction.
On July 10, 2007, the CA issued its Decisiongranting the Petition for Certiorari. The CA ruled that the Writ of
Preliminary Injunction was issued with grave abuse of discretion because petitioners failed to show a clear and
unmistakable right to an injunctive writ.The CA explained that the right to privacy of residence under Article
26(1) of the Civil Code was not violated since the property subject of the controversy is not used as a
residence. The CA alsosaid that since respondents are not the owners of the building, they could not have
installed video surveillance cameras.They are mere stockholders of Aldo, which has a separate juridical
personality.Thus, they are not the proper parties.
ISSUE:
The right to privacy is enshrined in our Constitutionand in our laws. It is defined as "the right to be free from
unwarranted exploitation of ones person or from intrusion into ones private activities in such a way as to cause
humiliation to a persons ordinary sensibilities."It is the right of an individual "to be free from unwarranted
publicity, or to live without unwarranted interference by the public in matters in which the public is not
necessarily concerned."Simply put, the right to privacy is "the right to be let alone."
The Bill of Rights guarantees the peoples right to privacy and protects them against the States abuse of power.
In this regard, the State recognizes the right of the people to be secure in their houses. No one, not even the
State, except "in case of overriding social need and then only under the stringent procedural safeguards," can
disturb them in the privacy of their homes.
CIVIL LAW: right to privacy under Article 26(1) of the Civil Code covers business offices where the public are
excluded therefrom and only certain individuals are allowed to enter.
Article 26(1) of the Civil Code, on the other hand, protects an individuals right to privacy and provides a legal
remedy against abuses that may be committed against him by other individuals. It states:
Art. 26. Every person shall respect the dignity, personality, privacy and peace of mind of his neighbors and
other persons. The following and similar acts, though they may not constitute a criminal offense, shall produce a
cause of action for damages, prevention and other relief:
This provision recognizes that a mans house is his castle, where his right to privacy cannot be denied or even
restricted by others. It includes "any act of intrusion into, peeping or peering inquisitively into the residence of
another without the consent of the latter."The phrase "prying into the privacy of anothers residence," however,
does not mean that only the residence is entitled to privacy. As elucidated by Civil law expert Arturo M.
Tolentino:
Our Code specifically mentions "prying into the privacy of anothers residence." This does not mean, however,
that only the residence is entitled to privacy, because the law covers also "similar acts." A business office is
entitled to the same privacy when the public is excluded therefrom and only such individuals as are allowed to
enter may come in.
Thus, an individuals right to privacy under Article 26(1) of the Civil Code should not be confined to his house or
residence as it may extend to places where he has the right to exclude the public or deny them access. The
phrase "prying into the privacy of anothers residence," therefore, covers places, locations, or even situations
which an individual considers as private. And as long as his right is recognized by society, other individuals may
not infringe on his right to privacy. The CA, therefore, erred in limiting the application of Article 26(1) of the Civil
Code only to residences.
POLITICAL LAW: the "reasonable expectation of privacy" test to determine whether there is a violation of the
right to privacy.
In ascertaining whether there is a violation of the right to privacy, courts use the "reasonable expectation of
privacy" test. This test determines whether a person has a reasonable expectation of privacy and whether the
expectation has been violated.In Ople v. Torres,we enunciated that "the reasonableness of a persons
expectation of privacy depends on a two-part test: (1) whether, by his conduct, the individual has exhibited an
expectation of privacy; and (2) this expectation is one that society recognizes as reasonable." Customs,
community norms, and practices may, therefore, limit or extend an individuals "reasonable expectation of
privacy." Hence, the reasonableness of a persons expectation of privacy must be determined on a case-to-
case basis since it depends on the factual circumstances surrounding the case.
In this day and age, video surveillance cameras are installed practically everywhere for the protection and
safety of everyone. The installation of these cameras, however, should not cover places where there is
reasonable expectation of privacy, unless the consent of the individual, whose right to privacy would be
affected, was obtained. Nor should these cameras be used to pry into the privacy of anothers residence or
business office as it would be no different from eavesdropping, which is a crime under Republic Act No. 4200 or
the Anti-Wiretapping Law.
In this case, the RTC, in granting the application for Preliminary Injunction, ruled that:
After careful consideration, there is basis to grant the application for a temporary restraining order. The
operation by respondents of a revolving camera, even if it were mounted on their building, violated the right of
privacy of petitioners, who are the owners of the adjacent lot. The camera does not only focus on respondents
property or the roof of the factory at the back (Aldo Development and Resources, Inc.) but it actually spans
through a good portion of the land of petitioners.
Based on the ocular inspection, the Court understands why petitioner Hing was so unyielding in asserting that
the revolving camera was set up deliberately to monitor the on[-]going construction in his property. The monitor
showed only a portion of the roof of the factory of Aldo. If the purpose of respondents in setting up a camera
at the back is to secure the building and factory premises, then the camera should revolve only towards their
properties at the back. Respondents camera cannot be made to extend the view to petitioners lot. To allow
the respondents to do that over the objection of the petitioners would violate the right of petitioners as property
owners. "The owner of a thing cannot make use thereof in such a manner as to injure the rights of a third
person."
The RTC, thus, considered that petitioners have a "reasonable expectation of privacy" in their property, whether
they use it as a business office or as a residence and that the installation of video surveillance cameras directly
facing petitioners property or covering a significant portion thereof, without their consent, is a clear violation of
their right to privacy. As we see then, the issuance of a preliminary injunction was justified. We need not belabor
that the issuance of a preliminary injunction is discretionary on the part of the court taking cognizance of the
case and should not be interfered with, unless there is grave abuse of discretion committed by the court.Here,
there is no indication of any grave abuse of discretion. Hence, the CA erred in finding that petitioners are not
entitled to an injunctive writ.
This brings us to the next question: whether respondents are the proper parties to this suit.
SEC. 2. Parties-in-interest. A real party-in-interest is the party who stands to be benefited or injured by the
judgment in the suit, or the party entitled to the avails of the suit. Unless otherwise authorized by law or these
Rules, every action must be prosecuted or defended in the name of the real party-in-interest.
A real party defendant is "one who has a correlative legal obligation to redress a wrong done to the plaintiff by
reason of the defendants act or omission which had violated the legal right of the former."
In ruling that respondents are not the proper parties, the CA reasoned that since they do not own the building,
they could not have installed the video surveillance cameras. Such reasoning, however, is erroneous. The fact
that respondents are not the registered owners of the building does not automatically mean that they did not
cause the installation of the video surveillance cameras.
In their Complaint, petitioners claimed that respondents installed the video surveillance cameras in order to fish
for evidence, which could be used against petitioners in another case.During the hearing of the application for
Preliminary Injunction, petitioner Bill testified that when respondents installed the video surveillance cameras, he
immediately broached his concerns but they did not seem to care,and thus, he reported the matter to the
barangay for mediation, and eventually, filed a Complaint against respondents before the RTC.He also
admitted that as early as 1998 there has already been a dispute between his family and the Choachuy family
concerning the boundaries of their respective properties.With these factual circumstances in mind, we believe
that respondents are the proper parties to be impleaded.
Moreover, although Aldo has a juridical personality separate and distinct from its stockholders, records show
that it is a family-owned corporation managed by the Choachuy family.
Also quite telling is the fact that respondents, notwithstanding their claim that they are not owners of the
building, allowed the court to enter the compound of Aldo and conduct an ocular inspection. The counsel for
respondents even toured Judge Marilyn Lagura-Yap inside the building and answered all her questions
regarding the set-up and installation of the video surveillance cameras.And when respondents moved for
reconsideration of the Order dated October 18, 2005 of the RTC, one of the arguments they raised is that Aldo
would suffer damages if the video surveillance cameras are removed and transferred.Noticeably, in these
instances, the personalities of respondents and Aldo seem to merge.
All these taken together lead us to the inevitable conclusion that respondents are merely using the corporate
fiction of Aldo as a shield to protect themselves from this suit. In view of the foregoing, we find that respondents
are the proper parties to this suit.
GUERRERO, J.:
This is an original action for mandamus to compel the Sangguniang Bayan and the municipal treasurer to pay
the salary due petitioner Hon. Expedite B. Pilar, in his capacity as the Vice Mayor of Dasol, Pangasinan, as
provided for by Batas Pajnbansa Big, 51 and as implemented by Circular 9-A of Joint Commission on Local
Government and Personnel Administration and to recover actual, moral and exemplary damages plus
attorney's fees.
Petitioner was elected vice mayor of Dasol, Pangasinan in 1980 local elections. Elected with him were Lodovico
Espinosa as the municipal mayor and the following members of the Sangguniang Bayan, to wit: Avelino Nacar,
Luz Jimenez, Gerardo Rivera, Juan Bonus, Apolonio G. Abella, Jaime Abella, Laurentino Balaoing and Elifas
Vidal. All of them assumed office on March 1, 1980. Later on, the following also became members of the
Sangguniang Bayan: Linda Bustria, Abraham Balaoing and Ceferino Quinitio.
On March 4,1980, the Sangguniang Bayan adopted Resolution No. l which increased the salaries of the mayor
and municipal treasurer to P18,636.00 and P16,044.00 per annum respectively. The said resolution did not
provide for an increase in salary of the vice mayor despite the fact that such position is entitled to an annual
salary of P16,0440.00[1] (Circular No. 9-A).
Petitioner questioned the failure of the Sangguniang Bayan to appropriate an amount for the payment of his
salary. He wrote letters to the proper authorities complaining about the matter and asking that something
should be done to correct it. The proper provincial[2] and national officials[3] endorsed compliance with Circular
9-A of the Joint Commission on Local Government and Personnel Administration in giving the revised rate of
salary for petitioner. In fact, the mayor was sent a letter by the Executive Secretary of the Commission advising
him that the Municipality should pay the Vice-Mayor the salary due him equivalent to that of the Municipal
Treasurer per Circular No. 15.
On December 12, 1980, the Sangguniang Bayan enacted a resolution appropriating the amount of P500.00 per
month as the salary of the petitioner. This amount was increased to P774.00 per month in December, 1981. [4]
On October 26,1982, the Sangguniang Bayan enacted a resolution appropriating the amount of P15,144.00 as
payment of the unpaid salaries of the petitioner from January 1, 1981 to December 31, 1982. The resolution was
vetoed by the respondent mayor resulting into the filing by the petitioner of this petition for a writ of mandamus
on February 16, 1983.[5]
In their comment, the respondents alleged that:
(1) The filing of the petition is premature because the petitioner did not exhaust all administrative remedies
contending that petitioner should have lodged his complaint first with the Ministry of Local Government and
Community Development; (2) that the petition involves a question of fact and, therefore, this Court does not
have jurisdiction over the case because the right of the petitioner to receive a salary depends on the
availability of municipal funds and lithe availability or non-availability of municipal funds is a factual issue which
is not cognizable by the Supreme Court"; and (3) that the petition is now moot and academic because on April
20, 1983, the Sangguniang Bayan enacted an appropriation ordinance which among others appropriated an
amount of P29,985.00 as payment of salary differentials of the petitioner pursuant to the Supplemental Budget
No. 3 Gen. Fund, C.Y. 1983.
Petitioner in his reply argues that: (1) There is no violation of the doctrine of exhaustion of administrative
remedies because only the writ of mandamus offers him an adequate and speedy remedy to his legal
problem, and the said doctrine can be dispensed with if the issue involved is a legal one and the issue to be
resolved in this case - on whether the appropriation of a salary of a vice mayor is a discretionary act or
ministerial act - is a legal issue. (2) The only factual issue involved in this case is the ascertainment of damages
inflicted to the petitioner due to the failure of the respondents to pay him his lawful salary. The existence of
municipal funds from which the salary of the petitioner could be appropriated is not a factual issue anymore
due to the certification of the municipal treasurer as to the existence of such funds, and (3) The issue has not
become moot and academic because there is no guarantee that even though a resolution appropriating the
salary of the Vice Mayor has been enacted, actual payment shall be made to the petitioner.
On June 1, 1983, We gave due course to the petition and required the parties to submit their respective
memoranda.
Petitioner admitted that at the time he submitted his memorandum, he has been fully paid of his salaries as
provided for by Batas Pambansa Big. 51 and implemented by Circular No. 9-A of the Joint Commission for Local
Government and Personnel Administration.[6]
Since petitioner's claim for salaries has already been provided for and paid, the case has become moot and
academic;
Nevertheless, We find and rule that petitioner is entitled to damages and attorney's fees because the facts
show that petitioner was forced to litigate in order to claim his lawful salary which was unduly denied him for
three (3) years and that the Mayor acted in gross and evident bad faith in refusing to satisfy petitioner's plainly
valid, just and demandable claim. (Article 2208, (2) and (5), New Civil Code).
That respondent Hon. Mayor Lodovico Espinosa alone should be held liable and responsible for the miserable
plight of the petitioner is clear. Respondent Mayor vetoed without just cause on October 26, 1982 the
Resolution of the Sangguniang Bayan appropriating the salary of the petitioner. [7] While "to veto or not to veto
involves the exercise of discretion" as contended by respondents, respondent Mayor, however, exceeded his
authority in an arbitrary manner when he vetoed the resolution since there exists sufficient municipal funds from
which the salary of the petitioner could be paid.[8] Respondent Mayor's refusal, neglect or omission in
complying with the directives of the Provincial Budget Officer and the Director of the Bureau of Local
Government that the salary of the petitioner be provided for and paid the prescribed salary rate, is reckless
and oppressive, hence, by way of example or correction for the public good, respondent Mayor is liable
personalty to the petitioner for exemplary or corrective damages.
Petitioner is likewise entitled to actual damages and costs of litigation which We reduce from P13,643.50 to
P5,000.00 and for the mental anguish, serious anxiety, wounded feelings, moral shock, social humiliation and
similar injury, We hold that petitioner is entitled to P5,000.00 as moral damages.
All the above sums as damages including attorney's fees in the amount of P5,000.00 shall be paid personally by
respondent Mayor Lodovico Espinosa from his private funds.
WHEREFORE, the petition is hereby considered moot and academic but respondent Mayor is hereby ordered to
pay petitioner from his private and personal funds actual damages and costs of litigation the amount of
P5,000.00; moral damages in the amount of P5,000.00; exemplary or corrective damages in the amount of
P5,000.00; and attorney's fees in the amount of P5,000.00.
Costs against respondent mayor.
SO ORDERED.
Makasiar (Acting C.J.), Conception Jr., Abad Santos, De Castro and Escolin, JJ., concur.
Aquino, J. (Acting Chairman), concurs in a separate opinion.
[1] Rollo, pp. 10-15, Annexes "A", "A-l", "A-2", "A-3", "AA" and "A-5".
[2] Ibid., pp. 20-21, Annexes "B-2" and "B-3".
[3] Ibid., pp. 22-23, Annexes "C" and "C-l".
[4] Ibid., petition, p. 5.
[5] Ibid., p. 6.
[6] Ibid., Memorandum, p. 64.
[7] Ibid., petition, p. 6.
[8] Annexes "D", "D-l" and "D-2".
GAUDENCIO T. MENDOZA, PLAINTIFF AND APPELLANT, VS. MAXIMO M. ALCALA, DEFENDANT AND APPELLEE.
DECISION
NATIVIDAD, J.:
This action for a sum of money, brought in the Court of First Instance of Nueva Ecija, was originally appealed to
the Court of Appeals. The latter court, however, has certified it to us for the reason that the questions involved
therein are purely of law.
It appears that sometime prior to September 12, 1955, an information was, at the instance of the plaintiff,
Gaudencio T. Mendoza, filed in the Court of First Instance of Nueva Ecija charging the defendant, Maximo M.
Alcala, with the crime of estafa. The charge was predicated upon a receipt which reads as follows:
RECIBO
"Tinanggap ko kay Gng. Gaudencio T. Mendoza ang halagang ISANG LIBO AT ISAND DAANG piso (1,100)
kualtang pilipino bilang paunang bayad ng isang daan (Wagwag) kabang palay sa 56 kilos bawa't kavan,
puesto sa kanyang kamalig.
"Ipinangako kong ihahatid ang palay na ito sa o bago dumating ang ika-5 ng Septiembre, 1953, dito sa San
Jose, Nueva Ecija.
"Sa katunayan ng lahat ay lumagda ako sa ibaba nito ngayong ika-2 ng Septiembre, 1953.
(Sgd.) Maximo M. Alcala"
The case was docketed as Criminal Case No. 3219, Court of First Instance of Nueva Ecija, People vs. Maximo
M. Alcala. After trial, that court acquitted the defendant of the offense charged, with costs de oficio, on the
following findings:
"The prosecution has not proved beyond reasonable doubt that the defendant had in fact represented to
Gaudencio T. Mendoza that he had 100 cavans of palay stored in his sister's bodega, which he offered to sell
for P1,100. The Court cannot believe that Gaudencio T. Mendoza would pay to the defendant the sum of
P1,100 on the mere representation of the defendant that the palay was in the bodega of his sister, and on his
request to pay him first as he was going to Manila. In the first place, there is no showing why the defendant was
in urgent need of P1,100 on September 2, and why it was absolutely necessary for him to go immediately to
Manila on that date, such that he had no time to deliver the 100 cavans of palay allegedly deposited in his
sister's bodega, which is only a few meters distant from the house of Gaudencio T. Mendoza. Mendoza and the
defendant are from the same town; they had known each other for a long time and they were even friends.
Defendant testified that he had no palay and had no land from which to raise that palay. That denial has not
been successfully rebutted by the prosecution. The prosecution could have shown that the defendant had in
fact tracts of land where he could raise enough palay to sell to Mendoza. Mendoza must have known that the
defendant had no palay to sell; and as defendant was not engaged in the business of buying and selling
palay, Mendoza could not have been deceived by the defendant. Again, since the bodega is near the house
of Mendoza, he could have verified from the defendant the existence of that palay. The fact that Mendoza
did not even attempt to verify the existence of that palay, is ample proof that the receipt Exhibit B was not in
fact what it purports to be. The court does not expressly pass upon the defense that the receipt signed by him
arouse from a usurious loan, as there is sufficient evidence to warrant a finding that there had been no deceit
or misrepresentation and that Exhibit B is not what it purports to be. Any obligation which the defendant may
have incurred in favor of Gaudencio T. Mendoza is purely civil in character, and not criminal." (Italics ours)
On December 16, 1954, while said criminal case was still pending, the plaintiff filed in the Justice of the Peace
Court of San Jose, Nueva Ecija, the complaint by which this case was initiated. That complaint was based on
the very same receipt upon which the criminal action was predicated, and in it plaintiff, after alleging violation
of the terms of said receipt, asked for judgment against the defendant for the sum of P1,100 with legal interests
from September 5, 1953 until full payment, plus P550 for damages, P300 for attorney's fees, and the costs of suit.
Defendant's answer consists of specific denials, affirmative defenses to the effect that the transaction referred
to in the complaint was a usurious loan in the sum of P500 and that the sum had already been paid in full, and
a counter-claim for actual, moral and exemplary damages, and attorney's fees, in the total sum of P6,000. After
trial, the justice of the peace court rendered judgment sentencing the defendant to pay to the plaintiff the
sum of P1,100, plus P300 as attorney's fees, and dismissing defendant's counterclaim. From this judgment, the
defendant appealed to the Court of First Instance of Nueva Ecija, where he reproduced the answer he had
filed in the justice of the peace court. At the hearing of the case in the Court of First Instance of Nueva Ecija,
and while the first witness for the plaintiff was testifying on the witness stand, the following proceedings were
had:
"AGREEMENT:
Atty. Padilla
The parties stipulate that the transaction which is now the object of the civil case is the same transaction which
had been the object in Criminal Case No. 3219 of this Hon. Court. "
Atty. Cadhit
Agreed.
Atty. Padilla
That the accused was acquitted in that case was evidenced by the decision, Exhibit A.
Atty. Cadhit
Agreed.
Atty. Padilla
In the said criminal case having made a specific finding that the transaction was not a sale of palay but it can
be any other, we believe any question with respect to the sale of palay will be out of order now.
Court
Submitted in accordance with Rule 107."
Upon the agreement and the decision rendered in Criminal Case No. 3219 above referred to, the Court of First
Instance of Nueva Ecija rendered judgment, dismissing plaintiff's complaint and defendant's counterclaim, with
costs against plaintiff, on the findings, among others, that
"On the basis of said stipulation a question of law is raised by the parties, to wit, whether the defendant could
still be prosecuted for the collection of the amount stated in the said receipt after he had been acquitted by
the Court on a charge of estafa based on the said receipt. Section d, Rule 107, provides:
"Extinction of penal action does not carry with it extinction proceeds from a declaration in a final judgment that
the fact from which the civil might arise did not exist.'
"In acquitting the accused of the crime of estafa, the Court expressly made a finding as follows:
'The Court does not expressly pass upon the defense that the receipt signed by him arose from a usurious loan,
as there is sufficient evidence to warrant a finding that there had been no deceit or misrepresentation and Exh.
B. is not what it purports to be.'
"In effect, the Court did not believe that the accused received the amount of P1,100 as advance payment of
the 100 cavans of palay weighing 46 kilos a cavan. Since the Court did not find this to be a fact, it cannot serve
as basis for a criminal action under the provision of the rule above-cited. The reason for the rule is that, once
the court makes a definite finding as to the non-existence of a fact, non-existence should be final and
conclusive against the party claiming the existence of the same, otherwise there would be no stability in the
decision of the courts. The only possibility, therefore, of filing a civil action against the same defendant is to work
out a theory entirely different from the theory followed in the criminal action, which was, that the defendant
received the amount of P1,100 as advance payment for palay for as to any other theory, the Court did not
make any express finding that the same did not exist.
"It may be contended that a separate civil action may even be filed against the same defendant if a criminal
action had already been filed against him. Granting this contention to be true and tenable, it is no less true that
when a criminal action is filed against the defendant the civil action must yield to the criminal action after the
acquittal of the defendant, if the two actions are based on the same set of facts. It may also be true that a
separate civil action may be filed against him if he is acquitted on a reasonable doubt. But that is entirely
different from a finding that the facts from which the civil action may arise did not exist, for in case of
reasonable doubt, this fact may yet exist. In other words, when the court makes an express finding that the
facts upon which the decision may be based do not exist, the same is conclusive and is a bar to the
prosecution based on the same set of facts."
From this judgment, the plaintiff appealed.
The appellant contends that the trial court committed error in dismissing the present action. It is claimed that as
in its decision in Criminal Case No. 3219 the trial court did not make any express finding that the fact on which
the action was predicated did not exist, but merely found that "the prosecution has not proved beyond
reasonable doubt that the defendant had in fact represented to Gaudencio T. Mendoza that he had 100
cavans of palay stored in his sister's bodega, which he offered to sell for P1,100," that "there is sufficient
evidence to warrant a finding that there had been no deceit or misrepresentation and that Exhibit B is not what
it purports to be," and that "any obligation which the defendant may have incurred in favor of Gaudencio T.
Mendoza is purely civil in character, and not criminal," which findings amount to a declaration that the
defendant was acquitted on reasonable doubt, a civil action based on the same transaction may still be
instituted.
The appellee, on the other hand, maintains that the judgment appealed from is correct. It is urged that the
findings made in said decision, particularly those quoted above, amount to a declaration that the transaction
which was the subject matter of the criminal case did not exist, and so no civil action based on that same
transaction would lie.
The pertinent provisions of law are Article 29 of the new Civil Code and Rule 107, Section 1, Subsection (d), of
the Rules of Court. Article 29 of the new Civil Code provides:
"Art. 29. When the accused in a criminal prosecution is acquitted on the ground that his guilt has not been
proved beyond reasonable doubt, a civil action for damages for the same act or omission may be instituted.
Upon motion of the defendant the court may require the plaintiff to file a bond to answer for damages in case
the complaint should be found to be malicious.
"If in a criminal case the judgment of acquittal is based upon reasonable doubt, the court shall so declare. In
the absence of any declaration to that effect, it may be inferred from the text of the decision whether or not
the acquittal is due to that ground."
and Rule 107, Section 1, Subsection (d), of the Rules of Court, reads as follows:
"Section 1. Rules governing civil actions arising from offenses. Except as otherwise provided by law, the following
rules shall be observed:
* * * * * * *
"(d) Extinction of the penal action does not carry with it extinction of the civil, unless the extinction proceeds
from a declaration in a final judgment that the fact from which the civil might arise did not exist. In the other
cases, the person entitled to the civil action may institute it in the jurisdiction and in the manner provided by law
against the person who may be liable for restitution of the thing and reparation or indemnity for the damages
suffered;
* * * * * * *"
Interpreting the scope of the above quoted provisions of law, we held in the case of Philippine National
Bank vs. Catipon, 98 Phil., 286; 52 Off. Gaz., 3589, that
"The acquittal of the accused of the charge of estafa predicated on the conclusion 'that the guilt of the
defendant has not been satisfactorily established,' is equivalent to one on reasonable doubt and does not
preclude a suit to enforce the civil liability for the same act or omission under Article 29 of the new Civil Code."
and in Republic of the Philippines vs. Assad, 96 Phil., 398; 51 Off. Gaz., 703, that
"A judgment of acquittal does not constitute a bar to a subsequent civil action involving the same subject
matter, even in regard to a civil action brought against the defendant by the State, nor it is evidence of his
innocence in such action, and is not admissible in evidence to prove that he was not guilty of the crime with
which he was charged. (50 C. J. S., pp. 272-273; 30 Am. Jur., 1003)"
As we analyze the record in the light of the above provisions of law and jurisprudence, we are fully persuaded
that appellant's contention is not without foundation. It will be noted that nowhere in the decision rendered in
Criminal Case No. 3219 of the Court of First Instance of Nueva Ecija is found an express declaration that the fact
from which the civil action might arise did not exist. It is true that said decision likewise contains no express
declaration that the acquittal of the defendant was based upon reasonable doubt. Whether or not, however,
the acquittal is due to that ground may, under the above quoted provision of Article 29 of the Civil Code, be
inferred from the text of the decision, and a close consideration of the language used in said decision,
particularly the findings quoted above, which are of similar import as the phrase "that the guilt of the defendant
has not been satisfactorily established," held in Philippine National Bank vs. Catipon, supra, to be equivalent to
a declaration that the acquittal was based on reasonable doubt, convinces us that the acquittal of the
defendant in the criminal case in question was predicated on the conclusion that his guilt of the crime charged
has not been proved beyond reasonable doubt and does not preclude a suit to enforce the civil liability arising
from the same transaction which was the subject-matter of said criminal action. The right, therefore, of the
appellant to bring the present action cannot be questioned, the fact that he did not reserve his right to file an
independent civil action, and that this action has been instituted before final judgment in the criminal case
rendered, notwithstanding. The declaration in the decision in Criminal Case No. 3219 to the effect that "any
obligation which the defendant may have incurred in favor of Gaudencio T. Mendoza is purely civil in
character, and not criminal" amount to a reservation of the civil action in favor of the offended party,
Philippine National Bank vs. Catipon, supra, and the offense charged in said criminal case being estafa, which
is fraud, the present action falls under the exception to the general rule and it can be filed independently of
the criminal action, (Article 33, new Civil Code; Dianeta vs. Makasiar, [CA] 55 Off. Gaz., 10273;
People vs. Balagtas, [CA] 51 Off. Gaz., 5714.)
Wherefore, the judgment appealed from is hereby vacated and set aside, and it is ordered that the records of
this case be remanded to the court of origin for further proceedings in accordance with law. With the costs
taxed against the appellee. It is so ordered.
Bengzon, C. J., Padilla, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, Dizon, and De Leon, JJ.,
concur.
Same; Acquittal based on reasonable doubt; Effect on civil liability of accused.—Where the decision in the
criminal case does not expressly declare that the fact from which the civil action might arise did not exist, nor
state that acquittal was based on reasonable doubt, but it may be inferred from the test thereof that acquittal
was based on reasonable doubt, the acquittal does not preclude a suit to enforce the civil liability arising from
the same transaction., The conclusion that “the guilt of the defendant has not been satisfactorily established” is
equivalent to one on reasonable doubt. (Philippine National Bank vs. Catipon, 52 O.G. 3589).
Same; Declaration amounting to reservation of civil action in favor of offended party.—Although the offended
party did not reserve his right to file a separate civil action, the declaration in the decision in the criminal case
that any obligation which defendant therein may have incurred in favor of the offended party is purely civil,
amounts to a reservation of the civil action in favor of the offended party.
Same; Civil action that may be filed independently of criminal action.—Where the offense charged in the
criminal action is estafa, which is fraud, the civil action may be filed independently of the criminal action. (Art.
33, New Civil Code; Dianeta vs. Makasiar, 55 O.G. 10273; People vs. Balagtas, 51 O.G. 5714). [Mendoza vs.
Alcala, 2 SCRA 1032(1961)]
G.R. No. 145391 August 26, 2002
AVELINO CASUPANAN and ROBERTO CAPITULO (petitioners)
vs.
MARIO LLAVORE LAROYA (respondent)
FACTS:
Two vehicles, one driven by respondent Laroya and the other owned by petitioner Capitulo and driven by
petitioner Casupanan, figured in an accident. This prompted the filing of two cases before the MCTC of Capas
Tarlac: 1st – a criminal case for reckless imprudence resulting to damage to property filed by respondent
against Casapunan; 2nd – a civil case arising from a quasi-delict filed by the petitioners against the respondent.
The civil case was filed pending preliminary investigation on the criminal case. Respondent as defendant in the
civil case filed a motion to dismiss on ground of forum shopping due pendency of the criminal case. The MCTC
granted the motion for dismissal on basis of forum shopping. Petitioners filed a Motion for Reconsideration on
the ground that a separate civil action may be instituted separately and independently from the criminal case.
MCTC denied the motion. Thereafter, petitioners filed a petition for Certiorari before Capas RTC to assail
MCTC’s Order, however the RTC dismissed the same for lack of merit. Hence, a petition for Review on Certiorari
before the Court.
ISSUE:
Whether or not an accused in a pending criminal case for reckless imprudence can validly file, simultaneously
and independently, a separate civil action for quasi-delict against the private complainant in the criminal
case.
HELD:
YES. The right of the accused to file a separate civil action for quasi-delict is akin to the right of the offended
party to file an independent civil action pursuant to Section 1 of Rule 111. Under the said rule, the independent
civil action in Articles 32, 33, 34 and 2176 of the Civil Code is not deemed instituted with the criminal action but
may be filed separately by the offended party even without reservation. The commencement of the criminal
action does not suspend the prosecution of the independent civil action under these articles of the Civil Code.
The suspension in Section 2 of the present Rule 111 refers only to the civil action arising from the crime, if such
civil action is reserved or filed before the commencement of the criminal action. Thus, the offended party can
file two separate suits for the same act or omission. The first a criminal case where the civil action to recover civil
liability ex-delicto is deemed instituted, and the other a civil case for quasi-delict – without violating the rule on
non-forum shopping. The two cases can proceed simultaneously and independently of each other. The
commencement or prosecution of the criminal action will not suspend the civil action for quasi-delict. The only
limitation is that the offended party cannot recover damages twice for the same act or omission of the
defendant.
Similarly, the accused can file a civil action for quasi-delict for the same act or omission he is accused of in the
criminal case. This is expressly allowed in paragraph 6, Section 1 of the present Rule 111 which states that the
counterclaim of the accused may be litigated in a separate civil action. This is only fair for two reasons. First, the
accused is prohibited from setting up any counterclaim in the civil aspect that is deemed instituted in the
criminal case. The accused is therefore forced to litigate separately his counterclaim against the offended
party. If the accused does not file a separate civil action for quasi-delict, the prescriptive period may set in
since the period continues to run until the civil action for quasi-delict is filed. Second, the accused, who is
presumed innocent, has a right to invoke Article 2177 of the Civil Code, in the same way that the offended
party can avail of this remedy which is independent of the criminal action. To disallow the accused from filing a
separate civil action for quasi-delict, while refusing to recognize his counterclaim in the criminal case, is to deny
him due process of law, access to the courts, and equal protection of the law.
Thus, the civil action based on quasi-delict filed separately by Petitioners is proper.
Hambon vs CA
FACTS:
Herein respondent filed a complaint for damages against respondent for the injuries and expenses he sustained
when the latter’s truck bumped him that night of December 9, 1985.
However, the criminal case (Serious Physical Injuries thru Reckless Imprudence) filed previously against the
respondent was dismissed by the court for petitioner’s lack of interest.
Respondent alleges that the dismissal of criminal case includes that of the civil action.
ISSUE:
WHETHER OR NOT A CIVIL CASE FOR DAMAGES BASED ON AN INDEPENDENT CIVIL ACTION FALLING UNDER
ARTICLE 32, 33, 34 AND 2176 OF THE NEW CIVIL CODE BE DULY DISMISSED FOR FAILURE TO MAKE RESERVATION TO
FILE A SEPARATE CIVIL ACTION IN A CRIMINAL CASE FILED ARISING FROM THE SAME ACT OR OMISSION OF THE
ACCUSED PURSUANT TO RULE 111, SECTION 1 OF THE RULES OF COURT, THE FAILURE TO MAKE RESERVATION
BEING DUE TO THE FACT THAT THE CRIMINAL CASE WAS DISMISSED BEFORE THE PROSECUTION STARTED TO
PRESENT EVIDENCE FOR FAILURE OF THE PRIVATE COMPLAINANT TO APPEAR DESPITE NOTICE
HELD:
1quite clearly requires that a reservation must be made to institute separately all civil actions for the recovery of
civil liability, otherwise they will de deemed to have been instituted with the criminal case.... In other words the
right of the injured party to sue separately for the recovery of the civil liability whether arising from crimes (ex
delicto) or from quasi-delict under Art. 2176 of the Civil Code must be reserved otherwise they will de deemed
instituted with the criminal action.
Contrary to private respondent's contention, the requirement that before a separate civil action may be
brought it must be reserved does not impair, diminish or defeat substantive rights, but only regulates their
exercise in the general interest of procedure. The requirement is merely procedural in nature. For that matter
the Revised Penal Code, by providing in Art. 100 that any person criminally liable is also civilly liable, gives the
offended party the right to bring a separate civil action, yet no one has ever questioned the rule that such
action must be reserved before it may be brought separately.
While the Abellana case ruled that a reservation is not necessary, the 1988 amendment of the rule explicitly
requires reservation of the civil action.
x x x Prior reservation is a condition sine qua non before any of these independent civil actions can be instituted
and thereafter have a continuous determination apart from or simultaneous with the criminal action.
. . . Far from altering substantive rights, the primary purpose of the reservation is, to borrow the words of the
Court in "Caños v. Peralta":
‘. . . to avoid multiplicity of suits, to guard against oppression and abuse, to prevent delays, to clear congested
dockets, to simplify the work of the trial court; in short, the attainment of justice with the least expense and
vexation to the parties-litigants.
Thus, herein petitioner Hambon should have reserved his right to separately institute the civil action for
damages in Criminal Case No. 2049. Having failed to do so, Civil Case No. 1761-R for damages subsequently
filed by him without prior reservation should be dismissed. With the dismissal of Criminal Case No. 2049,
whatever civil action for the recovery of civil liability that was impliedly instituted therein was likewise
dismissed.chan robles virtual law library
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit, and the decision of
the Court of Appeals dated March 8, 1995, is AFFIRMED in toto
Facts:
Petitioner George (Culhi) Hambon filed herein filed a complaint for damages against respondent for the injuries
and expenses he sustained sustained after the truck driven by the respondent bumped him on the night of
December 9, 1985.
However, the criminal case (Serious Physical Injuries thru Reckless Imprudence) filed previously against the
respondent was dismissed by the court for petitioner’s lack of interest and that the dismissal was with respect to
both criminal and civil liabilities of respondent.
After trial, the Regional Trial Court rendered a decision, dated December 18, 1991, ruling that the civil case was
not barred by the dismissal of the criminal case, and that petitioner is entitled to damages.
Respondent alleges that the dismissal of criminal case includes that of the civil action.
The Court of Appeals, in its decision promulgated on March 8, 1995, reversed and set aside the decision of the
trial court, and dismissed petitioner’s complaint for damages on the grounds that the Hambon failed to file the
civil case. Hence, it is impliedly instituted with the Criminal case. The dismissal of the criminal case also includes
the dismissal of the civil case.
According to the appellate court, since the petitioner did not make any reservation to institute a separate civil
action for damages, it was impliedly instituted with the criminal case, and the dismissal of the criminal case
carried with it the dismissal of the suit for damages, notwithstanding the fact that the dismissal was provisional
as it amounted to an acquittal and had the effect of an adjudication on the merits.
Issue:
Whether or not a civil case for damages based on an independent civil action falling under articles 32, 33, 34
and 2176 of the new civil code be duly dismissed for failure to make reservation to file a separate civil action in
a criminal case filed arising from the same act or omission of the accused pursuant to Rule 111, Section 1 of the
Rules of Court, the failure to make reservation being due to the fact that the criminal case was dismissed
before the prosecution started to present evidence for failure of the private complainant to appear despite
notice.
Held:
Civil actions to recover liability arising from crime (ex delicto) and under Articles 32, 33, 34 and 2176 of the Civil
Code (quasi-delict) are deemed impliedly instituted with the criminal action unless waived, reserved or
previously instituted.
The Court expounded that it clearly requires that a reservation must be made to institute separately all civil
actions for the recovery of civil liability, otherwise they will be deemed to have been instituted with the criminal
case. In other words, the right of the injured party to sue separately for the recovery of the civil liability whether
arising from crimes (ex delicto) or from quasi-delict under Art. 2176 of the Civil Code must be reserved otherwise
they will be deemed instituted with the criminal action.
Contrary to private respondent’s contention, the requirement that before a separate civil action may be
brought it must be reserved does not impair, diminish or defeat substantive rights, but only regulates their
exercise in the general interest of procedure. The requirement is merely procedural in nature. For that matter
the Revised Penal Code, by providing in Art. 100 that any person criminally liable is also civilly liable, gives the
offended party the right to bring a separate civil action, yet no one has ever questioned the rule that such
action must be reserved before it may be brought separately.
Thus, herein petitioner Hambon should have reserved his right to separately institute the civil action for
damages in Criminal Case No. 2049. Having failed to do so, Civil Case No. 1761-R for damages subsequently
filed by him without prior reservation should be dismissed. With the dismissal of Criminal Case No. 2049,
whatever civil action for the recovery of civil liability that was impliedly instituted therein was likewise dismissed.
WHEREFORE, the instant petition for review on certiorari is hereby DENIED for lack of merit, and the decision of
the Court of Appeals dated March 8, 1995, is AFFIRMED in toto.
Source:
G.R. No. 122150 – LawPhil. Retrieved
from: http://www.lawphil.net/judjuris/juri2003/mar2003/gr_122150_2003.html.
Note: Case related to Article 33 of the Civil Code.
ABERCA v. VER
FACTS
Task Force Makabansa (TFM) was ordered by General Fabian Ver to conduct pre-emptive strikes
against Communist- Terrorist underground houses. TFM raided several houses, employing in most cases
defectively judicial search warrants, arrested people without warrant of arrest, denied visitation rights, and
interrogated them with the use of threats and tortures. A motion to dismiss was filed by defendants, stating that
1) plaintiffs may not cause a judicial inquiry about their detention because the writ of habeas corpus was
suspended; 2) defendants are immune from liability for acts done in their official duties; 3) there was no cause
of action. On Nov 8, 1983, Judge Fortun granted the motion to dismiss, which prompted plaintiffs to file a MR on
Nov 18, 1983. He later inhibited himself and was replaced Judge Lising, who denied the MR for being filed out
of time. Another MR was filed, and was only modified to include Maj. Aguinaldo and MSgt. Balaba for officers
accountable in the said complaint.
ISSUES
1. Whether or not immunity from suit may be invoked?
2. Whether petitioners have the right to question the alleged violation of their rights in the constitution?
3. Whether the superior officers who gave the orders are liable?
HELD
1. NO, Article 32 of the Civil Code provides a sanction to rights and freedom enshrined in the constitution. These
rights cannot be violated just because of an order given by a superior. The rule of law must prevail, or else
liberty will perish. Even though they just followed the orders of their superior, these do not authorize them
to disregard the rights of the petitioners, and therefore cannot be considered “acts done in their official duties”.
Article 32 speaks of any public officer or private individual, and violation of these constitutional rights does not
exempt them from responsibility.
2. YES, the suspension of the writ of habeas corpus does not prevent petitioners from claiming damages for the
illegal arrest and detention in violation of their constitutional rights by seeking judicial authority. What the writ
suspends is merely the right of an individual to seek release from detention as a speedy means of obtaining
liberty. It cannot suspend their rights and cause of action for injuries suffered due to violation of their rights.
3. YES, Article 32 speaks of the liabilities of people who are in direct violation of the rights stated, as well as
people who are indirectly responsible for such acts. In the case at hand, the superior officers are the ones who
gave the order, and can be considered indirectly responsible. It was also stated in the complaint who were the
ones who directly and indirectly participated in those acts. By filing a motion to dismiss, they admitted all
the facts stated in the complaint.
RULE 111
Prosecution of Civil Action
Section 1. Institution of criminal and civil actions. — (a) When a criminal action is instituted, the civil action for
the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action
unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil
action prior to the criminal action.
The reservation of the right to institute separately the civil action shall be made before the prosecution starts
presenting its evidence and under circumstances affording the offended party a reasonable opportunity to
make such reservation.
When the offended party seeks to enforce civil liability against the accused by way of moral, nominal,
temperate, or exemplary damages without specifying the amount thereof in the complaint or information, the
filing fees thereof shall constitute a first lien on the judgment awarding such damages.
Where the amount of damages, other than actual, is specified in the complaint or information, the
corresponding filing fees shall be paid by the offended party upon the filing thereof in court.
Except as otherwise provided in these Rules, no filing fees shall be required for actual damages.
No counterclaim, cross-claim or third-party complaint may be filed by the accused in the criminal case, but
any cause of action which could have been the subject thereof may be litigated in a separate civil action.
(1a)
(b) The criminal action for violation of Batas Pambansa Blg. 22 shall be deemed to include the corresponding
civil action. No reservation to file such civil action separately shall be allowed.
Upon filing of the aforesaid joint criminal and civil actions, the offended party shall pay in full the filing fees
based on the amount of the check involved, which shall be considered as the actual damages claimed.
Where the complaint or information also seeks to recover liquidated, moral, nominal, temperate or exemplary
damages, the offended party shall pay additional filing fees based on the amounts alleged therein. If the
amounts are not so alleged but any of these damages are subsequently awarded by the court, the filing fees
based on the amount awarded shall constitute a first lien on the judgment.
Where the civil action has been filed separately and trial thereof has not yet commenced, it may be
consolidated with the criminal action upon application with the court trying the latter case. If the application is
granted, the trial of both actions shall proceed in accordance with section 2 of this Rule governing
consolidation of the civil and criminal actions. (cir. 57-97)
Section 2. When separate civil action is suspended. — After the criminal action has been commenced, the
separate civil action arising therefrom cannot be instituted until final judgment has been entered in the criminal
action.
If the criminal action is filed after the said civil action has already been instituted, the latter shall be suspended
in whatever stage it may be found before judgment on the merits. The suspension shall last until final judgment
is rendered in the criminal action. Nevertheless, before judgment on the merits is rendered in the civil action,
the same may, upon motion of the offended party, be consolidated with the criminal action in the court trying
the criminal action. In case of consolidation, the evidence already adduced in the civil action shall be
deemed automatically reproduced in the criminal action without prejudice to the right of the prosecution to
cross-examine the witnesses presented by the offended party in the criminal case and of the parties to present
additional evidence. The consolidated criminal and civil actions shall be tried and decided jointly.
During the pendency of the criminal action, the running of the period of prescription of the civil action which
cannot be instituted separately or whose proceeding has been suspended shall be tolled. (n)
The extinction of the penal action does not carry with it extinction of the civil action. However, the civil action
based on delict shall be deemed extinguished if there is a finding in a final judgment in the criminal action that
the act or omission from which the civil liability may arise did not exist. (2a)
Section 3. When civil action may proceeded independently. — In the cases provided for in Articles 32, 33, 34
and 2176 of the Civil Code of the Philippines, the independent civil action may be brought by the offended
party. It shall proceed independently of the criminal action and shall require only a preponderance of
evidence. In no case, however, may the offended party recover damages twice for the same act or omission
charged in the criminal action. (3a)
Section 4. Effect of death on civil actions. — The death of the accused after arraignment and during the
pendency of the criminal action shall extinguish the civil liability arising from the delict. However, the
independent civil action instituted under section 3 of this Rule or which thereafter is instituted to enforce liability
arising from other sources of obligation may be continued against the estate or legal representative of the
accused after proper substitution or against said estate, as the case may be. The heirs of the accused may be
substituted for the deceased without requiring the appointment of an executor or administrator and the court
may appoint a guardian ad litem for the minor heirs.
The court shall forthwith order said legal representative or representatives to appear and be substituted within a
period of thirty (30) days from notice.
A final judgment entered in favor of the offended party shall be enforced in the manner especially provided in
these rules for prosecuting claims against the estate of the deceased.
If the accused dies before arraignment, the case shall be dismissed without prejudice to any civil action the
offended party may file against the estate of the deceased. (n)
Section 5. Judgment in civil action not a bar. — A final judgment rendered in a civil action absolving the
defendant from civil liability is not a bar to a criminal action against the defendant for the same act or omission
subject of the civil action. (4a)
Section 6. Suspension by reason of prejudicial question. — A petition for suspension of the criminal action based
upon the pendency of a prejudicial question in a civil action may be filed in the office of the prosecutor or the
court conducting the preliminary investigation. When the criminal action has been filed in court for trial, the
petition to suspend shall be filed in the same criminal action at any time before the prosecution rests. (6a)
Section 7. Elements of prejudicial question. — The elements of a prejudicial question are: (a) the previously
instituted civil action involves an issue similar or intimately related to the issue raised in the subsequent criminal
action, and (b) the resolution of such issue determines whether or not the criminal action may proceed. (5a)
Cases where prejudicial question does not apply:
1. Sabandal v. Tongco, G.R. No. 124498, October 5, 2001: PTI filed a case for violation of BP 22 against Sabandal.
Three years after the Information was filed, Sabandal filed with the RTC a complaint against PTI for specific
performance, recovery of overpayment and damages. Sabandal then filed a motion to suspend trial in the BP
22 cases against him based on a prejudicial question. Is there a prejudicial question to warrant the suspension
of the trial of the BP 22 cases until after the resolution of the civil action for specific performance, recovery of
overpayment, and damages?
Held: None. The pendency of a civil action for specific performance, overpayment, and damages did not pose
a prejudicial question in the criminal cases for violation of Batas Pambansa Bilang 22. The issue in the criminal
cases for violation of Batas Pambansa Bilang 22 is whether the accused knowingly issued worthless checks. The
issue in the civil action for specific performance, overpayment, and damages is whether complainant
Sabandal overpaid his obligations to Philippines Today, Inc. If, after trial in the civil case, petitioner is shown to
have overpaid respondent, it does not follow that he cannot be held liable for the bouncing checks he issued,
for the mere issuance of worthless checks with knowledge of the insufficiency of funds to support the checks is
itself an offense. [Note: At the time the cases were filed, the Rule did not require a "previously" instituted civil
action. This was only required in the 2000 Revised Rules of Criminal Procedure]
Capili vs. People G.R. No. 183805, July 03, 2013 Bigamy
JANUARY 27, 2018
FACTS:
Petitioner was charged with the crime of bigamy before the RTC. Petitioner thereafter filed a Motion to Suspend
Proceedings alleging that: (1) there is a pending civil case for declaration of nullity of the second marriage
before the RTC of Antipolo City filed by Karla Y. Medina-Capili; (2) in the event that the marriage is declared
null and void, it would exculpate him from the charge of bigamy; and (3) the pendency of the civil case for the
declaration of nullity of the second marriage serves as a prejudicial question in the instant criminal case.
ISSUE:
Whether or not the subsequent declaration of nullity of the second marriage is a ground for dismissal of the
criminal case for bigamy.
RULING:
Article 349 of the Revised Penal Code defines and penalizes the crime of bigamy as
follows:cralavvonlinelawlibrary
Art. 349. Bigamy. – The penalty of prision mayorshall be imposed upon any person who shall contract a second
or subsequent marriage before the former marriage has been legally dissolved, or before the absent spouse
has been declared presumptively dead by means of a judgment rendered in the proper proceedings.
The elements of the crime of bigamy, therefore, are: (1) the offender has been legally married; (2) the marriage
has not been legally dissolved or, in case his or her spouse is absent, the absent spouse could not yet be
presumed dead according to the Civil Code; (3) that he contracts a second or subsequent marriage; and (4)
that the second or subsequent marriage has all the essential requisites for validity.9
In the present case, it appears that all the elements of the crime of bigamy were present when the Information
was filed on June 28, 2004.
It is undisputed that a second marriage between petitioner and private respondent was contracted on
December 8, 1999 during the subsistence of a valid first marriage between petitioner and Karla Y. Medina-
Capili contracted on September 3, 1999. Notably, the RTC of Antipolo City itself declared the bigamous nature
of the second marriage between petitioner and private respondent. Thus, the subsequent judicial declaration
of the second marriage for being bigamous in nature does not bar the prosecution of petitioner for the crime of
bigamy.
Jurisprudence is replete with cases holding that the accused may still be charged with the crime of bigamy,
even if there is a subsequent declaration of the nullity of the second marriage, so long as the first marriage was
still subsisting when the second marriage was celebrated.
Case Digest: G.R. No. 112381 March 20, 1995
Isabelo Apa, Manuel Apa and Leonilo Jacalan, petitioners, vs. Hon. Rumoldo R. Fernandez, Hon. Celso V.
Espinosa, And Sps. Felixberto Tigol, Jr. And Rosita Taghoy Tigol, respondents
Facts: This is a special civil action of certiorari to set aside orders of respondent Judge Romuldo Fernandez of
RTC, Branch 54 of Lapu-Lapu City denying petitioners motion for suspension of arraignment and motion for
reconsideration in a criminal case filed against them. Petitioners anchor their claim on a prior case regarding
ownership. Petitioners allege that the civil case filed in 1990 seeking declaration for nullity of land title of the
owner which had been filed three years before May 27, 1993 when the criminal case for squatting was filed
against them constitutes a prejudicial question.
Issue: Whether the question of ownership is a prejudicial question justifying the suspension of the criminal case
against petitioners.
Ruling: Petition to suspend Criminal Case No. 012489 based on the prejudicial question presented was granted
on basis that;
the prejudicial question is a question based on a fact distinct and separate from the crime but so
intimately connected with it that its resolution is determinative of the guilt or innocence of the accused.
elements of prejudicial question - (1) the civil action involves an issue similar or intimately related to the
issue raised in the criminal action; and (2) the resolution of such issue determines whether or not the criminal
action may proceed.
the criminal case alleges that petitioners squatted without the knowledge and consent of the owner,
which, in 1994 the civil case rendered the nullity of the title of the owner and declared both petitioners and
respondents as co-owners of the land.
respondents argue that owners can be ejected from his property only if for some reason, that is, he has
let it to some other person. However, both case of respondents and petitioners are based on ownership.
Facts:
On October 21, 1985, respondent Isagani contracted a first marriage with one Maria Dulce. Without said
marriage having been annulled, Isagani contracted a second marriage with petitioner Imelda on January 25,
1996 and allegedly a third marriage with a certain Julia. An information for bigamy was filed against Isagani
based on Imelda's complaint. Sometime thereafter, Isagani initiated a civil action for the judicial declaration
of absolute nullity of his first marriage on the ground that it was celebrated without a marriage
license. Isagani then filed a motion to suspend the proceedings in the criminal case for bigamy invoking the
pending civil case for nullity of the first marriage as a prejudicial question to the criminal case. The trial
judge granted the motion to suspend the criminal case.
Issue:
Does the subsequent filing of a civil action for declaration of nullity of a previous marriage constitutes a
prejudicial question to a criminal case for bigamy?
Held:
A prejudicial question is one which arises in a case the resolution of which is a logical antecedent of the issue
involved therein. It is a question based on a fact distinct and separate from the crime but so intimately
connected with it that it determines the guilt or innocence of the accused. It must appear not only that the civil
case involves facts upon which the criminal action is based, but also that the resolution of the issues raised in
the civil action would necessarily be determinative of the criminal case. Consequently, the defense must
involve an issue similar or intimately related to the same issue raised in the criminal action and its resolution
determinative of whether or not the latter action may proceed. Its two essential elements are:
(a) the civil action involves an issue similar or intimately related to the issue raised in the criminal action; and
(b) the resolution of such issue determines whether or not the criminal action may proceed.
Article 40 of the Family Code, which was effective at the time of celebration of the second marriage, requires a
prior judicial declaration of nullity of a previous marriage before a party may remarry. The clear implication of
this is that it is not for the parties, particularly the accused, to determine the validity or invalidity of the
marriage.
Isagani, without first having obtained the judicial declaration of nullity of the first marriage, can not be said to
have validly entered into the second marriage. He was for all legal intents and purposes regarded as a married
man at the time he contracted his second marriage with petitioner. Any decision in the civil action for nullity
would not erase the fact that respondent entered into a second marriage during the subsistence of a first
marriage. Thus, a decision in the civil case is not essential to the determination of the criminal charge. It is,
therefore, not a prejudicial question.
Respondent's clear intent is to obtain a judicial declaration of nullity of his first marriage and thereafter to invoke
that very same judgment to prevent his prosecution for bigamy. He cannot have his cake and eat it too.
Otherwise, all that an adventurous bigamist has to do is to disregard Article 40 of the Family Code, contract a
subsequent marriage and escape a bigamy charge by simply claiming that the first marriage is void and that
the subsequent marriage is equally void for lack of a prior judicial declaration of nullity of the first. A party may
even enter into a marriage aware of the absence of a requisite - usually the marriage license - and thereafter
contract a subsequent marriage without obtaining a declaration of nullity of the first on the assumption that
the first marriage is void. Such scenario would render nugatory the provisions on bigamy. As succinctly held in
Landicho v. Relova:
(P)arties to a marriage should not be permitted to judge for themselves its nullity, only competent courts having
such authority. Prior to such declaration of nullity, the validity of the first marriage is beyond question. A party
who contracts a second marriage then assumes the risk of being prosecuted for bigamy. (Bobis vs Bobis
Digest, G.R. No. 138509, July 31, 2000)