CONSTRUCTION AND
Purpose or Object of Construction
INTERPRETATION
A. Construction & Interpretation
Construction is the art or process of discovering
and expounding the meaning and intention of the
authors of the law, where that intention is
rendered doubtful by reason of the ambiguity in
its language or the fact that the given case is not
explicitly provided for in the law.
Because of infirmities of language and the limited
scope of legislative drafting, inevitable there
enters into the construction of statutes the play
of judicial judgment within the limits of the
relevant legislative materials.
Interpretation v. Construction
Interpretation is the Construction is the
art of finding the true process of drawing
meaning and sense of warranted
any form of words. conclusions not
always included in
direct expressions or
determining the
application of words
to facts in litigation.
Rules of Construction
Rules of statutory construction are tools used to
ascertain legislative intent.
They are not rules of law but mere axioms of
experience.
Where there is ambiguity in the language of a
statute, courts employ canons of statutory
construction ascertain its true intent and
meaning.
Rules of statutory construction have no binding
effect on the courts. Nor are they controlling in
the interpretation of laws. They may only be used
to clarify, not to defeat, legislative intent.
All rules of construction or interpretation have for
their sole object the ascertainment of the true
intent of the legislature. The object of all judicial
interpretation of a statute is to determine
legislative intent, what intention is conveyed, by
language used.
Legislative Intent
It is the vital part, the essence of the law. The
intent of the legislature is the law, and the key to,
and the controlling factor, its construction or
interpretation.
Courts will not follow the letter of the statute
when it leads away from the true intent of the
legislature and to conclusions inconsistent with
the general purpose of the act.
Legislative purpose is the reason why a particular
statute was enacted by the legislature.
Legislative meaning is what the law, by its
language, means.
If there is ambiguity in the language used in a
statute, its purpose may indicate the meaning of
the language and lead to what the legislative
intent is.
The Legislative Intent is Ascertained
Where the words and phrases of a statue are not
obscure or ambiguous, its meaning and intention
of the legislature must be determined from the
language employed.
If the statute as whole fails to indicate the
legislative intent because the words used are
ambiguous, the court may look beyond the
statute, such as its legislative history, in order to
ascertain what was in the legislative mind at the
time the statute was enacted;
When all the means from which legislative intent
may be ascertained fail, the court may look into
the effect of the law, but not otherwise because
then, interpretation becomes judicial legislation.
 B. POWER TO CONSTRUE
Construction is a Judicial Function
The duty and power to interpret or construe a
statute in the Constitution belong to the judiciary.
While the legislative and the executive
departments, by enacting and enforcing a law,
respectively, may construe or interpret the law, it
is the court that has the final word as to what the
law means.
A case is moot or academic when its purpose has
become stale or where no practical relied can be
granted or which can have no practical effect.
The court may nonetheless resolve the case and
construe the applicable law “if it is capable of
repetition, yet evading review” especially where
public interest requires its resolution.
Laws are interpreted always in the context of the
peculiar factual situation of the case. Facts should
all be taken in their totality so that justice can be
rationally and fairly dispensed.
Overruling Judicial Construction
The legislature has no power to overrule the
interpretation or construction of a statute or the
Constitution by the Supreme Court, for
interpretation is a judicial function assigned to
the latter by the fundamental law.
If the legislature may declare what a law means
or what a specific portion of the Constitution
means, especially after the courts have in actual
case ascertained its meaning by interpretation
and applied it in a decision, this would surely
cause confusion.
That would be neither wise nor desirable, besides
being clearly violative of the fundamental
principles of our constitutional system of
government, particularly those governing the
separation of powers.
When Judicial Interpretation May Be Set
Aside
The interpretation of a statute or a constitutional
provision by the courts is not so sacrosanct as to
be beyond modification or nullification. The
Supreme Court itself may, in an appropriate case,
change or overrule its previous construction – by
amending the Constitution.
Condition sine qua non, before the court may
construe or interpret a statute, is that there be
doubt or ambiguity in its language.
For where there is no ambiguity in the words of a
statute, there is no more room for construction.
Only statutes with an ambiguous or doubtful
meaning may be the subject of statutory
construction.
A statute is ambiguous of it is susceptible of more
than one interpretation.
Construction or interpretation comes only after it
has been demonstrated that application is
impossible or inadequate without it.
Where the law is clear and unambiguous it must
be taken to mean exactly what it says, and the
court has no choice but to see to it that its
mandate is obeyed.
We cannot rewrite the law; this is the function of
the Congress.
Verbal legis or Plain Meaning Rule
Where the statute is clear, plain and free from
ambiguity, it must be given its literal meaning and
applied without interpretation.
Presumption is that the words employed by the
legislature in a statue correctly express its
intention or will and preclude the court from
construing it differently.
Verbal legis non est recedendum or from the
words of a statute there should be no departure.
Rulings of the Supreme Court
Article 8 of the Civil Code:
“Judicial decisions applying or interpreting the
laws, or the Constitutional shall form part of the
legal system of the Philippines”
These decisions referred to are those of the
Supreme Court. By statutory fiat, rulings of the
court of last resort applying or interpreting a
statute become part of the statue itself.
Legis interpretatio legis vim obtinet- the
authoritative interpretation of the Supreme
Court of a statute acquires the force of law by
becoming a part thereof as of the date of its
enactment, since the court’s interpretation
merely established the contemporaneous
legislative intent
Stare decisis et non quieta movere- when the
Supreme Court has once laid down a principle of
law as applicable to a certain state of facts, it will
adhere to that principle and apply it to all future
cases where the facts are substantially the same.
The interpretation continues until overruled.
The Supreme Court may abandon or overrule its
earlier decision construing a statute whenever it
is right and proper to do so.
Rulings of the highest tribunal are binding upon
inferior courts.
Only the Supreme Court en banc can modify
or abandon principle of law, not any division
of the Court.
Pursuant to Article VIII 4(3) of the constitution, no
division of the Court has the power to modify or
reverse a doctrine or principle of law enunciated
by either another division of the Court, or the
Court en banc, except the Court en banc itself.
Courts may Issue Guidelines in Construing
Statute.
The Supreme Court has the duty to “formulate
guiding and controlling constitutional principles,
precepts, doctrines, or rules”
Such guidelines are not judicial legislation, but
the court merely defines what the law is.
C. LIMITATIONS ON POWER TO
CONSTRUE
Courts may not enlarge nor restrict statutes.
While statutory construction involves choice, the
court should resist the temptation to roam at will
and rely on its predilections as to what policy
should prevail.
Common sense and good faith are the leading
stars that should guide judicial construction.
Courts may not, in the guise of interpretation,
enlarge the scope of a statute and include therein
situations not provided not intended by the
lawmakers.
Courts are not authorized to insert into law what
they think should be in it or to supply what they
think the legislature would have supplied if its
attention had been called to omission.
Where a statute contains no limitations in its
operation or scope, courts should not engraft
any. Where a provision of law expressly limits its
application to certain transactions, it cannot be
extended to other transactions by interpretation.
To do any of such things would be to violence to
the language of the law and to invade the
legislative sphere.
A statute may be vague when it lacks
comprehensible standards that men of common
intelligence must necessarily guess at its meaning
and differ as to its application.
Courts not to be influence by questions of
wisdom.
Since the legislature, by their very nature of its
function, is primarily the judge of the necessity,
adequacy, wisdom, reasonableness and
expediency of any law, courts may not take any
of these matters into account in construing or
interpreting the law.
For it is not within their province to supervise
legislation and keep it within the bounds of
propriety and common sense.

Judges may regard a certain laws as harsh, unwise
or morally wrong ,and may recommend to the
authority or department concerned its
amendment, modification or repeal, still, as long
as said law is in force, they must apply it and give
it effect as decreed by the law making body
The question regarding the wisdom, morality, or
practicability of statutes are not addressed to the
judiciary but may be resolved only by the
legislative and executive departments.
That function is exclusive.
EXECUTIVE CONSTRUCTION
Construction placed upon the statute by an
executive or administrative officer called upon to
execute or administrative officer called upon to,
execute or administer such statute.
The duty of enforcing the law, which devolves
upon the executive branch of the government,
necessarily calls for the interpretation of its
ambiguous provisions.
Executive and administrative officers are
generally the very first officials to interpret the
law, preparatory to its enforcement. These
interpretations are in the forms of rules and
regulations, circulars, directives, opinions and
rulings.
There are 3 types of executive interpretation of
the law:
1. The first is the construction by an
executive or administrative officer
directly called to implement the law. It
may be expressed ir implied. An
interpretation embodied in a circular,
directive or regulations is an expressed
interpretation.
2. The second type is the construction by
the secretary of justice in his capacity as
the chief legal adviser of the
government. It is in the form of opinions
issued upon request of administrative or
executive officials who enforce the law.
3. The third kind of contemporaneous
construction is the interpretation handed
down in an adversary proceeding in the
form of a ruling by an executive officer
exercising quasi-judicial power.
Generally speaking, where there is doubt as to
the proper interpretation of a statute, the
uniform construction placed upon it by the
executive or administrative officer charged with
its enforcement will be adopted, if necessary, to
resolve the doubt.
The principle that the contemporaneous
construction of a statute by the executive officers
of the government, whose duty is to execute it, it
is entitled to great respect, and should ordinarily
control the construction of the statute by the
courts, is firmly embedded in our jurisdiction that
no authorities need to be cited to support it,
JUDICIAL CONSTRUCTION
Basis, Extent and Limitations
Article VIII, Section 1 to 4 of the Constitution:
SECTION 1. The judicial power shall be vested in
one Supreme Court and in such lower courts as
may be established by law.
Judicial power includes the duty of the courts of
justice to settle actual controversies involving
rights which are legally demandable and
enforceable, and to determine whether or not
there has been a grave abuse of discretion
amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the
Government.
SECTION 2. The Congress shall have the power to
define, prescribe, and apportion the jurisdiction
of various courts but may not deprive the
Supreme Court of its jurisdiction over cases
enumerated in Section 5 hereof.
No law shall be passed reorganizing the Judiciary
when it undermines the security of tenure of its
Members.
SECTION 3. The Judiciary shall enjoy fiscal
autonomy. Appropriations for the Judiciary may
not be reduced by the legislature below the
amount appropriated for the previous year and,
after approval, shall be automatically and
regularly released.
SECTION 4. (1) The Supreme Court shall be
composed of a Chief Justice and fourteen
Associate Justices. It may sit en banc or in its
discretion, in divisions of three, five, or seven
Members. Any vacancy shall be filled within
ninety days from the occurrence thereof.
(2) All cases involving the constitutionality of a
treaty, international or executive agreement, or
law, which shall be heard by the Supreme Court
en banc, and all other cases which under the
Rules of Court are required to be heard en banc,
including those involving the constitutionality,
application, or operation of presidential decrees,
proclamations, orders, instructions, ordinances,
and other regulations, shall be decided with the
concurrence of a majority of the Members who
actually took part in the deliberations on the
issues in the case and voted thereon.
(3) Cases or matters heard by a division shall be
decided or resolved with the concurrence of a
majority of the Members who actually took part
in the deliberations on the issues in the case and
voted thereon, and in no case, without the
concurrence of at least three of such Members.
When the required number is not obtained, the
case shall be decided en banc: Provided, that no
doctrine or principle of law laid down by the court
in a decision rendered en banc or in division may
be mediated or reversed except by the court
sitting en banc.
Presumption of constitutionality
Every statute is presumed is valid. The reason lies
in the very essence of how a law is enacted.
Before the legislature passes a bill, it presumed
that it has decided the measure to be
constitutional.
An act of the legislature, approved by the
President, is presumed to be within the
constitutional limitations.
To strike down a law, there must be a clear
showing that what the fundamental law
condemns or prohibits, the statute allows it to be
done.
Requisites for exercise of Judicial Power
Before the court may resolve the question of
constitutionality of a statute, the following
requisites should, as a rule, be present:
(1) Existence of an appropriate case
(2) An interest personal and substantial by
the party raising the constitutional
question
(3) The plea that the function be exercised at
the earlies opportunity
(4) The necessity that the constitutional
question be passed upon in order to
decide the case.
Necessity of deciding constitutionality
It is well-settled that the court will not pass upon
the validity a statute if it can decide the case on
some other grounds; it will the constitutional
question for consideration until an appropriate
case arises in which a decision upon such
question is unavoidable.
Requisites of Judicial Review
1. An actual case or controversy calling for
the exercise of judicial power
2. The person challenging the act must have
“standing” to challenge
3. The question of constitutionality must be
raised at the earliest possible
opportunity.
4. The issue of constitutionality must be the
very lis mota of the case.
Lis mota- the cause of the suit or action
Test of Constitutionality
The test of constitutionality of a statute is what
the Constitution provides in relation to what can
or may be done under the statute, and not by
what it has been done under it.
A statute may be declared unconstitutional
because:
1. it is not within the legislative power to
enact
2. It creates or establishes methods or
forms that infringe constitutional
principles.
3. Its purpose or effect violates the
constitution or its basic principles.
4. Allows something to be done which the
fundamental law condemns or prohibits
5. When it attempts to validate a course of
conduct the effect of which the
constitution specifically forbids.
6. It is vague
The courts may not declare a law
unconstitutional on other grounds other than
constitutional.
With respect to ordinances, the tests of validity
are:
1. It must not contravene the constitution
or any statute
2. It must not be unfair or oppressive
3. It must not be partial or discriminatory
4. It must not prohibit but may regulate
trade
5. It must be general and consistent with
public policy
6. It must not be unreasonable
Effects of Unconstitutionality
Article 7 of the New Civil Code
(2) “When the courts declared a law to be
inconsistent with the Constitution, the former
shall be void and the latter shall govern.”
The general rule is that an unconstitutional act is
not a law. It confers no rights, it imposes no
duties, it affords no protections, it creates no
office, it is, in legal contemplation, inoperative as
though it had never been passed.
There are two views on the effects of a
declaration of the constitutionality of a statute
a. The first is the orthodox view. Under this
rule, an unconstitutional act is not a law.
It is therefore stricken from the statute
books and considered never to have
existed at all. No one may therefore
invoke it or may the courts be permitted
to apply it in subsequent cases. It is, in
other words, a total nullity.
a. This view is expressed in art.7 of
the Civil Code, providing that
“when the courts declare a law to
be inconsistent with the
constitution, the former shall be
void and the latter shall govern”
b. The second or modern view is less
stringent. Under this view, the court in
passing upon the question of
constitutionality does not annul or repeal
the statute if it finds it in conflict with the
Constitution. It simply refuses to
recognize it and determines the rights of
the parties just as if such statute had no
existence.
Partial Invalidity
The general is that where part of a statute is void
as repugnant to the Constitution, while another
part is valid, the valid portion, if separable from
the invalid, may stand and be enforced.
The language used in the invalid part of a statute
can have no legal effect or efficacy for any
purpose whatsoever, and what remains must
express the legislative will independently of the
void part, since the court has no power to
legislate.
Exception to the general rule is that when the
parts of a statute are so mutually dependent and
connected, as conditions, considerations,
inducements, or compensations for each other,
as to warrant a belief that the legislature
intended them as a whole, the nullity of one part
will vitiate the rest.
Limitations of the Courts
1. Courts cannot limit the application or
coverage of a law, nor it can impose
conditions not provided therein. To do
so, according to the Supreme Court,
constitutes judicial legislation.
2. Considerations affecting the wisdom,
efficacy or practicability of a law should
come under the exclusively jurisdiction of
the Congress.
3. The determination of what constitutes
disorderly behavior is a political question
and therefore not cognizable by the
courts.
4. Under the doctrine of separation of
powers, the courts have no right to
directly decide matters over which full
discretionary authority has been
delegated to the Executive Branch of the
Government, or to substitute their own
judgments for that of the Executive
Branch.
To invalidate a law based on baseless supposition
is an affront to the wisdom not only of the
legislature that passed it but also of the executive
which approved it.
As the court previously held, where there are
serious allegations that a law has infringed the
Constitution, it becomes not only the right but
the duty of the Court to look into such allegations,
uphold the supremacy of the Constitution.
Moreover, where the issues raised are of
paramount importance to the public, the Court
has the discretion to brush aside technicalities of
procedure.
Independence of the Judiciary
To maintain the independence of the judiciary,
the following safeguards have been embodied in
the Constitution:
1. The supreme court is a constitutional
body. It cannot be abolished nor may its
membership or the manner of its
meetings be changed by mere legislation.
2. The members of the supreme court may
not be removed except in impeachment.
3. The supreme court may not be deprived
of its minimum original and appellate
jurisdiction as prescribed in Art. 8, Sec. 5
of the Constitution.
4. The appellate jurisdiction of the Supreme
Court may not be increased by law
without its advice and concurrence.
5. Appointees to the judiciary are now
nominated by the judiciary and bar
council and no longer subjects to
confirmation by the commission on
appointments.
6. The supreme court now has
administrative supervision over all lower
courts and their personnel.
7. The supreme court has exclusive power
to discipline judges of lower courts.
8. The members of the supreme court and
all lower courts have security of tenure,
which cannot be undermine by a law
reorganizing the judiciary.
9. They shall not be designated to any
agency performing quasi-judicial or
administrative functions.
10. The salaries of judges may not be
reduced during their continuance in
office.
11. The judiciary shall enjoy fiscal autonomy.
12. The supreme court alone may initiate
rules of court.
13. Only the supreme court may order the
temporary detail of judges
 and second, that the valid portions can stand
14. The supreme court can appoint all independently as a separate statute.
officials and employees of the judiciary
The legislative willingness to retain the valid
Judicial Power portions may be expressed in what is known as
Judicial power includes the duty of the courts of the separability clause.
justice to settle actual controversies involving
rights which are legally demandable and
enforceable, and to determine whether or not
there has been grave abuse of discretion
amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the
government.

The supreme court is the only constitutional

court, all the lower courts being of statutory
creation.

Requisites of a Judicial Inquiry

No constitutional question will be heard and
decided by them unless there is compliance with
that are known as the requisites of a judicial
inquiry.

These requisites are the following:

1. There must be an actual case or
controversy
2. The question of constitutionality must be
raised by the proper party
3. The constitutional question must be
raised at the earliest possible
opportunity
4. The decision of the constitutional
question must be necessary to the
determination of the case itself.

Partial Unconstitutionality
Also, in deference to the doctrine of separation
of powers, courts hesitate to declare a law totally
unconstitutional and, as long as it is possible, will
salvage the valid options thereof in order to give
effect to the legislative will.

Nevertheless, a declaration of partial

unconstitutionality will be valid only if two
conditions concur, to wit first: first, that the
legislature is willing to retain the valid portions
even if the rest of the statute is declared illegal,
CASES
*Caltex v. Palomar*
Facts: In the year 1960, Caltex (Philippines), Inc.
conceived and laid groundwork for a promotional
scheme calculated to drum up its patronage for
its products. The contest was called as “Caltex
Hooded Pump Contest” it calls for participants
therein to estimate the actual number of liters a
hooded gas pump at each Caltex station will
dispense during a specified period.
Participation in the said promo is to be open
indiscriminately to all "motor vehicle owners
and/or licensed drivers" with the exception of the
employees and their immediate families. No fee
or consideration is required to be paid, and no
purchase of Caltex products required to be made.
Entry forms are to be made available upon
request at any Caltex stations.
The contest was envisioned as having three-
staged winner selection system: Dealer Contest,
Regional Contest, and National Contest. The
winners at each level would receive various
prizes ranging from gifts like burner stoves to
cash prizes up to 3,000 pesos.
Foreseeing the extensive use of mails to publicize
the promotional scheme, Caltex made
representations with the postal authorities to
secure advanced clearance for mailing. This was
formalized in a letter sent by Caltex to the
Postmaster General, dated October 31, 1960, in
which Caltex, thru its counsel, enclosed a copy of
the contest rules and endeavored to justify its
position that the contest does not violate the “The
Anti-Lottery Provisions of the Postal Law”.
The Acting Postmaster General opined that the
said contest falls within the purview of the Anti-
Lottery provision and declined the grant of the
requested clearance.
Caltex sought a reconsideration, stressing that
the contest was not, under controlling authorities,
condemnable as a lottery. However, the
Postmaster General maintained his view that the
contest involves consideration, or even if it does
not involve any consideration it still falls as “Gift
Enterprise”, which was equally banned by the
Postal Law. Denying the use of the mails for the
purposes of the proposed contest and threatened
that if said contest was conducted , a fraud order
will be issued against Caltex and all its
representatives, pursuant to the powers granted
to him by Sections 1954(a), 1982, and 1983 of the
Revised Administrative Code.
Issue: Whether or not the scheme proposed by
Caltex the appellee is within the coverage of the
prohibitive provisions of the Postal Law?
[In line with the definition of construction:
Construction, verily, is the art or process of
discovering and expounding the meaning and
intention of the authors of the law with respect to
its application to a given case, where that
intention is rendered doubtful, amongst others, by
reason of the fact that the given case is not
explicitly provided for in the law (Black,
Interpretation of Laws, p. 1). This is precisely the
case here. Whether or not the scheme proposed
by the appellee is within the coverage of the
prohibitive provisions of the Postal Law
inescapably requires an inquiry into the intended
meaning of the words used therein].
Ruling: No - The Caltex Hooded Pump Contest
proposed by the appellee is not a lottery [nor a gift
enterprise] that may be administratively and
adversely dealt with under the Postal Law.
In "El Debate", Inc. vs. Topacio (44 Phil 278, 283-
284), the term "lottery" extends to all schemes for
the distribution of prizes by chance, such as
policy playing, gift exhibitions, prize concerts,
raffles at fairs, etc., and various forms of
gambling. There are three essential elements of
a lottery: prize, chance, and consideration. There
is without doubt that the element of prize and
chance is present in the contest at bar.
The element of consideration seemed to be
lacking. Nowhere in the said rules that any fee be
paid, any merchandise be bought, service
rendered, or any value whatsoever be given
(consideration) for the privilege to participate
because any prospective participant can request
for an entry form. Thus, the contest fails to exhibit
any discernible consideration which would brand
it as a lottery.
In the same manner, the all-embracing term “gift
enterprise” cannot embrace the scheme at bar.
Gift enterprise is defined as sporting artifice of
under which goods are sold for their market value
but by way of inducement each purchaser is given
a chance to win a prize.
It is only logical that the term under a construction
(gift enterprise) should be accorded no other
meaning than that which is consistent with the
nature of the word associated therewith (lottery).
Hence, if lottery is prohibited only if it involves a
consideration, so also must the term "gift
enterprise" be so construed.
In line with the legislative intent, prohibitive
provision of the Postal Law are enacted against
lotteries, gift enterprises, and similar schemes
due to the necessity to suppress their tendency to
inflame the gambling spirit and to corrupt public
morals. Herein, gambling requires that something
of value be hazarded for a chance to gain a larger
amount. It logically follows that where no
consideration is paid or given by the contestant to
participate, such a scheme cannot be accorded
as act of gambling.
The scheme does not only appear to be, but
actually is, a gratuitous distribution of property by
chance where no direct or indirect consideration
is derived from prospective participant; thus,
gambling spirit not being cultivated or stimulated
thereby. The contest does not transgress the
provisions of the Postal Law.
*City of Baguio v. Marcos*
This constitutional injuction makes the title an
indispensable part of a statute, and what may
be inadequately be omitted in the text may be
supplied or remedied by its title.
The case of city of baguio v. marcos illustrates
the rule. The question raised in this case is
when to count the
*Garcia v. Executive Secretary*
Please refer to page 112 and 125 of the
book of agpalo
*Commissioner of Customs v.
Hypermix*
*Endencia v. David*
Please refer to page 121 of the book of
agpalo
Facts: Congress enacted Republic Act No. 590,
which contained a provision that removed all
income tax exemptions of public officers,
including that of judges. Sec. 13 of R.A. No. 590
reads:
Sec. 13. No salary wherever received by any
public officer of the Republic of the Philippines
shall be considered as exempt from the income
tax, payment of which is hereby declared not to
be a diminution of his compensation fixed by the
Constitution or by law.
Thereafter, Justice Pastor Edencia and Justice
Fernando Jugo filed a joint appeal from the
decision of the CFI of Manila declaring Sec. 13 of
R.A. No. 590 unconstitutional and ordering
Saturnino David (as Collector of Internal
Revenue) to refund to Justice Edencia the sum of
P1, 744.45, representing the income tax collected
on his salary as Assoc. Justice of the CA in 1951,
and to Justice Jugo the amount of P 2,345.46,
representing the income tax collected on his
salary as Presiding Justice of the CA and
thereafter as Assoc. Justice of the SC.
The appellants cited Perfecto vs. Meer which
ruled that the collection of income taxes from the
salaries of appellants was a diminution of their
compensation and should therefore be
considered a violation of the Constitution.
Issue: Whether or not Sec. 13 of R.A. No. 590
can justify and legalize the collection of income
tax on the salary of judicial officers.
Ruling: No - The Supreme Court ruled in
Perfecto vs. Meer that judicial officers must be
exempt from the payment of income tax on their
salaries because collection of such was a
decrease or diminution of their salaries during
their continuance in office, as expressly
prohibited by the Constitution. Subsequently,
Congress enacted R.A. No. 590 either to
counteract the ruling in the Perfecto case or to at
least authorize and legalize the collection of
income tax on the salaries of judicial officers.
The authority to interpret and apply the laws
and/or the Constitution belongs exclusively to the
judicial department. The phrase “payment of
which is hereby declared not to be a diminution of
his compensation fixed by the Constitution or by
law” as stated in Sec. 13 of R.A. No. 590 is a clear
example of interpretation or ascertainment of the
meaning of the phrase found in Sec. 9, Art. VIII of
the Constitution. The Supreme Court held that in
enacting a law, the legislature may not legally
provide therein how such law should be
interpreted. Therefore, in this case the Supreme
Court found that there was an invasion of the
authority exclusively granted to the judicial
department by the fundamental law.
*Marcos v. Manglapus*
*Kilosbayan v.Morato*
Facts:
1. In the Previous case, GR 113375 (KIlosbayan
vs. Guingona) held invalidity of the contract
between Philippine Charity Sweepstakes
Office (PCSO) and the privately-owned
Philippine Gaming Management Corporation
(PGMC) for the operation of a nationwide on-
line lottery system. The contract violated the
provision in the PCSO Charter which
prohibits PCSO from holding and conducting
lotteries through a collaboration, association,
or joint venture.
2. Both parties again signed an Equipment
Lease Agreement (ELA)for online lottery
equipment and accessories on January 25,
1995. The agreement are as follow:
· Rental is 4.3% of gross amount
of ticket sales by PCSO at
which in no case be less than
an annual rental computed at
P35,000 per terminal in
commercial operation.
-Rent is computed bi-weekly.
-Term is 8 years.
-PCSO is to employ its own
personnel and responsible for
the facilities.
-Upon expiration of term, PCSO can
purchase the equipment at
P25M.
3. Kilosbayan again filed a petition to
declare amended ELA invalid because it
is the same with the previous agreement
between both parties. However, PCSO
and PGMC filed a separate comment
contending that Equipment Lease
Agreement (ELA) is a DIFFERENT lease
contract and it is not in coherence with
the previous contract that was already
invalid. On the other hand, the power to
determine if ELA is
advantageous/disadvantageous vests in
the Board of the directors of PCSO.
and since, PCSO do lack of funds in
purchasing online lottery equipment, they
do enter the said agreement with PGMC.
And lastly, they contended that
petitioners, KILOSBAYAN, do not have
legal standing because they are not
parties to the contract.
Issue:
1. Whether or not petitioner Kilosbayan,
Incorporated has a legal standing to sue.
2. Whether or not the ELA between PCSO and
PGMC in operating an online lottery is valid.
Ruling:
1. Petitoners do not have a legal standing
to sue.
a. The ELA is a question of law,
which petitioners seek to declare
invalid in this proceeding, is
essentially different from the
1993 Contract of Lease entered
into by the PCSO with the
PGMC. Hence the determination
in the prior case (G.R. No.
113375) that petitioners had
standing to challenge the validity
of the 1993 Contract of Lease,
the court does not preclude
determination of their standing in
the present suit.
b. The real parties are those who are
parties to the agreement or are
bound either principally or are
prejudiced in their rights with
respect to one of the contracting
parties and can show the
detriment which would positively
result to them from the contract.
c. Standing is a special concern in
constitutional law because in
some cases suits are brought not
by parties who have been
personally injured by the
operation of a law or by official
action taken, but by concerned
citizens, taxpayers or voters who
actually sue in the public interest.
On the other hand, "real party-in-
interest" is whether he is "the
 party who would be benefited or
injured by the judgment, or the
'party entitled to the avails of the
suit.
d. The Constitution requires that the
Ombudsman and his deputies,
"as protectors of the people shall
act promptly on complaints led in
any form or manner against
public officials or employees of
the government, or any
subdivision, agency or
instrumentality thereof including
government-owned or controlled
corporations." (Art. XI, 12) In
addition, the Solicitor General is
authorized to bring an action for
quo warranto if it should be
thought that a government
corporation, like the PCSO, has
offended against its corporate
charter or misused its franchise.
Therefore, petitioner have no
cause against respondents and
therefore their petition should be
dismissed.
Note:
STARE DECISIS cannot apply. The previous
ruling sustaining the standing of the petitioners is
a departure from the settled rulings on real parties
in interest because no constitutional issues were
actually involved.
LAW OF THE CASE (opinion delivered on a
former appeal) cannot also apply. Since the
present case is not the same one litigated by the
parties before in Kilosbayan vs. Guingona, Jr.,
the ruling cannot be in any sense be regarded as
“the law of this case”. The parties are the same
but the cases are not.
RULE ON “CONCLUSIVENESS OF
JUDGMENT” cannot still apply. An issue actually
and directly passed upon and determined in a
former suit cannot again be drawn in question in
any future action between the same parties
involving a different cause of action. But the rule
does not apply to issues of law at least when
substantially unrelated claims are involved. When
the second proceeding involves an instrument or
transaction identical with, but in a form separable
from the one dealt with in the first proceeding, the
Court is free in the second proceeding to make an
independent examination of the legal matters at
issue.
2. The Equipment Lease Agreement is
VALID
a. It is different with the prior lease
agreement: PCSO now bears all
losses because the operation of
the system is completely in its
hands.
b. Fixing the rental rate to a
minimum is a matter of business
judgment and the Court is not
inclined to review.
c. Rental rate is within the 15% net
receipts fixed by law as a
maximum. (4.3% of gross receipt
is discussed in the dissenting
opinion of Feliciano, J.)
d. In the contract, it stated that the
parties can change their
agreement. Petitioners state that
this would allow PGMC to control
and operate the on-line lottery
system. The Court held that the
claim is speculative. In any case,
in the construction of statutes,
the resumption is that in making
contracts, the government has
acted in good faith. The doctrine
that the possibility of abuse is not
a reason for denying power.
e. It was held in Kilosbayan Vs.
Guingona that PCSO does not
have the power to enter into any
contract which would involve it in
any form of “collaboration,
association, or joint venture” for
the holding of sweepstakes
activities. This only mentions that
PCSO is prohibited from
investing in any activities that
would compete in their own
activities.
f. It is claimed that ELA is a joint
venture agreement which does
not compete with their own
activities. The Court held that is
also based on speculation.
Evidence is needed to show that
the transfer of technology would
involve the PCSO and its
personnel in prohibited
association with the PGMC.
 g. O. 301 (on law of public bidding)
applies only to contracts for the
purchase of supplies, materials
and equipment and not on the
contracts of lease. Public bidding
for leases are only for privately-
owned buildings or spaces for
government use or of
government owned buildings or
spaces for private use.
*David v. Arroyo*
FACTS: 7 consolidated petitions for certiorari
and prohibition allege that in issuing PP No.
1017 and GO No. 5, GMA committed grave
abuse of discretion. It tramples upon the very
freedom guaranteed and protected by the
Constitution thus, such issuances are void
for being unconstitutional. GMA as the
President and Commander-in-Chief of the
Armed Forces of the Philippines by virtue of
the powers vested upon her by ARTICLE 7,
SECTION 18 (The President whenever it
becomes necessary may call out the armed
forces to prevent or suppress rebellion) and
in her capacity as the Commander-in-Chief
(do hereby command the AFP to maintain
law and order throughout the Philippines,
prevent or suppress all forms of lawless
violence as well as any act of insurrection or
rebellion and to enforce obedience to all the
laws and to all decrees, orders and
regulations promulgated by her personally or
upon her direction) and as provided in
ARTICLE 12, SECTION 17 of the
Constitution do hereby declare a State of
National Emergency. Main reason for PP
1017 – plot to unseat or assassinate GMA.
They considered the aim to oust or
assassinate the President and take-over the
reigns of government as a clear and present
danger. GO 5 implements PP 1017. After 1
week, PP No. 1021 lifted PP 1017. The
petitioners contend that PP 1017 and GO 5
are unconstitutional for having violated the
constitutional guarantees of freedom of the
press, speech, assembly, expression when
those tasked to enforce PP 1017 committed
these against the petitioners:
Revoked rally permits Warrantless arrest
Facility take over Restraining media
Also, it is unconstitutional because it grants
the President the power to promulgate
decrees when the proclamation stated
"enforce obedience to all the laws and to all
decrees, orders and regulations promulgated
by me personally".
ISSUES: WHETHER PP 1017 AND GO
5 ARE UNCONSTITUTIONAL. RULING:
PROVISIONS OF PP 1017 (discussed):
First provision: by virtue of the power vested
upon me by Section 18, Article VII do hereby
command the AFP, to maintain law and order
throughout the Philippines, prevent or
suppress all forms of lawless violence as well
any act of insurrection or rebellion.
THIS AN EXERCISE OF PRESIDENT'S
CALLING-OUT POWER.
In exercising her calling-out power, the
President relied on SECTION 17, ARTICLE
XII.
PP 1017 IS NOT A DECLARATION OF
MARTIAL LAW. IT IS MERELY AN
EXERCISE OF PRESIDENT ARROYO’S
CALLING – OUT POWER FOR THE
ARMED FORCES TO ASSIST HER IN
PREVENTING OR SUPPRESSING
LAWLESS VIOLENCE.
Second provision: and to enforce obedience
to all the laws and to all decrees, orders and
regulations promulgated by me personally or
upon my direction.
Petitioners argue that PP 1017 is
unconstitutional as it arrogated upon GMA
the power to enact laws and decrees in
violation of Section 1, Article VI. It was lifted
from Marcos’ PP No. 1081.
She cannot use decrees similar to those
issued by Marcos under PP 1081. PDs are
laws which are of the same category and
binding force as statutes because they were
issued by the President in exercise of his
legislative power during the period of Martial
Law under the 1973 Constitution.
THE COURT RULES THAT THE ASSAILED
PP 1017 IS UNCONSTITUTIONAL
INSOFAR AS IT GRANTS GMA THE
AUTHORITY TO PROMULGATE DECREES
when the proclamation stated "enforce
obedience to all the laws and to all decrees,
orders and regulations promulgated by me
personally".
Third provision: as provided in Section 17,
Article XII of the Constitution do hereby
declare a State of National Emergency.
A distinction must be drawn between the
President’s authority to declare a “state of
national emergency” and to exercise
emergency powers. The first, Section 18,
Article VII grants the President such power
so no constitutional objection can be raised.
But the second, Section 17, Article XII,
constitutional issue arise.
related to lawless violence, as well as
decrees promulgated by the President, are
declared UNCONSTITUTIONAL.
In addition, the provision in PP 1017
declaring national emergency under Section
17, Article VII of the Constitution is
CONSTITUTIONAL, but such declaration
does not authorize the President to take over
privately – owned public utility or business
affected with public interest without prior
legislation. GO 5 is CONSTITUTIONAL since
it provides a standard by which the AFP and
the PNP should implement PP 1017.
Considering that “acts of terrorism” have not
yet been defined and made punishable by
the Legislature, such portion of GO 5 is
UNCONSTITUTIONAL.
The violence against petitioners are
UNCONSTITUTIONAL.

THE CONSTITUTION DID NOT INTEND *Peralta v. CSC*

THAT CONGRESS SHOULD FIRST *Araullo v. Aquino*
AUTHORIZE THE PRESIDENT BEFORE
HE CAN DECLARE A “STATE OF
NATIONAL EMERGENCY”. SO,
PRESIDENT ARROYO COULD VALIDLY
DECLARE THE EXISTENCE OF NATIONAL
EMERGENCY EVEN IN THE ABSENCE OF
A CONGRESSIONAL ENACTMENT. BUT
THE EXERCISE OF EMERGENCY
POWERS SUCH AS THE TAKING OVER
OF PRIVATELY OWNED PUBLIC UTILITY
OR BUSINESS AFFECTED WITH PUBLIC
INTEREST, IS A DIFFERENT MATTER.
THIS REQUIRES DELEGATION FROM
CONGRESS.

The petitions are PARTLY GRANTED.

The Court rules that PP 1017 is

CONSTITUTIONAL insofar as it constitutes
a call by GMA on the AFP to prevent or
suppress lawless violence.
However, the provisions of PP 1017
commanding the AFP to enforce laws not