G.R.

No. L-6339 April 20, 1954

MANUEL LARA, ET AL., plaintiffs-appellants,
vs.
PETRONILO DEL ROSARIO, JR., defendant-appellee.
Manansala and Manansala for appellants.
Ramon L. Resurreccion for appellee.
MONTEMAYOR, J.:
In 1950 defendant Petronilo del Rosario, Jr., owner of twenty-five taxi cabs or cars, operated a taxi business under
the name of "Waval Taxi." He employed among others three mechanics and 49 chauffeurs or drivers, the latter
having worked for periods ranging from 2 to 37 months. On September 4, 1950, without giving said mechanics and
chauffeurs 30 days advance notice, Del Rosario sold his 25 units or cabs to La Mallorca, a transportation company,
as a result of which, according to the mechanics and chauffeurs above-mentioned they lost their jobs because the
La Mallorca failed to continue them in their employment. They brought this action against Del Rosario to recover
compensation for overtime work rendered beyond eight hours and on Sundays and legal holidays, and one month
salary (mesada) provided for in article 302 of the Code of Commerce because the failure of their former employer
to give them one month notice. Subsequently, the three mechanics unconditionally withdrew their claims. So only
the 49 drivers remained as plaintiffs. The defendant filed a motion for dismissal of the complaint on the ground
that it stated no cause of action and the trial court for the time being denied the motion saying that it will be
considered when the case was heard on the merits. After trial the complaint was dismissed. Plaintiffs appealed
from the order of dismissal to the Court of Appeals which Tribunal after finding only questions of law are involved,
certified the case to us.
The parties are agreed that the plaintiffs as chauffeurs received no fixed compensation based on the hours or the
period of time that they worked. Rather, they were paid on the commission basis, that is to say, each driver
received 20 per cent of the gross returns or earnings from the operation of his taxi cab. Plaintiffs claim that as a
rule, each drive operated a taxi 12 hours a day with gross earnings ranging from P20 to P25, receiving therefrom
the corresponding 20 per cent share ranging from P4 to P5, and that in some cases, especially during Saturdays,
Sundays, and holidays when a driver worked 24 hours a day he grossed from P40 to P50, thereby receiving a share
of from P8 to P10 for the period of twenty-four hours.
The reason given by the trial court in dismissing the complaint is that the defendant being engaged in the taxi or
transportation business which is a public utility, came under the exception provided by the Eight-Hour Labor Law
(Commonwealth Act No. 444); and because plaintiffs did not work on a salary basis, that is to say, they had no
fixed or regular salary or remuneration other than the 20 per cent of their gross earnings "their situation was
therefore practically similar to piece workers and hence, outside the ambit of article 302 of the Code of
Commerce."
For purposes of reference we are reproducing the pertinent provisions of the Eight-Hour Labor Law, namely,
sections 1 to 4.
SECTION 1. The legal working day for any person employed by another shall not be more than eight hours
daily. When the work is not continuous, the time during which the laborer is not working and can leave
his working place and can rest completely shall not be counted.
SEC. 2. This Act shall apply to all persons employed in any industry or occupation, whether public or
private, with the exception of farm laborers, laborers who prefer to be paid on piece work basis, domestic
servants and persons in the personal service of another and members of the family of the employer
working for him.
SEC. 3. Work may be performed beyond eight hours a day in case of actual or impending emergencies,
caused by serious accidents, fire flood, typhoon, earthquakes, epidemic, or other disaster or calamity in
order to prevent loss of life and property or imminent danger to public safety; or in case of urgent work to
be performed on the machines, equipment, or installations in order to avoid a serious loss which the
employer would otherwise suffer, or some other just cause of a similar nature; but in all cases the
laborers and the employees shall be entitled to receive compensation for the overtime work performed at
the same rate as their regular wages or salary, plus at least twenty-five per centum additional.
In case of national emergency the Government is empowered to establish rules and regulations for the
operation of the plants and factories and to determine the wages to be paid the laborers.
SEC. 4. No person, firm, or corporation, business establishment or place or center of work shall compel an
employee or laborer to work during Sundays and legal holidays, unless he is paid an additional sum of at
least twenty-five per centum of his regular remuneration: Provided however, That this prohibition shall

not apply to public utilities performing some public service such as supplying gas, electricity, power,
water, or providing means of transportation or communication.
Under section 4, as a public utility, the defendant could have his chauffeurs work on Sundays and legal holidays
without paying them an additional sum of at least 25 per cent of their regular remuneration: but that with
reference only to work performed on Sundays and holidays. If the work done on such days exceeds 8 hours a day,
then the Eight-Hour Labor Law would operate, provided of course that plaintiffs came under section 2 of the said
law. So that the question to be decided here is whether or not plaintiffs are entitled to extra compensation for
work performed in excess of 8 hours a day, Sundays and holidays included.
It will be noticed that the last part of section 3 of Commonwealth Act 444 provides for extra compensation for
over-time work "at the same rate as their regular wages or salary, plus at least twenty-five per centum additional'"
and that section 2 of the same act excludes application thereof laborers who preferred to be on piece work basis.
This connotes that a laborer or employee with no fixed salary, wages or remuneration but receiving as
compensation from his employer uncertain and variable amount depending upon the work done or the result of
said work (piece work) irrespective of the amount of time employed, is not covered by the Eight-Hour Labor Law
and is not entitled to extra compensation should he work in excess of 8 hours a day. And this seems to be the
condition of employment of the plaintiffs. A driver in the taxi business of the defendant, like the plaintiffs, in one
day could operate his taxi cab eight hours, or less than eight hours or in excess of 8 hours, or even 24 hours on
Saturdays, Sundays, and holidays, with no limit or restriction other than his desire, inclination and state of health
and physical endurance. He could drive continuously or intermittently, systematically or haphazardly, fast or slow,
etc. depending upon his exclusive wish or inclination. One day when he feels strong, active and enthusiastic he
works long, continuously, with diligence and industry and makes considerable gross returns and receives as much
as his 20 per cent commission. Another day when he feels despondent, run down, weak or lazy and wants to rest
between trips and works for less number of hours, his gross returns are less and so is his commission. In other
words, his compensation for the day depends upon the result of his work, which in turn depends on the amount of
industry, intelligence and experience applied to it, rather than the period of time employed. In short, he has no
fixed salary or wages. In this we agree with the learned trial court presided by Judge Felicisimo Ocampo which
makes the following findings and observations of this point.
. . . As already stated, their earnings were in the form of commission based on the gross receipts of the
day. Their participation in most cases depended upon their own industry. So much so that the more hours
they stayed on the road, the greater the gross returns and the higher their commissions. They have no
fixed hours of labor. They can retire at pleasure, they not being paid a fixed salary on the hourly, daily,
weekly or monthly basis.
It results that the working hours of the plaintiffs as taxi drivers were entirely characterized by its
irregularity, as distinguished from the specific regular remuneration predicated on specific and regular
hours of work of factories and commercial employees.
In the case of the plaintiffs, it is the result of their labor, not the labor itself, which determines their
commissions. They worked under no compulsion of turning a fixed income for each given day. . . ..
In an opinion dated June 1, 1939 (Opinion No. 115) modified by Opinion No. 22, series 1940, dated June 11, 1940,
the Secretary of Justice held that chauffeurs of the Manila Yellow Taxicab Co. who "observed in a loose way certain
working hours daily," and "the time they report for work as well as the time they leave work was left to their
discretion.," receiving no fixed salary but only 20 per cent of their gross earnings, may be considered as piece
workers and therefore not covered by the provisions of the Eight-Hour Labor Law.
The Wage Administration Service of the Department of Labor in its Interpretative Bulletin No. 2 dated May 28,
1953, under "Overtime Compensation," in section 3 thereof entitled Coverage, says:
The provisions of this bulletin on overtime compensation shall apply to all persons employed in any
industry or occupation, whether public or private, with the exception of farm laborers, non-agricultural
laborers or employees who are paid on piece work, contract, pakiao, task or commission basis, domestic
servants and persons in the personal service of another and members of the family of the employer
working for him.
From all this, to us it is clear that the claim of the plaintiffs-appellants for overtime compensation under the Eight-
Hour Labor Law has no valid support.
As to the month pay (mesada) under article 302 of the Code of Commerce, article 2270 of the new Civil Code
(Republic Act 386) appears to have repealed said Article 302 when it repealed the provisions of the Code of
Commerce governing Agency. This repeal took place on August 30, 1950, when the new Civil Code went into effect,
that is, one year after its publication in the Official Gazette. The alleged termination of services of the plaintiffs by
the defendant took place according to the complaint on September 4, 1950, that is to say, after the repeal of
Article 302 which they invoke. Moreover, said Article 302 of the Code of Commerce, assuming that it were still in
force speaks of "salary corresponding to said month." commonly known as "mesada." If the plaintiffs herein had

no fixed salary either by the day, week or month, then computation of the month's salary payable would be
impossible. Article 302 refers to employees receiving a fixed salary. Dr. Arturo M. Tolentino in his book entitled
"Commentaries and Jurisprudence on the Commercial Laws of the Philippines," Vol. 1, 4th edition, p. 160, says that
article 302 is not applicable to employees without fixed salary. We quote
Employees not entitled to indemnity. This article refers only to those who are engaged under salary
basis, and not to those who only receive compensation equivalent to whatever service they may render.
(1 Malagarriga 314, citing decision of Argentina Court of Appeals on Commercial Matters.)
In view of the foregoing, the order appealed from is hereby affirmed, with costs against appellants.
Pablo, Bengzon, Padilla, Reyes, Jugo, Bautista Angelo, Labrador, Concepcion, and Diokno, JJ., concur.
Paras, C.J., concurs in the result.

G.R. No. L-44717 August 28, 1985

THE CHARTERED BANK EMPLOYEES ASSOCIATION, petitioner,
vs.
HON. BLAS F. OPLE, in his capacity as the Incumbent Secretary of Labor, and THE CHARTERED BANK,
respondents.
GUTIERREZ, JR., J.:
This is a petition for certiorari seeking to annul the decision of the respondent Secretary, now Minister of Labor
which denied the petitioner's claim for holiday pay and its claim for premium and overtime pay differentials. The
petitioner claims that the respondent Minister of Labor acted contrary to law and jurisprudence and with grave
abuse of discretion in promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and in issuing Policy Instruction
No. 9, both referring to holidays with pay.
On May 20, 1975, the Chartered Bank Employees Association, in representation of its monthly paid
employees/members, instituted a complaint with the Regional Office No. IV, Department of Labor, now Ministry of
Labor and Employment (MOLE) against private respondent Chartered Bank, for the payment of ten (10) unworked
legal holidays, as well as for premium and overtime differentials for worked legal holidays from November 1, 1974.
The memorandum for the respondents summarizes the admitted and/or undisputed facts as follows:
l. The work force of respondent bank consists of 149 regular employees, all of whom are paid by
the month;
2. Under their existing collective bargaining agreement, (Art. VII thereof) said monthly paid
employees are paid for overtime work as follows:
Section l. The basic work week for all employees excepting security guards who by virtue of the
nature of their work are required to be at their posts for 365 days per year, shall be forty (40)
hours based on five (5) eight (8) hours days, Monday to Friday.
Section 2. Time and a quarter hourly rate shall be paid for authorized work performed in excess
of eight (8) hours from Monday through Friday and for any hour of work performed on Saturdays
subject to Section 5 hereof.
Section 3. Time and a half hourly rate shall be paid for authorized work performed on Sundays,
legal and special holidays.
xxx xxx xxx
xxx xxx xxx
Section 5. The provisions of Section I above notwithstanding the BANK may revert to the six (6)
days work week, to include Saturday for a four (4) hour day, in the event the Central Bank should
require commercial banks to open for business on Saturday.
3. In computing overtime pay and premium pay for work done during regular holidays, the
divisor used in arriving at the daily rate of pay is 251 days although formerly the divisor used was
303 days and this was when the respondent bank was still operating on a 6-day work week basis.
However, for purposes of computing deductions corresponding to absences without pay the
divisor used is 365 days.
4. All regular monthly paid employees of respondent bank are receiving salaries way beyond the
statutory or minimum rates and are among the highest paid employees in the banking industry.
5. The salaries of respondent bank's monthly paid employees suffer no deduction for holidays
occurring within the month.
On the bases of the foregoing facts, both the arbitrator and the National Labor Relations Commission (NLRC) ruled
in favor of the petitioners ordering the respondent bank to pay its monthly paid employees, holiday pay for the ten
(10) legal holidays effective November 1, 1974 and to pay premium or overtime pay differentials to all employees
who rendered work during said legal holidays. On appeal, the Minister of Labor set aside the decision of the NLRC
and dismissed the petitioner's claim for lack of merit basing its decision on Section 2, Rule IV, Book Ill of the
Integrated Rules and Policy Instruction No. 9, which respectively provide:

Sec. 2. Status of employees paid by the month. Employees who are uniformly paid by the month,
irrespective of the number of working days therein, with a salary of not less than the statutory or
established minimum wage shall be presumed to be paid for all days in the month whether
worked or not.
POLICY INSTRUCTION NO. 9
TO: All Regional Directors
SUBJECT: PAID LEGAL HOLIDAYS
The rules implementing PD 850 have clarified the policy in the implementation of the ten (10)
paid legal holidays. Before PD 850, the number of working days a year in a firm was considered
important in determining entitlement to the benefit. Thus, where an employee was working for
at least 313 days, he was considered definitely already paid. If he was working for less than 313,
there was no certainty whether the ten (10) paid legal holidays were already paid to him or not.
The ten (10) paid legal holidays law, to start with, is intended to benefit principally daily
employees. In the case of monthly, only those whose monthly salary did not yet include payment
for the ten (10) paid legal holidays are entitled to the benefit.
Under the rules implementing PD 850, this policy has been fully clarified to eliminate
controversies on the entitlement of monthly paid employees. The new determining rule is this: 'If
the monthly paid employee is receiving not less than P240, the maximum monthly minimum
wage, and his monthly pay is uniform from January to December, he is presumed to be already
paid the ten (10) paid legal holidays. However, if deductions are made from his monthly salary on
account of holidays in months where they occur, then he is still entitled to the ten (10) paid legal
holidays.
These new interpretations must be uniformly and consistently upheld.
This issuance shall take effect immediately.
The issues are presented in the form of the following assignments of errors:
First Error
Whether or not the Secretary of Labor erred and acted contrary to law in
promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and Policy
Instruction No. 9.
Second Error
Whether or not the respondent Secretary of Labor abused his discretion and
acted contrary to law in applying Sec. 2, Rule IV of the Integrated Rules and
Policy Instruction No. 9 abovestated to private respondent's monthly-paid
employees.
Third Error
Whether or not the respondent Secretary of Labor, in not giving due credence
to the respondent bank's practice of paying its employees base pay of 100%
and premium pay of 50% for work done during legal holidays, acted contrary to
law and abused his discretion in denying the claim of petitioners for unworked
holidays and premium and overtime pay differentials for worked holidays.
The petitioner contends that the respondent Minister of Labor gravely abused his discretion in promulgating
Section 2, Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9 as guidelines for the implementation
of Articles 82 and 94 of the Labor Code and in applying said guidelines to this case. It maintains that while it is true
that the respondent Minister has the authority in the performance of his duty to promulgate rules and regulations
to implement, construe and clarify the Labor Code, such power is limited by provisions of the statute sought to be
implemented, construed or clarified. According to the petitioner, the so-called "guidelines" promulgated by the
respondent Minister totally contravened and violated the Code by excluding the employees/members of the
petitioner from the benefits of the holiday pay, when the Code itself did not provide for their expanding the Code's
clear and concise conclusion and notwithstanding the Code's clear and concise phraseology defining those
employees who are covered and those who are excluded from the benefits of holiday pay.

On the other hand, the private respondent contends that the questioned guidelines did not deprive the
petitioner's members of the benefits of holiday pay but merely classified those monthly paid employees whose
monthly salary already includes holiday pay and those whose do not, and that the guidelines did not deprive the
employees of holiday pay. It states that the question to be clarified is whether or not the monthly salaries of the
petitioner's members already includes holiday pay. Thus, the guidelines were promulgated to avoid confusion or
misconstruction in the application of Articles 82 and 94 of the Labor Code but not to violate them. Respondent
explains that the rationale behind the promulgation of the questioned guidelines is to benefit the daily paid
workers who, unlike monthly-paid employees, suffer deductions in their salaries for not working on holidays.
Hence, the Holiday Pay Law was enacted precisely to countervail the disparity between daily paid workers and
monthly-paid employees.
The decision in Insular Bank of Asia and America Employees' Union (IBAAEU) v. Inciong (132 SCRA 663) resolved a
similar issue. Significantly, the petitioner in that case was also a union of bank employees. We ruled that Section 2,
Rule IV, Book III of the Integrated Rules and Policy Instruction No. 9, are contrary to the provisions of the Labor
Code and, therefore, invalid This Court stated:
It is elementary in the rules of statutory construction that when the language of the law is clear
and unequivocal the law must be taken to mean exactly what it says. In the case at bar, the
provisions of the Labor Code on the entitlement to the benefits of holiday pay are clear and
explicit it provides for both the coverage of and exclusion from the benefit. In Policy Instruction
No. 9, the then Secretary of Labor went as far as to categorically state that the benefit is
principally intended for daily paid employees, when the law clearly states that every worker shall
be paid their regular holiday pay. This is flagrant violation of the mandatory directive of Article 4
of the Labor Code, which states that 'All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.' Moreover, it shall always be presumed that the legislature intended to enact a
valid and permanent statute which would have the most beneficial effect that its language
permits (Orlosky v. Hasken, 155 A. 112)
Obviously, the Secretary (Minister) of Labor had exceeded his statutory authority granted by
Article 5 of the Labor Code authorizing him to promulgate the necessary implementing rules and
regulations.
We further ruled:
While it is true that the contemporaneous construction placed upon a statute by executive
officers whose duty is to enforce it should be given great weight by the courts, still if such
construction is so erroneous, as in the instant case, the same must be declared as null and void.
It is the role of the Judiciary to refine and, when necessary correct constitutional (and/or
statutory) interpretation, in the context of the interactions of the three branches of the
government, almost always in situations where some agency of the State has engaged in action
that stems ultimately from some legitimate area of governmental power (The Supreme Court in
Modern Role, C.B. Swisher 1958, p. 36).
xxx xxx xxx
In view of the foregoing, Section 2, Rule IV, Book III of the Rules to implement the Labor Code
and Policy Instruction No. 9 issued by the then Secretary of Labor must be declared null and void.
Accordinglyl public respondent Deputy Minister of Labor Amado G. Inciong had no basis at all to
deny the members of petitioner union their regular holiday pay as directed by the Labor Code.
Since the private respondent premises its action on the invalidated rule and policy instruction, it is clear that the
employees belonging to the petitioner association are entitled to the payment of ten (10) legal holidays under
Articles 82 and 94 of the Labor Code, aside from their monthly salary. They are not among those excluded by law
from the benefits of such holiday pay.
Presidential Decree No. 850 states who are excluded from the holiday provisions of that law. It states:
ART. 82. Coverage. The provision of this Title shall apply to employees in all establishments and
undertakings, whether for profit or not, but not to government employees, managerial
employees, field personnel members of the family of the employer who are dependent on him for
support, domestic helpers, persons in the personal service of another, and workers who are paid
by results as determined by the Secretary of Labor in appropriate regulations. (Emphasis
supplied).
The questioned Section 2, Rule IV, Book III of the Integrated Rules and the Secretary's Policy Instruction No. 9 add
another excluded group, namely, "employees who are uniformly paid by the month." While the additional
exclusion is only in the form of a presumption that all monthly paid employees have already been paid holiday pay,

it constitutes a taking away or a deprivation which must be in the law if it is to be valid. An administrative
interpretation which diminishes the benefits of labor more than what the statute delimits or withholds is obviously
ultra vires.
It is argued that even without the presumption found in the rules and in the policy instruction, the company
practice indicates that the monthly salaries of the employees are so computed as to include the holiday pay
provided by law. The petitioner contends otherwise.
One strong argument in favor of the petitioner's stand is the fact that the Chartered Bank, in computing overtime
compensation for its employees, employs a "divisor" of 251 days. The 251 working days divisor is the result of
subtracting all Saturdays, Sundays and the ten (10) legal holidays from the total number of calendar days in a year.
If the employees are already paid for all non-working days, the divisor should be 365 and not 251.
The situation is muddled somewhat by the fact that, in computing the employees' absences from work, the
respondent bank uses 365 as divisor. Any slight doubts, however, must be resolved in favor of the workers. This is
in keeping with the constitutional mandate of promoting social justice and affording protection to labor (Sections 6
and 9, Article II, Constitution). The Labor Code, as amended, itself provides:
ART. 4. Construction in favor of labor. All doubts in the implementation and interpretation of the
provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor.
Any remaining doubts which may arise from the conflicting or different divisors used in the computation of
overtime pay and employees' absences are resolved by the manner in which work actually rendered on holidays is
paid. Thus, whenever monthly paid employees work on a holiday, they are given an additional 100% base pay on
top of a premium pay of 50%. If the employees' monthly pay already includes their salaries for holidays, they
should be paid only premium pay but not both base pay and premium pay.
The contention of the respondent that 100% base pay and 50% premium pay for work actually rendered on
holidays is given in addition to monthly salaries only because the collective bargaining agreement so provides is
itself an argument in favor of the petitioner stand. It shows that the Collective Bargaining Agreement already
contemplated a divisor of 251 days for holiday pay computations before the questioned presumption in the
Integrated Rules and the Policy Instruction was formulated. There is furthermore a similarity between overtime
pay, which is computed on the basis of 251 working days a year, and holiday pay, which should be similarly treated
notwithstanding the public respondents' issuances. In both cases overtime work and holiday work- the employee
works when he is supposed to be resting. In the absence of an express provision of the CBA or the law to the
contrary, the computation should be similarly handled.
We are not unmindful of the fact that the respondent's employees are among the highest paid in the industry. It is
not the intent of this Court to impose any undue burdens on an employer which is already doing its best for its
personnel. we have to resolve the labor dispute in the light of the parties' own collective bargaining agreement
and the benefits given by law to all workers. When the law provides benefits for "employees in all establishments
and undertakings, whether for profit or not" and lists specifically the employees not entitled to those benefits, the
administrative agency implementing that law cannot exclude certain employees from its coverage simply because
they are paid by the month or because they are already highly paid. The remedy lies in a clear redrafting of the
collective bargaining agreement with a statement that monthly pay already includes holiday pay or an amendment
of the law to that effect but not an administrative rule or a policy instruction.
WHEREFORE, the September 7, 1976 order of the public respondent is hereby REVERSED and SET ASIDE. The
March 24, 1976 decision of the National Labor Relations Commission which affirmed the October 30, 1975
resolution of the Labor Arbiter but deleted interest payments is REINSTATED.
SO ORDERED.

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

PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and NESTOR S. FLORESCA; and
ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S. FLORESCA, MELBA S. FLORESCA, JUDITH S.
FLORESCA and CARMEN S. FLORESCA;
LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children LINDA, ROMEO,
ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ and TOMAS MARTINEZ;
SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children JOSE, ESTELA,
JULITA SALUD and DANILO, all surnamed OBRA;
LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children EDNA, GEORGE and
LARRY III, all surnamed VILLAR;
DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor children EDITHA,
ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed LANUZA;
EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children JOSE, LORENZO, JR.,
MARIA, VENUS and FELIX, all surnamed ISLA, petitioners,
vs.
PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII, Court of First Instance
of Manila, respondents.
Rodolfo C. Pacampara for petitioners.
Tito M. Villaluna for respondents.
MAKASIAR, J.:
This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII, dated December
16, 1968 dismissing petitioners' complaint for damages on the ground of lack of jurisdiction.
Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referred to as
Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June 28, 1967, died
as a result of the cave-in that buried them in the tunnels of the mine. Specifically, the complaint alleges that Philex,
in violation of government rules and regulations, negligently and deliberately failed to take the required
precautions for the protection of the lives of its men working underground. Portion of the complaint reads:
xxx xxx xxx
9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross and
reckless negligence and imprudence and deliberate failure to take the required precautions for
the due protection of the lives of its men working underground at the time, and in utter violation
of the laws and the rules and regulations duly promulgated by the Government pursuant thereto,
allowed great amount of water and mud to accumulate in an open pit area at the mine above
Block 43-S-1 which seeped through and saturated the 600 ft. column of broken ore and rock
below it, thereby exerting tremendous pressure on the working spaces at its 4300 level, with the
result that, on the said date, at about 4 o'clock in the afternoon, with the collapse of all
underground supports due to such enormous pressure, approximately 500,000 cubic feet of
broken ores rocks, mud and water, accompanied by surface boulders, blasted through the
tunnels and flowed out and filled in, in a matter of approximately five (5) minutes, the
underground workings, ripped timber supports and carried off materials, machines and
equipment which blocked all avenues of exit, thereby trapping within its tunnels of all its men
above referred to, including those named in the next preceding paragraph, represented by the
plaintiffs herein;
10. That out of the 48 mine workers who were then working at defendant PHILEX's mine on the
said date, five (5) were able to escape from the terrifying holocaust; 22 were rescued within the
next 7 days; and the rest, 21 in number, including those referred to in paragraph 7 hereinabove,
were left mercilessly to their fate, notwithstanding the fact that up to then, a great many of them
were still alive, entombed in the tunnels of the mine, but were not rescued due to defendant
PHILEX's decision to abandon rescue operations, in utter disregard of its bounden legal and moral
duties in the premises;
xxx xxx xxx

13. That defendant PHILEX not only violated the law and the rules and regulations duly
promulgated by the duly constituted authorities as set out by the Special Committee above
referred to, in their Report of investigation, pages 7-13, Annex 'B' hereof, but also failed
completely to provide its men working underground the necessary security for the protection of
their lives notwithstanding the fact that it had vast financial resources, it having made, during the
year 1966 alone, a total operating income of P 38,220,254.00, or net earnings, after taxes of
P19,117,394.00, as per its llth Annual Report for the year ended December 31, 1966, and with
aggregate assets totalling P 45,794,103.00 as of December 31, 1966;
xxx xxx xxx
(pp. 42-44, rec.)
A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of petitioners based
on an industrial accident are covered by the provisions of the Workmen's Compensation Act (Act 3428, as
amended by RA 772) and that the former Court of First Instance has no jurisdiction over the case. Petitioners filed
an opposition dated May 27, 1968 to the said motion to dismiss claiming that the causes of action are not based
on the provisions of the Workmen's Compensation Act but on the provisions of the Civil Code allowing the award
of actual, moral and exemplary damages, particularly:
Art. 2176. Whoever by act or omission causes damage to another, there being fault or
negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre-
existing contractual relation between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict.
(b) Art. 1173The fault or negligence of the obligor consists in the omission of that diligence
which is required by the nature of the obligation and corresponds with the circumstances of the
persons, of the time and of the place. When negligence shows bad faith, the provisions of
Articles 1171 and 2201, paragraph 2 shall apply.
Art. 2201. x x x x x x x x x
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance of the obligation.
Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross
negligence.
After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27, 1968 dismissing
the case on the ground that it falls within the exclusive jurisdiction of the Workmen's Compensation Commission.
On petitioners' motion for reconsideration of the said order, respondent Judge, on September 23, 1968,
reconsidered and set aside his order of June 27, 1968 and allowed Philex to file an answer to the complaint. Philex
moved to reconsider the aforesaid order which was opposed by petitioners.
On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that in accordance
with the established jurisprudence, the Workmen's Compensation Commission has exclusive original jurisdiction
over damage or compensation claims for work-connected deaths or injuries of workmen or employees,
irrespective of whether or not the employer was negligent, adding that if the employer's negligence results in
work-connected deaths or injuries, the employer shall, pursuant to Section 4-A of the Workmen's Compensation
Act, pay additional compensation equal to 50% of the compensation fixed in the Act.
Petitioners thus filed the present petition.
In their brief, petitioners raised the following assignment of errors:
I
THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS' COMPLAINT FOR LACK
OF JURISDICTION.
II
THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION BETWEEN CLAIMS
FOR DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR COMPENSATION UNDER THE
WORKMEN'S COMPENSATION ACT.

A
In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause of action
since the complaint is based on the provisions of the Civil Code on damages, particularly Articles 2176, 2178, 1173,
2201 and 2231, and not on the provisions of the Workmen's Compensation Act. They point out that the complaint
alleges gross and brazen negligence on the part of Philex in failing to take the necessary security for the protection
of the lives of its employees working underground. They also assert that since Philex opted to file a motion to
dismiss in the court a quo, the allegations in their complaint including those contained in the annexes are deemed
admitted.
In the second assignment of error, petitioners asseverate that respondent Judge failed to see the distinction
between the claims for compensation under the Workmen's Compensation Act and the claims for damages based
on gross negligence of Philex under the Civil Code. They point out that workmen's compensation refers to liability
for compensation for loss resulting from injury, disability or death of the working man through industrial accident
or disease, without regard to the fault or negligence of the employer, while the claim for damages under the Civil
Code which petitioners pursued in the regular court, refers to the employer's liability for reckless and wanton
negligence resulting in the death of the employees and for which the regular court has jurisdiction to adjudicate
the same.
On the other hand, Philex asserts that work-connected injuries are compensable exclusively under the provisions
of Sections 5 and 46 of the Workmen's Compensation Act, which read:
SEC. 5. Exclusive right to compensation.The rights and remedies granted by this Act to an
employee by reason of a personal injury entitling him to compensation shall exclude all other
rights and remedies accruing to the employee, his personal representatives, dependents or
nearest of kin against the employer under the Civil Code and other laws because of said injury ...
SEC. 46. Jurisdiction. The Workmen's Compensation Commissioner shall have exclusive
jurisdiction to hear and decide claims for compensation under the Workmen's Compensation
Act, subject to appeal to the Supreme Court, ...
Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that "all claims of
workmen against their employer for damages due to accident suffered in the course of employment shall be
investigated and adjudicated by the Workmen's Compensation Commission," subject to appeal to the Supreme
Court.
Philex maintains that the fact that an employer was negligent, does not remove the case from the exclusive
character of recoveries under the Workmen's Compensation Act; because Section 4-A of the Act provides an
additional compensation in case the employer fails to comply with the requirements of safety as imposed by law to
prevent accidents. In fact, it points out that Philex voluntarily paid the compensation due the petitioners and all
the payments have been accepted in behalf of the deceased miners, except the heirs of Nazarito Floresca who
insisted that they are entitled to a greater amount of damages under the Civil Code.
In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara, now President
of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and Assistant General Manager of
the GSIS Legal Affairs Department, and Commissioner on Elections, formerly UP Law Center Director Froilan
Bacungan, appeared as amici curiae and thereafter, submitted their respective memoranda.
The issue to be resolved as WE stated in the resolution of November 26, 1976, is:
Whether the action of an injured employee or worker or that of his heirs in case of his death
under the Workmen's Compensation Act is exclusive, selective or cumulative, that is to say,
whether his or his heirs' action is exclusively restricted to seeking the limited compensation
provided under the Workmen's Compensation Act or whether they have a right of selection or
choice of action between availing of the worker's right under the Workmen's Compensation Act
and suing in the regular courts under the Civil Code for higher damages (actual, moral and/or
exemplary) from the employer by virtue of negligence (or fault) of the employer or of his other
employees or whether they may avail cumulatively of both actions, i.e., collect the limited
compensation under the Workmen's Compensation Act and sue in addition for damages in the
regular courts.
There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee or worker, or
the heirs in case of his death, may initiate a complaint to recover damages (not compensation under the
Workmen's Compensation Act) with the regular court on the basis of negligence of an employer pursuant to the
Civil Code provisions. Atty. Angara believes otherwise. He submits that the remedy of an injured employee for
work-connected injury or accident is exclusive in accordance with Section 5 of the Workmen's Compensation Act,
while Atty. Bacungan's position is that the action is selective. He opines that the heirs of the employee in case of
his death have a right of choice to avail themselves of the benefits provided under the Workmen's Compensation

Act or to sue in the regular court under the Civil Code for higher damages from the employer by virtue of
negligence of the latter. Atty. Bocobo's stand is the same as that of Atty. Bacungan and adds that once the heirs
elect the remedy provided for under the Act, they are no longer entitled to avail themselves of the remedy
provided for under the Civil Code by filing an action for higher damages in the regular court, and vice versa.
On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to dismiss on the
ground that they have amicably settled their claim with respondent Philex. In the resolution of September 7, 1978,
WE dismissed the petition only insofar as the aforesaid petitioners are connected, it appearing that there are other
petitioners in this case.
WE hold that the former Court of First Instance has jurisdiction to try the case,
It should be underscored that petitioners' complaint is not for compensation based on the Workmen's
Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of eight
hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of the Workmen's
Compensation Act to entitle them to compensation thereunder. In fact, no allegation appeared in the complaint
that the employees died from accident arising out of and in the course of their employments. The complaint
instead alleges gross and reckless negligence and deliberate failure on the part of Philex to protect the lives of its
workers as a consequence of which a cave-in occurred resulting in the death of the employees working
underground. Settled is the rule that in ascertaining whether or not the cause of action is in the nature of
workmen's compensation claim or a claim for damages pursuant to the provisions of the Civil Code, the test is the
averments or allegations in the complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil. 100).
In the present case, there exists between Philex and the deceased employees a contractual relationship. The
alleged gross and reckless negligence and deliberate failure that amount to bad faith on the part of Philex,
constitute a breach of contract for which it may be held liable for damages. The provisions of the Civil Code on
cases of breach of contract when there is fraud or bad faith, read:
Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the
defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner.
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good
faith is able shall be those that are the natural and probable consequences of the breach of the
obligation, and which the parties have foreseen or could have reasonably foreseen at the time
the obligation was constituted.
In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to the non-performance of the obligation.
Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as assessed by the court.
The rationale in awarding compensation under the Workmen's Compensation Act differs from that in giving
damages under the Civil Code. The compensation acts are based on a theory of compensation distinct from the
existing theories of damages, payments under the acts being made as compensation and not as damages (99 C.J.S.
53). Compensation is given to mitigate the harshness and insecurity of industrial life for the workman and his
family. Hence, an employer is liable whether negligence exists or not since liability is created by law. Recovery
under the Act is not based on any theory of actionable wrong on the part of the employer (99 C.J.S. 36).
In other words, under the compensation acts, the employer is liable to pay compensation benefits for loss of
income, as long as the death, sickness or injury is work-connected or work-aggravated, even if the death or injury
is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On the other hand, damages are
awarded to one as a vindication of the wrongful invasion of his rights. It is the indemnity recoverable by a person
who has sustained injury either in his person, property or relative rights, through the act or default of another (25
C.J.S. 452).
The claimant for damages under the Civil Code has the burden of proving the causal relation between the
defendant's negligence and the resulting injury as well as the damages suffered. While under the Workmen's
Compensation Act, there is a presumption in favor of the deceased or injured employee that the death or injury is
work-connected or work-aggravated; and the employer has the burden to prove otherwise (De los Angeles vs.
GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551; Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228).
The claim of petitioners that the case is not cognizable by the Workmen's Compensation Commission then, now
Employees Compensation Commission, is strengthened by the fact that unlike in the Civil Code, the Workmen's
Compensation Act did not contain any provision for an award of actual, moral and exemplary damages. What the
Act provided was merely the right of the heirs to claim limited compensation for the death in the amount of six
thousand (P6,000.00) pesos plus burial expenses of two hundred (P200.00) pesos, and medical expenses when
incurred (Sections 8, 12 and 13, Workmen's Compensation Act), and an additional compensation of only 50% if the
complaint alleges failure on the part of the employer to "install and maintain safety appliances or to take other

precautions for the prevention of accident or occupational disease" (Section 4-A, Ibid.). In the case at bar, the
amount sought to be recovered is over and above that which was provided under the Workmen's Compensation
Act and which cannot be granted by the Commission.
Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an employee who
suffered an accident not due to the facilities or lack of facilities in the industry of his employer but caused by
factors outside the industrial plant of his employer. Under the Civil Code, the liability of the employer, depends on
breach of contract or tort. The Workmen's Compensation Act was specifically enacted to afford protection to the
employees or workmen. It is a social legislation designed to give relief to the workman who has been the victim of
an accident causing his death or ailment or injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379).
WE now come to the query as to whether or not the injured employee or his heirs in case of death have a right of
selection or choice of action between availing themselves of the worker's right under the Workmen's
Compensation Act and suing in the regular courts under the Civil Code for higher damages (actual, moral and
exemplary) from the employers by virtue of that negligence or fault of the employers or whether they may avail
themselves cumulatively of both actions, i.e., collect the limited compensation under the Workmen's
Compensation Act and sue in addition for damages in the regular courts.
In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442, ruled that an injured
worker has a choice of either to recover from the employer the fixed amounts set by the Workmen's
Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher damages but he cannot
pursue both courses of action simultaneously.
In Pacaa WE said:
In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section 6 of the
Workmen's Compensation Act on the injured workers' right to sue third- party tortfeasors in the
regular courts, Mr. Justice J.B.L. Reyes, again speaking for the Court, pointed out that the injured
worker has the choice of remedies but cannot pursue both courses of action simultaneously and
thus balanced the relative advantage of recourse under the Workmen's Compensation Act as
against an ordinary action.
As applied to this case, petitioner Esguerra cannot maintain his action for damages against the
respondents (defendants below), because he has elected to seek compensation under the
Workmen's Compensation Law, and his claim (case No. 44549 of the Compensation Commission)
was being processed at the time he filed this action in the Court of First Instance. It is argued for
petitioner that as the damages recoverable under the Civil Code are much more extensive than
the amounts that may be awarded under the Workmen's Compensation Act, they should not be
deemed incompatible. As already indicated, the injured laborer was initially free to choose either
to recover from the employer the fixed amounts set by the Compensation Law or else, to
prosecute an ordinary civil action against the tortfeasor for higher damages. While perhaps not
as profitable, the smaller indemnity obtainable by the first course is balanced by the claimant's
being relieved of the burden of proving the causal connection between the defendant's
negligence and the resulting injury, and of having to establish the extent of the damage suffered;
issues that are apt to be troublesome to establish satisfactorily. Having staked his fortunes on a
particular remedy, petitioner is precluded from pursuing the alternate course, at least until the
prior claim is rejected by the Compensation Commission. Anyway, under the proviso of Section 6
aforequoted, if the employer Franklin Baker Company recovers, by derivative action against the
alleged tortfeasors, a sum greater than the compensation he may have paid the herein
petitioner, the excess accrues to the latter.
Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party tortfeasor,
said rule should likewise apply to the employer-tortfeasor.
Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been dismissed in the
resolution of September 7, 1978 in view of the amicable settlement reached by Philex and the said heirs.
With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968 before
the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza,
Lorenzo Isla and Saturnino Martinez submitted notices and claims for compensation to the Regional Office No. 1 of
the then Department of Labor and all of them have been paid in full as of August 25, 1967, except Saturnino
Martinez whose heirs decided that they be paid in installments (pp. 106-107, rec.). Such allegation was admitted
by herein petitioners in their opposition to the motion to dismiss dated May 27, 1968 (pp. 121-122, rec.) in the
lower court, but they set up the defense that the claims were filed under the Workmen's Compensation Act before
they learned of the official report of the committee created to investigate the accident which established the
criminal negligence and violation of law by Philex, and which report was forwarded by the Director of Mines to the
then Executive Secretary Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.).

WE hold that although the other petitioners had received the benefits under the Workmen's Compensation Act,
such may not preclude them from bringing an action before the regular court because they became cognizant of
the fact that Philex has been remiss in its contractual obligations with the deceased miners only after receiving
compensation under the Act. Had petitioners been aware of said violation of government rules and regulations by
Philex, and of its negligence, they would not have sought redress under the Workmen's Compensation Commission
which awarded a lesser amount for compensation. The choice of the first remedy was based on ignorance or a
mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should therefore be
remanded to the lower court for further proceedings. However, should the petitioners be successful in their bid
before the lower court, the payments made under the Workmen's Compensation Act should be deducted from the
damages that may be decreed in their favor.
B
Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case. The Court
merely applies and gives effect to the constitutional guarantees of social justice then secured by Section 5 of
Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by Sections 6, 7, and 9 of Article 11 of the
DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, as amended, and as implemented by
Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the New Civil Code of 1950.
To emphasize, the 1935 Constitution declares that:
Sec. 5. The promotion of social justice to insure the well-being and economic security of all the
people should be the concern of the State (Art. II).
Sec. 6. The State shall afford protection to labor, especially to working women, and minors, and
shall regulate the relations between landowner and tenant, and between labor and capital in
industry and in agriculture. The State may provide for compulsory arbitration (Art. XIV).
The 1973 Constitution likewise commands the State to "promote social justice to insure the dignity, welfare, and
security of all the people "... regulate the use ... and disposition of private property and equitably diffuse property
ownership and profits "establish, maintain and ensure adequate social services in, the field of education, health,
housing, employment, welfare and social security to guarantee the enjoyment by the people of a decent standard
of living" (Sections 6 and 7, Art. II, 1973 Constitution); "... afford protection to labor, ... and regulate the relations
between workers and employers ..., and assure the rights of workers to ... just and humane conditions of work"
(Sec. 9, Art. II, 1973 Constitution, emphasis supplied).
The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the 1973
Constitution and re-stated as a declaration of basic policy in Article 3 of the New Labor Code, thus:
Art. 3. Declaration of basic policy.The State shall afford protection to labor, promote full
employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the
relations between workers and employers. The State shall assure the rights of workers to self-
organization, collective bargaining, security of tenure, and just and humane conditions of work.
(emphasis supplied).
The aforestated constitutional principles as implemented by the aforementioned articles of the New Civil Code
cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor Code. Section 5 of the
Workmen's Compensation Act (before it was amended by R.A. No. 772 on June 20, 1952), predecessor of Article
173 of the New Labor Code, has been superseded by the aforestated provisions of the New Civil Code, a
subsequent law, which took effect on August 30, 1950, which obey the constitutional mandates of social justice
enhancing as they do the rights of the workers as against their employers. Article 173 of the New Labor Code
seems to diminish the rights of the workers and therefore collides with the social justice guarantee of the
Constitution and the liberal provisions of the New Civil Code.
The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution are
statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in the case of
West Virginia State Board of Education vs. Barnette, with characteristic eloquence, enunciated:
The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of
political controversy, to place them beyond the reach of majorities and officials and to establish
them as legal principles to be applied by the courts. One's right to life, liberty, and property, to
free speech, a free press, freedom of worship and assembly, and other fundamental rights may
not be submitted to vote; they depend on the outcome of no elections (319 U.S. 625, 638, 87
L.ed. 1638, emphasis supplied).
In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New Labor Code
and the Civil Code direct that the doubts should be resolved in favor of the workers and employees.

Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as amended, promulgated
on May 1, 1974, but which took effect six months thereafter, provides that "all doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in
favor of labor" (Art. 2, Labor Code).
Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of laws, it is presumed
that the law-making body intended right and justice to prevail. "
More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all labor legislation and
all labor contracts shall be construed in favor of the safety and decent living of the laborer."
Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the Workmen's
Compensation Act provided:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an
employee by reason of a personal injury entitling him to compensation shall exclude all other
rights and remedies accruing to the employee, his personal representatives, dependents or
nearest of kin against the employer under the Civil Code and other laws, because of said injury
(emphasis supplied).
Employers contracting laborecsrs in the Philippine Islands for work outside the same may
stipulate with such laborers that the remedies prescribed by this Act shall apply exclusively to
injuries received outside the Islands through accidents happening in and during the performance
of the duties of the employment; and all service contracts made in the manner prescribed in this
section shall be presumed to include such agreement.
Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was amended by
Commonwealth Act No. 772 on June 20, 1952, thus:
Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an
employee by reason of a personal injury entitling him to compensation shall exclude all other
rights and remedies accruing to the employee, his personal representatives, dependents or
nearest of kin against the employer under the Civil Code and other laws, because of said injury.
Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate
with such laborers that the remedies prescribed by this Act shall apply to injuries received
outside the Island through accidents happening in and during the performance of the duties of
the employment. Such stipulation shall not prejudice the right of the laborers to the benefits of
the Workmen's Compensation Law of the place where the accident occurs, should such law be
more favorable to them (As amended by section 5 of Republic Act No. 772).
Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of the New
Civil Code, because said Article 173 provides:
Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State Insurance
Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the
employee, his dependents or anyone otherwise entitled to receive damages on behalf of the
employee or his dependents. The payment of compensation under this Title shall bar the
recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic
Act Numbered Eleven hundred sixty-one, as amended, Commonwealth Act Numbered One
hundred eighty- six, as amended, Commonwealth Act Numbered Six hundred ten, as amended,
Republic Act Numbered Forty-eight hundred Sixty-four, as amended, and other laws whose
benefits are administered by the System during the period of such payment for the same
disability or death, and conversely (emphasis supplied).
As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the Revised
Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as amended, R.A. No.
4864, as amended, and all other laws whose benefits are administered by the System (referring to the GSIS or SSS).
Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New Labor Code does not
even remotely, much less expressly, repeal the New Civil Code provisions heretofore quoted.
It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence, is not barred
by Article 173 of the New Labor Code. And the damages recoverable under the New Civil Code are not
administered by the System provided for by the New Labor Code, which defines the "System" as referring to the
Government Service Insurance System or the Social Security System (Art. 167 [c], [d] and [e] of the New Labor
Code).

Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the law of the
land.
Article 8 of the New Civil Code provides:
Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of
the legal system of the Philippines.
The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled:
Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or
interpreting the laws or the Constitution form part of this jurisdiction's legal system. These
decisions, although in themselves not laws, constitute evidence of what the laws mean. The
application or interpretation placed by the Court upon a law is part of the law as of the date of
the enactment of the said law since the Court's application or interpretation merely establishes
the contemporaneous legislative intent that the construed law purports to carry into effect" (65
SCRA 270, 272-273 [1975]).
WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute itself (Caltex vs.
Palomer, 18 SCRA 247; 124 Phil. 763).
The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it was amended by
Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of the deceased, ailing or
injured employee to the compensation provided for therein. Said Section 5 was not accorded controlling
application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus Company (32 SCRA 442) when WE
ruled that an injured worker has a choice of either to recover from the employer the fixed amount set by the
Workmen's Compensation Act or to prosecute an ordinary civil action against the tortfeasor for greater damages;
but he cannot pursue both courses of action simultaneously. Said Pacana case penned by Mr. Justice Teehankee,
applied Article 1711 of the Civil Code as against the Workmen's Compensation Act, reiterating the 1969 ruling in
the case of Valencia vs. Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz
Palma (104 Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L.
Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor.
Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first paragraph of
Section 5 of the Workmen's Compensation Act, as amended, and does not even refer, neither expressly nor
impliedly, to the Civil Code as Section 5 of the Workmen's Compensation Act did, with greater reason said Article
173 must be subject to the same interpretation adopted in the cases of Pacana, Valencia and Esguerra
aforementioned as the doctrine in the aforesaid three (3) cases is faithful to and advances the social justice
guarantees enshrined in both the 1935 and 1973 Constitutions.
It should be stressed likewise that there is no similar provision on social justice in the American Federal
Constitution, nor in the various state constitutions of the American Union. Consequently, the restrictive nature of
the American decisions on the Workmen's Compensation Act cannot limit the range and compass of OUR
interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-a-vis Article 173 of the New Labor
Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the 1935 Constitution then, and now
Sections 6, 7 and 9 of the Declaration of Principles and State Policies of Article II of the 1973 Constitution.
The dissent seems to subordinate the life of the laborer to the property rights of the employer. The right to life is
guaranteed specifically by the due process clause of the Constitution. To relieve the employer from liability for the
death of his workers arising from his gross or wanton fault or failure to provide safety devices for the protection of
his employees or workers against the dangers which are inherent in underground mining, is to deprive the
deceased worker and his heirs of the right to recover indemnity for the loss of the life of the worker and the
consequent loss to his family without due process of law. The dissent in effect condones and therefore encourages
such gross or wanton neglect on the part of the employer to comply with his legal obligation to provide safety
measures for the protection of the life, limb and health of his worker. Even from the moral viewpoint alone, such
attitude is un-Christian.
It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented by the
provisions of the New Civil Code, is not an exercise of the power of law-making, but is rendering obedience to the
mandates of the fundamental law and the implementing legislation aforementioned.
The Court, to repeat, is not legislating in the instant case.
It is axiomatic that no ordinary statute can override a constitutional provision.
The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New Labor Code subvert the
rights of the petitioners as surviving heirs of the deceased mining employees. Section 5 of the Workmen's
Compensation Act and Article 173 of the New Labor Code are retrogressive; because they are a throwback to the

obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his treatise Wealth of Nations (Collier's
Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon after the close of the 18th century due to the
Industrial Revolution that generated the machines and other mechanical devices (beginning with Eli Whitney's
cotton gin of 1793 and Robert Fulton's steamboat of 1807) for production and transportation which are dangerous
to life, limb and health. The old socio-political-economic philosophy of live-and-let-live is now superdesed by the
benign Christian shibboleth of live-and-help others to live. Those who profess to be Christians should not adhere to
Cain's selfish affirmation that he is not his brother's keeper. In this our civilization, each one of us is our brother's
keeper. No man is an island. To assert otherwise is to be as atavistic and ante-deluvian as the 1837 case of Prisley
vs. Fowler (3 MN 1,150 reprint 1030) invoked by the dissent, The Prisley case was decided in 1837 during the era of
economic royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoistic reactionaries
continue to pay obeisance to such un-Christian doctrine. The Prisley rule humiliates man and debases him; because
the decision derisively refers to the lowly worker as "servant" and utilizes with aristocratic arrogance "master" for
"employer." It robs man of his inherent dignity and dehumanizes him. To stress this affront to human dignity, WE
only have to restate the quotation from Prisley, thus: "The mere relation of the master and the servant never can
imply an obligation on the part of the master to take more care of the servant than he may reasonably be
expected to do himself." This is the very selfish doctrine that provoked the American Civil War which generated so
much hatred and drew so much precious blood on American plains and valleys from 1861 to 1864.
"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law insures man's
survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit giveth life."
C
It is curious that the dissenting opinion clings to the myth that the courts cannot legislate.
That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge or court shall
decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. "
Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain instances, the
court, in the language of Justice Holmes, "do and must legislate" to fill in the gaps in the law; because the mind of
the legislator, like all human beings, is finite and therefore cannot envisage all possible cases to which the law may
apply Nor has the human mind the infinite capacity to anticipate all situations.
But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American Constitution
foresaw and recognized the eventuality that the courts may have to legislate to supply the omissions or to clarify
the ambiguities in the American Constitution and the statutes.
'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies that the power
of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist, Modern Library, pp. 503-511,
1937 ed.). Thomas Jefferson went farther to concede that the court is even independent of the Nation itself (A.F.L.
vs. American Sash Company, 1949 335 US 538).
Many of the great expounders of the American Constitution likewise share the same view. Chief Justice Marshall
pronounced: "It is emphatically the province and duty of the Judicial department to say what the law is (Marbury
vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice Hughes when he said that "the Constitution is
what the judge says it is (Address on May 3, 1907, quoted by President Franklin Delano Roosevelt on March 9,
1937). This was reiterated by Justice Cardozo who pronounced that "No doubt the limits for the judge are
narrower. He legislates only between gaps. He fills the open spaces in the law. " (The Nature of the Judicial
Process, p. 113). In the language of Chief Justice Harlan F. Stone, "The only limit to the judicial legislation is the
restraint of the judge" (U.S. vs. Butler 297 U.S. 1 Dissenting Opinion, p. 79), which view is also entertained by
Justice Frankfurter and Justice Robert Jackson. In the rhetoric of Justice Frankfurter, "the courts breathe life, feeble
or strong, into the inert pages of the Constitution and all statute books."
It should be stressed that the liability of the employer under Section 5 of the Workmen's Compensation Act or
Article 173 of the New Labor Code is limited to death, ailment or injury caused by the nature of the work, without
any fault on the part of the employers. It is correctly termed no fault liability. Section 5 of the Workmen's
Compensation Act, as amended, or Article 173 of the New Labor Code, does not cover the tortious liability of the
employer occasioned by his fault or culpable negligence in failing to provide the safety devices required by the law
for the protection of the life, limb and health of the workers. Under either Section 5 or Article 173, the employer
remains liable to pay compensation benefits to the employee whose death, ailment or injury is work-connected,
even if the employer has faithfully and diligently furnished all the safety measures and contrivances decreed by the
law to protect the employee.
The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr. Justice Cardozo, "the
law has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every
slip was fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The Nature of the Judicial Process 100). Justice
Cardozo warned that: "Sometimes the conservatism of judges has threatened for an interval to rob the legislation

of its efficacy. ... Precedents established in those items exert an unhappy influence even now" (citing Pound,
Common Law and Legislation 21 Harvard Law Review 383, 387).
Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a cautionary
undertone: "that judges do and must legislate, but they can do so only interstitially they are confined from molar
to molecular motions" (Southern Pacific Company vs. Jensen, 244 US 204 1917). And in the subsequent case of
Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853), Justice Holmes pronounced:
The great ordinances of the Constitution do not establish and divide fields of black and white.
Even the more specific of them are found to terminate in a penumbra shading gradually from
one extreme to the other. x x x. When we come to the fundamental distinctions it is still more
obvious that they must be received with a certain latitude or our government could not go on.
To make a rule of conduct applicable to an individual who but for such action would be free from
it is to legislate yet it is what the judges do whenever they determine which of two competing
principles of policy shall prevail.
xxx xxx xxx
It does not seem to need argument to show that however we may disguise it by veiling words we
do not and cannot carry out the distinction between legislative and executive action with
mathematical precision and divide the branches into waterlight compartments, were it ever so
desirable to do so, which I am far from believing that it is, or that the Constitution requires.
True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly concede that in
certain cases judges do legislate. They criticize the assumption by the courts of such law-making power as
dangerous for it may degenerate into Judicial tyranny. They include Blackstone, Jeremy Bentham, Justice Black,
Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf Sartorious, Macklin Fleming and Beryl
Harold Levy. But said Justices, jurists or legal commentators, who either deny the power of the courts to legislate
in-between gaps of the law, or decry the exercise of such power, have not pointed to examples of the exercise by
the courts of such law-making authority in the interpretation and application of the laws in specific cases that gave
rise to judicial tyranny or oppression or that such judicial legislation has not protected public interest or individual
welfare, particularly the lowly workers or the underprivileged.
On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory enactments
expanding the scope of such provisions to protect human rights. Foremost among them is the doctrine in the cases
of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US 335), Escubedo vs. Illinois (378 US 478),
which guaranteed the accused under custodial investigation his rights to remain silent and to counsel and to be
informed of such rights as even as it protects him against the use of force or intimidation to extort confession from
him. These rights are not found in the American Bill of Rights. These rights are now institutionalized in Section 20,
Article IV of the 1973 Constitution. Only the peace-and-order adherents were critical of the activism of the
American Supreme Court led by Chief Justice Earl Warren.
Even the definition of Identical offenses for purposes of the double jeopardy provision was developed by American
judicial decisions, not by amendment to the Bill of Rights on double jeopardy (see Justice Laurel in People vs.
Tarok, 73 Phil. 260, 261-268). And these judicial decisions have been re-stated in Section 7 of Rule 117 of the 1985
Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the 1964 Revised Rules of Court. In both
provisions, the second offense is the same as the first offense if the second offense is an attempt to commit the
first or frustration thereof or necessarily includes or is necessarily included in the first offense.
The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed by judicial
decisions in the United States and in the Philippines even before people vs. Ylagan (58 Phil. 851-853).
Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537) as securing to
the Negroes equal but separate facilities, which doctrine was revoked in the case of Brown vs. Maryland Board of
Education (349 US 294), holding that the equal protection clause means that the Negroes are entitled to attend the
same schools attended by the whites-equal facilities in the same school-which was extended to public parks and
public buses.
De-segregation, not segregation, is now the governing principle.
Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46 Phil. 440) by a
conservative, capitalistic court to invalidate a law granting maternity leave to working women-according primacy
to property rights over human rights. The case of People vs. Pomar is no longer the rule.
As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice Holmes had been
railing against the conservatism of Judges perverting the guarantee of due process to protect property rights as
against human rights or social justice for the working man. The law fixing maximum hours of labor was invalidated.

Justice Holmes was vindicated finally in 1936 in the case of West Coast Hotel vs. Parish (300 US 377-79; 81 L. ed.
703) where the American Supreme Court upheld the rights of workers to social justice in the form of guaranteed
minimum wage for women and minors, working hours not exceeding eight (8) daily, and maternity leave for
women employees.
The power of judicial review and the principle of separation of powers as well as the rule on political questions
have been evolved and grafted into the American Constitution by judicial decisions (Marbury vs. Madison, supra
Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-212, 72 L. ed. 852, 853).
It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate concurring
opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question as beyond the ambit of
judicial review. There is nothing in both the American and Philippine Constitutions expressly providing that the
power of the courts is limited by the principle of separation of powers and the doctrine on political questions.
There are numerous cases in Philippine jurisprudence applying the doctrines of separation of powers and political
questions and invoking American precedents.
Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in the Supreme
Court the power to review the validity or constitutionality of any legislative enactment or executive act.
WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET ASIDE AND THE CASE IS
REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BE DECREED IN
FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM PURSUANT TO THE WORKMEN'S
COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.
SO ORDERED.

G.R. No. 136921 April 17, 2001

LORNA GUILLEN PESCA, petitioner
vs.
ZOSIMO A PESCA, respondent.
VITUG, J.:
Submitted for review is the decision of the Court of Appeals, promulgated on 27 May 1998, in C.A. G.R. CV. No.
52374, reversing the decision of the Regional Trial Court ("RTC") of Caloocan City, Branch 130, which has declared
the marriage between petitioner and respondent to be null and void ab initio on the ground of psychological
incapacity on the part of respondent.
Petitioner Lorna G. Pesca and respondent Zosimo A. Pesca first met sometime in 1975 while on board an inter-
island vessel bound for Bacolod City. After a whirlwind courtship, they got married on 03 March 1975. Initially, the
young couple did not live together as petitioner was still a student in college and respondent, a seaman, had to
leave the country on board an ocean-going vessel barely a month after the marriage. Six months later, the young
couple established their residence in Quezon City until they were able to build their own house in Caloocan City
where they finally resided. It was blissful marriage for the couple during the two months of the year that they
could stay together - when respondent was on vacation. The union begot four children, 19-year old Ruhem, 17-
year old Rez, 11-year old Ryan, and 9-year old Richie.
It started in 1988, petitioner said, when she noticed that respondent surprisingly showed signs of "psychological
incapacity" to perform his marital covenant. His "true color" of being an emotionally immature and irresponsible
husband became apparent. He was cruel and violent. He was a habitual drinker, staying with friends daily from
4:00 o'clock in the afternoon until 1:00 o'clock in the morning. When cautioned to stop or, to at least, minimize his
drinking, respondent would beat, slap and kick her. At one time, he chased petitioner with a loaded shotgun and
threatened to kill her in the presence of the children. The children themselves were not spared from physical
violence.
Finally, on 19 November 1992, petitioner and her children left the conjugal abode to live in the house of her sister
in Quezon City as they could no longer bear his violent ways. Two months later, petitioner decided to forgive
respondent, and she returned home to give him a chance to change. But, to her dismay, things did not so turn out
as expected. Indeed, matters became worse.
On the morning of 22 March 1994, about eight o'clock, respondent assaulted petitioner for about half an hour in
the presence of the children. She was battered black and blue. She submitted herself to medical examination at
the Quezon City General Hospital, which diagnosed her injuries as contusions and abrasions. Petitioner filed a
complaint with the barangay authorities, and a case was filed against respondent for slight physical injuries. He
was convicted by the Metropolitan Trial Court of Caloocan City and sentenced to eleven days of imprisonment.
This time, petitioner and her children left the conjugal home for good and stayed with her sister. Eventually, they
decided to rent an apartment. Petitioner sued respondent before the Regional Trial Court for the declaration of
nullity of their marriage invoking psychological incapacity. Petitioner likewise sought the custody of her minor
children and prayed for support pendente lite .
Summons, together with a copy of the complaint, was served on respondent on 25 April 1994 by personal service
by the sheriff. As respondent failed to file an answer or to enter his appearance within the reglementary period,
the trial court ordered the city prosecutor to look into a possible collusion between the parties. Prosecutor Rosa C.
Reyes, on 03 August 1994, submitted her report to the effect that she found no evidence to establish that there
was collusion between the parties. 1wphi1.nt
On 11 January 1995, respondent belatedly filed, without leave of court, an answer, and the same, although filed
late, was admitted by the court. In his answer, respondent admitted the fact of his marriage with petitioner and
the birth of their children. He also confirmed the veracity of Annex "A" of the complaint which listed the conjugal
property. Respondent vehemently denied, however, the allegation that he was psychologically incapacitated.
On 15 November 1995, following hearings conducted by it, the trial court rendered its decision declaring the
marriage between petitioner and respondent to be null and void ab initio on the basis of psychological incapacity
on the part of respondent and ordered the liquidation of the conjugal partnership.
Respondent appealed the above decision to the Court of Appeals, contending that the trial court erred,
particularly, in holding that there was legal basis to declare the marriage null and void and in denying his motion to
reopen the case.
The Court of Appeals reversed the decision of the trial court and declared the marriage between petitioner and
respondent valid and subsisting. The appellate court said:

"Definitely the appellee has not established the following: That the appellant showed signs of mental
incapacity as would cause him to be truly incognitive of the basic marital covenant, as so provided for in
Article 68 of the Family Code; that the incapacity is grave, has preceded the marriage and is incurable;
that his incapacity to meet his marital responsibility is because of a psychological, not physical illness; that
the root cause of the incapacity has been identified medically or clinically, and has been proven by an
expert; and that the incapacity is permanent and incurable in nature.
"The burden of proof to show the nullity of marriage lies in the plaintiff and any doubt should be resolved
1
in favor of the existence and continuation of the marriage and against its dissolution and nullity."
Petitioner, in her plea to this Court, would have the decision of the Court of Appeals reversed on the thesis that
2
the doctrine enunciated in Santos vs. Court of Appeals, promulgated on 14 January 1995, as well as the guidelines
3
set out in Republic vs. Court of Appeals and Molina, promulgated on 13 February 1997, should have no retroactive
application and, on the assumption that the Molina ruling could be applied retroactively, the guidelines therein
outlined should be taken to be merely advisory and not mandatory in nature. In any case, petitioner argues, the
application of the Santos and Molina dicta should warrant only a remand of the case to the trial court for further
proceedings and not its dismissal.
Be that as it may, respondent submits, the appellate court did not err in its assailed decision for there is absolutely
no evidence that has been shown to prove psychological incapacity on his part as the term has been so defined in
Santos.
Indeed, there is no merit in the petition.
The term "psychological incapacity," as a ground for the declaration of nullity of a marriage under Article 36 of the
Family Code, has been explained by the Court, in Santos and reiterated in Molina. The Court, in Santos, concluded:
"It should be obvious, looking at all the foregoing disquisitions, including, and most importantly, the
deliberations of the Family Code Revision Committee itself, that the use of the phrase 'psychological
incapacity' under Article 36 of the Code has not been meant to comprehend all such possible cases of
psychoses as, likewise mentioned by some ecclesiastical authorities, extremely low intelligence,
immaturity, and like circumstances (cited in Fr. Artemio Balumad's 'Void and Voidable Marriages in the
Family Code and their Parallels in Canon Law,' quoting form the Diagnostic Statistical Manuel of Mental
Disorder by the American Psychiatric Association; Edward Hudson's 'Handbook II for Marriage Nullity
Cases'). Article 36 of the Family. Code cannot be taken and construed independently of, but must stand in
conjunction with, existing precepts in our law on marriage. Thus correlated, 'psychological incapacity'
should refer to no less than a mental (not physical) incapacity that causes a party to be truly incognitive of
the basic marital covenants that concomitantly must be assumed and discharged by the parties to the
marriage which, as so expressed by Article 68 of the Family Code, include their mutual obligations to live
together, observe love, respect and fidelity and render help and support. There is hardly any doubt that
the intendment of the law has been to confine the meaning of 'psychological incapacity' to the most
serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give
meaning and significance to the marriage. This psychologic condition must exist at the time the marriage
is celebrated."
The- "doctrine of stare decisis," ordained in Article 8 of the Civil Code, expresses that judicial decisions applying or
interpreting the law shall form part of the legal system of the Philippines. The rule follows the settled legal maxim -
"legis interpretado legis vim obtinet" - that the interpretation placed upon the written law by a competent court
3
has the force of law. The interpretation or construction placed by the courts establishes the contemporaneous
legislative intent of the law. The latter as so interpreted and construed would thus constitute a part of that law as
of the date the statute is enacted. It is only when a prior ruling of this Court finds itself later overruled, and a
different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have
5
relied on the old doctrine and have acted in good faith in accordance therewith under the familiar rule of "lex
prospicit, non respicit."
The phrase "psychological incapacity ," borrowed from Canon law, is an entirely novel provision in our statute
books, and, until the relatively recent enactment of the Family Code, the concept has escaped jurisprudential
attention. It is in Santos when, for the first time, the Court has given life to the term. Molina, that followed, has
additionally provided procedural guidelines to assist the courts and the parties in trying cases for annulment of
marriages grounded on psychological incapacity. Molina has strengthened, not overturned, Santos.
At all events, petitioner has utterly failed, both in her allegations in the complaint and in her evidence, to make out
a case of psychological incapacity on the part of respondent, let alone at the time of solemnization of the contract,
so as to warrant a declaration of nullity of the marriage. Emotional immaturity and irresponsibility, invoked by her,
cannot be equated with psychological incapacity.
6

The Court reiterates its reminder that marriage is an inviolable social institution and the foundation of the family
that the State cherishes and protects. While the Court commisserates with petitioner in her unhappy marital

relationship with respondent, totally terminating that relationship, however, may not necessarily be the fitting
denouement to it. In these cases, the law has not quite given up, neither should we.
WHEREFORE, the herein petition is DENIED. No costs.
SO ORDERED.

G.R. No. L-63915 April 24, 1985

LORENZO M. TAADA, ABRAHAM F. SARMIENTO, and MOVEMENT OF ATTORNEYS FOR BROTHERHOOD,
INTEGRITY AND NATIONALISM, INC. [MABINI], petitioners,
vs.
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, in his capacity as Director,
Malacaang Records Office, and FLORENDO S. PABLO, in his capacity as Director, Bureau of Printing,
respondents.

ESCOLIN, J.:
Invoking the people's right to be informed on matters of public concern, a right recognized in Section 6, Article IV
1
of the 1973 Philippine Constitution, as well as the principle that laws to be valid and enforceable must be
published in the Official Gazette or otherwise effectively promulgated, petitioners seek a writ of mandamus to
compel respondent public officials to publish, and/or cause the publication in the Official Gazette of various
presidential decrees, letters of instructions, general orders, proclamations, executive orders, letter of
implementation and administrative orders.
Specifically, the publication of the following presidential issuances is sought:
a] Presidential Decrees Nos. 12, 22, 37, 38, 59, 64, 103, 171, 179, 184, 197, 200, 234, 265, 286,
298, 303, 312, 324, 325, 326, 337, 355, 358, 359, 360, 361, 368, 404, 406, 415, 427, 429, 445,
447, 473, 486, 491, 503, 504, 521, 528, 551, 566, 573, 574, 594, 599, 644, 658, 661, 718, 731,
733, 793, 800, 802, 835, 836, 923, 935, 961, 1017-1030, 1050, 1060-1061, 1085, 1143, 1165,
1166, 1242, 1246, 1250, 1278, 1279, 1300, 1644, 1772, 1808, 1810, 1813-1817, 1819-1826, 1829-
1840, 1842-1847.
b] Letter of Instructions Nos.: 10, 39, 49, 72, 107, 108, 116, 130, 136, 141, 150, 153, 155, 161,
173, 180, 187, 188, 192, 193, 199, 202, 204, 205, 209, 211-213, 215-224, 226-228, 231-239, 241-
245, 248, 251, 253-261, 263-269, 271-273, 275-283, 285-289, 291, 293, 297-299, 301-303, 309,
312-315, 325, 327, 343, 346, 349, 357, 358, 362, 367, 370, 382, 385, 386, 396-397, 405, 438-440,
444- 445, 473, 486, 488, 498, 501, 399, 527, 561, 576, 587, 594, 599, 600, 602, 609, 610, 611,
612, 615, 641, 642, 665, 702, 712-713, 726, 837-839, 878-879, 881, 882, 939-940, 964,997,1149-
1178,1180-1278.
c] General Orders Nos.: 14, 52, 58, 59, 60, 62, 63, 64 & 65.
d] Proclamation Nos.: 1126, 1144, 1147, 1151, 1196, 1270, 1281, 1319-1526, 1529, 1532, 1535,
1538, 1540-1547, 1550-1558, 1561-1588, 1590-1595, 1594-1600, 1606-1609, 1612-1628, 1630-
1649, 1694-1695, 1697-1701, 1705-1723, 1731-1734, 1737-1742, 1744, 1746-1751, 1752, 1754,
1762, 1764-1787, 1789-1795, 1797, 1800, 1802-1804, 1806-1807, 1812-1814, 1816, 1825-1826,
1829, 1831-1832, 1835-1836, 1839-1840, 1843-1844, 1846-1847, 1849, 1853-1858, 1860, 1866,
1868, 1870, 1876-1889, 1892, 1900, 1918, 1923, 1933, 1952, 1963, 1965-1966, 1968-1984, 1986-
2028, 2030-2044, 2046-2145, 2147-2161, 2163-2244.
e] Executive Orders Nos.: 411, 413, 414, 427, 429-454, 457- 471, 474-492, 494-507, 509-510, 522,
524-528, 531-532, 536, 538, 543-544, 549, 551-553, 560, 563, 567-568, 570, 574, 593, 594, 598-
604, 609, 611- 647, 649-677, 679-703, 705-707, 712-786, 788-852, 854-857.
f] Letters of Implementation Nos.: 7, 8, 9, 10, 11-22, 25-27, 39, 50, 51, 59, 76, 80-81, 92, 94, 95,
107, 120, 122, 123.
g] Administrative Orders Nos.: 347, 348, 352-354, 360- 378, 380-433, 436-439.
The respondents, through the Solicitor General, would have this case dismissed outright on the ground that
petitioners have no legal personality or standing to bring the instant petition. The view is submitted that in the
absence of any showing that petitioners are personally and directly affected or prejudiced by the alleged non-
2
publication of the presidential issuances in question said petitioners are without the requisite legal personality to
institute this mandamus proceeding, they are not being "aggrieved parties" within the meaning of Section 3, Rule
65 of the Rules of Court, which we quote:
SEC. 3. Petition for Mandamus.When any tribunal, corporation, board or person unlawfully
neglects the performance of an act which the law specifically enjoins as a duty resulting from an
office, trust, or station, or unlawfully excludes another from the use a rd enjoyment of a right or
office to which such other is entitled, and there is no other plain, speedy and adequate remedy in

the ordinary course of law, the person aggrieved thereby may file a verified petition in the
proper court alleging the facts with certainty and praying that judgment be rendered
commanding the defendant, immediately or at some other specified time, to do the act required
to be done to Protect the rights of the petitioner, and to pay the damages sustained by the
petitioner by reason of the wrongful acts of the defendant.
Upon the other hand, petitioners maintain that since the subject of the petition concerns a public right and its
object is to compel the performance of a public duty, they need not show any specific interest for their petition to
be given due course.
3

The issue posed is not one of first impression. As early as the 1910 case of Severino vs. Governor General, this
Court held that while the general rule is that "a writ of mandamus would be granted to a private individual only in
those cases where he has some private or particular interest to be subserved, or some particular right to be
protected, independent of that which he holds with the public at large," and "it is for the public officers exclusively
to apply for the writ when public rights are to be subserved [Mithchell vs. Boardmen, 79 M.e., 469]," nevertheless,
"when the question is one of public right and the object of the mandamus is to procure the enforcement of a
public duty, the people are regarded as the real party in interest and the relator at whose instigation the
proceedings are instituted need not show that he has any legal or special interest in the result, it being sufficient to
show that he is a citizen and as such interested in the execution of the laws [High, Extraordinary Legal Remedies,
3rd ed., sec. 431].
Thus, in said case, this Court recognized the relator Lope Severino, a private individual, as a proper party to the
mandamus proceedings brought to compel the Governor General to call a special election for the position of
municipal president in the town of Silay, Negros Occidental. Speaking for this Court, Mr. Justice Grant T. Trent said:
We are therefore of the opinion that the weight of authority supports the proposition that the
relator is a proper party to proceedings of this character when a public right is sought to be
enforced. If the general rule in America were otherwise, we think that it would not be applicable
to the case at bar for the reason 'that it is always dangerous to apply a general rule to a particular
case without keeping in mind the reason for the rule, because, if under the particular
circumstances the reason for the rule does not exist, the rule itself is not applicable and reliance
upon the rule may well lead to error'
No reason exists in the case at bar for applying the general rule insisted upon by counsel for the
respondent. The circumstances which surround this case are different from those in the United
States, inasmuch as if the relator is not a proper party to these proceedings no other person
could be, as we have seen that it is not the duty of the law officer of the Government to appear
and represent the people in cases of this character.
The reasons given by the Court in recognizing a private citizen's legal personality in the aforementioned case apply
squarely to the present petition. Clearly, the right sought to be enforced by petitioners herein is a public right
recognized by no less than the fundamental law of the land. If petitioners were not allowed to institute this
proceeding, it would indeed be difficult to conceive of any other person to initiate the same, considering that the
Solicitor General, the government officer generally empowered to represent the people, has entered his
appearance for respondents in this case.
Respondents further contend that publication in the Official Gazette is not a sine qua non requirement for the
effectivity of laws where the laws themselves provide for their own effectivity dates. It is thus submitted that since
the presidential issuances in question contain special provisions as to the date they are to take effect, publication
in the Official Gazette is not indispensable for their effectivity. The point stressed is anchored on Article 2 of the
Civil Code:
Art. 2. Laws shall take effect after fifteen days following the completion of their publication in the
Official Gazette, unless it is otherwise provided, ...
The interpretation given by respondent is in accord with this Court's construction of said article. In a long line of
4
decisions, this Court has ruled that publication in the Official Gazette is necessary in those cases where the
legislation itself does not provide for its effectivity date-for then the date of publication is material for determining
its date of effectivity, which is the fifteenth day following its publication-but not when the law itself provides for
the date when it goes into effect.
Respondents' argument, however, is logically correct only insofar as it equates the effectivity of laws with the fact
of publication. Considered in the light of other statutes applicable to the issue at hand, the conclusion is easily
reached that said Article 2 does not preclude the requirement of publication in the Official Gazette, even if the law
itself provides for the date of its effectivity. Thus, Section 1 of Commonwealth Act 638 provides as follows:
Section 1. There shall be published in the Official Gazette [1] all important legisiative acts and
resolutions of a public nature of the, Congress of the Philippines; [2] all executive and

administrative orders and proclamations, except such as have no general applicability; [3]
decisions or abstracts of decisions of the Supreme Court and the Court of Appeals as may be
deemed by said courts of sufficient importance to be so published; [4] such documents or classes
of documents as may be required so to be published by law; and [5] such documents or classes of
documents as the President of the Philippines shall determine from time to time to have general
applicability and legal effect, or which he may authorize so to be published. ...
The clear object of the above-quoted provision is to give the general public adequate notice of the various laws
which are to regulate their actions and conduct as citizens. Without such notice and publication, there would be no
basis for the application of the maxim "ignorantia legis non excusat." It would be the height of injustice to punish
or otherwise burden a citizen for the transgression of a law of which he had no notice whatsoever, not even a
constructive one.
Perhaps at no time since the establishment of the Philippine Republic has the publication of laws taken so vital
significance that at this time when the people have bestowed upon the President a power heretofore enjoyed
solely by the legislature. While the people are kept abreast by the mass media of the debates and deliberations in
the Batasan Pambansaand for the diligent ones, ready access to the legislative recordsno such publicity
accompanies the law-making process of the President. Thus, without publication, the people have no means of
knowing what presidential decrees have actually been promulgated, much less a definite way of informing
themselves of the specific contents and texts of such decrees. As the Supreme Court of Spain ruled: "Bajo la
denominacion generica de leyes, se comprenden tambien los reglamentos, Reales decretos, Instrucciones,
5
Circulares y Reales ordines dictadas de conformidad con las mismas por el Gobierno en uso de su potestad.
The very first clause of Section I of Commonwealth Act 638 reads: "There shall be published in the Official Gazette
... ." The word "shall" used therein imposes upon respondent officials an imperative duty. That duty must be
enforced if the Constitutional right of the people to be informed on matters of public concern is to be given
substance and reality. The law itself makes a list of what should be published in the Official Gazette. Such listing, to
our mind, leaves respondents with no discretion whatsoever as to what must be included or excluded from such
publication.
The publication of all presidential issuances "of a public nature" or "of general applicability" is mandated by law.
Obviously, presidential decrees that provide for fines, forfeitures or penalties for their violation or otherwise
impose a burden or. the people, such as tax and revenue measures, fall within this category. Other presidential
issuances which apply only to particular persons or class of persons such as administrative and executive orders
6
need not be published on the assumption that they have been circularized to all concerned.
It is needless to add that the publication of presidential issuances "of a public nature" or "of general applicability"
is a requirement of due process. It is a rule of law that before a person may be bound by law, he must first be
7
officially and specifically informed of its contents. As Justice Claudio Teehankee said in Peralta vs. COMELEC :
In a time of proliferating decrees, orders and letters of instructions which all form part of the law
of the land, the requirement of due process and the Rule of Law demand that the Official Gazette
as the official government repository promulgate and publish the texts of all such decrees, orders
and instructions so that the people may know where to obtain their official and specific contents.
The Court therefore declares that presidential issuances of general application, which have not been published,
shall have no force and effect. Some members of the Court, quite apprehensive about the possible unsettling
effect this decision might have on acts done in reliance of the validity of those presidential decrees which were
published only during the pendency of this petition, have put the question as to whether the Court's declaration of
invalidity apply to P.D.s which had been enforced or implemented prior to their publication. The answer is all too
familiar. In similar situations in the past this Court had taken the pragmatic and realistic course set forth in Chicot
8
County Drainage District vs. Baxter Bank to wit:
The courts below have proceeded on the theory that the Act of Congress, having been found to
be unconstitutional, was not a law; that it was inoperative, conferring no rights and imposing no
duties, and hence affording no basis for the challenged decree. Norton v. Shelby County, 118 U.S.
425, 442; Chicago, 1. & L. Ry. Co. v. Hackett, 228 U.S. 559, 566. It is quite clear, however, that
such broad statements as to the effect of a determination of unconstitutionality must be taken
with qualifications. The actual existence of a statute, prior to such a determination, is an
operative fact and may have consequences which cannot justly be ignored. The past cannot
always be erased by a new judicial declaration. The effect of the subsequent ruling as to
invalidity may have to be considered in various aspects-with respect to particular conduct,
private and official. Questions of rights claimed to have become vested, of status, of prior
determinations deemed to have finality and acted upon accordingly, of public policy in the light
of the nature both of the statute and of its previous application, demand examination. These
questions are among the most difficult of those which have engaged the attention of courts,
state and federal and it is manifest from numerous decisions that an all-inclusive statement of a
principle of absolute retroactive invalidity cannot be justified.

Consistently with the above principle, this Court in Rutter vs. Esteban sustained the right of a party under the
Moratorium Law, albeit said right had accrued in his favor before said law was declared unconstitutional by this
Court.
Similarly, the implementation/enforcement of presidential decrees prior to their publication in the Official Gazette
is "an operative fact which may have consequences which cannot be justly ignored. The past cannot always be
erased by a new judicial declaration ... that an all-inclusive statement of a principle of absolute retroactive
invalidity cannot be justified."
From the report submitted to the Court by the Clerk of Court, it appears that of the presidential decrees sought by
petitioners to be published in the Official Gazette, only Presidential Decrees Nos. 1019 to 1030, inclusive, 1278,
10
and 1937 to 1939, inclusive, have not been so published. Neither the subject matters nor the texts of these PDs
can be ascertained since no copies thereof are available. But whatever their subject matter may be, it is
undisputed that none of these unpublished PDs has ever been implemented or enforced by the government. In
11
Pesigan vs. Angeles, the Court, through Justice Ramon Aquino, ruled that "publication is necessary to apprise the
public of the contents of [penal] regulations and make the said penalties binding on the persons affected thereby.
" The cogency of this holding is apparently recognized by respondent officials considering the manifestation in
their comment that "the government, as a matter of policy, refrains from prosecuting violations of criminal laws
until the same shall have been published in the Official Gazette or in some other publication, even though some
criminal laws provide that they shall take effect immediately.
WHEREFORE, the Court hereby orders respondents to publish in the Official Gazette all unpublished presidential
issuances which are of general application, and unless so published, they shall have no binding force and effect.
SO ORDERED.

G.R. No. 80718 January 29, 1988

FELIZA P. DE ROY and VIRGILIO RAMOS, petitioners,
vs.
COURT OF APPEALS and LUIS BERNAL, SR., GLENIA BERNAL, LUIS BERNAL, JR., HEIRS OF MARISSA BERNAL,
namely, GLICERIA DELA CRUZ BERNAL and LUIS BERNAL, SR., respondents.
R E S O L U T I O N

CORTES, J.:
This special civil action for certiorari seeks to declare null and void two (2) resolutions of the Special First Division
of the Court of Appeals in the case of Luis Bernal, Sr., et al. v. Felisa Perdosa De Roy, et al., CA-G.R. CV No. 07286.
The first resolution promulgated on 30 September 1987 denied petitioners' motion for extension of time to file a
motion for reconsideration and directed entry of judgment since the decision in said case had become final; and
the second Resolution dated 27 October 1987 denied petitioners' motion for reconsideration for having been filed
out of time.
At the outset, this Court could have denied the petition outright for not being verified as required by Rule 65
section 1 of the Rules of Court. However, even if the instant petition did not suffer from this defect, this Court, on
procedural and substantive grounds, would still resolve to deny it.
The facts of the case are undisputed. The firewall of a burned-out building owned by petitioners collapsed and
destroyed the tailoring shop occupied by the family of private respondents, resulting in injuries to private
respondents and the death of Marissa Bernal, a daughter. Private respondents had been warned by petitioners to
vacate their shop in view of its proximity to the weakened wall but the former failed to do so. On the basis of the
foregoing facts, the Regional Trial Court. First Judicial Region, Branch XXXVIII, presided by the Hon. Antonio M.
Belen, rendered judgment finding petitioners guilty of gross negligence and awarding damages to private
respondents. On appeal, the decision of the trial court was affirmed in toto by the Court of Appeals in a decision
promulgated on August 17, 1987, a copy of which was received by petitioners on August 25, 1987. On September
9, 1987, the last day of the fifteen-day period to file an appeal, petitioners filed a motion for extension of time to
file a motion for reconsideration, which was eventually denied by the appellate court in the Resolution of
September 30, 1987. Petitioners filed their motion for reconsideration on September 24, 1987 but this was denied
in the Resolution of October 27, 1987.
This Court finds that the Court of Appeals did not commit a grave abuse of discretion when it denied petitioners'
motion for extension of time to file a motion for reconsideration, directed entry of judgment and denied their
motion for reconsideration. It correctly applied the rule laid down in Habaluyas Enterprises, Inc. v. Japzon, [G.R.
No. 70895, August 5, 1985,138 SCRA 461, that the fifteen-day period for appealing or for filing a motion for
reconsideration cannot be extended. In its Resolution denying the motion for reconsideration, promulgated on July
30, 1986 (142 SCRA 208), this Court en banc restated and clarified the rule, to wit:
Beginning one month after the promulgation of this Resolution, the rule shall be strictly enforced that no motion
for extension of time to file a motion for reconsideration may be filed with the Metropolitan or Municipal Trial
Courts, the Regional Trial Courts, and the Intermediate Appellate Court. Such a motion may be filed only in cases
pending with the Supreme Court as the court of last resort, which may in its sound discretion either grant or deny
the extension requested. (at p. 212)
Lacsamana v. Second Special Cases Division of the intermediate Appellate Court, [G.R. No. 73146-53, August 26,
1986, 143 SCRA 643], reiterated the rule and went further to restate and clarify the modes and periods of appeal.
Bacaya v. Intermediate Appellate Court, [G.R. No. 74824, Sept. 15, 1986,144 SCRA 161],stressed the prospective
application of said rule, and explained the operation of the grace period, to wit:
In other words, there is a one-month grace period from the promulgation on May 30, 1986 of the
Court's Resolution in the clarificatory Habaluyas case, or up to June 30, 1986, within which the
rule barring extensions of time to file motions for new trial or reconsideration is, as yet, not
strictly enforceable.
Since petitioners herein filed their motion for extension on February 27, 1986, it is still within the
grace period, which expired on June 30, 1986, and may still be allowed.
This grace period was also applied in Mission v. Intermediate Appellate Court [G.R. No. 73669, October 28, 1986,
145 SCRA 306].]

In the instant case, however, petitioners' motion for extension of time was filed on September 9, 1987, more than
a year after the expiration of the grace period on June 30, 1986. Hence, it is no longer within the coverage of the
grace period. Considering the length of time from the expiration of the grace period to the promulgation of the
decision of the Court of Appeals on August 25, 1987, petitioners cannot seek refuge in the ignorance of their
counsel regarding said rule for their failure to file a motion for reconsideration within the reglementary period.
Petitioners contend that the rule enunciated in the Habaluyas case should not be made to apply to the case at bar
owing to the non-publication of the Habaluyas decision in the Official Gazette as of the time the subject decision of
the Court of Appeals was promulgated. Contrary to petitioners' view, there is no law requiring the publication of
Supreme Court decisions in the Official Gazette before they can be binding and as a condition to their becoming
effective. It is the bounden duty of counsel as lawyer in active law practice to keep abreast of decisions of the
Supreme Court particularly where issues have been clarified, consistently reiterated, and published in the advance
reports of Supreme Court decisions (G. R. s) and in such publications as the Supreme Court Reports Annotated
(SCRA) and law journals.
This Court likewise finds that the Court of Appeals committed no grave abuse of discretion in affirming the trial
court's decision holding petitioner liable under Article 2190 of the Civil Code, which provides that "the proprietor
of a building or structure is responsible for the damage resulting from its total or partial collapse, if it should be
due to the lack of necessary repairs.
Nor was there error in rejecting petitioners argument that private respondents had the "last clear chance" to avoid
the accident if only they heeded the. warning to vacate the tailoring shop and , therefore, petitioners prior
negligence should be disregarded, since the doctrine of "last clear chance," which has been applied to vehicular
accidents, is inapplicable to this case.
WHEREFORE, in view of the foregoing, the Court Resolved to DENY the instant petition for lack of merit.

G.R. No. 18081 March 3, 1922

IN THE MATTER OF THE ESTATE OF CHEONG BOO, deceased.
MORA ADONG, petitioner-appellant,
vs.
CHEONG SENG GEE, opponent-appellant.
Kincaid, Perkins & Kincaid and P. J. Moore for petitioner-appellant.
Carlos A. Sobral for opponent-appellant.
MALCOLM, J.:
The two question presented for determination by these appeals may be framed as follows: Is a marriage
contracted in China and proven mainly by an alleged matrimonial letter, valid in the Philippines? Are the marriage
performed in the Philippines according to the rites of the Mohammedan religion valid? As the decision of the
Supreme Court on the last point will affect marriages consummated by not less than one hundred and fifty
thousand Moros who profess the Mohammedan faith, the transcendental importance of the cause can be realized.
We proposed to give to the subject the serious consideration which it deserves.
Cheong Boo, a native of China, died intestate in Zamboanga, Philippine Islands, on August 5, 1919. He left property
worth nearly P100,000. The estate of the deceased was claimed, on the one hand, by Cheong Seng Gee, who
alleged that he was a legitimate child by a marriage contracted by Cheong Boo with Tan Dit in China in 1895. The
estate was claimed, on the other hand, by the Mora Adong who alleged that she had been lawfully married to
Cheong Boo in 1896 in Basilan, Philippine Islands, and her daughters, Payang, married to Cheng Bian Chay, and
Rosalia Cheong Boo, unmarried.
The conflicting claims to the estate of Cheong Boo were ventilated in the Court of First Instance of Zamboanga. The
trial judge, the Honorable Quirico Abeto, after hearing the evidence presented by both sides, reached the
conclusion, with reference to the allegations of Cheong Seng Gee, that the proof did not sufficiently establish the
Chinese marriage, but that because Cheong Seng Gee had been admitted to the Philippine Islands as the son of the
deceased, he should share in the estate as a natural child. With reference to the allegations of the Mora Adong and
her daughters Payang and Rosalia, the trial judge reached the conclusion that the marriage between the Mora
Adong and the deceased had been adequately proved but that under the laws of the Philippine Islands it could not
be held to be a lawful marriage; accordingly, the daughters Payang and Rosalia would inherit as natural children.
The order of the trial judge, following these conclusions, was that there should be a partition of the property of the
deceased Cheong Boo between the natural children, Cheong Seng Gee, Payang, and Rosalia.
From the judgment of the Judge of First Instance both parties perfected appeals. As to the facts, we can say that
we agree in substance with the findings of the trial court. As to the legal issues submitted for decision by the
numerous assignments of error, these can best be resolved under two heads, namely: (1) The validity of the
Chinese marriage; and (2) the validity of the Mohammedan marriage.
1. Validity of the Chinese Marriage
The theory advanced on behalf of the claimant Cheong Seng Gee was that Cheong Boo was married in the city of
Amoy, China, during the second moon of the twenty-first year of the Emperor Quang Su, or, according to the
modern count, on February 16, 1985, to a young lady named Tan Dit. Witnesses were presented who testified to
having been present at the marriage ceremony. There was also introduced in evidence a document in Chinese
which in translation reads as follows:
One
hundred
years of life and
health for both.

Your nephew, Tan Chao, respecfully answers

the venerable Chiong Ing, father of the
bridegroom, accepting his offer of marriage,
and let this document serve as proof of the
acceptance of said marriage which is to be
celebrated during the merry season of the
flowers.
I take advantage of this occasion to wish for
your and the spouses much happiness, a long
life, and prolific issue, as noble and great as
that which you brought forth. I consider the
marriage of your son Boo with my sister Lit
Chia as a mandate of God and I hope that they
treat each other with great love and mutual
courtesy and that both they and their parents

be very happy.
Given during the second moon of the twenty-
first year of the reign of the Emperor Quang
Su.
Cheong Boo is said to have remained in China for one year and four months after his marriage during which time
there was born to him and his wife a child named Cheong Seng Gee. Cheong Boo then left China for the Philippine
Islands and sometime thereafter took to himself a concubine Mora by whom he had two children. In 1910, Cheong
Boo was followed to the Philippines by Cheong Seng Gee who, as appears from documents presented in evidence,
was permitted to land in the Philippine Islands as the son of Cheong Boo. The deceased, however, never returned
to his native hearth and seems never to have corresponded with his Chinese wife or to have had any further
relations with her except once when he sent her P10.
The trial judge found, as we have said, that the proof did not sustain the allegation of the claimant Cheong Seng
Gee, that Cheong Boo had married in China. His Honor noted a strong inclination on the part of the Chinese
witnesses, especially the brother of Cheong Boo, to protect the interests of the alleged son, Cheong Seng Gee, by
overstepping the limits of truthfulness. His Honor also noted that reliable witnesses stated that in the year 1895,
when Cheong Boo was supposed to have been in China, he was in reality in Jolo, in the Philippine Islands. We are
not disposed to disturb this appreciation of fact by the trial court. The immigration documents only go to show the
relation of parent and child existing between the deceased Cheong Boo and his son Cheong Seng Gee and do not
establish the marriage between the deceased and the mother of Cheong Seng Gee.
Section IV of the Marriage Law (General Order No. 68) provides that "All marriages contracted without these
Islands, which would be valid by the laws of the country in which the same were contracted, are valid in these
Islands." To establish a valid foreign marriage pursuant to this comity provision, it is first necessary to prove before
the courts of the Islands the existence of the foreign law as a question of fact, and it is then necessary to prove the
alleged foreign marriage by convincing evidence.
As a case directly in point is the leading one of Sy Joc Lieng vs. Encarnacion ([1910]), 16 Phil., 137; [1913], 228 U.S.,
335). Here, the courts of the Philippines and the Supreme Court of the United States were called upon to decide,
as to the conflicting claims to the estate of a Chinese merchant, between the descendants of an alleged Chinese
marriage and the descendants of an alleged Philippine marriage. The Supreme Courts of the Philippine Islands and
the United States united in holding that the Chinese marriage was not adequately proved. The legal rule was
stated by the United States Supreme Court to be this: A Philippine marriage, followed by forty years of
uninterrupted marital life, should not be impugned and discredited, after the death of the husband and
administration of his estate, though an alleged prior Chinese marriage, "save upon proof so clear, strong, and
unequivocal as to produce a moral conviction of the existence of such impediment." Another case in the same
category is that of Son Cui vs. Guepangco ([1912], 22 Phil., 216).
In the case at bar there is no competent testimony as to what the laws of China in the Province of Amoy
concerning marriage were in 1895. As in the Encarnacion case, there is lacking proof so clear, strong, and
unequivocal as to produce a moral conviction of the existence of the alleged prior Chinese marriage. Substitute
twenty-three years for forty years and the two cases are the same.
The lower court allowed the claimant, Cheong Seng Gee, the testamentary rights of an acknowledged natural child.
This finding finds some support in Exhibit 3, the affidavit of Cheong Boo before the American Vice-Consul at
Sandakan, British North Borneo. But we are not called upon to make a pronouncement on the question, because
the oppositor-appellant indicates silent acquiescence by assigning no error.
2. Validity of the Mohammedan Marriage
The biographical data relating to the Philippine odyssey of the Chinaman Cheong Boo is fairly complete. He
appears to have first landed on Philippine soil sometime prior to the year 1896. At least, in the year las mentioned,
we find him in Basilan, Philippine Islands. There he was married to the Mora Adong according to the ceremonies
prescribed by the book on marriage of the Koran, by the Mohammedan Iman (priest) Habubakar. That a marriage
ceremony took place is established by one of the parties to the marriage, the Mora Adong, by the Iman who
solemnized the marriage, and by other eyewitnesses, one of whom was the father of the bride, and another, the
chief of the rancheria, now a municipal councilor. The groom complied with Quranic law by giving to the bride a
dowry of P250 in money and P250 in goods.
The religious rites began with the bride and groom seating themselves in the house of the father of the bride,
Marahadja Sahibil. The Iman read from the Koran. Then the Iman asked the parents if they had any objection to
the marriage. The marital act was consummated by the groom entering the woman's mosquito net.
From the marriage day until the death of Cheong Boo, twenty-three years later, the Chinaman and the Mora
Adong cohabited as husband and wife. To them were born five children, two of whom, Payang and Rosalia, are

living. Both in his relations with Mora Adong and with third persons during his lifetime, Cheong Boo treated Adong
as his lawful wife. He admitted this relationship in several private and public documents. Thus, when different legal
documents were executed, including decrees of registration, Cheong Boo stated that he was married to the Mora
Adong while as late as 1918, he gave written consent to the marriage of his minor daughter, Payang.
Notwithstanding the insinuation of counsel for the Chinese appellant that the custom is prevalent among the
Moros to favor in their testimony, a relative or friend, especially when they do not swear on the Koran to tell the
truth, it seems to us that proof could not be more convincing of the fact that a marriage was contracted by the
Chinaman Cheong Boo and the Mora Adong, according to the ceremonies of the Mohammedan religion.
It is next incumbent upon us to approach the principal question which we announced in the very beginning of this
decision, namely, Are the marriages performed in the Philippines according to the rites of the Mohammedan
religion valid? Three sections of the Marriage Law (General Order No. 68) must be taken into consideration.
Section V of the Marriage Law provides that "Marriage may be solemnized by either a judge of any court inferior to
the Supreme Court, justice of the peace, or priest or minister of the Gospel of any denomination . . ." Counsel,
failing to take account of the word "priest," and only considering the phrase "minister of the Gospel of any
denomination" would limit the meaning of this clause to ministers of the Christian religion. We believe this is a
strained interpretation. "Priest," according to the lexicographers, means one especially consecrated to the service
of a divinity and considered as the medium through whom worship, prayer, sacrifice, or other service is to be
offered to the being worshipped, and pardon, blessing, deliverance, etc., obtained by the worshipper, as a priest of
Baal or of Jehovah; a Buddhist priest. "Minister of the Gospel" means all clergymen of every denomination and
faith. A "denomination" is a religious sect having a particular name. (Haggin vs. Haggin [1892], 35 Neb., 375; In re
Reinhart, 9 O. Dec., 441; Hale vs. Everett [1868], 53 N. H. 9.) A Mohammedan Iman is a "priest or minister of the
Gospel," and Mohammedanism is a "denomination," within the meaning of the Marriage Law.
The following section of the Marriage Law, No. VI, provides that "No particular form for the ceremony of marriage
is required, but the parties must declare, in the presence of the person solemnizing the marriage, that they take
each other as husband and wife." The law is quite correct in affirming that no precise ceremonial is indispensable
requisite for the creation of the marriage contract. The two essentials of a valid marriage are capacity and consent.
The latter element may be inferred from the ceremony performed, the acts of the parties, and habit or repute. In
this instance, there is no question of capacity. Nor do we think there can exist any doubt as to consent. While it is
true that during the Mohammedan ceremony, the remarks of the priest were addressed more to the elders than
to the participants, it is likewise true that the Chinaman and the Mora woman did in fact take each other to be
husband and wife and did thereafter live together as husband and wife. (Travers vs. Reinhardt [1907], 205 U.S.,
423.
It would be possible to leave out of view altogether the two sections of the Marriage Law which have just been
quoted and discussed. The particular portion of the law which, in our opinion, is controlling, is section IX, reading
as follows: "No marriage heretofore solemnized before any person professing to have authority therefor shall be
invalid for want of such authority or on account of any informality, irregularity, or omission, if it was celebrated
with the belief of the parties, or either of them, that he had authority and that they have been lawfully married."
The trial judge in construing this provision of law said that he did not believe that the legislative intention in
promulgating it was to validate marriages celebrated between Mohammedans. To quote the judge:
This provisions relates to marriages contracted by virtue of the provisions of the Spanish law before
revolutionary authorized to solemnized marriages, and it is not to be presumed that the legislator
intended by this law to validate void marriages celebrated during the Spanish sovereignty contrary to the
laws which then governed.
What authority there is for this statement, we cannot conceive. To our mind, nothing could be clearer than the
language used in section IX. Note for a moment the all embracing words found in this section:
"No marriage" Could more inclusive words be found? "Heretofore solemnized" Could any other construction
than that of retrospective force be given to this phrase? "Before any person professing to have authority therefor
shall be invalid for want of such authority" Could stronger language than this be invoked to announce legislative
intention? "Or on account of any informality, irregularity, or omission" Could the legislative mind frame an idea
which would more effectively guard the marriage relation against technicality? "If it was celebrated with the belief
of the parties, or either of them, that he had authority and that they have been lawfully married" What was the
purpose of the legislator here, if it was not to legalize the marriage, if it was celebrated by any person who thought
that he had authority to perform the same, and if either of the parties thought that they had been married? Is
there any word or hint of any word which would restrict the curative provisions of section IX of the Marriage Law
to Christian marriages? By what system of mental gymnastics would it be possible to evolve from such precise
language the curious idea that it was restricted to marriages performed under the Spanish law before the
revolutionary authorities?

In view of the importance of the question, we do not desire to stop here but would ascertain from other sources
the meaning and scope of Section IX of General Order No. 68.
The purpose of the government toward the Mohammedan population of the Philippines has, time and again, been
announced by treaty, organic law, statutory law, and executive proclamation. The Treaty of Paris in its article X,
provided that "The inhabitants of the territories over which Spain relinquishes or cedes her sovereignty shall be
secured Instructions to the Philippine Commission imposed on every branch of the Government of the Philippine
Islands the inviolable rule "that no law shall be made respecting an establishment of religion or prohibiting the free
exercise thereof, and that the free exercise and enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed ... That no form of religion and no minister of religion shall
be forced upon any community or upon any citizen of the Islands; that, upon the other hand, no minister of
religion shall be interfered with or molested in following his calling, and that the separation between state and
church shall be real, entire, and absolute." The notable state paper of President McKinley also enjoined the
Commission, "to bear in mind that the Government which they are establishing is designed . . . for the happiness,
peace, and prosperity of the people of the Philippine Islands" and that, therefore, "the measures adopted should
be made to conform to their customs, their habits, and even their prejudices. . . . The Philippine Bill and the Jones
Law reproduced the main constitutional provisions establishing religious toleration and equality.
Executive and legislative policy both under Spain and the United States followed in the same path. For instance, in
the Treaty of April 30, 1851, entered into by the Captain General of the Philippines and the Sultan of Sulu, the
Spanish Government guaranteed "with all solemnity to the Sultan and other inhabitants of Sulu the free exercise of
their religion, with which it will not interfere in the slightest way, and it will also respect their customs." (See
further Decree of the Governor-General of January 14, 1881.) For instance, Act No. 2520 of the Philippine
Commission, section 3, provided that "Judges of the Court of First Instance and justices of the peace deciding civil
cases in which the parties are Mohammedans or pagans, when such action is deemed wise, may modify the
application of the law of the Philippine Islands, except laws of the United States applicable to the Philippine
Islands, taking into account local laws and customs. . . ." (See further Act No. 787, sec. 13 [ j]; Act No. 1283, sec. 6
[b]; Act No. 114 of the Legislative Council amended and approved by the Philippine Commission; Cacho vs.
Government of the United States [1914], 28 Phil., 616.) Various responsible officials have so oft announced the
purpose of the Government not to interfere with the customs of the Moros, especially their religious customs, as
to make quotation of the same superfluous.
The retrospective provisions of the Philippine Marriage Law undoubtedly were inspired by the governmental policy
in the United States, with regard to the marriages of the Indians, the Quakers, and the Mormons. The rule as to
Indians marriages is, that a marriage between two Indians entered into according to the customs and laws of the
people at a place where such customs and laws are in force, must be recognized as a valid marriage. The rule as to
the Society of Quakers is, that they will be left to their own customs and that their marriages will be recognized
although they use no solemnization. The rule as to Mormon marriages is that the sealing ceremony entered into
before a proper official by members of that Church competent to contract marriage constitutes a valid marriage.
The basis of human society throughout the civilized world is that of marriage. Marriage in this jurisdiction is not
only a civil contract, but, it is a new relation, an institution in the maintenance of which the public is deeply
interested. Consequently, every intendment of the law leans toward legalizing matrimony. Persons dwelling
together in apparent matrimony are presumed, in the absence of any counter-presumption or evidence special to
the case, to be in fact married. The reason is that such is the common order of society, and if the parties were not
what they thus hold themselves out as being, they would be living in the constant violation of decency and of law.
A presumption established by our Code of Civil Procedure is "that a man and woman deporting themselves as
husband and wife have entered into a lawful contract of marriage.:" (Sec. 334, No. 28.) Semper praesumitur pro
matrimonio Always presume marriage. (U. S. vs. Villafuerte and Rabano [1905], 4 Phil., 476; Son Cui vs.
Guepangco, supra; U.S. vs. Memoracion and Uri [1916], 34 Phil., 633; Teter vs. Teter [1884], 101 Ind., 129.)
Section IX of the Marriage Law is in the nature of a curative provision intended to safeguard society by legalizing
prior marriages. We can see no substantial reason for denying to the legislative power the right to remove
impediments to an effectual marriage. If the legislative power can declare what shall be valid marriages, it can
render valid, marriages which, when they took place, were against the law. Public policy should aid acts intended
to validate marriages and should retard acts intended to invalidate marriages. (Coghsen vs. Stonington [1822], 4
Conn, 209; Baity vs. Cranfill [1884], 91 N. C., 273.)
The courts can properly incline the scales of their decisions in favors of that solution which will mot effectively
promote the public policy. That is the true construction which will best carry legislative intention into effect. And
here the consequences, entailed in holding that the marriage of the Mora Adong and the deceased Cheong Boo, in
conformity with the Mohammedan religion and Moro customs, was void, would be far reaching in disastrous
result. The last census shows that there are at least one hundred fifty thousand Moros who have been married
according to local custom. We then have it within our power either to nullify or to validate all of these marriages;
either to make all of the children born of these unions bastards or to make them legitimate; either to proclaim
immorality or to sanction morality; either to block or to advance settled governmental policy. Our duty is a obvious
as the law is plain.

In moving toward our conclusion, we have not lost sight of the decisions of this court in the cases of United States
vs. Tubban ([1915]), 29 Phil., 434) and United States vs. Verzola ([1916, 33 Phil., 285). We do not, however, believe
these decisions to be controlling. In the first place, these were criminal actions and two Justice dissented.. In the
second place, in the Tubban case, the marriage in question was a tribal marriage of the Kalingas, while in the
Verzola case, the marriage had been performed during the Spanish regime by a lieutenant of the Guardia Civil. In
neither case, in deciding as to whether or not the accused should be given the benefit of the so-called unwritten
law, was any consideration given to the provisions of section IX of General Order No. 68. We are free to admit that,
if necessary, we would unhesitatingly revoke the doctrine announced in the two cases above mentioned.
We regard the evidence as producing a moral conviction of the existence of the Mohammedan marriage. We
regard the provisions of section IX of the Marriage law as validating marriages performed according to the rites of
the Mohammedan religion.
There are other questions presented in the various assignments of error which it is unnecessary to decide. In
resume, we find the Chinese marriage not to be proved and that the Chinaman Cheong Seng Gee has only the
rights of a natural child, and we find the Mohammedan marriage to be proved and to be valid, thus giving to the
widow and the legitimate children of this union the rights accruing to them under the law.
Judgment is reversed in part, and the case shall be returned to the lower court for a partition of the property in
accordance with this decision, and for further proceedings in accordance with law. Without special findings as to
costs in this instance, it is so ordered.

G.R. No. L-22374 December 18, 1974

REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
EMILIO G. GUANZON, defendant-appellee.
Office of the Solicitor General Arturo A. Alafriz Solicitor Camilo D. Quiason and Special Attorney Maria C. Paraiso for
plaintiff-appellant.
Romeo C. Gonzaga for defendant-appellee.

FERNANDO, J.:p
A lower court decision, which on its face ignores the controlling statute as well as the applicable doctrines of this
Court, is appealed by the Republic of the Philippines. It filed an action for the foreclosure of certain real estate and
chattel mortgages executed by defendant Emilio G. Guanzon, now appellee, in favor of the former Bank of Taiwan,
Ltd., as security for the payment of the loans obtained by him from said bank. The amount involved is P3,722.13,
representing the principal and interest as of September 30, 1961, with an additional sum equivalent to ten percent
of the total indebtedness as attorney's fees. The loan transaction took place in 1943 during the period of Japanese
occupation. Upon the liberation of the Philippines in 1945, the United States, through its Alien Property Custodian,
acquired such credit. Thereafter, by virtue of the Philippine Property Act of 1946, it was transferred to our
1
government. With the statute and the controlling judicial decisions, clearly pointing to one direction, the lower
court, in a hasty and improvident exercise of judicial power, apparently oblivious of the law, took the other way. It
held that the Republic of the Philippines lacked legal interest over such mortgage loan and dismissed the case. We
have no choice but to reverse.
The facts are undisputed. As set forth in the brief for appellant Republic of the Philippines: "On May and June,
1943, the defendant obtained two (2) loans from the former Bank of Taiwan, Ltd., at its offices in Bacolod City, in
the total sum of P1,600.00, with interest at the rate of six per centum (6%) per annum, compounded quarterly,
evidenced by two (2) promissory notes ... executed, signed and delivered by him to said bank. To secure prompt
and full payment of the loans, the defendant executed a real estate mortgage ... on the two parcels of land
covered by Transfer Certificate of Title Nos. 1848 and 1855 of the Register of Deeds of Negros Occidental and a
Chattel Mortgage on standing crops ... growing on the same properties ... . By virtue of Vesting Order No. P-4,
dated January 21, 1946, and under the authority of the Trading with the Enemy Act, as amended, the United States
of America vested in the Government of the United States the assets in the Philippines of the Bank of Taiwan, Ltd.
Pursuant to the Philippine Property Act of 1946, these assets were subsequently transferred to the Republic of the
Philippines by the Attorney General of the United States under Transfer Agreements dated July 20, 1954 and June
15, 1957, and are now administered by the Board of Liquidators, a government agency created under Executive
Order No. 372, dated November 24, 1950, and in accordance with Republic Acts Nos. 477 and 8, and other
2
pertinent laws." According to the brief for appellee Guanzon: "The statement of facts stated in appellant's brief is
3
substantially correct so that this representation finds no necessity in offering counter-statement of facts."
It is not easy to explain, and certainly there is no justification, in the light of the above facts and considering the
state of the law, why the lower court, in its decision, dismissed the case on the ground that the Republic of the
Philippines lacks legal interest. As noted, we have to reverse.
1. In the very able brief for appellant Republic of the Philippines, prepared by the then Solicitor General Arturo A.
Alafriz and the former Solicitor, later Assistant Solicitor General Camilo D. Quiason, it was made clear that while
the Bank of Taiwan, Ltd. was the original creditor of the loans thus secured, with defendant, now appellee,
4
executing the mortages in question, the United States, pursuant to the Trading with the Enemy Act acquired such
account, being among the assets of a bank which was a declared national of an enemy country. This it did through
5
a vesting order, the legal effect of which was to effectuate immediately the transfer of title by operation of law
without any necessity for any court action. Thus, title over such credit passed to the United States "as completely
6
as if by conveyance, transfer, or assignment, ... . " The brief for the Republic continues: "In accordance with the
Philippine Property Act of 1946, the United States Government transferred, conveyed and assigned to the
Government of the Republic of the Philippines under Transfer Agreements, dated July 20, 1954 and June 15, 1957,
all its rights, title and interest to the loans in question. As such transferee, the Republic of the Philippines acquired
the title and interest thereto ... . It follows, therefore, that plaintiff has a legal interest in the promissory notes and
7
in the real and chattel mortgages and has a cause of action against the debtor-mortgagor, the defendant herein."
All that was set forth in the three-page brief of counsel for appellee Guanzon reads as follows: "There is no
showing as to how plaintiff-appellant was able to acquire the Real and Chattel Mortgage executed by the
defendant-appellee in favor of the Bank of Taiwan Ltd. a private bank of Japan, and therefore has no legal interest
in the subject matter. The transfer of obligation in question cannot be taken Judicial Notice by our courts because
the vesting order P-4 of the Government of the United States, pursuant to the Trading with the Enemy Act, as
amended, of any and all property of any nature whatsoever subject to the Jurisdiction of the United States

affecting alien property in the Philippines cannot be taken Judicial Notice in the light of Sec. 1 of Rule 129 of the
New Rules of Court, inasmuch as the Trading with the Enemy Act is a foreign law enacted by the U.S. Government
which is not enumerated in the aforecited new Rules of Court. Consequently, proof should have been introduced
to show how the United States Government was able to acquire the subject matter in litigation which was later
8
transferred to the plaintiff-appellant."
It thus appears obvious that counsel for appellee lacks awareness of the controlling doctrine announced in the
9
leading case of Brownell, Jr. v. Sun Life Assurance Company, where Justice Labrador explicitly set forth: "This
purpose of conveying enemy properties to the Philippines after all claims against them shall have been settled is
10
expressly embodied in the Philippine Property Act of 1946," A brief history of the Philippine Property Act of 1946
is likewise found in his opinion: "On July 3, 1946, the Congress of the United States passed Public Law 485-79th
Congress, known as the Philippine Property Act of 1946. Section 3 thereof provides that "The Trading with the
Enemy Act of October 6, 1917 (40 Stat. 411), as amended, shall continue in force in the Philippines after July 4,
1946, ... ." To implement the provisions of the act, the President of the United States on July 3, 1946, promulgated
Executive Order No. 9747, "continuing the functions of the Alien Property Custodian and the Department of the
Treasury in the Philippines." Prior to and preparatory to the approval of said Philippine Property Act of 1946, and
agreement was entered into between President Manuel Roxas of the Commonwealth and U.S. Commissioner Paul
V. McNutt whereby title to enemy agricultural lands and other properties was to be conveyed by the United States
to the Philippines in order to help the rehabilitation of the latter, but that in order to avoid complex legal problems
in relation to said enemy properties, the Alien Property Custodian of the United States was to continue operations
in the Philippines even after the latter's independence, that he may settle all claims that may exist or arise against
the above-mentioned enemy properties, in accordance with the Trading with the Enemy Act of the United States."
11

Nothing can be clearer, therefore, than that the lower court grievously erred in failing to perceive that precisely
the Republic of the Philippines, contrary to its holding, possesses a legal interest over the subject matter of this
controversy.
2. Apparently, the lower court, perhaps taken in by the contention of appellee, could not see its way clear to
applying the Philippine Property Act of 1946 enacted by the United States Congress as it was a foreign statute not
susceptible to judicial notice. Again, if it were cognizant of the leaning of the above Brownell decision, it would
have realized how erroneous such a view is. For, as was made clear in the above decision, there was "conformity to
the enactment of the Philippine Property Act of 1946 of the United States [as] announced by President Manuel
Roxas in a joint statement signed by him and by Commissioner McNutt Ambassador Romulo also formally
expressed the conformity of the Philippine Government to the approval of said act to the American Senate prior to
12
its approval." It was further stressed by Justice Labrador that after the grant of independence, the Congress of
the Philippines approved Republic Act No. 8, which authorized the President of the Philippines to enter into such
contract or undertakings as may be necessary to effectuate the transfer to the Republic of the Philippines under
the Philippine Property Act of 1946 of any property or property rights or the proceeds thereof authorized to be
transferred thereunder. Then his opinion continues: "The Congress of the Philippines also approved Republic Act
No. 7, which established a Foreign Funds Control Office. After the approval of the Philippine Property Act of 1946
of the United States, the Philippine Government also formally expressed, through the Secretary of Foreign Affairs
conformity thereto. ... The Congress of the Philippines has also approved Republic Act No. 477, which provides for
the administration and disposition of properties which have been or may hereafter be transferred to the Republic
13
of the Philippines in accordance with the Philippine Property Act of 1946 of the United States."
From which, the above conclusion follows: "It is evident, therefore, that the consent of the Philippine Government
to the application of the Philippine Property Act of 1946 to the Philippines after independence was given, not only
by the Executive Department of the Philippine Government, but also by the Congress, which enacted the laws that
would implement or carry out the benefits accruing from the operation of the United States
14
law." Under the circumstances, there is no question, as was pointed out by the same jurist, "that a foreign law
may have extraterritorial effect in a country other than the country of origin, provided the latter, in which it is
15
sought to be made operative, gives its consent thereto." That is a sound legal proposition. It is a juridical norm
that has found acceptance in the Philippines at the close of the nineteenth century after its acquisition by the
United States. Its origins in American law can be traced back to Chief Justice Marshall's opinion in The Schooner
16
Exchange v. M'Faddon, an 1812 decision. It was cited with approval in the recent case of Reagan v.
17
Commissioner of Internal Revenue. The doctrine is not unknown to European law. So it was noted in Reagan,
with a citation from Jellinek: "It is to be admitted that any state may, by its consent, express or implied, submit to a
restriction of its sovereign rights. There may thus be a curtailment of what otherwise is a power plenary in
character. That is the concept of sovereignty as auto-limitation, which, in the succinct language of Jellinek, "is the
property of a state-force due to which it has the exclusive capacity of legal self-determination and self-restriction."
18
A state then, if it chooses to, may refrain from the exercise of what otherwise is illimitable competence."
19

It is thus undoubted that the lower court misapplied the rule on judicial notice. The lower court could not simply
have closed its eyes to the plain command of the Philippine Property Act of 1946, which is a part of Philippine law,
as was held so categorically by the above Brownell decision. To repeat, there is no justification for the appealed
decision.

3. The tone of certitude with which the lower court summarily dismissed the claim of the Republic on the ground
of lack of legal interest is thus uncalled for. It could have been avoided by an acquaintance, even of the slightest,
20
with the doctrines enunciated by this Tribunal. An excerpt from Barrera v. Barrera is of some relevance: "The
delicate task of ascertaining the significance that attaches to a constitutional or statutory provision, an executive
order, a procedural norm or a municipal ordinance is committed to the judiciary. It thus discharges a role no less
crucial than that appertaining to the other two departments in the maintenance of the rule of law. To assure
stability in legal relations and avoid confusion, it has to speak with one voice. It does so with finality, logically and
rightly , through the highest judicial organ, this Court. What it says then should be definitive and authoritative,
21
binding on those occupying the lower ranks in the judicial hierarchy. They have to defer and to submit."
WHEREFORE, the decision of August 29, 1963 dismissing the complaint of the Republic of the Philippines is
reversed and set aside. Costs against defendant Guanzon.

G.R. No. L-22228 February 27, 1969

PHILIPPINE ASSOCIATION OF LABOR UNIONS (PAFLU) SOCIAL SECURITY SYSTEM EMPLOYEES ASSOCIATION-
PAFLU, AL FAJARDO AND ALL THE OTHER MEMBERS AND OFFICERS OF THE SOCIAL SECURITY AND EMPLOYEES
ASSOCIATION-PAFLU, petitioners,
vs.
THE SECRETARY OF LABOR, THE DIRECTOR OF LABOR RELATIONS and THE REGISTRAR OF LABOR
ORGANIZATIONS, respondents.
Cipriano Cid and Associates and Israel Bocobo for petitioners.
Office of the Solicitor General Arturo A. Alafriz and Solicitor Camilo D. Quiason for respondents.
CONCEPCION, C.J.:
Petitioners pray for writs of certiorari and prohibition to restrain respondents, the Secretary of Labor, the Director
of Labor Relations and the Registrar of Labor Organizations, from enforcing an order of cancellation of the
registration certificate of the Social Security System Employees Association hereinafter referred to as the SSSEA
which is affiliated to the Philippine Association of Free Labor Unions hereinafter referred to as PAFLU as
well as to annul all proceedings in connection with said cancellation and to prohibit respondents from enforcing
Section 23 of Republic Act No. 875. Petitioners, likewise, pray for a writ of preliminary injunction pending the final
determination of this case. In their answer, respondents traversed some allegations of fact and the legal
conclusions made in the petition. No writ of preliminary injunction pendente lite has been issued.
It appears that on September 25, 1963, the Registration of Labor Organizations hereinafter referred to as the
Registrar issued a notice of hearing, on October 17, 1963, of the matter of cancellation of the registration of the
SSSEA, because of:
1. Failure to furnish the Bureau of Labor Relations with copies of the reports on the finances of that union
duly verified by affidavits which its treasurer or treasurers rendered to said union and its members
covering the periods from September 24, 1960 to September 23, 1961 and September 24, 1961 to
September 23, 1962, inclusive, within sixty days of the 2 respective latter dates, which are the end of its
fiscal year; and
2. Failure to submit to this office the names, postal addresses and non-subversive affidavits of the officers
of that union within sixty days of their election in October (1st Sunday), 1961 and 1963, in conformity with
Article IV (1) of its constitution and by-laws.
in violation of Section 23 of Republic Act No. 875. Counsel for the SSSEA moved to postpone the hearing to
October 21, 1963, and to submit then a memorandum, as well as the documents specified in the notice. The
motion was granted, but, nobody appeared for the SSSEA on the date last mentioned. The next day, October 22,
1963, Manuel Villagracia, Assistant Secretary of the SSSEA filed with the Office of the Registrar, a letter dated
October 21, 1963, enclosing the following:
1. Joint non-subversive affidavit of the officers of the SSS Employees' Association-PAFLU;
2. List of newly-elected officers of the Association in its general elections held on April 29, 1963; and
3. Copy of the amended constitution and by-laws of the Association.
Holding
1. That the joint non-subversive affidavit and the list of officers mentioned in the letter of Mr. Manuel
Villagracia were not the documents referred to in the notice of hearing and made the subject matter of
the present proceeding; and
2. That there is no iota of evidence on records to show and/or warrant the dismissal of the present
proceeding.
on October 23, 1963, the Registrar rendered a decision cancelling the SSSEA's Registration Certificate No. 1-IP169,
issued on September 30, 1960. Soon later, or on October 28, 1963, Alfredo Fajardo, president of the SSSEA moved
for a reconsideration of said decision and prayed for time, up to November 15, within which to submit the
requisite papers and data. An opposition thereto having been filed by one Paulino Escueta, a member of the
SSSEA, upon the ground that the latter had never submitted any financial statement to its members, said motion
was heard on November 27, 1963. Subsequently, or on December 4, 1963, the Registrar issued an order declaring
that the SSSEA had "failed to submit the following requirements to wit:

1. Non-subversive affidavits of Messrs. Teodoro Sison, Alfonso Atienza, Rodolfo Zalameda, Raymundo
Sabino and Napoleon Pefianco who were elected along with others on January 30, 1962.
2. Names, postal addresses and non-subversive affidavits of all the officers who were supposedly elected
on October (1st Sunday), of its constitution and by-laws.
and granting the SSSEA 15 days from notice to comply with said requirements, as well as meanwhile holding in
abeyance the resolution of its motion for reconsideration.
Pending such resolution, or on December 16, the PAFLU, the SSSEA, Alfredo Fajardo "and all the officers and
members" of the SSSEA commenced the present action, for the purpose stated at the beginning of this decision,
upon the ground that Section 23 of Republic Act No. 875 violates their freedom of assembly and association, and is
inconsistent with the Universal Declaration of Human Rights; that it unduly delegates judicial power to an
administrative agency; that said Section 23 should be deemed repealed by ILO-Convention No. 87; that
respondents have acted without or in excess of jurisdiction and with grave abuse of discretion in promulgating, on
November 19, 1963, its decision dated October 22, 1963, beyond the 30-day period provided in Section 23(c) of
Republic Act No. 875; that "there is no appeal or any other plain, speedy and adequate remedy in the ordinary
course of law"; that the decision complained of had not been approved by the Secretary of Labor; and that the
cancellation of the SSSEA's certificate of registration would cause irreparable injury.
The theory to the effect that Section 23 of Republic Act No. 875 unduly curtails the freedom of assembly and
association guaranteed in the Bill of Rights is devoid of factual basis. The registration prescribed in paragraph (b) of
1
said section is not a limitation to the right of assembly or association, which may be exercised with or without said
2
registration. The latter is merely a condition sine qua non for the acquisition of legal personality by labor
organizations, associations or unions and the possession of the "rights and privileges granted by law to legitimate
labor organizations". The Constitution does not guarantee these rights and privileges, much less said personality,
which are mere statutory creations, for the possession and exercise of which registration is required to protect
both labor and the public against abuses, fraud, or impostors who pose as organizers, although not truly accredited
agents of the union they purport to represent. Such requirement is a valid exercise of the police power, because
the activities in which labor organizations, associations and union of workers are engaged affect public interest,
3
which should be protected. Furthermore, the obligation to submit financial statements, as a condition for the
non-cancellation of a certificate of registration, is a reasonable regulation for the benefit of the members of the
organization, considering that the same generally solicits funds or membership, as well as oftentimes collects, on
4
behalf of its members, huge amounts of money due to them or to the organization.
For the same reasons, said Section 23 does not impinge upon the right of organization guaranteed in the
Declaration of Human Rights, or run counter to Articles 2, 4, 7 and Section 2 of Article 8 of the ILO-Convention No.
87, which provide that "workers and employers, ... shall have the right to establish and ... join organizations of
their own choosing, without previous authorization"; that "workers and employers organizations shall not be liable
to be dissolved or suspended by administrative authority"; that "the acquisition of legal personality by workers'
and employers' organizations, ... shall not be made subject to conditions of such a character as to restrict the
application of the provisions" above mentioned; and that "the guarantees provided for in" said Convention shall
not be impaired by the law of the land.
5

In B.S.P. v. Araos, we held that there is no incompatibility between Republic Act No. 875 and the Universal
Declaration of Human Rights. Upon the other hand, the cancellation of the SSSEA's registration certificate would
not entail a dissolution of said association or its suspension. The existence of the SSSEA would not be affected by
said cancellation, although its juridical personality and its statutory rights and privileges as distinguished from
those conferred by the Constitution would be suspended thereby.
To be registered, pursuant to Section 23(b) of Republic Act No. 875, a labor organization, association or union of
workers must file with the Department of Labor the following documents:
(1) A copy of the constitution and by-laws of the organization together with a list of all officers of the
association, their addresses and the address of the principal office of the organization;
(2) A sworn statement of all the officers of the said organization, association or union to the effect that
they are not members of the Communist Party and that they are not members of any organization which
teaches the overthrow of the Government by force or by any illegal or unconstitutional method; and
(3) If the applicant organization has been in existence for one or more years, a copy of its last annual
financial report.
Moreover, paragraph (d) of said-Section ordains that:
The registration and permit of a legitimate labor organization shall be cancelled by the Department of
Labor, if the Department has reason to believe that the labor organization no longer meets one or more of
the requirements of paragraph (b) above; or fails to file with the Department Labor either its financial

report within the sixty days of the end of its fiscal year or the names of its new officers along with their
non-subversive affidavits as outlined in paragraph (b) above within sixty days of their election; however,
the Department of Labor shall not order the cancellation of the registration and permit without due
notice and hearing, as provided under paragraph (c) above and the affected labor organization shall have
6
the same right of appeal to the courts as previously provided.
The determination of the question whether the requirements of paragraph (b) have been met, or whether or not
the requisite financial report or non-subversive affidavits have been filed within the period above stated, is not
judicial power. Indeed, all officers of the government, including those in the executive department, are supposed,
to act on the basis of facts, as they see the same. This is specially true as regards administrative agencies given by
law the power to investigate and render decisions concerning details related to the execution of laws the
enforcement of which is entrusted thereto. Hence, speaking for this Court, Mr. Justice Reyes (J.B.L.) had occassion
to say:
The objections of the appellees to the constitutionality of Republic Act No. 2056, not only as an undue
delegation of judicial power to the Secretary of Public Works but also for being unreasonable and
arbitrary, are not tenable. It will be noted that the Act (R.A. 2056) merely empowers the Secretary to
remove unauthorized obstructions or encroachments upon public streams, constructions that no private
person was anyway entitled to make because the bed of navigable streams is public property, and
ownership
thereof
is
not
acquirable
by
adverse
possession
(Palanca vs. Commonwealth, 69 Phil., 449).
It is true that the exercise of the Secretary's power under the Act necessarily involves the determination
of some question of fact, such as the existence of the stream and its previous navigable character; but
these functions, whether judicial or quasi-judicial, are merely incidental to the exercise of the power
granted by law to clear navigable streams of unauthorized obstructions or encroachments, and authorities
are clear that they are validly conferable upon executive officials provided the party affected is given
7
opportunity to be heard, as is expressly required by Republic Act No. 2056, section 2.
It should be noted also, that, admittedly, the SSSEA had not filed the non-subversive affidavits of some of its
officers "Messrs. Sison, Tolentino, Atienza, Zalameda, Sabino and Pefianca" although said organization avers
that these persons "were either resigned or out on leave as directors or officers of the union", without specifying
who had resigned and who were on leave. This averment is, moreover, controverted by respondents herein.
Again, the 30-day period invoked by the petitioners is inapplicable to the decision complained of. Said period is
8
prescribed in paragraph (c) of Section 23, which refers to the proceedings for the "registration" of labor
organizations, associations or unions not to the "cancellation" of said registration, which is governed by the
abovequoted paragraph (d) of the same section.
Independently of the foregoing, we have repeatedly held that legal provisions prescribing the period within which
a decision should be rendered are directory, not mandatory in nature in the sense that, a judgment
promulgated after the expiration of said period is not null and void, although the officer who failed to comply with
9
law may be dealt with administratively, in consequence of his delay unless the intention to the contrary is
manifest. Such, however, is not the import of said paragraph (c). In the language of Black:
When a statute specifies the time at or within which an act is to be done by a public officer or body, it is
generally held to be directory only as to the time, and not mandatory, unless time is of the essence of the
thing to be done, or the language of the statute contains negative words, or shows that the designation of
10
the time was intended as a limitation of power, authority or right.
Then, again, there is no law requiring the approval, by the Secretary of Labor, of the decision of the Registrar
decreeing the cancellation of a registration certificate. In fact, the language of paragraph (d) of Section 23,
suggests that, once the conditions therein specified are present, the office concerned "shall" have no choice but to
issue the order of cancellation. Moreover, in the case at bar, there is nothing, as yet, for the Secretary of Labor to
approve or disapprove, since petitioners, motion for reconsideration of the Registrar's decision of October 23,
11
1963, is still pending resolution. In fact, this circumstance shows, not only that the present action is premature,
12
but, also, that petitioners have failed to exhaust the administrative remedies available to them. Indeed, they
could ask the Secretary of Labor to disapprove the Registrar's decision or object to its execution or enforcement, in
the absence of approval of the former, if the same were necessary, on which we need not and do not express any
opinion.
IN VIEW OF THE FOREGOING, the petition herein should be, as it is hereby dismissed, and the writs prayed for
denied, with costs against the petitioners. It is so ordered. lawphi1.nt

G.R. No. L-18883 May 18, 1962

PEDRO ESTELLA, protestant-appellant,
vs.
PEDRO EDAO, protestee-appellee.
Estrella Bengzon and Bengzon for protestant-appellant.
Tiburcio Edao, Jr. protestee-appellee.
BARRERA, J.:
Pedro Estella and Pedro Edao were candidates for the office of mayor of Masinloc, Zambales in the elections held
on November 10, 1959. After the canvassing of the results of the election was known, giving Edao a majority of
194 votes, Edao was duly proclaimed elected.
Estella filed a protest in the Court of First Instance of Zambales on December 29, 1959, wherein he sought a
recounting of the ballots cast in precincts Nos. 2, 3-C, 4, and 4-A, on the ground that fraudulent acts, forgery and
other irregularities were committed, and of those in precincts Nos. 6-A, 10, 10-A and 10-B, claiming that the voting
therein was attended by terrorism, intimidation and other election anomalies, to the prejudice of the protestant.
In his answer, protestee denied the existence of irregularities in the conduct of the elections.
The case was first set for hearing on March 2 and 3, 1960. On the first day of the hearing, the ballot boxes in
precincts Nos. 2, 3-C, 4 and 4-A, where fraudulent acts, forgery, and other irregularities were allegedly
perpetrated, were opened and the ballots found therein examined and recounted. Protestant did not register any
objection to the ballots cast therein. However, he requested for the postponement of the hearing scheduled for
the following day, promising to present in the next session evidence to prove that terrorism existed during the
elections, before the other ballot boxes from precincts Nos. 6-A, 10, 10-A and 10-B are to be opened. The court
granted this petition and the case was, consequently, set for hearing on April 11 and 12, 1960.
On April 5, 1960, protestant again moved for postponement of the trial, which was granted and the same was
reset for June 15, and 16, 1960. On June 11, protestant filed another motion for postponement. This, again, was
granted by the court, and the continuation of the hearing was set for July 20 and 21, 1960. As protestant once
more requested for transfer of the hearing, the court granted the same by order of July 20, 1960, with the warning
that should protestant fail to appear at the hearing scheduled for the following day, July 21, the case would be
considered submitted to decision.
On that day, July 21, 1960, the court received a telegraphic motion from the protestant asking for the
postponement of the hearing on the ground that the NBI handwriting expert to be presented by him would be
available only after August 10, 1960. This was amplified by a motion explaining the necessity of the presentation of
said expert witness to prove that only one or two persons prepared the ballots in precincts Nos. 10, 10-A and 10-B.
This time, the court, denied the motion, "it appearing that this case has been pending for more than six months as
a result of several postponements asked by the protestant to enable him to obtain the necessary evidence in this
case, and in view of the mandate of Section 177 of the Revised Election Code that the election protest of a
municipal office shall be decided within six months after its presentation." The case, therefore, was considered
submitted for decision.1wph1.t
On August 3, 1960, the court rendered a decision reading as follows:
This is an election protest for the office of mayorship of Masinloc, Zambales. The protestant seeks the
recounting of the votes cast in Precincts Nos. 2, 3-C, 4, and 4-A on the ground that an irregularity was
committed in the counting of the votes cast in said precincts. He also seeks to void the votes cast in
Precincts No. 6-A, 10, 10-A and 10-B on the ground that there were other irregularities committed in said
precincts. However, when the ballot boxes for Precincts Nos. 2, 3-C, 4 and 4-A, were opened and the
ballots therein recounted, no objection was raised by the parties on the validity of the ballots cast for the
mayorship of Masinloc, Zambales; and the result of the recounting tallies with the election returns with
respect to Precincts Nos. 2, and 3-C, and with respect to Precincts Nos. 4 and 4-A the recounting of votes
shows that the protestant and the protestee received one hundred thirty (130) votes each in precinct No.
4-A, while in Precinct No. 4 the protestant received sixty-nine (69) votes which also tallies with the
election returns, and the protestee received ninety-six (96) votes or one vote less than what he got in the
election returns.
On the alleged irregularities committed in Precincts Nos. 6-A, 10, 10-A and 10-B, the protestant has failed
to substantiate them.

IN VIEW of the foregoing, judgment is hereby rendered dismissing the instant protest with costs against
the protestant, and declaring the protestee Pedro Edao to have been duly elected mayor of Masinloc,
Zambales in the last election of November 10, 1959.
SO ORDERED.
Protestant thus interposed an appeal to the Court of Appeals. Said court, however, finding that no question of fact
is involved in the appeal, certified the case to us for adjudication in accordance with law.
It is now contended by appellant that the lower court erred:
1. In considering the case submitted for decision and denying the petition for postponement, because it
considered Section 177 of the Revised Election Code, which states that the election protest of a municipal
office shall be decided within six (6) months after its presentation, as mandatory.
2. In considering the case (submitted) for decision despite the fact that the court has not as yet opened
the ballot boxes Nos. 10, 10-A, 10-B and 6-A, and the commissioners appointed by the court have not
submitted their report regarding the contents of said ballot boxes.
3. In denying the protestant-appellant's motion for postponement by the telegram to be able to secure
the presence of a very important witness, sent on July 21, 1960, after receipt of the order of July 20, 1960,
wherein the hearing was set for the next day, July 21, 1960, with a warning as set forth in said order.
4. In denying the motion for reconsideration and new trial filed by the herein protestant-appellant.
The appeal is not meritorious. Contrary to protestant-appellant's allegation, the dismissal of the protest was not
predicated on the strict observance of Section 177 of the Revised Election Code providing for a period of 6 months
within which a decision in a protest involving a municipal office has to be decided. As a matter of fact, it must be
because of its awareness of the directory nature of such provision that the court did not dismiss the protest when
the six-month period from the date of the filing thereof (on December 29, 1959) had elapsed, but only after the
protestant-appellant failed to appear and adduce evidence at the hearing of July 21, 1960. The dismissal, clearly,
was for failure of said protestant to substantiate the allegations of the protest and not merely because of the lapse
of the 6-month period.
It can not also be seriously contended that the lower court erred in denying protestant's telegraphic motion for
postponement, and in considering the case submitted for decision before the ballot boxes in Precincts Nos. 10, 10-
A, 10-B and 6-A were actually opened and the ballots contained therein recounted.
In the first place, considering the charges proferred by protestant in connection with the various precincts
specified in the protest, the testimony of the expert witness would not be of such materiality as to warrant a
postponement of the trial.
Protestant charged, with respect to Precinct No. 2, that the signatures of the election inspectors were forged and
that no less than 50 votes validly cast in his favor were allegedly read for the protestee. While the testimony of the
expert would be necessary to prove the forgery, the ballots themselves would be the best evidence to prove the
charge that the ballots in favor of the protestant were read for the protestee.
With respect to Precinct No. 3-C, it was claimed that the ballot box was removed from the Municipal Treasurer's
office and was brought to the session hall of the municipal building where the same was emptied and its contents
tampered with. This, again, could be established by proofs, other than the testimony of the expert, showing that
such illegal acts were done.
As to Precinct No. 4, protestant charged that there was a mixed-up of the ballots thus enabling the election
inspector to tamper the true results of the voting. This charge could also be proven by evidence of such irregularity
or disorder, and not by an examination of the writings on the ballots.
In Precinct No. 4-A, the Board of Inspectors allegedly failed to read in favor of protestant 40 ballots found hidden
underneath the ballot box. The charge could properly be substantiated by a recounting of the ballots, not an
examination thereof.
In connection with Precincts Nos. 10, 10-A and 10-B, located in the private property of the Consolidated Mines,
Inc., it was charged that the chief of the mining police force, a certain Delfin Fadera, terrorized and intimidated the
voters into voting for the protestee, and that during the counting, ballots validly cast for the protestant were not
read. These charges could be established by testimonies and other proofs of the existence of the alleged terrorism,
and by a recounting of the ballots, but not by the testimony of a handwriting expert.

As to Precinct No. 6-A, wherein the Chairman of the Board of Inspectors allegedly took the ballot box to her
residence where the contents thereof were removed and tampered with, such alleged illegal act could have been
proven by other evidence. As a matter of fact, protestant already submitted a photograph purportedly showing the
serious and anomalous situation in this precinct. Certainly, the testimony of the expert witness would not be
necessary to establish this point.
Secondly, considering that the court actually had dealt with the protestant with leniency in the sense that the
latter was given more than enough opportunity to prove his charges, and had even given him warning that no
further postponement would be granted, the denial of the motion for the transfer of the hearing set for July 21,
1960, is in order.
Regarding the order of the court denying protestant's motion for new trial, taking into account the fact that only
the allegation of the existence of terrorism in Precincts Nos. 10, 10-A, 10-B and 6-A remains to be substantiated,
and evidence of the genuineness of the handwriting on the disputed ballot, as we have previously said, would not
be necessary to prove the same, such order is justified.
WHEREFORE, the decision and order of the lower court appealed from are hereby affirmed, with costs against the
protestant-appellant. So ordered.

G.R. No. L-21881 October 3, 1924

E. MACIA & CO., importers and exporters, plaintiff-appellant,
vs.
THE CHINA FIRE INSURANCE & CO., LTD., THE YANGTSZE INSURANCE ASSOCIATION, LTD., and THE STATE
ASSURANCE CO., LTD., defendants-appellees.
Schwarzkopf & Ohnick, Ramon Sotelo and Macario M. Peralta for appellant.
Fisher, DeWitt, Perkins & Brady and John R. McFie, Jr., for appellees.

OSTRAND, J.:
It appears from the record that during the period from September, 1918, to February, 1919, the plaintiff
corporation applied for and obtained the following policies of insurance against loss by fire in its mercantile
establishment in Manila:
(a) Two policies with the China Fire Insurance & Co., Ltd., one dated September 16, 1918, for the sum of P12,000
and the other dated March 21, 1919, for P15,000; (b) with the Yangtsze Fire Association, Ltd., dated February 3,
1919, for the sum of P10,000; and (c) one with the State Assurance Co., Ltd., dated February 3, 1919, for P8,000.
The firm of Warner, Barnes & Co., Ltd., was the agent in the Philippine for all of the insurance companies
mentioned and the policies were obtained through that firm.
On March 25, 1919, while the policies were still in force, a fire occurred in the plaintiff's place of business as a
result of which the insured property was more or less damaged and partly destroyed. Claim was made upon the
agent, Warner, Barnes & Co., Ltd., for the damages but no agreement as to the amount of the loss could be
reached and on April 7, 1919, Warner, Barnes & Co., Ltd., acting in its capacity as agent for the insurance
companies, rejected the claim of the plaintiff. Thereafter and on June 14, 1919, the plaintiff instituted an action
upon the various insurance policies above mentioned against Warner, Barnes & Co., Ltd., in its capacity as agent
for the insurance companies. Judgment was rendered by the trial court in favor of the plaintiff and against Warner,
Barnes & Co., Ltd., as agent and the case was appealed to this court, where it was given the number R. G. 16492,
and where the decision of the lower court was reversed and the complaint dismissed on the ground that the agent
of the insurance companies was not the real party in interest and that the action should have been brought against
1
the insurance companies. The decision was promulgated on March 9, 1922, and may be found in 43 Phil., 155.
Thereafter, and on September 30, 1922, the plaintiff instituted the present action against the defendant insurance
companies based upon the same facts and cause of action alleged in its complaint against Warner, Barnes & Co.,
Ltd., in case R. G. No. 16492. The defendants interposed a general denial and set up several special defenses to the
effect:
(a) That plaintiff had failed and refused to render to defendants a claim in writing specifying the articles
and items of property damaged or destroyed and of the alleged amount of the loss or damage sustained;
(b) that the plaintiff had made a grossly fraudulent claim of alleged damage sustained in direct violation of
the stipulations in the policies of insurance; and (c) that plaintiff had not instituted action or suit against
these defendants within the time required by the aforesaid policies of insurance held by plaintiff; viz:
within three moths after its claim of loss had been finally rejected, viz: April 7, 1919.
The court below sustained the special defense last mentioned and gave judgment for the defendants dismissing
the complaint, with the costs, whereupon this appeal was taken by the plaintiff.
The assignments of error raise only one question, namely, whether the court below erred in holding that the
action was barred by not having been brought within the time prescribed by the policies and insurance. In this
connection the appellant argues that inasmuch as arbitration was made a condition precedent to the bringing of
an action on the insurance policies, and no arbitration having been had, the three months limitation provided for
in the policies has not as yet commenced. Neither the policies nor the evidence referred to in paragraph VIII of the
stipulation of facts are before us and as the pleadings, stipulation of the parties and decision of the trial court
contain no specified reference to the arbitration clause, we are not in position to discuss this point. We have only
the finding of the trial court that the action was not brought within the period of limitation provided for in the
policies.
But the appellant maintains that assuming that the contractual limitation began to run on April 7, 1919, the date
on which the appellant's claim for damages was rejected, it is still entitled to the benefit of the provisions of
section 49 of the Code of Civil Procedure, which reads as follows:
If, in an action commenced, or attempted to be commenced, in due time, a judgment for the plaintiff be
reversed, or if the plaintiff fail otherwise than upon the merits, and the time limited for the

commencement of such action has, at the date of such reversal or failure, expired, the plaintiff, or, if he
die and the cause of action survive, his representatives may commence a new action within one year after
such date, and this provision shall apply to any claim asserted in any pleading by a defendant.
The appellant's argument is that in the first action brought "the plaintiff failed otherwise than upon the merits"
and that the present action having been brought within a year from the dismissal of the first, it has been brought
in time.
An overwhelming weight of authority is against the appellant's contention. The leading case on the subject is that
of Riddlesbarger vs. Hartford Fire Ins. Co. (7 Wall., 386), in which the plaintiff had insured his house in Kansas City,
Mo., for P10,000 with defendant company on June 1, 1861. The house was destroyed by fire in March, 1862; in
June, 1862, plaintiff bought suit against defendant in the Court of Common Pleas, Jackson County, Mo.; and
defendant insurance company appeared and answered to the merits. When the cause was carried over to the June
term, 1864, plaintiff dismissed his action, but within one year of such dismissal instituted a second action against
defendant in the Court of Common Pleas, County of St. Louis, Mo., from whence the cause was transferred to the
Circuit Court of the United States. The policy within twelve months after the loss had occurred, which condition
defendant company pleaded in bar of the second action; to this plaintiff pleaded the statute of Missouri which
provided that if, any action commenced within the period mentioned (Period of Limitations) the plaintiff shall
"suffer a nonsuit," he may commence a new action within one year afterwards; defendant demurred to this
replication. The Supreme Court of the United States said:
The Statute of Missouri, which allows a party who "suffers a nonsuit" in an action to bring a new action
for the same cause within one year afterwards, does not affect the rights of the parties in this case. In the
first place, the statute only applies to cases of involuntary nonsuit, not to cases where the plaintiff of his
own motion dismisses the miscarriage, as from defects in the proofs, or in the parties or pleadings, and
like particulars. In the second place, the rights of the parties flow from the contract. That relieves them
from the general limitations of the statute, and as a consequence, from its exceptions also.
The action mentioned, which must be commenced within the twelve months, is the one which is
prosecuted to judgment. The failure of a previous action from any action shall not alter the case. The
contract declares that an action shall not be sustained, unless such action, not some previous action, shall
be commenced within the period designated. It makes no provision for any exception in the event of the
failure of an action commenced, and the court cannot insert one without changing the contract.
The question presented in this case, though new to this court, are not new to the country. The validity of
the limitation stipulated in conditions similar to the one in the case at bar, has been elaborately
considered in the highest courts of several of the States, and has been sustained in all of them except in
the Supreme Court of Indiana, Eagle Ins. Co. vs. Lafayette Ins. Co., 9 Ind., 443, which followed an adverse
decision of Mr. Justice McLean, in the Circuit Court of the district of that State. French vs. Lafayette Ins.
Co., 5 McLean, 462. Its validity has also been sustained by Mr. Justice Nelson, in the Circuit Court for the
district of Connecticut. Gray vs. Hartford Ins. Co., 1 Blatchf., 280. 1awph!l.net
We have no doubt of its validity. The commencement, therefore, of the present action within the period
designated, was a condition essential to the plaintiff's recovery; and this condition was not affected by the
fact that the action, which was dismissed, had been commenced within that period.
The rule laid down in the Riddlesbarger case has been followed by practically all courts in the United States. (Leigh
Ellis & Co. vs. Davis, 260, U. S., 682; Harvey vs. Fidelity, etc., Co., 200 Fed., 925; 119 C. C. A., 221; Spinns vs. Mutual
Reserve, etc., 137 Fed., 169; Vette vs. Clinton Fire Ins. Co., 30 Fed., 668; O'Laughlin vs. Union etc. Co., 11 Fed., 280;
David vs. Phoenix Ins. Co., 6 Fed. Cas. No. 3607; Gray vs. Hartford F. Ins. Co., 6 Fed. Cas. No. 3374; Provident Fund
Soc. vs. Howell, 110 Ala., 508; Gill vs. Manhattan Ins. Co., 11 Ariz., 232; Woodbury, etc., Assn. vs. Charter Oak Ins.
Co., 31 Conn., 517; Brooks vs. Ga. Home Ins. co., 99 Ga., 116; Hartford Fire Ins. Co. vs. Amos, 98 Ga., 533;
Underwriters Agency vs. Sutherlin, 55 Ga., 266; Brown vs. Savannah Mut. Ins. Co., 24 Ga., 97; Andes Ins. Co. vs.
Fish, 71 Ill., 620; Peoria M. & F. Ins. Co. vs. Whitehill, 25 Ill., 466; Merchants' Life Ins. Co., 96 Ill., App., 355; Richter
vs. Michigan, etc. Ins. Co., 66 Ill. App., 606; Stephens vs. Phoenix Assur. Co., 85 Ill. App., 671; Fireman's Fund Ins.
Co. vs. Western Refrigerator Co., 55 Ill. App., 329; Hekla Ins. Co. vs. Schroeder, 9 Ill. App., 472; Caywood vs.
Supreme Lodge, 171 Ind., 410; Wilhelmi vs. Des Moines Ins. Co., 103 Iowa, 532; Harrison vs. Hartford F. Ins. Co.,
102 Iowa, 112; Moore vs. Dayton Ins. Co., 72 Iowa, 414; Stout vs. City Fire Ins. Co., 12 Iowa, 371; State Ins. Co. vs.
Stoffels, 48 Kan., 205; Loe vs. Union, etc., Ins. Co., 22 Ky. Law, 1712; Smith vs. Herd, 110 Ky., 56; Carraway vs.
Merchant's Mut. Ins. Co., 26 La. Ann., 298; Lewis vs. Metropolitan Life Ins. Co., 180; Mass., 317; Carlson vs.
Metropolitan Life Ins. Co., 172 Mass., 142; Barry, etc. Lumber Co. vs. Citizens' Ins. Co., 136 Mich., 42; Peck vs.
German F. Ins. Co., 102 Mich., 52; Steele vs. German F. Ins. Co., 92 Mich., 81; Ghio vs. Western Assur. Co., 65 Miss.,
532; Glass vs. Walker, 66 Mo., 32; Kein vs. Home Mutual, etc., Ins. Co., 42 Mo., 38; Maynard vs. U. S. Health, etc.,
Ins. Co., 76 N. H., 275; Tasker vs. Kenton Ins. Co., 58 N. H., 465; Patrick vs. Farmers' Ins. Co., 43 N. H., 621; Sullivan
vs. Providential Ins. Co., 172 N. Y., 482; Roach vs. New York, etc., Ins. Co., 30 N. Y., 546; Ripley vs. Aetna Ins. Co., 39
N. T., 136; Williams vs. Philadelphia Fire Assn., 119 App. Div. [N. Y.], 573; Heilig vs. Aetna L. Ins. Co., 152 N. C., 358;
Lowe vs. U. S. Mut. Acc. Assn., 155 N. C., 18; Appel vs. Cooper Ins. Co., 76 Ohio State, 52; Northwestern Ins. Co. vs.
Phoenix Oil, etc., Co., 31 Pa., 448; Warner vs. Ins. Co. of North America, 1 Walk., 315; Edwards vs. Metropolitan L.
Ins. Co., 5 Kulp, 259; Brown vs. Hartford Ins. Co., 5 R. I., 394; Suggs vs. Travelers' Ins. Co., 71 Tex., 579; Merchants'

Mutual Ins. Co. vs. Lacroix, 35 Tex., 249; Schlitz vs. Lowell Mut. Fire Ins. Co., 119 Atl., 516; Morrill vs. New England
F. Ins. Co., 71 Vt., 281; Wilson vs. Aetna Ins. Co., 27 Vt., 99; Virginia F. & M. Ins. Co. vs. Wells, 83 Va., 736; Virginia F.
& M. Ins. Co. vs. Aiken, 82 Va., 424; McFarland vs. Aetna F. & M. Ins. Co., 6 W. Va., 437; Griem vs. Fidelity, etc., Co.,
99 Wis., 530.)
The opposite view is taken in the case of Omaha Fire Insurance Co. vs. Drennan (56 Neb., 623) and Miller vs. State
Ins. Co. of Des Moines (54 Neb., 121). There is also an early Indiana case, Eagle Ins. Co. vs. Lafayette Ins. Co. (9 Ind.,
443), which supports the same view, but which was overruled by the later cases of Insurance Co. of North
American vs. Brim (111 Ind., 281) and Caywood vs. Supreme Lodge (171 Ind., 410).
We have also found two early Ohio cases which tend to sustain the appellant's contention. In the first of these
cases, that of Madison Ins. Co. vs. Fellowes ([1856], 1 Disney, 217), the Supreme Court of Cincinnati held that
where a fire policy contains a condition that "all claims under this policy are barred unless prosecuted within one
year from the date of the loss," that condition is performed if within a year a suit is brought in good faith for the
purpose of enforcing the claim, and if the assured for good cause abandons that suit and promptly brings another,
although after the year had elapsed, he is not barred of his right to recover. The second case, Bates vs. Sandusky,
etc., Ry. Co. (12 Ohio St. Rep., 620), was decided in 1861 and applied the rule followed in Madison Ins. Co., vs.
Fellowes, supra, to a claim against a common carrier. Both cases are earlier than the case of Riddlesbarger vs.
Hartford Fire Ins. Co., supra, and both differ from the present case in that both the first and second actions were
brought against the same defendants. Ohio seems now to have adopted the doctrine laid down in the
Riddlesbarger case (Appel vs. Cooper Ins. Co., supra).
Many of the cases above cited relate only to the general proposition that reasonable contractual limitations of
actions will prevail over statutory limitations and do not specifically deal with exceptions to the statutory
limitations such as the one found in section 49 of the Code of Civil Procedure. But it seems obvious that if a
contractual limitation prevails over the statutory limitation it must also prevail over the exceptions to the statutory
limitations; the contract necessarily supersedes the statute and the limitation is in all its phases governed entirely
by the former.
It has been so held in the Riddlesbarger case and in a very large number of other cases. In the case of McElroy vs.
Continental Insurance Co. of New York (48 Kan., 200), the plaintiff, after dismissing his first action brought within
the time specified in the insurance policy, instituted a second action within the time allowed by section 23 of the
Code of Civil Procedure of Kansas, which is almost identical with out section 49 and which reads as follows:
. . . "If any action be commenced within due time, and a judgment thereon for the plaintiff be reversed, or
if the plaintiff fail in such action otherwise than upon the merits, and the time limited for the same shall
have expired, the plaintiff, or, if he die and the cause of action within one year after the reversal or
failure." . . .
The demurrer of defendant insurance company to plaintiff's second complaint was sustained. In holding that the
above quoted Code provision had no application whatsoever to the facts in that case, the court said:
. . . While it is admitted that parties to a contract may, by express agreement, fix a limitation of time
within which any action for its breach shall be commenced, even if the time fixed is less than that allowed
by statute, and that in such cases of agreement the statutory limitations do not apply, yet it is insisted
that the exceptions to the statutory limitations do apply in such cases. This seems to us to be an
unreasonable contention, and not supported by any authority to which our attention has been called. The
case of Riddlesbarger vs. Hartford Fire Insurance Co., 7 Wall., 386, says "that the rights of the parties flow
from the contract. That relieves them from the general limitations of the statute, and, as a consequence,
from its exceptions also." In the case of Wilkinson vs. Fire Insurance Co., 72 N. Y., 499, the policy sued
upon contained a provision that no suit for the recovery of any loss thereunder shall be sustainable in any
court of law or chancery, unless it shall be commenced within 12 months after the loss occurs, any statute
of limitation to the contrary. The action was commenced more than two years after the loss occurred. To
avoid the limitation contained in the policy, the plaintiff alleged that the insurance company had been
enjoined by a court of competent jurisdiction from paying, and a third party, who claimed to own the
policy, from receiving the amount of the loss. Section 105 of the Code of New York contains a provision
saving the rights of parties stayed by injunction. The court says: "It is to be observed that this claim is not
justified by the terms of the contract. The provision fixing the time within which an action must be
brought is distinct, definite and unqualified. The contract contains no saving of the action within the time
limited by the contract was waived by the defendant, or was excused and made impossible by the act of
God or of the law, the remedy of the plaintiff has been lost." The court further says, in commenting upon
saving the rights stayed by an injunction: "This provision does not aid the plaintiff. The exception has no
application where a limitation is prescribed by the contract of the parties, but only applies to cases
governed by the limitations in the general law:" citing the case in 7 Wall., and others. The last case is
affirmed in Arthur vs. Homestead Insurance Co., 78 N. Y., 462, the facts being similar to the one we are
now considering. In the case of Wilson vs. Aetna Insurance Co., 27 Vt., 99, the policy contained the one-
year limitation. The loss occurred on the 6th day of May, 1849. On the 1st day of September, 1849, the
plaintiff commenced an action on the policy to recover the loss. On the second Tuesday of March, 1851,
the plaintiff was obliged, without fault on his part, to submit to a nonsuit. On the 20th of August he

commenced this suit. The court says: "A stipulation in a policy of insurance that no action shall be
sustainable unless commenced within twelve months after the loss, is binding, and bars a suit
commenced after that time, even though a prior suit was commenced within twelve months, and failed
without fault on the part of the plaintiff." REDFIELD C. J., commenting on such a stipulation, remarks:
"This stipulation is too explicit to allow of any escape from its import by construction. It is not that an
action shall be commenced within twelve months, but that no recovery shall be had unless such action is
commenced within twelve months after the loss. Such action can only signify the action in which recovery
is sought. That must be this action, and all actions in which a recovery is claimed, and there is no provision
for any exception on account of the failure of any such action. And without such a provision in the
contract the court cannot import one without subjecting the contract to virtual disregard at the mere will
or caprice of the parties. No court of law could relieve the party from the performance of a condition of
this nature, unless it be on proof of the fraud of the other party. If the party could have any relief in such
case, which is questionable too questionable to be hopeful it would not be here." To the same effect
is the case of Brown vs. Insurance Co., 7 R. I., 301. The court says: "The statute of limitations has no
application in any of its provisions to the clause in question, and, indeed, the only argument against the
clause is, that it sets up for the contract a different law of limitation from that which the law imposes. We
have held that the contracting parties have a right to do this in reference to a policy of fire insurance, and
we know of no right that we have, from a consideration of general equity, to import into their contract
qualifying terms which they have not seen fit to adopt." It seems to us that if it be conceded, as is has
been by many court of last resort, including the Supreme Court of the United States, that the parties to an
insurance contract can stipulate as to the time within which an action shall be brought to recover a loss,
independent of the limitations prescribed by the statute, then that stipulation alone must govern;
because it is both unreasonable and illogical to say that the general limitations, that are almost universal
in their operation upon all causes of action, cannot control the conventional limitation fixed in the policy,
but that the exceptions to the general limitations prescribed by the statute, that are contingent,
incidental, and entirely dependent upon the general limitations, do apply to and control the stipulation of
the parties. We are of opinion that the trial court ruled rightly in sustaining the demurrer to the petition,
and recommend that the judgment be affirmed.
In the case of Harrison vs. Hartford Fire Ins. Co. (102 Iowa, 112), after plaintiff's first case had been dismissed as
premature and a second suit was brought within the time fixed in the saving clauses of section 2851, Iowa Code,
but after the time specified in the insurance policy, the court said:
The policy in suit contained this among other provisions: "No suit or action on this policy, for the recovery
of any claim, shall be sustainable in any court of law or equity until after full compliance by the insured
with all the foregoing requirements, nor unless commenced within twelve months next after the fire."
Defendants claims that this provision is a bar to plaintiff's action. It will be noticed that this action was
commenced 2 years, 9 months, and 21 days after the fire, and more than 2 years and six months after the
90 days in which plaintiff must have given notice and proofs of loss. Such a stipulation as that contained in
this policy is valid in every state in the Union save Indiana. See Carter vs. Insurance Co., 12 Iowa, 287; Vore
vs. Insurance Co., 76 Iowa, 548, 41 N. W. Rep., 309; Moore vs. Insurance Co., 72 Iowa, 414, 34 N. W. Rep.,
183; Housinkveld vs. Insurance Co., 95 Iowa, 504, 64 N. W. Rep., 594; Riddlesbarger vs. Insurance Co., 7
Wall., 391; Insurance Co. vs. Whitehill, 25 Ill., 382; and cases cited in 2 Wood, Insurance, sec. 460. There is
no claim that this condition has been waived; hence plaintiff's action is barred unless there be something
in his claim that section 2537 of the Code applies. That section is found in chapter 2 of title 17 of the Code
of 1873, relating to limitation of actions, and is as follows: "If after the commencement of an action the
plaintiff fail therein for any cause except negligence in its prosecution, and a new suit be brought within
six months thereafter, the second suit shall for the purpose herein contemplated be a continuation of the
first." Statutes similar to this exist in many of the states, and the question has frequently arisen whether
such a statute is applicable to a contract limitation such as the one in the policy in suit. The general tenor
of the authorities is to the effect that it is not, for the reasons that the rights of the parties arise out of
contract which relieves them from the general limitations of the statute, and as a consequence from its
exceptions also. See Riddlesbarger vs. Insurance Co., supra; Arthur vs. Insurance Co., 78 N. Y., 462;
Association vs. Norris (Pa. sup.) 8 Atl. Rep., 638; McElroy vs. Insurance Co. (Kan. sup.) 29 Pac. Rep., 478;
McIntyre vs. Insurance Co. (Mich.) 17 N. W. Rep., 614; Insurance Co. vs. Hooking (Pa. sup.) 18 Atl. Rep.,
614; Wilson vs. Insurance Co., 27 Vt., 969; May, Insurance, sec. 483.
For the reason stated and upon the authorities cited, we are constrained to hold that the failure of the plaintiff to
sue the defendant insurance companies within the time limited in the insurance policies is fatal to his action and
that the question is in nowise affected by section 49 of the Code of Civil Procedure. To so hold may bear harshly on
the plaintiff in this particular case, but in matters of insurance law the importance of securing uniformity in judicial
interpretation is such that we feel bound to follow the rule adopted by practically every court in the land. It may be
observed that the question as to the reasonableness of a three months contractual limitation is not raised in the
present case.
The judgment appealed from is affirmed, without costs. So ordered.

G.R. No. L-15127 May 30, 1961

EMETERIO CUI, plaintiff-appellant,
vs.
ARELLANO UNIVERSITY, defendant-appellee.
G.A.S. Sipin, Jr., for plaintiff-appellant.
E. Voltaire Garcia for defendant-appellee.
CONCEPCION, J.:
Appeal by plaintiff Emeterio Cui from a decision of the Court of First Instance of Manila, absolving defendant
Arellano University from plaintiff's complaint, with costs against the plaintiff, and dismissing defendant's counter
claim, for insufficiency of proof thereon.
In the language of the decision appealed from:
The essential facts of this case are short and undisputed. As established by the agreement of facts Exhibits
X and by the respective oral and documentary evidence introduced by the parties, it appears conclusive
that plaintiff, before the school year 1948-1949 took up preparatory law course in the defendant
University. After finishing his preparatory law course plaintiff enrolled in the College of Law of the
defendant from the school year 1948-1949. Plaintiff finished his law studies in the defendant university up
to and including the first semester of the fourth year. During all the school years in which plaintiff was
studying law in defendant law college, Francisco R. Capistrano, brother of the mother of plaintiff, was the
dean of the College of Law and legal counsel of the defendant university. Plaintiff enrolled for the last
semester of his law studies in the defendant university but failed to pay his tuition fees because his uncle
Dean Francisco R. Capistrano having severed his connection with defendant and having accepted the
deanship and chancellorship of the College of Law of Abad Santos University, plaintiff left the defendant's
law college and enrolled for the last semester of his fourth year law in the college of law of the Abad
Santos University graduating from the college of law of the latter university. Plaintiff, during all the time
he was studying law in defendant university was awarded scholarship grants, for scholastic merit, so that
his semestral tuition fees were returned to him after the ends of semester and when his scholarship
grants were awarded to him. The whole amount of tuition fees paid by plaintiff to defendant and
refunded to him by the latter from the first semester up to and including the first semester of his last year
in the college of law or the fourth year, is in total P1,033.87. After graduating in law from Abad Santos
University he applied to take the bar examination. To secure permission to take the bar he needed the
transcripts of his records in defendant Arellano University. Plaintiff petitioned the latter to issue to him
the needed transcripts. The defendant refused until after he had paid back the P1,033 87 which
defendant refunded to him as above stated. As he could not take the bar examination without those
transcripts, plaintiff paid to defendant the said sum under protest. This is the sum which plaintiff seeks to
recover from defendant in this case.
Before defendant awarded to plaintiff the scholarship grants as above stated, he was made to sign the
following contract covenant and agreement:
"In consideration of the scholarship granted to me by the University, I hereby waive my right to transfer
to another school without having refunded to the University (defendant) the equivalent of my scholarship
cash.
(Sgd.) Emeterio Cui".
It is admitted that, on August 16, 1949, the Director of Private Schools issued Memorandum No. 38, series of 1949,
on the subject of "Scholarship," addressed to "All heads of private schools, colleges and universities," reading:
1. School catalogs and prospectuses submitted to this, Bureau show that some schools offer full or partial
scholarships to deserving students for excellence in scholarship or for leadership in extra-curricular
activities. Such inducements to poor but gifted students should be encouraged. But to stipulate the
condition that such scholarships are good only if the students concerned continue in the same school
nullifies the principle of merit in the award of these scholarships.
2. When students are given full or partial scholarships, it is understood that such scholarships are merited
and earned. The amount in tuition and other fees corresponding to these scholarships should not be
subsequently charged to the recipient students when they decide to quit school or to transfer to another
institution. Scholarships should not be offered merely to attract and keep students in a school.
3. Several complaints have actually been received from students who have enjoyed scholarships, full or
partial, to the effect that they could not transfer to other schools since their credentials would not be

released unless they would pay the fees corresponding to the period of the scholarships. Where the
Bureau believes that the right of the student to transfer is being denied on this ground, it reserves the
right to authorize such transfer.
that defendant herein received a copy of this memorandum; that plaintiff asked the Bureau of Private Schools to
pass upon the issue on his right to secure the transcript of his record in defendant University, without being
required to refund the sum of P1,033.87; that the Bureau of Private Schools upheld the position taken by the
plaintiff and so advised the defendant; and that, this notwithstanding, the latter refused to issue said transcript of
records, unless said refund were made, and even recommended to said Bureau that it issue a written order
directing the defendant to release said transcript of record, "so that the case may be presented to the court for
judicial action." As above stated, plaintiff was, accordingly, constrained to pay, and did pay under protest, said sum
of P1,033.87, in order that he could take the bar examination in 1953. Subsequently, he brought this action for the
recovery of said amount, aside from P2,000 as moral damages, P500 as exemplary damages, P2,000 as attorney's
fees, and P500 as expenses of litigation.
In its answer, defendant reiterated the stand it took, vis-a-vis the Bureau of Private Schools, namely, that the
provisions of its contract with plaintiff are valid and binding and that the memorandum above-referred to is null
and void. It, likewise, set up a counterclaim for P10,000.00 as damages, and P3,000 as attorney's fees.
The issue in this case is whether the above quoted provision of the contract between plaintiff and the defendant,
whereby the former waived his right to transfer to another school without refunding to the latter the equivalent of
his scholarships in cash, is valid or not. The lower court resolved this question in the affirmative, upon the ground
that the aforementioned memorandum of the Director of Private Schools is not a law; that the provisions thereof
are advisory, not mandatory in nature; and that, although the contractual provision "may be unethical, yet it was
more unethical for plaintiff to quit studying with the defendant without good reasons and simply because he
wanted to follow the example of his uncle." Moreover, defendant maintains in its brief that the aforementioned
memorandum of the Director of Private Schools is null and void because said officer had no authority to issue it,
and because it had been neither approved by the corresponding department head nor published in the official
gazette.
We do not deem it necessary or advisable to consider as the lower court did, the question whether plaintiff had
sufficient reasons or not to transfer from defendant University to the Abad Santos University. The nature of the
issue before us, and its far reaching effects, transcend personal equations and demand a determination of the case
from a high impersonal plane. Neither do we deem it essential to pass upon the validity of said Memorandum No.
38, for, regardless of the same, we are of the opinion that the stipulation in question is contrary to public policy
and, hence, null and void. The aforesaid memorandum merely incorporates a sound principle of public policy. As
the Director of Private Schools correctly pointed, out in his letter, Exhibit B, to the defendant,
There is one more point that merits refutation and that is whether or not the contract entered into
between Cui and Arellano University on September 10, 1951 was void as against public policy. In the case
of Zeigel vs. Illinois Trust and Savings Bank, 245 Ill. 180, 19 Ann. Case 127, the court said: 'In determining a
public policy of the state, courts are limited to a consideration of the Constitution, the judicial decisions,
the statutes, and the practice of government officers.' It might take more than a government bureau or
office to lay down or establish a public policy, as alleged in your communication, but courts consider the
practices of government officials as one of the four factors in determining a public policy of the state. It
has been consistently held in America that under the principles relating to the doctrine of public policy, as
applied to the law of contracts, courts of justice will not recognize or uphold a transaction which its
object, operation, or tendency is calculated to be prejudicial to the public welfare, to sound morality or to
civic honesty (Ritter vs. Mutual Life Ins. Co., 169 U.S. 139; Heding vs. Gallaghere 64 L.R.A. 811; Veazy vs.
Allen, 173 N.Y. 359). If Arellano University understood clearly the real essence of scholarships and the
motives which prompted this office to issue Memorandum No. 38, s. 1949, it should have not entered
into a contract of waiver with Cui on September 10, 1951, which is a direct violation of our Memorandum
and an open challenge to the authority of the Director of Private Schools because the contract was
repugnant to sound morality and civic honesty. And finally, in Gabriel vs. Monte de Piedad, Off. Gazette
Supp. Dec. 6, 1941, p. 67 we read: 'In order to declare a contract void as against public policy, a court
must find that the contract as to consideration or the thing to be done, contravenes some established
interest of society, or is inconsistent with sound policy and good morals or tends clearly to undermine the
security of individual rights. The policy enunciated in Memorandum No. 38, s. 1949 is sound policy.
Scholarship are awarded in recognition of merit not to keep outstanding students in school to bolster its
prestige. In the understanding of that university scholarships award is a business scheme designed to
increase the business potential of an education institution. Thus conceived it is not only inconsistent with
sound policy but also good morals. But what is morals? Manresa has this definition. It is good customs;
those generally accepted principles of morality which have received some kind of social and practical
confirmation. The practice of awarding scholarships to attract students and keep them in school is not
good customs nor has it received some kind of social and practical confirmation except in some private
institutions as in Arellano University. The University of the Philippines which implements Section 5 of
Article XIV of the Constitution with reference to the giving of free scholarships to gifted children, does not
require scholars to reimburse the corresponding value of the scholarships if they transfer to other
schools. So also with the leading colleges and universities of the United States after which our educational

practices or policies are patterned. In these institutions scholarships are granted not to attract and to
keep brilliant students in school for their propaganda mine but to reward merit or help gifted students in
whom society has an established interest or a first lien. (Emphasis supplied.)
WHEREFORE, the decision appealed from is hereby reversed and another one shall be entered sentencing the
defendant to pay to the plaintiff the sum of P1,033.87, with interest thereon at the legal rate from September 1,
1954, date of the institution of this case, as well as the costs, and dismissing defendant's counterclaim. It is so
ordered.

G.R. No. L-9451 March 29, 1957

OLAF N. BORLOUGH, petitioner,
vs.
FORTUNE ENTERPRISES, INC. and THE HONORABLE COURT OF APPEALS (2nd DIVISION), respondents.
Arturo M. del Rosario and Alfredo G. Fernando for petitioner.
Laurel & Salonga for respondents.
LABRADOR, J.:
Appeal by certiorari against a judgment of the Court of Appeals, Second Division. The facts of the case have been
briefly stated as follows:
On March 8, 1952, the United Car Exchange sold to the Fortune Enterprises, Inc., the following described
car
Make: Chevrolet (1947); Plate No. 34-1465
Type : Sedan; Motor No. EAA-20834 (Exhibit D).
The same car was sold by the Fortune Enterprises, Inc. to one Salvador Aguinaldo, and for not having paid
it in full, the latter executed on the same date a promissory note in the amount of P2,400 payable in 20
installments including interest thereon at 12 per cent per annum, the last of which installments fell due
on January 9, 1953 (Exhibit "A").
To secure the payment of this note, Aguinaldo executed a deed of chattel mortgage over said car. The
deed was duly registered in the office of the Register of Deeds of Manila at 1:12 p.m. on March 11, 1952
(Exhibit "B"). As the buyer-mortgagor defaulted in the payment of the installments due, counsel for
Fortune Enterprises Inc. addressed a letter on May 16, 1952 (Exhibit "C"), requesting him to make the
necessary payment and to keep his account up to date, to that no court action would be resorted to.
It further appears that the above-described car found its way again into the United Car Exchange which
sold the same in cash for P4,000 to one O. N. Borlough on April 6, 1952. Accordingly, he registered it on
the following day with the Motor Vehicles Office. (Decision, Court of Appeal.).
It also appears from the record that defendant 0. N. Borlough took possession of the vehicle from the time he
purchased it, On July 10, 1952, Fortune Enterprises, Inc. brought action against Salvador Aguinaldo to recover the
balance of the purchase price. Borlough filed a third-party complaint, claiming the vehicle. Thereupon, Fortune
Enterprises, Inc. amended its complaint, including Borlough as a defendant and alleging that he was in connivance
with Salvador Aguinaldo and was unlawfully hiding and concealing the vehicle in order to evade seizure by judicial
process. Borlough answered alleging that he was in legal possession thereof, having purchased it in good faith and
for the full price of P4,000, and that he had a certificate of registration of the vehicle issued by the Motor Vehicles
Office, and he prayed for the dismissal of the complaint, the return of the vehicle and for damages against the
plaintiff.
The vehicle was seized by the sheriff of Manila on August 4, 1952 and was later sold at public auction. The Court of
First Instance rendered judgment in favor of Borlough, and against plaintiff, ordering the latter to pay Borlough the
sum of P4,000, with interest at 6 per cent per annum, from the date of the seizure of the car on August 4, 1952,
and in addition thereto, attorney's fees in the sum of P1,000.
Upon appeal to the Court of Appeals, this court rendered judgment ordering that Emil B. Fajardo pay Borlough
P4,000 plus attorney's fees and that plaintiff pay to Borlough any amount received by it in excess of its credits and
judicial expenses. The reason for the modification of the judgment is that the mortgage was superior, being prior
in point of time, to whatever rights may have been acquired by Borlough by reason of his possession and by the
registration of his title in the Motor Vehicle Office.
The question involved in the appeal in this case is one of law and may be stated thus: As between a prior mortgage
executed over a motor vehicle, registered under the Chattel Mortgage Law only, without annotation thereof in the
Motor Vehicles Office, and a subsequent registration of the vehicle in the Motor Vehicles Office accompanied by
actual possession of the motor vehicle, which should prevail. While the question can be resolved by the general
principles found in the Civil Code and expressly stated in Article 559, there is no need resorting thereto (the
general principles) in view of the express provisions of the Revised Motor Vehicles Law, which expressly and
specifically regulate the registration, sale or transfer and mortgage of motor vehicles. The following provisions of
said law may help decide the legal question now under consideration:
SEC. 5 (c) Reports of motor vehicle sales. On the first day of each month, every dealer in motor vehicles
shall furnish the Chief of the Motor Vehicles Office a true report showing the name and address of each
purchase of a motor vehicle during the previous month and the manufacturer's serial number and motor

number; a brief description of the vehicle, and such other information as the Chief of the Motor Vehicles
Office may require.
SEC. 5 (e) Report of mortgages. Whenever any owner hypothecates or mortgage any motor vehicle as
surety for a debt or other obligation, the creditor or person in whose favor the mortgage is made shall,
within seven days, notify the Chief of the Motor Vehicles Office in writing to the effect, stating the
registration number of the motor vehicle, date of mortgage, names and addresses of both parties, and
such other information as the Chief of the Motor Vehicles Office may require. This notice shall be signed
jointly by the parties to the mortgage.
On termination, cancellation or foreclosure of the mortgage, a similar written notice signed by both
parties, shall be forwarded to the Chief of the Motor Vehicles Office by the owner.
These notice shall be filed by the Chief of the Motor Vehicles Office in the motor records, and in the
absence of more specific information, shall be deemed evidence of the true status of ownership of the
motor vehicle. (Revised Motor Vehicles Law.)
It is to be noted that under section 4 (b) of the Revised Motor Vehicles Law the Chief of the Motor Vehicles Office
is required to enter or record, among other things, transfers of motor vehicles "with a view of making and keeping
the same and each all of them as accessible as possible to and for persons and officers properly interested in the
same," and to "issue such reasonable regulations governing the search and examination of the documents and
records . . . as will be consistent with their availability to the public and their safe and secure prevention."
Two recording laws are here being invoked, one by each contending party the Chattel Mortgage Law (Act No.
1508), by the mortgagor and the Revised Motor Vehicles Law (Act No. 3992), by a purchaser in possession. What
effect did the passenger of the Revised Motor Vehicles Law have on the previous enactment?
The Revised Motor Vehicles Law is a special legislation enacted to "amend and compile the laws relative to motor
vehicles," whereas the Chattel Mortgage Law is a general law covering mortgages of all kinds of personal property.
The former is the latest attempt to assemble and compile the motor vehicle laws of the Philippines, all the earlier
laws on the subject having been found to be very deficient in form as well as in substance (Villar and De Vega,
Revised Motor Vehicles Law, p. 1); it had been designed primarily to control the registration and operation of
motor vehicles (section 2, Act No. 3992).
Counsel for petitioner contends that the passage of the Revised Motor Vehicles Law had the effect of repealing the
Chattel Mortgage Law, as regards registration of motor vehicles and of the recording of transaction affecting the
same. We do not believe that it could have been the intention of the legislature to bring about such a repeal. In the
first place, the provisions of the Revised Motor Vehicles Law on registration are not inconsistent with does of the
Chattel Mortgage Law. In the second place, implied repeals are not favored; implied repeals are permitted only in
cases of clear and positive inconsistency. The first paragraph of section 5 indicates that the provisions of the
Revised Motor Vehicles Law regarding registration and recording of mortgage are not incompatible with a
mortgage under the Chattel Mortgage Law. The section merely requires report to the Motor Vehicles Office of a
mortgage; it does not state that the registration of the mortgage under the Chattel Mortgage Law is to be
dispensed with. We have, therefore, an additional requirements in the Revised Motor Vehicles Law, aside from the
registration of a chattel mortgage, which is to report a mortgage to the Motor Vehicles Office, if the subject of the
mortgage is a motor vehicle; the report merely supplements or complements the registration.
The recording provisions of the Revised Motor Vehicles Law, therefore, are merely complementary to those of the
Chattel Mortgage Law. A mortgage in order to affect third persons should not only be registered in the Chattel
Mortgage Registry, but the same should also be recorded in the motor Vehicles Office as required by section 5 (e)
of the Revised Motor Vehicles Law. And the failure of the respondent mortgage to report the mortgage executed
in its favor had the effect of making said mortgage ineffective against Borlough, who had his purchase registered in
the said Motor Vehicles Office.
On failure to comply with the statute, the transferee's title is rendered invalid as against a subsequent
purchaser from the transferor, who is enabled by such failure of compliance to retain the indicia of
ownership, such as a subsequent purchaser in good faith, or a purchaser from a conditional buyer in
possession; and the lien of a chattel mortgage given by the buyer to secure a purchase money loan never
becomes effective in such case as against an innocent purchaser. (60 Corpus Juris Secundum, p. 171.)
One holding a lien on a motor vehicle, in so far as he can reasonably do so, must protect himself and
others thereafter dealing in good faith by complying and requiring compliance with the provisions of the
laws concerning certificates of title to motor vehicles, such as statutes providing for the notation of liens
or claims against the motor vehicle certificate of title or manufacturer's certificate, or for the issuance to
the mortgagee of a new certificate of ownership. Where the lien holder has satisfied himself that the
existence of the lien is recited in the certificate of title, he has done all that the law contemplates that he
should do, and there is notice to the public of the existing lien, which continues valid until the record
shows that it has been satisfied and a new certificate issued on legal authority, even through another

certificate which does not disclose the lien is procured as the result of false statements made in the
application therefore, and the vehicle is purchased by a bona fide purchaser.
The holder of a lien who is derelict in his duty to comply and require compliance with the statutory
provisions acts at his own peril, and must suffer the consequence of his own negligence; and accordingly,
he is not entitled to the lien as against a subsequent innocent purchaser filed as provided by other chattel
mortgage statutes. The rule is otherwise, however, as against claimants not occupying the position of
innocent purchaser, such as a judgment creditor, or one acquiring title with actual notice of an
unregistered lien, and the statutes do not protect a purchaser holding under registered title if a link in the
title is forgery. Moreover, such statute will not impair vested rights of a mortgage under a chattel
mortgage duly recorded. (60 C.J.S., pp. 181-182.)
The above authorities leave no room for doubt that purchaser O. N. Borlough's right to the vehicle as against the
previous and prior mortgage Fortune Enterprises, Inc., which failed to record its lien in accordance with the
Revised Motor Vehicles Law, should be upheld.
For the foregoing consideration, the judgment of the Court of Appeals is hereby reversed and that of the Court of
First Instance affirmed, with costs against respondent.