THIRD DIVISION

[G.R. No. 104528. January 18, 1996.]

PHILIPPINE NATIONAL BANK, Petitioner, v. OFFICE OF THE PRESIDENT, HOUSING AND

LAND USE REGULATORY BOARD (HLURB), ALFONSO MAGLAYA, ANGELINA MAGLAYA P.
REYES, JORGE C. BERNARDINO, CORAZON DE LEON, VICTORIANO ACAYA, FLORENCIA
CULTURA, MARIA CAMPOS, ERNESTO SARMIENTO, SANTIAGO TAMONAN, APOLONIA
TADIAQUE, SIMEON DE LEON, NATIVIDAD J. CRUZ, NATIVIDAD B. LORESCO, FELICIDAD
GARCIA, ANA ANITA TAN, LUCAS SERVILLION, JOSE NARAWAL, represented by their duly
authorized Attorney-in-Fact, CORAZON DE LEON AND SPOUSES LEOPOLDO AND CARMEN
SEBASTIAN, Respondents. chanroblesvirtuallawlibrary

SYLLABUS

1. ADMINISTRATIVE LAW; OFFICE OF THE PRESIDENT- APPEAL THEREFROM MAY BE TAKEN TO THE
COURT OF A~PEALS; SUPREME COURT MAY TAKE COGNIZANCE THEREOF IN THE INTEREST OF
SPEEDY JUSTICE. — Under Revised Administrative Circular No. 1-95, "appeals from judgments or
final orders of the . . . Office of the President . . . may be taken to the Court of Appeals . . ."
However, in order to hasten the resolution of this case, which was deemed submitted for decision
three years ago, the Court resolved to make an exception to the said Circular in the interest of
speedy justice.

2. CIVIL LAW; GENERALLY, LAWS HAVE NO RRETROACTIVE EFFECT — Pursuant to Article 4 of the
Civil Code," (l)aws shall have no retroactive effect, unless the contrary is provided." cralaw virtua 1aw lib rary

3. ADMINISTRATIVE LAW; PRESIDENTIAL DECREE NO. 957 (THE SUBDIVISION AND CONDOMINIUM
BUYERS’ PROTECTIVE DECREE) WITH RETROACTIVE APPLICATION. — It is obvious and indubitable
that P.D. 957 was intended to cover even those real estate mortgages, like the one at issue here,
executed prior to its enactments, and such intent (as succinctly captured in the preamble) must be
given effect if the laudable purpose of protecting innocent purchasers is to be achieved. While P.D.
957 did not expressly provide for retroactivity in its entirety, yet the same can be plainly inferred
from the unmistakable intent of the law to protect innocent lot buyers from scheming subdivision
developers. As between these small lot buyers and the gigantic financial institutions which the
developers deal with, it is obvious that the law as an instrument of social justice - must favor the
weak. Likewise noteworthy are certain provisions of P.D. 957, which themselves constitute strong
arguments in favor of the retroactivity of P.D. 957 as a whole. These are Sections 20, 21 and 23
thereof, which by their very terms have retroactive effect and will impact upon even those contracts
and transactions entered into prior to P.D. 957’s enactment

4. STATUTORY CONSTRUCTION; INTENT OF THE STATUTE IS THE LAW. — The instent of a statute is
the law. If a statute is valid it is to have effect according to the purpose and intent of the lawmaker.
The intent is the vital part, the essence of the law, and the primary rule of construction is to
ascertain and give effect to the intent. The intention of the legislature in enacting a law is the law
itself, and must be enforced when ascertained; although it may not be consistent with the strict letter
of the statute. Courts will not follow the letter of a statute when it leads away from the true intent
and purpose of the legislature and to conclusions inconsistent with the general purpose of the act.
Intent is the spirit which gives life to a legislative enactment. In construing statutes the proper
course is to start out and follow the true intent of the legislature and to adopt that sense which
harmonizes best with the context and promotes in the fullest manner the apparent policy and objects
of the legislature. (Sutherland, in his well-known treatise on Statutory Construction [quoted with
approval by this Court in an old case of consequence, Ongsiako v. Gamboa]).

5. CONSTITUTIONAL LAW; CONSTITUTION, NON-IMPAIRMENT CLAUSE: CAN NOT PREVAIL OVER

POLICE POWER OF THE STATE. — Despite the Impairment clause, a contract valid at the time of its
execution may be legally modified or even completely invalidated by a subsequent law. If the law is a
proper exercise of the police power, it will prevail over the contract. Into each contract are read the
provisions of existing law and, always, a reservation of the police power as long as the agreement
deals with a matter affecting the public welfare. Such a contract, it has been held, suffers a
congenital infirmity, and this is its susceptibility to change by the legislature as a postulate of the
legal order.

6. ADMINISTRATIVE LAW PRESIDENTIAL DECREE NO. 957 (THE SUBDIVIION AND CONDOMINIUM
BUYERS’ DECREE); REAL ESTATE MORTGAGE MADE BY THE SUBDIVISION OWNER IN FAVOR OF THE
BANK DECLARED NULL AND VOID WHERE RIGHTS OF SUBDIVISION LOT BUYERS CLASH WITH THE
MORTGAGEES BANK’S RIGHT TO FORECLOSE. — The decision of the Court of Appeals in Breta and
Hamor v. Lao, et al, penned by then Court of Appeals Associate Justice Jose A R. Melo, now a
respected member of this Court, is persuasive, the factual circumstances therein being of great
similarity to the antecedent facts of the case at bench. By the foregoing citation, this Court thus
adopts by reference the foregoing as part of this Decision. The real estate mortgage in the above
cited case, although constituted in 1975 and outside the beneficial aegis of P.D. 957,was struck down
by the Court of Appeals which found in favor of subdivision lot buyers when the rights of the latter
clashed with the mortgagee bank’s right to foreclose the property. The Court of Appeals in that case
upheld the decision of the trial court declaring the real estate mortgage as null and void.

7. ID.; ID.; ID.; ID. MORTGAGEE BANK OBLIGED TO ACCEPT PAYMENT OF REAMINING UNPAID
AMORTIZATIONS OF SUBDIVISION LOT BUYERS. — A to the second issue of non-privity, petitioner
avers that, in view of the provisions of Article 1311 of the Civil Code, PNB, being a "total stranger to
the land purchase agreement," cannot be made to take the developer’s place. We disagree. P.D. 957
being applicable, Section 18 of said law obliges petitioner Bank to accept the payment of the
rernaining unpaid amortizations tendered by private respondents. Privity of contracts as a defense
does not apply in this case for the law explicitly grants to the buyer the option to pay the installment
payment for his lot or unit directly to the mortgagee (petitioner), which is required to apply such
payments to reduce the corresponding portion of the mortgage indebtedness secured by the
particular lot or unit being paid for. And, as stated earlier, this is without prejudice to petitioner
Bank’s seeking relief against the subdivision developer.

RESOLUTION

PANGANIBAN, J.:

May a buyer of a property at a foreclosure sale dispossess prior purchasers on installment of

individual lots therein, or compel them to pay again for the lots which they previously bought from
the defaulting mortgagor-subdivision developer, on the theory that P.D. 957, "The Subdivision and
Condominium Buyers’ Protective Decree", is not applicable to the mortgage contract in question, the
same having been executed prior to the enactment of P.D. 957? This is the question confronting the
Court in this Petition challenging the Decision dated March 10, 1992 of the Office of the President of
the Philippines in O.P. Case No. 4249, signed by the Executive Secretary, Franklin M. Drilon, "by
authority of the President."cralaw virtua 1aw lib rary

Private respondents were buyers on installment of subdivision lots from Marikina Village, Inc.
(represented by spouses Antonio and Susana Astudillo). Notwithstanding the land purchase
agreements it executed over said lots, the subdivision developer mortgaged the lots in favor of the
petitioner, Philippine National Bank. Unaware of this mortgage, private respondents duly complied
with their obligations as lot buyers and constructed their houses on the lots in question.

Subsequently, the subdivision developer defaulted and PNB foreclosed on the mortgage. As highest
bidder at the foreclosure sale, the bank became owner of the lots. chanroblesvi rtua l|awlibra ry

Acting on suits brought by private respondents (which were later consolidated), the HLURB Office of
Appeals Adjudication and Legal Affairs (OAALA) in a decision rendered on October 28, 1988 ruled
that PNB — without prejudice to seeking relief against Marikina Village, Inc. — may collect from
private respondents only the "remaining amortization, in accordance with the land purchase
agreements they had previously entered into with "Marikina Village. Inc., and cannot compel private
respondents to pay all over again for the lots they had already bought from said subdivision
developer. On May 2, 1989, the Housing and Land Use Regulatory Board affirmed this decision. On
March 10, 1992, the Office of the President, invoking P.D. 957, likewise concurred with the HLURB.
Hence, the present recourse to this Court.

Under Revised Administrative Circular No. 1-95, "appeals from judgments or final orders of the . . .
Office of the President . . . may be taken to the Court of Appeals . . . ." However, in order to hasten
the resolution of this case, which was deemed submitted for decision three years ago, the Court
resolved to make an exception to the said Circular in the interest of speedy justice.

Petitioner bank raised the following issues: chanroblesv irt uallawl ibra ry

1. The Office of the President erred in applying P.D. 957 because said law was enacted only on July
12, 1976, while the subject mortgage was executed on December 18, 1975; and

2. Petitioner Bank is not privy to the contracts between private respondents and mortgagor-
subdivision developer, hence, the Office of the President erred in ordering petitioner Bank to accept
private respondents’ remaining amortization and issue the corresponding titles after payment
thereof.

Normally, pursuant to Article 4 of the Civil Code." (l)aws shall have no retroactive effect, unless the
contrary is provided." However, it is obvious and indubitable that P.D. 957 was intended to cover
even those real estate mortgages, like the one at issue here, executed prior to its enactment, and
such intent (as succinctly captured in the preamble quoted below) must be given effect if the
laudable purpose of protecting innocent purchasers is to be achieved: chanroble s.com : vi rtual lawlib rary

"WHEREAS, it is the policy of the State to afford its inhabitants the requirements of decent human
settlement and to provide them with ample opportunities for improving their quality of life;

"WHEREAS, numerous reports reveal that many real estate subdivision owners, developers,
operators, and/or sellers have reneged on their representations and obligations to provide and
maintain properly subdivision roads, drainage, sewerage, water systems, lighting systems, and other
similar basic requirements, thus endangering the health and safety of home and lot buyers;

"WHEREAS, reports of alarming magnitude also show cases of swindling and fraudulent
manipulations perpetrated by unscrupulous subdivision and condominium sellers and operators, such
as failure to deliver titles to the buyers or titles free from liens and encumbrance’ and to pay real
estate taxes, and fraudulent sales of the same subdivision lots to different innocent purchasers for
value;" 1 (Emphasis supplied)

While P.D. 957 did not expressly provide for retroactivity in its entirety, yet the same can be plainly
inferred from the unmistakable intent of the law to protect innocent lot buyers from scheming
subdivision developers. As between these small lot buyers and the gigantic financial institutions
which the developers deal with, it is obvious that the law — as an instrument of social justice — must
favor the weak. Indeed, the petitioner Bank had at its disposal vast resources with which it could
adequately protect its loan activities, and therefore is presumed to have conducted the usual "due
diligence" checking and ascertained (whether thru ocular inspection or other modes of investigation)
the actual status, condition, utilization and occupancy of the property offered as collateral. It could
not have been unaware that the property had been built on by small lot buyers. On the other hand,
private respondents obviously were powerless to discover the attempt of the land developer to
hypothecate the property being sold to them. It was precisely in order to deal with this kind of
situation that P.D. 957 was enacted, its very essence and intendment being to provide a protective
mantle over helpless citizens who may fall prey to the razzmatazz of what P.D. 957 termed
"unscrupulous subdivision and condominium sellers." cralaw virtua1aw l ibra ry

The intent of the law, as culled from its preamble and from the situation, circumstances and condition
it sought to remedy, must be enforced. Sutherland, in his well-known treatise on Statutory
Construction (quoted with approval by this Court in an old case of consequence, Ongsiako v. Gamboa
2), says:jgc:chanroble s.com.p h

"The intent of a statute is the law. If a statute is valid it is to have effect according to the purpose
and intent of the lawmaker. The intent is the vital part, the essence of the law, and the primary rule
of construction is to ascertain and give effect to the intent. The intention of the legislature in enacting
a law is the law itself, and must be enforced when ascertained; although it may not be consistent
with the strict letter of the statute. Courts will not follow the letter of a statute when it leads away
from the true intent and purpose of the legislature and to conclusions inconsistent with the general
purpose of the act. Intent is the spirit which gives life to a legislative enactment. In construing
statutes, the proper course is to start out and follow the true intent of the legislature and to adopt
that sense which harmonizes best with the context and promotes in the fullest manner the apparent
policy and objects of the legislature." 3chanroblesvi rtua llawli bra ry

Truly, this Court cannot allow the injustice that will be wrought by a strictly prospective application of
the law. Little people who have toiled for years through blood and tears would be deprived of their
homes through no fault of their own. As the Solicitor General, in his comment, argues: jgc:chanroble s.com.p h
"Verily, if P.D. 957 were to exclude from its coverage the aforecited mortgage contract, the vigorous
regulation which P.D. 957 seeks to impose on unconscientious subdivision sellers will be translated
into a feeble exercise of police power just because the iron hand of the State cannot particularly
touch mortgage contracts badged with the fortunate accident of having been constituted prior to the
enactment of P.D. 957. Indeed, it would be illogical in the extreme if P.D. 957 is to be given full force
and effect and yet, the fraudulent practices and manipulations it seeks to curb in the first instance
can nevertheless be liberally perpetrated precisely because P.D. 957 cannot be applied to existing
antecedent mortgage contracts. The legislative intent could not have conceivably permitted a
loophole which all along works to the prejudice of subdivision lot buyers (private respondents)." 4

Likewise noteworthy are certain provisions of P.D. 957, which themselves constitute strong
arguments in favor of the retroactivity of P.D. 957 as a whole. These are Sections 20, 21 and 23
thereof, which by their very terms have retroactive effect and will impact upon even those contracts
and transactions entered into prior to P.D. 957’s enactment: chanroble svi rtual|awl ibra ry

"SEC. 20. Time of Completion. — Every owner or developer shall construct and provide the facilities,
improvements, infrastructures and other forms of development, including water supply and lighting
facilities, which are offered and indicated in the approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in any form of advertisement, within one year from
the date of the issuance of the license for the subdivision or condominium project or such other
period of time as may be fixed by the Authority.

"SEC. 1. Sales Prior to Decree. — In cases of subdivision lots or condominium units sold or disposed
of prior to the effectivity of this Decree, it shall be incumbent upon the owner or developer of the
subdivision or condominium project to complete compliance with his or its obligations as provided in
the preceding section within two years from the date of this Decree unless otherwise extended by the
Authority or unless an adequate performance bond is filed in accordance with Section 6 hereof.

"Failure of the owner or developer to comply with the obligations under this and the preceding
provisions shall constitute a violation punishable under Section 38 and 39 of this Decree. chanroblesv irt uallawl ib rary

"SEC. 23. Non-Forfeiture of Payments. — No installment payment made by a buyer in a subdivision

or condominium project for the lot or unit he contracted to buy shall be forfeited in favor of the
owner or developer when the buyer, after due notice to the owner or developer, desists from further
payment due to the failure of the owner or developer to develop the subdivision or condominium
project according to the approved plans and within the time limit for complying with the same. Such
buyer may, at his option, be reimbursed the total amount paid including amortization interests but
excluding delinquency interests, with interest thereon at the legal rate." (Emphasis supplied)

As for objections about a possible violation of the impairment clause, we find the following
statements of Justice Isagani Cruz enlightening and pertinent to the case a bench: jgc:chanrob les.co m.ph

"Despite the impairment clause, a contract valid at the time of its execution may be legally modified
or even completely invalidated by a subsequent law. If the law is a proper exercise of the police
power, it will prevail over the contract.
chanrobles. com : virtual law lib rary

"Into each contract are read the provisions of existing law and, always, a reservation of the police
power as long as the agreement deals with a matter affecting the public welfare. Such a contract, it
has been held, suffers a congenital infirmity, and this is its susceptibility to change by the legislature
as a postulate of the legal order." 5

This Court ruled along similar lines in Juarez v. Court of Appeals 6: jgc:chanrob l es.com.ph

"The petitioner complains that the retroactive application of the law would violate the impairment
clause. The argument does not impress. The impairment clause is now no longer inviolate; in fact,
there are many who now believe it is an anachronism in the present-day society. It was quite useful
before in protecting the integrity of private agreements from government meddling, but that was
when such agreements did not affect the community in general. They were indeed purely private
agreements then. Any interference with them at that time was really an unwarranted intrusion that
could properly struck down.

"But things are different now. More and more the interests of the public have become involved in
what are supposed to be still private agreements, which have as a result been removed from the
protection of the impairment clause. These agreements have come within the embrace of the police
power, that obtrusive protector of the public interest. It is a ubiquitous policeman indeed. As long as
the contract affects the public welfare one way or another so as to require the interference of the
State, then must the police power be asserted, and prevail, over the impairment clause." cralaw virtua 1aw libra ry
The decision of the Court of Appeals in Breta and Hamor v. Lao, Et. Al. 7, penned by then Court of
Appeals Associate Justice Jose A. R. Melo, now a respected member of this Court is persuasive, the
factual circumstances therein being of great similarity to the antecedent facts of the case at bench: jgc:chanrob les.co m.ph

"Protection must be afforded small homeowners who toil and save if only to purchase on installment
a tiny home lot they can call their own. The consuming dream of every Filipino is to be able to buy a
lot, no matter how small, so that he may somehow build a house. It has, however, been seen of late
that these honest, hard-living individuals are taken advantage of, with the delivery of titles delayed,
the subdivision facilities, including the most essential such as water installations not completed, or
worse yet, as in the instant case, after almost completing the payments for the property and after
constructing a house, the buyer is suddenly confronted by the stark reality, contrived or otherwise, in
which another person would now appear to be owner. chanroble svirtual lawlib rary

x x x

"We cannot over emphasize the fact that the BANK cannot barefacedly argue that simply because the
title or titles offered as security were clean of any encumbrance or lien, that it was thereby relieved
of thing any other step to verify the over-reaching implications should the subdivision be auctioned
on foreclosure. The BANK could not have closed its eyes that it was dealing over a subdivision where
there were already houses constructed. Did it not enter the mind of the responsible officers of the
BANK that there may even be subdivision residents who have almost completed their installment
payments?" (Id., pp. 7 & 9)

By the foregoing citation, this Court thus adopts by reference the foregoing as part of this Decision.

The real estate mortgage in the above cited case although constituted in 1975 and outside the
beneficial aegis of P.D. 957, was struck down by the Court of Appeals which found in favor of
subdivision lot buyers when the rights of the latter clashed with the mortgagee bank’s right to
foreclose the property. The Court of Appeals in that case upheld the decision of the trial court
declaring the real estate mortgage as null and void. chanroblesv irt ual|awlib rary

As to the second issue of non-privity, petitioner avers that, in view of the provisions of Article 1311
of the Civil Code, PNB, being a "total stranger to the land purchase agreement," cannot be made to
take the developer’s place.

We disagree. P.D. 957 being applicable, Section 18 of said law obliges petitioner Bank to accept the
payment of the remaining unpaid amortization tendered by private respondents.

"SEC. 18. Mortgages. — No mortgage on any unit or lot shall be made by the owner or developer
without prior written approval of the Authority. Such approval shall not be granted unless it is shown
that the proceeds of the mortgage loan shall be used for the development of the condominium or
subdivision project and effective measures have been provided to ensure such utilization. The loan
value of each lot or unit covered by the mortgage shall be determined and the buyer thereof, if any,
shall be notified before the release of the loan. The buyer may, at his option, pay his installment for
the lot or unit directly to the mortgagee who shall apply the payments to the corresponding
mortgage indebtedness secured by the particular lot or unit being paid for, with a view to enabling
said buyer to obtain title over the lot or unit promptly after full payment thereof ." (Emphasis
supplied)chanroble svirtual lawlib rary

Privity of contracts as a defense does not apply in this case for the law explicitly grants to the buyer
the option to pay the installment payment for his lot or unit directly to the mortgagee (petitioner,
which is required to apply such payments to reduce the corresponding portion of the mortgage
indebtedness secured by the particular lot or unit being paid for. And, as stated earlier, this is
without prejudice to petitioner Bank’s seeking relief against the subdivision developer.

Finally, before closing this Resolution, we enjoin petitioner Bank to focus not only on the strictly legal
issues involved in this case but also to take another look at the larger issues including social justice
and the protection of human rights as enshrined in the Constitution, firstly, because legal issues are
raised and decided not in a vacuum but within the context of existing social, economic and political
conditions, law being merely a brick in the up-building of the social edifice; and secondly, Petitioner,
being THE state bank, is for all intents and purposes an instrument for the implementation of state
policies so cherished in our fundamental law. These consideration are obviously far more weighty
than the winning of any particular suit or the acquisition of any specific property. Thus, as the
country strives to move ahead towards economic self-sufficiency and to achieve dreams of "NIC-
blood" and social well-being for the majority of our countrymen, we hold that petitioner Bank, the
premier bank in the country, which has in recent years made record earnings and acquired an enable
international stature, with branches and subsidiaries in key financial centers around the world, should
be equally as happy with the disposition of this case as the private respondents, who were almost
deprived and dispossessed of their very homes purchased through their hard work and with their
meager savings.

WHEREFORE, in view of the foregoing considerations, the petition is hereby DENIED, petitioner
having failed to show any REVERSIBLE ERROR or GRAVE ABUSE OF DISCRETION in the assailed
decision. No costs.chanroble s.com : vi rtua l lawlib ra ry

SO ORDERED.

Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 168129 April 24, 2007

COMMISSIONER OF INTERNAL REVENUE, Petitioner,

vs.
PHILIPPINE HEALTH CARE PROVIDERS, INC., Respondent.

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
as amended, seeking to reverse the Decision1 dated February 18, 2005 and Resolution dated May 9, 2005 of the
Court of Appeals (Fifteenth Division) in CA-G.R. SP No. 76449.

The factual antecedents of this case, as culled from the records, are:

The Philippine Health Care Providers, Inc., herein respondent, is a corporation organized and existing under the
laws of the Republic of the Philippines. Pursuant to its Articles of Incorporation,2 its primary purpose is "To establish,
maintain, conduct and operate a prepaid group practice health care delivery system or a health maintenance
organization to take care of the sick and disabled persons enrolled in the health care plan and to provide for the
administrative, legal, and financial responsibilities of the organization."
1^vvphi 1.net

On July 25, 1987, President Corazon C. Aquino issued Executive Order (E.O.) No. 273, amending the National
Internal Revenue Code of 1977 (Presidential Decree No. 1158) by imposing Value-Added Tax (VAT) on the sale of
goods and services. This E.O. took effect on January 1, 1988.

Before the effectivity of E.O. No. 273, or on December 10, 1987, respondent wrote the Commissioner of Internal
Revenue (CIR), petitioner, inquiring whether the services it provides to the participants in its health care program are
exempt from the payment of the VAT.

On June 8, 1988, petitioner CIR, through the VAT Review Committee of the Bureau of Internal Revenue (BIR),
issued VAT Ruling No. 231-88 stating that respondent, as a provider of medical services, is exempt from the VAT
coverage. This Ruling was subsequently confirmed by Regional Director Osmundo G. Umali of Revenue Region No.
8 in a letter dated April 22, 1994.

Meanwhile, on January 1, 1996, Republic Act (R.A.) No. 7716 (Expanded VAT or E-VAT Law) took effect, amending
further the National Internal Revenue Code of 1977. Then on January 1, 1998, R.A. No. 8424 (National Internal
Revenue Code of 1997) became effective. This new Tax Code substantially adopted and reproduced the provisions
of E.O. No. 273 on VAT and R.A. No. 7716 on E-VAT.

In the interim, on October 1, 1999, the BIR sent respondent a Preliminary Assessment Notice for deficiency in its
payment of the VAT and documentary stamp taxes (DST) for taxable years 1996 and 1997.

On October 20, 1999, respondent filed a protest with the BIR.

On January 27, 2000, petitioner CIR sent respondent a letter demanding payment of "deficiency VAT" in the amount
of ₱100,505,030.26 and DST in the amount of ₱124,196,610.92, or a total of ₱224,702,641.18 for taxable years
1996 and 1997. Attached to the demand letter were four (4) assessment notices.

On February 23, 2000, respondent filed another protest questioning the assessment notices.

Petitioner CIR did not take any action on respondent's protests. Hence, on September 21, 2000, respondent filed
with the Court of Tax Appeals (CTA) a petition for review, docketed as CTA Case No. 6166.

On April 5, 2002, the CTA rendered its Decision, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, the instant Petition for Review is PARTIALLY GRANTED. Petitioner is
hereby ORDERED TO PAY the deficiency VAT amounting to ₱22,054,831.75 inclusive of 25% surcharge plus 20%
interest from January 20, 1997 until fully paid for the 1996 VAT deficiency and ₱31,094,163.87 inclusive of 25%
surcharge plus 20% interest from January 20, 1998 until paid for the 1997 VAT deficiency. Accordingly, VAT Ruling
1aw phi1.nét

No. 231-88 is declared void and without force and effect. The 1996 and 1997 deficiency DST assessment against
petitioner is hereby CANCELLED AND SET ASIDE. Respondent is ORDERED to DESIST from collecting the said
DST deficiency tax.

SO ORDERED.

Respondent filed a motion for partial reconsideration of the above judgment concerning its liability to pay the
deficiency VAT.

In its Resolution3 dated March 23, 2003, the CTA granted respondent's motion, thus:

WHEREFORE, in view of the foregoing, the instant Motion for Partial Reconsideration is GRANTED. Accordingly,
the VAT assessment issued by herein respondent against petitioner for the taxable years 1996 and 1997 is hereby
WITHDRAWN and SET ASIDE.

SO ORDERED.

The CTA held:

Moreover, this court adheres to its conclusion that petitioner is a service contractor subject to VAT since it does
not actually render medical service but merely acts as a conduit between the members and petitioner's accredited
and recognized hospitals and clinics.

However, after a careful review of the facts of the case as well as the Law and jurisprudence applicable, this court
resolves to grant petitioner's "Motion for Partial Reconsideration." We are in accord with the view of petitioner that it
is entitled to the benefit of non-retroactivity of rulings guaranteed under Section 246 of the Tax Code, in the absence
of showing of bad faith on its part. Section 246 of the Tax Code provides:

Sec. 246. Non-Retroactivity of Rulings. - Any revocation, modification or reversal of any of the rules and
regulations promulgated in accordance with the preceding Sections or any of the rulings or circulars promulgated by
the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be
prejudicial to the taxpayers, x x x.

Clearly, undue prejudice will be caused to petitioner if the revocation of VAT Ruling No. 231-88 will be retroactively
applied to its case. VAT Ruling No. 231-88 issued by no less than the respondent itself has confirmed petitioner's
entitlement to VAT exemption under Section 103 of the Tax Code. In saying so, respondent has actually broadened
the scope of "medical services" to include the case of the petitioner. This VAT ruling was even confirmed
subsequently by Regional Director Ormundo G. Umali in his letter dated April 22, 1994 (Exhibit M). Exhibit P, which
served as basis for the issuance of the said VAT ruling in favor of the petitioner sufficiently described the business of
petitioner and there is no way BIR could be misled by the said representation as to the real nature of petitioner's
business. Such being the case, this court is convinced that petitioner's reliance on the said ruling is premised on
good faith. The facts of the case do not show that petitioner deliberately committed mistakes or omitted material
facts when it obtained the said ruling from the Bureau of Internal Revenue. Thus, in the absence of such proof, this
court upholds the application of Section 246 of the Tax Code. Consequently, the pronouncement made by the BIR in
VAT Ruling No. 231-88 as to the VAT exemption of petitioner should be upheld.

Petitioner seasonably filed with the Court of Appeals a petition for review, docketed as CA-G.R. SP No. 76449.

In its Decision dated February 18, 2005, the Court of Appeals affirmed the CTA Resolution.

Petitioner CIR filed a motion for reconsideration, but it was denied by the appellate court in its Resolution4 dated
May 9, 2005.

Hence, the instant petition for review on certiorari raising these two issues: (1) whether respondent's services are
subject to VAT; and (2) whether VAT Ruling No. 231-88 exempting respondent from payment of VAT has retroactive
application.

On the first issue, respondent is contesting petitioner's assessment of its VAT liabilities for taxable years 1996 and
1997.

Section 1025 of the National Internal Revenue Code of 1977, as amended by E.O. No. 273 (VAT Law) and R.A. No.
7716 (E-VAT Law), provides:

SEC. 102. Value-added tax on sale of services and use or lease of properties. - (a) Rate and base of tax. - There
shall be levied, assessed and collected, a value-added tax equivalent to 10% of gross receipts derived from the sale
or exchange of services, including the use or lease of properties.

The phrase "sale or exchange of service" means the performance of all kinds of services in the Philippines for a fee,
remuneration or consideration, including those performed or rendered by construction and service contractors x x x.
Section 1036 of the same Code specifies the exempt transactions from the provision of Section 102, thus:

SEC. 103. Exempt Transactions. - The following shall be exempt from the value-added tax:

xxx

(l) Medical, dental, hospital and veterinary services except those rendered by professionals

xxx

The import of the above provision is plain. It requires no interpretation. It contemplates the exemption from VAT of
taxpayers engaged in the performance of medical, dental, hospital, and veterinary services. In Commissioner of
International Revenue v. Seagate Technology (Philippines),7 we defined an exempt transaction as one involving
goods or services which, by their nature, are specifically listed in and expressly exempted from the VAT, under the
Tax Code, without regard to the tax status of the party in the transaction. In Commissioner of Internal Revenue v.
Toshiba Information Equipment (Phils.) Inc.,8 we reiterated this definition.

In its letter to the BIR requesting confirmation of its VAT-exempt status, respondent described its services as
follows:

Under the prepaid group practice health care delivery system adopted by Health Care, individuals enrolled in Health
Care's health care program are entitled to preventive, diagnostic, and corrective medical services to be dispensed
by Health Care's duly licensed physicians, specialists, and other professional technical staff participating in said
group practice health care delivery system established and operated by Health Care. Such medical services will be
dispensed in a hospital or clinic owned, operated, or accredited by Health Care. To be entitled to receive such
medical services from Health Care, an individual must enroll in Health Care's health care program and pay an
annual fee. Enrollment in Health Care's health care program is on a year-to-year basis and enrollees are issued
identification cards.

From the foregoing, the CTA made the following conclusions:

a) Respondent "is not actually rendering medical service but merely acting as a conduit between the
members and their accredited and recognized hospitals and clinics."

b) It merely "provides and arranges for the provision of pre-need health care services to its members
for a fixed prepaid fee for a specified period of time."

c) It then "contracts the services of physicians, medical and dental practitioners, clinics and
hospitals to perform such services to its enrolled members;" and

d) Respondent "also enters into contract with clinics, hospitals, medical professionals and then
negotiates with them regarding payment schemes, financing and other procedures in the delivery of
health services."

We note that these factual findings of the CTA were neither modified nor reversed by the Court of Appeals. It is a
doctrine that findings of fact of the CTA, a special court exercising particular expertise on the subject of tax, are
generally regarded as final, binding, and conclusive upon this Court, more so where these do not conflict with the
findings of the Court of Appeals.9 Perforce, as respondent does not actually provide medical and/or hospital
services, as provided under Section 103 on exempt transactions, but merely arranges for the same, its
services are not VAT-exempt.

Relative to the second issue, Section 246 of the 1997 Tax Code, as amended, provides that rulings, circulars, rules
and regulations promulgated by the Commissioner of Internal Revenue have no retroactive application if to apply
them would prejudice the taxpayer. The exceptions to this rule are: (1) where the taxpayer deliberately misstates or
omits material facts from his return or in any document required of him by the Bureau of Internal Revenue; (2) where
the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which
the ruling is based, or (3) where the taxpayer acted in bad faith.

We must now determine whether VAT Ruling No. 231-88 exempting respondent from paying its VAT liabilities has
retroactive application.

In its Resolution dated March 23, 2003, the CTA found that there is no showing that respondent "deliberately
committed mistakes or omitted material facts" when it obtained VAT Ruling No. 231-88 from the BIR. The CTA held
that respondent's letter which served as the basis for the VAT ruling "sufficiently described" its business and "there
is no way the BIR could be misled by the said representation as to the real nature" of said business.

In sustaining the CTA, the Court of Appeals found that "the failure of respondent to refer to itself as a health
maintenance organization is not an indication of bad faith or a deliberate attempt to make false representations." As
"the term health maintenance organization did not as yet have any particular significance for tax purposes,"
respondent's failure "to include a term that has yet to acquire its present definition and significance cannot be
equated with bad faith."

We agree with both the Tax Court and the Court of Appeals that respondent acted in good faith. In Civil Service
Commission v. Maala,10 we described good faith as "that state of mind denoting honesty of intention and freedom
from knowledge of circumstances which ought to put the holder upon inquiry; an honest intention to abstain from
taking any unconscientious advantage of another, even through technicalities of law, together with absence of all
information, notice, or benefit or belief of facts which render transaction unconscientious."

According to the Court of Appeals, respondent's failure to describe itself as a "health maintenance organization,"
which is subject to VAT, is not tantamount to bad faith. We note that the term "health maintenance organization"
was first recorded in the Philippine statute books only upon the passage of "The National Health Insurance Act of
1995" (Republic Act No. 7875). Section 4 (o) (3) thereof defines a health maintenance organization as "an entity that
provides, offers, or arranges for coverage of designated health services needed by plan members for a fixed prepaid
premium." Under this law, a health maintenance organization is one of the classes of a "health care provider."

It is thus apparent that when VAT Ruling No. 231-88 was issued in respondent's favor, the term "health
maintenance organization" was yet unknown or had no significance for taxation purposes. Respondent, therefore,
believed in good faith that it was VAT exempt for the taxable years 1996 and 1997 on the basis of VAT Ruling No.
231-88.

In ABS-CBN Broadcasting Corp. v. Court of Tax Appeals,11 this Court held that under Section 246 of the 1997 Tax
Code, the Commissioner of Internal Revenue is precluded from adopting a position contrary to one
previously taken where injustice would result to the taxpayer. Hence, where an assessment for deficiency
withholding income taxes was made, three years after a new BIR Circular reversed a previous one upon which the
taxpayer had relied upon, such an assessment was prejudicial to the taxpayer. To rule otherwise, opined the Court,
would be contrary to the tenets of good faith, equity, and fair play.

This Court has consistently reaffirmed its ruling in ABS-CBN Broadcasting Corp. in the later cases of Commissioner
of Internal Revenue v. Borroughs, Ltd.,12 Commissioner of Internal Revenue v. Mega Gen. Mdsg.
Corp.13 Commissioner of Internal Revenue v. Telefunken Semiconductor (Phils.) Inc.,14 and Commissioner of
Internal Revenue v. Court of Appeals.15 The rule is that the BIR rulings have no retroactive effect where a grossly
unfair deal would result to the prejudice of the taxpayer, as in this case.

More recently, in Commissioner of Internal Revenue v. Benguet Corporation,16 wherein the taxpayer was entitled to
tax refunds or credits based on the BIR's own issuances but later was suddenly saddled with deficiency taxes due to
its subsequent ruling changing the category of the taxpayer's transactions for the purpose of paying its VAT, this
Court ruled that applying such ruling retroactively would be prejudicial to the taxpayer.

WHEREFORE, we DENY the petition and AFFIRM the assailed Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 76449. No costs.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

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.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. 103982 December 11, 1992

ANTONIO A. MECANO, petitioner,

vs.
COMMISSION ON AUDIT, respondent.

CAMPOS, JR., J.:

Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commission on Audit (COA,
for brevity) embodied in its 7th Indorsement, dated January 16, 1992, denying his claim for reimbursement under
Section 699 of the Revised Administrative Code (RAC), as amended, in the total amount of P40,831.00.

Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized for cholecystitis from
March 26, 1990 to April 7, 1990, on account of which he incurred medical and hospitalization expenses, the total
amount of which he is claiming from the COA.

On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity), he requested
reimbursement for his expenses on the ground that he is entitled to the benefits under Section 6991 of the RAC, the
pertinent provisions of which read:

Sec. 699. Allowances in case of injury, death, or sickness incurred in performance of duty. — When
a person in the service of the national government of a province, city, municipality or municipal
district is so injured in the performance of duty as thereby to receive some actual physical hurt or
wound, the proper Head of Department may direct that absence during any period of disability
thereby occasioned shall be on full pay, though not more than six months, and in such case he may
in his discretion also authorize the payment of the medical attendance, necessary transportation,
subsistence and hospital fees of the injured person. Absence in the case contemplated shall be
charged first against vacation leave, if any there be.

xxx xxx xxx

In case of sickness caused by or connected directly with the performance of some act in the line of
duty, the Department head may in his discretion authorize the payment of the necessary hospital
fees.

Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to the Secretary of
Justice, along with the comment, bearing the same date, of Gerarda Galang, Chief, LED of the NBI, "recommending
favorable action thereof". Finding petitioner's illness to be service-connected, the Committee on Physical
Examination of the Department of Justice favorably recommended the payment of petitioner's claim.

However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated November 21, 1990,
returned petitioner's claim to Director Lim, having considered the statements of the Chairman of the COA in its 5th
Indorsement dated 19 September 1990, to the effect that the RAC being relied upon was repealed by the
Administrative Code of 1987.

Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 19912 dated April 26, 1991 of
then Secretary of Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that "the issuance of the
Administrative Code did not operate to repeal or abregate in its entirety the Revised Administrative Code, including
the particular Section 699 of the latter".

On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim to then Undersecretary
Bello for favorable consideration. Under a 6th Indorsement, dated July 2, 1991, Secretary Drilon forwarded
petitioner's claim to the COA Chairman, recommending payment of the same. COA Chairman Eufemio C. Domingo,
in his 7th Indorsement of January 16, 1992, however, denied petitioner's claim on the ground that Section 699 of the
RAC had been repealed by the Administrative Code of 1987, solely for the reason that the same section was not
restated nor re-enacted in the Administrative Code of 1987. He commented, however, that the claim may be filed
with the Employees' Compensation Commission, considering that the illness of Director Mecano occurred after the
effectivity of the Administrative Code of 1987.
Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo Montenegro to Director Lim under
a 9th Indorsement dated February 7, 1992, with the advice that petitioner "elevate the matter to the Supreme Court
if he so desires".

On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section 699 of the RAC,
this petition was brought for the consideration of this Court.

Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementioned Opinion No. 73, S.
1991 of Secretary Drilon. He further maintains that in the event that a claim is filed with the Employees'
Compensation Commission, as suggested by respondent, he would still not be barred from filing a claim under the
subject section. Thus, the resolution of whether or not there was a repeal of the Revised Administrative Code of
1917 would decide the fate of petitioner's claim for reimbursement.

The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of 1987 (Exec. Order
No. 292) operated to revoke or supplant in its entirety the Revised Administrative Code of 1917. The COA claims
that from the "whereas" clauses of the new Administrative Code, it can be gleaned that it was the intent of the
legislature to repeal the old Code. Moreover, the COA questions the applicability of the aforesaid opinion of the
Secretary of Justice in deciding the matter. Lastly, the COA contends that employment-related sickness, injury or
death is adequately covered by the Employees' Compensation Program under P.D. 626, such that to allow
simultaneous recovery of benefits under both laws on account of the same contingency would be unfair and unjust
to the Government.

The question of whether a particular law has been repealed or not by a subsequent law is a matter of legislative
intent. The lawmakers may expressly repeal a law by incorporating therein a repealing provision which expressly
and specifically cites the particular law or laws, and portions thereof, that are intended to be repealed.3 A declaration
in a statute, usually in its repealing clause, that a particular and specific law, identified by its number or title, is
repealed is an express repeal; all others are implied repeals.4

In the case of the two Administrative Codes in question, the ascertainment of whether or not it was the intent of the
legislature to supplant the old Code with the new Code partly depends on the scrutiny of the repealing clause of the
new Code. This provision is found in Section 27, Book VII (Final Provisions) of the Administrative Code of 1987
which reads:

Sec. 27. Repealing Clause. — All laws, decrees, orders, rules and regulations, or portions thereof,
inconsistent with this Code are hereby repealed or modified accordingly.

The question that should be asked is: What is the nature of this repealing clause? It is certainly not an express
repealing clause because it fails to identify or designate the act or acts that are intended to be repealed.5 Rather, it is
an example of a general repealing provision, as stated in Opinion No. 73, S. 1991. It is a clause which predicates
the intended repeal under the condition that substantial conflict must be found in existing and prior acts. The failure
to add a specific repealing clause indicates that the intent was not to repeal any existing law, unless an
irreconcilable inconcistency and repugnancy exist in the terms of the new and old laws.6 This latter situation falls
under the category of an implied repeal.

Repeal by implication proceeds on the premise that where a statute of later date clearly reveals an intention on the
part of the legislature to abrogate a prior act on the subject, that intention must be given effect.7 Hence, before there
can be a repeal, there must be a clear showing on the part of the lawmaker that the intent in enacting the new law
was to abrogate the old one. The intention to repeal must be clear and manifest;8 otherwise, at least, as a general
rule, the later act is to be construed as a continuation of, and not a substitute for, the first act and will continue so far
as the two acts are the same from the time of the first enactment.9

There are two categories of repeal by implication. The first is where provisions in the two acts on the same subject
matter are in an irreconcilable conflict, the later act to the extent of the conflict constitutes an implied repeal of the
earlier one. The second is if the later act covers the whole subject of the earlier one and is clearly intended as a
substitute, it will operate to repeal the earlier law.10

Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same subject matter;
they are so clearly inconsistent and incompatible with each other that they cannot be reconciled or harmonized; and
both cannot be given effect, that is, that one law cannot be enforced without nullifying the other.11

Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover the entire subject
matter of the old Code. There are several matters treated in the old Code which are not found in the new Code,
such as the provisions on notaries public, the leave law, the public bonding law, military reservations, claims for
sickness benefits under Section 699, and still others.

Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the subject claim are
in an irreconcilable conflict. In fact, there can be no such conflict because the provision on sickness benefits of the
nature being claimed by petitioner has not been restated in the Administrative Code of 1987. However, the COA
would have Us consider that the fact that Section 699 was not restated in the Administrative Code of 1987 meant
that the same section had been repealed. It further maintained that to allow the particular provisions not restated in
the new Code to continue in force argues against the Code itself. The COA anchored this argument on the whereas
clause of the 1987 Code, which states:

WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code
which incorporate in a unified document the major structural, functional and procedural principles
and rules of governance; and

xxx xxx xxx

It argues, in effect, that what is contemplated is only one Code — the Administrative Code of 1987. This contention
is untenable.

The fact that a later enactment may relate to the same subject matter as that of an earlier statute is not of itself
sufficient to cause an implied repeal of the prior act, since the new statute may merely be cumulative or a
continuation of the old one. 12 What is necessary is a manifest indication of legislative purpose to repeal.13

We come now to the second category of repeal — the enactment of a statute revising or codifying the former laws
on the whole subject matter. This is only possible if the revised statute or code was intended to cover the whole
subject to be a complete and perfect system in itself. It is the rule that a subsequent statute is deemed to repeal a
prior law if the former revises the whole subject matter of the former statute.14 When both intent and scope clearly
evidence the idea of a repeal, then all parts and provisions of the prior act that are omitted from the revised act are
deemed repealed.15 Furthermore, before there can be an implied repeal under this category, it must be the clear
intent of the legislature that the later act be the substitute to the prior act.16

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to cover only those
aspects of government that pertain to administration, organization and procedure, understandably because of the
many changes that transpired in the government structure since the enactment of the RAC decades of years ago.
The COA challenges the weight that this opinion carries in the determination of this controversy inasmuch as the
body which had been entrusted with the implementation of this particular provision has already rendered its
decision. The COA relied on the rule in administrative law enunciated in the case of Sison vs. Pangramuyen17 that in
the absence of palpable error or grave abuse of discretion, the Court would be loathe to substitute its own judgment
for that of the administrative agency entrusted with the enforcement and implementation of the law. This will not hold
water. This principle is subject to limitations. Administrative decisions may be reviewed by the courts upon a
showing that the decision is vitiated by fraud, imposition or mistake.18 It has been held that Opinions of the Secretary
and Undersecretary of Justice are material in the construction of statutes in pari materia.19

Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not favored.20 The
presumption is against inconsistency and repugnancy for the legislature is presumed to know the existing laws on
the subject and not to have enacted inconsistent or conflicting statutes.21

This Court, in a case, explains the principle in detail as follows: "Repeals by implication are not favored, and will not
be decreed unless it is manifest that the legislature so intended. As laws are presumed to be passed with
deliberation with full knowledge of all existing ones on the subject, it is but reasonable to conclude that in passing a
statute it was not intended to interfere with or abrogate any former law relating to some matter, unless the
repugnancy between the two is not only irreconcilable, but also clear and convincing, and flowing necessarily from
the language used, unless the later act fully embraces the subject matter of the earlier, or unless the reason for the
earlier act is beyond peradventure renewed. Hence, every effort must be used to make all acts stand and if, by any
reasonable construction, they can be reconciled, the later act will not operate as a repeal of the earlier.22

Regarding respondent's contention that recovery under this subject section shall bar the recovery of benefits under
the Employees' Compensation Program, the same cannot be upheld. The second sentence of Article 173, Chapter
II, Title II (dealing on Employees' Compensation and State Insurance Fund), Book IV of the Labor Code, as
amended by P.D. 1921, expressly provides that "the payment of compensation under this Title shall not bar the
recovery of benefits as provided for in Section 699 of the Revised Administrative Code . . . whose benefits are
administered by the system (meaning SSS or GSIS) or by other agencies of the government."

WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent is hereby ordered to
give due course to petitioner's claim for benefits. No costs.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-39990 July 22, 1975

THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee,

vs.
RAFAEL LICERA, defendant-appellant.

Office of the Solicitor General Felix Q. Antonio, Assistant Solicitor General Crispin V. Bautista and Solicitor Pedro A.
Ramirez for plaintiff-appellee.

Romeo Mercado (as Counsel de Oficio) for defendant-appellant.

CASTRO, J.:

This is an appeal, on a question of law, by Rafael Licera from the judgment dated August 14, 1968 of the Court of
First Instance of Occidental Mindoro convicting him of the crime of illegal possession of firearm and sentencing him
to imprisonment of five (5) years. We reverse the judgment of conviction, for the reasons hereunder stated.

On December 3, 1965 the Chief of Police of Abra de Ilog, Occidental Mindoro, filed a complaint, subscribed and
sworn to by him, with the municipal court of the said municipality, charging Rafael Licera with illegal possession of a
Winchester rifle, Model 55, Caliber .30. On August 13, 1966 the municipal court rendered judgment finding Licera
guilty of the crime charged, sentencing him to suffer an indeterminate penalty ranging five years and one day to six
years and eight months of imprisonment. Licera appealed to the Court of First Instance of Occidental Mindoro.

In the Court of First Instance, the parties agreed to the joint trial of the case for illegal possession of firearm and
another case, likewise filed against Licera with the municipal court but already forwarded to the said Court of First
Instance, for assault upon an agent of a person in authority, the two offenses having arisen from the same occasion:
apprehension of Licera by the Chief of Police and a patrolman of Abra de Ilog on December 2, 1965 for possession
of the Winchester rifle without the requisite license or permit therefor.

On August 14, 1968 the court a quo rendered judgment acquitting Licera of the charge of assault upon an agent of a
person in authority, but convicting him of illegal possession of firearm, sentencing him to suffer five years of
imprisonment, and ordering the forfeiture of the Winchester rifle in favor of the Government.

Licera's appeal to the Court of Appeals was certified on October 16, 1974 to this Court as involving only one
question of law.

Licera invokes as his legal justification for his possession of the Winschester rifle his appointment as secret agent
on December 11, 1961 by Governor Feliciano Leviste of Batangas. He claims that as secret agent, he was a "peace
officer" and, thus, pursuant to People vs. Macarandang,1 was exempt from the requirements relating to the issuance
of license to possess firearms. He alleges that the court a quo erred in relying on the later case of People vs.
Mapa2 which held that section 879 of the Revised Administrative Code provides no exemption for persons appointed
as secret agents by provincial governors from the requirements relating to firearm licenses.

The principal question thus posed calls for a determination of the rule that should be applied to the case at bar that
enunciated in Macarandang or that in Mapa.

The appointment given to Licera by Governor Leviste which bears the date "December 11, 1961" includes a grant of
authority to Licera to possess the Winchester rifle in these terms: "In accordance with the decision of the Supreme
Court in G.R. No. L-12088 dated December 23, 1959, you will have the right to bear a firearm ... for use in
connection with the performance of your duties." Under the rule then prevailing, enunciated in Macarandang,3 the
appointment of a civilian as a "secret agent to assist in the maintenance of peace and order campaigns and
detection of crimes sufficiently put[s] him within the category of a "peace officer" equivalent even to a member of the
municipal police" whom section 879 of the Revised Administrative Code exempts from the requirements relating to
firearm licenses.

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.4

At the time of Licera's designation as secret agent in 1961 and at the time of his apprehension for possession of the
Winchester rifle without the requisite license or permit therefor in 1965, the Macarandang rule — the Courts
interpretation of section 879 of the Revised Administrative Code - formed part of our jurisprudence and, hence, of
this jurisdiction's legal system. Mapa revoked the Macarandang precedent only in 1967. Certainly, where a new
doctrine abrogates an old rule, the new doctrine should operate respectively only and should not adversely affect
those favored by the old rule, especially those who relied thereon and acted on the faith thereof. This holds more
especially true in the application or interpretation of statutes in the field of penal law, for, in this area, more than in
any other, it is imperative that the punishability of an act be reasonably foreseen for the guidance of society.5

Pursuant to the Macarandang rule obtaining not only at the time of Licera's appointment as secret agent, which
appointment included a grant of authority to possess the Winchester rifle, but as well at the time as of his
apprehension, Licera incurred no criminal liability for possession of the said rifle, notwithstanding his non-
compliance with the legal requirements relating to firearm licenses. 1äwphï1.ñët

ACCORDINGLY, the judgment a quo is reversed, and Rafael Licera is hereby acquitted. Costs de oficio.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-10010 August 1, 1916

CHU JAN, plaintiff-appellee,

vs.
LUCIO BERNAS, defendant-appellant.

Sulpicio V. Cea for appellant.

ARAULLO, J.:

On the afternoon of June 26, 1913, a match was held in the cockpit of the municipality of Tabaco, Albay, between
two cocks belonging to the plaintiff and to the defendant respectively. Each of said persons had put up a wager of
P160; and as the referee of the cockpit had declared the defendant's cock the winner in the bout, the plaintiff
brought suit against the defendant in the justice of the peace court of the said pueblo, asking that his own rooster be
declared the winner. The justice of the peace court decided that the bout was a draw. From this judgment the
defendant appealed to the Court of First Instance of the province. For the purposes of the appeal, the plaintiff filed
his complaint and prayed this court to render judgment ordering the defendant to abide by and comply with the rules
and regulations governing cockfights, to pay the stipulated wager of P160; to return the other like amount (both
sums of wager being held for safe-keeping by the cockpit owner, Tomas Almonte) and to assess the costs of both
instances against the defendant.

The defendant denied each and all of the allegations of the complaint and moved to dismiss with the costs against
the plaintiff. On September 11, 1913, the said Court of First Instance rendered judgment dismissing the appeal
without special finding as to costs. The defendant excepted to this judgment as well as to an order dictated by the
same court on November 8th of the same year, on the plaintiff's motion, ordering the provincial treasurer of Albay
and, if necessary, the municipal treasurer of Tabaco of the same province, to release the deposit of P160 and return
it to its owner, the plaintiff Chinaman, Chu Jan. These proceedings have come before us on appeal by means of the
proper bill of exceptions.

The grounds for the dismissal pronounced by the lower court in the judgment appealed from ere that the court has
always dismissed cases of this nature, that he is not familiar with the rules governing cockfights and the duties of
referees thereof; that he does not know where to find the law on the subject and, finally, that he knows of no law
whatever that governs the rights to the plaintiff and the defendant in questions concerning cockfights.

The ignorance of the court or his lack of knowledge regarding the law applicable to a case submitted to him for
decision, the fact that the court does not know the rules applicable to a certain matter that is the subject of an appeal
which must be decided by him and his not knowing where to find the law relative to the case, are not reasons that
can serve to excuse the court for terminating the proceedings by dismissing them without deciding the issues. Such
an excuse is the less acceptable because, foreseeing that a case might arise to which no law would be exactly
applicable, the Civil Code, in the second paragraph of article 6, provides that the customs of the place shall be
observed, and, in the absence thereof, the general principles of law.

Therefore the judgment and the order appealed from, hereinbefore mentioned, are reversed and to record of the
proceedings shall remanded to the court from whence they came for due trial and judgment as provided by law. No
special finding is made with regard to costs. So ordered.

Arellano, C. J., Torres, Johnson, and Trent, JJ., concur.

Moreland, J., took no part.
 Republic of the Philippines
SUPREME COURT
Manila

EN BANC

G.R. No. L-42050-66 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
HONORABLE JUDGE AMANTE P. PURISIMA, COURT OF FIRST INSTANCE OF MANILA, BRANCH VII, and
PORFIRIO CANDELOSAS, NESTOR BAES, ELIAS L. GARCIA, SIMEON BUNDALIAN, JR., JOSEPH C. MAISO,
EDUARDO A. LIBORDO, ROMEO L. SUGAY, FEDERICO T. DIZON, GEORGE M. ALBINO, MARIANO COTIA,
JR., ARMANDO L. DIZON, ROGELIO B. PARENO, RODRIGO V. ESTRADA, ALFREDO A. REYES, JOSE A.
BACARRA, REYNALDO BOGTONG, and EDGARDO M. MENDOZA, respondents.

G.R. No. L-46229-32 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and REYNALDO
LAQUI Y AQUINO, ELPIDIO ARPON, VICTOR EUGENIO Y ROQUE and ALFREDO VERSOZA, respondents.

G.R. No. L-46313-16 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
JUDGE MAXIMO A. MACEREN, COURT OF FIRST INSTANCE OF MANILA, BRANCH XVIII, and JUANITO DE
LA CRUZ Y NUNEZ, SABINO BUENO Y CACAL, TIRSO ISAGAN Y FRANCISCO and BEN CASTILLO Y
UBALDO, respondents.

G.R. No. L-46997 November 20, 1978

THE PEOPLE OF THE PHILIPPINES, petitioner,

vs.
THE HONORABLE WENCESLAO M. POLO, Judge of the Court of First Instance of Samar, and PANCHITO
REFUNCION, respondents.

Jose L. Gamboa, Fermin Martin, Jr. & Jose D. Cajucom, Office of the City of Fiscal of Manila and the Office of
Provincial Fiscal of Samar for petitioners.

Norberto Parto for respondents Candelosas, Baes and Garcia.

Amado C. de la Marced for respondents Simeon Bundalian Jr., et al.

Manuel F. de Jesus for all the respondents in L-46229-32 and L-46313-16.

Norberto L. Apostol for respondent Panchito Refuncion.

Hon. Amante P. Purisima for and in his own behalf.

MUÑOZ PALMA, J.:

These twenty-six (26) Petitions for Review filed by the People of the Philippines represented, respectively, by the
Office of the City Fiscal of Manila, the Office of the Provincial Fiscal of Samar, and joined by the Solicitor General,
are consolidated in this one Decision as they involve one basic question of law.

These Petitions or appeals involve three Courts of First Instance, namely: the Court of First Instance of Manila,
Branch VII, presided by Hon. Amante P. Purisima (17 Petitions), the Court of First Instance of Manila, Branch XVIII,
presided by Hon. Maximo A. Maceren (8 Petitions) and, the Court of First Instance of Samar, with Hon. Wenceslao
M. Polo, presiding, (1 Petition).

Before those courts, Informations were filed charging the respective accused with "illegal possession of deadly
weapon" in violation of Presidential Decree No. 9. On a motion to quash filed by the accused, the three Judges
mentioned above issued in the respective cases filed before them — the details of which will be recounted below —
an Order quashing or dismissing the Informations, on a common ground, viz, that the Information did not allege facts
which constitute the offense penalized by Presidential Decree No. 9 because it failed to state one essential element
of the crime.

Thus, are the Informations filed by the People sufficient in form and substance to constitute the offense of "illegal
possession of deadly weapon" penalized under Presidential Decree (PD for short) No. 9? This is the central issue
which we shall resolve and dispose of, all other corollary matters not being indispensable for the moment.

A — The Information filed by the People —

1. In L-42050-66, one typical Information filed with the Court presided by Judge Purisima follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus PORFIRIO CANDELOSAS Y DURAN,

accused.

Crim. Case No. 19639

VIOLATION OF PAR. 3, PRES. DECREE No. 9 OF PROCLAMATION 1081

INFORMATION

The undersigned accuses PORFIRIO CANDELOSAS Y DURAN of a violation of paragraph 3,

Presidential Decree No. 9 of Proclamation 1081, committed as follows:

That on or about the 14 th day of December, 1974, in the City of Manila, Philippines, the said
accused did then and there wilfully, unlawfully, feloniously and knowingly have in his possession and
under his custody and control one (1) carving knife with a blade of 6-½ inches and a wooden handle
of 5-1/4 inches, or an overall length of 11-¾ inches, which the said accused carried outside of his
residence, the said weapon not being used as a tool or implement necessary to earn his livelihood
nor being used in connection therewith.

Contrary to law. (p. 32, rollo of L-42050-66)

The other Informations are similarly worded except for the name of the accused, the date and place of the
commission of the crime, and the kind of weapon involved.

2. In L-46229-32 and L-46313-16, the Information filed with the Court presided by Judge Maceren follows:

THE PEOPLE OF THE PHILIPPINES, plaintiff, versus REYNALDO LAQUI Y AQUINO, accused.

CRIM. CASE NO.

29677

VIOL. OF PAR. 3,

PD 9 IN REL. TO LOI

No. 266 of the Chief

Executive dated April

1, 1975

INFORMATION

The undersigned accuses REYNALDO LAQUI Y AQUINO of a VIOLATION OF PARAGRAPH 3,

PRESIDENTIAL DECREE NO. 9 in relation to Letter of Instruction No. 266 of the Chief Executive
dated April 1, 1975, committed as follows:

That on or about the 28 th day of January, 1977, in the City of Manila, Philippines, the said accused
did then and there wilfully, unlawfully and knowingly carry outside of his residence a bladed and
pointed weapon, to wit: an ice pick with an overall length of about 8½ inches, the same not being
used as a necessary tool or implement to earn his livelihood nor being used in connection therewith.

Contrary to law. (p. 14, rollo of L-46229-32)

The other Informations are likewise similarly worded except for the name of the accused, the date and place of the
commission of the crime, and the kind of weapon involved.
3. In L-46997, the Information before the Court of First Instance of Samar is quoted hereunder:

PEOPLE OF THE PHILIPPINES, complainant, versus PANCHITO REFUNCION, accused.

CRIM. CASE NO. 933

For:

ILLEGAL
POSSESSION OF

DEADLY WEAPON

(VIOLATION OF PD
NO. 9)

INFORMATION

The undersigned First Assistant Provincial Fiscal of Samar, accuses PANCHITO REFUNCION of the
crime of ILLEGAL POSSESSION OF DEADLY WEAPON or VIOLATION OF PD NO. 9 issued by the
President of the Philippines on Oct. 2, 1972, pursuant to Proclamation No. 1081 dated Sept. 21 and
23, 1972, committed as follows:

That on or about the 6th day of October, 1976, in the evening at Barangay Barruz, Municipality of
Matuginao, Province of Samar Philippines, and within the jurisdiction of this Honorabe Court, the
abovenamed accused, knowingly, wilfully, unlawfully and feloniously carried with him outside of his
residence a deadly weapon called socyatan, an instrument which from its very nature is no such as
could be used as a necessary tool or instrument to earn a livelihood, which act committed by the
accused is a Violation of Presidential Decree No. 9.

CONTRARY TO LAW. (p. 8, rollo of L-46997)

B. — The Orders of dismissal —

In dismissing or quashing the Informations the trial courts concurred with the submittal of the defense that one
essential element of the offense charged is missing from the Information, viz: that the carrying outside of the
accused's residence of a bladed, pointed or blunt weapon is in furtherance or on the occasion of, connected with or
related to subversion, insurrection, or rebellion, organized lawlessness or public disorder.

1. Judge Purisima reasoned out, inter alia, in this manner:

... the Court is of the opinion that in order that possession of bladed weapon or the like outside
residence may be prosecuted and tried under P.D. No. 9, the information must specifically allege
that the possession of bladed weapon charged was for the purpose of abetting, or in furtherance of
the conditions of rampant criminality, organized lawlessness, public disorder, etc. as are
contemplated and recited in Proclamation No. 1081, as justification therefor. Devoid of this specific
allegation, not necessarily in the same words, the information is not complete, as it does not allege
sufficient facts to constitute the offense contemplated in P.D. No. 9. The information in these cases
under consideration suffer from this defect.

xxx xxx xxx

And while there is no proof of it before the Court, it is not difficult to believe the murmurings of
detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No.
9, that more than ever before, policemen - of course not all can be so heartless — now have in their
hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being
sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which
only God knows where it came from. Whereas before martial law an extortion-minded peace officer
had to have a stock of the cheapest paltik, and even that could only convey the coercive message of
one year in jail, now anything that has the semblance of a sharp edge or pointed object, available
even in trash cans, may already serve the same purpose, and yet five to ten times more
incriminating than the infamous paltik.

For sure, P.D. No. 9 was conceived with the best of intentions and wisely applied, its necessity can
never be assailed. But it seems it is back-firing, because it is too hot in the hands of policemen who
are inclined to backsliding.
 The checkvalves against abuse of P.D. No. 9 are to be found in the heart of the Fiscal and the
conscience of the Court, and hence this resolution, let alone technical legal basis, is prompted by the
desire of this Court to apply said checkvalves. (pp. 55-57, rollo of L-42050-66)

2. Judge Maceren in turn gave his grounds for dismissing the charges as follows:

xxx xxx xxx

As earlier noted the "desired result" sought to be attained by Proclamation No. 1081 is the
maintenance of law and order throughout the Philippines and the prevention and suppression of all
forms of lawless violence as well as any act of insurrection or rebellion. It is therefore reasonable to
conclude from the foregoing premises that the carrying of bladed, pointed or blunt weapons outside
of one's residence which is made unlawful and punishable by said par. 3 of P.D. No. 9 is one
that abets subversion, insurrection or rebellion, lawless violence, criminality, chaos and public
disorder or is intended to bring about these conditions. This conclusion is further strengthened by the
fact that all previously existing laws that also made the carrying of similar weapons punishable have
not been repealed, whether expressly or impliedly. It is noteworthy that Presidential Decree No. 9
does not contain any repealing clause or provisions.

xxx xxx xxx

The mere carrying outside of one's residence of these deadly weapons if not concealed in one's
person and if not carried in any of the aforesaid specified places, would appear to be not unlawful
and punishable by law.

With the promulgation of Presidential Decree No. 9, however, the prosecution, through Assistant
Fiscal Hilario H. Laqui, contends in his opposition to the motion to quash, that this act is now made
unlawful and punishable, particularly by paragraph 3 thereof, regardless of the intention of the
person carrying such weapon because the law makes it "mala prohibita". If the contention of the
prosecution is correct, then if a person happens to be caught while on his way home by law
enforcement officers carrying a kitchen knife that said person had just bought from a store in order
that the same may be used by one's cook for preparing the meals in one's home, such person will be
liable for punishment with such a severe penalty as imprisonment from five to ten years under the
decree. Such person cannot claim that said knife is going to be used by him to earn a livelihood
because he intended it merely for use by his cook in preparing his meals.

This possibility cannot be discounted if Presidential Decree No. 9 were to be interpreted and applied
in the manner that that the prosecution wants it to be done. The good intentions of the President in
promulgating this decree may thus be perverted by some unscrupulous law enforcement officers. It
may be used as a tool of oppression and tyranny or of extortion.

xxx xxx xxx

It is therefore the considered and humble view of this Court that the act which the President intended
to make unlawful and punishable by Presidential Decree No. 9, particularly by paragraph 3 thereof,
is one that abets or is intended to abet subversion, rebellion, insurrection, lawless violence,
criminality, chaos and public disorder. (pp. 28-30, rollo of L-46229-32)

3. Judge Polo of the Court of First Instance of Samar expounded his order dismissing the Information filed before
him, thus:

... We believe that to constitute an offense under the aforcited Presidential decree, the same should
be or there should be an allegation that a felony was committed in connection or in furtherance of
subversion, rebellion, insurrection, lawless violence and public disorder. Precisely Proclamation No.
1081 declaring a state of martial law throughout the country was issued because of wanton
destruction to lives and properties widespread lawlessness and anarchy. And in order to restore the
tranquility and stability of the country and to secure the people from violence anti loss of lives in the
quickest possible manner and time, carrying firearms, explosives and deadly weapons without a
permit unless the same would fall under the exception is prohibited. This conclusion becomes more
compelling when we consider the penalty imposable, which is from five years to ten years. A strict
enforcement of the provision of the said law would mean the imposition of the Draconian penalty
upon the accused.

xxx xxx xxx

It is public knowledge that in rural areas, even before and during martial law, as a matter of status
symbol, carrying deadly weapons is very common, not necessarily for committing a crime nor as
their farm implement but for self-preservation or self-defense if necessity would arise specially in
going to and from their farm. (pp. 18-19, rollo of L-46997)
In most if not all of the cases, the orders of dismissal were given before arraignment of the accused. In the criminal
case before the Court of (First Instance of Samar the accused was arraigned but at the same time moved to quash
the Information. In all the cases where the accused were under arrest, the three Judges ordered their immediate
release unless held on other charges.

C. — The law under which the Informations in question were filed by the People.

As seen from the Informations quoted above, the accused are charged with illegal possession of deadly weapon in
violation of Presidential Decree No. 9, Paragraph 3.

We quote in full Presidential Decree No. 9, to wit:

PRESIDENTIAL DECREE NO. 9

DECLARING VIOLATIONS OF GENERAL ORDERS NO. 6 and NO. 7 DATED SEPTEMBER 22,
1972, AND SEPTEMBER 23, 1972, RESPECTIVELY, TO BE UNLAWFUL AND PROVIDING
PENALTIES THEREFORE.

WHEREAS, pursuant to Proclamation No. 1081 dated September 21, 1972, the Philippines has
been placed under a state of martial law;

WHEREAS, by virtue of said Proclamation No. 1081, General Order No. 6 dated September 22,
1972 and General Order No. 7 dated September 23, 1972, have been promulgated by me;

WHEREAS, subversion, rebellion, insurrection, lawless violence, criminality, chaos and public
disorder mentioned in the aforesaid Proclamation No. 1081 are committed and abetted by the use of
firearms, explosives and other deadly weapons;

NOW, THEREFORE, I, FERDINAND E. MARCOS, Commander-in-Chief of all the Armed Forces of

the Philippines, in older to attain the desired result of the aforesaid Proclamation No. 1081 and
General Orders Nos. 6 and 7, do hereby order and decree that:

1. Any violation of the aforesaid General Orders Nos. 6 and 7 is unlawful and the violator shall, upon
conviction suffer:

(a) The mandatory penalty of death by a firing squad or electrocution as a Military,

Court/Tribunal/Commission may direct, it the firearm involved in the violation is unlicensed and is
attended by assault upon, or resistance to persons in authority or their agents in the performance of
their official functions resulting in death to said persons in authority or their agent; or if such
unlicensed firearm is used in the commission of crimes against persons, property or chastity causing
the death of the victim used in violation of any other General Orders and/or Letters of Instructions
promulgated under said Proclamation No. 1081:

(b) The penalty of imprisonment ranging from twenty years to life imprisonment as a Military
Court/Tribunal/commission may direct, when the violation is not attended by any of the
circumstances enumerated under the preceding paragraph;

(c) The penalty provided for in the preceding paragraphs shall be imposed upon the owner,
president, manager, members of the board of directors or other responsible officers of any public or
private firms, companies, corporations or entities who shall willfully or knowingly allow any of the
firearms owned by such firm, company, corporation or entity concerned to be used in violation of
said General Orders Nos. 6 and 7.

2. It is unlawful to posses deadly weapons, including hand grenades, rifle grenades and other
explosives, including, but not limited to, "pill box bombs," "molotov cocktail bombs," "fire bombs," or
other incendiary device consisting of any chemical, chemical compound, or detonating agents
containing combustible units or other ingredients in such proportion, quantity, packing, or bottling
that ignites by fire, by friction, by concussion, by percussion, or by detonation of all or part of the
compound or mixture which may cause such a sudden generation of highly heated gases that the
resultant gaseous pressures are capable of producing destructive effects on continguous objects or
of causing injury or death of a person; and any person convicted thereof shall be punished by
imprisonment ranging from ten to fifteen years as a Military Court/Tribunal/Commission may direct.

3. It is unlawful to carry outside of residence any bladed, pointed or blunt weapon such as "fan
knife," "spear," "dagger," "bolo," "balisong," "barong," "kris," or club, except where such articles are
being used as necessary tools or implements to earn a livelihood and while being used in connection
therewith; and any person found guilty thereof shall suffer the penalty of imprisonment ranging from
five to ten years as a Military Court/Tribunal/Commission may direct.
 4. When the violation penalized in the preceding paragraphs 2 and 3 is committed during the
commission of or for the purpose of committing, any other crime, the penalty shall be imposed upon
the offender in its maximum extent, in addition to the penalty provided for the particular offenses
committed or intended to be committed.

Done in the City of Manila, this 2nd day of October in the year of Our Lord, nineteen hundred and
seventy-two.

(SGD) FERDINAND E. MARCOS

President

Republic of the Philippines

D. — The arguments of the People —

In the Comment filed in these cases by the Solicitor General who as stated earlier joins the City Fiscal of Manila and
the Provincial Fiscal of Samar in seeking the setting aside of the questioned orders of dismissal, the main argument
advanced on the issue now under consideration is that a perusal of paragraph 3 of P.D. 9 'shows that the prohibited
acts need not be related to subversive activities; that the act proscribed is essentially a malum prohibitum penalized
for reasons of public policy.1

The City Fiscal of Manila in his brief adds further that in statutory offenses the intention of the accused who commits
the act is immaterial; that it is enough if the prohibited act is voluntarily perpetuated; that P.D. 9 provides and
condemns not only the carrying of said weapon in connection with the commission of the crime of subversion or the
like, but also that of criminality in general, that is, to eradicate lawless violence which characterized pre-martial law
days. It is also argued that the real nature of the criminal charge is determined not from the caption or preamble of
the information nor from the specification of the provision of law alleged to have been violated but by the actual
recital of facts in the complaint or information.2

E. — Our Ruling on the matter —

1. It is a constitutional right of any person who stands charged in a criminal prosecution to be informed of the nature
and cause of the accusation against him.3

Pursuant to the above, Section 5, Rule 110 of the Rules of Court, expressly requires that for a complaint or
information to be sufficient it must, inter alia state the designation of the offense by the statute, and the acts or
omissions complained of as constituting the offense. This is essential to avoid surprise on the accused and to afford
him the opportunity to prepare his defense accordingly. 4

To comply with these fundamental requirements of the Constitution and the Rules on Criminal Procedure, it is
imperative for the specific statute violated to be designated or mentioned 4 in the charge. In fact, another compelling
reason exists why a specification of the statute violated is essential in these cases. As stated in the order of
respondent Judge Maceren the carrying of so-called "deadly weapons" is the subject of another penal statute and a
Manila city ordinance. Thus, Section 26 of Act No. 1780 provides:

Section 26. It should be unlawful for any person to carry concealed about his person any bowie
knife, dirk dagger, kris, or other deadly weapon: ... Any person violating the provisions of this section
shall, upon conviction in a court of competent jurisdiction, be punished by a fine not exceeding five
hundred pesos, or by imprisonment for a period not exceeding six months, or both such fine and
imprisonment, in the discretion of the court.

Ordinance No. 3820 of the City of Manila as amended by Ordinance No. 3928 which took effect on December 4,
1957, in turn penalizes with a fine of not more than P200.00 or imprisonment for not more than one months, or both,
at the discretion of the court, anyone who shall carry concealed in his person in any manner that would disguise its
deadly character any kind of firearm, bowie knife, or other deadly weapon ... in any public place. Consequently, it is
necessary that the particular law violated be specified as there exists a substantial difference between the statute
and city ordinance on the one hand and P.D. 9 (3) on the other regarding the circumstances of the commission of
the crime and the penalty imposed for the offense.

We do not agree with petitioner that the above-mentioned statute and the city ordinance are deemed repealed by
P.D. 9 (3). 5 P. D. 9(3) does not contain any repealing clause or provision, and repeal by implication is not
favored. 6 This principle holds true with greater force with regards to penal statutes which as a rule are to be
construed strictly against the state and liberally in favor of the accused. 7 In fact, Article 7 of the New Civil Code
provides that laws are repealed only by subsequent ones and their violation or non- observance shall not be
excused by disuse, or custom or practice to the contrary.

Thus we are faced with the situation where a particular act may be made to fall, at the discretion of a police officer or
a prosecuting fiscal, under the statute, or the city ordinance, or the presidential decree. That being the case, the
right becomes more compelling for an accused to be confronted with the facts constituting the essential elements of
the offense charged against him, if he is not to become an easy pawn of oppression and harassment, or of negligent
or misguided official action — a fear understandably shared by respondent Judges who by the nature of their judicial
functions are daily exposed to such dangers.

2. In all the Informations filed by petitioner the accused are charged in the caption as well as in the body of the
Information with a violation of paragraph 3, P.D. 9. What then are the elements of the offense treated in the
presidential decree in question?

We hold that the offense carries two elements: first, the carrying outside one's residence of any bladed, blunt, or
pointed weapon, etc. not used as a necessary tool or implement for a livelihood; and second, that the act of carrying
the weapon was either in furtherance of, or to abet, or in connection with subversion, rebellion, insurrection, lawless
violence, criminality, chaos, or public disorder.

It is the second element which removes the act of carrying a deadly weapon, if concealed, outside of the scope of
the statute or the city ordinance mentioned above. In other words, a simple act of carrying any of the weapons
described in the presidential decree is not a criminal offense in itself. What makes the act criminal or punishable
under the decree is the motivation behind it. Without that motivation, the act falls within the purview of the city
ordinance or some statute when the circumstances so warrant.

Respondent Judges correctly ruled that this can be the only reasonably, logical, and valid construction given to P.D.
9(3).

3. The position taken by petitioner that P.D. 9(3) covers one and all situations where a person carries outside his
residence any of the weapons mentioned or described in the decree irrespective of motivation, intent, or purpose,
converts these cases into one of "statutory construction." That there is ambiguity in the presidential decree is
manifest from the conflicting views which arise from its implementation. When ambiguity exists, it becomes a judicial
task to construe and interpret the true meaning and scope of the measure, guided by the basic principle that penal
statutes are to be construed and applied liberally in favor of the accused and strictly against the state.

4. In the construction or interpretation of a legislative measure — a presidential decree in these cases — the primary
rule is to search for and determine the intent and spirit of the law. Legislative intent is the controlling factor, for in the
words of this Court in Hidalgo v. Hidalgo, per Mr. Justice Claudio Teehankee, whatever is within the spirit of a
statute is within the statute, and this has to be so if strict adherence to the letter would result in absurdity, injustice
and contradictions. 8

There are certain aids available to Us to ascertain the intent or reason for P.D. 9(3).

First, the presence of events which led to or precipitated the enactment of P.D. 9. These events are clearly spelled
out in the "Whereas" clauses of the presidential decree, thus: (1) the state of martial law in the country pursuant to
Proclamation 1081 dated September 21, 1972; (2) the desired result of Proclamation 1081 as well as General
Orders Nos. 6 and 7 which are particularly mentioned in P.D. 9; and (3) the alleged fact that subversion, rebellion,
insurrection, lawless violence, criminality, chaos, aid public disorder mentioned in Proclamation 1081 are committed
and abetted by the use of firearms and explosives and other deadly weapons.

The Solicitor General however contends that a preamble of a statute usually introduced by the word "whereas", is
not an essential part of an act and cannot enlarge or confer powers, or cure inherent defects in the statute (p. 120,
rollo of L-42050-66); that the explanatory note or enacting clause of the decree, if it indeed limits the violation of the
decree, cannot prevail over the text itself inasmuch as such explanatory note merely states or explains the reason
which prompted the issuance of the decree. (pp. 114-115, rollo of 46997)

We disagree with these contentions. Because of the problem of determining what acts fall within the purview of P.D.
9, it becomes necessary to inquire into the intent and spirit of the decree and this can be found among others in the
preamble or, whereas" clauses which enumerate the facts or events which justify the promulgation of the decree
and the stiff sanctions stated therein.

A "preamble" is the key of the statute, to open the minds of the makers as to the mischiefs which are
to be remedied, and objects which are to be accomplished, by the provisions of the statute." (West
Norman Timber v. State, 224 P. 2d 635, 639, cited in Words and Phrases, "Preamble"; emphasis
supplied)

While the preamble of a statute is not strictly a part thereof, it may, when the statute is in itself
ambiguous and difficult of interpretation, be resorted to, but not to create a doubt or uncertainty
which otherwise does not exist." (James v. Du Bois, 16 N.J.L. (1 Har.) 285, 294, cited in Words and
Phrases, "Preamble")

In Aboitiz Shipping Corporation, et al. v. The City of Cebu, et al. this Court had occasion to state that '(L)egislative
intent must be ascertained from a consideration of the statute as a whole, and not of an isolated part or a particular
provision alone. This is a cardinal rule of statutory construction. For taken in the abstract, a word or phrase might
easily convey a meaning quite different from the one actually intended and evident when the word or phrase is
considered with those with which it is associated. Thus, an apparently general provision may have a limited
application if read together with other provisions. 9

Second, the result or effects of the presidential decree must be within its reason or intent.

In the paragraph immediately following the last "Whereas" clause, the presidential decree states:

NOW, THEREFORE, I , FERDINAND E. MARCOS, Commander-in-Chief of an the Armed Forces of

the Philippines, in order to attain the desired result of the aforesaid Proclamation No. 1081 and
General Orders Nos. 6 and 7, do hereby order and decree that:

xxx xxx xxx

From the above it is clear that the acts penalized in P.D. 9 are those related to the desired result of
Proclamation 1081 and General Orders Nos. 6 and 7. General Orders Nos. 6 and 7 refer to firearms
and therefore have no relevance to P.D. 9(3) which refers to blunt or bladed weapons. With respect
to Proclamation 1081 some of the underlying reasons for its issuance are quoted hereunder:

WHEREAS, these lawless elements having taken up arms against our duly constituted government
and against our people, and having committed and are still committing acts of armed insurrection
and rebellion consisting of armed raids, forays, sorties, ambushes, wanton acts of murders, spoilage,
plunder, looting, arsons, destruction of public and private buildings, and attacks against innocent and
defenseless civilian lives and property, all of which activities have seriously endangered and
continue to endanger public order and safety and the security of the nation, ...

xxx xxx xxx

WHEREAS, it is evident that there is throughout the land a state of anarchy and lawlessness, chaos
and disorder, turmoil and destruction of a magnitude equivalent to an actual war between the forces
of our duly constituted government and the New People's Army and their satellite organizations
because of the unmitigated forays, raids, ambuscades, assaults, violence, murders, assassinations,
acts of terror, deceits, coercions, threats, intimidations, treachery, machinations, arsons, plunders
and depredations committed and being committed by the aforesaid lawless elements who have
pledged to the whole nation that they will not stop their dastardly effort and scheme until and unless
they have fully attained their primary and ultimate purpose of forcibly seizing political and state
power in this country by overthrowing our present duly constituted government, ... (See Book I, Vital
Documents on the Declaration of Martial Law in the Philippines by the Supreme Court of the
Philippines, pp. 13-39)

It follows that it is only that act of carrying a blunt or bladed weapon with a motivation connected with or related to
the afore-quoted desired result of Proclamation 1081 that is within the intent of P.D. 9(3), and nothing else.

Statutes are to be construed in the light of purposes to be achieved and the evils sought to be
remedied. (U.S. v. American Tracking Association, 310 U.S. 534, cited in LVN Pictures v. Philippine
Musicians Guild, 110 Phil. 725, 731; emphasis supplied)

When construing a statute, the reason for its enactment should be kept in mind, and the statute
should be construed with reference to its intended scope and purpose. (Statutory Construction by
E.T. Crawford, pp. 604-605, cited in Commissioner of Internal Revenue v. Filipinas Compania de
Seguros, 107 Phil. 1055, 1060; emphasis supplied)

5. In the construction of P.D. 9(3) it becomes relevant to inquire into the consequences of the measure if a strict
adherence to the letter of the paragraph is followed.

It is a salutary principle in statutory construction that there exists a valid presumption that undesirable consequences
were never intended by a legislative measure, and that a construction of which the statute is fairly susceptible is
favored, which will avoid all objectionable, mischievous, indefensible, wrongful, evil, and injurious consequences.9-a

It is to be presumed that when P.D. 9 was promulgated by the President of the Republic there was no intent to work
a hardship or an oppressive result, a possible abuse of authority or act of oppression, arming one person with a
weapon to impose hardship on another, and so on.10

At this instance We quote from the order of Judge Purisima the following:

And while there is no proof of it before the Court, it is not difficult to believe the murmurings of
detained persons brought to Court upon a charge of possession of bladed weapons under P.D. No.
9, that more than ever before, policemen - of course not all can be so heartless — now have in their
hands P.D. No. 9 as a most convenient tool for extortion, what with the terrifying risk of being
 sentenced to imprisonment of five to ten years for a rusted kitchen knife or a pair of scissors, which
only God knows where it came from. Whereas before martial law an extortion-minded peace officer
had to have a stock of the cheapest paltik, and even that could only convey the coercive message of
one year in jail, now anything that has the semblance of a sharp edge or pointed object, available
even in trash cans, may already serve the same purpose, and yet five to ten times more
incriminating than the infamous paltik. (pp. 72-73, rollo L-42050-66)

And as respondent Judge Maceren points out, the people's interpretation of P.D. 9(3) results in absurdity at times.
To his example We may add a situation where a law-abiding citizen, a lawyer by profession, after gardening in his
house remembers to return the bolo used by him to his neighbor who lives about 30 meters or so away and while
crossing the street meets a policeman. The latter upon seeing the bolo being carried by that citizen places him
under arrest and books him for a violation of P.D. 9(3). Could the presidential decree have been conceived to
produce such absurd, unreasonable, and insensible results?

6. Penal statutes are to be construed strictly against the state and liberally in favor of an accused.

American jurisprudence sets down the reason for this rule to be "the tenderness of the law of the rights of
individuals; the object is to establish a certain rule by conformity to which mankind would be safe, and the discretion
of the court limited." 11 The purpose is not to enable a guilty person to escape punishment through a technicality
but to provide a precise definition of forbidden acts.12

Our own decisions have set down the same guidelines in this manner, viz:

Criminal statutes are to be construed strictly. No person should be brought within their terms who is
not clearly within them, nor should any act be pronounced criminal which is not made clearly so by
the statute. (U.S. v. Abad Santos, 36 Phil. 243, 246)

The rule that penal statutes are given a strict construction is not the only factor controlling the
interpretation of such laws, instead, the rule merely serves as an additional, single factor to be
considered as an aid in determining the meaning of penal laws. (People v. Manantan, 5 SCRA 684,
692)

F. The Informations filed by petitioner are fatally defective.

The two elements of the offense covered by P.D. 9(3) must be alleged in the Information in order that the latter may
constitute a sufficiently valid charged. The sufficiency of an Information is determined solely by the facts alleged
therein.13 Where the facts are incomplete and do not convey the elements of the crime, the quashing of the
accusation is in order.

Section 2(a), Rule 117 of the Rules of Court provides that the defendant may move to quash the complaint or
information when the facts charged do not constitute an offense.

In U.S.U. Gacutan, 1914, it was held that where an accused is charged with knowingly rendering an unjust judgment
under Article 204 of the Revised Penal Code, failure to allege in the Information that the judgment was rendered
knowing it to be unjust, is fatal. 14

In People v. Yadao, 1954, this Court through then Justice Cesar Bengzon who later became Chief Justice of the
Court affirmed an order of the trial court which quashed an Information wherein the facts recited did not constitute a
public offense as defined in Section 1, Republic Act 145. 15

G. The filing of these Petitions was unnecessary because the People could have availed itself of other available
remedies below.

Pertinent provisions of the Rules of Court follow:

Rule 117, Section 7. Effect of sustaining the motion to quash. — If the motion to quash is sustained
the court may order that another information be filed. If such order is made the defendant, if in
custody, shall remain so unless he shall be admitted to bail. If such order is not made or if having
been made another information is not filed withuntime to be specified in the order, or within such
further time as the court may allow for good cause shown, the defendant, if in custody, shall be
discharged therefrom, unless he is in custody on some other charge.

Rule 110, Section 13. Amendment. — The information or complaint may be amended, in substance
or form, without leave of court, at any time before the defendant pleads; and thereafter and during
the trial as to all matters of form, by leave and at the discretion of the court, when the same can be
done without prejudice to the rights of the defendant.

xxx xxx xxx

Two courses of action were open to Petitioner upon the quashing of the Informations in these cases, viz:

First, if the evidence on hand so warranted, the People could have filed an amended Information to include the
second element of the offense as defined in the disputed orders of respondent Judges. We have ruled that if the
facts alleged in the Information do not constitute a punishable offense, the case should not be dismissed but the
prosecution should be given an opportunity to amend the Information.16

Second, if the facts so justified, the People could have filed a complaint either under Section 26 of Act No. 1780,
quoted earlier, or Manila City Ordinance No. 3820, as amended by Ordinance No. 3928, especially since in most if
not all of the cases, the dismissal was made prior to arraignment of the accused and on a motion to quash.

Section 8. Rule 117 states that:

An order sustaining the motion to quash is not a bar to another prosecution for the same offense
unless the motion was based on the grounds specified in section 2, subsections (f) and (h) of this
rule.

Under the foregoing, the filing of another complaint or Information is barred only when the criminal action or liability
had been extinguished (Section 2[f]) or when the motion to quash was granted for reasons of double jeopardy. (ibid.,
[h])

As to whether or not a plea of double jeopardy may be successfully invoked by the accused in all these cases
should new complaints be filed against them, is a matter We need not resolve for the present.

H. — We conclude with high expectations that police authorities and the prosecuting arm of the government true to
the oath of office they have taken will exercise utmost circumspection and good faith in evaluating the particular
circumstances of a case so as to reach a fair and just conclusion if a situation falls within the purview of P.D. 9(3)
and the prosecution under said decree is warranted and justified. This obligation becomes a sacred duty in the face
of the severe penalty imposed for the offense.

On this point, We commend the Chief State Prosecutor Rodolfo A. Nocon on his letter to the City Fiscal of Manila on
October 15, 1975, written for the Secretary, now Minister of Justice, where he stated the following:

In any case, please study well each and every case of this nature so that persons accused of
carrying bladed weapons, specially those whose purpose is not to subvert the duly constituted
authorities, may not be unduly indicted for the serious offenses falling under P.D. No. 9.17

Yes, while it is not within the power of courts of justice to inquire into the wisdom of a law, it is however a judicial
task and prerogative to determine if official action is within the spirit and letter of the law and if basic fundamental
rights of an individual guaranteed by the Constitution are not violated in the process of its implementation. We have
to face the fact that it is an unwise and unjust application of a law, necessary and justified under prevailing
circumstances, which renders the measure an instrument of oppression and evil and leads the citizenry to lose their
faith in their government.

WHEREFORE, We DENY these 26 Petitions for Review and We AFFIRM the Orders of respondent Judges
dismissing or quashing the Information concerned, subject however to Our observations made in the preceding
pages 23 to 25 of this Decision regarding the right of the State or Petitioner herein to file either an amended
Information under Presidential Decree No. 9, paragraph 3, or a new one under other existing statute or city
ordinance as the facts may warrant.

Without costs.

SO ORDERED.

Fernando, Teehankee, Santos, Fernandez and Guerrero, JJ., concur.

Castro, C.J. and Antonio, J, concur in the result.

Aquino, J, took no part.

Separate Opinions

BARREDO, J., concurring.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need of amending
the information, for violation of other laws or ordinances on concealment of deadly weapons.

Makasiar, J, concurs.
CONCEPCION, JR., J, concurring:

I concur with the additional observation that accused could properly be convicted of a violation of Act 1780 of the
Philippine Commission or of the ordinance.

Separate Opinions

BARREDO, J., concurring.

I concur with the qualification that under existing jurisprudence conviction is possible, without the need of amending
the information, for violation of other laws or ordinances on concealment of deadly weapons.

Makasiar, J, concurs.

CONCEPCION, JR., J, concurring:

I concur with the additional observation that accused could properly be convicted of a violation of Act 1780 of the
Philippine Commission or of the ordinance.