Republic of the Philippines

SUPREME COURT

Manila

FIRST DIVISION

G. R. No. L-41001 September 30, 1976

MANILA LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF THE ELKS, INC., petitioner,

vs.

THE HONORABLE COURT OF APPEALS, CITY OF MANILA, and TARLAC DEVELOPMENT CORPORATION, respondents.

No. L-41012 September 30, 1976

TARLAC DEVELOPMENT CORPORATION, petitioner,

vs.

HONORABLE COURT OF APPEALS, CITY OF MANILA, LODGE NO. 761, BENEVOLENT AND PROTECTIVE ORDER OF ELKS, INC., respondents.

CASTRO, C.J.:têñ.£îhqwâ£

STATEMENT OF THE CASE AND STATEMENTOF THE FACTS

These two cases are petitions on certiorari to review the decision dated June 30, 1975 of the Court of Appeals in CA-G.R. No. 51590-R entitled "Tarlac Development Corporation vs. City of Manila, and Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc.," affirming the trial court's finding in Civil Case No. 83009 that the property subject of the decision a quo is a "public park or plaza."

On June 26, 1905 the Philippine Commission enacted Act No. l360 which authorized the City of Manila to reclaim a portion of Manila Bay. The reclaimed area was to form part of the Luneta extension. The Act provided that the reclaimed area "Shall be the property of the City of Manila" and that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the Luneta extension x x x at the north end not to exceed five hundred feet by six hundred feet in size, for a hotel site, and to lease the same, with the approval of the Governor General, to a responsible person or corporation for a term not exceed ninety-nine years."

Subsequently, the Philippine Commission passed on May 18, 1907 Act No. 1657, amending Act No. 1360, so as to authorize the City of' Manila either to lease or to sell the portion set aside as a hotel site.

The total area reclaimed was a little over 25 hectares. The City of Manila applied for the registration of the reclaimed area, and on January 20, 1911, O.C.T. No. 1909 was issued in the name of the City of Manila. The title described the registered land as "un terreno conocido con el nombre de Luneta Extension, situato en el distrito de la Ermita x x x." The registration was "subject, however to such of the incumbrances mentioned in Article 39 of said law (Land Registration Act) as may be subsisting" and "sujeto a las disposiciones y condiciones impuestas en la Ley No. 1360; y sujeto tambein a los contratos de venta, celebrados y otorgados por la Ciudad de Manila a favor del Army and Navy Club y la Manila Lodge No. 761, Benevolent and Protective Order of Elks, fechados respectivamente, en 29 de Diciembre de 1908 y 16 de Enero de 1909." 1

On July 13, 1911 the City of Manila, affirming a prior sale dated January 16, 1909 cancelled 5,543.07 square meters of the reclaimed area to the Manila Lodge No. 761, Benevolent and Protective Order of Elks of the U.S.A. (BPOE, for short) on the basis of which TCT No. 2195 2 was issued to the latter over the Marcela de terreno que es parte de la Luneta Extension, Situada en el Distrito le la Ermita ... ." At the back of this title vas annotated document 4608/T-1635, which in part reads as follows: "que la citada Ciusdad de Manila tendra derecho a su opcion, de recomparar la expresada propiedad para fines publicos solamete in cualquier tiempo despues de cincuenta anos desde el 13 le Julio le 1911, precio de la misma propiedad, mas el valor que entonces tengan las mejoras."

For the remainder of the Luneta Extension, that is, after segregating therefrom the portion sold to the Manila Lodge No. 761, PBOE, a new Certificate of Title No. 2196 3 was issued on July 17, 1911 to the City of Manila.

Manila Lodge No. 761, BPOE, subsequently sold the said 5,543.07 square meters to the Elks Club, Inc., to which was issued TCT No. 67488. 4 The registered owner, "The Elks Club, Inc.," was later changed by court oder to "Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc."

In January 1963 the BPOE. petitioned the Court of First Instance of Manila, Branch IV, for the cancellation of the right of the City of Manila to repurchase the property This petition was granted on February 15, 1963.

On November 19, 1963 the BPOE sold for the sum of P4,700,000 the land together with all the improvements thereon to the Tarlac Development Corporation (TDC, for short) which paid P1,700.000 as down payment and mortgaged to the vendor the same realty to secure the payment of the balance to be paid in quarterly installments.5 At the time of the sale,, there was no annotation of any subsisting lien on the title to the property. On December 12, 1963 TCT No. 73444 was issued to TDC over the subject land still described as "UNA PARCELA DE TERRENO, que es parte de la Luneta Extension, situada en el Distrito de Ermita ... ."

In June 1964 the City of Manila filed with the Court of First Instance of Manila a petition for the reannotation of its right to repurchase; the court, after haering, issued an order, dated November 19, 1964, directing the Register of Deeds of the City of Manila to reannotate in toto the entry regarind the right of the City of Manila to repurchase the property after fifty years. From this order TDC and BPOE appealed to this Court which on July 31, 1968 affirmed in G.R. Nos. L-24557 and L-24469 the trial court's order of reannotation, but reserved to TDC the right to bring another action for the clarification of its rights.

As a consequence of such reservation, TDC filed on April 28, 1971 against the City of Manila and the Manila Lodge No. 761, BPOE, a complaint, docketed as Civil Case No. 83009 of the Court of First Instance of Manila, containing three causes of action and praying -

a) On the first cause of action, that the plaintiff TDC be declared to have purchased the parcel of land now in question with the buildings and improvements thereon from the defendant BPOE for value

and in good faith, and accordingly ordering the cancellation of Entry No. 4608/T-1635 on Transfer Certificate of Title No. 73444 in the name of the Plaintiff;

b) On the second cause of action, ordering the defendant City of Manila to pay the plaintiff TDC damages in the sum of note less than one hundred thousand pesos (P100,000.00);

c) On the third cause of action, reserving to the plaintiff TDC the right to recover from the defendant BPOE the amounts mentioned in par. XVI of the complaint in accordance with Art. 1555 of the Civil Code, in the remote event that the final judgment in this case should be that the parcel of land now in question is a public park; and

d) For costs, and for such other and further relief as the Court may deem just and equitable. 6

Therein defendant City of Manila, in its answer dated May 19, 1971, admitted all the facts alleged in the first cause of action except the allegation that TDC purchased said property "for value and in good faith," but denied for lack of knowledge or information the allegations in the second and third causes of action. As, special and affirmative defense, the City of Manila claimed that TDC was not a purchaser in good faith for it had actual notice of the City's right to repurchase which was annotated at the back of the title prior to its cancellation, and that, assuming arguendo that TDC had no notice of the right to repurchase, it was, nevertheless, under obligation to investigate inasmuch as its title recites that the property is a part of the Luneta extension. 7

The Manila Lodge No. 761, BPOE, in its answer dated June 7, 1971, admitted having sold the land together with the improvements thereon for value to therein plaintiff which was in good faith, but denied for lack of knowledge as to their veracity the allegations under the second cause of action. It furthermore admitted that TDC had paid the quarterly installments until October l5, 1964 but claimed that the latter failed without justifiable cause to pay the subsequent installments. It also asserted that it was a seller for value in good faith without having misrepresented or concealed tacts relative to the title on the property. As counterclaim, Manila Lodge No. 761 (BPOE) sought to recover the balance of the purchase price plus interest and costs. 8

On June 15, 1971 TDC answered the aforesaid counterclaim, alleging that its refusal to make further payments was fully justified. 9

After due trial the court a quo rendered on July 14, 1972 its decision finding the subject land to be part of the "public park or plaza" and, therefore, part of the public domain. The court consequently declared that the sale of the subject land by the City of Manila to Manila Lodge No. 761, BPOE, was null and void; that plaintiff TDC was a purchaser thereof in g faith and for value from BPOE and can enforce its rights against the latter; and that BPOE is entitled to recover from the City of Manila whatever consideration it had 'paid the latter. 'The dispositive part of the decision reads: ñé+.£ªwph!1

WHEREFORE, the Court hereby declares that the parcel of land formerly covered by Transfer Certificate of Title Nos 2195 and 67488 in the name of BPOE and now by Transfer Certificate of Title No. 73444 in the name of Tarlac Development Corporation is a public' park or plaza, and, consequently, instant complaint is dimissed, without pronouncement as to costs.

In view of the reservation made by plaintiff Tarlac Development Corporation to recover from defendant BPOE the amounts mentioned in paragraph XVI of the complaint in accordance with Article 1555 of the Civil Code, the Court makes no pronouncement on this point. 10

From said decision the therein plaintiff TDC as well as the defendant Manila Lodge No. 761, BPOE, appealed to the Court of Appeals.

In its appeal docketed as CA-G.R. No. 51590-R, the Manila Lodge No. 761, BPOE, avers that the trial court committed the following errors, namely:

1. In holding that the property subject of the action is not patrimonial property of the City of Manila; and

2. In holding that the Tarlac Development Corporation may recover and enforce its right against the defendant BPOE. 11

The Tarlac Development Corporation, on the other hand, asserts that the trial court erred:

(1) In finding that the property in question is or was a public park and in consequently nullifying the sale thereof by the City of Manila to BPOE;

(2) In applying the cases of Municipality of Cavite vs. Rojas, 30 Phil. 602, and Government vs. Cabangis, 53 Phil. 112, to the case at bar; and

(3) In not holding that the plaintiff-appellant is entitled to ,recover damages from the defendant City of Manila. 12

Furthermore, TDC as appellee regarding the second assignment of error raised by BPOE, maintained that it can recover and enforce its rigth against BPOE in the event that the land in question is declared a public park or part thereof. 13

In its decision promulgated on June 30, 1975, the Court of Appeals concur ed in the findings and conclusions of the lower court upon the ground that they are supported by he evidence and are in accordance with law, and accordingly affirmed the lower court's judgment.

Hence, the present petitions for review on certiorari.

G.R. No. L-41001

The Manila Lodge No. 761, BPOE, contends, in its petition for review on certiorari docketed as G.R. No. L-41001, that the Court of Appeals erred in (1) disregarding the very enabling acts and/or statutes according to which the subject property was, and still is, patrimonial property of the City of Manila and could therefore be sold and/or disposed of like any other private property; and (2) in departing from the accepted and usual course of judicial proceedings when it simply made a general affirmance of the court a quo's findings and conclusions without bothering to discuss or resolve several vital points stressed by the BPOE in its assigned errrors. 14

G.R. No. L-41012

The Tarlac Development Corporation, in its petition for review on certiorari docketed as G.R. No. L-41012, relies on the following grounds for the allowance of its petition:

1. that the Court of Appeals did not correctly interpret Act No. 1360, as amended by Act No. 1657, of the Philippine Commission; and

2. that the Court of Appeals has departed from the accepted and usual course of judicial proceedings in that it did not make its own findings but simply recited those of the lower court. 15

ISSUES AND ARGUMENTS

FIRST ISSUE

Upon the first issue, both petitioners claim that the property subject of the action, pursuant to the provisions of Act No. 1360, as amended by Act No. 1657, was patrimonial property of the City of Manila and not a park or plaza.

Arguments of Petitioners

In G.R. No. L-41001, the Manila Lodge No. 761, BPOE, admits that "there appears to be some logic in the conclusion" of the Court of Appeals that "neither Act No. 1360 nor Act No. 1657 could have meant to supply the City of Manila the authority to sell the subject property which is located at the south end not the north — of the reclaimed area." 16 It argues, however, that when Act No. 1360, as amended, authorized the City of Manila to undertake the construction of the Luneta extension by reclaimed land from the Manila Bay, and declared that the reclaimed land shall be the "property of the City of Manila," the State expressly granted the ownership thereof to the City of Manila which. consequently. could enter into transactions involving it; that upon the issuance of O.C.T. No. 1909, there could he no doubt that the reclaimed area owned by the City was its patrimonial property;" that the south end of the reclaimed area could not be for public use for. as argued by TDC a street, park or promenade can be property for public use pursuant to Article 344 of the Spanish Civil Code only when it has already been so constructed or laid out, and the subject land, at the time it was sold to the Elk's Club, was neither actually constructed as a street, park or promenade nor laid out as a street, park or promenade;" that even assuming that the subject property was at the beginning property of public dominion, it was

subsequently converted into patrimonial property pursuant to Art. 422 of the Civil Code, inasmuch as it had never been used, red or utilized since it was reclaimed in 1905 for purpose other than this of an ordinary real estate for sale or lease; that the subject property had never been intended for public use, is further shown by the fact that it was neither included as a part of the Luneta Park under Plan No. 30 of the National Planning Commission nor considered a part of the Luneta National Park (now Rizal Park) by Proclamation No. 234 dated December 19, 1955 of President Ramon Magsaysay or by Proclamation Order No. 274 dated October 4, 1967 of President Ferdinand E. Marcos;" 19 that, such being the case, there is no reason why the subject property should -not be considered as having been converted into patrimonial property, pursuant to the ruling in Municipality vs. Roa 7 Phil. 20, inasmuch as the City of Manila has considered it as its patrimonial property not only bringing it under the operation of the Land Registration Act but also by disposing of it; 20 and that to consider now the subject property as a public plaza or park would not only impair the obligations of the parties to the contract of sale (rated July 13, 1911, but also authorize deprivation of property without due process of law. 21

G.R. No. L-410112

In L-41012, the petitioner TDC stresses that the principal issue is the interpretation of Act No. 1360, as amended by. Act No. 1657 of the Philippine Commission, 22 and avers that inasmuch as Section 6 of Act No. 1360, as amended by Act 1657, provided that the reclamation of the Luneta extension was to be paid for out of the funds of the City of Manila which was authorized to borrow P350,000 "to be expended in the construction of Luneta Extension," the reclaimed area became "public land" belonging to the City of Manila that spent for the reclamation, conformably to the holding in Cabangis, 23 and consequently, said land was subject to sale and other disposition; that the Insular Government itself considered the reclaimed Luneta extension as patrimonial property subject to disposition as evidenced by the fact that See. 3 of Act 1360 declared that "the land hereby reclaimed shall be the property of the City of Manila;" that this property cannot be property for public use for according to Article 344 of the Civil Code, the character of property for public use can only attach to roads and squares that have already been constructed or at least laid out as such, which conditions did not obtain regarding the subject land, that Sec. 5 of Act 1360 authorized the City of Manila to lease the northern part of the reclaimed area for hotel purposes; that Act No. 1657 furthermore authorized the City of Manila to sell the same; 24 that the express statutory authority to lease or sell the northern part of the reclaimed area cannot be interpreted to mean that the remaining area could not be sold inasmuch as the purpose of the statute was not merely to confer authority to sell the northern portion but rather to limit the city's power of disposition thereof, to wit: to prevent disposition of the northern portion for any purpose other than for a hotel site that the northern and southern ends of the reclaimed area cannot be considered as extension of the Luneta for they lie beyond the sides of the original Luneta when extended in the direction of the sea, and that is the reason why the law authorized the sale of the northern portion for hotel purposes, and, for the same reason, it is implied that the southern portion could likewise be disposed of. 26

TDC argues likewise that there are several items of uncontradicted circumstantial evidence which may serve as aids in construing the legislative intent and which demonstrate that the subject property is patrimonial in nature, to wit: (1) Exhibits "J" and "J-1", or Plan No. 30 of the National Planning Commission showing the Luneta and its vicinity, do not include the subject property as part of the Luneta Park; (2) Exhibit "K", which is the plan of the subject property covered by TCT No. 67488 of BPOE, prepared on November 11, 1963, indicates that said property is not a public park; (3) Exhibit "T", which is a certified copy of Proclamation No. 234 issued on December 15, 1955 is President Magsaysay, and Exhibit "U" which is Proclamation Order No. 273 issued on October 4, 1967 by President Marcos, do not include the subject property in the Luneta Park-, (4) Exhibit "W", which is the location plan of the Luneta National Park under Proclamations Nos. 234 and 273, further confirms that the subject property is not a public park; and (5) Exhibit "Y", which is a copy of O.C.T. No. 7333 in the name of the United States of America covering the land now occupied by the America covering the land now occupied by the American Embassy, the boundaries of which were delineated by the Philippine Legislature, states that the said land is bounded on the northwest by properties of the Army and Navy Club (Block No. 321) and the Elks Club (Block No. 321), and this circumstance shows that even the Philippine Legislature recognized the subject property as private property of the Elks Club. 27

TDC furthermore contends that the City of Manila is estopped from questioning the validity of the sale of the subject property that it executed on July 13, 1911 to the Manila Lodge No. 761, BPOE, for several reasons, namely: (1) the City's petition for the reannotation of Entry No. 4608/T-1635 was predicated on the validity of said sale; (2) when the property was bought by the petitioner TDC it was not a public plaza or park as testified to by both Pedro Cojuanco, treasurer of TDC, and the surveyor, Manuel Añoneuvo, according to whom the subject property was from all appearances private property as it was enclosed by fences; (3) the property in question was cadastrally surveyed and registered as property of the Elks Club, according to Manuel Anonuevo; (4) the property was never used as a public park, for, since the issuance of T.C.T. No. 2165 on July 17, 1911 in the name of the Manila Lodge NO. 761, the latter used it as private property, and as early as January 16, 1909 the City of Manila had already executed a deed of sale over the property in favor of the Manila Lodge No. 761; and (5) the City of Manila has not presented any evidence to show that the subject property has ever been proclaimed or used as a public park. 28

TDC, moreover, contends that Sec. 60 of Com. Act No. 141 cannot apply to the subject land, for Com. Act No. 141 took effect on December 1, 1936 and at that time the subject land was no longer part of the part of the public domain. 29

TDC also stresses that its rights as a purchaser in good faith cannot be disregarded, for the mere mention in the certificate of title that the lot it purchased was "part of the Luneta extension" was not a

sufficient warning that tile title to the City of Manila was invalid; and that although the trial court, in its decision affirmed by the Court of Appeals, found the TDC -to has been an innocent purchaser for value, the court disregarded the petitioner's rights as such purchaser that relied on Torrens certificate of title. 30

The Court, continues the petitioner TDC erred in not holding that the latter is entitled to recover from the City of Manila damages in the amount of P100,000 caused by the City's petition for- reannotation of its right to repurchase.

DISCUSSION AND RESOLUTION OF FIRST ISSUE

It is a cardinal rule of statutory construction that courts must give effect to the general legislative intent that can be discovered from or is unraveled by the four corners of the statute, 31 and in order to discover said intent, the whole statute, and not only a particular provision thereof, should be considered. 32 It is, therefore, necessary to analyze all the provisions of Act No. 1360, as amended, in order to unravel the legislative intent.

Act No. 1360 which was enacted by the Philippine Commission on June 26, 1905, as amended by Act No. 1657 enacted on May 18, 1907, authorized the "construction of such rock and timber bulkheads or sea walls as may be necessary for the making of an extension to the Luneta" (Sec. 1 [a]), and the placing of the material dredged from the harbor of Manila "inside the bulkheads constructed to inclose the Luneta extension above referred to" (Sec. 1 [a]). It likewise provided that the plan of Architect D. H. Burnham as "a general outline for the extension and improvement of the Luneta in the City of Manila" be adopted; that "the reclamation from the Bay of Manila of the land included in said projected Luneta extension... is hereby authorized and the land thereby reclaimed shall be the property of the City of Manila" (Sec. 3); that "the City of Manila is hereby authorized to set aside a tract of the reclaimed land formed by the Luneta extension authorized by this Act at the worth end of said tract, not to exceed five hundred feet by six hundred feet in size, for a hotel site, and to lease the same with the approval of the Governor General, ... for a term not exceeding ninety-nine years; that "should the Municipal Board ... deem it advisable it is hereby authorized to advertise for sale to sell said tract of land ... ;" "that said tract shall be used for hotel purposes as herein prescribed, and shall not be devoted to any other purpose or object whatever;" "that should the grantee x x x fail to maintain on said tract a first-class hotel x x x then the title to said tract of land sold, conveyed, and transferred, and shall not be devoted to any other purpose or object whatever;" "that should the grantee x x x fail to maintain on said tract a first-class hotel x x x then the title to said tract of land sold, conveyed, and transferred to the grantee shall revert to the City of Manila, and said City of Manila shall thereupon become entitled to immediate possession

of said tract of land" (Sec. 5); that the construction of the rock and timber bulkheads or sea wall "shall be paid for out of the funds of the City of Manila, but the area to be reclaimed by said proposed Luneta extension shall be filled, without cost to the City of Manila, with material dredged from Manila Bay at the expense of the Insular Government" (Sec. 6); and that "the City of Manila is hereby authorized to borrow from the Insular Government ... the sum of three hundred thousand pesos, to be expended in the construction of Luneta extension provided for by paragraph (a) of section one hereof" (Sec.7).

The grant made by Act No. 1360 of the reclaimed land to the City of Manila is a grant of "public" nature, the same having been made to a local political subdivision. Such grants have always been strictly construed against the grantee. 33 One compelling reason given for the strict interpretation of a public grant is that there is in such grant a gratuitous donation of, public money or resources which results in an unfair advantage to the grantee and for that reason, the grant should be narrowly restricted in favor of the public. 34 This reason for strict interpretation obtains relative to the aforesaid grant, for, although the City of Manila was to pay for the construction of such work and timber bulkheads or sea walls as may be necessary for the making of the Luneta extension, the area to be reclaimed would be filled at the expense of the Insular Government and without cost to the City of Manila, with material dredged from Manila Bay. Hence, the letter of the statute should be narrowed to exclude maters which if included would defeat the policy of the legislation.

The reclaimed area, an extension to the Luneta, is declared to be property of the City of Manila. Property, however, is either of public ownership or of private ownership. 35 What kind of property of the City is the reclaimed land? Is it of public ownership (dominion) or of private ownership?

We hold that it is of public dominion, intended for public use.

Firstly, if the reclaimed area was granted to the City of Manila as its patrimonial property, the City could, by virtue of its ownership, dispose of the whole reclaimed area without need of authorization to do so from the lawmaking body. Thus Article 348 of the Civil Code of Spain provides that "ownership is the right to enjoy and dispose of a thing without further limitations than those established by law." 36 The right to dispose (jus disponendi) of one's property is an attribute of ownership. Act No. 1360, as amended, however, provides by necessary implication, that the City of Manila could not dispose of the reclaimed area without being authorized by the lawmaking body. Thus the statute provides that "the City of Manila is hereby authorized to set aside a tract ... at the north end, for a hotel site, and to lease the same ... should the municipal board ... deem it advisable, it is hereby authorized ...to sell said tract of land ... " (Sec. 5). If the reclaimed area were patrimonial property of the City, the latter could dispose of it without need of the authorization provided by the statute, and the authorization to set aside ...

lease ... or sell ... given by the statute would indeed be superfluous. To so construe the statute s to render the term "authorize," which is repeatedly used by the statute, superfluous would violate the elementary rule of legal hermeneutics that effect must be given to every word, clause, and sentence of the statute and that a statute should be so interpreted that no part thereof becomes inoperative or superfluous. 37 To authorize means to empower, to give a right to act. 38 Act No. 1360 furthermore qualifies the verb it authorize" with the adverb "hereby," which means "by means of this statue or section," Hence without the authorization expressly given by Act No. 1360, the City of Manila could not lease or sell even the northern portion; much less could it dispose of the whole reclaimed area. Consequently, the reclaimed area was granted to the City of Manila, not as its patrimonial property. At most, only the northern portion reserved as a hotel site could be said to be patrimonial property for, by express statutory provision it could be disposed of, and the title thereto would revert to the City should the grantee fail to comply with the terms provided by the statute.

TDC however, contends that the purpose of the authorization provided in Act No. 1360 to lease or sell was really to limit the City's power of disposition. To sustain such contention is to beg the question. If the purpose of the law was to limit the City's power of disposition then it is necessarily assumed that the City had already the power to dispose, for if such power did not exist, how could it be limited? It was precisely Act 1360 that gave the City the power to dispose for it was hereby authorized by lease of sale. Hence, the City of Manila had no power to dispose of the reclaimed land had such power not been granted by Act No. 1360, and the purpose of the authorization was to empower the city to sell or lease the northern part and not, as TDC claims, to limit only the power to dispose. Moreover, it is presumed that when the lawmaking body enacted the statute, it had full knowledge of prior and existing laws and legislation on the subject of the statute and acted in accordance or with respect thereto. 39 If by another previous law, the City of Manila could already dispose of the reclaimed area, which it could do if such area were given to it as its patrimonial property, would it then not be a superfluity for Act No. 1360 to authorize the City to dispose of the reclaimed land? Neither has petitioner TDC pointed to any other law that authorized the City to do so, nor have we come across any. What we do know is that if the reclaimed land were patrimonial property, there would be no need of giving special authorization to the City to dispose of it. Said authorization was given because the reclaimed land was not intended to be patrimonial property of the City of Manila, and without the express authorization to dispose of the northern portion, the City could not dispose of even that part.

Secondly, the reclaimed area is an "extension to the Luneta in the City of Manila." 40 If the reclaimed area is an extension of the Luneta, then it is of the same nature or character as the old Luneta. Anent this matter, it has been said that a power to extend (or continue an act or business) cannot authorize a transaction that is totally distinct. 41 It is not disputed that the old Luneta is a public park or plaza and it is so considered by Section 859 of the Revised Ordinances of the City of Manila. 42 Hence the "extension to the Luneta" must be also a public park or plaza and for public use.

TDC, however, contends that the subject property cannot be considered an extension of the old Luneta because it is outside of the limits of the old Luneta when extended to the sea. This is a strained interpretation of the term "extension," for an "extension," it has been held, "signifies enlargement in any direction — in length, breadth, or circumstance." 43

Thirdly, the reclaimed area was formerly a part of the manila Bay. A bay is nothing more than an inlet of the sea. Pursuant to Article 1 of the Law of Waters of 1866, bays, roadsteads, coast sea, inlets and shores are parts of the national domain open to public use. These are also property of public ownership devoted to public use, according to Article 339 of the Civil Code of Spain.

When the shore or part of the bay is reclaimed, it does not lose its character of being property for public use, according to Government of the Philippine Islands vs. Cabangis. 44 The predecessor of the claimants in this case was the owner of a big tract of land including the lots in question. From 1896 said land began to wear away due to the action of the waters of Manila Bay. In 1901 the lots in question became completely submerged in water in ordinary tides. It remained in such a state until 1912 when the Government undertook the dredging of the Vitas estuary and dumped the Sand and - silt from estuary on the low lands completely Submerged in water thereby gradually forming the lots in question. Tomas Cabangis took possession thereof as soon as they were reclaimed hence, the claimants, his successors in interest, claimed that the lots belonged to them. The trial court found for the claimants and the Government appealed. This Court held that when the lots became a part of the shore. As they remained in that condition until reclaimed by the filling done by the Government, they belonged to the public domain. for public use .4' Hence, a part of the shore, and for that purpose a part of the bay, did not lose its character of being for public use after it was reclaimed.

Fourthly, Act 1360, as amended, authorized the lease or sale of the northern portion of the reclaimed area as a hotel sites. The subject property is not that northern portion authorized to be leased or sold; the subject property is the southern portion. Hence, applying the rule of expresio unius est exlusio alterius, the City of Manila was not authorized to sell the subject property. The application of this principle of statutory construction becomes the more imperative in the case at bar inasmuch as not only must the public grant of the reclaimed area to the City of Manila be, as above stated, strictly construed against the City of Manila, but also because a grant of power to a municipal corporation, as happens in this case where the city is author ized to lease or sell the northern portion of the Luneta extension, is strictly limited to such as are expressly or impliedly authorized or necessarily incidental to the objectives of the corporation.

Fifthly, Article 344 of the Civil Code of Spain provides that to property of public use, in provinces and in towns, comprises the provincial and town roads, the squares streets fountains, and public waters the promenades, and public works of general service paid for by such towns or provinces." A park or plaza, such as the extension to the Luneta, is undoubtedly comprised in said article.

The petitioners, however, argue that, according to said Article 344, in order that the character of property for public use may be so attached to a plaza, the latter must be actually constructed or at least laid out as such, and since the subject property was not yet constructed as a plaza or at least laid out as a plaza when it was sold by the City, it could not be property for public use. It should be noted, however, that properties of provinces and towns for public use are governed by the same principles as properties of the same character belonging to the public domain. 46 In order to be property of public domain an intention to devote it to public use is sufficient. 47 The, petitioners' contention is refuted by Manresa himself who said, in his comments", on Article 344, that: ñé+.£ªwph!1

Las plazas, calles y paseos publicos correspondent sin duda aiguna aldominio publico municipal ), porque se hallan establecidos sobre suelo municipal y estan destinadas al uso de todos Laurent presenta tratando de las plazas, una question relativa a si deben conceptuarse como de dominio publico los lugares vacios libres, que se encuenttan en los Municipios rurales ... Laurent opina contra Pioudhon que toda vez que estan al servicio de todos pesos lugares, deben considerable publicos y de dominion publico. Realmente, pala decidir el punto, bastara siempre fijarse en el destino real y efectivo de los citados lugares, y si este destino entraña un uso comun de todos, no hay duda que son de dominio publico municipal si no patrimoniales.

It is not necessary, therefore, that a plaza be already constructed of- laid out as a plaza in order that it be considered property for public use. It is sufficient that it be intended to be such In the case at bar, it has been shown that the intention of the lawmaking body in giving to the City of Manila the extension to the Luneta was not a grant to it of patrimonial property but a grant for public use as a plaza.

We have demonstrated ad satietatem that the Luneta extension as intended to be property of the City of Manila for public use. But, could not said property-later on be converted, as the petitioners contend, to patrimonial property? It could be. But this Court has already said, in Ignacio vs. The Director of Lands, 49 the executive and possibly the legislation department that has the authority and the power to make the declaration that said property, is no longer required for public use, and until such declaration i made the property must continue to form paint of the public domain. In the case at bar, there has been no such explicit or unequivocal declaration It should be noted, furthermore, anent this matter, that courts

are undoubted v not. primarily called upon, and are not in a position, to determine whether any public land is still needed for the purposes specified in Article 4 of the Law of Waters . 50

Having disposed of the petitioners' principal arguments relative to the main issue, we now pass to the items of circumstantial evidence which TDC claims may serve as aids in construing the legislative intent in the enactment of Act No. 1360, as amended. It is noteworthy that all these items of alleged circumstantial evidence are acts far removed in time from the date of the enactment of Act No.1360 such that they cannot be considered contemporaneous with its enactment. Moreover, it is not farfetched that this mass of circumstantial evidence might have been influenced by the antecedent series of invalid acts, to wit: the City's having obtained over the reclaimed area OCT No. 1909 on January 20,1911; the sale made by the City of the subject property to Manila Lodge No. 761; and the issuance to the latter of T.C.T. No. 2195. It cannot gainsaid that if the subsequent acts constituting the circumstantial evidence have been base on, or at least influenced, by those antecedent invalid acts and Torrens titles S they can hardly be indicative of the intent of the lawmaking body in enacting Act No. 1360 and its amendatory act.

TDC claims that Exhs. "J," "J-l" "K," "T," "U," "W" and "Y" show that the subject property is not a park.

Exhibits "J" and "J-1," the "Luneta and vicinity showing proposed development" dated May 14, 1949, were prepared by the National Urban Planning Commission of the Office of the President. It cannot be reasonably expected that this plan for development of the Luneta should show that the subject property occupied by the ElksClub is a public park, for it was made 38 years after the sale to the Elks, and after T.C.T. No. 2195 had been issued to Elks. It is to be assumed that the Office of the President was cognizant of the Torrens title of BPOE. That the subject property was not included as a part of the Luneta only indicated that the National Urban Planning Commission that made the plan knew that the subject property was occupied by Elks and that Elks had a Torrens title thereto. But this in no way proves that the subject property was originally intended to be patrimonial property of the City of Manila or that the sale to Elks or that the Torrens-title of the latter is valid.

Exhibit "K" is the "Plan of land covered by T.C.T . No ----, as prepared for Tarlac Development Company." It was made on November 11, 1963 by Felipe F. Cruz, private land surveyor. This surveyor is admittedly a surveyor for TDC. 51 This plan cannot be expected to show that the subject property is a part of the Luneta Park, for he plan was made to show the lot that "was to be sold to petitioner." This plan must have also assumed the existence of a valid title to the land in favor of Elks.

Exhibits "T" and "U" are copies of Presidential Proclamations No. 234 issued on November 15, 1955 and No. 273 issued on October 4, 1967, respectively. The purpose of the said Proclamations was to reserve certain parcels of land situated in the District of Ermita, City of Manila, for park site purposes. Assuming that the subject property is not within the boundaries of the reservation, this cannot be interpreted to mean that the subject property was not originally intended to be for public use or that it has ceased to be such. Conversely, had the subject property been included in the reservation, it would mean, if it really were private property, that the rights of the owners thereof would be extinguished, for the reservations was "subject to private rights, if any there be." That the subject property was not included in the reservation only indicates that the President knew of the existence of the Torrens titles mentioned above. The failure of the Proclamations to include the subject property in the reservation for park site could not change the character of the subject property as originally for public use and to form part of the Luneta Park. What has been said here applies to Exhibits "V", "V-1" to "V-3," and "W" which also refer to the area and location of the reservation for the Luneta Park.

Exhibit "Y" is a copy of O.C.T. No. 7333 dated November 13, 1935, covering the lot where now stands the American Embassy [Chancery]. It states that the property is "bounded ... on the Northwest by properties of Army and Navy Club (Block No.321) and Elks Club (Block No. 321)." Inasmuch as the said bounderies delineated by the Philippine Legislature in Act No. 4269, the petitioners contend that the Legislature recognized and conceded the existence of the Elks Club property as a primate property (the property in question) and not as a public park or plaza. This argument is non sequitur plain and simple Said Original Certificate of Title cannot be considered as an incontrovertible declaration that the Elks Club was in truth and in fact the owner of such boundary lot. Such mention as boundary owner is not a means of acquiring title nor can it validate a title that is null and void.

TDC finally claims that the City of Manila is estopped from questioning the validity of the sale it executed on July 13,'1911 conconveying the subject property to the Manila Lodge No. 761, BPOE. This contention cannot be seriously defended in the light of the doctrine repeatedly enunciated by this Court that the Government is never estopped by mistakes or errors on the pan of its agents, and estoppel does not apply to a municipal corporation to validate a contract that is prohibited by law or its against Republic policy, and the sale of July 13, 1911 executed by the City of Manila to Manila Lodge was certainly a contract prohibited by law. Moreover, estoppel cannot be urged even if the City of Manila accepted the benefits of such contract of sale and the Manila Lodge No. 761 had performed its part of the agreement, for to apply the doctrine of estoppel against the City of Manila in this case would be tantamount to enabling it to do indirectly what it could not do directly. 52

The sale of the subject property executed by the City of Manila to the Manila Lodge No. 761, BPOE, was void and inexistent for lack of subject matter. 53 It suffered from an incurable defect that could not be ratified either by lapse of time or by express ratification. The Manila Lodge No. 761 therefore acquired

no right by virtue of the said sale. Hence to consider now the contract inexistent as it always has seen, cannot be, as claimed by the Manila Lodge No. 761, an impairment of the obligations of contracts, for there was it, contemplation of law, no contract at all.

The inexistence of said sale can be set up against anyone who asserts a right arising from it, not only against the first vendee, the Manila Lodge No. 761, BPOE, but also against all its suceessors, including the TDC which are not protected the doctrine of bona fide ii purchaser without notice, being claimed by the TDC does not apply where there is a total absence of title in the vendor, and the good faith of the purchaser TDC cannot create title where none exists. 55

The so-called sale of the subject property having been executed, the restoration or restitution of what has been given is order 56

SECOND ISSUE

The second ground alleged in support of the instant petitions for review on certiorari is that the Court of Appeals has departed from the accepted and usual course of judicial proceedings as to call for an exercise of the power of supervision. TDC in L-41012, argues that the respondent Court did not make its own findings but simply recited those of the lower court and made a general affirmance, contrary to the requirements of the Constitution; that the respondent Court made glaring and patent mistakes in recounting even the copied findings, palpably showing lack of deliberate consideration of the matters involved, as, for example, when said court said that Act No. 1657 authorized the City of Manila to set aside a portion of the reclaimed land "formed by the Luneta Extension of- to lease or sell the same for park purposes;" and that respondent Court. further more, did not resolve or dispose of any of the assigned errors contrary to the mandate of the Judiciary Act.. 57

The Manila Lodge No. 761, in L-41001, likewise alleges, as one of the reasons warranting review, that the Court of Appeals departed from the accepted and usual course of Judicial proceedings by simply making a general affirmance of the court a quo findings without bothering to resolve several vital points mentioned by the BPOE in its assigned errors. 58

COMMENTS ON SECOND ISSUE

We have shown in our discussion of the first issue that the decision of the trial court is fully in accordance with law. To follows that when such decision was affirmed by the Court of Appeals, the affirmance was likewise in accordance with law. Hence, no useful purpose will be served in further discussing the second issue.

CONCLUSION

ACCORDINGLY, the petitions in both G.R. Nos. L-41001 and L-41012 are denied for lack of merit, and the decision of the Court of Appeals of June 30, 1975, is hereby affirmed, at petitioner's cost.

Makasiar, Munoz Palma and Martin, JJ., concur.1äwphï1.ñët

Teehankee, concurs in the result which is wholly consistent with the basic rulings and jugdment of this Court in its decision of July 31, 1968.

Footnotesñé+.£ªwph!1

1 Exh. "H," Exh. "13-Elks."

2 Exh. "I."

3 Exh. "X. "

4 Exh. "B."

5 Exh. "C."

6 Joint Record on Appeal of the Plaintiff and the Defendant Manila Lodge No. 761, Benevolent and Protective Order of Elks, Inc., pp. 33-34.

7 Ibid., pp. 49-63.

8 Ibid., pp. 64-71.

9 Ibid., pp. 87-88.

10 Ibid., pp. 92-110.

11 Record, L-41001, p.7.

12 Record, L-41012, p. 11; Brief for Plaintiff-Appellant in CA-G.R. No. 51590-R, pp. 1-2.

13 Brief for the Plaintiff-Appellant Tarlac Development Corporation in CA-G.R. No. 51590-R, p. 2.

14 Record, L-41001, pp. 14-16.

15 Record, L-41012, pp. 16-46.

16 L,41001, Record, p. 17.

17 Ibid., p. 19.

18 Ibid., pp. 19-20.

19 Ibid., p. 91. 21.

20 Ibid., pp. 21-22.

21 Ibid., pp. 22-23.

22 L-41012, Record, pp. 16-17.

23 53 Phil. 112 (1930).

24 L-41012, Record, pp- 22-23, 25-26.

25 Ibid., pp. 23-25.

26 Ibid., pp, 27-28.

27 Ibid., pp. 28-34.

28 Ibid., pp. 34-41.

29 Ibid., pp. 42-43.

30 Ibid., pp. 44-45

31 Borromeo vs. Mariano, 41 Phil. 322.

32 Aboitiz Shipping Corporation vs. The City of Cebu, L-14526, March 31, 1965, 13 SCRA 449, 453.

33 Sutherland, Statutes and Statutory Construction, 3rd ed., Vol. II. p. 240.

34 Ibid., Vol III, pp. 204-208.

35 Art. 338, Civil Code of Spain; Art. 419 of the Philippines provides: "Property is either of public dominion or of private ownership."

36 Art. 428, Civil Code.

37 Sutherland, op. cit., p. 339.

38 4 Words and Phrases, p. 830, citing State vs. Board of Com'rs of Franklin County, 114 p. 247, 248; 24; Kan. 404.

39 Tamiami Trial Tours vs. Lee, 194 So. 305, 306

40 Sec. 1, Act No. 1360.

41 See 15-A Words and Phrases, p. 602, citing Clements' Ex'rs vs. Dickey, 5 Fed. Cas. 1025, 1027.

42 Bureau of Printing, 1908, p. 281.

43 15-A Words and Phrases, p. 614, citing Mayor, etc. of Monroe vs. Ouachita Parish, 17 So. 498, 499, 47 La. Ann. 1061.

44 53 Phil. 112.

45 Syllabus, citing Aragon vs. Insular Government, 19 Phil. 223; Francisco s Government of the Philippine Islands, 28 Phil. 505.

46 Viuda de Tan Toco vs. Municipal Council of Iloilo, 49 Phil, 52, 55.

47 Art 420, Civil Code.

48 3 Codigo Civil Español, 6a edicion, p. 106.

49 108 Phil. 335, 339.

50 Monteverde vs. Director of Lands, 93 Phil. 134, cited in Ignacio vs- The Director of Lands, supra.

51 L-41012, Record, p. 29

52 Republic vs. Go Bon Lee, L-11499, April 29, 1, 1 SCRA 1166, 1170; Go Tian An vs. Republic, L-19833, August 31, 1966, 17 SCRA 1053, 105a; Pechueco Sons Company vs. Provincial Board of Antique, L-27038, January 30, 1970, 31 SCRA 320, 327, citing San Diego vs. Municipality of Naujan L-9920, 29 February 1960, cited in Favis vs. Municipality of Sabangan, L-26522, 27 February 1969, 27 SCRA 92; see also City of Manila vs. Tarlac Development Corporation, L-24557, L-24469 and L-24481, 31 July 1968, 24 SCRA 466.

53 Arts. 1409 and 1458, Civil Code.

54 4 Tolentino, Civil Code p. 575, citing 1 Von Tuhr Obligaciones, p. 164.

55 92 CJS p. 219, citing Chestnut vs. Weekes, 188 S.E. 714, 183 Ga. 367' Bradbury vs. Green, 351 p. 2d 807, 207 Okl. 586; Noble vs. Kahn, 240 P. 2d/ 757, 206 Okl. 13, 35 A.L.R. 2d 119.

56 4 Tolentino, Civil Code, p. 576, citing Perez Gonzales and Alguer; I-II Enneccerus, Kipp and Wolff, 364-366; 3 Von Tuhr 311; 3 Fabres 231. See also 92 CJS p. 550, citing Bologna Bros. vs. Stephens, 18 So. 2d 914, 206 La. 112; Partlow vs. Mulligan, 76 N.Y.S. 2d 181.3

The Lawphil Project - Arellano Law FoundationRepublic of the Philippines

SUPREME COURT

Manila

EN BANC

G.R. No. L-6225 January 10, 1953

ARSENIO H. LACSON, petitioner,

vs.

MARIANO ROQUE, as Acting Executive Secretary, BARTOLOME GATMAITAN, as Vice-Mayor of Manila and DIONISIO OJEDA, as Acting Chief of Police of Manila, respondents.

Arsenio H. Lacson, Jose P. Laurel, Ramon Diokno and Jose W. Diokno for petitioner.

City Fiscal Eugenio Angeles for respondents Bartolome Gatmaitan and Dionisio Ojeda.

Office of the Solicitor General Juan R. Liwag and Solicitor Felix V. Makasiar for respondents.

Jesus G. Barrera and Enrique M. Fernando as amici curiae.

TUASON, J.:

The petitioner, Arsenio H. Lacson, Mayor of the City of Manila, has been suspended from the office by the President and has brought this original action for prohibition contesting the legality of the suspension. Mariano Roque, Acting Executive Secretary, and Dionisio Ojeda, Chief of Police of Manila, who are said to have threatened to carry out the President's order, and Bartolome Gatmaitan, the Vice-Mayor who is performing the duties of mayor, are made defendants.

The salient facts alleged in the application, not denied by the respondents, are as follows:

On October 20, 1952, following the acquittal of Celestino C. Juan, Deputy Chief of Police, in a criminal prosecution for malversation of public property instituted at the instance of Mayor Lacson, the petitioner made a radio broadcast in which he criticized the court's decision stating, it is alleged: "I have nothing but contempt for certain courts of justice. . . . I tell you one thing (answering an interrogator), if I have the power to fire Judge Montesa (the trial judge) I will fire him for being incompetent, for being an arrogant . . . an ignoramus."

Thereafter, Judge Montesa, at a public meeting of the Judges of the Courts of First Instance of Manila submitted to the consideration of his colleagues the question of whether Mayor Lacson's remarks were contempt of court. A committee of judges, which was appointed to study the question, reported that it was not free to state whether contempt proceedings if instituted would prosper. The Committee believed that Judge Montesa was the one most competent to decide upon the action that should be taken.

In the meanwhile, On October 23, Judge Montesa wrote the Secretary of Justice requesting that a special prosecutor be designated to handle the case for criminal libel which he intended to file against the mayor. He gave as reasons for his request that "whatever blunders the mayor had committed, the same was due to an advice given him by his legal adviser, the city fiscal, "and that it would be "difficult to expect that he would be willing to move against him or act in a manner that would put him in a bad light with the mayor."

On October 24, in Special Administrative Order No. 235, marked RUSH, the Secretary of Justice designated Solicitor Martiniano P. Vivo of the Solicitor's Office "to assist the City Fiscal of Manila in the investigation of the complaint of Judge Agustin P. Montesa against Mayor Arsenio H. Lacson, to file whatever criminal action the evidence may warrant and to prosecute the same in court."

On the following day, Judge Montesa filed his projected complaint for "libel and contempt" with the City Fiscal which was numbered 27909. This complaint in the ordinary routine of distribution of cases in the City Fiscal's Office should have corresponded to Assistant Fiscal Jose B. Jimenez. Consequently upon Solicitor Vivo's designation, City Fiscal Angeles designated Assistant Fiscals Jimenez and also Hermogenes Concepcion, Jr. to represent him and to collaborate with the Solicitor from the Bureau of Justice.

Solicitor Vivo conducted a preliminary investigation in the office of the Solicitor General without the presence of either of the Assistant Fiscals assigned to this case, and sent out subpoenas in his name and upon his signature. And having completed the preliminary examination, on October 30 he docketed in the Court of First Instance a complaint for libel against Mayor Lacson, signed and sworn to by Judge Montesa as complainant. At the foot of the complaint both Assistant Fiscal Hermogenes Concepcion, Jr. and Solicitor Vivo certified that "we have conducted the preliminary investigation in this case in accordance with law" although Fiscal Concepcion had taken no part in the proceedings.

On October 31, the day following the filing of the above complaint, the President wrote the Mayor a letter of the following tenor:

In view of the pendency before the Court of First Instance of Manila of criminal case No. 20707 against you, for libel, and pursuant to the present policy of the administration, requiring the suspension of any local elective official which is being charged before the courts with any offense involving moral turpitude, you are hereby suspended from office effective upon receipt hereof, your suspension to continue until the final disposition of the said criminal case.

And notified of the suspension, Vice-Mayor Bartolome Gatmaitan entered upon the duties of the office in place of the suspended city executive.

Allegations have been made vigorously attacking the form and legality of Solicitor Vivo's designation and of the procedure pursued in the conduct of the preliminary investigation. The objections are at best

inconclusive of the fundamental issues and will be brushed aside in this decision. It will be assumed for the purpose of our decisions that the assailed designation and investigation were regular and legal, and we will proceed at once to the consideration of the validity of the disputed suspension.

By section 9 of the Revised Charter of the City of Manila (Republic Act No. 409), "the Mayor shall hold office for four years unless sooner removed." But the Chartter does not contain any provision for this officer's removal or suspension. This silence is in striking contrast to the explicitness with which Republic Act No. 409 stipulates for the removal and suspension of board members and other city officials. Section 14 specifies the causes for which members of the Municipal Board may be suspended and removed, to wit: the same causes for removal of provincial elective officers, and section 22 expressly authorizes the removal — for cause — of appointive city officials and employees by the President or the Mayor depending on who made the appointments.

Nevertheless, the rights, duties and privileges of municipal officers do not have to be embodied in the charter, but may be regulated by provisions of general application specially if these are incorporated in the same code of which the city organic law forms a part.

Such is the case here. If the Manila City Charter itself is silent regarding the suspension or removal of the mayor, section 64 (b) of the Revised Administrative Code does confer upon the President the power to remove any person from any position of trust or authority under the Government of the Philippines for disloyalty to the Republic of the Philippines. There is no denying that the position of mayor is under the Government of the Philippines and one trust and authority, and comes within the purview of the provision before cited.

The intent of the phrase "unless sooner removed" in section 9 of the Manila Charter has been a topic of much speculation and debate in the course of the oral argument and in the briefs. This phrase is not uncommon in statutes relating to public offices, and has received construction from the courts. It has been declared that "Power in the appointing authority to remove a public officer may be implied where to statutory specification of the term of office are added the words 'unless sooner removed.'" (43 Am. Jur., 30.)

It is obvious from the plain language of this statement that the respondents can hardly derive comfort from the phrase in question as repository of a hidden or veiled authority of the President. Implying power of the appointing agency to remove, the natural inference is that the words have exclusive application to cases affecting appointive officers; so that, where the officers involved are elective, like

that of mayor of the City of Manila, they have no other meaning than that the officer is not immune to removal, and the whole clauses is to be interpreted to read, "The mayor shall hold his position for the prescribed term unless sooner ousted as provided by other laws," or something to the effect. The Congress is presumed to have been aware of section 64 (b) of the Revised Administrative Code and to have in mind this section and other removal statutes that may be enacted in the future, in employing the phrase "unless sooner removed." Another conclusion, we are impelled to say, is that under existing legislation, the Manila City Mayor is removable only for disloyalty to the Republic. For, as will be shown, the express mention of one cause or several causes for removal or suspension excludes other causes.

Four justices who join in this decision do not share the view that the only ground which the Mayor may be expelled is disloyalty. The Chief Justice, Mr. Justice Padilla and Mr. Justice Jugo, three of the Justices referred to, reason that, as the office of provincial executive is at least as important as the office of mayor of the city of Manila, the latter officer, by analogy, ought to be amenable to removal and suspension for the same causes as provincial executives, who, under section 2078 of the Revised Administrative Code, may be discharged for dishonesty, oppression, or misconduct in office, besides disloyalty. Even so, these members of the Court opine that the alleged offense for which Mayor Lacson has been suspended is not one of the grounds just enumerated, and are in complete agreement with others of the majority that the suspension is unwarranted and illegal. Mr. Justice Pablo also believes that the suspension was illegal but wants to have it understood that he bases his concurrence mainly on the strength of the ruling in the case of Cornejo vs. Naval (54 Phil., 809), of which will speak more later.

The contention that the President has inherent power to remove or suspend municipal officers is without doubt not well taken. Removal and suspension of Public officers are always controlled by the particular law applicable and its proper construction subject to constitutional limitations. (2 McQuillen's Municipal Corporations [Revised], section 574.) So it has been declared that the governor of a state, (who is the state what the President is to the Republic of the Philippines), can only remove where the power is expressly given or arises by necessary implication under the Constitution or statutes. (43 Am. Jur., 34.)

There is neither statutory nor constitutional provision granting the President sweeping authority to remove municipal officials. By Article VII, Section 10, paragraph (1) of the Constitution the President "shall . . . exercise general supervision over all local governments," but supervision does not contemplate control. (People vs. Brophy, 120 P., 2nd., 946; Cal. App., 2nd., 15.) Far from implying control or power to remove, the President's supervisory authority over municipal affairs disqualified by the proviso " as may be provided by law," a clear indication of constitutional intention that the provision was not to be self-executing but requires legislative implementation. And the limitation does not stop here. It is significant to note that section 64 (b) of the Revised Administrative Code in conferring on the Chief Executive power to remove specifically enjoins that the said power should be exercised

conformably to law, which we assume to mean that removals must be accomplished only for any of the causes and in the fashion prescribed by law and the procedure.

Then again, strict construction of law relating to suspension and removal, is the universal rule. The rule is expressed in different forms which convey the same idea: Removal is to be confined within the limits prescribed for it; The causes, manner and conditions fixed must be pursued with strictness; Where the cause for removal is specified, the specification amounts to a prohibition to remove for a different cause; etc., etc. (Mechem on the Law of Offices and Officers, p 286; 2 McQuillen's Municipal Corporations [Revised], section 575; 43 Am. Jur., 39.) The last statement is a paraphrase of the well known maxim Expressio unius est exclusio alterius.

The reason for the stringent rule is said to be that the remedy by removal is a drastic one (43 Am. Jur., 39) and, according to some courts, including ours (Cornejo vs. Naval, supra), penal in nature. When dealing with elective posts, the necessity for restricted construction is greater. Manifesting jealous regard for the integrity of positions filled by popular election, some courts have refused to bring officers holding elective offices within constitutional provision which gives the state governor power to remove at pleasure. Not even in the face of such provision, it has been emphasized, may elective officers be dismissed except for cause. (62 C.J.S., 947.)

It may be true, as suggested, that the public interest and the proper administration of official functions would be best served by an enlargement of the causes for removal of the mayor, and vice versa. The answer to this observation is that the shortcoming is for the legislative branch alone to correct by appropriate enactment. It is trite to say that we are not to pass upon the folly or wisdom of the law. As has been said in Cornejo vs. Naval, supra, anent identical criticisms, "if the law is too narrow in scope, it is for the Legislature rather than the courts to expand it." It is only when all other means of determining the legislative intention fail that a court may look into the effect of the law; otherwise the interpretation becomes judicial legislation . (Kansas ex rel. Little Atty., Gen. vs. Mitchell, 70 L.R.A., 306; Dudly vs. Reynolds, 1 Kan., 285.)

Yet, the abridgment of the power to remove or suspend an elective mayor is not without it own justification, and was, we think, deliberately intended by the lawmakers. The evils resulting from a restricted authority to suspend or remove must have been weighed against the injustices and harms to the Republic interest which would be likely to emerge from an unrestrained discretionary power to suspend and remove.

In consonance with the principles before stated, we are constrained to conclude that the power of the President to remove or suspend the Mayor of the City of Manila is confined to disloyalty to the Republic or, at the most, following the opinion of three of the subscribing Justices, for the other causes stipulated in section 2078 of the Revised Administrative Code, and that the suspension of the petitioner for libel is outside the bounds of express or unwritten law. It needs no argument to show that the offense of libel or oral defamation for which Mayor Lacson is being prosecuted is not disloyalty, dishonesty, or oppression within the legal or popular meaning of these words. Misconduct in office is the nearest approach to the offense of libel, and misconduct Mayor Lacson's offense is, in the opinion of counsel and of some members of the court. Admitting, as we understand the respondents' position, that the petitioner was not guilty of disloyalty, dishonesty or oppression, yet counsel do contend that the petitioner's "outburst" against Judge Montesa constituted misconduct in office.

Misconduct in office has a definite and well-understood legal meaning. By uniform legal definition, it is a misconduct such as affects his performance of his duties as an officer and not such only as affects his character as a private individual. In such cases, it has been said all times, it is necessary to separate the character of the man from the character of the officer. (Mechem, supra, section 457.) "It is settled that misconduct, misfeasance, or malfeasance warranting removal from office of an officer, must have direct relation to and be connected with the performance of official duties amounting either to maladministration or willful, intentional neglect and failure to discharge the duties of the office . . . " (43, Am. Jur., 39, 40.) To this effect is the principle laid down in Cornejo vs. Naval, supra.

In that case, Cornejo, Municipal President of Pasay, Rizal, had been found guilty of the crime of falsification of a private document and sentenced therefore to one year, eight months, and twenty-one days' imprisonment, etc. On the basis of his conviction, the Municipal President had been suspended and administrative charges preferred against him with the Provincial Board, by the Governor.

The suspended officer assailed the legality of the suspension before this court, and this court in a unanimous decision ruled that the suspension was illegal and without effect. The court prefaced its opinion with the statement that the charge against the municipal officer to be valid cause for suspension or removal "must be one affecting the official integrity of the officer in question." Making this premise the basis of its investigation, the court concluded that the crime of falsification of a private document is not misconduct in office, pointing out that this crime "does not imply that one takes advantage of his official position, inasmuch as corruption signifies in office, and inasmuch of the charge must be one affecting the official integrity of the officer in question."

Judged by the foregoing standard definition of misconduct in office, the alleged libel imputed to the suspended mayor was not such misconduct even if the term "misconduct in office" be taken in its broadest sense. The radio broadcast in which the objectionable utterances were made had nothing or very little to do with petitioner's official functions and duties as mayor. It is was not done by virtue or under color of authority. It was not any wrongful official act, or omission to perform a duty of public concern, tacitly or expressly annexed to his position Neither can it be said that Mayor Lacson committed an abuse or took advantage of his office. One does not have to be a mayor to make those remarks or to talk on the radio. The use of the radio is a privilege open to anyone who would pay for the time consumed, or whom the owner would allow for reasons of his own. The mere circumstance that the broadcast was transmitted from the City Hall instead of the radio station did not alter the situation. It is the character of the remarks and their immediate relation to the office that are of paramount consideration. It is our considered opinion that the petitioner acted as a private individual and should be made to answer in his private capacity if he committed any breach of propriety or law.

The most liberal view that can be taken of the power of the President to remove the Mayor of the City of Manila is that it must be for cause. Even those who would uphold the legality of the Mayor's suspension do not go so far as to claim power in the Chief Executive to remove or suspend the Mayor at pleasure. Untramelled discretionary power to remove does not apply to appointed officers whose term of office is definite, much less elective officers. has been pointedly stated, "Fixity of tenure destroys the power of removal at pleasure otherwise incident to the appointing power . . . The reason of this rule is the evident repugnance between the fixed term and the power of arbitrary removal . . ."

"An inferential authority to remove at pleasure can not be deduced, since the existence of a defined term, ipso facto, negatives such an inference, and implies a contrary presumption, i.e., that the incumbent shall hold office to the end of his term subject to removal for cause." (State ex rel. Gallaghar vs. Brown, 57 Mo Ap., 203, expressly adopted by the Supreme Court in State ex rel. vs. Maroney, 191, Mo., 548; 90 S.W., 141; State vs. Crandell, 269 Mo., 44; 190 S.W., 889; State vs. Salval, 450, 2d, 995; 62 C.J.S., 947.)

Granting now, for the sake of argument, that the President may remove the Mayor for cause, was the Mayor's alleged crime sufficient legal justification for his suspension?

In a limited sense the words "for cause" and "misconduct in office" are synonymous. "For cause," like "misconduct in office." has been universally accepted to mean for reasons which the law and sound public policy recognize as sufficient ground for removal, that is, legal cuase, and not merely cause which the appointing power in the exercise of discretion may deem sufficient. It is implied that officers may not

be removed at the mere will of those vested with the power of removal, or without any cause. Moreover, the cause must relate to and effect the administration of the office and must be restricted to something to a substantial nature directly affecting the rights and interest of the public. (43 Am. Jur., 48.) One court went to the extent of saying that "The eccentric manner of an officer, his having exaggerated notion of his own importance, indulgence in coarse language, or talking loudly on the streets, however offensive, would not warrant any interference with his incumbency. Rudeness of an officer not amounting to illegality of conduct or oppression is not such misconduct as will give cause for removing him from office."

Much discussion, which we consider of title or no importance, has been devoted to the question of whether the power to remove carries with it the power to suspend. The two powers, as has been indicated, are identical and governed by the same principles in their important aspects that have any bearing on the case at bar. Whether decreed as a punishment in itself, or as auxiliary in the proceedings for removal so as to tie the defendant's hand pending his investigation, suspension ought to be based on the same ground upon which removal may be effected or is sought. (43 Am. Jur., 65.) When exercised as a mere incident to the power to remove, the power to suspend cannot be broader than the power to which it is anciliary. A stream cannot rise higher than its source, as the saying goes.

In their effects, the difference between the power to remove and the power to suspend is only one of degree. Suspension is a qualified expulsion, and whether termed suspension or expulsion, it constitutes either temporary or permanent disfranchisement. It is an ad interim stoppage or arrest of an official power and pay. (2 McQuillen's Municipal Corporations [Revised], section 585). In fact, when the "suspension is to continue until the final disposition" of a criminal prosecution, like the petitioner's suspension, it might become a virtual removal, considering that in the event of conviction by the trial court the case might drag as long as the remainder of the suspended officer's term of office, or longer.

We believe also that in the field of procedure no less than in that of substantive law the suspension under review is fatally defective. No administrative charges have been preferred against the petitioner and none seem to be contemplated. The sole grounds for the suspension, as recited in the President's order, are "the pendency of criminal case No. 20707 for libel," and "the present policy of the administration, requiring the suspension of any elective official who is being charged before the courts of any offense involving moral turpitude."

It seems self-evident that if, as must be conceded, temporary suspension is allowed merely so as to prevent the accused from hampering the normal course of the investigation with his influence and authority over possible witnesses, the rule presupposes the existence of administrative charges and

investigation being conducted or to be conducted. We are certain that no authority or good reason can be found in support of a proposition that the Chief Executive can suspend an officer facing criminal charges for the sole purpose of aiding the court in the administration of justice. Independent of the other branches of the Government, the courts can well take care of their own administration of the law.

An administrative policy or practice not predicated on constitutional or statutory authority can have no binding force and effect in matters not purely political or governmental. Where individual rights, honor and reputation are in jeopardy, it is only law or the Constitution which can give legality to executive actions. It has been shown that nothing in the Constitution, law or decision warrants the petitioner's suspension.

If policy is to be a guiding factor, and we think if should be, such policy must emanate from the legislative branch, which, under our form of government, is the legitimate policy-making department. The legislative policy, as such policy may be gathered from section 2188 of the Revised Administrative Code, frowns upon prolonged or indefinite suspension of local elective officials. By this section "the provincial governor shall receive and investigate complaints against municipal officers for neglect of duty, oppression, corruption or other form of maladministration of office.' It provides that in case suspension has been effected, the hearing shall occur as soon as practicable, in no case later than ten days from the date the accused is furnished a copy of the charges, unless the suspended official on sufficient grounds asks for an extension of time to prepare his defense. The section further warns that "the preventive suspension shall not be for more than thirty days," and ordains that at the end of that period the officer should be reinstated in office without prejudice to the continuation of the proceedings against him until their completion, unless the delay in the decision of the case is due to the defendant's fault, neglect or request, and unless in case of conviction the Secretary of the Interior shall otherwise direct.

Section 2188 is of relatively recent vintage, and is designed to protect elective municipal officials against abuses of the power of suspension, abuses of which past experience and observation had presented abundant examples. The point we wish to drive home is that, evincing grave concerns for ordinary municipal officials including municipal councilors, as a matter of public policy, it is unreasonable to suppose that the Legislature intended to withhold the same safeguards from the post of mayor of the metropolis and seat of the National Government. On the contrary, in converting the office from appointive to elective, one of the legislative purposes, we venture to say, was to afford the position greater stability as well as to clothe it with greater dignity and prestige. What could be the practical use of having the people choose the city executive to manage the city's affairs if by the simple expedient of a criminal accusation he could be laid off for the long duration of a criminal prosecution, prosecution which, at long last might, as is not infrequently the case, turn out to be false, malicious, unsubstantial, or founded on a mistaken notion of law or evidence? Let it not be overlooked that criminal accusations are

easy to make and take months or years to try and finally decide, and that the filing of such accusations and the time within which they are to be finished are matters over which the accused has no effective control. It is not difficult to see that the tenure of office and the incumbent's rights could easily be overthrown and defeated if power rested in any authority to suspend the officer on the mere filing or pendency of a criminal accusation, the suspension to continue until the final termination of the trial. The idea seems repugnant to the principles of due process, speedy trial, and simple justice — "principles that are fundamental and eternal."

It will also be noted from section 2188 that it does not only limit the period of preventive suspension, but requires the filing of charges and prompt investigation. Without such express provision, however, it is established by the great weight of authority that the power of removal or suspension for cause can not, except by clear statutory authority, be exercised without notice and hearing. Mere silence of the statute with respect to notice and hearing will not justify the removal of such an officer without knowledge of the charges and an opportunity to be heard. (Mechem, p. 287; 43 Am. Jur., 50-52; 93 C.J., 65; 62 C.J.S., 924; 43 C.J., 666, footnote 83 [e] and cases cited.) It is only in those cases in which the office is held at the pleasure of the appointing power, and where the power of removal is exercisable at its mere discretion, that the officer may be removed without such notice or hearing. (Id.) Not even final conviction of a crime involving moral turpitude, as distinguished from conviction pending appeal, dispenses with the requisites notice and hearing. Final conviction is mentioned in section 2188 of the Revised Administrative Code as ground for proceeding administratively against the convicted officer but does not operate as automatic removal doing away with the formalities of an administrative hearing.

The policy manifested by section 2188 of the Revised Administrative Code, which is a consecrated policy in other jurisdictions whose republican institutions this country has copied, requires speedy termination of a case in which suspension of the accused has been decreed, not only in the interest of the immediate party but of the public in general. The electorate is vitality interested, and the public good demands, that the man it has elevated to office be, within the shortest time possible, separated from the service if proven unfit and unfaithful to its trust, and restored if found innocent. Special proceedings alone, unicumbered by nice technicalities of pleading, practice and procedure, and the right of appeal, are best calculated to guarantee quick result.

The petition must be, and the same is granted, without costs.

Feria, Pablo, and Jugo, JJ., concur.

Separate Opinions

PARAS, C.J., concurring:

The Executive power is vested in the President. (Section 1, Article VIII, Constitution.) The President exercises general supervision over all local governments as may be provided by law. (Section 10, [1], Article VII, Constitution.) Among the particular power of the President is the power "to remove all officials from office conformably to law." (Section 64(b), Revised Administrative Code.) Upon the other hand, the Revised Charter of the City of Manila, Republic Act No. 409, section 9, provides that the city mayor "shall hold office for four years, unless sooner removed."

Counsel for the petitioner admits that the weight of authority in the United States is to the effect that the power to remove includes the power to suspend. We are of the opinion that the President has the power to remove and consequently to suspend the petitioner conformably to law. It is noteworthy that the power of removal conferred on the President by section 64(b) of the Revised Administrative Code refers to "all officials"; and there being no statutory distinction, the term, "officials" should include both appointive and elective officials.

It is hard and illogical to believe that, while there are express legal provisions for the suspension and removal of provincial governors and municipal mayors, it could have been intended that the mayor of Manila should enjoy an over all immunity or sacrosanct position, considering that a provincial governor or municipal mayor may fairly be considered in parity with the city mayor insofar as they are all executive heads of political subdivisions. Counsel for petitioner calls attention to the fact that the peculiarly elevated standard of the City of Manila and its populace might have prompted the lawmakers to exempt the city mayor from removal or suspension. Much can be said about the desirability of making the executive head of Manila as strong and independent as possible, but there should not be any doubt that awareness of the existence of some sort of disciplinary measures has a neutralizing and deterring influence against any tendency towards official's misfeasance, excesses or omission.

It is contended for the petitioner that the terms "unless sooner removed" in section 9 of Republic Act No. 409 is merely a part of the provision fixing the tenure of office, and refers to such removal as may arise from causes enumerated in section 29 of the Revised Election Code, Articles 13 to 32 of the Revised Penal Code, and Article VI, section 10, paragraph (3), and Article IX of the Constitution. This

contention is untenable, because under petitioner's theory the clause "unless sooner removed" would be superfluous.

It is also argued for the petitioner that under the constitution, Article VII, section 10, paragraph (1), the President is granted the power to exercise only generally supervision over local governments, in contrast to the power granted to him to have control over the executive departments, bureaus or offices, thereby intimating that the words "general supervision" were so intended as to deprive the President of any authority over local governments, including that of removal. This contention is likewise without merit, since the consitutional provision confers such general supervision as may be provided by law, so that said supervision will include any power vested in the President by law. As Already stated, 64(b) of the Revised Administrative Code has conferred on the President the special power to remove all officials conformably to law. Moreover, the removal of provincial officers is expressly provided for in section 2078 of the Revised Administrative Code, and it is not pretended that said provision is inconsistent with the power of general supervision conferred on the President by section 10, Article VII, paragraph (1) of the Constitution.

The question that arises calls for the specification of the causes or grounds warranting the suspension or removal of the city mayor by the President. As already seen, section 64(b) of the Revised Administrative Code provides that the President may remove all officials conformably to law. While there are statutory causes regarding a provincial officer (Section 2078, Revised Administrative Code) or municipal officer (section 2188, id.), there is no legal provision enumerating the causes for the removal or suspension of the city mayor. In such case, removal conformably to law, as provided for in section 64(b) of the Revised Administrative Code, necessarily means removal for cause. This follows from the constitutional provision that no officer or employee in the civil service shall be removed or suspended except for cause as provided for by law, and from the circumstance (Admitted by counsel for petitioner) that the mayor of Manila, as an elective official is included in the unclassified civil service (section 671, paragraph [c], Revised Administrative Code.) The phrase "for cause" means, "for reasons which the law and sound public policy recognized as sufficient warrant for removal, that is legal cause, and not merely causes which the appointing power in the exercise of discretion may deem sufficient. It is implied that officers may not be removed at the mere will of those vested with the power of removal, or without any cause. Moreover, the cause must relate to and affect the administration of office, and must be restricted to something of a substantial nature directly affecting the rights and interests of the public." (43 Am. Jur., 47, 48.) (See also De los Santos vs. Mallare,* 48 Off. Ga., 1787.)

We believe that the grounds for the suspension and removal of a provincial governor, namely, disloyalty, dishonesty, oppression, or misconduct in office, may by analogy be applied to the city mayor. But even extending the similarity further, and applying the grounds as to a municipal mayor, namely, neglect of duty, oppression, corruption, or other from of maladministration of office, and conviction by final

judgment of any crime involving moral turpitude, — certainly the city mayor is entitled to at least the same, if not more, protection enjoyed by a municipal officer, — the question is whether the petitioner's suspension may be based on the mere filing against him of a complaint for libel. The offense of libel is clearly not disloyalty, dishonesty, oppression, misconduct in office, neglect of duty, oppression, corruption or other form of maladministration of office. Indeed, petitioner's suspension is not premised on any of these grounds. The petitioner has neither been convicted by final judgment of the offense of libel, so that even assuming that said offense involves moral turpitude, his suspension was not yet in order.

Upon the other hand, the offense of libel cannot be loosely considered as a misconduct in office, because the misconduct in office "which shall warrant a removal of the officer must be such as affects his performance of his duties as an officer and not such only as affects his character as a private individual. In such cases it is necessary `to separate the character of the man from the character of the officer'." (Mechem, Officers, p. 290, see also Cornejo vs. Naval, 54 Phil., 809.) In this connection, the rule of strict construction should be observed. (Cornejo vs. Naval, 54 Phil., 809.)

The law, in requiring final conviction, undoubtedly is intended to forestall any fabricated criminal prosecution as a political maneuver or revenge, not to mention the constitutional presumption of innocence. It cannot be argued that, if final conviction is always necessary, the power to suspend is rendered nugatory. In the first place, suspension lies on other grounds. In the second place, even with respect to a criminal conviction, administrative investigation has to be conducted with a view to determining whether the crime involves moral turpitude, and of course during the period of said investigation the officer concerned may be suspended. At any rate, if the power to suspend or removed has to be stretched, it is for the lawmakers to make the necessary statutory changes.

The libel which the petitioner is prosecuted cannot in turn be said as having been committed in connection with or during the performance by the petitioner of his official duties and functions as mayor of Manila. He participated in the radio broadcast which gave rise to the allegedly libelous imputations, not in the exercise of his office as city mayor but as any other private citizen, since there is no law imposing upon the petitioner the duty of speaking before the radio on the occasion in question.

Wherefore, I vote to grant the petition.

PADILLA, J., concurring:

The office of mayor of the City of Manila therefore appointive was made elective by the new charter of the City, Republic Act No. 409. Under the charter the choice of the person to hold the office of mayor in the City of Manila devolves exclusively upon the qualified electors of the City. The tenure of office is for a fixed term of four years "unless sooner removed" (section 9). This provision of the charter contemplates the possibility of removal. As a rule the power to remove encompasses the power to suspend. There is no doubt in my mind that the city mayor may be removed and, therefore, suspended. But such removal an suspension must be for cause. In the case of the members of the municipal board the charter provides that "they may be suspended or removed from office under the same circumstances, in the same manner, and with the same effect, as elective provincial officers" (section 14). In the case of the mayor there is no such provision except the bare feasibility of his removal. That power to remove must, of course, be lodged somewhere in the framework of the Government. It could be in a competent court if the mayor should be found guilty of a crime or misdemeanor for which the penalty provided and imposed upon him be temporary or perpetual disqualification or suspension from holding public office. If he should be found to have committed malfeasance or irregularities in the exercise of his powers and performance of his duties as such mayor not amounting to a crime or misdeameanor, the President could remove him. Pursuant to section 64(b) of the Revised Administrative Code the President is empowered "to remove officials from office conformably to law and to declare vacant the offices held by such removed officials." And "For disloyalty, . . . the President of the Philippines may at any time remove a person from any position of trust or authority under the Government of the Philippines." Does that provision specifying disloyalty as the cause for removal and, therefore, suspension exclude other causes which would render the City Mayor unfit and unworthy to act as such? I believe that the mention of disloyalty as a cause for removal from office was not intended by Congress as a limitation, for the clause where disloyalty is mentioned as a cause for removals from office is preceded by another granting to the President the power "to remove officials from office conformably to law," and because if construed as a limitation, it would defeat its very aim and purpose — an honest government dedicated to the promotion of the general well-being of all the inhabitants of the city. Section 2078 of the Revised Administrative Code provides that provincial officers may be suspended and removed not only for disloyalty but also for dishonesty, oppression or misconduct in office. I do not believe the City Mayor of Manila should be placed over and above the elective provincial governors in rank and importance; and for the that reason the causes for removal of elective provincial governors may as well be applied to the City Mayor of Manila. I am, therefore, of the opinion that the City Mayor of Manila, if found guilty after investigation or trial, could be removed and also suspended pending an administrative or judicial investigation of charges preferred against him involving disloyalty, dishonesty, oppression or misconduct in office.

This brings me to the consideration of whether the information for libel filed against the petitioner in the Court of First Instance of Manila warrants his suspension from office by the President of the

Philippines. When an information is filed in the city courts charging a person with the commission of a crime, it is done only after an investigation has been made by the prosecuting officer who finds sufficient or prima facie evidence of his guilt. To find out whether he should suspend and then after an investigation remove an officer charged with irregularities or malfeasance in office, the President in the exercise of his supervisory power could either order such administrative investigation to be conducted or rely upon the investigation made by a prosecuting officer, and if he believes that the facts found by the prosecuting officer warrant suspension the President, undoubtedly, could suspend him and thereafter if the officer charged with a crime should be found by a competent court guilty thereof, he could remove him form office. The President may choose between instituting an administrative inquiry or rely upon the trial and judgment made by a competent court of justice. Nevertheless, conviction of a crime by a competent court does not necessarily grant the President under his authority of supervision the power to remove unless for cause provided by law, to wit: disloyalty, dishonesty, oppression or misconduct in office. Disloyalty may be committed independently of the exercise of the powers and performance of the duties by the City Mayor. Once that is proved the President may and must remove him. Dishonesty may be committed not only in connection with the exercise of the powers and performance of the functions and duties by the mayor but also independently of the exercise of such powers and performance of such duties. For instance, independently of the exercise of his powers and the performance of his duties as mayor of the City of Manila he may be charged with and found guilty of smuggling contraband goods into a province or other city outside his city's jurisdictional limits or he may be charged with and found guilty of robbery, burglary, forgery or seduction unconnected with the exercise of his powers and the performance of his duties. Such conviction involves dishonesty and certainly the mayor cannot continue in office but must be removed. A man of such a character should not be allowed to continue in office. He should forthwith be removed. Acts of oppression must be committed in connection with the exercise of the powers and the performance of the duties as mayor, unless they involve dishonesty. Not all acts of oppression involve dishonesty. They vary in degree and some may seem oppressive but do not involve dishonesty. For that reason in order that the mayor may be removed from office, if found guilty of oppression, it must be in connection with the exercise of his powers and performance of his duties as such mayor. It is clear that misconduct in office must be committed in connection with the exercise of his powers and performance of his duties as such mayor.

Again this brings me to another point. Whether an information for libel which is neither disloyalty, disloyalty, dishonesty, or oppression may be considered as misconducting office. It should be borne in mind that the filing of the information for libel against the petitioner is the offshoot or aftermath of the steps taken by him to purge the Manila Police Department. As a result of such steps he filed a complaint against the Deputy Chief of Police, Lt. Colonel Celestino C. Juan. All the steps taken by him, such as investigating the police officers involved in the irregularities committed in the Manila Police Department, filing the complaint in the city fiscal's office and presenting or submitting evidence against the deputy chief of police, were all in connection with the performance of his duties as mayor. So that if for such acts he could be held liable in an administrative investigation they would fall under misconduct in office provided for by law. But there is no question that such steps cannot be deemed to constitute

misconduct in office. On the contrary, they are praiseworthy acts. However, the performance of his duties in connection with the prosecution and eventual they are praise worthy acts. However, the performance of his duties in connection with the prosecution and eventual removal of the deputy chief of police of Manila stopped or ceased to be a function of his office after the presentation of the complaint and of the complaint and of the evidence in support thereof to the city fiscal's office. Thereafter, anything done by him, anything uttered by him, anything uttered by him, if it should constitute a crime would not be in connection with the performance of the duties of his office and, therefore, it would not constitute a misconduct in office. If it is a crime, his is the responsibility and he must be made to answer for it before a court a competent jurisdiction.

Much as it is wished and desired to see and have a mayor as becoming an officer of such high rank possessed of composure in his behavior, prudence in his acts and self-restraint in his utterances, yet I cannot bring myself to believe that a libel allegedly committed by him which is unrelated to the performance of the duties of his office would warrant his suspension from office. It is unnecessary to pass judgment on whether he may be removed after conviction. His utterances may be biting, cutting, sharp, caustic and sarcastic; and, granting for the sake argument, that the utterance upon which the information for libel is grounded to contemptuous — a point I do not pass upon pending determination and judgement on the merits of the case for libel file against the petitioner in the Court of First Instance of Manila — still I do not believe that the alleged libelous utterance which gave rise to the filing of the information, unrelated to the performance of his duties as mayor, would be sufficient cause for his suspension from office. The offended party must resort to court for redress of his grievance and to have it right the wrong. And if it be contemptuous the court against which it was committed has ample power to make him answer for his misdeed.

The foregoing reasons lead me to hold the opinion and conclude that the suspension of the petitioner is illegal, invalid and of no legal effect. The petition for a writ of quo warranto should be granted, as the respondent acting mayor is unlawfully holding an office from which the petitioner who is entitled thereto is excluded.

BAUTISTA ANGELO, J., dissenting:

The power of the President to remove the officials in the government service may be found in section 64(b) of the Revised Administrative Code. This section provides , among others, that the President can "remove officials from office conformably to law." In addition, he may also remove for disloyalty any person from any position of trust or authority under the government.

The term "officials" includes all officials of the government, whether elective of appointive, because when the law does not distinguish there is no justification to make any distinction. Ubi Lex Non Distinguit, Nec Nos Distinguere Debemus. Said term, therefore, includes the Mayor of the City of Manila.

But is there any law which expressly authorizes the President to remove the Mayor of the City of Manila? The answer to this question would bring us to a scrutiny of the Charter of the City of Manila (Republic Act No. 409). A careful perusal of this charter would disclose no express provision concerning the removal of the Mayor other than the following phrase; "He shall hold office for four years, unless sooner removed", unlike the members of the Municipal Board wherein it is clearly postulated that they can be removed in the same manner and on the same grounds as any provincial official. And because of this scanty provision, counsel for petitioner now contends that there is a void in the law which can only be remedied by legislation. The phrase unless sooner removed, counsel claims, does not necessarily allude to the President as the removing power, but rather it is expressive of acts which may render the Mayor disqualified to continue in office as found at random in different penal provisions of the land. But an insight into the origin and historical background of the phrase under consideration would at once reveal that such a claim has no merit.

Note that the phrase unless sooner removed is an old provision contained in the Revised Administrative Code (section 2434) and which was merely transplanted to the Charter of the City of Manila (Republic Act No. 409, section 9). Said phrase was at the same time taken from statutes of American origin. This phrase has a well-defined meaning in American statutes. In the case of State ex rel. Nagle vs. Sullivan, (99 A.L.R., 321, 329), the phrase was defined as implying "power in the appointing authority to remove," which ruling found support in two other cases. (Townsend vs. Kurtz, 83 Md., 350; 34 A., 1123, 1126; State ex rel. vs. Mitchell, 50 Kan., 295; 33 P., 104, 105; 20 L. R. a., 306.) Or, as quoted in the majority opinion, "Power in the appointing authority to remove a public officer may be implied where to statutory specification of the term of office are added the words "unless sooner removed." (43 Am. Jur., 30.) These authorities suffice to dispel any doubt that when said phrase was carried into the charter of the City of Manila it was so carried with the implication that the President would continue wielding his power of removal as heretofore followed under the old set-up. The is nothing in said Charter that would indicate any intention to the contrary. To hold otherwise would be to devoid the word removed of its substance and meaning. This word presupposes the existence of power somewhere, and this power can only be the Chief Executive. This is essentially an executive function. He cannot be deprived of this power unless the law lodges it elsewhere.

This case presents the questions whether under the Constitution the President has the exclusive power of removing executive officers of the United States whom he has appointed by and with advice and consent of the Senate . . . .

It is very clear from this history that the exact question which the House voted upon was whether it should recognize and declare the power of the President under the Constitution to remove the Secretary of foreign Affairs without the advice and consent of the Senate. That was what the vote was taken for. Some effort has been made to question whether the decision carries the result claimed for it, but there is not the slightest doubt, after an examination of the record, that the vote was, and was intended to be, a legislative declaration that the power to remove officers oppointed by the President and the Senate vested in the President alone, and until the Johnson impeachment trial in 1868, its meaning was not doubted even by those who questioned its soundness. . . .

After the bill as amended has passed the House, it was sent to the Senate, where it was discussed in secret session, without report. The critical vote there was upon the striking out of the clause recognizing and affirming the unrestricted power of the President to remove. The Senate divided by ten to ten, requiring the deciding vote of the Vice-President, John Adams, who voted against striking out, and in favor of the passage of the bill as it had left the House. Ten of the Senators had been in the Constitutional convention, and of them six voted that the power of removal was in the President alone. The bill having passed as it came from the House was signed by President Washington and became a law. Ac of July 27, 1789, 1 Stat. at L. 28, Chap. 4. . . .

Assuming then the power of Congress to regulate removals as incidental to the exercise of its constitutional power to vest appointments of inferior officers in the heads of departments, certainly as long as Congress does not exercise that power, the power of removal must remain where the Constitution place it, with the President, as part of the executive power, in accordance with the legislative decision of 1789 which we have been considering. (Myers vs. United States, 71 law. ed. pp. 160, 162, 165, 184.) (Emphasis supplied.)

Now, the law says that the Mayor shall hold office for four years unless sooner removed. It does not say that he shall hold office at the pleasure of the President unlike similar provisions appearing in other city charters. The idea is to give the Mayor a definite tenure of office not dependent upon the pleasure of the President. If this were the case he could be separated from the service regardless of the cause or motive. But when he was given a definite tenure the implication is that he can only be removed for "cause".

An inferential authority to remove at pleasure can not be deduced, since the existence of a defined term, ipso facto, negatives such an inference, and implies a contrary presumption, i.e., that the incumbent shall hold office to the end of his term subject to removal for cause." (State ex rel. Gallaghar vs. Brown, 57 Mo. Ap., 203 expressly adopted by the Supreme Court in States ex rel. vs. Maroney, 191 Mo., 548; 90 s.w., 141; State vs. Crandell, 269 Mo., 44; 190 S.W., 889; State vs. Salval, 450, 2d, 995; 62 C.J. S., 947.)

There is a divergence of opinion among the members of the court as to the cause that may serve as basis for the removal of the Mayor of the City of Manila in view of the silence of the law. Some are of the opinion that the cause must be one which specifically relates to, and affects the administration of, the office of the official to be removed. And in that the advocacy they are guided by the ruling laid down in the case of Cornejo vs. Naval, (54 Phil., 809). But I am of the opinion that cause should not be given a restrictive meaning in dealing with the office of the Mayor of the City of Manila considering its importance and stature. The City of Manila is a class by itself. It is the show window of the Orient so to speak. Peoples of different nationalities and from all walks of life have their abode in that city and because of their peculiar situation are entitled to be accorded such treatment, courtesy and consideration which are not expected in other cities. In dealing with these different groups of people the Mayor is confronted not only with domestic problems but international as well. His approach to these problems but international as well. His approach to these problems should be characterized with utmost tact, ability and circumspection. His office is on a par with other high officials of our national government and at times he is called upon to meet issues and situations just as important and far-reaching as those confronted by the President himself. Such a situation could not have passed unnoticed to Congress when it deemed it wise to place within the sound discretion of the President his continuance in office. And so it is my considered opinion that when the Chapter of the City of Manila has impliedly provided that the Mayor can only be removed for cause it must have meant one which the law an bound public policy recognize as sufficient warrant for removal regardless of whether it relates to his office or otherwise. There are many authorities which follow this line of reasoning.

Discharge of a civil service employee for "good of the service" or "for cause" implied some personal misconduct, or fact, rendering incumbent's further tenure harmful to the public interest (State ex rel. Eckles vs. Kansas City, Mo., 257 s.W., 197, 200).

The phrase "for cause" when used in reference to removal of officers means not the arbitrary will of the appointing power, but some cause affecting or concerning the ability of fitness of the officer to perform his duties. (Farish vs. Young, 158 P., 845, 847, 18 Ariz., 298)

"Cause" as effect removal of a public employee means some substantial shortcoming which renders continuance in his office or employment in some way detrimental to the discipline and efficiency of the service and something which the law and sound public opinion recognize as a good cause for his no longer occupying the place" (Murphy vs. Houston, 259 Ill., pp. 385)

"Cause" for removal of officer stated in resolution of address if Legislature must be legal and relate to maters of substantial nature directly affecting public interest, and the qualifications of officer or performance of this duties, showing he is not fit person to hold office (Moulton vs. Scully, 89 A., 944, 947, 111 me. 428.

A "cause" within statute providing that no person in the classified civil service can be removed except for the cause on written charges means some substantial shortcoming which renders continuance in his office or employment in some way detrimental to the discipline and efficiency of the service and something which the law and a a sound public opinion will recognize as a good cause for his no longer occupying the place (City of Chicago vs. Gillen, 124 Ill. app., 210)

Rejecting our theory that the phrase "shall hold office for four years unless sooner removed" comprises the Mayor of the City of Manila even if he is an elective official, the majority opinion holds the view that as the law now stands the Mayor is removable only for disloyalty to the Republic. The opinion also expresses the view the "strict construction of law relating to suspension and removal is the universal rule... Removal it to be confined with the limits prescribed for it; the causes, manner and conditions fixed must be pursued with strictness; where the cause for removal is specified, the specification amounts to a prohibition to remove for a different cause." But in the same breath the opinion acquiesces in the view of three members of the court to the effect that "as the office of provincial executive is at least as important as the office of the Mayor of the City of Manila, the latter officer, by analogy, ought to be amenable to removal and suspension for the same causes as provincial executives, who, under section 2078 of the Revised Administrative Code, may be discharged from office for dishonesty, oppression or misconduct in office, besides disloyalty." I cannot see how the above expressed views can be reconciled. If the law, as contended, only provides for the removal of the Mayor of the City of Manila on the ground of disloyalty, and this provision should be construed strictissimi juris, simple logic dictates that he is not amenable to other causes of removal. This line of reasoning can only give rise to the implication that the Mayor of the City of Manila can be removed not only for disloyalty but also for other causes which the Revised Administrative Code specifically provides for provincial and municipal officers if the Chief Executive in his sound discretion believes them to be sufficient (Section 2078, 2188). All of these grounds fit in to the realm of wide discretion that is conferred by law upon the Chief Executive under his power to remove for "casue".

But I will follow the line of reasoning and the majority in its discussion of the causes of removal by the Chief Executive of the City Mayor of Manila, and I will admit that one of them is misconduct in office. At this juncture, I wish to ask; cannot the behavior observed by petitioner in disparaging against a Judge of First Instance, a high and respectable official in our Government set-up, in a radio broadcast held exclusively for the expression of his views as Mayor of the City of Manila be considered misconduct in office? The majority opinion holds that such a behavior should be characterized as one entirely divorced from the official position of petitioner and should be appreciated merely in the light of a personal actuation which has no bearing on his office. I cannot subscribe to this view. The Circumstances under which the petitioner made the utterances imputed to him as libelous point to a different conclusion. It should be borne in mind that those utterances were made on the occasion of a radio broadcast exclusively held to give petitioner an opportunity to express his view on public questions in his capacity as Mayor of the City of Manila. It was a broadcast given by him not as Lacson, the individual, but as Lacson the Mayor. The public listened to him not because he was Arsenio Lacson but because he was the Mayor of the City. Such is the general impression when the broad case was made, and that is the reason why the broadcast was made right in the City Hall in order to give to the whole show a color of official authority. And in that broadcast he made the following utterances: "I have nothing but contempt for certain courts of justice. . . . I tell you one thing (answering an interrogator), if I have the power to fire Judge Montesa (the trial judge) I will fire him for being incompetent, for being an ignorant . . . an ingnoramus". The majority believes that such as behavior does not constitute a misconduct in office, but the Chief Executive holds a different opinion. On maters which involve differences of opinion between this court and the Chief Executive, a becoming regard for a co-equal power demands that the opinion of the latter should be respected in the absence of abuse of discretion.

Much stress is laid by the majority opinion on the ratio decidendi in the case of Cornejo vs. Naval, 54 Phil., 809, in its effort to show that the cause of removal must have direct relation to, and be connected, with the performance of official duties of petitioner. But this case cannot be invoked as a precedent here because it involves the interpretation of a law which governs the removal of municipal officials (section 2188, Rev. Adm. code). In that case, the phrase "other form of malaadministration in office" was interpreted in connection with the word "currpution". On one hand, the petitioner contended that phrase only limits the disciplinary action to misconduct relating to the office and doe not extend to personal misbehavior. The respondents, on the other hand, claimed that the word corruption should be interpreted independently of the office of petitioner. It was then that the court made the following pronouncement: "It is a well recognized rule of statutory construction and of the law of public officers that a statute prescribing the grounds for which an officer may be suspended is penal in nature, and should be strictly construed. Making this principle the basis of our investigation, it is not possible to reach any other conclusion than that the prepositional phrase 'in office' qualifies the various grounds for legal suspension. The law says 'or other form maladministration in office'. By the maxim Ejusdem generis, the scope of the word `other' is limited to that which is of the same kind as its antecedent. Corruption, therefore, refers to corruption in office." The citation, therefore, of the Naval case as a precedent in the present case has no legal basis.

Having established that the President has the power to remove the Mayor of the City of Manila under the Charter provided that sufficient legal cause exists for doing so, the next inquiry is, can he also suspend him? The answer is in the affirmative under the well-known rule that the power to remove embraces the authority to suspend. One authority says, "the suspension of an officer pending his trial for misconduct, so as to tie his hands for the time being, seems to be universally accepted as fair and often necessary. The power of suspend is generally considered as included in the power of removal for cause, since a suspension is merely a less severe disciplinary measure" (43 Am. Jur., 65, section 242). It has also been held that "where the power of removal is limited to cause, the power to suspend, made use of as a disciplinary power pending charges, has been regarded as included within the power of removal, and it has been announced that the power to suspend is an incident to the power to remove for cause, and according to some authorities, the power to remove necessarily includes the minor power to suspend" (67 C.J. S. 233-234). A similar ruling was laid down in this jurisdiction in a case involving a municipal official. Said this Court:

. . . Indeed, if the President could, in the manner prescribed by law, remove a municipal official, it would be a legal incongruity if he were to be devoid for the lesser power of suspension. And the incongruity would be more potent if, possessed the power both to suspend and to remove a provincial official (sec. 2078, Administrative Code), the President were to be without the power to suspend a municipal official. Here is, parenthetically, an instance where, as counsel for petitioner admitted, the power to suspend a municipal official is not exclusive. Upon the other hand, it may be argued with some degree of plausibility that, if the Secretary of the interior is, as we have hereinabove concluded, empowered to investigate the charges against the petitioner and to appoint a special investigator for that purpose, preventive suspension may be a means by which to carry into effect a fair and impartial investigation. (Villena vs. Secretary of the Interior, 67 Phil., 451, 460-461.) (Emphasis supplied.)

It is true that the suspension of petitioner by the Chief Executive has been predicated merely upon the pendency of a criminial case No. 20707 for libel and not as a result of an administrative charges preferred against him in connection with the performance of his official duties. And because the suspension has been brought about without any previous administrative charge, the majority opinion opines that such suspension is unwarranted, as it finds no support in law of jurisprudence. I again disagree with this opinion. As well stated by the majority, "temporary suspension is allowed merely so as to prevent the accused from hampering the normal course of the investigation with his influence and authority of possible witnesses". To this I agree. This is the philosophy of a temporary suspension. But where we disagree is in its application, for I entertain the view that it also applies to a case where the officer is indicted in court for a criminal charge. I believe that the same evil or danger exists when an officer is charged administratively, as well as when he is indicated in court. Unless removed from power and authority he is apt to make use of his influence to his advantages by suppressing or tampering with

the witnesses. And he is apt to d to this with more reason when he is indicted in court for then not only his position is at stake but his liberty as well.

. . . No right to suspend is given in express terms. If such power exists, it must be implied; . . . This court in the Peterson case quoted therefrom with respect language of such importance to the question here involved that we take the liberty of reproducing it on account of its practical suggestive force on this inquiry. Promising that in the Missouri case the right to suspend the official depended upon a power conferred solely by a statute, that court said: "The suspension of an officer, pending his trial, for misconduct, so as to tie his hands for the time being, seems to be universally accepted as a fair, salutary, and often necessary incident of the situation. His retention, at such time of all the advantage and opportunities afforded by official position may enable and encourage him not only to persist in the rebellious practice complained of, but also to seriously embarrass his triers in their approaches to the ends of justice. In the absence of any express limitation to the contrary, —and none has been shown,—we are of the opinion that in cases where guiltiness of the offenses charged will involve a dismissal form office there is, on general principles, no arbitrary or improper exercise of a supervisory authority in a suspension of the accused pending his trial in due and proper form.' The reasons stated in the above quotation for holding that the right of suspension during proceedings for removal seems to be essential to a complete and thorough investigation of an official charged with misconduct as to furnish an unanswerable argument to the claim of respondent that the minor right to suspend is not included in the major authority to remove. A better illustration of the necessity of holding that such incidental right exists cannot be made than in the case of an investigated sheriff, who as executive officer of the country enjoys great influence, which might extend to the control of papers absolutely necessary to determine the matters under investigation. He might, if so disposed, prevent the use of evidence necessary to a full and fair hearing of the charges against him. If the alleged acts of misconduct against such sheriff were, as they might supposedly be, made the grounds of inquest by the grand jury upon which further proceedings might depend, it is each to see how he would have a deep interest in withholding use of means that would result in prosecution; and, it he might hold the office until removed by the governor, a trial of an indictment against him might be made ineffectual in various ways by the exercise of his power and influence in the court, as well as in the investigation by the commissioners. It may be said that it is a great hardship to an accused official to be deprived of his fees and emouments before actual removal; but the answer to this suggestion is that he takes the office and retains it cum onere, and must accept its burden with its benefits. It ought not, therefore, to be held that the unquestionable power to remove should be so handicapped by an interpretation of the statute as to defeat the very object is seeks to attain. Presumably, the chief executive of the state will act upon an exalted sense of justice and high consideration of duty, and only in cases where strong reasons exist for exercising the power of suspension will impose unnecessary burdnes upon the accused official after a sufficient review of the reasons upon which that power is to be exercised. (State vs. Megaarden, 88 N.W., pp. 414-415.) (Emphasis supplied.)

The remaining question to be determined is whether the President is justified in suspending petitioner from office. The record shows that petitioner has been suspended from office as a result of the charge for libel field against him by Judge Agustin P. Montesa. The Libelous statements imputed to petitioner are not only contrary to justice, honesty or good morals or in derogation of the elementary duty of respect and consideration he owes to a judge and to his judiciary in general but call for the application of a penalty which involves suspension from public office (Article 355, in connection with article 43, Revised Penal code). considering the nature of the charges as reflected in the information, and without in any way disputing or giving any opinion on the merits of the case, they at once give the impression that they are of a serious nature which involve moral turpitude. This is the only consideration which guided the President to suspend him following the policy he has consistently pursued in dealing with public officers, whether appointive or elective, who are charged in court or otherwise with an offense which involves moral turpitude (Exhibit A-1). The soundness and validity of this policy cannot be seriously disputed. The authority of the President to enunciate and adopt such a policy flows necessarily from his constitutional power of supervision over local governments and his equally consitutional duty to faithfully execute the laws (sec. 10, par. 1, Article VII, constitution), and this policy should apply with greater force to the City Mayor who is the right arm of the President in the execution and enforecement of the law n the city.

The action of the President in suspending petitioner because of the charges preferred against him by Judge MOntesa cannot be branded as unwarranted or arbitrary. It is to be presumed that, before taking such action, he has carefully weighed the nature and seriousness of the charges not only as affecting the offended party but the judiciary as well. It should be noted that petitioner, in his radio broadcast, and as quoted in the information, made disparaging remarks not only against the judge but against some courts of justice. These remarks, affecting as they do the judiciary, must have impressed the president as tending to undermine the faith and confidence of the people in the administration of justice. While there are authorities who favor criticism of court decisions after they have become final, which Judges should not begrudge, the criticisms should be made in the proper spirit and must be kept within proper bounds. It should not be contemptuous nor cast unsavory reflection against the judge. Undoubtedly, the remarks of petitioner, considering the circumstances under which they were made, were considered by the President not only derogatory to the judiciary but one which involves moral turpitude, and this opinion must be respected unless the courts opine otherwise. Jurisprudence sustains this action of the President.

This is a proceeding to disbar an attorney, instituted by the state upon the relation of the members of the grievance committee of the Oregon State Bar Association. The fact are that O.P. Mason, a licensed attorney, was indicted, tried, and convicted of the crime of libel, upon proof of the publication of defamatory matter in a newspaper published at Portland, Or., known as the Sunday Mercury, while he was its editor. Whereupon the relators filed an information against him in this court, alleging such conviction, and that the offense of which he was so convicted is a `misdemeanor involving moral

turpitude,' and prayed a judgment of removal against the accused. The defendant, upon being cited to appear, filed his answer to the information, in which he denies that the misdemeanor of which he was convicted involved moral turpitude, and alleges that he was found guilty thereof by construction of law only, which renders the manager, editor, or owner of a newspaper criminally liable for the publication of a libel, whether he wrote the article or not, or had any knowledge of its publication; that he did not write the alleged libelous article, nor see it or know of its publication until after the newspapers was in circulation . . .

. . . But inability to properly define the term, however, does not preclude us from saying that it is, and of necessity must be, involved in the willful publication of a libel. The case of Andres vs. Koppenheafer, supra, was an action for slander, founded upon the following language: `What is a woman that makes a libel? She is a dirty creature, and that is you. You have made a libel, and I will prove it with my whole estate.' It was held that the crime of libel, imputed to the plaintiff, involved moral turpitude; Tilghaman, CJ., saying : "The man who wantonly, maliciously, and falsely traduces the character of his neighbor is no better than a felon. He endeavors to rob him of that, in comparison with which, gold and diamonds are but dress." We think there can be no doubt that the willful publication of a malicious libel by the manager of a newspaper, when made either to vent his spleen upon the object of his wrath, or to cater to the perverted taste of a small portion of the public, clearly involves moral turpitude, and manifests, on the part of the libeler, a depraved disposition and a malignant purpose." (State ex rel., Mays et al., vs. Mason, 29 Or., 18; Feb. 3, 1896; 43 PAC., 651, 652.) (Emphasis supplied.)

There may be differences of opinion with regard to the determination of the nature or seriousness of the offense charged or the question whether such charged warrants disciplinary action, but there are authorities which hold that the officer invested with the power of removal is the sole judge of the existence of the sufficiency of the cause (17 R.C.L., section 233; Attorney General vs. Doherty, 13 Am. Rep., 132), and unless a flagrant abuse of the exercise of that power is shown, public policy and a becoming regard for the principle of separation of powers demand that his action should be left undisturbed. Here there is no such showing nor the slightest intimation that power has been abused. And so it is my opinion that this court should do well in leaving the matter to the sole responsibility of the President until the criminal case which is now pending in the courts has been finally terminated.

For these reasons, I dissent from the opinion of the majority.

Bengzon, Montemayor and Labrador, JJ., concur.

Footnotes

PARAS, C.J., concurring:

* 87 Phil., 289

The Lawphil Project - Arellano Law Foundation

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-36049 May 31, 1976

CITY OF NAGA, VICENTE P. SIBULO, as Mayor, and JOAQUIN C. CLEOPE, as Treasurer of the City of Naga, petitioners, vs.CATALINO AGNA, FELIPE AGNA and SALUD VELASCO, respondents.

Ernesto A. Miguel for petitioners.

Bonot, Cledera & Associates for respondents.

 

MARTIN, J.:

Petition for review on certiorari, which We treat as special civil action, of the decision of the Court of First Instance of Camarines Sur in Civil Case No. 7084, entitled Agna, et al. versus City of Naga, et al., declaring Ordinance No. 360 of the City of Naga enforceable in 1971 the year following its approval and requiring petitioners to pay to private respondents the amounts sought for in their complaint plus attorney's fees and costs. Included in the present controversy as proper parties are Vicente P. Sibulo and Joaquin C. Cleope, the City Mayor and City Treasurer of the City of Naga, respectively.

On June 15, 1970, the City of Naga enacted Ordinance No. 360 changing and amending the graduated tax on quarterly gross sales of merchants prescribed in Section 3 of Ordinance No. 4 of the City of Naga to percentage tax on gross sales provided for in Section 2 thereof. Pursuant to said ordinance, private respondents paid to the City of Naga the following taxes on their gross sales for the quarter from July 1, 1970 to September 30, 1970, as follows:

Catalino Agna paid P1,805.17 as per Official Receipt No. 1826591;

Felipe Agna paid P625.00 as per Official Receipt No. 1826594; and

Salud Velasco paid P129.81 as per Official Receipt No. 1820339.

On February 13, 1971, private respondents filed with the City Treasurer of the City of Naga a claim for refund of the following amounts, together with interests thereon from the date of payments: To Catalino Agna, P1,555.17; to Felipe Agna, P560.00; and to Salud Velasco, P127.81, representing the difference between the amounts they paid under Section 3, Ordinance No. 4 of the City of Naga, i.e., P250.00; P65.00 and P12.00 respectively. They alleged that under existing law, Ordinance No. 360, which amended Section 3, Ordinance No. 4 of the City of Naga, did not take effect in 1970, the year it was approved but in the next succeeding year after the year of its approval, or in 1971, and that therefore, the taxes they paid in 1970 on their gross sales for the quarter from July 1, 1970 to September 30, 1970 were illegal and should be refunded to them by the petitioners.

The City Treasurer denied the claim for refund of the amounts in question. So private respondents filed a complaint with the Court of First Instance of Naga (Civil Case No. 7084), seeking to have Ordinance No. 360 declared effective only in the year following the year of its approval, that is, in 1971; to have Sections 4, 6 and 8 of Ordinance No. 360 declared unjust, oppressive and arbitrary, and therefore, null and void; and to require petitioners to refund the sums being claimed with interests thereon from the date the taxes complained of were paid and to pay all legal costs and attorney's fees in the sum of P1,000.00. Private respondents further prayed that the petitioners be enjoined from enforcing Ordinance No. 360.

In their answer, the petitioners among other things, claimed that private respondents were not "compelled" but voluntarily made the payments of their taxes under Ordinance No. 360; that the said ordinance was published in accordance with law; that in accordance with Republic Act No. 305 (Charter of the City of Naga) an ordinance takes effect after the tenth day following its passage unless otherwise stated in said ordinance; that under existing law the City of Naga is authorized to impose certain conditions to secure and accomplish the collection of sales taxes in the most effective manner. As special and affirmative defenses, the petitioners allege that the private respondents have no cause of action against them; that granting that the collection of taxes can be enjoined. the complaint does not allege facts sufficient to justify the issuance of a writ of preliminary injunction; that the refund prayed for by the private respondents is untenable; that petitioners Vicente P. Sibulo and Joaquin C. Cleope, the City Mayor and Treasurer of the City of Naga, respectively are not proper parties in interest; that the private respondents are estopped from questioning the validity and/or constitutionality of the provisions of Ordinance No. 360. Petitioners counterclaimed for P20,000.00 as exemplary damages, for the alleged unlawful and malicious filing of the claim against them, in such amount as the court may determine.

During the hearing of the petition for the issuance of a writ of preliminary injunction and at the pre-trial conference as well as at the trial on the merits of the case, the parties agreed on the following stipulation of facts: That on June 15, 1970, the City Board of the City of Naga enacted Ordinance No. 360 entitled "An ordinance repealing Ordinance No. 4, as amended, imposing a sales tax on the quarterly sales or receipts on all businesses in the City of Naga," which ordinance was transmitted to

the City Mayor for approval or veto on June 25, 1970; that the ordinance was duly posted in the designated places by the Secretary of the Municipal Board; that private respondents voluntarily paid the gross sales tax, pursuant to Ordinance No. 360, but that on February 15, 1971, they filed a claim for refund with the City Treasurer who denied the same.

On October 9, 1971, the respondent Judge rendered judgment holding that Ordinance No. 360, series of 1970 of the City of Naga was enforceable in the year following the date of its approval, that is, in 1971 and required the petitioners to reimburse the following sums, from the date they paid their taxes to the City of Naga: to Catalino Agna, the sum of P1,555.17; to Felipe Agna, P560.00; and to Salud Velasco, P127.81 and the corresponding interests from the filing of the complaint up to the reimbursement of the amounts plus the sum of P500.00 as attorney's fees and the costs of the proceedings.

Petitioners' submit that Ordinance No. 360, series of 1970 of the City of Naga, took effect in the quarter of the year of its approval, that is in July 1970, invoking Section 14 of Republic Act No. 305, 1 as amended, otherwise known as the Charter of the City of Naga, which, among others, provides that "Each approved ordinance ... shall take effect and be enforced on and after the 10th day following its passage unless otherwise stated in said ordinance ... ". They contend that Ordinance No. 360 was enacted by the Municipal Board of the City of Naga on June 15, 1970 2 and was transmitted to the City Mayor for his approval or veto on June 25, 1970 3 but it was not acted upon by the City Mayor until August 4, 1970. Ordinarily, pursuant to Section 14 of Republic Act No. 305, said ordinance should have taken effect after the 10th day following its passage on June 15, 1970, or on June 25, 1970. But because the ordinance itself provides that it shall take effect upon its approval, it becomes necessary to determine when Ordinance No. 360 was deemed approved. According to the same Section 14 of Republic Act No. 305, "if within 10 days after receipt of the ordinance the Mayor does not return it with his veto or approval 4 the ordinance is deemed approved." Since the ordinance in question was not returned by the City Mayor with his veto or approval within 10 days after he received it on June 25, 1970, the same was deemed approved after the lapse of ten (10) days from June 25, 1970 or on July 6, 1970. On this date, the petitioners claim that Ordinance No. 360 became effective. They further contend that even under Section 2, of Republic Act No. 2264 (Local Autonomy Acts) 5 which expressly provides: "A tax ordinance shall go into effect on the fifteenth day after its passage unless the ordinance shall provide otherwise', Ordinance No. 360 could have taken effect on June 30, 1970, which is the fifteenth day after its passage by the Municipal Board of the City of Naga on June 15, 1970, or as earlier explained, it could have taken effect on July 6, 1970, the date the ordinance was deemed approved because the ordinance itself provides that it shall take effect upon its approval. Of the two provisions invoked by petitioners to support their stand that the ordinance in question took effect in the year of its approval, it is Section 2 of Republic Act No. 2264 (Local Autonomy Act) that is more relevant because it is the provision that specifically refers to effectivity of a tax ordinance and being a provision of much later law it is deemed to have superseded Section 14 of Republic Act No. 305 (Charter of the City of Naga) in so far as effectivity of a tax ordinance is concerned.

On the other hand, private respondents contend that Ordinance No. 360 became effective and enforceable in 1971, the year following the year of its approval, invoking Section 2309 of the Revised Administrative Code which provides:

Section 2309. Imposition of tax and duration of license.—A municipal license tax already in existence shall be subject to change only by ordinance enacted prior to the 15th day of December of any year after the next succeeding year, but an entirely new tax may be created by any ordinance enacted during the quarter year effective at the beginning of any subsequent quarter.

They submit that since Ordinance No. 360, series of 1970 of the City of Naga, is one which changes the existing graduated sales tax on gross sales or receipts of dealers of merchandise and sari-sari merchants provided for in Ordinance No. 4 of the City of Naga to a percentage tax on their gross sales prescribed in the questioned ordinance, the same should take effect in the next succeeding year after the year of its approval or in 1971.

Evidently, the divergence of opinion as to when Ordinance No. 360 took effect and became enforceable is mainly due to the seemingly apparent conflict between Section 2309 of the Revised Administrative Code and Section 2 of Republic Act No. 2264 (Local Autonomy Act). Is there really such a conflict in the above-mentioned provisions? It will be easily noted that Section 2309 of the Revised Administrative Code contemplates of two types of municipal ordinances, namely: (1) a municipal ordinance which changes a municipal license tax already in existence and (2) an ordinance which creates an entirely new tax. Under the first type, a municipal license tax already in existence shall be subject to change only by an ordinance enacted prior to the 15th day of December of any year after the next succeeding year. This means that the ordinance enacted prior to the 15th day of December changing or repealing a municipal license tax already in existence will have to take effect in next succeeding year. The evident purpose of the provision is to enable the taxpayers to adjust themselves to the new charge or burden brought about by the new ordinance. This is different from the second type of a municipal ordinance where an entirely new tax may be created by any ordinance enacted during the quarter year to be effective at the beginning of any subsequent quarter. We do not find any such distinction between an ordinance which changes a municipal license tax already in existence and an ordinance creating an entirely new tax in Section 2 of Republic Act No. 2264 (Local Autonomy Act) which merely refers to a "tax ordinance" without any qualification whatsoever.

Now to the meat of the problem in this petition. Is not Section 2309 of the Revised Administrative Code deemed repealed or abrogated by Section 2 of Republic Act No. 2264 (Local Autonomy Act) in so far as effectivity of a tax ordinance is concerned? An examination of Republic Act No. 2264 (Local Autonomy Act) fails to show any provision expressly repealing Section 2309 of the Revised Administrative Code. All that is mentioned therein is Section 9 which reads:

Section 9 — All acts, executive orders, administrative orders, proclamations or parts thereof, inconsistent with any of the provisions of this Act are hereby repealed and modified accordingly.

The foregoing provision does not amount to an express repeal of Section 2309 of the Revised Administrative Code. It is a well established principle in statutory construction that a statute will not be construed as repealing prior acts on the same subject in the absence of words to that effect unless there is an irreconcilable repugnancy between them, or unless the new law is evidently intended to supersede all prior acts on the matter in hand and to comprise itself the sole and complete system of legislation on that subject. Every new statute should be construed in connection with those already existing in relation to the same subject matter and all should be made to harmonize and stand together, if they can be done by any fair and reasonable interpretation ... . 6 It will also be noted that Section 2309 of the Revised Administrative Code and Section 2 of Republic Act No. 2264 (Local Autonomy Act) refer to the same subject matter-enactment and effectivity of a tax ordinance. In this respect they can be considered in pari materia. Statutes are said to be in pari materia when they relate to the same person or thing, or to the same class of persons or things, or have the same purpose or object. 7 When statutes are in pari materia, the rule of statutory construction dictates that they should be construed together. This is because enactments of the same legislature on the same subject matter are supposed to form part of one uniform system; that later statutes are supplementary or complimentary to the earlier enactments and in the passage of its acts the legislature is supposed to have in mind the existing legislation on the same subject and

to have enacted its new act with reference thereto. 8 Having thus in mind the previous statutes relating to the same subject matter, whenever the legislature enacts a new law, it is deemed to have enacted the new provision in accordance with the legislative policy embodied in those prior statutes unless there is an express repeal of the old and they all should be construed together. 9 In construing them the old statutes relating to the same subject matter should be compared with the new provisions and if possible by reasonable construction, both should be so construed that effect may be given to every provision of each. However, when the new provision and the old relating to the same subject cannot be reconciled the former shall prevail as it is the latter expression of the legislative will. 10 Actually we do not see any conflict between Section 2309 of the Revised Administrative Code and Section 2 of the Republic Act No. 2264 (Local Autonomy Act). The conflict, if any, is more apparent than real. It is one that is not incapable of reconciliation. And the two provisions can be reconciled by applying the first clause of Section 2309 of the Revised Administrative Code when the problem refers to the effectivity of an ordinance changing or repealing a municipal license tax already in existence. But where the problem refers to effectivity of an ordinance creating an entirely new tax, let Section 2 of Republic Act No. 2264 (Local Autonomy Act) govern.

In the case before Us, the ordinance in question is one which changes the graduated sales tax on gross sales or receipts of dealers of merchandise and sari-sari merchants prescribed in Section 3 of Ordinance No. 4 of the City of Naga to percentage tax on their gross sale-an ordinance which definitely falls within the clause of Section 2309 of the Revised Administrative Code. Accordingly it should be effective and enforceable in the next succeeding year after the year of its approval or in 1971 and private respondents should be refunded of the taxes they have paid to the petitioners on their gross sales for the quarter from July 1, 1970 to September 30, 1970 plus the corresponding interests from the filing of the complaint until reimbursement of the amount.

IN VIEW OF THE FOREGOING, the instant petition is hereby dismissed.

SO ORDERED.

Teehankee (Chairman), Makasiar, Esguerra and Muñoz Palma, JJ., concur.

 

Footnotes

1 Section 14, RA 305, as amended, otherwise known as the Charter of Naga City, provides:

Each approved ordinance, resolution or motion shall be sealed with the seal of the Board, signed by the presiding officer and the secretary of the Board and recorded in a book for the purpose and shall, on the day following its passage, be posted by the secretary at the main entrance to the City Hall, and shall take effect and be in force on and after the tenth day following its passage, unless otherwise stated in said ordinance, resolution or motion or vetoed by the Mayor as hereinafter provided. (Emphasis ours)

2 Stipulation of Facts.

3 Stipulation of Facts.

4 See. 14 (RA 305) — Method of transacting business by the Board-Veto-Authentication and publication of ordinance —

... Within ten days after the receipt of the ordinance, resolution, or motion, the Mayor shall return it with his approval or veto. If he does not return it within that time it shall be to be approved, if he returns it with his veto, his reasons therefor in writing shall accompany it. It may then be again enacted by the affirmative vetoes of six member of the Board and again forwarded to the Mayor for his approval, and if within ten days after his receipt he does not again return it with his veto, it shall be deemed to be approved. If within said time he again returns it with his veto, it shall be forwarded forthwith to the Secretary of the Interior for his approval or disapproval, which shall be final." (Emphasis ours.)

5 Sec. 2, Republic Act 2264, otherwise known as the Local Autonomy Act, provides:

Section 2. (Republic Act No. 2264) Taxation—Any provision of law to the contrary notwithstanding, all chartered cities, municipalities and municipal districts shall have authority to impose municipal license taxes or fees upon persons engaged in any occupation or business ...

A tax ordinance shall go into effect on the fifteenth day after its p , unless the ordinance shall provide otherwise: Provided, however, that the Secretary of Finance shall have authority to suspend the effectivity of any ordinance within one hundred and twenty days after its passage, if, in his opinion the tax or fees therein levied, or imposed is unjust, excessive, oppressive, or confiscatory, and when the said secretary exercises this authority the effectivity or such ordinance shall be suspended. (emphasis ours)

6 Black on Interpretation of Laws, p. 351.

7 Sutherland Statutory Construction, Vol. 11, pp. 535- 536.

8 Black on Interpretation of Laws, See. 106.

9 Ibid

10 Sutherland Statutory Construction, Vol. 11, p. 529.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-33281             March 31, 1930

CHIN AH FOO (alias CHAN FOO WOO) and YEE SHEE (alias YEE SUI YENG), widow of Chin Ah Kim,petitioners, vs.PEDRO CONCEPCION, Judge of First Instance of Manila, and LEE VOO, respondents.

Harvey and O'Brien for petitioners.Lazaro Pormarejo for respondent Lee Voo.J. A. Wolfson for respondent judge.

MALCOLM, J.:

The question for decision in this certiorari proceeding concerns the power of a Judge of First Instance, who has in effect acquitted a man charged with murder on the plea of insanity, and who has ordered the confinement of the insane person in an asylum, subsequently to permit the insane person to leave the asylum without the acquiescence of the Director of Health. Otherwise stated, the factor determinative of the question has to do with the effect, if any, of section 1048 of the Administrative Code on article 8 of the Penal Code.

On November 15, 1927, one Chan Sam (alias Chin Ah Woo), was charged in the Court of First Instance of Manila with the murder of Chin Ah Kim. Thereafter, the trial judge rendered judgment declaring the accused not responsible for the crime, and dismissing the case, but requiring the reclusion of the accused for treatment in San Lazaro Hospital, in accordance with article 8 of the Penal Code, with the admonition that the accused be not permitted to leave the said institution without first obtaining the permission of the court. In compliance with this order, Chan Sam was confined for approximately two years in San Lazaro Hospital. During this period, efforts to obtain his release were made induced by the desire of his wife and father-in-law to have him proceed to Hongkong. Opposition to the allowance of the motions came from the wife and children of the murdered man, who contended that Chan Sam was still insane, and that he had made threats that if he ever obtained his liberty he would kill the wife and the children of the deceased and probably other members of his own family who were living in Hongkong. These various legal proceedings culminated in Doctors Domingo and De los Angeles being delegated to examine and certify the mental condition of Chan Sam, which they did. After this report had been submitted, counsel for the oppositors challenged the jurisdiction of the court. However, the respondent judge sustained the court's right to make an order in the premises and allowed Chan Sam to leave the San Lazaro Hospital to be turned over to the attorney-in-fact of his wife so that he might be taken to Hongkong to join his wife in that city.

Article 8 of the Penal Code, pursuant to which the trial judge purported to act in issuing his order of release, provides that among those exempt from criminal liability are:

1. An imbecile or lunatic, unless the latter has acted during the lucid interval.

When the imbecile or lunatic has committed an act which the law defines as a grave felony, the court shall order his confinement in one of the asylums established for persons thus afflicted, which he shall not be permitted to leave without first obtaining the permission of the same court.

Section 1048 of the Administrative Code, which, it is argued, has superseded or supplemented article 8 of the Penal Code, provides as to the discharge of a patient from custody from a hospital for the insane the following:

When in the opinion of the Director of Health any patient in any Government hospital or other place for the insane is temporarily or permanently cured, or may be released without danger, he may discharge such patient, and shall notify the Judge of the Court of First Instance who ordered the commitment, in case the patient is confined by order of the court.

An examination of article 8, paragraph 1, of the Penal Code discloses that the permission of the court who orders the confinement of one accused of a grave felony in an insane asylum is a prerequisite for obtaining release from the institution. The respondent judge has based his action in this case on this provision of the law. On the other hand, section 1048 of the Administrative Code grants to the Director of Health authority to say when a patient may be discharged from an insane asylum. There is no pretense that the Director of Health has exercised his authority in this case, or that the head of the Philippine Health Service has been asked to express his opinion.

Contrasting the two provisions of Philippine law which have been mentioned, it is self-evident that for section 1048 of the Administrative Code to prevail exclusively it would be necessary to find an implied repeal of a portion of article 8 of the Penal Code. But it is a well-known rule of statutory construction that when there is no express repeal none is presumed to be intended. The most reasonable supposition is that when the Legislature placed the provision, from which section 1048 of the Administrative Code was derived, on the statute books, it did so without any consideration as to the effect of the new law on article 8 of the Penal Code. It is likewise a canon of statutory construction that when two portions of the law can be construed so that both can stand together, this should be done. In this respect, we believe that the authority of the courts can be sustained in cases where the courts take action, while the authority of the Director of Health can be sustained in other cases not falling within the jurisdiction of the courts. This latter construction is reinforced by that portion of section 1048 of the Administrative Code which requires the Director of Health to notify the Judge of First Instance who ordered the commitment, in case the patients is confined by order of the court.

In 1916, the Director of Health raised this same question. He then took the view that section 7 of Act No. 2122, now incorporated in the Administrative Code as section 1048, applied to all cases of confinement of persons adjudged to be insane in any Government hospital or other places for the insane, and that the entire discretion as to the sanity of any patient whatever was vested by this section exclusively in the Director of Health. The Attorney-General, who at that time was Honorable Ramon Avanceña, ruled against the Director of Health, saying that "the Legislature could not have intended to vest in the Director of Health the power to release, without proper judicial authority, any person confined by order of the court in an asylum pursuant to the provisions of article 8 of the Penal Code."

In at least two cases, United States vs. Guendia ([1917], 37 Phil., 337), and People vs. Bascos ([1922], 44 Phil., 204), this court has relied on article 8, paragraph 1, of the Penal Code. The judgments in the cited cases concluded with this order: "The defendant shall be kept in confinement in the San Lazaro Hospital, or such other hospital for the insane as the Director of Health may direct, and shall not be permitted to depart therefrom without the prior approval of the Court of First Instance of the Province of Iloilo (Pangasinan)."

Due to differences in statutory provisions, the American authorities on the question are not very helpful. However, one case has been found where the facts were practically identical with the ones before us, where the law is much the same as Philippine Law, and where the procedure which should be followed was outlined by the Supreme Court of the State of Washington. We refer to the case of State vs. Snell ([1908], 49 Wash., 177). In the decision in the cited case, the court, speaking through Justice Rudkin, said:

On the 7th day of July, 1906, the relator, Chester Thompson, killed George Meade Emory in the City of Seattle, and by reason thereof was informed against in the superior court of King county for the crime of murder. A plea of not guilty was interposed, and the place of trial was changed to the superior court of Pierce county. The relator was tried in the latter court before the respondent as presiding judge, and the jury be returned a verdict of not guilty by reason

of insanity. On the 3rd day of May, 1907, the respondent entered an order reciting that the relator was then insane; that he had been acquitted of the crime of murder by reason of insanity; that his discharge or going at large would be manifestly dangerous to the peace and safety of the community; and committed him to the county jail of Pierce county. It was further ordered that, on the 12th day of June, 1907, the relator should be taken from the county jail of Pierce county and transferred to the state penitentiary at Walla Walla, to be there confined in the ward set apart for the confinement, custody, and keeping of the criminal insane until the further order of the court and until discharge therefrom by due process of law. The relator was committed to the county jail and thereafter transferred to the insane ward of the penitentiary in obedience to this order, and is now confined in the latter institution. On the 19th day of February, 1908, he applied to the physician in charge of the criminal insane at the state penitentiary for an examination of his mental condition and fitness to be at large, as provided in section 6 of the act of February 21, 1907, entitled, "An act relating to the criminal insane, their trial, commitment, and custody." Laws of 1907, page 33. After such examination, the physician certified to the warden of the penitentiary that he had reasonable cause to believe that the relator had become sane since his commitment, and was a safe person to be at large. The warden thereupon granted the relator permission to present a petition to the court that committed him, setting up the facts leading to his commitment, and that he had become sane and mentally responsible, and in such condition that he is a safe person to be at large, and praying for his discharge from custody. A petition in due form was thereupon presented to the respondent judge, after service thereof upon the prosecuting attorney of Pierce county, but the respondent refused to set the matter down for hearing or to entertain jurisdiction of the proceeding,. . . . Application was there-upon made to this court for a writ of mandamus, requiring the respondent to set the petition down for hearing, and the case is now before us on the return to the alternative writ.

x x x           x x x           x x x

We are of opinion, therefore, that the procedure adopted by the relator is in conformity with the law, and the writ will issues as prayed.

The foregoing is our understanding of the law on the subject. The following represents our deductions and conclusions. Article 8 of the Penal Code has not been impliedly repealed by section 1048 of the Administrative Code. Article 8 of the Penal Code and section 1048 of the Administrative Code can be construed so that both can stand together. Considering article 8 of the Penal Code as in force and construing this article and section 1048 of the Administrative Code, we think that the Attorney-General was right in expressing the opinion that the Director of Health was without power to release, without proper judicial authority, any person confined by order of the court in an asylum pursuant to the provisions of article 8 of the Penal Code. We think also that the converse proposition is equally tenable, and is that any person confined by order of the court in an asylum in accordance with article 8 of the Penal Code cannot be discharged from custody in an insane asylum until the views of the Director of Health have been ascertained as to whether or not the person is temporarily or permanently cured or may be released without danger. In other words, the powers of the courts and the Director of Health are complementary each with the other. As a practical observation, it may further be said that it is well to adopt all reasonable precautions to ascertain if a person confined in an asylum as insane should be permitted to leave the asylum, and this can best be accomplished through the joint efforts of the courts and the Director of Health in proper cases.

Various defenses were interposed by the respondents to the petition, but we have not been impressed with any of them except the ones which go to the merits. After thorough discussion, our view is that while the respondent Judge acted patiently and cautiously in the matters which came

before him, yet he exceeded his authority when he issued his orders of December 26, 1929, and March 17, 1930, without first having before him the opinion of the Director of Health.

The writ prayed for will issue and the temporary restraining order will be made permanent, without costs.

Villamor, Ostrand, Johns, Romualdez and Villa-Real, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-8451        December 20, 1957

THE ROMAN CATHOLIC APOSTOLIC ADMINISTRATOR OF DAVAO, INC., petitioner, vs.THE LAND REGISTRATION COMMISSION and THE REGISTER OF DEEDS OF DAVAO CITY, respondents.

Teodoro Padilla, for petitioner.Office of the Solicitor General Ambrosio Padilla, Assistant Solicitor General Jose G. Bautista and Troadio T. Quianzon, Jr., for respondents.

 

FELIX, J.:

This is a petition for mandamus filed by the Roman Catholic Apostolic Administrator of Davao seeking the reversal of a resolution by the Land Registration Commissioner in L.R.C. Consulta No. 14. The facts of the case are as follows:

On October 4, 1954, Mateo L. Rodis, a Filipino citizen and resident of the City of Davao, executed a deed of sale of a parcel of land located in the same city covered by Transfer Certificate No. 2263, in favor of the Roman Catholic Apostolic Administrator of Davao Inc., s corporation sole organized and existing in accordance with Philippine Laws, with Msgr. Clovis Thibault, a Canadian citizen, as actual incumbent. When the deed of sale was presented to Register of Deeds of Davao for registration, the latter.

having in mind a previous resolution of the Fourth Branch of the Court of First Instance of Manila wherein the Carmelite Nuns of Davao were made to prepare an affidavit to the effect that 60 per cent of the members of their corporation were Filipino citizens when they sought to register in favor of their congregation of deed of donation of a parcel of land—

required said corporation sole to submit a similar affidavit declaring that 60 per cent of the members thereof were Filipino citizens.

The vendee in the letter dated June 28, 1954, expressed willingness to submit an affidavit, both not in the same tenor as that made the Progress of the Carmelite Nuns because the two cases were not similar, for whereas the congregation of the Carmelite Nuns had five incorporators, the corporation sole has only one; that according to their articles of incorporation, the organization of the Carmelite Nuns became the owner of properties donated to it, whereas the case at bar, the totality of the Catholic population of Davao would become the owner of the property bought to be registered.

As the Register of Deeds entertained some doubts as to the registerability if the document, the matter was referred to the Land Registration Commissioner en consulta for resolution in accordance with section 4 of Republic Act No. 1151. Proper hearing on the matter was conducted by the Commissioner and after the petitioner corporation had filed its memorandum, a resolution was rendered on September 21, 1954, holding that in view of the provisions of Section 1 and 5 of Article XIII of the Philippine Constitution, the vendee was not qualified to acquire private lands in the Philippines in the absence of proof that at least 60 per centum of the capital, property, or assets of the Roman Catholic Apostolic Administrator of Davao, Inc., was actually owned or controlled by Filipino citizens, there being no question that the present incumbent of the corporation sole was a Canadian citizen. It was also the opinion of the Land Registration Commissioner that section 159 of the corporation Law relied upon by the vendee was rendered operative by the aforementioned provisions of the Constitution with respect to real estate, unless the precise condition set therein — that at least 60 per cent of its capital is owned by Filipino citizens — be present, and, therefore, ordered the Registered Deeds of Davao to deny registration of the deed of sale in the absence of proof of compliance with such condition.

After the motion to reconsider said resolution was denied, an action for mandamus was instituted with this Court by said corporation sole, alleging that under the Corporation Law as well as the settled jurisprudence on the matter, the deed of sale executed by Mateo L. Rodis in favor of petitioner is actually a deed of sale in favor of the Catholic Church which is qualified to acquire private agricultural lands for the establishment and maintenance of places of worship, and prayed that judgment be rendered reserving and setting aside the resolution of the Land Registration Commissioner in question. In its resolution of November 15, 1954, this Court gave due course to this petition providing that the procedure prescribed for appeals from the Public Service Commission of the Securities and Exchange Commissions (Rule 43), be followed.

Section 5 of Article XIII of the Philippine Constitution reads as follows:

SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

Section 1 of the same Article also provides the following:

SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to cititzens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, SUBJECT TO ANY EXISTING RIGHT, grant, lease, or concession AT THE TIME OF THE INAUGURATION OF THE GOVERNMENT ESTABLISHED UNDER CONSTITUTION. Natural resources, with the exception of public agricultural land, shall not be alienated, and no license, concession, or leases for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial

uses other than the development of water power, in which cases other than the development and limit of the grant.

In virtue of the foregoing mandates of the Constitution, who are considered "qualified" to acquire and hold agricultural lands in the Philippines? What is the effect of these constitutional prohibition of the right of a religious corporation recognized by our Corporation Law and registered as a corporation sole, to possess, acquire and register real estates in its name when the Head, Manager, Administrator or actual incumbent is an alien?

Petitioner consistently maintained that a corporation sole, irrespective of the citizenship of its incumbent, is not prohibited or disqualified to acquire and hold real properties. The Corporation Law and the Canon Law are explicit in their provisions that a corporation sole or "ordinary" is not the owner of the of the properties that he may acquire but merely the administrator thereof. The Canon Law also specified that church temporalities are owned by the Catholic Church as a "moral person" or by the diocess as minor "moral persons" with the ordinary or bishop as administrator.

And elaborating on the composition of the Catholic Church in the Philippines, petitioner explained that as a religious society or organization, it is made up of 2 elements or divisions — the clergy or religious members and the faithful or lay members. The 1948 figures of the Bureau of Census showed that there were 277,551 Catholics in Davao and aliens residing therein numbered 3,465. Ever granting that all these foreigners are Catholics, petitioner contends that Filipino citizens form more than 80 per cent of the entire Catholics population of that area. As to its clergy and religious composition, counsel for petitioner presented the Catholic Directory of the Philippines for 1954 (Annex A) which revealed that as of that year, Filipino clergy and women novices comprise already 60.5 per cent of the group. It was, therefore, allowed that the constitutional requirement was fully met and satisfied.

Respondents, on the other hand, averred that although it might be true that petitioner is not the owner of the land purchased, yet he has control over the same, with full power to administer, take possession of, alienate, transfer, encumber, sell or dispose of any or all lands and their improvements registered in the name of the corporation sole and can collect, receive, demand or sue for all money or values of any kind that may be kind that may become due or owing to said corporation, and vested with authority to enter into agreements with any persons, concerns or entities in connection with said real properties, or in other words, actually exercising all rights of ownership over the properties. It was their stand that the theory that properties registered in the name of the corporation sole are held in true for the benefit of the Catholic population of a place, as of Davao in the case at bar should be sustained because a conglomeration of persons cannot just be pointed out as the cestui que trust or recipient of the benefits from the property allegedly administered in their behalf. Neither can it be said that the mass of people referred to as such beneficiary exercise ant right of ownership over the same. This set-up, respondents argued, falls short of a trust. The respondents instead tried to prove that in reality, the beneficiary of ecclesiastical properties are not members or faithful of the church but someone else, by quoting a portion a portion of the ought of fidelity subscribed by a bishop upon his elevation to the episcopacy wherein he promises to render to the Pontificial Father or his successors an account of his pastoral office and of all things appertaining to the state of this church.

Respondents likewise advanced the opinion that in construing the constitutional provision calling for 60 per cent of Filipino citizenship, the criterion of the properties or assets thereof.

In solving the problem thus submitted to our consideration, We can say the following: A corporation sole is a special form of corporation usually associated with the clergy. Conceived and introduced into the common law by sheer necessity, this legal creation which was referred to as "that unhappy

freak of English law" was designed to facilitate the exercise of the functions of ownership carried on by the clerics for and on behalf of the church which was regarded as the property owner (See I Couvier's Law Dictionary, p. 682-683).

A corporation sole consists of one person only, and his successors (who will always be one at a time), in some particular station, who are incorporated by law in order to give them some legal capacities and advantages, particularly that of perpetuity, which in their natural persons they could not have had. In this sense, the king is a sole corporation; so is a bishop, or dens, distinct from their several chapters (Reid vs. Barry, 93 Fla. 849, 112 So. 846).

The provisions of our Corporation law on religious corporations are illuminating and sustain the stand of petitioner. Section 154 thereof provides:

SEC. 154. — For the administration of the temporalities of any religious denomination, society or church and the management of the estates and the properties thereof, it shall be lawful for the bishop, chief priest, or presiding either of any such religious denomination, society or church to become a corporation sole, unless inconsistent wit the rules, regulations or discipline of his religious denomination, society or church or forbidden by competent authority thereof.

See also the pertinent provisions of the succeeding sections of the same Corporation Law copied hereunder:

SEC. 155. In order to become a corporation sole the bishop, chief priest, or presiding elder of any religious denomination, society or church must file with the Securities and Exchange Commissioner articles of incorporation setting forth the following facts:

xxx xxx xxx.

(3) That as such bishop, chief priest, or presiding elder he is charged with the administration of the temporalities and the management of the estates and properties of his religious denomination, society, or church within its territorial jurisdiction, describing it;

xxx xxx xxx.

(As amended by Commonwealth Act No. 287).

SEC. 157. From and after the filing with the Securities and Exchange Commissioner of the said articles of incorporation, which verified by affidavit or affirmation as aforesaid and accompanied by the copy of the commission, certificate of election, or letters of appointment of the bishop, chief priest, or presiding elder, duly certified as prescribed in the section immediately preceding such the bishop, chief priest, or presiding elder, as the case may be, shall become a corporation sole and all temporalities, estates, and properties the religious denomination, society, or church therefore administered or managed by him as such bishop, chief priest, or presiding elder, shall be held in trust by him as a corporation sole, for the use, purpose, behalf, and sole benefit of his religious denomination, society, or church, including hospitals, schools, colleges, orphan, asylums, parsonages, and cemeteries thereof. For the filing of such articles of incorporation, the Securities and Exchange Commissioner shall collect twenty-five pesos. (As amended by Commonwealth Act. No. 287); and.

SEC. 163. The right to administer all temporalities and all property held or owned by a religious order or society, or by the diocese, synod, or district organization of any religious denomination or church shall, on its incorporation, pass to the corporation and shall be held in trust for the use, purpose behalf, and benefit of the religious society, or order so incorporated or of the church of which the diocese, or district organization is an organized and constituent part.

The Cannon Law contains similar provisions regarding the duties of the corporation sole or ordinary as administrator of the church properties, as follows:

Al Ordinario local pertenence vigilar diligentemente sobre la administracion de todos los bienes eclesiasticos que se hallan en su territorio y no estuvieren sustraidos de su jurisdiccion, salvs las prescriciones legitimas que le concedan mas aamplios derechos.

Teniendo en cuenta los derechos y las legitimas costumbres y circunstancias, procuraran los Ordinarios regular todo lo concerniente a la administracion de los bienes eclesciasticos, dando las oportunas instucciones particularles dentro del narco del derecho comun. (Title XXVIII, Codigo de Derecho Canonico, Lib. III, Canon 1519).1

That leaves no room for doubt that the bishops or archbishops, as the case may be, as corporation's sole are merely administrators of the church properties that come to their possession, in which they hold in trust for the church. It can also be said that while it is true that church properties could be administered by a natural persons, problems regarding succession to said properties can not be avoided to rise upon his death. Through this legal fiction, however, church properties acquired by the incumbent of a corporation sole pass, by operation of law, upon his death not his personal heirs but to his successor in office. It could be seen, therefore, that a corporation sole is created not only to administer the temporalities of the church or religious society where he belongs but also to hold and transmit the same to his successor in said office. If the ownership or title to the properties do not pass to the administrators, who are the owners of church properties?.

Bouscaren and Elis, S.J., authorities on cannon law, on their treatise comment:

In matters regarding property belonging to the Universal Church and to the Apostolic See, the Supreme Pontiff exercises his office of supreme administrator through the Roman Curia; in matters regarding other church property, through the administrators of the individual moral persons in the Church according to that norms, laid down in the Code of Cannon Law. This does not mean, however, that the Roman Pontiff is the owner of all the church property; but merely that he is the supreme guardian (Bouscaren and Ellis, Cannon Law, A Text and Commentary, p. 764).

and this Court, citing Campes y Pulido, Legislacion y Jurisprudencia Canonica, ruled in the case of Trinidad vs. Roman Catholic Archbishop of Manila, 63 Phil. 881, that:

The second question to be decided is in whom the ownership of the properties constituting the endowment of the ecclesiastical or collative chaplaincies is vested.

Canonists entertain different opinions as to the persons in whom the ownership of the ecclesiastical properties is vested, with respect to which we shall, for our purpose, confine ourselves to stating with Donoso that, while many doctors cited by Fagnano believe that it resides in the Roman Pontiff as Head of the Universal Church, it is more probable that ownership, strictly speaking, does not reside in the latter, and, consequently, ecclesiastical

properties are owned by the churches, institutions and canonically established private corporations to which said properties have been donated.

Considering that nowhere can We find any provision conferring ownership of church properties on the Pope although he appears to be the supreme administrator or guardian of his flock, nor on the corporation sole or heads of dioceses as they are admittedly mere administrators of said properties, ownership of these temporalities logically fall and develop upon the church, diocese or congregation acquiring the same. Although this question of ownership of ecclesiastical properties has off and on been mentioned in several decisions of the Court yet in no instance was the subject of citizenship of this religious society been passed upon.

We are not unaware of the opinion expressed by the late Justice Perfecto in his dissent in the case of Agustines vs. Court of First Instance of Bulacan, 80 Phil. 565, to the effect that "the Roman Catholic Archbishop of Manila is only a branch of a universal church by the Pope, with permanent residence in Rome, Italy". There is no question that the Roman Catholic Church existing in the Philippines is a tributary and part of the international religious organization, for the word "Roman" clearly expresses its unity with and recognizes the authority of the Pope in Rome. However, lest We become hasty in drawing conclusions, We have to analyze and take note of the nature of the government established in the Vatican City, of which it was said:

GOVERNMENT. In the Roman Catholic Church supreme authority and jurisdiction over clergy and laity alike as held by the pope who (since the Middle Ages) is elected by the cardinals assembled in conclave, and holds office until his death or legitimate abdication. . . While the pope is obviously independent of the laws made, and the officials appointed, by himself or his predecessors, he usually exercises his administrative authority according to the code of canon law and through the congregations, tribunals and offices of the Curia Romana. In their respective territories (called generally dioceses) and over their respective subjects, the patriarchs, metropolitans or archbishops and bishops exercise a jurisdiction which is called ordinary (as attached by law to an office given to a person. . . (Collier's Encyclopedia, Vol. 17, p. 93).

While it is true and We have to concede that in the profession of their faith, the Roman Pontiff is the supreme head; that in the religious matters, in the exercise of their belief, the Catholic congregation of the faithful throughout the world seeks the guidance and direction of their Spiritual Father in the Vatican, yet it cannot be said that there is a merger of personalities resultant therein. Neither can it be said that the political and civil rights of the faithful, inherent or acquired under the laws of their country, are affected by that relationship with the Pope. The fact that the Roman Catholic Church in almost every country springs from that society that saw its beginning in Europe and the fact that the clergy of this faith derive their authorities and receive orders from the Holy See do not give or bestow the citizenship of the Pope upon these branches. Citizenship is a political right which cannot be acquired by a sort of "radiation". We have to realize that although there is a fraternity among all the catholic countries and the dioceses therein all over the globe, the universality that the word "catholic" implies, merely characterize their faith, a uniformity in the practice and the interpretation of their dogma and in the exercise of their belief, but certainly they are separate and independent from one another in jurisdiction, governed by different laws under which they are incorporated, and entirely independent on the others in the management and ownership of their temporalities. To allow theory that the Roman Catholic Churches all over the world follow the citizenship of their Supreme Head, the Pontifical Father, would lead to the absurdity of finding the citizens of a country who embrace the Catholic faith and become members of that religious society, likewise citizens of the Vatican or of Italy. And this is more so if We consider that the Pope himself may be an Italian or national of any other country of the world. The same thing be said with regard to the nationality or citizenship of the

corporation sole created under the laws of the Philippines, which is not altered by the change of citizenship of the incumbent bishops or head of said corporation sole.

We must therefore, declare that although a branch of the Universal Roman Catholic Apostolic Church, every Roman Catholic Church in different countries, if it exercises its mission and is lawfully incorporated in accordance with the laws of the country where it is located, is considered an entity or person with all the rights and privileges granted to such artificial being under the laws of that country, separate and distinct from the personality of the Roman Pontiff or the Holy See, without prejudice to its religious relations with the latter which are governed by the Canon Law or their rules and regulations.

We certainly are conscious of the fact that whatever conclusion We may draw on this matter will have a far reaching influence, nor can We overlook the pages of history that arouse indignation and criticisms against church landholdings. This nurtured feeling that snowbailed into a strong nationalistic sentiment manifested itself when the provisions on natural to be embodied in the Philippine Constitution were framed, but all that has been said on this regard referred more particularly to landholdings of religious corporations known as "Friar Estates" which have already bee acquired by our government, and not to properties held by corporations sole which, We repeat, are properties held in trust for the benefit of the faithful residing within its territorial jurisdiction. Though that same feeling probably precipitated and influenced to a large extent the doctrine laid down in the celebrated Krivenco decision, We have to take this matter in the light of legal provisions and jurisprudence actually obtaining, irrespective of sentiments.

The question now left for our determination is whether the Universal Roman Catholic Apostolic Church in the Philippines, or better still, the corporation sole named the Roman Catholic Apostolic Administrator of Davao, Inc., is qualified to acquire private agricultural lands in the Philippines pursuant to the provisions of Article XIII of the Constitution.

We see from sections 1 and 5 of said Article quoted before, that only persons or corporations qualified to acquire hold lands of the public domain in the Philippines may acquire or be assigned and hold private agricultural lands. Consequently, the decisive factor in the present controversy hinges on the proposition or whether or not the petitioner in this case can acquire agricultural lands of the public domain.

From the data secured from the Securities and Exchange Commission, We find that the Roman Catholic Bishop of Zamboanga was incorporated (as a corporation sole) in September, 1912, principally to administer its temporalities and manage its properties. Probably due to the ravages of the last war, its articles of incorporation werereconstructed in the Securities and Exchange Commission on April 8, 1948. At first, this corporation sole administered all the temporalities of the church existing or located in the island of Mindanao. Later on, however, new dioceses were formed and new corporations sole were created to correspond with the territorial jurisdiction of the new dioceses, one of them being petitioner herein, the Roman Catholic Apostolic Administrator of Davao, Inc., which was registered with the Securities and Exchange Commission on September 12, 1950, and succeeded in the administrative for all the "temporalities" of the Roman Catholic Church existing in Davao.

According to our Corporation Law, Public Act No. 1549, approved April 1, 1906, a corporation sole.

is organized and composed of a single individual, the head of any religious society or church, for the ADMINISTRATION of the temporalities of such society or church. By "temporalities" is meant estate and properties not used exclusively for religious worship. The successor in office of such religious head or chief priest incorporated as a corporation sole shall become

the corporation sole on ascension to office, and shall be permitted to transact business as such on filing with the Securities and Exchange Commission a copy of his commission, certificate of election or letter of appointment duly certified by any notary public or clerk of court of record (Guevara's The Philippine Corporation Law, p. 223).

The Corporation Law also contains the following provisions:

SECTION 159. Any corporation sole may purchase and hold real estate and personal; property for its church, charitable, benevolent, or educational purposes, and may receive bequests or gifts of such purposes. Such corporation may mortgage or sell real property held by it upon obtaining an order for that purpose from the Court of First Instance of the province in which the property is situated; but before making the order proof must be made to the satisfaction of the Court that notice of the application for leave to mortgage or sell has been given by publication or otherwise in such manner and for such time as said Court or the Judge thereof may have directed, and that it is to the interest of the corporation that leave to mortgage or sell must be made by petition, duly verified by the bishop, chief priest, or presiding elder acting as corporation sole, and may be opposed by any member of the religious denomination, society or church represented by the corporation sole: Provided, however, That in cases where the rules, regulations, and discipline of the religious denomination, society or church concerned represented by such corporation sole regulate the methods of acquiring, holding, selling and mortgaging real estate and personal property, such rules, regulations, and discipline shall control and the intervention of the Courts shall not be necessary.

It can, therefore, be noticed that the power of a corporation sole to purchase real property, like the power exercised in the case at bar, it is not restricted although the power to sell or mortgage sometimes is, depending upon the rules, regulations, and discipline of the church concerned represented by said corporation sole. If corporations sole can purchase and sell real estate for its church, charitable, benevolent, or educational purposes, can they register said real properties? As provided by law, lands held in trust for specific purposes me be subject of registration (section 69, Act 496), and the capacity of a corporation sole, like petitioner herein, to register lands belonging to it is acknowledged, and title thereto may be issued in its name (Bishop of Nueva Segovia vs. Insular Government, 26 Phil. 300-1913). Indeed it is absurd that while the corporations sole that might be in need of acquiring lands for the erection of temples where the faithful can pray, or schools and cemeteries which they are expressly authorized by law to acquire in connection with the propagation of the Roman Catholic Apostolic faith or in furtherance of their freedom of religion they could not register said properties in their name. As professor Javier J. Nepomuceno very well says "Man in his search for the immortal and imponderable, has, even before the dawn of recorded history, erected temples to the Unknown God, and there is no doubt that he will continue to do so for all time to come, as long as he continues 'imploring the aid of Divine Providence'" (Nepomuceno's Corporation Sole, VI Ateneo Law Journal, No. 1, p. 41, September, 1956). Under the circumstances of this case, We might safely state that even before the establishment of the Philippine Commonwealth and of the Republic of the Philippines every corporation sole then organized and registered had by express provision of law the necessary power and qualification to purchase in its name private lands located in the territory in which it exercised its functions or ministry and for which it was created, independently of the nationality of its incumbent unique and single member and head, the bishop of the dioceses. It can be also maintained without fear of being gainsaid that the Roman Catholic Apostolic Church in the Philippines has no nationality and that the framers of the Constitution, as will be hereunder explained, did not have in mind the religious corporations sole when they provided that 60 per centum of the capital thereof be owned by Filipino citizens.

There could be no controversy as to the fact that a duly registered corporation sole is an artificial being having the right of succession and the power, attributes, and properties expressly authorized by law or incident to its existence (section 1, Corporation Law). In outlining the general powers of a corporation. Public Act. No. 1459 provides among others:

SEC. 13. Every corporation has the power:

(5) To purchase, hold, convey, sell, lease, lot, mortgage, encumber, and otherwise deal with such real and personal property as the purpose for which the corporation was formed may permit, and the transaction of the lawful business of the corporation may reasonably and necessarily require, unless otherwise prescribed in this Act: . . .

In implementation of the same and specially made applicable to a form of corporation recognized by the same law, Section 159 aforequoted expressly allowed the corporation sole to purchase and hold real as well as personal properties necessary for the promotion of the objects for which said corporation sole is created. Respondent Land Registration Commissioner, however, maintained that since the Philippine Constitution is a later enactment than public Act No. 1459, the provisions of Section 159 in amplification of Section 13 thereof, as regard real properties, should be considered repealed by the former.

There is a reason to believe that when the specific provision of the Constitution invoked by respondent Commissioner was under consideration, the framers of the same did not have in mind or overlooked this particular form of corporation. It is undeniable that the naturalization and conservation of our national resources was one of the dominating objectives of the Convention and in drafting the present Article XII of the Constitution, the delegates were goaded by the desire (1) to insure their conservation for Filipino posterity; (2) to serve as an instrument of national defense, helping prevent the extension into the country of foreign control through peaceful economic penetration; and (3) to prevent making the Philippines a source of international conflicts with the consequent danger to its internal security and independence (See The Framing of the Philippine Constitution by Professor Jose M. Aruego, a Delegate to the Constitutional Convention, Vol. II. P. 592-604). In the same book Delegate Aruego, explaining the reason behind the first consideration, wrote:

At the time of the framing of Philippine Constitution, Filipino capital had been to be rather shy. Filipinos hesitated s a general rule to invest a considerable sum of their capital for the development, exploitation and utilization of the natural resources of the country. They had not as yet been so used to corporate as the peoples of the west. This general apathy, the delegates knew, would mean the retardation of the development of the natural resources, unless foreign capital would be encouraged to come and help in that development. They knew that the naturalization of the natural resources would certainly not encourage theINVESTMENT OF FOREIGN CAPITAL into them. But there was a general feeling in the Convention that it was better to have such a development retarded or even postpone together until such time when the Filipinos would be ready and willing to undertake it rather than permit the natural resources to be placed under the ownership or control of foreigners in order that they might be immediately be developed, with the Filipinos of the future serving not as owners but utmost as tenants or workers under foreign masters. By all means, the delegates believed, the natural resources should be conserved for Filipino posterity.

It could be distilled from the foregoing that the farmers of the Constitution intended said provisions as barrier for foreigners or corporations financed by such foreigners to acquire, exploit and develop our natural resources, saving these undeveloped wealth for our people to clear and enrich when they are already prepared and capable of doing so. But that is not the case of corporations sole in

the Philippines, for, We repeat, they are mere administrators of the "temporalities" or properties titled in their name and for the benefit of the members of their respective religion composed of an overwhelming majority of Filipinos. No mention nor allusion whatsoever is made in the Constitution as to the prohibition against or the liability of the Roman Catholic Church in the Philippines to acquire and hold agricultural lands. Although there were some discussions on landholdings, they were mostly confined in the inclusion of the provision allowing the Government to break big landed estates to put an end to absentee landlordism.

But let us suppose, for the sake of argument, that the above referred to inhibitory clause of Section 1 of Article XIII of the constitution does have bearing on the petitioner's case; even so the clause requiring that at least 60 per centum of the capital of the corporation be owned by Filipinos is subordinated to the petitioner's aforesaid right already existing at the time of the inauguration of the Commonwealth and the Republic of the Philippines. In the language of Mr. Justice Jose P. Laurel (a delegate to the Constitutional Convention), in his concurring opinion of the case of Gold Creek mining Corporation, petitioner vs. Eulogio Rodriguez, Secretary of Agriculture and Commerce, and Quirico Abadilla, Director of the Bureau of Mines, respondent, 66 Phil. 259:

The saving clause in the section involved of the Constitution was originally embodied in the report submitted by the Committee on Naturalization and Preservation of Land and Other Natural Resources to the Constitutional Convention on September 17, 1954. It was later inserted in the first draft of the Constitution as section 13 of Article XIII thereof, and finally incorporated as we find it now. Slight have been the changes undergone by the proviso from the time when it comes out of the committee until it was finally adopted. When first submitted and as inserted to the first draft of the Constitution it reads: 'subject to any right, grant, lease, or concession existing in respect thereto on the date of the adoption of the Constitution'. As finally adopted, the proviso reads: 'subject to any existing right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution'. This recognition is not mere graciousness but springs form the just character of the government established. The framers of the Constitution were not obscured by the rhetoric of democracy or swayed to hostility by an intense spirit of nationalism. They well knew that conservation of our natural resources did not mean destruction or annihilation of acquired property rights. Withal, they erected a government neither episodic nor stationary but well-nigh conservative in the protection of property rights. This notwithstanding nationalistic and socialistic traits discoverable upon even a sudden dip into a variety of the provisions embodied in the instrument.

The writer of this decision wishes to state at this juncture that during the deliberation of this case he submitted to the consideration of the Court the question that may be termed the "vested right saving clause" contained in Section 1, Article XII of the Constitution, but some of the members of this Court either did not agree with the theory of the writer, or were not ready to take a definite stand on the particular point I am now to discuss deferring our ruling on such debatable question for a better occasion, inasmuch as the determination thereof is not absolutely necessary for the solution of the problem involved in this case. In his desire to face the issues squarely, the writer will endeavor, at least as a disgression, to explain and develop his theory, not as a lucubration of the Court, but of his own, for he deems it better and convenient to go over the cycle of reasons that are linked to one another and that step by step lead Us to conclude as We do in the dispositive part of this decision.

It will be noticed that Section 1 of Article XIII of the Constitution provides, among other things, that "all agricultural lands of the public domain and their disposition shall be limited to citizens of the Philippines or to corporations at least 60 per centum of the capital of which is owned by such citizens, SUBJECT TO ANY EXISTING RIGHT AT THE TIME OF THE INAUGURATION OF THE GOVERNMENT ESTABLISHED UNDER THIS CONSTITUTION."

As recounted by Mr. Justice Laurel in the aforementioned case of Gold Creek Mining Corporation vs. Rodriguez et al., 66 Phil. 259, "this recognition (in the clause already quoted), is not mere graciousness but springs from the just character of the government established. The farmers of the Constitution were not obscured by the rhetoric of democracy or swayed to hostility by an intense spirit of nationalism. They well knew that conservation of our natural resources did not mean destruction or annihilation of ACQUIRED PROPERTY RIGHTS".

But respondents' counsel may argue that the preexisting right of acquisition of public or private lands by a corporation which does not fulfill this 60 per cent requisite, refers to purchases of the Constitution and not to later transactions. This argument would imply that even assuming that petitioner had at the time of the enactment of the Constitution the right to purchase real property or right could not be exercised after the effectivity of our Constitution, because said power or right of corporations sole, like the herein petitioner, conferred in virtue of the aforequoted provisions of the Corporation Law, could no longer be exercised in view of the requisite therein prescribed that at least 60 per centum of the capital of the corporation had to be Filipino. It has been shown before that: (1) the corporation sole, unlike the ordinary corporations which are formed by no less than 5 incorporators, is composed of only one persons, usually the head or bishop of the diocese, a unit which is not subject to expansion for the purpose of determining any percentage whatsoever; (2) the corporation sole is only the administrator and not the owner of the temporalities located in the territory comprised by said corporation sole; (3) such temporalities are administered for and on behalf of the faithful residing in the diocese or territory of the corporation sole; and (4) the latter, as such, has no nationality and the citizenship of the incumbent Ordinary has nothing to do with the operation, management or administration of the corporation sole, nor effects the citizenship of the faithful connected with their respective dioceses or corporation sole.

In view of these peculiarities of the corporation sole, it would seem obvious that when the specific provision of the Constitution invoked by respondent Commissioner (section 1, Art. XIII), was under consideration, the framers of the same did not have in mind or overlooked this particular form of corporation. If this were so, as the facts and circumstances already indicated tend to prove it to be so, then the inescapable conclusion would be that this requirement of at least 60 per cent of Filipino capital was never intended to apply to corporations sole, and the existence or not a vested right becomes unquestionably immaterial.

But let us assumed that the questioned proviso is material. yet We might say that a reading of said Section 1 will show that it does not refer to any actual acquisition of land up to the right, qualification or power to acquire and hold private real property. The population of the Philippines, Catholic to a high percentage, is ever increasing. In the practice of religion of their faithful the corporation sole may be in need of more temples where to pray, more schools where the children of the congregation could be taught in the principles of their religion, more hospitals where their sick could be treated, more hallow or consecrated grounds or cemeteries where Catholics could be buried, many more than those actually existing at the time of the enactment of our Constitution. This being the case, could it be logically maintained that because the corporation sole which, by express provision of law, has the power to hold and acquire real estate and personal property of its churches, charitable benevolent, or educational purposes (section 159, Corporation Law) it has to stop its growth and restrain its necessities just because the corporation sole is a non-stock corporation composed of only one person who in his unity does not admit of any percentage, especially when that person is not the owner but merely an administrator of the temporalities of the corporation sole? The writer leaves the answer to whoever may read and consider this portion of the decision.

Anyway, as stated before, this question is not a decisive factor in disposing the case, for even if We were to disregard such saving clause of the Constitution, which reads: subject to any existing right, grant, etc., at the same time of the inauguration of the Government established under this

Constitution, yet We would have, under the evidence on record, sufficient grounds to uphold petitioner's contention on this matter.

In this case of the Register of Deeds of Rizal vs. Ung Sui Si Temple, 2 G.R. No. L-6776, promulgated May 21, 1955, wherein this question was considered from a different angle, this Court through Mr. Justice J.B.L. Reyes, said:

The fact that the appellant religious organization has no capital stock does not suffice to escape the Constitutional inhibition, since it is admitted that its members are of foreign nationality. The purpose of the sixty per centum requirement is obviously to ensure that corporation or associations allowed to acquire agricultural land or to exploit natural resources shall be controlled by Filipinos; and the spirit of the Constitution demands that in the absence of capital stock, the controlling membership should be composed of Filipino citizens.

In that case respondent-appellant Ung Siu Si Temple was not a corporation sole but a corporation aggregate, i.e., an unregistered organization operating through 3 trustees, all of Chinese nationality, and that is why this Court laid down the doctrine just quoted. With regard to petitioner, which likewise is a non-stock corporation, the case is different, because it is a registered corporation sole, evidently of no nationality and registered mainly to administer the temporalities and manage the properties belonging to the faithful of said church residing in Davao. But even if we were to go over the record to inquire into the composing membership to determine whether the citizenship requirement is satisfied or not, we would find undeniable proof that the members of the Roman Catholic Apostolic faith within the territory of Davao are predominantly Filipino citizens. As indicated before, petitioner has presented evidence to establish that the clergy and lay members of this religion fully covers the percentage of Filipino citizens required by the Constitution. These facts are not controverted by respondents and our conclusion in this point is sensibly obvious.

Dissenting Opinion—Discussed. — After having developed our theory in the case and arrived at the findings and conclusions already expressed in this decision. We now deem it proper to analyze and delve into the basic foundation on which the dissenting opinion stands up. Being aware of the transcendental and far-reaching effects that Our ruling on the matter might have, this case was thoroughly considered from all points of view, the Court sparing no effort to solve the delicate problems involved herein.

At the deliberations had to attain this end, two ways were open to a prompt dispatch of the case: (1) the reversal of the doctrine We laid down in the celebrated Krivenko case by excluding urban lots and properties from the group of the term "private agricultural lands" use in this section 5, Article XIII of the Constitution; and (2) by driving Our reasons to a point that might indirectly cause the appointment of Filipino bishops or Ordinary to head the corporations sole created to administer the temporalities of the Roman Catholic Church in the Philippines. With regard to the first way, a great majority of the members of this Court were not yet prepared nor agreeable to follow that course, for reasons that are obvious. As to the second way, it seems to be misleading because the nationality of the head of a diocese constituted as a corporation sole has no material bearing on the functions of the latter, which are limited to the administration of the temporalities of the Roman Catholic Apostolic Church in the Philippines.

Upon going over the grounds on which the dissenting opinion is based, it may be noticed that its author lingered on the outskirts of the issues, thus throwing the main points in controversy out of focus. Of course We fully agree, as stated by Professor Aruego, that the framers of our Constitution had at heart to insure the conservation of the natural resources of Our motherland of Filipino posterity; to serve them as an instrument of national defense, helping prevent the extension into the country of foreign control through peaceful economic penetration; and to prevent making the

Philippines a source of international conflicts with the consequent danger to its internal security and independence. But all these precautions adopted by the Delegates to Our Constitutional Assembly could have not been intended for or directed against cases like the one at bar. The emphasis and wonderings on the statement that once the capacity of a corporation sole to acquire private agricultural lands is admitted there will be no limit to the areas that it may hold and that this will pave the way for the "revival or revitalization of religious landholdings that proved so troublesome in our past", cannot even furnish the "penumbra" of a threat to the future of the Filipino people. In the first place, the right of Filipino citizens, including those of foreign extraction, and Philippine corporations, to acquire private lands is not subject to any restriction or limit as to quantity or area, and We certainly do not see any wrong in that. The right of Filipino citizens and corporations to acquire public agricultural lands is already limited by law. In the second place, corporations sole cannot be considered as aliens because they have no nationality at all. Corporations sole are, under the law, mere administrators of the temporalities of the Roman Catholic Church in the Philippines. In the third place, every corporation, be it aggregate or sole, is only entitled to purchase, convey, sell, lease, let, mortgage, encumber and otherwise deal with real properties when it is pursuant to or in consonance with the purposes for which the corporation was formed, and when the transactions of the lawful business of the corporation reasonably and necessarily require such dealing — section 13-(5) of the Corporation Law, Public Act No. 1459 — and considering these provisions in conjunction with Section 159 of the same law which provides that a corporation sole may only "purchase and hold real estate and personal properties for its church, charitable, benevolent or educational purposes", the above mentioned fear of revitalization of religious landholdings in the Philippines is absolutely dispelled. The fact that the law thus expressly authorizes the corporations sole to receive bequests or gifts of real properties (which were the main source that the friars had to acquire their big haciendas during the Spanish regime), is a clear indication that the requisite that bequests or gifts of real estate be for charitable, benevolent, or educational purposes, was, in the opinion of the legislators, considered sufficient and adequate protection against the revitalization of religious landholdings.

Finally, and as previously stated, We have reason to believe that when the Delegates to the Constitutional Convention drafted and approved Article XIII of the Constitution they do not have in mind the corporation sole. We come to this finding because the Constitutional Assembly, composed as it was by a great number of eminent lawyers and jurists, was like any other legislative body empowered to enact either the Constitution of the country or any public statute, presumed to know the conditions existing as to particular subject matter when it enacted a statute (Board of Commerce of Orange Country vs. Bain, 92 S.E. 176; N. C. 377).

Immemorial customs are presumed to have been always in the mind of the Legislature in enacting legislation. (In re Kruger's Estate, 121 A. 109; 277 P. 326).

The Legislative is presumed to have a knowledge of the state of the law on the subjects upon which it legislates. (Clover Valley Land and Stock Co. vs. Lamb et al., 187, p. 723,726.)

The Court in construing a statute, will assume that the legislature acted with full knowledge of the prior legislation on the subject and its construction by the courts. (Johns vs. Town of Sheridan, 89 N. E. 899, 44 Ind. App. 620.).

The Legislature is presumed to have been familiar with the subject with which it was dealing . . . . (Landers vs. Commonwealth, 101 S. E. 778, 781.).

The Legislature is presumed to know principles of statutory construction. (People vs. Lowell, 230 N. W. 202, 250 Mich. 349, followed in P. vs. Woodworth, 230 N.W. 211, 250 Mich. 436.).

It is not to be presumed that a provision was inserted in a constitution or statute without reason, or that a result was intended inconsistent with the judgment of men of common sense guided by reason" (Mitchell vs. Lawden, 123 N.E. 566, 288 Ill. 326.) See City of Decatur vs. German, 142 N. E. 252, 310 Ill. 591, and may other authorities that can be cited in support hereof.

Consequently, the Constitutional Assembly must have known:

1. That a corporation sole is organized by and composed of a single individual, the head of any religious society or church operating within the zone, area or jurisdiction covered by said corporation sole (Article 155, Public Act No. 1459);

2. That a corporation sole is a non-stock corporation;

3. That the Ordinary ( the corporation sole proper) does not own the temporalities which he merely administers;

4. That under the law the nationality of said Ordinary or of any administrator has absolutely no bearing on the nationality of the person desiring to acquire real property in the Philippines by purchase or other lawful means other than by hereditary succession, who according to the Constitution must be a Filipino (sections 1 and 5, Article XIII).

5. That section 159 of the Corporation Law expressly authorized the corporation sole to purchase and holdreal estate for its church, charitable, benevolent or educational purposes, and to receive bequests or giftsfor such purposes;

6. That in approving our Magna Carta the Delegates to the Constitutional Convention, almost all of whom were Roman Catholics, could not have intended to curtail the propagation of the Roman Catholic faith or the expansion of the activities of their church, knowing pretty well that with the growth of our population more places of worship, more schools where our youth could be taught and trained; more hallow grounds where to bury our dead would be needed in the course of time.

Long before the enactment of our Constitution the law authorized the corporations sole even to receive bequests or gifts of real estates and this Court could not, without any clear and specific provision of the Constitution, declare that any real property donated, let as say this year, could no longer be registered in the name of the corporation sole to which it was conveyed. That would be an absurdity that should not receive our sanction on the pretext that corporations sole which have no nationality and are non-stock corporations composed of only one person in the capacity of administrator, have to establish first that at least sixty per centum of their capital belong to Filipino citizens. The new Civil Code even provides:

ART. 10. — In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail.

Moreover, under the laws of the Philippines, the administrator of the properties of a Filipino can acquire, in the name of the latter, private lands without any limitation whatsoever, and that is so because the properties thus acquired are not for and would not belong to the administrator but to the Filipino whom he represents. But the dissenting Justice inquires: If the Ordinary is only the administrator, for whom does he administer? And who can alter or overrule his acts? We will forthwith proceed to answer these questions. The corporations sole by reason of their peculiar

constitution and form of operation have no designed owner of its temporalities, although by the terms of the law it can be safely implied that the Ordinary holds them in trust for the benefit of the Roman Catholic faithful to their respective locality or diocese. Borrowing the very words of the law, We may say that the temporalities of every corporation sole are held in trust for the use, purpose, behalf and benefit of the religious society, or order so incorporated or of the church to which the diocese, synod, or district organization is an organized and constituent part (section 163 of the Corporation Law).

In connection with the powers of the Ordinary over the temporalities of the corporation sole, let us see now what is the meaning and scope of the word "control". According to the Merriam-Webster's New International Dictionary, 2nd ed., p. 580, on of the acceptations of the word "control" is:

4. To exercise restraining or directing influence over; to dominate; regulate; hence, to hold from action; to curb; subject; also, Obs. — to overpower.

SYN: restrain, rule, govern, guide, direct; check, subdue.

It is true that under section 159 of the Corporation Law, the intervention of the courts is not necessary, tomortgage or sell real property held by the corporation sole where the rules, regulations and discipline of the religious denomination, society or church concerned presented by such corporation sole regulates the methods of acquiring, holding, selling and mortgaging real estate, and that the Roman Catholic faithful residing in the jurisdiction of the corporation sole has no say either in the manner of acquiring or of selling real property. It may be also admitted that the faithful of the diocese cannot govern or overrule the acts of the Ordinary, but all this does not mean that the latter can administer the temporalities of the corporation sole without check or restraint. We must not forget that when a corporation sole is incorporated under Philippine laws, the head and only member thereof subjects himself to the jurisdiction of the Philippine courts of justice and these tribunals can thus entertain grievances arising out of or with respect to the temporalities of the church which came into the possession of the corporation sole as administrator. It may be alleged that the courts cannot intervene as to the matters of doctrine or teachings of the Roman Catholic Church. That is correct, but the courts may step in, at the instance of the faithful for whom the temporalities are being held in trust, to check undue exercise by the corporation sole of its power as administrator to insure that they are used for the purpose or purposes for which the corporation sole was created.

American authorities have these to say:

It has been held that the courts have jurisdiction over an action brought by persons claiming to be members of a church, who allege a wrongful and fraudulent diversion of the church property to uses foreign to the purposes of the church, since no ecclesiastical question is involved and equity will protect from wrongful diversion of the property (Hendryx vs. Peoples United Church, 42 Wash. 336, 4 L.R.A. — n.s. — 1154).

The courts of the State have no general jurisdiction and control over the officers of such corporations in respect to the performance of their official duties; but as in respect to the property which they hold for the corporation, they stand in position of TRUSTEES and the courts may exercise the same supervision as in other cases of trust (Ramsey vs. Hicks, 174 Ind. 428, 91 N.E. 344, 92 N.E. 164, 30 L.R.A. — n.s. — 665; Hendryx vs. Peoples United Church, supra.).

Courts of the state do not interfere with the administration of church rules or discipline unless civil rights become involved and which must be protected (Morris St., Baptist Church vs. Dart, 67 S.C. 338, 45 S.E. 753, and others). (All cited in Vol. II, Cooley's Constitutional Limitations, p. 960-964.).

If the Constitutional Assembly was aware of all the facts above enumerated and of the provisions of law relative to existing conditions as to management and operation of corporations sole in the Philippines, and if, on the other hand, almost all of the Delegates thereto embraced the Roman Catholic faith, can it be imagined even for an instant that when Article XIII of the Constitution was approved the framers thereof intended to prevent or curtail from then on the acquisition sole, either by purchase or donation, of real properties that they might need for the propagation of the faith and for there religious and Christian activities such as the moral education of the youth, the care, attention and treatment of the sick and the burial of the dead of the Roman Catholic faithful residing in the jurisdiction of the respective corporations sole? The mere indulgence in said thought would impress upon Us a feeling of apprehension and absurdity. And that is precisely the leit motiv that permeates the whole fabric of the dissenting opinion.

It seems from the foregoing that the main problem We are confronted with in this appeal, hinges around the necessity of a proper and adequate interpretation of sections 1 and 5 of Article XIII of the Constitution. Let Us then be guided by the principles of statutory construction laid down by the authorities on the matter:

The most important single factor in determining the intention of the people from whom the constitution emanated is the language in which it is expressed. The words employed are to be taken in their natural sense, except that legal or technical terms are to be given their technical meaning. The imperfections of language as a vehicle for conveying meanings result in ambiguities that must be resolved by result to extraneous aids for discovering the intent of the framers. Among the more important of these are a consideration of the history of the times when the provision was adopted and of the purposes aimed at in its adoption. The debates of constitutional convention, contemporaneous construction, and practical construction by the legislative and executive departments, especially if long continued, may be resorted to resolve, but not to create, ambiguities. . . . Consideration of the consequences flowing from alternative constructions of doubtful provisions constitutes an important interpretative device. . . . The purposes of many of the broadly phrased constitutional limitations were the promotion of policies that do not lend themselves to definite and specific formulation. The courts have had to define those policies and have often drawn on natural law and natural rights theories in doing so. The interpretation of constitutions tends to respond to changing conceptions of political and social values. The extent to which these extraneous aids affect the judicial construction of constitutions cannot be formulated in precise rules, but their influence cannot be ignored in describing the essentials of the process (Rottschaeffer on Constitutional Law, 1939 ed., p. 18-19).

There are times that when even the literal expression of legislation may be inconsistent with the general objectives of policy behind it, and on the basis of equity or spirit of the statute the courts rationalize a restricted meaning of the latter. A restricted interpretation is usually applied where the effect of literal interpretation will make for injustice and absurdity or, in the words of one court, the language must be so unreasonable 'as to shock general common sense'. (Vol. 3, Sutherland on Statutory Construction, 3rd ed., 150.).

A constitution is not intended to be a limitation on the development of a country nor an obstruction to its progress and foreign relations (Moscow Fire Ins. Co. of Moscow, Russia vs. Bank of New York and Trust Co., 294 N. Y. S.648; 56 N.E. 2d. 745, 293 N.Y. 749).

Although the meaning or principles of a constitution remain fixed and unchanged from the time of its adoption, a constitution must be construed as if intended to stand for a great length of time, and it is progressive and not static. Accordingly, it should not receive too narrow or literal an interpretation but rather the meaning given it should be applied in such

manner as to meet new or changed conditions as they arise (U.S. vs. Lassic, 313 U.S. 299, 85 L. Ed., 1368).

Effect should be given to the purpose indicated by a fair interpretation of the language used and that construction which effectuates, rather than that which destroys a plain intent or purpose of a constitutional provision, is not only favored but will be adopted (State ex rel. Randolph Country vs. Walden, 206 S.W. 2d 979).

It is quite generally held that in arriving at the intent and purpose the construction should be broad or liberal or equitable, as the better method of ascertaining that intent, rather than technical (Great Southern Life Ins. Co. vs. City of Austin, 243 S.W. 778).

All these authorities uphold our conviction that the framers of the Constitution had not in mind the corporations sole, nor intended to apply them the provisions of section 1 and 5 of said Article XIII when they passed and approved the same. And if it were so as We think it is, herein petitioner, the Roman Catholic Apostolic Administrator of Davao, Inc., could not be deprived of the right to acquire by purchase or donation real properties for charitable, benevolent and educational purposes, nor of the right to register the same in its name with the Register of Deeds of Davao, an indispensable requisite prescribed by the Land Registration Act for lands covered by the Torrens system.

We leave as the last theme for discussion the much debated question above referred to as "the vested right saving clause" contained in section 1, Article XIII of the Constitution. The dissenting Justice hurls upon the personal opinion expressed on the matter by the writer of the decision the most pointed darts of his severe criticism. We think, however, that this strong dissent should have been spared, because as clearly indicated before, some members of this Court either did not agree with the theory of the writer or were not ready to take a definite stand on that particular point, so that there being no majority opinion thereon there was no need of any dissension therefrom. But as the criticism has been made the writer deems it necessary to say a few words of explanation.

The writer fully agrees with the dissenting Justice that ordinarily "a capacity to acquire (property) in futuro, is not in itself a vested or existing property right that the Constitution protects from impairment. For a property right to be vested (or acquired) there must be a transition from the potential or contingent to the actual, and the proprietary interest must have attached to a thing; it must have become 'fixed and established'" (Balboa vs. Farrales, 51 Phil. 498). But the case at bar has to be considered as an exception to the rule because among the rights granted by section 159 of the Corporation Law was the right to receive bequests or gifts of real properties for charitable, benevolent and educational purposes. And this right to receive such bequests or gifts (which implies donations in futuro), is not a mere potentiality that could be impaired without any specific provision in the Constitution to that effect, especially when the impairment would disturbingly affect the propagation of the religious faith of the immense majority of the Filipino people and the curtailment of the activities of their Church. That is why the writer gave us a basis of his contention what Professor Aruego said in his book "The Framing of the Philippine Constitution" and the enlightening opinion of Mr. Justice Jose P. Laurel, another Delegate to the Constitutional Convention, in his concurring opinion in the case of Goldcreek Mining Co. vs. Eulogio Rodriguez et al., 66 Phil. 259. Anyway the majority of the Court did not deem necessary to pass upon said "vested right saving clause" for the final determination of this case.

JUDGMENT

Wherefore, the resolution of the respondent Land Registration Commission of September 21, 1954, holding that in view of the provisions of sections 1 and 5 of Article XIII of the Philippine Constitution the vendee (petitioner) is not qualified to acquire lands in the Philippines in the absence of proof that

at least 60 per centum of the capital, properties or assets of the Roman Catholic Apostolic Administrator of Davao, Inc. is actually owned or controlled by Filipino citizens, and denying the registration of the deed of sale in the absence of proof of compliance with such requisite, is hereby reversed. Consequently, the respondent Register of Deeds of the City of Davao is ordered to register the deed of sale executed by Mateo L. Rodis in favor of the Roman Catholic Apostolic Administrator of Davao, Inc., which is the subject of the present litigation. No pronouncement is made as to costs. It is so ordered.

Bautista Angelo and Endencia, JJ., concur.

Paras, C.J., and Bengzon, J., concur in the result.

LABRADOR, J., concurring:

The case at bar squarely present this important legal question: Has the bishop or ordinary of the Roman Catholic Church who is not a Filipino citizen, as corporation sole, the right to register land, belonging to the Church over which he presides, in view of the Krivenko decision? Mr. Justice Felix sustains the affirmative view while Mr. Justice J. B. L. Reyes, the negative. As the undersigned understands it, the reason given for this last view is that the constitutional provision prohibiting land ownership by foreigners also extends to control because this lies within the scope and purpose of the prohibition.

To our way of thinking, the question at issue depends for its resolution upon another, namely, who is the owner of the land or property of the Church sought to be registered? Under the Canon Law the parish and the diocese have the right to acquire and own property.

SEC. 1. La Iglesia catolica y la Sede Apostolica, libre e independientemente de la potestad civil, tiene derecho innato de adquirir, retener y administrar bienes temporales para el logro de sus propios fines.

SEC. 2. Tambien las iglesias particulares y demas personas morales erigidas por la autoridad eclesiastica en persona juridica, tienen derecho, a tenor de los sagrados canones, de adquirir, retener y administrar bienes temporales. (Canon 1495) (Codigo de Derecho Canonico por Miguelez-Alonzo-Cabreros, 4a ed., p. 562.).

The Canon Law further states that Church property belongs to the non-collegiate moral person called the parish, or to the diocese.

In canon law the ownership of ecclesiastical goods belongs to each separate juridical person in the Church (C. 1499). The property of St. John's Church does not belong to the Pope, the bishop, the pastor, or even to the people of the parish. It belongs to the non-collegiate moral person called the parish, which has been lawfully erected. It is not like a stock company. The civil law does not recognize this canonical principle; it insists on an act of civil incorporation or some other legal device. (Ready Answers in Canon Law by Rev. P.J. Lydon, DD., 3rd ed., 1948, p. 576.).

Parish. 3. A portion or subdivision of a diocese committed to the spiritual jurisdiction or care of a priest or minister, called rector or pastor. In the Protestant Episcopal Church, it is a territorial division usually following civil bounds, as those of a town. In the Roman Catholic Church, it is usually territorial, but whenever, as in some parts of the United States there are different rites and languages, the boundaries and jurisdiction are determined by right or

language; as, a Ruthenian or Polish parish. "5. The inhabitants or members of a parish, collectively.

Diocese. 3. Eccl. The circuit or extent of a bishop's jurisdiction; the district in which a bishop has authority. (Webster's New International Dictionary).

We are aware of the fact that some writers believe that ownership of ecclesiastical properties resides in the Roman Catholic Pontiff as Head of the Universal Church, but the better opinion seems to be that they do belong to the parishes and diocese as above indicated.

Canonists entertain different opinions as to the person in whom the ownership of the ecclesiastical properties is vested, with respect to which we shall, for our purpose, confine ourselves to stating with Donoso that, while many doctors cited by Fagnano believe that it resides in the Roman Pontiff as Head of the Universal Church, it is more probable that ownership, strictly speaking, does not reside in the latter and, consequently, ecclesiastical properties are owned by the churches, institutions and canonically established private corporations to which said properties have been donated. (3 Campos y Pulido, Legislacion y Jurisprudencia Canonica, P. 420, cited in Trinidad vs. Roman Catholic Archbishop of Manila, 63 Phil., 881, 888-889.).

The property in question, therefore, appears to belong to the parish or the diocese of Davao. But the Roman Catholics of Davao are not organized as a juridical person, either under the Canon law or under the Civil Law. Neither is there any provision in either for their organization as a juridical person. Registration of the property in the name of the Roman Catholics of Davao is, therefore, impossible.

As under the Civil Law, however, the organization of parishes and dioceses as juridical persons is not expressly provided for, the corporation law has set up the fiction known as the "corporation sole."

It tolerates the corporation sole wherever and as long as the state law does not permit the legal incorporation of the parish or diocese. The bishop officially is the legal owner. (Ready Answers in Canon Law, supra, p. 577.) .

and authorizes it to purchase and hold real estate for the Church.

SEC. 159. Any corporation sole may purchase and hold real estate and personal property for its church, charitable, benevolent, or educational purposes, and may receive bequests or gifts for such purposes. Such corporation may mortgage or sell real property held by it upon obtaining an order for that purpose from the Court of First Instance of the province in which the property is situated; but before making the order proof must be made to the satisfaction of the court that notice of the application for leave to mortgage or sell has been given by publication or otherwise in such manner and for such time as said court or the judge thereof may have directed, and that it is to the interest of the corporation that leave to mortgage or sell should be granted. The application for leave to mortgage or sell must be made by petition, duly verified by the bishop, chief priest, or presiding elder, acting as corporation sole, and may be opposed by any member of the religious denomination, society, or church represented by the corporation sole: Provided, however, That in cases when the rules, regulations and discipline of the religious denomination, society or church concerned represented by such corporation sole regulate the methods of acquiring, holding, selling, and mortgaging real estate and personal property, such rules, regulations, and discipline shall control and the intervention of the courts shall not be necessary. (The Corporation Law.)

And in accordance with the above section, temporalities of the Church or of parish or a diocese are allowed to be registered in the name of the corporation sole for purposes of administration and in trust for the real owners.

The mere fact that the Corporation Law authorizes the corporation sole to acquire and hold real estate or other property does not make the latter the real owner thereof, as his tenure of Church property is merely for the purposes of administration. As stated above, the bishop is only the legal (technical) owner or trustee, the parish or diocese being the beneficial owner, or cestui que trust.

Having arrived at the conclusion that the property in question belongs actually either to the parish or to the dioceses of Davao, the next question that possess for solution is, In case of said property, whose nationality must be considered for the purpose of determining the applicability of the constitutional provision limiting ownership of land to Filipinos, that of the bishop or chief priest who registers as corporation sole, or that of the constituents of the parish or diocese who are the beneficial owners of the land? We believe that of a latter must be considered, and not that of the priest clothed with the corporate fiction and denominated as the corporation sole. The corporation sole is a mere contrivance to enable a church to acquire, own and manage properties belonging to the church. It is only a means to an end. The constitutional provision could not have been meant to apply to the means through which and by which property may be owned or acquired, but to the ultimate owner of the property. Hence, the citizenship of the priest forming the corporation sole should be no impediment if the parish or diocese which owns the property is qualified to own and possess the property.

We can take judicial notice of the fact that a great majority of the constituents of the parish or diocese of Davao are Roman Catholics. The affidavit demanded is therefore, a mere formality.

The dissenting opinion sustains the proposition that control, not actual ownership, is the factor that determines whether the constitutional prohibition against alien ownership of lands should or should not apply. We may assume the correctness of the proposition that the Holy See exercises control cannot be real and actual but merely theoretical. In any case, the constitutional prohibition is limited by its terms to ownership and ownership alone. And should the corporation sole abuse its powers and authority in relation to the administration or disposal of the property contrary to the wishes of the constituents of the parish or the diocese, the act may always be questioned as ultra vires.

We agree, therefore, with the reversal of the order.

Montemayor and Reyes, A., JJ., concur.

REYES, J.B.L., dissenting:

I regret not being able to assent to the opinion of Mr. Justice Felix. The decision of the Supreme Court in this case will be of far reaching results, for once the capacity of corporations sole to acquire public and private agricultural lands is admitted, there will be no limit to the areas they may hold until the Legislature implements section 3 of Article XIII of the Constitution, empowering it to set a limit to the size of private agricultural land that may be held; and even then it can only be done without prejudice to rights acquired prior to the enactment of such law. In other words, even if a limitative law is adopted, it will not affect the landholdings acquired before the law become effective, no matter how vast the estate should be.

The Constitutional restrictions to the acquisition of agricultural land are well known:

SECTION 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and the limit of the grant. (Article XII, Constitution of the Phil.).

SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines. (Art. XII, Constitution of the Phil.).

In requiring corporations or associations to have sixty per cent (60%) of their capital owned by Filipino citizens, the constitution manifestly disregarded the corporate fiction, i.e., the juridical personality of such corporations or associations. It went behind the corporate entity and looked at the natural persons that composed it, and demanded that a clear majority in interest (60%) should be Filipino. To me this was done to ensure that the control of its properties (not merely the beneficial ownership thereof) remained in Filipino hands. (Aruego, Framing of the Constitution, Vol. 2. pp. 604, 606.) .

The nationalization of the natural resources of the country was intended (1) to insure their conservation for Filipino posterity; (2) to serve as an instrument of national defense, helping prevent the extension into the country of foreign control through peaceful economic penetration; and (3) to prevent making the Philippines a source of international conflicts with the consequent danger to its internal security and independence. . . .

The convention permitted aliens to acquire an interest in the natural resources of the country and in private agricultural lands as component elements of corporations or associations. The maximum limit of interest that they could hold in a corporation or association would be only forty per centum of the capital. Accordingly the control of the corporation or association would remain in Filipino hands.

In its report the committee on nationalization and preservation of lands and other natural resources recommended that the maximum limit of interest that aliens could hold in a corporation or association should be only twenty-five per centum of the capital. The purpose of the committee was to enable Filipino-controlled corporations or associations, if necessary, to interest aliens to join their technical or managerial staff by giving them a part interest in the same. The sub-committee of seven embodied this recommendation in the first draft of the Constitution; but in the revised article on General Provisions, it raised the amount to forty per centum. (emphasis supplied.)

It was in recognition of this basic rule that we held in Register of Deeds vs. Ung Siu Si Temple, 51 Off. Gaz. p. 2866, that if the association had no capital, its controlling membership must be composed of Filipinos. Becauseownership divorced from control is not true ownership.

From these premises it can be deduced that the preliminary question to be decide by the court is the following: what and who exercises the power of control in the corporation sole known as "The Roman Catholic Apostolic Administrator of Davao, Inc."?.

Under section 155 of the Corporation Law, the bishop, or other religious head, as corporation sole, is "charged with the administration of the temporalities of his church." It becomes then pertinent to inquire: if he is only an administrator, for whom does he administer? And who can alter or overrule his acts?

If his acts as administrator can not be overridden, or altered, except by himself, then obviously the control of the corporation and its temporalities is in the bishop himself, and he must be a Filipino citizen. If, on the other hand, the final say as to management, exploitation, encumbrance or disposition of the temporalities resides in another individual or body of individuals, then the control resides there. To possess constitutional capacity to acquire agricultural land or other natural resources, that body making the final decision for the corporation must have at least 60 per cent Filipino membership.

By this test, the body of members professing the Catholic faith in the diocese of Davao does not constitute the controlling membership. For under the rules of the Roman Catholic Church the faithful can not control the acts of the Ordinary; they cannot override his decision, just as they do not elect or remove him. Only his hierarchical superiors can do that; the control is from above, not from below. Hence, the fact that 90 per cent (or even 100 per cent) of the faithful in the diocese should be composed of Filipino citizens is totally devoid of significance from the standpoint of the constitutional restrictions in question (see Codex, Canons 1518 and 1530, paragraph 1, No. 3).

Moreover, I do not think that the body of Catholic faithful in the Davao diocese can be taken, for the purpose here under consideration, as the Church represented by the Ordinary of Davao. That body does not constitute an entity or unit separate and apart from the rest of the faithful throughout the world that compose the Roman Catholic Church that has always claimed ecumenical (universal) character. There is nom Catholic Church of Davao district and independent of the Catholic Church of Manila, Lipa or Rome. All those professing Catholic faith are members of only one single church or religious group. Thus the Iglesia Filipina Independiente is not part of the Catholic Church, precisely because of its independence.

If, the, the Catholic Church of Davao is part and parcel of the universal Catholic Church, it can not be considered separate and apart from it in this case. And if considered with it, obviously the condition of 60 per cent Filipino membership is not satisfied when all the Catholic faithful in the world are taken into account.

The unity and singleness of the various diocese of the church appears expressly recognized in section 163 of the Corporation Law, which provides that the corporation (sole) shall hold the temporalities, not for the diocese; but for the benefit "of the church of which the diocese — is an organized or constituent part."

SEC. 163. The right to administer all temporalities and all property held or owned by a religious order or society, or by the diocese synod, or district organization of any religious denomination or church shall, on its incorporation, pass to the corporation and shall be held in trust for the use purpose, behalf, and benefit of the religious society or order so incorporated or of the church of which the diocese, synod, or district organization is an organized and constituent part.

So that, even from the standpoint of beneficial ownership, the dioceses of Davao can not be viewed as a group legally isolated from the Catholic Church as a whole.

Nor does court control over the acts of the corporation sole constitute a guarantee of Filipino control that would satisfy the purposes of the constitution, for the reason that under section 159 (last proviso) of the Corporation law, the court intervention is dispensed with where the rules and discipline of the church already regulate the acquisition and disposition of real estate and personal property.

Provided however, that in cases where the rules, regulations and discipline of the religious denomination, society, or church concerned represented by such corporation sole regulate the methods of acquiring, holding, selling, and mortgaging real estate and personal property, such rules, regulations, and discipline shall control and the intervention of the courts shall not be necessary. (emphasis supplied.)

It is argued that a distinction must be drawn between the lands to be devoted to purely religious purposes and the lands held in ordinary ownership. But where in the Constitution is such a distinction drawn? Under it, capacity to acquire agricultural land for the erection of a church is capacity to acquire agricultural lands for any lawful purpose, whether it be for convents or schools or seminaries or haciendas for their support or land to be held solely for enjoyment of the revenue. Once the capacity to acquire is granted, the way is paved for the revitalization of religious landholdings that proved so troublesome in our past. I cannot conceive that the Constitution intended to revive them.

It is also argued that, before the Constitution was adopted, the corporations sole had, by express statute, the right to acquire agricultural land; and that the Constitution was not intended to destroy such "acquired property rights." If followed, the argument destroys the constitutional restrictions. All aliens had a capacity to acquire agricultural land before the Constitution came into effect, because no prohibition existed previously. Must their right to acquire and hold agricultural land be conceded in spite of the Constitution?.

That the law should have expressly conferred capacity to acquire land upon corporations sole was not due any special predilection for them; it was exclusively due to the principle that corporation, as artificial entities, have no inherent rights, but only those granted by the sovereign. Unless conferred, the corporate right would not exist.

Furthermore, a capacity to acquire in futuro, is not in itself a vested existing property right that the Constitution protects from impairment. For a property right to be vested (or acquired) there must be a transition from thepotential, or contingent, to the actual, and the proprietary interest must have attached to a thing, it must have become "fixed or established "(Balboa vs. Farrales, 51 Phil. 498). If mere potentialities cannot be impaired, then the law would become unchangeable, for every variation in it will reduce some one's legal ability to do or not to do. Already in Benguet Consolidated vs. Pineda, 3 52 Off. Gaz. 1961, we have ruled that no one has a vested right in statutory privileges or exemptions. And in the concurring opinion in Gold Creek Mining Corp. vs. Rodriguez, 66 Phil. 259 (cited by Justice Felix), Mr. Justice Laurel squarely declared that "contingency or expectation is neither property right." (cas. cit., p. 269.) Finally, the point is also made that the Ordinary, as religious corporation sole, has no citizenship, and is not an alien. The answer is that under the Constitution of the Republic, it is not enough that the acquirer of agricultural land be not an alien; he must be a Filipino or controlled by Filipinos.

Wherefore, I am constrained to conclude:

(1) That the capacity of religious corporations sole to acquire agricultural land depends upon 60 per cent Filipino membership of the group or body exercising control of the corporation; lawphi1.net

(2) That if control of any such corporation should be vested in a single person, then such person must be a Filipino citizen;1awphi1.net

(3) That in the absence of evidence on these points, the order appealed from, denying registration of the conveyance, should be affirmed.

Concepcion, J., concur.

 

Footnotes

1 Translation. — Unless by lawful provisions more ample rights are conferred upon him, to the local Ordinary pertains the duty to exercise diligence in the administration of all the ecclesiastical properties located within the territory and to avoid their removal from his jurisdiction.

Taking into account the rights and the legitimate customs and circumstances, every Ordinary shall endeavor to regulate everything concerning the administration of the ecclesiastical properties and shall give, within the bonds of Common Law, timely and particular instructions therefor.

2 97 Phil., 58.

3 98 Phil., 711.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-14859             March 31, 1962

MACARIO KING, ET AL., petitioners-appellees, vs.PEDRO S. HERNAEZ, ETC., ET AL., respondents-appellants.

Sycip, Salazar and Associates for petitioners-appellees.Office of the Solicitor General for respondents-appellants.

BAUTISTA ANGELO, J.:

On January 1, 1957, Macario King, a naturalized Filipino citizen, became the owner of the business establishment known as "Import Meat and Produce", a grocery wholesale and retail business, previously owned by the Philippine Cold Stores, Inc. In the business 15 persons were employed 12 of whom are Filipinos and the other 3 Chinese. The three Chinese were old employees of the

previous owner, the Philippine Cold Stores, Inc., one having been employed as purchaser and the other two as salesmen.

Three weeks after King had acquired the business as aforesaid, he sought permission from the President of the Philippines to retain the services of the three Chinese employees pursuant to Section 2-A of Commonwealth Act 108, coursing his letter thru the Secretary of Commerce and Industry. This official recommended to the President the disapproval of King's request on the ground that aliens may not be appointed to operate or administer a retail business under Section 1 of Republic Act No. 1180 which requires that its capital be wholly owned by citizens of the Philippines, the only exception thereto being the employment of technical personnel which may be allowed after securing to that effect an authorization from the President. The President approved the recommendation of the Secretary of Commerce and Industry since the positions of purchaser and salesmen occupied by the three Chinese employees are not technical positions within the meaning of Section 2-A of Commonwealth Act 108, as amended by Republic Act No. 134.

As a result of such adverse ruling, Macario King and his three Chinese employees filed a petition for declaratory relief, injunction and mandamus on August 25, 1958 against the Secretary of Commerce and Industry and the Executive Secretary before the Court of First Instance of Manila praying that they be given relief because they are "uncertain and in doubt as to their rights and duties under Republic Act No. 1180 and Commonwealth Act No. 108, as amended by Republic Act No. 134, in view of the aforesaid rulings of the Department of Commerce and Industry and of the Executive Secretary." They alleged that said rulings are illegal in view of the respective situations and positions of petitioners in the retail establishment, the purpose and language of the laws abovementioned, and the constitutional guarantee of the rights of an employer to employ and of an employee to work accorded to citizens and aliens alike. The lower court issued a writ of preliminary injunction ex parte upon petitioners' filing a bond in the amount of P5,000.00. 1äwphï1.ñët

Respondents filed an answer setting up certain affirmative and special defenses tending to show that the petition does not allege facts sufficient to constitute a cause of action. With regard to the declaratory relief, respondents claim that such remedy is not available to petitioners because they have already committed a breach of the statute which is apparent on the face of the petition, meaning that the employment of the three Chinese as salesmen and purchaser in the store of Macario King is a violation of the Section 1 of the Retail Trade Act which provides that only citizens of the Philippines can engage in retail trade, as well as of Section 2-A of the Anti-Dummy Law which prohibits Chinese citizens to intervene in the management, operation, administration or control of such business, whether as an officer, employee or laborer with or without remuneration. Respondents further claim that the three Chinese employees are not technical men who are exempted from the operation of the law, and even if they are, they need the authorization of the President which they failed to obtain in their case.

With regard to the petition for preliminary injunction, respondents contend that the requisites for its issuance have not been satisfied. And with regard to the petition for mandamus, respondents alleged that petitioners have failed to show that respondents have unlawfully neglected any duty which they are called upon to perform and which would make them liable for such relief. Hence, respondents prayed that the petition be dismissed and that the writ of preliminary injunction issued by the court ex parte be lifted.

To this answer, petitioners filed a reply, which was followed by a rejoinder and sur-rejoinder, with a detailed discussion of the arguments advanced in support thereof. And because the motion to dismiss filed by respondents had been denied for lack of merit, trial proceeded, after which the lower court entered judgment holding "that petitioner Macario King may employ any person, although not a citizen of the Philippines or of the United States of America, including the three petitioners herein as

purchaser and salesmen, in any position in his retail business not involving participation, or intervention in the management, operation, administration or control of said business; that petitioners Lim Pin, Chang Pak and Ng See Keng are entitled to continue as purchaser and salesmen, respectively, in Macario King's Import Meat and Produce or in any other retail establishment; that the writ of preliminary injunction issued against respondents ordering the to desist from interfering by criminal and/or administrative action with the rights of the petitioners as above defined, is hereby declared final; and, finally, respondents are hereby ordered to allow and permit petitioners to enjoy and exercise their rights in the manner and to the extent aforestated." Respondents took the present appeal before this Court.

The center of controversy between petitioners-appellees and respondents-appellants hinges on the interpretation be given to Section 1, Republic Act No. 1180, in relation to Section 2-A, Commonwealth Act 108, as amended by Republic Act No. 134. For ready reference we quote the pertinent provisions: .

SECTION 1. No person who is not a citizen of the Philippines, and no association, partnership, or corporation the capital of which is not wholly owned by citizens of the Philippines, shall engage directly or indirectly in the retail business: ... (Emphasis supplied) .

SEC. 2-A. Any person, corporation, or association which, having in its name or under its control, a right, franchise, privilege, property or business, the exercise or enjoyment of which is expressly reserved by the Constitution or the laws to citizens of the Philippines, or of any other specific country, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, permits or allows the use, exploitation or enjoyment thereof by a person, corporation or association not possessing the requisites prescribed by the Constitution or the laws of the Philippines; or leases, or in any other way transfers or conveys said right, franchise, privilege, property or business to a person, corporation or association not otherwise qualified under the Constitution, or the provisions of the existing laws; or in any manner permits or allows any person, not possessing the qualifications required by the Constitution or existing laws to acquire, use, exploit or enjoy a right, franchise, privilege, property or business, the exercise and enjoyment of which are expressly reserved by the Constitution or existing laws to citizens of the Philippines or of any other specific country, to intervene in the management, operation, administration or control thereof, whether as an officer, employee or laborer therein, with or without remuneration except technical personnel whose employment may be specifically authorized by the President of the Philippines upon recommendation of the Department Head concerned.... (emphasis supplied) .

With regard to the Retail Trade Law, this Court had already occasion to rule on its constitutionality. We held that the same is valid and that its purpose is to completely nationalize the retail trade in the Philippines. In other words, its primordial purpose is to confine the privilege to engage in retail trade to Filipino citizens by prohibiting any person who is not a Filipino citizen or any entity whose capital is not wholly owned by citizens of the Philippines from engaging, directly or indirectly, in the retail business. The nationalization of retail trade is, therefore, complete in the sense that it must be wholly owned by a Filipino citizen or Filipino controlled entity in order that it may be licensed to operate. The law seeks a complete ban to aliens who may not engage in it directly or indirectly. And the reasons behind such ban are the pernicious and intolerable practices of alien retailers who in the past have either individually or in organized groups contrived in many dubious ways to control the trade and dominate the distribution of goods vital to the life of our people thereby resulting not only in the increasing dominance of alien control in retail trade but at times in the strangle hold on our economic life. These reasons were well expressed by Mr. Justice Labrador in the following wise: .

"But the dangers arising from alien participation in the retail trade does not seem to lie in the predominance alone; there is a prevailing feeling that such predominance may truly endanger the national interest. With ample capital, unity of purpose and action and thorough organization, alien retailers and merchants can act in such complete unison and concert on such vital matters as the fixing of prices, the determination of the amount of goods or articles to be made available in the market, and even the choice of the goods or articles they would or would not patronize or distribute, that fears of dislocation of the national economy and of the complete subservience of national retailers and of the producers and consumers alike, can be placed completely at their mercy...

"... Grave abuses have characterized the exercise of the retail trade by aliens. It is a fact within judicial notice, which courts of justice may not properly overlook or ignore in the interests of truth and justice, that there exists a general feeling on the part of the public that alien participation in the retail trade has been attended by a pernicious and intolerable practices, the mention of a few of which would suffice for our purposes; that at some time or other they have cornered the market of essential commodities, like corn and rice, creating artificial scarcities to justify and enhance profits to unreasonable proportions; that they have hoarded essential foods to the inconvenience and prejudice of the consuming public, so much so that the Government has had to establish the National Rice and Corn Corporation to save the public from their continuous hoarding practices and tendencies; that they have violated price control laws, especially on foods and essential commodities, such that the legislature had to enact a law (Sec. 9, Republic Act No. 1168), authorizing their immediate and automatic deportation for price control convictions; that they have secret combinations among themselves to control prices, cheating the operation of the law of supply and demand; that they have connived to boycott honest merchants and traders who would not cater or yield to their demands, in unlawful restraint of freedom of trade and enterprise. They are believed by the public to have evaded tax laws, smuggled goods and money into and out of the land, violated import and export prohibitions, control laws and the like, in derision and contempt of lawful authority. It is also believed that they have engaged in corrupting public officials with fabulous bribes, indirectly causing the prevalence of graft and corruption in the Government. As a matter of fact appeals to unscrupulous aliens have been made both by the Government and by their own lawful diplomatic representatives, action which impliedly admits a prevailing feeling about the existence of many of the above practices.

The circumstances above set forth create well founded fears that worse things may come in the future. The present dominance of the alien retailer, especially in the big centers of population, therefore, becomes a potential source of danger on occasions of war or other calamity. We do not have here in this country isolated groups of harmless aliens retailing goods among nationals; what we have are well organized and powerful groups that dominate the distribution of goods and commodities in the communities and big centers of population. They owe no allegiance or loyalty to the State, and the State cannot rely upon them in times of crisis or emergency. While the national holds his life, his person and his property subject to the needs of his country, the alien may even become the potential enemy of the State. (Lao H. Ichong v. Hernandez, et al., G.R. No. L-7995, May 31, 1957).

The purpose of the enactment of the Retail Trade Law, therefore, is clear. As expressed by this Court, it is to translate the general preoccupation of the Filipinos against the threat and danger to our national economy caused by alien dominance and control of the retail business by weeding out such threat and danger and thus prevent aliens from having a strangle hold upon our economic life. But in so doing the legislature did not intend to deprive aliens of their means of livelihood. This is clearly pointed out in the explanatory note of the law: .

This bill proposes to regulate the retail business. Its purpose is to prevent persons who are not citizens of the Philippines from having a strangle hold upon our economic life. If the persons who control this vital artery of our economic life are those who owe no allegiance to this Republic, who have no profound devotion to our free institutions and who have no permanent state in our people's welfare, we are not really the masters of our own country. All aspects of our life, even our national security, will be at the mercy of other people.

In seeking to accomplish the foregoing purpose, we do not propose to deprive persons who are not citizens of the Philippines of their means of livelihood. While this bill seeks to take away from the hands of persons who are not citizens of the Philippines a power that can be wielded to paralyze all aspects of our national life and endanger our national security, it respects existing rights.

It is in the light of this view of the Retail Trade Law that the issue was posed whether the prohibition to aliens from engaging in such trade is intended merely to ban them from its ownership and not from its management control or operation. However, from the context of the law as well as from the decision of this Court in the Ichong case, it may be safely inferred that the nationalization of the retail trade is merely confined to its ownership and not its management, control, or operation. Nevertheless, this apparent flaw in the Retail Trade Law cannot be availed of by an unscrupulous alien as a convenient pretext to employ in the management of his business persons of his ilk to flout the law or subvert its nationalistic purpose, for in pari materia with such law we have the Anti-Dummy Law (Commonwealth Act No. 108, as amended by Republic Act No. 134), which seeks "to punish acts of evasion of the laws of nationalization of certain rights, franchises or privileges." Read in connection with the Retail Trade Law, the Anti-Dummy Law would punish acts intended to circumvent the provisions of the former law which nationalize the retail business.

The question that now arises is: Is the employment of aliens in non-control positions in a retail establishment or trade prohibited by the Anti-Dummy Law?

Petitioners contend that their employment is not prohibited either by the Retail Trade Law or the Anti-Dummy Law. The three Chinese petitioners testified that they had nothing to do with the management and control of the business, nor do they participate in its profits outside of their monthly salaries. They had been employed long before the enactment of Republic Act No. 1180. They only wait for customers and sell according to the prices appearing on the tags previously fixed by their manager Macario King. They desire to continue in the employ of Macario King in his business and their job is their only means of earning support for themselves and their families. Lim Pin who is employed as buyer declared that his duties include no more than buying the groceries appearing in a list prepared and given to him from time to time by Macario King, and at no more than the prices indicated in said list. Respondents did not present any evidence to contradict these facts, as they merely relied their motion to dismiss.

It is evident that petitioners' theory is that since they do not intervene in the management, operation, administration or control of the retail establishment of Macario King they are not covered by the Anti-Dummy Law. Indeed, they contend, Section 1 of Republic Act No. 1180 mirrors the legislative intent to nationalize the retail trade merely thru the ownership by Filipinos of the business, and as stated by this Court in the Ichong case, the ownership of the retail business by non-citizens lies at the foundation of the prohibition, and since there is nothing in the Retail Trade Law which prohibits a Filipino-owned retail enterprise from employing an alien and the dummy law merely limits the prohibition to any position that relates to management, operation, administration or control, petitioners contend that they may be allowed to continue in their positions without doing violence to both the Retail Trade Law and the Anti-Dummy Law. In other words, they draw a line of distinction

between one class of alien employees occupying positions of control and another class occupying non-control positions.

Respondents, on the other hand, sustain a different view. They hold that the language of the Anti-Dummy Law bans aliens' employment in both control and non-control positions. They contend that the words management, operation, administration and control, followed by and blended with the words "whether as an officer, employee or laborer therein", signify the legislative intent to cover the entire scale of personnel activity so that even laborers are excluded from employment, the only exemption being technical personnel whose employment may be allowed with the previous authorization of the President. This contention, according to respondents, results from the application of the rule known in statutory construction as redendo singula singulis. This means that the antecedents "management, operation, administration and control" and the consequents "officer, employee, and laborer" should be read distributively to the effect that each word is to be applied to the subject to which it appears by context most properly relate and to which it is most applicable (Vol. 2, Sutherland, Statutory Construction, Section 4819).

We agree to this contention of respondents not only because the context of the law seems to be clear on what its extent and scope seem to prohibit but also because the same is in full accord with the main objective that permeates both the Retail Trade Law and the Anti-Dummy Law. The one advocates the complete nationalization of the retail trade by denying its ownership to any alien, while the other limits its management, operation, administration and control to Filipino citizens. The prevailing idea is to secure both ownership and management of the retail business in Filipino hands. It prohibits a person not a Filipino from engaging in retail trade directly or indirectly while it limits the management, operation, administration and control to Filipino citizens. These words may be technically synonymous in the sense that they all refer to the exercise of a directing, restraining or governing influence over an affair or business to which they relate, but it cannot be denied that by reading them in connection with the positions therein enumerated one cannot draw any other conclusion than that they cover the entire range of employment regardless of whether they involve control or non-control activities. When the law says that you cannot employ an alien in any position pertaining to management, operation, administration and control, "whether as an officer, employee, or laborer therein", it only means one thing: the employment of a person who is not a Filipino citizen even in a minor or clerical or non-control position is prohibited. The reason is obvious: to plug any loophole or close any avenue that an unscrupulous alien may resort to flout the law or defeat its purpose, for no one can deny that while one may be employed in a non-control position who apparently is harmless he may later turn out to be a mere tool to further the evil designs of the employer. It is imperative that the law be interpreted in a manner that would stave off any attempt at circumvention of this legislative purpose.

In this respect, we agree with the following remark of the Solicitor General: "Summing up, there is no point in distinguishing employments in positions of control from employments in non-control positions except to facilitate violations of the Anti-Dummy Law. It does not require ingenuity to realize that the law is framed up the way we find it so that no difficulties will be encountered in its enforcement. This is not the first time to use the words of the United States Supreme Court ... that a government wants to know, without being put to a search, that what it forbids is carried out effectively." .

There is an intimation in the decision of the trial court that if the employment of aliens in non-control positions is prohibited as respondents so advocate, it may impair the right of a citizen under our Constitution to select, pick and employ any one who in his opinion may be amenable to his business provided he is not a criminal, a communist, or affected by a contagious disease, in the same manner as one may not be deprived of his right to associate with people of his own choice because those are rights that are guaranteed by our Constitution. The language of the trial court on this matter follows: .

There is no question that a Filipino citizen has a right under the Constitution and the laws of this Republic to engage in any lawful business, to select, pick and employ anyone who in his opinion may be amenable, congenial, friendly, understanding and profitable to his business provided that they are not originals, say communists, or affected by some contagious disease or morally unfit. The right to associate with our friends or people of our choice cannot be seriously contested in a democratic form of government. This is one of the most cherished privileges of a citizen. Nullify it and it will produce a communist control of action in our free movement and intercourse with our fellow citizens as now prevails in Russia and other Soviet satellites History has amply demonstrated that in countries where personal liberties are limited, curtailed or hampered, communism thrives; while in the lands where personal liberties are protected, democracy lives. We need but look at the horizon and see terrible and sinister shadows of some catastrophic events threatening to annihilate all our hopes and love for liberty if we are to traffic with our rights as citizens like any other ordinary commodities. It is our sacred and bounden duty to protect individual rights so that by their benign influence real democracy may be nurtured to full maturity.

x x x           x x x           x x x

There is no need of any lengthy discussion as to the rights of a Filipino citizen to employ any person in his business provided the latter is not a criminal, affected with some contagious disease, or a recognized human derelict. The right to employ is the same as the right to associate. The right to associate is admittedly one of the most sacred privileges of a Filipino citizen. If a Filipino citizen has the right to employ any person in his business, has a naturalized citizen the same rights? We hold and sustain that under the Constitution and laws of this country, there is no difference between a natural-born citizen and a naturalized citizen, with the possible exception, as provided by the Constitution, that while the former can be President, Vice-President or member of Congress, the latter cannot. But outside of these exceptions, they have the same rights and privileges.

It is hard to see how the nationalization of employment in the Philippines can run counter to any provision of our Constitution considering that its aim is not exactly to deprive citizen of a right that he may exercise under it but rather to promote enhance and protect those that are expressly accorded to a citizen such as the right to life, liberty and pursuit of happiness. The nationalization of an economic measure when founded on grounds of public policy cannot be branded as unjust, arbitrary or oppressive or contrary to the Constitution because its aim is merely to further the material progress and welfare of the citizens of a country. This is what we expressed in no uncertain terms in the Ichong Case when we declared constitutional the nationalization of the retail trade. Indeed, we said there that it is a law "clearly in the interest of the public, nay of the national security itself, and indisputability falls within the scope police power, thru which and by which the State insures its existence and security and the supreme welfare of its citizens." True, this fundamental policy was expressed in a decision the subject of which concerns the constitutionality of the Retail Trade Act, but since the Anti-Dummy Law is but a mere complement of the former in the sense that it is designed to make effective its aims and purposes and both tend to accomplish the same objective either by excluding aliens from owning any retail trade or by banning their employment if the trade is owned by Filipinos, and the target of both is "the removal and eradication of the shackles of foreign economic control and domination" thru the nationalization of the retail trade both in ownership and employment, the pronouncement made in one regarding its constitutionality applies equally if not with greater reason to the other both being complementary one to the other. Indeed, in nationalizing employment in retail trade the right of choice of an employer is not impaired but its sphere is merely limited to the citizens to the exclusion of those of other nationalities.

We note that the case cited by the trial court to substantiate its conclusion that freedom to employ is guaranteed by our Constitution is Meyer v. Nebraska, 67 Law Ed. 1042, which is also the same case relied upon by petitioners in support of their proposition that "the liberty guaranteed by the Constitution includes the right to engage in any of the common occupations of life". We also note that this is the same case cited by counsel for Lao Itchong to support the same proposition in his advocacy of the unconstitutionality of the nationalization of the Retail Trade Law which did not deserve favorable consideration by this Court in the Itchong case. To refute counsel's argument that the retail trade is a common occupation the pursuit of which cannot be impaired and consequently the right to employ therein is guaranteed by our Constitution, suffice it to state that we brushed aside such theory in the Itchong case in view of the monopolistic control exercised by aliens in the retail business and their "deadly strangle hold on the national economy endangering the national security in times of crisis and emergency". The circumstances surrounding the enforcement of the Retail Trade Law being the very foundation of the Anti-Dummy Law the same circumstances that justify the rejection of counsel's proposition in the Itchong case should also apply with regard to the application of the Meyer case in the consideration of the constitutionality of the Anti-Dummy Law.

The thinking of the lower court that the nationalization of employment in retail trade produces communistic control or impairs a right guaranteed by the Constitution to a citizen seems to have as basis its pronouncement that "the right to employ is the same as the right to associate". This promise has no foundation in law for it confuses the right of employment with the right of association embodied in the Bill of Rights of our Constitution. Section 1, paragraph 6, of said Bill of Rights, provides that "the right to form associations or societies for purposes not contrary to law, shall not be abridged", and this has as its main purpose "to encourage the formation of voluntary associations so that thru the cooperative activities of individuals the welfare of the nation may be advanced."1Petitioners have never been denied the right to form voluntary associations. In fact, they can so organize to engage in any business venture of their own choosing provided that they comply with the limitations prescribed by our regulatory laws. These laws cannot be assailed as abridging our Constitution because they were adopted in the exercise of the police power of the State (Lao Itchong case, supra).

Against the charge that this nationalization movement initiated by Congress in connection with several measures that affect the economic life of our people places the Philippines in a unique position in the free world, we have only to cite the cases of Commonwealth v. Hans, 81 N.E. 149, and Bloomfield v. State, 99 N.E. 309, which this Court considered as basic authorities for nationalization of legislative measures in the Lao Ichong case. Similar laws had been declared constitutional by the Supreme Court of California and the United States Supreme Court in a series of cases involving contracts under the Alien Land Law, and because of the similarities of the facts and laws involved therein we can consider the decisions rendered in said cases of persuasive force and effect in the determination of the present case.2

We wish to add one word with regard to the procedural aspect raised in respondents' brief. It is respondents' theory that a complaint for declaratory relief will not prosper if filed after a contract or statute has been breached. The law does not even require that there shall be an actual pending case. It is sufficient that there is a breach of the law, or an actionable violation, to bar a complaint for declaratory judgment (Vol. 2, Moran, Comments on the Rules of Court, 1957 Ed., 145). The pertinent provisions of the Anti-Dummy Law postulate that aliens cannot be employed by Filipino retailers except for technical positions with previous authority of the President, and it is contended that Macario King had in his employ his Chinese co-petitioners for a period of more than 2 years in violation of Section 2-A of Republic Act No. 134. Hence, respondents contend, due to their breach of the law petitioners have forfeited their right to file the present action for declaratory relief.

It appears, however, that alien petitioners were already in the employ of the establishment known as "Import Meat and Produce" previously owned by the Philippine Cold Stores, Inc. when Macario King acquired the ownership of said establishment and because of the doubt he entertained as regards the scope of the prohibition of the law King wrote the President of the Philippines to request permission to continue said petitioners in his employment, and immediately after the request was denied, he instituted the present petition for declaratory relief. It cannot, therefore, be said that King has already breached the law when he filed the present action..

WHEREFORE, the decision appealed from is reversed. This preliminary injunction issued by the trial court on December 6, 1958 is hereby lifted. The petition for mandamus is dismissed, with costs against appellees.

Bengzon, C.J., Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes, Dizon and De Leon, JJ., concur.Padilla, J., took no part.

Footnotes

1Sinco on Philippine Political Law, 10th ed., p. 647.

2Porterfield v. U.S. Webb, 195 Cal. 71; Carter v. Utley, 195 Cal. 84; In re Y. Akado, 188 Cal 739; In re Okahara, 191 Cal. 353: O'Brien v. Webb, 263 U.S. 313, 68 L. Ed., 318; Terrace v. Thompson, 263 U.S 197, 68 L. Ed., 255; Porterfield v. Webb, 263 U.S. 326, 68 L. Ed., 278; Frick v. Webb, 326 L. Ed., 323.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-27275      November 18, 1967

C & C COMMERCIAL CORPORATION, plaintiff-appellee, vs.NATIONAL WATERWORKS AND SEWERAGE AUTHORITY, defendant-appellant.

The Government Corporate Counsel for defendant-appellant.Cesar R. Canonizado and E. Ignacio for plaintiff-appellee.

ANGELES, J.:

The main issue in this appeal is, whether or not the call for bids for the supply of steel and centrifugal cast iron pipes for the waterworks projects in Manila and suburbs, and in the cities of Davao and Iloilo, the National Waterworks & Sewerage Authority (NAWASA) violated the provisions of Republic Act 912, section 1 of which provides as follows:

Sec. 1. In construction or repair work undertaken by the Government, whether done directly or through contract awards, Philippine made materials and products, whenever available, practicable and usable, and will serve the purpose as equally well as foreign made products or materials, shall be used in said construction or repair work, upon the proper certification of

the availability, practicability, usability and durability of said materials or products by the Director of the Bureau of Public Works and/or his assistants.

In the decision appealed from the Court of First Instance of Manila has permanently enjoined the NAWASA from the procurement of the materials needed for the projects involved which, according to the appellant, are designed to alleviate the sufferings of the millions of inhabitants in said places where there is a crying need for more water — an item so vital to human existence — and the delay occasioned by the injunctions complained of, has in no little way, further aggravated the inconvenience of the consuming public in said metropolitan areas where acute water crises have recurred through the years. Nevertheless, it is vehemently contended by the appellee that the declaration of an economic national policy as envisioned in the aforequoted provision of the law which, like the original Flag Law1 is impressed with the clear nationalistic policy of giving preference to locally produced materials and products, has been violated; and if this is so, no amount of public clamor could justify the acts of the NAWASA complained of, for above all the supremacy of the law must be upheld. We have, therefore, examined the record of this case with these considerations foremost in Our minds.

It appears that the case, originally commenced in the Court of First Instance of Manila, on July 7, 1965, as a petition for declaratory relief for the purpose of securing a judicial pronouncement on the interpretation of the word "practicable" as used in Republic Act No. 912, i.e., whether it means that the cheapest materials among the locally produced or manufactured products should be preferred and specified in construction and repair works undertaken by the Government, was later converted into, an action for prohibition with preliminary injunction through the process of supplemental pleadings.

THE SAN PABLO WATERWORKS SYSTEM —

The corresponding complaint was filed on 19 July 1965, alleging that the NAWASA had started to negotiate: for direct purchase of centrifugally cast iron pipes (CCI) for the improvement of the San Pablo Waterworks System in violation of the provisions of Republic Act 912 and the law on public biddings, excluding the C & C Commercial Company, the plaintiff, which can supply instead asbestos cement pressure pipes which are available, practicableand usable, and will serve the purpose of the said project at a much lower cost.

On 6 August 1965, the NAWASA filed its answer to the complaint. On 10 August 1965, the Filipino Pipe and Foundry Corporation, with leave of court, also filed its answer in intervention.

On 16 August 1965, as prayed for in the complaint, the court issued a writ of preliminary injunction restraining the NAWASA from further negotiating the purchase of the CCI pipes from the intervenor.

On 23 September 1965, the plaintiff and the NAWASA entered into a partial stipulation of facts, on the basis of which and the additional evidence adduced at the hearing, the court rendered a partial decision on 31 January 1966, dismissing the complaint insofar as the San Pablo Waterworks System was concerned and dissolving the preliminary injunction issued thereunder. This partial decision has become final.

THE DAVAO METROPOLITAN WATERWORKS —

On 22 January 1965, the NAWASA called for bids for the furnishing of labor and the supply of materials for the construction of the proposed improvement of the Davao Metropolitan Waterworks System. In the call for bids, the bidders were required to submit proposals for the supply of 24-inch steel pipes, asbestos, cement pressure pipes, and cast iron pipes. The bidding was held on 23

February 1965. On 15 March 1965, the committee on award of the NAWASA recommended to the board of directors that the bid be awarded to the lowest bidder, Tirso del Rosario, under his proposal to supply steel pipes.

On 10 August 1965, the plaintiff filed a (First) supplemental complaint seeking to restrain the NAWASA from proceeding with the award of the project in Davao, alleging that in specifying steel pipes for the project, which is admittedly imported material, without giving preference to locally produced asbestos cement pressure pipes manufactured by the plaintiff, violates the provisions of Republic Act 912. On 14 August 1965, the court admitted the supplemental complaint; and as prayed for therein on, 17 September 1965, the Court issued a writ of preliminary injunction.

THE ILOILO WATERWORKS SYSTEM —

As early as on 26 November 1962, the NAWASA called for bids for the supply of 18-inch steel pipes for the improvement of the Iloilo Waterworks System. The bidding was conducted on 27 December 1962. C & C Commercial Co. participated in the bidding offering to supply the needed 18-inch steel pipes for the project, but lost in the bidding. The lowest bidder for the supply of the specified 18-inch steel pipes was the Regal Trading Corporation, and the bid was awarded to it.

On 8 September 1965, almost three (3) years after the date of the bidding, the C & C Commercial Co. filed a (Second) supplemental complaint; seeking to restrain the NAWASA from formalizing or implementing the award on the aforesaid Iloilo project for the supply of 18-inch steel pipes, alleging that in specifying steel pipes for the particular project, the NAWASA has violated the provisions of Republic Act 912 which requires the purchase of Philippine made materials and products which are available, practicable and usable locally, like plaintiff's product — asbestos cement pressure pipes — in construction and repair undertaken by the government. On 24 September 1965, over the objection of the NAWASA, alleges second supplemental complaint was admitted by the court. The record is not clear when the restraining order under the second supplemental complaint was issued, although the NAWASA alleges that a restraining order was issued under date of 10 September 1965, which fact has not been traversed by the plaintiff.

THE MANILA AND SUBURBS WATERWORKS SYSTEM —

On 13 September 1965, the NAWASA advertised for bids for the supply of 30 to 42-inch steel pipes for the use and improvement of the interim waterworks project in the City of Manila and suburbs, the bidding to take place on 14 December 1955. On 10 November 1965, the C & C Commercial Co. filed a (Third) Supplemental complaintseeking to restrain the NAWASA and its representatives from holding the balding under the aforementioned notice to bid, averring identical facts as those alleged in the previous supplemental complaints, that the call for bid for steel pipes for the Manila project and suburbs violates the provisions of Republic Act 912. Over the objection of the defendant NAWASA, the supplemental complaint was admitted; and as prayed for therein, on 20 November 1965, a writ of preliminary injunction was issued restraining the NAWASA from holding the bidding scheduled on 14 December 1965, or on any subsequent date, until further orders from the court.

Pending the case in the court a quo, the NAWASA filed three separate motions praying for the dissolution of the preliminary injunctive writs issued in connection with the Davao, Iloilo and Manila projects, pleading to the court to consider the crying need for a more adequate supply of water in those cities, particularly in the City of Manila and its suburbs, where the lack of adequate supply of potable water has been a recurrent crisis which affected to a dangerous extent, the health and the life of the inhabitants, and that the continuation of the injunctive writs may bring about the cancellation of the $20,200,000.00 loan of the NAWASA from the World Bank, which would result

from the failure of the NAWASA to comply with the formulated work schedule of the waterworks projects, which under the agreement with the World Bank, has to be completed in the month of October 1967; but the court failed to take any action on the motions. Parodying Shakespeare, "Set honor in one eye, and death in the other, and I will look on both indifferently."

After a trial of the case, on 15 August 1966, the court rendered a decision finding and concluding that the act of the NAWASA in specifying steel pipes for the project of the city of Manila and its suburbs, and in awarding the contracts for the supply of steel pipes in the cases of the Davao and Iloilo Waterworks System, constituted a violation of the provisions of Republic Act 912; the dispositive portion of the decision reads as follows:

(a) On the supplemental complaint, making permanent the preliminary injunction dated September 2, 1965, enjoining the defendant or its representatives and agents from formalizing or implementing the award for the construction of the Davao Waterworks Project in respect of the award of pipes to be used therein; rescinding the award made in favor of Tirso del Rosario; and ordering the reappraisal of the bids with a view to complying with the provisions of Republic Act No 912;

(b) On the second supplemental complaint ordering the issuance of a permanent injunction to enjoin the defendants or its agents and representatives from formalizing the award of the contract for the furnishing of 18" steel pipes for the Iloilo Waterworks System; ordering a new bidding for the said project so as to include in the call for bids for the supply and delivery of materials, asbestos cement pipes, as well as CCI pipes; and rescinding the award of the contract in favor of the Regal Trading Corporation;

(c) On the third supplemental complaint, making permanent the preliminary injunction dated December 14, 1965, or any other subsequent date calling for imported steel pipes from 30" to 42" diameter for the interim Development of Waterworks System for Manila and suburbs; and ordering the defendant to specify asbestos cement pressure pipes for the said project; and

(d) Ordering the defendants to pay the costs.

From the decision, NAWASA appealed to this Court.

Appellant contends that the provisions of Republic Act 912, are applicable only to construction or repair works undertaken by the Government. It argues, that since the NAWASA, though a public corporation, is not a municipal corporation or agency of the State empowered to regulate or administer the local affairs of a town or city,2 nor one of the various arms of the government through which political authority is made effective in the Islands, consequently, the NAWASA should not be included within the meaning of the term "Government" as used in the law.3 It is to be noted, however, that Section 2 of the Revised Administrative Code defining the term "Government" which is heavily relied upon by the appellant recognizes an exception: "when a different meaning for the word or phrase is given a particular statute or is plainly to be collected from the context or connection where the term is used." In this context of the law, the term "government" without any qualification as used in Republic Act 912, should be construed in its implied sense and not in the strict signification of the term "Government of the Philippines" as the political entity through which political authority is exercised. A comparative analysis of Republic Act 912 and Commonwealth Act 138, otherwise known as the "Flag Law" the latter "An Act to give Native Products and Domestic Entities the Preference in the Purchase of Articles for the Government", and the former "An Act to Require the Use, Under Certain Conditions, of Philippine Made Materials or Products in Government Projects or Public Works Construction, Whether Done Directly by the Government or Awarded thru Contracts",

discloses that both relate to the same subject matter and have the same nationalistic purpose or object: to give preference to locally produced materials in purchases, works or projects of the Government. The oberservation that Commonwealth Act 138 expressly includes purchases by Government-owned companies, while Republic Act 912 merely relates to construction or repair work done by the Government, is no argument for the proposition that government-owned or controlled corporations have been excepted from the operation of the latter law, for it is clear that Commonwealth Act 138 also ordains that the Purchase and Equipment Division of government-owned companies authorized to purchase or contract for materials and supplies for public use, buildings, or public works, shall give preference to locally produced materials or products. Being statutes in pari materia they should be construed together to attain the purpose of an expressed national policy. Thus, it has been aptly stated:

On the presumption that whenever the legislature enacts a provision it has in mind the previous statutes relating to the same subject matter, it is held that in the absence of any express repeal or amendment therein, the new provision was enacted in accord with the legislative policy embodied in those prior statutes, and they all should be construed together. Provisions in an act which are omitted in another act relating to the same subject matter will be applied in a proceeding under the other act, when not inconsistent with its purpose. Prior statutes relating to the same subject matter are to be compared with the new provisions; and if possible by reasonable construction, both are to be construed that effect is given to every provision of each. Statutes in pari materia although in apparent conflict, are so far as reasonably possible construed to be in harmony with each other.4

The main objective of the Government is to develop our domestic industries so that the country will be economically self-sufficient. And both Commonwealth Act 138 and Republic Act 912 aim to contribute to the realization of the aforesaid nationalistic policy by requiring, the use of Philippine made products or materials, whenever available, practicable and usable in government construction work or repair projects. The alleged conflict between the two laws is more apparent than real, and should not be allowed to defeat the purpose of these laws. We have to declare, therefore, that the NAWASA, like any other corporation exercising proprietary or governmental functions should be deemed embraced within the term "Government" found in Republic Act 912, and in the repair or construction of their works or projects or the purchase of materials therefor, local materials should be given preference when available, practicable and usable.

The next issue for consideration is: Did the NAWASA violate the provisions of Republic Act 912?

Appellant vehemently denies the charge and decries the holding of the lower court appealed from that in specifying steel pipes in the call for bids for the supply of materials for the waterworks projects under consideration it had defied the mandate of the law. Appellant insists that at the time it called for bids for the Davao project, followed by the call for the supply of materials, for the Iloilo project, herein appellee's plant was only capable of producing asbestos cement pressure pipes up to 12 inches diameter; while at the time the call for bids for the supply of materials for the Interim Project of Manila and suburbs was advertised, the largest size of asbestos cement pipes available were of 24 inches being produced at the time by another local manufacturer, the Eternit Corporation, which never protested against the bids in question.

We have reexamined the record of the case with painstaking solicitude and, instead, We find the facts indubitable and conclusive that the C & C Commercial Corporation had not therefore and even up to the present time ever produced pipes larger than 12 inches in diameter. Said appellee corporation has implicitly admitted this as a fact; and although it claims to have a complete plant that is equipped with the necessary machinery, technicians and skilled laborers capable of producing pipes in the sizes called for in those bids (18 to 42 inches in diameter) had the NAWASA specified

them in asbestos cement, the weakness of the argument is at once exposed by a mere examination of the pertinent evidence adduced during the trial of the case on this particular point. The claim is belied by Leopoldo del Rosario, a staff civil an engineer of the NAWASA, who testified as follows:

Q.       Engineer Del Rosario, what is the limitation of the local asbestos cement pressure pipes that are locally manufactured in the Philippines?

A.       We based on NAWASA's experience, we have purchased only sizes up to 12 inches, but on certification of the Bureau of Public Works, a report has been submitted to us that asbestos cement pressure pipes (is) being manufactured by one local manufacturing company in the Philippines, the Eternit Corporation, which is a pipe manufacturer. and we have recently purchased pipes for the Manila interim project of sizes up to 24 inches non-pressure pipes.

Q.       Is there any other local manufacturer of asbestos cement pressure pipes besides C & C Commercial Corporation?

A.       None, sir, only the C & C Commercial Corporation.5

Q.       Engineer del Rosario, as staff civil engineer and the specification engineer, member-secretary of the Pre-Qualifications Committee and the present chairman of all the bidding committees of the NAWASA, do you know if C & C Commercial Corporation, the plaintiff herein, is manufacturing asbestos cement pressure pipes from sizes thirty inches and up in diameter?

A.       The company does not manufacture size beyond twelve inches.

Q.       Why do you say that the C & C Commercial Corporation is not manufacturing asbestos cement pressure. pipes beyond twelve inches?

A.       Because we had bi-yearly inspection of all local plants here as a matter of policy of the committee to determine the capacity or capability of the local manufacturers to supply and even to bid. So every six months the pre-qualifications, committee in collaboration with the procurement inspect all the facilities of the chemical producing plant, this cast iron and asbestos plant, the galvanized iron pipe plant, these are regularly inspected every six months and so the pre-qualifications would know what is available.6

And the foregoing testimony relative to the "non-availability" of appellee's products in sizes above 12 inches in diameter was corroborated by Mrs. Clara Reyes Pastor, herein appellee corporation's President, who declared as follows:

Q.       Is it not a fact Mrs. Reyes, that the sizes of asbestos cement pressure pipes locally manufactured by you and which you furnish the NAWASA is only 12 inches in diameter? Yes or No ?

A.       Yes, sir, because that is the only pipe required at the time I delivered it.

Q.       And the asbestos cement pressure pipes from sizes 12 to 42 inches that you have supplied the NAWASA in the past, they were all imported by you?

A.       Yes, sir.

Q.       I heard you testify Mrs. Reyes, that in case you win in this particular bidding, you intend to import equipments from abroad, is that correct?

A.       Not equipments, only mandril.

Q.       So that presently what is the biggest size of mandril that you have?

A.       I have a 16-inch mandril the biggest of them all.7

From the foregoing testimony of witnesses, and in the light of other evidence submitted by the parties, the following may be deduced: that it is the practice of the NAWASA — which we find both practical and logical — to send out its own men to the various local manufacturing plants for the purpose of knowing the availability of materials needed for its projects; that at the time it specified 18 and 24 inches diameter steel pipes for the Davao and Iloilo waterworks projects, there were no locally produced materials in said sizes; and that with respect to those sizes that were already available, the NAWASA has actually specified and used them in various other construction and repair works even without the certification of the Director of Public Works. We really do not see Our way clear how herein appellee could have charged that the NAWASA had discriminated against its products under the circumstances when its own president admits that it has supplied the NAWASA before locally produced asbestos cement pressure pipes up to 12 inches diameter only and all those with diameters above 12 inches were of foreign manufacture. The evidence, therefore, is conclusive that locally produced asbestos pipes above 12 inches in diameter were not available for purposes of claiming any preference under the provisions of Republic Act 912. And this conclusion becomes even more cogent if We are to consider the fact that C & C Commercial Corporation failed to produce the necessary certification from the Director of Public Works to show that its products were already certified as available, practicable and usable at the time that the call for bids for the supply of materials for the Davao, Iloilo and Manila Interim projects were made to give some semblance of the right it claims to have been violated.

Of course, appellee points out the fact that it has subsequently secured the necessary certification from the Director of Public Works certifying to the availability, practicability and durability of the asbestos cement pressure pipes produced from its plant. We agree, and there should be no quarrel at all that with respect to pipes of 4 to 12 inches in diameter which it is actually producing now, the preference claimed under the law may be allowed. Be that as it may, however, the certification referred to did not in any way improve its position; for the stubborn fact still remains that at the time said certification was issued on July 6,1966, C & C Commercial Corporation was actually producing asbestos pipe up to 12 inches only, which its existing equipment or machinery, when inspected by a representative of the Office that issued the certification, was found capable of producing. Hence, We cannot subscribe to the holding of the court below that locally produced asbestos cement pipes above 12 inches in diameter may be considered "'available" within the meaning of Republic Act 912 simply because the President of herein appellee corporation n had manifested or promised that it can procure bigger mandrels worth $25,000.00 fom abroad and will be able to produce pipes in the larger sizes called for in the questioned bids shortly after their installation, for that would be giving the term "available" a very strained meaning. It would really be unfair to require in order to be "available" within the meaning of the law that herein appellee should have in stock the sizes of pipes called for in the bids in the quantity needed by the appellant; but We cannot also believe, by any stretch of the imagination, that the Director of Public Works would certify to the availability, practicability, usability and durability of certain products even before the machinery, equipment or tools needed to produce said products are actually bought from abroad and installed in its plant by the manufacturer.

Statutes granting advantages to private persons have in many instances created special privileges or monopolies for the grantees and thus have been viewed with suspicion and strictly construed. This is altogether appropriate in the majority of situations, for if public advantage is gained by the grant,it normally appears to be of secondary significance compared with the advantage gained by the grantee.8 And rights which exist only by virtue of such statutes come into being only after strict compliance with all the conditions found in those statutes.9 These rules should apply to the case at bar where the law invoked grants a preference to locally produced products or materials. Since Republic Act 912 grants preference only upon the certification of availability, practicability and usability of locally produced materials by the Director of Public Works, that certification must be existing and effective before any right arising therefrom may be claimed to have been violated. Notwithstanding the clear nationalistic policy of the law aforementioned, We cannot, by any mistaken sympathy towards herein appellee, recognize the existence of its right under the law alleged to have been violated, which C & C Commercial Corporation has miserably failed to prove in this case.

With respect to the Interim Project for the City of Manila and its suburbs, it would seem that the decision appealed from had virtually become moot and academic by reason of the passage of Republic Act 4858 which authorizes the President to allow the procurement of supplies necessary for the rehabilitation of the project as an exception to the restrictions and preferences provided for in Republic Act 912, and the President appears to have authorized the General Manager of the NAWASA under the said statutory power to purchase all the pipes and materials necessary for the project by negotiated sales.

For all the foregoing, We find it unnecessary to discuss further the other errors assigned by the appellant.

WHEREFORE, the decision appealed from is hereby set aside, with costs against the appellee. The writs of preliminary injunctions issued by the lower court are set, aside, and declared null and void.

Concepcion, C.J., Reyes J.B.L., Dizon, Bengzon, J.P., Zaldivar, Sanchez and Castro, JJ., concur.Fernando, J., took no part.

Footnotes

1 Commonwealth Act No. 138, Nov. 7, 1936.

2 Citing NAWASA vs. NAWASA Consolidated Unions, et al. L-18938.

3 Citing Section 2, Rev. Adm. Code which provides, inter alia, as follows: "The Government of the Republic of the Phil. in a term which refers to the corporate governmental entity through which the functions of the government are exercised throughout the Philippines, including, save as the contrary appear; from the context, the various arms through which political authority is made effective in the Philippines, whether pertaining to the central government or to the provincial or municipal branches or other forms of local government."

4 Sutherland & Statutory Construction, Vol. II, pp. 530-532.

5 T.S.N., June 27, 1966, pp. 54-55.

6 T.S.N., June 7, 1966, pp. 8-10.

7 T.S.N., June 27, 1966, pp. 44-45.

8 Sutherland Statutory Construction, Vol. II, see. 3404, p. 240.

9 Id., Vol. III, sec. 5812, p. 94.