Republic v. Manalo, G.R. No. 221029, Art. 26.

All marriages
solemnized outside the
April 24, 2018]
Philippines, in accordance with
On January 10, 2012, respondent the laws in force in the country
Marelyn Tanedo Manalo (Manalo) filed a petition where they were solemnized,
for cancellation of entry of marriage in the Civil and valid there as such, shall
Registry of San Juan, Metro Manila, by virtue of a also be valid in this country,
judgment of divorce rendered by a Japanese except those prohibited under
court. Articles 35(1), (4), (5) and (6),
36, 37 and 38.
Finding the petition to be sufficient in
form and in substance, Branch 43 of the Regional Where a marriage
Trial Court (RTC) of Dagupan City set the case between a Filipino citizen and a
for initial hearing on April 25, 2012. The petition foreigner is validly celebrated
and the notice of initial hearing were published and a divorce is thereafter validly
once a week for three consecutive weeks in a obtained abroad by the alien
newspaper of general circulation. During the spouse capacitating him or her to
initial hearing, counsel for Manalo marked the remarry, the Filipino spouse shall
documentary evidence (consisting of the trial likewise have capacity to
court's Order dated January 25, 2012, affidavit of remarry under Philippine law.
publication, and issues of the Northern Journal Now, the Court is tasked to resolve whether, under
dated February 21-27, 2012, February 28-March the same provision, a Filipino citizen has the capacity
5, 2012, and March 6-12, 2012) for purposes of to remarry under Philippine law after initiating a
compliance with the jurisdictional requirements.
divorce proceeding abroad and obtaining a favorable
The Office of the Solicitor judgment against his or her alien spouse who is
General (OSG) entered its appearance for capacitated to remarry. Specifically, Manalo pleads
petitioner Republic of the Philippines authorizing for the recognition and enforcement of the divorce
the Office of the City Prosecutor of Dagupan to decree rendered by the Japanese court and for the
appear on its behalf. Likewise, a Manifestation cancellation of the entry of marriage in the local civil
and Motion was filed questioning the title and/or registry "in order that it would not appear anymore
caption of the petition considering that, based on
that [she] is still married to the said Japanese national
the allegations therein, the proper action should
be a petition for recognition and enforcement of a who is no longer her husband or is no longer married
foreign judgment. to her; [and], in the event that [she] decides to be
remarried, she shall not be bothered and disturbed by
On appeal, the CA overturned the RTC said entry of marriage," and to return and to use her
decision. It held that Article 26 of the Family Code maiden surname.|||
of the Philippines (Family Code) is applicable
even if it was Manalo who filed for divorce against Paragraph 2 of Article 26 speaks of "a
her Japanese husband because the decree they divorce x x x validly obtained abroad by the alien
obtained makes the latter no longer married to the spouse capacitating him or her to
former, capacitating him to remarry. remarry." Based on a clear and plain reading of
On July 6, 1987, then President Corazon the provision, it only requires that there be a
C. Aquino signed into law Executive Order (E.O.) divorce validly obtained abroad. The letter of the
No. 209, otherwise known as The Family Code of law does not demand that the alien spouse
the Philippines, which took effect on August 3, should be the one who initiated the proceeding
1988. Shortly thereafter, E.O. No. 227 was wherein the divorce decree was granted. It does
issued on July 17, 1987. Aside from amending not distinguish whether the Filipino spouse is the
Articles 36 and 39 of the Family Code, a second petitioner or the respondent in the foreign divorce
paragraph was added to Article 26.This provision proceeding. The Court is bound by the words of
was originally deleted by the Civil Code Revision the statute; neither can We put words in the
Committee (Committee), but it was presented mouths of the lawmakers. "The legislature is
and approved at a Cabinet meeting after Pres. presumed to know the meaning of the words, to
Aquino signed E.O. No. 209. As modified, Article have used words advisedly, and to have
26 now states: expressed its intent by the use of such words as
are found in the statute. Verba legis non est

Statutory Construction Case Digests (Chapter 3) 1

recedendum, or from the words of a statute there (Cariño v. Commission on Human Rights,
should be no departure."
G.R. No. 96681, [December 2, 1991], 281
Assuming, for the sake of argument, that PHIL 547-565)
the word "obtained" should be interpreted to
mean that the divorce proceeding must be Facts: Some 800 public school teachers, among them
actually initiated by the alien spouse, still, the members of the Manila Public School Teachers
Court will not follow the letter of the statute when Association (MPSTA) and Alliance of Concerned
to do so would depart from the true intent of the Teachers (ACT) undertook what they described as
legislature or would otherwise yield conclusions "mass concerted actions" to "dramatize and highlight"
inconsistent with the general purpose of the
their plight resulting from the alleged failure of the
act. Laws have ends to achieve, and statutes
public authorities to act upon grievances that had time
should be so construed as not to defeat but to
carry out such ends and purposes. and again been brought to the latter's attention. |||the
teachers participating in the mass actions were
The legislative intent is served with an order of the Secretary of Education to
not at all times accurately return to work in 24 hours or face dismissal, and a
reflected in the manner in which memorandum directing the DECS officials concerned
the resulting law is couched.
to initiate dismissal proceedings against those who
Thus, applying a verba legis or
strictly literal interpretation of a did not comply and to hire their replacements. "For
statute may render it failure to heed the return-to-work order, the CHR
meaningless and lead to complainants (private respondents) were
inconvenience, an absurd administratively charged on the basis of the
situation or injustice. To obviate principal's report and given five (5) days to answer the
this aberration, and bearing in charges. In the meantime, the "MPSTA filed a petition
mind the principle that the intent for certiorari before the Regional Trial Court of Manila
or the spirit of the law is the law against petitioner (Cariño), which was dismissed
itself, resort should be to the rule (unmarked CHR Exhibit, Annex I).Later, the MPSTA
that the spirit of the law controls went to the Supreme Court (on certiorari, in an
its letter. attempt to nullify said dismissal. In the meantime,
To reiterate, the purpose of Paragraph 2 too, the respondent teachers submitted sworn
of Article 26 is to avoid the absurd situation where statements dated September 27, 1990 to the
the Filipino spouse remains married to the alien Commission on Human Rights.
spouse who, after a foreign divorce decree that is
effective in the country where it was rendered, is Whether or not the Commission on Human Rights has
no longer married to the Filipino spouse. The the power under the Constitution to do so; whether or
provision is a corrective measure to address an not, like a court of justice, or even a quasi-judicial
anomaly where the Filipino spouse is tied to the agency, it has jurisdiction or adjudicatory powers
marriage while the foreign spouse is free to marry over, or the power to try and decide, or hear and
under the laws of his or her country. Whether the determine, certain specific type of cases, like alleged
Filipino spouse initiated the foreign divorce human rights violations involving civil or political rights
proceeding or not, a favorable decree dissolving
the marriage bond and capacitating his or her The Court declares the Commission on Human
alien spouse to remarry will have the same result: Rights to have no such power; and that it was not
the Filipino spouse will effectively be without a meant by the fundamental law to be another court or
husband or wife. A Filipino who initiated a foreign quasi-judicial agency in this country, or duplicate
divorce proceeding is in the same place and in much less take over the functions of the latter.
like circumstance as a Filipino who is at the
receiving end of an alien initiated proceeding. To investigate is not to adjudicate or adjudge.
Therefore, the subject provision should not make Whether in the popular or the technical sense, these
a distinction. In both instance, it is extended as a terms have well understood and quite distinct
means to recognize the residual effect of the meanings.
foreign divorce decree on Filipinos whose marital
ties to their alien spouses are severed by "Investigate," commonly understood, means to
operation of the latter's national law. examine, explore, inquire or delve or probe into,
research on, study. The dictionary definition of

Statutory Construction Case Digests (Chapter 3) 2

"investigate" is "to observe or study closely: inquire allegedly made pursuant to Section 40(e) of the
into systematically: "to search or inquire into: . . . to Public Service Act, as amended by Republic Act
subject to an official probe . . .: to conduct an official 3792. After paying under protest the demanded
inquiry." The purpose of investigation, of course, is to amounts, the above mentioned corporations sent
discover, to find out, to learn, obtain information. separate letters to the Commission, except the
Nowhere included or intimated is the notion of Philippine Steam Navigation Company which filed a
settling, deciding or resolving a controversy involved formal petition instead, 1 requesting for
in the facts inquired into by application of the law to reconsideration of the assessments on the ground
the facts established by the inquiry. that under Section 40 (e) of the Public Service Act, as
amended, such assessments should be based not on
The legal meaning of "investigate" is essentially the the value of the properties but upon the subscribed
same: "(t)o follow up step by step by patient inquiry or and paid up capital stocks of the corporations.|||
observation. To trace or track; to search into; to
examine and inquire into with care and accuracy; to Raising the same question of the proper assessment-
find out by careful inquisition; examination; the taking base to be used in imposing the prescribed
of evidence; a legal inquiry;" "to inquire; to make an supervision and regulation fees on public utilities.|||
investigation," "investigation" being in turn described
as "(a)n administrative function, the exercise of which For annual reimbursement of the expenses
ordinarily does not require a hearing. 2 Am J2d Adm incurred by the Commission in the
L Sec. 257; . . . an inquiry, judicial or otherwise, for supervision of other public services and/or in
the discovery and collection of facts concerning a the regulation or fixing of their rates, twenty
certain matter or matters." centavos for each one hundred pesos or
fraction thereof, of the capital stock
"Adjudicate," commonly or popularly understood, subscribed or paid, or if no shares have been
means to adjudge, arbitrate, judge, decide, issued, of the capital invested, or of the
determine, resolve, rule on, settle. The dictionary property or equipment, whichever is higher."
defines the term as "to settle finally (the rights and
duties of the parties to a court case) on the merits of In denying petitioner's prayer for reconsideration and
issues raised: . . . to pass judgment on: settle upholding the correctness of the assessed fees, the
judicially: . . . act as judge." And "adjudge" means "to Commission reasons out that the clause "or of the
decide or rule upon as a judge or with judicial or property and equipment, whichever is higher"
quasi-judicial powers: . . . to award or grant judicially inserted or added to Section 40(e) of the Public
in a case of controversy . . .In the legal sense, Service Act as an alternative base for supervision
"adjudicate" means: "To settle in the exercise of fees collectible thereunder applies to both stock and
judicial authority. To determine finally. Synonymous non-stock corporations. The ruling is premised on the
with adjudge in its strictest sense;" and "adjudge" argument that the cost of property and equipment
means: "To pass on judicially, to decide, settle or being usually higher than both the subscribed and
decree, or to sentence or condemn. . . . Implies a paid up stocks in stock corporations and the capital
judicial determination of a fact, and the entry of a investment in non-stock entities, to declare its use as
judgment.” assessment base only in case of public utilities not
issuing stocks, to the exclusion of stock corporate
public services, would make the law discriminatory,
unfair and unjust. It was further reasoned out that the
(Philippine Long Distance Telephone Co. appearance of a comma after the words "capital
v. Public Service Commission, G.R. No. subscribed or paid" and another after the words
L-26762, L-26765, L-26779, L-26799, "Capital invested," immediately preceding the clause
[August 31, 1970], 145 PHIL 413-422) "property and equipment, whichever is higher,"
indicates the intention of the legislature to constitute
On various dates in September, 1964, the Public the latter as an alternative of boththe subscribed and
Service Commission assessed several public utilities invested capital. In short, the stand of the
for supposed supervision and regulation fees for that Commission is this: if the legislature designed
year, as follows: Philippine Long Distance Telephone "property and equipment" to apply only to non-stock
Company — P214,353.60; Manila Electric Company corporations, the amended provision should have
— P727,526.00; Bolinao Electronics Corporation — been drafted —
P11,610.40 Philippine Steam Navigation Company —
". . . twenty centavos for each one
P23,921.60; and General Shipping Company —
hundred pesos or fraction thereof,
P33,146.80, based upon the value of their respective
of the capital stock subscribed or
properties or equipment. The assessments were

Statutory Construction Case Digests (Chapter 3) 3

 paid, or if no shares have been nominees to the President; and that a "final and
issued, of the capital invested or of definitive resolution of the constitutional questions
the property or equipment, raised above would diffuse (sic) the tension in the
whichever is higher." legal community that would go a long way to keep and
instead of placing a comma between the maintain stability in the judiciary and the political
words invested and or of the property, etc., as it system
now stands; or better still, a semicolon would have
Although it has already begun the process for the
been inserted after the words "capital stock
subscribed or paid." filling of the position of Chief Justice Puno in
accordance with its rules, the JBC is not yet decided
But in the particular case at bar, a comparison of the on when to submit to the President its list of nominees
text of Section 40(e) appearing in the official text for the position due to the controversy now before us
of Republic Act No. 3792 with that of its original, being yet unresolved.|||
House Bill No. 4613, shows that the punctuation of
the provision in question has undergone no alteration Likewise, the JBC has yet to take a position on
at all. At any rate, the consideranda on punctuation when to submit the shortlist to the proper
made in the Commission's appealed resolution was appointing authority, in light of Section 4 (1),
merely employed to reinforce its main argument that Article VIII of the Constitution, which provides
nothing in the law justifies a discriminatory application that vacancy in the Supreme Court shall be filled
of the value of the property or equipment (as within ninety (90) days from the occurrence
alternative rate base) solely to operators not issuing thereof, Section 15, Article VII of
shares of capital stock.|| the Constitution concerning the ban on
Presidential appointments "two (2) months
immediately before the next presidential elections
and up to the end of his term" and Section 261 (g),
(De Castro v. Judicial and Bar Council, Article XXII of the Omnibus Election Code of the
G.R. Nos. 191002, 191032, 191057, 10-2-5- Philippines.
SC, 191149, 191342 & 191420, [March 17,
Two constitutional provisions are seemingly in
2010], 629 PHIL 629-779)
conflict.
In G.R. No. 191002, De Castro submits that the The first, Section 15, Article VII (Executive
conflicting opinions on the issue expressed by legal Department), provides:
luminaries — one side holds that the incumbent
President is prohibited from making appointments Section 15. Two months
within two months immediately before the coming immediately before the next
presidential elections and until the end of her term of presidential elections and up to the
end of his term, a President or
office as President on June 30, 2010, while the other
Acting President shall not make
insists that the prohibition applies only to appointments, except temporary
appointments to executive positions that may appointments to executive
influence the election and, anyway, paramount positions when continued
national interest justifies the appointment of a Chief vacancies therein will prejudice
Justice during the election ban — has impelled the public service or endanger public
JBC to defer the decision to whom to send its list of at safety.
least three nominees, whether to the incumbent
The other, Section 4 (1), Article VIII
President or to her successor. 8 He opines that the
(Judicial Department), states:
JBC is thereby arrogating unto itself "the judicial
function that is not conferred upon it by Section 4. (1). The Supreme Court
the Constitution," which has limited it to the task of shall be composed of a Chief
recommending appointees to the Judiciary, but has Justice and fourteen Associate
not empowered it to "finally resolve constitutional Justices. It may sit en banc or in its
questions, which is the power vested only in the discretion, in division of three, five,
or seven Members. Any vacancy
Supreme Court under the Constitution." As such, he
shall be filled within ninety days
contends that the JBC acted with grave abuse of from the occurrence thereof.
discretion in deferring the submission of the list of

Statutory Construction Case Digests (Chapter 3) 4

Had the framers intended to extend the prohibition On the basis of the above facts, the Court of First
contained in Section 15, Article VII to the appointment Instance of Cebu held that petitioner is a person in
of Members of the Supreme Court, they could have the Philippine Civil Service, pertaining to the
explicitly done so. They could not have ignored the unclassified service (section 670, Revised
meticulous ordering of the provisions. They would Administrative Code as amended), and his removal
have easily and surely written the prohibition made from his position is a violation of section 694 of the
Revised Administrative Code and section 4 of Art
explicit in Section 15, Article VII as being equally
XII of the Constitution. The court further held that
applicable to the appointment of Members of the
the notation at the bottom of petitioner's
Supreme Court in Article VIII itself, most likely in appointment to the effect that his appointment is
Section 4 (1), Article VIII. That such specification was "temporary pending report from the Government
not done only reveals that the prohibition against the Service Insurance System as to the appointee's
President or Acting President making appointments physical and medical examination" did not make his
within two months before the next presidential appointment merely temporary.
elections and up to the end of the President's or
It is also contended that the use of capitals in the
Acting President's term does not refer to the Members words "Civil Service" in section 1 and 4 of Article XII
of the Supreme Court. of the Constitution and the use of small letters for
the same words, "civil service," in section 670,
Moreover, the usage in Section 4 (1),
Revised Administrative Code, indicates that only
Article VIII of the word shall — an imperative,
those pertaining to the classified service are
operating to impose a duty that may be
enforced 71 — should not be disregarded. protected in the above-mentioned sections of the
Constitution. We see no validity in this argument.
Thereby, Sections 4 (1) imposes on the President
the imperative duty to make an appointment of a Capital "C" and "S" in the words "Civil Service" were
used in the Constitution to indicate the group. No
Member of the Supreme Court within 90 days
capitals are used in the similar provisions of the
from the occurrence of the vacancy. The failure
Code to indicate the system. We see no difference
by the President to do so will be a clear
between the use of capitals in the former and of
disobedience to the Constitution. As judges, we
small letters in the latter. There is no reason for
are not to unduly interpret, and should not accept
excluding persons in the unclassified service from
an interpretation that defeats the intent of the
the benefits extended to those belonging to the
framers.
classified service. Both are expressly declared to
Consequently, prohibiting the incumbent belong to the Civil Service; hence, the same rights
President from appointing a Chief Justice on the and privileges should be accorded to both. Persons
premise that Section 15, Article VII extends to in the unclassified service are so designated
appointments in the Judiciary cannot be because the nature of their work and qualifications
sustained. A misinterpretation are not subject to classification, which is not true of
like Valenzuela should not be allowed to last after those appointed to the classified service. This can
its false premises have been exposed. not be a valid reason for denying privileges to the
former that are granted the latter.|||

(Unabia v. City Mayor, G.R. No. L-8759,

[May 25, 1956], 99 PHIL 253-259) (Funa v. Villar, G.R. No. 192791, [April
24, 2012], 686 PHIL 571-649)
The case was submitted to the court for decision on
a stipulation of facts the most pertinent of which are On February 15, 2001, President Gloria
as follows: Petitioner was a foreman, Group Macapagal-Arroyo (President Macapagal-Arroyo)
Disposal, Office of the City Health Officer, Cebu appointed Guillermo N. Carague (Carague) as
City, at P3.90 per day. On June 16, 1953, the City Chairman of the Commission on Audit (COA) for a
Mayor removed him from the service and his place term of seven (7) years, pursuant to the 1987
was taken by Perfecto Abellana, and latter by Pedro Constitution. Carague's term of office started on
E. Gonzales. Before June 16, 1953, the Group February 2, 2001 to end on February 2, 2008.
Disposal Division, including personnel, was Meanwhile, on February 7, 2004, President
transferred from the City Health Department to the Macapagal-Arroyo appointed Reynaldo A. Villar
Office of the City Engineer. In April, 1954, petitioner (Villar) as the third member of the COA for a term
sought to be reinstated but his petition was not of seven (7) years starting February 2, 2004 until
headed by the respondents. February 2, 2011.

Statutory Construction Case Digests (Chapter 3) 5

Following the retirement of Carague on February 2, Central to the adjudication of the instant petition is
2008 and during the fourth year of Villar as COA the correct meaning to be given to Sec. 1 (2), Article
Commissioner, Villar was designated as Acting IX (D) of the Constitution on the ban against
Chairman of COA from February 4, 2008 to April reappointment in relation to the appointment issued
14, 2008. Subsequently, on April 18, 2008, Villar to respondent Villar to the position of COA
was nominated and appointed as Chairman of the Chairman.
COA. Shortly thereafter, on June 11, 2008, the
The flaw lies in regarding the word "reappointment"
Commission on Appointments confirmed his
as, in context, embracing any and all species of
appointment. He was to serve as Chairman of COA,
appointment.
as expressly indicated in the appointment papers,
until the expiration of the original term of his office The rule is that if a statute or constitutional provision
as COA Commissioner or on February 2, 2011. is clear, plain and free from ambiguity, it must be
Challenged in this recourse, Villar, in an obvious bid given its literal meaning and applied without
to lend color of title to his hold on the chairmanship, attempted interpretation. This is known as the plain
insists that his appointment as COA Chairman meaning rule enunciated by the maxim verba legis
accorded him a fresh term of seven (7) years which non est recedendum,or from the words of a statute
is yet to lapse. He would argue, in fine, that his term there should be no departure.
of office, as such chairman, is up to February 2,
2015,or 7 years reckoned from February 2, 2008 The primary source whence to ascertain
when he was appointed to that position. constitutional intent or purpose is the language of
the provision itself. If possible, the words in
Meanwhile, Evelyn R. San Buenaventura (San the Constitution must be given their ordinary
Buenaventura) was appointed as COA meaning, save where technical terms are
Commissioner to serve the unexpired term of Villar employed.
as Commissioner or up to February 2, 2011.
The first sentence is unequivocal
Whether or not Villar's appointment as COA enough. The COA Chairman shall be appointed
Chairman, while sitting in that body and after having by the President for a term of seven years, and if
served for four (4) years of his seven (7) year term he has served the full term, then he can no longer
as COA commissioner, is valid in light of the term be reappointed or extended another
limitations imposed under, and the circumscribing appointment. In the same vein, a Commissioner
concepts tucked in, Sec. 1 (2), Art. IX (D) of who was appointed for a term of seven years who
the Constitution, which reads: likewise served the full term is barred from being
reappointed. In short, once the Chairman or
(2) The Chairman and Commissioners
Commissioner shall have served the full term of
[on Audit] shall be appointed by the
seven years, then he can no longer be
President with the consent of the
reappointed to either the position of Chairman or
Commission on Appointments for a term
Commissioner. The obvious intent of the framers
of seven years without
is to prevent the president from "dominating" the
reappointment.Of those first appointed,
Commission by allowing him to appoint an
the Chairman shall hold office for seven
additional or two more commissioners.
years, one commissioner for five years,
and the other commissioner for three The same purpose obtains in the second
years, without sentence of Sec. 1 (2). The Constitutional
reappointment. Appointment to any Convention barred reappointment to be extended
vacancy shall be only for the unexpired to commissioner-members first appointed under
portion of the term of the predecessor.In the 1987 Constitution to prevent the President
no case shall any member be appointed or from controlling the commission. Thus, the first
designated in a temporary or acting Chairman appointed under the 1987
capacity. Constitution who served the full term of seven
years can no longer be extended a
Villar's promotional appointment, so it is argued, is
reappointment. Neither can the Commissioners
void from the start, constituting as it did a
first appointed for the terms of five years and
reappointment enjoined by the Constitution, since it
three years be eligible for reappointment. This is
actually needed another appointment to a different
the plain meaning attached to the second
office and requiring another confirmation by the
sentence of Sec. 1 (2), Article IX (D).
Commission on Appointments.
On the other hand, the provision, on its face, does
not prohibit a promotional appointment from

Statutory Construction Case Digests (Chapter 3) 6

commissioner to chairman as long as the Petitioner's Arguments
commissioner has not served the full term of seven
Petitioner argues that the enumeration of
years, further qualified by the third sentence of Sec.
services subject to VAT in Section 108 of
1 (2),Article IX (D) that "the appointment to any
the NIRC is not exhaustive because it covers all
vacancy shall be only for the unexpired portion of
sales of services unless exempted by law. He
the term of the predecessor." In addition, such
claims that the CTA erred in applying the rules on
promotional appointment to the position of
statutory construction and in using extrinsic aids
Chairman must conform to the rotational plan or the
in interpreting Section 108 because the provision
staggering of terms in the commission membership
is clear and unambiguous. Thus, he maintains
such that the aggregate of the service of the
that the exhibition of movies by cinema operators
Commissioner in said position and the term to
or proprietors to the paying public, being a sale of
which he will be appointed to the position of
service, is subject to VAT.
Chairman must not exceed seven years so as not
to disrupt the rotational system in the commission Respondents' Arguments
prescribed by Sec. 1 (2),Art. IX (D).
Respondents, on the other hand, argue
In conclusion, there is nothing in Sec. 1 (2),Article that a plain reading of Section 108 of the NIRC of
IX (D) that explicitly precludes a promotional 1997 shows that the gross receipts of proprietors
appointment from Commissioner to Chairman, or operators of cinemas/theaters derived from
provided it is made under the aforestated public admission are not among the services
circumstances or conditions. subject to VAT. Respondents insist that gross
receipts from cinema/theater admission tickets
The phrase "upgrading of position" found in the
were never intended to be subject to any tax
underscored portion unmistakably shows that Sec.
imposed by the national government. According
1 (2), Art. IX (D) of the 1987 Constitution, for all its
to them, the absence of gross receipts from
caveat against reappointment, does notper
cinema/theater admission tickets from the list of
se preclude, in any and all cases, the promotional
services which are subject to the national
appointment or upgrade of a commissioner to
amusement tax under Section 125 of the NIRC of
chairman, subject to this proviso: the appointee's
1997 reinforces this legislative intent.
tenure in office does not exceed 7 years in all.
Respondents also highlight the fact that RMC No.
Moreover, jurisprudence tells us that the word 28-2001 on which the deficiency assessments
"reappointment" means a second appointment to were based is an unpublished administrative
one and the same office. ruling.
Under the NIRC of 1939 the national
government imposed amusement tax on
(Commissioner of Internal Revenue v. proprietors, lessees, or operators of theaters,
SM Prime Holdings, Inc., G.R. No. cinematographs, concert halls, circuses, boxing
183505, [February 26, 2010], 627 PHIL exhibitions, and other places of amusement,
581-605) including cockpits, race tracks, and cabaret. In
the case of theaters or cinematographs, the taxes
Respondents SM Prime Holdings, Inc. (SM Prime) were first deducted, withheld, and paid by the
and First Asia Realty Development Corporation proprietors, lessees, or operators of such
(First Asia) are domestic corporations duly theaters or cinematographs before the gross
organized and existing under the laws of the receipts were divided between the proprietors,
Republic of the Philippines. Both are engaged in the lessees, or operators of the theaters or
business of operating cinema houses, among cinematographs and the distributors of the
others. ||| cinematographic films. Section 11 of the Local
(BIR) sent SM Prime a Preliminary Assessment Tax Code, however, amended this provision by
Notice (PAN) for value added tax (VAT) deficiency transferring the power to impose amusement
on cinema ticket sales in the amount of tax on admission from theaters, cinematographs,
P119,276,047.40 for taxable year 2000.The BIR concert halls, circuses and other places of
denied the protest filed by SM Prime and ordered it amusements exclusively to the local government.
to pay the VAT deficiency for taxable year 2000. Thus, when the NIRC of 1977 was enacted, the
national government imposed amusement tax
Whether gross receipts derived from admission only on proprietors, lessees or operators of
tickets by cinema/theater operators or proprietors cabarets, day and night clubs, Jai-Alai and race
are subject to VAT? tracks.

Statutory Construction Case Digests (Chapter 3) 7

 These reveal the legislative intent not to impose from Trust Fund A a lump sum of 1 1/2 month's
VAT on persons already covered by the pay per year of service "based on the member's
amusement tax. This holds true even in the case last or terminal basic monthly salary", 5 and (2)
of cinema/theater operators taxed under the LGC whatever the employee has contributed to Trust
of 1991 precisely because the VAT law was Fund B, together with the income minus any
intended to replace the percentage tax on certain losses incurred. The URP excludes
services. The mere fact that they are taxed by the commissions, overtime, bonuses, or extra
local government unit and not by the national compensations in the computation of the basic
government is immaterial. The Local Tax Code, salary for purposes of retirement.
in transferring the power to tax gross receipts
Oxales joined UNILAB on September 1,
derived by cinema/theater operators or proprietor
1968. He was compulsorily retired by UNILAB
from admission tickets to the local government,
when he reached his 60th birthday on September
did not intend to treat cinema/theater houses as
7, 1994, after having rendered service of twenty-
a separate class. No distinction must, therefore,
five (25) years, eleven (11) months, and six (6)
be made between the places of amusement
days. He was then Director of Manufacturing
taxed by the national government and those
Services Group.
taxed by the local government.
On August 21, 1997, Oxales wrote
To hold otherwise would impose an
UNILAB, claiming that he should have been paid
unreasonable burden on cinema/theater houses
P1,775,907.23 more in retirement pay and
operators or proprietors, who would be paying an
unused leave credits. He insisted that his
additional 10% VAT on top of the 30%
bonuses, allowances and 13th month pay should
amusement tax imposed by Section 140 of
have been factored in the computation of his
the LGC of 1991, or a total of 40% tax. Such
retirement benefits. 6
imposition would result in injustice, as persons
taxed under the NIRC of 1997 would be in a On September 9, 1997, UNILAB
better position than those taxed under the LGC of wrote 7 back and reminded Oxales about the
1991. We need not belabor that a literal provision of the URP excluding any commissions,
application of a law must be rejected if it will overtime, bonuses or extra compensations in the
operate unjustly or lead to absurd results. Thus, computation of the basic salary of the retiring
we are convinced that the legislature never employee. CA also held that R.A. No. 7641 is
intended to include cinema/theater operators or applicable only in the absence of a retirement
proprietors in the coverage of VAT. plan or agreement providing for the retirement
benefits of employees in an establishment.
Whether R.A.No.7641 is applicable for purposes
(Oxales v. United Laboratories, Inc., of computing his retirement benefits?
G.R. No. 152991, [July 21, 2008], 581
The obligations arising from the agreement
PHIL 23-47) between the employer and the employee have
Sometime in 1959, UNILAB established the force of law between them and should be
the United Retirement Plan (URP). 4 The plan is complied with in good faith. However, though the
a comprehensive retirement program aimed at employer and the employee are given the widest
providing for retirement, resignation, disability, latitude possible in the crafting of their contract,
and death benefits of its members. An employee such right is not absolute. There is no such thing
of UNILAB becomes a member of the URP upon as absolute freedom of contract. A limitation is
his regularization in the company. The URP provided for by the law itself. Their stipulations,
mandates the compulsory retirement of any clauses, terms, and conditions should not be
member-employee who reaches the age of 60.|| contrary to law, morals, good customs, public
Both UNILAB and the employee contribute to the order, or public policy. Indeed, the law respects
URP. On one hand, UNILAB provides for the the freedom to contract but, at the same time, is
account of the employee an actuarially- very zealous in protecting the contracting parties
determined amount to Trust Fund A. On the other and the public in general. So much so that the
hand, the employee chips in 2 1/2% of his contracting parties need not incorporate the
monthly salary to Trust Fund B. Upon retirement, existing laws in their contract, as the law is
the employee gets both amounts standing in his deemed written in every contract. Quando abest,
name in Trust Fund A and Trust Fund B.||| As proviso parties, adest proviso legis. When the
retirement benefits, the employee receives (1) provision of the party is lacking, the provision of

Statutory Construction Case Digests (Chapter 3) 8

 the law supplies it. Kung may kulang na However, conviction under the second mode does
kondisyon sa isang kasunduan, ang batas not automatically mean that the same involved
ang magdaragdag dito. SaCIDT moral turpitude. A determination of all surrounding
circumstances of the violation of the statute must
Viewed from the foregoing, We rule that
be considered. Besides, moral turpitude does not
Oxales is not entitled to the additional retirement
include such acts as are not of themselves immoral
benefits he is asking. The URP is very clear:
but whose illegality lies in their being positively
"basic monthly salary" for purposes of computing
prohibited, as in the instant case.
the retirement pay is "the basic monthly salary, or
if daily[,] means the basic rate of pay converted First, there is neither merit nor factual basis in
to basic monthly salary of the COMELEC's finding that petitioner used his official
employee excluding any commissions, capacity in connection with his interest in the
overtime, bonuses, or extra compensations." cockpit and that he hid the same by transferring the
Inclusio unius est exclusio alterius. The inclusion management to his wife, in violation of the trust
of one is the exclusion of others. Ang pagsama reposed on him by the people.||| Second, while
ng isa, pagpwera naman sa iba. possession of business and pecuniary interest in a
cockpit licensed by the local government unit is
The URP is not contrary to law,
expressly prohibited by the present LGC,however,
morals, good customs, public order, or public
its illegality does not mean that violation thereof
policy to merit its nullification. We, thus,
necessarily involves moral turpitude or makes such
sustain it. At first blush, the URP seems to be
possession of interest inherently immoral. Under
disadvantageous to the retiring employee
the old LGC, mere possession by a public officer of
because of the exclusion of commissions,
pecuniary interest in a cockpit was not among the
overtime, bonuses, or extra compensations in the
prohibitions. Suffice it to state that cockfighting,
computation of the basic monthly salary.
or sabong in the local parlance, has a long and
However, a close reading of its provisions would
storied tradition in our culture and was prevalent
reveal otherwise.
even during the Spanish occupation. While it is a
form of gambling, the morality thereof or the
wisdom in legalizing it is not a justiciable issue.|||
(Teves v. Commission on Elections,
G.R. No. 180363, [April 28, 2009], 604
PHIL 717-752) (Biraogo v. Philippine Truth
Petitioner was a candidate for the position of Commission of 2010, G.R. Nos. 192935
Representative of the 3rd legislative district of & 193036, [December 7, 2010], 651 PHIL
Negros Oriental during the May 14, 2007 elections. 374-773)
On March 30, 2007, respondent Herminio G. Teves
filed a petition to disqualify petitioner on the ground For consideration before the Court are two
that in Teves v. Sandiganbayan, he was convicted consolidated cases both of which essentially assail
of violating Section 3 (h), Republic Act (R.A.) No. the validity and constitutionality of Executive Order
3019, or the Anti-Graft and Corrupt Practices No. 1, dated July 30, 2010, entitled "Creating the
Act, for possessing pecuniary or financial interest in Philippine Truth Commission of 2010."|||
a cockpit, which is prohibited under Section 89 (2) The first case is G.R. No. 192935, a special civil
of the Local Government Code (LGC) of 1991, and action for prohibition instituted by petitioner Louis
was sentenced to pay a fine of P10,000.00. Biraogo (Biraogo) in his capacity as a citizen and
Respondent alleged that petitioner is disqualified taxpayer. Biraogo assails Executive Order No. 1 for
from running for public office because he was being violative of the legislative power of Congress
convicted of a crime involving moral turpitude which under Section 1, Article VI of the Constitution as it
carries the accessory penalty of perpetual usurps the constitutional authority of the legislature
disqualification from public office. to create a public office and to appropriate funds
WHETHER PETITIONER IS DISQUALIFIED TO therefor.|||
RUN FOR PUBLIC OFFICE TAKING INTO When then Senator Benigno Simeon Aquino III
CONSIDERATION THE DECISION OF THE declared his staunch condemnation of graft and
SUPREME COURT IN G.R. NO. 154182. corruption with his slogan, "Kung walang corrupt,
The offense proved, therefore, is the second mode walang mahirap." The Filipino people, convinced of
of violation of Section 3(h) of the Anti-Graft Law, his sincerity and of his ability to carry out this noble
which is possession of a prohibited interest. objective, catapulted the good senator to the

Statutory Construction Case Digests (Chapter 3) 9

presidency. To transform his campaign slogan into assume the functions of the executive
reality, President Aquino found a need for a special department.
body to investigate reported cases of graft and
Invoking this authority, the President
corruption allegedly committed during the previous
constituted the PTC to primarily investigate
administration.
reports of graft and corruption and to recommend
Thus, at the dawn of his administration, the the appropriate action. As previously stated, no
President on July 30, 2010, signed Executive Order quasi-judicial powers have been vested in the
No. 1 establishing the Philippine Truth Commission said body as it cannot adjudicate rights of
of 2010 (Truth Commission). persons who come before it. It has been said that
"Quasi-judicial powers involve the power to hear
Whether or not Executive Order No. 1 violates the
and determine questions of fact to which the
principle of separation of powers by usurping the
legislative policy is to apply and to decide in
powers of Congress to create and to appropriate
accordance with the standards laid down by law
funds for public offices, agencies and
itself in enforcing and administering the same
commissions;||
law."In simpler terms, judicial discretion is
In his memorandum in G.R. No. 192935, Biraogo involved in the exercise of these quasi-judicial
asserts that the Truth Commission is a public office power, such that it is exclusively vested in the
and not merely an adjunct body of the Office of the judiciary and must be clearly authorized by the
President. Thus, in order that the President may legislature in the case of administrative agencies.
create a public office he must be empowered by the
Fact-finding is not adjudication and it
Constitution, a statute or an authorization vested in
cannot be likened to the judicial function of a court
him by law. According to petitioner, such power
of justice, or even a quasi-judicial agency or
cannot be presumed since there is no provision in
office. The function of receiving evidence and
the Constitution or any specific law that authorizes
ascertaining therefrom the facts of a controversy
the President to create a truth commission. He
is not a judicial function. To be considered as
adds that Section 31 of the Administrative Code of
such, the act of receiving evidence and arriving at
1987, granting the President the continuing
factual conclusions in a controversy must be
authority to reorganize his office, cannot serve as
accompanied by the authority of applying the law
basis for the creation of a truth commission
to the factual conclusions to the end that the
considering the aforesaid provision merely uses
controversy may be decided or resolved
verbs such as "reorganize," "transfer,"
authoritatively, finally and definitively, subject to
"consolidate," "merge," and "abolish." Insofar as it
appeals or modes of review as may be provided
vests in the President the plenary power to
by law. Even respondents themselves admit that
reorganize the Office of the President to the extent
the commission is bereft of any quasi-judicial
of creating a public office, Section 31 is inconsistent
power.
with the principle of separation of powers enshrined
in the Constitution and must be deemed repealed Contrary to petitioners' apprehension,
upon the effectivity thereof. ||| the PTC will not supplant the Ombudsman or the
DOJ or erode their respective powers. If at all, the
The OSG counters that there is nothing exclusively
investigative function of the commission will
legislative about the creation by the President of a
complement those of the two offices. As pointed
fact-finding body such as a truth commission.
out by the Solicitor General, the recommendation
Pointing to numerous offices created by past
to prosecute is but a consequence of the overall
presidents, it argues that the authority of the
task of the commission to conduct a fact-finding
President to create public offices within the Office
investigation." The actual prosecution of
of the President Proper has long been
suspected offenders, much less adjudication on
recognized.|||
the merits of the charges against them, is
The President's power to conduct certainly not a function given to the commission.
investigations to ensure that laws are faithfully The phrase, "when in the course of its
executed is well recognized. It flows from investigation," under Section 2 (g), highlights this
the faithful-execution clause of the Constitution fact and gives credence to a contrary
under Article VII, Section 17 thereof. As the Chief interpretation from that of the petitioners. The
Executive, the president represents the function of determining probable cause for the
government as a whole and sees to it that all laws filing of the appropriate complaints before the
are enforced by the officials and employees of his courts remains to be with the DOJ and the
department. He has the authority to directly Ombudsman.

Statutory Construction Case Digests (Chapter 3) 10

 In Executive Order No. 1, however, there
is no inadvertence. That the previous
administration was picked out was deliberate and
intentional as can be gleaned from the fact that it
was underscored at least three times in the
assailed executive order. It must be noted that
Executive Order No. 1 does not even mention any
particular act, event or report to be focused on
unlike the investigative commissions created in
the past. "The equal protection clause is violated
by purposeful and intentional discrimination." |||

Statutory Construction Case Digests (Chapter 3) 11