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7/23/2019 Genato Commercial Corporation

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GENATO COMMERCIAL CORPORATION, Petitioner, v. THE COURT OF TAX APPEALS , ETAL., Respondents.Arturo A. Alafriz & Associates for Petitioner.Solicitor General Ambrosio Padilla, Assistant Solicitor Genera l Jose P. Alejandro and Special

Attorne !melda de Leon"Rees for Respondents.S#LLA$%S. TA'AT!()* PER+E)TAGE TA' () !P(RTAT!() +-ARGES T( $E !)+L%E !) T-E

ASSESSE)T. / %nder Section 01 2$3 of t4e )ational !nternal Re5enue +ode, an importer isre6uired to pa in ad5ance t4e necessar percenta7e ta8 on t4e articles imported 9based on t4eimport in5oice 5alue t4ereof, certified to as correct b t4e P4ilippine +onsul at t4e port of ori7in ift4ere is an, includin7 frei74t, posta7e, insurance, commission, customs dut, and all similarc4ar7es.9 !n ot4er :ords, t4e la: re6uires t4at it be included in t4e assessment not onl t4eimport in5oice 5alue of t4e merc4andise, :4ic4 includes frei74t, etc., but all ot4er similar c4ar7es:4ic4 :ould necessaril increase t4e landed cost of t4e merc4andise imported, :4ic4 s4ouldinclude t4e difference of P;.< paid b petitioner to a local ban= in t4e purc4ase of forei7ne8c4an7e to carr out t4e importation. !ndeed, t4e intention of +on7ress in enactin7 t4eaforesaid section is to include in t4e assessment all c4ar7es :4et4er specified or ot4er:ise,:4ic4 an importer 4as to pa to complete 4is importation.>. Ejusdem Generis* ?-E) PR!)+!PLE A# $E !)@(E. / T4e doctrine of ejusdem7eneris is but a rule of construction adopted as an aid to ascertain and 7i5e effect to t4ele7islati5e intent :4en t4at intent is uncertain or ambi7uous, but t4e same s4ould not be 7i5ensuc4 :ide application t4at :ould operate to defeat t4e purpose of t4e la:. !n ot4er :ords, t4edoctrine is not of uni5ersal application. !ts application must ield to t4e manifest intent of+on7ress 2State 5. Prat4er, > LRA >1, >


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+ourt in t4e case of +andido ontales 5. +ollector of !nternal Re5enue, $.T.A. )o. 01,promul7ated September 1, D;;. -e too= 4is oat4 of office on Au7ust 1,>;; and assumed 4is post on Au7ust , >;;. -e is in c4ar7e of t4e Re5enue +ollectiononitorin7 Group.

(n Au7ust >;, >;;1, t4e (ffice of t4e (mbudsman recei5ed t4e S:orn +omplaint dated Jul >0,>;;1 filed b t4en irector Eduardo S. atillano of t4e P4ilippine )ational Police +riminal!n5esti7ation and etection Group 2P)P"+!G3. !n t4e said s:orn complaint, irector atillanoc4ar7ed respondent @alera :it4 criminal offenses in5ol5in7 5iolation of 5arious pro5isions ofRepublic Act 2R.A.3 )o. 1;D,>K t4e Tariff and +ustoms +ode of t4e P4ilippines 2T++P3,

E8ecuti5e (rder )o. 10,1K E8ecuti5e (rder )o. >D0CK and R.A. )o. H1;;>, :4ile in t4e performance of 4is official functions, Att. Gil A. @alera 4adcompromised t4e case a7ainst t4e Steel Asia anufacturin7 +orporation in +i5il +ase )o. ;";>1H T++P 2Aut4orit of +ommission to ma=e+ompromise3 and :it4out t4e appro5al of t4e President, in 5iolation of E8ecuti5e (rder )o.


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($"+"+";>";, >;;1, (mbudsman Simeon @. arcelo issued a emorandumDK in4ibitin74imself from t4e fore7oin7 criminal cases as :ell as t4e related administrati5e case and directin7petitioner Special Prosecutor @illa"!7nacio to act in 4is 2t4e (mbudsmans3 stead and place. T4esaid memorandum readsB

E(RA)%

T( B -(). E))!S . @!LLA"!G)A+!(Special Prosecutor(ffice of t4e Special Prosecutor

S%$JE+T B ($"+"+";>";;;C, pursuant to t4e abo5e memorandum, petitioner Special Prosecutor @illa"!7nacio, in t4e administrati5e case ($"+"A";1D"J, issued t4e (rder placin7 respondent@alera under pre5enti5e suspension for si8 mont4s :it4out pa. !n t4e said order, petitionerSpecial Prosecutor @illa"!7nacio found t4at respondent @alera entered into t4e compromisea7reement :it4 Steel Asia anufacturin7 +orp. in +i5il +ase )o. ;";>1H;K of t4e T++P.

As earlier mentioned, +i5il +ase )o. ;";>;;C b statin7t4at cKonsiderin7 t4e stron7 e5idence of 7uilt of respondent eput +ommissioner @alera andt4e fact t4at t4e c4ar7es a7ainst 4im consist of Gra5e isconduct andOor is4onest :4ic4 ma:arrant 4is remo5al from t4e ser5ice, it is 4ereb declared t4at t4e re6uirements under Section>C of R.A. )o. H;, in relation to Sec. D, Rule !!! of Administrati5e (rder )o. , on t4e Rules ofProcedure of t4e (ffice of t4e (mbudsman, as amended, are present, and placin7 respondenteput +ommissioner @alera under pre5enti5e suspension pendin7 administrati5e in5esti7ationon t4e matter for a period of si8 2H3 mont4s :it4out pa is clearl justified.K

T4e decretal portion of t4e arc4 , >;;C (rder readsB

?-ERE(RE, pursuant to Sec. >C of R.A. )o. H;, ot4er:ise =no:n as t4e (mbudsman Actof D0D, in relation to Sec. D , Rule !!! of Administrati5e (rder )o. , respondent ATT#. G!L A.@ALERA, eput +ommissioner, (ffice of t4e +ollection and onitorin7 Group, $ureau of

+ustoms, is 4ereb placed under pre5enti5e suspension for S!' 2H3 ()T-S ?!T-(%T PA#.

Pursuant to Sec. >23 of R.A. )o. H;, t4is (rder of Pre5enti5e Suspension is deemedimmediatel effecti5e and e8ecutor.

T4e -onorable +ommissioner Antonio . $ernard, $ureau of +ustoms, is 4ereb directed toimplement t4e (rder immediatel upon receipt 4ereof and to promptl inform t4is (ffice ofcompliance 4ere:it4.

Respondent Att. Gil A. @alera, eput +ommissioner, (ffice of t4e +ollection and onitorin7Group, $ureau of +ustoms, is 4ereb ordered to file 4is counter"affida5it and ot4er contro5ertin7e5idence to t4e complaint, cop of :4ic4 to7et4er :it4 t4e anne8es, is 4ereto attac4ed, :it4inten 2;3 das from receipt 4ereof in t4ree 213 le7ible copies addressed to t4e +entral Recordsi5ision, (ffice of t4e (mbudsman, (mbudsman $uildin7, A74am Road, Go5ernment +enter,

)ort4 Trian7le, iliman, uezon +it, furnis4in7 t4e complainant :it4 a cop of said counter"affida5it.

urt4er, respondent is also ordered to submit proof of ser5ice of 4is counter"affida5it to t4ecomplaint, :4o ma file its repl t4ereto :it4in a period of ten 2;3 das from receipt of t4esame.

ailure to compl as 4erein directed :it4in t4e period prescribed b t4e rules s4all be deemedas a :ai5er of t4e ri74t to submit t4e parts counter"affida5it or repl, nonet4eless, despite saidnon"filin7, t4e in5esti7ation s4all proceed pursuant to e8istin7 rules.

T4is (rder is bein7 issued b t4e undersi7ned in 5ie: of t4e in4ibition of t4e -onorableTanodbaan Simeon arcelo from 4is case as contained in a emorandum dated > )o5ember>;;1.

S( (RERE.>K


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Respondent @alera sou74t reconsideration of t4e said (rder claimin7 denial of due process. -ea5erred t4at 4e 4ad alread submitted 4is counter"affida5it refutin7 t4e c4ar7es le5eled a7ainst4im b t4e P)P"+!G :a bac= on )o5ember H , >;;1. -e pointed out t4at irector atillanoss:orn complaint :as filed on Au7ust >;, >;;1 and it :as onl t:o mont4s later or on (ctober>>, >;;1 t4at t4e (mbudsman found enou74 basis to proceed :it4 t4e administrati5ein5esti7ation of t4e case b re6uirin7 respondent @alera to file 4is counter"affida5it. -e did so on)o5ember H, >;;1. urin7 t4e said period of t:o mont4s, t4e Preliminar !n5esti7ation and

Administrati5e Adjudication $ureau"A 2P!A$"A3 of t4e (ffice of t4e (mbudsman did not findenou74 bases to pre5enti5el suspend 4im. Accordin7 to respondent @alera, 4e :as at a loss asto :4 it :as onl t4en 2arc4 , >;;C3 t4at 4e :as bein7 placed under pre5enti5e suspension.

Actin7 on respondent @aleras motion for reconsideration, petitioner Special Prosecutor @illa"!7nacio issued t4e (rder dated April ;;C e8plainin7 t4at t4e dela in t4e issuance of t4epre5enti5e suspension order :as due to t4e in4ibition of t4e (mbudsman from t4e case and for:4ic4 reason, 4e 2petitioner Special Prosecutor @illa"!7nacio3, b 5irtue of t4e emorandumdated )o5ember >, >;;1, 4ad to act in 4is place and stead. Petitioner Special Prosecutor @illa"!7nacio a5erred t4at contrar to respondent @aleras assertion, 4is counter"affida5it :ould not

justif t4e re5ersal of t4e arc4 , >;;C (rder since 4e failed to s4o: t4at 4e 4ad t4e re6uisiteaut4orit from t4e +ommissioner of +ustoms to enter into t4e said compromise a7reement :it4respect to t4e Steel Asia anufacturin7 +orp. case. !t :as not s4o:n under :4at aut4orit andon :4at basis respondent @alera entered into t4e said compromise a7reement.

!n li74t of t4e fore7oin7 ratiocination, petitioner Special Prosecutor @illa"!7nacio deniedrespondent @aleras motion for reconsideration. T4e decretal portion of 4is (rder dated April ;;C readsB

?-ERE(RE, t4e undersi7ned finds no co7ent reason to reconsider t4e suspension orderpre5iousl issued dated arc4 >;;C but considers t4e +ounter"Affida5it recei5ed b t4e(ffice of t4e (mbudsman ;H )o5ember >;;1 as sufficient compliance to t4e portion of t4eassailed (rder directin7 4im to file 4is counter"affida5it. +onse6uentl, t4e (rder insofar as itre6uires 4im to file counter"affida5it contained in t4e arc4 >;;CK (rder is SET AS!E.1K

E5en before 4is motion for reconsideration :as acted upon, 4o:e5er, respondent @alera alreadfiled :it4 t4e +ourt of Appeals a special ci5ilaction for certiorari and pro4ibition as 4e sou74t to nullif t4e arc4 , >;;C (rder ofpre5enti5e suspension issued b petitioner Special Prosecutor @illa"!7nacio and to enjoin+ommissioner of +ustoms Antonio . $ernardo from implementin7 t4e said (rder.

(n April H, >;;C, t4e appellate court 4eard t4e parties on oral ar7uments on t4e praer forinjunction. (n e5en date, it issued a temporar restrainin7 order a7ainst t4e implementation oft4e pre5enti5e suspension order.

(n June >;;C, t4e appellate court rendered t4e assailed ecision settin7 aside t4e arc4, >;;C (rder of pre5enti5e suspension and directin7 petitioner Special Prosecutor @illa"!7nacio to desist from ta=in7 an furt4er action in ($"+"A";1";1D"J.

!n so rulin7, t4e +A 4eld mainl t4at petitioner Special Prosecutor @illa"!7nacio is not aut4orizedb la: to si7n and issue pre5enti5e suspension orders. !t cited Section >C of R.A. )o. H;,ot4er:ise =no:n as T4e (mbudsman Act of D0D, :4ic4 5ests on t4e (mbudsman and 4iseput t4e po:er to pre5enti5el suspend an 7o5ernment officer or emploee under t4e(mbudsmans aut4orit pendin7 in5esti7ation subject to certain conditions. !n relation t4ereto,

Section


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t4at 4ad petitioner Special Prosecutor @illa"!7nacio dul considered t4e said counter"affida5it, 4e:ould 4a5e reac4ed a different conclusion, i.e., t4ere is no stron7 e5idence a7ainst respondent@alera. urt4er, t4at t4e latter, in enterin7 into t4e compromise a7reement :it4 Steel Asiaanufacturin7 +orp., is aut4orized to do so under Section >C;1H t4ereof, cited b petitioner Special Prosecutor @illa"!7nacio, is inapplicable. T4e +Aconcluded t4at petitioner Special Prosecutor @illa"!7nacio acted :it4 7ra5e abuse of discretion inissuin7 t4e arc4 , >;;C placin7 respondent @alera under pre5enti5e suspension for si8mont4s :it4out pa in connection :it4 t4e administrati5e case ($"+"A";1";1D"J.

T4e decretal portion of t4e decision of t4e appellate court readsB

?-ERE(RE, t4e petition is 4ereb GRA)TE, and t4e assailed order of arc4 , >;;C,issued b respondent ennis @illa"!7nacio in ($"+"A";1";1D"J is SET AS!E.

Respondent Special Prosecutor is !RE+TE to desist from ta=in7 an furt4er action in ($"+"A";1";1D"J.

S( (RERE.HK

-ence, t4e recourse to t4is +ourt b petitioners Special Prosecutor @illa"!7nacio and t4e (fficeof t4e (mbudsman.

T4e Petitioners +ase

T4e submit t4e follo:in7 as 7rounds for t4e allo:ance of t4eir petitionB

!) !TS E+!S!() ATE >< J%)E >;;C, T-E +(%RT ( APPEALS +(!TTE SER!(%SERR(R !) !)!)G T-AT T-E PET!T!()ER SPE+!AL PR(SE+%T(R +(!TTE GRA@E

A$%SE ( !S+RET!(), A) !) SETT!)G AS!E T-E AR+- , >;;C (RER (PRE@E)T!@E S%SPE)S!() !SS%E $# T-E PET!T!()ER SPE+!AL PR(SE+%T(R,+()S!ER!)G T-ATB

!PET!T!()ERK SPE+!AL PR(SE+%T(R A+TE ?!T- %LL A%T-(R!T# +()S!ER!)GT-AT T-E ($%SA) E'PRESSL# ASS!G)E T( PET!T!()ERK SPE+!ALPR(SE+%T(R T-E SPE+!!+ %)+T!() ( A+T!)G !) -!S 2($%SA)S3 PLA+E A)STEA !) ($"+"A";1;1D"J, A) T-!S ELEGAT!() ( A%T-(R!T# S%ERS R(

)( @!+E (R EE+T A), () T-E +()TRAR#, -AS T-E %LL A)ATE ( T-E LA?.

!!)( GRA@E A$%SE ( !S+RET!() -AS $EE) +(!TTE $# T-E PET!T!()ERS !)!)!)G, AT T-AT STAGE, T-E E@!E)+E ( G%!LT T( $E STR()G () T-E PART (PR!@ATE RESP()E)T, (R GRA@E !S+()%+T A)O(R !S-()EST#.

!!!PR!@ATE RESP()E)TS PET!T!() !LE $E(RE T-E +(%RT A %( S-(%L -A@E$EE) !S!SSE (R @!(LAT!() ( T-E R%LE () (R% S-(PP!)G.K

T4e petitioners 5i7orousl maintain t4at no 7ra5e abuse of discretion attended t4e issuance bpetitioner Special Prosecutor @illa"!7nacio of t4e arc4 , >;;C (rder placin7 respondent

@alera under pre5enti5e

suspension because t4e (mbudsman, in directin7 petitioner Special Prosecutor @illa"!7nacio toact in 4is place and stead insofar as ($"+"A";1";1D"J :as concerned, full clot4ed t4e latter:it4 dele7ated aut4orit to act t4ereon. Since under Section >C of R.A. )o. H;, t4e(mbudsman ma pre5enti5el suspend respondent @alera in t4e subject administrati5e case, itfollo:s t4at :it4 t4e dele7ation of 4is aut4orit to petitioner Special Prosecutor @illa"!7nacio, 4e4ad full aut4orit to pre5enti5el suspend respondent @alera. Petitioner Special Prosecutor @illa"!7nacio, upon findin7 t4at all t4e elements for pre5enti5e suspension in Section >C of R.A. )o.H; are present, accordin7l placed respondent @alera under pre5enti5e suspension for si8mont4s :it4out pa in connection :it4 t4e subject administrati5e case.

T4e petitioners defend t4e 5alidit of t4e (mbudsmans dele7ation of 4is aut4orit to petitionerSpecial Prosecutor @illa"!7nacio :it4 respect to t4e administrati5e case ($"+"A";1";1D"Jcontendin7 t4atB a3 t4e aut4orit to pre5enti5el suspend is not insusceptible to dele7ation to analter e7o of t4e (mbudsman* b3 t4e petitioner Special Prosecutor possessed t4e necessar6ualifications and competence to e8ercise t4e dele7ated functions* c3 no la: or rule :as 5iolated:it4 t4e said dele7ation.0K

)ot4in7 in Section >C of R.A. )o. H; alle7edl pro4ibits t4e dele7ation b t4e (mbudsman of4is aut4orit to pre5enti5el suspend to 4is alter e7o. T4e petitioners point out t4at under R.A.)o. H;, t4e SpecialProsecutor, li=e t4e eput (mbudsmen, 4eads a major office in t4e (ffice of t4e (mbudsman*DK 4e is appointed in t4e same manner as t4e eput (mbudsmen*>;K 4e s4ares t4e same6ualifications>K and enjos t4e same ran= and pri5ile7e as t4e latter.>>K As suc4, t4e SpecialProsecutor, li=e an of t4e ot4er eput (mbudsmen, 4as t4e competence and capabilit topre5enti5el suspend an officer or emploee under t4e aut4orit of t4e (mbudsman.

T4e petitioners in5o=e, in particular, Section 2C32c3 of R.A. )o. H;BSec. . Structural (r7anization.

2C3 T4e (ffice of t4e Special Prosecutor s4all, under t4e super5ision and control and upon t4eaut4orit of t4e (mbudsman, 4a5e t4e follo:in7 po:ersB

2c3 To perform suc4 ot4er duties assi7ned to it b t4e (mbudsman.

$ t4is pro5ision, t4e (mbudsman ma alle7edl 5alidl dele7ate to t4e Special Prosecutor suc4ot4er functions t4at 4e cannot, ot4er:ise, perform b 4imself and t4at 4e 2t4e (mbudsman3 is

not obli7ed to al:as ma=e suc4 dele7ation to t4e (5erall eput (mbudsman. !n t4e e8erciseof 6uasi"judicial functions, t4ere is no la: :4ic4 mandates t4at t4e (mbudsman can onl in4ibit4imself in fa5or of t4e eput (mbudsmen.

T4e petitioners assert t4at t4e e5idence of respondent @aleras 7uilt for serious administrati5einfractions is stron7. Accordin7 to t4em, t4e facts t4at 4a5e so far been establis4ed s4o: t4atrespondent @alera entered into t4e compromise a7reement :it4 Steel anufacturin7 Asia +orp.to undul s4ield and promote its interests and to t4e prejudice of t4e 7o5ernment. !t is alle7edlsuspicious t4at 4e 2respondent @alera3 simpl allo:ed t4e said compan to redeem t4e spuriousta8 credit certificates :it4 a 1;"mont4 sta77ered pament :4en sufficient properties of t4e saidcompan 4ad alread been attac4ed to satisf not onl t4e P1 million principal amount of ta8eso:ed b t4e said compan but t4e penalt c4ar7es and dama7es as :ell. -e furt4er unjustifiable8onerated t4e said compans officers of an criminal :ron7doin7 :4en t4e are conclusi5elliable for t4e procurement of t4ese spurious ta8 credit certificates. urt4er, respondent @alera:as ne5er aut4orized b t4e +ustoms +ommissioner to enter into suc4 compromise a7reementnor :as it appro5ed b t4e Secretar of inance as re6uired b Section >1H of t4e T++P.)eit4er :as it appro5ed b t4e President of t4e P4ilippines as furt4er re6uired b E.(. )o. 10.


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Respondent @alera t4us committed an act of misrepresentation :4en 4e si7ned t4e compromisea7reement under t4e clause $ aut4orit of t4e +ommissioner.

T4e petitioners posit t4at conclusi5el at t4e 7i5en sta7e respondent @alera appeared to 4a5ecommitted Gra5e isconduct and is4onest to :arrant 4is pre5enti5e suspension. T4e alsoa5er t4at t4e e5idence stron7l s4o: t4at respondent @alera obtained emploment for 4isbrot4er"in"la:, Ariel anon7do, :it4 +actus +ar7o Sstems, !nc., a customs bro=era7e firm:4ose business principall in5ol5es dealin7 on a re7ular basis :it4 t4e $ureau of +ustoms, incontra5ention of R.A. )o. H1 and R.A. )o. 1;D.

To refute t4e appellate courts statement t4at t4ere :as inordinate dela in t4e issuance of t4earc4 , >;;C (rder of pre5enti5e suspension, t4e petitioners e8plain t4at t4e same :as dueto, amon7 ot4ers, t4e in4ibition of t4e (mbudsman from t4e case, t4e dela in t4e transmittal oft4e case records and t4e amount of time t4at it too= petitioner Special Prosecutor @illa"!7nacio tostud t4e recommendation of t4e P!A$"A and t4e di5er7ent recommendation of t4e Assistant(mbudsman for Preliminar !n5esti7ation, Adjudication and onitorin7 (ffice 2PA(3.

oreo5er, e5en if t4e P!A$"A recommended a7ainst placin7 respondent @alera under pre5enti5esuspension, petitioner Special Prosecutor @illa"!7nacio :as not bound to adopt t4e same. ?it4respect to respondent @aleras counter"affida5it, t4e petitioners insist t4at t4e same failed to rebutt4e stron7 e5idence a7ainst 4im* 4ence, justifin7 4is pre5enti5e suspension.

inall, t4e petitioners fault t4e appellate court for not dismissin7 outri74t respondent @aleraspetition for certiorari. T4e c4ar7e 4im :it4 5iolation of t4e rule on non"forum s4oppin7 as 4e

filed 4is petition for certiorari :it4 t4e +A e5en :4en 4is motion for reconsideration 4ad et to beacted upon b petitioner Special Prosecutor @illa"!7nacio.

T4e Respondents +ounter"Ar7uments

Respondent @alera mainl ar7ues t4at petitioner Special Prosecutor @illa"!7nacio 4as noaut4orit to issue t4e arc4 , >;;C (rder placin7 4im under pre5enti5e suspension. ?4ileSection 2C32c3 of R.A. )o. H; 7rants t4e (ffice of t4e Special Prosecutor t4e po:er toperform suc4 ot4er duties assi7ned to it b t4e (mbudsman, t4e performance of suc4 ot4erduties s4ould still be under t4e super5ision and control and upon t4e aut4orit of t4e(mbudsman. Respondent @alera ec4oes t4e ratiocination of t4e +A t4at t4e emorandumdated )o5ember >, >;;1 issued b (mbudsman arcelo directin7 petitioner SpecialProsecutor @illa"!7nacio to act in 4is place and stead in ($"+"A";1";1D"J produced t4e effectof ma=in7 4im 2petitioner Special Prosecutor3 step into t4e position of t4e (mbudsman. T4is isnot t4e =ind of assi7nment of duties contemplated b Section 2C32c3 of R.A. )o. H; because,in suc4 a case, t4e (mbudsmans po:er of super5ision and control o5er t4e Special Prosecutoris undermined.

Respondent @alera submits t4at t4e (mbudsmans memorandum desi7natin7 petitioner SpecialProsecutor @illa"!7nacio to act in 4is place and stead 4as destroed t4e 4ierarc4 of command:it4in t4e (ffice of t4e (mbudsman because it put t4e Special Prosecutor o5er and abo5e t4e(ffice of t4e (5erall eput (mbudsman. Suc4 desi7nation infrin7es on Section 2>3 of R.A.)o. H; :4ic4 pro5ides t4at t4e (5erall eput (mbudsman s4all o5ersee and administer t4eoperations of t4e different offices under t4e (ffice of t4e (mbudsman. T4e (5erall eput(mbudsman is ne8t in line to t4e (mbudsman as s4o:n b t4e fact t4at 4e assumes as Actin7(mbudsman in case of 5acanc in t4e (ffice of t4e (mbudsman due to deat4, resi7nation,remo5al or permanent disabilit of t4e incumbent (mbudsman.

Respondent @alera stresses t4at t4e po:er to pre5enti5el suspend an officer or emploee

under t4e aut4orit of t4e (mbudsman pendin7 in5esti7ation is e8clusi5el 5ested on t4e(mbudsman or 4is eput pursuant to Section >C of R.A. )o. H;. Since t4e Special

Prosecutor is not named t4erein as 5ested :it4 t4e said po:er, t4en petitioner SpecialProsecutor @illa"!7nacio 4as no aut4orit to issue a pre5enti5e suspension.

!n relation t4ereto, t4e Special Prosecutors po:ers is alle7edl limited to t4e conduct ofpreliminar in5esti7ation and prosecution of criminal cases :it4in t4e jurisdiction of t4eSandi7anbaan. Respondent @alera cites t4e enumeration of t4e Special Prosecutors po:ers inSection 2C3 of R.A. )o. H;BSec. . Structural (r7anization.

2C3 T4e (ffice of t4e Special Prosecutor s4all, under t4e super5ision and control and upon t4eaut4orit of t4e (mbudsman, 4a5e t4e follo:in7 po:ersB

2a3 To conduct preliminar in5esti7ation and prosecute criminal cases :it4in t4e jurisdiction oft4e Sandi7anbaan*

2b3 To enter into plea bar7ainin7 a7reement* and

2c3 To perform suc4 ot4er duties assi7ned to it b t4e (mbudsman.

Applin7 t4e rule of ejusdem 7eneris, respondent @alera t4eorizes t4at since t4e first t:o po:ersrelate to criminal complaints and criminal cases, t4en t4e last po:er to perform suc4 ot4er duties

assi7ned to it b t4e (mbudsman can onl refer to ot4er duties related to criminal complaintsand criminal cases and not to administrati5e complaints, in5esti7ation, adjudication andadministrati5e pre5enti5e suspension. ?4ile 4e concedes t4at t4e (mbudsman ma in4ibit4imself in certain cases, respondent @alera is of t4e 5ie: t4at :4en t4e (mbudsman does in4ibit4imself in an administrati5e in5esti7ation pendin7 before t4e (ffice of t4e (mbudsman, 4e manot desi7nate t4e Special Prosecutor to act in 4is place and stead.

Respondent @alera also 4arps on petitioner Special Prosecutor @illa"!7nacios alle7ed failure toconsider 4is 2respondent @aleras3 counter"affida5it before issuin7 t4e pre5enti5e suspensionorder. T4is omission coupled :it4 t4e dela in issuin7 t4e same alle7edl renders t4e arc4 ,>;;C (rder null and 5oid.(n t4e e5idence a7ainst 4im, respondent @alera claims t4at t4e same is not stron7. -e cites t4edela in placin7 4im under pre5enti5e suspension as 4e alle7es t4at t4e first complaint in5ol5in7t4e Steel anufacturin7 Asia +orp. case :as filed a7ainst 4im b Att. +asareo as earl as

Au7ust >H, >;;>. -o:e5er, it :as onl on arc4 , >;;C t4at 4e :as placed under pre5enti5esuspension b petitioner Special Prosecutor @illa"!7nacio. T4e stren7t4 of t4e e5idence a7ainst4im is also belied b t4e fact t4at t4e P!A$"A recommended a7ainst placin7 4im underpre5enti5e suspension.

(n t4e procedural point, respondent @alera states t4at 4e filed t4e petition for certiorari :it4 t4e+A :it4out a:aitin7 t4e resolution of 4is motion for reconsideration because, at t4e time,petitioner Special Prosecutor @illa"!7nacio still 4ad not resol5ed t4e same despite t4e lapse oft4e period pro5ided b t4e (mbudsmans rules of procedure.

!ssue

T4e basic issue for t4e +ourts resolution is :4et4er petitioner Special Prosecutor @illa"!7nacio4as t4e aut4orit to place respondent @alera under pre5enti5e suspension in connection :it4 t4e

administrati5e case ($"+"A";1";1D"J pendin7 before t4e (ffice of t4e (mbudsman.


7/14

T4e +ourts Rulin7

T4e +ourt 4olds t4at t4e Special Prosecutor 4as no suc4 aut4orit.

Preliminaril, it is noted t4at petitioner Special Prosecutor @illa"!7nacio anc4ors 4is aut4orit toconduct t4e administrati5e in5esti7ation in ($"+"A";1";1D"J on t4e emorandum dated)o5ember >, >;;1 issued b (mbudsman arcelo in4ibitin7 4imself t4erefrom and directin7petitioner Special Prosecutor @illa"!7nacio to act in 4is place and stead.

Si7nificantl, (mbudsman arcelo did not state in t4e said memorandum t4e reason for 4isin4ibition. (n t4is point, t4e rule on 5oluntar in4ibition of jud7es finds application to t4e(mbudsman in t4e performance of 4is functions particularl in administrati5e proceedin7s li=e($"+"A";1";1D"J. Li=e jud7es, t4e decision on :4et4er or not to in4ibit is admittedl left tot4e (mbudsmans sound discretion and conscience.>1K -o:e5er, a7ain similar to jud7es,(mbudsman arcelo 4as no unfettered discretion to in4ibit 4imself. T4e in4ibition must be for

just and 5alid causes.>CK )o suc4 cause :as proffered b (mbudsman arcelo for 4isin4ibition in ($"+"A";1";1D"J.

T4e +ourt s4all no: proceed to resol5e t4e basic issue of t4e case.

T4e (mbudsman, pursuant to 4is po:er ofsuper5ision and control o5er t4e SpecialProsecutor, ma aut4orize t4e latter toconduct administrati5e in5esti7ation

T4e (ffice of t4e (mbudsman is 5ested b t4e +onstitution :it4 t4e follo:in7 po:ers, functionsand dutiesB23 !n5esti7ate on its o:n, or on complaint b an person, an act or omission of an publicofficial, emploee, office or a7enc, :4en suc4 act or omission appears to be ille7al, unjust,improper, or inefficient*

2>3 irect, upon complaint or at its o:n instance, an public official or emploee of t4eGo5ernment, or an subdi5ision, a7enc or instrumentalit t4ereof, as :ell as of an7o5ernment"o:ned and controlled corporation :it4 ori7inal c4arter, to perform and e8pedite anact or dut re6uired b la:, or to stop, pre5ent and correct an abuse or impropriet in t4eperformance of duties*

213 irect t4e officer concerned to ta=e appropriate action a7ainst a public official or emploee atfault, and recommend 4is remo5al, suspension, demotion, fine, censure, or prosecution, andensure compliance t4ere:it4*

2C3 irect t4e officer concerned, in an appropriate case, and subject to suc4 limitations as mabe pro5ided b la: to furnis4 it :it4 copies of documents relatin7 to contracts or transactionsentered into b 4is office in5ol5in7 t4e disbursement or use of public funds or properties, andreport an irre7ularit to t4e +ommission on Audit for appropriate action*2HK and made t4e (ffice of t4e Special Prosecutor an or7anic componentof t4e (ffice of t4e (mbudsman.>K As suc4, R.A. )o. H; 5ests on t4e (ffice of t4e SpecialProsecutor, under t4e super5ision and control and upon t4e aut4orit of t4e (mbudsman, t4efollo:in7 po:ersB

2a3 To conduct preliminar in5esti7ation and prosecute criminal cases :it4in t4e jurisdiction oft4e Sandi7anbaan*

2b3 To enter into plea bar7ainin7 a7reement* and

2c3 To perform suc4 ot4er duties assi7ned to it b t4e (mbudsman.>0K

$ased on t4e pertinent pro5isions of t4e +onstitution and R.A. )o. H;, t4e po:ers of t4e(mbudsman 4a5e 7enerall been cate7orized into t4e follo:in7B in5esti7ator po:er*prosecutor po:er* public assistance functions* aut4orit to in6uire and obtain information* andfunction to adopt, institute and implement pre5enti5e measures.>DK T4e (mbudsmansin5esti7ator and prosecutor po:er 4as been c4aracterized as plenar and un6ualifiedBT4e po:er to in5esti7ate and to prosecute 7ranted b la: to t4e (mbudsman is plenar andun6ualified. !t pertains to an act or omission of an public officer or emploee :4en suc4 act oromission appears to be ille7al, unjust, improper or inefficient1;K

(n t4e ot4er 4and, t4e aut4orit of t4e (ffice of t4e Special Prosecutor 4as been c4aracterizedas limitedBoreo5er, t4e jurisdiction of t4e (ffice of t4e (mbudsman s4ould not be e6uated :it4 t4e limitedaut4orit of t4e Special Prosecutor under Section of R.A. H;. T4e (ffice of t4e SpecialProsecutor is merel a component of t4e (ffice of t4e (mbudsman and ma act onl under t4esuper5ision and control and upon t4e aut4orit of t4e (mbudsman. !ts po:er to conductpreliminar in5esti7ation and prosecute is limited to criminal cases :it4in t4e jurisdiction of t4eSandi7anbaan. +ertainl, t4e la:ma=ers did not intend to confine t4e in5esti7ator andprosecutor po:er of t4e (mbudsman to t4ese tpes of cases. T4e (mbudsman is mandatedb la: to act on all complaints a7ainst officers and emploees of t4e 7o5ernment and to enforcet4eir administrati5e, ci5il and criminal liabilit in e5er case :4ere t4e e5idence :arrants. Tocarr out t4is dut, t4e la: allo:s 4im to utilize t4e personnel in 4is office andOor desi7nate anfiscal, state prosecutor or la:er in t4e 7o5ernment ser5ice to act as special in5esti7ator orprosecutor to assist in t4e in5esti7ation and prosecution of certain cases. T4ose desi7nated ordeputized to assist 4im :or= under 4is super5ision and control. T4e la: li=e:ise allo:s 4im todirect t4e Special Prosecutor to prosecute cases outside t4e Sandi7anbaans jurisdiction inaccordance :it4 Section 2Cc3 of R.A. H;.1K


8/14

T4e +ourt 4as consistentl 4eld t4at t4e (ffice of t4e Special Prosecutor is merel a componentof t4e (ffice of t4e (mbudsman and ma onl act under t4e super5ision and control and uponaut4orit of t4e (mbudsman.1>K

Section 1023, +4apter , $oo= !@ of t4e Administrati5e +ode of D0 defines super5ision andcontrol t4usB23 Super5ision and +ontrol. Super5ision and control s4all include aut4orit to act directl:4ene5er a specific function is entrusted b la: or re7ulation to a subordinate* direct t4eperformance of dut* restrain t4e commission of acts* re5ie:, appro5e, re5erse or modif actsand decisions of subordinate officials or units* determine priorities in t4e e8ecution of plans and

pro7rams* and prescribe standards, 7uidelines, plans and pro7rams. %nless a different meanin7is e8plicitl pro5ided in t4e specific la: 7o5ernin7 t4e relations4ip of particular a7encies, t4e:ord control s4all encompass super5ision and control as defined in t4is para7rap4.

T4e po:er of super5ision and control 4as been li=e:ise e8plained as follo:sB!n administrati5e la:, super5ision means o5erseein7 or t4e po:er or aut4orit of an officer to seet4at subordinate officers perform t4eir duties. !f t4e latter fail or ne7lect to fulfill t4em, t4e formerma ta=e suc4 action or step as prescribed b la: to ma=e t4em perform suc4 duties. +ontrol,on t4e ot4er 4and, means t4e po:er of an officer to alter or modif or nullif or set aside :4at asubordinate officer 4ad done in t4e performance of 4is duties and to substitute t4e jud7ment oft4e former for t4at of t4e latter.11K

Pursuant to its po:er of super5ision and control, t4e (ffice of t4e (mbudsman is empo:ered

under Section C of R.A. )o H;, 4o:e5er, 7rantst4e po:er to pre5enti5el suspend onl to t4e

(mbudsman and t4e eput (mbudsmen

Section >C of R.A. )o. H; readsBSec. >C. Pre5enti5e Suspension. T4e (mbudsman and 4is eput ma pre5enti5el suspendan officer or emploee under 4is aut4orit pendin7 an in5esti7ation, if in 4is jud7ment t4ee5idence of 7uilt is stron7, and 2a3 t4e c4ar7e a7ainst suc4 officer or emploee in5ol5esdis4onest, oppression or 7ra5e misconduct or ne7lect in t4e performance of dut* 2b3 t4ec4ar7es :ould :arrant remo5al from t4e ser5ice* or 2c3 t4e respondents continued sta in officema prejudice t4e case filed a7ainst 4im.

T4e pre5enti5e suspension s4all continue until t4e case is terminated b t4e (ffice of t4e(mbudsman but not more t4an si8 mont4s, :it4out pa, e8cept :4en t4e dela in t4e dispositionof t4e case b t4e (ffice of t4e (mbudsman is due to t4e fault, ne7li7ence or petition of t4e

respondent, in :4ic4 case t4e period of suc4 dela s4all not be counted in computin7 t4e periodof suspension 4erein pro5ided.

!t is obser5ed t4at R.A. )o. H; 4as in5ariabl mentioned t4e Special Prosecutor alon7side t4e(mbudsman andOor t4e eput (mbudsmen :it4 respect to t4e manner of appointment,1CK6ualifications,1C of R.A. )o H; ma=es no mention of t4e Special Prosecutor. T4e ob5iousimport of t4is e8clusion is to :it44old from t4e Special Prosecutor t4e po:er to pre5enti5elsuspend. !t is a basic precept of statutor construction t4at t4e e8press mention of one person,

t4in7, act or conse6uence e8cludes all ot4ers as e8pressed in t4e familiar ma8im e8pressiounius est e8clusio alterius.C;K

T4e petitioners contention t4at since t4e Special Prosecutor is of t4e same ran= as t4at of aeput (mbudsman, t4en t4e former can ri74tfull perform all t4e functions of t4e latter,includin7 t4e po:er to pre5enti5el suspend, is not persuasi5e. %nder ci5il ser5ice la:s, ran=classification determines t4e salar and status of 7o5ernment officials and emploees.CK

Alt4ou74 t4ere is substantial e6ualit in t4e le5el of t4eir respecti5e functions, t4ose occupin7t4e same ran= do not necessaril 4a5e t4e same po:ers nor perform t4e same functions.

T4e (mbudsman and t4e eput (mbudsmen, as t4e are e8pressl named in Section >C ofR.A. )o. H;, 4a5e been 7ranted t4e po:er to pre5enti5el suspend as t4e same in4eres int4eir mandate under t4e +onstitutionB

Sec. >. T4e (mbudsman and 4is eputies, as protectors of t4e people, s4all act promptl oncomplaints filed in an form or manner a7ainst public officials or emploees of t4e Go5ernment,or an subdi5ision, a7enc, or instrumentalit t4ereof, includin7 7o5ernment"o:ned or controlledcorporations, and s4all, in appropriate cases, notif t4e complainants of t4e action ta=en and t4eresult t4ereof.C>K

?4ile R.A. )o. H; accords t4e Special Prosecutor t4e same ran= as t4at of t4e eput(mbudsmen, Section >C t4ereof e8pressl 7rants onl to t4e (mbudsman and t4e eput(mbudsmen t4e po:er to place under pre5enti5e suspension 7o5ernment officials andemploees under t4eir aut4orit pendin7 an administrati5e in5esti7ation.C1K

-o:e5er, if t4e (mbudsman dele7ates 4is aut4orit to conduct administrati5e in5esti7ation tot4e Special Prosecutor and t4e latter finds t4at t4e pre5enti5e suspension of t4e public official oremploee subject t4ereof is :arranted, t4e Special Prosecutor ma recommend to t4e(mbudsman to place t4e said public officer or emploee under pre5enti5e suspension.

Pertinentl, t4e in5esti7ation of ($"+"A";1";1D"J :as initiall conducted b t4e P!A$"A, apanel composed of t:o Special Prosecution (fficers !!!CCK and Graft !n5esti7ation andProsecution (fficers !!.CC, R.A. H;, are not stron7 enou74 to :arrant t4e imposition ofpre5enti5e suspension of respondent Att. Gil A. @alera. T4e e5idence on record fall s4ort of t4e6uantum of e5idence necessar to establis4 t4e necessar :ei74t to pre5enti5el suspend 4im.-o:e5er, t4e !n5esti7atin7 Panel finds enou74 basis to proceed :it4 t4e administrati5ein5esti7ation of t4is case.CHK

!t appears in t4e si7nator pa7e of t4e said memorandum t4at t4e findin7s and recommendationt4erein :ere re5ie:ed b t4e irectorCK of t4e P!A$"A. urt4er, t4e memorandum :as,li=e:ise, re5ie:ed b t4e Assistant (mbudsman,C0K Preliminar !n5esti7ation, Adjudication and


9/14

onitorin7 (ffice 2PA(3 :it4 t4e notation recommendin7 disappro5al. T4is demonstrates t4atin t4e conduct of administrati5e in5esti7ation, t4e P!A$"A e8ercises merel recommendatorpo:ers particularl :it4 respect to :4et4er to place t4e public official or emploee subjectt4ereof under pre5enti5e suspension.

(mbudsman arcelo desi7nated t4e Special Prosecutor to conduct t4e administrati5ein5esti7ation. !n t4e course t4ereof, petitioner Special Prosecutor @illa"!7nacio found t4at t4epre5enti5e suspension of respondent @alera :as :arranted under Section >C of R.A. )o. H;.-o:e5er, since under t4e said pro5ision onl t4e (mbudsman or 4is eput ma e8ercise t4epo:er of pre5enti5e suspension, petitioner Special Prosecutor @illa"

!7nacio could onl recommend to t4e (mbudsman or, in t4is case because of t4e lattersin4ibition, to t4e desi7nated eput (mbudsman to place respondent @alera under pre5enti5esuspension.

Stated differentl, :it4 respect to t4e conduct of administrati5e in5esti7ation, t4e SpecialProsecutors aut4orit, insofar as pre5enti5e suspension is concerned, is a=in to t4at of t4e P!A$"

A, i.e., recommendator in nature. !t bears stressin7 t4at t4e po:er to place a public officer oremploee under pre5enti5e suspension pendin7 an in5esti7ation is lod7ed onl :it4 t4e(mbudsman or t4e eput (mbudsmen.

+onse6uentl, petitioner Special Prosecutor @illa"!7nacio 4ad no aut4orit to issue t4e arc4 ,>;;C (rder placin7 respondent @alera under pre5enti5e suspension for si8 mont4s :it4out pain connection :it4 t4e administrati5e case ($"+"A";1";1D"J. T4e appellate court t4uscorrectl nullified and set aside t4e said assailed order.

+onsiderin7 t4e findin7 t4at petitioner Special Prosecutor @illa"!7nacio 4ad no aut4orit to issuet4e arc4 , >;;C pre5enti5e suspension order, t4e resolution of t4e issue of :4et4er or nott4e e5idence of respondent @aleras 7uilt is stron7 to :arrant 4is pre5enti5e suspension need notbe passed upon at t4is point. Anent respondent @aleras alle7ed non"compliance :it4 t4e rule onnon"forum s4oppin7 :4en 4e filed t4e petition for certiorari :it4 t4e appellate court, suffice it tostate t4at t4e appellate court correctl o5erloo=ed t4is procedural lapse. T4e merits ofrespondent @aleras case are special circumstances or compellin7 reasons :4ic4 justified t4eappellate courts rela8in7 t4e rule re6uirin7 certification on non"forum s4oppin7.CDK

!t is :ell to mention, at t4is point, t4at after t4e appellate court rendered its decision nullifin7 t4earc4 , >;;C (rder of petitioner Special Prosecutor @illa"!7nacio and directin7 4im to desistfrom ta=in7 an furt4er action in ($"+"A";1";1D"J, t4e said case :as ne8t assi7ned to t4e(ffice of t4e eput (mbudsman for t4e ilitar and (t4er La: Enforcement (ffices 2(LE(3,4eaded b r. (rlando +. +asimiro.;;C (rder issued bpetitioner Special Prosecutor @illa"!7nacio in ($"+"A";1";1D"J, is A!RE.

C$&te' v# P$&om$rFACTS(

!n t4e ear DH;, +alte8 P4ilippines concei5ed and laid t4e 7round :or= for apromotional sc4eme calculated to drum up patrona7e for its oil products. T4e contest :asentitled Q+alte8 -ooded Pump +ontest, :4ic4 calls for participants to estimate t4e actual

number of liters as 4ooded 7as pump at eac4 +alte8 station :ill dispense durin7 a specificperiod.

oreseein7 t4e e8tensi5e use of t4e mails not onl as amon7st t4e media for publicizin7t4e contest but also for t4e transmission of communications, representations :ere made b+alte8 :it4 t4e postal aut4orities for t4e contest to be cleared in ad5ance for mailin7. T4is :asformalized in a letter sent b +alte8 to t4e Post master General, dated (ctober 1, DH;, in:4ic4 +alte8, t4ru its counsel, enclosed a cop of t4e contest rules and endea5ored to justif itsposition t4at t4e contest does not 5iolate t4e QT4e Anti"Lotter Pro5isions of t4e Postal La:.

%nfortunatel, t4e Palomar, t4e actin7 Postmaster General denied +alte8Fs re6ueststatin7 t4at t4e contest sc4eme falls :it4in t4e pur5ie: of t4e Anti"lotter Pro5ision andultimatel, declined +late8Fs re6uest for clearance.

+alte8 sou74t reconsideration, stressin7 t4at t4ere bein7 no consideration in5ol5ed inpart of t4e contestant, t4e contest :as not commendable as a lotter. -o:e5er, t4e PostmasterGeneral maintained 4is 5ie: t4at t4e contest in5ol5es consideration, or e5en it does not in5ol5ean consideration it still falls as QGift Enterprise, :4ic4 :as e6uall banned b t4e Postal La:.

!SS%EB

?4et4er t4e petition states a sufficient cause of action for declarator relief?4et4er or not t4e sc4eme proposed b +alte8 t4e appellee is :it4in t4e co5era7e of t4epro4ibiti5e pro5isions of t4e Postal La:-ELB

!.

$ e8press mandate of Section of Rule HH of t4e old Rules of +ourt :4ic4 deals :it4 t4eapplicabilit to in5o=e declarator relief :4ic4 statesB Qeclarator relief is a5ailable to person:4ose ri74ts are affected b a statute, to determine an 6uestion of construction or 5aliditarisin7 under t4e statute and for a declaration of ri74ts t4ereunder.

!n amplification, conformabl establis4ed jurisprudence on t4e matter, laid do:n certainconditionsB

T4ere must be a justiciable contro5ers.T4e contro5ers must be bet:een persons :4ose interests are ad5erse.T4e part see=in7 declarator relief must 4a5e a le7al interest in t4e contro5ers.T4e issue in5ol5ed must be ripe for judicial determination.?it4 t4e appelleeFs bent to 4old t4e contest and t4e appellantFs t4reat to issue a fraud order ifcarried out, t4e contenders are confronted b an ominous s4ado: of imminent and ine5itableliti7ation unless t4eir differences are settled and stabilized b a declaration. And, contrar to t4e

insinuation of t4e appellant, t4e time is lon7 past :4en it can ri74tl be said t4at merel t4eappelleeFs Qdesires are t4:arted b its o:n doubts, or b t4e fears of ot4ers / :4ic4 admittedldoes not confer a cause of action. oubt, if an t4ere :as, 4as ripened into a justiciablecontro5ers :4en, as in t4e case at bar, it :as translated into a positi5e claim of ri74t :4ic4 isactuall contested.

+onstruction

!s t4e art or process of disco5erin7 and e8poundin7 t4e meanin7 and intention of t4eaut4ors of t4e la: :it4 respect to its application to a 7i5en case, :4ere t4at intention is rendereddoubtful, amon7st ot4ers, b reason of t4e fact t4at t4e 7i5en case is not e8plicitl pro5ided for int4e la:.

!t is not amiss to point out at t4is juncture t4at t4e conclusion :e 4a5e 4erein just reac4ed is not:it4out precedent. !n Libert +alendar +o. 5s. +o4en, D ).J., 1DD, A. >d., C0, :4ere a

corporation en7a7ed in promotional ad5ertisin7 :as ad5ised b t4e count prosecutor t4at itsproposed sales promotion p lan 4ad t4e c4aracteristics of a lotter, and t4at if suc4 sales


10/14

promotion :ere conducted, t4e corporation :ould be subject to criminal prosecution, it :as 4eldt4at t4e corporation :as entitled to maintain a declarator relief action a7ainst t4e countprosecutor to determine t4e le7alit of its sales promotion plan.

!!.

!s t4e +ontest Sc4eme a Lotter

Lotter

E8tends to all sc4emes for t4e distribution of prizes b c4ance

e.7. polic plain7, 7ift e84ibitions, prize concerts, raffles and fairs as :ell as 5arious forms of7amblin7.

T4ree Essential ElementsB

+onsiderationPrize1. +4ance )o, accordin7 to t4e Supreme +ourt, t4e contest sc4eme is not a lotter but it appears tobe more of a 7ratuitous distribution since no:4ere in t4e rules is an re6uirements t4at an feebe paid, an merc4andise be bou74t, an ser5ices be rendered, or an 5alue :4atsoe5er be7i5en for t4e pri5ile7e to participate. Since, a prospecti5e contestant 4as to do is 7o to a +alte8Station, re6uest for t4e entr form :4ic4 is a5ailable on demand and accomplis4 and submit t4esame for t4e dra:in7 of t4e :inner. $ecause of t4is, t4e contest fails to e84ibit an discernible

consideration :4ic4 :ould brand it as a lotter.

oreo5er, t4e la: does not condemn t4e 7ratuitous distribution of propert b c4ance, if noconsideration is deri5ed directl or indirectl from t4e part recei5in7 t4e c4ance, but it doescondemn as criminal sc4eme in :4ic4 a 5aluable consideration of some =ind is paid directl orindirectl for t4e c4ance to dra: a prize.

!s t4e sc4eme, as sales promotion :4ic4 :ould benefit t4e sponsor in t4e :a of increasedpatrona7e be considered as a consideration and t4us 5iolates t4e Postal La:

)o, t4e re6uired element of consideration does not consist of t4e benefit deri5ed b t4esponsors of t4e contest. T4e true test lies on :4et4er or not t4e participant pas a 5aluableconsideration for t4e c4ance of :innin7 and not :4et4er or not t4ose conductin7 t4e enterpriserecei5er somet4in7 of 5alue for t4e distribution of t4e prize.

!s t4e +ontest Sc4eme a Gift Enterprise

E5en if t4e term Gift Enterprise is not et defined e8plicitl, t4ere appears to be aconsensus amon7 le8ico7rap4ers and standard aut4orities t4at t4e term is common applied to asportin7 artifice of under :4ic4 7oods are sold for t4eir mar=et 5alue but b :a of inducementto purc4ase t4e product, t4e purc4aser is 7i5en a c4ance to :in a prize.

And t4us, t4e term of 7ift enterprise cannot be establis4ed in t4e case at bar since t4ereis not sale of ant4in7 to :4ic4 t4e c4ance offered is attac4ed as an inducement to t4epurc4aser. T4e contest is open to all 6ualified contestant irrespecti5e of :4et4er or not t4e but4e appelleeFs products.

T4e lesson t4at :e deri5e from t4is state of t4e pertinent jurisprudence is t4at e5er case mustbe resol5ed upon t4e particular p4raseolo7 of t4e applicable statutor pro5ision. !t is onllo7ical t4at t4e term under a construction s4ould be accorded no ot4er meanin7 t4an t4at :4ic4

is consistent :it4 t4e nature of t4e :ord associated t4ere:it4.

!n t4e end, t4e Supreme +ourt ruled out t4at under t4e pro4ibiti5e pro5ision of t4e Postal La:,7ift enterprise and similar sc4emes t4erein contemplated are condemnable onl if, li=e lotteries,t4e in5ol5e t4e element of consideration. indin7 non in t4e contest, it :as ruled out t4at t4eappellee ma not be denied t4e use of t4e mails for t4e purpose t4ereof.

McGEE v# REPU)LICAppellee +lde E. cGee, an American citizen is married to Leonardo S. +risostomo b :4om4e 4as one c4ild. T4e minors aria and Amada, bot4 surnamed a7pao are LeonardaUsc4ildren b 4er first 4usband Ernesto a7pao :4o :as =illed b t4e Japanese durin7 t4eoccupation. cGee filed a petition in t4e +ourt of irst !nstance of anila to adopt 4is t:o minorstep"c4ildren aria and Amada.

At t4e 4earin7, t4e Go5ernment filed its opposition to t4e petition on t4e 7round t4at petitioner4as a le7itimate c4ild and conse6uentl, is dis6ualified to adopt under article 11


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5ie:, article 110 ma not be re7arded as a surplusa7e. T4at ma 4a5e been t4e reason :4 int4e old +ode of +i5il Procedure, particularl its pro5isions re7ardin7 adoption, aut4orit to adopta step"c4ild b a step"fat4er :as pro5ided in section HH not:it4standin7 t4e 7eneralaut4orization in section H< e8tended to an in4abitant of t4e P4ilippines to adopt a minor c4ild.T4e same ar7ument of surplusa7e could plausibl 4a5e been ad5anced as re7ards section HH,t4at is to sa, section HH :as unnecessar and superfluous because :it4out it a step"fat4ercould adopt a minor step"c4ild an:a. -o:e5er, t4e insertion of section HH :as not entirel:it4out reason. T4e +ode of +i5il Procedure :as of common la: ori7in. !t seems to be anestablis4ed principle in American jurisprudence t4at a person ma not adopt 4is o:n relati5e, t4ereason bein7 t4at it is unnecessar to establis4 a relations4ip :4ere suc4 alread e8ists 2t4esame p4ilosop4 underlin7 our codal pro5isions on adoption3. So, some states 4a5e special

la:s aut4orizin7 t4e adoption of relati5es suc4 as a 7randfat4er adoptin7 a 7randc4ild and afat4er adoptin7 4is ille7itimate or natural c4ild.

Anot4er possible reason for t4e insertion of section HH in t4e +ode of +i5il Procedure andarticle 110, para7rap4 1, in t4e ne: +i5il +ode, aut4orizin7 t4e adoption of a step"c4ild b t4estep"fat4er or step"mot4er is t4at :it4out said e8press le7al sanction, t4ere mi74t be some doubtas to t4e propriet and ad5isabilit of said adoption due to t4e possibilit, if not probabilit, ofpressure brou74t to bear upon t4e adoptin7 step"fat4er or mot4er b t4e le7itimate and naturalparent.

(ne additional reason for 4oldin7 t4at article 110 of t4e ne: +i5il +ode s4ould be subordinatedand made subject to t4e pro5isions of article 11< so as to limit t4e permission to adopt 7ranted inarticle 110, to parents :4o 4a5e no c4ildren of t4eir o:n, is t4at t4e terms of article 11< arep4rased in a ne7ati5e manner / t4e follo:in7 cannot be adopted, :4ile t4e p4raseolo7 ofarticle 110 is onl affirmati5e / t4e follo:in7 ma be adopted. %nder t4e rule of statutor

construction, ne7ati5e :ords and p4rases are to be re7arded as mandator :4ile t4ose in t4eaffirmati5e are merel director.

. . . ne7ati5e 2pro4ibitor and e8clusi5e :ords or terms are indicati5e of t4e le7islati5e intent t4att4e statute is to be mandator, . . . 2+ra:ford, Statutor +onstruction, sec. >H1, p. 1.3

(rdinaril ... t4e :ord 9ma9 is d irector, . . . 2+ra:ford, op. cit., sec. >H>, p. H1, p. 1.3

T4e principal reason be4ind article 11


12/14

!n a complaint filed :it4 said court, plaintiff, a resident of Pampan7a, see=s to reco5er fromdefendant emetrio $. Encarnacion t4e a77re7ate sum of P;>< of t4e +ourt of irst !nstance of Vambales, entitled 9!nestate Estate of t4e eceased

A7ustin). edina,9 of a pleadin7 captioned 9anifestation and Refutation,9containin7statements :4ic4 are said to be libelous and dera7ator to di7nit, inte7rit,reputationand standin7 of t4e former, as :ell as irrele5ant to t4e issues in said specialproceedin7..c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

!n due course, t4e defendant mo5ed to dismiss t4e case upon t4e t4eor t4at, pursuant to Art.1H; of t4e re5ised Penal +ode, as ammended b Republic Act)o. >0D, plaintiffUs action s4ould

be instituted in t4e +ourt of irst !nstance of Vambales, in :4ic4 said 9anifestation andRefutation9, 4ad been filed. T4e motion :as 7ranted b t4e +ourt of irst !nstance ofPampan7a,:4ic4 accordin7l dismissed t4e present case, :it4out prejudice to its rene:alin t4e9proper court.9 A reconsideration of t4e order to t4is effect 4a5in7been denied, plaintiff 4asbrou74t t4e case to us b record on appeal..c4anrobles5irtuala:librarc4anrobles 5irtual la:librar

T4e appeal 4in7es on said pro5ision of t4e Re5ised Penal +ode, as ammended b Republic Act.)o. >0D, t4e pertinent part of :4ic4 readsB ... T4e criminal and ci5il action for dama7es in casesof :ritten defamation as pro5ided for in t4is c4apter, s4all be filed simultaneousl or separatel:it4 t4e court of irst instance of t4e pro5ince or cit :4ere an of t4e accused or an of t4eoffended parties resides at t4e time of t4e commission of t4e offenseB Pro5ided, 4o:e5er, T4at:4ere t4e libel is publis4ed, circulated, displaed, or e84ibited in a pro5ince or a cit:4ereinneit4er t4e offender or nor t4e offended t4e part resides t4e ci5il and criminal actions ma bebrou74t in t4e court of first !nstance t4ereofBPro5ided, furt4ermore, T4at t4e court :4ere t4e

criminal action or ci5il action for dama7es is first filed, s4all ac6uire jurisdiction to t4e e8clusionof ot4er courts* And pro5ided, finall, T4at t4is ammendments4all not appl to cases of :rittendefamations, t4e ci5il andOor criminalactions to 4a5e been filed in court at t4e time of t4eeffecti5it of 4isla:..c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

:4ic4, as contendent b t4e defendant, :as constuend b t4e lo:er court to meanB.c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

... t4at :4en an of t4e accused or an of t4e offended of t4e parties resides in a pro5ince or cit:4ere a :ritten defamation is publis4ed,circulated, displaed or e84ibited, t4e action, ci5il orcriminal, s4all be filed simultaneousl or separatel :it4 t4e court of first instance of saidpro5ince or but :4en t4e offender or an of t4e offenders or t4e offended part or an of t4eoffended parties does not reside in a pro5ince or cit, :4ere t4e publication, circulation, displaor e84ibition :ere made, suc4 action must be interposedt4erein..c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

?e find oursel5es unable to concur in t4is 5ie:. T4e lan7ua7e of t4e abo5e 6uoted pro5ision is,to our mind, plain and clear. !t establis4es a 7eneral rule and an e8ception t4ereto. +i5il actionsfor dama7es in cases of :ritten defamation 9s4all9 be filed :it4 t4e court of first instance of t4epro5ince or cit in :4ic4 9an of t4e accused or 9an of t4e offended paries resides.9!n ot4er:ords, t4e plaintiff is limited in 4is c4oice of 5enue to t4e court of first instance of 4is residenceor to t4at of an of t4e accused. Plaintiffma not file t4e action else:4ere, unless t4e libel ispublis4ed, circulated,displaed, or e84ibited in a pro5ince or cit :4erein neit4er t4e offendernort4e offended part resides, in :4ic4 case 9t4e ci5il criminal actions ma be brou74t in t4ecourt of first instance t4ereof.9 T4e 5erb 9ma9 is permissi5e.-ence, it does not necessaril impla complete abro7ation of t4e 7eneral rule laid do:n in t4e preceedin7 sentence, e8cept in sofaras it broadens t4et:o 2>3 alternati5es t4erein set fort4, b 7i5in7 t4e plaintiff a t4ird c4oiceof5enue. .c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

Alt4ou74 t4e term 9ma9 s4ould be ta=en as 9must9 or 9s4all9 :4en t4e intention of t4e la:

ma=er to 7i5e t4ereto a mandator or compolsar meanin7is patent or manifest, no suc4 intentappears insofar as t4e abo5e pro5isionis concerned. (n t4e contrar, t4e use of t4e :ord 9ma9

in t4e first, clearlsu77est t4at +on7ress meant t4e second sentence to be merel permissi5e,notmandator. !ndeed, :4en t4e libelous imputation 4as not been publis4ed or circulated in t4elocalit :4erein eit4er of t4e parties resides, t4e offendedpart ma not :is4 to initiate t4e actiont4erein, for t4e same :ould 4a5e t4e t4e effect of 7i5in7 t4e additional publicit to t4e dero7ator,and of increasin7 t4e 4arm alread caused to t4e complainant. As a conse6uence, 4e 9ma9prefer to file suit :4ere t4e libel 4ad actuall been publis4ed or circulated. -ence, t4e pro5isionof t4is effect 4as been establis4ed, in our opinion, for 4is benefit, :4ic4 4e ma:ai5e..c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

(t4er:ise, if t4e complainant :ere a resident of Jolo and t4e defendant,residin7 in +ebu, 4addefamed 4im in $atanes, it :ould be necessar to brin7t4e action in t4e latter pro5ince, t4ereb

imposin7 upon t4e a5era7e memberof t4e communit a serious 4indrance to t4e 5indication of4is most preciouspossession " 4is 7ood name and reputation. !n fact, if t4e t4eor ad5anced bt4e appellee :ere up4eld, t4e defendants could purposel c4oose to publis4 and circulate t4eirdefamator imputations in a place far a:a from :4ere t4e and t4e offended parties resides inorder to ma=e it con5enient, if not :ell"ni74 impossible for t4e letter to sue t4e former for redressof t4e :ron7committed t4em. )eit4er t4e lan7ua7e of t4e la: nor t4e adduced b 4ereinappellee :arrant t4e belief t4at +on7ress intended to create suc4 obstacles to t4e prosecutionof t4ose 7uilt of t4e crime of libel..c4anrobles5irtuala:librarc4anrobles 5irtual la: librar

?-ERE(RE, t4e order appealed from is set aside and t4e case 4ereb remanded to t4e lo:ercourt furt4er proceedin7s, :it4 t4e costs of t4is instance a7ainst t4e appellee. !t is so ordered..

2e Me#$ v# Menci$#actsB

(pponents for aoralt of untinlupa, Rizal in t4e DH1 elections :ere rancisco e esaand a8imino Ar7ana. T4e electorateFs c4oice, as tallied b t4e local board of +an5assers :asde esa. Elected 5ice maor :as Loresca. ean:4ile, Ar7ana protested t4e election of eesa. (n arc4 0, DHC, 4o:e5er, an assassinFs bullet felled e esa, and, fort4:it4 Loresca:as, b operation of la:, dul installed as 4is successor. !n t4e election case, t4e protestant

Ar7ana mo5ed for t4e constitution of committees on re5ision of ballots.

(n a H, DHC, t4e court a 6uo re6uired t4e protesteeFs :ido: and c4ildren to appear :it4in 1, DHC, :it4out notice of t4e protestee and O or 4is le7al representati5e, t4e trial court7ranted t4e motion aforesaid. T4e trial court adjud7ed t4e protestant Ar7ana as t4e dul electedaor of untinlupa, Rizal in t4e DH1 elections, and ta8ed t4e costs of e8penses of t4e protesta7ainst t4e estate of t4e deceased protestee e esa.

!ssueB ?4et4er or not t4e re6uirement for t4e procurement of a le7al representati5e of a

deceased liti7ant is couc4ed in t4e permissi5e term Qma instead of t4e mandator c4aracter ofstatutor pro5isions.


13/14

Rulin7sB

?4ere t4e statute pro5ides for t4e doin7 of some act :4ic4 is re6uired b justice or public dut,or :4ere it 5ests a publi c bod, municipalit, or public officer :it4 po:er and aut4orit to ta=esome actions :4ic4 concerns t4e public interests or ri74ts of indi5iduals, t4e permissi5elan7ua7e :ill be construed as mandator and t4e e8ecution of t4e po:er ma be insisted uponas dut.

A++(R!)GL#, t4e jud7ment under re5ie: is re5ersed and in lieu t4ereof, anot4er is rendered/

23 eclarin7 null and 5oid t4e jud7ment of t4e +ourt of irst !nstance of Rizal in electioncase D>C t4ereof, dated Au7ust ;, DHC, :4ic4 proclaimed t4e pro testant a8imino A. Ar7anat4e dul elected maor of untinlupa, Rizal in t4e DH1 elections, for 4a5in7 been rendered:it4out jurisdiction o5er t4e person of t4e le7al representati5e of t4e deceased protesteerancisco de esa and all ot4er proceedin7s ta=en b said court in said election casesubse6uent to t4e deat4 of t4e said protestee*

2>3 (rderin7 t4e protestant a8imino A. Ar7ana, :it4out dela, to 5acate t4e office of t4emaor of untinlupa, Rizal and to relin6uis4 t4e same in fa5or of emetrio R. Loresca* and

213 (rderin7 t4e +ourt of irst !nstance of Rizal to fort4:it4 appoint t4e petitioneremetrio R. Loresca as t4e le7al representati5e of t4e deceased protestee rancisco de esaand allo: 4is appearance as suc4 in substitution of t4e said deceased for purposes of saidelection case D>C of said court, to conduct a ne: trial in said election case, and t4ereafter to

render jud7ment t4erein as t4e e5idence ma :arrant.

Pere4 v# CA2Special Proceedin7s +ustodB A c4ild under se5en ears s4all not be separated from 4 ismot4er3

actsB Respondent fat4er, a doctor of medicine and petitioner mot4er, a re7istered nurse:or=in7 in t4e %S are married couples :4o are separated in fact :it4 onl one c4ild.

Petitioner filed a petition for 4abeas corpus as=in7 respondent to surrender t4e custod of t4eirson. T4e RT+ issued an (rder a:ardin7 custod of t4e one"ear old c4ild to 4is mot4er, citin7t4e second para7rap4 of Article >1 of t4e amil +ode.

%pon appeal b t4e fat4er, t4e +ourt of Appeals re5ersed t4e trial courtFs order and a:ardedcustod of t4e bo to 4im rulin7 t4at t4ere :ere enou74 reasons to den petitioner custod o5er

t4e c4ild e5en under se5en ears old. !t 4eld t4at 7rantin7 custod to t4e boFs fat4er :ould befor t4e c4ildFs best interest and :elfare.

Article >1, par >, pro5ides in case of separation of parents t4at no c4ild under ears of a7es4all be separated from t4e mot4er, unless t4e court finds compellin7 reasons to orderot4er:ise.

Rule DD, Section H of t4e Re5ised Rules of +ourt also states t4at Q)o c4ild under se5en ears ofa7e s4all be separated from t4e mot4er, unless t4e court finds t4ere are compellin7 reasonst4erefore.

!ssueB ?() custod of t4e c4ild is to be 7i5en to t4e fat4er.

-eldB )o. T4e pro5isions of t4e la: clearl mandate t4at a c4ild under se5en ears of a7e s4allnot be separated from 4is mot4er unless t4e court finds compellin7 reasons to order ot4er:ise.

T4e use of t4e :ord Qs4all in Article >1 of t4e amil +ode and Rule DD, Sec H of t4e Re5isedRules of +ourt connotes a mandator c4aracter.

+ouples :4o are separated in fact are co5ered :it4in t4e term separation.

T4e amil +ode in re5ertin7 to t4e pro5ision of t4e +i5il +ode t4at a c4ild belo: se5en earsold s4all not be separated from t4e mot4er 2Article 1H13, 4as e8pressl repealed t4e earlier

Article , par 1 of t4e +4ild and out4 ?elfare +ode :4ic4 reduced t4e c4ildFs a7e to < ears.

Rom!&o, et.$& v# H2MFactsB petitioner Romulo, abanta, $uena5entura, Saoc and e Los An7eles 24ereafterPET!T!()ER3, a la: firm, :as e8empted for t4e period Januar to 1 ecember DD did not amend nor repeal Section D ofP.. )o. but merel implement t4e la:. T4e respondent $oard :as merel e8ercisin7 itsrule"ma=in7 po:er under Section 1 of P.. )o. . !t 4ad t4e option to use Qand onl instead

of Qor in t4e rules on :ai5er in order to effecti5el implement t4e Pa7"!$!G und La:. $c4oosin7 Qand, t4e $oard 4as clarified t4e confusion brou74t about b t4e use of QandOor inSection D of P.. )o. , as amended.PET!T!()ER filed a petition for re5ie: before t4e +ourt of Appeals but :as dismissed.!ssueB ?4et4er or not t4e board of - e8ceeded its dele7ated po:er.-eldB #ES. T4e contro5ers lies in t4e le7al si7nification of t4e :ords QandOor.!t seems to us clear from t4e lan7ua7e of t4e enablin7 la: t4at Section D of P.. )o. intended t4at an emploer :it4 a pro5ident plan or an emploee 4ousin7 plan superior to t4at oft4e fund ma obtain e8emption from co5era7e. !f t4e la: 4ad intended t4at t4e emploee sicKs4ould 4a5e bot4 a superior pro5ident plan and a 4ousin7 plan in order to 6ualif for e8emption,it :ould 4a5e used t4e :ords Qand instead of QandOor.)otabl, para7rap4 2a3 of Section D re6uires for annual certification of :ai5er or suspension,t4at t4e features of t4e plan or plans are superior to t4e fund or continue to be so. T4e la:ob5iousl contemplates t4at t4e e8istence of eit4er plan is considered as sufficient basis for t4e7rant of an e8emption* needless to state, t4e concurrence of bot4 plans is more t4an sufficient.

To re6uire t4e e8istence of bot4 plans :ould radicall impose a more strin7ent condition for:ai5er :4ic4 :as not clearl en5isioned b t4e basic la:. $ remo5in7 t4e disjuncti5e :ord Qorin t4e implementin7 rules t4e respondent $oard 4as e8ceeded its aut4orit.!t is :it4out doubt t4at t4e - $oard 4as rule"ma=in7 po:er as pro5ided in Section and Section 1 0 of P.. )o. . -o:e5er, it is :ell"settled t4at rules andre7ulations, :4ic4 are t4e product of a dele7ated po:er to create ne: and additional le7alpro5isions t4at 4a5e t4e effect of la:, s4ould be :it4in t4e scope of t4e statutor aut4or it7ranted b t4e le7islature to t4e administrati5e a7enc. D !t is re6uired t4at t4e re7ulation be7ermane to t4e objects and purposes of t4e la:, and be not in contradiction to, but in conformit:it4, t4e standards prescribed b la:.

!n t4e present case, :4en t4e $oard of Trustees of t4e - re6uired in Section , Rule @!! oft4e DD< Amendments to t4e Rules and Re7ulations !mplementin7 R.A. )o. C> t4atemploers s4ould 4a5e bot4 pro5identOretirement and 4ousin7 benefits for all its emploees inorder to 6ualif for e8emption from t4e und, it effecti5el amended Section D of P.. )o. .

And :4en t4e $oard subse6uentl abolis4ed t4at e8emption t4rou74 t4e DDH Amendments, itrepealed Section D of P.. )o. . Suc4 amendment and subse6uent repeal of Section D


14/14

are bot4 in5alid, as t4e are not :it4in t4e dele7ated po:er of t4e $oard. T4e - cannot, int4e e8ercise of its rule"ma=in7 po:er, issue a re7ulation not consistent :it4 t4e la: it see=s toappl. !ndeed, administrati5e issuances must not o5erride, supplant or modif t4e la:, but mustremain consistent :it4 t4e la: t4e intend to carr out. (nl +on7ress can repeal or amend t4ela:.

)onnevie v# CAactsB

ecember H, DHHB Spouses Jose . Lozano and Josefa P. Lozano secured t4eir loan of P, DH0B -onesto $onne5ie paid a total of P0,DCC.>> to P$+a C, DH0B -onesto $onne5ie assi7ned all 4is ri74ts under t4e eed of Sale :it4 Assumptionof ort7a7e to 4is brot4er, inter5enor Raoul $onne5ieJune ;, DH0B P$+ applied for t4e foreclosure of t4e mort7a7e, and notice of sale :aspublis4edJanuar >H, DB -onesto $onne5ie filed in t4e +! of Rizal a7ainst P4ilippine $an= of+ommerce for t4e annulment of t4e eed of ort7a7e dated ecember H, DHH as :ell as t4ee8trajudicial foreclosure made on September C, DH0.

+!B ismissed t4e complaint :it4 costs a7ainst t4e $onne5ies+AB Affirmed!SS%EB ?O) t4e forclosure on t4e mort7a7e is 5alidl e8ecuted.-ELB #ES. +A affirmed

A contract of loan bein7 a consensual contract is perfected at t4e same time t4e contract ofmort7a7e :as e8ecuted. T4e promissor note e8ecuted on ecember >, DHH is onl ane5idence of indebtedness and does not indicate lac= of consideration of t4e mort7a7e at t4etime of its e8ecution.Respondent $an= 4ad e5er ri74t to rel on t4e certificate of title. !t :as not bound to 7o be4indt4e same to loo= for fla:s in t4e mort7a7orUs title, t4e doctrine of innocent purc4aser for 5aluebein7 applicable to an innocent mort7a7ee for 5alue.

T4ru certificate of sale in fa5or of appellee :as re7istered on September >, DH0 and t4e oneear redemption period e8pired on September 1, DHD. !t :as not until September >D, DHD t4at-onesto $onne5ie first :rote respondent and offered to redeem t4e propert.loan matured on ecember >H, DH so :4en respondent $an= applied for foreclosure, t4e loan:as alread si8 mont4s o5erdue. Pament of interest on Jul >, DH0 does not ma=e t4e earlieract of P$+ ine6uitous nor does it ipso facto result in t4e rene:al of t4e loan. !n order t4at arene:al of a loan ma be effected, not onl t4e pament of t4e accrued interest is necessar butalso t4e pament of interest for t4e proposed period of rene:al as :ell. $esides, :4et4er or nota loan ma be rene:ed does not solel depend on t4e debtor but more so on t4e discretion oft4e ban=.

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