[statcon] ch10 cases

7/24/2019 [Statcon] Ch10 Cases

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Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. 103982 December 11, 1992

ANTONIO A. MECANO, petitioner,vs.COMMISSION ON AUDIT, respondent.

CAMPOS, JR.,J.:

Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Coission on Audit !C"A, for brevity#ebodied in its $th %ndorseent, dated &anuary '(, '))*, denying his clai for reiburseent under +ection ()) of theRevised Adinistrative Code !RAC#, as aended, in the total aount of P-,/'.--.

Petitioner is a 0irector %% of the National Bureau of %nvestigation !NB%#. 1e 2as hospitali3ed for cholecystitis fro March *(,'))- to April $, '))-, on account of 2hich he incurred edical and hospitali3ation e4penses, the total aount of 2hich he isclaiing fro the C"A.

"n May '', '))-, in a eorandu to the NB% 0irector, Alfredo +. 5i !0irector 5i, for brevity#, he re6uestedreiburseent for his e4penses on the ground that he is entitled to the bene7ts under +ection ()) 1of the RAC, the pertinentprovisions of 2hich read8

+ec. ()).Allowances in case of injury, death, or sickness incurred in performance of duty. 9 :hen a personin the service of the national governent of a province, city, unicipality or unicipal district is so in;ured inthe perforance of duty as thereby to receive soe actual physical hurt or 2ound, the proper 1ead of0epartent ay direct that absence during any period of disability thereby occasioned shall be on full pay,though not ore than si4 onths, and in such case he ay in his discretion also authori3e the payent ofthe edical attendance, necessary transportation, subsistence and hospital fees of the in;ured person.Absence in the case conteplated shall be charged 7rst against vacation leave, if any there be.

444 444 444

%n case of sickness caused by or connected directly 2ith the perforance of soe act in the line of duty, the0epartent head ay in his discretion authori3e the payent of the necessary hospital fees.

0irector 5i then for2arded petitionerrecoending favorable actionthereof>. ?inding petitionerthe issuance of the Adinistrative Code didnot operate to repeal or abregate in its entirety the Revised Adinistrative Code, including the particular +ection ()) of thelatter>.

"n May '-, '))', 0irector 5i, under a th %ndorseent transitted ane2 Mecano


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Eventually, petitioner


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claied by petitioner has not been restated in the Adinistrative Code of ')$. 1o2ever, the C"A 2ould have s considerthat the fact that +ection ()) 2as not restated in the Adinistrative Code of ')$ eant that the sae section had beenrepealed. %t further aintained that to allo2 the particular provisions not restated in the ne2 Code to continue in force arguesagainst the Code itself. Dhe C"A anchored this arguent on the 2hereas clause of the ')$ Code, 2hich states8

:1EREA+, the eectiveness of the =overnent 2ill be enhanced by a ne2 Adinistrative Code 2hichincorporate in a unied documentthe a;or structural, functional and procedural principles and rules ofgovernance and

444 444 444

%t argues, in eect, that 2hat is conteplated is only one Code 9 the Adinistrative Code of ')$. Dhis contention isuntenable.

Dhe fact that a later enactent ay relate to the sae sub;ect atter as that of an earlier statute is not of itself suIcient tocause an iplied repeal of the prior act, since the ne2 statute ay erely be cuulative or a continuation of the oldone. 12:hat is necessary is a anifest indication of legislative purpose to repeal. 13

:e coe no2 to the second category of repeal 9 the enactent of a statute revising or codifying the forer la2s on the2hole sub;ect atter. Dhis is only possible if the revised statute or code 2as intended to cover the 2hole sub;ect to be acoplete and perfect syste in itself. %t is the rule that a subse6uent statute is deeed to repeal a prior la2 if the forerrevises the 2hole sub;ect atter of the forer statute. 14:hen both intent and scope clearly evidence the idea of a repeal,then all parts and provisions of the prior act that are oitted fro the revised act are deeed repealed. 1?urtherore,before there can be an iplied repeal under this category, it ust be the clear intent of the legislature that the later act bethe substitute to the prior act.1!

According to "pinion No. $/, +. '))' of the +ecretary of &ustice, 2hat appears clear is the intent to cover only those aspectsof governent that pertain to adinistration, organi3ation and procedure, understandably because of the any changes thattranspired in the governent structure since the enactent of the RAC decades of years ago. Dhe C"A challenges the 2eightthat this opinion carries in the deterination of this controversy inasuch as the body 2hich had been entrusted 2ith theipleentation of this particular provision has already rendered its decision. Dhe C"A relied on the rule in adinistrative la2enunciated in the case of Sison vs.Pangramuyen1"that in the absence of palpable error or grave abuse of discretion, theCourt 2ould be loathe to substitute its o2n ;udgent for that of the adinistrative agency entrusted 2ith the enforceentand ipleentation of the la2. Dhis 2ill not hold 2ater. Dhis principle is sub;ect to liitations. Adinistrative decisions aybe revie2ed by the courts upon a sho2ing that the decision is vitiated by fraud, iposition or istake. 18%t has been held that"pinions of the +ecretary and ndersecretary of &ustice are aterial in the construction of statutes in pari materia.19

5astly, it is a 2ell@settled rule of statutory construction that repeals of statutes by iplication are not favored.20

Dhepresuption is against inconsistency and repugnancy for the legislature is presued to kno2 the e4isting la2s on the sub;ectand not to have enacted inconsistent or conHicting statutes.21

Dhis Court, in a case, e4plains the principle in detail as follo2s8 >Repeals by iplication are not favored, and 2ill not be

decreed unless it is anifest that the legislature so intended. As la2s are presued to be passed 2ith deliberation 2ith fullkno2ledge of all e4isting ones on the sub;ect, it is but reasonable to conclude that in passing a statute it 2as not intended tointerfere 2ith or abrogate any forer la2 relating to soe atter, unless the repugnancy bet2een the t2o is not onlyirreconcilable, but also clear and convincing, and Ho2ing necessarily fro the language used, unless the later act fullyebraces the sub;ect atter of the earlier, or unless the reason for the earlier act is beyond peradventure rene2ed. 1ence,every eort ust be used to ake all acts stand and if, by any reasonable construction, they can be reconciled, the later act2ill not operate as a repeal of the earlier.22

Regarding respondent


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:1ERE?"RE, preises considered, the Court resolves to =RAND the petition respondent is hereby ordered to give due courseto petitioner


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Manila

EN BANC

G.R. No. #$2044 A%&%'( 2!, 1949

J. ANTONIO ARANETA,petitioner,vs.

RA)AE# DING#ASAN, J%*&e o+ )r'( I-'(-ce o+ M-/, -* JOSE P. ENGON, )'c/ o+ C( o+M-/,respondents.

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G.R. No. #$2"! A%&%'( 2!, 1949

J. ANTONIO ARANETA -* GREGORIO I##AMOR,petitioners,vs.EUGENIO ANGE#ES, )'c/ o+ C( o+ M-/,respondent.

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G.R. No. #$304 A%&%'( 2!, 1949

EU#OGIO RODRIGUE, Sr., or ' como Pre'*e-(e *e/ Pr(*o Nco-/'(,recurrente,vs.E# TESORERO DE )I#IPINAS,recurrido.

4@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@@4

G.R. No. #$30 A%&%'( 2!, 1949

#EON MA. GURRERO,petitioner,vs.T5E COMMISSIONER O) CUSTOMS -* T5E ADMINISTRATOR, SUGAR 6UOTA O))ICE, DEPARTMENT O)

COMMERCE AND INDUSTR7,respondents.

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G.R. No. #$30! A%&%'( 2!, 1949

ANTONIO ARREDO, - ' o- be/+ -* o- be/+ o+ // (:er' 'm/r/ '(%(e*, petitioner,vs.T5E COMMISSION ON E#ECTIONS, T5E AUDITOR GENERA# -* T5E INSU#AR TREASURER O) T5E

P5I#IPPINES,respondents.

L!"##Paredes, $ia% and Po&lador, 'esus () *arrera, +icente ilado, and Araneta and Araneta for petitioner)


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-.ce of the Solicitor (eneral /eli0 *autista Angelo, Assistant Solicitor (eneral Ruperto 1apunan, 'r), Solicitor 2artiniano P)

+ico and Assistant City /iscal 'ulio +illamor for respondents)

Claro 2) Recto and Padilla, Carlos and /ernando as amici curiae)

L!345

Araneta and Araneta and 'esus () *arrera for petitioners)

Assistant City /iscal Luis *) Reyes for respondent)Claro 2) Recto as amici curiae)

L6"4#

Claro 2) Recto, Ramon $iokno, 'ose -) +era, Alejo 2a&anag, 'ose *) Laurel, 'r) and Antonio *arredo for petitioner)-.ce of the Solicitor (eneral /eli0 *autista Angelo for respondent)+icente de +era, Chairman, Commission on 7lections)

Alfonso Ponce 7nrile, Alva ') ill and onorio Po&lador, 'r) and 7miliano R) 8avarro as amici curiae)

'esus () *arrera, 7nri9ue 2) /ernando, Ramon Sunico, and /rancisco A) Rodrigo also as amici curiae)

L6"44Claro 2) Recto and Leon 2a) (uerrero for petitioner)

-.ce of the Solicitor (eneral /eli0 *autista Angelo for respondents)

+) () *unuan, Administrator, Sugar :uota -.ce)

'esus () *arrera, /eli0&erto 2) Serrano, 7nri9ue; onorio Po&lador, 'r) and 7miliano R) 8avarro as amici curiae)

L6"45

Claro 2) Recto and Antonio *arredo for petitioner)

-.ce of the Solicitor (eneral /eli0 *autista Angelo for respondents)+icente de +era, Chairman, Commission on 7lections)

Alfonso Ponce 7nrile, Alva ') ill, 'esus () *arrera, 7nri9ue 2) /ernando, Ramon Sunico and /rancisco A) Rodrigo; onorio

Po&lador, 'r) and 7miliano R) 8avarro as amici curiae)

TUASON,J.;

Dhree of these cases 2ere consolidated for arguent and the other t2o 2ere argued separately on other dates. %nasuch asall of the present the sae fundaental 6uestion 2hich, in our vie2, is decisive, they 2ill be disposed of ;ointly. ?or thesae reason 2e 2ill pass up the ob;ection to the personality or suIciency of interest of the petitioners in case =. R. No. 5@/- and case =. R. No. 5@/-( and the 6uestion 2hether prohibition lies in cases Nos. 5@*- and 5@*$(. No practicalbene7t can be gained fro a discussion of the procedural atters since the decision in the cases 2herein the petitionersthe respondents fro disbursing,spending or other2ise disposing of that aount or any part of it.>

Not2ithstanding allegations in the petitions assailing the constitutionally of Act No. ($', the petitioners do not press the pointin their oral arguent and eorandu. Dhey rest their case chieHy on the proposition that the Eergency Po2ers Act!Coon2ealth Act No. ($'# has ceased to have any force and eect. Dhis is the basic 6uestion 2e have referred to, and it isto this 6uestion that 2e 2ill presently address ourselves and devote greater attention. ?or the purpose of this decision, only,the constitutionality of Act No. ($' 2ill be taken for granted, and any dictu or stateent herein 2hich ay appear contraryto that hypothesis should be understood as having been ade erely in furtherance of the ain thesis.

Act No. ($' in full is as follo2s8


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AN ACD 0EC5AR%N= A +DADE "? D"DA5 EMER=ENCK A+ A RE+5D "? :AR %NF"5F%N= D1E P1%5%PP%NE+ AN0AD1"R%L%N= D1E PRE+%0END D" PR"M5=ADE R5E+ AN0 RE=5AD%"N+ D" MEED +C1 EMER=ENCK.

Be it enacted by the National Assebly of the Philippines8

+ECD%"N '. Dhe e4istence of 2ar bet2een the nited +tates and other countries of Europe and Asia, 2hich involvesthe Philippines, akes it necessary to invest the President 2ith e4traordinary po2ers in order to eet the resultingeergency.

>+EC. *. Pursuant to the provisions of Article F%, section *(, of the Constitution, the President is hereby authori3ed,during the e4istence of the eergency, to proulgate such rules and regulations as he ay dee necessary to carryout the national policy declared in section ' hereof. Accordingly, he is, aong other things, epo2ered ! a# to transferthe seat of the =overnent or any of its subdivisions, branches, departents, oIces, agencies or instruentalities! to reorgani3e the =overnent of the Coon2ealth including the deterination of the order of precedence ofthe heads of the E4ecutive 0epartent !c# to create ne2 subdivisions, branches, departents, agencies orinstruentalities of governent and to abolish any of those already e4isting !d# to continue in force la2s andappropriations 2hich 2ould lapse or other2ise becoe inoperative, and to odify or suspend the operation orapplication of those of an adinistrative character !e# to ipose ne2 ta4es or to increase, reduce, suspend orabolish those in e4istence !f# to raise funds through the issuance of bonds or other2ise, and to authori3e thee4penditure of the proceeds thereof !g# to authori3e the national, provincial, city or unicipal governents to incurin overdrafts for purposes that he ay approve !h# to declare the suspension of the collection of credits or thepayent of debts and !i# to e4ercise such other po2ers as he ay dee to enable the =overnent to ful7ll itsresponsibities and to aintain and enforce the authority.

+EC. /. Dhe President of the Philippines shall as soon as practicable upon the convening of the Congress of thePhilippines report thereto all the rules and regulations proulgated by hi under the po2ers herein granted.

+EC. . Dhis Act shall take eect upon its approval and the rules and regulations proulgated hereunder shall be inforce and eect until the Congress of the Philippines shall other2ise provide.

+ection *( of Article F% of the Constitution provides8

%n tie of 2ar or other national eergency, the Congress ay by la2 authori3e the President, for a liited period andsub;ect to such restrictions as it ay prescribe, to proulgate rules and regulations to carry out a declared nationalpolicy.

Coon2ealth Act No. ($' does not in ter 74 the duration of its eectiveness. Dhe intention of the Act has to be sought for

in its nature, the ob;ect to be accoplish, the purpose to be subserved, and its relation to the Constitution. Dhe conse6uencesof the various constructions oered 2ill also be resorted to as additional aid to interpretation. :e test a rule by its results.

Article F% of the Constitution provides that any la2 passed by virtue thereof should be >for a liited period.> >5iited> hasbeen de7ned to ean >restricted bounded prescribed con7ned 2ithin positive bounds restrictive in duration, e4tent orscope.> !Encyclopedia 5a2 0ictionary, /rd ed., (() Blackliited period> as usedin the Constitution are beyond 6uestion intended to ean restrictive in duration. Eergency, in order to ;ustify the delegationof eergency po2ers, >ust be teporary or it can not be said to be an eergency.> !?irst Drust &oint +tock 5and Bank ofChicago vs)Adolph P. Arp, et al., '*- A. 5. R., )/$, )/.#.

%t is to be presued that Coon2ealth Act No. ($' 2as approved 2ith this liitation in vie2. Dhe opposite theory 2ouldake the la2 repugnant to the Constitution, and is contrary to the principle that the legislature is deeed to have fullkno2ledge of the constitutional scope of its po2ers. Dhe assertion that ne2 legislation is needed to repeal the act 2ould notbe in harony 2ith the Constitution either. %f a ne2 and dierent la2 2ere necessary to terinate the delegation, the period

for the delegation, it has been correctly pointed out, 2ould be unliited, inde7nite, negative and uncertain >that 2hich 2asintended to eet a teporary eergency ay becoe peranent la2,> !Peck vs)?ink, * ?ed. *d, )'*# for Congress ightnot enact the repeal, and even if it 2ould, the repeal ight not eet the approval of the President, and the Congress ightnot be able to override the veto. ?urtherore, this 2ould create the anoaly that, 2hile Congress ight delegate its po2ersby siple a;ority, it ight not be able to recall the e4cept by a t2o@third vote. %n other 2ords, it 2ould be easier forCongress to delegate its po2ers than to take the back. Dhis is not right and is not, and ought not to be, the la2. Cor2in,President8 "Ice and Po2ers, ') ed., p. '(-, says8

%t is generally agreed that the a4i that the legislature ay not delegate its po2ers signi7es at the very least thatthe legislature ay not abdicate its po2ers8 Ket ho2, in vie2 of the scope that legislative delegations take no2adays,is the line bet2een delegation and abdication to be aintainedG "nly, % urge, by rendering the delegated po2ersrecoverable 2ithout the consent of the delegate . . . .


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+ection goes far to settle the legislative intention of this phase of Act No. ($'. +ection stipulates that >the rules andregulations proulgated thereunder shall be in full force and eect until the Congress of the Philippines shall other2iseprovide.> Dhe silence of the la2 regarding the repeal of the authority itself, in the face of the e4press provision for the repealof the rules and regulations issued in pursuance of it, a clear anifestation of the belief held by the National Assebly thatthere 2as no necessity to provide for the forer. %t 2ould be strange if having no idea about the tie the Eergency Po2ersAct 2as to be eective the National Asseble failed to ake a provision for this terination in the sae 2ay that it did forthe terination of the eects and incidents of the delegation. Dhere 2ould be no point in repealing or annulling the rules andregulations proulgated under a la2 if the la2 itself 2as to reain in force, since, in that case, the President could not onlyake ne2 rules and regulations but he could restore the ones already annulled by the legislature.

More anoalous than the e4ercise of legislative function by the E4ecutive 2hen Congress is in the unobstructed e4ercise ofits authority is the fact that there 2ould be t2o legislative bodies operating over the sae 7eld, legislating concurrently andsiultaneously, utually nullifying each otherfor a certain period> and >2ould becoe invalid unless reenacted.> Dhese phrases connoteautoatical e4tinction of the la2 upon the conclusion of a certain period. Dogether they denote that a ne2 legislation 2asnecessary to keep alive !not to repeal# the la2 after the e4piration of that period. Dhey signify that the sae la2, not adierent one, had to be repassed if the grant should be prolonged.

:hat then 2as the conteplated periodG President Jue3on in the sae paragraph of his autobiography furnished part of theans2er. 1e said he issued the call for a special session of the National Assebly >2hen it becae evident that 2e 2erecopletely helpless against air attack, and that it 2as most unlikely the Philippine Legislature would hold its ne0t regularsession 2hich 2as to open on &anuary ', ')*.> !Ephasis ours.# %t can easily be discerned in this stateent that theconferring of enorous po2ers upon the President 2as decided upon 2ith speci7c vie2 to the inability of the NationalAssebly to eet. %ndeed no other factor than this inability could have otivated the delegation of po2ers so vast as toaount to an abdication by the National Assebly of its authority. Dhe enactent and continuation of a la2 so destructive ofthe foundations of deocratic institutions could not have been conceived under any circustance short of a coplete

disruption and dislocation of the noral processes of governent. Any2ay, if 2e are to uphold the constitutionality of the acton the basis of its duration, 2e ust start 2ith the preise that it 74ed a de7nite, liited period. As 2e have indicated, theperiod that best coports 2ith constitutional re6uireents and liitations, 2ith the general conte4t of the la2 and 2ith 2hat2e believe to be the ain if not the sole raison d


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1aving arrived at this conclusion, 2e are relieved of the necessity of deciding the 6uestion as to 2hich departent ofgovernent is authori3ed to in6uire 2hether the contingency on 2hich the la2 is predicated still e4ists. Dhe right of one oranother departent to declare the eergency terinated is not in issue. As a atter of fact, 2e have endeavored to 7nd the2ill of the National Assebly9call that 2ill, an e4ercise of the police po2er or the 2ar po2er 9 and, once ascertained, toapply it. "f course, the function of interpreting statutes in proper cases, as in this, 2ill not be denied the courts as theirconstitutional prerogative and duty. %n so far as it is insinuated that the Chief E4ecutive has the e4clusive authority to say that2ar not ended, and ay act on the strength of his opinion and 7ndings in contravention of the la2 as the courts haveconstrued it, no legal principle can be found to support the proposition. Dhere is no pretense that the President hasindependent or inherent po2er to issue such e4ecutive orders as those under revie2. 2e take it that the respondents, insustaining the validity of these e4ecutive orders rely on Act No. (--, Act No. (*-, or Act No. ($' of the forer Coon2ealthand on no other source. Do put it dierently, the Presidentunless sooner aended or repealed by the National Assebly.> Dhe logical deduction to be dra2n fro thisprovision is that in the ind of the la2akers the idea 2as 74ed that the Acts theselves 2ould lapse not latter than therules and regulations. Dhe design to provide for the autoatic repeal of those rules and regulations necessarily 2aspredicated on the consciousness of a prior or at best siultaneous repeal of their source. :ere not this the case, there 2ouldarise the curious spectacle, already painted, and easily foreseen, of the 5egislature aending or repealing rules andregulations of the President 2hile the latter 2as epo2ered to keep or return the into force and to issue ne2 onesindependently of the National Assebly. ?or the rest, the reasoning heretofore adduced against the asserted inde7nitecontinuance of the operation of Act No. ($' e6ually applies to Acts Nos. (-- and (*-.

Dhe other corollary of the opinion 2e have reached is that the 6uestion 2hether 2ar, in la2 or in fact, continues, is irrelevant.%f 2e 2ere to that actual hostilities bet2een the original belligerents are still raging, the elusion 2ould not be altered. Afterthe convening of Congress ne2 legislation had to be approved if the continuation of the eergency po2ers, or soe of the,2as desired. %n the light of the conditions surrounding the approval of the Eergency Po2er Act, 2e are of the opinion thatthe >state of total eergency as a result of 2ar> envisaged in the preable referred to the ipending invasion andoccupation of the Philippines by the eney and the conse6uent total disorgani3ation of the =overnent, principally theipossibility for the National Assebly to act. Dhe state of aairs 2as one 2hich called for iediate action and 2ith 2hichthe National Assebly 2ould 2ould not be able to cope. Dhe 2ar itself and its attendant chaos and calaities could not havenecessitated the delegation had the National Assebly been in a position to operate.

After all the criticis that have been ade against the eIciency of the syste of the separation of po2ers, the fact reainsthat the Constitution has set up this for of governent, 2ith all its defects and shortcoings, in preference to thecoingling of po2ers in one an or group of en. Dhe ?ilipino people by adopting parliaentary governent have givennotice that they share the faith of other deocracy@loving people in this syste, 2ith all its faults, as the ideal. Dhe point is,under this frae2ork of governent, legislation is preserved for Congress all the tie, not e4pecting periods of crisis noatter ho2 serious. Never in the history of the nited +tates, the basic features of 2hose Constitution have been copied inours, have the speci7c functions of the legislative branch of enacting la2s been surrendered to another departent 9 unless2e regard as legislating the carrying out of a legislative policy according to prescribed standards no, not even 2hen thatRepublic 2as 7ghting a total 2ar, or 2hen it 2as engaged in a life@and@death struggle to preserve the nion. Dhe truth is thatunder our concept of constitutional governent, in ties of e4tree perils ore than in noral circustances >the variousbranches, e4ecutive, legislative, and ;udicial,> given the ability to act, are called upon >to the duties and discharge theresponsibilities coitted to the respectively.>

Dhese observations, though beyond the issue as forulated in this decision, ay, 2e trust, also serve to ans2er theveheent plea that for the good of the Nation, the President should retain his e4traordinary po2ers as long asturoil andother ills directly or indirectly traceable to the late 2ar harass the Philippines.

pon the foregoing considerations, the petitions 2ill be granted. %n order to avoid any possible disruption and interruption inthe noral operation of the =overnent, 2e have deeed it best to depart in these cases fro the ordinary rule to theperiod for the eectivity of decisions, and to decree, as it is hereby decreed, that this decision take eect 7fteen days frothe date of the entry of 7nal ;udgent provided in section of Rule / of the Rules of Court in relation to section * of Rule /.No costs 2ill be charged.


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EN BANC

COA?, 5ON. GREGORIA S. ONG, DIRECTOR,COMMISSION ON AUDIT -* 5ON. SA#ACION DA#ISA7, PROINCIA# AUDITOR, respondents.

D E C I S I O N

CORONA,J.;

Before us is a petition for certiorariunder Rule ( in relation to +ection *, Rule ( of the Rules of Court, seeking toreverse and set aside the decision'dated +epteber ', '))) of the Coission on Audit !C"A#, aIring the resolution ofC"A Regional 0irector =regoria +. "ng dated March *), ')) 2hich in turn aIred the opinion dated "ctober '), '))/ ofthe Provincial Auditor of "riental Mindoro, +alvacion M. 0alisay. All three denied the grant of P',(-- onthly allo2ance topetitioner &udge Doas C. 5eynes by the Municipality of Nau;an, "riental Mindoro.

)ACTUA# ANTECEDENTS

Petitioner &udge Doas C. 5eynes 2ho, at present, is the presiding ;udge of the Regional Drial Court of Calapan City"riental Mindoro, Branch - 2as forerly assigned to the Municipality of Nau;an, "riental Mindoro as the sole presiding ;udgeof the Municipal Drial Court thereof. As such, his salary and representation and transportation allo2ance !RADA# 2ere dra2nfro the budget of the +upree Court. %n addition, petitioner received a onthly allo2ance of P) from the local funds*othe Municipality of Nau;an starting '))/

"n March ', '))/, the Sangguniang *ayan of Nau;an, through Resolution No. -$, sought the opinion of the ProvinciaAuditor and the Provincial Budget "Icer regarding any budgetary liitation on the grant of a onthly allo2ance by theunicipality to petitioner ;udge. "n May $, '))/, the Sangguniang *ayan unaniously approved Resolution No. '-'increasing petitioner ;udges onthly allo2ance fro P) to P',(-- !an increase of P((# starting May '))/. By virtue osaid resolution, the unicipal governent !the Municipal Mayor and the Sangguniang *ayan# approved a suppleentabudget 2hich 2as like2ise approved by the SangguniangPanlalawigan and the "Ice of Provincial Budget and Manageent of"riental Mindoro. %n ')), the Municipal =overnent of Nau;an again provided for petitioner ;udgesP',(-- onthly allo2ancein its annual budget 2hich 2as again approved by the Sangguniang Panlalawigan and the "Ice of Provincial Budget andManageent of "riental Mindoro.

"n ?ebruary '$, ')), Provincial Auditor +alvacion M. 0alisay sent a letter to the Municipal Mayor andthe Sangguniang *ayan of Nau;an directing the to stop the payent of the P',(-- onthly allo2ance or RADA to petitione;udge and to re6uire the iediate refund of the aounts previously paid to the latter. +he opined thattheMunicipality of Nau;an could not grant RADA to petitioner ;udge in addition to the RADA the latter 2as already receivingfro the +upree Court. 1er directive 2as based on the follo2ing8

+ection /(, RA No. $(, =eneral Appropriations Act of '))/

Representation and Dransportation Allo2ances. Dhe follo2ing oIcials and those of e6uivalent rank as ay be deterined bythe 0epartent of Budget and Manageent !0BM# 2hile in the actual perforance of their respective functions are here&ygranted monthly commuta&le representation and transportation allowances paya&le from the programmed appropriations

provided for their respective o.ces, not e0ceeding the rates indicated &elow ) . .

National Copensation Circular No. ($ dated &anuary ', '))*, of the 0epartent of Budget and Manageent

+ub;ect8 Representation and Dransportation Allo2ances of National =overnent "Icials and Eployees
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. ?unding +ource8 =n all cases, coutable and reibursable RADA shall be paid fro the aount appropriated for thepurpose and other personal services savings of the agency or pro;ect from where the o.cials and employees covered underthis Circular draw their salaries) 8o one shall &e allowed to collect RA>A from more than one source.(!ephasis supplied#

Petitioner ;udge appealed to C"A Regional 0irector =regoria +. "ng 2ho, ho2ever, upheld the opinion of ProvinciaAuditor 0alisay and 2ho added that Resolution No. '-', +eries of '))/ of the Sangguniang *ayan of Nau;an failed to coply2ith +ection / of 5ocal Budget Circular No. / dated +epteber ', '))/ outlining the conditions for the grant of allo2ances to;udges and other national oIcials or eployees by the local governent units !5=s#. +ection / of the said budget circularprovides that8

+ec. / Allo2ances. O 5=s ay grant allo2ancesadditional copensation to the national governent oIcialseployeesassigned to their locality at rates authori3ed by la2, rules and regulations and sub;ect to the follo2ing preconditions8

a. Dhat the annual incoe or 7nances of the unicipality, city or province as certi7ed by the Accountant concerned2ill allo2 the grant of the allo2ancesadditional copensation 2ithout e4ceeding the general liitations forpersonal services under +ection /* of RA $'(-

b. Dhat the budgetary re6uireents under +ection /* of RA $'(- including the full re6uireent of RA ($ havebeen satis7ed and provided fully in the budget as certi7ed by the Budget "Icer and C"A representative inthe 5= concerned

c. Dhat the 5= has fully ipleented the devolution of personnelfunctions in accordance 2ith the provisions of RA$'(-

d. Dhat the 5= has already created andatory positions prescribed in RA $'(- and

e. Dhat siilar allo2ancesadditional copensation are not granted by the national governent to theoIcialseployees assigned to the 5=.$

Petitioner ;udge appealed the unfavorable resolution of the Regional 0irector to the Coission on Audit. %n theeantie, a disallo2ance of the payent of theP',(-- onthly allo2ance to petitioner 2as issued. Dhus he receivedhis P',(-- onthly allo2ance fro the Municipality of Nau;an only for the period May '))/ to &anuary ')).

"n +epteber ', '))), the C"A issued its decision aIring the resolution of Regional 0irector =regoria +. "ng8

Dhe ain issue . . . is 2hether or not the Municipality of Nau;an, "riental Mindoro can validly provide RADA to its Municipal&udge, in addition to that provided by the +upree Court.

=enerally, the grant of !RADA# sic to 6uali7ed national governent oIcials and eployees pursuant to +ection /( of R.A.$( =eneral Appropriations Act of '))/ and NCC No. ($ dated -' &anuary '))* is sub;ect to the follo2ing conditions to 2it8

'. Payable fro the prograed appropriated aount and others fro personal services savings of the respectiveoIces 2here the oIcials or eployees dra2 their salaries

*. Not e4ceeding the rates prescribed by the Annual =eneral Appropriations Act

/. "Icials eployees on detail 2ith other oIces or assigned to serve other oIces or agencies shall be paid frotheir parent agencies

. No one shall be allo2ed to collect RADA fro ore than one source.

"n the other hand, the unicipal governent ay provide additional allo2ances and other bene7ts to ;udges and othernational governent oIcials or eployees assigned or stationed in the unicipality, provided, that the 7nances of theunicipality allo2 the grant thereof pursuant to +ection $, Par. ' !4i#, R.A. $'(-, and provided further, that siilarallo2anceadditional copensation are not granted by the national governent to the oIcialeployee assigned to the localgovernent unit as provided under +ection /!e# of 5ocal Budget Circular No. /, dated -' +epteber '))/.

>he con?icting provisions of Section ##3, Par) @B @0iB of the Local (overnment Code of and Section 65 of the (eneralAppropriations Act of 6 DRA 35#4E have &een harmoni%ed &y the Local *udget Circular 8o) 46 dated " Septem&er 6,issued &y the $epartment of *udget and 2anagement pursuant to its powers under Section !4 and Section 6!3 of the Local(overnment Code)Dhe said circular ust be adhered to by the local governent units particularly +ection / thereof 2hichprovides the ipleenting guidelines of +ection $, Par. !'# !4i# of the 5ocal =overnent Code of '))' in the grant ofallo2ances to national governent oIcialseployees assigned or stationed in their respective local governent units.

Conse6uently, the sub;ect +B Resolution No. '-' dated '' May '))/ of the +angguniang Bayan of Nau;an, "riental Mindoro,having failed to coply 2ith the inherent precondition as de7ned in +ection / !e#. . . is null and void. ?urtherore, the1onorable &udge Doas C. 5eynes, being a national governent oIcial is prohibited to receive additional RADA fro the localgovernent fund pursuant to +ection /( of the =eneral Appropriations Act !R.A. $( for '))/# and National CopensationCircular No. ($ dated ' &anuary '))*.!ephasis ours#

ASSIGNMENTS O) ERROR

Petitioner ;udge 7led a otion for reconsideration of the above decision but it 2as denied by the Coission in aresolution dated May /-, *---. Aggrieved, petitioner 7led the instant petition, raising the follo2ing assignents of error forour consideration8

I
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:1ED1ER "R N"D RE+"5D%"N N". '"', +ER%E+ "? '))/ "? NA&AN, "R%ENDA5 M%N0"R", :1%C1 =RANDE0 A00%D%"NA5A55":ANCE D" D1E MN%C%PA5 DR%A5 &0=E "? NA&AN, "R%ENDA5 M%N0"R" AN0 %NCREA+%N= 1%+ CRRENDREPRE+ENDAD%"N AN0 DRAFE55%N= A55":ANCE !RADA# D" AN AM"ND EJ%FA5END D" D1AD RECE%FE0 M"ND15K BK+AN==N%AN= MEMBER+ %N PE+"+8 "NE D1"+AN0 +%Q 1N0RE0 !P',(--.--# E??ECD%FE '))/, %+ FA5%0.

II

:1ED1ER "R N"D D1E P":ER "? MN%C%PA5 ="FERNMEND+ D" =RAND A00%D%"NA5 A55":ANCE+ AN0 "D1ER BENE?%D+D" NAD%"NA5 ="FERNMEND EMP5"KEE+ +DAD%"NE0 %N D1E%R MN%C%PA5%DK %+ FERK EQP5%C%D AN0 NEJ%F"CA5 N0ER D1E5"CA5 ="FERNMEND C"0E "? '))' PARD%C5AR5K +ECD%"N $ %N RE5AD%"N D" +ECD%"N+ '$ AN0 ** D1ERE"?.

III

:1ED1ER "R N"D D1E 0EPARDMEND "? B0=ED AN0 MANA=EMEND !0BM# CAN, BK D1E %++ANCE "? B0=ED C%RC5AR+,RE+DR%CD A MN%C%PA5 ="FERNMEND ?R"M EQERC%+%N= %D+ =%FEN 5E=%+5AD%FE P":ER+ "? PR"F%0%N= A00%D%"NA5A55":ANCE+ AN0 "D1ER BENE?%D+ D" NAD%"NA5 EMP5"KEE+ +DAD%"NE0 "R A++%=NE0 D" D1E%R MN%C%PA5%DK ?"R A+5"N= A+ D1E%R ?%NANCE+ +" A55":.

I

:1ED1ER "R N"D D1E 5"CA5 ="FERNMEND C"0E "? '))' PARD%C5AR5K +ECD%"N $ !a# !'# !4i# :A+ EQPRE++5K "R%MP5%E05K REPEA5E0 "R M"0%?%E0 BK REPB5%C ACD $( AN0 D1E =ENERA5 APPR"PR%AD%"N+ ACD "? '))/.

:1ED1ER "R N"D PED%D%"NER :A+ END%D5E0 D" RECE%FE D1E A00%D%"NA5 A55":ANCE+ =RANDE0 D" 1%M BK D1EMN%C%PA5%DK "? NA&AN, "R%ENDA5 M%N0"R" BK F%RDE "? %D+ RE+"5D%"N N". '-', +ER%E+ "? '))/.

POSITION O) COA

Respondent Coission on Audit opposes the grant by the Municipality of Nau;an of the P',(-- onthly allo2ance topetitioner &udge 5eynes for the reason that the unicipality could not grant RADA to ;udges in additionto the RADA alreadyreceived fro the +upree Court.)Respondent bases its contention on the follo2ing8

'. National Copensation Circular No. ($ !hereafter NCC No. ($# dated &anuary ', '))* of the 0epartent of Budget andManageent !0BM# 2hich provides that !a# the RADA of national oIcials and eployees shall be payable fro theprograed appropriations or personal services savings of the agency 2here such oIcials or eployees dra2their salary and !b# no one shall be allo2ed to collect RADA fro ore than one source

*. the =eneral Appropriations Act of '))/ !RA $(# 2hich provided that the RADA of national oIcials shall be payablefro the prograed appropriations of their respective oIces and

/. 5ocal Budget Circular No. / !hereafter 5BC No. /# dated +epteber ', '))/ of the 0BM 2hich prohibits localgovernent units fro granting allo2ances to national governent oIcials or eployees stationed in theirlocalities 2hen such allo2ances are also granted by the national governent or are similar to the allo2ancesgranted by the national governent to such oIcials or eployees. '-

POSITION O) PETITIONER

Petitioner ;udge, on the other hand, asserts that the unicipality is e4pressly and une6uivocally epo2ered by RA $'(-!the 5ocal =overnent Code of '))'# to enact appropriation ordinances granting allo2ances and other bene7ts to ;udgesstationed in its territory. +ection $!a#!'#!4i# of the 5ocal =overnent Code of '))' iposes only one condition, that is,2hen the 7nances of the unicipal governent allo2. Dhe Code does not ipose any other restrictions in the e4ercise of suchpo2er by the unicipality. Petitioner also asserts that the 0BM cannot aend or odify a substantive la2 like the 5oca=overnent Code of '))' through ere budget circulars. Petitioner ephasi3es that budget circulars ust confor to, notodify or aend, the provisions of the la2 it seeks to ipleent. ''

5ISTOR7 O) GRANT O)

A##O@ANCES TO JUDGES

Dhe po2er of local governent units !5=s# to grant allo2ances to ;udges stationed in their respective territories 2asoriginally provided by 5etter of %nstruction No. '' dated &uly ', ') !hereafter 5"% No. ''#8

:1EREA+, the +tate is cogni3ant of the need to aintain the independence of the &udiciary

:1EREA+, the budgetary allotent of the &udiciary constitutes only a sall percentage of the national budget

:1EREA+, present econoic conditions adversely aected the livelihood of the ebers of the &udiciary

:1EREA+, soe local governent units are ready, 2illing and able to pay additional allowances to 'udges of variouscourts 2ithin their respective territorial ;urisdiction

N":, D1ERE?"RE, %, ?ER0%NAN0 E. MARC"+, President of the Republic of the Philippines, do hereby direct8

'. +ection / of 5etter of %pleentation No. )( is hereby aended to read as follo2s8

/. Dhe allo2ances provided in this letter shall be borne e4clusively by the National =overnent. owever,provincial, city and municipal governments may pay additional allowances to the mem&ers andpersonnel of the 'udiciary assigned in their respective areas out of availa&le local funds but not toe4ceed P',--.-- Provided, that in Metropolitan Manila, the city and unicipal governentstherein ay pay additional allo2ances not e4ceeding P/,---.--. !ephasis ours#'*
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"n &une *, '))', the 0BM issued Circular No. )'@$ outlining the guidelines for the continued receipt of allo2ances by;udges fro 5=s8

Consistent 2ith the constitutional provision on the 7scal autonoy of the ;udiciary and the policy of the National =overnentof allo2ing greater autonoy to local governent units,judges of the 'udiciary are here&y allowed to continue to receiveallowances at the same rates which they have &een receiving from the Local (overnment Fnits as of 'une 6", G, sub;ectto the follo2ing guidelines8

'. Dhat the continuance of payent of sub;ect allo2ance to the recipient ;udge shall be entirely voluntary and non@copulsory on the part of the 5ocal =overnent nits

*. Dhat payent of the above shall al2ays be sub;ect to the availability of local funds

/. Dhat it shall be ade only in copliance 2ith the policy of non@diinution of copensation received by therecipient ;udge before the ipleentation of the salary standardi3ation

. Dhat the sub;ect allo2ance shall be given only to ;udges 2ho 2ere receiving the sae as of &une /-, ')) andshall be co@terinous 2ith the incubent ;udges and

. Dhat the sub;ect allo2ance shall autoatically terinate upon transfer of a ;udge fro one local governent unitto another local governent unit. !ephasis ours#

"n "ctober '-, '))', Congress enacted RA $'(-, other2ise kno2n as the 5ocal =overnent Code of '))'. '/Dhe po2eof the 5=s to grant allo2ances and other bene7ts to ;udges and other national oIcials stationed in their respectiveterritories 2as e4pressly provided in +ections $!a#!'#!4i#, !a#!'#!4i# and (!a#!'#!4i# of the Code.

"n March ', ')), the 0BM issued 5ocal Budget Circular No. !hereafter 5BC No. # setting out the a4iuaount of allo2ances that 5=s ay grant to ;udges. ?or provinces and cities, the aount should not e4ceed P',--- and forunicipalities, P$--.

"n 0eceber /, *--*, 2e struck do2n the above circular in $adole, et al) vs) C-A)'

:e ruled there that the 5oca=overnent Code of '))' clearly provided that5=s could grant allo2ances to ;udges, sub;ect only to the condition that the7nances of the 5=s allo2ed it) :e held that setting a unifor aount for the grant of allo2ances !2as# an inappropriate 2ayof enforcing said criterion. Accordingly, 2e declared that the 0BM e4ceeded its po2er of supervision over 5=s by iposing aprohibition that did not ;ibe 2ith the 5ocal =overnent Code of '))'.'

ESTA#IS5ED PRINCIP#ES INO#ED

?ro the foregoing history of the po2er of 5=s to grant allo2ances to ;udges, the follo2ing principles should be noted8

'. the po2er of 5=s to grant allo2ances to ;udges has long been recogni3ed !since ') by virtue of 5"% No. ''# andat present, it is e4pressly and une6uivocally provided in +ections $, and ( of the 5ocal =overnent Codeof '))'

*. the issuance of 0BM Circular No. )'@$ dated &une *, '))' and 5BC No. dated March ', ')) indicates that thenational governent recogni3es the po2er of5=s to grant such allo2ances to ;udges

/. in Circular No. )'@$, the national governent erely provides the guidelines for the continued receipt of allo2ancesby ;udges fro 5=s 2hile in 5BC No. , the national governent erely tries to liit the aount oallo2ances 5=s ay grant to ;udges and

. in the recent case of $adole, et al) vs) C-A, the Court upheld the constitutionally enshrined autonoy of 5=s togrant allo2ances to ;udges in any amount deeed appropriate, depending on availability of funds, in accordance2ith the 5ocal =overnent Code of '))'.

OUR RU#ING

:e rule in favor of petitioner ;udge. Respondent C"A erred in opposing the grant of the P',(-- onthly allo2ance bythe Municipality of Nau;an to petitioner &udge5eynes.

DISCUSSION O) OUR RU#ING

+ection $!a#!'#!4i# of RA $'(-, the 5ocal =overnent Code of '))', provides8

!a# Dhe sangguniang bayan, as the legislative body of the unicipality, shall enact ordinances, approve resolutions andappropriate funds for the general 2elfare of the unicipality and its inhabitants . . ., and shall8

!'# Approve ordinances and pass resolutions necessary for an eIcient and eective unicipal governent, and in thisconnection shall8

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!4i# Hhen the nances of the municipal government allow, provide for additional allo2ances and other bene7ts to ;udges,prosecutors, public eleentary and high school teachers, and other national governent oIcials stationed in or assigned tothe unicipality !ephasis ours#

Respondent C"A, ho2ever, contends that the above section has been repealed, odi7ed or aended by NCC No. ($dated &anuary ', '))*, RA $( !the =eneral Appropriations Act of '))/# and 5BC No. / dated +epteber ', '))/.'(

%t is eleentary in statutory construction that an adinistrative circular cannot supersede, abrogate, odify or nullify astatute. A statute is superior to an adinistrative circular, thus the latter cannot repeal or aend it. '$%n the present caseNCC No. ($, being a ere adinistrative circular, cannot repeal a substantive la2 like RA $'(-.
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%t is also an eleentary principle in statutory construction that repeal of statutes by iplication is not favored, unless itis anifest that the legislature so intended. Dhe legislature is assued to kno2 the e4isting la2s on the sub;ect and cannotbe presued to have enacted inconsistent or conHicting statutes.'Respondent C"A alleges that +ection /( of RA $( !the=AA of '))/# repealed +ection $!a#!l#!4i# of RA $'(- !the 5=C of '))'#. A revie2 of the t2o la2s, ho2ever, sho2s that this2as not so.+ection /( of RA $( erely provided for the dierent rates of RADA payable to national governent oIcials oreployees, depending on their position, and stated that these aounts 2ere payable fro the prograed appropriations ofthe parent agencies to 2hich the concerned national oIcials or eployees belonged. ?urtherore, there 2as no otherprovision in RA $( fro 2hich a repeal of +ection $!a# !l#!4i# of RA $'(- could be iplied. %n the absence, therefore, ofany clear repeal of +ection $!a#!l#!4i# of RA $'(-, 2e cannot presue such intention on the part of the legislature.

Moreover, the presuption against iplied repeal becoes stronger 2hen, as in this case, one la2 is special and theother is general.')Dhe principle is e4pressed in the a4i generalia speciali&us non derogant, a general la2 does not nullifya speci7c or special la2. Dhe reason for this is that the legislature, in passing a la2 of special character, considers and akesspecial provisions for the particular circustances dealt 2ith by the special la2. Dhis being so, the legislature, by adopting ageneral la2 containing provisions repugnant to those of the special la2 and 2ithout aking any ention of its intention toaend or odify such special la2, cannot be deeed to have intended an aendent, repeal or odi7cation of the latter. *-

%n this case, RA $'(- !the 5=C of '))'# is a special la2*'2hich e4clusively deals 2ith local governent units !5=s#,outlining their po2ers and functions in consonance 2ith the constitutionally andated policy of local autonoy. RA $( !the=AA of '))/#, on the other hand, 2as a general la2 **2hich outlined the share in the national fund of all branches of thenational governent. RA $( therefore, being a general la2, could not have, by ere iplication, repealed RA $'(-. Rather,RA $'(- should be taken as the e4ception to RA $( in the absence of circustances 2arranting a contrary conclusion. */

Dhe controversy actually centers on the seeingly s2eeping provision in NCC No. ($ 2hich states that no one shall beallo2ed to collect RADA fro ore than one source. 0oes this ean that ;udges cannot receive allo2ances fro 5=s inaddition to the RADA fro the +upree CourtG ?or reasons that 2ill hereinafter be discussed, 2e ans2er in the negative.

Dhe pertinent provisions of NCC No. ($ read8

/. Rules and Regulations8

/.'.' Payent of RADA, 2hether coutable or reibursable, shall be in accordance 2ith the rates prescribedfor each of the follo2ing oIcials and eployees and those of e6uivalent ranks, and the conditionsenuerated under the pertinent sections of the =eneral Provisions of the annual =eneralAppropriations Act !=AA#8

4 4 4 4 4 4 4 4 4

. ?unding +ource8

=n all cases, commuta&le and reim&ursa&le RA>A shall &e paid from the amount appropriated for the purpose and otherpersonal services savings of the agency or project from where the o.cials and employees covered under this Circular drawtheir salaries) 8o one shall &e allowed to collect RA>A from more than one source) !ephasis ours#

%n construing NCC No. ($, 2e apply the principle in statutory construction that force and eect should not be narro2lygiven to isolated and dis;oined clauses of the la2 but to its spirit, broadly taking all its provisions together in one rational vie2.*

Because a statute is enacted as a 2hole and not in parts or sections, that is, one part is as iportant as the others, thestatute should be construed and given eect as a 2hole. A provision or section 2hich is unclear by itself ay be clari7ed byreading and construing it in relation to the 2hole statute. *

Daking NCC No. ($ as a 2hole then, 2hat it seeks to prevent is the dual collection of RADA by a national oIcial fro thebudgets of ore than one national agency. :e ephasi3e that the other sourcereferred to in the prohibition is anothernational agency. Dhis can be gleaned fro the fact that the sentence no one shall be allo2ed to collect RADA fro ore thanone source !the controversial prohibition# iediately follo2s the sentence that RADA shall be paid fro the budget of thenational agency 2here the concerned national oIcials and eployees dra2 their salaries. Dhe fact that the other source isanother national agency is supported by RA $( !the =AA of '))/# invoked by respondent C"A itself and, in fact, by allsubse6uent =AAs for that atter, because the =AAs all essentially provide that !'# the RADA of national oIcials shall bepayable fro the budgets of their respective national agencies and !*# those oIcials on detail 2ith other national agenciesshall be paid their RADA only fro the budget of their parent national agency8

+ection /(, RA $(, =eneral Appropriations Act of '))/8

Representation and >ransportation Allowances) >he following o.cials and those of e9uivalent rank as may &e determined &y

the $epartment of *udget and 2anagement @$*2B while in the actual performance of their respective functions are here&ygranted monthly commuta&le representation and transportation allowances paya&le from the programmed appropriations

provided for their respective o.ces, not e0ceeding the rates indicated &elow, which shall apply to each type of allowanceI

4 4 4 4 4 4 4 4 4

-.cials on detail with other o.ces, including o.cials of the Commission of Audit assigned to serve other o.ces or agencies,shall &e paid the allowance herein authori%ed from the appropriations of their parent agencies. !ephasis ours#

Clearly therefore, the prohi&ition in 8CC 8o) 53 is only against the dual or multiple collection of RA>A &y a nationalo.cial from the &udgets of two or more national agencies) Stated otherwise, when a national o.cial is on detail with anothernational agency, he should get his RA>A only from his parent national agency and not from the other national agency he isdetailed to)

+ince the other sourcereferred in the controversial prohibition is another national agency, said prohibition clearly doesnot apply to 5=s like the Municipality ofNau;an. National agency of course refers to the dierent oIces, bureaus and
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15/87

departents coprising the national governent. Dhe budgets of these departents or oIces are 74ed annually byCongress in the =eneral Appropriations Act.*(An 5= is obviously not a national agency. %ts annual budget is 74ed by its o2nlegislative council !Sangguniang *ayan, Panlungsod or Panlalawigan#, not by Congress. :ithout doubt, NCC No. ($ does notapply to 5=s.

Dhe prohibition in NCC No. ($ is in fact an adinistrative tool of the 0BM to prevent the uch@abused practice ofultiple allo2ances, thus standardi3ing the grant of RADA by national agencies. Dhus, the purpose clause of NCC No. ($ reads8

Dhis Circular is being issued to ensure unifority and consistency of actions on clais for representation and transportationallo2ance !RADA# 2hich is priarily granted by la2 to national governent oIcials and eployees to cover e4pensesincurred in the discharge or perforance of their duties and responsibilities.

By no stretch of the iagination can NCC No. ($ be construed as nullifying the po2er of 5=s to grant allo2ances to;udges under the 5ocal =overnent Code of '))'. %t 2as issued priarily to ake the grant of RADA to national oIcials undethe national budget unifor. %n other 2ords, it applies only to the national funds adinistered by the 0BM, not the local fundsof 5=s.

Do rule against the po2er of 5=s to grant allo2ances to ;udges as 2hat respondent C"A 2ould like us to do 2ill subvertthe principle of local autonoy 3ealously guaranteed by the Constitution. *$Dhe 5ocal =overnent Code of '))' 2asspecially proulgated by Congress to ensure the autonoy of local governents as andated by the Constitution. Byupholding, in the present case, the po2er of 5=s to grant allo2ances to ;udges and leaving to their discretion the aount ofallo2ances they ay 2ant to grant, depending on the availability of local funds, 2e ensure the genuine and eaningful locaautonoy of 5=s.

:e no2 discuss the ne4t contention of respondent C"A8 that the resolution of the Sangguniang *ayan of Nau;an grantingthe P',(-- onthly allo2ance to petitioner ;udge 2as null and void because it failed to coply 2ith 5BC No. /dated +epteber ', '))/8

+ec. / Allo2ances. O 5=s ay grant allo2ancesadditional copensation to the national governent oIcialseployees

assigned to their locality at rates authori3ed by la2, rules and regulations and sub;ect to the follo2ing preconditions8

a. Dhat the annual incoe or 7nances of the unicipality, city or province as certi7ed by the Accountantconcerned 2ill allo2 the grant of the allo2ancesadditional copensation 2ithout e4ceeding thegeneral liitations for personal services under +ection /* of RA $'(-

b. Dhat the budgetary re6uireents under +ection /* of RA $'(- including the full re6uireent of RA ($have been satis7ed and provided fully in the budget as certi7ed by the Budget "Icer and C"Arepresentative in the 5= concerned

c. Dhat the 5= has fully ipleented the devolution of personnelfunctions in accordance 2ith the provisionsof RA $'(-

d. Dhat the 5= has already created andatory positions prescribed in RA $'(-.

e. Dhat siilar allo2ancesadditional copensation are not granted by the national governent to theoIcialseployees assigned to the 5=.

Dhough 5BC No. / of the 0BM ay be considered 2ithin the abit of the President


16/87

Municipality of Nau;an to ake sure that they coplied 2ith +ections /* and /* of the Code./:e presue the regularityof the SangguniangPanlalawigansoIcial act.

Moreover, it is 2ell@settled that an ordinance ust be presued valid in the absence of evidence sho2ing that it is not inaccordance 2ith the la2./Respondent C"A had the burden of proving that Resolution No. '-' ofthe Sangguniang *ayanof Nau;an did not coply 2ith the condition provided in +ection $ of the Code, the budgetaryre6uireents and general liitations on the use of unicipal funds provided in +ections /* and /* of the Code and theipleenting guidelines issued by the 0BM, i.e., paragraphs !a# to !d#, +ection / of 5BC No. /. Respondent C"A also had theburden of sho2ing that the Sangguniang Panlalawiganof "riental Mindoroerroneously approved said resolution despite itsnon@copliance 2ith the re6uireents of the la2. %t failed to discharge such burden. "n the contrary, 2e 7nd that theresolution of the Municipality of Nau;an granting the P',(-- onthly allo2ance to petitioner ;udge fully coplied 2ith the la2.Dhus, 2e uphold its validity.

%n su, 2e hereby aIr the po2er of the Municipality of Nau;an to grant the 6uestioned allo2ance to petitione&udge 5eynes in accordance 2ith the constitutionally andated policy of local autonoy and the provisions of the 5oca=overnent Code of '))'. :e also sustain the validity of Resolution No. '-', +eries of '))/, otheSangguniang *ayan of Nau;an for being in accordance 2ith the la2.

@5ERE)ORE, the petition is hereby =RANDE0. Dhe assailed decision dated +epteber ', '))) of the Coission ofAudit is hereby +ED A+%0E and +ection /, paragraph !e# of 5BC No. / is hereby declared N55 and F"%0.

No costs.

SO ORDERED.

EN BANC


17/87

CORONA,J.;

Before this Court is a petition for certiorariunder Rule ( 2hich seeks to annul and set aside the resolution dated May $,*--' of the Coission on Elections as 2ell as the resolution dated May '*, *--' denying petitioners otion foreconsideration.

Dhis petition originated fro a case 7led by private respondent on March *', *--' for the dis6uali7cation of petitioneNestor Magno as ayoralty candidate of +an %sidro, Nueva Eci;a during the May ', *--' elections on the ground thatpetitioner 2as previously convicted by the +andiganbayan of four counts of direct bribery penali3ed under Article *'- of theRevised Penal Code. %t appears that on &uly *, ')), petitioner 2as sentenced to suer the indeterinate penalty of /

onths and '' days of arresto mayor as iniu to ' year onths and *' days ofprision correccionalas a4iu, foeach of the four counts of direct bribery. Dhereafter, petitioner applied for probation and 2as discharged on March , '))upon order of the Regional Drial Court of =apan, Nueva Eci;a.

"n May $, *--', the Coission on Elections !C"ME5EC# rendered a decision granting the petition of private respondentand declaring that petitioner 2as dis6uali7ed fro running for the position of ayor in the May ', *--' elections. %n rulingagainst petitioner, the C"ME5EC cited +ection '* of the BP ' or the "nibus Election Code 2hich provides as follo2s8

Sec) !) 0is6uali7cations ) Any person who has &een declared &y competent authority insane or incompetent, or has &eensentenced &y nal judgment for su&version, insurrection, re&ellion or for any oense for 2hich he has been sentenced to apenalty of ore than eighteen !'# onths, or for a crie involving oral turpitude , shall &e dis9ualied to &e a candidateand to hold any o.ce, unless he has &een given plenary pardon, or granted amnesty)

>he dis9ualications to &e a candidate herein provided shall &e deemed removed upon the declaration &y competent

authority that said insanity or incompetence had &een removed orafter the e4piration of a period of 7ve years fro hisservice of sentence, unless within the same period he again &ecomes dis9ualied)

Dhe above provision e4plicitly lifts the dis6uali7cation to run for an elective oIce of a person convicted of a crieinvolving oral turpitude after 7ve !# years fro the service of sentence. According to the C"ME5EC, inasuch as petitione2as considered to have copleted the service of his sentence on March , ')), his 7ve@year dis6uali7cation 2ill end only onMarch , *--/.

"n May '-, *--', petitioner 7led a otion for reconsideration but the sae 2as denied by the C"ME5EC in its resolutiondated May '*, *--'.

1ence, this petition.

Petitioner argues that direct bribery is not a crie involving oral turpitude. 5ike2ise, he cites +ection - of RA $'(-,other2ise kno2n as the 5ocal =overnent Code of '))', 2hich he clais is the la2 applicable to the case at bar, not BP 'or the "nibus Election Code as claied by the C"ME5EC. +aid provision reads8

Section #") $is9ualications) >he following persons are dis9ualied from running for any elective local positionI

@aB >hose sentenced &y nal judgment for an oJense involving moral turpitude or for an oJense punisha&le &y one @B year or

more of imprisonment, within two @!B years after serving sentence)

0 0 0 0

Petitioner insists that he had already served his sentence as of March , ')) 2hen he 2as discharged froprobation. +uch being the case, the t2o@year dis6uali7cation period iposed by +ection - of the 5ocal =overnent Code

e4pired on March , *---. Dhus, petitioner 2as 6uali7ed to run in the *--' elections.

Mean2hile, +onia 5oren3o 2as proclaied by the C"ME5EC as the duly elected ayor of +an %sidro, Nueva Eci;a. Dhus,on &une '), *--', petitioner 7led a suppleental petition 2hich this Court erely noted in its resolution dated &une *(,*--'. %n his suppleental petition, petitioner assailed the proclaation of +onia 5oren3o on the ground that the propriety ofhis dis6uali7cation 2as still under revie2 by this Court. Petitioner like2ise asked this Court to declare hi as the duly electedunicipal ayor instead of +onia 5oren3o.

"n &uly ', *--', the +olicitor@=eneral 7led his anifestation and agreed 2ith petitioner that C"ME5EC should haveapplied +ection - of the 5ocal =overnent Code.


18/87

Dhe ain issue is 2hether or not petitioner 2as dis6uali7ed to run for ayor in the *--' elections. %n resolving this, t2osub@issues need to be threshed out, naely8 !'# 2hether the crie of direct bribery involves oral turpitude and !*# 2hetherit is the "nibus Election Code or the 5ocal =overnent Code that should apply in this situation.

Regarding the 7rst sub@issue, the Court has consistently adopted the de7nition in Blacks 5a2 0ictionary of oraturpitude as8

0 0 0 an act of &aseness, vileness, or depravity in the private duties which a man owes his fellow men, or to society ingeneral, contrary to the accepted and customary rule of right and duty &etween man and woman or conduct contrary to

justice, honesty, modesty, or good morals)'

Not every criinal act, ho2ever, involves oral turpitude. %t fre6uently depends on the circustances surrounding theviolation of the la2.*

%n this case, 2e need not revie2 the facts and circustances relating to the coission of the crie considering thatpetitioner did not assail his conviction. By applying for probation, petitioner in eect aditted all the eleents of the crie ofdirect bribery8

'. the oJender is a pu&lic o.cer;

*. the oJender accepts an oJer or promise or receives a gift or present &y himself or through another

/. such oer or proise be accepted or gift or present be received by the public oIcer 2ith a vie2 to coitting

soe crie, or in consideration of the e4ecution of an act 2hich does not constitute a crie but the act ust beun;ust, or to refrain fro doing soething 2hich it is his oIcial duty to do and %talics supplied

. the act which the oJender agrees to perform or which he e0ecutes is connected with the performance of hiso.cial duties)/

Moral turpitude can be inferred fro the third eleent. Dhe fact that the oender agrees to accept a proise or gift anddeliberately coits an un;ust act or refrains fro perforing an oIcial duty in e4change for soe favors, denotes aalicious intent on the part of the oender to renege on the duties 2hich he o2es his fello2en and society in general. Alsothe fact that the oender takes advantage of his oIce and position is a betrayal of the trust reposed on hi by the public. %is a conduct clearly contrary to the accepted rules of right and duty, ;ustice, honesty and good orals. %n all respects, directbribery is a crie involving oral turpitude.

%t is the second sub@issue 2hich is probleatical. Dhere appears to be a glaring incopatibility bet2een the 7ve@yeardis6uali7cation period provided in +ection '* of the "nibus Election Code and the t2o@year dis6uali7cation period in +ection- of the 5ocal =overnent Code.

%t should be noted that the "nibus Election Code !BP '# 2as approved on 0eceber /, ') 2hile the 5oca=overnent Code !RA $'(-# took eect on &anuary ', '))*. %t is basic in statutory construction that in case of irreconcilableconHict bet2een t2o la2s, the later enactent ust prevail, being the ore recent e4pression of legislative 2ill. Legis

posteriores priores contrarias a&rogant. %n enacting the later la2, the legislature is presued to have kno2ledge of the olderla2 and intended to change it. ?urtherore, the repealing clause of +ection / of RA $'(- or the 5ocal =overnent Codestates that8

@fB All general and special laws, acts, city charters, decrees, e0ecutive orders, proclamations and administrative regulations,or part or parts thereof which are inconsistent with any provisions of this Code are here&y repealed or modied accordingly)

%n accordance there2ith, +ection - of RA $'(- is deeed to have repealed +ection '* of BP '. ?urtherore, Article $ ofthe Civil Code provides that la2s are repealed only by subse6uent ones, and not the other 2ay around. :hen a subse6uenla2 entirely encopasses the sub;ect atter of the forer enactent, the latter is deeed repealed.

%n $avid vs) C-27L7C, 2e declared that RA $'(- is a codi7ed set of la2s that speci7cally applies to local governentunits. +ection - thereof specially and de7nitively provides for dis6uali7cations of candidates for elective local positions. %t isapplicable to the only. "n the other hand, +ection '* of BP ' speaks of dis6uali7cations of candidates for any pu&lico.ce. %t deals 2ith the election of all pu&lic o.cers. Dhus, +ection - of RA $'(-, insofar as it governs the dis6uali7cations ofcandidates for local positions, assues the nature of a special la2 2hich ought to prevail.

Dhe intent of the legislature to reduce the dis6uali7cation period of candidates for local positions fro 7ve to t2o yearsis evident. Dhe cardinal rule in the interpretation of all la2s is to ascertain and give eect to the intent of the la2. (Dhereduction of the dis6uali7cation period fro 7ve to t2o years is the anifest intent.
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19/87

Dherefore, although his crie of direct bribery involved oral turpitude, petitioner nonetheless could not be dis6uali7edfro running in the *--' elections. Article '* of the "nibus Election Code !BP '# ust yield to Article - of the 5ocal=overnent Code !RA $'(-#. Petitioners dis6uali7cation ceased as of March , *--- and he 2as therefore under no suchdis6uali7cation anyore 2hen he ran for ayor of +an %sidro, Nueva Eci;a in the May ', *--' elections.

nfortunately, ho2ever, neither this Court nor this case is the proper foru to rule on !'# the validity of +onia 5oren3osproclaation and !*# the declaration of petitioner as the rightful 2inner. %nasuch as +onia 5oren3o had already beenproclaied as the 2inning candidate, the legal reedy of petitioner 2ould have been a tiely election protest.

@5ERE)ORE, the instant petition is hereby PARD%A55K =RANDE0. Dhe challenged resolutions of the Coission on

Elections dated May $, *--' and May '*, *--' are hereby reversed and set aside. Dhe petitioners prayer in his suppleentapetition for his proclaation as the 2inner in the May ', *--' ayoralty elections in +an %sidro, Nueva Eci;a, not being2ithin our ;urisdiction, is hereby denied.

SO ORDERED.


Manila

?%R+D 0%F%+%"N

G.R. No. #$13!8 Noember !, 1981

T5E PEOP#E O) T5E P5I#IPPINES, plainti@appellee,vs.SAG#A#A MACATANDA, defendant@appellant.

DE CASTRO,J.:

Charged 2ith and convicted on a plea of guilty, in the Court of ?irst %nstance of 5anao del Norte, Branch %F in %ligan City, forthe crie of cattle rustling, +aglala Macatanda 2as sentenced as follo2s8

:1ERE?"RE, and in vie2 of all the foregoing, this court 7nds the accused +aglala Macatanda guilty beyondreasonable doubt of the crie of Cattle Rustling penali3ed under P0 No. // and as described in theinforation 7led against hi. Crediting in his favor the itigating circustances of plea of guilty ande4tree poverty 2ithout any attendant aggravating circustances, and after applying the %ndeterinate+entence 5a2, the said accused is hereby sentenced to suer the indeterinate penalty of iprisonent ofsi4 !(# years and one !'# day of prision ayor as iniu, to eight !# years of prision ayor, as a4iu .


20/87

Dhe period of his preventive iprisonent shall be credited in his favor in accordance 2ith the ters andconditions provided by Article *) of the Revised Penal Code, as aended.

Dhe aount of "ne 1undred ?ifty !P'-.--# Pesos is hereby ordered paid to Atty. Reynaldo Echave3 for hisservices as counsel de o7cio in this case in accordance 2ith the provisions of the Rules of Court, the aountto be taken fro the funds appropriated by the =overnent for the purpose.

:ith costs against the accused. !Appellee


21/87

reaching its present state since recent years, 2hen it certainly can no longer be said of any eber of a cultural inority inthe country that he is uncivili3ed or sei@uncivili3ed.

But ore than 2hat has ;ust been observed. a legal ipedient stands in the 2ay to giving the lenient treatent appellantinvokes in his appeal. %t is that the records of the case do not aord any basis on 2hich to ;udge the degree of instruction ofthe appellant, no evidence having been taken relative thereto because he entered a plea of guilty. "And the stricter treatentprovided by P.0. // for the crie charged 2ith a ore severe penalty iposed thereon, hardly ;usti7es the courts to applysaid la2 2ith leniency.

Appellant, 7nally, contends that in the coputation of the penalty the rules prescribed under Article (, paragraph should

be applied. Do this arguent, the +olicitor =eneral coes up 2ith a reply that Article ( of the Revised Penal Code does notapply to penalties prescribed by special la2s. 1e considers P.0. //, other2ise kno2n as >Anti@ Cattle Rustling 5a2 of ')$>as a special la2, and in accordance 2ith e4isting rulings, 8the penalty should not be governed by the Revised Penal Code.Accordingly, his recoendation as to the proper penalty to be iposed and pursuant to the %ndeterinate +entence 5a22hich provides8

... if the oense is punished by any other la2, the court shall sentence the accused to an indeterinatesentence, the a4iu ter of 2hich shall not e4ceed the a4iu 74ed by said la2 and the iniushall not be less than the iniu ter prescribed by the sae. !As aended by Act No. **.# !Appellee


22/87


Manila

?%R+D 0%F%+%"N

G.R. No. #$230! Oc(ober 12, 1981

AS$CN ROADCASTING CORPORATION, petitioner,vs.COURT O) TAB APPEA#S -* T5E COMMISSIONER O) INTERNA# REENUE, respondents.

ME#ENCIO$5ERRERA,J.:Dhis is a Petition for Revie2 on certiorari of the 0ecision of the Court of Da4 Appeals in C.D.A. Case No. *-), dated Noveber*), ')$), 2hich aIred the assessent by the Coissioner of %nternal Revenue, dated April '(, ')$', of a de7ciency2ithholding incoe ta4 against petitioner, AB+@CBN Broadcasting Corporation, for the years ')(, ')((, ')($ and ')( inthe respective aounts of P$,).*, P)),*/).', P'*,-*.-- and P***, *(-.(, or a total of P*,)$.-(.

0uring the period pertinent to this case, petitioner corporation 2as engaged in the business of telecasting local as 2ell asforeign 7ls ac6uired fro foreign corporations not engaged in trade or business 2ithin the Philippines. for 2hich petitionerpaid rentals after 2ithholding incoe ta4 of /-of one@half of the 7l rentals.

%n so far as the incoe ta4 on non@resident corporations is concerned, section * !b# of the National %nternal Revenue Code,as aended by Republic Act No. *// dated &une *-, ')), used to provide8

!b# >a0 on foreign corporations.9!'# 8onresident corporations.9 Dhere shall be levied, collected, and paidfor each ta4able year, in lieu of the ta4 iposed by the preceding paragraph, upon the aount received byevery foreign corporation not engaged in trade or business 2ithin the Philippines, fro an sources 2ithin the

Philippines, as interest, dividends, rents, salaries, 2ages, preius, annuities, copensations,reunerations, eoluents, or other 74ed or deterinable annual or periodical gains, pro7ts, and incoe, ata4 e6ual to thirtyper centum of such amount. !Ephasis supplied#

"n April '*, ')(', in ipleentation of the afore6uoted provision, the Coissioner of %nternal Revenue issued =eneralCircular No. F@// reading thus8

%n connection 2ith +ection * !b# of Da4 Code, the aendent introduced by Republic Act No. *//, under2hich an incoe ta4 e6ual to /- is levied upon the aount received by every foreign corporation notengaged in trade or business 2ithin the Philippines fro all sources 2ithin this country as interest, dividends,rents, salaries, 2ages, preius, annuities, copensations, reunerations, eoluents, or other 74ed ordeterinable annual or periodical gains, pro7ts, and incoe, it has been deterined that the ta4 is stilliposed on incoe derived fro capital, or labor, or both cobined, in accordance 2ith the basic principleof incoe ta4ation !+ec. /), %ncoe Da4 Regulations#, and that a ere return of capital or investent is notincoe !Par. ,-(, ' Mertens 5a2 of ?ederal


23/87

!b# >a0 on foreign corporations.9!'# 8onresident corporations.9A foreign corporation not engaged in tradeor business in the Philippines including a foreign life insurance copany not engaged in the life insurancebusiness in the Philippines shall pay a ta4 e6ual to thirty@7ve per cent of the gross incoe received duringeach ta4able year fro all sources 2ithin the Philippines, as interests, dividends, rents, royalties, salaries,2ages, preius, annuities, copensations, reunerations for technical services or other2ise, eoluentsor other 74ed or deterinable annual, periodical or casual gains, pro7ts, and incoe, and capitalgains, Provided however, Dhat preius shah not include reinsurance preius. !Ephasis supplied#

"n ?ebruary , ')$', the Coissioner of %nternal Revenue issued Revenue Meorandu Circular No. @$', revoking=eneral Circular No. F@//, and holding that the latter 2as >erroneous for lack of legal basis,> because >the ta4 thereinprescribed should be based on gross incoe 2ithout deduction 2hatever,> thus8

After a restudy and analysis of +ection * !b# of the National %nternal Revenue Code, as aended by RepublicAct No. /', and guided by the interpretation given by ta4 authorities to a siilar provision in the %nternalRevenue Code of the nited +tates, on 2hich the aforeentioned provision of our Da4 Code 2as patterned,this "Ice has coe to the conclusion that the ta4 therein prescribed should &e &ased on gross incomewithout t deduction whatever. Conse6uently, the ruling in =eneral Circular No. F@//, dated April '*, ')(',allo2ing the deduction of the proportionate cost of production or e4hibition of otion picture 7ls fro therental incoe of non@ resident foreign corporations, is erroneous for lack of legal basis.

%n vie2 thereof, =eneral Circular No. F@//, dated April '*, ')(', is hereby revoked and henceforth, local7ls distributors and e4hibitors shall deduct and 2ithhold 64K of the entire amount payable by the to non@resident foreign corporations, as 7l rental or royalty, or 2hatever such payent ay be denoinated,2ithout any deduction 2hatever, pursuant to +ection * !b#, and pay the 2ithheld ta4es in accordance 2ith+ection of the Da4 Code, as aended.

All rulings inconsistent 2ith this Circular is like2ise revoked. !Ephasis ours#

"n the basis of this ne2 Circular, respondent Coissioner of %nternal Revenue issued against petitioner a letter of

assessent and deand dated April ', ')$', but allegedly released by it and received by petitioner on April '*, ')$',re6uiring the to pay de7ciency 2ithholding incoe ta4 on the reitted 7l rentals for the years ')( through ')( and7l royalty as of the end of ')( in the total aount of P*,)$.-( coputed as follo2s8

')(

Dotal aount reitted P '',-).

:ithholding ta4 due thereon '/,/'.--

5ess8 Aount alreadyassessed

),---.--

Balance P(,/'.--

Add8 '* o. int. fr. @'(@(( to @'(@()

'',$$.*

Dotal aount due Scollectible

P $,).*

')((

Dotal aount reitted P/$/,)*.*

:ithholding ta4 duethereon

''*,-.--


*$,)$.--

Balance ,'-'.--


24/87

Add8 ''*o. int. fr. @'(@($ to @''(@$-

','/.'


P)),*/).'

')($

Dotal aount reitted P(-','(-.(


'-,/.--


$',.--

Balance '-,)--.--

Add8 '* o. int. fr. @'(@( to @'(@$'

'),(-*.--


P'*,-*.--

')(

Dotal aount reitted P','(.)*


*)',*/.--


)*,(.--

Balance P'),$.--

Add8 '* o. int. fr. @'(@() to @*)@$'

*/,'/.(


P***,*(-. 1

"n May , ')$', petitioner re6uested for a reconsideration and 2ithdra2al of the assessent. 1o2ever, 2ithout actingthereon, respondent, on April (, ')$(, issued a 2arrant of distraint and levy over petitioner


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of %nternal Revenue as de7ciency 2ithholding incoe ta4 for the ta4able years ')( thru ')(, plus thesurcharge and interest 2hich have accrued thereon incident to delin6uency pursuant to +ection ' !e# of theNational %nternal Revenue Code, as aended.

:1ERE?"RE, the decision appealed fro is hereby aIred at petitioner


26/87

and incoe, AN0 CAP%DA5 =A%N+, a ta4 e6ual to thirty per centum of such amount. !!double ephasissupplied#

Dhe principle of legislative approval of adinistrative interpretation by re@enactent clearly obtains in this case. %t providesthat >the re@enactent of a statute substantially unchanged is persuasive indication of the adoption by Congress of a priore4ecutive construction. "Note should be taken of the fact that this case involves not a ere opinion of the Coissioner orruling rendered on a ere 6uery, but a Circular forally issued to >all internal revenue oIcials> by the then Coissioner of%nternal Revenue.

%t 2as only on &une *$, ')( under Republic Act No. /', supra, 2hich becae the basis of Revenue Meorandu CircularNo. @$', that +ec. * !b# 2as aended to refer speci7cally to / of the > gross income.>

Dhis Court is not una2are of the 2ell@entrenched principle that the =overnent is never estopped fro collecting ta4esbecause of istakes or errors on the part of itsagents. 8%n fact, utost caution should be taken in this regard. 9But, like other principles of la2, this also adits ofe4ceptions in the interest of ;ustice and fairplay. Dhe insertion of +ec. //@A into the National %nternal Revenue Code, as heldin the case of Duason, &r. vs. 5ingad, 10is indicative of legislative intention to support the principle of good faith. %n fact, in thenited +tates, fro 2here +ec. * !b# 2as patterned, it has been held that the Coissioner of Collector is precluded froadopting a position inconsistent 2ith one previously taken 2here in;ustice 2ould result therefro, 11or 2here there has beena isrepresentation to the ta4payer. 12

:e have also noted that in its 0ecision, the Court of Da4 Appeals further re6uired the petitioner to pay interest and surchargeas provided for in +ec. ' !e# of the Da4 Code in addition to the de7ciency 2ithholding ta4 of P *,)$.-(. Dhis additionalre6uireent is uch less called for because the petitioner relied in good faith and religiously coplied 2ith no less than aCircular issued >to all internal revenue oIcials> by the highest oIcial of the Bureau of %nternal Revenue and approved by thethen +ecretary of ?inance. 13

:ith the foregoing conclusions arrived at, resolution of the issue of prescription becoes unnecessary.

:1ERE?"RE, the ;udgent of the Court of Da4 Appeals is hereby reversed, and the 6uestioned assessent set aside. Nocosts.

+" "R0ERE0.

EN BANC

)DC?, SAN#AAS,petitioners,'. 5ON. RUENTORRES - ' cc( ' (e E:ec%(e Secre(r, 5ON. )RANCISCO IRA7, - ' cc( ' (e

Secre(r o+ E-er&, CA#TEB P/-e', I-c., PETRON Coror(o- -* PI#IPINAS S5E##Coror(o-, respondents.

D E C I S I O N

PUNO,J.:

Dhe petitions at bar challenge the constitutionality of Republic Act No. '- entitled >An Act 0eregulating the0o2nstrea "il %ndustry and ?or "ther Purposes.> 'R.A. No. '- ends t2enty si4 !*(# years of governent regulation of thedo2nstrea oil industry. ?e2 cases carry a surpassing iportance on the life of every ?ilipino as these petitions for theups2ing and do2ns2ing of our econoy aterially depend on the oscillation of oil.

?irst, the facts 2ithout the fat. Pror (o 19"1, there 2as no governent agency regulating the oil industry other thanthose dealing 2ith ordinary coodities. "il copanies 2ere free to enter and e4it the arket 2ithout any governentinterference. Dhere 2ere four !# re7ning copanies !+hell, Calte4, Bataan Re7ning Copany and ?iloil Re7ning# and si4 !(#petroleu arketing copanies !Esso, ?iloil, Calte4, =etty, Mobil and +hell#, then operating in the country. *
http://sc.judiciary.gov.ph/jurisprudence/1997/nov1997/124360.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1997/nov1997/124360.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1997/nov1997/124360.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1997/nov1997/124360.htm#_edn2


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I- 19"1, the country 2as driven to its knees by a crippling oil crisis. Dhe governent, reali3ing that petroleu and itsproducts are vital to national security and that their continued supply at reasonable prices is essential to the general 2elfareenacted the "il %ndustry Coission Act./ %t created theO/ I-*%'(r Comm''o-!"%C# to re&%/(ethe business oiporting, e4porting, re@e4porting, shipping, transporting, processing, re7ning, storing, distributing, arketing and sellingcrude oil, gasoline, kerosene, gas and other re7ned petroleu products. Dhe "%C 2as vested 2ith the oer (o :thearket rce'of petroleu products, to regulate the capacities of re7neries, to license ne2 re7neries and to regulate theoperations and trade practices of the industry.

%n addition to the creation of the "%C, the governent sa2 the iperious need for a ore active role of ?ilipinos in the oiindustry. U-(/ (e er/ 'ee-(e', (e *o-'(rem o/ -*%'(r ' co-(ro//e* b m%/(-(o-/ com-e' . Althe oil re7neries and arketing copanies 2ere o2ned by +ore&-er'2hose econoic interests did not al2ays coincide2ith the interest of the ?ilipino. Crude oil 2as transported to the country by foreign@controlled tankers. Crude processing 2asdone locally by foreign@o2ned re7neries and petroleu products 2ere arketed through foreign@o2ned retail outlets. "nNoveber ), ')$/, President ?erdinand E. Marcos boldly created the Philippine National "il Corporation !PN"C# to break thecontrol by foreigners of our oil industry.PN"C engaged in the business of re7ning, arketing, shipping, transporting, andstoring petroleu. %t ac6uired o2nership of E++" Philippines and ?iloil to serve as its arketing ar. %t bought the controllingshares of Bataan Re7ning Corporation, the largest re7nery in the country. (PN"C later put up its o2n arketing subsidiary @Petrophil. PN"C operated under the business nae PEDR"N Corporation. ?or the 7rst tie, there 2as a ?ilipino presence inthe Philippine oil arket.

%n '), President Marc

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