Cases Persons (2)

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. L-56487 October 21, 1991 REYNALDA GATCHALIAN, petitioner, vs. ARSENIO DELIM and the HON. COURT OF APPEALS, respondents. Pedro G. Peralta for petitioner. Florentino G. Libatique for private respondent. FELICIANO, J.:p At noon time on 11 July 1973, petitioner Reynalda Gatchalian boarded, as a paying passenger, respondent's "Thames" mini bus at a point in San Eugenio, Aringay, La Union, bound for Bauang, of the same province. On the way, while the bus was running along the highway in Barrio Payocpoc, Bauang, Union, "a snapping sound" was suddenly heard at one part of the bus and, shortly thereafter, the vehicle bumped a cement flower pot on the side of the road, went off the road, turned turtle and fell into a ditch. Several passengers, including petitioner Gatchalian, were injured. They were promptly taken to Bethany Hospital at San Fernando, La Union, for medical treatment. Upon medical examination, petitioner was found to have sustained physical injuries on the leg, arm and forehead, specifically described as follows: lacerated wound, forehead; abrasion, elbow, left; abrasion, knee, left; abrasion, lateral surface, leg, left. 1 On 14 July 1973, while injured. passengers were confined in the hospital, Mrs. Adela Delim, wife of respondent, visited them and later paid for their hospitalization and medical expenses. She also gave petitioner P12.00 with which to pay her transportation expense in going home from the hospital. However, before Mrs. Delim left, she had the injured passengers, including petitioner, sign an already prepared Joint Affidavit which stated, among other things: That we were passengers of Thames with Plate No. 52-222 PUJ Phil. 73 and victims after the said Thames met an accident at Barrio Payocpoc Norte, Bauang, La Union while passing through the National Highway No. 3; That after a thorough investigation the said Thames met the accident due to mechanical defect and went off the road and turned turtle to the east canal of the road into a creek causing physical injuries to us; xxx xxx xxx That we are no longer interested to file a complaint, criminal or civil against the said driver and owner of the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries. xxx xxx xxx 2 (Emphasis supplied) Notwithstanding this document, petitioner Gathalian filed with the then Court of First Instance of La Union an actionextra contractu to recover compensatory and moral damages. She alleged in the complaint that her injuries sustained from the vehicular mishap had left her with a conspicuous white scar measuring 1 by 1/2 inches on the forehead, generating mental suffering and an inferiority complex on her part; and that as a result, she had to retire in seclusion and stay away from her friends. She also alleged that the scar diminished her facial beauty and deprived her of opportunities for employment. She prayed for an award of: P10,000.00 for loss of employment and other opportunities; P10,000.00 for the cost of plastic surgery for removal of the scar on her forehead; P30,000.00 for moral damages; and P1,000.00 as attorney's fees.

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In defense, respondent averred that the vehicular mishap was due to force majeure, and that petitioner had already been paid and moreover had waived any right to institute any action against him (private respondent) and his driver, when petitioner Gatchalian signed the Joint Affidavit on 14 July 1973. After trial, the trial court dismissed the complaint upon the ground that when petitioner Gatchalian signed the Joint Affidavit, she relinquished any right of action (whether criminal or civil) that she may have had against respondent and the driver of the mini-bus. On appeal by petitioner, the Court of Appeals reversed the trial court's conclusion that there had been a valid waiver, but affirmed the dismissal of the case by denying petitioner's claim for damages: We are not in accord, therefore, of (sic) the ground of the trial court's dismissal of the complaint, although we conform to the trial court's disposition of the case — its dismissal. IN VIEW OF THE FOREGOING considerations, there being no error committed by the lower court in dismissing the plaintiff-appellant's complaint, the judgment of dismissal is hereby affirmed. Without special pronouncement as to costs. SO ORDERED. 3 In the present Petition for Review filed in forma pauperis, petitioner assails the decision of the Court of Appeals and ask this Court to award her actual or compensatory damages as well as moral damages. We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner. The relevant language of the Joint Affidavit may be quoted again: That we are no longer interested to file a complaint, criminal or civil against the said driver and ownerof the said Thames, because it was an accident and the said driver and owner of the said Thames have gone to the extent of helping us to be treated upon our injuries. (Emphasis supplied) A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. 4 A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. The degree of explicitness which this Court has required in purported waivers is illustrated in Yepes and Susaya v. Samar Express Transit (supra), where the Court in reading and rejecting a purported waiver said: . . . It appears that before their transfer to the Leyte Provincial Hospital, appellees were asked to sign as, in fact, they signed the document Exhibit I wherein they stated that "in consideration of the expenses which said operator has incurred in properly giving us the proper medical treatment, we hereby manifest our desire to waive any and all claims against the operator of the Samar Express Transit." xxx xxx xxx Even a cursory examination of the document mentioned above will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure to comply with their contract of carriage. All that said document proves is that they expressed a "desire" to make the waiver — which obviously is not the same as making an actual waiver of their right. A waiver of the kind invoked by appellant must be clear and unequivocal (Decision of the Supreme Court of Spain of July 8, 1887) — which is not the case of the one relied upon in this appeal. (Emphasis supplied) If we apply the standard used in Yepes and Susaya, we would have to conclude that the terms of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear and unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling from the effects of the vehicular accident, having been in the hospital for only three days, when the purported

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waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances there appears substantial doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent. Finally, because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. For a waiver to be valid and effective, it must not be contrary to law, morals, public policy or good customs. 5 To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. 6 We believe such a purported waiver is offensive to public policy. Petitioner Gatchalian also argues that the Court of Appeals, having by majority vote held that there was no enforceable waiver of her right of action, should have awarded her actual or compensatory and moral damages as a matter of course. We have already noted that a duty to exercise extraordinary diligence in protecting the safety of its passengers is imposed upon a common carrier. 7 In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." 8 In fact, because of this statutory presumption, it has been held that a court need not even make an express finding of fault or negligence on the part of the common carrier in order to hold it liable. 9 To overcome this presumption, the common carrier must slow to the court that it had exercised extraordinary diligence to prevent the injuries. 10 The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a good paterfamilias established in respect of the ordinary relations between members of society. A common carrier is bound to carry its passengers safely" as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the circumstances". 11 Thus, the question which must be addressed is whether or not private respondent has successfully proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The records before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. Curiously, respondent did not even attempt, during the trial before the court a quo, to prove that he had indeed exercised the requisite extraordinary diligence. Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force majeure. But allegation is not proof and here again, respondent utterly failed to substantiate his defense of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the casualty was entirely independent of the human will, but also that it was impossible to avoid. Any participation by the common carrier in the occurrence of the injury will defeat the defense of force majeure. InServando v. Philippine Steam Navigation Company, 12 the Court summed up the essential characteristics of force majeure by quoting with approval from the Enciclopedia Juridica Española: Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability non-performance. The Partidas, the antecedent of Article 1174 of the Civil Code, defines "caso fortuito" as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robber. In its dissertation on the phrase "caso fortuito" the Enciclopedia Juridica Española says: 'In legal sense and, consequently, also in relation to contracts, a "caso fortuito" presents the following essential characteristics: (1) the cause of the unforeseen and unexpected occurence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the "caso fortuito", or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor. Upon the other hand, the record yields affirmative evidence of fault or negligence on the part of respondent common carrier. In her direct examination, petitioner Gatchalian narrated that shortly before the vehicle went off the road and into a ditch, a "snapping sound" was suddenly heard at one part of the bus. One of the passengers, an old woman, cried out, "What happened?" ("Apay addan samet nadadaelen?"). The driver replied, nonchalantly, "That is only normal" ("Ugali ti makina dayta"). The driver did not stop to check if anything had gone wrong with the bus. Moreover, the driver's reply necessarily indicated that the same "snapping

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sound" had been heard in the bus on previous occasions. This could only mean that the bus had not been checked physically or mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is obviously alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the bus be checked and repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver. We turn to petitioner's claim for damages. The first item in that claim relates to revenue which petitioner said she failed to realize because of the effects of the vehicular mishap. Petitioner maintains that on the day that the mini-bus went off the road, she was supposed to confer with the district supervisor of public schools for a substitute teacher's job, a job which she had held off and on as a "casual employee." The Court of Appeals, however, found that at the time of the accident, she was no longer employed in a public school since, being a casual employee and not a Civil Service eligible, she had been laid off. Her employment as a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for substitute teachers. In view of her employment status as such, the Court of Appeals held that she could not be said to have in fact lost any employment after and by reason of the accident. 13 Such was the factual finding of the Court of Appeals, a finding entitled to due respect from this Court. Petitioner Gatchalian has not submitted any basis for overturning this finding of fact, and she may not be awarded damages on the basis of speculation or conjecture. 14 Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante. If the scar is relatively small and does not grievously disfigure the victim, the cost of surgery may be expected to be correspondingly modest. In Araneta, et al. vs. Areglado, et al., 15 this Court awarded actual or compensatory damages for, among other things, the surgical removal of the scar on the face of a young boy who had been injured in a vehicular collision. The Court there held: We agree with the appellants that the damages awarded by the lower court for the injuries suffered by Benjamin Araneta are inadequate. In allowing not more than P1,000.00 as compensation for the "permanent deformity and — something like an inferiority complex" as well as for the "pathological condition on the left side of the jaw" caused to said plaintiff, the court below overlooked the clear evidence on record that to arrest the degenerative process taking place in the mandible and restore the injured boy to a nearly normal condition, surgical intervention was needed, for which the doctor's charges would amount to P3,000.00, exclusive of hospitalization fees, expenses and medicines.Furthermore, the operation, according to Dr. Diño, would probably have to be repeated in order to effectuate a complete cure, while removal of the scar on the face obviously demanded plastic surgery. xxx xxx xxx The father's failure to submit his son to a plastic operation as soon as possible does not prove that such treatment is not called for. The damage to the jaw and the existence of the scar in Benjamin Araneta's face are physical facts that can not be reasoned out of existence. That the injury should be treated in order to restore him as far as possible to his original condition is undeniable. The father's delay, or even his negligence, should not be allowed to prejudice the son who has no control over the parent's action nor impair his right to a full indemnity. . . . Still, taking into account the necessity and cost of corrective measures to fully repair the damage;the pain suffered by the injured party; his feelings of inferiority due to consciousness of his present deformity, as well as the voluntary character of the injury inflicted; and further considering that a repair, however, skillfully conducted, is never equivalent to the original state, we are of the opinion that the indemnity granted by the trial court should be increased to a total of P18,000.00. (Emphasis supplied) Petitioner estimated that the cost of having her scar surgically removed was somewhere between P10,000.00 to P15,000.00. 16 Upon the other hand, Dr. Fe Tayao Lasam, a witness presented as an expert by petitioner, testified that the cost would probably be between P5,000.00 to P10,000.00. 17 In view of this testimony, and the fact that a considerable amount of time has lapsed since the mishap in 1973 which may be expected to increase not only the cost but also very probably the difficulty of removing the scar, we consider that the amount of P15,000.00 to cover the cost of such plastic surgery is not unreasonable.

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Turning to petitioner's claim for moral damages, the long-established rule is that moral damages may be awarded where gross negligence on the part of the common carrier is shown. 18 Since we have earlier concluded that respondent common carrier and his driver had been grossly negligent in connection with the bus mishap which had injured petitioner and other passengers, and recalling the aggressive manuevers of respondent, through his wife, to get the victims to waive their right to recover damages even as they were still hospitalized for their injuries, petitioner must be held entitled to such moral damages. Considering the extent of pain and anxiety which petitioner must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as atttorney's fees is in fact even more modest. 19 WHEREFORE, the Decision of the Court of Appeals dated 24 October 1980, as well as the decision of the then Court of First Instance of La Union dated 4 December 1975 are hereby REVERSED and SET ASIDE.Respondent is hereby ORDERED to pay petitioner Reynalda Gatchalian the following sums: 1) P15,000.00 as actual or compensatory damages to cover the cost of plastic surgery for the removal of the scar on petitioner's forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as attorney's fees, the aggregate amount to bear interest at the legal rate of 6% per annum counting from the promulgation of this decision until full payment thereof. Costs against private respondent. SO ORDERED. Fernan, C.J., Gutierrez, Jr., Bidin and Davide, Jr., JJ., concur. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 116631 October 28, 1998 MARSH THOMSON, petitioner, vs. COURT OF APPEALS and THE AMERICAN CHAMPER OF COMMERCE OF THE PHILIPPINES, INC,respondents.

QUISUMBING, J.: This is a petition for review on certiorari seeking the reversal of the Decision 1 of the Court of Appeals on May 19, 1994, disposing as follows: WHEREFORE, THE DECISION APPEALED FROM IS HEREBY SET ASIDE. ANOTHER JUDGMENT IS ENTERED ORDERING DEFENDANT-APPELLEE MARSH THOMSON TO TRANSFER THE SAID MPC [Manila Polo Club] SHARE TO THE NOMINEE OF THE APPELLANT. The facts of the case are: Petitioner Marsh Thomson (Thomson) was the Executive Vice-President and, later on, the Management Consultant of private respondent, the American Chamber of Commerce of the Philippines, Inc. (AmCham) for over ten years, 1979-1989. While petitioner was still working with private respondent, his superior, A. Lewis Burridge, retired as AmCham's President. Before Burridge decided to return to his home country, he wanted to transfer his proprietary share in the Manila Polo Club (MPC) to petitioner. However, through the intercession of Burridge, private respondent paid for the share but had it listed in petitioner's name. This was made clear in an employment advice dated January 13, 1986, wherein petitioner was informed by private respondent as follows:

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xxx xxx xxx 11. If you so desire, the Chamber is willing to acquire for your use a membership in the Manila Polo Club. The timing of such acquisition shall be subject to the discretion of the Board based on the Chamber's financial position. All dues and other charges relating to such membership shall be for your personal account. If the membership is acquired in your name, you would execute such documents as necessary to acknowledge beneficial ownership thereof by the Chamber. 2 xxx xxx xxx On April 25, 1986, Burridge transferred said proprietary share to petitioner, as confirmed in a letter 3 of notification to the Manila Polo Club. Upon his admission as a new member of the MPC, petitioner paid the transfer fee of P40,000.00 from his own funds; but private respondent subsequently reimbursed this amount. On November 19, 1986, MPC issued Proprietary Membership Certificate Number 3398 in favor of petitioner. But petitioner, however, failed to execute a document recognizing private respondent's beneficial ownership over said share. Following AmCham's policy and practice, there was a yearly renewal of employment contract between the petitioner and private respondent. Separate letters of employment advice dated October 1, 1986 4, as well March 4, 1988 5 and January 7, 1989 6, mentioned the MPC share. But petitioner never acknowledged that private respondent is the beneficial owner of the share as requested in follow-up requests, particularly one dated March 4, 1988 as follows: Dear Marsh: xxx xxx xxx All other provisions of your compensation/benefit package will remain the same and are summarized as follows: xxx xxx xxx 9) The Manila Polo Club membership provided by the Chamber for you and your family will continue on the same basis, to wit: all dues and other charges relating to such membership shall be for your personal account and, if you have not already done so, you will execute such documents as are necessary to acknowledge that the Chamber is the beneficial owner of your membership in the Club. 7 When petitioner's contract of employment was up for renewal in 1989, he notified private respondent that he would no longer be available as Executive Vice President after September 30, 1989. Still, the private respondent asked the petitioner to stay on for another six (6) months. Petitioner indicated his acceptance of the consultancy arrangement with a counter-proposal in his letter dated October 8, 1989, among others as follows: 11.) Retention of the Polo Club share, subject to my reimbursing the purchase price to the Chamber, or one hundred ten thousand pesos (P110,000.00). 8 Private respondent rejected petitioner's counter-proposal. Pending the negotiation for the consultancy arrangement, private respondent executed on September 29, 1989 a Release and Quitclaim, 9 stating that "AMCHAM, its directors, officers and assigns, employees and/or representatives do hereby release, waive, abandon and discharge J. MARSH THOMSON from any and all existing claims that the AMCHAM, its directors, officers and assigns, employees and/or representatives may have against J. MARSH THOMSON." 10 The quitclaim, expressed in general terms, did not mention specifically the MPC share. On April 5, 1990, private respondent, through counsel sent a letter to the petitioner demanding the return and delivery of the MPC share which "it (AmCham) owns and placed in your (Thomson's) name." 11

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Failing to get a favorable response, private respondent filed on May 15, 1990, a complaint against petitioner praying, inter alia, that the Makati Regional Trial Court render judgment ordering Thomson "to return the Manila Polo Club share to the plaintiff and transfer said share to the nominee of plaintiff." 12 On February 28, 1992, the trial court promulgated its decision, 13 thus: The foregoing considered judgment is rendered as follows: 1) The ownership of the contested Manila Polo Club share is adjudicated in favor of defendant Marsh Thomson; and; 2) Defendant shall pay plaintiff the sum of P300,000.00 Because both parties thru their respective faults have somehow contributed to the birth of this case, each shall 14 bear the incidental expenses incurred. In said decision, the trial court awarded the MPC share to defendant (petitioner now) on the ground that the Articles of Incorporation and By-laws of Manila Polo Club prohibit artificial persons, such as corporations, to be club members, ratiocinating in this manner: An assessment of the evidence adduced by both parties at the trial will show clearly that it was the intention of the parties that a membership to Manila Polo Club was to be secured by plaintiff [herein private respondent] for defendant's [herein petitioner] use. The latter was to execute the necessary documents to acknowledge ownership of the Polo membership in favor of plaintiff. (Exh. C par 9) However, when the parties parted ways in disagreement and with some degree of bitterness, the defendant had second thoughts and decided to keep the membership for himself. This is evident from the exhibits (E & G) where defendant asked that he retained the Polo Club membership upon reimbursement of its purchase price; and where he showed his "profound disappointment, both at the previous Board's unfair action, and at what I consider to be harsh terms, after my long years of dedication to the Chamber's interest." xxx xxx xxx Notwithstanding all these evidence in favor of plaintiff, however, defendant may not be declared the owner of the contested membership be compelled to execute documents transferring the Polo Membership to plaintiff or the latter's nominee for the reason that this is prohibited by Polo Club's Articles & By-Laws. . . . It is for the foregoing reasons that the Court rules that the ownership of the questioned Polo Club membership be retained by defendant. 15 . . . . Not satisfied with the trial court's decision, private respondent appealed to the Court of Appeals. 16

On May 19, 1994, the Court of Appeals (Former Special Sixth Division) promulgated its decision in said CA-G.R. CV No. 38417, reversing the, trial court's judgment and ordered herein petitioner to transfer the MPC share to the nominee of private respondent, reasoning thus: xxx xxx xxx The significant fact in the instant case is that the appellant [herein private respondent] purchased the MPC share for the use of the appellee [herein petitioner] and the latter expressly conformed thereto as shown in Exhibits A-1, B, B-1, C, C-1, D, D-1. By such express conformity of the appellee, the former was bound to recognize the appellant as the owner of the said share for a contract has the force of law between the parties. (Alim vs. CA, 200 SCRA 450; Sasuhura Company, Inc., Ltd. vs. IAC, 205 SCRA 632) Aside from the foregoing, the appellee conceded the true ownership of the said share to the appellant when (1) he offered to buy the MPC share from the appellant (Exhs. E and E-1) upon the termination of his employment; (2) he obliged himself to return the MPC share after his six month consultancy contract had elapsed, unless its return was earlier requested in writting (Exh. I); and (3) on cross-examination, he admitted that the proprietary share listed as one of the assets of the appellant corporation

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in its 1988 Corporate Income Tax Return, which he signed as the latter's Executive Vice President (prior to its 17 filing), refers to the Manila Polo Club Share (tsn., pp. 19-20, August 30, 1991). . . . On 16 June 1994, petitioner filed a motion for reconsideration the Court of Appeals denied the motion for reconsideration.

18

of said decision. By resolution

19

promulgated on August 4, 1994,

In this petition for review, petitioner alleges the following errors of public respondent as grounds for our review: I. The respondent Court of Appeals erred in setting aside the Decision dated 28 February 1992 of the Regional Trial Court, NCJR, Branch 65, Makati, Metro Manila, in its Civil Case No. 90-1286, and in not confirming petitioner's ownership over the MPC membership share. II. The respondent Court of Appeals erred in ruling that "the Quitclaim executed by AmCham in favor of petitioner of September 29, 1989 was superseded by the contractual agreement entered into by the parties on October 13, 1989 wherein again the appellee acknowledged that the appellant owned the MPC share, there being absolutely no evidence to support such a conclusion and/or such inference is manifestly mistaken. III. The respondent Court of Appeals erred in rendering judgment ordering petitioner to transfer the contested MPC share to a nominee of respondent AmCham notwithstanding that: (a) AmCham has no standing in the Manila Polo Club (MPG), and being an artificial person, it is precluded under MPC's Articles of Incorporation and governing rules and regulations from owning a proprietary share or from becoming a member thereof: and (b) even under AmCham's Articles of Incorporation, the purposes for which it is dedicated, becoming a stockholder or shareholder in other corporation is not one of the express implied powers fixed in AmCham's said corporate franchise. 20 As posited above, these assigned errors show the disputed matters herein are mainly factual. As such they are best left to the trial and appellate courts' disposition. And this Court could have dismissed the petition outright, were it not for the opposite results reached by the courts below. Moreover, for the enhanced appreciation of the jural relationship between the parties involving trust, this Court has given due course to the petition, which we now decide. After carefully considering the pleadings on record, we find there are two main issues to be resolved: (1) Did respondent court err in holding that private respondent is the beneficial owner of the disputed share? (2) Did the respondent court err in ordering petitioner to transfer said share to private respondent's nominees? Petitioner claims ownership of the MPC share, asserting that he merely incurred a debt to respondent when the latter advanced the funds for the purchase of the share. On the other hand, private respondent asserts beneficial ownership whereby petitioner only holds the share in his name, but the beneficial title belongs to private respondent. To resolve the first issue, we must clearly distinguish a debt from a trust. The beneficiary of a trust has beneficial interest in the trust property, while a creditor has merely a personal claim against the debtor. In trust, there is a fiduciary relation between a trustee and a beneficiary, but there is no such relation between a debtor and creditor. While a debt implies merely an obligation to pay a certain sum of money, a trust refers to a duty to deal with a specific property for the benefit of another. If a creditor-debtor relationship exists, but not a fiduciary relationship between the parties, there is no express trust. However, it is understood that when the purported trustee of funds is entitled to use them as his or her own (and commingle them with his or her own money), a debtor-creditor relationship exists, not a trust. 21 In the present case, as the Executive Vice-President of AmCham, petitioner occupied a fiduciary position in the business of AmCham. AmCham released the funds to acquire a share in the Club for the use of petitioner but obliged him to "execute such document as necessary to acknowledge beneficial ownership thereof by the Chamber". 22 A trust relationship is, therefore, manifestly indicated. Moreover, petitioner failed to present evidence to support his allegation of being merely a debtor when the private respondent paid the purchase price of the MPC share. Applicable here is the rule that a trust arises in favor of one who pays the purchase money of property in the name of another, because of the presumption that he who pays for a thing intends a beneficial interest therein for himself. 23

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Although petitioner initiated the acquisition of the share, evidence on record shows that private respondent acquired said share with its funds. Petitioner did not pay for said share, although he later wanted to, but according to his own terms, particularly the price thereof. Private respondent's evident purpose in acquiring the share was to provide additional incentive and perks to its chosen executive, the petitioner himself. Such intention was repeated in the yearly employment advice prepared by AmCham for petitioner's concurrence. In the cited employment advice, dated March 4, 1988, private respondent once again, asked the petitioner to execute proof to recognize the trust agreement in writing: The Manila Polo membership provided by the Chamber for you and your family will continue on the same basis, to wit: all dues and other charges relating to such membership shall be for your personal account and, if you have not already done so, you will execute such documents as are necessary to acknowledge that the Chamber is the beneficial owner of your membership in the Club. 24 Petitioner voluntarily affixed his signature to conform with the employment advice, including his obligation stated therein — for him to execute the necessary document to recognize his employer as the beneficial owner of the MPC share. Now, we cannot hear him claiming otherwise, in derogation of said undertaking, without legal and equitable justification. For private respondent's intention to hold on to its beneficial ownership is not only presumed; it was expressed in writing at the very outset. Although the share was placed in the name of petitioner, his title is limited to the usufruct, that is, to enjoy the facilities and privileges of such membership in the club appertaining to the share. Such arrangement reflects a trust relationship governed by law and equity. While private respondent paid the purchase price for the share, petitioner was given legal title thereto. Thus, a resulting trust is presumed as a matter of law. The burden then shifted to the transferee to show otherwise, that it was just a loan. Such resulting trust could have been rebutted by proof of a contrary intention by a showing that, in fact, no trust was intended. Petitioner could have negated the trust agreement by contrary, consistent and convincing evidence on rebuttal. However, on the witness stand, petitioner failed to do so persuasively. On cross-examination, the petitioner testified as follows: ATTY. AQUINO (continuing) Q. Okay, let me go to the cash advance that you mentioned Mr. Witness, is there any document proving that you claimed cash advance signed by an officer of the Chamber? A. I believe the best evidence is the check. Q. Is there any document? COURT Other than the Check? MR. THOMSON Nothing more. ATTY. AQUINO Is there any application filed in the Chamber to avail of this cash advance? A. Verbal only. Q. Nothing written, and can you tell to this Honorable Court what are the stipulations or conditions, or terms of this transaction of securing this cash advance or loan?

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xxx xxx xxx COURT How are you going to repay the cash advance? MR. THOMSON The cash advance, we never stipulate when I have to repay it, but I presume that I would, when able to repay the money. 25 In deciding whether the property was wrongfully appropriated or retained and what the intent of the parties was at the time of the conveyance, the court must rely upon its impression of the credibility of the witnesses. 26 Intent is a question of fact, the determination of which is not reviewable unless the conclusion drawn by the trier is one which could not reasonably be drawn. 27 Petitioner's denial is not adequate to rebut the trust. Time and again, we have ruled that denials, if unsubstantiated by clear and convincing evidence, are deemed negative and self-serving evidence, unworthy of credence. 28 The trust between the parties having been established, petitioner advanced an alternative defense that the private respondent waived the beneficial ownership of MPC share by issuing the Release and Quitclaim in his favor. This argument is less than persuasive. The quitclaim executed by private respondent does not clearly show the intent to include therein the ownership over the MPC share. Private respondent even asserts that at the time the Release and Quitclaim was executed on September 29, 1989, the ownership of the MPC share was not controversial nor contested. Settled is the rule that a waiver to be valid and effective must, in the first place, be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. 29 A waiver may not be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. 30 If we apply the standard rule that waiver must be cast in clear and unequivocal terms, then clearly the general terms of the cited release and quitclaim indicates merely a clearance from general accountability, not specifically a waiver of AmCham's beneficial ownership of the disputed shares. Additionally, the intention to waive a right or advantage must be shown clearly and convincingly, and when the only proof of intention rests in what a party does, his act should be so manifestly consistent with, and indicative of, an intent to voluntarily relinquish the particular right or advantage that no other reasonable explanation of his conduct is possible. 31 Considering the terms of the quitclaim executed by the President of private respondent, the tenor of the document does not lead to the purported conclusion that be intended to renounce private respondent's beneficial title over its share in the Manila Polo Club. We, therefore, find no reversible error in the respondent Court's holding that private respondent, AmCham, is the beneficial owner of the share in dispute. Turning now to the second issue, the petitioner contends that the Articles of Incorporation and By-laws of Manila Polo Club prohibit corporate membership. However, private respondent does not insist nor intend to transfer the club membership in its name but rather to its designated nominee. For as properly ruled by the Court of Appeals: The matter prayed for does not involve the transfer of said share to the appellant, an artificial person. The transfer sought is to the appellant's nominee. Even if the MPC By-Laws and Articles prohibit corporate membership, there would be no violation of said prohibition for the appellant's nominee to whom the said share is sought to be transferred would certainly be a natural person. . . . As to whether or not the transfer of said share the appellant's nominee would be disapproved by the MPC, is a 32 matter that should be raised at the proper time, which is only if such transfer is disapproved by the MPC. The Manila Polo Club does not necessarily prohibit the transfer of proprietary shares by its members. The Club only restricts membership to deserving applicants in accordance with its rules, when the amended Articles of Incorporation states that: "No transfer shall be valid except between the parties, and shall be registered in the Membership Book unless made in accordance with these Articles and the By-Laws". 33 Thus, as between parties herein, there is no question that a transfer is feasible. Moreover, authority granted to a corporation to regulate the transfer of its stock does not empower it to restrict the right of a stockholder to transfer his shares, but merely authorizes the adoption of regulations as to the formalities and procedure to be followed in effecting 34 transfer.

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In this case, the petitioner was the nominee of the private respondent to hold the share and enjoy the privileges of the club. But upon the expiration of petitioner's employment as officer and consultant of AmCham, the incentives that go with the position, including use of the MPC share, also ceased to exist. It now behooves petitioner to surrender said share to private respondent's next nominee, another natural person. Obviously this arrangement of trust and confidence cannot be defeated by the petitioner's citation of the MPC rules to shield his untenable position, without doing violence to basic tenets of justice and fair dealing. However, we still have to ascertain whether the rights of herein parties to the trust still subsist. It has been held that so long as there has been no denial or repudiation of the trust, the possession of the trustee of an express and continuing trust is presumed to be that of the beneficiary, and the statute of limitations does not run between them. 35 With regard to a constructive or a resulting trust, the statute of limitations does not begin to run until the trustee clearly repudiates or disavows the trust and such disavowal is brought home to the other party, "cestui que trust". 36 The statute of limitations runs generally from the time when the act was done by which the party became chargeable as a trustee by operation of law or when the beneficiary knew that he had a cause of action, 37 in the absence of fraud or concealment. Noteworthy in the instant case, there was no declared or explicit repudiation of the trust existing between the parties. Such repudiation could only be inferred as evident when the petitioner showed his intent to appropriate the MPC share for himself. Specifically, this happened when he requested to retain the MPC share upon his reimbursing the purchase price of P110,000, a request denied promptly by private respondent. Eventually, petitioner refused to surrender the share despite the written demand of private respondent. This act could then be construed as repudiation of the trust. The statute of limitation could start to set in at this point in time. But private respondent took immediate positive action. Thus, on May 15, 1990, private respondent filed an action to recover the MPC share. Between the time of implicit repudiation of the trust on October 9, 1989, as evidenced by petitioner's letter of said date, and private respondent's institution of the action to recover the MPC share on May 15, 1990, only about seven months bad lapsed. Our laws on the matter provide that actions to recover movables shall prescribe eight years from the time the possession thereof is lot, 38 unless the possessor has acquired the ownership by prescription for a less period of four years if in good faith. 39 Since the private respondent filed the necessary action on time and the defense of good faith is not available to the petitioner, there is no basis for any purported claim of prescription, after repudiation of the trust, which will entitle petitioner to ownership of the disputed share. As correctly held by the respondent court, petitioner has the obligation to transfer now said share to the nominee of private respondent. WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision of the Court of Appeals of May 19, 1994, is AFFIRMED. COSTS against petitioner. SO ORDERED. Davide, Jr., Vitug and Panganiban, JJ., concur. Bellosillo, J., is on leave. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-24687

September 21, 1968

IN THE MATTER OF THE PETITION TO BE ADMITTED A CITIZEN OF THE PHILIPPINES, FONG CHOY, also known as CARLOS YEE, petitioner-appellee, vs. REPUBLIC OF THE PHILIPPINES, oppositor-appellant. Jose A. Uy for petitioner-appellee. Office of the Solicitor General for oppositor-appellant.

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FERNANDO, J.: The question presented in this appeal from a grant of citizenship is whether an applicant, who previously pleaded guilty to an indictment for the violation of the Price Tag Law, had nonetheless successfully hurdled the barrier rightfully interposed to weed out undesirables and to bestow citizenship only on the deserving. The lower court, the Hon. Francisco Geronimo presiding, answered in the affirmative. As the correct response ought to have been anything but that, we reverse the lower court. In the statement of facts in the brief for the Republic as appellant, there being an acceptance of what was set forth therein in 1 petitioner-appellee's brief, it was expressly set forth: "During the hearing, the petitioner admitted that he was fined P25.00 for violation of the Price Tag Law. He explained that at that time all the articles he was selling were properly tagged as to its prices, but it so happened that the tag of a certain article fell and when the inspector came the tag was not on the article. In order to avoid any 2 more discussion, he paid the fine. ... ." The above admission notwithstanding, there being an opposition to the petition filed by the Republic as to his failure to conduct himself in a proper and irreproachable manner as shown by such violation of the Price Tag Law, the lower court, on March 24, 1965, rendered a decision to the effect that there was no impediment to applicant Fong Choy's naturalization. It was held that he was possessed of all the qualifications required by law and none of the disqualifications specified therein, thus entitling him to the grant of Filipino citizenship. The Republic appealed.1awphîl.nèt We sustain the appeal and reverse the lower court. Its rather generous frame of mind in considering this application for citizenship, manifested in the decision appealed from, finds no support in the law. The decision was rendered on March 24, 1965. Approximately five months previously, on October 30, 1964, in Tio Tek Chai v. Republic, 3 this Court held that violation of the Price Tag Law "certainly renders [petitioner's] conduct anything but proper and irreproachable." What this Court has ruled is binding on inferior tribunals. The lower court, instead of exhibiting deference and respect for a decision of this Court, would in effect overrule the same. It did not have such a power. What this Court had decreed must be obeyed. The lower court's duty was plain. It failed to do it. Its decision is tainted with the corrosion of substantial legal error. It cannot stand. In the Tio Tek Chai decision, the opinion being penned by Justice Makalintal, reference was made to the testimonial evidence of applicant to the effect that he had the qualifications and none of the disqualifications for naturalization. The opinion continues: "One of the facts disclosed by such evidence, and now relied upon by appellant as the only ground for urging the denial of the petition, is that sometime in 1956, petitioner was charged with violation of the Price Tag Law (Republic Act No. 71) and upon his plea of guilty was sentenced to pay a fine of P10.00. Petitioner tried to minimize the significance of that conviction as follows: that he was the owner of a bakery, from which he was deriving his income; that one day in 1956 his storekeeper cleaned the showcase in his establishment where different kinds of bread and biscuit were displayed; that the storekeeper failed to replace the price tag pertaining to one of them and a policeman noticed the omission; and that although petitioner was not in the bakery at the time he nevertheless owned the violation, preferring the fine to the trouble of defending himself in a litigation." It goes on to refer to the "considerable discussion in the briefs as to whether or not the offense of which petitioner was convicted" involves moral turpitude. Petitioner was sustained by the Court below in his view that it does not, but the Solicitor General maintained the contrary. This Court, in the Tio Tek Chai decision, ruled that "the point is of no decisive importance." It explained why: "Conviction of a crime involving moral turpitude is one of the grounds upon which an alien is absolutely disqualified from becoming naturalized as a Filipino citizen, according to Section 4 of the Revised Naturalization Law (Commonwealth Act No. 473, as amended). However, it is not enough that an applicant be not disqualified under said provision; it is also required that he be possessed of the qualifications enumerated in Section 2. And among those qualifications is that he must have conducted himself in a proper and irreproachable manner during the entire period of his residence in the Philippines in his relation with the constituted government as well as with the community in which he is living." Moreover, in that case, the explanation that the plea of guilt was inspired, presumably "for convenience as businessmen in general desire to devote all their time to their business rather than to waste [it]," in lawsuits failed to satisfy this Tribunal. Thus, according to the concluding paragraph of the Tio Tek Chai opinion: "Republic Act No. 71, as amended by Republic Act No. 1074, provides that all articles of commerce and trade offered for sale to the public at retail shall be publicly displayed with appropriate tags or labels to indicate the price of each article and that said articles shall be sold uniformly and without discrimination at the stated prices. The absence of price tags could obviously serve as a means to facilitate profiteering; and the law was enacted precisely to protect the buying public therefrom. Violation of this law by petitioner certainly renders his conduct anything but proper and irreproachable. The explanation given by him — that he pleaded guilty simply to avoid a troublesome court proceeding — deserves

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little credence; and if true at all betrays a lack of faith in the administration of justice in this country that is unseemly in one desiring to become a citizen." So it ought to have been in this case. That is all that needs be said concerning this appeal of the Republic which, as above pointed out, must be given a favorable response. One other point. The lower court apparently was satisfied with the explanation that while petitioner saw to it that the articles he was selling were properly tagged, "it so happened that the tag of a certain article fell, and when the inspector came, the tag was not on the article." 4 Off-hand, such an explanation appears to strain the limits of human credulity, but, of course, some minds are more credulous than others. Such a version could, without implausibility, be looked upon as indicative of applicant's ingenuity, apparently taxed to the utmost, to explain the inexplicable and excuse the inexcusable. It could have been inspired by an awareness that unless he could offer some sort of a justification, however lame, the obstacle to the grant of citizenship was insuperable. Hence such a version. Truth may be stranger than fiction, but it would not be safe rule to consider as the test of veracity the improbability of what is asserted. The unbelievable as such, can, more often than not, hardly claim kinship with the truth. The lower court apparently was of a different mind. That is no guaranty of the correctness of its conclusion. Far from it. Even if there were no binding Tio Tek Chai ruling therefore, the lower court ought to have been less generous in its indiscriminate acceptance of explanations of such character. It ought to have shown greater awareness of the trend of decisions of this Tribunal, which is rightfully insistent on the rigorous observance of each and every requisite indispensable for the acquisition of citizenship. Such should be the case if the boon of nationality which is the basis of political rights is to be accorded only to those who, by their exemplary behavior and conduct, have earned the title-deed to membership in our political community. The applicant in this case failed to live up to such a rigorous standard. Hence, his petition ought to have been denied. WHEREFORE, the decision of the lower court naturalizing petitioner Fong Choy, also known as Carlos Yee, is reversed. Costs against petitioner. Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro and Angeles, JJ., concur. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. L-30061 February 27, 1974 THE PEOPLE OF THE PHILIPPINES, plaintiff-appellees, vs. JOSE JABINAL Y CARMEN, defendant-appellant. Office of the Solicitor General Felix V. Makasiar and Solicitor Antonio M. Martinez for plaintiff-appellee. Pedro Panganiban y Tolentino for defendant-appellant.

ANTONIO, J.:p Appeal from the judgment of the Municipal Court of Batangas (provincial capital), Batangas, in Criminal Case No. 889, finding the accused guilty of the crime of Illegal Possession of Firearm and Ammunition and sentencing him to suffer an indeterminate penalty

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ranging from one (1) year and one (1) day to two (2) years imprisonment, with the accessories provided by law, which raises in issue 1 the validity of his conviction based on a retroactive application of Our ruling in People v. Mapa. The complaint filed against the accused reads: That on or about 9:00 o'clock, p.m., the 5th day of September, 1964, in the poblacion, Municipality of Batangas, Province of Batangas, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a person not authorized by law, did then and there wilfully, unlawfully and feloniously keep in his possession, custody and direct control a revolver Cal. .22, RG8 German Made with one (1) live ammunition and four (4) empty shells without first securing the necessary permit or license to possess the same. At the arraignment on September 11, 1964, the accused entered a plea of not guilty, after which trial was accordingly held. The accused admitted that on September 5, 1964, he was in possession of the revolver and the ammunition described in the complaint, without the requisite license or permit. He, however, claimed to be entitled to exoneration because, although he had no license or permit, he had an appointment as Secret Agent from the Provincial Governor of Batangas and an appointment as Confidential Agent from the PC Provincial Commander, and the said appointments expressly carried with them the authority to possess and carry the firearm in question. Indeed, the accused had appointments from the above-mentioned officials as claimed by him. His appointment from Governor Feliciano Leviste, dated December 10, 1962, reads: Reposing special trust and confidence in your civic spirit, and trusting that you will be an effective agent in the detection of crimes and in the preservation of peace and order in the province of Batangas, especially with respect to the suppression of trafficking in explosives, jueteng, illegal cockfighting, cattle rustling, robbery and the detection of unlicensed firearms, you are hereby appointed a SECRET AGENT of the undersigned, the appointment to take effect immediately, or as soon as you have qualified for the position. As such Secret Agent, your duties shall be those generally of a peace officer and particularly to help in the preservation of peace and order in this province and to make reports thereon to me once or twice a month. It should be clearly understood that any abuse of authority on your part shall be considered sufficient ground for the automatic cancellation of your appointment and immediate separation from the service. In accordance with the decision of the Supreme Court in G.R. No. L12088 dated December 23, 1959, you will have the right to bear a firearm, particularly described below, for use in connection with the performance of your duties. By virtue hereof, you may qualify and enter upon the performance of your duties by taking your oath of office and filing the original thereof with us. Very truly yours, (Sgd.) FELICIA NO LEVISTE Provinci al Governo r FIREARM AUTHORIZED TO CARRY: Kind: — ROHM-Revolver Make: — German SN: — 64 Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

Cal:— .22 On March 15, 1964, the accused was also appointed by the PC Provincial Commander of Batangas as Confidential Agent with duties to furnish information regarding smuggling activities, wanted persons, loose firearms, subversives and other similar subjects that might affect the peace and order condition in Batangas province, and in connection with these duties he was temporarily authorized to possess a ROHM revolver, Cal. .22 RG-8 SN-64, for his personal protection while in the performance of his duties. The accused contended before the court a quo that in view of his above-mentioned appointments as Secret Agent and Confidential Agent, with authority to possess the firearm subject matter of the prosecution, he was entitled to acquittal on the basis of the Supreme Court's decision in People vs. Macarandang 2 and People vs. Lucero. 3 The trial court, while conceding on the basis of the evidence of record the accused had really been appointed Secret Agent and Confidential Agent by the Provincial Governor and the PC Provincial Commander of Batangas, respectively, with authority to possess and carry the firearm described in the complaint, nevertheless held the accused in its decision dated December 27, 1968, criminally liable for illegal possession of a firearm and ammunition on the ground that the rulings of the Supreme Court in the cases of Macarandang and Lucero were reversed and abandoned in People vs. Mapa, supra. The court considered as mitigating circumstances the appointments of the accused as Secret Agent and Confidential Agent. Let us advert to Our decisions in People v. Macarandang, supra, People v. Lucero, supra, and People v. Mapa, supra. In Macarandang, We reversed the trial court's judgment of conviction against the accused because it was shown that at the time he was found to possess a certain firearm and ammunition without license or permit, he had an appointment from the Provincial Governor as Secret Agent to assist in the maintenance of peace and order and in the detection of crimes, with authority to hold and carry the said firearm and ammunition. We therefore held that while it is true that the Governor has no authority to issue any firearm license or permit, nevertheless, section 879 of the Revised Administrative Code provides that "peace officers" are exempted from the requirements relating to the issuance of license to possess firearms; and Macarandang's appointment as Secret Agent to assist in the maintenance of peace and order and detection of crimes, sufficiently placed him in the category of a "peace officer" equivalent even to a member of the municipal police who under section 879 of the Revised Administrative Code are exempted from the requirements relating to the issuance of license to possess firearms. In Lucero, We held that under the circumstances of the case, the granting of the temporary use of the firearm to the accused was a necessary means to carry out the lawful purpose of the batallion commander to effect the capture of a Huk leader. In Mapa, expressly abandoning the doctrine in Macarandang, and by implication, that in Lucero, We sustained the judgment of conviction on the following ground: The law is explicit that except as thereafter specifically allowed, "it shall be unlawful for any person to ... possess any firearm, detached parts of firearms or ammunition therefor, or any instrument or implement used or intended to be used in the manufacture of firearms, parts of firearms, or ammunition." (Sec. 878, as amended by Republic Act No. 4, Revised Administrative Code.) The next section provides that "firearms and ammunition regularly and lawfully issued to officers, soldiers, sailors, or marines [of the Armed Forces of the Philippines], the Philippine Constabulary, guards in the employment of the Bureau of Prisons, municipal police, provincial governors, lieutenant governors, provincial treasurers, municipal treasurers, municipal mayors, and guards of provincial prisoners and jails," are not covered "when such firearms are in possession of such officials and public servants for use in the performance of their official duties." (Sec. 879, Revised Administrative Code.) The law cannot be any clearer. No provision is made for a secret agent. As such he is not exempt. ... . It will be noted that when appellant was appointed Secret Agent by the Provincial Government in 1962, and Confidential Agent by the Provincial Commander in 1964, the prevailing doctrine on the matter was that laid down by Us in People v. Macarandang (1959) and People v. Lucero (1958). Our decision in People v. Mapa reversing the aforesaid doctrine came only in 1967. The sole question in this appeal is: Should appellant be acquitted on the basis of Our rulings in Macarandang and Lucero, or should his conviction stand in view of the complete reversal of the Macarandang and Lucero doctrine in Mapa? The Solicitor General is of the first view, and he accordingly recommends reversal of the appealed judgment. Decisions of this Court, although in themselves not laws, are nevertheless evidence of what the laws mean, and this is the reason why under Article 8 of the New Civil Code "Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system ... ." The interpretation upon a law by this Court constitutes, in a way, a part of the law as of the date that law originally passed, since this Court's construction merely establishes the contemporaneous legislative intent that law thus construed intends to effectuate. The settled rule supported by numerous authorities is a restatement of legal maxim "legis interpretatio legis vim obtinet" — the interpretation placed upon the written law by a competent court has the force of law. The doctrine laid down in Lucero andMacarandang was part of the jurisprudence, hence of the law, of the land, at the time appellant was found in

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possession of the firearm in question and when he arraigned by the trial court. It is true that the doctrine was overruled in the Mapa case in 1967, but when a doctrine of this Court is overruled and a different view is adopted, the new doctrine should be applied prospectively, and should not apply to parties who had relied on the old doctrine and acted on the faith thereof. This is especially true in the construction and application of criminal laws, where it is necessary that the punishability of an act be reasonably foreseen for the guidance of society. It follows, therefore, that considering that appellant conferred his appointments as Secret Agent and Confidential Agent and authorized to possess a firearm pursuant to the prevailing doctrine enunciated in Macarandang andLucero, under which no criminal liability would attach to his possession of said firearm in spite of the absence of a license and permit therefor, appellant must be absolved. Certainly, appellant may not be punished for an act which at the time it was done was held not to be punishable. WHEREFORE, the judgment appealed from is hereby reversed, and appellant is acquitted, with costs de oficio. Zaldivar (Chairman), Barredo, Fernandez and Aquino, JJ., concur. Fernando, J., took no part. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 166562

March 31, 2009

BENJAMIN G. TING, Petitioner, vs. CARMEN M. VELEZ-TING, Respondent. DECISION NACHURA, J.: Before us is a petition for review on certiorari seeking to set aside the November 17, 2003 Amended Decision1 of the Court of Appeals (CA), and its December 13, 2004 Resolution2 in CA-G.R. CV No. 59903. The appellate court, in its assailed decision and resolution, affirmed the January 9, 1998 Decision3 of the Regional Trial Court (RTC), Branch 23, Cebu City, declaring the marriage between petitioner and respondent null and void ab initio pursuant to Article 36 of the Family Code.4 The facts follow. Petitioner Benjamin Ting (Benjamin) and respondent Carmen Velez-Ting (Carmen) first met in 1972 while they were classmates in medical school.5 They fell in love, and they were wed on July 26, 1975 in Cebu City when respondent was already pregnant with their first child. At first, they resided at Benjamin’s family home in Maguikay, Mandaue City.6 When their second child was born, the couple decided to move to Carmen’s family home in Cebu City.7 In September 1975, Benjamin passed the medical board examinations8 and thereafter proceeded to take a residency program to become a surgeon but shifted to anesthesiology after two years. By 1979, Benjamin completed the preceptorship program for the said field9 and, in 1980, he began working for Velez Hospital, owned by Carmen’s family, as member of its active staff,10 while Carmen worked as the hospital’s Treasurer.11 The couple begot six (6) children, namely Dennis, born on December 9, 1975; James Louis, born on August 25, 1977; Agnes Irene, born on April 5, 1981; Charles Laurence, born on July 21, 1986; Myles Vincent, born on July 19, 1988; and Marie Corinne, born on June 16, 1991.12 On October 21, 1993, after being married for more than 18 years to petitioner and while their youngest child was only two years old, Carmen filed a verified petition before the RTC of Cebu City praying for the declaration of nullity of their marriage based on Article

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36 of the Family Code. She claimed that Benjamin suffered from psychological incapacity even at the time of the celebration of their 13 marriage, which, however, only became manifest thereafter. In her complaint, Carmen stated that prior to their marriage, she was already aware that Benjamin used to drink and gamble occasionally with his friends.14 But after they were married, petitioner continued to drink regularly and would go home at about midnight or sometimes in the wee hours of the morning drunk and violent. He would confront and insult respondent, physically assault her and force her to have sex with him. There were also instances when Benjamin used his gun and shot the gate of their house.15 Because of his drinking habit, Benjamin’s job as anesthesiologist was affected to the point that he often had to refuse to answer the call of his fellow doctors and to pass the task to other anesthesiologists. Some surgeons even stopped calling him for his services because they perceived petitioner to be unreliable. Respondent tried to talk to her husband about the latter’s drinking 16 problem, but Benjamin refused to acknowledge the same. Carmen also complained that petitioner deliberately refused to give financial support to their family and would even get angry at her whenever she asked for money for their children. Instead of providing support, Benjamin would spend his money on drinking and 17 18 gambling and would even buy expensive equipment for his hobby. He rarely stayed home and even neglected his obligation to his 19 children. Aside from this, Benjamin also engaged in compulsive gambling.20 He would gamble two or three times a week and would borrow from his friends, brothers, or from loan sharks whenever he had no money. Sometimes, Benjamin would pawn his wife’s own jewelry to finance his gambling.21 There was also an instance when the spouses had to sell their family car and even a portion of the lot Benjamin inherited from his father just to be able to pay off his gambling debts.22 Benjamin only stopped going to the casinos in 1986 after he was banned therefrom for having caused trouble, an act which he said he purposely committed so that he would be banned from the gambling establishments.23 In sum, Carmen’s allegations of Benjamin’s psychological incapacity consisted of the following manifestations: 1. Benjamin’s alcoholism, which adversely affected his family relationship and his profession; 2. Benjamin’s violent nature brought about by his excessive and regular drinking; 3. His compulsive gambling habit, as a result of which Benjamin found it necessary to sell the family car twice and the property he inherited from his father in order to pay off his debts, because he no longer had money to pay the same; and 4. Benjamin’s irresponsibility and immaturity as shown by his failure and refusal to give regular financial support to his family.24 In his answer, Benjamin denied being psychologically incapacitated. He maintained that he is a respectable person, as his peers would confirm. He said that he is an active member of social and athletic clubs and would drink and gamble only for social reasons and for leisure. He also denied being a violent person, except when provoked by circumstances.25 As for his alleged failure to support his family financially, Benjamin claimed that it was Carmen herself who would collect his professional fees from Velez Hospital when 26 he was still serving there as practicing anesthesiologist. In his testimony, Benjamin also insisted that he gave his family financial support within his means whenever he could and would only get angry at respondent for lavishly spending his hard-earned money on unnecessary things.27 He also pointed out that it was he who often comforted and took care of their children, while Carmen played mahjong with her friends twice a week.28 During the trial, Carmen’s testimony regarding Benjamin’s drinking and gambling habits and violent behavior was corroborated by 29 Susana Wasawas, who served as nanny to the spouses’ children from 1987 to 1992. Wasawas stated that she personally witnessed 30 instances when Benjamin maltreated Carmen even in front of their children. 31

Carmen also presented as witness Dr. Pureza Trinidad-Oñate, a psychiatrist. Instead of the usual personal interview, however, Dr. Oñate’s evaluation of Benjamin was limited to the transcript of stenographic notes taken during Benjamin’s deposition because the latter had already gone to work as an anesthesiologist in a hospital in South Africa. After reading the transcript of stenographic notes, Dr. Oñate concluded that Benjamin’s compulsive drinking, compulsive gambling and physical abuse of respondent are clear 32 indications that petitioner suffers from a personality disorder. To refute Dr. Oñate’s opinion, petitioner presented Dr. Renato D. Obra, a psychiatrist and a consultant at the Department of Psychiatry in Don Vicente Sotto Memorial Medical Center, as his expert witness.33 Dr. Obra evaluated Benjamin’s psychological

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behavior based on the transcript of stenographic notes, as well as the psychiatric evaluation report prepared by Dr. A.J.L. Pentz, a psychiatrist from the University of Pretoria in South Africa, and his (Dr. Obra’s) interview with Benjamin’s brothers.34 Contrary to Dr. Oñate’s findings, Dr. Obra observed that there is nothing wrong with petitioner’s personality, considering the latter’s good relationship with his fellow doctors and his good track record as anesthesiologist.35 On January 9, 1998, the lower court rendered its Decision36 declaring the marriage between petitioner and respondent null and void. The RTC gave credence to Dr. Oñate’s findings and the admissions made by Benjamin in the course of his deposition, and found him to be psychologically incapacitated to comply with the essential obligations of marriage. Specifically, the trial court found Benjamin an excessive drinker, a compulsive gambler, someone who prefers his extra-curricular activities to his family, and a person with violent tendencies, which character traits find root in a personality defect existing even before his marriage to Carmen. The decretal portion of the decision reads: WHEREFORE, all the foregoing considered, judgment is hereby rendered declaring the marriage between plaintiff and defendant null and void ab initio pursuant to Art. 36 of the Family Code. x x x xxxx SO ORDERED.37 Aggrieved, petitioner appealed to the CA. On October 19, 2000, the CA rendered a Decision38 reversing the trial court’s ruling. It faulted the trial court’s finding, stating that no proof was adduced to support the conclusion that Benjamin was psychologically incapacitated at the time he married Carmen since Dr. Oñate’s conclusion was based only on theories and not on established fact,39 contrary to the guidelines set forth in Santos v. Court of Appeals40 and in Rep. of the Phils. v. Court of Appeals and Molina.41 Because of this, Carmen filed a motion for reconsideration, arguing that the Molina guidelines should not be applied to this case since the Molina decision was promulgated only on February 13, 1997, or more than five years after she had filed her petition with the RTC.42 She claimed that the Molina ruling could not be made to apply retroactively, as it would run counter to the principle of stare decisis. Initially, the CA denied the motion for reconsideration for having been filed beyond the prescribed period. Respondent thereafter filed a manifestation explaining compliance with the prescriptive period but the same was likewise denied for lack of merit. Undaunted, respondent filed a petition for certiorari43 with this Court. In a Resolution44 dated March 5, 2003, this Court granted the petition and directed the CA to resolve Carmen’s motion for reconsideration.45 On review, the CA decided to reconsider its previous ruling. Thus, on November 17, 2003, it issued an Amended Decision46reversing its first ruling and sustaining the trial court’s decision.47 A motion for reconsideration was filed, this time by Benjamin, but the same was denied by the CA in its December 13, 2004 Resolution.48 Hence, this petition. For our resolution are the following issues: I. Whether the CA violated the rule on stare decisis when it refused to follow the guidelines set forth under the Santos and Molina cases; II. Whether the CA correctly ruled that the requirement of proof of psychological incapacity for the declaration of absolute nullity of marriage based on Article 36 of the Family Code has been liberalized; and III. Whether the CA’s decision declaring the marriage between petitioner and respondent null and void [is] in accordance with law and jurisprudence. We find merit in the petition. I. On the issue of stare decisis. The principle of stare decisis enjoins adherence by lower courts to doctrinal rules established by this Court in its final decisions. It is based on the principle that once a question of law has been examined and decided, it should be deemed settled and closed to

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further argument. Basically, it is a bar to any attempt to relitigate the same issues, necessary for two simple reasons: economy 51 and stability. In our jurisdiction, the principle is entrenched in Article 8 of the Civil Code. This doctrine of adherence to precedents or stare decisis was applied by the English courts and was later adopted by the United States. Associate Justice (now Chief Justice) Reynato S. Puno’s discussion on the historical development of this legal principle in his dissenting opinion in Lambino v. Commission on Elections52 is enlightening: The latin phrase stare decisis et non quieta movere means "stand by the thing and do not disturb the calm." The doctrine started with the English Courts. Blackstone observed that at the beginning of the 18th century, "it is an established rule to abide by former precedents where the same points come again in litigation." As the rule evolved, early limits to its application were recognized: (1) it would not be followed if it were "plainly unreasonable"; (2) where courts of equal authority developed conflicting decisions; and, (3) the binding force of the decision was the "actual principle or principles necessary for the decision; not the words or reasoning used to reach the decision." The doctrine migrated to the United States. It was recognized by the framers of the U.S. Constitution. According to Hamilton, "strict rules and precedents" are necessary to prevent "arbitrary discretion in the courts." Madison agreed but stressed that "x x x once the precedent ventures into the realm of altering or repealing the law, it should be rejected." Prof. Consovoy well noted that Hamilton and Madison "disagree about the countervailing policy considerations that would allow a judge to abandon a precedent." He added that their ideas "reveal a deep internal conflict between the concreteness required by the rule of law and the flexibility demanded in error correction. It is this internal conflict that the Supreme Court has attempted to deal with for over two centuries." Indeed, two centuries of American case law will confirm Prof. Consovoy's observation although stare decisis developed its own life in the United States. Two strains of stare decisis have been isolated by legal scholars. The first, known as vertical stare decisis deals with the duty of lower courts to apply the decisions of the higher courts to cases involving the same facts. The second, known as horizontal stare decisis requires that high courts must follow its own precedents. Prof. Consovoy correctly observes that vertical stare decisis has been viewed as an obligation, while horizontal stare decisis, has been viewed as a policy, imposing choice but not a command. Indeed, stare decisis is not one of the precepts set in stone in our Constitution. It is also instructive to distinguish the two kinds of horizontal stare decisis — constitutional stare decisis and statutory stare decisis. Constitutional stare decisis involves judicial interpretations of the Constitution while statutory stare decisis involves interpretations of statutes. The distinction is important for courts enjoy more flexibility in refusing to apply stare decisis in constitutional litigations. Justice Brandeis' view on the binding effect of the doctrine in constitutional litigations still holds sway today. In soothing prose, Brandeis stated: "Stare decisis is not . . . a universal and inexorable command. The rule of stare decisis is not inflexible. Whether it shall be followed or departed from, is a question entirely within the discretion of the court, which is again called upon to consider a question once decided." In the same vein, the venerable Justice Frankfurter opined: "the ultimate touchstone of constitutionality is the Constitution itself and not what we have said about it." In contrast, the application of stare decisis on judicial interpretation of statutes is more inflexible. As Justice Stevens explains: "after a statute has been construed, either by this Court or by a consistent course of decision by other federal judges and agencies, it acquires a meaning that should be as clear as if the judicial gloss had been drafted by the Congress itself." This stance reflects both respect for Congress' role and the need to preserve the courts' limited resources. In general, courts follow the stare decisis rule for an ensemble of reasons, viz.: (1) it legitimizes judicial institutions; (2) it promotes judicial economy; and, (3) it allows for predictability. Contrariwise, courts refuse to be bound by the stare decisis rule where (1) its application perpetuates illegitimate and unconstitutional holdings; (2) it cannot accommodate changing social and political understandings; (3) it leaves the power to overturn bad constitutional law solely in the hands of Congress; and, (4) activist judges can dictate the policy for future courts while judges that respect stare decisis are stuck agreeing with them. In its 200-year history, the U.S. Supreme Court has refused to follow the stare decisis rule and reversed its decisions in 192 cases. The most famous of these reversals is Brown v. Board of Education which junked Plessy v. Ferguson's "separate but equal doctrine." Plessy upheld as constitutional a state law requirement that races be segregated on public transportation. In Brown, the U.S. Supreme Court, unanimously held that "separate . . . is inherently unequal." Thus, by freeing itself from the shackles of stare decisis, the U.S. Supreme Court freed the colored Americans from the chains of inequality. In the Philippine setting, this Court has likewise refused to be straitjacketed by the stare decisis rule in order to promote public welfare. In La Bugal-B'laan Tribal Association, Inc. v. Ramos, we reversed our original ruling that certain provisions of the Mining Law are unconstitutional. Similarly, in Secretary of Justice v. Lantion, we overturned our first ruling and held, on motion for reconsideration, that a private respondent is bereft of the right to notice and hearing during the evaluation stage of the extradition process.

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An examination of decisions on stare decisis in major countries will show that courts are agreed on the factors that should be considered before overturning prior rulings. These are workability, reliance, intervening developments in the law and changes in fact. In addition, courts put in the balance the following determinants: closeness of the voting, age of the prior decision and its merits. The leading case in deciding whether a court should follow the stare decisis rule in constitutional litigations is Planned Parenthood v. Casey. It established a 4-pronged test. The court should (1) determine whether the rule has proved to be intolerable simply in defying practical workability; (2) consider whether the rule is subject to a kind of reliance that would lend a special hardship to the consequences of overruling and add inequity to the cost of repudiation; (3) determine whether related principles of law have so far developed as to have the old rule no more than a remnant of an abandoned doctrine; and, (4) find out whether facts have so 53 changed or come to be seen differently, as to have robbed the old rule of significant application or justification. To be forthright, respondent’s argument that the doctrinal guidelines prescribed in Santos and Molina should not be applied retroactively for being contrary to the principle of stare decisis is no longer new. The same argument was also raised but was struck 54 55 down in Pesca v. Pesca, and again in Antonio v. Reyes. In these cases, we explained that the interpretation or construction of a law by courts constitutes a part of the law as of the date the statute is enacted. It is only when a prior ruling of this Court is overruled, and a different view is adopted, that the new doctrine may have to be applied prospectively in favor of parties who have relied on the old doctrine and have acted in good faith, in accordance therewith under the familiar rule of "lex prospicit, non respicit." II. On liberalizing the required proof for the declaration of nullity of marriage under Article 36. Now, petitioner wants to know if we have abandoned the Molina doctrine. We have not. In Edward Kenneth Ngo Te v. Rowena Ong Gutierrez Yu-Te,56 we declared that, in hindsight, it may have been inappropriate for the Court to impose a rigid set of rules, as the one in Molina, in resolving all cases of psychological incapacity. We said that instead of serving as a guideline, Molina unintentionally became a straightjacket, forcing all cases involving psychological incapacity to fit into and be bound by it, which is not only contrary to the intention of the law but unrealistic as well because, with respect to psychological incapacity, no case can be considered as on "all fours" with another.57 By the very nature of cases involving the application of Article 36, it is logical and understandable to give weight to the expert opinions furnished by psychologists regarding the psychological temperament of parties in order to determine the root cause, juridical antecedence, gravity and incurability of the psychological incapacity. However, such opinions, while highly advisable, are not conditions sine qua non in granting petitions for declaration of nullity of marriage.58 At best, courts must treat such opinions as decisive but not indispensable evidence in determining the merits of a given case. In fact, if the totality of evidence presented is enough to sustain a finding of psychological incapacity, then actual medical or psychological examination of the person concerned need not be resorted to.59 The trial court, as in any other given case presented before it, must always base its decision not solely on the expert opinions furnished by the parties but also on the totality of evidence adduced in the course of the proceedings. It was for this reason that we found it necessary to emphasize in Ngo Te that each case involving the application of Article 36 must be treated distinctly and judged not on the basis of a priori assumptions, predilections or generalizations but according to its own attendant facts. Courts should interpret the provision on a case-to-case basis, guided by experience, the findings of experts and researchers in psychological disciplines, and by decisions of church tribunals. Far from abandoning Molina, we simply suggested the relaxation of the stringent requirements set forth therein, cognizant of the explanation given by the Committee on the Revision of the Rules on the rationale of the Rule on Declaration of Absolute Nullity of Void Marriages and Annulment of Voidable Marriages (A.M. No. 02-11-10-SC), viz.: To require the petitioner to allege in the petition the particular root cause of the psychological incapacity and to attach thereto the verified written report of an accredited psychologist or psychiatrist have proved to be too expensive for the parties. They adversely affect access to justice o poor litigants. It is also a fact that there are provinces where these experts are not available. Thus, the Committee deemed it necessary to relax this stringent requirement enunciated in the Molina Case. The need for the examination of a party or parties by a psychiatrist or clinical psychologist and the presentation of psychiatric experts shall now be determined by the court during the pre-trial conference.60

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But where, as in this case, the parties had the full opportunity to present professional and expert opinions of psychiatrists tracing the root cause, gravity and incurability of a party’s alleged psychological incapacity, then such expert opinion should be presented and, accordingly, be weighed by the court in deciding whether to grant a petition for nullity of marriage. III. On petitioner’s psychological incapacity. Coming now to the main issue, we find the totality of evidence adduced by respondent insufficient to prove that petitioner is psychologically unfit to discharge the duties expected of him as a husband, and more particularly, that he suffered from such psychological incapacity as of the date of the marriage eighteen (18) years ago. Accordingly, we reverse the trial court’s and the appellate court’s rulings declaring the marriage between petitioner and respondent null and void ab initio. The intendment of the law has been to confine the application of Article 36 to the most serious cases of personality disorders clearly demonstrative of an utter insensitivity or inability to give meaning and significance to the marriage.61 The psychological illness that must have afflicted a party at the inception of the marriage should be a malady so grave and permanent as to deprive one of 62 awareness of the duties and responsibilities of the matrimonial bond he or she is about to assume. 1avvphi1.zw+ In this case, respondent failed to prove that petitioner’s "defects" were present at the time of the celebration of their marriage. She merely cited that prior to their marriage, she already knew that petitioner would occasionally drink and gamble with his friends; but such statement, by itself, is insufficient to prove any pre-existing psychological defect on the part of her husband. Neither did the evidence adduced prove such "defects" to be incurable. The evaluation of the two psychiatrists should have been the decisive evidence in determining whether to declare the marriage between the parties null and void. Sadly, however, we are not convinced that the opinions provided by these experts strengthened respondent’s allegation of psychological incapacity. The two experts provided diametrically contradicting psychological evaluations: Dr. Oñate testified that petitioner’s behavior is a positive indication of a personality disorder,63 while Dr. Obra maintained that there is nothing wrong with petitioner’s personality. Moreover, there appears to be greater weight in Dr. Obra’s opinion because, aside from analyzing the transcript of Benjamin’s deposition similar to what Dr. Oñate did, Dr. Obra also took into consideration the psychological evaluation report furnished by another psychiatrist in South Africa who personally examined Benjamin, as well as his (Dr. Obra’s) personal interview with Benjamin’s brothers.64 Logically, therefore, the balance tilts in favor of Dr. Obra’s findings. Lest it be misunderstood, we are not condoning petitioner’s drinking and gambling problems, or his violent outbursts against his wife. There is no valid excuse to justify such a behavior. Petitioner must remember that he owes love, respect, and fidelity to his spouse as much as the latter owes the same to him. Unfortunately, this court finds respondent’s testimony, as well as the totality of evidence presented by the respondent, to be too inadequate to declare him psychologically unfit pursuant to Article 36. It should be remembered that the presumption is always in favor of the validity of marriage. Semper praesumitur pro matrimonio.65 In this case, the presumption has not been amply rebutted and must, perforce, prevail. WHEREFORE, premises considered, the petition for review on certiorari is GRANTED. The November 17, 2003 Amended Decision and the December 13, 2004 Resolution of the Court of Appeals in CA-G.R. CV No. 59903 are accordingly REVERSED and SET ASIDE. SO ORDERED. ANTONIO EDUARDO B. NACHURA Associate Justice WE CONCUR: CONSUELO YNARES-SANTIAGO Associate Justice Chairperson CONCHITA CARPIO MORALES Associate Justice

*

MINITA V. CHICO-NAZARIO Associate Justice

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DIOSDADO M. PERALTA Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. CONSUELO YNARES-SANTIAGO Associate Justice Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. REYNATO S. PUNO Chief Justice Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 163586

January 27, 2009

SHARON CASTRO, Petitioner, vs. HON. MERLIN DELORIA, as Presiding Judge, Regional Trial Court, Branch 65, Guimaras; the COA-Region VI, represented by its Director; and HON. COURT OF APPEALS, Respondents. DECISION AUSTRIA-MARTINEZ, J.: Before the Court is a Petition for Certiorari under Rule 65 of the Rules of Court filed by Sharon Castro (petitioner) to assail the July 22, 2003 Decision1 of the Court of Appeals (CA) which dismissed CA-G.R. SP No. 69350; and the March 26, 2004 CA Resolution2 which denied the motion for reconsideration. The facts are of record. On May 31, 2000, petitioner was charged by the Ombudsman before the Regional Trial Court (RTC), Branch 65, Guimaras, with Malversation of Public Funds, under an Information which reads, as follows: That on or about the 17th day of August 1998, and for sometime prior thereto, in the Municipality of Buenavista, Province of Guimaras, Philippines and within the jurisdiction of the this Honorable Court, abovenamed accused, a public officer, being the Revenue Officer I of the Bureau of Internal Revenue, Buenavista, Guimaras and as such, was in the custody and possession of public funds in the amount of P556,681.53, Philippine Currency, representing the value of her collections and other accountabilities, for which she is accountable by reason of the duties of her office, in such capacity and committing the offense in relation to office, taking advantage of her public position, with deliberate intent, and with intent to gain, did then and there willfully, unlawfully and feloniously appropriate, take, misappropriate, embezzle and convert to her own personal use and benefit said amount of P556,681.53, and despite notice and demands made upon her account for said public funds, she has failed to do so, to the damage and prejudice of the government.

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CONTRARY TO LAW.3 Petitioner pleaded NOT GUILTY when arraigned on February 16, 2001. On August 31, 2001, petitioner filed a Motion to Quash on the grounds of lack of jurisdiction and lack of authority of the Ombudsman to conduct the preliminary investigation and file the Information. Petitioner argued that the Information failed to 4 allege her salary grade -- a material fact upon which depends the jurisdiction of the RTC. Citing Uy v. Sandiganbayan, petitioner further argued that as she was a public employee with salary grade 27, the case filed against her was cognizable by the RTC and may be investigated and prosecuted only by the public prosecutor, and not by the Ombudsman whose prosecutorial power was limited to cases cognizable by theSandiganbayan.5 6

The RTC denied the Motion to Quash in an Order dated September 7, 2001. It held that the jurisdiction of the RTC over the case did not depend on the salary grade of petitioner, but on the penalty imposable upon the latter for the offense charged.7 Moreover, it sustained the prosecutorial authority of the Ombudsman in the case, pointing out that in Uy, upon motion for clarification filed by the Ombudsman, the Court set aside its August 9, 1999 Decision and issued a March 20, 2001 Resolution expressly recognizing the prosecutorial and investigatory authority of the Ombudsman in cases cognizable by the RTC. The RTC further held that the Motion to Quash was contrary to Sec. 1, Rule 117, for it was filed after petitioner pleaded not guilty under the Information.8 Petitioner filed a Motion for Reconsideration,9 which the RTC denied in its December 18, 2001 Order.10 Petitioner filed a petition for certiorari11 with the CA, but the latter dismissed the petition in the Decision under review. Petitioner’s motion for reconsideration12 was also denied. Hence, the present petition, confining the issues to the following: 1. Whether or not the Ombudsman, as of May 31, 2000, when the Information for Malvesation of Public Funds was instituted against the Petitioner, had the authority to file the same in light of this Supreme Court’s ruling in the First "Uy vs. Sandiganbayan" case, which declared that the prosecutorial powers of the Ombudsman is limited to cases cognizable by the Sandiganbayan. 2. Whether or not the clarificatory Resolution issued by the Supreme Court dated February 22, 2001 in the Uy vs. Sandiganbayan case can be made applicable to the Petitioner-Accused, without violating the constitutional provision on expost facto laws and denial of the accused to due process.13 Petitioner contends that from the time of the promulgation on August 9, 1999 of the Decision of the Court in Uy up to the time of issuance on March 20, 2001 of the Resolution of the Court in the same case, the prevailing jurisprudence was that the Ombudsman had no prosecutorial powers over cases cognizable by the RTC. As the investigation and prosecution against petitioner was conducted by the Ombudsman beginning April 26, 2000, then the August 9, 1999 Decision in Uy was applicable, notwithstanding that the said decision was set aside in the March 20, 2001 Resolution of the Court in said case. Hence, the Information that was filed against petitioner was void for at that time the Ombudsman had no investigatory and prosecutorial powers over the case. The petition lacks merit. The petition calls to mind Office of the Ombudsman v. Enoc,14 wherein accused Ruben Enoc, et al. invoked the August 9, 1999 Decision of the Court in Uy15 in a motion to dismiss the 11 counts of malversation that were filed against them by the Ombudsman before the RTC. The RTC granted the motion but upon petition filed by the Ombudsman, the Court reversed the RTC and held: In turn, petitioner filed a Manifestation invoking the very same resolution promulgated on March 20, 2001 in Uy v. Sandiganbayan reconsidering the ruling that the prosecutory power of the Ombudsman extended only to cases cognizable by the Sandiganbayan. Indeed, this Court has reconsidered the said ruling and held that the Ombudsman has powers to prosecute not only graft cases within the jurisdiction of the Sandiganbayan but also those cognizable by the regular courts. It held:

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The power to investigate and to prosecute granted by law to the Ombudsman is plenary and unqualified. It pertains to any act or omission of any public officer or employee when such act or omission appears to be illegal, unjust, improper or inefficient. The law does not make a distinction between cases cognizable by the Sandiganbayan and those cognizable by regular courts. It has been held that the clause "any illegal act or omission of any public official" is broad enough to embrace any crime committed by a public officer or employee. The reference made by RA 6770 to cases cognizable by the Sandiganbayan, particularly in Section 15(1) giving the Ombudsman primary jurisdiction over cases cognizable by the Sandiganbayan, and Section 11(4) granting the Special Prosecutor the power to conduct preliminary investigation and prosecute criminal cases within the jurisdiction of the Sandiganbayan, should not be construed as confining the scope of the investigatory and prosecutory power of the Ombudsman to such cases. Section 15 of RA 6770 gives the Ombudsman primary jurisdiction over cases cognizable by the Sandiganbayan. The law defines such primary jurisdiction as authorizing the Ombudsman "to take over, at any stage, from any investigatory agency of the government, the investigation of such cases." The grant of this authority does not necessarily imply the exclusion from its jurisdiction of cases involving public officers and employees cognizable by other courts. The exercise by the Ombudsman of his primary jurisdiction over cases cognizable by the Sandiganbayan is not incompatible with the discharge of his duty to investigate and prosecute other offenses committed by public officers and employees. Indeed, it must be stressed that the powers granted by the legislature to the Ombudsman are very broad and encompass all kinds of malfeasance, misfeasance and non-feasance committed by public officers and employees during their tenure of office. Moreover, the jurisdiction of the Office of the Ombudsman should not be equated with the limited authority of the Special Prosecutor under Section 11 of RA 6770. The Office of the Special Prosecutor is merely a component of the Office of the Ombudsman and may only act under the supervision and control and upon authority of the Ombudsman. Its power to conduct preliminary investigation and to prosecute is limited to criminal cases within the jurisdiction of the Sandiganbayan. Certainly, the lawmakers did not intend to confine the investigatory and prosecutory power of the Ombudsman to these types of cases. The Ombudsman is mandated by law to act on all complaints against officers and employees of the government and to enforce their administrative, civil and criminal liability in every case where the evidence warrants. To carry out this duty, the law allows him to utilize the personnel of his office and/or designate any fiscal, state prosecutor or lawyer in the government service to act as special investigator or prosecutor to assist in the investigation and prosecution of certain cases. Those designated or deputized to assist him work under his supervision and control. The law likewise allows him to direct the Special prosecutor to prosecute cases outside the Sandiganbayan’s jurisdiction in accordance with Section 11(4c) of RA 6770. We, therefore, hold that the Ombudsman has authority to investigate and prosecute Criminal Case Nos. 374(97) to 385(97) against respondents in the RTC, Branch 19 of Digos, Davao Del Sur even as this authority is not exclusive and is shared by him with the regular prosecutors. WHEREFORE, the order, dated October 7, 2000, of the Regional Trial Court, branch 19 of Digos, Davao del Sur is SET ASIDE and Criminal Case Nos. 374(97) to 385(97) are hereby REINSTATED and the Regional Trial Court is ORDERED to try and decide the same. (Emphasis supplied) Similarly relevant is the case of Office of Ombudsman v. Hon. Breva,16 in which, citing the August 9, 1999 Decision in Uy, the RTC dismissed a criminal complaint that was filed before it by the Ombudsman. The Court reversed the RTC, for, "given the Court’s Uy ruling under its March 20, 2001 Resolution, the trial court’s assailed Orders x x x are, in hindsight, without legal support and must, therefore, be set aside." It is settled, therefore, that the March 20, 2001 Resolution in Uy, that the Ombudsman has prosecutorial powers in cases cognizable by the RTC, extends even to criminal information filed or pending at the time when its August 9, 1999 Decision was the operative ruling on the issue. Petitioner would argue, however, that the March 20, 2001 Resolution in Uy cannot have retroactive effect, for otherwise it would 17 amount to "an ex-post facto law, which is constitutionally proscribed." Petitioner is grasping at straws. A judicial interpretation of a statute, such as the Ombudsman Act, constitutes part of that law as of the date of its original passage. Such interpretation does not create a new law but construes a pre-existing one; it merely casts light upon the contemporaneous

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legislative intent of that law. Hence, the March 20, 2001 Resolution of the Court in Uy interpreting the Ombudsman Act is deemed part of the law as of the date of its effectivity on December 7, 1989. Where a judicial interpretation declares a law unconstitutional or abandons a doctrinal interpretation of such law, the Court, recognizing that acts may have been performed under the impression of the constitutionality of the law or the validity of its interpretation, has consistently held that such operative fact cannot be undone by the mere subsequent declaration of the nullity of the law or its interpretation; thus, the declaration can only have a prospective application.19 But where no law is invalidated nor 20 doctrine abandoned, a judicial interpretation of the law should be deemed incorporated at the moment of its legislation. In the present case, the March 20, 2001 Resolution in Uy made no declaration of unconstitutionality of any law nor did it vacate a doctrine long held by the Court and relied upon by the public. Rather, it set aside an erroneous pubescent interpretation of the Ombudsman Act as expressed in the August 9, 1999 Decision in the same case. Its effect has therefore been held by the Court to reach back to validate investigatory and prosecutorial processes conducted by the Ombudsman, such as the filing of the Information against petitioner. With the foregoing disquisition, the second issue is rendered moot and academic. WHEREFORE, the petition is DISMISSED for lack of merit. No costs. SO ORDERED. MA. ALICIA AUSTRIA-MARTINEZ* Associate Justice Acting Chairperson WE CONCUR: DANTE O. TINGA* Associate Justice MINITA V. CHICO-NAZARIO Associate Justice

ANTONIO EDUARDO B. NACHURA Associate Justice

TERESITA J. LEONARDO-DE CASTRO** Associate Justice ATTESTATION I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. MA. ALICIA AUSTRIA-MARTINEZ Associate Justice Acting Chairperson, Third Division CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting Chairperson’s Attestation, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division. LEONARDO A. QUISUMBING Acting Chief Justice

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Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-10010

August 1, 1916

CHU JAN, plaintiff-appellee, vs. LUCIO BERNAS, defendant-appellant. Sulpicio V. Cea for appellant. ARAULLO, J.: On the afternoon of June 26, 1913, a match was held in the cockpit of the municipality of Tabaco, Albay, between two cocks belonging to the plaintiff and to the defendant respectively. Each of said persons had put up a wager of P160; and as the referee of the cockpit had declared the defendant's cock the winner in the bout, the plaintiff brought suit against the defendant in the justice of the peace court of the said pueblo, asking that his own rooster be declared the winner. The justice of the peace court decided that the bout was a draw. From this judgment the defendant appealed to the Court of First Instance of the province. For the purposes of the appeal, the plaintiff filed his complaint and prayed this court to render judgment ordering the defendant to abide by and comply with the rules and regulations governing cockfights, to pay the stipulated wager of P160; to return the other like amount (both sums of wager being held for safe-keeping by the cockpit owner, Tomas Almonte) and to assess the costs of both instances against the defendant. The defendant denied each and all of the allegations of the complaint and moved to dismiss with the costs against the plaintiff. On September 11, 1913, the said Court of First Instance rendered judgment dismissing the appeal without special finding as to costs. The defendant excepted to this judgment as well as to an order dictated by the same court on November 8th of the same year, on the plaintiff's motion, ordering the provincial treasurer of Albay and, if necessary, the municipal treasurer of Tabaco of the same province, to release the deposit of P160 and return it to its owner, the plaintiff Chinaman, Chu Jan. These proceedings have come before us on appeal by means of the proper bill of exceptions. The grounds for the dismissal pronounced by the lower court in the judgment appealed from ere that the court has always dismissed cases of this nature, that he is not familiar with the rules governing cockfights and the duties of referees thereof; that he does not know where to find the law on the subject and, finally, that he knows of no law whatever that governs the rights to the plaintiff and the defendant in questions concerning cockfights. The ignorance of the court or his lack of knowledge regarding the law applicable to a case submitted to him for decision, the fact that the court does not know the rules applicable to a certain matter that is the subject of an appeal which must be decided by him and his not knowing where to find the law relative to the case, are not reasons that can serve to excuse the court for terminating the proceedings by dismissing them without deciding the issues. Such an excuse is the less acceptable because, foreseeing that a case might arise to which no law would be exactly applicable, the Civil Code, in the second paragraph of article 6, provides that the customs of the place shall be observed, and, in the absence thereof, the general principles of law. Therefore the judgment and the order appealed from, hereinbefore mentioned, are reversed and to record of the proceedings shall remanded to the court from whence they came for due trial and judgment as provided by law. No special finding is made with regard to costs. So ordered. Arellano, C. J., Torres, Johnson, and Trent, JJ., concur. Moreland, J., took no part. Republic of the Philippines SUPREME COURT Manila EN BANC Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

G.R. No. L-30642 April 30, 1985 PERFECTO S. FLORESCA, in his own behalf and on behalf of the minors ROMULO and NESTOR S. FLORESCA; and ERLINDA FLORESCA-GABUYO, PEDRO S. FLORESCA, JR., CELSO S. FLORESCA, MELBA S. FLORESCA, JUDITH S. FLORESCA and CARMEN S. FLORESCA; LYDIA CARAMAT VDA. DE MARTINEZ in her own behalf and on behalf of her minor children LINDA, ROMEO, ANTONIO JEAN and ELY, all surnamed Martinez; and DANIEL MARTINEZ and TOMAS MARTINEZ; SALUSTIANA ASPIRAS VDA. DE OBRA, in her own behalf and on behalf of her minor children JOSE, ESTELA, JULITA SALUD and DANILO, all surnamed OBRA; LYDIA CULBENGAN VDA. DE VILLAR, in her own behalf and on behalf of her minor children EDNA, GEORGE and LARRY III, all surnamed VILLAR; DOLORES LOLITA ADER VDA. DE LANUZA, in her own behalf and on behalf of her minor children EDITHA, ELIZABETH, DIVINA, RAYMUNDO, NESTOR and AURELIO, JR. all surnamed LANUZA; EMERENCIANA JOSE VDA. DE ISLA, in her own behalf and on behalf of her minor children JOSE, LORENZO, JR., MARIA, VENUS and FELIX, all surnamed ISLA, petitioners, vs. PHILEX MINING CORPORATION and HON. JESUS P. MORFE, Presiding Judge of Branch XIII, Court of First Instance of Manila, respondents. Rodolfo C. Pacampara for petitioners. Tito M. Villaluna for respondents.

MAKASIAR, J.: This is a petition to review the order of the former Court of First Instance of Manila, Branch XIII, dated December 16, 1968 dismissing petitioners' complaint for damages on the ground of lack of jurisdiction. Petitioners are the heirs of the deceased employees of Philex Mining Corporation (hereinafter referred to as Philex), who, while working at its copper mines underground operations at Tuba, Benguet on June 28, 1967, died as a result of the cave-in that buried them in the tunnels of the mine. Specifically, the complaint alleges that Philex, in violation of government rules and regulations, negligently and deliberately failed to take the required precautions for the protection of the lives of its men working underground. Portion of the complaint reads: xxx xxx xxx 9. That for sometime prior and up to June 28,1967, the defendant PHILEX, with gross and reckless negligence and imprudence and deliberate failure to take the required precautions for the due protection of the lives of its men working underground at the time, and in utter violation of the laws and the rules and regulations duly promulgated by the Government pursuant thereto, allowed great amount of water and mud to accumulate in an open pit area at the mine above Block 43-S-1 which seeped through and saturated the 600 ft. column of broken ore and rock below it, thereby exerting tremendous pressure on the working spaces at its 4300 level, with the result that, on the said date, at about 4 o'clock in the afternoon, with the collapse of all underground supports due to such enormous pressure, approximately 500,000 cubic feet of broken ores rocks, mud and water, accompanied by surface boulders, blasted through the tunnels and flowed out and filled in, in a matter of approximately five (5) minutes, the underground workings, ripped timber supports and carried off materials, machines and equipment which blocked all avenues of exit, thereby trapping within its tunnels of all its men above referred to, including those named in the next preceding paragraph, represented by the plaintiffs herein;

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10. That out of the 48 mine workers who were then working at defendant PHILEX's mine on the said date, five (5) were able to escape from the terrifying holocaust; 22 were rescued within the next 7 days; and the rest, 21 in number, including those referred to in paragraph 7 hereinabove, were left mercilessly to their fate, notwithstanding the fact that up to then, a great many of them were still alive, entombed in the tunnels of the mine, but were not rescued due to defendant PHILEX's decision to abandon rescue operations, in utter disregard of its bounden legal and moral duties in the premises; xxx xxx xxx 13. That defendant PHILEX not only violated the law and the rules and regulations duly promulgated by the duly constituted authorities as set out by the Special Committee above referred to, in their Report of investigation, pages 7-13, Annex 'B' hereof, but also failed completely to provide its men working underground the necessary security for the protection of their lives notwithstanding the fact that it had vast financial resources, it having made, during the year 1966 alone, a total operating income of P 38,220,254.00, or net earnings, after taxes of P19,117,394.00, as per its llth Annual Report for the year ended December 31, 1966, and with aggregate assets totalling P 45,794,103.00 as of December 31, 1966; xxx xxx xxx (pp. 42-44, rec.) A motion to dismiss dated May 14, 1968 was filed by Philex alleging that the causes of action of petitioners based on an industrial accident are covered by the provisions of the Workmen's Compensation Act (Act 3428, as amended by RA 772) and that the former Court of First Instance has no jurisdiction over the case. Petitioners filed an opposition dated May 27, 1968 to the said motion to dismiss claiming that the causes of action are not based on the provisions of the Workmen's Compensation Act but on the provisions of the Civil Code allowing the award of actual, moral and exemplary damages, particularly: Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged to pay for the damage done. Such fault or negligence, if there is no pre- existing contractual relation between the parties, is called a quasi-delict and is governed by the provisions of this Chapter. Art. 2178. The provisions of articles 1172 to 1174 are also applicable to a quasi-delict. (b) Art. 1173—The fault or negligence of the obligor consists in the omission of that diligence which is required by the nature of the obligation and corresponds with the circumstances of the persons, of the time and of the place. When negligence shows bad faith, the provisions of Articles 1171 and 2201, paragraph 2 shall apply. Art. 2201. x x x x x x x x x In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. Art. 2231. In quasi-delicts, exemplary damages may be granted if the defendant acted with gross negligence. After a reply and a rejoinder thereto were filed, respondent Judge issued an order dated June 27, 1968 dismissing the case on the ground that it falls within the exclusive jurisdiction of the Workmen's Compensation Commission. On petitioners' motion for reconsideration of the said order, respondent Judge, on September 23, 1968, reconsidered and set aside his order of June 27, 1968 and allowed Philex to file an answer to the complaint. Philex moved to reconsider the aforesaid order which was opposed by petitioners. On December 16, 1968, respondent Judge dismissed the case for lack of jurisdiction and ruled that in accordance with the established jurisprudence, the Workmen's Compensation Commission has exclusive original jurisdiction over damage or compensation claims for work-connected deaths or injuries of workmen or employees, irrespective of whether or not the employer was negligent, adding that if the employer's negligence results in work-connected deaths or injuries, the employer shall, pursuant to Section 4-A of the Workmen's Compensation Act, pay additional compensation equal to 50% of the compensation fixed in the Act.

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Petitioners thus filed the present petition. In their brief, petitioners raised the following assignment of errors: I THE LOWER COURT ERRED IN DISMISSING THE PLAINTIFFS- PETITIONERS' COMPLAINT FOR LACK OF JURISDICTION. II THE LOWER COURT ERRED IN FAILING TO CONSIDER THE CLEAR DISTINCTION BETWEEN CLAIMS FOR DAMAGES UNDER THE CIVIL CODE AND CLAIMS FOR COMPENSATION UNDER THE WORKMEN'S COMPENSATION ACT. A In the first assignment of error, petitioners argue that the lower court has jurisdiction over the cause of action since the complaint is based on the provisions of the Civil Code on damages, particularly Articles 2176, 2178, 1173, 2201 and 2231, and not on the provisions of the Workmen's Compensation Act. They point out that the complaint alleges gross and brazen negligence on the part of Philex in failing to take the necessary security for the protection of the lives of its employees working underground. They also assert that since Philex opted to file a motion to dismiss in the court a quo, the allegations in their complaint including those contained in the annexes are deemed admitted. In the second assignment of error, petitioners asseverate that respondent Judge failed to see the distinction between the claims for compensation under the Workmen's Compensation Act and the claims for damages based on gross negligence of Philex under the Civil Code. They point out that workmen's compensation refers to liability for compensation for loss resulting from injury, disability or death of the working man through industrial accident or disease, without regard to the fault or negligence of the employer, while the claim for damages under the Civil Code which petitioners pursued in the regular court, refers to the employer's liability for reckless and wanton negligence resulting in the death of the employees and for which the regular court has jurisdiction to adjudicate the same. On the other hand, Philex asserts that work-connected injuries are compensable exclusively under the provisions of Sections 5 and 46 of the Workmen's Compensation Act, which read: SEC. 5. Exclusive right to compensation.—The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws because of said injury ... SEC. 46. Jurisdiction.— The Workmen's Compensation Commissioner shall have exclusive jurisdiction to hear and decide claims for compensation under the Workmen's Compensation Act, subject to appeal to the Supreme Court, ... Philex cites the case of Manalo vs. Foster Wheeler (98 Phil. 855 [1956]) where it was held that "all claims of workmen against their employer for damages due to accident suffered in the course of employment shall be investigated and adjudicated by the Workmen's Compensation Commission," subject to appeal to the Supreme Court. Philex maintains that the fact that an employer was negligent, does not remove the case from the exclusive character of recoveries under the Workmen's Compensation Act; because Section 4-A of the Act provides an additional compensation in case the employer fails to comply with the requirements of safety as imposed by law to prevent accidents. In fact, it points out that Philex voluntarily paid the compensation due the petitioners and all the payments have been accepted in behalf of the deceased miners, except the heirs of Nazarito Floresca who insisted that they are entitled to a greater amount of damages under the Civil Code. In the hearing of this case, then Undersecretary of Labor Israel Bocobo, then Atty. Edgardo Angara, now President of the University of the Philippines, Justice Manuel Lazaro, as corporate counsel and Assistant General Manager of the GSIS Legal Affairs Department, and Commissioner on Elections, formerly UP Law Center Director Froilan Bacungan, appeared as amici curiae and thereafter, submitted their respective memoranda.

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The issue to be resolved as WE stated in the resolution of November 26, 1976, is: Whether the action of an injured employee or worker or that of his heirs in case of his death under the Workmen's Compensation Act is exclusive, selective or cumulative, that is to say, whether his or his heirs' action is exclusively restricted to seeking the limited compensation provided under the Workmen's Compensation Act or whether they have a right of selection or choice of action between availing of the worker's right under the Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher damages (actual, moral and/or exemplary) from the employer by virtue of negligence (or fault) of the employer or of his other employees or whether they may avail cumulatively of both actions, i.e., collect the limited compensation under the Workmen's Compensation Act and sue in addition for damages in the regular courts. There are divergent opinions in this case. Justice Lazaro is of the opinion that an injured employee or worker, or the heirs in case of his death, may initiate a complaint to recover damages (not compensation under the Workmen's Compensation Act) with the regular court on the basis of negligence of an employer pursuant to the Civil Code provisions. Atty. Angara believes otherwise. He submits that the remedy of an injured employee for work-connected injury or accident is exclusive in accordance with Section 5 of the Workmen's Compensation Act, while Atty. Bacungan's position is that the action is selective. He opines that the heirs of the employee in case of his death have a right of choice to avail themselves of the benefits provided under the Workmen's Compensation Act or to sue in the regular court under the Civil Code for higher damages from the employer by virtue of negligence of the latter. Atty. Bocobo's stand is the same as that of Atty. Bacungan and adds that once the heirs elect the remedy provided for under the Act, they are no longer entitled to avail themselves of the remedy provided for under the Civil Code by filing an action for higher damages in the regular court, and vice versa. On August 3, 1978, petitioners-heirs of deceased employee Nazarito Floresca filed a motion to dismiss on the ground that they have amicably settled their claim with respondent Philex. In the resolution of September 7, 1978, WE dismissed the petition only insofar as the aforesaid petitioners are connected, it appearing that there are other petitioners in this case. WE hold that the former Court of First Instance has jurisdiction to try the case, It should be underscored that petitioners' complaint is not for compensation based on the Workmen's Compensation Act but a complaint for damages (actual, exemplary and moral) in the total amount of eight hundred twenty-five thousand (P825,000.00) pesos. Petitioners did not invoke the provisions of the Workmen's Compensation Act to entitle them to compensation thereunder. In fact, no allegation appeared in the complaint that the employees died from accident arising out of and in the course of their employments. The complaint instead alleges gross and reckless negligence and deliberate failure on the part of Philex to protect the lives of its workers as a consequence of which a cave-in occurred resulting in the death of the employees working underground. Settled is the rule that in ascertaining whether or not the cause of action is in the nature of workmen's compensation claim or a claim for damages pursuant to the provisions of the Civil Code, the test is the averments or allegations in the complaint (Belandres vs. Lopez Sugar Mill, Co., Inc., 97 Phil. 100). In the present case, there exists between Philex and the deceased employees a contractual relationship. The alleged gross and reckless negligence and deliberate failure that amount to bad faith on the part of Philex, constitute a breach of contract for which it may be held liable for damages. The provisions of the Civil Code on cases of breach of contract when there is fraud or bad faith, read: Art. 2232. In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or malevolent manner. Art. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is able shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted. In cases of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation. Furthermore, Articles 2216 et seq., Civil Code, allow the payment of all kinds of damages, as assessed by the court. The rationale in awarding compensation under the Workmen's Compensation Act differs from that in giving damages under the Civil Code. The compensation acts are based on a theory of compensation distinct from the existing theories of damages, payments

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under the acts being made as compensation and not as damages (99 C.J.S. 53). Compensation is given to mitigate the harshness and insecurity of industrial life for the workman and his family. Hence, an employer is liable whether negligence exists or not since liability is created by law. Recovery under the Act is not based on any theory of actionable wrong on the part of the employer (99 C.J.S. 36). In other words, under the compensation acts, the employer is liable to pay compensation benefits for loss of income, as long as the death, sickness or injury is work-connected or work-aggravated, even if the death or injury is not due to the fault of the employer (Murillo vs. Mendoza, 66 Phil. 689). On the other hand, damages are awarded to one as a vindication of the wrongful invasion of his rights. It is the indemnity recoverable by a person who has sustained injury either in his person, property or relative rights, through the act or default of another (25 C.J.S. 452). The claimant for damages under the Civil Code has the burden of proving the causal relation between the defendant's negligence and the resulting injury as well as the damages suffered. While under the Workmen's Compensation Act, there is a presumption in favor of the deceased or injured employee that the death or injury is work-connected or work-aggravated; and the employer has the burden to prove otherwise (De los Angeles vs. GSIS, 94 SCRA 308; Carino vs. WCC, 93 SCRA 551; Maria Cristina Fertilizer Corp. vs. WCC, 60 SCRA 228). The claim of petitioners that the case is not cognizable by the Workmen's Compensation Commission then, now Employees Compensation Commission, is strengthened by the fact that unlike in the Civil Code, the Workmen's Compensation Act did not contain any provision for an award of actual, moral and exemplary damages. What the Act provided was merely the right of the heirs to claim limited compensation for the death in the amount of six thousand (P6,000.00) pesos plus burial expenses of two hundred (P200.00) pesos, and medical expenses when incurred (Sections 8, 12 and 13, Workmen's Compensation Act), and an additional compensation of only 50% if the complaint alleges failure on the part of the employer to "install and maintain safety appliances or to take other precautions for the prevention of accident or occupational disease" (Section 4-A, Ibid.). In the case at bar, the amount sought to be recovered is over and above that which was provided under the Workmen's Compensation Act and which cannot be granted by the Commission. Moreover, under the Workmen's Compensation Act, compensation benefits should be paid to an employee who suffered an accident not due to the facilities or lack of facilities in the industry of his employer but caused by factors outside the industrial plant of his employer. Under the Civil Code, the liability of the employer, depends on breach of contract or tort. The Workmen's Compensation Act was specifically enacted to afford protection to the employees or workmen. It is a social legislation designed to give relief to the workman who has been the victim of an accident causing his death or ailment or injury in the pursuit of his employment (Abong vs. WCC, 54 SCRA 379). WE now come to the query as to whether or not the injured employee or his heirs in case of death have a right of selection or choice of action between availing themselves of the worker's right under the Workmen's Compensation Act and suing in the regular courts under the Civil Code for higher damages (actual, moral and exemplary) from the employers by virtue of that negligence or fault of the employers or whether they may avail themselves cumulatively of both actions, i.e., collect the limited compensation under the Workmen's Compensation Act and sue in addition for damages in the regular courts. In disposing of a similar issue, this Court in Pacana vs. Cebu Autobus Company, 32 SCRA 442, ruled that an injured worker has a choice of either to recover from the employer the fixed amounts set by the Workmen's Compensation Act or to prosecute an ordinary civil action against the tortfeasor for higher damages but he cannot pursue both courses of action simultaneously. In Pacaña WE said: In the analogous case of Esguerra vs. Munoz Palma, involving the application of Section 6 of the Workmen's Compensation Act on the injured workers' right to sue third- party tortfeasors in the regular courts, Mr. Justice J.B.L. Reyes, again speaking for the Court, pointed out that the injured worker has the choice of remedies but cannot pursue both courses of action simultaneously and thus balanced the relative advantage of recourse under the Workmen's Compensation Act as against an ordinary action. As applied to this case, petitioner Esguerra cannot maintain his action for damages against the respondents (defendants below), because he has elected to seek compensation under the Workmen's Compensation Law, and his claim (case No. 44549 of the Compensation Commission) was being processed at the time he filed this action in the Court of First Instance. It is argued for petitioner that as the damages recoverable under the Civil Code are much more extensive than the amounts that may be awarded under the Workmen's Compensation Act, they

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should not be deemed incompatible. As already indicated, the injured laborer was initially free to choose either to recover from the employer the fixed amounts set by the Compensation Law or else, to prosecute an ordinary civil action against the tortfeasor for higher damages. While perhaps not as profitable, the smaller indemnity obtainable by the first course is balanced by the claimant's being relieved of the burden of proving the causal connection between the defendant's negligence and the resulting injury, and of having to establish the extent of the damage suffered; issues that are apt to be troublesome to establish satisfactorily. Having staked his fortunes on a particular remedy, petitioner is precluded from pursuing the alternate course, at least until the prior claim is rejected by the Compensation Commission. Anyway, under the proviso of Section 6 aforequoted, if the employer Franklin Baker Company recovers, by derivative action against the alleged tortfeasors, a sum greater than the compensation he may have paid the herein petitioner, the excess accrues to the latter. Although the doctrine in the case of Esguerra vs. Munoz Palma (104 Phil. 582), applies to third-party tortfeasor, said rule should likewise apply to the employer-tortfeasor. Insofar as the heirs of Nazarito Floresca are concerned, as already stated, the petition has been dismissed in the resolution of September 7, 1978 in view of the amicable settlement reached by Philex and the said heirs. With regard to the other petitioners, it was alleged by Philex in its motion to dismiss dated May 14, 1968 before the court a quo, that the heirs of the deceased employees, namely Emerito Obra, Larry Villar, Jr., Aurelio Lanuza, Lorenzo Isla and Saturnino Martinez submitted notices and claims for compensation to the Regional Office No. 1 of the then Department of Labor and all of them have been paid in full as of August 25, 1967, except Saturnino Martinez whose heirs decided that they be paid in installments (pp. 106107, rec.). Such allegation was admitted by herein petitioners in their opposition to the motion to dismiss dated May 27, 1968 (pp. 121-122, rec.) in the lower court, but they set up the defense that the claims were filed under the Workmen's Compensation Act before they learned of the official report of the committee created to investigate the accident which established the criminal negligence and violation of law by Philex, and which report was forwarded by the Director of Mines to the then Executive Secretary Rafael Salas in a letter dated October 19, 1967 only (p. 76, rec.). WE hold that although the other petitioners had received the benefits under the Workmen's Compensation Act, such may not preclude them from bringing an action before the regular court because they became cognizant of the fact that Philex has been remiss in its contractual obligations with the deceased miners only after receiving compensation under the Act. Had petitioners been aware of said violation of government rules and regulations by Philex, and of its negligence, they would not have sought redress under the Workmen's Compensation Commission which awarded a lesser amount for compensation. The choice of the first remedy was based on ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent choice. The case should therefore be remanded to the lower court for further proceedings. However, should the petitioners be successful in their bid before the lower court, the payments made under the Workmen's Compensation Act should be deducted from the damages that may be decreed in their favor. B Contrary to the perception of the dissenting opinion, the Court does not legislate in the instant case. The Court merely applies and gives effect to the constitutional guarantees of social justice then secured by Section 5 of Article 11 and Section 6 of Article XIV of the 1935 Constitution, and now by Sections 6, 7, and 9 of Article 11 of the DECLARATION OF PRINCIPLES AND STATE POLICIES of the 1973 Constitution, as amended, and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and 2232 of the New Civil Code of 1950. To emphasize, the 1935 Constitution declares that: Sec. 5. The promotion of social justice to insure the well-being and economic security of all the people should be the concern of the State (Art. II). Sec. 6. The State shall afford protection to labor, especially to working women, and minors, and shall regulate the relations between landowner and tenant, and between labor and capital in industry and in agriculture. The State may provide for compulsory arbitration (Art. XIV). The 1973 Constitution likewise commands the State to "promote social justice to insure the dignity, welfare, and security of all the people "... regulate the use ... and disposition of private property and equitably diffuse property ownership and profits "establish, maintain and ensure adequate social services in, the field of education, health, housing, employment, welfare and social security to

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guarantee the enjoyment by the people of a decent standard of living" (Sections 6 and 7, Art. II, 1973 Constitution); "... afford protection to labor, ... and regulate the relations between workers and employers ..., and assure the rights of workers to ... just and humane conditions of work"(Sec. 9, Art. II, 1973 Constitution, emphasis supplied). The foregoing constitutional guarantees in favor of labor institutionalized in Section 9 of Article 11 of the 1973 Constitution and restated as a declaration of basic policy in Article 3 of the New Labor Code, thus: Art. 3. Declaration of basic policy.—The State shall afford protection to labor, promote full employment, ensure equal work opportunities regardless of sex, race or creed, and regulate the relations between workers and employers. The State shall assure the rights of workers to self-organization, collective bargaining, security of tenure, and just and humane conditions of work. (emphasis supplied). The aforestated constitutional principles as implemented by the aforementioned articles of the New Civil Code cannot be impliedly repealed by the restrictive provisions of Article 173 of the New Labor Code. Section 5 of the Workmen's Compensation Act (before it was amended by R.A. No. 772 on June 20, 1952), predecessor of Article 173 of the New Labor Code, has been superseded by the aforestated provisions of the New Civil Code, a subsequent law, which took effect on August 30, 1950, which obey the constitutional mandates of social justice enhancing as they do the rights of the workers as against their employers. Article 173 of the New Labor Code seems to diminish the rights of the workers and therefore collides with the social justice guarantee of the Constitution and the liberal provisions of the New Civil Code. The guarantees of social justice embodied in Sections 6, 7 and 9 of Article II of the 1973 Constitution are statements of legal principles to be applied and enforced by the courts. Mr. Justice Robert Jackson in the case of West Virginia State Board of Education vs. Barnette, with characteristic eloquence, enunciated: The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts. One's right to life, liberty, and property, to free speech, a free press, freedom of worship and assembly, and other fundamental rights may not be submitted to vote; they depend on the outcome of no elections (319 U.S. 625, 638, 87 L.ed. 1638, emphasis supplied). In case of any doubt which may be engendered by Article 173 of the New Labor Code, both the New Labor Code and the Civil Code direct that the doubts should be resolved in favor of the workers and employees. Thus, Article 4 of the New Labor Code, otherwise known as Presidential Decree No. 442, as amended, promulgated on May 1, 1974, but which took effect six months thereafter, provides that "all doubts in the implementation and interpretation of the provisions of this Code, including its implementing rules and regulations, shall be resolved in favor of labor" (Art. 2, Labor Code). Article 10 of the New Civil Code states: "In case of doubt in the interpretation or application of laws, it is presumed that the lawmaking body intended right and justice to prevail. " More specifically, Article 1702 of the New Civil Code likewise directs that. "In case of doubt, all labor legislation and all labor contracts shall be construed in favor of the safety and decent living of the laborer." Before it was amended by Commonwealth Act No. 772 on June 20, 1952, Section 5 of the Workmen's Compensation Act provided: Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws, because of said injury (emphasis supplied). Employers contracting laborecsrs in the Philippine Islands for work outside the same may stipulate with such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside the Islands through accidents happening in and during the performance of the duties of the employment; and all service contracts made in the manner prescribed in this section shall be presumed to include such agreement. Only the second paragraph of Section 5 of the Workmen's Compensation Act No. 3428, was amended by Commonwealth Act No. 772 on June 20, 1952, thus: Print to PDF without this message by purchasing novaPDF (http://www.novapdf.com/)

Sec. 5. Exclusive right to compensation.- The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws, because of said injury. Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with such laborers that the remedies prescribed by this Act shall apply to injuries received outside the Island through accidents happening in and during the performance of the duties of the employment. Such stipulation shall not prejudice the right of the laborers to the benefits of the Workmen's Compensation Law of the place where the accident occurs, should such law be more favorable to them (As amended by section 5 of Republic Act No. 772). Article 173 of the New Labor Code does not repeal expressly nor impliedly the applicable provisions of the New Civil Code, because said Article 173 provides: Art. 173. Exclusiveness of liability.- Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the employee, his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. The payment of compensation under this Title shall bar the recovery of benefits as provided for in Section 699 of the Revised Administrative Code, Republic Act Numbered Eleven hundred sixty-one, as amended, Commonwealth Act Numbered One hundred eighty- six, as amended, Commonwealth Act Numbered Six hundred ten, as amended, Republic Act Numbered Forty-eight hundred Sixty-four, as amended, and other laws whose benefits are administered by the System during the period of such payment for the same disability or death, and conversely (emphasis supplied). As above-quoted, Article 173 of the New Labor Code expressly repealed only Section 699 of the Revised Administrative Code, R.A. No. 1161, as amended, C.A. No. 186, as amended, R.A. No. 610, as amended, R.A. No. 4864, as amended, and all other laws whose benefits are administered by the System (referring to the GSIS or SSS). Unlike Section 5 of the Workmen's Compensation Act as aforequoted, Article 173 of the New Labor Code does not even remotely, much less expressly, repeal the New Civil Code provisions heretofore quoted. It is patent, therefore, that recovery under the New Civil Code for damages arising from negligence, is not barred by Article 173 of the New Labor Code. And the damages recoverable under the New Civil Code are not administered by the System provided for by the New Labor Code, which defines the "System" as referring to the Government Service Insurance System or the Social Security System (Art. 167 [c], [d] and [e] of the New Labor Code). Furthermore, under Article 8 of the New Civil Code, decisions of the Supreme Court form part of the law of the land. Article 8 of the New Civil Code provides: Art. 8. Judicial decisions applying or interpreting the laws or the Constitution shall form a part of the legal system of the Philippines. The Court, through the late Chief Justice Fred Ruiz Castro, in People vs. Licera ruled: Article 8 of the Civil Code of the Philippines decrees that judicial decisions applying or interpreting the laws or the Constitution form part of this jurisdiction's legal system. These decisions, although in themselves not laws, constitute evidence of what the laws mean. The application or interpretation placed by the Court upon a law is part of the law as of the date of the enactment of the said law since the Court's application or interpretation merely establishes the contemporaneous legislative intent that the construed law purports to carry into effect" (65 SCRA 270, 272-273 [1975]). WE ruled that judicial decisions of the Supreme Court assume the same authority as the statute itself (Caltex vs. Palomer, 18 SCRA 247; 124 Phil. 763). The aforequoted provisions of Section 5 of the Workmen's Compensation Act, before and after it was amended by Commonwealth Act No. 772 on June 20, 1952, limited the right of recovery in favor of the deceased, ailing or injured employee to the compensation

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provided for therein. Said Section 5 was not accorded controlling application by the Supreme Court in the 1970 case of Pacana vs. Cebu Autobus Company (32 SCRA 442) when WE ruled that an injured worker has a choice of either to recover from the employer the fixed amount set by the Workmen's Compensation Act or to prosecute an ordinary civil action against the tortfeasor for greater damages; but he cannot pursue both courses of action simultaneously. Said Pacana case penned by Mr. Justice Teehankee, applied Article 1711 of the Civil Code as against the Workmen's Compensation Act, reiterating the 1969 ruling in the case of Valencia vs. Manila Yacht Club (28 SCRA 724, June 30,1969) and the 1958 case of Esguerra vs. Munoz Palma (104 Phil. 582), both penned by Justice J.B.L. Reyes. Said Pacana case was concurred in by Justices J.B.L. Reyes, Dizon, Makalintal, Zaldivar, Castro, Fernando and Villamor. Since the first sentence of Article 173 of the New Labor Code is merely a re-statement of the first paragraph of Section 5 of the Workmen's Compensation Act, as amended, and does not even refer, neither expressly nor impliedly, to the Civil Code as Section 5 of the Workmen's Compensation Act did, with greater reason said Article 173 must be subject to the same interpretation adopted in the cases of Pacana, Valencia and Esguerra aforementioned as the doctrine in the aforesaid three (3) cases is faithful to and advances the social justice guarantees enshrined in both the 1935 and 1973 Constitutions. It should be stressed likewise that there is no similar provision on social justice in the American Federal Constitution, nor in the various state constitutions of the American Union. Consequently, the restrictive nature of the American decisions on the Workmen's Compensation Act cannot limit the range and compass of OUR interpretation of our own laws, especially Article 1711 of the New Civil Code, vis-a-vis Article 173 of the New Labor Code, in relation to Section 5 of Article II and Section 6 of Article XIV of the 1935 Constitution then, and now Sections 6, 7 and 9 of the Declaration of Principles and State Policies of Article II of the 1973 Constitution. The dissent seems to subordinate the life of the laborer to the property rights of the employer. The right to life is guaranteed specifically by the due process clause of the Constitution. To relieve the employer from liability for the death of his workers arising from his gross or wanton fault or failure to provide safety devices for the protection of his employees or workers against the dangers which are inherent in underground mining, is to deprive the deceased worker and his heirs of the right to recover indemnity for the loss of the life of the worker and the consequent loss to his family without due process of law. The dissent in effect condones and therefore encourages such gross or wanton neglect on the part of the employer to comply with his legal obligation to provide safety measures for the protection of the life, limb and health of his worker. Even from the moral viewpoint alone, such attitude is unChristian. It is therefore patent that giving effect to the social justice guarantees of the Constitution, as implemented by the provisions of the New Civil Code, is not an exercise of the power of law-making, but is rendering obedience to the mandates of the fundamental law and the implementing legislation aforementioned. The Court, to repeat, is not legislating in the instant case. It is axiomatic that no ordinary statute can override a constitutional provision. The words of Section 5 of the Workmen's Compensation Act and of Article 173 of the New Labor Code subvert the rights of the petitioners as surviving heirs of the deceased mining employees. Section 5 of the Workmen's Compensation Act and Article 173 of the New Labor Code are retrogressive; because they are a throwback to the obsolete laissez-faire doctrine of Adam Smith enunciated in 1776 in his treatise Wealth of Nations (Collier's Encyclopedia, Vol. 21, p. 93, 1964), which has been discarded soon after the close of the 18th century due to the Industrial Revolution that generated the machines and other mechanical devices (beginning with Eli Whitney's cotton gin of 1793 and Robert Fulton's steamboat of 1807) for production and transportation which are dangerous to life, limb and health. The old socio-political-economic philosophy of live-and-let-live is now superdesed by the benign Christian shibboleth of live-and-help others to live. Those who profess to be Christians should not adhere to Cain's selfish affirmation that he is not his brother's keeper. In this our civilization, each one of us is our brother's keeper. No man is an island. To assert otherwise is to be as atavistic and ante-deluvian as the 1837 case of Prisley vs. Fowler (3 MN 1,150 reprint 1030) invoked by the dissent, The Prisley case was decided in 1837 during the era of economic royalists and robber barons of America. Only ruthless, unfeeling capitalistics and egoistic reactionaries continue to pay obeisance to such un-Christian doctrine. The Prisley rule humiliates man and debases him; because the decision derisively refers to the lowly worker as "servant" and utilizes with aristocratic arrogance "master" for "employer." It robs man of his inherent dignity and dehumanizes him. To stress this affront to human dignity, WE only have to restate the quotation from Prisley, thus: "The mere relation of the master and the servant never can imply an obligation on the part of the master to take more care of the servant than he may reasonably be expected to do himself." This is the very selfish doctrine that provoked the American Civil War which generated so much hatred and drew so much precious blood on American plains and valleys from 1861 to 1864.

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"Idolatrous reverence" for the letter of the law sacrifices the human being. The spirit of the law insures man's survival and ennobles him. In the words of Shakespeare, "the letter of the law killeth; its spirit giveth life." C It is curious that the dissenting opinion clings to the myth that the courts cannot legislate. That myth had been exploded by Article 9 of the New Civil Code, which provides that "No judge or court shall decline to render judgment by reason of the silence, obscurity or insufficiency of the laws. " Hence, even the legislator himself, through Article 9 of the New Civil Code, recognizes that in certain instances, the court, in the language of Justice Holmes, "do and must legislate" to fill in the gaps in the law; because the mind of the legislator, like all human beings, is finite and therefore cannot envisage all possible cases to which the law may apply Nor has the human mind the infinite capacity to anticipate all situations. But about two centuries before Article 9 of the New Civil Code, the founding fathers of the American Constitution foresaw and recognized the eventuality that the courts may have to legislate to supply the omissions or to clarify the ambiguities in the American Constitution and the statutes. 'Thus, Alexander Hamilton pragmatically admits that judicial legislation may be justified but denies that the power of the Judiciary to nullify statutes may give rise to Judicial tyranny (The Federalist, Modern Library, pp. 503-511, 1937 ed.). Thomas Jefferson went farther to concede that the court is even independent of the Nation itself (A.F.L. vs. American Sash Company, 1949 335 US 538). Many of the great expounders of the American Constitution likewise share the same view. Chief Justice Marshall pronounced: "It is emphatically the province and duty of the Judicial department to say what the law is (Marbury vs. Madison I Cranch 127 1803), which was re-stated by Chief Justice Hughes when he said that "the Constitution is what the judge says it is (Address on May 3, 1907, quoted by President Franklin Delano Roosevelt on March 9, 1937). This was reiterated by Justice Cardozo who pronounced that "No doubt the limits for the judge are narrower. He legislates only between gaps. He fills the open spaces in the law. " (The Nature of the Judicial Process, p. 113). In the language of Chief Justice Harlan F. Stone, "The only limit to the judicial legislation is the restraint of the judge" (U.S. vs. Butler 297 U.S. 1 Dissenting Opinion, p. 79), which view is also entertained by Justice Frankfurter and Justice Robert Jackson. In the rhetoric of Justice Frankfurter, "the courts breathe life, feeble or strong, into the inert pages of the Constitution and all statute books." It should be stressed that the liability of the employer under Section 5 of the Workmen's Compensation Act or Article 173 of the New Labor Code is limited to death, ailment or injury caused by the nature of the work, without any fault on the part of the employers. It is correctly termed no fault liability. Section 5 of the Workmen's Compensation Act, as amended, or Article 173 of the New Labor Code, does not cover the tortious liability of the employer occasioned by his fault or culpable negligence in failing to provide the safety devices required by the law for the protection of the life, limb and health of the workers. Under either Section 5 or Article 173, the employer remains liable to pay compensation benefits to the employee whose death, ailment or injury is workconnected, even if the employer has faithfully and diligently furnished all the safety measures and contrivances decreed by the law to protect the employee. The written word is no longer the "sovereign talisman." In the epigrammatic language of Mr. Justice Cardozo, "the law has outgrown its primitive stage of formalism when the precise word was the sovereign talisman, and every slip was fatal" (Wood vs. Duff Gordon 222 NW 88; Cardozo, The Nature of the Judicial Process 100). Justice Cardozo warned that: "Sometimes the conservatism of judges has threatened for an interval to rob the legislation of its efficacy. ... Precedents established in those items exert an unhappy influence even now" (citing Pound, Common Law and Legislation 21 Harvard Law Review 383, 387). Finally, Justice Holmes delivered the coup de grace when he pragmatically admitted, although with a cautionary undertone: "that judges do and must legislate, but they can do so only interstitially they are confined from molar to molecular motions" (Southern Pacific Company vs. Jensen, 244 US 204 1917). And in the subsequent case of Springer vs. Government (277 US 188, 210-212, 72 L.ed. 845, 852- 853), Justice Holmes pronounced: The great ordinances of the Constitution do not establish and divide fields of black and white. Even the more specific of them are found to terminate in a penumbra shading gradually from one extreme to the other. x x x. When we come to the fundamental distinctions it is still more obvious that they must be received with a certain latitude or our government could not go on.

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To make a rule of conduct applicable to an individual who but for such action would be free from it is to legislate yet it is what the judges do whenever they determine which of two competing principles of policy shall prevail. xxx xxx xxx It does not seem to need argument to show that however we may disguise it by veiling words we do not and cannot carry out the distinction between legislative and executive action with mathematical precision and divide the branches into waterlight compartments, were it ever so desirable to do so, which I am far from believing that it is, or that the Constitution requires. True, there are jurists and legal writers who affirm that judges should not legislate, but grudgingly concede that in certain cases judges do legislate. They criticize the assumption by the courts of such law-making power as dangerous for it may degenerate into Judicial tyranny. They include Blackstone, Jeremy Bentham, Justice Black, Justice Harlan, Justice Roberts, Justice David Brewer, Ronald Dworkin, Rolf Sartorious, Macklin Fleming and Beryl Harold Levy. But said Justices, jurists or legal commentators, who either deny the power of the courts to legislate in-between gaps of the law, or decry the exercise of such power, have not pointed to examples of the exercise by the courts of such law-making authority in the interpretation and application of the laws in specific cases that gave rise to judicial tyranny or oppression or that such judicial legislation has not protected public interest or individual welfare, particularly the lowly workers or the underprivileged. On the other hand, there are numerous decisions interpreting the Bill of Rights and statutory enactments expanding the scope of such provisions to protect human rights. Foremost among them is the doctrine in the cases of Miranda vs. Arizona (384 US 436 1964), Gideon vs. Wainright (372 US 335), Escubedo vs. Illinois (378 US 478), which guaranteed the accused under custodial investigation his rights to remain silent and to counsel and to be informed of such rights as even as it protects him against the use of force or intimidation to extort confession from him. These rights are not found in the American Bill of Rights. These rights are now institutionalized in Section 20, Article IV of the 1973 Constitution. Only the peace-and-order adherents were critical of the activism of the American Supreme Court led by Chief Justice Earl Warren. Even the definition of Identical offenses for purposes of the double jeopardy provision was developed by American judicial decisions, not by amendment to the Bill of Rights on double jeopardy (see Justice Laurel in People vs. Tarok, 73 Phil. 260, 261-268). And these judicial decisions have been re-stated in Section 7 of Rule 117 of the 1985 Rules on Criminal Procedure, as well as in Section 9 of Rule 117 of the 1964 Revised Rules of Court. In both provisions, the second offense is the same as the first offense if the second offense is an attempt to commit the first or frustration thereof or necessarily includes or is necessarily included in the first offense. The requisites of double jeopardy are not spelled out in the Bill of Rights. They were also developed by judicial decisions in the United States and in the Philippines even before people vs. Ylagan (58 Phil. 851-853). Again, the equal protection clause was interpreted in the case of Plessy vs. Ferguson (163 US 537) as securing to the Negroes equal but separate facilities, which doctrine was revoked in the case of Brown vs. Maryland Board of Education (349 US 294), holding that the equal protection clause means that the Negroes are entitled to attend the same schools attended by the whites-equal facilities in the same school-which was extended to public parks and public buses. De-segregation, not segregation, is now the governing principle. Among other examples, the due process clause was interpreted in the case of People vs. Pomar (46 Phil. 440) by a conservative, capitalistic court to invalidate a law granting maternity leave to working women-according primacy to property rights over human rights. The case of People vs. Pomar is no longer the rule. As early as 1904, in the case of Lochner vs. New York (198 US 45, 76, 49 L. ed. 937, 949), Justice Holmes had been railing against the conservatism of Judges perverting the guarantee of due process to protect property rights as against human rights or social justice for the working man. The law fixing maximum hours of labor was invalidated. Justice Holmes was vindicated finally in 1936 in the case of West Coast Hotel vs. Parish (300 US 377-79; 81 L. ed. 703) where the American Supreme Court upheld the rights of workers to social justice in the form of guaranteed minimum wage for women and minors, working hours not exceeding eight (8) daily, and maternity leave for women employees. The power of judicial review and the principle of separation of powers as well as the rule on political questions have been evolved and grafted into the American Constitution by judicial decisions (Marbury vs. Madison, supra Coleman vs. Miller, 307 US 433, 83 L. ed. 1385; Springer vs. Government, 277 US 210-212, 72 L. ed. 852, 853).

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It is noteworthy that Justice Black, who seems to be against judicial legislation, penned a separate concurring opinion in the case of Coleman vs. Miller, supra, affirming the doctrine of political question as beyond the ambit of judicial review. There is nothing in both the American and Philippine Constitutions expressly providing that the power of the courts is limited by the principle of separation of powers and the doctrine on political questions. There are numerous cases in Philippine jurisprudence applying the doctrines of separation of powers and political questions and invoking American precedents. Unlike the American Constitution, both the 1935 and 1973 Philippine Constitutions expressly vest in the Supreme Court the power to review the validity or constitutionality of any legislative enactment or executive act. WHEREFORE, THE TRIAL COURT'S ORDER OF DISMISSAL IS HEREBY REVERSED AND SET ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS. SHOULD A GREATER AMOUNT OF DAMAGES BE DECREED IN FAVOR OF HEREIN PETITIONERS, THE PAYMENTS ALREADY MADE TO THEM PURSUANT TO THE WORKMEN'S COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS. SO ORDERED. Fernando, C.J., Teehankee, Plana, Escolin, De la Fuente, Cuevas and Alampay JJ., concur. Concepcion, Jr., J., is on leave. Abad Santos and Relova, JJ., took no part.

Separate Opinions

MELENCIO-HERRERA, J., dissenting: A This case involves a complaint for damages for the death of five employees of PHILEX Mining Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides for its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found in Title XVIII-Damages that: COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS. Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et al., 104 Phil. 582, 586, Justice J.B.L. Reyes had said: Petitioner also avers that compensation is not damages. This argument is but a play on words. The term compensation' is used in the law (Act 3812 and Republic Act 772) in the sense of indemnity for damages suffered, being awarded for a personal injury caused or aggravated by or in the course of employment. ... By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the complaint involved in the instant case. That "special law", in reference to the complaint, can be no other than the Workmen's Compensation Even assuming, without conceding, that an employee is entitled to an election of remedies, as the majority rules, both options cannot be exercised simultaneously, and the exercise of one will preclude the exercise of the other. The petitioners had already exercised their option to come under the Workmen's Compensation Act, and they have already received compensation payable to them under that Act. Stated differently, the remedy under the Workmen's Compensation Act had already become a "finished transaction".

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There are two considerations why it is believed petitioners should no longer be allowed to exercise the option to sue under the Civil Code. In the first place, the proceedings under the Workmen's Compensation Act have already become the law in regards to" the "election of remedies", because those proceedings had become a "finished transaction". In the second place, it should be plainly equitable that, if a person entitled to an "election of remedies" makes a first election and accepts the benefits thereof, he should no longer be allowed to avail himself of the second option. At the very least, if he wants to make a second election, in disregard of the first election he has made, when he makes the second election he should surrender the benefits he had obtained under the first election, This was not done in the case before the Court. B. 'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the exclusory provision of the Workmen's Compensation Act." I may further add: 1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes. Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of the law were taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's Compensation Act, p. 2] Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267. Sec. 112. Hawaii Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment' and employees of the territory and its political subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.) Compensation is not payable when injury is due to employee's willful intention to injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.) When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.) 2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the Philippine Legislature worded the first paragraph of Section 5 of the Act as follows: SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws, because of said injury (Paragraphing and emphasis supplied) In regards to the intent of the Legislature under the foregoing provision: A cardinal rule in the interpretation of statutes is that the meaning and intention of the law-making body must be sought, first of all in the words of the statute itself, read and considered in their natural, ordinary, commonlyaccepted and most obvious significations, according to good and approved usage and without resorting to forced or subtle construction Courts, therefore, as a rule, cannot presume that the law-making body does not know the meaning of words and the rules of grammar. Consequently, the grammatical reading of a statute must be presumed to yield its correct sense. (Espino vs. Cleofe 52 SCRA 92, 98) [Italics supplied] 3. The original second paragraph of Section 5 provided:

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Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside the Islands through accidents happening in and during the performance of the duties of the employment. (Italics supplied) The use of the word "exclusively is a further confirmation of the exclusory provision of the Act, subject only to exceptions which may be provided in the Act itself. 4. It might be mentioned that, within the Act itself, provision is made for remedies other than within the Act itself. Thus, Section 6, in part, provides: SEC. 6. Liability of third parties.-In case an employee suffers an injury for which compensation is due under this Act by any other person besides his employer, it shall be optional with such injured employee either to claim compensation from his employer, under this Act, or sue such other person for damages, in accordance with law; ... (Emphasis supplied) If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to sue his employer under the Civil Code, the legislator could very easily have formulated the said first paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the legislative intent not to allow any option to an employee to sue the employer under the Civil Code for injuries compensable under the Act. 5. There should be no question but that the original first paragraph of Section 5 of the Workmen's Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code nor to any other law relative to the liability of the employer. After 1927, there were occasions when the legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies under the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the legislatives continuing intent to maintain the exclusory provision of the first paragraph of Section 5 unless otherwise provided in the Act itself. (a) The original second paragraph of Section 5 provided: Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with such laborers that the remedies prescribed by this Act shall apply (exclusively) to injuries received outside the Islands through accidents happening in and during the performance of the duties of the employment (and all service contracts made in the manner prescribed in this section be presumed to include such agreement). On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the elimination of the underlined words in parentheses, and the addition of this sentence at the end of the paragraph: Such stipulation shall not prejudice the right of the laborers to the benefits of the Workmen's Compensation Law of the place where the accident occurs, should such law be more favorable to them. (Emphasis supplied) It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time, if he had so desired, the legislator could have amended the first paragraph of Section 5 so that the employee would have the option to sue the employer under the Act, or under the Civil Code, should the latter be more favorable to him. (b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured employee without regard to the presence or absence of negligence on the part of the employer. The compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689 [1938]). In time, it must have been thought that it was inequitable to have the amount of compensation, caused by negligence on the part of the employer, to be the same amount payable when the employer was not negligent. Based on that thinking, Section 4-A 1 was included into the Act, on June 20, 1952, through RA 772. Said Section 4-A increased the compensation payable by 50% in case there was negligence on the part of the employer. That additional section evidenced the intent of the legislator not to give an option to an employee, injured with negligence on the part of the employer, to sue the latter under the provisions of the Civil Code. On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again given the opportunity to provide, but he did not, the option to an employee to sue under the Act or under the Civil Code.

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When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court is unjustifiably legislating. It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint. GUTIERREZ, JR., J., dissenting: To grant the petition and allow the victims of industrial accidents to file damages suits based on torts would be a radical innovation not only contrary to the express provisions of the Workmen's Compensation Act but a departure from the principles evolved in the long history of workmen's compensation. At the very least, it should be the legislature and not this Court which should remove the exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present Labor Code on employees' compensation. Workmen's compensation evolved to remedy the evils associated with the situation in the early years of the industrial revolution when injured workingmen had to rely on damage suits to get recompense. Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit that his employer was either negligent or in bad faith, that his injury was caused by the employer and not a fellow worker, and that he was not guilty of contributory negligence. The employer could employ not only his wealth in defeating the claim for damages but a host of common law defenses available to him as well. The worker was supposed to know what he entered into when he accepted employment. As stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030) decided in 1837 "the mere relation of the master and the servant never can imply an obligation on the part of the master to take more care of the servant than he may reasonably be expected to do of himself." By entering into a contract of employment, the worker was deemed to accept the risks of employment that he should discover and guard against himself. The problems associated with the application of the fellow servant rule, the assumption of risk doctrine, the principle of contributory negligence, and the many other defenses so easily raised in protracted damage suits illustrated the need for a system whereby workers had only to prove the fact of covered employment and the fact of injury arising from employment in order to be compensated. The need for a compensation scheme where liability is created solely by statute and made compulsory and where the element of fault-either the fault of the employer or the fault of the employee-disregarded became obvious. Another objective was to have simplified, expeditious, inexpensive, and non-litigious procedures so that victims of industrial accidents could more readily, if not automatically, receive compensation for work-related injuries. Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a major step in the desired direction. However, employers liability legislation proved inadequate. Legislative reform led to the workmen's compensation. I cite the above familiar background because workmen's compensation represents a compromise. In return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only disregards the element of fault but it is also a pre- determined amount based on the wages of the injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer is required to act swiftly on compensation claims. An administrative agency supervises the program. And because the overwhelming mass of workingmen are benefited by the compensation system, individual workers who may want to sue for big amounts of damages must yield to the interests of their entire working class. The nature of the compensation principle is explained as follows: An appreciation of the nature of the compensation principle is essential to an understanding of the acts and the cases interpreting them. By the turn of the century it was apparent that the toll of industrial accidents of both the avoidable and unavoidable variety had become enormous, and government was faced with the problem of who was to pay for the human wreckage wrought by the dangers of modern industry. If the accident was avoidable and could be attributed to the carelessness of the employer, existing tort principles offered some measure of redress. Even here, however, the woeful inadequacy of the fault principle was manifest. The uncertainty of the outcome of torts litigation in court placed the employee at a substantial disadvantage. So long as liability depended on fault there

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could be no recovery until the finger of blame had been pointed officially at the employer or his agents. In most cases both the facts and the law were uncertain. The witnesses, who were usually fellow workers of the victim, were torn between friendship or loyalty to their class, on the one hand, and fear of reprisal by the employer, on the other. The expense and delay of litigation often prompted the injured employee to accept a compromise settlement for a fraction of the full value of his claim. Even if suit were successfully prosecuted, a large share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus the employer against whom judgment was cast often paid a substantial damage bill, while only a part of this enured to the benefit of the injured employee or his dependents. The employee's judgment was nearly always too little and too late. xxx xxx xxx Workmen's Compensation rests upon the economic principle that those persons who enjoy the product of a business- whether it be in the form of goods or services- should ultimately bear the cost of the injuries or deaths that are incident to the manufacture, preparation and distribution of the product. ... xxx xxx xxx Under this approach the element of personal fault either disappears entirely or is subordinated to broader economic considerations. The employer absorbs the cost of accident loss only initially; it is expected that this cost will eventually pass down the stream of commerce in the form of increase price until it is spread in dilution among the ultimate consumers. So long as each competing unit in a given industry is uniformly affected, no producer can gain any substantial competitive advantage or suffer any appreciable loss by reason of the general adoption of the compensation principle. In order that the compensation principle may operate properly and with fairness to all parties it is essential that the anticipated accident cost be predictable and that it be fixed at a figure that will not disrupt too violently the traffic in the product of the industry affected. Thus predictability and moderateness of cost are necessary from the broad economic viewpoint. .... Compensation, then, differs from the conventional damage suit in two important respects: Fault on the part of either employer or employee is eliminated; and compensation payable according to a definitely limited schedule is substituted for damages. All compensation acts alike work these two major changes, irrespective of how they may differ in other particulars. Compensation, when regarded from the viewpoint of employer and employee represents a compromise in which each party surrenders certain advantages in order to gain others which are of more importance both to him and to society. The employer gives up the immunity he otherwise would enjoy in cases where he is not at fault, and the employee surrenders his former right to full damages and accepts instead a more modest claim for bare essentials, represented by compensation. The importance of the compromise character of compensation cannot be overemphasized. The statutes vary a great deal with reference to the proper point of balance. The amount of weekly compensation payments and the length of the period during which compensation is to be paid are matters concerning which the acts differ considerably. The interpretation of any compensation statute will be influenced greatly by the court's reaction to the basic point of compromise established in the Act. If the court feels that the basic compromise unduly favors the employer, it will be tempted to restore what it regards as a proper balance by adopting an interpretation that favors the worker. In this way, a compensation act drawn in a spirit of extreme conservatism may be transformed by a sympathetic court into a fairly liberal instrument; and conversely, an act that greatly favors the laborer may be so interpreted by the courts that employers can have little reason to complain. Much of the unevenness and apparent conflict in compensation decisions throughout the various jurisdictions must be attributed to this." (Malone & Plant, Workmen's Compensation American Casebook Series, pp. 63-65). The schedule of compensation, the rates of payments, the compensable injuries and diseases, the premiums paid by employers to the present system, the actuarial stability of the trust fund and many other interrelated parts have all been carefully studied before the integrated scheme was enacted in to law. We have a system whose parts must mesh harmonious with one another if it is to succeed. The basic theory has to be followed.

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If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the system without touching the related others, the entire structure is endangered. For instance, I am personally against stretching the law and allowing payment of compensation for contingencies never envisioned to be compensable when the law was formulated. Certainly, only harmful results to the principle of workmen's compensation can arise if workmen, whom the law allows to receive employment compensation, can still elect to file damage suits for industrial accidents. It was precisely for this reason that Section 5 of the Workmen's Compensation Act, which reads: SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws because of said injury. ... Article 173 of the labor Code also provides: ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the employee his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. I am against the Court assuming the role of legislator in a matter calling for actuarial studies and public hearings. If employers already required to contribute to the State Insurance Fund will still have to bear the cost of damage suits or get insurance for that purpose, a major study will be necessary. The issue before us is more far reaching than the interests of the poor victims and their families. All workers covered by workmen's compensation and all employers who employ covered employees are affected. Even as I have deepest sympathies for the victims, I regret that I am constrained to dissent from the majority opinion.

Separate Opinions

MELENCIO-HERRERA, J., dissenting: A This case involves a complaint for damages for the death of five employees of PHILEX Mining Corporation under the general provisions of the Civil Code. The Civil Code itself, however, provides for its non-applicability to the complaint. It is specifically provided in Article 2196 of the Code, found in Title XVIII-Damages that: COMPENSATION FOR WORKMEN AND OTHER EMPLOYEES IN CASE OF DEATH, INJURY OR ILLNESS IS REGULATED BY SPECIAL LAWS. Compensation and damages are synonymous. In Esguerra vs. Muñoz Palma, etc., et al., 104 Phil. 582, 586, Justice J.B.L. Reyes had said: Petitioner also avers that compensation is not damages. This argument is but a play on words. The term compensation' is used in the law (Act 3812 and Republic Act 772) in the sense of indemnity for damages suffered, being awarded for a personal injury caused or aggravated by or in the course of employment. ... By the very provisions of the Civil Code, it is a "special law", not the Code itself, which has to apply to the complaint involved in the instant case. That "special law", in reference to the complaint, can be no other than the Workmen's Compensation Even assuming, without conceding, that an employee is entitled to an election of remedies, as the majority rules, both options cannot be exercised simultaneously, and the exercise of one will preclude the exercise of the other. The petitioners had already exercised their option to come under the Workmen's Compensation Act, and they have already received compensation payable to

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them under that Act. Stated differently, the remedy under the Workmen's Compensation Act had already become a "finished transaction". There are two considerations why it is believed petitioners should no longer be allowed to exercise the option to sue under the Civil Code. In the first place, the proceedings under the Workmen's Compensation Act have already become the law in regards to" the "election of remedies", because those proceedings had become a "finished transaction". In the second place, it should be plainly equitable that, if a person entitled to an "election of remedies" makes a first election and accepts the benefits thereof, he should no longer be allowed to avail himself of the second option. At the very least, if he wants to make a second election, in disregard of the first election he has made, when he makes the second election he should surrender the benefits he had obtained under the first election, This was not done in the case before the Court. B. 'There is full concurrence on my part with the dissenting opinion of Mr. Justice Gutierrez upholding "the exclusory provision of the Workmen's Compensation Act." I may further add: 1. The Workmen's Compensation Act (Act No. 3428) was approved on December 10, 1927 and took effect on June 10, 1928. It was patterned from Minnesota and Hawaii statutes. Act No. 3428 was adopted by the Philippine legislature, in Spanish and some sections of the law were taken from the statutes of Minnesota and Hawaii, (Chapter 209 of the Revised Laws of Hawaii, 1925). [Morabe & Inton, Workmen's Compensation Act, p. 2] Under the Workmen's Compensation Act of Hawaii, when the Act is applicable, the remedy under the Act is exclusive The following is stated in 1 Schneider Workmen's Compensation Text, pp. 266, 267. Sec. 112. Hawaii Statutory Synopsis. The act is compulsory as to employees in 'all industrial employment' and employees of the territory and its political subdivisions. (Sections 7480-7481, S.S., Vol. 1, p. 713.) Compensation is not payable when injury is due to employee's willful intention to injure himself or another or to his intoxication. (Sec. 7482, S.S., p. 713.) When the act is applicable the remedy thereunder is exclusive (Sec. 7483, S.S., p. 714.) 2. In providing for exclusiveness of the remedy under our Workmen's Compensation Act, the Philippine Legislature worded the first paragraph of Section 5 of the Act as follows: SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws, because of said injury (Paragraphing and emphasis supplied) In regards to the intent of the Legislature under the foregoing provision: A cardinal rule in the interpretation of statutes is that the meaning and intention of the law-making body must be sought, first of all in the words of the statute itself, read and considered in their natural, ordinary, commonlyaccepted and most obvious significations, according to good and approved usage and without resorting to forced or subtle construction Courts, therefore, as a rule, cannot presume that the law-making body does not know the

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meaning of words and the rules of grammar. Consequently, the grammatical reading of a statute must be presumed to yield its correct sense. (Espino vs. Cleofe 52 SCRA 92, 98) [Italics supplied] 3. The original second paragraph of Section 5 provided: Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with such laborers that the remedies prescribed by this Act shall apply exclusively to injuries received outside the Islands through accidents happening in and during the performance of the duties of the employment. (Italics supplied) The use of the word "exclusively is a further confirmation of the exclusory provision of the Act, subject only to exceptions which may be provided in the Act itself. 4. It might be mentioned that, within the Act itself, provision is made for remedies other than within the Act itself. Thus, Section 6, in part, provides: SEC. 6. Liability of third parties.-In case an employee suffers an injury for which compensation is due under this Act by any other person besides his employer, it shall be optional with such injured employee either to claim compensation from his employer, under this Act, or sue such other person for damages, in accordance with law; ... (Emphasis supplied) If the legislative intent under the first paragraph of Section 5 were to allow the injured employee to sue his employer under the Civil Code, the legislator could very easily have formulated the said first paragraph of Section 5 according to the pattern of Section 6. That that was not done shows the legislative intent not to allow any option to an employee to sue the employer under the Civil Code for injuries compensable under the Act. 5. There should be no question but that the original first paragraph of Section 5 of the Workmen's Compensation Act, formulated in 1927, provided that an injured worker or employee, or his heirs, if entitled to compensation under the Act, cannot have independent recourse neither to the Civil Code nor to any other law relative to the liability of the employer. After 1927, there were occasions when the legislator had the opportunity to amend the first paragraph of Section 5 such that the remedies under the Act would not be exclusive; yet, the legislator refrained from doing so. That shows the legislatives continuing intent to maintain the exclusory provision of the first paragraph of Section 5 unless otherwise provided in the Act itself. (a) The original second paragraph of Section 5 provided: Employers contracting laborers in the Philippine Islands for work outside the same shall stipulate with such laborers that the remedies prescribed by this Act shall apply (exclusively) to injuries received outside the Islands through accidents happening in and during the performance of the duties of the employment (and all service contracts made in the manner prescribed in this section be presumed to include such agreement). On June 20, 1952, through RA 772, the foregoing second paragraph was amended with the elimination of the underlined words in parentheses, and the addition of this sentence at the end of the paragraph: Such stipulation shall not prejudice the right of the laborers to the benefits of the Workmen's Compensation Law of the place where the accident occurs, should such law be more favorable to them. (Emphasis supplied) It will be seen that, within the Act itself, the exclusory character of the Act was amended. At that time, if he had so desired, the legislator could have amended the first paragraph of Section 5 so that the employee would have the option to sue the employer under the Act, or under the Civil Code, should the latter be more favorable to him. (b) The Workmen's Compensation Act, which took effect in 1927, grants compensation to an injured employee without regard to the presence or absence of negligence on the part of the employer. The compensation is deemed an expense chargeable to the industry (Murillo vs. Mendoza, 66 Phil. 689 [1938]). In time, it must have been thought that it was inequitable to have the amount of compensation, caused by negligence on the part of 1 the employer, to be the same amount payable when the employer was not negligent. Based on that thinking, Section 4-A was included into the Act, on June 20, 1952, through RA 772. Said Section 4-A increased the compensation payable by 50% in case there

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was negligence on the part of the employer. That additional section evidenced the intent of the legislator not to give an option to an employee, injured with negligence on the part of the employer, to sue the latter under the provisions of the Civil Code. On June 20, 1964, Section 4-A was amended (insubstantially) by RA 4119. The legislator was again given the opportunity to provide, but he did not, the option to an employee to sue under the Act or under the Civil Code. When a Court gives effect to a statute not in accordance with the intent of the law-maker, the Court is unjustifiably legislating. It is in view of the foregoing that I vote for affirmation of the trial Court's dismissal of the Complaint. GUTIERREZ, JR., J., dissenting: To grant the petition and allow the victims of industrial accidents to file damages suits based on torts would be a radical innovation not only contrary to the express provisions of the Workmen's Compensation Act but a departure from the principles evolved in the long history of workmen's compensation. At the very least, it should be the legislature and not this Court which should remove the exclusory provision of the Workmen's Compensation Act, a provision reiterated in the present Labor Code on employees' compensation. Workmen's compensation evolved to remedy the evils associated with the situation in the early years of the industrial revolution when injured workingmen had to rely on damage suits to get recompense. Before workmen's compensation, an injured worker seeking damages would have to prove in a tort suit that his employer was either negligent or in bad faith, that his injury was caused by the employer and not a fellow worker, and that he was not guilty of contributory negligence. The employer could employ not only his wealth in defeating the claim for damages but a host of common law defenses available to him as well. The worker was supposed to know what he entered into when he accepted employment. As stated in the leading case of Priestley u. Fowler (3 M. & W. 1, 150 Reprint 1030) decided in 1837 "the mere relation of the master and the servant never can imply an obligation on the part of the master to take more care of the servant than he may reasonably be expected to do of himself." By entering into a contract of employment, the worker was deemed to accept the risks of employment that he should discover and guard against himself. The problems associated with the application of the fellow servant rule, the assumption of risk doctrine, the principle of contributory negligence, and the many other defenses so easily raised in protracted damage suits illustrated the need for a system whereby workers had only to prove the fact of covered employment and the fact of injury arising from employment in order to be compensated. The need for a compensation scheme where liability is created solely by statute and made compulsory and where the element of fault-either the fault of the employer or the fault of the employee-disregarded became obvious. Another objective was to have simplified, expeditious, inexpensive, and non-litigious procedures so that victims of industrial accidents could more readily, if not automatically, receive compensation for work-related injuries. Inspite of common law defenses to defeat a claim being recognized, employers' liability acts were a major step in the desired direction. However, employers liability legislation proved inadequate. Legislative reform led to the workmen's compensation. I cite the above familiar background because workmen's compensation represents a compromise. In return for the near certainty of receiving a sum of money fixed by law, the injured worker gives up the right to subject the employer to a tort suit for huge amounts of damages. Thus, liability not only disregards the element of fault but it is also a pre- determined amount based on the wages of the injured worker and in certain cases, the actual cost of rehabilitation. The worker does not receive the total damages for his pain and suffering which he could otherwise claim in a civil suit. The employer is required to act swiftly on compensation claims. An administrative agency supervises the program. And because the overwhelming mass of workingmen are benefited by the compensation system, individual workers who may want to sue for big amounts of damages must yield to the interests of their entire working class. The nature of the compensation principle is explained as follows: An appreciation of the nature of the compensation principle is essential to an understanding of the acts and the cases interpreting them.

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By the turn of the century it was apparent that the toll of industrial accidents of both the avoidable and unavoidable variety had become enormous, and government was faced with the problem of who was to pay for the human wreckage wrought by the dangers of modern industry. If the accident was avoidable and could be attributed to the carelessness of the employer, existing tort principles offered some measure of redress. Even here, however, the woeful inadequacy of the fault principle was manifest. The uncertainty of the outcome of torts litigation in court placed the employee at a substantial disadvantage. So long as liability depended on fault there could be no recovery until the finger of blame had been pointed officially at the employer or his agents. In most cases both the facts and the law were uncertain. The witnesses, who were usually fellow workers of the victim, were torn between friendship or loyalty to their class, on the one hand, and fear of reprisal by the employer, on the other. The expense and delay of litigation often prompted the injured employee to accept a compromise settlement for a fraction of the full value of his claim. Even if suit were successfully prosecuted, a large share of the proceeds of the judgment were exacted as contingent fees by counsel. Thus the employer against whom judgment was cast often paid a substantial damage bill, while only a part of this enured to the benefit of the injured employee or his dependents. The employee's judgment was nearly always too little and too late. xxx xxx xxx Workmen's Compensation rests upon the economic principle that those persons who enjoy the product of a business- whether it be in the form of goods or services- should ultimately bear the cost of the injuries or deaths that are incident to the manufacture, preparation and distribution of the product. ... xxx xxx xxx Under this approach the element of personal fault either disappears entirely or is subordinated to broader economic considerations. The employer absorbs the cost of accident loss only initially; it is expected that this cost will eventually pass down the stream of commerce in the form of increase price until it is spread in dilution among the ultimate consumers. So long as each competing unit in a given industry is uniformly affected, no producer can gain any substantial competitive advantage or suffer any appreciable loss by reason of the general adoption of the compensation principle. In order that the compensation principle may operate properly and with fairness to all parties it is essential that the anticipated accident cost be predictable and that it be fixed at a figure that will not disrupt too violently the traffic in the product of the industry affected. Thus predictability and moderateness of cost are necessary from the broad economic viewpoint. .... Compensation, then, differs from the conventional damage suit in two important respects: Fault on the part of either employer or employee is eliminated; and compensation payable according to a definitely limited schedule is substituted for damages. All compensation acts alike work these two major changes, irrespective of how they may differ in other particulars. Compensation, when regarded from the viewpoint of employer and employee represents a compromise in which each party surrenders certain advantages in order to gain others which are of more importance both to him and to society. The employer gives up the immunity he otherwise would enjoy in cases where he is not at fault, and the employee surrenders his former right to full damages and accepts instead a more modest claim for bare essentials, represented by compensation. The importance of the compromise character of compensation cannot be overemphasized. The statutes vary a great deal with reference to the proper point of balance. The amount of weekly compensation payments and the length of the period during which compensation is to be paid are matters concerning which the acts differ considerably. The interpretation of any compensation statute will be influenced greatly by the court's reaction to the basic point of compromise established in the Act. If the court feels that the basic compromise unduly favors the employer, it will be tempted to restore what it regards as a proper balance by adopting an interpretation that favors the worker. In this way, a compensation act drawn in a spirit of extreme conservatism may be transformed by a sympathetic court into a fairly liberal instrument; and conversely, an act that greatly favors the laborer may be so interpreted by the courts that employers can have little reason to complain. Much of the unevenness and apparent conflict in compensation decisions throughout the various jurisdictions must be attributed to this." (Malone & Plant, Workmen's Compensation American Casebook Series, pp. 63-65).

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The schedule of compensation, the rates of payments, the compensable injuries and diseases, the premiums paid by employers to the present system, the actuarial stability of the trust fund and many other interrelated parts have all been carefully studied before the integrated scheme was enacted in to law. We have a system whose parts must mesh harmonious with one another if it is to succeed. The basic theory has to be followed. If this Court disregards this totality of the scheme and in a spirit of generosity recasts some parts of the system without touching the related others, the entire structure is endangered. For instance, I am personally against stretching the law and allowing payment of compensation for contingencies never envisioned to be compensable when the law was formulated. Certainly, only harmful results to the principle of workmen's compensation can arise if workmen, whom the law allows to receive employment compensation, can still elect to file damage suits for industrial accidents. It was precisely for this reason that Section 5 of the Workmen's Compensation Act, which reads: SEC. 5. Exclusive right to compensation.-The rights and remedies granted by this Act to an employee by reason of a personal injury entitling him to compensation shall exclude all other rights and remedies accruing to the employee, his personal representatives, dependents or nearest of kin against the employer under the Civil Code and other laws because of said injury. ... Article 173 of the labor Code also provides: ART. 173. Exclusivenesss of liability.—Unless otherwise provided, the liability of the State Insurance Fund under this Title shall be exclusive and in place of all other liabilities of the employer to the employee his dependents or anyone otherwise entitled to receive damages on behalf of the employee or his dependents. I am against the Court assuming the role of legislator in a matter calling for actuarial studies and public hearings. If employers already required to contribute to the State Insurance Fund will still have to bear the cost of damage suits or get insurance for that purpose, a major study will be necessary. The issue before us is more far reaching than the interests of the poor victims and their families. All workers covered by workmen's compensation and all employers who employ covered employees are affected. Even as I have deepest sympathies for the victims, I regret that I am constrained to dissent from the majority opinion. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-18924

October 19, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS, plaintiff-appellant, vs. WONG CHENG (alias WONG CHUN), defendant-appellee. Attorney-General Villa-Real for appellant. Eduardo Gutierrez Repide for appellee. ROMUALDEZ, J.: In this appeal the Attorney-General urges the revocation of the order of the Court of First Instance of Manila, sustaining the demurrer presented by the defendant to the information that initiated this case and in which the appellee is accused of having illegally smoked opium, aboard the merchant vessel Changsa of English nationality while said vessel was anchored in Manila Bay two and a half miles from the shores of the city. The demurrer alleged lack of jurisdiction on the part of the lower court, which so held and dismissed the case. The question that presents itself for our consideration is whether such ruling is erroneous or not; and it will or will not be erroneous according as said court has or has no jurisdiction over said offense.

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The point at issue is whether the courts of the Philippines have jurisdiction over crime, like the one herein involved, committed aboard merchant vessels anchored in our jurisdiction waters. 1awph!l.net There are two fundamental rules on this particular matter in connection with International Law; to wit, the French rule, according to which crimes committed aboard a foreign merchant vessels should not be prosecuted in the courts of the country within whose territorial jurisdiction they were committed, unless their commission affects the peace and security of the territory; and the English rule, based on the territorial principle and followed in the United States, according to which, crimes perpetrated under such circumstances are in general triable in the courts of the country within territory they were committed. Of this two rules, it is the last one that obtains in this jurisdiction, because at present the theories and jurisprudence prevailing in the United States on this matter are authority in the Philippines which is now a territory of the United States. In the cases of The Schooner Exchange vs. M'Faddon and Others (7 Cranch [U. S.], 116), Chief Justice Marshall said: . . . When merchant vessels enter for the purposes of trade, it would be obviously inconvenient and dangerous to society, and would subject the laws to continual infraction, and the government to degradation, if such individuals or merchants did not owe temporary and local allegiance, and were not amenable to the jurisdiction of the country. . . . In United States vs. Bull (15 Phil., 7), this court held: . . . No court of the Philippine Islands had jurisdiction over an offense or crime committed on the high seas or within the territorial waters of any other country, but when she came within three miles of a line drawn from the headlands, which embrace the entrance to Manila Bay, she was within territorial waters, and a new set of principles became applicable. (Wheaton, International Law [Dana ed.], p. 255, note 105; Bonfils, Le Droit Int., secs. 490 et seq.; Latour, La Mer Ter., ch. 1.) The ship and her crew were then subject to the jurisdiction of the territorial sovereign subject to such limitations as have been conceded by that sovereignty through the proper political agency. . . . It is true that in certain cases the comity of nations is observed, as in Mali and Wildenhus vs. Keeper of the Common Jail (120 U.., 1), wherein it was said that: . . . The principle which governs the whole matter is this: Disorder which disturb only the peace of the ship or those on board are to be dealt with exclusively by the sovereignty of the home of the ship, but those which disturb the public peace may be suppressed, and, if need be, the offenders punished by the proper authorities of the local jurisdiction. It may not be easy at all times to determine which of the two jurisdictions a particular act of disorder belongs. Much will undoubtedly depend on the attending circumstances of the particular case, but all must concede that felonious homicide is a subject for the local jurisdiction, and that if the proper authorities are proceeding with the case in the regular way the consul has no right to interfere to prevent it. Hence in United States vs. Look Chaw (18 Phil., 573), this court held that: Although the mere possession of an article of prohibited use in the Philippine Islands, aboard a foreign vessel in transit in any local port, does not, as a general rule, constitute a crime triable by the courts of the Islands, such vessels being considered as an extension of its own nationality, the same rule does not apply when the article, the use of which is prohibited in the Islands, is landed from the vessels upon Philippine soil; in such a case an open violation of the laws of the land is committed with respect to which, as it is a violation of the penal law in force at the place of the commission of the crime, no court other than that established in the said place has jurisdiction of the offense, in the absence of an agreement under an international treaty. As to whether the United States has ever consented by treaty or otherwise to renouncing such jurisdiction or a part thereof, we find nothing to this effect so far as England is concerned, to which nation the ship where the crime in question was committed belongs. Besides, in his work "Treaties, Conventions, etc.," volume 1, page 625, Malloy says the following: There shall be between the territories of the United States of America, and all the territories of His Britanic Majesty in Europe, a reciprocal liberty of commerce. The inhabitants of the two countries, respectively, shall have liberty freely and securely to come with their ships and cargoes to all such places, ports and rivers, in the territories aforesaid, to which other foreigners are permitted to come, to enter into the same, and to remain and reside in any parts of the said territories, respectively; also to hire and occupy houses and warehouses for the purposes of their commerce; and, generally, the merchants and traders of each nation respectively shall enjoy the most complete protection and security for their

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commerce, but subject always to the laws and statutes of the two countries, respectively. (Art. 1, Commerce and Navigation Convention.) We have seen that the mere possession of opium aboard a foreign vessel in transit was held by this court not triable by or courts, because it being the primary object of our Opium Law to protect the inhabitants of the Philippines against the disastrous effects entailed by the use of this drug, its mere possession in such a ship, without being used in our territory, does not being about in the said territory those effects that our statute contemplates avoiding. Hence such a mere possession is not considered a disturbance of the public order. But to smoke opium within our territorial limits, even though aboard a foreign merchant ship, is certainly a breach of the public order here established, because it causes such drug to produce its pernicious effects within our territory. It seriously contravenes the purpose that our Legislature has in mind in enacting the aforesaid repressive statute. Moreover, as the Attorney-General aptly observes: . . . The idea of a person smoking opium securely on board a foreign vessel at anchor in the port of Manila in open defiance of the local authorities, who are impotent to lay hands on him, is simply subversive of public order. It requires no unusual stretch of the imagination to conceive that a foreign ship may come into the port of Manila and allow or solicit Chinese residents to smoke opium on board. The order appealed from is revoked and the cause ordered remanded to the court of origin for further proceedings in accordance with law, without special findings as to costs. So ordered. Araullo, C.J., Street, Malcolm, Avanceña, Villamor, Ostrand and Johns, JJ., concur.

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