Exclusio Unius Expressio Alterius

THE HONORABLE MONETARY BOARD AND GAIL U. FULE, DIRECTOR,

SUPERVISION AND EXAMINATION DEPARTMENT II, AND BANGKO SENTRAL

NG PILIPINAS, Petitioners, v.PHILIPPINE VETERANS BANK, Respondent

G.R. No. 189571, January 21, 2015

FACTS: Respondent established a pension loan product for bona fide veterans or their

surviving spouses, as well as salary loan product for teachers and low-salaried employees

pursuant to its mandate under Republic Act (RA) Nos. 3518 and 7169 to provide financial

assistance to veterans and teachers. As its clientele usually do not have real estate or security to

cover their pension or salary loan, other than their continuing good health and/or employment,

respondent devised a program by charging a premium in the form of a higher fee known

as Credit Redemption Fund (CRF) from said borrowers. Resultantly, Special Trust Funds were

established by respondent for the pension loans of the veteran-borrowers, salary loans of teachers

and low-salaried employees. These trust funds were, in turn, managed by respondent’s Trust and

Investment Department, with respondent as beneficiary. The fees charged against the borrowers

were credited to the respective trust funds, which would be used to fully pay the outstanding

obligation of the borrowers in case of death.

On April 30, 2002, an examination was conducted by the Supervision and Examination

Department (SED) II of the Bangko Sentral ng Pilipinas (BSP). It found, among other things, that

respondent’s collection of premiums from the proceeds of various salary and pension loans of

borrowers to guarantee payment of outstanding loans violated Section 54 of RA No. 8791 which

states that banks shall not directly engage in insurance business as insurer.

On September 16, 2005, petitioners issued Monetary Board (MB) Resolution No. 1139 directing

respondent’s Trust and Investment Department to return to the borrowers all the balances of the

CRF in the amount of P144,713,224.54 as of August 31, 2004, and to preserve the records of

borrowers who were deducted CRFs from their loan proceeds pending resolution or ruling of the

Office of the General Counsel of the BSP. Thus, respondent requested reconsideration of said

MB Resolution. However, the same was denied in a letter dated December 5, 2006.

Accordingly, respondent filed a Petition for Declaratory Relief with the RTC of Makati City. In

response, petitioners filed a Motion to Dismiss alleging that the petition for declaratory relief

cannot prosper due to respondent’s prior breach of Section 54 of RA No. 8791.

In an Order dated September 24, 2007, the RTC dismissed

respondent’s petition for declaratory relief that it did not violate Sec. 54,

R.A. 8791, otherwise known as the “General Banking Law of 2000.” The

Monetary Board Resolution No. 1139 dated August 26, 2005 is hereby

declared null and void.

ISSUE: Whether or not the petition for declaratory relief is proper.

RULING: The Court rule in the negative. Declaratory relief is defined as an action by any

person interested in a deed, will, contract or other written instrument, executive order or

resolution, to determine any question of construction or validity arising from the instrument,

executive order or regulation, or statute; and for a declaration of his rights and duties thereunder.

The only issue that may be raised in such a petition is the question of construction or validity of

provisions in an instrument or statute. the Court, in CJH Development Corporation v. Bureau of

Internal Revenue, held that in the same manner that court decisions cannot be the proper subjects

of a petition for declaratory relief, decisions of quasi-judicial agencies cannot be subjects of a

petition for declaratory relief for the simple reason that if a party is not agreeable to a decision

either on questions of law or of fact, it may avail of the various remedies provided by the Rules

of Court. The decision of the BSP Monetary Board cannot be a proper subject matter for a

petition for declaratory relief since it was issued by the BSP Monetary Board in the exercise of

its quasi-judicial powers or functions.

A perusal of Section 9(3) of Batas Pambansa Blg. 129, as

amended, and Section 1, Rule 43 of the 1997 Rules of Civil Procedure

reveals that the BSP Monetary Board is not included among the quasi-

judicial agencies explicitly named therein, whose final judgments, orders,

resolutions or awards are appealable to the Court of Appeals. Such

omission, however, does not necessarily mean that the Court of Appeals

has no appellate jurisdiction over the judgments, orders, resolutions, or

awards of the BSP Monetary Board. It bears stressing that Section 9(3)

of Batas Pambansa Blg. 129, as amended, on the appellate jurisdiction of

the Court of Appeals, generally refers to quasi-judicial agencies,

instrumentalities, boards or commissions. The use of the word “including”

in the said provision, prior to the naming of several quasi-judicial

agencies, necessarily conveys the very idea of non-exclusivity of the

enumeration. The principle of expressio unius est exclusio alterius does

not apply where other circumstances indicate that the enumeration was not

intended to be exclusive, or where the enumeration is by way of example

only.

Undoubtedly, the BSP Monetary Board is a quasi-judicial agency

exercising quasi-judicial powers or functions. As aptly observed by the

Court of Appeals, the BSP Monetary Board is an independent central

monetary authority and a body corporate with fiscal and administrative

autonomy, mandated to provide policy directions in the areas of money,

banking, and credit. It has the power to issue subpoena, to sue for

contempt those refusing to obey the subpoena without justifiable reason,

to administer oaths and compel presentation of books, records and others,

needed in its examination, to impose fines and other sanctions and to issue

cease and desist order. Section 37 of Republic Act No. 7653, in particular,

explicitly provides that the BSP Monetary Board shall exercise its

discretion in determining whether administrative sanctions should be

imposed on banks and quasi-banks, which necessarily implies that the

BSP Monetary Board must conduct some form of investigation or hearing

regarding the same.

Ejusdem Generis

GLENN VIÑAS, Petitioner, v. MARY GRACE PAREL-VIÑAS, Respondent.

G.R. No. 208790, January 21, 2015

FACTS: On April 26, 1999, Glenn and Mary Grace, then 25 and 23 years old, respectively,

got married in civil rites held in Lipa City, Batangas. Mary Grace was already pregnant then. The

infant, however, died at birth due to weakness and malnourishment. Glenn alleged that the

infant’s death was caused by Mary Grace’s heavy drinking and smoking during her pregnancy.

The couple lived together under one roof.

On February 18, 2009, Glenn filed a Petition for the declaration of

nullity of his marriage with Mary Grace. He alleged that Mary Grace was

insecure, extremely jealous, outgoing and prone to regularly resorting to

any pretext to be able to leave the house. She thoroughly enjoyed the night

life, and drank and smoked heavily even when she was pregnant. Further,

Mary Grace refused to perform even the most essential household chores

of cleaning and cooking. According to Glenn, Mary Grace had not

exhibited the foregoing traits and behavior during their whirlwind

courtship. Glenn likewise alleged that Mary Grace was not remorseful

about the death of the infant whom she delivered. She lived as if she were

single and was unmindful of her husband’s needs. She was self-centered,

selfish and immature. She eventually left their home without informing

Glenn. Glenn later found out that she left for an overseas employment in

Dubai.

To ease their marital problems, Glenn sought professional

guidance and submitted himself to a psychological evaluation by Clinical

Psychologist Nedy Tayag (Dr. Tayag). Dr. Tayag found him as “amply

aware of his marital roles” and “capable of maintaining a mature and

healthy heterosexual relationship.LawOn the other hand, Dr. Tayag

assessed Mary Grace’s personality through the data she had gathered from

Glenn and his cousin, Rodelito Mayo, who knew Mary Grace way back in

college. Dr. Tayag diagnosed Mary Grace to be suffering from a

Narcissistic Personality Disorder with anti-social traits. Dr. Tayag

concluded that Mary Grace and Glenn’s relationship is not founded on

mutual love, trust, respect, commitment and fidelity to each other. Hence,

Dr. Tayag recommended the propriety of declaring the nullity of the

couple’s marriage.

On February 18, 2009, Glenn filed before the RTC a Petition for

the Declaration of Nullity of his marriage with Mary Grace. During the

trial, the testimonies of Glenn, Dr. Tayag and Rodelito were offered as

evidence. Glenn and Rodelito described Mary Grace as outgoing, carefree,

and irresponsible. She is the exact opposite of Glenn, who is conservative

and preoccupied with his work.

On January 29, 2010, the RTC rendered its Decision declaring the

marriage between Glenn and Mary Grace as null and void on account of

the latter’s psychological incapacity. On appeal before the CA, the OSG

claimed that no competent evidence exist proving that Mary Grace indeed

suffers from a Narcissistic Personality Disorder, which prevents her from

fulfilling her marital obligations. The RTC decision failed to cite the root

cause of Mary Grace’s disorder. Further, the RTC did not state its own

findings and merely relied on Dr. Tayag’s statements anent the gravity and

incurability of Mary Grace’s condition. The RTC resorted to mere

generalizations and conclusions sans details. Besides, what psychological

incapacity contemplates is downright incapacity to assume marital

obligations. In the instant case, irreconcilable differences, sexual

infidelity, emotional immaturity and irresponsibility were shown, but these

do not warrant the grant of Glenn’s petition. Glenn, on the other hand,

sought the dismissal of the OSG’s appeal. On January 29, 2013, the CA

rendered the herein assailed decision reversing the RTC ruling and

declaring the marriage between Glenn and Mary Grace as valid and

subsisting. 

ISSUE: Whether or not sufficient evidence exist justifying the RTC’s declaration of

nullity of his marriage with Mary Grace.

RULING: The instant petition lacks merit. The lack of personal examination or assessment

of the respondent by a psychologist or psychiatrist is not necessarily fatal in a petition for the

declaration of nullity of marriage. “If the totality of evidence presented is enough to sustain a

finding of psychological incapacity, then actual medical examination of the person concerned

need not be resorted to.” In the instant petition, however, the cumulative testimonies of Glenn,

Dr. Tayag and Rodelito, and the documentary evidence offered do not sufficiently prove the root

cause, gravity and incurability of Mary Grace’s condition. In the present case, the respondent’s

stubborn refusal to cohabit with the petitioner was doubtlessly irresponsible, but it was never

proven to be rooted in some psychological illness. Further, considering that Mary Grace was not

personally examined by Dr. Tayag, there arose a greater burden to present more convincing

evidence to prove the gravity, juridical antecedence and incurability of the former’s condition.

Glenn, however, failed in this respect. Glenn’s testimony is wanting in material details. Dr.

Tayag’s conclusions about the respondent’s psychological incapacity were based on the

information fed to her by only one side – the petitioner – whose bias in favor of her cause cannot

be doubted. Dr. Tayag only diagnosed the respondent from the prism of a third party account;

she did not actually hear, see and evaluate the respondent and how he would have reacted and

responded to the doctor’s probes.

The Supreme Court find these observations and conclusions

insufficiently in-depth and comprehensive to warrant the conclusion that a

psychological incapacity existed that prevented the respondent from

complying with the essential obligations of marriage. It failed to identify

the root cause of the respondent’s narcissistic personality disorder and to

prove that it existed at the inception of the marriage. Neither did it explain

the incapacitating nature of the alleged disorder, nor show that the

respondent was really incapable of fulfilling his duties due to some

incapacity of a psychological, not physical, nature. To make conclusions

and generalizations on the respondent’s psychological condition based on

the information fed by only one side is, to our mind, not different from

admitting hearsay evidence as proof of the truthfulness of the content of

such evidence. Dr. Tayag’s testimony reveals that she failed to establish

the fact that at the time the parties were married, respondent was already

suffering from a psychological defect that deprived him of the ability to

assume the essential duties and responsibilities of marriage. Neither did

she adequately explain how she came to the conclusion that respondent’s

condition was grave and incurable. The totality of the evidence presented

provides inadequate basis for the Court to conclude that Mary Grace is

indeed psychologically incapacitated to comply with her obligations as

Glenn’s spouse.

Ratio Legis

DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

(DENR), Petitioner, v. UNITED PLANNERS CONSULTANTS, INC. (UPCI), Respondent.

G.R. No. 212081, February 23, 2015

FACTS: On July 26, 1993, petitioner, through the Land Management Bureau (LMB),

entered into an Agreement for Consultancy Services (Consultancy Agreement) with respondent

United Planners Consultants, Inc. (respondent) in connection with the LMB’s Land Resource

Management Master Plan Project (LRMMP). Under the Consultancy Agreement, petitioner

committed to pay a total contract price of P4,337,141.00, based on a predetermined percentage

corresponding to the particular stage of work accomplished. In December 1994, respondent

completed the work required, which petitioner formally accepted on December 27, 1994.

However, petitioner was able to pay only 47% of the total contract price in the amount of

P2,038,456.30.

In October 25, 1994, the Commission on Audit (COA) released the

Technical Services Office Report(TSO) finding the contract price of the

Agreement to be 84.14% excessive. This notwithstanding, petitioner, in a

letter dated December 10, 1998, acknowledged its liability to respondent

in the amount of P2,239,479.60 and assured payment at the soonest

possible time. For failure to pay its obligation under the Consultancy

Agreement despite repeated demands, respondent instituted a

Complaint against petitioner before the Regional Trial Court of Quezon

City, Branch 222 (RTC), docketed as Case No. Q-07-60321.

Unconvinced, petitioner filed a motion for reconsideration, which

the Arbitral Tribunal merely noted without any action, claiming that it had

already lost jurisdiction over the case after it had submitted to the RTC its

Report together with a copy of the Arbitral Award. Consequently,

petitioner filed before the RTC a Motion for Reconsideration dated May

19, 2010(May 19, 2010 Motion for Reconsideration) and a Manifestation

and Motion dated June 1, 2010 (June 1, 2010 Manifestation and Motion),

asserting that it was denied the opportunity to be heard when the Arbitral

Tribunal failed to consider its draft decision and merely noted its motion

for reconsideration.

Thus, on June 15, 2011, respondent moved for the issuance of a

writ of execution, to which no comment/opposition was filed by petitioner

despite the RTC’s directive therefor. In an Order dated September 12,

2011, the RTC granted respondent’s motion.d Petitioner moved to quash

the writ of execution, positing that respondent was not entitled to its

monetary claims. It also claimed that the issuance of said writ was

premature since the RTC should have first resolved its May 19, 2010

Motion for Reconsideration and June 1, 2010 Manifestation and Motion,

and not merely noted them, thereby violating its right to due process.

In an Order dated July 9, 2012, the RTC denied petitioner’s motion

to quash. It found no merit in petitioner’s contention that it was denied due

process, ruling that its May 19, 2010 Motion for Reconsideration was a

prohibited pleading under Section 17.2, Rule 17 of the CIAC Rules.

Dissatisfied, it filed on September 10, 2012 a petition

for certiorari before the CA, docketed as CA-G.R. SP No. 126458,

averring in the main that the RTC acted with grave abuse of discretion in

confirming and ordering the execution of the Arbitral Award. However,

the CA dismissed the certiorari petition on two (2) grounds, namely: (a)

the petition essentially assailed the merits of the Arbitral Award which is

prohibited under Rule 19.7 of the Special ADR Rules; and (b) the petition

was filed out of time, having been filed way beyond 15 days from notice

of the RTC’s July 9, 2012 Order, in violation of Rule 19.28 in relation to

Rule 19.8 of said Rules which provide that a special civil action

for certiorari must be filed before the CA within 15 days from notice of

the judgment, order, or resolution sought to be annulled or set aside (or

until July 27, 2012). Aggrieved, petitioner filed the instant case.

ISSUE: Whether or not the CA erred in applying the provisions of the Special ADR

Rules, resulting in the dismissal of petitioner’s special civil action for certiorari.

RULING: The petition lacks merit. Republic Act No. (RA) 9285, otherwise known as the

Alternative Dispute Resolution Act of 2004,” institutionalized the use of an Alternative Dispute

Resolution System (ADR System) in the Philippines.  The Act, however, was without prejudice

to the adoption by the Supreme Court of any ADR system as a means of achieving speedy and

efficient means of resolving cases pending before all courts in the Philippines. Notably, the

Special ADR Rules do not automatically govern the arbitration proceedings itself. A pivotal

feature of arbitration as an alternative mode of dispute resolution is that it is a product of party

autonomy or the freedom of the parties to make their own arrangements to resolve their own

disputes. Thus, Rule 2.3 of the Special ADR Rules explicitly provides that “parties are free to

agree on the procedure to be followed in the conduct of arbitral proceedings. Failing such

agreement, the arbitral tribunal may conduct arbitration in the manner it considers appropriate.”

Rule 19.28 of the Special ADR Rules provide that

said certiorari petition should be filed “with the [CA] within fifteen (15)

days from notice of the judgment, order or resolution sought to be

annulled or set aside. No extension of time to file the petition shall be

allowed.” In this case, petitioner asserts that its petition is not covered by

the Special ADR Rules (particularly, Rule 19.28 on the 15-day

reglementary period to file a petition for certiorari) but by Rule 65 of the

Rules of Court (particularly, Section 4 thereof on the 60-day reglementary

period to file a petition for certiorari), which it claimed to have suppletory

application in arbitration proceedings since the Special ADR Rules do not

explicitly provide for a procedure on execution. The position is untenable.

Execution is fittingly called the fruit and end of suit and the life of the

law. A judgment, if left unexecuted, would be nothing but an empty

victory for the prevailing party. While it appears that the Special ADR

Rules remain silent on the procedure for the execution of a confirmed

arbitral award, it is the Court’s considered view that the Rules’ procedural

mechanisms cover not only aspects of confirmation but necessarily extend

to a confirmed award’s execution in light of the doctrine of necessary

implication which states that every statutory grant of power, right or

privilege is deemed to include all incidental power, right or privilege.

In Atienza v. Villarosa, the doctrine was explained, thus:

No statute can be enacted that can provide all the details involved

in its application. There is always an omission that may not meet a

particular situation. What is thought, at the time of enactment, to be an all-

embracing legislation may be inadequate to provide for the unfolding of

events of the future. So-called gaps in the law develop as the law is

enforced. One of the rules of statutory construction used to fill in the gap

is the doctrine of necessary implication. The doctrine states that what is

implied in a statute is as much a part thereof as that which is

expressed. Every statute is understood, by implication, to contain all such

provisions as may be necessary to effectuate its object and purpose, or to

make effective rights, powers, privileges or jurisdiction which it grants,

including all such collateral and subsidiary consequences as may be fairly

and logically inferred from its terms. Ex necessitate legis. And every

statutory grant of power, right or privilege is deemed to include all

incidental power, right or privilege. This is so because the greater includes

the lesser, expressed in the maxim, in eo plus sit, simper inest et minus.

As the Court sees it, execution is but a necessary incident to the

Court’s confirmation of an arbitral award. To construe it otherwise would

result in an absurd situation whereby the confirming court previously

applying the Special ADR Rules in its confirmation of the arbitral award

would later shift to the regular Rules of Procedure come execution.

Irrefragably, a court’s power to confirm a judgment award under the

Special ADR Rules should be deemed to include the power to order its

execution for such is but a collateral and subsidiary consequence that may

be fairly and logically inferred from the statutory grant to regional trial

courts of the power to confirm domestic arbitral awards. All the more is

such interpretation warranted under the principle of ratio legis est

anima which provides that a statute must be read according to its spirit or

intent,for what is within the spirit is within the statute although it is not

within its letter, and that which is within the letter but not within the spirit

is not within the statute.

Verba Legis

SILICON PHILIPPINES, INC. (FORMERLY INTEL PHILIPPINES

MANUFACTURING, INC.),Petitioner, v. COMMISSIONER OF INTERNAL

REVENUE, Respondent.

GR. No. 173241, March 25, 2015

FACTS: SPI, formerly known as Intel Philippines Manufacturing, Inc., is a corporation

duly organized and existing under Philippine laws, and engaged in the business of designing,

developing, manufacturing, and exporting advance and large-scale integrated circuit components,

commonly referred to in the industry as Integrated Circuits or “ICs.”  It is registered with the

Bureau of Internal Revenue (BIR) as a VAT taxpayer and with the Board of Investments as a

preferred pioneer enterprise enjoying a six-year income holiday, in accordance with the

provisions of the Omnibus Investments Code.

SPI filed on May 6, 1999 with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback

Center of the Department of Finance an Application for Tax Credit/Refund of Value-Added Tax

Paid covering the Third Quarter of 1998. SPI sought the tax credit/refund of input VAT for the

said tax period in the sum of P25,531,312.83. When respondent Commissioner of Internal

Revenue (CIR) failed to act upon its aforesaid Application for Tax Credit/Refund, SPI filed on

September 29, 2000 a Petition for Review before the CTA Division, which was docketed as CTA

Case No. 6170. The CTA Division rendered a Decision on November 24, 2003 only partially

granting the claim of SPI for tax credit/refund. he CTA Division particularly pointed out the

failure of SPI to comply with invoicing requirements under Sections 113, 237, and 238 of the

National Internal Revenue Code of 1997 (1997 Tax Code) and Section 4.108-1 of Revenue

Regulations No. 7-95, i.e., registration of receipts or sales or commercial invoices with the BIR;

securing an authority to print receipts or sales or commercial invoices from the BIR; and

imprinting the words “zero-rated” on the invoices covering zero-rated sales. SPI filed a Motion

for Partial Reconsideration and Supplemental Motion for Partial Reconsideration of the

foregoing Decision dated November 24, 2003 of the CTA Division but to no avail. SPI sought

recourse from the CTA en banc by filing a Petition for Review assailing the Decision but the CA

en banc denied due course and dismissed for lack of merit. SPI now comes before this Court via

the instant Petition for Review.

ISSUE: Whether or not the Court erred in disregarding the petitioner’s claim in proving its

claim for tax credit or refund.

RULING: No. The Court interpreted the aforequoted provisions, as well as the seemingly

conflicting jurisprudence and administrative rulings on the same provisions, in Commissioner of

Internal Revenue v. San Roque Power Corporation, thus: Section 112(C) also expressly grants

the taxpayer a 30-day period to appeal to the CTA the decision or inaction of the Commissioner,

thus:

x x x the taxpayer affected may, within thirty (30) days from the receipt of the decision denying

the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the

unacted claim with the Court of Tax Appeals.

This law is clear, plain, and unequivocal.  Following the well-

settled verba legis doctrine, this law should be applied exactly as worded

since it is clear, plain, and unequivocal. As this law states, the taxpayer

may, if he wishes, appeal the decision of the Commissioner to the CTA

within 30 days from receipt of the Commissioner’s decision, or if the

Commissioner does not act on the taxpayer’s claim within the 120-day

period, the taxpayer may appeal to the CTA within 30 days from the

expiration of the 120-day period.

Section 112(A) and (C) must be interpreted according to its clear, plain,

and unequivocal language. The taxpayer can file his administrative claim

for refund or credit at anytime within the two-year prescriptive period. If

he files his claim on the last day of the two-year prescriptive period, his

claim is still filed on time. The Commissioner will have 120 days from

such filing to decide the claim. If the Commissioner decides the claim on

the 120th day, or does not decide it on that day, the taxpayer still has 30

days to file his judicial claim with the CTA. This is not only the plain

meaning but also the only logical interpretation of Section 112(A) and (C).

The Court reiterates its pronouncements in a previously decided case which also involved SPI

and similar claims for tax credit/refund but for different tax periods:

Courts are bound by prior decisions. Thus, once a case has been decided one way, courts

have no choice but to resolve subsequent cases involving the same issue in the same manner. As

this Court has repeatedly emphasized, a tax credit or refund, like tax exemption, is strictly

construed against the taxpayer.  The taxpayer claiming the tax credit or refund has the burden of

proving that he is entitled to the refund by showing that he has strictly complied with the

conditions for the grant of the tax refund or credit.  Strict compliance with the mandatory and

jurisdictional conditions prescribed by law to claim such tax refund or credit is essential and

necessary for such claim to prosper.  Noncompliance with the mandatory periods, nonobservance

of the prescriptive periods, and non adherence to exhaustion of administrative remedies bar a

taxpayer’s claim for tax refund or credit, whether or not the CIR questions the numerical

correctness of the claim of the taxpayer.  For failure of Silicon to comply with the provisions of

Section 112(C) of the NIRC, its judicial claims for tax refund or credit should have been

dismissed by the CTA for lack of jurisdiction. In addition, when a case is on appeal, the Court

has the authority to review matters not specifically raised or assigned as error if their

consideration is necessary in reaching a just conclusion of the case.  More importantly, courts

have the power to motu proprio dismiss an action that already prescribed. The Petition for

Review of Silicon Philippines, Inc. seeking tax credit/refund of the input Value-Added Tax

attributable to its zero-rated sales and on its purchases of capital goods for the Third Quarter of

1998, docketed as CTA Case No. 6170 before the Court of Tax Appeals Division,

is DISMISSED for being filed out of time.

Pari Materia Rule

THE OFFICE OF THE SOLICITOR GENERAL (OSG), Petitioner, vs.

THE HONORABLE COURT OF APPEALS and THE MUNICIPAL GOVERNMENT OF

SAGUIRAN, LANAO DEL SUR, Respondents.

G.R. No. 199027,June 9, 2014

FACTS: The Municipality of Saguiran was named a respondent in a petition for

mandamus filed with the Regional Trial Court (RTC) of Lanao del Sur by the former members of

the Sangguniang Bayan of Saguiran, namely, Macmod P. Masorong, Amrosi MacoteSamporna,

Alanie L. Dalama, Hassan P. Amai-Kurot and Cadalay S. Rataban. Therein petitioners sought to

compel the Municipality of Saguiran to pay them the aggregate amount of 726,000.00,

representing their unpaid terminal leave benefits under Section 5 of the Civil Service

Commission Memorandum Circular Nos. 41, Series of 1998 and 14, Series of 1999. The

Municipality of Saguiran sought the trial court’s dismissal of the petition through its Verified

Answer with Affirmative Defenses and Counterclaim which was signed by Municipal Mayor

Hadjah Rasmia B. Macabago and Municipal Treasurer Hadji Mautinter Dimacaling. In January

6, 2009, the RTC issued an Order dismissing the petition on the ground that the act being sought

by therein petitioners was not a ministerial duty. The RTC explained that the payment of

terminal leave benefits had to undergo the ordinary process of verification, approval or

disapproval by municipal officials. It, nonetheless, directed the Municipality of Saguiran to

include in its general or special budget for the year 2009 the subject claims for terminal leave

benefits.

Dissatisfied with the RTC’s directive for the inclusion of the

subject claims in the municipality’s budget, the Municipality of Saguiran

partially appealed the order of the RTC to the CA. On December 14, 2009,

the appellate court issued a notice requiring the OSG to file a

memorandum for the Municipality of Saguiran within a non-extendible

period of 30 days.The OSG initially moved for a suspension of the period

to file the required memorandum, explaining that it had not received any

document or pleading in connection with the case. It asked for a period of

30 days from receipt of such documents within which to file the required

memorandum. On April 23, 2010, the OSG’s motion was denied by the

CA on the ground that the relief sought was not among the remedies

allowed under the Rules of Court. The OSG was instead given a non-

extendible period of 90 days from notice within which to file the

memorandum. On August 5, 2010, the OSG filed a Manifestation and

Motion requesting to be excused from filing the memorandum on the

ground of lack of legal authority to represent the Municipality of Saguiran.

It reasoned that the Municipality of Saguiran had to be represented by its

legal officer, pursuant to Article XI(3)(i) of Republic Act No. 7160,

otherwise known as the Local Government Code of 1991 (LGC).On

October 18, 2010, the CA issued the assailed Resolution denying the

OSG’s motion.

ISSUE: Whether or not the Court of Appeals committed grave abuse of discretion

amounting to lack or excess of jurisdiction in compelling the OSG to represent the Municipal

Government of saguiran, Lanao Del Sur in its lawsuit.

RULING: The petition is meritorious. The OSG’s powers and functions are defined in the

Administrative Code of 1987 (Administrative Code), particularly in Section 35, Book IV, Title

III, Chapter 12 thereof, which reads:

Sec. 35. Powers and Functions. – The Office of the Solicitor

General shall represent the Government of the Philippines, its agencies

and instrumentalities and its officials and agents in any litigation,

proceeding, investigation or matter requiring the services of a lawyer.

When authorized by the President or head of the office concerned, it shall

also represent government-owned or controlled corporations. The Office

of the Solicitor General shall constitute the law office of the Government

and, as such, shall discharge duties requiring the services of a lawyer. It

shall have the following specific powers and functions:

(1) Represent the Government in the Supreme Court and the Court of Appeals in all criminal

proceedings; represent the Government and its officers in the Supreme Court, the Court of

Appeals, and all other courts or tribunals in all civil actions and special proceedings in which the

Government or any officer thereof in his official capacity is a party; A cursory reading of this

provision may create the impression that the OSG’s mandate under the Administrative Code is

unqualified, and thus broad enough to include representation of a local government unit in any

case filed by or against it, as local government units, indisputably, form part of the Government

of the Philippines. Towards a proper resolution of the pending issue, however, the OSG’s

mandate under the Administrative Code must be construed taking into account the other statutes

that pertain to the same subject of representation in courts. 

Statutes are in pari materia when they relate to the same person or

thing or to the same class of persons or things, or object, or cover the same

specific or particular subject matter.

It is axiomatic in statutory construction that a statute must be interpreted, not only to be

consistent with itself, but also to harmonize with other laws on the same subject matter, as to

form a complete, coherent and intelligible system. The rule is expressed in the maxim,

"interpretare et concordare legibus est optimus interpretandi," or every statute must be so

construed and harmonized with other statutes as to form a uniform system of jurisprudence.

On the matter of counsels’ representation for the government, the

Administrative Code is not the only law that delves on the issue.

Specifically for local government units, the LGC limits the lawyers who

are authorized to represent them in court actions

A general law and a special law on the same subject are statutes in pari materia and should,

accordingly, be read together and harmonized, if possible, with a view to giving effect to both.

The rule is that where there are two acts, one of which is special and particular and the other

general which, if standing alone, would include the same matter and thus conflict with the

special act, the special law must prevail since it evinces the legislative intent more clearly than

that of a general statute and must not be taken as intended to affect the more particular and

specific provisions of the earlier act, unless it is absolutely necessary so to construe it in order to

give its words any meaning at all.

Given the foregoing, the CA committed grave abuse of discretion

amounting to lack or excess of jurisdiction in issuing the assailed

resolutions which obligated the OSG to represent the Municipality of

Saguiran. Such ruling disregarded the provisions of the LGC that vested

exclusive authority upon legal officers to be counsels of local government

units. Even the employment of a special legal officer is expressly allowed

by the law only upon a strict condition that the action or proceeding which

involves the component city or municipality is adverse to the provincial

government or to another component city or municipality. The mere fact

that the OSG initially filed before the CA a motion for extension of time to

file the required memorandum could not have estopped it from later

raising the issue of its lack of authority to represent the Municipality of

Saguiran. Its mandate was to be traced from existing laws. No action of

the OSG could have validated an act that was beyond the scope of its

authority.

The Legal Officer of the Municipal Government of Saguiran,

Lanao del Sur, or if there is none, the Provincial Attorney of the Province

of Lanao del Sur, and not the Office of the Solicitor General, has the duty

to represent the local government unit as counsel.