[GRN L-19650 September 29, 1966] CALTEX (PHILlPPINES) INC., petitioner and appellee, vs.

ENRICO PALOMAR, in his capacity as the POSTMASTER GENERAL, respondent and appellant. APPEAL from a judgment of the Court of First Instance of Manila. Alvendia, J. The facts are stated in the opinion of the Court. Solicitor General Arturo A. Alafriz, Asst. Solicitor General Felicisimo R. Rosete and Solicitor J. M. Lantin, for appellant-, Ross, Selph & Carrascoso for appellee. RUIZ CASTRO, J.: In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived and laid the groundwork for a promotional scheme calculated to drum up patronage for its oil products. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to estimate the actual number of liters a hooded gas pump at each Caltex station will dispense during a specified period. Employees of the Caltex (Philippines) Inc., its dealers and its advertising agency, and their immediate families excepted, participation is to be open indiscriminately to all "motor vehicle owners and/or licensed drivers". For the privilege to participate, no fee or consideration is required to be paid, no purchase of Caltex products required to be made. Entry forms are to be made available upon request at each Caltex station where a sealed can will be provided for the deposit of accomplished entry stubs. A three-staged winner selection system is envisioned. At the station level, called "Dealer Contest", the contestant whose estimate is closest to the actual number of liters dispensed by the hooded pump thereat is to be awarded the first prize; the next closest, the second; and the next, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottle and a Ray-O-Vac hunter lantern for second; and an Eveready Magnet-lite flashlight with batteries and a screwdriver set for third. The firstprize winner in each station will then be qualified to join in the "Regional Contest" in seven different regions. The winning stubs of the qualified contestants in each region will be deposited in a sealed an from which the first-prize, secondprize and third prize winners of that region will be drawn. The regional first-prize winners will be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied by their respective Caltex dealers, in order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash prizes of P500 and P300, respectively. At the national level, the stubs of the seven regional first-prize winners will be placed inside a sealed can from which. the drawing for the final first-prize, second-prize and third prize winners will be made. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second; P1,500 for third; and P650 as consolation prize for each of the remaining four participants. Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also for the transmission of communications relative thereto, representations were made by Caltex with the postal authorities for the contest to be cleared in advance for mailing, having in view sections

1954(a), 1982 and 1983 of the Revised Administrative Code, the pertinent provisions of which read as follows: "SECTION 1954. Absolutely non-mailable matter.-No matter belonging to any of the following classes, whether sealed as first-class matter or not, shall be imported into the Philippines through the mails, or be deposited in or carried by the mails of the Philippines, or be delivered to its addressee by any officer or employee of the Bureau of Posts: (a) Written or printed matter in any form advertising, describing, or in any manner pertaining to, or conveying or purporting to convey any information concerning any lottery, gift enterprise, or similar scheme depending in whole or in part upon lot or chance, or any scheme, device, or enterprise for obtaining any money or property of any kind by means of false or fraudulent pretenses, representations, or promises." "SECTION 1982. Fraud orders.-Upon satisfactory evidence that any person or company is engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promises, the Director of Posts may instruct any postmaster or other officer or employee of the Bureau to return to the person, depositing same in the mails, with the word 'fraudulent' plainly written or stamped upon the outside cover thereof, any mail matter of whatever class mailed by or addressed to such person or company or the representative or agent of such person or company." "SECTION 1983. Deprivation of use of money order system and telegraphic transfer service.-The Director of Posts may, upon evidence satisfactory to him that any person or company is engaged in conducting any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind, or that any person or company is conducting any scheme, device, or enterprise for obtaining money or property of any kind through the mails by means of false or fraudulent pretenses, representations, or promise, forbid the issue or payment by any postmaster of any postal money order or telegraphic transfer to said person or company or to the agent of any such person or company, whether such agent is acting as an individual or as a firm, bank, corporation, or association of any kind, and may provide by regulation for the return to the remitters of the sums named in money orders or telegraphic transfers drawn in favor of such person or company or its agent." The overtures were later formalized in a letter to the Postmaster General, dated October 31, 1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to justify its position that the contest does not violate the anti-lottery provisions of the Postal Law. Unimpressed, the then Acting Postmaster General opined that the scheme falls within the purview of the Provisions aforesaid and declined to grant the requested clearance. In its counsel's letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand, stressing that there being involved no consideration on the part of any contestant, the contest was not, under controlling authorities, condemnable as a lottery. Relying, however, on an opinion rendered by the Secretary of Justice on an

unrelated case seven years before (Opinion 217, Series of 1953), the Postmaster General maintained his view that the contest involves consideration, or that, if it does not, it is nevertheless a "gift enterprise" which is equally banned by the Postal Law, and in his letter of December 10, 1960 not only denied the use of the mails for purposes of the proposed contest but as well threatened that if the contest was conducted, "a fraud order will have to be issued against it (Caltex) and all its representatives". Caltex thereupon invoked judicial intervention by filing the present Petition for declaratory relief against Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its 'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent to allow petitioner the use of the mails to bring the contest to the attention of the public". After issues were joined upon the respective memoranda of the parties, the trial court rendered judgment as follows: "In view of the foregoing considerations, the Court holds that the proposed 'Caltex Hooded Pump Contest' announced to be conducted by the petitioner under the rules marked as Annex B of the petition do (sic) not violate the Postal Law and the respondent has -no right to bar the public distribution of said rules by the-mails." The respondent appealed. The parties are now before us, arrayed against each other upon two basic issues: first, whether the petition states a sufficient cause of action for declaratory relief; and, second, whether the proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up in seriatim. 1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was the applicable legal basis for the remedy at the time it was invoked, declaratory relief is available to any person "whose rights are affected by a statute . . . -1 to determine any question of construction or validity arising under the . . . statute and for a declaration of his rights or duties thereunder" (now section 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably to established jurisprudence on the matter, laid down certain conditions sine qua non therefor to wit: (1) there must be a justiciable controversy; (2) the controversy must be between persons whose interests are adverse; (3) the party seeking declaratory relief must have a legal interest in the controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs. The Board of Accountancy, et al., 90 Phil., 83; Delumen, et al. vs. Republic of the Philippines, 94 Phil., 287; 50 Off. Gaz., No. 2, pp. 578, 578-579; Edades vs. Edades, et al., 99 Phil., 675). The gravamen of the appellant's stand being that the petition herein states no sufficient cause of action for declaratory relief, our duty is to assay the factual bases thereof upon the foregoing crucible. As we look in retrospect at the incidents that generated the present controversy, a number of significant points stand out in bold relief. The appellee (Caltex), as a business enterprise of some consequence, concededly has the unquestioned right to exploit every legitimate means, and to avail of all appropriate media to advertise and stimulate increased patronage for its products. In contrast, the appellant, as the authority charged with the enforcement the Postal Law, admittedly has the power and the duty to Suppress transgressions thereof-particularly thru the issuance of fraud orders, under sections 1982 and 1983 of the Revised Administrative Code, against legally nonmailable schemes. Obviously pursuing its right aforesaid, the appellee laid out plans for the sales promotion scheme hereinbefore detailed. To

forestall possible difficulties in the dissemination of information thereon thru the mails, amongst other media, it was found expedient to request the appellant for an advance clearance therefor. However, likewise by virtue of his jurisdiction in the premises and construing the pertinent provisions of the Postal Law, the appellant saw a violation thereof in the proposed scheme and accordingly declined the request. A point of difference as to the correct construction to be given to the applicable statute was thus reached. Communications in which the parties expounded on their respective theories were exchanged. The confidence with which the appellee insisted upon its position was matched only by the obstinacy with which the appellant stood his ground. And this impasse was climaxed by the appellant's open warning to the appellee that if the proposed contest was "conducted, a fraud order will have to be issued against it and all its representatives". Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee's insistent assertion of its claim to the use of the mails for its proposed contest and the challenge thereto and consequent denial by the appellant of the privilege demanded, undoubtedly spawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is an active antagonistic assertion of a legal right on one side and a denial thereof on the other, concerning a real-not a mere theoretical-question or issue. The contenders are as real as their interests are substantial, To the appellee, the uncertainty occasioned by the divergence of views on the issue of construction hampers or disturbs its freedom to enhance its business. To the appellant, the suppression of the appellee's proposed contest believed to transgress a law be has sworn to uphold and enforce is an unavoidable duty. With the appellee's bent to hold the contest and the appellant's threat to issue a fraud order therefor if carried out, the contenders are confronted by the ominous shadow of an imminent and inevitable litigation unless their differences are settled and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs. Republic of the Philippines, G. R. No. L-6868, April 30, 1955). And, contrary to the insinuation of the appellant, the time is long past when it can rightly be said that merely the appellee's desires are thwarted by its own doubts, or by the fears of others"which admittedly does not confer a cause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as in the case at bar, it was translated into a positive claim of right which is actually contested (111 Moran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox West Coast Theaters, 36 Ariz., 251, 284 Pac. 350). We cannot hospitably entertain the appellant's pretense that there is here no question of construction because the said appellant "simply applied the clear provisions of the law to a given set of facts as embodied in the rules of the contest", hence, there is no room for declaratory relief. The infirmity of this pose lies in the fact that it proceeds from the assumption that, in the circumstances here presented, the construction of the legal provisions can be divorced from the matter of their application to the appellee's contest. This is not feasible. Construction, verily, is the art or process of discovering and expounding the meaning and intention of the authors of the law with respect to its application to a given case, where that intention is rendered doubtful, amongst others, by reason of the fact that the given ease is not explicitly provided for in the law (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not the scheme proposed by the appellee is within the coverage of the prohibitive provisions of the Postal Law inescapably requires an inquiry into the intended meaning of

the words used therein. To our mind, this is as much a question of construction or interpretation as any other. Nor it is accurate to say, as the appellant intimates, that a pronouncement on the matter at hand can amount to nothing more than an advisory Opinion the handing down of which is anathema to a declaratory relief action. Of course, no breach of the Postal Law has as yet been committed. Yet, the disagreement over the construction thereof is no longer nebulous or contingent. It has taken a fixed and final shape, presenting clearly defined legal issues susceptible of immediate resolution. With the battle lines drawn, in a manner of speaking, the proprietynay, the necessity--of setting the dispute at rest before it accumulates the asperity, distemper, animosity, passion and violence of a full-blown battle which looms ahead (III Moran, Comments on the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasing the language in Zeitlin vs. Arnebergh, 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, cited in 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which it has been cast, would be to force it to choose between undesirable alternatives. If it cannot obtain a final and definitive pronouncement as to whether the anti-lottery provisions of the Postal Law apply to its proposed contest, it would be faced with these choices: If it launches the contest and uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened with the certain imposition, of a fraud order with its concomitant stigma which may attach even if the appellee will eventually be vindicated; if it abandons the contest, it becomes a selfappointed censor, or permits the appellant to put into effect a virtual flat of previous censorship which is constitutionally unwarranted. As we weigh these considerations in one equation and in the spirit of liberality with which the Rules of Court are to be interpreted in order to promote their object (Section 1, Rule 1, Revised Rules of Court) which, in the instant case, is to settle, and afford relief from uncertainty and insecurity with respect to, rights and duties under a law we cannot see in the present case any imposition upon our jurisdiction or any futility or prematurity in our intervention. The appellant, we apprehend, underrates the force and binding effect of the ruling we hand down in this case if he believes that it will not have the final and pacifying function that a declaratory judgment is calculated to subserve. At the very least, the appellant will be bound. But more than this, he obviously overlooks, that in this jurisdiction, "Judicial decisions applying or interpreting the law shall form a part of the legal system" (article 8, Civil Code of the Philippines). In effect, judicial decisions assume the same authority as the statute itself and, until authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteria which must control the actuations not only of those called upon to abide thereby but also of those in duty bound to enforce obedience thereto. Accordingly, we entertain no misgiving that our resolution of this case will terminate the controversy at hand. It is not amiss to point out at this juncture that the conclusion we have herein just reached is not without precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399,117 A. 2d., 487, where a corporation engaged in promotional advertising was advised by the county prosecutor that its proposed sales promotion plan had the characteristics of a lottery, and that if such sales promotion were conducted, the corporation would. be subject to criminal prosecution, it was held that the corporation was entitled to maintain a declaratory relief action against the county prosecutor to determine the legality of its sales

promotion plan. In pari materia, see also: Bunis vs. Conway, 17 App. Div. 2d., 207, 234 N,Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra.; Thrillo, Inc. vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903. In fine, we hold that. the appellee has made out a, case for declaratory relief. 2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical terminology in: sections 1954 (a), 1982 and 1983 thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise deny the use of the facilities of the postal' service to, any information concerning "any lottery, gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind". Upon these words hinges the resolution of the second issue posed in this appeal. Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc. vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postal authorities under the above-mentioned provisions of the Postal Law, this Court declared that"While countless definitions of lottery have been attempted the authoritative one for this jurisdiction is that of the. United States Supreme Court, in analogous cases having to do with the power of the United States Postmaster General, viz: The term 'lottery' extends to all schemes I for the distribution of prizes by chance, such as policy playing, gift exhibitions prize concerts, raffles at fairs, etc., and various forms' of gambling. The three essmtial elements of a lottery are: First, consideration; second, prize; and third, chance. (Horner vs. United States [1892], 147 U.S. 449; Public Clearing House vs. Coyne [1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsen and Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla Hotel Construction Company vs. Carmona, p. 233, ante.)" Unanimity there is in all quarters, and we agree, that the elements of prize and chance are too obvious in the disputed scheme to be the subject of contention. Consequently, as the appellant himself concedes, the field of inquiry is narrowed down to the existence of the element of consideration therein. Respecting this matter, our task is considerably lightened inasmuch as in the same case just cited, this Court has laid down a definitive yardstick in the following terms: "In respect to the last element of consideration, the law does not condemn the gratuitous distribution of property by chance, if no consideration is derived directly or indirectly from the party receiving the chance, but does condemn as criminal schemes in which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a prize." Reverting to the rules of the proposed contest, we are struck by the clarity of the language in which the invitation to participate therein is couched. Thus"No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't have to buy anything? Simply estimate the actual number of liters the Caltex gas pump with the hood at your favorite Caltex dealer will dispense from to, and win valuable prizes . . . " Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought, any service be rendered or any value whatsoever be given for the privilege to I participate. A prospective

contestant has but to go to a CaItex station, request for the entry form which is available on demand, and accomplish and submit the same for the drawing of the winner. Viewed from all angles or turned inside out, the contest fails to exhibit any discernible consideration which would brand it as a lottery. Indeed, even as we heed the stern injunction, "look beyond the fair exterior, to the substance, in order to unmask the real) element and pernicious tendencies which the law is, seeking to prevent" ("El Debate", Inc. vs. Topacio, supra, p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, a gratuitous distribution of property by chance. There is no point to the appellant's insistence that non-Caltex customers who may buy Caltex products simply to win a prize would actually be indirectly paying a consideration for the privilege to join the contest. Perhaps this would be tenable if the purchase of any Caltex product or the use of any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardly needs reiterating, does not have to buy anything or to give anything of value. Off-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, would naturally benefit the sponsor in the way of increased patronage by those who will be encouraged to prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". The required element of consideration does not consist of the benefit derived by the proponent of the contest. The true test, as laid down in People vs. Cardas, 28 P. 2d. 99, 137 Cal. App. (Supp). 788, is whether the participant pays a valuable consideration for the chance, and not whether those conducting the enterprise receive something of value in return for the distribution of the prize. Perspective properly oriented, the standpoint of the contestant is all that matters, not that of the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest: "The fact that the holder of the drawing expects thereby to receive, or in fact does receive, some benefit in the way of patronage or otherwise, as a result of the drawing, does not supply the element of consideration. Griffith Amusement Co. vs. Morgan, Tex. Civ. App., 98 S.W. 2d., 844." (54 C.L.S., p. 849). Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest" proposed by the appellee is not a lottery that may be administratively and adversely dealt with under the Postal Law. Put it may be asked Is it not at least a "gift enterprise, or scheme for the distribution of money, or of any real or personal property by lot, chance, or drawing of any kind", which is equally proscribed? Incidentally, while the appellant's brief appears to have concentrated on the issue of consideration, this aspect of the case cannot be avoided if the remedy here invoked is to achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recalling that the appellant's action was predicated, amongst other bases, upon Opinion 217, Series 1953, of the Secretary of Justice, which opined in effect that a scheme, though not a lottery for want of consideration, may nevertheless be a gift enterprise in which that element is not essential, the determination of whether or not the proposed contest, wanting in consideration as we have found it to be-is a prohibited gift enterprise, cannot be passed over sub silencio.

While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicit words, there appears to be a consensus among lexicographers, and standard authorities that the term is commonly applied to a sporting artifice under which goods are sold for their market value but. by- way of inducement each purchaser is given a chance to, win a prize (54 C.J.S., 850; 34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary with Pronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs. Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs. State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannot embrace the scheme at bar. As already noted, there is no sale of anything to which the chance offered is attached as an inducement to the purchaser. The contest is open to all qualified contestants irrespective of whether or not they buy the appellee's products. Going a step farther, however, and assuming that the appellee's contest can be encompassed within the broadest sweep that the term "gift enterprise" is capable of being extended, we think that the appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulings there are indeed holding that a gift enterprise involving an award by chance, even in default of the element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs. State, 235 Ala. 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga., 154, 58 S.E., 88; State ex. rel. Stafford vs. Fox-Great Falls Theater Corporation, 132 P. 2d., 689, 694, 698, 114 Mont. 52). But this is only one side of the coin. Equally impressive authorities declare that, like a lottery, a gift enterprise comes within the prohibitive statutes only if it exhibits the tripartite elements of prize, chance and consideration (E.g.: Bills vs. People, 157 P. 2d., 139, 142, 113 Colo., 326; D'Orio vs. Jacobs, 275 P. 563, 565, 151 Wash., 297; People vs. Psallis, 12 N.Y.S., 2d., 796; City and County of Denver vs. Frueauff, 88 P., 389, 394, 39 Colo. 20, 7 L.R.A., N. S 1131, 12 Ann. Cas., 521; 54 C.J.S., 851, citing: Barker vs. State, 193 S.E., 605, 607, 56 Ga. App., 705; 18 Words and Phrases, perm. ed., pp. 590-594). The apparent conflict of opinions is explained by the fact that the specific statutory provisions relied upon are not identical. In some cases, as pointed out in 54 C.J.S., 851, the terms "lottery" and "gift enterprise" are used interchangeably (Bills vs. People, supra); in others, the necessity for the element of consideration or chance has been specifically eliminated by statute (54 C.J.S., 351-352, citing Barker vs. State, supra; State ex rel. Stafford vs. Fox-Great Falls Theater Corporation, supra). The lesson that we derive from this state of the pertinent jurisprudence is, therefore, that every case must be resolved upon the particular phraseology of the applicable statutory provision. Taking this case, we note that in the Postal Law, the term in question is used in association with the word "lottery". With the meaning of lottery settled, and consonant to the well-known principle of legal hermeneutics noscitur a sociis which Opinion 217 aforesaid also relied upon although only in so far as the element of chance is concerned-it is only logical that the term under construction should be accorded no other meaning than that which is consistent with the nature of the word associated therewith. Hence, if lottery is prohibited only if it involves a consideration, so also must the term "gift enterprise" be so construed. Significantly, there is not in the law the slightest indicium of any intent to eliminate that element of consideration from the "gift enterprise" therein included. This conclusion firms up in the light of the mischief sought to be remedied by the law, resort to the determination thereof being an accepted extrinsic aid in statutory construction. Mail fraud orders, it is

axiomatic, are designed to prevent the use of the mails as a medium for disseminating printed matters which on grounds of public policy are declared non-mailable. As applied to lotteries, gift enterprises and similar schemes, justification. lies in the recognized necessity to suppress their tendency to inflame the gambling spirit and to corrupt public morals (Com. vs. Lund., 15 A. 2d., 839, 143 Pa. Super. 208). Since in gambling it is inherent that something of value be hazarded for a chance to gain a larger amount, it follows ineluctably that where no consideration is paid by the contestant to participate, the reason behind the law can hardly be said to obtain. If, as it has been held: "Gratuitous distribution of property by lot or chance does not constitute 'lottery', if it is not resorted to as a device to evade the law and no consideration is derived, directly or indirectly, from the party receiving the chance, gambling spirit not being cultivated or stimulated thereby. City of Roswell vs. Jones, 67 P. 2d., 286, 41 N.M., 258." (25 Words and Phrases, perm. ed., p. 695, Italics supplied). We find no obstacle in saying the same respecting a gift enterprise. In the end, we are persuaded to hold that, under the prohibitive provisions of the Postal Law which we have heretofore examined, gift enterprises and similar schemes therein contemplated are condemnable only if, like lotteries, they involve the element of consideration. Finding none in the contest here in question, we rule that the appellee may not be denied the use of the mails for purposes thereof. Recapitulating, we hold that the petition herein states a sufficient cause of action for declaratory relief, and that the "Caltex Hooded Pump Contest" as described in the rules submitted by the appellee does not transgress the Provisions of the Postal Law. Accordingly, the judgment appealed from is affirmed. No costs. Concepcion, C. J., Reyes, J. B. L., Barrera, Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and Sanchez, JJ., concur. Judgment affirmed.

[GRN 63318 November 25, 1983] PHILIPPINE CONSUMERS FOUNDATION, INC., petitioner, vs. NATIONAL TELECOMMUNICATIONS COMMISSION AND PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, respondents. DECISION FIRST DIVISION APPEARANCES OF COUNSEL Tomas C. Llamas for petitioner. Graciano C. Regala and Eliseo B. Alampay for respondents. RELOVA, J.: Petition for certiorari seeking to set aside and annul the decision, dated November 22,1982, of public respondent National Telecommunications Commission (NTC, for short), approving the application of the Philippine Long Distance Telephone Company (PLDT, for short) of its revised schedule for its Subscriber Investment Plan (SEP) for the entire service area, including the ex-RETELCO area; as well as the order of January 14, 1983 which denied the motion for reconsideration of petitioner Philippine Consumers Foundation, Inc. (PCFI, for short). Records show that on March 20, 1980, private respondent PLDT filed an application with the NTC for the approval of a revised schedule for its Subscriber Investment Plan (SIP), docketed as Case No. 82-27. On April 14,1982, the NTC issued an ex-parte order provisionally approving the revised scheduled which, however, was set aside by this Court on August 31, 1982 in the case of "Samuel Bautista vs. NTC, et al.," 116 SCRA 411. The Court therein ruled that "there was necessity of a hearing by the Commission before it should have acted on the application of the PLDT so that the public could air its opposition, particularly the herein petitioner and the Solicitor General, representing the government. They should be given the opportunity to substantiate their objection that the rates under the subscriber investment plan are excessive and unreasonable and as a consequence, the low income and middle class group cannot afford to have telephone connections; and, that there is no need to increase the rate because the applicant is financially sound." On November 22, 1982, the NTC rendered the questioned decision permanently approving PLDT's new and increased SIP rates, the dispositive portion of which reads: "IN VIEW OF ALL THE FOREGOING, this Commission finds that applicant's reduced proposals for its revised Subscriber Investment Plan Schedule, upon further reductions herein ordered with respect to subscriber investaments for new installations of single residential telephones in the Metro Manila and Provincial Service Areas, are all within the 50% off-cost limit provided in P.D. 217; that they are just and reasonable and so consonance with the public policies declared in said decree: and that it is in the public interest that applicant's revised SIP Schedule be, as it is hereby "PROVED, as follows:

REVISED SIP SCHEDULE Revised SIP Rates Service Category Metro Manila Provincial 1. New Instrctions 1 . PBX/PARX Trunk P 5,000 P3,000 2. Business Phone: Single line 3,5002,000 Paro line 2,0001,500 3. Residential Phone: Single line 1,8001,300 Party line 900900 4. Leased line 2,500 21,500 5. Tie trunk or tie line 6. Outside local 2,500 II. Transfers 1. PBX/PARX 1,5001,200 2. Business Phone: Single line 800 600 Party line 600 500 3. Residential Phone: single line 600 500 Party line 500 300 2,500 2,5002,500

4. Leased Line 800 800 5. Tie trunk or tie line 800 800 6. Outside local 800 800"

(pp. 34-35, Rollo) Petitioner filed a motion for reconsideration of the above judgment on December 14, 1982, and after a month, or on January 14, 1983, NTC denied said motion for reconsideration. It is the submission of petitioner that the SIP schedule presented by the PLDT is pre-mature and, therefore, illegal and baseless, because the NTC has not yet promulgated the required rules and regulations implementing Section 2 of Presidential Decree No. 217 which provides: "Section 2. The Department of Public Works. Transportation and Communications through its Board of Communications and/or appropriate agency shall see to it that the herein declared policies for the telephone industry are immediately implemented and for this purpose pertinent rules and regulations may be promulgated. . . . " (Italics supplied). Petitioner avers that the "substitute procedural vehicle utilized by NTC in allowing the establishment of SIP by PLDT was by treating the appropriate Petition of PLDT as if the same were a rate case over which the Rules of Practice was applicable. NTC proceeded to invoke the summary powers provided for in the Rules of Practice to fully bear on the hapless consumer, notably the repressive 'Provisional Reliefs'; (pp. 5-6, Rollo) that at the hearings thereof, "NTC limited the numerous oppositors in the instant Application. among them PCFI, by applying the two-oppositor rule. This means that only two of the oppositors will be heard in representation of all the oppositors, again pursuant to the procedure laid down in the Rules of Practice." (p. 130, rollo) Further, the NTC invoked its extraordinary powers pursuant to Section 3 of Rule 15 of the Rules of Practice, "whereby even without an iota or proof to substantiate its application, NTC allowed the desired increase purportedly on a provisional basis." (p. 129, rollo). The question is whether or not respondent acted with grave abuse of discretion when it approved the Revised Subscriber Investment Plan (SEP) of respondent PLDT in the absence of specific rules and regulations implementing Presidential Decree No. 217. Petitioner claims that these implementing rules and regulations are mandatory pre-requisite for the approval of said SIP rates. Respondent NTC admits the absence of rules and regulations referred to in PD 217. However, it contends that nowhere in said decree is there any legal provision making the promulgation of rules amandatory pre-requisite to the establishment of SIP and the determination of its schedules; that since respondent NTC is enjoined to implement the declared policies of the decree, for its immediate implementation, it may rely on existing Rules of Practice; that under the same Rules of Practice all existing subscriber investment plans were presented, considered and approved by the NTC; that the promulgation of the rules is inherently an internal and administrative matter and therefore, is not a proper subject of litigation, much less a duty of the NTC to accomplish; and, that public respondent may or may not promulgate the rules in the immediate implementation of said decree as the word used there is "may." We are not persuaded.

Presidential Decree No. 217 was promulgated on June 16, 1973 and paragraph 4 of Section 1 thereof provides: "4. In line with the objective of spreading ownership among a wide base of the people, the concept of telephone subcriber self-financing is hereby adopted whereby a telephone subscriber finances part of the capital investments in telephone installations through the purchase of stocks, whether common or preferred stock, of the telephone company." (Italics Supplied) There is merit in the contention of petitioner that it is the duty of respondent NTC to promulgate rules and regulations because: "1. P.D. 217 deals with matters so alien, innovative and untested such that existing substantive and procedural laws would not be applicable. Thus, the Subscriber Investment Plan (SIP) was so set up precisely to ensure the financial viability of Public telecommunications companies which in turn assumes the enjoyment of the population at minimum cost the benefits of a telephone facility. "The SIP has never been contemplated prior to P.D. 217. "The existing law on the other band, the Public Service Act, diametrically runs counter to the spirit and intention, if not the purpose of P.D. 217. It may even be gainsaid that as long as the optimum number of individuals may enjoy telephone service, there is no limitation on the profitability of much companies. Hence, while P.D. 217 encourages the profitability of Public telecommunication companies, the Public service Act limits the same. "2. In the absence of such rules and regulations, there is outright confusion among the rights of PLDT, the consumers and the government itself. As may clearly be seen, how can the Decision be said to have assured that most of the population will enjoy telephone facilities? Did the Decision likewise assure the financial viability of PLDT? Was the government's duty to provide telephone service to its constituents subserved by the Decision? These questions can never be answered unless much rules and regulations am set up. "3. Finally, it should be emphasized that NTC in estopped from claiming that there is no need to promulgate such rules and regulations. In the case of PCFI vs. NTC, G.R. No. 61892, now pending resolution before this Honorable Tribunal, NTC totally refused to act on a petition filed by PLDT precisely for the promulgation of such rules and regulations. Why then did NTC refuse to act on such petition if and when there is no need for the promulgation of such rules and regulations? After all, NTC could have simply ruled that the petition in G.R. No. 61892 is unnecessary because such rules and regulations are also unnecessary." (pp. 135-136, Rollo) At any rate, there is no justification for the rate increase of the revised schedule of PLDT's Subscriber Investment Plan. It is to say the least, untimely, considering the present economic condition obtaining in the country. The approved rate defeats the purpose of the decree which is to spread ownership among the wide base of investors. The State, in Presidential Decree No. 217 promulgated on June 16, 1973, adopted the basic policies of the telephone industry which, among others, are: (1) the attainment of

efficient telephone service for as wide an area as possible at the lowest reasonable costs to the subscriber (2) the capital requirements of telephone utilities obtained from ownership funds shall be raised from abroad base of investors, involving as large a number of individual investors as may be possible; and (3) in any subscriber self-financing plan, the amount of subscriber self-financing will, in no case, exceed fifty per centum (50%) of the cost of the installed telephone line, as may be determined from time to time by the regulatory bodies of the State. The load on the back of our people is heavy enough. Let us not increase its weight further. Noteworthy is the concurrence of Justice Vicente Abad Santos in the case of Bautista vs. NTC (supra) that "the PLDT which is reported to have made over 100 million pesos in profits in just six months but with its service so poor that even the First Lady has taken notice should think of improved service before increased profits." Indeed, let us not aggravate the situation of the place by raising the revised SIP schedule plan of the PLDT. A rate increase would be an additional burden on the telephone subscribers. The plan to expand the company program and/or improve its service is laudable, but the expenses should not be shouldered by the telephone subscribers. Considering the multimillion profits of the company, the cost of expansion and/or improvement should come from part of its huge profits. Anent the question that petitioner should have appealed the decision of respondent NTC, instead of filing the instant petition, suffice it to say that certiorari is available despite existence of the remedy of appeal where public welfare and the advancement of public policy so dictate, or the orders complained of were issued in excess of or without jurisdiction (Jose vs. Zulueta, 2 SCRA 574). ACCORDINGLY, the DECISION of the public respondent National Telecommunications Commission, dated November 22, 1982, and the ORDER dated January 14, 1983, are hereby ANNULLED and SET ASIDE. SO ORDERED. Fernando, CJ., Teehankee, Makasiar, Guerrero, Abad-Santos, Melencio-Herrera, Escolin and Gutierrez, Jr., JJ., concur. Aquino, Concepcion Jr. and De Castro, JJ., took no part. Plana, J., reserves his vote.

[GRN L-22231 March 21, 1968] THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee defendantappellant. vs. MARCELO PAAT alias PEDRING,

1.MURDER; TREACHERY, PRESENT AS A QUALIFYING CIRCUMSTANCE.- Where while the right hand of the deceased was held by one person and his left hand by another, a third person approached from behind and stabbed him in the back with a small bolo, the crime committed is murder qualified by treachery. 2.ID.; PASSION AND OBFUSCATION NOT MITIGATING IN CASE AT BAR.- The mitigating circumstance of passion and obfuscation cannot be taken into account in favor of appellant because, upon the facts proven beyond reasonable doubt, there was no reason for him to have acted under the influence of passion or obfuscation. APPEAL from a judgment of the Court of First Instance of Cagayan. Quitoriano, J. The facts are stated in the opinion of the Court. Felix R. Rosacia for appellant. Assistant Solicitor General Esmieraldo Umali and Solicitor Federico V. Sian for appellee. DIZON, J.: Marcelo Paat alias Pedring, Virgilio Paat and Juan Donato 20, were charged below with murder. After trial upon a plea of not guilty, the lower court acquitted Juan Donato and Virgilio Paat on the ground of reasonable doubt, but convicted Marcelo Paat as charged and, after considering in his favor the mitigating circumstance of having acted upon an impulse so powerful as naturally to have produced passion or obfuscation, sentenced him to suffer an indeterminate penalty of from 10 years and 1 day of prisionmayor to 17 years, 4 months and 1 day of reclusion temporal, with the accessory penalties provided by law, to indemnify the heirs of the deceased Teodorico Catuiran in the sum of P6,000, without subsidiary imprisonment in case of insolvency, and to pay 1/3 of the costs. Marcelo Paat appealed to the Court of Appeals, but after a review of the evidence, said court found that, on the basis thereof, Paat was guilty of murder, qualified by treachery, and without any right to have the mitigating circumstance of passion or obfuscation considered in his favor. As the imposable penalty would then be reclusion perpetua, said court certified the appeal to Us pursuant to section 34 of the Judiciary Act of 1948, as amended. The Court of Appeals, after a careful consideration of the testimony of prosecution witnesses, correctly found that it established the following facts: In the morning of August 25, 1957, Juan Donato, Virgilio Paat, and Marcelo Paat were in the market place of the barrio of Masical in the municipality of Amulong in the province of Cagayan. The three brothers Ricardo, Eulogio and Teodorico, all surnamed Catuiran, were likewise in the said market place. Eulogio and Teodorico were drinking basi in a tienda while Ricardo was reading an issue of the magazine

Bannawag some distance from the tienda. Eulogio invited Juan Donato, who was nearby to drink basi; the latter excused himself, saying that he was not drinking. Eulogio felt insulted and said to Donato: 'It seems that you resent us'. An altercation ensued, in which Virgilio Paat and Teodorico Catuiran intervened. Juan Donato held the right hand of Teodorico while Virgilio held Teodorico's left hand. At this very juncture, the accused Marcelo Paat approached and stabbed Teodorico in the back with a small bolo (imuco). When Donato and Virgilio released their hold on Teodorico, the latter drew his bolo, swung it and hit Virgilio in the abdomen. Teodorico took a few steps, slumped to the ground, and expired. "According to Dr. Dulce Donato Baculi, the municipal health officer, Teodorico Catuiran sustained a 'stab wound above the superior angle of the right scapula running horizontally, penetrating the upper lobe of the right lung about 5-1/2 inches deep and about 1 inch wide' (see exh. A, post mortem examination report), This wound was fatal; Teodorico died of hemorrhage and shock." The same court found that the evidence for the defense tended to prove that- on the morning in question Virgilio Paat and Marcelo Paat were in the market place looking for men whom they could employ to transplant palay in their land in Bayabat. Virgilio was invited by Eulogio Catuiran to drink basi, Virgilio declined the offer, but because of the insistence of Eulogio he drank a little. Eulogio suggested to Virgilio that the latter buy another bottle of basi so that all of them could drink, Virgilio declined, saying that he had no more than P0.20, Nevertheless, he bought another bottle and they drank. After this bottle was emptied, Eulogio again requested Virgilio to buy another bottle. Virgilio excused himself this time, saying that he had no more money, At this juncture, Eulogio hurled these remarks at Virgilio, 'You are the same as the old man your uncle Juan Donato, Vulva of your mother'. Virgilio was incensed, and he retorted, 'what is the matter with you? Because this is your place, you are scandalizing me. Leche! As Virgilio said this, he swung his hands and struck Eulogio's forehead. Forthwith, Teodorico stabbed Virgilio, from behind, and hit the right side of the latter's abdomen, Teodorico attempted to stab Virgilio a second time, but the latter retreated. The appellant Marcelo saw Teodorico in the act of stabbing Virgilio, and he immediately ran to the rescue of Virgilio, and stabbed Teodorico in the back, Juan Donato was not present when Marcelo stabbed Teodorico, as he had walked away to return to his house in Masical. "Virgilio was taken to the hospital in Tuguegarao, Cagayan, and was examined by Dr. Gregorio Reyes. Virgilio sustained a penetrating wound in his right loin; the right side of the middle third of his large intestine was punctured. Dr. Reyes performed the necessary surgical operation on Virgilio. In court he declared that Virgilio could not have survived for more than 48 hours without the surgical operation." It is clear from the foregoing that the decisive issue to be resolved in this appeal is whether appellant inflicted the mortal wound that caused the death of Teodorico Catuiran in defense of his brother Virgilio. After a careful consideration of the entire testimonial evidence of record, We have come to the conclusion that the trial court committed no error in according full credit to the testimony of the prosecution witnesses. Particular mention must be made of that given by prosecution witness Alfonso Binayug against whose credibility and impartiality the record discloses nothing. In a clear and

straightforward manner he testified that while he was buying some merchandise in the market place of Masical, he heard a scream; that thereupon, as he looked in the direction the scream came from, he saw Juan Donato holding the right hand of Teodorico Catuiran and Virgilio Paat holding the left; that it was at that juncture that appellant, coming from behind, stabbed Teodorico in the back; that as appellant pulled his weapon from the back of his victim, Juan and Virgilio almost simultaneously released their hold on Teodorico and ran away; that when Virgilio passed in front of Teodorico, the latter was able to draw his bolo and stabbed him on the right side of his abdomen. Having arrived at the conclusion that it is the prosecution evidence that has established the manner and circumstances under which appellant stabbed the deceased Teodorico, We must necessarily reject his claim that he committed the crime to defend the life of his brother Virgilio. As it was only after appellant had already mortally wounded Teodorico Catuiran that the latter, already free from the hold of Juan Donato and Virgilio Paat, was able to stab Virgilio, it is abundantly clear that the theory of the defense has no leg to stand upon. With respect to the mitigating circumstance of passion or obfuscation, We agree with the Solicitor General that the trial court effed in taking it into account in favor of appellant. Upon the facts proven beyond reasonable doubt, there was no reason for appellant to have acted under the influence of passion or obfuscation. While it is true that Teodorico Catuiran tried - as did Virgilio Paat - to intervene in the altercation that took place between Juan Donato and Eulogio Catuiran, the evidence shows that Virgilio and Juan Donato immediately rendered Teodorico helpless by holding his hands, and it was while the latter was in such helpless condition that appellant stabbed him from behind. IN VIEW OF THE FOREGOING, We are of the opinion and so hold, that the crime committed by appellant was that of murder, qualified by treachery. There being no modifying circumstance present, the penalty provided by law reclusion temporal to death should be imposed in its medium period, that is, reclusion perpetua. Thus modified, the appealed judgment is affirmed in all other respects. Reyes, J.B.L., (Acting C.J.), Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Angeles and Fernando, JJ., concur. Judgment affirmed but modified as to penalty.

[GRN 91014 March 31,1993.] PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ELMER MAPA Y DE GULA, accused-appellant NOCON, J : Accused-appellant Elmer Maps y de Gula and Serapin de Gula y Tongco were both charged with violation of Section 4, Article II of Republic Act 6425, otherwise known as the Dangerous Drugs Act, under an information 1 which reads: "That on or about the 16th day of July 1986, in the Municipality of Valenzuela, Metro Manila, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused without authority of the law, conspiring with each other, did then and there, wilfully, unlawfully, and feloniously possessed and sell and gave away twelve (12) sticks of marijuana treated cigarettes, thereby violating Section 4, Article II, in relation to Section 21, Article IV of R.A. 6425, as amended." Upon arraignment, both accused pleaded not guilty to the crime charged. After a trial on the merits, Serapio de Gula was acquitted on reasonable doubt while accused Elmer Mapa was found guilty of the crime charged and was sentenced acccordingly to suffer the penalty of reclusion perpetua. The dispositive portion of the decision2 reads: "WHEREFORE, finding the accused Elmer Mapa y de Gula Guilty beyond reasonable doubt of the crime of selling and delivering prohibited drug, consisting of twelve (12) sticks of rmarijuana cigarettes (Indian Hemp) as defined and penalized under Section 4, Article II of Republic Act 6426, as amended, he is hereby sentenced to suffer the penalty of Reclusion Perpetua with the accessory penalties prescribed by law and to pay a fine of Twenty Thousand Pews (P20,000.00) with the corresponding subsidiary imprisonment in case of insolvency and the costs of suit. On ground of reasonable doubt, the Court hereby ACQUITS the accused Serapio de Gula y Tongco of the crime charged. Costs de officio. The twelve (12) sticks of marijuana cigarettes an hereby confiscated in favor of the Government to be turned over to the, Dangerous Drugs Board for proper disposition."3 The Peoples version of the facts is as follows: Acting upon a confidential information that a certain "Elmer" was engaged in drug pushing at T. de Gula St., Marulas Valenzuela, Major Elias Casimiro, Chief of the Valenzuela Police Anti-Narcotics Unit dispatched a team composed of Valenzuela policemen, namely: Cpt. Romeo Martin, Pfc. Pedro Protestants, Patrolmen Eduardo Pabalan, Wilfredo Lucero and a certain Pat. Garcia to conduct a surveillance operation in the area. On July 16, 1986, at around 8 o'clock in the evening, the team launched a buy-bust operation against accused-appellant at T. de Gula St., Marulas Valenzuela using two (2) P10.00 marked bills.4 Pat. Mario Capangyarihan, who then acted as a poseur-buyer together with the confidential informant proceeded

to appellant's address at T. de Gula Street. Upon reaching the place, the confidential informant introduced Pat. Capangyarihan to accused-appellant as a "scorer" of "damo." Pat. Capangyarihan asked for P20.00 worth of marijuana and then handed to appel lant the two(2) marked P10.00 bills. After receipt of the money, appellant left for a while to get the "marijuana." Later, appellant entered the yard of the house with a wooden fence and talked briefly to a certain person (later identified as accused Serapio de Gula) who was seen by Pat. Capangyarihan handing over something to appellant. Thereafter, accused-appellant returned and handed over to the poseur-buyer a plastic bag containing twelve (12) sticks of marijuana cigarettes. Pat. Capangyarihan identified himself as a policemen and grabbed appellant by the arms. Pat. Capangyarihan then signalled his companions to come and help him subdue the suspect. At this juncture, Serapio de Gula approached the police team and told them that appellant is his nephew. The policemen told Serapio that appellant was placed under arrest for selling "marijuana". Since Pat. Capangyarihan recognized Serapio as the person with whom appellant talked after receiving the marked bilk, Serapio was also arrested. The two (2) marked bills were retrieved from the accusedappellant. Appellant and Serapi were brought to the Valenzuela Police stations for further investigation. the plastic bag containing twelve (12) sticks of suspected marijuana were forwarded to the NBI for examination. Microscopic, chemical and chromatographic tests was conducted on the seized articles and all yielded "positive results" for "marijuana". Accused appellant Elmer Maps however, disputes the foregoing facts. Insteed, the defense maintains that the facts are as follows: At around 8 &clock in the evening of July 16, 1986, while accused Elmer Maps was inside their house with his co-accused/ uncle Serapio de Gula and their chess dub members playing chess, two men with drawn guns entered the premises of the accused's house without permission, calling for accused Elmer Mapa, prompting accused Serapio de Gula to tell them, "pare, among problems, trespassing kayo."5 In answer, the men identified themselves as policemen and told Serapio not to interfere. However, Serapio de Gula insisted that even if they were police officers they should nevertheless ask permission from the owner of the house before entering. In reply the police officers allegedly manhandled him while one of them entered the house where accused Elmer Mapa was, pulled him out and brought him to a waiting jeep. Serapio further testified that the four police officers who manhandled him were Patrolman Puchero, Patrolman Inciong, Patrolman Capangyarihan and Patrolman Protestante.6 Serapio threatened to file charges against these police officers for mauling him so much so that said officers likewise arrested him. Serapio's testimony is as follows: "QNow, after Elmer was pulled outside, how about you, what was done to you? AThe policemen left, I was left behind, then afterwards, the person who manhandled me, when he was leaving, I was able to remember him and I told him that I was going to file a Case against him with the Napolcom, then that said policeman returned and he told me, Tamil pals. ang isasabit mo, sama ka na rin'. That was what he told me."7 This was corroborated by a defense witness, Antonio Trinidad. In his testimony, Antonio revealed that one unidentified man entered the house and when questioned by Serapio, de Gula, the man hit the

latter with gun, He could not do anyt hing, much less the other chess players present because guns were poked at them.8 Both the accused were brought to the the sub-station where they were mauled and forced to admit the charges against them. Serapio remembered Patrolman Inciong going to his cell and showing (14) tea bags and jastingly said, "Never will you be able to get out of this jail because we will charge you with drug pushing and we will use these as evidence against you. ''9 Tarried in jail during the early months of their apprehension, Elmer Maps learned that a policeman talked to a certain Due s who was earlier detained for illegal possession of marijuana, that if he wanted to be released, he must give a substitute or "palitulo" in jail lingo. That upon his apprehension, he learned that Eduardo Due s was later released by the police. From the foregoing facts, We hold the accused-appellant innocent. The conflicting and contradictory evidence of the prosecution affirms the weakness of its case thereby creating reasonable doubt as to his guilt. We find several glaring inconsistencies and contradictions in the testimonies of the prosecution witnesses as to engender doubt on the moral certainty of accused-appellants guilt. The prosecution presented only two of the members of the buy-bust operation, whose testimoniesunfortunately did not impress this Court. On the contrary, it weakens the prosecution's case. Take for instance the testimony of Pat. Capangyarihan who testified that Serapio was arrested some 9 to 10 meters away from where Elmer Maps was standing and that he was not present during the arrest of Serapio de Gula. Contrary to his testimony however, Pat. Lucero testified that when Serapio was apprehended by him Pat. Capangyarihan was present and saw him effect the arrest. ThusPat. Capangyarihan: "QDo you know who was that person? ALater on, I came to know the name of that person and it appears that his name is Serapio de Gula. QAnd how far were you from them when they talked with each other? AFrom the witness stand up to that wall, sir (Which was estimated to be 9 to 10 meters).10 xxx xxx xxx QMr. Witness, when you accosted Elmer Maps, you actually were not aware what happened to Serapio de Gula since you were not present when he was accosted by Pat. Lucero? AIt was Elmer Maps who was first accosted and after he was arrested, my other police companions ran. QAnd they ran towards what direction?

ATowards the place where Serapio de Gula was standing. QAnd when you said the place where he was standing, it is the place where he was talking with Elmer Maps? AYes, Ma'am. QAnd when Pat. Lucero effected the arrest, you were not actually present? AI was not there, but I saw that it was Pat. Lucero who first took hold of Serapio de Gula. QNow, since you were not with the team who accosted de Gula, you were not sure that the alleged marked money was recovered from de Gula? AI am sure about that, Ma'am.11 Patrolman Lucero on the other hand, testified differently on this matter" "QAfter you approached Pat. Capangyarihan, what happen next? ASubsequently a person pulled Elmer Mapa. QWho was this person who arrived and pulled Elmer Mapa? ASerapio de Gula, Sir. QDid Serapio de Gula succeed in pulling out Elmer Mapa from the hands of Pat. Capangyarihan? ANo, sir. QWhat happened after that? AWe got hold of Serafin de Gula and asked him why he is interfering." QWas there any answer from him? AHe told us that Elmer Maps is his nephew. xxx xxx xxx QWhat did you do after you were informed about that? AWe also got hold of Serapio de Gula and frisked him."12 Another glaring inconsistency lies in the seized articles. Pat. Capangyarihan testifies: "QAnd after Elmer had approached you, what did he do? AHe handed me a plastic container containing twelve (12) handrolled suspected marijuana cigarettes. QAnd what did you do?

AAfter Emer handed to me that suspected handrolled marijuana cigarettes, I introduced myself to him and then I arrested him."13 On the other land, Pat. Lucero testified that what Elmer was holding is a tea bag of marijuana and not a plastic container containing twelve (12) handrolled marijuana cigarettes. "QWhen you saw Elmer Mapa being held by Pat. Capangyarihan , did you see him holding the money, referring to accused Elmer Mapa? AYes, sir. QWhat was that? QOne tea bag of marijuana. xxx xxx xxx QWhat happened to the tea bag being held by Elmer Mapa and two peso bills found in possession of Serapio do Gula? AThe tea bag of marijuana was brought to the NBI for laboratory examination.14 Realizing probably his mistake, Pat. Capangyarihan later on changed his testimony by stating that he could not remember whether it was a plastic container that was given to him or not. Thus "Q Mr. Witness, it appears that this alleged marijuana handrolled cigarettes is contained in an envelope with the marking DDM, etc. Is this also the same container when you received the marijuana from the accused? AI cannot recall if this was the same thing wherein these 12 sticks of marijuana were placed. xxx xxx xxx QBut you don't recall, Mr. witness, at the time you appre hended the accused where was this marijuana cigarettes? AAfter having taken these marijuana cigarettes from Mapa, I took hold of them. AMeaning this was not contained in any container? AI cannot remember anymore if it was contained in any container or not.15 The trial court observed the strange testimony of Pat. Lucero on a material point on cross examination wherein he admitted that a tea bag cannot be cigarette sticks. This shows oat the prosecution cannot enen determine what was really taken from accusedappellant, a tea bag or cigarette sticks, Thus, the Court inquired: " Q Now, Mr. Witness, who was in custody of the alleged tea bag which was recovered by the team from Elmer Maps, who was in possession from the time Elmer Maps was already arrested up to the time he was brought to the police station?

AIt was Pat. Mario Capangyarihan, sir. QBut you admitted that you have occasion to look at the tea bag? AYes, sir. QWhat is the difference between the tea bag and the suspected marijuana? What is the difference? ATea bag is like a tea bag, it is square contained like cigarette. QYou will agree with me that as far as I know a reach is like what we call "upos", a cigarette wrapped in a paper. I am referring to the paper wrapper, rolling paper? AYes, ma'am. QAnd also you will agree with me that a tea bag cannot be a cigarette stick. AYes, Ma'm.16 Not only are there inconsistencies as to what was recovered but also on who requested for the seized articles to be examined by the NBI. Pat. Capangyarihan testified that it was police aide Carreon who brought the seized articles to the NBI for examination, whereas Pat. Lucero testified that it was he who forwarded the marijuana to the NBI. Thus Pat. Capangyarihan: QBy the way who submitted this alleged marijuana handrolled cigarettes to the NBI? AAs far as I could remember, it was police aide Carreon who brought it to the NBI.17 Pat. Lucero however testified: "QYou said you forwarded this to the NBI for laboratory examination. Did you come to know the result of the examination? AYes, sir. QHow did you come to know the result? AThere was a request to bring to the NBI and I waited for the result and upon reaching the headquarters, we submit them to the investigating Fiscal.18 The foregoing contradictory testimony of two prosecution witnesses on who brought the marijuana to the NBI for laboratory examination is significant. Is it police aide Carreon or Pat. Lucero? Carreon never testified on the matter or that the specimen submitted to the NBI for examination was the same specimen allegedly taken from the accused. Neither was Pat. Lucero's testimony clear on the matter. Obviously, one of them is lying, Pat. Capangyarihan or Pat. Lucero. On such kind of shaky testimony conviction cannot he had.

The inconsistencies were never explained by the prosecution. Irreconcilable and unexplained contradictions in the testimonies of the prosecution witnesses cast doubt on the culpability of the appellant and his guilt for the crime charged.19 As it is, the bungled testimonies of the police officers cannot be given credence. We are more inclined to believe the testimony of accusedappellant that he was a "target" to be arrested not for selling marijuana but as a replacement for Eduardo Due s who was at the time detained in the Municipal Jail, with accusedappellant as the substitute or 'palit-ulo" in jail lingo, so that the detainee could be released. It would be noteworthy to mention though, that accusedappellant was subjected to a drug test to find out whether he was likewise a drug user. It is often observed that a drug pusher usually, if not all the time is also a drug user. The act of pushing drugs is a means to support his being a drug dependent. For whatever its worth, accusedappellant was found to be drug free. In the NBI Taxicology Report No. TDD-86-646,20 blood and urine, specimens of Elmer Maps showed negative results for the preence of prohibited and or regulated drugs. Though this report was not presented during trial, such is made part of the records.

The evident falsehood spread on the records before Us creates a nagging doubt on the culpability of the accused-appellant. It is sad to state that many innocent people become victims of physical violence and/or harassment from police officers who are supposed to be the protectors of the citizenry. We cannot condone such practices to continue in a civilized society. While this Court commends the efforts of law enforcement agencies who are engaged in the difficult and dangerous task of apprehending and prosecuting drug-traffickers, it cannot, however, close its eyes nor ignore the many reports of false arrests of innocent persons for extortion purposes and blackmail, or to satisfy some hidden personal resentment of the "informer" or law enforcer against the accused. Courts should be vigilant and alert to recognize trumped up drug charges lest an innocent man, on the basis of planted evidence, be made to suffer the unusually severe penalties for drug offenses.21 WHEREFORE, the decision appealed herefrom is hereby REVERSED, and the accused-appellant, Elmer Maps y de Gula, is hereby ACQUITTED on reasonable doubt of the crime charged. Costs de officio. SO ORDERED. Narvasa (C.J., Chairman), Padilla, Regalado and Campos, Jr., JJ., concur. Decision reversed. 1. Rollo, p. 1. 2. Rollo, pp. 149-163. 3. Id., at p. 163.

4. Exhibit, "A", "A-l". 5. T.S.N., February 17, 1988, p. 8. 6. Id., at p. 15. 7. Id., at p. 13. 8. TSN, July 8, 1988, pp. 7-11. 9. id., at p. 17. 10. T.S.N., January 23, 1987, pp. 9-10. 11. Id., A pp. 19-20. 12. T.S.N February 9, 1987, pp. 5-6. 13. T.S.N, January 23, 1987, pp. 10-11. 14. T.S.N., February 9, 1987, p. 7. 15. TS.N., June 5, 1987. pp. 7-8. 16. T.S.N., February 9, 1987, p. 13. 17. T.S.N. June 5, 1987, p. 7. 18. T.S.N., February 9, 1987, p. 8. 19. People vs. Cariela, G.R. No. 97086, 206 SCRA 842 (1992). 20. Records, p. 19. 21. People vs. Garcia, G.R. Nos. 64867-68, 172 SCRA 262 (1989).

[GRN 66614 January 25, 1988*] PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners, vs. INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICS ADMINISTRATION, respondents. PETITION for certiorari to review the decision of the Intermediate Appellate Court, Castro-Bartolome, J. The facts are stated in the opinion of the Court. BIDIN, J.: This is a Petition for Review on certiorari seeking the reversal of the decision of the Intermediate Appellate Court, Third Division** dated February 23, 1994 in XC-G.R. No. CV No. 61705 entitled Mobil Oil Philippines, Inc., plaintiff-appellee vs. Primitivo Leveriza Parungao, Antonio C. Vasco and Civil Aeronautics Administration, defendants-appellants; Primitivo Leveriza, Fe Leveriza Parungao and Antonio C. Leveriza, cross-defendant, affirming in toto the decision of the trial court dated April 6, 1976. As found by the trial court and adopted by the Intermediate Appellate Court, the facts of this case are as follows: "Around three contracts of lease resolve the basic issues in the instant case. These three contracts are as follows: First Contract.-For purposes of easy reference and brevity, this contract shall be referred to hereinafter as Contract A. This is a "CONTRACT OF LEASE', executed between the REPUBLIC OF THE PHILIPPINES, represented by Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, and ROSARIO C. LEVERIZA, as lessee, on April 2, 1965, over a certain parcel of land at the MIA area, consisting of approximately 4,502 square meters, at a monthly rental of P450.20, for a period of 25 years, (Exhibit 'A', Exhibit 'ILeverizas', Exhibit' I CAA). Second Contracts.-For purposes of easy references and brevity, this contract shall be referred to hereinafter as Contract B. This is a 'LEASE AGREEMENT', executed between ROSARIO C. LEVERIZA, as lessor, and Plaintiff MOBIL OIL PHILIPPINES, INC., as lessee on May 21, 1965, over 3,000 square meters of that SAME Parcel of land subject of Contract A above mentioned, at a monthly rental of P1,500.00, for a period of 25 years (Exhibit 'B', Exhibit 4-Leverizas'). Third Contract.-For purposes of easy reference and brevity, this contract shall be referred to hereinafter as Contract C. This is a 'LEASE AGREEMENT', executed between Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, and plaintiff MOBIL OIL PHILIPPINES, INC., as lessee, on June 1, 1968 over that SAME parcel of land (Lot A, on plan being a portion of Parcel, Psu 2031), containing an area of 3,000 square meters more or less, at a monthly rental of P.25 per square meter for the second 200 square meters, and P.20 per square meter for the rest, for a period of '29 (sic) years. (Exhibit 'C'). "There is no dispute among the parties that the subject matter of the three contracts of lease above mentioned, Contract A, Contract B, and Contract C, is the same parcel of land, with the noted difference

that while in Contract A, the area leased is 4,502 square meters, in Contract B and Contract C, the area has been reduced to 3,000 square meters. To summarize: Contract A-a lease contract of April 2, 1965 between the Republic of the Philippines, represented by Defendant Civil Aeronautics Administration and Rosario C. Leveriza over a parcel of land containing an area of 4,502 square meters, for 25 years. Contract B-a lease contract (in effect a sublease) of May 21, 1965 between defendant Rosario C. Leveriza and plaintiff Mobil Oil Philippines, Inc. over the same parcel of land, but reduced to 3,000 square meters for 25 years; and Contract C-a lease contract of June 1, 1968 between defendant Civil Aeronautics Administration and plaintiff Mobil Oil Philippines, Inc., over the same parcel of land, but reduced to 3,000 square meters, for 25 years. "It is important to note, for a clear understanding of the issues involved, that it appears that defendant Civil Aeronautics Administration as LESSOR, leased the same parcel of land, for durations of time that overlapped to two lessees, to wit: (1) Defendant Rosario C. Leveriza, and that plaintiff Mobil Oil Philippines, Inc., as LESSEE, leased the same parcel of land from two lessors, to wit: (1) defendant Rosario C. Leveriza and (2) defendant Civil Aeronautics Administration, Inc., for durations of C-me that also overlapped. 'For purposes of brevity defendant Civil Aeronautics Administration shall be referred to hereinafter as defendant CAA "Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is now deceased. This is the reason why her successor-in-interest, Her heirs, are sued, namely: Defendants Primitivo Leveriza, her second husband, (now also deceased), Fe Leveriza Parungao, her daughter by her second husband, and Antonio C. Vasco, her son by her first husband. For purposes of brevity, these defendants shall be referred to hereinafter as Defendants Leveriza. "Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as the Plaintiff.' (pp. 95-99, Record on Appeal). "Plaintiff in this case seeks the rescission or cancellation of Contract A and Contract B on the ground that Contract A from which Contract B is derived and depends has already been cancelled by the defendant Civil Aeronautics Administration and maintains that Contract C with the defendant CAA is the only valid and subsisting contract insofar as the parcel of land, subject to the present litigation is concerned. On the other hand, defendants Leverizas'claim that Contract A which is their contract with CAA has never been legally cancelled and still valid and subsisting; that it is Contract C between plaintiff and defendant CAA which should be declared void. "Defendant CAA asserts that Exhibit -A' is still valid and subsisting because its cancellation by Guillermo Jurado was ineffective and asks the court to annul Contract A because of the violation committed by defendant Leveriza in leasing the parcel of land to plaintiff by virtue of Contract B without the consent of

defendant CAA. Defendant CAA further asserts that Contract C not having been approved by the Director of Public Works and Communications is not valid. x x x" x x xx x x x x x After trial, the lower court render judgment on April 6, 1976 the dispositive part of which reads: 'WHEREFORE, after having thus considered the evidence of all the parties, testimonial and documentary, and their memoranda and replymemoranda, this Court hereby renders judgment: 1. Declaring Contract A as having been validly cancelled on June 28, 1966, and has therefore ceased to have any effect as of that date; 2. Declaring that Contract B has likewise ceased to have any effect as of June 28, 1966 because of the cancellation of Contract A; 3. Declaring that Contract C was validly entered into on June 1, 1968, and that it is still valid and subsisting; 4. Ordering defendant CAA to refund to defendants Leverizas the amount of P32,189.30 with 6% per annum until fully paid; 5. Ordering defendants Leverizas to refund to plaintiff the amount of P48,000.00 with 6% interest per annum until fully paid; 6. Dismissing defendants Leverizas' four counterclaims against plaintiff-, 7. Dismissing defendants Leverizas' cross-claim against defendant CAA; 8. Dismissing defendant CAA's counterclaim against plaintiff; 9. Dismissing defendant CAA`s counterclaim against defendant Leverizas. No pronouncements as to costs." On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly discovered evidence, lack of jurisdiction of the court over the case and lack of evidentiary support of the decision which was denied in the order of November 12, 1976 (Rollo, p. 17). On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot lease was properly registered in the name of the Republic of the Philippines, it was only the President of the Philippines or an officer duly designated by him who could execute the lease contract pursuant to Sec. 567 of the Revised Administrative Code; that the Airport General Manager has no authority to cancel Contract A, the contract entered into between the CAA and Leveriza, and that Contact C between the CAA and Mobil was void for not having been approved by the Secretary of Public Works and Communications. Said motion was however denied on November 12, 1976 (Rollo, p. 18).

On appeal, the Intermediate Appellate Court, being in full accord with the trial court, rendered a decision on February 29, 1984, the dispositive part of which reads: "WHEREFORE, finding no reversible error in the decision of the lower court dated April 6, 1976, the same is hereby affirmed in toto." Hence, this petition. The petitioners raised the following assignment of errors: I THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION (CAA) HAD THE STATUTORY AUTHORITY TO LEASE, EVEN WITHOUT APPROVAL OF THE THEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, REAL PROPERTY BELONGING TO THE REPUBLIC OF THE PHILIPPINES. II THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION HAD STATUTORY AUTHORITY, WITHOUT THE APPROVAL OF THE THEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, TO CANCEL A LEASE CONTRACT OVER REAL PROPERTY OWNED BY THE REPUBLIC OF THE PHILIPPINES, WHICH CONTRACT WAS APPROVED, AS REQUIRED BY LAW, BY THE SECRETARY. III THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE CONTRACT OF SUBLEASE (CONTRACT B) ENTERED INTO BETWEEN PETITIONERS' PREDECESSOR-IN-INTEREST AND RESPONDENT MOBIL OIL PHILIPPINES, INC. WAS WITHOUT THE CONSENT OF THE ADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION. The petition is devoid of merit. There is no dispute that Contract "A" at the time of its execution was a valid contract. The issue therefore is whether or not said contract is still subsisting after its cancellation by CAA on the ground of a sublease executed by petitioners with Mobil Oil Philippines without the consent of CAA and the execution of another contract of lease between CAA and Mobil Oil Philippines (Contract "C"). Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid sublease and does not constitute a ground for the cancellation of Contract "A", while Contract "C", a subsequent lease agreement between CAA and Mobil Oil Philippines is null and void, for lack of approval by the Department Secretary. Petitioners anchor their position on Sections 567 and 568 of the Revised Administrative Code which require among others, that subject contracts should be executed by the President of the Philippines or by an officer duly designated by him, unless authority to execute the same is by law vested in some other officer (Petition, Rollo, pp. 15-16).

At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validly cancelled on June 28, 1966 and so was Contract "B" which was derived therefrom. Accordingly, it maintains that Contract "C" is the only valid contract insofar as the parcel of land in question is concerned and that approval of the Department Head is not necessary under Section 32 (par. 24) of the Republic Act 776 which expressly vested authority to enter into such contracts in the Administrator of CAA (Comment; Rollo, p. 83). On its part, respondent Civil Aeronautics Administration took the middle ground with its view that Contract "A" is still subsisting as its cancellation is ineffective without the approval of the Department Head but said contract is not enforceable because of petitioners' violation of its terms and conditions by entering into Contract "B" of sublease without the consent of CAA. The CAA further asserts that Contract "C"not having been approved by the Secretary of Public Works and Communications, is not valid (Rollo, p. 43). However, in its comment filed with the Supreme Court, the CAA made a complete turnabout adopting the interpretation and ruling made by the trial court which was affirmed by the Intermediate Appellate Court (Court of Appeals), that the CAA Administrator has the power to execute the deed or contract of lease involving real properties under its administration belonging to the Republic of the Philippines without the approval of the Department Head as clearly provided in Section 32, paragraph (24) of Republic Act 776. The issue narrows down to whether or not there is a valid ground for the cancellation of Contract "A." Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee specifically "for the purpose of operating and managing a gasoline station by the latter, to serve vehicles going in and out of the airport." As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of paragraph 7 of said Contract reads in full: "7. The Party of the Second part may transfer her rights to the leased premises but in such eventuality, the consent of the Party of the First Part shall first be secured. In any event, such transfer of rights shall have. to respect the terms and conditions of this agreement." Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of the contract. Said paragraph reads: "8. Failure on the part of the Party of the Second Part to comply with the terms and conditions herein agreed upon shall be sufficient for revocation of this contract by the Party of the First Part without need of judicial demand." It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract "B") with Mobil Oil Philippines without the consent of CAA (lessor). The cancellation of the contract was made in a letter dated June 28, 1966 of Guillermo P. Jurado, Airport General Manager of CAA addressed to Rosario Leveriza, as follows: (Letterhead)

"June 28, 1966 Mrs. Rosario Leveriza Manila International Airport Madam: It has been found out by the undersigned that you have sublet the property of the CAA leased to you and by virtue of this, your lease contract is hereby cancelled because of the violation of the stipulations of the contract. I would like to inform you that even without having sublet the said property the said contract would have been cancelled as per attached communication. Very truly yours, For the Director: (Sgd.) Illegible (Typed) GUILLERMO P. JURADO Airport General Manager Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the Airport General Manager had no legal authority to make the cancellation. They maintain that it is only the Secretary of Public Works and Communications, acting for the President, or by delegation of power, the Director of Civil Aeronautics Administration who could validly cancel the contract. They do admit, however, and it is evident from the records that the Airport General Manager signed "For the Director." Under the circumstances, there is no question that such act enjoys the presumption of regularity, not to mention the unassailable fact that such act was subsequently affirmed or ratified by the Director of the CAA himself (Record on Appeal, pp. 108110). Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in effect, repealing an act of the Secretary which is beyond the authority of the Administrator. Such argument is untenable. The terms and conditions under which such revocation or cancellation may be made, have already been specifically provided for in Contract "A" which has already been approved by the Department Head. It is evident that in the implementation of aforesaid contract, the approval of said Department Head is no longer necessary if not redundant. It is further contended that even granting that such cancellation was effective, a subsequent billing by the Accounting Department of the CAA has in effect waived or nullified the rescission of Contract "A".

It will be recalled that the questioned cancellation of Contract "A" was among others, mainly based on the violation of its terms and conditions, specifically, the sublease of the property by the lessee without the consent of the lessor. The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after the cancellation of Contract "A" is obviously an error. However, this Court has already ruled that the mistakes of government personnel should not affect public interest. In San Mauricio Mining Company v. Ancheta (105 SCRA 391, 422), it has been held that as a matter of law Tooted in the protection of public interest, and also as a general policy to protect the government and the people, errors of government personnel in the performance of their duties should never deprive the people of the right to rectify such error and recover what might be lost or be bartered away in any actuation, deal or transaction concerned. In the case at bar, the lower court in its decision which has been affirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the amount of rentals which was not due from them with 6% interest per Annum until fully paid. Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a mere sublease to respondent Mobil Oil Philippines, Inc. and requires no prior consent of CAA to perfect the same. Citing Article 1650 of the Civil Code, they assert that the prohibition to sublease must be expressed and cannot be merely implied or inferred (Rollo, p. 151). As correctly found by the Court of Appeals, petitioners in asserting the non-necessity for a prior consent interprets the first sentence of paragraph 7 of Contract "A"to refer to an assignment of lease under Article 1649 of the Civil Code and: not to a mere sublease. A careful scrutiny of said paragraph of Contract "A" clearly shows that it speaks of transfer of rights of Rosario Leveriza to the leased premises and not to assignment of the lease (Rollo, pp. 48-49). Petitioners likewise argued that it was contemplated by the parties to Contract "A" that Mobil Oil Philippines would be the owner of the gasoline station it would construct on the leased premises during the period of the lease, hence, it is understood that it must be given a right to use and occupy the lot in question in the form of a sub-lease (Rollo, p. 152). In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage and operate the gasoline station. The fact that Mobil Oil was mentioned in that contract was clearly not intended to give approval to a sublease between petitioners and said company but rather to insure that in the arrangements to be made between them, it must be understood that after the expiration of the lease contract, whatever improvements have been constructed in the leased premises shall be relinquished to CAA. Thus, this Court held that "the primary and elementary rule of construction of documents is that when the words or language thereof is clear and plain or readily understandable by any ordinary reader thereof, there is absolutely no room for interpretation or construction anymore." (San Mauricio Mining Company v. Ancheta, supra). Finally, petitioners contend that the administrator of CAA cannot execute without approval of the Department Secretary, a valid contract of lease over real property owned by the Republic of the Philippines, citing Sections 567 and 568 of the Revised Administrative Code, which provide as follows:

"SEC. 567. Authority of the President of the Philippines to execute contracts relative to real property.When the Republic of the Philippines is party to a deed conveying the title to real property or is party to any lease or other contract relating to real property belonging to said government, said deed or contract shall be executed on behalf of said government by the President of the Philippines or by an officer duly designated by him, unless authority to execute the same is by law expressly vested in some other officer." (Italics supplied) "SEC. 568. Authority of national officials to make contract.Written contracts not within the purview of the preceding section Shan, in the absence of special provision, be executed, with the approval of the proper Department Head, by the Chief of the Bureau or Office having control of the appropriation against which the contract would create a charge; or if there is no such chief, by the proper Department Head himself or the President of the Philippines as the case may require." On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease real property belonging to the Republic of the Philippines under its administration even without the approval of the Secretary of Public Works and Communications, which authority is expressly vested in it by law, more particularly Section 32 (24) of Republic Act 776, which reads: "Sec. 32. Powers and Duties of the Administrator.-Subject to the general control and supervision of the Department Head, the Administrator shall have, among others, the following powers and duties: xxx xxx xxx

"(24) To administer, operate, manage, control, maintain and develop the Manila International Airport and all government aerodromes except those controlled or operated by the Armed Forces of the Philippines including such power and duties as: x x x (b) to enter into, make and execute contracts of any kind with any person, firm, or public or private corporation or entity; (c) to acquire, hold, purchase, or lease any personal or real property, right of ways, and easements which may be proper or necessary: Provided, that no real property thus acquired and any other real property of the Civil Aeronautics Administration shall be sold without the approval of the President of the Philippines. x x x" There is no dispute that the Revised Administrative Code is a general law while Republic Act 776 is a special law nor in the fact that the real property subject of the lease in Contract "C" is real property belonging to the Republic of the Philippines. Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by the President of the Philippines, or (2) by an officer duly designated by him or (3) by an officer expressly vested bylaw. It is readily apparent that in the case at bar, the Civil Aeronautics Administration has the authority to enter into Contracts of Lease for the government under the third category. Thus, as correctly ruled by the Court of Appeals, the Civil Aeronautics Administration has the power to execute the deed or contract involving leases of real properties belonging to the Republic of the Philippines, not because it is an entity duly designated by the President but because the said authority to execute the same is, by law expressly vested in it.

Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the Civil Aeronautics Administration by reason of its creation and existence, administers properties belonging to the Republic of the Philippines and it is on these properties that the Administrator must exercise his vast power and discharge his duty to enter into, make and execute contract of any kind with any person, firm, or public or private corporation or entity and to acquire, hold, purchase, or lease any personal or real property, right of ways and easements which may be proper or necessary. The exception, however, is the sale of properties acquired by CAA or any other real properties of the same which must have the approval of the President of the Philippines. The Court of Appeals took cognizance of the striking absence of such proviso in the other transactions contemplated in paragraph (24) and is convinced as we are, that the Director of the Civil Aeronautics Administration does not need the prior approval of the President or the Secretary of Public Works and Communications in the execution of Contract "C." In this regard, this Court ruled that another basic principle of statutory construction mandates that general legislation must give way to special legislation on the same subject, and generally be so interpreted as to embrace only cases in which the special provisions are not applicable (Sto. Domingo v. De los Angeles, 96 SCRA 139), that specific statute prevails over a general statute (De Jesus v. People, 120 SCRA 760) and that where two statutes are of equal theoretical application to a particular case, the one designed therefor specially should prevail (Wil Wilhensen, Inc. v. Baluyot, 83 SCRA 38) WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of Appeals appealed from is AFFIRMED in toto. SO ORDERED. Gutierrez, Jr., Feliciano and Cortrs, JJ., concur. Fernan, J., no part-related to a partner in the law firm representing petitioner. Petition dismissed. Decision affirmed.

[GRN L-34568 March 28, 1988.*] RODERICK DAOANG, and ROMMEL DAOANG, assisted by their father, ROMEO DAOANG, petitioners, vs. THE MUNICIPAL JUDGE, SAN NICOLAS, ILOCOS NORTE, ANTERO AGONOY and AMANDA RAMOSAGONOY, respondents. PETITION for review on certiorari from the decision of the Municipal Court of San Nicolas, Ilocos Norte. Barba, J. The facts are stated in the opinion of the Court. PADILLA, J,: This is a petition for review on certiorari of the decision, dated 30 June 1971, rendered by the respondent judge** in Spec. Proc. No. 37 of the Municipal Court of San Nicolas, Ilocos Norte, entitled: "In re Adoption of the Minors Quirino Bonilla and Wilson Marcos; Antero Agonoy and Amanda R. Agonoy, petitioners", the dispositive part of which reads, as follows: "Wherefore, Court renders judgment declaring that henceforth Quirino Bonilla and Wilson Marcos be, to all legitimate intents and purposes, the children by adoption of the joint petitioners Antero Agonoy and Amanda R. Agonoy and that the former be freed from legal obedience and maintenance by their respective parents, Miguel Bonilla and Laureana Agonoy for Quirino Bonilla and Modesto Marcos and Benjamina Gonzales for Wilson Marcos and their family names 'Bonilla' and 'Marcos' be changed with 'Agonoy', which is the family name of the petitioners. "Successional rights of the children and that of their adopting parents shall be governed by the pertinent provisions of the New Civil Code. "Let copy of this decision be furnished and entered into the records of the Local Civil Registry of San Nicolas, Ilocos Norte, for its legal effects at the expense of the petitioners."1 The undisputed facts of the case are as follows: On 23 March 1971, the respondent spouses Antero and Amanda Agonoy filed a petition with the Municipal Court of San Nicolas, Ilocos Norte, seeking the adoption of the minors Quirino, Bonilla and Wilson Marcos. The case, entitled: "In re Adoption of the Minors Quirino, Bonilla and Wilson Marcos, Antero Agonoy and Amanda Ramos-Agonoy, petitioners", was docketed therein as Spec. Proc. No. 37.2 The petition was set for hearing on 24 April 1971 and notices thereof were caused to be served upon the Office of the Solicitor General and ordered published in the ILOCOS TIMES, a weekly newspaper of general circulation in the province of Ilocos Norte, with editorial offices in Laoag City.3 On 22 April 1971, the minors Roderick and Rommel Daoang, assisted by their father and guardian ad litem, the petitioners herein, filed an opposition to the aforementioned petition for adoption, claiming that the spouses Antero and Amanda Agonoy had a legitimate daughter named Estrella Agonoy,

oppositors' mother, who died on 1 March 1971, and therefore, said spouses were disqualified to adopt under Art. 335 of the Civil Code.4 After the required publication of notice had been accomplished, evidence was presented. Thereafter, the Municipal Court of San Nicolas, Ilocos Norte rendered its decision, granting the petition for adoption.5 Hence, the present recourse by the petitioners (oppositors in the lower court). The sale issue for consideration is one of law and it is whether or not the respondent spouses Antero Agonoy and Amanda Ramos-Agonoy are disqualified to adopt under paragraph (1), Art. 335 of the Civil Code. The pertinent provision of law reads, as follows: "Art. 335. The following cannot adopt: (1) Those who have legitimate, legitimated, acknowledged natural children, or children by legal fiction; xxx xxx xxx

In overruling the opposition of the herein petitioners, the respondent judge held that "to add grandchild or grandchildren in this article where no grandchild is included would violate to (sic) the legal maxim that what is expressly included would naturally exclude what is not included". But, it is contended by the petitioners, citing the case of In re Adoption of Millendez,6 that the adoption of Quirino, Bonilla and Wilson Marcos would not only introduce a foreign element into the family unit, but would result in the reduction of their legitimes. It would also produce an indirect, permanent and irrevocable disinheritance which is contrary to the policy of the law that a subsequent reconciliation between the offender and the offended person deprives the latter of the right to disinherit and renders ineffectual any disinheritance that may have been made. We find, however, that the words used in paragraph (1) of Art. 335 of the Civil Code, in enumerating the persons who cannot adopt, are clear and unambiguous. The children mentioned therein have a clearly defined meaning in law and, as pointed out by the respondent judge, do not include grandchildren. Well known is the rule of statutory construction to the effect that a statute clear and unambiguous on its face need not be interpreted; stated otherwise, the rule is that only statutes with an ambiguous or doubtful meaning may be the subject of statutory construction.7 Besides, it appears that the legislator, in enacting the Civil Code of the Philippines, obviously intended that only those persons who have certain classes of children, are disqualified to adopt. The Civil Code of Spain, which was once in force in the Philippines, and which served as the pattern for the Civil Code of the Philippines, in its Article 174, disqualified persons who have legitimate or legitimated descendants from adopting. Under this article, the spouses Antero and Amanda Agonoy would have been disqualified to adopt as they have legitimate grandchildren, the petitioners herein. But, when the Civil Code of the

Philippines was adopted, the word "descendants" was changed to "children", in paragraph (1) of Article 335. Adoption used to be for the benefit of the adoptor. It was intended to afford to persons who have no child of their own the consolation of having one, by creating through legal fiction, the relation of paternity and filiation where none exists by blood relationship.8 The present tendency, however, is geared more towards the promotion of the welfare of the child and the enhancement of his opportunities for a useful and happy life, and every intendment is sustained to promote that objective.9 Under the law now in force, having legitimate, legitimated, acknowledged natural children, or children by legal fiction, is no longer a ground for disqualification to adopt.10 WHEREFORE, the petition is DENIED. The judgment of the Municipal Court of San Nicolas, Ilocos Norte in Spec. Proc. No. 37 is AFFIRMED. Without pronouncement as to costs in this instance. SO ORDERED. Yap, Melencio-Herrera, Paras and Sarmiento, JJ., concur. Petition denied. Judgment affirmed. 1. Rollo, pp. 19-20. 2. Id., p. 8. 3. Id., p. 12. 4. Id., p. 13. 5. Id., p. 14. 6. G.R. No. L-28195, June 10, 1971, 39 SCRA 499. 7. 2 Sutherland, Statutory Construction, 3rd. ed., Section 4502, p. 316. 8. In re Adoption of Resaba, 95 Phil. 244. 9. Santos vs. Aranzanso, 123 Phil, 160. 10. Child and Welfare Code, Art. 28.

EN BANC [G.R. No. 123169. November 4, 1996] DANILO E. PARAS, petitioner, vs. COMMISSION ON ELECTIONS, respondent. RESOLUTION FRANCISCO, J.: Petitioner Danilo E. Paras is the incumbent Punong Barangay of Pula, Cabanatuan City who won during the last regular barangay election in 1994. A petition for his recall as Punong Barangay was filed by the registered voters of the barangay. Acting on the petition for recall, public respondent Commission on Elections (COMELEC) resolved to approve the petition, scheduled the petition signing on October 14, 1995, and set the recall election on November 13, 1995.1 At least 29.30% of the registered voters signed the petition, well above the 25% requirement provided by law. The COMELEC, however, deferred the recall election in view of petitioner opposition. On December 6, 1995, the COMELEC set anew the recall election, this time on December 16, 1995. To prevent the holding of the recall election, petitioner filed before the Regional Trial Court of Cabanatuan City a petition for injunction, docketed as SP Civil Action No. 2254-AF, with the trial court issuing a temporary restraining order. After conducting a summary hearing, the trial court lifted the restraining order, dismissed the petition and required petitioner and his counsel to explain why they should not be cited for contempt for misrepresenting that the barangay recall election was without COMELEC approval.2 In a resolution dated January 5, 1996, the COMELEC, for the third time, re-scheduled the recall election on January 13, 1996; hence, the instant petition for certiorari with urgent prayer for injunction. On January 12, 1996, the Court issued a temporary restraining order and required the Office of the Solicitor General, in behalf of public respondent, to comment on the petition. In view of the Office of the Solicitor General manifestation maintaining an opinion adverse to that of the COMELEC, the latter through its law department filed the required comment. Petitioner thereafter filed a reply.3 Petitioner argument is simple and to the point. Citing Section 74 (b) of Republic Act No. 7160, otherwise known as the Local Government Code, which states that o recall shall take place within one (1) year from the date of the official assumption to office or one (1) year immediately preceding a regular local election? petitioner insists that the scheduled January 13, 1996 recall election is now barred as the Sangguniang Kabataan (SK) election was set by Republic Act No. 7808 on the first Monday of May 1996, and every three years thereafter. In support thereof, petitioner cites Associated Labor Union v. Letrondo-Montejo, 237 SCRA 621, where the Court considered the SK election as a regular local election. Petitioner maintains that as the SK election is a regular local election, hence no recall election can be had for barely four months separate the SK election from the recall election. We do not agree. The subject provision of the Local Government Code provides:

 EC. 74. Limitations on Recall. ?(a) Any elective local official may be the subject of a recall election only once during his term of office for loss of confidence. (b) No recall shall take place within one (1) year from the date of the official assumption to office or one (1) year immediately preceding a regular local election.? [Emphasis added.] It is a rule in statutory construction that every part of the statute must be interpreted with reference to the context, i.e., that every part of the statute must be considered together with the other parts, and kept subservient to the general intent of the whole enactment.4 The evident intent of Section 74 is to subject an elective local official to recall election once during his term of office. Paragraph (b) construed together with paragraph (a) merely designates the period when such elective local official may be subject of a recall election, that is, during the second year of his term of office. Thus, subscribing to petitioner interpretation of the phrase regular local election to include the SK election will unduly circumscribe the novel provision of the Local Government Code on recall, a mode of removal of public officers by initiation of the people before the end of his term. And if the SK election which is set by R.A. No. 7808 to be held every three years from May 1996 were to be deemed within the purview of the phrase egular local election? as erroneously insisted by petitioner, then no recall election can be conducted rendering inutile the recall provision of the Local Government Code. In the interpretation of a statute, the Court should start with the assumption that the legislature intended to enact an effective law, and the legislature is not presumed to have done a vain thing in the enactment of a statute.5 An interpretation should, if possible, be avoided under which a statute or provision being construed is defeated, or as otherwise expressed, nullified, destroyed, emasculated, repealed, explained away, or rendered insignificant, meaningless, inoperative or nugatory.6 It is likewise a basic precept in statutory construction that a statute should be interpreted in harmony with the Constitution.7 Thus, the interpretation of Section 74 of the Local Government Code, specifically paragraph (b) thereof, should not be in conflict with the Constitutional mandate of Section 3 of Article X of the Constitution to nact a local government code which shall provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative, and referendum x x x.? Moreover, petitioner too literal interpretation of the law leads to absurdity which we cannot countenance. Thus, in a case, the Court made the following admonition: e admonish against a too-literal reading of the law as this is apt to constrict rather than fulfill its purpose and defeat the intention of its authors. That intention is usually found not in he letter that killeth but in the spirit that vivifieth?x x x? The spirit, rather than the letter of a law determines its construction; hence, a statute, as in this case, must be read according to its spirit and intent.

Finally, recall election is potentially disruptive of the normal working of the local government unit necessitating additional expenses, hence the prohibition against the conduct of recall election one year immediately preceding the regular local election. The proscription is due to the proximity of the next regular election for the office of the local elective official concerned. The electorate could choose the official replacement in the said election who certainly has a longer tenure in office than a successor elected through a recall election. It would, therefore, be more in keeping with the intent of the recall provision of the Code to construe regular local election as one referring to an election where the office held by the local elective official sought to be recalled will be contested and be filled by the electorate. Nevertheless, recall at this time is no longer possible because of the limitation stated under Section 74 (b) of the Code considering that the next regular election involving the barangay office concerned is barely seven (7) months away, the same having been scheduled on May 1997.9 ACCORDINGLY, the petition is hereby dismissed for having become moot and academic. The temporary restraining order issued by the Court on January 12, 1996, enjoining the recall election should be as it is hereby made permanent. SO ORDERED. Romero, Melo, Puno, Kapunan, Hermosisima, Jr., Panganiban, and Torres, Jr., JJ., concur. Narvasa, C.J., Padilla, Regalado, Bellosillo, Vitug, and Mendoza, JJ., concur in the majority and separate concurring opinions. Davide, Jr., Please see separate concurring opinion.