CASE DIGEST: G.R. No.

L-19650
Caltex Philippines, Inc., petitioner-appellee Vs.
Enrico Palomar, in his capacity as The Postmaster General, respondent-appellant
FACTS:
In the year 1960, Caltex Philippines conceived and laid the ground work for a promotional scheme calculated
to drum up patronage for its oil products. The contest was entitled Caltex Hooded Pump Contest, which calls
for participants to estimate the actual number of liters as hooded gas pump at each Caltex station will
dispense during a specific period.
Foreseeing the extensive use of the mails not only as amongst the media for publicizing the contest but also
for the transmission of communications, representations were made by Caltex with the postal authorities for
the contest to be cleared in advance for mailing. This was formalized in a letter sent by Caltex to the Post
master General, dated October 31, 1960, in which Caltex, thru its counsel, enclosed a copy of the contest
rules and endeavored to justify its position that the contest does not violate the The Anti-Lottery Provisions of
the Postal Law.
Unfortunately, the Palomar, the acting Postmaster General denied Caltexs request stating that the contest
scheme falls within the purview of the Anti-lottery Provision and ultimately, declined Clatexs request for
clearance.
Caltex sought reconsideration, stressing that there being no consideration involved in part of the contestant,
the contest was not commendable as a lottery. However, the Postmaster General maintained his view that the
contest involves consideration, or even it does not involve any consideration it still falls as Gift Enterprise,
which was equally banned by the Postal Law.
ISSUE:
Whether the petition states a sufficient cause of action for declaratory relief?
Whether or not the scheme proposed by Caltex the appellee is within the coverage of the prohibitive
provisions of the Postal Law?
HELD:
I. By express mandate of Section 1 of Rule 66 of the old Rules of Court which deals with the applicability to
invoke declaratory relief which states: Declaratory relief is available to person whose rights are affected by a
statute, to determine any question of construction or validity arising under the statute and for a declaration of
rights thereunder.
In amplification, conformably established jurisprudence on the matter, laid down certain conditions:
-There must be a justiciable controversy.
-The controversy must be between persons whose interests are adverse.
-The party seeking declaratory relief must have a legal interest in the controversy.
-The issue involved must be ripe for judicial determination.
With the appellees bent to hold the contest and the appellants threat to issue a fraud order if carried out, the
contenders are confronted by an ominous shadow of imminent and inevitable litigation unless their differences
are settled and stabilized by a declaration. And, contrary to the insinuation of the appellant, the time is long
past when it can rightly be said that merely the appellees 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.
Construction
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 case is not explicitly provided for in the law.
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.
II. Is the Contest Scheme a Lottery?
Lottery
Extends to all schemes for the distribution of prizes by chance
e.g. policy playing, gift exhibitions, prize concerts, raffles and fairs as well as various forms of gambling.
Three Essential Elements: Consideration, Prize, Chance
No, according to the Supreme Court, the contest scheme is not a lottery but it appears to be more of a
gratuitous distribution since nowhere in the rules is any requirements that any fee be paid, any merchandise
be bought, any services be rendered, or any value whatsoever be given for the privilege to participate. Since,
a prospective contestant has to do is go to a Caltex Station, request for the entry form which is available on
demand and accomplish and submit the same for the drawing of the winner. Because of this, the contest fails
to exhibit any discernible consideration which would brand it as a lottery.
Moreover, 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 it does condemn as criminal scheme in
which a valuable consideration of some kind is paid directly or indirectly for the chance to draw a prize.
Is the scheme, as sales promotion which would benefit the sponsor in the way of increased patronage
be considered as a consideration and thus violates the Postal Law?
No, the required element of consideration does not consist of the benefit derived by the sponsors of the
contest. The true test lies on whether or not the participant pays a valuable consideration for the chance of
winning and not whether or not those conducting the enterprise receiver something of value for the distribution
of the prize.
Is the Contest Scheme a Gift Enterprise?
Even if the term Gift Enterprise is not yet defined explicitly, there appears to be a consensus among
lexicographers and standard authorities that the term is common applied to a sporting artifice of under which
goods are sold for their market value but by way of inducement to purchase the product, the purchaser is
given a chance to win a prize.
And thus, the term of gift enterprise cannot be established in the case at bar since there is not sale of anything
to which the chance offered is attached as an inducement to the purchaser. The contest is open to all qualified
contestant irrespective of whether or not they buy the appellees products.
The lesson that we derive from this state of the pertinent jurisprudence is that every case must be resolved
upon the particular phraseology of the applicable statutory provision. It is only logical that the term under a
construction should be accorded no other meaning than that which is consistent with the nature of the word
associated therewith.
In the end, the Supreme Court ruled out that under the prohibitive provision of the Postal Law, gift enterprise
and similar schemes therein contemplated are condemnable only if, like lotteries, they involve the element of
consideration. Finding non in the contest, it was ruled out that the appellee may not be denied the use of the
mails for the purpose thereof.

-----------------------------------------------------------------------------------------------------------------------------------------1) Facts
The case before us now is a petition for declaratory relief against Postmaster
General Enrico Palomar, parying 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.

In 1960, Caltex launched a promotional scheme called Caltex Hooded Pump

Contest? which calls for participants to estimate the actual number of liters a
hooded gas pump at each Caltex station will dispense during a specified period.?
The contest is open to all motor vehicle owners and/or licensed drivres?.
There is neither a fee or consideration required nor a purchase required to be made.
The forms are available upon request at each Caltex station and there is also a
sealed can where accomplished entry stubs may be deposited.
Caltex wishes to use mails amongst the media for publicizing about the contest,
thus, Caltex sent representatives to the postal authorities for advance clearing for
the use of mails for the contest. However, the postal authorities denied their request
in view of sections 1954 (a), 1982, and 1983 of the Revised Administrative Code
(Anti-lottery provisions of the Postal Law), which prohibits the use of mail in
conveying any information concerning non-mailable schemes, such as lottery, gift
enterprise, or similar scheme.
Caltex sought for a reconsideration and stressed that there was no consideration
involved in the part of the contestant(s) but the Postmaster General maintained
their view and even threatened Caltex that if the contest was conducted, a
fraud order will have to be issued against it (Caltex) and all its representatives?.
This leads to Caltexs filing of this petition for declaratory relief.
The court ruled that the petitioner does not violate the Postal Law and the
respondent has no right to bar the public distribution or said rules by the mails?.
The respondent then appealed.
2) Issue(s)
a) Whether or not the petition states a sufficient cause of action for declaratory
relief?
b) Whether or not the proposed Caltex Hooded Pump Contest? violates the
Postal Law?
3) Ruling
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.

purchase anything from Caltex in order to participate in the contest. The true test for
having consideration 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.?

CASE DIGEST: National Federation of Labor (NFL) v. Eisma GR L-61236, 31

January 1984 (127 SCRA 419)
En Banc, Fernando (p): 9 concur, 1 concur with comments, 1 took no part, 1
on leave
Facts:
On 5 March 1982, the National Federation of Labor filed with the Ministry of Labor
and Employment (Labor Relations Division, Zamboanga City), a petition for direct
certification as the sole exclusive collective bargaining representative of the monthly
paid employees at the Lumbayao manufacturing plant of the Zamboanga Wood
Products, Inc. (Zambowood). On 17 April 1982, such employees charged the firm
before the same office for underpayment of monthly living allowances. On 3 May
1982, the union issued a notice of strike against the firm, alleging illegal termination
of Dionisio Estioca, president of the said local union; unfair labor practice;
nonpayment of living allowances; and employment of oppressive alien
management personnel without proper permit. The strike began on 23 May 1982.On
9 July 1982, Zambowood filed a complaint with the trial court against the officers
and members of the union, for damages for obstruction of private property with
prayer for preliminary injunction and/or restraining order. The union filed a motion
for the dismissal and for the dissolution of the restraining order, and opposition to
the issuance of the writ of preliminary injunction, contending that the incidents of
picketing are within the exclusive jurisdiction of the Labor Arbiter pursuant to Batas
Pambansa 227 (Labor Code, Article 217) and not to the Court of First Instance. The
motion was denied. Hence, the petition for certiorari.
Issue: Whether construction of the law is required to determine jurisdiction.

4) Ratio
Declaratory Relief is the interpretation of several constitutional provisions. Based on
Section 1 Rule 63 of the Rules of Court, an action for declaratory relief should be
filed by a person interested under a deed, a will, a contract or other written
instrument, and whose rights are affected by a statute, an executive order, a
regulation or an ordinance.
Requisites for Declaratory Relief:
- There is justiciable controversy
- The controversy is between persons whose interests are adverse
- The party seeking the relief has a legal interest in the controversy
- The issue is ripe for judicial determination
* The Caltex Hooded Pump Contest? is a mere gratuitous distribution of
property by chance?. It does not qualify as a lottery due to the lack of
consideration. An act to be deemed as a lottery must constitute a (1) prize, (2)
chance, and (3) consideration. The participants are not required to do anything or

Held:
The first and fundamental duty of courts is to apply the law. Construction and
interpretation come only after it has been demonstrated that application is
impossible or inadequate without them. Jurisdiction over the subject matter in a
judicial proceeding is conferred by the sovereign authority which organizes the
court; and it is given only by law. Jurisdiction is never presumed; it must be
conferred bylaw in words that do not admit of doubt. Since the jurisdiction of courts
and judicial tribunals is derived exclusively from the statutes of the forum, the issue
should be resolved on the basis of the law or statute in force. Therefore, since (1)
the original wording of Article 217 vested the labor arbiters with jurisdiction; since
(2) Presidential Decree 1691 reverted the jurisdiction with respect to money claims
of workers or claims for damages arising from employer-employee relations to the
labor arbiters after Presidential Decree 1367 transferred such jurisdiction to the
ordinary courts, and since (3) Batas Pambansa 130 made no change with respect to

the original and exclusive jurisdiction of Labor Arbiters with respect to money claims
of workers or claims for damages arising from employer-employee relations; Article
217 is to be applied the way it is worded. The exclusive original jurisdiction of a labor
arbiter is therein provided for explicitly. It means, it can only mean, that a court of
first instance judge then, a regional trial court judge now, certainly acts beyond the
scope of the authority conferred on him by law when he entertained the suit for
damages, arising from picketing that accompanied a strike. The Supreme Court,
CASE DIGEST: Daoang vs. Municipal Judge of San Nicolas GR L-34568, 28
March 1988 (159 SCRA 369)
Facts:
On 23 March 1971, spouses Antero and Amanda Agonoy filed a petition with the
Municipal Court of San Nicolas, Ilocos Norte seeking the adoption of minors Quirino
Bonilla and Wilson Marcos. However, minors Roderick and Rommel Daoang, assisted
by their father and guardian ad litem, the petitioners herein filed an opposition to
the said adoption. They contended 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 Article 335
of the Civil Code, which provides that those who have legitimate, legitimated,
acknowledged natural children or children by legal fiction cannot adopt.
Issue: Whether the spouses Antero Agonoy and Amanda Ramos are disqualified to
adopt under paragraph 1 of Article 335 of the Civil Code.
Held:
The words used in paragraph (1) of Article 335 of the Civil Code, in enumerating the
persons who cannot adopt, are clear and unambiguous. When the New Civil Code
was adopted, it changed the word descendant, found in the Spanish Civil Code to
which the New Civil Code was patterned, to children. The children thus mentioned
have a clearly defined meaning in law and 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. The rule is that only statutes with
an ambiguous or doubtful meaning may be the subjects of statutory construction. In
the present case, Roderick and Rommel Daoang, the grandchildren of Antero Agonoy
and Amanda Ramos-Agonoy, cannot assail the adoption of Quirino Bonilla and
Wilson Marcos by the Agonoys.
The Supreme Court denied the petition, and affirmed the judgment of the Municipal
Court of San Nicolas, Ilocos Norte (Special Proceedings 37), without pronouncement
as to costs.

thus, granted the writ of certiorari, and nullified and set aside the 20 July 1982 order
issued by the court a quo. It granted the writ of prohibition, and enjoined the Judge
of said court, or whoever acts in his behalf in the RTC to which this case is assigned,
from taking any further action on the civil case (Civil Case 716 [2751]), except for
the purpose of dismissing it. It also made permanent the restraining order issued on
5 August 1982.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-6355-56
August 31, 1953
PASTOR M. ENDENCIA and FERNANDO JUGO, plaintiffs-appellees, vs.
SATURNINO DAVID, as Collector of Internal Revenue, defendant-appellant.
Office of the Solicitor General Juan R. Liwag and Solicitor Jose P. Alejandro for appellant.
Manuel O. Chan for appellees.
MONTEMAYOR, J.:
This is a joint appeal from the decision of the Court of First Instance of Manila declaring section 13 of Republic
Act No. 590 unconstitutional, and ordering the appellant Saturnino David as Collector of Internal Revenue to
re-fund to Justice Pastor M. Endencia the sum of P1,744.45, representing the income tax collected on his
salary as Associate Justice of the Court of Appeals in 1951, and to Justice Fernando Jugo the amount of
P2,345.46, representing the income tax collected on his salary from January 1,1950 to October 19, 1950, as
Presiding Justice of the Court of Appeals, and from October 20, 1950 to December 31,1950, as Associate
Justice of the Supreme Court, without special pronouncement as to costs.
Because of the similarity of the two cases, involving as they do the same question of law, they were jointly
submitted for determination in the lower court. Judge Higinio B. Macadaeg presiding, in a rather exhaustive
and well considered decision found and held that under the doctrine laid down by this Court in the case of
Perfecto vs. Meer, 85 Phil., 552, the collection of income taxes from the salaries of Justice Jugo and Justice
Endencia was a diminution of their compensation and therefore was in violation of the Constitution of the
Philippines, and so ordered the refund of said taxes.
We see no profit and necessity in again discussing and considering the proposition and the arguments pro and
cons involved in the case of Perfecto vs. Meer, supra, which are raised, brought up and presented here. In that
case, we have held despite the ruling enunciated by the United States Federal Supreme Court in the case of
O 'Malley vs. Woodrought 307 U. S., 277, that taxing the salary of a judicial officer in the Philippines is a
diminution of such salary and so violates the Constitution. We shall now confine our-selves to a discussion
and determination of the remaining question of whether or not Republic Act No. 590, particularly section 13,
can justify and legalize the collection of income tax on the salary of judicial officers.
According to the brief of the Solicitor General on behalf of appellant Collector of Internal Revenue, our
decision in the case of Perfecto vs. Meer, supra, was not received favorably by Congress, because
immediately after its promulgation, Congress enacted Republic Act No. 590. To bring home his point, the
Solicitor General reproduced what he considers the pertinent discussion in the Lower House of House Bill No.
1127 which became Republic Act No. 590.
For purposes of reference, we are reproducing section 9, Article VIII of our Constitution:.
SEC. 9. The members of the Supreme Court and all judges of inferior courts shall hold office during
good behavior, until they reach the age of seventy years, or become incapacitated to discharge the
duties of their office. They shall receive such compensation as may be fixed by law, which shall not be
diminished during their continuance in office. Until the Congress shall provide otherwise, the Chief
Justice of the Supreme Court shall receive an annual compensation of sixteen thousand pesos, and
each Associate Justice, fifteen thousand pesos.

As already stated construing and applying the above constitutional provision, we held in the Perfecto case that
judicial officers are exempt from the payment of income tax on their salaries, because the collection thereof by
the Government was a decrease or diminution of their salaries during their continuance in office, a thing which
is expressly prohibited by the Constitution. Thereafter, according to the Solicitor General, because Congress
did not favorably receive the decision in the Perfecto case, Congress promulgated Republic Act No. 590, if not
to counteract the ruling in that decision, at least now to authorize and legalize the collection of income tax on
the salaries of judicial officers. We quote section 13 of Republic Act No. 590:
SEC 13. No salary wherever received by any public officer of the Republic of the Philippines shall be
considered as exempt from the income tax, payment of which is hereby declared not to be dimunition of
his compensation fixed by the Constitution or by law.
So we have this situation. The Supreme Court in a decision interpreting the Constitution, particularly section 9,
Article VIII, has held that judicial officers are exempt from payment of income tax on their salaries, because
the collection thereof was a diminution of such salaries, specifically prohibited by the Constitution. Now comes
the Legislature and in section 13, Republic Act No. 590, says that "no salary wherever received by any public
officer of the Republic (naturally including a judicial officer) shall be considered as exempt from the income
tax," and proceeds to declare that payment of said income tax is not a diminution of his compensation. Can
the Legislature validly do this? May the Legislature lawfully declare the collection of income tax on the salary
of a public official, specially a judicial officer, not a decrease of his salary, after the Supreme Court has found
and decided otherwise? To determine this question, we shall have to go back to the fundamental principles
regarding separation of powers.
Under our system of constitutional government, the Legislative department is assigned the power to make and
enact laws. The Executive department is charged with the execution of carrying out of the provisions of said
laws. But the interpretation and application of said laws belong exclusively to the Judicial department. And this
authority to interpret and apply the laws extends to the Constitution. Before the courts can determine whether
a law is constitutional or not, it will have to interpret and ascertain the meaning not only of said law, but also of
the pertinent portion of the Constitution in order to decide whether there is a conflict between the two, because
if there is, then the law will have to give way and has to be declared invalid and unconstitutional.
Defining and interpreting the law is a judicial function and the legislative branch may not limit or restrict
the power granted to the courts by the Constitution. (Bandy vs. Mickelson et al., 44N. W., 2nd 341, 342.)
When it is clear that a statute transgresses the authority vested in the legislature by the Constitution, it is
the duty of the courts to declare the act unconstitutional because they cannot shrink from it without
violating their oaths of office. This duty of the courts to maintain the Constitution as the fundamental law
of the state is imperative and unceasing; and, as Chief Justice Marshall said, whenever a statute is in
violation of the fundamental law, the courts must so adjudge and thereby give effect to the Constitution.
Any other course would lead to the destruction of the Constitution. Since the question as to the
constitutionality of a statute is a judicial matter, the courts will not decline the exercise of jurisdiction
upon the suggestion that action might be taken by political agencies in disregard of the judgment of the
judicial tribunals. (11 Am. Jur., 714-715.)
Under the American system of constitutional government, among the most important functions in trusted
to the judiciary are the interpreting of Constitutions and, as a closely connected power, the determination
of whether laws and acts of the legislature are or are not contrary to the provisions of the Federal and
State Constitutions. (11 Am. Jur., 905.).
By legislative fiat as enunciated in section 13, Republic Act NO. 590, Congress says that taxing the salary of a
judicial officer is not a decrease of compensation. This is a clear example of interpretation or ascertainment of
the meaning of the phrase "which shall not be diminished during their continuance in office," found in section
9, Article VIII of the Constitution, referring to the salaries of judicial officers. This act of interpreting the
Constitution or any part thereof by the Legislature is an invasion of the well-defined and established province
and jurisdiction of the Judiciary.
The rule is recognized elsewhere that the legislature cannot pass any declaratory act, or act declaratory
of what the law was before its passage, so as to give it any binding weight with the courts. A legislative
definition of a word as used in a statute is not conclusive of its meaning as used elsewhere; otherwise,
the legislature would be usurping a judicial function in defining a term. (11 Am. Jur., 914, emphasis
supplied)
The legislature cannot, upon passing a law which violates a constitutional provision, validate it so as to
prevent an attack thereon in the courts, by a declaration that it shall be so construed as not to violate the
constitutional inhibition. (11 Am. Jur., 919, emphasis supplied)
We have already said that the Legislature under our form of government is assigned the task and the power to
make and enact laws, but not to interpret them. This is more true with regard to the interpretation of the basic
law, the Constitution, which is not within the sphere of the Legislative department. If the Legislature may
declare what a law means, or what a specific portion of the Constitution means, especially after the courts
have in actual case ascertain its meaning by interpretation and applied it in a decision, this would surely cause
confusion and instability in judicial processes and court decisions. Under such a system, a final court
determination of a case based on a judicial interpretation of the law of the Constitution may be undermined or
even annulled by a subsequent and different interpretation of the law or of the Constitution by the Legislative
department. That would be neither wise nor desirable, besides being clearly violative of the fundamental,
principles of our constitutional system of government, particularly those governing the separation of powers.

So much for the constitutional aspect of the case. Considering the practical side thereof, we believe that the
collection of income tax on a salary is an actual and evident diminution thereof. Under the old system where
the in-come tax was paid at the end of the year or sometime thereafter, the decrease may not be so apparent
and clear. All that the official who had previously received his full salary was called upon to do, was to fulfill his
obligation and to exercise his privilege of paying his income tax on his salary. His salary fixed by law was
received by him in the amount of said tax comes from his other sources of income, he may not fully realize the
fact that his salary had been decreased in the amount of said income tax. But under the present system of
withholding the income tax at the source, where the full amount of the income tax corresponding to his salary
is computed in advance and divided into equal portions corresponding to the number of pay-days during the
year and actually deducted from his salary corresponding to each payday, said official actually does not
receive his salary in full, because the income tax is deducted therefrom every payday, that is to say, twice a
month. Let us take the case of Justice Endencia. As Associate Justice of the Court of Appeals, his salary is
fixed at p12,000 a year, that is to say, he should receive P1,000 a month or P500 every payday, fifteenth
and end of month. In the present case, the amount collected by the Collector of Internal Revenue on said
salary is P1,744.45 for one year. Divided by twelve (months) we shall have P145.37 a month. And further
dividing it by two paydays will bring it down to P72.685, which is the income tax deducted form the collected
on his salary each half month. So, if Justice Endencia's salary as a judicial officer were not exempt from
payment of the income tax, instead of receiving P500 every payday, he would be actually receiving P427.31
only, and instead of receiving P12,000 a year, he would be receiving but P10,255.55. Is it not therefor clear
that every payday, his salary is actually decreased by P72.685 and every year is decreased by P1,744.45?
Reading the discussion in the lower House in connection with House Bill No. 1127, which became Republic
Act No. 590, it would seem that one of the main reasons behind the enactment of the law was the feeling
among certain legislators that members of the Supreme Court should not enjoy any exemption and that as
citizens, out of patriotism and love for their country, they should pay income tax on their salaries. It might be
stated in this connection that the exemption is not enjoyed by the members of the Supreme Court alone but
also by all judicial officers including Justices of the Court of Appeals and judges of inferior courts. The
exemption also extends to other constitutional officers, like the President of the Republic, the Auditor General,
the members of the Commission on Elections, and possibly members of the Board of Tax Appeals,
commissioners of the Public Service Commission, and judges of the Court of Industrial Relations. Compares
to the number of all these officials, that of the Supreme Court Justices is relatively insignificant. There are
more than 990 other judicial officers enjoying the exemption, including 15 Justices of the Court of Appeals,
about 107 Judges of First Instance, 38 Municipal Judges and about 830 Justices of the Peace. The reason
behind the exemption in the Constitution, as interpreted by the United States Federal Supreme Court and this
Court, is to preserve the independence of the Judiciary, not only of this High Tribunal but of the other courts,
whose present membership number more than 990 judicial officials.
The exemption was not primarily intended to benefit judicial officers, but was grounded on public policy. As
said by Justice Van Devanter of the United States Supreme Court in the case of Evans vs. Gore (253 U. S.,
245):
The primary purpose of the prohibition against diminution was not to benefit the judges, but, like the
clause in respect of tenure, to attract good and competent men to the bench and to promote that
independence of action and judgment which is essential to the maintenance of the guaranties, limitations
and pervading principles of the Constitution and to the administration of justice without respect to person
and with equal concern for the poor and the rich. Such being its purpose, it is to be construed, not as a
private grant, but as a limitation imposed in the public interest; in other words, not restrictively, but in
accord with its spirit and the principle on which it proceeds.
Having in mind the limited number of judicial officers in the Philippines enjoying this exemption, especially
when the great bulk thereof are justices of the peace, many of them receiving as low as P200 a month, and
considering further the other exemptions allowed by the income tax law, such as P3,000 for a married person
and P600 for each dependent, the amount of national revenue to be derived from income tax on the salaries of
judicial officers, were if not for the constitutional exemption, could not be large or substantial. But even if it
were otherwise, it should not affect, much less outweigh the purpose and the considerations that prompted the
establishment of the constitutional exemption. In the same case of Evans vs. Gore, supra, the Federal
Supreme Court declared "that they (fathers of the Constitution) regarded the independence of the judges as
far as greater importance than any revenue that could come from taxing their salaries.
When a judicial officer assumed office, he does not exactly ask for exemption from payment of income tax on
his salary, as a privilege . It is already attached to his office, provided and secured by the fundamental law, not
primarily for his benefit, but based on public interest, to secure and preserve his independence of judicial
thought and action. When we come to the members of the Supreme Court, this excemption to them is
relatively of short duration. Because of the limited membership in this High Tribunal, eleven, and due to the
high standards ofEXPERIENCE , practice and training required, one generally enters its portals and comes
to join its membership quite late in life, on the aver-age, around his sixtieth year, and being required to retire at
seventy, assuming that he does not die or become incapacitated earlier, naturally he is not in a position to
receive the benefit of exemption for long. It is rather to the justices of the peace that the exemption can give
more benefit. They are relatively more numerous, and because of the meager salary they receive, they can
less afford to pay the income tax on it and its diminution by the amount of the income tax if paid would be real,
substantial and onerous.

Considering exemption in the abstract, there is nothing unusual or abhorrent in it, as long as it is based on
public policy or public interest. While all other citizens are subject to arrest when charged with the commission
of a crime, members of the Senate and House of Representatives except in cases of treason, felony and
breach of the peace are exempt from arrest, during their attendance in the session of the Legislature; and
while all other citizens are generally liable for any speech, remark or statement, oral or written, tending to
cause the dishonor, discredit or contempt of a natural or juridical person or to blacken the memory of one who
is dead, Senators and Congressmen in making such statements during their sessions are extended immunity
and exemption.
And as to tax exemption, there are not a few citizens who enjoy this exemption. Persons, natural and juridical,
are exempt from taxes on their lands, buildings and improvements thereon when used exclusively for
educational purposes, even if they derive income therefrom. (Art. VI, Sec. 22 [3].) Holders of government
bonds are exempted from the payment of taxes on the income or interest they receive therefrom (sec. 29 (b)
[4], National Internal Revenue Code as amended by Republic Act No. 566). Payments or income received by
any person residing in the Philippines under the laws of the United States administered by the United States
Veterans Administration are exempt from taxation. (Republic Act No. 360). Funds received by officers and
enlisted men of the Philippine Army who served in the Armed Forces of the United States, allowances earned
by virtue of such services corresponding to the taxable years 1942 to 1945, inclusive, are exempted from
income tax. (Republic Act No. 210). The payment of wages and allowances of officers and enlisted men of the
Army Forces of the Philippines sent to Korea are also exempted from taxation. (Republic Act No. 35). In other
words, for reasons of public policy and public interest, a citizen may justifiably by constitutional provision or
statute be exempted from his ordinary obligation of paying taxes on his income. Under the same public policy
and perhaps for the same it not higher considerations, the framers of the Constitution deemed it wise and
necessary to exempt judicial officers from paying taxes on their salaries so as not to decrease their
compensation, thereby insuring the independence of the Judiciary.
In conclusion we reiterate the doctrine laid down in the case of Perfecto vs. Meer, supra, to the effect that the
collection of income tax on the salary of a judicial officer is a diminution thereof and so violates the
Constitution. We further hold that the interpretation and application of the Constitution and of statutes is within
the exclusive province and jurisdiction of the Judicial department, and that in enacting a law, the Legislature
may not legally provide therein that it be interpreted in such a way that it may not violate a Constitutional
prohibition, thereby tying the hands of the courts in their task of later interpreting said statute, specially when
the interpretation sought and provided in said statute runs counter to a previous interpretation already given in
a case by the highest court of the land.
In the views of the foregoing considerations, the decision appealed from is hereby affirmed, with no
pronouncement as to costs.
Pablo, Bengzon, Padilla, Tuason, Reyes, and Labrador, JJ., concur.

Separate Opinions
BAUTISTA ANGELO, J., concurring:
Without expressing any opinion on the doctrine laid down by this Court in the case of Perfecto vs. Meer, G. R.
No. L-2314, in view of the part I had in that case as former Solicitor General, I wish however to state that I
concur in the opinion of the majority to the effect that section 13, Republic Act No. 590, in so far as it provides
that taxing of the salary of a judicial officer shall be considered "not to be a diminution of his compensation
fixed by the Constitution or by law", constitutes an invasion of the province and jurisdiction of the judiciary. In
this sense, I am of the opinion that said section is null and void, it being a transgression of the fundamental
principle underlying the separation of powers.

PARAS, C.J., concurring and dissenting:

I dissent for the same reasons stated in the dissenting opinion of Mr. Justice Ozaeta in Perfecto vs. Meer, 85
Phil., 552, in which I concurred. But I disagree with the majority in ruling that no legislation may provide that it
be held valid although against a provision of the Constitution.
--------------------------------------------------------------------------------------------------------------------------------------------------

CASE DIGEST: Endencia vs. David 93 Phil 696 August 31 1953 [Salaries of
Judges Tax Exemption]
FACTS:
Saturnino David was the Internal Revenue Collector who ordered Judges Endencio
and Jugos salaries. A case was filed. However, upon construing Article VIII Section 9
of the constitution, it shows that judicial officers are exempt from paying tax from

their salaries and thus considered that the deduction of salaries from the said judges
as a violation from the compensation received by judicial officers.
ISSUE: Whether or not Section 13 of RA 590 is constitutional.
RULING:
No, the Section 13 of RA 590 is unconstitutional. The collection of income taxes in
judicial officers is considered as against the provisions given by the Article VIII Sec 9
of the Constitution. The compensation shall not be diminished during their
continuance of their service. Section 13 of RA 590 stated that no salary received by
any public officer of the republic shall be exempted from paying its taxes. This
specific part of RA 590 is in contrary with what is Article VIII Sec 9 has provided.

CASE DIGEST: Endencia v. David GR L-6355-56, 31 August 1953 (93 Phil

696)
En Banc, Montemayor (p): 6 concur
Facts:
Saturnino David, as a Collector of Internal Revenue collected income taxes from
Justices Endencia and Jugo, as Presiding Justice of the Court of Appeals and
Associate Justice of the Supreme Court respectively. The lower court held that under
the doctrine laid down in the case of Perfecto vs. Meer, 85 Phil., 552, the collection
of income taxes from the salaries of Justice Jugo and Justice Endencia was a
diminution of their compensation and therefore was in violation of the Constitution
of the Philippines, and so ordered the refund of said taxes. Respondent, through the
Solicitor General contended that the collection was done pursuant to Section 13 of
Republic Act 590 which Congress enacted to authorize and legalize the collection of
income tax on the salaries of judicial officers, if not to counteract the ruling on the
Perfecto Case.
Issue: Whether the Legislature may lawfully declare the collection of income tax on
the salary of a public official, specially a judicial officer, not a decrease of his salary,
after the Supreme Court has found and decided otherwise.
Held:
The Legislature cannot lawfully declare the collection of income tax on the salary of
a public official, specially a judicial officer, not a decrease of his salary, after the
Supreme Court has found and decided otherwise. The interpretation and application
of the Constitution and of statutes is within the exclusive province and jurisdiction of
the judicial department, and that in enacting a law, the Legislature may not legally
provide therein that it be interpreted in such a way that it may not violate a
Constitutional prohibition, thereby tying the hands of the courts in their task of later

interpreting said statute, specially when the interpretation sought and provided in
said statute runs counter to a previous interpretation already given in a case by the
highest court of the land. In the case at bar, Section 13 of Republic Act 590
interpreted or ascertained the meaning of the phrase which shall not be diminished
during their continuance in office, found in section 9, Article VIII of the Constitution,
referring to the salaries of judicial officers. This act of interpreting the Constitution or
any part thereof by the Legislature is an invasion of the well-defined and established
province and jurisdiction of the Judiciary. The Legislature under our form of
government is assigned the task and the power to make and enact laws, but not to
interpret them. This is more true with regard to the interpretation of the basic law,
the Constitution, which is not within the sphere of the Legislative department.
Allowing the legislature to interpret the law would bring confusion and instability in
judicial processes and court decisions.
Further, under the Philippine system of constitutional government, the Legislative
department is assigned the power to make and enact laws. The Executive
department is charged with the execution or carrying out of the provisions of said
laws. But the interpretation and application of said laws belong exclusively to the
Judicial department. And this authority to interpret and apply the laws extends to the
Constitution. Before the courts can determine whether a law is constitutional or not,
it will have to interpret and ascertain the meaning not only of said law, but also of
the pertinent portion of the Constitution in order to decide whether there is a conflict
between the two, because if there is, then the law will have to give way and has to
be declared invalid and unconstitutional. Therefore, the doctrine laid down in the
case of Perfecto vs. Meer to the effect that the collection of income tax on the salary
of a judicial officer is a diminution thereof and so violates the Constitution, is
reiterated.
The Supreme Court affirmed the decision, affirming the ruling in Perferto v. Meer and
holding the interpretation and application of laws belong to the Judiciary.

Issue: Whether Director Noriel acted with grave abuse of discretion in granting
NAFLU as the exclusive bargaining agent of all the employees in the Philippine
Blooming Mills
Held: Director Noriel did not act with grave abuse of discretion. Certiorari does not
lie. The conclusion reached by the Court derives support from the deservedly high
repute attached to the construction placed by the executive officials entrusted with
the responsibility of applying a statute. The Rules and Regulations implementing the
present Labor Code were issued by Secretary Blas Ople of the Department of Labor
and took effect on 3 February 1975, the present Labor Code having been made
known to the public as far back as 1 May 1974, although its date of effectivity was
postponed to 1 November 1974,. It would appear then that there was more than
enough time for a really serious and careful study of such suppletory rules and
regulations to avoid any inconsistency with the Code. This Court certainly cannot
ignore the interpretation thereafter embodied in the Rules. As far back as In re
Allen, a 1903 decision, Justice McDonough, as ponente, cited this excerpt from the
leading American case of Pennoyer v. McConnaughy, decided in 1891: The principle
that the contemporaneous construction of a statute by the executive officers of the
government, whose duty it is to execute it, is entitled to great respect, and should
ordinarily control the construction of the statute by the courts, is so firmly
embedded in our jurisprudence that no authorities need be cited to support it.
There was a paraphrase by Justice Malcolm of such a pronouncement in Molina v.
Rafferty, a 1918 decision: Courts will and should respect the contemporaneous
construction placed upon a statute by the executive officers whose duty it is to
enforce it, and unless such interpretation is clearly erroneous will ordinarily be
controlled thereby. Since then, such a doctrine has been reiterated in numerous
decisions. As was emphasized by Chief Justice Castro, the construction placed by
the office charged with implementing and enforcing the provisions of a Code should
he given controlling weight.
The Supreme Court dismissed the petition, with costs against petitioner PAFLU.

CASE DIGEST: PAFLU v. Bureau of Labor Relations GR L-43760, 21 August

1976 (72 SCRA 396)
Second Division, Fernando (p): 4 concurring
Facts:
In the certification election held on February 27, 1976, respondent Union obtained
429 votes as against 414 of petitioner Union. Again, admittedly, under the Rules and
Regulations implementing the present Labor Code, a majority of the valid votes cast
suffices for certification of the victorious labor union as the sole and exclusive
bargaining agent. There were four votes cast by employees who did not want any
union. On its face therefore, respondent Union ought to have been certified in
accordance with the above applicable rule. Petitioner, undeterred, would seize upon
the doctrine announced in the case of Allied Workers Association of the Philippines v.
Court of Industrial Relations that spoiled ballots should be counted in determining
the valid votes cast. Considering there were seventeen spoiled ballots, it is the
submission that there was a grave abuse of discretion on the part of respondent
Director.

CASE DIGEST: Philippine Apparel Workers Union v. NLRC GR L-50320, 31

July 1981 (105 SCRA 444)
First Division, Makasiar (p): 3 concurring
Facts: In anticipation of the expiration of their 1973-1976 collective bargaining
agreement, the Union submitted a set of bargaining proposals to the company.
Negotiations were held thereafter, but due to the impasse, the Union filed a
complaint with the Department of Labor praying that the parties be assisted in
concluding a collective agreement. Notwithstanding the complaint, the parties
continued with negotiations. Finally, on 3 September 1977, the parties signed the

agreement providing for a three-stage wage increase for all rank and file employees,
retroactive to 1April 1977. Meanwhile, on 21 April 1977, Presidential Decree 1123
was enacted to take effect on 1 May 1977 providing for an increase by P60.00 in the
living allowance ordained by Presidential Decree 525. This increase was
implemented effective 1 May 1977 by the company. The controversy arose when
the petitioner union sought the implementation of the negotiated wage increase of
P0.80 as provided for in the collective bargaining agreement. The company alleges
that it has opted to consider the P0.80 daily wage increase (roughly P22 per month)
as partial compliance with the requirements of PD 1123, so that it is obliged to pay
only the balance of P38 per month, contending that that since there was already a
meeting of the minds between the parties as early as 2 April 1977 about the wage
increases which were made retroactive to 1 April 1977, it fell well within the
exemption provided for in the Rules Implementing PD 1123. The Union, on the other
hand, maintains that the living allowance under PD 1123 (originally PD 525) is
distinct from the negotiated daily wage increase of P0.80.
On 13 February 1978, the Union filed a complaint for unfair labor practice and
violation of the CBA against the company. On 30 May 1978, an Order was issued by
the Labor Arbiter dismissing the complaint and referred the case to the parties to
resolve their disputes in accordance with the machinery established in the Collective
Bargaining Agreement. From this order, both parties appealed to the Commission.
On 1 September 1978, the Commission (Second Division) promulgated its decision,
setting aside the order appealed from and entering a new one dismissing the case
for obvious lack of merit, relying on a letter of the Undersecretary of Labor that
agreement between the parties was made 2 April 1977 granting P27 per month
retroactive to 1 April 1977 which was squarely under the exceptions provided for in
paragraph k of the rules implementing PD 1123. The union filed for reconsideration,
but the Commission en banc dismissed the same on 8 February 1979. Hence, the
petition.
Issue: Whether the Commission was correct in determining the agreement falls
under the exceptions.
Held: The collective bargaining agreement was entered into on 3 September1977,
when PD 1123 was already in force and effect, although the increase on the first
year was retroactive to 1 April 1977. There is nothing in the records that the
negotiated wage increases were granted or paid before May 1977, to allow the
company to fall within the exceptions provided for in paragraph k of the rules
implementing PD 1123. There was neither a perfected contract nor an actual
payment of said increase. There was no grant of said increases yet, despite the
contrary opinion expressed in the letter of the Undersecretary of Labor. It must be
noted that the letter was based on a wrong premise or representation on the part of
the company. The company had declared that the parties have agreed on 2 April
1977 in recognition of the imperative need for employees to cope up with inflation
brought about by, among others, another increase in oil price, but omitting the fact
that negotiations were still being held on other unresolved economic and noneconomic bargaining items (which were only agreed upon on 3 September 1977).
The Department of Labor had the right to construe the word grant as used in its
rules implementing PD 1123, and its explanation regarding the exemptions to PD
1123 should be given weight; but, when it is based on misrepresentations as to the
existence of an agreement between the parties, the same cannot be applied. There

is no distinction between interpretation and explaining the extent and scope of the
law; because where one explains the intent and scope of a statute, he is interpreting
it. Thus, the construction or explanation of Labor Undersecretary is not only wrong
as it was purely based on a misapprehension of facts, but also unlawful because it
goes beyond the scope of the law.
The writ of certiorari was granted. The Supreme Court set aside the decision of the
commission, and ordered the company to pay, in addition to the increased
allowance provided for in PD 1123, the negotiated wage increase of P0.80 daily
effective 1 April 1977 as well as all other wage increases embodied in the Collective
Bargaining Agreement, to all covered employees; with costs against the company.

CASE DIGEST: IBAA Employees Union v. Inciong GR L52415, 23 October

1984 (132 SCRA 663)
Facts:
On June 20, 1975, the Union filed a complaint against the bank for the payment of
holiday pay before the then Department of Labor, National Labor Relations
Commission, Regional Office IV in Manila. Conciliation having failed, and upon the
request of both parties, the case was certified for arbitration on 7 July 1975. On 25
August 1975, Labor Arbiter Ricarte T. Soriano rendered a decision in the aboveentitled case, granting petitioners complaint for payment of holiday pay.
Respondent bank did not appeal from the said decision. Instead, it complied with the
order of the Labor Arbiter by paying their holiday pay up to and including January
1976.
On 16 December 1975, Presidential Decree 850 was promulgated amending, among
others, the provisions of the Labor Code on the right to holiday pay. Accordingly, on
16 February 1976, by authority of Article 5 of the same Code, the Department of
Labor (now Ministry of Labor) promulgated the rules and regulations for the
implementation of holidays with pay. The controversial section thereof reads as
Status of employees paid by the month. Employees who are uniformly paid by
the month, irrespective of the number of working days therein, with a salary of not
less than the statutory or established minimum wage shall be presumed to be paid
for all days in the month whether worked or not. On 23 April 1976, Policy
Instruction 9 was issued by the then Secretary of Labor (now Minister) interpreting
the above-quoted rule. The bank, by reason of the ruling laid down by the rule
implementing Article 94 of the Labor Code and by Policy Instruction 9, stopped the
payment of holiday pay to an its employees.
On 30 August 1976, the Union filed a motion for a writ of execution to enforce the
arbiters decision of 25 August 1975, which the bank opposed. On 18 October 1976,
the Labor Arbiter, instead of issuing a writ of execution, issued an order enjoining
the bank to continue paying its employees their regular holiday pay. On 17
November 1976, the bank appealed from the order of the Labor Arbiter to the NLRC.
On 20 June 1978, the NLRC promulgated its resolution en banc dismissing the banks
appeal, and ordering the issuance of the proper writ of execution. On 21 February
1979, the bank filed with the Office of the Minister of Labor a motion for
reconsideration/appeal with urgent prayer to stay execution. On 13 August 1979,s
the NLRC issued an order directing the Chief of Research and Information of the
Commission to compute the holiday pay of the IBAA employees from April 1976 to
the present in accordance with the Labor Arbiter dated 25 August 1975. On 10
November 1979, the Office of the Minister of Labor, through Deputy Minister Amado
G. Inciong, issued an order setting aside the resolution en banc of the NLRC dated 20
June 1978, and dismissing the case for lack of merit. Hence, the petition for
certiorari charging Inciong with abuse of discretion amounting to lack or excess of
jurisdiction.
Issue: Whether the Ministry of Labor is correct in determining that monthly paid
employees are excluded from the benefits of holiday pay.
Held:

From Article 92 of the Labor Code, as amended by Presidential Decree 850, and
Article 82 of the same Code, it is clear that monthly paid employees are not
excluded from the benefits of holiday pay. However, the implementing rules on
holiday pay promulgated by the then Secretary of Labor excludes monthly paid
employees from the said benefits by inserting, under Rule IV, Book Ill of the
implementing rules, Section 2, which provides that: employees who are uniformly
paid by the month, irrespective of the number of working days therein, with a salary
of not less than the statutory or established minimum wage shall be presumed to be
paid for all days in the month whether worked or not. Even if contemporaneous
construction placed upon a statute by executive officers whose duty is to enforce it
is given great weight by the courts, still if such construction is so erroneous, the
same must be declared as null and void. So long, as the regulations relate solely to
carrying into effect the provisions of the law, they are valid. Where an administrative
order betrays inconsistency or repugnancy to the provisions of the Act, the mandate
of the Act must prevail and must be followed. A rule is binding on the Courts so long
as the procedure fixed for its promulgation is followed and its scope is within the
statutory authority granted by the legislature, even if the courts are not in
agreement with the policy stated therein or its innate wisdom. Further,
administrative interpretation of the law is at best merely advisory, for it is the courts
that finally determine what the law means.
The Supreme Court granted the petition, set aside the order of the Deputy Minister
of Labor, and reinstated the 25 August 1975 decision of the Labor Arbiter Ricarte T.
Soriano.
-----------------------------------------------------------------------------------------------------------------------------------------FACTS
The Secretary of Labor, issued Policy no. 9 interpreting article 94 of Labor Code as
regards Right to Holiday pay, stated among others, that PD 850 principally intended
to benefit daily-paid workers. Those who are paid by the month, i.e., he is paid
uniformly from January to December is presumed to have been paid with legal
holidays, unless his salary is deducted for the month the holiday occurs. Invoking
this Policy, the Bank stopped paying its employees for the legal holidays.
ISSUE Whether or not, PD 850 was intended only for daily wage workers.
RULING
It is elementary in the rules of statutory construction that when the language of the
law is clear and unequivocal the law must be taken to mean exactly what it says. In
the case at bar, the provisions of the Labor Code on the entitlement to the benefits
of holiday pay are clear and explicit - it provides for both the coverage of and
exclusion from the benefits. In Policy Instruction No. 9, the then Secretary of Labor
went as far as to categorically state that the benefit is principally intended for daily
paid employees, when the law clearly states that every worker shall be paid their
regular holiday pay. This is a flagrant violation of the mandatory directive of Article 4
of the Labor Code, which states that "All doubts in the implementation and
interpretation of the provisions of this Code, including its implementing rules and
regulations, shall be resolved in favor of labor." Moreover, it shall always be
presumed that the legislature intended to enact a valid and permanent statute
which would have the most beneficial effect that its language permits (Orlosky vs.
Haskell, 155 A. 112.)

CASE DIGEST: Chartered Bank Employees Association v. Ople GR L-44717,

28 August 1985 (138 SCRA 273) En Banc, Gutierrez, Jr. (p): 10 concur, 1
concur in result, 1 took no part, 1 on leave
Facts:
On 20 May 1975, the Chartered Bank Employees Association, in representation of its
monthly paid employees/members, instituted a complaint with the Regional Office
IV, Department of Labor, now Ministry of Labor and Employment (MOLE) against
Chartered Bank, for the payment of 10 unworked legal holidays, as well as for
premium and overtime differentials for worked legal holidays from 1 November
1974.
Both the arbitrator and the National Labor Relations Commission (NLRC) ruled in
favor of the petitioners ordering the bank to pay its monthly paid employees the
holiday pay and the premium or overtime pay differentials to all employees who
rendered work during said legal holidays.
On appeal, the Minister of Labor set aside the decision of the NLRC and dismissed
the petitioners claim for lack of merit basing its decision on Section 2, Rule IV, Book
III of the Integrated Rules and Policy Instruction 9, claiming the rule that If the
monthly paid employee is receiving not less than P240, the maximum monthly
minimum wage, and his monthly pay is uniform from January to December, he is
presumed to be already paid the 10 paid legal holidays. However, if deductions are
made from his monthly salary on account of holidays in months where they occur,
then he is still entitled to the 10 paid legal holidays.
Issue: Whether the Ministry of Labor is correct in maintaining that monthly paid
employees are not entitled to the holiday pay nor all employees who rendered work
during said legal holidays are entitled to the premium or overtime pay differentials.
Held: When the language of the law is clear and unequivocal the law must be taken
to mean exactly what it says. An administrative interpretation, which diminishes the
benefits of labor more than what the statute delimits or withholds, is obviously ultra
vires. In the present case, the provisions of the Labor Code on the entitlement to the
benefits of holiday pay are clear and explicit, it provides for both the coverage of
and exclusion from the benefit. In Policy Instruction 9, the Secretary of Labor went
as far as to categorically state that the benefit is principally intended for daily paid

employees, when the law clearly states that every worker shall be paid their regular
holiday pay.
While it is true that the contemporaneous construction placed upon a statute by
executive officers whose duty is to enforce it should be given great weight by the
courts, still if such construction is so erroneous, the same must be declared as null
and void. It is the role of the Judiciary to refine and, when necessary, correct
constitutional (and/or statutory) interpretation, in the context of the interactions of
the three branches of the government, almost always in situations where some
agency of the State has engaged in action that stems ultimately from some
legitimate area of governmental power. Section 2, Rule IV, Book III of the Rules to
implement the Labor Code and Policy Instruction was declared null and void in
IBAAEU v. Inciong, and thus applies in the case at bar. Since the private respondent
premises its action on the invalidated rule and policy instruction, it is clear that the
employees belonging to the petitioner association are entitled to the payment of 10
legal holidays under Articles 82 and 94 of the Labor Code, aside from their monthly
salary. They are not among those excluded by law from the benefits of such holiday
pay
The Supreme Court reversed and set aside the Labor Ministers 7 September 1976
order, and reinstated with modification (deleting the interest payments) the 24
March 1976 decision of the NLRC affirming the 30 October 1975 resolution of the
Labor Arbiter.

CASE DIGEST: Power to construe: THE CHARTERED BANK EMPLOYEES

ASSOCIATION vs. HON. BLAS F. OPLE, in his capacity as the Incumbent
Secretaryof Labor, and THE CHARTERED BANK G.R. No. L-44717 August 28,
1985
Facts:
On May 20, 1975, the Chartered Bank Employees Association, in representation of
its monthly paid employees/members, instituted a complaint with the Regional
Office No. IV, Department of Labor, now Ministry of Labor and Employment (MOLE)
against Chartered Bank, for the payment of ten (10) unworked legal holidays, as well
as for premium and overtime differentials for worked legal holidays from November
1, 1974. The Minister of Labor dismissed the Chartered Bank Employees
Associations claim for lack of merit basing its decision on Section 2,Rule IV, Book Ill
of the Integrated Rules and Policy Instruction No. 9,which respectively provide:
Sec. 2. Status of employees paid by the month. Employees who are uniformly paid
by the month, irrespective of the number of working days therein, with a salary of
not les sthan the statutory or established minimum wage shall be presumed to be
paid for all days in the month whether worked or not.
POLICY INSTRUCTION NO. 9
TO: All Regional Directors
SUBJECT: PAID LEGAL HOLIDAYS
The rules implementing PD 850 have clarified the policy in the implementation of
the ten (10) paid legal holidays. Before PD 850, the number of working days a year
in a firm was considered important in determining entitlement to the benefit. Thus,
where an employee was working for at least 313 days, he was considered definitely
already paid. If he was working for less than 313, there was no certainty whether the

ten (10) paid legal holidays were already paid to him or not. The ten (10) paid legal
holidays law, to start with, is intended to benefit principally daily employees. In the
case of monthly, only those whose monthly salary did not yet include payment for
the ten (10) paid legal holidays are entitled to the benefit. Under the rules
implementing PD 850, this policy has been fully clarified to eliminate controversies
on the entitlement of monthly paid employees. The new determining rule is this: 'If
the monthly paid employee is receiving not less than P240, the maximum monthly
minimum wage, and his monthly pay is uniform from January to December, he is
presumed to be already paid the ten (10) paid legal holidays. However, if deductions
are made from his monthly salary on account of holidays in months where they
occur, then he is still entitled to the ten (10) paid legal holidays. These new
interpretations must be uniformly and consistently upheld.
Issue: Whether or not the Secretary of Labor erred and acted contrary to law in
promulgating Sec. 2, Rule IV, Book III of the Integrated Rules and Policy Instruction
No. 9.
Held:
Yes. The Secretary (Minister) of Labor had exceeded his statutory authority granted
by Article 5 of the Labor Code authorizing him to promulgate the necessary
implementing rules and regulations. While it is true that the Minister has the
authority in the performance of his duty to promulgate rules and regulations to
implement, construe and clarify the Labor Code, such power is limited by provisions
of the statute sought to be implemented, construed or clarified.

Amici curiae submitted their respective memoranda, pursuant to the resolution of 26

November 1976, involving the issue whether the action of an injured employee or
worker or that of his heirs in case of his death under the Workmens Compensation
Act is exclusive, selective or cumulative; i.e. (1: Exclusive) whether an injured
employee or his heirs action is exclusively restricted to seeking the limited
compensation provided under the Workmens Compensation Act, (2: Selective)
whether an injured employee or his heirs have a right of selection or choice of action
between availing of the workers right under the Workmens Compensation Act and
suing in the regular courts under the Civil Code for higher damages (actual, moral
and/or exemplary) from the employer by virtue of negligence (or fault) of the
employer or of his other employees, or (3: Cumulative) whether an injured employee
or his heirs may avail cumulatively of both actions, i.e., collect the limited
compensation under the Workmens Compensation Act and sue in addition for
damages in the regular courts. The opinions of the amici curiae are diverse.
The Court in this same decision agreed with the argument that the action is
selective, i.e. that the injured worker or his heirs have the choice of remedies, but
that they cannot pursue both courses of action simultaneously and balance the
relative advantage of recourse under the Workmens Compensation Act as against
an ordinary action. It further held that the petitioners who had received the benefits
under the Workmens Compensation Act, such may not preclude them from bringing
an action before the regular court, as the choice of the first remedy was based on
ignorance or a mistake of fact, which nullifies the choice as it was not an intelligent
choice, but that upon the success of such bids before the lower court, the payments
made under the Workmens Compensation Act should be deducted from the
damages that may be decreed in their favor.
Issue: Whether the Supreme Court, in determining the action to be selective, is
guilty of judicial legislation.

CASE DIGEST: Floresca v. Philex Mining GR L-30642., 30 April 1985 (136

SCRA 142)
En Banc, Makasiar (p): 7 concurring, 1 on leave, 2 took no part, others
dissenting
Facts:
Several miners were killed in a cave-in at one of Philex Mining Corporations mine
sites. The heirs of the miners were able to recover under the Workmans
Compensation Act (WCA). Thereafter, a special committee report indicated that the
company failed to provide the miners with adequate safety protection. The heirs
decided to file a complaint for damages before the Court of First Instance (CFI) of
Manila. Philex filed a Motion to Dismiss on the ground that the action was based on
an industrial accident which is covered under the WCA and, therefore, the CFI has no
jurisdiction over the case. Philex argues that the work connected injuries are
compensable exclusively under Sections 5 and 46 of the WCA; and that the WCA
covers work-connected accidents even if the employer was negligent as the WCA
under Section 4-A imposes a 50% additional compensation in the event that the
employer is negligent. The heirs, however, contend that the CFI has jurisdiction, as
their complaint is not based on the WCA but on the Civil Code provisions on
damages arising out of negligence. The CFI dismissed the complaint for lack of
jurisdiction. The heirs questioned the dismissal before the Supreme Court.

Held: The Court, through its majority, defended itself by holding that the Court does
not legislate but merely applies and gives effect to the constitutional guarantees of
social justice then secured by Section 5 of Article II and Section 6 of Article XIV of
the 1935 Constitution, and later by Sections 6, 7, and 9 of Article II of the
Declaration of Principles and State Policies of the 1973 Constitution, as amended,
and as implemented by Articles 2176, 2177, 2178, 1173, 2201, 2216, 2231 and
2232 of the New Civil Code of 1950. Further, it reiterated its ruling in People vs.
Licera: that judicial decisions of the Supreme Court assume the same authority as
the statute itself, pursuant to Article 8 of the Civil Code of the Philippines which
decrees that judicial decisions applying or interpreting the laws or the Constitution
form part of this jurisdictions legal system. It argues that the application or
interpretation placed by the Court upon a law is part of the law as of the date of the
enactment of the said law since the Courts application or interpretation merely
establishes the contemporaneous legislative intent that the construed law purports
to carry into effect. Yet, the Court argues that the Court can legislate, pursuant to
Article 9 of the New Civil Code, which provides that No judge or court shall decline
to render judgment by reason of the silence, obscurity or insufficiency of the laws.
Thus, even the legislator himself recognizes that in certain instances, the court do
and must legislate to fill in the gaps in the law; because the mind of the legislator,
like all human beings, is finite and therefore cannot envisage all possible cases to
which the law may apply.

-----------------------------------------------------------------------------------------------------------------------------------------FACTS:
On June 28, 1967, some employees of Philex Mining Corporation died as a result of
the cave-in that buried them in the tunnels of the copper mine (Tuba,Benguet)
during underground operations. Allegedly, Philex was in violation of government
rules and regulations for negligently and deliberately failing to take the required
precautions for the protection of the lives of its men working underground. The
Petitioners (Floresca et al) are the heirs of the deceased employees of Philex Mining
Corporation. Petitioners moved to claim their benefits pursuant to the Workmens
Compensation Act before the Workmens Compensation Commission. They also
petitioned before the regular courts and sued Philex for additional damages. Philex
invoked that they can no longer be sued because the petitioners have already
claimed benefits under the WCA.
ISSUE: Whether or not Floresca et al can claim benefits and at the same time sue.
HELD:
Under the law, Floresca et al could only do either one. If they filed for benefits under
the WCA then they will be prohibited from proceeding with a civil case before the
regular courts. On the contrary, if they sued before the civil courts then they would
also be prohibited from claiming benefits under the WCA. The SC however ruled that

Floresca et al are excused from this deficiency due to ignorance of the fact. Had they
been aware of such then they may have not availed of such a remedy. The SC ruled
that the dismissal of the case in the lower court be reversed and case is remanded
for further proceedings. However, if in case the petitioners win in the lower court,
whatever award may be granted, the amount given to them under the WCA should
be deducted. The SC emphasized that if they would go strictly by the book in this
case then the purpose of the law may be defeated. (Refer to excerpt below)
WHEREFORE, THE TRIAL COURTS ORDER OF DISMISSAL IS HEREBY REVERSED
ANDSET ASIDE AND THE CASE IS REMANDED TO IT FOR FURTHER PROCEEDINGS.
SHOULD AGREATER AMOUNT OF DAMAGES BE DECREED IN FAVOR OF HEREIN
PETITIONERS, THEPAYMENTS ALREADY MADE TO THEM PURSUANT TO THE
WORKMENS COMPENSATION ACT SHALL BE DEDUCTED. NO COSTS.
Justice Gutierrez dissenting
No civil suit should prosper after claiming benefits under the WCA. If employers are
already liable to pay benefits under the WCA they should not be compelled to bear
the cost of damage suits or get insurance for that purpose. The exclusion provided
by the WCA can only be properly removed by the legislature NOT the SC.