G.R. No.

L-28742 April 30, 1982

VIRGILIO CAPATI, plaintiff-appellant,
vs.
DR. JESUS P. OCAMPO, defendant-appellee.
We set aside the order of the Court of First Instance of Pampanga in Civil Case No. 3188 which dismissed the plaintiff's complaint on ground of improper venue.
Plaintiff Virgilio Capati a resident of Bacolor, Pampanga, was the contractor of the Feati Bank for the construction of its building in Iriga, Camarines Sur. On May 23,
1967, plaintiff entered into a sub-contract with the defendant Dr. Jesus Ocampo, a resident of Naga City, whereby the latter, in consideration of the amount of
P2,200.00, undertook to construct the vault walls, exterior walls and columns of the said Feati building in accordance with the specifications indicated therein.
Defendant further bound himself to complete said construction on or before June 5, 1967 and, to emphasize this time frame for the completion of the construction job,
defendant affixed his signature below the following stipulation written in bold letters in the sub-contract: "TIME IS ESSENTIAL, TO BE FINISHED 5 JUNE' 67."
Claiming that defendant finished the construction in question only on June 20, 1967, plaintiff filed in the Court of First Instance of Pampanga an action for recovery of
consequential damages in the sum of P85,000.00 with interest, plus attorney's fees and costs. The complaint alleged inter alia that "due to the long unjustified delay
committed by defendant, in open violation of his express written agreement with plaintiff, the latter has suffered great irreparable loss and damage ... "
Defendant filed a motion to dismiss the complaint on the ground that venue of action was improperly laid. The motion was premised on the stipulation printed at the
back of the contract which reads:
14. That all actions arising out, or relating to this contract may be instituted in the Court of First Instance of the City of Naga.
Plaintiff filed an opposition to the motion, claiming that their agreement to hold the venue in the Court of First Instance of Naga City was merely optional to both
contracting parties. In support thereof, plaintiff cited the use of the word "may " in relation with the institution of any action arising out of the contract.
The lower court, in resolving the motion to dismiss, ruled that "there was no sense in providing the aforequoted stipulation, pursuant to Sec. 3 of Rule 4 of the
Revised Rules of Court, if after all, the parties are given the discretion or option of filing the action in their respective residences," and thereby ordered the dismissal
of the complaint.
Hence, this appeal.
The rule on venue of personal actions cognizable by the courts of first instance is found in Section 2 (b), Rule 4 of the Rules of Court, which provides that such
"actions may be commenced and tried where the defendant or any of the defendants resides or may be found, or where the plaintiff or any of the plaintiffs resides, at
the election of the plaintiff." The said section is qualified by the following provisions of Section 3 of the same rule:
By written agreement of the parties the venue of an action may be changed or transferred from one province to another.
Defendant stands firm on his contention that because of the aforequoted covenant contained in par. 14 of the contract, he cannot be sued in
any court except the Court of First Instance of Naga City. We are thus called upon to rule on the issue as to whether the stipulation of the
parties on venue is restrictive in the sense that any litigation arising from the contract can be filed only in the court of Naga City, or merely
permissive in that the parties may submit their disputes not only in Naga City but also in the court where the defendant or the plaintiff resides,
at the election of the plaintiff, as provided for by Section 2 (b) Rule 4 of the Rules of Court.
It is well settled that the word "may" is merely permissive and operates to confer discretion upon a party. Under ordinary circumstances, the
term "may be" connotes possibility; it does not connote certainty. "May" is an auxillary verb indicating liberty, opportunity, permission or
possibility. 1
In Nicolas vs. Reparations Commission 2, a case involving the interpretation of a stipulation as to venue along lines similar to the present one, it was held that the
agreement of the parties which provided that "all legal actions arising out of this contract ... may be brought in and submitted to the jurisdiction of the proper courts in
the City of Manila," is not mandatory.
We hold that the stipulation as to venue in the contract in question is simply permissive. By the said stipulation, the parties did not agree to file their suits solely and
exclusively with the Court of First Instance of Naga. They merely agreed to submit their disputes to the said court, without waiving their right to seek recourse in the
court specifically indicated in Section 2 (b), Rule 4 of the Rules of Court.

Since the complaint has been filed in the Court of First Instance of Pampanga, where the plaintiff resides, the venue of action is properly laid in accordance with
Section 2 (b), Rule 4 of the Rules of Court.
WHEREFORE, the order appealed from is hereby set aside. Let the records be returned to the court of origin for further proceedings. Costs against defendantappellee.
SO ORDERED.
G.R. No. L-51201 May 29, 1980
IN THE MATTER OF THE PETITION FOR CHANGE OF NAME OF MARIA ESTRELLA VERONICA PRIMITIVA DUTERTE, ESTRELLA S. ALFON, petitioner,
vs.
REPUBLIC OF THE PHILIPPINES, respondent.wph!1
This is a petition filed pursuant to Republic Act No. 5440 to review an Order of the Court of First Instance of Rizal, Branch XXIII, dated December 29, 1978, which
partially denied petitioner's prayer for a change of name. Only a question of law is involved and there is no controversy over the facts which are well-stated in the
questioned Order as follows: t.hqw
This is verified petition filed on April 28, 1978 by petitioner Maria Estrella Veronica Primitiva Duterte through her counsel, Atty. Rosauro Alvarez, praying that her
name be changed from Maria Estrella Veronica Primitiva Duterte to Estrella S. Alfon.
The notice setting the petition for hearing on December 14, 1978 at 8:30 o'clock in the morning was published in the Times Journal in its issues of July 28, August 5
and 11, 1978 and a copy thereof together with a copy of the petition was furnished the Office of the Solicitor General (Exhibits C, C-1, C-2 and C-3).
At the hearing of the petition on December 14, 1978, Atty. Rosauro Alvarez appeared for the petitioner and Fiscal Donato Sor. Suyat, Jr.
represented the office of the Solicitor General, Upon motion of counsel for the petitioner, without objection on the part of Fiscal Suyat, the
Deputy Clerk of Court was appointed commissioner to receive the evidence and to submit the same for resolution of the Court.
From the testimonial and document evidence presented, it appears that petitioner Maria Estrella Veronica Primitiva Duterte was born on May
15, 1952 at the U.S.T. Hospital (Exhibit A). She was registered at the local Civil Registrar's Office as Maria Estrella Veronica Primitiva Duterte
On June 15, 1952, she was baptized as Maria Estrella Veronica Primitiva Duterte at the St. Anthony de Padua Church Singalong, Manila
(Exhibit B). Her parents are Filomeno Duterte and Estrella Veronica Primitiva Duterte has been taken cared of by Mr. and Mrs. Hector Alfon.
Petitioner and her uncle, Hector Alfon, have been residing at 728 J.R. Yulo Street corner Ideal Street, Mandaluyong, Metro Manila for twentythree (23) years. When petitioner started schooling, she used the name Estrella S. Alfon. She attended her first grade up to fourth year high
school at Stella Maris College using the name Estrella S. Alfon (Exhibits E, E-1, E-2 and E-3). After graduating from high school she enrolled at
the Arellano University and finished Bachelor of Science in Nursing (Exhibit E-4). Her scholastic records from elementary to college show that
she was registered by the name of Estrella S. Alfon. Petitioner has exercised her right of suffrage under the same name (Exhibit D). She has
not committed any felony or misdemeanor (Exhibits G, G-1, G-2, G-3 and G-4).
Petitioner has advanced the following reasons for filing the petition:
1. She has been using the name Estrella Alfon since her childhood;
2. She has been enrolled in the grade school and in college using the same name;
3. She has continuously used the name Estrella S. Alfon since her infancy and all her friends and acquaintances know her by this name;
4. She has exercised her right of suffrage under the same name.
Section 5, Rule 103 of the Rules of Court provides:
Upon satisfactory proof in open court on the date fixed in the order that such order has been published as directed and that the allegations of
the petition are true, the court shall if proper and reasonable cause appears for changing the name of the petitioner adjudge that such name be
changed in accordance with the prayer of the petition.
The evidence submitted shows that the change of name from Maria Estrella Veronica Primitiva Duterte to Estrella Alfon is not proper and
reasonable with respect to the surname. The fact that petitioner has been using a different surname and has become known with such

surname does not constitute proper and reasonable cause to legally authorize and change her surname to Alfon. The birth certificate clearly
shows that the father of petitioner is Filomeno Duterte. Petitioner likewise admitted this fact in her testimony. To allow petitioner to change her
surname from Duterte to Alfon is equivalent to allowing her to use her mother's surname. Article 364 of the Civil Code provides:
Legitimate and legitimated children shall principally use the surname of the father.
If another purpose of the petitioner is to carry the surname of Alfon because her uncle who reared her since childhood has the surname "Alfon"
then the remedy is not a petition for change of name.
WHEREFORE, the petition insofar as the first name is granted but denied with respect to the surname. Petitioner is authorized to change her
name from Maria Estrella Veronica Primitiva Duterte to Estrella Alfon Duterte.
Let copy of this order be furnished the Local Civil Registrar of Pasig, Metro Manila pursuant to Section 3, Rule 103 of the Rules of Court.
The lower court should have fully granted the petition.
The only reason why the lower court denied the petitioner's prayer to change her surname is that as legitimate child of Filomeno Duterte and Estrella Alfon she
should principally use the surname of her father invoking Art. 364 of the Civil Code. But the word "principally" as used in the codal provision is not equivalent to
"exclusively" so that there is no legal obstacle if a legitimate or legitimated child should choose to use the surname of its mother to which it is equally entitled.
Moreover, this Court in Haw Liong vs. Republic, G.R. No. L-21194. April 29, 1966, 16 SCRA 677, 679, said: t.hqw
The following may be considered, among others, as proper or reasonable causes that may warrant the grant of a petitioner for change of name;
(1) when the name is ridiculous, tainted with dishonor, or is extremely difficult to write or pronounce; (2) when the request for change is a
consequence of a change of' status, such as when a natural child is acknowledged or legitimated; and (3) when the change is necessary to
avoid confusion Tolentino, Civil Code of the Philippines, 1953 ed., Vol. 1, p. 660).
In the case at bar, it has been shown that petitioner has, since childhood, borne the name Estrella S. Alfon although her birth records and baptismal certificate show
otherwise; she was enrolled in the schools from the grades up to college under the name Estrella S. Alfon; all her friends call her by this name; she finished her
course in Nursing in college and was graduated and given a diploma under this name; and she exercised the right of suffrage likewise under this name. There is
therefore ample justification to grant fully her petition which is not whimsical but on the contrary is based on a solid and reasonable ground, i.e. to avoid confusion.
WHEREFORE, the Order appealed from is hereby modified in that, the petitioner is allowed to change not only her first name but also her surname so as to be
known as ESTRELLA S. ALFON. No costs.
SO ORDERED.

G.R. Nos. L-69810-14 June 19, 1985

TEODULO RURA, petitioner,
vs.
THE HON. GERVACIO A. LEOPENA, Presiding Judge of the 2nd Municipal Circuit Trial Court of Tubigon-Clarin, Tubigon, Bohol and
PEOPLE OF THE PHILIPPINES, respondents.
This case involves the application of the Probation Law (P.D. No. 968, as amended), more specifically Section 9 thereof which disqualifies
from probation those persons:
(c) who have previously been convicted by final judgment of an offense punished by imprisonment of not less than one
month and one day and or a fine of not less than Two Hundred Pesos.
Petitioner Teodulo Rura was accused, tried and convicted of five (5) counts of estafa committed on different dates in the Municipal Circuit Trial
Court of Tubigon-Clarin, Tubigon, Bohol, denominated as Criminal Case Nos. 523, 524, 525, 526 and 527.
The five cases were jointly tried and a single decision was rendered on August 18, 1983. Rura was sentenced to a total prison term of
seventeen (17) months and twenty-five (25) days. In each criminal case the sentence was three (3) months and fifteen (15) days.
Rura appealed to the Regional Trial Court of Bohol but said court affirmed the decision of the lower court. When the case was remanded to
the court of origin for execution of judgment, Rura applied for probation. The application was opposed by a probation officer of Bohol on the
ground Chat Rura is disqualified for probation under Sec. 9 (c) of the Probation law quoted above. The court denied the application for
probation. A motion for reconsideration was likewise denied. Hence the instant petition.
The question which is raised is whether or not the petitioner is disqualified for probation.
In denying the application for probation, the respondent judge said:
Though the five estafa cases were jointly tried and decided by the court convicting the accused thereof, yet the dates of
commission are different. Upon conviction he was guilty of said offenses as of the dates of commission of the acts
complained of. (Rollo, p, 58.)
Upon the other hand, the petitioner argues:
We beg to disagree. There is no previous conviction by final judgment to speak of. The five (5) cases of Estafa were tried
jointly and there is only one decision rendered on the same dateAugust 18. 1983. It could not be presumed that

accused-petitioner had been convicted one after the other for the five cases of Estafa because the conviction in these
cases took place within the same day, August 18, 1983 by means of a Joint Decision, and not in a separate decision.
Previous conviction, we submit, presupposes that there is a prior sentence or that there was already a decision rendered
which convicted the accused. In this instant cases, however, there is only one decision rendered on the five (5) counts of
Estafa which was promulgated on the same date. In other words the effects of conviction does not retract to the date of the
commission of the offense as the trial court held. (Id., pp, 8-9.)
We hold for the petitioner. When he applied for probation he had no previous conviction by final judgment. When he applied for probation the
only conviction against him was the judgment which was the subject of his application. The statute relates "previous" to the date of conviction,
not to the date of the commission of the crime.
WHEREFORE, the petition is granted and the respondent judge is directed to give due course to the petitioner's application for probation. No
costs.
SO ORDERED.

G.R. No. L-64313 January 17, 1985

NATIONAL HOUSING CORPORATION, petitioner,
vs.
BENJAMIN JUCO AND THE NATIONAL LABOR RELATIONS COMMISSION, respondents.
Are employees of the National Housing Corporation (NHC) covered by the Labor Code or by laws and regulations governing the civil service?
The background facts of this case are stated in the respondent-appellee's brief as follows:
The records reveal that private respondent (Benjamin C. Juco) was a project engineer of the National Housing Corporation (NHC) from
November 16, 1970 to May 14, 1975. For having been implicated in a crime of theft and/or malversation of public funds involving 214 pieces of
scrap G.I. pipes owned by the corporation which was allegedly committed on March 5, 1975. Juco's services were terminated by (NHC)
effective as of the close of working hours on May 14, 1975. On March 25, 1977 he filed a complaint for illegal dismissal against petitioner
(NHC) with Regional Office No. 4, Department of Labor (now Ministry of Labor and Employment) docketed as R04-3-3309-77 (Annex A,
Petition). The said complaint was certified by Regional Branch No. IV of the NLRC for compulsory arbitration where it was docketed as Case
No. RB-IV-12038-77 and assigned to Labor Arbiter Ernilo V. Pealosa. The latter conducted the hearing. By agreement of the parties, the case
was submitted for resolution upon submission of their respective position papers. Private respondent (Juco) submitted his position paper on
July 15, 1977. He professed innocence of the criminal acts imputed against him contending "that he was dismissed based on purely fabricated
charges purposely to harass him because he stood as a witness in the theft case filed against certain high officials of the respondent's
establishment" (NHC) and prayed for 'his immediate reinstatement to his former position in the (NHC) without loss of seniority rights and the
consequent payment of his will back wages plus all the benefits appertaining thereto. On July 28, 1977, the NHC also filed its position paper
alleging that the Regional Office Branch IV, Manila, NLRC, "is without authority to entertain the case for lack of jurisdiction, considering that the
NHC is a government owned and controlled corporation; that even assuming that this case falls within the jurisdiction of this Office, respondent
firm (now petitioner) maintains that respondent (Juco), now private respondent, was separated from the service for valid and justified reasons,
i.e., for having sold company properties consisting of 214 pieces of scrap G.I. pipes at a junk shop in Alabang, Muntinlupa, Metro Manila, and
thereafter appropriating the proceeds thereof to his own benefit."
The pertinent portion of the decision of respondent National Labor Relations Commission (NLRC) reads:
The fact that in the early case of Fernandez v. Cedro (NLRC Case No. 201165-74, May 19, 1975) the Commission, (Second Division) ruled that
the respondent National Housing Corporation is a government-owned or controlled corporation does not preclude us from later taking a
contrary stand if by doing so the ends of justice could better be served.

For although adherence to precedents (stare decisis) is a sum formula for achieving uniformity of action and conducive to the smooth operation
of an office, Idolatrous reverence for precedents which have outlived their validity and usefulness retards progress and should therefore be
avoided. In fact, even courts do reverse themselves for reasons of justice and equity. This Commission as an Administrative body performing
quasi judicial function is no exception.
WHEREFORE, in the light of the foregoing, the decision appealed from is hereby, set aside. In view, however, of the fact that the Labor Arbiter
did not resolve the issue of illegal dismissal we have opted to remand this case to the Labor Arbiter a quo for resolution of the aforementioned
issue.
The NHC is a one hundred percent (100%) government-owned corporation organized in accordance with Executive Order No. 399, the Uniform Charter of
Government Corporations, dated January 5, 1951. Its shares of stock are owned by the Government Service Insurance System the Social Security System, the
Development Bank of the Philippines, the National Investment and Development Corporation, and the People's Homesite and Housing Corporation. Pursuant to
Letter of Instruction No. 118, the capital stock of NHC was increased from P100 million to P250 million with the five government institutions above mentioned
subscribing in equal proportion to the increased capital stock. The NHC has never had any private stockholders. The government has been the only stockholder from
its creation to the present.
There should no longer be any question at this time that employees of government-owned or controlled corporations are governed by the civil service law and civil
service rules and regulations.
Section 1, Article XII-B of the Constitution specifically provides:
The Civil Service embraces every branch, agency, subdivision, and instrumentality of the Government, including every government-owned or
controlled corporation. ...
The 1935 Constitution had a similar provision in its Section 1, Article XI I which stated:
A Civil Service embracing all branches and subdivisions of the Government shall be provided by law.
The inclusion of "government-owned or controlled corporations" within the embrace of the civil service shows a deliberate effort of the framers to plug an earlier
loophole which allowed government-owned or controlled corporations to avoid the full consequences of the an encompassing coverage of the civil service system.
The same explicit intent is shown by the addition of "agency" and "instrumentality" to branches and subdivisions of the Government. All offices and firms of the
government are covered.
The amendments introduced in 1973 are not Idle exercises or a meaningless gestures. They carry the strong message that t civil service coverage is broad and anembracing insofar as employment in the government in any of its governmental or corporate arms is concerned.
The constitutional provision has been implemented by statute. Presidential Decree No. 807 is unequivocal that personnel of government-owned or controlled
corporations belong to the civil service and are subject to civil service requirements.
It provides:
SEC. 56. Government-owned or Controlled Corporations Personnel. All permanent personnel of government-owned or controlled
corporations whose positions are now embraced in the civil service shall continue in the service until they have been given a chance to qualify
in an appropriate examination, but in the meantime, those who do not possess the appropriate civil service eligibility shag not be promoted until
they qualify in an appropriate civil service examination. Services of temporary personnel may be terminated any time.
The very Labor Code, P. D. No. 442 as amended, which the respondent NLRC wants to apply in its entirety to the private respondent provides:
ART. 277. Government employees. The terms and conditions of employment of all government employees, including employees of
government-owned and controlled corporations shall be governed by the Civil Service Law, rules and regulations. Their salaries shall be
standardized by the National Assembly as provided for in the New Constitution. However, there shall be reduction of existing wages, benefits
and other terms and conditions of employment being enjoyed by them at the time of the adoption of the Code.
Our decision in Alliance of Government Workers, et al v. Honorable Minister of Labor and Employment et all. (124 SCRA 1) gives the background of the amendment
which includes government-owned or controlled corporations in the embrace of the civil service.
We stated:

Records of the 1971 Constitutional Convention show that in the deliberation held relative to what is now Section 1(1), Article XII-B, supra, the
issue of the inclusion of government-owned or controlled corporations figured prominently.
The late delegate Roberto S. Oca, a recognized labor leader, vehemently objected to the inclusion of government-owned or controlled
corporations in the Civil Service. He argued that such inclusion would put asunder the right of workers in government corporations, recognized
in jurisprudence under the 1935 Constitution, to form and join labor unions for purposes of collective bargaining with their employers in the
same manner as in the private section (see: records of 1971 Constitutional Convention).
In contrast, other labor experts and delegates to the 1971 Constitutional Convention enlightened the members of the Committee on Labor on
the divergent situation of government workers under the 1935 Constitution, and called for its rectification. Thus, in a Position Paper dated
November 22, 197 1, submitted to the Committee on Labor, 1971 Constitutional Convention, then Acting Commissioner of Civil Service Epi Rey
Pangramuyen declared:
It is the stand, therefore, of this Commission that by reason of the nature of the public employer and the peculiar
character of the public service, it must necessary regard the right to strike given to unions in private industry as not
applying to public employees and civil service employees. It has been stated that the Government, in contrast to the
private employer, protects the interests of all people in the public service, and that accordingly, such conflicting interests
as are present in private labor relations could not exist in the relations between government and those whom they
employ.
Moreover, determination of employment conditions as well as supervision of the management of the public service is in
the hands of legislative bodies. It is further emphasized that government agencies in the performance of their duties have
a right to demand undivided allegiance from their workers and must always maintain a pronounced esprit de corps or firm
discipline among their staff members. It would be highly incompatible with these requirements of the public service, if
personnel took orders from union leaders or put solidarity with members of the working class above solidarity with the
Government. This would be inimical to the public interest.
Moreover, it is asserted that public employees by joining labor unions may be compelled to support objectives which are
political in nature and thus jeopardize the fundamental principle that the governmental machinery must be impartial and
non-political in the sense of party politics. (See: Records of 1971 Constitutional Convention).
Similar, Delegate Leandro P. Garcia, expressing for the inclusion of government-owned or controlled corporations in the Civil Service, argued:
It is meretricious to contend that because Government-owned or controlled corporations yield profits, their employees are
entitled to better wages and fringe benefits than employees of Government other than Government-owned and controlled
corporations which are not making profits. There is no gainsaying the fact that the capital they use is the people's money.
(see: Records of the 1971 Constitutional Convention).
Summarizing the deliberations of the 1971 Constitutional Convention on the inclusion of Government-owned or controlled corporation Dean
Joaquin G. Bernas, SJ., of the Ateneo de Manila University Professional School of Law, stated that government-owned corporations came
under attack as g cows of a privileged few enjoying salaries far higher than their counterparts in the various branches of government, while the
capital of these corporations belongs to the Government and government money is pumped into them whenever on the brink of disaster, and
they should therefore come under the strict surveillance of the Civil Service System. (Bernas, The 1973 Philippine Constitution, Notes and
Cases, 1974 ed., p. 524).
Applying the pertinent provisions of the Constitution, the Labor Code as amended, and the Civil Service Decree as amended and the precedent in the Alliance of
Government Workers decision, it is clear that the petitioner National Housing Corporation comes under the jurisdiction of the Civil Service Commission, not the
Ministry of Labor and Employment.
This becomes more apparent if we consider the fact that the NHC performs governmental functions and not proprietary ones.
The NHC was organized for the governmental objectives stated in its amended articles of incorporation as follows:
SECOND: That the purpose for which the corporation is organized is to assist and carry out the coordinated massive housing program of the
government, principally but not limited to low-cost housing with the integration cooperation and assistance of all governmental agencies
concerned, through the carrying on of any or all the following activities:

l) The acquisition, development or reclamation of lands for the purpose of construction and building therein preferably low-cost housing so as to
provide decent and durable dwelling for the greatest number of inhabitants in the country;
2) The promotion and development of physical social and economic community growth through the establishment of general physical plans for
urban, suburban and metropolitan areas to be characterized by efficient land use patterns;
3) The coordination and implementation of all projects of the government for the establishment of nationwide and massive low cost housing;
4) The undertaking and conducting of research and technical studies of the development and promotion of construction of houses and buildings
of sound standards of design liability, durability, safety, comfort and size for improvement of the architectural and engineering designs and utility
of houses and buildings with the utilization of new and/or native materials economics in material and construction, distribution, assembly and
construction and of applying advanced housing and building technology.
5) Construction and installation in these projects of low-cost housing privately or cooperatively owned water and sewerage system or waste
disposal facilities, and the formulations of a unified or officially coordinated urban transportation system as a part of a comprehensive
development plan in these areas.
The petitioner points out that it was established as an instrumentality of the government to accomplish governmental policies and objectives and extend essential
services to the people. It would be incongruous if employees discharging essentially governmental functions are not covered by the same law and rules which govern
those performing other governmental functions. If government corporations discharging proprietary functions now belong to the civil service with more reason should
those performing governmental functions be governed by civil service law.
The respondent NLRC cites a 1976 opinion of the Secretary of Justice which holds that the phrase "government-owned or controlled corporations" in Section 1,
Article XII-B of the Constitution contemplates only those government-owned or controlled corporations created by special law. The opinion states that since the
Constitution provides for the organization or regulation of private corporations only by "general law", expressly excluding government-owned or controlled
corporations, it follows that whenever the Constitution mentions government-owned or controlled corporations, it must refer to those created by special law. P.D. No.
868 which repeals all charters, laws, decrees, rules, and provisions exempting any branch, agency, subdivision, or instrumentality of the government, including
government- owned or controlled corporations from the civil service law and rules is also cited to show that corporations not governed by special charters or laws are
not to be brought within civil service coverage. The discussions in the Constitutional Convention are also mentioned. It appears that at the time the Convention
discussed government-owned or controlled corporations, all such corporations were organized only under special laws or charters.
The fact that "private" corporations owned or controlled by the government may be created by special charter does not mean that such corporations not created by
special law are not covered by the civil service. Nor does the decree repealing all charters and special laws granting exemption from the civil service law imply that
government corporations not created by special law are exempt from civil service coverage. These charters and statutes are the only laws granting such exemption
and, therefore, they are the only ones which could be repealed. There was no similar exempting provision in the general law which called for repeal. And finally, the
fact that the Constitutional Convention discussed only corporations created by special law or charter cannot be an argument to exclude petitioner NHC from civil
service coverage. As stated in the cited speech delivered during the convention sessions of March 9, 1972, all government corporations then in existence were
organized under special laws or charters. The convention delegates could not possibly discuss government-owned or controlled corporations which were still nonexistent or about whose existence they were unaware.
Section I of Article XII-B, Constitution uses the word "every" to modify the phrase "government-owned or controlled corporation."
"Every" means each one of a group, without exception It means all possible and all taken one by one. Of course, our decision in this case refers to a
corporation created as a government-owned or controlled entity. It does not cover cases involving private firms taken over by the government in foreclosure or similar
proceedings. We reserve judgment on these latter cases when the appropriate controversy is brought to this Court.
The infirmity of the respondents' position lies in its permitting a circumvention or emasculation of Section 1, Article XII-B of the Constitution It would be possible for a
regular ministry of government to create a host of subsidiary corporations under the Corporation Code funded by a willing legislature. A government-owned
corporation could create several subsidiary corporations. These subsidiary corporations would enjoy the best of two worlds. Their officials and employees would be
privileged individuals, free from the strict accountability required by the Civil Service Decree and the regulations of the Commission on Audit. Their incomes would not
be subject to the competitive restraints of the open market nor to the terms and conditions of civil service employment. Conceivably,all government-owned or
controlled corporations could be created, no longer by special charters, but through incorporation under the general law. The constitutional amendment including
such corporations in the embrace of the civil service would cease to have application. Certainly, such a situation cannot be allowed to exist.
WHEREFORE, the petition is hereby GRANTED. The questioned decision of the respondent National Labor Relations Commission is SET ASIDE. The decision of
the Labor Arbiter dismissing the case before it for lack of jurisdiction is REINSTATED.
SO ORDERED.

G.R. No. L-28396

December 29, 1967

AGRIPINO DEMAFILES, petitioner,

vs.
COMMISSION ON ELECTIONS, PROVINCIAL BOARD OF ANTIQUE, in its capacity as Board of Canvassers for the newly created Municipality of Sebaste of
the Province of Antique, and BENITO B. GALIDO,respondents.
The new municipality of Sebaste1 in Antique province held its first election of officers in the general elections of November 14, 1967, with the petitioner Agripino
Demafiles and the respondent Benito B. Galido vying for the mayoralty.
On November 21 the respondent Galido asked the provincial board, acting as municipal board of canvassers pursuant to section 167 (b) of the Revised Election
Code, to disregard, as "obviously manufactured", the election return from precinct 7 on the ground that the said return shows that 195 voters were registered (of
whom 188 voted), when, according to a certificate of the municipal election registrar only 182 had registered in that precinct as of October 30, 1997. At its session on
the following day, November 22, the board, over the objection of one member, voted to reject the return from precinct 7 and then proceeded with the canvass of the

returns from the other precints. The resulting tally gave Galido 888 votes as against 844 for Demafiles. Accordingly, Galido was proclaimed mayor-elect of the
municipality of Sebaste.
On November 24 Demafiles wired the Commission on Elections, protesting the board's action of rejection of the return from precinct 7 and the subsequent
proclamation of Galido, and challenging the right of two board members, Julito Moscoso and Quirico Escao, to sit, considering that they were reelectionists. Acting
on the protest, the COMELEC resolved on November 28, 1967:
To annul the canvass and proclamation of the local officials of the new municipality of Sebaste, Antique, which was made by the Provincial Board of
Antique;
To constitute the Board of Canvassers by appointing the substitutes pursuant to the provisions of Sec. 167 (a) of the Revised Election Code, which shall
canvass anew the results of the election for local offices of Sebaste, Antique, in accordance with the Instructions to Boards of Canvassers contained in the
Resolution of the Commission No. RR-544, particularly No. 5-K thereof, and thereafter to proclaim the winning candidates for local offices of said
municipality.
In turn, Galido asked for a reconsideration on the ground that the two members of the provincial board who were reelectionists were disqualified from sitting only
when the board was acting as a provincial, but not as a municipal, board of canvassers and that the COMELEC resolution annulling the canvass and proclamation of
officials was issued without giving him an opportunity to be heard. In its resolution of December 4, 1967 the respondent Commission reconsidered its previous order
and held "that the canvass and proclamation already made of the local officials . . . stands".
Failing to secure a reconsideration of this latter resolution, Demafiles filed the present petition for mandamus andcertiorari to set aside the aforesaid resolution of the
COMELEC, to annull the proclamation of Galido, and to secure an order directing the COMELEC to appoint substitute members of the provincial board and to order a
new canvass of the returns, including that from precinct 7.
The three principal issues tendered for resolution in this case are: (1) whether the respondent board of canvassers was within the periphery of its power in rejecting
the return from precinct 7 on the strength of an election registrar's certificate that a less number of voters than that shown in the return had registered; (2) whether the
provincial board members, who were candidates for reelection, were disqualified from sitting in the board in its capacity as a municipal board of canvassers; and (3)
whether the Commission on Elections can order the board of canvassers to count a return from a given precinct.
These issues, together with the arguments of the parties, will be discussed seriatim, but we must first proceed to dispose of the preliminary question raised by the
respondent Galido, namely, that this case is moot because he had taken his oath and assumed office on November 22, pursuant to Republic Act 4870.
Obviously, the frame of reference is section 2 of the statute which reads:
The first mayor, vice-mayor and councilors of the Municipality of Sebaste shall be elected in the next general elections for local officials and shall have
qualified [sic].
In our view, the last portion of the provision "and shall have qualified" is devoid of any meaning, is unmitigated jargon in or out of context, and does not warrant
the respondent's reading that the term of office of the first municipal officials of Sebaste begins immediately after their proclamation. It is quite probable that that is
what the legislature meant. But here is a clear case of a failure to express a meaning, and a becoming sense of judicial modesty forbids the courts from assuming
and, consequently, from supplying.itc-alf "If there is no meaning in it," said the King in Alice in Wonderland, "that saves a world of trouble, you know, as we needn't try
to find any." Frankfurter, who himself was fond of quoting this passage, admonishes that "a judge must not rewrite a statute, neither to enlarge nor to contract it.
Whatever temptations the statesmanship of policy-making might wisely suggest, construction must eschew interpolation and evisceration." 2 Accordingly, we have to
go by the general rule that the term of office of municipal officials shall begin on the first day of January following their election, 3 and so the assumption of office by
the respondent Galido in no way affected the basic issues in this case, which we need not reach and resolve.
First, a canvassing board performs a purely ministerial function that of compiling and adding the results they appear in the returns, transmitted to it. This is the
teaching in Nacionalista Party v. Commission on Elections:4 "the canvassers are to be satisfied of the, genuineness of the returns namely, that the papers
presented to them are not forged and spurious, that they are returns, and that they are signed by the proper officers. When so satisfied, . . . they may not reject any
returns because of informalities in them or because of illegal and fraudulent practices in the elections."5 Thus, they cannot pass upon the validity of an election return,
much less exclude it from the canvass on the ground that the votes cast in the precinct from whence it came are illegal. 6
But the exclusion of the return in this case is sought to be justified on the ground that it is "obviously manufactured" because, contrary to the statement therein that
there were 195 registered voters, of whom 188 voted, the certificate of the local election registrar states that only 182 voters had registered on October 30,
1967. Lagumbay v. Commission on Elections7 is cited in support of this view. In Lagumbay the returns were palpably false as it was indeed statistically improbable
that "all the eight candidates of one party garnered all the votes, each of themreceiving exactly the same number, whereas all the eight candidates of the other party
got precisely nothing.itc-alf" In other words, the aid of evidence aliunde was not needed, as "the fraud [being] so palpable from the return itself (res ipsa loquitur
the thing speaks for itself), there is no reason to accept it and give it prima facie value.

On the other hand, the return in this case shows nothing on its face from which the canvassers might conclude that it does not speak the truth. It is only when it is
compared in the certificate of the election registrar that a discrepancy appears as to the number of registered voters. The return therefore is by no means "obviously
manufactured" so as to justify its exclusion.
This is not to belittle the respondent's claim that more people than registered voters were allowed to vote in precinct 7. Perhaps that is true, although the petitioner
claims that after October 30, 1967 eight more voters were allowed to register (making a total of 190, voters), and on the day of the election 5 voters erroneously
assigned to precinct 6 were allowed to vote in precinct 7 because that was where they were really assigned. The point is simply that this question should be threshed
out in an election contest.itc-alf Lagumbay itself explicitly says
Of course we agree that fraud in the holding of the election should be handled and finally settled by the corresponding courts or electoral tribunals.
That is the general rule, where testimonial or documentary evidence is necessary. . . .
Consequently, the canvass made and proclamation had should be annulled.8
Second, the canvass and proclamation should be annulled because two of the four members of the board of canvassers were disqualified from sitting in it, they being
candidates for reelection. As this Court held in Salcedo v. Commission on Elections:9
And added reason for the nullification of the actuation of the Provincial Board of Oriental Mindoro is the fact that its members were disqualified to act it
appearing that they were all candidates for reelection. This is clear from Section 28 of the Revised Election Code which provides that any member of the
provincial board who is a candidate for an elective office shall be incompetent to act in said board in the performance of its duties in connection with the
election.
Branding the above statement as obiter dictum, the respondent Galido argues that reelectionist members of the provincial board are disqualified under section 28
only when the board acts as a provincial board of canvassers, to prevent them fro canvassing their own votes, and not when they sit as a municipal board of
canvassers.
With respect to the canvass and proclamation made the provincial board of Oriental Mindoro, three issues raised inSalcedo, in resolving which this Court held (1) that
a provincial board cannot act as a municipal board of canvassers where a municipal council has been formed; (2) that provincial board members who are candidates
for reelection are disqualified to sit in the board and (3) that a board of canvassers which excludes from canvass the return from a precinct acts "in contravention of
law."
At any rate the language of section 28 is all-inclusive Thus:
Any member of a provincial board or of a municipal council who is a candidate for office in any election, shall be incompetent to act on said body in the
performance of the duties the of relative to said election . . . .
The statute draws no distinction between the provincial board acting as a provincial board of canvassers and the same board acting as a municipal canvassing body
new municipalities, and so we make none, in line with the maxim ubi lex non distinguit, nec nos distinguere debemos.
Third, it is now settled doctrine that the COMELEC has the power to annul an illegal canvass and an illegal proclamation as when they are based on incomplete
returns, and order a new canvass to be made by counting the returns wrongfully excluded.10 If it has power to direct that certain copies of election returns be used in
preference to other copies of the same returns,11 there is no reason why it cannot direct canvassing bodies to count all turns which are otherwise regular.itcalf Indeed, it is its duty to do so, failing which it may be compelled by mandamus. As earlier pointed out, it is the ministerial function a board of canvassers to count
the results as they appeal in the returns which on their face do not reveal any irregularities or falsities.
ACCORDINGLY, the resolutions dated December 4 and 8, 1967 of the Commission on Elections are set aside, and the canvass of returns made and the subsequent
proclamation of the respondent Benito B. Galido are annulled. The respondent Commission on Elections is hereby directed. (1) to appoint new members of the board
of canvassers in substitution of Julito Moscoso and Quirico Escao, and (2) immediately thereafter to order the board of canvassers as reconstituted to convene,
canvass all votes including those appearing in the return from precinct 7, and, in accordance with the results of such canvass, proclaim the winning candidates. Costs
against the private respondent Galido.
Concepcion, C.J., Reyes, J.B.L., Makalintal, Bengzon, J.P., Sanchez and Angeles, JJ., concur.
Dizon, Zaldivar and Fernando, JJ., took no part.
G.R. No. L-37684 September 10, 1975

ARABAY, INC., petitioner,

vs.
THE COURT OF FIRST INSTANCE OF ZAMBOANGA DEL NORTE, BRANCH II, THE CITY OF DIPOLOG and EMILIO L. TAGAILO, in his capacity as City
Treasurer of the City of Dipolog, et al., respondents.
Before us is a petition for review of the decision of the Court of First Instance of Zamboanga del Norte, Branch II, dismissing the complaint of the herein petitioner
Arabay, Inc., for annulment of a tax ordinance of the Municipal Council of Dipolog, Zamboanga del Norte, and for refund of the taxes it had paid thereunder. On
December 17, 1965 the Municipal Council of Dipolog enacted Ordinance No. 19 amending Section I of Ordinance No. 53 series of 1964. As thus amended the said
Section I reads as follows:
Section 1. There shall be charged for the selling and distribution of refined and manufactured mineral oils, motor and diesel fuels, and
petroleum based on the monthly allocation actually delivered and distributed and intended for sale, in any manner whatsoever, by the Company
or supplier to any person, firm, entity, or corporation, whether as dealer of such refined and manufactured mineral oils, motor and diesel fuels,
and petroleum or as operator of any station thereof, the following tax payable monthly:
Gasoline P0.01 per liter
Lubricating oils P0.01 per liter
Diesel Fuel oils centavo per liter
Petroleum or P0.05 per gallon can
kerosene or
P0.02 per half gallon tin
Provided, however, that retail seller of not more than 5 gallon cans or its equivalent shall be exempted from the provisions of this ordinance.
Section 2. This Ordinance shall take effect on January 1, 1966.
On June 21, 1969 Republic Act No. 5520 was approved. It provided for the creation of the City of Dipolog from the then of the Municipality of Dipolog, to take effect
on January 1, 1970.
On July 28, 1971 the Arabay, Inc., a distributor of gas, oil and other petroleum products, filed with the Court of First Instance of Zamboanga del Norte a complaint
against the City of Dipolog contesting the validity of the above-mentioned Section 1 of Ordinance No. 53 on the ground that the same imposed a sales tax which is
beyond the power of a municipality to levy under Section 2 of Republic Act No. 2264, otherwise known as the Local Autonomy Act of 1959. Said Section 2 provides:
SEC. 2 Taxation Any provision of law to the contrary notwithstanding, all chartered cities, municipalities and municipal districts shall have
authority to impose municipal license taxes or fees upon persons engaged in any occupation or business, or exercising privileges in chartered
cities, municipalities or municipal districts by requiring them to secure licenses at rates fixed by the municipal board or city council of the city,
the municipal council of the municipality, or the municipal district council of the municipal district; to collect fees and charges for service
rendered by the city, municipality or municipal district; to regulate and impose reasonable fees for services rendered in connection with any
business, profession or occupation being conducted within the city, municipality or municipal district and otherwise to levy for public purposes,
just and uniform taxes, licenses or fees: Provided, That municipalities and municipal districts shall, in no case, impose any percentage tax on
sales or other taxes in any form based thereon nor impose taxes on articles subject to specific tax, except gasoline, under the provisions of the
National Internal Revenue: Provided, however, That no city, municipality or municipal district may levy or impose any of the following: ...
(emphasis supplied)
On August 30, 1972 the Arabay, Inc. filed a supplemental complaint which prayed, among others, for a refund of the taxes it had paid under the ordinance in
question.
On October 30, 1972 the parties entered into a stipulation of facts which, inter alia, states:
2. That plaintiff, pursuant to the above ordinance, paid sales taxes for the sale of Diesel fuel oils, lubricating oils, petroleum, kerosene and other
related petroleum products, to the defendant City of Dipolog, from December, 1969 to July, 1972 in the total amount of FIVE THOUSAND
FOUR HUNDRED PESOS (P5,400.00). A schedule of the payments made by plaintiff is hereto attached as Annex "A" and is made an integral
part hereof. However, the payments made from April, 1972 to July, 1972, in the total amount of P69.80 have been refunded by defendant City
of Dipolog to plaintiff.
WHEREFORE, on the basis of the foregoing stipulation of facts and of the Memorandum of Arguments to be submitted by the parties, the latter,
through, their respective counsels, hereby submit the case for the determination of this Honor.

On January 16, 1973 the court a quo rendered judgment upholding the validity of the questioned provision of Ordinance No. 53, as amended, essentially on the
grounds that the Arabay, Inc. failed to present evidence that the tax provision in question imposed a sales tax, and the tax prescribed therein was, moreover, not a
specific tax on the products themselves but on the privilege of selling them.
The basic issues in the case at bar are: (1) whether or not the questioned tax provision imposes a sales tax; and (2) if it imposes a sales tax, whether the Arabay, Inc.
is entitled to a tax refund, considering that Dipolog is now a city.
1. It is settled rule in this jurisdiction that for purposes of Section 2 of the Local Autonomy Act, supra, a municipal tax ordinance which prescribes a set ratio between
the amount of the tax and the volume of sales of the taxpayer imposes a sales tax and is null and void for being beyond the power of a municipality to enact. 1
In our view, the questioned section of Ordinance No. 53 of the Municipal Council of Dipolog levies a sales tax, not only because the character of the ordinance as a
sales tax ordinance was admitted by the parties below, but as well because the phraseology of the said provision reveals in clear terms the intention to impose a tax
on the sale of oil, gasoline and other petroleum products. Thus, the ordinance provides: "There shall be charged for the selling and distribution of refined and
manufactured oils ... based on the monthly allocation actually delivered and distributed and intended for sale ... by the Company or supplier to any person ... whether
as dealer ... or as operator of any station ... the following tax payable monthly: ..." It is quite evident from these terms that the amount of the tax that may be collected
is directly dependent upon or bears a direct relationship to the volume of sales which the owner or supplier of the itemized products generates every month. The
ordinance in question therefore exacts a tax based on sales; it follows that the Municipality of Dipolog was not authorized to enact such an ordinance under the local
Autonomy Act.
2. The obligation of the City of Dipolog to refund the sum collected under the void provisions of an ordinance enacted while it was still a municipality, is not open to
doubt. In San Miguel Corporation vs. The Municipal Council of Mandaue, Cebu, supra, the Court ordered, the return to the taxpayer of the sums paid under an
ordinance enacted under circumstances similar to the case at bar, and rejected the argument that the municipality of Mandaue had in the meantime been converted
into a city. The Court said:
Respondent however claim that with the conversion of Mandaue into a city pursuant to Republic Act No. 5519, which was approved on June
21, 1969, the issue has already become moot, since the prohibition contained in section 2 of Republic Act 2264 applies only to municipalities
and not to chartered cities. The same contention has been rejected in City of Naga v. Court of Appeals, andLaoag Producers' Cooperative
Marketing Association, Inc. vs. Municipality of Laoag, where We ruled that the legality of an ordinance depends upon the power of the
municipality at the time of the enactment of the challenged ordinance. Since the municipality of Mandaue had no authority to enact the said
ordinance, the subsequent approval of Republic Act No. 5519 which became effective on June 21, 1969, did not remove the original infirmity of
the ordinance. Indeed there is no provision in the aforecited statute which invests a curative effect upon the ordinances of the municipality
which when enacted were beyond its statutory authority.
The right of the Arabay, Inc. to a refund of the local sales taxes it had paid under the questioned ordinance may not, however, include those levied on its gasoline
sales. The relevant proviso of Section 2 of the Local Autonomy Act states:
... Provided, That municipalities and municipal districts shall, in no case, impose any percentage tax on sales or other taxes on articles subject
to specific tax, except gasoline, under the provisions of the National Internal Revenue Code:
xxx xxx xxx (Emphasis supplied)
Under the foregoing proviso of Section 2 of R.A. 2264, two courses of action in the exercise of their taxing powers are denied to municipalities and municipal districts,
to wit, (1) to levy any sales tax in whatever form; and (2) to levy any tax on articles subject to specific tax under the National Internal Revenue Code. It is not difficult
to see that these two prohibitions overlap in the sense that while the first clause of the said proviso forbids the levying of sales taxes of whatever form or guise, the
second clause of the same proviso forbids the levying of "taxes" without any distinction as to the kind of tax, i.e.' whether percentage tax, sales tax, specific tax or
license tax, although this latter prohibition applies only to a limited class of articles, viz., those subject to the specific tax under the Tax Code.
Such an overlap would probably carry or connote no legal significance but for the exclusion of gasoline from the prohibition contained in the second clause of the
mentioned proviso. For, with the exemption of gasoline from the coverage of the same, it becomes relevant to determine the effect which such exclusion has on the
previous prohibition against the levying of the sales tax.
In our opinion, a reasonable and practical interpretation of the terms of the proviso in question results in the conclusion that Congress, in excluding gasoline from the
general disability imposed on municipalities and municipal districts to exact any kind of taxes on articles subject to specified tax under the Tax Code, deliberately and
intentionally meant to put it within the power of such local governments to impose whatever type or form of taxes the latter may deem proper to levy on gasoline
including a sales tax or one in that form. There is after all no clearly demonstrable and convincing reason why the law would allow municipal imposition of taxes on
gasoline and yet withhold such power if the imposition is in the form of a sales tax, when it was a known fact at the time of the enactment of the Local Autonomy Act
in 1959 and this still is true to this day that gasoline is of no profitable use to the companies which own it unless turned over to the consuming public which,
perforce, must pay for the right to obtain that commodity.

ACCORDINGLY, the judgment a quo is set aside. The City of Dipolog is hereby ordered to refund to the Arabay, Inc. the taxes the latter has paid under Section 1 of
Ordinance No. 53, series of 1964, as amended, deducting therefrom the amount representing the taxes paid by the Arabay, Inc. on its gasoline sales. No costs.
Teehankee, Makasiar, Muoz Palma and Martin, JJ., concur.