8/12/2019 Cases 6.17

1/83

G.R. No. 1051 May 19, 1903

THE UNITED STATES,complainant-appellee,vs.FRED L. DORR, ET AL.,defendants-appellants.

F. G. Waite for appellants.Solicitor-General Araneta for appellee.

LADD, J.:

The defendants have been convicted upon a complaint charging them with the offense ofwriting, publishing, and circulating a scurrilous libel against the Government of the United Statesand the Insular Government of the Philippine Islands. The complaint is based upon section 8 of

Act No. 292 of the Commission, which is as follows:

Every person who shall utter seditious words or speeches, write, publish, or circulatescurrilous libels against the Government of the United States or the Insular Government ofthe Philippine Islands, or which tend to disturb or obstruct any lawful officer in executing hisoffice, or which tend to instigate others to cabal or meet together for unlawful purposes, orwhich suggest or incite rebellious conspiracies or riots, or which tend to stir up the peopleagainst the lawful authorities, or to disturb the peace of the community, the safety and orderof the Government, or who shall knowingly conceal such evil practices, shall be punished bya fine not exceeding two thousand dollars or by imprisonment not exceeding two years, orboth, in the discretion of the court.

The alleged libel was published as an editorial in the issue of the "Manila Freedom" of April 6,1902, under the caption of "A few hard facts."

The Attorney-General in his brief indicates the following passages of the article as those uponwhich he relies to sustain the conviction:

Sidney Adamson, in a late letter in "Leslie's Weekly," has the following to say of the action ofthe Civil Commission in appointing rascally natives to important Government positions:

"It is a strong thing to say, but nevertheless true, that the Civil Commission, throughits ex-insurgent office holders, and by its continual disregard for the records ofnatives obtained during the military rule of the Islands, has, in its distribution ofoffices, constituted a protectorate over a set of men who should be in jail or deported.. . . [Reference is then made to the appointment of one Tecson as justice of the

peace.] This is the kind of foolish work that the Commission is doing all over theIslands, reinstating insurgents and rogues and turning down the men who haveduring the struggle, at the risk of their lives, aided the Americans."

xxx xxx xxx

There is no doubt but that the Filipino office holders of the Islands are in a good manyinstances rascals.

8/12/2019 Cases 6.17

2/83

xxx xxx xxx

The commission has exalted to the highest positions in the Islands Filipinos who are allegedto be notoriously corrupt and rascally, and men of no personal character.

xxx xxx xxx

Editor Valdez, of "Miau," made serious charges against two of the native Commissioners charges against Trinidad H. Pardo de Tavera, which, if true, would brand the man as a cowardand a rascal, and with what result? . . . [Reference is then made to the prosecution andconviction of Valdez for libel "under a law which specifies that the greater the truth the greaterthe libel."] Is it the desire of the people of the United States that the natives against whom thesecharges have been made (which, if true, absolutely vilify their personal characters) be permittedto retain their seats on the Civil Commission, the executive body of the Philippine Government,without an investigation?

xxx xxx xxx

It is a notorious fact that many branches of the Government organized by the CivilCommission are rotten and corrupt. The fiscal system, upon which life, liberty, and justicedepends, is admitted by the Attorney-General himself to be most unsatisfactory. It is a factthat the Philippine judiciary is far from being what it should. Neither fiscals nor judges can bepersuaded to convict insurgents when they wish to protect them.

xxx xxx xxx

Now we hear all sorts of reports as to rottenness existing in the province [of Tayabas], andespecially the northern end of it; it is said that it is impossible to secure the conviction oflawbreakers and outlaws by the native justices, or a prosecution by the native fiscals.

xxx xxx xxx

The long and short of it is that Americans will not stand for an arbitrary government,especially when evidences of carpetbagging and rumors of graft are too thick to be pleasant.

We do not understand that it is claimed that the defendants succeeded in establishing at the trialthe truth of any of the foregoing statements. The only question which we have considered iswhether their publication constitutes an offense under section 8 of Act No. 292, above cited.

Several allied offenses or modes of committing the same offense are defined in that section, viz:(1) The uttering of seditious words or speeches; (2) the writing, publishing, or circulating ofscurrilous libels against the Government of the United States or the Insular Government of thePhilippine Islands; (3) the writing, publishing, or circulating of libels which tend to disturb orobstruct any lawful officer in executing his office; (4) or which tend to instigate others to cabal ormeet together for unlawful purposes; (5) or which suggest or incite rebellious conspiracies orriots; (6) or which tend to stir up the people against the lawful authorities or to disturb the peaceof the community, the safety and order of the Government; (7) knowingly concealing such evilpractices.

8/12/2019 Cases 6.17

3/83

The complaint appears to be framed upon the theory that a writing, in order to be punishable asa libel under this section, must be of a scurrilous nature and directed against the Government ofthe United States or the Insular Government of the Philippine Islands, and must, in addition,tend to some one of the results enumerated in the section. The article in question is described inthe complaint as "a scurrilous libel against the Government of the United States and the InsularGovernment of the Philippine Islands, which tends to obstruct the lawful officers of the United

States and the Insular Government of the Philippine Islands in the execution of their offices, andwhich tends to instigate others to cabal and meet together for unlawful purposes, and whichsuggests and incites rebellious conspiracies, and which tends to stir up the people against thelawful authorities, and which disturbs the safety and order of the Government of the UnitedStates and the Insular Government of the Philippine Islands." But it is "a well-settled rule inconsidering indictments that where an offense may be committed in any of several differentmodes, and the offense, in any particular instance, is alleged to have been committed in two ormore modes specified, it is sufficient to prove the offense committed in any one of them,provided that it be such as to constitute the substantive offense" (Com. vs.Kneeland, 20 Pick.,Mass., 206, 215), and the defendants may, therefore, be convicted if any one of the substantivecharges into which the complaint may be separated has been made out.

We are all, however, agreed upon the proposition that the article in question has no appreciabletendency to "disturb or obstruct any lawful officer in executing his office," or to "instigate" anyperson or class of persons "to cabal or meet together for unlawful purposes," or to "suggest orincite rebellious conspiracies or riots," or to "stir up the people against the lawful authorities or todisturb the peace of the community, the safety and order of the Government." All these varioustendencies, which are described in section 8 of Act No. 292, each one of which is made anelement of a certain form of libel, may be characterized in general terms as seditioustendencies. This is recognized in the description of the offenses punished by this section, whichis found in the title of the act, where they are defined as the crimes of the "seditious utterances,whether written or spoken."

Excluding from consideration the offense of publishing "scurrilous libels against the Government

of the United States or the Insular Government of the Philippine Islands," which mayconceivably stand on a somewhat different footing, the offenses punished by this section allconsist in inciting, orally or in writing, to acts of disloyalty or disobedience to the lawfullyconstituted authorities in these Islands. And while the article in question, which is, in the main, avirulent attack against the policy of the Civil Commission in appointing natives to office, mayhave had the effect of exciting among certain classes dissatisfaction with the Commission andits measures, we are unable to discover anything in it which can be regarded as having atendency to produce anything like what may be called disaffection, or, in other words, a state offeeling incompatible with a disposition to remain loyal to the Government and obedient to thelaws. There can be no conviction, therefore, for any of the offenses described in the section onwhich the complaint is based, unless it is for the offense of publishing a scurrilous libel againstthe Government of the of the United States or the Insular Government of the Philippine Islands.

Can the article be regarded as embraced within the description of "scurrilous libels against theGovernment of the United States or the Insular Government of the Philippine Islands?" In thedetermination of this question we have encountered great difficulty, by reason of the almostentire lack of American precedents which might serve as a guide in the construction of the law.There are, indeed, numerous English decisions, most of them of the eighteenth century, on thesubject of libelous attacks upon the "Government, the constitution, or the law generally," attacksupon the Houses of Parliament, the Cabinet, the Established Church, and other governmental

8/12/2019 Cases 6.17

4/83

organisms, but these decisions are not now accessible to us, and, if they were, they were madeunder such different conditions from those which prevail at the present day, and are foundedupon theories of government so foreign to those which have inspired the legislation of which theenactment in question forms a part, that they would probably afford but little light in the presentinquiry. In England, in the latter part of the eighteenth century, any "written censure upon publicmen for their conduct as such," as well as any written censure "upon the laws or upon the

institutions of the country," would probably have been regarded as a libel upon the Government.(2 Stephen, History of the Criminal Law of England, 348.) This has ceased to be the law inEngland, and it is doubtful whether it was ever the common law of any American State. "It is truethat there are ancient dicta to the effect that any publication tending to "possess the people withan ill opinion of the Government" is a seditious libel ( per Holt, C. J., in R. vs.Tuchin, 1704, 5 St.Tr., 532, and Ellenborough, C. J., in R. vs.Cobbett, 1804, 29 How. St. Tr., 49), but no onewould accept that doctrine now. Unless the words used directly tend to foment riot or rebellionor otherwise to disturb the peace and tranquility of the Kingdom, the utmost latitude is allowed inthe discussion of all public affairs." (11 Enc. of the Laws of England, 450.) Judge Cooley says(Const. Lim., 528): "The English common law rule which made libels on the constitution or thegovernment indictable, as it was administered by the courts, seems to us unsuited to thecondition and circumstances of the people of America, and therefore never to have been

adopted in the several States."

We find no decisions construing the Tennessee statute (Code, sec. 6663), which is apparentlythe only existing American statute of a similar character to that in question, and from whichmuch of the phraseology of then latter appears to have been taken, though with some essentialmodifications.

The important question is to determine what is meant in section 8 of Act No. 292 by theexpression "the Insular Government of the Philippine Islands." Does it mean in a general andabstract sense the existing laws and institutions of the Islands, or does it mean the aggregate ofthe individuals by whom the government of the Islands is, for the time being, administered?Either sense would doubtless be admissible.

We understand, in modern political science, . . . by the term government, that institution oraggregate of institutions by which an independent society makes and carries out those rules ofaction which are unnecessary to enable men to live in a social state, or which are imposed uponthe people forming that society by those who possess the power or authority of prescribingthem. Government is the aggregate of authorities which rule a society. By "dministration, again,we understand in modern times, and especially in more or less free countries, the aggregate ofthose persons in whose hands the reins of government are for the time being (the chiefministers or heads of departments)." (Bouvier, Law Dictionary, 891.) But the writer adds that theterms "government" and "administration" are not always used in their strictness, and that"government" is often used for "administration."

In the act of Congress of July 14, 1798, commonly known as the "Sedition Act," it is made anoffense to "write, print, utter, or published," or to "knowingly and willingly assist or aid in writing,printing, uttering, or publishing any false, scandalous, and malicious writing or writings againstthe Government of the United States, or either House of the Congress of the United States, orthe President of the United States, with intent to defame the said Government, or either Houseof the said Congress, or the said President, or to bring them, or either of them, into contempt ordisrepute, or to excite against them or either or any of them the hatred of the good people of theUnited States," etc. The term "government" would appear to be used here in the abstract sense

8/12/2019 Cases 6.17

5/83

of the existing political system, as distinguished from the concrete organisms of the Governmentthe Houses of Congress and the Executive which are also specially mentioned.

Upon the whole, we are of the opinion that this is the sense in which the term is used in theenactment under consideration.

It may be said that there can be no such thing as a scurrilous libel, or any sort of a libel, upon anabstraction like the Government in the sense of the laws and institutions of a country, but wethink an answer to this suggestion is that the expression "scurrilous libel" is not used in section8 of Act No. 292 in the sense in which it is used in the general libel law (Act No. 277) that is,in the sense of written defamation of individuals but in the wider sense, in which it is appliedin the common law to blasphemous, obscene, or seditious publications in which there may beno element of defamation whatever. "The word 'libel' as popularly used, seems to mean onlydefamatory words; but words written, if obscene, blasphemous, or seditious, are technicallycalled libels, and the publication of them is, by the law of England, an indictable offense."(Bradlaugh vs.The Queen, 3 Q. B. D., 607, 627, per Bramwell L. J. See Com. vs.Kneeland, 20Pick., 206, 211.)

While libels upon forms of government, unconnected with defamation of individuals, must in thenature of things be of uncommon occurrence, the offense is by no means an imaginary one. Aninstance of a prosecution for an offense essentially of this nature is Republica vs.Dennie, 4Yeates (Pa.), 267, where the defendant was indicted "as a factious and seditious person of awicked mind and unquiet and turbulent disposition and conversation, seditiously, maliciously,and willfully intending, as much as in him lay, to bring into contempt and hatred theindependence of the United States, the constitution of this Commonwealth and of the UnitedStates, to excite popular discontent and dissatisfaction against the scheme of polity instituted,and upon trial in the said United States and in the said Commonwealth, to molest, disturb, anddestroy the peace and tranquility of the said United States and of the said Commonwealth, tocondemn the principles of the Revolution, and revile, depreciate, and scandalize the charactersof the Revolutionary patriots and statesmen, to endanger, subvert, and totally destroy the

republican constitutions and free governments of the said United States and thisCommonwealth, to involve the said United States and this Commonwealth in civil war,desolation, and anarchy, and to procure by art and force a radical change and alteration in theprinciples and forms of the said constitutions and governments, without the free will, wish, andconcurrence of the people of the said United States and this Commonwealth, respectively," thecharge being that "to fulfill, perfect, and bring to effect his wicked, seditious, and detestableintentions aforesaid he . . . falsely, maliciously, factiously, and seditiously did make, compose,write, and publish the following libel, to wit; 'A democracy is scarcely tolerable at any period ofnational history. Its omens are always sinister and its powers are unpropitious. With all the lightsor experience blazing before our eyes, it is impossible not to discover the futility of this form ofgovernment. It was weak and wicked at Athens, it was bad in Sparta, and worse in Rome. It hasbeen tried in France and terminated in despotism. it was tried in England and rejected with the

utmost loathing and abhorrence. It is on its trial here and its issue will be civil war, desolation,and anarchy. No wise man but discerns its imperfections; no good man but shudders at itsmiseries; no honest man but proclaims its fraud, and no brave man but draws his sword againstits force. The institution of a scheme of polity so radically contemptible and vicious is amemorable example of what the villainy of some men can devise, the folly of others receive, andboth establish, in despite of reason, reflection, and sensation.'"

8/12/2019 Cases 6.17

6/83

An attack upon the lawfully established system of civil government in the Philippine Islands, likethat which Dennie was accused of making upon the republican form of government lawfullyestablished in the United States and in the State of Pennsylvania would, we think, if couched inscandalous language, constitute the precise offense described in section 8 of Act No. 292 as ascurrilous libel against the Insular Government of the Philippine Islands.

Defamation of individuals, whether holding official positions or not, and whether directed to theirpublic conduct or to their private life, may always be adequately punished under the generallibel law. Defamation of the Civil Commission as an aggregation, it being "a body of personsdefinite and small enough for its individual members to be recognized as such" (Stephen, Digestof the Criminal Law, art. 277), as well as defamation of any of the individual members of theCommission or of the Civil Governor, either in his public capacity or as a private individual, maybe so punished. The general libel law enacted by the Commission was in force when Act No.292, was passed. There was no occasion for any further legislation on the subject of libelsagainst the individuals by whom the Insular Government is administered against the InsularGovernment in the sense of the aggregate of such individuals. There was occasion for stringentlegislation against seditious words or libels, and that is the main if not the sole purpose of thesection under consideration. It is not unreasonable to suppose that the Commission, in enacting

this section, may have conceived of attacks of a malignant or scurrilous nature upon the existingpolitical system of the United States, or the political system established in these Islands by theauthority of the United States, as necessarily of a seditious tendency, but it is not so reasonableto suppose that they conceived of attacks upon the personnel of the government as necessarilytending to sedition. Had this been their view it seems probable that they would, like the framersof the Sedition Act of 1798, have expressly and specifically mentioned the various publicofficials and collegiate governmental bodies defamation of which they meant to punish assedition.

The article in question contains no attack upon the governmental system of the United States,and it is quite apparent that, though grossly abusive as respects both the Commission as a bodyand some of its individual members, it contains no attack upon the governmental system by

which the authority of the United States is enforced in these Islands. The form of government bya Civil Commission and a Civil Governor is not assailed. It is the character of the men who areintrusted with the administration of the government that the writer is seeking to bring intodisrepute by impugning the purity of their motives, their public integrity, and their private morals,and the wisdom of their policy. The publication of the article, therefore, no seditious tendencybeing apparent, constitutes no offense under Act No. 292, section 8.

The judgment of conviction is reversed and the defendants are acquitted, with costs de oficio.

Arellano, C.J. Torres, Willard and Mapa, JJ.,concur.

MECANO vs.COA

G.R. No. 103982

December 11, 1992

FACTS: Mecano is a Director II of the NBI. He was hospitalized and on account of which he incurred

medical and hospitalization expenses, the total amount of which he is claiming from the COA.

8/12/2019 Cases 6.17

7/83

In a memorandum to the NBI Director, Director Lim requested reimbursement for his expenses on the

ground that he is entitled to the benefits under Section 699of the RAC, the pertinent provisions of

which read:

Sec. 699.Allowances in case of injury, death, or sickness incurred in performance of duty. When a

person in the service of the national government of a province, city, municipality or municipal district

is so injured in the performance of duty as thereby to receive some actual physical hurt or wound, theproper Head of Department may direct that absence during any period of disability thereby occasioned

shall be on full pay, though not more than six months, and in such case he may in his discretion also

authorize the payment of the medical attendance, necessary transportation, subsistence and hospital

fees of the injured person. Absence in the case contemplated shall be charged first against vacation

leave, if any there be.

xxx xxx xxx

In case of sickness caused by or connected directly with the performance of some act in the line of

duty, the Department head may in his discretion authorize the payment of the necessary hospital fees.

Director Lim then forwarded petitioners claim, to the Secretary of Justice. Finding petitioners illness

to be service-connected, the Committee on Physical Examination of the Department of Justicefavorably recommended the payment of petitioners claim.

However, then Undersecretary of Justice Bello III returned petitioners claim to Director Lim, having

considered the statements of the Chairman of the COA to the effect that the RAC being relied

upon was repealed by the Administrative Code of 1987.

Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 1991 of then

Secretary of Justice Drilon stating that the issuance of the Administrative Code did not operate to

repeal or abregate in its entirety the Revised Administrative Code, including the particular Section 699

of the latter.

Director Lim transmitted anew Mecanos claim to then Undersecretary Bello for favorable

consideration; Secretary Drilon forwarded petitioners claim to the COA Chairman, recommending

payment of the same. COA Chairman however, denied petitioners claim on theground that Section

699 of the RAC had been repealed by the Administrative Code of 1987, solely for the reason that the

same section was not restated nor re-enacted in the Administrative Code of 1987. He

commented, however, that the claim may be filed with the Employees Compensation Commission,

considering that the illness of Director Mecano occurred after the effectivity of the Administrative Code

of 1987.

Eventually, petitioners claim was returned by Undersecretary of Justice Montenegro to Director Lim

with the advice that petitioner elevate the matter to the Supreme Court if he so desires.

Hence this petition for certiorari.

ISSUE: 1. WONthe Administrative Code of 1987 repealed or abrogated Section 699 of the RAC

HELD: The Court resolves to GRANT the petition; respondent is hereby ordered to give due course to

petitioners claim for benefits

NO

The question of whether a particular law has been repealed or not by a subsequent law is a matter of

legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealing

provision which expressly and specifically cites the particular law or laws, and portions thereof, that

8/12/2019 Cases 6.17

8/83

are intended to be repealed. A declaration in a statute, usually in its repealing clause, that a particular

and specific law, identified by its number or title, is repealed is an express repeal; all others are

implied repeals

In the case of the two Administrative Codes in question, the ascertainment of whether or not it was

the intent of the legislature to supplant the old Code with the new Code partly depends on the scrutiny

of the repealing clause of the new Code. This provision is found in Section 27, Book VII (FinalProvisions) of the Administrative Code of 1987 which reads:

Sec. 27. Repealing Clause. All laws, decrees, orders, rules and regulations, or portions thereof,

inconsistent with this Code are hereby repealed or modified accordingly.

The question that should be asked is: What is the nature of this repealing clause?

It is certainly not an express repealing clause because it fails to identify or designate the act or acts

that are intended to be repealed.Rather, it is an example of a general repealing provision. It is

a clause which predicates the intended repeal under the condition that substantial conflict must be

found in existing and prior acts. This latter situation falls under the category of an implied repeal.

There are two categories of repeal by implication.

1. Where provisions in the two acts on the same subject matter are in an irreconcilable conflict, thelater act to the extent of the conflict constitutes an implied repeal of the earlier one.

2. 2. If the later act covers the whole subject of the earlier one and is clearly intended as a

substitute, it will operate to repeal the earlier law.

Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover the

entire subject matter of the old Code. There are several matters treated in the old Code which are not

found in the new Code, such as the provisions on notaries public, the leave law, the public bonding

law, military reservations, claims for sickness benefits under Section 699, and still others.

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent to

cover only those aspects of government that pertain to administration, organization and procedure,

understandably because of the many changes that transpired in the government structure since the

enactment of the RAC decades of years ago.

Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of the

subject claim are in an irreconcilable conflict. In fact, there can be no such conflict because the

provision on sickness benefits of the nature being claimed by petitioner has not been restated in the

Administrative Code of 1987.

Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are not

favored.20The presumption is against inconsistency and repugnancy for the legislature is presumed to

know the existing laws on the subject and not to have enacted inconsistent or conflicting statutes.

NOTES:

1. the COA would have Us consider that the fact that Section 699 was not restated in the

Administrative Code of 1987 meant that the same section had been repealed. The COA anchored this

argument on the whereas clause of the 1987 Code, which states:

WHEREAS, the effectiveness of the Government will be enhanced by a new Administrative Code which

incorporate in a unified documentthe major structural, functional and procedural principles and rules

of governance; and

xxx xxx xxx

8/12/2019 Cases 6.17

9/83

It argues, in effect, that what is contemplated is only one Code the Administrative Code of 1987.

This contention is untenable.

The fact that a later enactment may relate to the same subject matter as that of an earlier statute is

not of itself sufficient to cause an implied repeal of the prior act, since the new statute may merely

be cumulative or a continuation of the old one. What is necessary is a manifest indication of

legislative purpose to repeal.

2. Regarding COA contention that recovery under this subject section (699) shall bar the recovery of

benefits under the Employees Compensation Program, the same cannot be upheld. The second

sentence of Article 173, Chapter II, Title II (dealing on Employees Compensation and State Insurance

Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly provides that the payment of

compensation under this Title shall not bar the recovery of benefits as provided for in Section 699 of

the Revised Administrative Code . . . whose benefits are administered by the system (meaning SSS or

GSIS) or by other agencies of the government.

G.R. No. 103982 December 11, 1992

ANTONIO A. MECANO, petitioner,vs.COMMISSION ON AUDIT, respondent.

CAMPOS, JR., J.:

Antonio A. Mecano, through a petition for certiorari, seeks to nullify the decision of the Commissionon Audit (COA, for brevity) embodied in its 7th Indorsement, dated January 16, 1992, denying hisclaim for reimbursement under Section 699 of the Revised Administrative Code (RAC), as amended,in the total amount of P40,831.00.

Petitioner is a Director II of the National Bureau of Investigation (NBI). He was hospitalized forcholecystitis from March 26, 1990 to April 7, 1990, on account of which he incurred medical andhospitalization expenses, the total amount of which he is claiming from the COA.

On May 11, 1990, in a memorandum to the NBI Director, Alfredo S. Lim (Director Lim, for brevity),he requested reimbursement for his expenses on the ground that he is entitled to the benefits underSection 6991of the RAC, the pertinent provisions of which read:

Sec. 699.Allowances in case of injury, death, or sickness incurred in performance ofduty. When a person in the service of the national government of a province, city,municipality or municipal district is so injured in the performance of duty as thereby to

receive some actual physical hurt or wound, the proper Head of Department maydirect that absence during any period of disability thereby occasioned shall be on fullpay, though not more than six months, and in such case he may in his discretion alsoauthorize the payment of the medical attendance, necessary transportation,subsistence and hospital fees of the injured person. Absence in the casecontemplated shall be charged first against vacation leave, if any there be.

xxx xxx xxx

8/12/2019 Cases 6.17

10/83

In case of sickness caused by or connected directly with the performance of someact in the line of duty, the Department head may in his discretion authorize thepayment of the necessary hospital fees.

Director Lim then forwarded petitioner's claim, in a 1st Indorsement dated June 22, 1990, to theSecretary of Justice, along with the comment, bearing the same date, of Gerarda Galang, Chief,

LED of the NBI, "recommending favorable action thereof". Finding petitioner's illness to be service-connected, the Committee on Physical Examination of the Department of Justice favorablyrecommended the payment of petitioner's claim.

However, then Undersecretary of Justice Silvestre H. Bello III, in a 4th Indorsement dated November21, 1990, returned petitioner's claim to Director Lim, having considered the statements of theChairman of the COA in its 5th Indorsement dated 19 September 1990, to the effect that the RACbeing relied upon was repealed by the Administrative Code of 1987.

Petitioner then re-submitted his claim to Director Lim, with a copy of Opinion No. 73, S. 19912datedApril 26, 1991 of then Secretary of Justice Franklin M. Drilon (Secretary Drilon, for brevity) stating that"the issuance of the Administrative Code did not operate to repeal or abregate in its entirety the RevisedAdministrative Code, including the particular Section 699 of the latter".

On May 10, 1991, Director Lim, under a 5th Indorsement transmitted anew Mecano's claim to thenUndersecretary Bello for favorable consideration. Under a 6th Indorsement, dated July 2, 1991,Secretary Drilon forwarded petitioner's claim to the COA Chairman, recommending payment of thesame. COA Chairman Eufemio C. Domingo, in his 7th Indorsement of January 16, 1992, however,denied petitioner's claim on the ground that Section 699 of the RAC had been repealed by the

Administrative Code of 1987, solely for the reason that the same section was not restated nor re-enacted in the Administrative Code of 1987. He commented, however, that the claim may be filedwith the Employees' Compensation Commission, considering that the illness of Director Mecanooccurred after the effectivity of the Administrative Code of 1987.

Eventually, petitioner's claim was returned by Undersecretary of Justice Eduardo Montenegro to

Director Lim under a 9th Indorsement dated February 7, 1992, with the advice that petitioner"elevate the matter to the Supreme Court if he so desires".

On the sole issue of whether or not the Administrative Code of 1987 repealed or abrogated Section699 of the RAC, this petition was brought for the consideration of this Court.

Petitioner anchors his claim on Section 699 of the RAC, as amended, and on the aforementionedOpinion No. 73, S. 1991 of Secretary Drilon. He further maintains that in the event that a claim isfiled with the Employees' Compensation Commission, as suggested by respondent, he would still notbe barred from filing a claim under the subject section. Thus, the resolution of whether or not therewas a repeal of the Revised Administrative Code of 1917 would decide the fate of petitioner's claimfor reimbursement.

The COA, on the other hand, strongly maintains that the enactment of the Administrative Code of1987 (Exec. Order No. 292) operated to revoke or supplant in its entirety the Revised AdministrativeCode of 1917. The COA claims that from the "whereas" clauses of the new Administrative Code, itcan be gleaned that it was the intent of the legislature to repeal the old Code. Moreover, the COAquestions the applicability of the aforesaid opinion of the Secretary of Justice in deciding the matter.Lastly, the COA contends that employment-related sickness, injury or death is adequately coveredby the Employees' Compensation Program under P.D. 626, such that to allow simultaneous recovery

8/12/2019 Cases 6.17

11/83

of benefits under both laws on account of the same contingency would be unfair and unjust to theGovernment.

The question of whether a particular law has been repealed or not by a subsequent law is a matterof legislative intent. The lawmakers may expressly repeal a law by incorporating therein a repealingprovision which expressly and specifically cites the particular law or laws, and portions thereof, that

are intended to be repealed.3

A declaration in a statute, usually in its repealing clause, that a particularand specific law, identified by its number or title, is repealed is an express repeal; all others are impliedrepeals.4

In the case of the two Administrative Codes in question, the ascertainment of whether or not it wasthe intent of the legislature to supplant the old Code with the new Code partly depends on thescrutiny of the repealing clause of the new Code. This provision is found in Section 27, Book VII(Final Provisions) of the Administrative Code of 1987 which reads:

Sec. 27. Repealing Clause. All laws, decrees, orders, rules and regulations, orportions thereof, inconsistent with this Code are hereby repealed or modifiedaccordingly.

The question that should be asked is: What is the nature of this repealing clause? It is certainly notan express repealing clause because it fails to identify or designate the act or acts that are intendedto be repealed.5Rather, it is an example of a general repealing provision, as stated in Opinion No. 73, S.1991. It is a clause which predicates the intended repeal under the condition that substantial conflict mustbe found in existing and prior acts. The failure to add a specific repealing clause indicates that the intentwas not to repeal any existing law, unless an irreconcilable inconcistency and repugnancy exist in theterms of the new and old laws. 6This latter situation falls under the category of an implied repeal.

Repeal by implication proceeds on the premise that where a statute of later date clearly reveals anintention on the part of the legislature to abrogate a prior act on the subject, that intention must begiven effect.7Hence, before there can be a repeal, there must be a clear showing on the part of thelawmaker that the intent in enacting the new law was to abrogate the old one. The intention to repeal

must be clear and manifest;8

otherwise, at least, as a general rule, the later act is to be construed as acontinuation of, and not a substitute for, the first act and will continue so far as the two acts are the samefrom the time of the first enactment. 9

There are two categories of repeal by implication. The first is where provisions in the two acts on thesame subject matter are in an irreconcilable conflict, the later act to the extent of the conflictconstitutes an implied repeal of the earlier one. The second is if the later act covers the wholesubject of the earlier one and is clearly intended as a substitute, it will operate to repeal the earlierlaw.10

Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the samesubject matter; they are so clearly inconsistent and incompatible with each other that they cannot bereconciled or harmonized; and both cannot be given effect, that is, that one law cannot be enforcedwithout nullifying the other.11

Comparing the two Codes, it is apparent that the new Code does not cover nor attempt to cover theentire subject matter of the old Code. There are several matters treated in the old Code which arenot found in the new Code, such as the provisions on notaries public, the leave law, the publicbonding law, military reservations, claims for sickness benefits under Section 699, and still others.

8/12/2019 Cases 6.17

12/83

Moreover, the COA failed to demonstrate that the provisions of the two Codes on the matter of thesubject claim are in an irreconcilable conflict. In fact, there can be no such conflict because theprovision on sickness benefits of the nature being claimed by petitioner has not been restated in the

Administrative Code of 1987. However, the COA would have Us consider that the fact that Section699 was not restated in the Administrative Code of 1987 meant that the same section had beenrepealed. It further maintained that to allow the particular provisions not restated in the new Code to

continue in force argues against the Code itself. The COA anchored this argument on the whereasclause of the 1987 Code, which states:

WHEREAS, the effectiveness of the Government will be enhanced by a newAdministrative Code which incorporate in a unified documentthe major structural,functional and procedural principles and rules of governance; and

xxx xxx xxx

It argues, in effect, that what is contemplated is only one Code the Administrative Code of 1987.This contention is untenable.

The fact that a later enactment may relate to the same subject matter as that of an earlier statute isnot of itself sufficient to cause an implied repeal of the prior act, since the new statute may merely becumulative or a continuation of the old one. 12What is necessary is a manifest indication of legislativepurpose to repeal.13

We come now to the second category of repeal the enactment of a statute revising or codifyingthe former laws on the whole subject matter. This is only possible if the revised statute or code wasintended to cover the whole subject to be a complete and perfect system in itself. It is the rule that asubsequent statute is deemed to repeal a prior law if the former revises the whole subject matter ofthe former statute.14When both intent and scope clearly evidence the idea of a repeal, then all parts andprovisions of the prior act that are omitted from the revised act are deemed repealed.15Furthermore,before there can be an implied repeal under this category, it must be the clear intent of the legislature thatthe later act be the substitute to the prior act.16

According to Opinion No. 73, S. 1991 of the Secretary of Justice, what appears clear is the intent tocover only those aspects of government that pertain to administration, organization and procedure,understandably because of the many changes that transpired in the government structure since theenactment of the RAC decades of years ago. The COA challenges the weight that this opinioncarries in the determination of this controversy inasmuch as the body which had been entrusted withthe implementation of this particular provision has already rendered its decision. The COA relied onthe rule in administrative law enunciated in the case of Sison vs.Pangramuyen17that in the absenceof palpable error or grave abuse of discretion, the Court would be loathe to substitute its own judgment forthat of the administrative agency entrusted with the enforcement and implementation of the law. This willnot hold water. This principle is subject to limitations. Administrative decisions may be reviewed by thecourts upon a showing that the decision is vitiated by fraud, imposition or mistake.18It has been held thatOpinions of the Secretary and Undersecretary of Justice are material in the construction of statutes in parimateria.19

Lastly, it is a well-settled rule of statutory construction that repeals of statutes by implication are notfavored.20The presumption is against inconsistency and repugnancy for the legislature is presumed toknow the existing laws on the subject and not to have enacted inconsistent or conflicting statutes. 21

This Court, in a case, explains the principle in detail as follows: "Repeals by implication are notfavored, and will not be decreed unless it is manifest that the legislature so intended. As laws are

8/12/2019 Cases 6.17

13/83

presumed to be passed with deliberation with full knowledge of all existing ones on the subject, it isbut reasonable to conclude that in passing a statute it was not intended to interfere with or abrogateany former law relating to some matter, unless the repugnancy between the two is not onlyirreconcilable, but also clear and convincing, and flowing necessarily from the language used, unlessthe later act fully embraces the subject matter of the earlier, or unless the reason for the earlier act isbeyond peradventure renewed. Hence, every effort must be used to make all acts stand and if, by

any reasonable construction, they can be reconciled, the later act will not operate as a repeal of theearlier.22

Regarding respondent's contention that recovery under this subject section shall bar the recovery ofbenefits under the Employees' Compensation Program, the same cannot be upheld. The secondsentence of Article 173, Chapter II, Title II (dealing on Employees' Compensation and StateInsurance Fund), Book IV of the Labor Code, as amended by P.D. 1921, expressly provides that "thepayment of compensation under this Title shall not bar the recovery of benefits as provided for inSection 699 of the Revised Administrative Code . . . whose benefits are administered by the system(meaning SSS or GSIS) or by other agencies of the government."

WHEREFORE, premises considered, the Court resolves to GRANT the petition; respondent ishereby ordered to give due course to petitioner's claim for benefits. No costs.

SO ORDERED.

LEVERIZA et al vs. IAC, Mobil oil and CAA

G.R. No. L-66614

January 25, 1988

FACTS: Around three contracts of lease resolve the basic issues in the instant case:

Contract A a lease contract of April 2, 1965 between the Republic of the Philippines, represented by

Civil Aeronautics Administration (CAA) and. Leveriza over a parcel of land containing an area of 4,502square meters, for 25 years.

Contract B a lease contract (in effect a sublease) of May 21, 1965 between Leveriza and Mobil Oil

Philippines, Inc., over the same parcel of land, but reduced to 3,000 square meters for 25 years; and

Contract C a lease contract of June 1, 1968 between defendant CAA and plaintiff Mobil Oil over the

same parcel of land, but reduced to 3,000 square meters, for 25 years.

There is no dispute among the parties that the subject matter of the three contracts of lease above

mentioned, Contract A, Contract B, and Contract C, is the same parcel of land, with the noted

difference that while in Contract A, the area leased is 4,502 square meters, in Contract B and Contract

C, the area has been reduced to 3,000 square meters.

It is important to note, for a clear understanding of the issues involved, that it appears that defendant

CAA as LESSOR, leased the same parcel of land, for durations of time that overlapped to two lessees,

to wit: (1) Leveriza and Mobil Oil, and the latter, as LESSEE, leased the same parcel of land from two

lessors, to wit: (1) Leveriza and (2) CAA for durations of time that also overlapped.

Leveriza, the lessee in Contract A and the lessor in Contract B, is now deceased. This is the reason

why her successor-in-interest, her heirs, are sued. For purposes of brevity, these defendants shall be

referred to hereinafter as Defendants Leveriza.

8/12/2019 Cases 6.17

14/83

Mobil Oil seeks the rescission or cancellation of Contract A and Contract B on the ground that

Contract A from which Contract B is derived and depends has already been cancelled by the defendant

CAA and maintains that Contract C with the defendant CAA is the only valid and subsisting contract

insofar as the parcel of land, subject to the present litigation is concerned.

Defendants Leverizas claim that Contract A which is their contract with CAA has never been legally

cancelled and still valid and subsisting; that it is Contract C between plaintiff and defendant CAA which

should be declared void.

CAA asserts that Contract A is still valid and subsisting because its cancellation by Jurado was

ineffective and asks the court to annul Contract A because of the violation committed by Leveriza in

leasing the parcel of land to plaintiff by virtue of Contract B without the consent of CAA. CAA further

asserts that Contract C not having been approved by the Director of Public Works and

Communications is not valid.

After trial, the lower courts rendered judgment:

1. Declaring Contract A as having been validly cancelled on June 28, 1966, and has therefore ceasedto have any effect as of that date;

2. Declaring that Contract B has likewise ceased to have any effect as of June 28, 1966 because of the

cancellation of Contract A;

3. Declaring that Contract C was validly entered into on June 1, 1968, and that it is still valid and

subsisting;

CAA filed a Motion for Reconsideration, averring that because the lot lease was properly registered in

the name of the Republic of the Philippines, it was only the President of the Philippines or an officer

duly designated by him who could execute the lease contract pursuant to Sec. 567 of the Revised

Administrative Code; that the Airport General Manager has no authority to cancel Contract A, thecontract entered into between the CAA and Leveriza, and that Contract C between the CAA and Mobil

was void for not having been approved by the Secretary of Public Works and Communications. Said

motion was however denied.

On appeal, the IAC affirmed in toto the decision of the lower court. Hence this petition for Review on

certiorari.

ISSUE: There is no dispute that Contract A at the time of its execution was a valid contract. The

issue therefore is whether or not said contract is still subsisting after its cancellation by CAA on the

ground of a sublease executed by petitioners with Mobil Oil (CONTRACT B) without the consent of CAA

and the execution of another contract of lease between CAA and Mobil Oil (CONTRACT C)

The issue narrows down to: WON there is a valid ground for the cancellation of Contract A

HELD: The petition is DISMISSED for lack of merit and the decision of the Court of Appeals appealed

from is AFFIRMED in toto.

YES

8/12/2019 Cases 6.17

15/83

Contract A was entered into by CAA as the lessor and the Leverizas as the lessee specifically for the

purpose of operating and managing a gasoline station by the latter, to serve vehicles going in and out

of the airport.

As regards prior consent of the lessor to the transfer of rights to the leased premises, the provision of

paragraph 7 of said Contract reads in full:

7. The Party of the Second part may transfer her rights to the leased premises but in such eventuality,

the consent of the Party of the First Part shall first be secured. In any event, such transfer of rights

shall have to respect the terms and conditions of this agreement.

Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions of

the contract. Said paragraph reads:

8. Failure on the part of the Party of the Second Part to comply with the terms and conditions herein

agreed upon shall be sufficient for revocationof this contract by the Party of the First Part without

need of judicial demand.

It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract B) withMobil Oil without the consent of CAA (lessor). The cancellation of the contract was made in a letter by

Jurado, Airport General Manager of CAA addressed to Rosario Leveriza.

Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that the Airport

General Manager had no legal authority to make the cancellation. They maintain that it is only the

(1)Secretary of Public Works and Communications, acting for the President, or by delegation of power,

the (2)Director of CCA who could validly cancel the contract. Petitioners argue that cancelling or

setting aside a contract approved by the Secretary is, in effect, repealing an act of the Secretary

which is beyond the authority of the Administrator.

Such argument is untenable. The terms and conditions under which such revocation or cancellation

may be made, have already been specifically providedfor in Contract A which has already beenapproved by the Department Head, It is evident that in the implementation of aforesaid contract, the

approval of said Department Head is no longer necessary if not redundant

NOTES:

1. It is further contended that even granting that such cancellation was effective, a subsequent billing

by the Accounting Department of the CAA has in effect waived or nullified the rescission of Contract

A.

The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, after the

cancellation of Contract A is obviously an error. However, this Court has already ruled that the

mistakes of government personnel should not affect public interest.

2. Petitioners further assail the interpretation of Contract A, claiming that Contract B was a mere

sublease to Mobil Oil and requires no prior consent of CAA to perfect the same. Citing Article 1650 of

the Civil Code, they assert that the prohibition to sublease must be expressed and cannot be merely

implied or inferred.

8/12/2019 Cases 6.17

16/83

As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a prior

consent interprets the first sentence of paragraph 7 of Contract A to refer to an assignment of lease

under Article 1649 of the Civil Code and not to a mere sublease. A careful scrutiny of said paragraph

of Contract A clearly shows that it speaks of transfer of rights of Rosario Leveriza to the leased

premises and not to assignment of the lease.

2. Petitioners likewise argued that it was contemplated by the parties to Contract A that Mobil Oil

would be the owner of the gasoline station it would construct on the leased premises during the period

of the lease, hence, it is understood that it must be given a right to use and occupy the lot in question

in the form of a sub-lease.

In Contract A, it was categorically stated that it is the lessee (petitioner) who will manage and

operate the gasoline station. The fact that Mobil Oil was mentioned in that contract was clearly not

intended to give approval to a subleasebetween petitioners and said company but rather to

insure that in the arrangements to be made between them, it must be understood that after the

expiration of the lease contract, whatever improvements have been constructed in the leased

premises shall be relinquished to CAA. Thus, this Court held that the primary and elementary rule of

construction of documents is that when the words or language thereof is clear and plain or readilyunderstandable by any ordinary reader thereof, there is absolutely no room for interpretation or

construction anymore.

3. Finally, petitioners contend that the administrator of CAA cannot

execute without approval of the Department Secretary, a valid contract of lease over real property

owned by the Republic of the Philippines, citing the Revised Administrative Code, which provide

that Under 567 of the Revised Administrative Code, such contract of lease must be executed:

(1) by the President of the Philippines, or

(2) by an officer duly designated by him or

(3) by an officer expressly vested by law.

On the other hand, respondent CAA avers that the CAA Administrator has the authorityto lease real

property belonging to the RP under its administration even without the approval of the Secretary of

Public Works and Communications, which authority is expressly vested in it by law, more particularly

Section 32 (24) of Republic Act 776,which reads:

Sec. 32. Powers and Duties of the Administrator. Subject to the general control and supervision of

the Department Head, the Administrator shall have, among others, the following powers and duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the Manila International Airport

and all government aerodromes except those controlled or operated by the Armed Forces of the

Philippines including such power and duties as: (b) to enter into, make and execute contracts of any

kind with any person, firm, or public or private corporation or entity; (c) to acquire, hold, purchase, or

lease any personal or real property; right of ways, and easements which may be proper or necessary:

Provided, that no real property thus acquired and any other real property of the Civil Aeronautics

Administration shall be sold without the approval of the President of the Philippines.

8/12/2019 Cases 6.17

17/83

There is no dispute that the Revised Administrative Code is a general law while Republic Act 776 is a

special law nor in the fact that the real property subject of the lease in Contract C is real property

belonging to the Republic of the Philippines.

It is readily apparent that in the case at bar, the CAA has the authority to enter into Contracts of

Lease for the government under the third category (Art. 567. )Thus, as correctly ruled by the Court of

Appeals, the CAA has the power to execute the deed or contract involving leases of real properties

belonging to the RP, not because it is an entity duly designated by the President but because the said

authority to execute the same is, by law expressly vested in it, which in this case is RA 776.

Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of the

CAA by reason of its creation and existence, administers properties belonging to the RP and it is on

these properties that the Administrator must exercise his vast power and discharge his duty to enter

into, make and execute contract of any kind with any person, firm, or public or private corporation or

entity and to acquire, hold, purchase, or lease any personal or real property, right of ways and

easements which may be proper or necessary. (The exception, however, is the sale of properties

acquired by CAA or any other real properties of the same which must have the approval of the

President of the Philippines.) The Court of appeals took cognizance of the striking absence of suchproviso in the other transactions contemplated in paragraph (24) and is convinced as we are, that the

Director of the CAA does not need the prior approval of the President or the Secretaryof Public

Works and Communications in the execution of Contract C.

In this regard, this Court, ruled that another basic principle of statutory construction mandates that

general legislation must give way to special legislation on the same subject, and generally be so

interpreted as to embrace only cases in which the special provisions are not applicable; that specific

statute prevails over a general ; and that where two statutes are of equal theoretical application to a

particular case, the one designed therefor specially should prevail.

G.R. No. L-66614 January 25, 1988

PRIMITIVO LEVERIZA, FE LEVERIZA, PARUNGAO & ANTONIO C. VASCO, petitioners,vs.INTERMEDIATE APPELLATE COURT, MOBIL OIL PHILIPPINES & CIVIL AERONAUTICSADMINISTRATION, respondents.

BIDIN, J.:

This is a Petition for Review on certiorari seeking the reversal of the decision of the IntermediateAppellate Court, Third Division * dated February 29, 1984 in AC-G.R. No. CV No. 61705 entitled Mobil Oil Philippines, Inc.,plaintiff-appelleevs. Primitivo Leveriza Parungao, Antonio C. Vasco and Civil Aeronautics Administration , defendants-appellants; Primitive

Leveriza, Fe Leveriza Parungao and Antonio C. Leveriza, cross-defendant, affirming in totothe decision of the trial court dated April 6, 1976.

As found by the trial court and adopted by the Intermediate Appellate Court, the facts of this caseare as follows:

Around three contracts of lease resolve the basic issues in the instant case. Thesethree contracts are as follows:

8/12/2019 Cases 6.17

18/83

First Contract. For purposes of easy reference and brevity, this contract shall bereferred to hereinafter as Contract A. This is a "CONTRACT OF LEASE", executedbetween the REPUBLIC OF THE PHILIPPINES, represented by Defendant CIVIL

AERONAUTICS ADMINISTRATION, as lessor, and ROSARIO C. LEVERIZA, aslessee, on April 2, 1965, over a certain parcel of land at the MIA area, consisting ofapproximately 4,502 square meters, at a monthly rental of P450.20, for a period of 25

years, (Exhibit "A", Exhibit "I-Leverizas", Exhibit "I-CAA").

Second Contracts. For purposes of easy references and brevity, this contract shallbe referred to hereinafter as Contract B. This is a "LEASE AGREEMENT", executedbetween ROSARIO C. LEVERIZA, as lessor, and Plaintiff MOBIL OIL PHILIPPINES,INC., as lessee on May 21, 1965, over 3,000 square meters of that SAME Parcel ofland subject of Contract A above mentioned, at a monthly rental of P1,500.00, for aperiod of 25 years (Exhibit 'B', Exhibit 4-Leverizas' ).

Third Contract. For purposes of easy reference and brevity, this contract shall bereferred to hereinafter as Contract C. This is a "LEASE AGREEMENT", executedbetween Defendant CIVIL AERONAUTICS ADMINISTRATION, as lessor, andplaintiff MOBIL OIL PHILIPPINES, INC., as lessee, on June 1, 1968 over that SAMEparcel of land (Lot A, on plan being a portion of Parcel, Psu 2031), containing anarea of 3,000 square meters more or less, at a monthly rental of P.25 per squaremeter for the second 200 square meters, and P.20 per square meter for the rest, fora period of 29 (sic) years. (Exhibit "C").

There is no dispute among the parties that the subject matter of the three contractsof lease above mentioned, Contract A, Contract B, and Contract C, is the sameparcel of land, with the noted difference that while in Contract A, the area leased is4,502 square meters, in Contract B and Contract C, the area has been reduced to3,000 square meters. To summarize:

Contract A a lease contract of April 2, 1965 between the Republic

of the Philippines, represented by Defendant Civil AeronauticsAdministration and Rosario C. Leveriza over a parcel of landcontaining an area of 4,502 square meters, for 25 years.

Contract B a lease contract (in effect a sublease) of May 21, 1965between defendant Rosario C. Leveriza and plaintiff Mobil OilPhilippines, Inc. over the same parcel of land, but reduced to 3,000square meters for 25 years; and

Contract C a lease contract of June 1, 1968 between defendantCivil Aeronautics Administration and plaintiff Mobil Oil Philippines,Inc., over the same parcel of land, but reduced to 3,000 square

meters, for 25 years.

It is important to note, for a clear understanding of the issues involved, that it appearsthat defendant Civil Aeronautics Administration as LESSOR, leased the same parcelof land, for durations of time that overlapped to two lessees, to wit: (1) DefendantRosario C. Leveriza, and that plaintiff Mobil Oil Philippines, Inc., as LESSEE, leasedthe same parcel of land from two lessors, to wit: (1) defendant Rosario C. Leverizaand (2) defendant Civil Aeronautics Administration, Inc., for durations of time thatalso overlapped.

8/12/2019 Cases 6.17

19/83

For purposes of brevity defendant Civil Aeronautics Administration shall be referredto hereinafter as defendant CAA.

Rosario C. Leveriza, the lessee in Contract A and the lessor in Contract B, is nowdeceased. This is the reason why her successor-in-interest, her heirs, are sued,namely: Defendants Primitive Leveriza, her second husband, (now also deceased),

Fe Leveriza Parungao, her daughter by her second husband, and Antonio C. Vasco,her son by her first husband. For purposes of brevity, these defendants shall bereferred to hereinafter as Defendants Leveriza.

Plaintiff Mobil Oil Philippines, Inc., shall be referred to hereinafter simply as thePlaintiff. (pp. 95-99, Record on Appeal).

Plaintiff in this case seeks the rescission or cancellation of Contract A and Contract Bon the ground that Contract A from which Contract B is derived and depends hasalready been cancelled by the defendant Civil Aeronautics Administration andmaintains that Contract C with the defendant CAA is the only valid and subsistingcontract insofar as the parcel of land, subject to the present litigation is concerned.

On the other hand, defendants Leverizas' claim that Contract A which is theircontract with CAA has never been legally cancelled and still valid and subsisting; thatit is Contract C between plaintiff and defendant CAA which should be declared void.

Defendant CAA asserts that Exhibit "A" is still valid and subsisting because itscancellation by Guillermo Jurado was ineffective and asks the court to annul Contract

A because of the violation committed by defendant Leveriza in leasing the parcel ofland to plaintiff by virtue of Contract B without the consent of defendant CAA.Defendant CAA further asserts that Contract C not having been approved by theDirector of Public Works and Communications is not valid. ...

xxx xxx xxx

After trial, the lower court render judgment on April 6, 1976 the dispositive part of which reads:

WHEREFORE, after having thus considered the evidence of all the parties,testimonial and documentary, and their memoranda and reply-memoranda, thisCourt hereby renders judgment:

1. Declaring Contract A as having been validly cancelled on June 28,1966, and has therefore ceased to have any effect as of that date;

2. Declaring that Contract B has likewise ceased to have any effectas of June 28, 1966 because of the cancellation of Contract A;

3. Declaring that Contract C was validly entered into on June 1, 1968,and that it is still valid and subsisting;

4. Ordering defendant CAA to refund to defendants Leverizas theamount of P32,189.30 with 6% per annum until fully paid;

5. Ordering defendants Leverizas to refund to plaintiff the amount ofP48,000.00 with 6% interest per annum until fully paid;

8/12/2019 Cases 6.17

20/83

6. Dismissing defendants Leverizas' four counterclaims againstplaintiff;

7. Dismissing defendants Leverizas' cross-claim against defendantCAA;

8. Dismissing defendant CAA's counterclaim against plaintiff;

9. Dismissing defendant CAA's counterclaim against defendantLeverizas.

No pronouncements as to costs.

On June 2, 1976, defendant Leveriza filed a motion for new trial on the ground of newly discoveredevidence, lack of jurisdiction of the court over the case and lack of evidentiary support of thedecision which was denied in the order of November 12,1976 (Rollo, p. 17).

On July 27, 1976, the CAA filed a Motion for Reconsideration, averring that because the lot lease

was properly registered in the name of the Republic of the Philippines, it was only the President ofthe Philippines or an officer duly designated by him who could execute the lease contract pursuantto Sec. 567 of the Revised Administrative Code; that the Airport General Manager has no authorityto cancel Contract A, the contract entered into between the CAA and Leveriza, and that Contract Cbetween the CAA and Mobil was void for not having been approved by the Secretary of PublicWorks and Communications. Said motion was however denied on November 12, 1976 (Rollo, p. 18).

On appeal, the Intermediate Appellate Court, being in full accord with the trial court, rendered adecision on February 29, 1984, the dispositive part of which reads:

WHEREFORE, finding no reversible error in the decision of the lower court datedApril 6, 1976, the same is hereby affirmed in toto.

Hence, this petition.

The petitioners raised the following assignment of errors:

I

THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THEADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION (CAA) HADTHE STATUTORY AUTHORITY TO LEASE, EVEN WITHOUT APPROVAL OF THETHEN SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, REALPROPERTY BELONGING TO THE REPUBLIC OF THE PHILIPPINES.

II

THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THEADMINISTRATOR OF THE CIVIL AERONAUTICS ADMINISTRATION HADSTATUTORY AUTHORITY, WITHOUT THE APPROVAL OF THE THENSECRETARY OF PUBLIC WORKS AND COMMUNICATIONS, TO CANCEL ALEASE CONTRACT OVER REAL PROPERTY OWNED BY THE REPUBLIC OF

8/12/2019 Cases 6.17

21/83

THE PHILIPPINES, WHICH CONTRACT WAS APPROVED, AS REQUIRED BYLAW, BY THE SECRETARY.

III

THE INTERMEDIATE APPELLATE COURT ERRED WHEN IT RULED THAT THE

CONTRACT OF SUBLEASE (CONTRACT B) ENTERED INTO BETWEENPETITIONERS' PREDECESSOR-IN-INTEREST AND RESPONDENT MOBIL OILPHILIPPINES, INC. WAS WITHOUT THE CONSENT OF THE ADMINISTRATOROF THE CIVIL AERONAUTICS ADMINISTRATION.

The petition is devoid of merit.

There is no dispute that Contract "A" at the time of its execution was a valid contract. The issuetherefore is whether or not said contract is still subsisting after its cancellation by CAA on the groundof a sublease executed by petitioners with Mobil Oil Philippines without the consent of CAA and theexecution of another contract of lease between CAA and Mobil Oil Philippines (Contract "C").

Petitioners contend that Contract "A" is still subsisting because Contract "B" is a valid sublease anddoes not constitute a ground for the cancellation of Contract "A", while Contract "C", a subsequentlease agreement between CAA and Mobil Oil Philippines is null and void, for lack of approval by theDepartment Secretary. Petitioners anchor their position on Sections 567 and 568 of the Revised

Administrative Code which require among others, that subject contracts should be executed by thePresident of the Philippines or by an officer duly designated by him, unless authority to execute thesame is by law vested in some other officer (Petition, Rollo, pp. 15-16).

At the other extreme, respondent Mobil Oil Philippines asserts that Contract "A" was validlycancelled on June 28, 1966 and so was Contract "B" which was derived therefrom. Accordingly, itmaintains that Contract "C" is the only valid contract insofar as the parcel of land in question isconcerned and that approval of the Department Head is not necessary under Section 32 (par. 24) ofthe Republic Act 776 which expressly vested authority to enter into such contracts in the

Administrator of CAA (Comment; Rollo, p. 83).

On its part, respondent Civil Aeronautics Administration took the middle ground with its view thatContract "A" is still subsisting as its cancellation is ineffective without the approval of the DepartmentHead but said contract is not enforceable because of petitioners' violation of its terms and conditionsby entering into Contract "B" of sublease without the consent of CAA. The CAA further asserts thatContract "C" not having been approved by the Secretary of Public Works and Communications, isnot valid (Rollo, p. 43). However, in its comment filed with the Supreme Court, the CAA made acomplete turnabout adopting the interpretation and ruling made by the trial court which was affirmedby the Intermediate Appellate Court (Court of Appeals), that the CAA Administrator has the power toexecute the deed or contract of lease involving real properties under its administration belonging tothe Republic of the Philippines without the approval of the Department Head as clearly provided in

Section 32, paragraph (24) of Republic Act 776.

The issue narrows down to whether or not there is a valid ground for the cancellation of Contract "A."

Contract "A" was entered into by CAA as the lessor and the Leverizas as the lessee specifically "forthe purpose of operating and managing a gasoline station by the latter, to serve vehicles going inand out of the airport."

8/12/2019 Cases 6.17

22/83

As regards prior consent of the lessor to the transfer of rights to the leased premises, the provisionof paragraph 7 of said Contract reads in full:

7. The Party of the Second part may transfer her rights to the leased premises but insuch eventuality, the consent of the Party of the First Part shall first be secured. Inany event, such transfer of rights shall have to respect the terms and conditions of

this agreement.

Paragraph 8 provides the sanction for the violation of the above-mentioned terms and conditions ofthe contract. Said paragraph reads:

8. Failure on the part of the Party of the Second Part to comply with the terms andconditions herein agreed upon shall be sufficient for revocation of this contract by theParty of the First Part without need of judicial demand.

It is not disputed that the Leverizas (lessees) entered into a contract of sublease (Contract "B") withMobil Oil Philippines without the consent of CAA (lessor). The cancellation of the contract was madein a letter dated June 28, 1966 of Guillermo P. Jurado, Airport General Manager of CAA addressed

to Rosario Leveriza, as follows:

(Letterhead)

June 28, 1966

Mrs. Rosario LeverizaManila International Airport

Madam:

It has been found out by the undersigned that you have sublet the

property of the CAA leased to you and by virtue of this, your leasecontract is hereby cancelled because of the violation of thestipulations of the contract. I would like to inform you that evenwithout having sublet the said property the said contract would havebeen cancelled as per attached communication.

Verytrulyyours,

For theDirecto

r:

(Sgd.)Illegible(Typed)

GUILLERMO P.JURADO

8/12/2019 Cases 6.17

23/83

Airport GeneralManager

Respondent Leverizas and the CAA assailed the validity of such cancellation, claiming that theAirport General Manager had no legal authority to make the cancellation. They maintain that it isonly the Secretary of Public Works and Communications, acting for the President, or by delegation

of power, the Director of Civil Aeronautics Administration who could validly cancel the contract. Theydo admit, however, and it is evident from the records that the Airport General Manager signed "Forthe Director." Under the circumstances, there is no question that such act enjoys the presumption ofregularity, not to mention the unassailable fact that such act was subsequently affirmed or ratified bythe Director of the CAA himself (Record on Appeal, pp. 108-110).

Petitioners argue that cancelling or setting aside a contract approved by the Secretary is, in effect,repealing an act of the Secretary which is beyond the authority of the Administrator.

Such argument is untenable. The terms and conditions under which such revocation or cancellationmay be made, have already been specifically provided for in Contract "A" which has already beenapproved by the Department Head, It is evident that in the implementation of aforesaid contract, the

approval of said Department Head is no longer necessary if not redundant.

It is further contended that even granting that such cancellation was effective, a subsequent billingby the Accounting Department of the CAA has in effect waived or nullified the rescission of Contract"A."

It will be recalled that the questioned cancellation of Contract "A" was among others, mainly basedon the violation of its terms and conditions, specifically, the sublease of the property by the lesseewithout the consent of the lessor.

The billing of the petitioners by the Accounting Department of the CAA if indeed it transpired, afterthe cancellation of Contract "A" is obviously an error. However, this Court has already ruled that themistakes of government personnel should not affect public interest. In San Mauricio MiningCompany v. Ancheta(105 SCRA 391, 422), it has been held that as a matter of law rooted in theprotection of public interest, and also as a general policy to protect the government and the people,errors of government personnel in the performance of their duties should never deprive the people ofthe right to rectify such error and recover what might be lost or be bartered away in any actuation,deal or transaction concerned. In the case at bar, the lower court in its decision which has beenaffirmed by the Court of Appeals, ordered the CAA to refund to the petitioners the amount of rentalswhich was not due from them with 6% interest per annum until fully paid.

Petitioners further assail the interpretation of Contract "A", claiming that Contract "B" was a meresublease to respondent Mobil Oil Philippines, Inc. and requires no prior consent of CAA to perfectthe same. Citing Article 1650 of the Civil Code, they assert that the prohibition to sublease must beexpressed and cannot be merely implied or inferred (Rollo, p. 151).

As correctly found by the Court of Appeals, petitioners in asserting the non- necessity for a priorconsent interprets the first sentence of paragraph 7 of Contract "A" to refer to an assignment of leaseunder Article 1649 of the Civil Code and not to a mere sublease. A careful scrutiny of said paragraphof Contract "A" clearly shows that it speaks of transfer of rights of Rosario Leveriza to the leasedpremises and not to assignment of the lease (Rollo, pp. 48-49).

Petitioners likewise argued that it was contemplated by the parties to Contract "A" that Mobil OilPhilippines would be the owner of the gasoline station it would construct on the leased premises

8/12/2019 Cases 6.17

24/83

during the period of the lease, hence, it is understood that it must be given a right to use and occupythe lot in question in the form of a sub-lease (Rollo, p. 152).

In Contract "A", it was categorically stated that it is the lessee (petitioner) who will manage andoperate the gasoline station. The fact that Mobil Oil was mentioned in that contract was clearly notintended to give approval to a sublease between petitioners and said company but rather to insure

that in the arrangements to be made between them, it must be understood that after the expiration ofthe lease contract, whatever improvements have been constructed in the leased premises shall berelinquished to CAA. Thus, this Court held that "the primary and elementary rule of construction ofdocuments is that when the words or language thereof is clear and plain or readily understandableby any ordinary reader thereof, there is absolutely no room for interpretation or constructionanymore." (San Mauricio Mining Company v. Ancheta, supra).

Finally, petitioners contend that the administrator of CAA cannot execute without approval of theDepartment Secretary, a valid contract of lease over real property owned by the Republic of thePhilippines, citing Sections 567 and 568 of the Revised Administrative Code, which provide asfollows:

SEC. 567.Authority of the President of the Philippines to execute contracts relativeto real property. When the Republic of the Philippines is party to a deed conveyingthe title to real property or is party to any lease or other contract relating to real

property belonging to said government, said deed or contract shall be executed onbehalf of said government by the President of the Philippinesor by an officer dulydesignated by him, unless authority to execute the same is by law expressly vestedin some other officer. (Emphasis supplied)

SEC. 568.Authority of national officials to make contract. Written contracts notwithin the purview of the preceding section shall, in the absence of special provision,be executed, with the approval of the proper Department Head, by the Chief of theBureau or Office having control of the appropriation against which the contract wouldcreate a charge; or if there is no such chief, by the proper Department Head himself

or the President of the Philippines as the case may require.

On the other hand, respondent CAA avers that the CAA Administrator has the authority to lease realproperty belonging to the Republic of the Philippines under its administration even without theapproval of the Secretary of Public Works and Communications, which authority is expressly vestedin it by law, more particularly Section 32 (24) of Republic Act 776, which reads:

Sec. 32. Powers and Duties of the Administrator. Subject to the general controland supervision of the Department Head, the Administrator shall have, amongothers, the following powers and duties:

xxx xxx xxx

(24) To administer, operate, manage, control, maintain and develop the ManilaInternational Airport and all government aerodromes except those controlled oroperated by the Armed Forces of the Philippines including such power and duties as:... (b) to enter into, make and execute contracts of any kind with any person, firm, orpublic or private corporation or entity; (c) to acquire, hold, purchase, or lease anypersonal or real property; right of ways, and easements which may be proper ornecessary: Provided, that no real property thus acquired and any other real property

8/12/2019 Cases 6.17

25/83

of the Civil Aeronautics Administration shall be sold without the approval of thePresident of the Philippines. ...

There is no dispute that the Revised Administrative Code is a general law whileRepublic Act 776 is a special law nor in the fact that the real property subject of thelease in Contract "C" is real property belonging to the Republic of the Philippines.

Under 567 of the Revised Administrative Code, such contract of lease must be executed: (1) by thePresident of the Philippines, or (2) by an officer duly designated by him or (3) by an officer expresslyvested by law. It is readily apparent that in the case at bar, the Civil Aeronautics Administration hasthe authority to enter into Contracts of Lease for the government under the third category. Thus, ascorrectly ruled by the Court of Appeals, the Civil Aeronautics Administration has the power toexecute the deed or contract involving leases of real properties belonging to the Republic of thePhilippines, not because it is an entity duly designated by the President but because the saidauthority to execute the same is, by law expressly vested in it.

Under the above-cited Section 32 (par. 24) of Republic Act 776, the Administrator (Director) of theCivil Aeronautics Administration by reason of its creation and existence, administers properties

belonging to the Republic of the Philippines and it is on these properties that the Administrator mustexercise his vast power and discharge his duty to enter into, make and execute contract of any kindwith any person, firm, or public or private corporation or entity and to acquire, hold, purchase, orlease any personal or real property, right of ways and easements which may be proper ornecessary. The exception, however, is the sale of properties acquired by CAA or any other realproperties of the same which must have the approval of the President of the Philippines. The Courtof appeals took cognizance of the striking absence of such proviso in the other transactionscontemplated in paragraph (24) and is convinced as we are, that the Director of the Civil Aeronautics

Administration does not need the prior approval of the President or the Secretary of Public Worksand Communications in the execution of Contract "C."

In this regard, this Court, ruled that another basic principle of statutory construction mandates thatgeneral legislation must give way to special legislation on the same subject, and generally be so

interpreted as to embrace only cases in which the special provisions are not applicable (Sto.Domingo v. De los Angeles, 96 SCRA 139),. that specific statute prevails over a general statute (DeJesus v. People, 120 SCRA 760) and that where two statutes are of equal theoretical application toa particular case, the one designed therefor specially should prevail (Wil Wilhensen, Inc. v. Baluyot,83 SCRA 38)

WHEREFORE, the petition is DISMISSED for lack of merit and the decision of the Court of Appealsappealed from is AFFIRMED in toto.

SO ORDERED.

Luzon Development Bank vs Association vs

AssociationChester Cabalza recommends his visitors to please read the original & full text of the case cited. Xie xie!

LUZON DEVELOPMENT BANK, petitioner,

vs.

ASSOCIATION OF LUZON DEVELOPMENT BANK EMPLOYEES and ATTY. ESTER S. GARCIA in her capacity

8/12/2019 Cases 6.17

26/83

as VOLUNTARY ARBITRATOR, respondents

G.R. No. 120319

October 6, 1995

Facts:

From a submission agreement of the Luzon Development Bank (LDB) and the Association of Luzon Development

Bank Employees (ALDBE) arose an arbitration case to resolve the following issue: whether or not the company has

violated the Collective Bargaining Agreement provision and the Memorandum of Agreement dated April 1994, on

promotion.

At a conference, the parties agreed on the submission of their respective Position Papers on December 1-15, 1994.

Atty. Ester S. Garcia, in her capacity as Voluntary Arbitrator, received ALDBE's Position Paper on January 18, 1995.

LDB, on the other hand, failed to submit its Position Paper despite a letter from the Voluntary Arbitrator reminding

them to do so. As of May 23, 1995 no Position Paper had been filed by LDB. On May 24, 1995, without LDB's

Position Paper, the Voluntary Arbitrator rendered a decision disposing as follows:

WHEREFORE, finding is hereby made that the Bank has not adhered to the Collective Bargaining Agreementprovision nor the Memorandum of Agreement on promotion. Hence, this petition for certiorari and prohibition seeking

to set aside the decision of the Voluntary Arbitrator and to prohibit her from enforcing the same.

Issue:

Which court has the jurisdiction for the appellate review of adjudications of all quasi -judicial entities

Held:

Section 9 of B.P. Blg. 129, as amended by Republic Act No. 7902, provides that the Court of Appeals shall exercise:

(B) Exclusive appellate jurisdiction over all final judgments, decisions, resolutions, orders or awards of Regional TrialCourts and quasi-judicial agencies, instrumentalities, boards or commissions, including the Securities and Exchange

Commission, the Employees Compensation Commission and the Civil Service Commission, except those falling

within the appellate jurisdiction of the Supreme Court in accordance with the Constitution, the Labor Code of the

Philippines under Presidential Decree No. 442, as amended, the provisions of this Act, and of subparagraph (1) of the

third paragraph and subparagraph (4) of the fourth paragraph of Section 17 of the Judiciary Act of 1948.

The voluntary arbitrator no less performs a state function pursuant to a governmental power delegated to him under

the provisions therefor in the Labor Code and he falls, therefore, within the contemplation of the term "instrumentality"

in the aforequoted Sec. 9 of B.P. 129. The fact that his functions and powers are provided for in the Labor Code does

not place him within the exceptions to said Sec. 9 since he is a quasi-judicial instrumentality as contemplated therein

A fortiori, the decision or award of the voluntary arbitrator or panel of arbitrators should likewise be appealable to the

Court of Appeals, in line with the procedure outlined in Revised Administrative Circular No. 1-95, just like those of thequasi-judicial agencies, boards and commissions enumerated therein.

This would be in furtherance of, and consistent with, the original purpose of Circular No. 1-91 to provide a uniform

procedure for the appellate review of adjudications of all quasi-judicial entities not expressly excepted from the

coverage of Sec. 9 of B.P. 129 by either the Constitution or another statute. In the same vein, it is worth mentioning

that under Section 22 of Republic Act No. 876, also known as the Arbitration Law, arbitration is deemed a special

proceeding of which the court specified in the contract or submission, or if none be specified, the Regional Trial Court

for the province or city in which one of the parties resides or is doing business, or in which the arbitration is held, shall

8/12/2019 Cases 6.17

27/83

have jurisdiction. A party to the controversy may, at any time within one (1) month after an award is made, apply to

the court having jurisdiction for an order confirming the award and the court must grant such order unless the award

is vacated, modified or corrected.

In