PEOPLE VS.

QUE PO LAY
94 SCRA 641, March 29, 1954 (Constitutional Law Publication of Bank Circulars and
Regulations)
FACTS: Appellant who was in possession of foreign exchange consisting of U.S. dollars,
U.S. checks and U.S. money orders failed to sell the same to the Central Bank through its
agents within one day following the receipt of such foreign exchange as required by Central
Bank Circular No. 20. Appellant appeals on the claim that the said circular had no force or
effect because the same was not published in the official Gazette prior to the act or
omission imputed to said appellant. The Solicitor General counters that Commonwealth Act.
No. 638 and 2930 do not require the publication in the Official Gazette of said circular
issued for the implementation of a law in order to have force and effect.
ISSUE: Whether or not circulars and regulations should be published in order to have force
and effect.
HELD: Yes, circulars and regulations especially like Circular No. 20 of the Central Bank
which prescribes a penalty for its violation should be published before becoming effective.
Before the public is bound by its contents, especially its penal provisions, a law, regulation
or circular must first be published and the people officially and specifically informed of said
contents and its penalties.

TAADA, L. M. ET AL VS. HON. J.C. TUVERA ET AL

G.R. No. L-63915
April 24, 1985
En Banc
Facts:
Petitioners asked for the issuance of the Writ of mandamus to compel the respondents to
publish in the Official Gazette the unpublished Executive Issuances such as; Presidential
Decrees, Proclamations, Executive Orders, general orders, letters of implementation, and
administrative orders. In defense, respondents stated that the petitioners have no legal
personality in the case citing sec. 3 of rule 65 of the Rules of Court which lays-out the
requirement for filing for a Writ of Mandamus. Petitioners contended that the issue touches
the public and thereby does not require any special circumstance to institute an action. On
the other hand, respondents stated that publication of the mentioned issuances is not a sine
qua non requirement as the Law provides its own affectivity date as stated in Art. 2 of the
Civil Code.
Issue:
Whether or not publication affects the validity of the Executive Issuances.
Ruling:
The Supreme Court in its decision, ordered the respondents to publish the Executive
Issuances of general application, and further stated that failure for publication would render
the Issuances no binding force and effect.
It was explained that such publication is essential as it gives basis to the legal maxim known
as ignorantia legis non excusat. Thus, failure to publish would make create injustice as
would it would punish the citizen for transgression of the law which he had no notice.
The court declared that Presidential issuances with general application without publication
would be inoperative and null and void. However, some justices in their concurring opinions
made a qualification stating that publication is not an absolute requirement for the
publication. As Justice Fernando stated that, publication is needed but it must not only
confined in the Official Gazette because it would make those other laws not published in the

Official Gazette bereft of any binding force or effect.

TANADA V. TUVERA
GR L-63915, 29 December 1986 (146 SCRA 446)
Facts:
On 24 April 1985, the Court affirmed the necessity for the publication to the OfficialGazette
all unpublished presidential issuances which are of general application, and unless
so published, they shall have no binding force and effect. Decision was concurred only by 3
judges.Petitioners move for reconsideration / clarification of the decision on various
questions. Solicitor General avers that the motion is a request for advisory opinion.
February Revolution took place,which subsequently required the new Solicitor General to
file a rejoinder on the issue (under Rule 3, Section 18 of the Rules of Court).
Issue:
Whether publication is still required in light of the clause unless otherwise provided.
Held:
The clause unless it is otherwise provided, in Article 2 of the Civil Code, refers to thedate
of effectivity and not to the requirement of publication itself, which cannot in any event
beomitted. This clause does not mean that the legislature may make the law effective
immediatelyupon approval, or on any other date, without its previous publication. The
legislature may in itsdiscretion provide that the usual fifteen-day period shall be shortened
or extended. Publicationrequirements applies to (1) all statutes, including those of local
application and private laws; (2) presidential decrees and executive orders promulgated by
the President in the exercise of legislative powers whenever the same are validly delegated
by the legislature or directlyconferred by the Constitution; (3) Administrative rules and
regulations for the purpose of enforcing or implementing existing law pursuant also to a
valid delegation; (4) Charter of a citynotwithstanding that it applies to only a portion of the
national territory and directly affects onlythe inhabitants of that place; (5) Monetary Board
circulars to fill in the details of the CentralBank Act which that body is supposed to enforce.
Further, publication must be in full or it is no publication at all since its purpose is to inform
the public of the contents of the laws.
Reasoning:
The Supreme Court declared that all laws as above defined shall immediately upontheir
approval, or as soon thereafter as possible, be published in full in the Official Gazette,

to become effective only after 15 days from their publication, or on another date specified by
thelegislature, in accordance with Article 2 of the Civil Code.
PHILIPPINE ASSOCIATION OF SERVICE EXPORTERS, INC. V. TORRES
G.R. No. 101279 August 6, 1992
Grio-Aquino, J.
FACTS:
As a result of published stories regarding the abuses suffered by Filipino housemaids
employed in Hong Kong, then DOLE Secretary Ruben Torres issued Department Order
No.16, Series of 1991, temporarily suspending the recruitment by private employment
agencies of Filipino domestic helpers going to Hong Kong. The DOLE itself, through the
POEA took over the business of deploying such Hong Kong-bound workers. The POEA
Administrator also issued Memorandum Circular No. 37, Series of 1991, on the processing
of employment contracts of domestic workers for Hong Kong. PASEI filed a petition for
prohibition to annul the aforementioned DOLE and POEA circular 1sand to prohibit their
implementation on the grounds that DOLE and POEA acted with grave abuse of discretion
and/or in excess of their rule-making authority in issuing said circulars;
that the assailed DOLE and POEA circulars are contrary to the Constitution, are
unreasonable, unfair and oppressive; and that the requirements of publication and filing with
the Office of the National Administrative Register were not complied with.
HELD:
The second and first grounds are unmeritorious. Article 36 of the Labor Code grantsthe
Labor Secretary the power to restrict and regulate recruitment and placement activities.
It reads: The Secretary of Labor shall have the power to restrict and regulate the
recruitment and placement activities of all agencies within the coverage of this title[Regulati
on of Recruitment and Placement Activities] and is hereby authorized to issue orders and
promulgate rules and regulations to carry out the objectives and implement the provisions of
this title. On the other hand, the scope of the regulatory authority of the POEA, which was
created by Executive Order No. 797 to take over the functions of the Overseas Employment
Development Board, the National Seamen Board, and the overseas employment functions
of the Bureau of Employment Services, is broad and far-ranging for
among the functions inherited by the
POEA from the defunct Bureau of Employment
Services was the power and duty to establish and maintain a registration and/or
licensingsystem to regulate private sector participation in the recruitment and placement of
workers,locally and overseas; it assumed

from the defunct Overseas Employment DevelopmentBoard the power and duty to recruit
and place workers for overseas employment of Filipinocontract workers on a government
to government arrangement and in such other sectors aspolicy may dictate; and from the
National Seamen Board, the POEA took over to regulateand supervise the activities of
agents or representatives of shipping companies in the hiringof seamen for overseas
employment; and secure the best possible terms of employment forcontract seamen
workers and secure compliance therewith.Said administrative issuances merely restricted
the
scope
or area
of
PASEIs
businessoperations by excluding therefrom
recruitment and deployment of domestic helpers forHong Kong till after the establishment of
the mechanisms that will enhance the protectionof Filipino domestic helpers going to Hong
Kong. In fine, other than the recruitment anddeployment of Filipino domestic helpers for
Hong Kong, PASEI may still deploy other class of Filipino workers either for Hong Kong and
other countries and all other classes of Filipinoworkers for other countries. Said
administrative
issuances,
are
intended
to
curtail,
if
not
toend, rampant violations of the rule against excessive collections of placement anddocume
ntation fees, travel fees
and other charges committed by private employmentagencies
recruiting
and
deploying
domestic
helpers
to
Hong
Kong.
They
are
reasonable,valid and justified under the general welfare clause of the Constitution, since the
recruitment and
deployment business, as it is conducted
today,
is affected
with publicinterest.

Nevertheless, they are legally invalid, defective and unenforceable for lack of
powerpublication and filing in the Office of the National Administrative Register. As
announced in

TAADA VS. TUVERA

,All
statutes
, including those of local application and private laws, shall bepublished as a condition
for their effectivity, which shall begin fifteen days afterpublication unless a different effectivity
date
is fixed
by
the legislature.Covered by this rule are presidential decrees and executive orderspromulgat
ed by the President in the exercise of legislative powers whenever thesame are validly
delegated by the legislature or, at present, directly conferredby the Constitution:
Administrative rules and regulations must also be publishedif their purpose is to enforce or
implement
existing
law
pursuant
to
a
validdelegation.Interpretative regulations and those merely internal in nature, that is,regulati
ng only the personnel of the administrative agency and the public,
neednot be published. Neither is publication required of the so-called letter of instructions is
sued by the administrative superiors concerning the rules orguidelines
to be followed
by their subordinates in the performance of theirduties.

PHIL. ASSOCIATION OF SERVICE EXPORTERS, INC. VS. TORRES, 212 SCRA 298;
G.R. NO. 101279, AUGUST 6, 1992
Posted by Pius Morados on November 13, 2011
(Admin Law, DOLE, quasi-legislative power)
Facts: DOLE Dept. Order No. 16 temporarily suspends the recruitment by private
employment agencies of Filipino DH going to Hong Kong in view of the need to establish
mechanisms that will enhance the protection for the same.
The DOLE, through POEA took over the business of deploying such HK-bound workers.
Pursuant to the above order, POEA issued memorandum circular no. 30 providing
guidelines on the government processing and deployment of Filipino domestic helpers to
HK and the accreditation of HK recruitment agencies intending to hire Filipino domestic
helpers, and the memorandum circular No. 30, pertaining to the processing of employment
contracts of domestic workers for HK.
Petitioner contends that respondents acted with grave abuse of discretion and/or in excess
of their rule-making authority in issuing said circulars.
Issue: WON the take-over of the business deploying DH to HK by DOLE and POEA through
an administrative order and circular is valid.
Held: Yes. Article 36 of the Labor Code grants the Labor Secretary the power to restrict and
regulate recruitment and placement activities. The challenge administrative issuance
discloses that the same fall within the administrative and police powers expressly or by
necessary implication conferred upon the respondents.

FACTS:
SEC. 67 of the Omnibus Election Code reads: Candidates holding elective office. Any
elective official, whether national or local, running for any office other than the one which he
is holding in a permanent capacity, except for President and Vice-President, shall be
considered ipso facto resigned from his office upon the filing of his certificate of candidacy.
Petitioners alleged that Section 14 of RA 9006 entitled "An Act to Enhance the Holding of
Free, Orderly, Honest, Peaceful and Credible Elections through Fair Elections Practices,

insofar as it repeals Section 67 of the Omnibus Election Code, is unconstitutional for being
in violation of Section 26(1) of the Article VI of the Constitution, requiring every law to have
only one subject which should be in expressed in its title.

The inclusion of Sec 14 repealing Sec 67 of the Omnibus Election Code in RA 9006
constitutes a proscribed rider. The Sec 14 of RA 9006 primarily deals with the lifting of the
ban on the use of media for election propaganda and the elimination of unfair election
practices. Sec 67 of the OEC imposes a limitation of officials who run for office other than
the one they are holding in a permanent capacity by considering them as ipso facto
resigned therefrom upon filing of the certificate of candidacy. The repeal of Sec 67 of the
OEC is thus not embraced in the title, nor germane to the subject matter of RA 9006.

ISSUE:
Whether or not Section 14 of RA 9006 is a rider.

RULING:
No. The Court is convinced that the title and the objectives of RA 9006 are comprehensive
enough to include the repeal of Section 67 of the Omnibus Election Code within its
contemplation. To require that the said repeal of Section 67 of the Code be expressed in the
title is to insist that the title be a complete index of its content. The purported dissimilarity of
Section 67 of the Code and the Section 14 of the RA 9006 does not violate "one subject-one
title rule." This Court has held that an act having a single general subject, indicated in the
title, may contain any number of provisions, no matter how diverse they may be, so long as
they are not inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying out the
general subject.

Section 26(1) of the Constitution provides: Every bill passed by the Congress shall embrace
only one subject which shall be expressed in the title thereof.

The avowed purpose of the constitutional directive that the subject of a bill should be
embraced in its title is to apprise the legislators of the purposes, the nature and scope of its
provisions, and prevent the enactment into law of matters which have not received the
notice, action and study of the legislators and the public. In this case, it cannot be claimed
that the legislators were not apprised of the repeal of Section 67 of the Code as the same
was amply and comprehensively deliberated upon by the members of the House. In fact,
the petitioners as members of the House of Representatives, expressed their reservations
regarding its validity prior to casting their votes. Undoubtedly, the legislators were aware of
the existence of the provision repealing Section 67 of the Omnibus Election Code.

PEOPLE VS. SITON, ET AL.,GR 169364, 18 SEPT. 2009FACTS:

Respondents Evangeline Siton and Krystel Kate Sagarano were charged with vagrancy
pursuant toArt. 202 (2) of the RPC in two separate Informations. Accused were found
wandering and loiteringaround San Pedro and Legaspi Streets of Davao City, without any
visible means to support herself norlawful and justifiable purpose. Respondents filed
separate Motions to Quash on the ground that Art. 202(2) is unconstitutional for being
vague and overboard. The municipal trial court denied the motions,directed respondents to
file their respective counter-affidavits, and declared that the law on vagrancy
was enacted pursuant to the States police power (or the
power of promoting public welfare by
restraining and regulating the use of liberty and property) and justified by the Latin maxim
salus populiest suprema lex (which calls for the subordination of individual benefit to the
interest of the greater
number). Respondents filed a petition for certiorari and prohibition with the RTC challenging
theconstitutionality of the anti-vagrancy law and claiming that Art 202 (2) violated the equal
protectionclause. The RTC granted the petition of the herein respondents and declared Art.
202 (2)unconstitutional.
Issue:
Does Article 202 (2), RPC on vagrancy violate the equal protection clause?
Ruling:
No. Article 202 (2) of the RPC does not violate the equal protection clause; neither does
itdiscriminate against the poor and the unemployed. Offenders of public order laws
are punished not fortheir status, as for being poor or unemployed, but for conducting
themselves under such circumstancesas to endanger the public peace or cause alarm and
apprehension in the community. Being poor orunemployed is not a license or a justification
to act indecently or to engage in immoral conduct.

CONSUNJI VS. COURT OF APPEALS

FACTS:
At around 1:30 p.m., November 2, 1990, Jose Juego, a construction worker of D. M.
Consunji, Inc., fell 14 floors from the Renaissance Tower, Pasig City to his death. On May 9,
1991, Jose Juegos widow, Maria, filed in the Regional Trial Court (RTC) of Pasig a
complaint for damages against the deceaseds employer, D.M. Consunji, Inc. The employer
raised, among other defenses, the widows prior availment of the benefits from the State
Insurance Fund. After trial, the RTC rendered a decision in favor of the widow Maria Juego.
On appeal by D. M. Consunji, the Court of Appeals (CA) affirmed the decision of the RTC in
toto.
D. M. Consunji then sought the reversal of the CA decision.
ISSUES:
1. Whether or not the petitioner is held liable under the grounds of negligence.
2. Whether or not the injured employee or his heirs in case of death have a right of
selection or choice of action between availing themselves of the workers right
under the Workmens Compensation Act and suing in the regular courts under
the Civil Code for higher damages (actual, moral and exemplary) from the
employers by virtue of the negligence or fault of the employers or whether they
may avail themselves cumulatively of both actions,
RULING:
1. The doctrine of res ipsa loquitur (the thing or transaction speaks for itself)
is peculiar to the law of negligence which recognizes that prima facie
negligence may be established without direct proof and furnishes a substitute
for specific proof of negligence. It has the following requisites: (1) the accident
was of a kind which does not ordinarily occur unless someone is negligent; (2)
the instrumentality or agency which caused the injury was under the exclusive
control of the person charged with negligence; and (3)the injury suffered must
not have been due to any voluntary action or contribution on the part of the
person injured. All the requisites for the application of the rule of res ipsa

loquitur are present in the case at bar, thus a reasonable presumption or

inference of appellants negligence arises. Petitioner does not cite any other
evidence to rebut the inference or presumption of negligence arising from the
application of res ipsa loquitur, or to establish any defense relating to
the incident.
2. The claims for damages sustained by workers in the course of their
employment could be filed only under the Workmens Compensation Law, to
the exclusion of all further claims under other laws. In the course of availing the
remedies provided under the Workmens Compensation law, the claimants are
deemed to have waived theirknown right of the remedies provided by other
laws. The Court of Appeals, however, held that the case at bar came under
exception because private respondent was unaware of petitioners negligence
when she filed her claim for death benefits from the State Insurance Fund. Had
the claimant been aware, she wouldve opted to avail of a better remedy than
that of which she already had.

ATCI OVERSEAS CORPORATION, AMALIA G. IKDAL AND MINISTRY OF PUBLIC

HEALTH-KUWAITPETITIONERS, VS. MA. JOSEFA ECHIN, RESPONDENT.G.R. NO.
178551OCTOBER 11, 2010
FACTS:
Respondent Echin was hired by petitioner ATCI in behalf of its principal co-petitioner,
Ministry of PublicHealth of Kuwait, for the position of medical technologist under a two-year
contract with a monthlysalary of US$1,200.00.Within a year, Respondent was terminated for
not passing the probationaryperiod which was under the Memorandum of
Agreement.Ministry deni
ed respondents request and she
returned to the Philippines shouldering her own fair.Respondent filed with the National
Labor Relations Commission (NLRC) a complaint against ATCI forillegal dismissal. Labor
Arbiter rendered judgment in favor of respondent and ordered ATCI to pay her$3,600.00,
her salary for the three months unexpired portion of the contract.
ATCI appealed Labor Arbiters decision, however, NLRC affirmed the latters decision and
denie
d
petitioner ATCIs motion for

reconsideration. Petitioner appealed to the Court Appeals contending thattheir principal

being a foreign government agency is immune from suit, and as such, immunity extendedto
them.
Appellate Court affirmed NLRCs decision. It noted that under the law, a private employment
agencyshall assume all responsibilities for the implementation of the contract of
employment of an overseasworker; hence, it can be sued jointly and severally with the
foreign principal for any violation of therecruitment agreement or contract of employment.
Petitioners motion for r
econsideration was denied; hence, this present petition.
Issue:
Whether or not petitioners be held liable considering that the contract specifically stipulates
that
respondents employment
shall be governed by the Civil Service Law and Regulations of Kuwait.
Ruling:
Court denied the petition. According to RA 8042:

The obligations covenanted in the recruitmentagreement entered into by and between the
local agent and its foreign principal are not coterminouswith the term of such agreement so
that if either or both of the parties decide to end the agreement,the responsibilities of such
parties towards the contracted employees under the agreement do not at allend, but the
same extends up to and until the expiration of the employment contracts of the
employeesrecruited and employed pursuant to the said recruitment agreement. In
international law, the party whowants to have a foreign law applied to a dispute or case has
the burden of proving the foreign law.Where a foreign law is not pleaded or, even if pleaded,
is not proved, the presumption is that foreignlaw is the same as ours. Thus, we apply
Philippine labor laws in determining the issues presented beforeus.

THE UNITED STATES V. DIAZ-CONDE

42 Phil. 766 (Outline)G.R. No. L-18208, February 14, 1922 (Resource)Plaintiffappellee: THE UNITED STATES
Defendants-appellants: Vicente Diaz Conde and Apolinaria R. De CondeWhat happened:
On December 30, 1915, Bartolome Oliveros and Engracia Lianco accomplished and
delivered to the defendants a contract (named Exhibit B) which stated that the Oliveros
and Lianco had borrowed from the latter a sum of three hundred pesos (Php 300), and by
virtue of the terms of said contract, Oliveros and Lianco obligated themselves to pay to the
defendants interest at the rate of five percent (5%) per month, payable within the first ten
days of each and every month, the first payment to be made on the January 10, 1916.
On May 1, 1916, Act no. 2655 or the Usury Law came into effect. The law stated that
that the legal rate of interest for the loan or forbearance of any money, goods or credits, []
shall be 12% per annum. Any amount of interest paid or to be paid in excess of that fixed by
law is considered usurious, therefore unlawful.
A complaint was filed in the Court of First Instance of the city of Manila on May 6, 1921,
charging the defendants with a violation of the Usury Law (Act No. 2655). Upon said
complaint they were arrested, charged, and pleaded not guilty. On September 1, 1921, the
case was finally brought on for trial. At the end of the trial, with consideration to the
evidences cited in court, Hon. M. V. del Rosario, judge, found that the defendants were
guilty of the crime charged in the complaint and sentenced each of them to pay a fine of
P120 and, if they cannot meet their debt obligations, the defendants would suffer subsidiary

imprisonment in accordance with the provisions of the law. From that sentence each of the
defendants made an appeal.

Contention of the State:

The lower court, in the course of its opinion, stated that at the time of the execution and
delivery of said contract, there was no law in force in the Philippine Islands that punishes
usury. However, the defendants had collected a usurious rate of interest after the adoption
of the Usury Law in the Philippine Islands (Act No. 2655), Therefore, they were guilty in the
violation of that law and should be punished in accordance with its provisions.
Contention of the Accused:(a) The contract upon which the alleged usurious interest was
collected was executed before Act No. 2655 was adopted.
(b) The time that the said contract was made (December 30, 1915), there was no usury
law in force in the Philippine Islands.
(c) Act No. 2655 did not become effective until the May 1, 1916, or four months and a half
after the contract was executed.
(d) The said law could have no retroactive effect or operation
(e) The said law impairs the obligation of a contract.
For all of said reasons the judgment imposed by the lower court should be revoked; that the
complaint should be dismissed, and that they should each be discharged from the custody
of the law.Ruling of the Supreme Court:
The Supreme Court en banc promulgated on February 14, 1922 its ruling on the case of
The United States vs Vicente Diaz Conde and Apolinaria R. De Conde (G.R. No. L-18208).
The court has decided that the acts complained of by the defendants did not constitute a
crime at the time they were committed. A law imposing a new penalty, liability or disability,
or giving a new right of action, must not be construed as having a retroactive effect. It is an
elementary rule of contract that the laws in force at the time of the contract was made must
govern its interpretation and application. Laws must be construed prospectively and not
retrospectively. If a contract is legal at its commencement, it cannot be rendered illegal by
any subsequent legislation. If that were permitted, then the obligations of a contract might
be impaired, which is prohibited by Philippine law.
Ex post facto laws, unless they are favorable to the defendant, are prohibited in this

jurisdiction. Every law that makes an action, done before the passage of the law, and which
was innocent when done, criminal, and punishes such action, is an ex post facto law. The
Legislature is prohibited from adopting a law which will make an act done before its
adoption a crime, as in the case of Act No. 2655. A law may be given a retroactive effect in
civil action, providing it is curative in character, but ex post facto laws are absolutely
prohibited unless its retroactive effect is favorable to the defendant.The complaint was
therefore dismissed, and the defendants were discharged from the custody of the law with
costs.

FRIVALDO VS. COMELEC (1996)

G.R. No. 120295, June 28 1996, 257 SCRA 727

FACTS:
Juan G. Frivaldo ran for Governor of Sorsogon again and won. Raul R. Lee questioned his
citizenship. He then petitioned for repatriation under PresidentialDecree No. 725 and was
able to take his oath of allegiance as a Philippine citizen.
However, on the day that he got his citizenship, the Court had already ruled based on his
previous attempts to run as governor and acquire citizenship, and had proclaimed Lee, who
got the second highest number of votes, as the newly elect Governor of Sorsogon.

ISSUE:
Whether or not Frivaldos repatriation was valid.

HELD:

The Court ruled his repatriation was valid and legal and because of the curative nature
of Presidential Decree No. 725, his repatriation retroacted to the date of the filing of
his application to run for governor. The steps to reacquire Philippine Citizenship by
repatriation under Presidential Decree No. 725 are: (1) filing the application; (2) action by
the committee; and (3) taking of the oath of allegiance if the application is approved. It is
only upon taking the oath of allegiance that the applicant is deemed ipso jure to have
reacquired Philippine citizenship. If the decree had intended the oath taking to retroact to
the date of the filing of the application, then it should not have explicitly provided otherwise.
He is therefore qualified to be proclaimed governor of Sorsogon.

ALBINO S. CO, PETITIONER,VS.COURT OF APPEALS AND PEOPLE OF THE

PHILIPPINES, RESPONDENTS.
FACTS:
A criminal complaint for violation of Batas Pambansa Bilang 22 was filed by the salvage
company against petitioner with the Regional Trial Court. The case eventuated in
petitioners conviction of the crime charged on the basis that a check issued merely to
guarantee the performance of an obligation is nevertheless covered by B.P. Blg. 22.
Pending litigation, Ministry of Justice Circular No. 4 (which excludes guarantee check from
application of B.P. Blg. 22) was subsequently reversed by Ministry Circular No. 12 which
ruled that a check issued merely to guarantee the performance of an obligation is
nevertheless covered by B.P. Blg. 22. Petitioner appealed to the Court of Appeals. There he
sought exoneration upon the theory that it was reversible error for the Regional Trial Court
but the Court of Appeals affirmed his conviction.
ISSUE:
Whether or not Ministry Circular No. 12 dated August 8, 1984 declaring the guarantee check
will no longer be considered as a valid defense be retroactively applied.
HELD:
NO. Decision of the Court of Appeals and RTC were set aside. Criminal prosecution against
accused-petitioner was dismissed.

RATIO:
It would seem that the weight of authority is decidedly in favor of the proposition that the
Courts decision of September 21, 1987 in Que v. People, 154 SCRA 160 (1987) that a
check issued merely to guarantee the performance of an obligation is nevertheless covered
by B.P. Blg. 22 should not be given retrospective effect to the prejudice of the petitioner
and other persons situated, who relied on the official opinion of the Minister of Justice that
such a check did not fall within the scope of B.P. Blg. 22.
This is after all a criminal action all doubts in which, pursuant to familiar, fundamental
doctrine, must be resolved in favor of the accused. Everything considered, the Court sees
no compelling reason why the doctrine of mala prohibita should override the principle of
prospectivity, and its clear implications as herein above set out and discussed, negating
criminal liability.

FAR
EAST
BANK
&
MARQUEZ, RESPONDENT.

TRUST

CO., PETITIONER,

VS. ARTURO

L.

DECISION
PANGANIBAN, J.:
Under PD 957, the mortgage of a subdivision lot or a condominium unit is void, if executed
by a property developer without the prior written approval of the Housing and Land Use
Regulatory Board (HLURB). That an encumbrance has been constituted over an entire
property, of which the subject lot or unit is merely a part, does not affect the invalidity of the
lien over the specific portion at issue.
The Case
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the April
27, 2001 Decision2 of the Court of Appeals (CA) in CA-GR SP No. 56813. The decretal
portion of the Decision reads as follows:
WHEREFORE, the petition for review is DENIED, for lack of merit.3
The Facts
The undisputed facts of the case are summarized in the CA Decision as follows:

1. On 13 March 1989, respondent [Arturo] Marquez entered into a Contract to Sell with
Transamerican Sales and Exposition (TSE), through the latters Owner/General Manager
Engr. Jesus Garcia, involving a 52.5 sq. m. lot in Diliman, Quezon City with a three-storey
townhouse unit denominated as Unit No. 10 to be constructed thereon for a total
consideration of P800,000.00. The parcel of land in question is a portion of that property
covered by TCT No. 156254 (now TCT No. 383697).
2. On 22 May 1989, TSE obtained a loan from petitioner FEBTC in the amount
of P7,650,000.00 and mortgaged the property covered by TCT No. 156254.
3. For failure of TSE to pay its obligation, petitioner FEBTC extrajudicially foreclosed the
real estate mortgage and became the highest bidder (P15.7 million) in the auction sale
conducted for the purpose.
4. Respondent had already paid a total of P600,000.00 when he stopped payment because
the construction of his townhouse unit slackened. He discovered later on that this was due
to the foreclosure.
"5. Consequently, [respondent] instituted a case with the Office of Appeals, Adjudication and
Legal Affairs (OAALA) of the Housing and Land Use Regulatory Board (HLURB) on 29
January 1991 entitled Arturo Marquez vs. Transamerican Sales, et al docketed as HLRB
Case No. REM-012991-4712 to compel TSE to complete the construction of the townhouse
and to prevent the enforceability of the extra-judicial foreclosure made by petitioner FEBTC
and to have the mortgage between TSE and petitioner FEBTC declared invalid, said
mortgage having been entered into by the parties in violation of section 18 of P.D. 957.
6. The OAALA ruled in favor of the respondent via a Decision dated 11 November 1991, the
decretal portion of which reads as follows:
WHEREFORE, premises considered, judgment is hereby rendered as follows:
1. Declaring the mortgage executed by and between x x x Engr. Jesus
Garcia/Transamerican Sales and Exposition and Far East Bank and Trust Company to be
unenforceable against [respondent];
2. Ordering the x x x Far East Bank and Trust Company to compute and/or determine the
loan value of the [respondent] who was not able to complete or make full payment and
accept payment and/or receive the amortization from the [respondent] and upon full
payment to deliver the title corresponding to Unit No. 10 of that Townhouse Project located
at No. 10 Panay Ave., Quezon City;
3. Ordering the Register of Deeds of Quezon City to cancel the annotations of the mortgage

indebtedness between x x x Engr. Jesus Garcia and Far East Bank and Trust Company;
4. Ordering, likewise, the Register of Deeds of Quezon City to cancel the annotation of the
Certificate of Sale in favor of the Far East Bank and Trust Company on Transfer Certificate
of Title No. 156254 to which the lot subject of this case is a part thereof, without prejudice to
its right to require x x x Engr. Jesus Garcia/Transamerican Sales and Exposition to
constitute new collateral in lieu of said title sufficient in value to cover the mortgage
obligation.
xxx xxx xx x
7. Petitioner FEBTC interposed a Petition for Review from the decision issued by the
OAALA with the Board of Commissioners of the HLURB, docketed as HLRB Case No.
REM-A-1126, which in a Decision dated 18 July 1994 affirmed in toto the OAALA decision.
8. Hence, petitioner FEBTC appealed the Decision dated 18 July 1994 to the Office of the
President xxx.
xxx xxx xx x
9. The Office of the President dismissed the appeal and affirmed the Decision dated 18 July
1994 x x x.4 (Citations omitted)
Petitioner then elevated the case to the CA through a Petition for review under Rule 43.
Ruling of the Court of Appeals
The CA found that petitioner had known that a subdivision was forthcoming inasmuch as the
loan was obtained by TSE to partially finance the construction of a 20-unit townhouse
project, as stated in the Whereas clause in the mortgage contract.5 Thus, the CA ruled that
petitioner should not have merely relied on the representation of TSE that it had obtained
the approval and authorization of the proper government agencies but should have required
the submission of said documents.6
Further, the appellate court found that the Certification against forum shopping attached to
the Petition before it had not been made under oath, in violation of the Rules of Court.
Hence, this Petition.7
The Issues
Petitioner raises the following issues for our consideration:

Whether or not the mortgage contract violated Section 18 of P.D. 957, hence, void insofar
as third persons are concerned.
Assuming arguendo that the mortgage contract violated Section 18 of P.D. 957, whether or
not the remedy granted and imposed by the HLURB, as sustained by the Office of the
President and the Court of Appeals, is proper.
Whether or not the inadvertent failure of the notary public to affix his signature on the
Certification against forum shopping executed by petitioner FEBTC in connection with the
Petition for Review it filed with the Court of Appeals provided a sufficient basis for the
dismissal of the appeal.8
The Court's Ruling
The Petition is partly meritorious.
First Issue:
Violation of Section 18 of PD 957
Section 18 of PD 9579 provides as follows:
SEC. 18. Mortgages. - No mortgage on any unit or lot shall be made by the owner or
developer without prior written approval of the Authority. Such approval shall not be granted
unless it is shown that the proceeds of the mortgage loan shall be used for the development
of the condominium or subdivision project and effective measures have been provided to
ensure such utilization.The loan value of each lot or unit covered by the mortgage shall be
determined and the buyer thereof, if any, shall be notified before the release of the loan. The
buyer may, at his option, pay his installment for the lot or unit directly to the mortgagee who
shall apply the payments to the corresponding mortgage indebtedness secured by the
particular lot or unit being paid for, with a view to enabling said buyer to obtain title over the
lot or unit promptly after full payment thereof.
Petitioner contends that the above-quoted provision does not apply to this case, because
the land mortgaged to it was one whole parcel, not of a subdivision lot, but of an
unsubdivided one. It insists that the written approval of the National Housing Authority (now
the Housing and Land Use Regulatory Board) was not a requirement for the constitution of
a mortgage on the property.
We are not persuaded. It is undisputed that the subject 52.5-square-meter lot with a threestorey town house unit denominated as Unit No. 10 (the lot) is part of the property
mortgaged to petitioner and is covered by TCT No. 156254. The lot was technically

described and segregated in a Contact to Sell that had been entered into before the
mortgage loan was contracted. The fact that the lot had no separate TCT did not make it
less of a "subdivision lot" entitled to the protection of PD 957.
That the subject of the mortgage loan was the entire land, not the individual subdivided lots,
does not take the loan beyond the coverage of Section 18 of PD 957. Undeniably, the lot
was also mortgaged when the entire parcel of land, of which it was a part, was encumbered.
Petitioner also contends that Section 18 of PD 957 is merely a directory provision,
noncompliance with which does not render the mortgage transaction void.
In determining whether a law is mandatory, it is necessary to ascertain the legislative intent,
as stated by Sen. Arturo M. Tolentino, an authority on civil law:
There is no well-defined rule by which a mandatory or prohibitory law may, in all
circumstances, be distinguished from one which is directory, suppletory, or permissive. In
the determination of this question, the prime object is to ascertain the legislative intention.
Generally speaking, those provisions which are mere matter of form, or which are not
material, do not affect any substantial right, and do not relate to the essence of the thing to
be done, so that compliance is a matter of convenience rather that substance, are
considered to be directory. On the other hand, statutory provisions which relate to matters of
substance, affect substantial rights and are the very essence of the thing required to be
done, are regarded as mandatory.10
In Philippine National Bank v. Office of the President,11 we had occasion to mull over the
intent of PD 957 thus:
x x x [T]he unmistakable intent of the law [is] to protect innocent lot buyers from scheming
subdivision developers. As between these small lot buyers and the gigantic financial
institutions which the developers deal with, it is obvious that the law -- as an instrument of
social justice -- must favor the weak. Indeed, the petitioner Bank had at its disposal vast
resources with which it could adequately protect its loan activities, and therefore is
presumed to have conducted the usual due diligence checking and ascertaining (whether
thru ocular inspection or other modes of investigation) the actual status, condition, utilization
and occupancy of the property offered as collateral, x x x On the other hand, private
respondents obviously were powerless to discover the attempt of the land developer to
hypothecate the property being sold to them. It was precisely in order to deal with this kind
of situation that P.D. 957 was enacted, its very essence and intendment being to provide a
protective mantle over helpless citizens who may fall prey to the razzmatazz of what P.D.
957 termed unscrupulous subdivision and condominium sellers.12

Concededly, PD 957 aims to protect innocent lot buyers. Section 18 of the decree directly
addresses the problem of fraud committed against buyers when the lot they have
contracted to purchase, and which they have religiously paid for, is mortgaged without their
knowledge. The avowed purpose of PD 957 compels the reading of Section 18 as
prohibitory -- acts committed contrary to it are void.13 Such construal ensures the
attainment of the purpose of the law: to protect lot buyers, so that they do not end up still
homeless despite having fully paid for their home lots with their hard-earned cash.
Petitioner argues that it is an innocent mortgagee whose lien must be respected and
protected, since the title offered as security was clean of any encumbrance or lien. We do
not agree.
x xx. As a general rule, where there is nothing on the certificate of title to indicate any cloud
or vice in the ownership of the property, or any encumbrance thereon, the purchaser is not
required to explore further than what the Torrens Title upon its face indicates in quest for
any hidden defect or inchoate right that may subsequently defeat his right thereto. This rule,
however, admits of an exception as where the purchaser or mortgagee has knowledge of a
defect or lack of title in the vendor, or that he was aware of sufficient facts to induce a
reasonably prudent man to inquire into the status of the property in litigation.14
Petitioner bank should have considered that it was dealing with a town house project that
was already in progress. A reasonable person should have been aware that, to finance the
project, sources of funds could have been used other than the loan, which was intended to
serve the purpose only partially. Hence, there was need to verify whether any part of the
property was already the subject of any other contract involving buyers or potential buyers.
In granting the loan, petitioner bank should not have been content merely with a clean title,
considering the presence of circumstances indicating the need for a thorough investigation
of the existence of buyers like respondent. Having been wanting in care and prudence, the
latter cannot be deemed to be an innocent mortgagee.
Petitioner cannot claim to be a mortgagee in good faith. Indeed it was negligent, as found
by the Office of the President and by the CA. Petitioner should not have relied only on the
representation of the mortgagor that the latter had secured all requisite permits and licenses
from the government agencies concerned. The former should have required the submission
of certified true copies of those documents and verified their authenticity through its own
independent effort.
Having been negligent in finding out what respondents rights were over the lot, petitioner
must be deemed to possess constructive knowledge of those rights.15
Second Issue:

Remedy Granted
To retain possession of the lot, petitioner claims that its rights as the buyer in the foreclosure
sale are superior to those of respondent.
We are not persuaded. Aside from being a buyer of the lot, petitioner was also the
mortgagee, which, as previously discussed, was presumed to know the rights of respondent
over that lot. The conversion of the status of the former from mortgagee to buyer-owner will
not lessen the importance of such knowledge. Neither will the conversion set aside the
consequences of its negligence as a mortgagee.
The lot was mortgaged in violation of Section 18 of PD 957. Respondent, who was the
buyer of the property, was not notified of the mortgage before the release of the loan
proceeds by petitioner. Acts executed against the provisions of mandatory or prohibitory
laws shall be void.16 Hence, the mortgage over the lot is null and void insofar as private
respondent is concerned.17
The remedy granted by the HLURB and sustained by the Office of the President is proper
only insofar as it refers to the lot of respondent. In short, the mortgage contract is void as
against him. Since there is no law stating the specifics of what should be done under the
circumstances, that which is in accord with equity should be ordered. The remedy granted
by the HLURB in the first and the second paragraphs of the dispositive portion of its
Decision insofar as it referred to respondent's lot is in accord with equity.
The HLURB, however, went overboard in its disposition in paragraphs 3 and 4, which
pertained not only to the lot but to the entire parcel of land mortgaged. Such ruling was
improper. The subject of this litigation is limited only to the lot that respondent is buying, not
to the entire parcel of land. He has no personality or standing to bring suit on the whole
property, as he has actionable interest over the subject lot only.
Third Issue:
Certification Against Forum Shopping
We find no cogent reason to alter the ruling of the CA regarding the Certification against
forum shopping that did not bear the notary public's signature. It is worth emphasizing that
despite petitioner's noncompliance with the technical requirements regarding the
Certification, the CA still ruled on the merits of the case.18 In fact, there is no more need to
pass upon this issue inasmuch as, on the merits, we have already turned down petitioners
plea against respondent.
WHEREFORE, the Petition is PARTLY GRANTED. The Decision of the HLURB

is AFFIRMED, but it shall be applicable only to the 52.5-square-meter lot with a three-storey
town house unit denominated as Unit No. 10. No costs.
SO ORDERED
Davide Jr., C. J., (Chairman), Ynares-Santiago, Carpio and Azcuna, JJ., concur.

RADIO MINDANAO NETWORK

The Facts:
In 1989, Michael Amurao was hired as radio broadcaster/production manager by Radio
Mindanao Network (RMN). After several years, RMN decided to reformat and restructure
the programming of its station DWKC, thus, its president met with Michael and other station
personnel to inform them of the management decision; that the reformatting will affect their
employment; and that they would be paid there retirement and other benefits. Michael and
his colleagues then received a letter terminating their employment effective June 15, 2002.
Though they refused to sign the letters when it was served on them, they later agreed to
compromise with RMN. Michael thus executed an Affidavit of Quitclaim and Release,
stating as follows:
AFFIDAVIT OF RELEASE/QUITCLAIM
That I, MICHAEL MAXIMO R. AMURAO III, of legal age, Filipino, and a resident of Manila
after having been duly sworn to according to law, hereby depose and say:
1. That I have retired from my position as Production Manager from RADIO MINDANAO
NETWORK INC. EFFECTIVE June 15, 2002;
2. That for and in consideration of sum THREE HUNDRED ELEVEN THOUSAND NINE
HUNDRED TWENTY-TWO PESOS & 00 CENTS. (P311,922.00) in Philippine Currency, to
me in hand paid by RADIO MINDANAO NETWORK, INC. in additional retirement benefits

per corrected employment period, receipt of which is hereby acknowledged to my complete

and full satisfaction;
3. That I hereby RELEASE AND DISCHARGE RADIO MINDANAO NETWORK, INC., its
Officers, Directors, and Managers from any and all claims and demands whatsoever as
maybe due to me incident to employment with radio station DWKC-FM and/or cessation of
the same with Radio Mindanao Network, Inc., on June 15, 2002.
4. That I hereby state further that I have no more claims, right or action whatsoever nature
whether past, present or contingent against said corporation;
5. That, I manifest that the terms of this release and quitclaim have been read and
thoroughly understood by me and accepted said terms on my own consent.
Michael filed a case for illegal dismissal with the NLRC, five months after executing the
Affidavit of Quitclaim and Release.
The Labor Arbiter decided in favour of Michael, ruling him illegally dismissed as the
termination did not fall under any of the just or authorized causes for termination under
Article 282. It also ruled that the quitclaim executed by Michael was void as it was not
voluntarily executed. RMN appealed to the NLRC, arguing that the decision was premature
as the case was not set for hearing nor declared the same submitted for resolution; it also
assailed the LAs finding that the quitclaim was void, arguing that the same was valid and
binding because it represented a voluntary and reasonable settlement of Michaels claims,
hence he was estopped from filing the illegal dismissal case. The NLRC however affirmed
the LA ruling, which decision was affirmed by the CA.
The Issue:
Whether oft not the quitclaim executed by Michael in favor of RMN was valid and binding.

The Ruling:
That Michael was illegally dismissed from his employment is beyond question. RMN does
not dispute this. Its only submission now is that it was discharged from whatever claims
Michael had against it arising from his employment by virtue of the Affidavit of
Release/Quitclaim he signed in its favor. Accordingly, the remaining question to resolve is
whether the quitclaim was valid and binding.
This Court recognizes that the issue concerning the validity of the quitclaim was a question

of fact that is not within the province of a review on certiorari under Rule 45. However, there
is reason to hold that the CA manifestly overlooked certain relevant and undisputed facts
that, if properly considered, would justify a different conclusion herein. On that basis, the
Court has to delve into the factual issue, and has to review the evidence again to ensure
that its ruling on the issue jibes with the evidence on record.1 Its doing so is an acceptable
exception to the general rule of non-review of factual matters.2
The CA was quick to rule that Michael had been coerced into signing the quitclaim. It did so
because he had assailed the voluntariness of the execution of the quitclaim. It noted that
the fact that Michael had refused to sign the May 14, 2002 letter and thereby indicate his
acceptance of the terms of his termination stated therein was proof enough of the quitclaim
not being freely signed.3
The Court finds and considers the CAs ruling unfounded.
RMN consistently contended that a series of negotiations between Michael and the
management preceded the giving of the settlement pay that they had considered as
reasonable.4Not once did Michael refute this contention. Worth noting is that Michael
signed the quitclaim to release RMN from any and all claims that could be due to him by
reason of his employment after he receiving the agreed settlement pay of P311,922.00.
Not all quitclaims are per se invalid or against public policy. A quitclaim is invalid or contrary
to public policy only: (1) where there is clear proof that the waiver was wrangled from an
unsuspecting or gullible person; or (2) where the terms of settlement are unconscionable on
their face. In instances of invalid quitclaims, the law steps in to annul the questionable
waiver. Indeed, there are legitimate waivers that represent the voluntary and reasonable
settlements of laborers claims that should be respected by the Court as the law between
the parties. Where the party has voluntarily made the waiver, with a full understanding of its
terms as well as its consequences, and the consideration for the quitclaim is credible and
reasonable, the transaction must be recognized as a valid and binding undertaking, and
may not later be disowned simply because of a change of mind.5 A waiver is essentially
contractual.
In our view, the requisites for the validity of Michaels quitclaim were satisfied. We explain.
Firstly, Michael acknowledged in his quitclaim that he had read and thoroughly understood
the terms of his quitclaim and signed it of his own volition. Being a radio broadcaster and
production manager, he occupied a highly responsible position in the company. It would be
implausible to hold, therefore, that he could be easily duped into simply signing away his
rights. Besides, the language and content of the quitclaim were clear and uncomplicated
such that he could not claim that he did not understand what he was signing.

Secondly, the settlement pay of P311,922.00 was credible and reasonable considering that
Michael did not even assail such amount as unconscionably low, or even state that he was
entitled to a higher amount.
Thirdly, that he was required to sign the quitclaim as a condition to the release of the
settlement pay6 did not prove that its execution was coerced. Having agreed to part with a
substantial amount of money, RMN took steps to protect its interest and obtain its release
from all obligations once it paid Michael his settlement pay, which it did in this case.
And, lastly, that he signed the quitclaim out of fear of not being able to provide for the needs
of his family and for the schooling of his children did not immediately indicate that he had
been forced to sign the same.7 Dire necessity should not necessarily be an acceptable
ground for annulling the quitclaim, especially because it was not at all shown that he had
been forced to execute it. Nor was it even proven that the consideration for the quitclaim
was unconscionably low, and that he had been tricked into accepting the consideration.8
With the quitclaim having been freely and voluntarily signed, RMN was released and
absolved from any liability in favor of Michael. Suffice it to say that the quitclaim is
ineffective in barring recovery of the full measure of an employees rights only when the
transaction is shown to be questionable and the consideration is scandalously low and
inequitable.9 Such is not true here.
WHEREFORE,
the
Court GRANTS the
petition
for
review
on certiorari; REVERSES and SETS ASIDE the decision promulgated on August 31,
2004; DECLARES the Affidavit of Release/Quitclaim executed by and between respondent
Michael Maximo R. Amurao III and petitioner Radio Mindanao Network, Inc. valid and
binding; and DISMISSES the complaint for illegal dismissal of Michael Maximo R. Amurao
III.
No pronouncement on costs of suit.

SO ORDERED.