G.R. No. 115245. July 11, 1995.

JUANITO C. PILAR, petitioner, vs. COMMISSION ON ELECTIONS, respondent.

Election Law; Section 14 of RA No. 7166 states that every candidate has the obligation to file his statement of contributions and expenditures.—Section 14 of
R.A. No. 7166 states that “every candidate” has the obligation to file his statement of contributions and expenditures.
Same: Same; The rule is well recognized that where the law does not distinguish courts should not distinguish.—Well-recognized is the rule that where the
law does not distinguish, courts should not distinguish. Ubi lex non distinguit nec nos distinguere debemos(Philippine British Assurance Co. Inc. v. Intermediate
Appellate Court, 150 SCRA 520 [1987]; cf. Olfato v. Commission on Elections, 103 SCRA 741 [1981]). No distinction is to be made in the application of a law
where none is indicated.
Same; Same; The term “every candidate” must be deemed to refer not only to a candidate who pursued his campaign but also to one who withdrew his
candidacy.—In the case at bench, as the law makes no distinction or qualification as to whether the candidate pursued his candidacy or withdrew the same, the term
“every candidate” must be deemed to refer not only to a candidate who pursued his campaign, but also to one who withdrew his candidacy.
Same; Same: Section 13 of Resolution No. 2348 categorically refers to “all candidates who filed their certificate of candidacy."—The COMELEC, the body
tasked with the enforcement and administration of all laws and regulations relative to the conduct of an election, plebiscite, initiative, referendum, and recall (The
Constitution of the Republic of the Philippines, Art. IX(C), Sec. 2[1]), issued Resolution No. 2348 in implementation or interpretation of the provisions of Republic
Act No. 7166 on election contributions and expenditures. Section 13 of Resolution No. 2348 categorically refers to “all candidates who filed their certificates of
candidacy.” under the fourth paragraph of Section 73 of the B.P. Blg. 881 or the Omnibus Election Code of the Philippines, it is provided that “[t]he filing or
withdrawal of certificate of candidacy shall not affect whatever civil, criminal or administrative liabilities which a candidate may have incurred.” Petitioner’s
withdrawal of his candidacy did not extinguish his liability for the administrative fine.

MELO, J., Dissenting Opinion:

Election Law; Section 14 of R.A. No. 7166 states that every candidate has the obligation to file his statement of contributions and expenditures; The term
“candidate” is used to designate a person who actually submits himself and is voted for at our election.—But is an aspirant for public office who had a sudden
change of heart, so to speak, still considered a candidate to begin with? I am of the impression that he is not and is thus not bound to render an accounting
subsequent to election for the simple reason that the term ‘candidate’ is used to designate a person who actually submits himself and is voted for at our election
(Santos vs. Miranda, 35 Phil. 643, 648 (1916) citing State vs. Hirsch, 125 Ind., 207; 9 L.R.A. 107; Moreno, Philippine Law Dictionary, 1972 2nd ed., p. 84).
Certainly, one who withdraws his certificate of candidacy 3 days after the filing thereof, can not be voted for at an election. And considering the shortness of the
period of 3 days from the filing to the withdrawal of the certificate of candidacy, petitioner cannot be accused, as indeed there is no such charge, of utilizing his
aborted candidacy for purposes to raise funds or to extort money from other candidates in exchange for the withdrawal.

SPECIAL CIVIL ACTION in the Supreme Court. Certiorari.

The facts are stated in the opinion of the Court.

Diosdado G. Gozar for petitioner.
QUIASON, J.:

This is a petition for certiorari under Rule 65 of the Revised Rules of Court assailing the Resolution dated April 28, 1994 of the Commission on
Elections (COMELEC) in UND No. 94-040.

On March 22, 1992, petitioner Juanito C. Pilar filed his certificate of candidacy for the position of member of the Sangguniang Panlalawigan of the
Province of Isabela.
On March 25, 1992, petitioner withdrew his certificate of candidacy.
In M.R. Nos. 93-2654 and 94-0065 dated November 3, 1993 and February 13, 1994 respectively, the COMELEC imposed upon petitioner the fine
of Ten Thousand Pesos (P10,000.00) for failure to file his statement of contributions and expenditures.
In M.R. No. 94-0594 dated February 24, 1994, the COMELEC denied the motion for reconsideration of petitioner and deemed final M.R. Nos. 93-
2654 and 94-0065 (Rollo, p. 14).
Petitioner went to the COMELEC En Banc (UND No. 94-040), which denied the petition in a Resolution dated April 28, 1994 (Rollo, pp. 10-13).
Hence, this petition for certiorari.
We dismiss the petition.

II

Section 14 of R.A. No. 7166 entitled “An Act Providing for Synchronized National and Local Elections and for Electoral Reforms, Authorizing
Appropriations Therefor, and for Other Purposes” provides as follows:
“Statement of Contributions and Expenditures: Effect of Failure to File Statement. Every candidate and treasurer of the political party shall,within thirty (30) days
after the day of the election, file in duplicate with the offices of the Commission the full, true and itemized statement of all contributions and expenditures in
connection with the election.
“No person elected to any public office shall enter upon the duties of his office until he has filed the statement of contributions and expenditures herein required.
“The same prohibition shall apply if the political party which nominated the winning candidate fails to file the statement required herein within the period
prescribed by this Act.
“Except candidates for elective barangay office, failure to file the statements or reports in connection with electoral contributions and expenditures as required
herein shall constitute an administrative offense for which the offenders shall be liable to pay an administrative fine ranging from One Thousand Pesos (P1,000.00)
to Thirty Thousand Pesos (P30,000.00), in the discretion of the Commission.
“The fine shall be paid within thirty (30) days from receipt of notice of such failure; otherwise, it shall be enforceable by a writ of execution issued by the
Commission against the properties of the offender.
“It shall be the duty of every city or municipal election registrar to advise in writing, by personal delivery or registered mail, within five (5) days from the date
of election all candidates residing in his jurisdiction to comply with their obligation to file their statements of contributions and expenditures.
 “For the commission of a second or subsequent offense under this Section, the administrative fine shall be from Two Thousand Pesos (P2,000.00) to Sixty
Thousand Pesos (P60,000.00), in the discretion of the Commission. In addition, the offender shall be subject to perpetual disqualification to hold public office”
(Italics supplied).
To implement the provisions of law relative to election contributions and expenditures, the COMELEC promulgated on January 13, 1992 Resolution
No. 2348 (Re: Rules and Regulations Governing Electoral Contributions and Expenditures in Connection with the National and Local Elections on
May 11, 1992). The pertinent provisions of said Resolution are:
“Sec. 13. Statement of contributions and expenditures: Reminders to candidates to file statements.—Within five (5) days from the day of the election, the Law
Department of the Commission, the regional election director of the National Capital Region, the provincial election supervisors and the election registrars shall
advise in writing by personal delivery or registered mail all candidates who filed their certificates of candidacy with them to comply with their obligation to file
their statements of contributions and expenditures in connection with the elections. Every election registrar shall also advise all candidatesresiding in his
jurisdiction to comply with said obligation” (Italics supplied).
“Sec. 17. Effect of failure to file statement.—(a) No person elected to any public office shall enter upon the duties of his office until he has filed the statement of
contributions and expenditures herein required.
“The same prohibition shall apply if the political party which nominated the winning candidates fails to file the statement required within the period prescribed
by law.
“(b) Except candidates for elective barangay office, failure to file statements or reports in connection with the electoral contributions and expenditures as required
herein shall constitute an administrative offense for which the offenders shall be liable to pay an administrative fine ranging from One Thousand Pesos (P1,000) to
Thirty Thousand Pesos (P30,000), in the discretion of the Commission.
“The fine shall be paid within thirty (30) days from receipt of notice of such failure; otherwise, it shall be enforceable by a writ of execution issued by the
Commission against the properties of the offender.
“For the commission of a second or subsequent offense under this section, the administrative fine shall be from Two Thousand Pesos (P2,000) to Sixty
Thousand Pesos (P60,000), in the discretion of the Commission. In addition, the offender shall be subject to perpetual disqualification to hold public office.”

Petitioner argues that he cannot be held liable for failure to file a statement of contributions and expenditures because he was a “non-candidate,”
having withdrawn his certificate of candidacy three days after its filing. Petitioner posits that “it is x x x clear from the law that the candidate must
have entered the political contest, and should have either won or lost” (Rollo, p. 39).
Petitioner’s argument is without merit. Section 14 of R.A. No. 7166 states that “every candidate” has the obligation to file his statement of
contributions and expenditures. Well-recognized is the rule that where the law does not distinguish, courts should not distinguish. Ubi lex non
distinguit nec nos distinguere debemos (Philippine British Assurance Co. Inc. v. Intermediate Appellate Court, 150 SCRA 520 [1987]; cf. Olfato v.
Commission on Elections, 103 SCRA 741 [1981]). No distinction is to be made in the application of a law where none is indicated (Lo Cham v.
Ocampo, 77 Phil. 636 [1946]).
In the case at bench, as the law makes no distinction or qualification as to whether the candidate pursued his candidacy or withdrew the same, the
term “every candidate” must be deemed to refer not only to a candidate who pursued his campaign, but also to one who withdrew his candidacy.
The COMELEC, the body tasked with the enforcement and administration of all laws and regulations relative to the conduct of an election, plebiscite,
initiative, referendum, and recall (The Constitution of the Republic of the Philippines, Art. IX(C), Sec. 2[1]), issued Resolution No. 2348 in
implementation or interpretation of the provisions of Republic Act No. 7166 on election contributions and expenditures. Section 13 of Resolution
 No. 2348 categorically refers to “all candidates who filed their certificates of candidacy.” Furthermore, Section 14 of the law uses the word
“shall.” As a general rule, the use of the word “shall” in a statute implies that the statute is
mandatory, and imposes a duty which may be enforced, particularly if public policy is in favor of this meaning or where public interest is involved.
We apply the general rule (Baranda v. Gustilo, 165 SCRA 757 [1988]; Diokno v. Rehabilitation Finance Corporation, 91 Phil. 608[1952]).
The state has an interest in seeing that the electoral process is clean, and ultimately expressive of the true will of the electorate. One way of
attaining such objective is to pass legislation regulating contributions and expenditures of candidates, and compelling the publication of the same.
Admittedly, contributions and expenditures are made for the purpose of influencing the results of the elections (B.P. Blg. 881, Sec. 94; Resolution No.
2348, Sec. 1). Thus, laws and regulations prescribe what contributions are prohibited (B.P. Blg. 881, Sec. 95; Resolution No. 2348, Sec. 4), or
unlawful (B.P. Blg. 881, Sec. 96), and what expenditures are authorized (B.P. Blg. 881, Sec. 102; R.A. No. 7166, Sec. 13; Resolution No. 2348, Sec.
7) or lawful (Resolution No. 2348, Sec. 8).
Such statutes are not peculiar to the Philippines. In “corrupt and illegal practices acts” of several states in the United States, as well as in federal
statutes, expenditures of candidates are regulated by requiring the filing of statements of expenses and by limiting the amount of money that may be
spent by a candidate. Some statutes also regulate the solicitation of campaign contributions (26 Am Jur 2d, Elections § 287). These laws are designed
to compel publicity with respect to matters contained in the statements and to prevent, by such publicity, the improper use of moneys devoted by
candidates to the furtherance of their ambitions (26 Am Jur 2d, Elections § 289). These statutes also enable voters to evaluate the influences exerted
on behalf of candidates by the contributors, and to furnish evidence of corrupt practices for annulment of elections (Sparkman v. Saylor[Court of
Appeals of Kentucky], 180 Ky. 263, 202 S.W. 649 [1918]).
State courts have also ruled that such provisions are mandatory as to the requirement of filing (State ex rel. Butchofsky v. Crawford[Court of Civil
Appeals of Texas], 269 S.W. 2d 536 [1954]; Best v. Sidebottom, 270 Ky. 423, 109 S.W. 2d 826 [1937]; Sparkman v. Saylor, supra.)
It is not improbable that a candidate who withdrew his candidacy has accepted contributions and incurred expenditures, even in the short span of
his campaign. The evil sought to be prevented by the law is not all too remote.
It is noteworthy that Resolution No. 2348 even contemplates the situation where a candidate may not have received any contribution or made any
expenditure. Such a candidate is not excused from filing a statement, and is in fact required to file a statement to that effect. Under Section 15 of
Resolution No. 2348, it is provided that “[i]f a candidate or treasurer of the party has received no contribution, made no expenditure, or has no
pending obligation, the statement shall reflect such fact.”
Lastly, we note that under the fourth paragraph of Section 73 of the B.P. Blg. 881 or the Omnibus Election Code of the Philippines, it is provided
that “[t]he filing or withdrawal of certificate of candidacy shall not affect whatever civil, criminal or administrative liabilities which a candidate may
have incurred.” Petitioner’s withdrawal of his candidacy did not extinguish his liability for the administrative fine.
WHEREFORE, the petition is DISMISSED.
Narvasa (C.J.), Feliciano, Regalado, Davide, Jr., Romero, Bellosillo, Puno, Vitug, Mendoza and Francisco, JJ.,concur.
Padilla, J., I join Mr. Justice Melo in his dissenting opinion.
Melo, J., Please see dissent.
Kapunan, J., On leave.
DISSENTING OPINION

MELO, J.:

The majority opinion is to the effect that every candidate, including one who has withdrawn his certificate of candidacy, is obliged to file his
statement of contributions and expenditures in line with Section 14 of Republic Act No. 7166 vis-a-vis the pertinent portions of Comelec Resolution
No. 2348. I must concede that the use of the word “shall” in the main statute as well as the implementing rules generally suggest mandatoriness as to
cover all candidates.
But is an aspirant for public office who had a sudden change of heart, so to speak, still considered a candidate to begin with? I am of the
impression that he is not and is thus not bound to render an accounting subsequent to election for the simple reason that the term ‘candidate’ is used to
designate a person who actually submits himself and is voted for at our election (Santos vs. Miranda, 35 Phil. 643, 648 (1916) citing State vs. Hirsch,
125 Ind., 207; 9 L.R.A. 107; Moreno, Philippine Law Dictionary, 1972 2nd ed., p. 84). Certainly, one who withdraws his certificate of candidacy 3
days after the filing thereof, can not be voted for at an election. And considering the shortness of the period of 3 days from the filing to the withdrawal
of the certificate of candidacy, petitioner cannot be accused, as indeed there is no such charge, of utilizing his aborted candidacy for purposes to raise
funds or to extort money from other candidates in exchange for the withdrawal.
I, therefore, vote to grant the petition.
Petition dismissed.
 G.R. No. 78585. July 5, 1989.*

JOSE ANTONIO MAPA, petitioner, vs. HON. JOKER ARROYO, in his Capacity as Executive Secretary, and LABRADOR DEVELOPMENT
CORPORATION, respondents.

Courts; Findings of an administrative agency, accorded respect; Exceptions.—As recently reiterated, it is jurisprudentially settled that absent a clear, manifest
and grave abuse of discretion amounting to want of jurisdiction, the findings of the administrative agency on matters falling within its competence will not be
disturbed by the courts. Specifically with respect to factual findings, they are accorded respect, if not finality, because of the special knowledge and expertise
gained by these tribunals from handling the specific matters falling under their jurisdiction. Such factual findings may be disregarded only if they “are not
supported by evidence; where the findings are vitiated by fraud, imposition or collusion; where the procedure which led to the factual findings is irregular; when
palpable errors are committed; or when grave abuse of discretion, arbitrariness or capriciousness is manifest.”
Same; Contracts; Petitioner’s insistence on the applicability of P.D. No. 957 must be rejected since the same was issued long after the execution of the contracts
involved; Case at bar.—Petitioner’s insistence on the applicability of Presidential Decree No. 957 must be rejected. Said decree was issued on July 12, 1976 long
after the execution of the contracts involved. Obviously and necessarily, what subsequently were statutorily provided therein as obligations of the owner or
developer could not have been intended by the parties to be a part of their contracts. No intention to give restrospective application to the provisions of said decree
can be gathered from the language thereof. Section 20, in relation to Section 21, of the decree merely requires the owner or developer to construct the facilities,
improvements, infrastructures and other forms of development but only such as are offered and indicated in the approved subdivision or condominium plans,
brochures, prospectus, printed matters, letters or in any form of advertisements. Other than what are provided in Clause 20 of the contract, no further written
commitment was made by the developer in this respect. To read into the contract the matters desired by petitioner would have the law impose additional obligations
on the parties to a contract executed before that very law existed or was contemplated.
Same; Same; Statutory Construction; “And” is not meant to separate words but is a conjunction used to denote a joinder or union.—We further reject
petitioner’s strained and tenuous application of the socalled doctrine of last antecedent in the interpretation of Section 20 and, correlatively, of Section 21. He
would thereby have the enumeration of “facilities, improvements, infrastructures and other forms of development” interpreted to mean that the demonstrative
phrase “which are offered and indicated in the approved subdivision plans, etc.” refer only to “other forms of development” and not to “facilities, improvements
and infrastructures.” While this subserves his purpose, such bifurcation, whereby the supposed adjectival phrase is set apart from the antecedent words, is illogical
and erroneous. The complete and applicable rule is ad proximum antecedens fiat relatio nisi impediatur sentencia. Relative words refer to the nearest antecedent,
unless it be prevented by the context. In the present case, the employment of the word “and” between “facilities, improvements, infrastructures” and “other forms of
development,” far from supporting petitioner’s theory, enervates it instead since it is basic in legal hermeneutics that “and” is not meant to separate words but is a
conjunction used to denote a joinder or union.

SPECIAL CIVIL ACTION for certiorari to review the decision of the Deputy Executive Secretary, Office of the President.

The facts are stated in the opinion of the Court.

Francisco T. Mamaug for petitioner.
Emiliano S. Samson for private respondent.

REGALADO, J.:

We are called upon once again, in this special civil action for certiorari, for a pronouncement as to whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction on the part of the executive branch of Government, particularly in the adjudication of a
controversy originally commenced in one of its regulatory agencies.
 Petitioner herein seeks the reversal of the decision of the Office of the President, rendered by the Deputy Executive Secretary on April 24,
1987,1which dismissed his appeal from the resolution of the Commission Proper, Human Settlements Regulatory Commission (HSRC, for short),
promulgated on January 10, 1986 and affirming the decision of July 3, 1985 of the Office of Adjudication and Legal Affairs (OAALA, for brevity) of
HSRC. Petitioner avers that public respondent “gravely transcended the sphere of his discretion” in finding that Presidential Decree No. 957 is
inapplicable to the contracts to sell involved in this case and in consequently dismissing the same.2
The established facts on which the assailed decision is based are set out therein as follows: “Records disclose that, on September 18, 1975, appellant Jose
Antonio Mapa and appellee Labrador Development Corporation (Labrador, for short), owner/developer of the Barangay Hills Subdivision in Antipolo, Rizal,
entered into two contracts to sell over lots 12 and 13 of said subdivision. On different months in 1976, they again entered into two similar contracts involving lots
15 and 16 in the same subdivision. Under said contracts, Mapa undertook to make a total monthly installment of P2,137.54 over a period of ten (10) years. Mapa,
however, defaulted in the payment thereof starting December 1976, prompting Labrador to send to the former a demand letter, dated May 5, 1977, giving him until
May 18, 1977, within which to settle his unpaid installments for the 4 lots amounting to P15,411.66, with a warning that non-payment thereof will result in the
cancellation of the four (4) contracts. Despite receipt of said letter on May 6, 1977, Mapa failed to take any action thereon. Labrador subsequently wrote Mapa
another letter, dated June 15, 1982, which the latter received on June 21, 1982, reminding him of his total arrears amounting to P180,065.27 and demanding
payment within 5 days from receipt thereof, but which letter Mapa likewise ignored. Thus, on August 16, 1982, Labrador sent Mapa a notarial cancellation of the
four (4) contracts to sell, which Mapa received on August 20, 1982. On September 10, 1982, however, Mapa’s counsel sent Labrador a letter calling Labrador’s
attention to, and demanding its compliance with, Clause 20 of the four (4) contracts to sell which relates to Labrador’s obligation to provide, among others,
lighting/water facilities to subdivision lot buyers.
“On September 10, 1982, Labrador issued a certification ‘holding the implementation of the letter dated August 16, 1982 (re notarial cancellation) pending the
complete development of road lot cul de sac within the properties of Mapa at Barangay Hills Subdivision.’ Thereafter, on October 25, 1982, Labrador sent Mapa a
letter informing him ‘that the construction of road, sidewalk, curbs and gutters adjacent to Block 11 Barangay Hills Subdivision are already completed’ and further
requesting Mapa to ‘come to our office within five (5) days upon receipt of this letter to settle your account.’
“On December 10, 1982, Mapa tendered payment by means of a check in the amount of P2,137.54, but Labrador refused to accept payment for the reason that it
was agreed ‘that after the development of the cul de sac, he (complainant) will pay in full the total amount due,’ which Labrador computed at P260,138.61. On
December 14, 1982, Mapa wrote Labrador claiming that ‘you have not complied with the requirements for water and light facilities in lots 12, 13, 15 & 16 Block 2
of Barangay Hills Subdivision.’ The following day, Mapa filed a complaint against Labrador for the latter’s neglect to put 1) a water system that meets the
minimum standard as specified by HSRC, and 2) electrical power supply. By way of relief, Mapa requested the HSRC to direct Labrador to provide the facilities
aforementioned, and to issue a cease and desist order enjoining Labrador from cancelling the contracts to sell.
“After due hearing/investigation, which included an on-site inspection of the subdivision, OAALA issued its decision of July 3, 1985, dismissing the complaint
and declaring that ‘after the lapse of 5 years from complainant’s default respondent had every right to rescind the contract pursuant to Clause 7 thereof . . .’
“Per its resolution of January 10, 1986, the Commission Proper, HSRC, affirmed the aforesaid OAALA decision.”3

It was petitioner’s adamant submission in the administrative proceedings that the provisions of Presidential Decree No. 9574and implementing rules
form part of the contracts to sell executed by him and respondent corporation, hence the obligations imposed therein had to be complied with by
Labrador within the period provided. Since, according to petitioner, Labrador failed to perform the aforementioned obligations, it is precluded from
rescinding the subject contracts to sell since petitioner consequently did not incur in delay on his part.
Such intransigent position of petitioner has not changed in the petition at bar and unyielding reliance is placed on the provisions of Presidential
Decree No. 957 and its implementing rules. The specific provisions of the Decree which are persistently relied upon read:
“SEC. 20. Time of Completion.—Every owner or developer shall construct and provide the facilities, improvements, infrastructures and other forms of development,
including water supply and lighting facilities, which are offered and indicated in the approved subdivision or condominium plans, brochures, prospectus, printed
matters, letters or in any form of advertisements, within one year from the date of the issuance of the license for the subdivision or condominium project or such
other period of time as may be fixed by the Authority.
 “SEC. 21. Sales Prior to Decree.—In cases of subdivision lots or condominium units sold or disposed of prior to the effectivity of this Decree, it shall be
incumbent upon the owner or developer of the subdivision or condominium project to complete compliance with his or its obligations as provided in the preceding
section within two years from the date of this Decree unless otherwise extended by the Authority or unless an adequate performance bond is filed in accordance
with Section 6 hereof.
“Failure of the owner or developer to comply with the obligations under this and the preceding provisions shall constitute a violation punishable under Sections 38
and 39 of this Decree.”
Rule V of the implementing rules, on the other hand, requires two (2) sources of electric power, two (2) deepwell and pump sets with a specified
capacity and two standard fire hose flows with a capacity of 175 gallons per minute.5
The provision, in said contracts to sell which, according to petitioner, includes and incorporates the aforequoted statutory provisions, is Clause 20
of said contracts which provides:
“Clause 20—BDIVISION DEVELOPMENT—insure the physical development of the subdivision, the SELLER hereby obliges itself to provide the individual lot
buyer with the following:
a) PAVED ROADS
b) UNDERGROUND DRAINAGE
c) CONCRETE CURBS AND GUTTERS
d) WATER SYSTEM
e) PARK AND OPEN SPACE

“These improvements shall apply only to the portions of the subdivision which are for sale or have been sold.
“All improvements except those requiring the services of a public utility company or the government shall be completed within a period of three (3) years from
date of this contract. Failure by the SELLER to reasonably comply with the above schedule shall permit the BUYER/S to suspend his monthly installments without
any penalties or interest charges until such time that these improvements shall have been made as scheduled.6
As recently reiterated, it is jurisprudentially settled that absent a clear, manifest and grave abuse of discretion amounting to want of jurisdiction, the
findings of the administrative agency on matters falling within its competence will not be disturbed by the courts.7Specifically with respect to factual
findings, they are accorded respect, if not finality, because of the special knowledge and expertise gained by these tribunals from handling the specific
matters falling under their jurisdiction. Such factual findings may be disregarded only if they “are not supported by evidence; where the findings are
vitiated by fraud, imposition or collusion; where the procedure which led to the factual findings is irregular; when palpable errors are committed; or
when grave abuse of discretion, arbitrariness or capriciousness is manifest.”8
A careful scrutiny of the records of the instant case reveals that the circumstances thereof do not fall under the aforesaid excepted cases, with the
findings duly supported by the evidence.
Petitioner’s insistence on the applicability of Presidential Decree No. 957 must be rejected. Said decree was issued on July 12, 1976 long after the
execution of the contracts involved. Obviousy and necessarily, what subsequently were statutorily provided therein as obligations of the owner or
developer could not have been intended by the parties to be a part of their contracts. No intention to give restrospective application to the provisions
of said decree can be gathered from the language thereof. Section 20, in relation to Section 21, of the decree merely requires the owner or developer to
construct the facilities, improvements, infrastructures and other forms of development but only such as are offered and indicated in the approved
subdivision or condominium plans, brochures, prospectus, printed matters, letters or in any form of advertisements. Other than what are provided in
Clause 20 of the contract, no further written commitment was made by the developer in this respect. To read into the contract the matters desired by
petitioner would have the law impose additional obligations on the parties to a contract executed before that very law existed or was contemplated.
We further reject petitioner’s strained and tenuous application of the so-called doctrine of last antecedent in the interpretation of Section 20 and,
correlatively, of Section 21. He would thereby have the enumeration of “facilities, improvements, infrastructures and other forms of development”
interpreted to mean that the demonstrative phrase “which are offered and indicated in the approved subdivision plans, etc.” refer only to “other forms
of development” and not to “facilities, improvements and infrastructures.” While this subserves his purpose, such bifurcation, whereby the supposed
adjectival phrase is set apart from the antecedent words, is illogical and erroneous. The complete and applicable rule is ad proximum antecedens fiat
relatio nisi impediatur sentencia.9Relative words refer to the nearest antecedent, unless it be prevented by the context. In the present case, the
employment of the word “and” between “facilities, improvements, infrastructures” and “other forms of development,” far from supporting petitioner’s
theory, enervates it instead since it is basic in legal hermeneutics that “and” is not meant to separate words but is a conjunction used to denote a
joinder or union.
Thus, if ever there is any valid ground to suspend the monthly installments due from petitioner, it would only be based on non-performance of the
obligations provided in Clause 20 of the contract, particularly the alleged non-construction of the culde-sac. But, even this is unavailing and is
obviously being used only to justify petitioner’s default. The on-site inspection of the subdivision conducted by the OAALA and its subsequent report
reveal that Labrador substantially complied with its obligation.10
Furthermore, the initial non-construction of the cul-de-sac, as private respondent Labrador explained, was because petitioner Mapa requested the
suspension of its construction since his intention was to purchase the adjoining lots and thereafter enclose the same.11 If these were not true, petitioner
would have invoked that supposed default in the first instance. As the OAALA noted, petitioner “stopped payments of his monthly obligations as
early as December, 1976, which is a mere five months after the effectivity of P.D. No. 957 or about a year after the execution of the contracts. This
means that respondent still has 1 and 1/2 years to comply with its legal obligation to develop the subdivision under said P.D. and two years to do so
under the agreement, hence, it was improper for complainant to have suspended payments in December, 1976 on the ground of non-development
since the period allowed for respondent’s obligation to undertake such development has not yet expired.”12
ON THE FOREGOING CONSIDERATIONS, the petition should be, as it is hereby DISMISSED.
SO ORDERED.
Melencio-Herrera(Chairman), Paras, Padilla and Sarmiento, JJ., concur.

Petition dismissed.

Notes.—The Court is not bound by the Commissioner’s report in fixing price of land in expropriation cases. (Republic vs. Santos, 141 SCRA 30.)
Only legal questions are reviewable by the Supreme Court. (Director of Lands vs. Funtillar, 142 SCRA 57.)
G.R. No. 140230. December 15, 2005.*

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, respondent.

Taxation; Words and Phrases; Direct Taxes; Direct taxes are those that are exacted from the very person who, it is intended or desired, should pay them—
they are impositions for which a taxpayer is directly liable on the transaction or business he is engaged in.—Based on the possibility of shifting the evidence, or as
to who shall bear the burden to taxation, taxes may be classified into either direct or indirect tax. In context, direct taxes are those that are exacted from the very
person who, it is intended or desired, should pay them; they are impositions for which a taxpayer is directly liable on the transaction or business he is engaged in.
Same; Same; Indirect Taxes; Indirect taxes are those that are demanded, in the first instance, from, or are paid by, one person in the expectation and intention that
he can shift the burden to someone else—stated elsewise, indirect taxes are taxes wherein the liability for the payment of the tax falls on one person but the burden
thereof can be shifted or passed on to another person, such as when the tax is imposed upon goods before reaching the consumer who ultimately pays for it.—
Indirect taxes are those that are demanded, in the first instance, from, or are paid by, one person in the expectation and intention that he can shift the burden to
someone else. Stated elsewise, indirect taxes are taxes wherein the liability for the payment of the tax falls on one person but the burden thereof can be shifted or
passed on to another person, such as when the tax is imposed upon goods before reaching the consumer who ultimately pays for it. When the seller passes on the
tax to his buyer, he, in effect, shifts the tax burden, not the liability to pay it, to the purchaser as part of the price of goods sold or services rendered.
Same; The National Internal Revenue Code (NIRC) classified Value Added Tax (VAT) as “indirect tax . . . the amount of which may be shifted or passed on to
the buyer, transferee or lessee of the goods.”—The NIRC classifies VAT as “an indirect tax . . . the amount of [which] may be shifted or passed on to the buyer,
transferee or lessee of the goods.” As aptly pointed out by Judge Amancio Q. Saga in his dissent in C.T.A. Case No. 5178, the 10% VAT on importation of goods
partakes of an excise tax levied on the privilege of importing articles. It is not a tax on the franchise of a business enterprise or on its earnings. It is imposed on all
taxpayers who import goods (unless such importation falls under the category of an exempt transaction under Sec. 109 of the Revenue Code) whether or not the
goods will eventually be sold, bartered, exchanged or utilized for personal consumption. The VAT on importation replaces the advance sales tax payable by regular
importers who import articles for sale or as raw materials in the manufacture of finished articles for sale.
Same; Advance sales tax has the attributes of an indirect tax because the tax-paying importer of goods for sale or of raw materials to be processed into
merchandise can shift the “economic burden of the tax,” on the purchaser, by subsequently adding the tax to the selling price of the imported article or finished
product.—Advance sales tax has the attributes of an indirect tax because the tax-paying importer of goods for sale or of raw materials to be processed into
merchandise can shift the tax or, to borrow from Philippine Acetylene Co., Inc. vs. Commissioner of Internal Revenue, lay the “economic burden of the tax,” on the
purchaser, by subsequently adding the tax to the selling price of the imported article or finished product.
Same; Compensating tax also partakes of the nature of an excise tax payable by all persons who import articles, whether in the course of business or not.—
Compensating tax also partakes of the nature of an excise tax payable by all persons who import articles, whether in the course of business or not. The rationale for
compensating tax is to place, for tax purposes, persons purchasing from merchants in the Philippines on a more or less equal basis with those who buy directly from
foreign countries.
 Same; It bears to stress that the liability for the payment of the indirect taxes lies only with the seller of the goods or services, not in the buyer thereof.—It
bears to stress that the liability for the payment of the indirect taxes lies only with the seller of the goods or services, not in the buyer thereof. Thus, one cannot
invoke one’s exemption privilege to avoid the passing on or the shifting of the VAT to him by the manufacturers/suppliers of the goods he purchased. Hence, it is
important to determine if the tax exemption granted to a taxpayer specifically includes the indirect tax which is shifted to him as part of the purchase price,
otherwise it is presumed that the tax exemption embraces only those taxes for which the buyer is directly liable.
Same; Time and again, the Supreme Court has stated that taxation is the rule, exemption is the exception.—Time and again, the Court has stated that taxation
is the rule, exemption is the exception. Accordingly, statutes granting tax exemptions must be construed in strictissimi juris against the taxpayer and liberally in
favor of the taxing authority. To him, therefore, who claims a refund or exemption from tax payments rests the burden of justifying the exemption by words too
plain to be mistaken and too categorical to be misinterpreted.
Same; Statutory Construction; It is basic that in construing a statute, it is the duty of the courts to seek the real intent of the legislature, even if by so doing,
they may limit the literal meaning of the broad language.—Jurisprudence thus teaches that imparting the “in lieu of all taxes” clause a literal meaning, as did the
Court of Appeals and the CTA before it, is fallacious. It is basic that in construing a statute, it is the duty of courts to seek the real intent of the legislature, even if,
by so doing, they may limit the literal meaning of the broad language. It cannot be over-emphasized that tax exemption represents a loss of revenue to the
government and must, therefore, not rest on vague inference. When claimed, it must be strictly construed against the taxpayer who must prove that he falls under
the exception. And, if an exemption is found to exist, it must not be enlarged by construction, since the reasonable presumption is that the state has granted in
express terms all it intended to grant at all, and that, unless the privilege is limited to the very terms of the statute the favor would be extended beyond dispute in
ordinary cases. All told, we fail to see how Section 12 of RA 7082 operates as granting PLDT blanket exemption from payment of indirect taxes, which, in the
ultimate analysis, are not taxes on its franchise or earnings. PLDT has not shown its eligibility for the desired exemption. None should be granted.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Osias B. Baldovino and Pablo M. Bastes for petitioner.
Meer, Meer & Meer for respondent.

GARCIA, J.:

In this petition for review on certiorari, the Commissioner of Internal Revenue (Commissioner) seeks the review and reversal of the September 17,
1999 Decision1 of the Court of Appeals (CA) in CA-G.R. No. SP 47895, affirming, in effect, the February 18, 1998 decision2 of the Court of Tax
Appeals (CTA) in C.T.A. Case No. 5178, a claim for tax refund/credit instituted by respondent Philippine Long Distance Company (PLDT) against
petitioner for taxes it paid to the Bureau of Internal Revenue (BIR) in connection with its importation in 1992 to 1994 of equipment, machineries and
spare parts.
The facts:
PLDT is a grantee of a franchise under Republic Act (R.A.) No. 7082 to install, operate and maintain a telecommunications system throughout the
Philippines.
For equipment, machineries and spare parts it imported for its business on different dates from October 1, 1992 to May 31, 1994, PLDT paid the
BIR the amount of P164,510,953.00, broken down as follows: (a) compensating tax of P126,713,037.00; advance sales tax of P12,460,219.00 and
other internal revenue taxes of P25,337,697.00. For similar importations made between March 1994 to May 31, 1994, PLDT paid P116,041,333.00
value-added tax (VAT).
On March 15, 1994, PLDT addressed a letter to the BIR seeking a confirmatory ruling on its tax exemption privilege under Section 12 of R.A.
7082, which reads: “Sec. 12. The grantee . . . shall be liable to pay the same taxes on their real estate, buildings, and personal property, exclusive of this franchise,
as other persons or corporations are now or hereafter may be required by law to pay. In addition thereto, the grantee, . . . shall pay a franchise tax equivalent to three
percent (3%) of all gross receipts of the telephone or other telecommunications businesses transacted under this franchise by the grantee, its successors or assigns,
and the said percentage shall be in lieu of all taxes on this franchise or earnings thereof: Provided, That the grantee … shall continue to be liable for income
taxes payable under Title II of the National Internal Revenue Code pursuant to Sec. 2 of Executive Order No. 72 unless the latter enactment is amended or repealed,
in which case the amendment or repeal shall be applicable thereto.” (Emphasis supplied).
Responding, the BIR issued on April 19, 1994 Ruling No. UN-140-94,3 pertinently reading, as follows:
PLDT shall be subject only to the following taxes, to wit:

7. The 3% franchise tax on gross receipts which shall be in lieu of all taxes on its franchise or earnings thereof.
xxx xxx xxx
The “in lieu of all taxes” provision under Section 12 of RA 7082 clearly exempts PLDT from all taxes including the 10% value-added tax (VAT) prescribed by
Section 101 (a) of the same Code on its importations of equipment, machineries and spare parts necessary in the conduct of its business covered by the franchise,
except the aforementioned enumerated taxes for which PLDT is expressly made liable.
xxx xxx xxx
In view thereof, this Office . . . hereby holds that PLDT, is exempt from VAT on its importation of equipment, machineries and spare parts . . . needed in its
franchise operations.
Armed with the foregoing BIR ruling, PLDT filed on December 2, 1994 a claim4 for tax credit/refund of the VAT, compensating taxes, advance sales
taxes and other taxes it had been paying “in connection with its importation of various equipment, machineries and spare parts needed for its
operations.” With its claim not having been acted upon by the BIR, and obviously to forestall the running of the prescriptive period therefor, PLDT
filed with the CTA a petition for review,5therein seeking a refund of, or the issuance of a tax credit certificate in, the amount of P280,552,286.00,
representing compensating taxes, advance sales taxes, VAT and other internal revenue taxes alleged to have been erroneously paid on its importations
from October 1992 to May 1994. The petition was docketed in said court as CTA Case No. 5178.
On February 18, 1998, the CTA rendered a decision6granting PLDT’s petition, pertinently saying:

This Court has noted that petitioner has included in its claim receipts covering the period prior to December 16, 1992, thus, pre- scribed and barred from recovery.
In conclusion, We find that the petitioner is entitled to the reduced amount of P223,265,276.00 after excluding from the final computation those taxes that were
paid prior to December 16, 1992 as they fall outside the two-year prescriptive period for claiming for a refund as provided by law. The computation of the
refundable amount is summarized as follows:

COMPENSATING TAX
Total amount claimed P126,713,037.00
Less:
a) Amount already prescribed: x x x
Total P
38,015,132.00
b) P P 39,456,006.00
Waived 1,440,874.00
by
petitioner
(Exh. B-
216)
Amount refundable P 87,257,031.00
ADVANCE SALES TAX
Total amount claimed P12,460,219.00
Less amount already P 5,043,828.00
prescribed:
Amount refundable P 7,416,391.00
OTHER BIR TAXES
Total amount claimed P 25,337,697.00
Less amount already 11,187,740.00
prescribed:
Amount refundable P 14,149,957.00
VALUE ADDED TAX
Total amount claimed P
116,041,333.00
Less amount waived
by petitioner
(unaccounted receipts) 1,599,436.00
 Amount refundable P
114,441,897.00
TOTAL AMOUNT P
REFUNDABLE 223,265,276.00
(Breakdown omitted)

and accordingly disposed, as follows:

“WHEREFORE, in view of all the foregoing, this Court finds the instant petition meritorious and in accordance with law. Accordingly, respondent is hereby ordered to
REFUND or to ISSUE in favor of petitioner a Tax Credit Certificate in the reduced amount of P223,265,276.00 representing erroneously paid value-added taxes,
compensating taxes, advance sales taxes and other BIR taxes on its importation of equipments (sic), machineries and spare parts for the period covering the taxable
years 1992 to 1994.”
Noticeably, the CTA decision, penned by then Associate Justice Ramon O. de Veyra, with then CTA Presiding Judge Ernesto D. Acosta, concurring,
is punctuated by a dissenting opinion7 of Associate Judge Amancio Q. Saga who maintained that the phrase “in lieu of all taxes” found in Section 12
of R.A. No. 7082, supra, refers to exemption from “direct taxes only” and does not cover “indirect taxes,” such as VAT, compensating tax and
advance sales tax.
In time, the BIR Commissioner moved for a reconsideration but the CTA, in its Resolution8 of May 7, 1998, denied the motion, with Judge
Amancio Q. Saga reiterating his dissent.9 Unable to accept the CTA decision, the BIR Commissioner elevated the matter to the Court of Appeals (CA)
by way of petition for review, thereat docketed as CA-G.R. No. 47895.
As stated at the outset hereof, the appellate court, in the herein challenged Decision10 dated September 17, 1999, dismissed the BIR’s petition,
thereby effectively affirming the CTA’s judgment.
Relying on its ruling in an earlier case between the same parties and involving the same issue—CA-G.R. SP No. 40811, decided 16 February
1998 —the appellate court partly wrote in its assailed decision:
“This Court has already spoken on the issue of what taxes are referred to in the phrase “in lieu of all taxes” found in Section 12 of R.A. 7082. There are no reasons
to deviate from the ruling and the same must be followed pursuant to the doctrine of stare decisis. x x x. “Stare decisis et non quieta movere. Stand by the decision
and disturb not what is settled.”
Hence, this recourse by the BIR Commissioner on the lone assigned error that:
THE COURT OF APPEALS ERRED IN HOLDING THAT RESPONDENT IS EXEMPT FROM THE PAYMENT OF VALUEADDED TAXES, COMPENSATING
TAXES, ADVANCE SALES TAXES AND OTHER BIR TAXES ON ITS IMPORTATIONS, BY VIRTUE OF THE PROVISION IN ITS FRANCHISE THAT THE 3%
FRANCHISE TAX ON ITS GROSS RECEIPTS SHALL BE IN LIEU OF ALL TAXES ON ITS FRANCHISE OR EARNINGS THEREOF.

There is no doubt that, insofar as the Court of Appeals is concerned, the issue petitioner presently raises had been resolved by that court in CA-G.R.
SP No. 40811, entitled Commissioner of Internal Revenue vs. Philippine Long Distance Company. There, the Sixteenth Division of the appellate court
declared that under the express provision of Section 12 of R.A. 7082, supra, “the payment [by PLDT] of the 3% franchise tax of [its] gross receipts
shall be in lieu of all taxes” exempts PLDT from payment of compensating tax, advance sales tax, VAT and other internal revenue taxes on its
importation of various equipment, machinery and spare parts for the use of its telecommunications system.
Dissatisfied with the CA decision in that case, the BIR Commissioner initially filed with this Court a motion for time to file a petition for review,
docketed in this Court as G.R. No. 134386. However, on the last day for the filing of the intended petition, the then BIR Commissioner had a change
of heart and instead manifested11that he will no longer pursue G.R. No. 134386, there being no compelling grounds to disagree with the Court of
Appeals’ decision in CA-G.R. 40811. Consequently, on September 28, 1998, the Court issued a Resolution12 in G.R. No. 134386notifying the parties
that “no petition” was filed in said case and that the CA judgment sought to be reviewed therein “has now become final and executory.”
Pursuant to said Resolution, an Entry of Judgment13 was issued by the Court of Appeals in CA-G.R. SP No. 40811. Hence, the CA’s dismissal of CA-
G.R. No. 47895 on the additional ground of stare decisis.
Under the doctrine of stare decisis et non quieta movere, a point of law already established will, generally, be followed by the same determining
court and by all courts of lower rank in subsequent cases where the same legal issue is raised.14 For reasons needing no belaboring, however, the
Court is not at all concluded by the ruling of the Court of Appeals in its earlier CA-G.R. SP No. 47895.
The Court has time and again stated that the rule on stare decisis promotes stability in the law and should, therefore, be accorded respect. However,
blind adherence to precedents, simply as precedent, no longer rules. More important than anything else is that the court is right,15thus its duty to
abandon any doctrine found to be in violation of the law in force.16
As it were, the former BIR Commissioner’s decision not to pursue his petition in G.R. No. 134386 denied the BIR, at
least as early as in that case, the opportunity to obtain from the Court an authoritative interpretation of Section 12
of R.A. 7082. All is, however, not lost. For, the government is not estopped by acts or errors of its agents,
particularly on matters involving taxes. Corollarily, the erroneous application of tax laws by public officers does
not preclude the subsequent correct application thereof.17 Withal, the errors of certain administrative officers, if
that be the case, should never be allowed to jeopardize the government’s financial position.18 Hence, the need to
address the main issue tendered herein.
According to the Court of Appeals, the “in lieu of all taxes” clause found in Section 12 of PLDT’s franchise (R.A. 7082) covers all taxes, whether
direct or indirect; and that said section states, in no uncertain terms, that PLDT’s payment of the 3% franchise tax on all its gross receipts from
businesses transacted by it under its franchise is in lieu of all taxes on the franchise or earnings thereof. In fine, the appellate court, agreeing with
PLDT, posits the view that the word “all”encompasses any and all taxes collectible under the National Internal Revenue Code (NIRC), save those
specifically mentioned in PLDT’s franchise, such as income and real property taxes.
The BIR Commissioner excepts. He submits that the exempting “in lieu of all taxes” clause covers direct taxes only, adding that for indirect taxes
to be included in the exemption, the intention to include must be specific and unmistakable. He thus faults the Court of Appeals for erroneously
declaring PLDT exempt from payment of VAT and other indirect taxes on its importations. To the Commissioner, PLDT’s claimed entitlement to tax
refund/credit is without basis inasmuch as the 3% franchise tax being imposed on PLDT is not a substitute for or in lieu of indirect taxes.
The sole issue at hand is whether or not PLDT, given the tax component of its franchise, is exempt from paying VAT, compensating taxes,
advance sales taxes and internal revenue taxes on its importations.
Based on the possibility of shifting the incidence of taxation, or as to who shall bear the burden of taxation, taxes may be classified into either
direct tax or indirect tax.
 In context, direct taxes are those that are exacted from the very person who, it is intended or desired, should pay them;19 they are impositions for
which a taxpayer is directly liable on the transaction or business he is engaged in.20
On the other hand, indirect taxes are those that are demanded, in the first instance, from, or are paid by, one person in the expectation and intention
that he can shift the burden to someone else.21 Stated elsewise, indirect taxes are taxes wherein the liability for the payment of the tax falls on one
person but the burden thereof can be shifted or passed on to another person, such as when the tax is imposed upon goods before reaching the
consumer who ultimately pays for it. When the seller passes on the tax to his buyer, he, in effect, shifts the tax burden, not the liability to pay it, to the
purchaser as part of the price of goods sold or services rendered.
To put the situation in graphic terms, by tacking the VAT due to the selling price, the seller remains the person primarily and legally liable for the
payment of the tax. What is shifted only to the intermediate buyer and ultimately to the final purchaser is the burden of the tax.22 Stated differently, a
seller who is directly and legally liable for payment of an indirect tax, such as the VAT on goods or services, is not necessarily the person who
ultimately bears the burden of the same tax. It is the final purchaser or end-user of such goods or services who, although not directly and legally liable
for the payment thereof, ultimately bears the burden of the tax.23
There can be no serious argument that PLDT, vis-à-vis its payment of internal revenue taxes on its importations in question, is effectively claiming
exemption from taxes not falling under the category of direct taxes. The claim covers VAT, advance sales tax and compensating tax.
The NIRC classifies VAT as “an indirect tax . . . the amount of [which] may be shifted or passed on to the buyer, transferee or lessee of the
goods.”24 As aptly pointed out by Judge Amancio Q. Saga in his dissent in C.T.A. Case No. 5178, the 10% VAT on importation of goods partakes of
an excise tax levied on the privilege of importing articles. It is not a tax on the franchise of a business enterprise or on its earnings. It is imposed on all
taxpayers who import goods (unless such importation falls under the category of an exempt transaction under Sec. 109 of the Revenue Code) whether
or not the goods will eventually be sold, bartered, exchanged or utilized for personal consumption. The VAT on importation replaces the advance
sales tax payable by regular importers who import articles for sale or as raw materials in the manufacture of finished articles for sale.25
Advance sales tax has the attributes of an indirect tax because the tax-paying importer of goods for sale or of raw materials to be processed into
merchandise can shift the tax or, to borrow from Philippine Acetylene Co., Inc. vs. Commissioner of Internal Revenue,26 lay the “economic burden of
the tax,” on the purchaser, by subsequently adding the tax to the selling price of the imported article or finished product. Compensating tax also
partakes of the nature of an excise tax payable by all persons who import articles, whether in the course of business or not.27The rationale for
compensating tax is to place, for tax purposes, persons purchasing from merchants in the Philippines on a more or less equal basis with those who buy
directly from foreign countries.28
It bears to stress that the liability for the payment of the indirect taxes lies only with the seller of the goods or services, not in the buyer thereof.
Thus, one cannot invoke one’s exemption privilege to avoid the passing on or the shifting of the VAT to him by the manufacturers/suppliers of the
goods he purchased.29 Hence, it is important to determine if the tax exemption granted to a taxpayer specifically includes the indirect tax which is
shifted to him as part of the purchase price, otherwise it is presumed that the tax exemption embraces only those taxes for which the buyer is directly
liable.
Time and again, the Court has stated that taxation is the rule, exemption is the exception. Accordingly, statutes granting tax exemptions must be
construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority.31 To him, therefore, who claims a refund or exemption
from tax payments rests the burden of justifying the exemption by words too plain to be mistaken and too categorical to be misinterpreted.32
As may be noted, the clause “in lieu of all taxes” in Section 12 of RA 7082 is immediately followed by the limiting or qualifying clause “on this
franchise or earnings thereof,” suggesting that the exemption is limited to taxes imposed directly on PLDT since taxes pertaining to PLDT’s franchise
or earnings are its direct liability. Accordingly, indirect taxes, not being taxes on PLDT’s franchise or earnings, are outside the purview of the “in
lieu” provision.
If we were to adhere to the appellate court’s interpretation of the law that the “in lieu of all taxes” clause encompasses the totality of all taxes
collectible under the Revenue Code, then, the immediately following limiting clause “on this franchise and its earnings” would be nothing more than
a pure jargon bereft of effect and meaning whatsoever. Needless to stress, this kind of interpretation cannot be accorded a governing sway following
the familiar legal maxim redendo singula singulismeaning, take the words distributively and apply the reference. Under this principle, each word or
phrase must be given its proper connection in order to give it proper force and effect, rendering none of them useless or superfluous.33
Significantly, in Manila Electric Company [Meralco] vs. Vera,34 the Court declared the relatively broader exempting clause “shall be in lieu of all
taxes and assessments of whatsoever nature . . . upon the privileges earnings, income franchise . . . of the grantee” written in par. # 9 of Meralco’s
franchise as not so all encompassing as to embrace indirect tax, like compensating tax. There, the Court said:
“It is a well-settled rule or principle in taxation that a compensating tax . . . is an excise tax . . . one that is imposed on the performance of an act, the engaging in an
occupation, or the enjoyment of a privilege. A tax levied upon property because of its ownership is a direct tax, whereas one levied upon property because of its use
is an excise duty. . . . .
The compensating tax being imposed upon . . . MERALCO, is an impost on its use of imported articles and is not in the nature of a direct tax on the articles
themselves, the latter tax falling within the exemption. Thus, in International Business Machine Corporation vs. Collector of Internal Revenue, . . . which involved
the collection of a compensating tax from the plaintiff-petitioner on business machines imported by it, this Court stated in unequivocal terms that “it is not the act of
importation that is taxed under section 190 but the uses of imported goods not subjected to a sales tax” because the “compensating tax was expressly designated as a
substitute to make up or compensate for the revenue lost to the government through the avoidance of sales taxes by means of direct purchases abroad.
xxx xxx xxx
x x x If it had been the legislative intent to exempt MERALCO from paying a tax on the use of imported equipments, the legislative body could have easily done
so by expanding the provision of paragraph 9 and adding to the exemption such words as “compensating tax” or “purchases from abroad for use in its business,”
and the like.”
It may be so that in Maceda vs. Macaraig, Jr.35 the Court held that an exemption from “all taxes” granted to the National Power Corporation (NPC)
under its charter36 includes both direct and indirect taxes. But far from providing PLDT comfort, Maceda in fact supports the case of herein petitioner,
the correct lesson of Maceda being that an exemption from “all taxes” excludes indirect taxes, unless the exempting statute, like NPC’s charter, is so
couched as to include indirect tax from the exemption. Wrote the Court:
x x x However, the amendment under Republic Act No. 6395 enumerated the details covered by the exemption. Subsequently, P.D. 380, made even more specific
the details of the exemption of NPC to cover, among others, both direct and indirect taxes on all petroleum products used in its operation. Presidential Decree No.
938 [NPC’s amended charter) amended the tax exemption by simplifying the same law in general terms. It succinctly exempts NPC from “all forms of taxes, duties
fees . . . .”
The use of the phrase “all forms” of taxes demonstrate the intention of the law to give NPC all the tax exemptions it has been enjoying
before. . . . . x x x x x x x x x

It is evident from the provisions of P.D. No. 938 that its purpose is to maintain the tax exemption of NPC from all forms of taxes including indirect taxes as
provided under R.A. No. 6395 and P.D. 380 if it is to attain its goals. (Italics in the original; words in bracket added)
Of similar import is what we said in Borja vs. Collector of Internal Revenue.37 There, the Court upheld the decision of the CTA denying a claim for
refund of the compensating taxes paid on the importation of materials and equipment by a grantee of a heat and power legislative franchise containing
an “in lieu” provision, rationalizing as follows:
x x x Moreover, the petitioner’s alleged exemption from the payment of compensating tax in the present case is not clear or expressed; unlike the exemption from
the payment of income tax which was clear and expressed in the Carcar case. Unless it appears clearly and manifestly that an exemption is intended, the provision
is to be construed strictly against the party claiming exemption. x x x.

Jurisprudence thus teaches that imparting the “in lieu of all taxes” clause a literal meaning, as did the Court of Appeals and the CTA before it, is
fallacious. It is basic that in construing a statute, it is the duty of courts to seek the real intent of the legislature, even if, by so doing, they may limit
the literal meaning of the broad language.38
It cannot be over-emphasized that tax exemption represents a loss of revenue to the government and must, therefore, not rest on vague inference.
When claimed, it must be strictly construed against the taxpayer who must prove that he falls under the exception. And, if an exemption is found to
exist, it must not be enlarged by construction, since the reasonable presumption is that the state has granted in express terms all it intended to grant at
all, and that, unless the privilege is limited to the very terms of the statute the favor would be extended beyond dispute in ordinary cases.39
All told, we fail to see how Section 12 of RA 7082 operates as granting PLDT blanket exemption from payment of indirect taxes, which, in the
ultimate analysis, are not taxes on its franchise or earnings. PLDT has not shown its eligibility for the desired exemption. None should be granted.
As a final consideration, the Court takes particular stock, as the CTA earlier did, of PLDT’s allegation that the Bureau of Customs assessed the
company for advance sales tax and compensating tax for importations entered between October 1, 1992 and May 31, 1994 when the value-added tax
system already replaced, if not totally eliminated, advance sales and compensating taxes.40Indeed, pursuant to Executive Order No. 27341 which took
effect on January 1, 1988, a multi-stage value-added tax was put into place to replace the tax on original and subsequent sales tax.42 It stands to reason
then, as urged by PLDT, that compensating tax and advance sales tax were no longer collectible internal revenue taxes under the NILRC when the
Bureau of Customs made the assessments in question and collected the corresponding tax. Stated a bit differently, PLDT was no longer under legal
obligation to pay compensating tax and advance sales tax on its importation from 1992 to 1994.
Parenthetically, petitioner has not made an issue about PLDT’s allegations concerning the abolition of the provisions of the Tax Code imposing the
payment of compensating and advance sales tax on importations and the non-existence of these taxes during the period under review. On the contrary,
petitioner admits that the VAT on importation of goods has “replace[d] the compensating tax and advance sales tax under the old Tax Code.”43
Given the above perspective, the amount PLDT paid in the concept of advance sales tax and compensating tax on the 1992 to 1994 importations
were, in context, erroneous tax payments and would theoretically be refundable. It should be emphasized, however, that, such importations were,
when made, already subject to VAT.
Factoring in the fact that a portion of the claim was barred by prescription, the CTA had determined that PLDT is entitled to a total refundable
amount of P94,673,422.00 (P87,257,031.00 of compensating tax + P7,416,391.00 = P94,673,422.00). Accordingly, it behooves the BIR to grant a
refund of the advance sales tax and compensating tax in the total amount of P94,673,422.00, subject to the condition that PLDT present proof of
payment of the corresponding VAT on said transactions.
WHEREFORE, the petition is partially GRANTED. The Decision of the Court of Appeals in CA-G.R. No. 47895 dated September 17, 1999 is
MODIFIED. The Commissioner of Internal Revenue is ORDERED to issue a Tax Credit Certificate or to refund to PLDT only the of P94,673,422.00
advance sales tax and compensating tax erroneously collected by the Bureau of Customs from October 1, 1992 to May 31, 1994, less the VAT which
may have been due on the importations in question, but have otherwise remained uncollected.
SO ORDERED.
Sandoval-Gutierrez, Corona and Carpio-Morales, JJ., concur.
Panganiban (Chairman), J., No part. Former counsel of a party.

Petition partially granted, judgment modified.

Note.—The VAT is a tax on consumption “expressed as a percentage of the value added to the goods and services” purchased by the producer or
taxpayer. (Commissioner of Internal Revenue vs. American Express International, Inc., 462 SCRA 197 [2005])
 G.R. No. 161081. May 10, 2005.*

RAMON M. ATIENZA, in his capacity as Vice-Governor of the Province of Occidental Mindoro, petitioner, vs. JOSE T. VILLAROSA, in his
capacity as Governor of the Province of Occidental Mindoro, respondent.

Municipal Corporations; Local Government Units; Actions; Moot and Academic Questions; Even in cases where supervening events had made the cases moot, the
Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench, bar and the public.—Before
resolving the foregoing issues, it is noted that petitioner Atienza and respondent Villarosa had ceased to be the Vice-Governor and Governor, respectively, of the
Province of Occidental Mindoro effective June 30, 2004 when the newly-elected officials of the province took their oaths of offices. The petitioner Vice-Governor
did not run for re-election during the May 2004 elections while the respondent Governor did not succeed in his re-election bid. The expiration of their terms of
offices has effectively rendered the case moot. However, even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the
legal or constitutional issues raised to formulate controlling principles to guide the bench, bar and the public. In this case, there is compelling reason for the Court
to resolve the issues presented in order to clarify the scope of the respective powers of the Governor and Vice-Governor under the pertinent provisions of the Local
Government Code of 1991.
Same; Same; Local Government Code (R.A. No. 7160); Local Autonomy; Decentralization; The provisions of R.A. No. 7160 are anchored on principles that give effect to
decentralization.—To resolve the substantive issues presented in the instant case, it is well to recall that Rep. Act No. 7160 was enacted to give flesh to the constitutional
mandate to “provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanism of recall,
initiative and referendum, allocate among the different local government units their powers, responsibilities, and resources, and provide for the qualifications, election,
appointment and removal, term, salaries, powers and functions and duties of local officials, and all matters relating to the organization and operation of the local
units.” In this connection, the provisions of Rep. Act No. 7160 are anchored on principles that give effect to decentralization. Among these principles are: [t]here
shall be an effective allocation among the different local government units of their respective powers, functions, responsibilities, and resources; [t]here shall be
established in every local government unit an accountable, efficient, and dynamic organizational structure and operating mechanism that will meet the priority
needs and service requirements of its communities; [p]rovinces with respect to component cities and municipalities, and cities and municipalities with respect to
component barangays, shall ensure that the acts of their component units are within the scope of their prescribed powers and functions; and [e]ffective mechanisms
for ensuring the accountability of local government units to their respective constituents shall be strengthened in order to upgrade continually the quality of local
leadership.
Same; Same; Same; The Vice-Governor, as the presiding officer of the Sangguniang Panlalawigan, has administrative control of the funds of the said body
and it is he who has the authority to approve disbursement vouchers for expenditures appropriated for the operation of the Sangguniang Panlalawigan.—Reliance
by the CA on the clause “approval of the disbursement voucher by the local chief executive himself shall be required whenever local funds are disbursed” of the
above section (Section 344) to rule that it is the Governor who has the authority to approve purchase orders for the supplies, materials or equipment for the
operation of the Sangguniang Panlalawigan is misplaced. This clause cannot prevail over the more specific clause of the same provision which provides that
“vouchers and payrolls shall be certified to and approved by the head of the department or office who has administrative control of the fund concerned.” The Vice-
Governor, as the presiding officer of the Sangguniang Panlalawigan, has administrative control of the funds of the said body. Accordingly, it is the Vice-Governor
who has the authority to approve disbursement vouchers for expenditures appropriated for the operation of the Sangguniang Panlalawigan.
Same; Same; Same; Statutory Construction; Doctrine of Necessary Implication; Words and Phrases; While R.A. No. 7160 is silent as to the matter, the authority
granted to the Vice-Governor to sign all warrants drawn on the provincial treasury for all expenditures appropriated for the operation of the Sangguniang Panlalawigan
as well as to approve disbursement vouchers relating thereto necessarily includes the authority to approve purchase orders covering the same applying the doctrine of
necessary implication; The doctrine of necessary implication states that what is implied in a statute is as much a part thereof as that which is expressed
 —every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make effective
rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its
terms.— While Rep. Act No. 7160 is silent as to the matter, the authority granted to the Vice-Governor to sign all warrants drawn on the provincial treasury for all
expenditures appropriated for the operation of the Sangguniang Panlalawigan as well as to approve disbursement vouchers relating thereto necessarily includes the
authority to approve purchase orders covering the same applying the doctrine of necessary implication. This doctrine is explained, thus: No statute can be enacted
that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is thought, at the time of enactment, to
be an all-embracing legislation may be inadequate to provide for the unfolding of events of the future. So-called gaps in the law develop as the law is enforced. One of the
rules of statutory construction used to fill in the gap is the doctrine of necessary implication. The doctrine states that what is implied in a statute is as much a part thereof as
that which is expressed. Every statute is understood, by implication, to contain all such provisions as may be necessary to effectuate its object and purpose, or to make
effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and subsidiary consequences as may be fairly and logically inferred from its
terms. Ex necessitate legis. And every statutory grant of power, right or privilege is deemed to include all incidental power, right or privilege. This is so because the greater
includes the lesser, expressed in the maxim, in eo plus sit, simper inest et minus.
Same; Same; Same; Words and Phrases; “Warrants,” “Vouchers,” and “Purchase Orders,” Explained.—Warrants are “order[s] directing the treasurer of the
municipality to pay money out of funds in city treasury which are or may become available for purpose specified to designated person[s].” Warrants of a municipal
corporation are generally orders payable when funds are found. They are issued for the payment of general municipal debts and expenses subject to the rule that
they shall be paid in the order of presentation. The ordinary meaning of “voucher” is a document which shows that services have been performed or expenses
incurred. It covers any acquittance or receipt discharging the person or evidencing payment by him. When used in connection with disbursement of money, it
implies some instrument that shows on what account or by what authority a particular payment has been made, or that services have been performed which entitle
the party to whom it is issued to payment.Purchase order, on the other hand, is “an authorization by the issuing party for the recipient to provide materials or
services for which issuing party agrees to pay; it is an offer to buy which becomes binding when those things ordered have been provided.”
Same; Same; Same; Since it is the Vice-Governor who approves disbursement vouchers and approves the payment for the procurement of the supplies, materials and
equipment needed for the operation of the Sangguniang Panlalawigan, then he also has the authority to approve the purchase orders to cause the delivery of the said
supplies, materials or equipment—the express authority to approve disbursement vouchers and, in effect, authorize the payment of money claims for supplies,
materials or equipment, necessarily includes the authority to approve purchase orders to cause the delivery of the same; The authority granted to the Vice-Governor
to sign all warrants drawn on the provincial treasury for all expenditures appropriated for the operation of the Sangguniang Panlalawigan as well as to approve
disbursement vouchers relating thereto is greater and includes the authority to approve purchase orders for the procurement of the supplies, materials and equipment
necessary for the operation of the Sangguniang Panlalawigan.—When an authorized person approves a disbursement voucher, he certifies to the correctness of the
entries therein, among others: that the expenses incurred were necessary and lawful, the supporting documents are complete and the availability of cash therefor.
Further, the person who performed the services or delivered the supplies, materials or equipment is entitled to payment. On the other hand, the terms and conditions
for the procurement of supplies, materials or equipment, in particular, are contained in a purchase order. The tenor of a purchase order basically directs the
supplier to deliver the articles enumerated and subject to the terms and conditions specified therein. Hence, the express authority to approve disbursement
vouchers and, in effect, authorize the payment of money claims for supplies, materials or equipment, necessarily includes the authority to approve purchase
orders to cause the delivery of the said supplies, materials or equipment. Since it is the Vice-Governor who approves disbursement vouchers and approves the
payment for the procurement of the supplies, materials and equipment needed for the operation of the Sangguniang Panlalawigan, then he also has the
authority to approve the purchase orders to cause the delivery of the said supplies, materials or equipment. Indeed, the authority granted to the Vice-Governor
to sign all warrants drawn on the provincial treasury for all expenditures appropriated for the operation of the Sangguniang Panlalawigan as well as to approve
disbursement vouchers relating thereto is greater and includes the authority to approve purchase orders for the procurement of the supplies, materials and
equipment necessary for the operation of the Sangguniang Panlalawigan.
Same; Same; Same; Appointments; Courts; Actions; Moot and Academic Questions; “Capable of Repetition Yet Evading Review” Rule; The Governor has no
authority to appoint the officials and employees of the Sangguniang Panlalawigan; It is recognized that courts will decide a question otherwise moot and academic
if it is “capable of repetition yet evading review.”—Anent the second issue, the appellate court likewise committed reversible error in holding that the
implementation of the Memorandum dated July 1, 2002 had rendered the petition moot and academic. It is recognized that courts will decide a question otherwise
moot and academic if it is “capable of repetition yet evading review.” Even if the employees whose contractual or job order employment had been terminated by
the implementation of the July 1, 2002 Memorandum may no longer be reinstated, still, similar memoranda may be issued by other local chief executives. Hence, it
behooves the Court to resolve whether the Governor has the authority to terminate or cancel the appointments of casual/job order employees of the Sangguniang
Panlalawigan and the Office of the Vice-Governor. We hold that the Governor, with respect to the appointment of the officials and employees of the Sangguniang
Panlalawigan, has no such authority.
Same; Same; Same; Same; While the Governor has authority to appoint officials and employees whose salaries are paid out of the provincial funds, this does
not extend to the officials and employees of the Sangguniang Panlalawigan because such authority is lodged with the Vice-Governor; The appointing power of the
Vice-Governor is limited to those employees of the Sangguniang Panlalawigan, as well as those of the Office of the Vice Governor, whose salaries are paid out of
the funds appropriated for the Sangguniang Panlalawigan—if the salary of an employee or official is charged against the provincial funds, even if this employee
reports to the Vice-Governor or is assigned to his office, the Governor retains the authority to appoint the said employee.—Thus, while the Governor has the
authority to appoint officials and employees whose salaries are paid out of the provincial funds, this does not extend to the officials and employees of the
Sangguniang Panlalawigan because such authority is lodged with the Vice-Governor. In the same manner, the authority to appoint casual and job order employees
of the Sangguniang Panlalawigan belongs to the Vice-Governor. The authority of the Vice-Governor to appoint the officials and employees of the Sangguniang
Panlalawigan is anchored on the fact that the salaries of these employees are derived from the appropriation specifically for the said local legislative body. Indeed,
the budget source of their salaries is what sets the employees and officials of the Sangguniang Panlalawigan apart from the other employees and officials of the
province. Accordingly, the appointing power of the Vice-Governor is limited to those employees of the Sangguniang Panlalawigan, as well as those of the Office
of the Vice-Governor, whose salaries are paid out of the funds appropriated for the Sangguniang Panlalawigan. As a corollary, if the salary of an employee or
official is charged against the provincial funds, even if this employee reports to the Vice-Governor or is assigned to his office, the Governor retains the authority to
appoint the said employee pursuant to Section 465(b)(v) of Rep. Act No. 7160.
Same; Same; Same; Separation of Powers; With R.A. No. 7160, the union of legislative and executive powers in the office of the local chief executive under BP Blg.
337 has been disbanded, so that either department now comprises different and non-intermingling official personalities with the end in view of ensuring a better delivery of
public service and provide a system of check and balance between the two; The avowed intent of R.A. No. 7160 is to vest on the Sangguniang Panlalawigan independence
in the exercise of its legislative functions vis-à-vis the discharge by the Governor of the executive functions.—With Rep. Act No. 7160, the union of legislative and
executive powers in the office of the local chief executive under the BP Blg. 337 has been disbanded, so that either department now comprises different and non-
intermingling official personalities with the end in view of ensuring a better delivery of public service and provide a system of check and balance between the two. Senator
Aquilino Pimentel, the principal author of Rep. Act No. 7160, explained that “the Vice-Governor is now the presiding officer of the Sangguniang Panlalawigan. The City
Vice-Mayor presides at meetings of the Sangguniang Panlungsod and the Municipal Vice-Mayor at the sessions of the Sangguniang Bayan. The idea is to distribute
powers among elective local officials so that the legislative, which is the Sanggunian, can properly check the executive, which is the Governor or the Mayor and vice versa
and exercise their functions without any undue interference from one by the other.” The avowed intent of Rep. Act. No. 7160, therefore, is to vest on the Sangguniang
Panlalawigan independence in the exercise of its legislative functions vis-à-vis the discharge by the Governor of the executive functions.
PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

Emmanuel Ruben T. Malto, Sr. for petitioner.
Augusto S. Jimenez for respondent.
CALLEJO, SR., J.:

Before the Court is the petition for review on certiorari filed by Ramon M. Atienza, in his capacity as Vice-Governor of the Province of Occidental
Mindoro, seeking to reverse and set aside the Decision1 dated November 28, 2003 of the Court of Appeals in CA-G.R. SP No. 72069. The assailed
decision dismissed the petition for prohibition under Rule 65 of the Rules of Court filed by petitioner Atienza which had sought to enjoin the
implementation of the Memoranda dated June 25, 2002 and July 1, 2002 issued by Jose T. Villarosa, Governor of the same province.
The present case arose from the following undisputed facts:
Petitioner Atienza and respondent Villarosa were the Vice-Governor and Governor, respectively, of the Province of Occidental Mindoro. On June 26,
2002, the petitioner Vice-Governor received the Memorandum dated June 25, 2002 issued by the respondent Governor concerning the
“AUTHORITY TO SIGN PURCHASE ORDERS OF SUPPLIES, MATERIALS, EQUIPMENT[S], INCLUDING FUEL, REPAIRS AND
MAINTENANCE OF THE SANGGUNIANG PANLALAWIGAN.” The said memorandum reads:
For proper coordination and to ensure efficient and effective local government administration particularly on matters pertaining to supply and property management,
effective immediately, all Purchase Orders issued in connection with the procurement of supplies, materials and equipment[s] including fuel, repairs and
maintenance needed in the transaction of public business or in the pursuit of any undertaking, project or activity of the Sangguniang Panlalawigan, this province,
shall be approved by the undersigned in his capacity as the local chief executive of the province.
The provision of DILG Opinion No. 148-1993 which states that the authority to sign Purchase Orders of supplies, materials and equipment[s] of the Sanggunian
belongs to the local chief executive, serves as basis of this memorandum.
For strict compliance.2
In reply to the above memorandum, the petitioner Vice-Governor wrote the respondent Governor stating that:
We are of the opinion that . . . purchase orders for supplies, materials and equipment are included under those as authorized for signature by the Vice-chief
executive of the Sanggunian on the basis of the DILG Opinion No. 96-1995 as affirmed by the COA Opinions on June 28, April 11 and February 9, 1994 and
coursing it to the Governor for his approval is no longer necessary, the fact that [Secs.] 466 and 468, RA 7160 already provides for the separation of powers
between the executive and legislative. Such authority even include everything necessary for the legislative research program of the Sanggunian.3
Unimpressed, the respondent Governor issued the Memorandum dated July 1, 2002 relating to the “TERMINATION OF CONTRACT OF
SERVICES OF CASUAL/JOB ORDER EMPLOYEES AND REAPPOINTMENT OF THE RESPECTIVE RECOMMENDEES.” The said
memorandum reads:

For faithful and appropriate enforcement and execution of laws and issuances and to promote efficiency in the government service, effective immediately, all
existing contract of employment—casual/ job order basis and reappointment of the recommendees—entered into by Vice-Governor Ramon M. Atienza are hereby
terminated for being unauthorized.
Aside from being signed by the unauthorized signatory, the following facts regarding the appointments were considered:
 1. The appointment of 28 clerks—on top of existing permanent employees—is a clear manifestation of an excessive and bloated bureaucracy;
2. The appointment of an X-ray Technician detailed at the Provincial Health Office and some clerks detailed at various offices in the province were not
proper to be assigned by the Vice-Governor;
3. The appointment of 30 messengers, utility workers and drivers ran counter to COA Opinion as cited in the letter of the undersigned dated 28 June 2002,
addressed to the Vice-Governor.

However, in order to accommodate the Vice-Governor and the members of the Sangguniang Panlalawigan, the undersigned, in his capacity as the local chief
executive of the province, will allow four (4) casual/job order employees to be assigned to the Vice-Governor and one (1) casual/job order employee to be assigned
to each member of the Sangguniang Panlalawigan.
The Vice-Governor and all the Sanggunian Members are hereby directed to submit immediately the names of their recommendees to the undersigned for
immediate approval of their respective appointments.
Please be guided accordingly.4
On July 3, 2002, the respondent Governor issued another Memorandum regarding the “ENFORCIBILITY (sic) OF PREVIOUS MEMORANDA ISSUED
ON JUNE 20, 26 AND JULY 1, 2002.” It provides that:

Please be properly advised that the Memoranda dated June 20, 26 and July 1, 2002 issued by the undersigned regarding the issuance of permit to travel and
authority to sign Purchase Orders of supplies, materials, equipment, including fuel, repairs and maintenance of the Sangguniang Panlalawigan, is to be strictly
adhered to for compliance.
Likewise for strict compliance is the Memorandum dated July 1, 2002 with reference to the Cancellation of the Appointment of Casual/Job Order Employees of
the Sangguniang Panlalawigan Members/Office of the Vice-Governor previously signed by Vice-Governor Ramon M. Atienza.
Please be guided accordingly.5

In his Letter dated July 9, 2002, the petitioner Vice-Governor invoked the principle of separation of powers as applied to the local government units,
i.e., the respondent, as the Governor, the head of the executive branch, and the petitioner, as the Vice-Governor, the head of the legislative branch,
which is the Sangguniang Panlalawigan. The petitioner Vice-Governor reiterated his request for the respondent to make a “deeper study” on the
matter before implementing his memoranda. The request, however, went unheeded as the respondent Governor insisted on obliging the department
heads of the provincial government to comply with the memoranda.
The petitioner Vice-Governor thus filed with the Court of Appeals the petition for prohibition assailing as having been issued with grave abuse of
discretion the respondent Governor’s Memoranda dated June 25, 2002 and July 1, 2002. The petitioner Vice-Governor claimed that these memoranda
excluded him from the use and enjoyment of his office in violation of the pertinent provisions of Republic Act No. 7160, or the Local Government
Code of 1991, and its implementing rules and regulations. It was prayed that the respondent Governor be enjoined from implementing the assailed
memoranda.
The appellate court, in its Decision dated November 28, 2003, dismissed the petition for prohibition. Citing Section 3446of Rep. Act No. 7160, the
CA upheld the authority of the respondent Governor to issue the Memorandum dated June 25, 2002 as it recognized his authority to approve the
purchase orders. The said provision provides in part that “approval of the disbursement voucher by the local chief executive himself shall be required
whenever local funds are disbursed.”
The CA explained that Section 466(a)(1)7 of the same Code, relied upon by the petitioner Vice-Governor, speaks of the authority of the Vice-
Governor to sign “all warrantsdrawn on the public treasury for all expenditures appropriated for the operation of the sangguniang panlalawigan.” In
declaring this provision inapplicable, the CA reasoned that the approval of purchase orders is different from the power of the Vice-Governor to sign
warrants drawn against the public treasury.
Section 3618 was, likewise, held to be inapplicable ratiocinating, thus:
[R]equisitioning, which is provided under Section 361 of RA 7160, is the act of requiring that something be furnished. In the procurement function, it is the
submission of written requests for supplies and materials and the like. It could be inferred that, in the scheme of things, approval of purchase requests is different
from approval of purchase orders. Thus, the inapplicability of Section 361.

Anent the Memorandum dated July 1, 2002, the CA ruled that the issue on whether it could be enjoined had already been rendered moot and academic.
The CA pointed out that the subject of the said memorandum could no longer be enjoined or restrained as the termination of the employees had
already been effected. It opined that where the act sought to be enjoined in the prohibition proceedings had already been performed and there is
nothing more to restrain, the case is already moot and academic.
The petitioner Vice-Governor now seeks recourse to this Court alleging that the appellate court committed reversible error in ruling that it is the
Governor, and not the Vice-Governor, who has the authority to sign purchase orders of supplies, materials, equipment, including fuel, repairs and
maintenance of the Sangguniang Panlalawigan. The petitioner Vice-Governor, likewise, takes exception to the holding of the CA that the issue
relating to the July 1, 2002 Memorandum had been rendered moot and academic. He points out that the appointment of casual/job order employees is
exercised by the appointing authority every six months in the case of casual employees and per job order as to job order employees. Thus, while
theJuly 1, 2002 Memorandum had already been implemented, what is being sought to be enjoined is the respondent Governor’s continued usurpation
of the petitioner Vice-Governor’s authority to appoint the employees of the Sangguniang Panlalawigan under the pertinent provisions of Rep. Act No.
7160.
For his part, the respondent Governor maintains that his Memoranda dated June 25, 2002 and July 1, 2002 are valid. He asserts that the approval of
purchase orders is different from the power of the Vice-Governor to sign warrants drawn against the provincial treasury under Section 466(a)(1) of
Rep. Act No. 7160. Rather, he insists on the application of the last clause in Section 344 which states that the approval of the disbursement by the
local chief executive is required whenever local funds are disbursed.
The respondent Governor likewise defends the validity of the Memorandum dated July 1, 2002 stating that it was issued upon finding that the
petitioner Vice-Governor appointed, among others, 28 clerks on top of the existing permanent employees resulting in an excessive and bloated
bureaucracy. He concedes the appointing power of the Vice-Governor but submits that this is limited to the employees of the Sangguniang
Panlalawigan and that he is not authorized to appoint officials and employees of the Office of the Vice-Governor.
As correctly presented by the appellate court, the issues for resolution in this case are:
A. Who between the petitioner and the respondent is authorized to approve purchase orders issued in connection with the procurement of
supplies, materials, equipment, including fuel, repairs and maintenance of the Sangguniang Panlalawigan?
B. Does respondent Villarosa, as local chief executive, have the authority to terminate or cancel the appointments of casual/job order employees
of the Sangguniang Panlalawigan Members and the Office of the Vice-Governor?9

Before resolving the foregoing issues, it is noted that petitioner Atienza and respondent Villarosa had ceased to be the Vice-Governor and Governor,
respectively, of the Province of Occidental Mindoro effective June 30, 2004 when the newly elected officials of the province took their oaths of
offices. The petitioner Vice-Governor did not run for re-election during the May 2004 elections while the respondent Governor did not succeed in his
re-election bid. The expiration of their terms of offices has effectively rendered the case moot. However, even in cases where supervening events had
made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the
bench, bar and the public.10 In this case, there is compelling reason for the Court to resolve the issues presented in order to clarify the scope of the
respective powers of the Governor and Vice-Governor under the pertinent provisions of the Local Government Code of 1991.
To resolve the substantive issues presented in the instant case, it is well to recall that Rep. Act No. 7160 was enacted to give flesh to the
constitutional mandate to “provide for a more responsive and accountable local government structure instituted through a system of decentralization
with effective mechanism of recall, initiative and referendum, allocate among the different local government units their powers, responsibilities, and
resources, and provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and
all matters relating to the organization and operation of the local units.”11
In this connection, the provisions of Rep. Act No. 7160 are anchored on principles that give effect to decentralization. Among these principles are:
[t]here shall be an effective allocation among the different local government units of their respective powers, functions, responsibilities, and resources;
[t]here shall be established in every local government unit an accountable, efficient, and dynamic organizational structure and operating mechanism
that will meet the priority needs and service requirements of its communities; [p]rovinces with respect to component cities and municipalities, and
cities and municipalities with respect to component barangays, shall ensure that the acts of their component units are within the scope of their
prescribed powers and functions; and [e]ffective mechanisms for ensuring the accountability of local government units to their respective constituents
shall be strengthened in order to upgrade continually the quality of local lead-ership.12
With these guideposts, the Court shall now address the issue on who between the Governor and Vice-Governor is authorized to approve purchase
orders issued in connection with the procurement of supplies, materials, equipment, including fuel, repairs and maintenance of the Sangguniang
Panlalawigan.
We hold that it is the Vice-Governor who has such authority.
(1) Under Rep. Act No. 7160, local legislative power for the province is exercised by the Sangguniang Panlalawigan13 and the Vice-Governor is its
presiding officer.14 Being vested with legislative powers, the Sangguniang Panlalawiganenacts ordinances, resolutions and appropriates funds for the
general welfare of the province in accordance with the provisions of Rep. Act No. 7160.15 The same statute vests upon the Vice-Governor the power
to:
(2) Be the presiding officer of the sangguniang panlalawigan and sign all warrants drawn on the provincial treasury for all expenditures appropriated for the
operation of the sangguniang panlalawigan.16

Further, Section 344 provides:

Sec. 344. Certification on, and Approval of, Vouchers.—No money shall be disbursed unless the local budget officer certifies to the existence of appropriation that
has been legally made for the purpose, the local accountant has obligated said appropriation, and the local treasurer certifies to the availability of funds for the
purpose. Vouchers and payrolls shall be certified to and approved by the head of the department or office who has administrative control of the fund concerned, as
to validity, propriety and legality of the claim involved. Except in cases of disbursements involving regularly recurring administrative expenses such as payrolls for
regular or permanent employees, expenses for light, water, telephone and telegraph services, remittances to government creditor agencies such as the GSIS, SSS,
LBP, DBP, National Printing Office, Procurement Service of the DBM and others, approval of the disbursement voucher by the local chief executive himself shall
be required whenever local funds are disbursed.
In cases of special or trust funds, disbursements shall be approved by the administrator of the fund.
 In case of temporary absence or incapacity of the department head or chief of office, the officer next-in-rank shall automatically perform his function and he
shall be fully responsible therefor.
Reliance by the CA on the clause “approval of the disbursement voucher by the local chief executive himself shall be required whenever local funds
are disbursed” of the above section (Section 344) to rule that it is the Governor who has the authority to approve purchase orders for the supplies,
materials or equipment for the operation of the Sangguniang Panlalawiganis misplaced. This clause cannot prevail over the more specific clause of
the same provision which provides that “vouchers and payrolls shall be certified to and approved by the head of the department or office who has
administrative control of the fund concerned.” The Vice-Governor, as the presiding officer of the Sangguniang Panlalawigan, has administrative
control of the funds of the said body. Accordingly, it is the Vice-Governor who has the authority to approve disbursement vouchers for expenditures
appropriated for the operation of the Sangguniang Panlalawigan.
On this point, Section 39 of the Manual on the New Government Accounting System for Local Government Units, prepared by the Commission on
Audit (COA), is instructive:
Sec. 39. Approval of Disbursements.—Approval of disbursements by the Local Chief Executive (LCE) himself shall be required whenever local funds are
disbursed, except for regularly recurring administrative expenses such as: payrolls for regular or permanent employees, expenses for light, water, telephone and
telegraph services, remittances to government creditor agencies such as GSIS, BIR, PHILHEALTH, LBP, DBP, NPO, PS of the DBM and others, where the
authority to approve may be delegated. Disbursement vouchers for expenditures appropriated for the operation of the Sanggunian shall be approved by the
provincial Vice Governor, the city Vice-Mayor or the municipal Vice-Mayor, as the case may be.17
While Rep. Act No. 7160 is silent as to the matter, the authority granted to the Vice-Governor to sign all warrants drawn on the provincial treasury for
all expenditures appropriated for the operation of the Sangguniang Panlalawigan as well as to approve disbursement vouchers relating thereto
necessarily includes the authority to approve purchase orders covering the same applying the doctrine of necessary implication. This doctrine is
explained, thus:

No statute can be enacted that can provide all the details involved in its application. There is always an omission that may not meet a particular situation. What is
thought, at the time of enactment, to be an all-embracing legislation may be inadequate to provide for the unfolding of events of the future. So-called gaps in the
law develop as the law is enforced. One of the rules of statutory construction used to fill in the gap is the doctrine of necessary implication. The doctrine states that
what is implied in a statute is as much a part thereof as that which is expressed. Every statute is understood, by implication, to contain all such provisions as may be
necessary to effectuate its object and purpose, or to make effective rights, powers, privileges or jurisdiction which it grants, including all such collateral and
subsidiary consequences as may be fairly and logically inferred from its terms. Ex necessitate legis. And every statutory grant of power, right or privilege is deemed
to include all incidental power, right or privilege. This is so because the greater includes the lesser, expressed in the maxim, in eo plus sit, simper inest et minus.18

Warrants are “order[s] directing the treasurer of the municipality to pay money out of funds in city treasury which are or may become available for
purpose specified to designated person[s].”19 Warrants of a municipal corporation are generally orders payable when funds are found. They are issued
for the payment of general municipal debts and expenses subject to the rule that they shall be paid in the order of presentation.20
The ordinary meaning of “voucher” is a document which shows that services have been performed or expenses incurred. It covers any acquittance or
receipt discharging the person or evidencing payment by him. When used in connection with disbursement of money, it implies some instrument that
shows on what account or by what authority a particular payment has been made, or that services have been performed which entitle the party to
whom it is issued to payment.21
 Purchase order, on the other hand, is “an authorization by the issuing party for the recipient to provide materials or services for which issuing party
agrees to pay; it is an offer to buy which becomes binding when those things ordered have been provided.”22
When an authorized person approves a disbursement voucher, he certifies to the correctness of the entries therein, among others: that the expenses
incurred were necessary and lawful, the supporting documents are complete and the availability of cash therefor. Further, the person who performed
the services or delivered the supplies, materials or equipment is entitled to payment.23 On the other hand, the terms and conditions for the procurement
of supplies, materials or equipment, in particular, are contained in a purchase order. The tenor of a purchase order basically directs the supplier to
deliver the articles enumerated and subject to the terms and conditions specified therein. Hence, the express authority to approve disbursement
vouchers and, in effect, authorize the payment of money claims for supplies, materials or equipment, necessarily includes the authority to approve
purchase orders to cause the delivery of the said supplies, materials or equipment.
Since it is the Vice-Governor who approves disbursement vouchers and approves the payment for the procurement of the supplies, materials and
equipment needed for the operation of the Sangguniang Panlalawigan, then he also has the authority to approve the purchase orders to cause the
delivery of the said supplies, materials or equipment.
Indeed, the authority granted to the Vice-Governor to sign all warrants drawn on the provincial treasury for all expenditures appropriated for the
operation of the Sangguniang Panlalawiganas well as to approve disbursement vouchers relating thereto is greater and includes the authority to
approve purchase orders for the procurement of the supplies, materials and equipment necessary for the operation of the Sangguniang Panlalawigan.
Anent the second issue, the appellate court likewise committed reversible error in holding that the implementation of the Memorandum dated July
1, 2002 had rendered the petition moot and academic. It is recognized that courts will decide a question otherwise moot and academic if it is “capable
of repetition yet evading review.”25Even if the employees whose contractual or job order employment had been terminated by the implementation of
the July 1, 2002 Memorandum may no longer be reinstated, still, similar memoranda may be issued by other local chief executives. Hence, it
behooves the Court to resolve whether the Governor has the authority to terminate or cancel the appointments of casual/job order employees of the
Sangguniang Panlalawigan and the Office of the Vice-Governor.
We hold that the Governor, with respect to the appointment of the officials and employees of the Sangguniang Panlalawigan, has no such
authority.
Among the powers granted to the Governor under Section 465 of Rep. Act No. 7160 are:
Sec. 465. The Chief Executive: Powers, Duties, Functions and Compensation.—(a) The provincial governor, as the chief executive of the provincial government,
shall exercise such powers and perform such duties and functions as provided by this Code and other laws.
(b) For efficient, effective and economical governance the purpose of which is the general welfare of the province and its inhabitants pursuant to Section 16 of
this Code, the provincial governor shall:
...

(v) Appoint all officials and employees whose salaries and wages are wholly or mainly paid out of provincial funds and whose appointments are not otherwise provided for in this Code, as
well as those he may be authorized by law to appoint.

On the other hand, Section 466 vests on the Vice-Governor the power to, among others:

(2) Subject to civil service law, rules and regulations, appoint all officials and employees of the sangguniang panlalawigan, except those whose manner of
appointment is specifically provided in this Code.
Thus, while the Governor has the authority to appoint officials and employees whose salaries are paid out of the provincial funds, this does not extend
to the officials and employees of the Sangguniang Panlalawiganbecause such authority is lodged with the Vice-Governor. In the same manner, the
authority to appoint casual and job order employees of the Sangguniang Panlalawigan belongs to the Vice-Governor.
The authority of the Vice-Governor to appoint the officials and employees of the Sangguniang Panlalawigan is anchored on the fact that the salaries
of these employees are derived from the appropriation specifically for the said local legislative body. Indeed, the budget source of their salaries is
what sets the employees and officials of the Sangguniang Panlalawigan apart from the other employees and officials of the province. Accordingly,
the appointing power of the Vice-Governor is limited to those employees of the Sangguniang Panlalawigan, as well as those of the Office of the
Vice-Governor, whose salaries are paid out of the funds appropriated for the Sangguniang Panlalawigan. As a corollary, if the salary of an employee
or official is charged against the provincial funds, even if this employee reports to the Vice-Governor or is assigned to his office, the Governor retains
the authority to appoint the said employee pursuant to Section 465(b)(v) of Rep. Act No. 7160.
However, in this case, it does not appear whether the contractual/job order employees, whose appointments were terminated or cancelled by the
Memorandum dated July 1, 2002 issued by the respondent Governor, were paid out of the provincial funds or the funds of the Sangguniang
Panlalawigan.Nonetheless, the validity of the said memorandum cannot be upheld because it absolutely prohibited the respondent Vice-Governor
from exercising his authority to appoint the employees, whether regular or contractual/job order, of the Sangguniang Panlalawigan and restricted
such authority to one of recommendatory nature only.26This clearly constituted an encroachment on the appointment power of the respondent Vice-
Governor under Section 466(a)(2) of Rep. Act No. 7160.
At this juncture, it is well to note that under Batas Pambansa Blg. 337, the Local Government Code prior to Rep. Act No. 7160, the Governor was
the presiding officer of the Sangguniang Panlalawigan:
Sec. 205. Composition. (1) Each provincial government shall have a provincial legislature hereinafter known as the sangguniang panlalawigan, upon which shall
be vested the provincial legislative power.
The sangguniang panlalawigan shall be composed of the governor, vice-governor, elective members of the said sanggunian, and the presidents of the katipunang
panlalawigan and the kabataang barangay provincial federation who shall be appointed by the President of the Philippines.

Sec. 206. Sessions.—

(3) The governor, who shall be the presiding officer of the sangguniang panlalawigan, shall not be entitled to vote except in case of a tie.
...

With Rep. Act No. 7160, the union of legislative and executive powers in the office of the local chief executive under the BP Blg. 337 has been
disbanded, so that either department now comprises different and non-intermingling official personalities with the end in view of ensuring a better
delivery of public service and provide a system of check and balance between the two.27
Senator Aquilino Pimentel, the principal author of Rep. Act No. 7160, explained that “the Vice-Governor is now the presiding officer of the
Sangguniang Panlalawigan. The City Vice-Mayor presides at meetings of the Sangguniang Panlungsod and the Municipal Vice-Mayor at the
sessions of the Sangguniang Bayan. The idea is to distribute powers among elective local officials so that the legislative, which is the Sanggunian,
can properly check the executive, which is the Governor or the Mayor and vice versa and exercise their functions without any undue interference
from one by the other.”28
The avowed intent of Rep. Act. No. 7160, therefore, is to vest on the Sangguniang Panlalawigan independence in the exercise of its legislative
functions vis-à-vis the discharge by the Governor of the executive functions. The Memoranda dated June 25, 2002 and July 1, 2002 of the respondent
Governor, which effectively excluded the petitioner Vice-Governor, the presiding officer of the Sangguniang Panlalawigan, from signing the
purchase orders for the procurement of supplies, materials or equipment needed for the operation of the Sangguniang Panlalawigan as well as from
appointing its casual and job order employees, constituted undue interference with the latter’s functions. The assailed memoranda are clearly not in
keeping with the intent of Rep. Act No. 7160 and their implementation should thus be permanently enjoined.
WHEREFORE, the petition is GRANTED. The Memoranda dated June 25, 2002 and July 1, 2002 issued by respondent Governor Jose T.
Villarosa are NULL AND VOID.
SO ORDERED.
Davide, Jr. (C.J.), Quisumbing, Ynares-Santiago,Carpio, Austria-Martinez, Corona, Carpio-Morales, Azcuna, Tinga, Chico-
Nazarioand Garcia, JJ., concur.
Puno, J., On Sick Leave.
Panganiban and Sandoval-Gutierrez, JJ., On Official Leave.
Petition granted.

Notes.—A Vice-Governor who is concurrently an Acting Governor is actually a quasi-Governor. This means, that for purposes of exercising his
legislative prerogatives and powers, he is deemed as a non-member of the Sangguniang Panlalawigan for the time being. (Gamboa, Jr. vs. Aguirre,
Jr.,310 SCRA 867 [1999])
The power of the Department Secretary to promulgate internal rules of administrative procedure is lodged in him by necessary implication as part
of his express power to “promulgate rules and regulations necessary to carry out department objectives, policies, functions, plans, programs and
projects.” (Valencia vs. Court of Appeals, 401 SCRA 666 [2003])
 No. L-19281. June 30, 1965.

IN THE MATTER OF THE INTESTATE ESTATE OF PEDRO SANTILLON, CLARO SANTILLON, petitioner-appellant, vs. PERFECTA
MIRANDA, BENITO U. MIRANDA and ROSARIO CORRALES, oppositors-appellees.

Appeals in special proceedings; Order of court determining distributive share of heirs appealable.—An order of the Court of First Instance which determines
the distributive shares of the heirs of a deceased person is appealable.
Succession; Surviving spouse concurring with a legitimate child entitled to one-half of the intestate estate.—When intestacy occurs, a surviving spouse
concurring with only one legitimate child of the deceased is entitled to one-half of the estate of the deceased spouse under Article 996 of the Civil Code.

APPEAL from an order of the Court of First Instance of Pangasinan. Pabalan, J.

The facts are stated in the opinion of the Court.

Clodualdo P. Surio and Claro Santillon (in his own behalf) for petitioner-appellant.
Patricio M. Patajo for oppositors-appellees.
BENGZON, C.J.:

This is an appeal from the order of the Court of First Instance of Pangasinan, specifying the respective shares of the principal parties herein in the
intestate estate of Pedro Santillon.
On November 21, 1953, Santillon died without testament in Tayug, Pangasinan, his residence, leaving one son, Claro, and his wife, Perfecta
Miranda. During his marriage, Pedro acquired several parcels of land located in that province.
About four years after his death, Claro Santillon filed a petition for letters of administration. Opposition to said petition was entered by the widow
Perfecta Miranda and the spouses Benito U. Miranda and Rosario Corrales on the following grounds: (a) that the properties enumerated in the petition
were all conjugal, except three parcels which Perfecta Miranda claimed to be her exclusive properties; (b) that Perfecta Miranda by virtue of two
documents had conveyed 3/4 of her undivided share in most of the properties enumerated in the petition to said spouses Benito and Rosario; (c) that
administration of the estate was not necessary, there being a case for partition pending; and (d) that if administration was necessary at all, the
oppositor Perfecta Miranda and not the petitioner ‘was better qualified for the post. It appears that subsequently, oppositor Perfecta Miranda was
appointed administratrix of the estate.
On March 22, 1961, the court appointed commissioners to draft within sixty days, a project of partition and distribution of all the properties of the
deceased Pedro Santillon.
On April 25, 1961, Claro filed a “Motion to Declare Share of Heirs” and to resolve the conflicting claims of the parties with respect to their respective
rights in the estate. Invoking Art. 892 of the New Civil Code, he insisted that after deducting 1/2 from the conjugal properties as the conjugal share of
Perfecta, the remaining 1/2 must be divided as follows: 1/4 for her and 3/4 for him. Oppositor Perfecta, on the other hand, claimed that besides her
conjugal half, she was entitled under Art. 996 of the New Civil Code to another 1/2 of the remaining half. In other words, Claro claimed 3/4 of
Pedro’s inheritance, while Perfecta claimed 1/2.
After due notice and hearing, the court, on June 28, 1961, issued an order, the dispositive portion of which reads:
“IN VIEW OF THE FOREGOING CONSIDERATIONS it is hereby ruled and ordered that in the intestate succession of the deceased Pedro Santillon, the
surviving spouse Perfecta Miranda shall inherit ONE-HALF (1/2) share and the remaining ONE-HALF (1/2) share for the only son, Atty. Claro Santillon. This is
after deducting the share of the widow as co-owner of the conjugal properties, x x x.”
From this order, petitioner Claro Santillon has appealed to this Court. Two questions of law are involved. The first, raised in Perfecta’s Motion to
Dismiss Appeal, is whether the order of the lower court is appealable. And the second, raised in appellant’s lone assignment of error, is: How shall the
estate of a person who dies intestate be divided when the only survivors are the spouse and one legitimate child?
The First Issue:—It is clear that the order of the lower court is final and, therefore, appealable to this Court.
Under Rule 109, see 1, a person may appeal in special proceedings from an order of the Court of First Instance where such order “determines xxx
the distributive share of the estate to which such person is entitled.”
The Second Issue:—Petitioner rests his claim to 3/4 of his father’s estate on Art. 892 of the New Civil Code which provides that:
“If only the legitimate child or descendant of the deceased survives, the widow or widower shall be entitled to one-fourth of the hereditary estate. xxx.”

As she gets one-fourth, therefore, I get 3/4, says Claro. Perfecta, on the other hand, cites Art. 996 which provides:
“If a widow or widower and legitimate children or descendants are left, the surviving spouse has in the succession the same share as that of each of the children.”
Replying to Perfecta’s claim, Claro says the article is unjust and unequitable to the extent that it grants the widow the same share as that of the
children in intestate succession, whereas in testate, she is given 1/4 and the only child 1/2.
Oppositor Perfecta Miranda, on the other hand, contends that Art. 996 should control, regardless of its alleged inequity, being as it is, a provision
on intestate succession involving a surviving spouse and a legitimate child, inasmuch as in statutory construction, the plural word “children” includes
the singular “child.”
Art. 892 of the New Civil Code falls under the chapter on Testamentary Succession; whereas Art. 996 comes under the chapter on Legal or
Intestate Succession. Such being the case, it is obvious that Claro cannot rely on Art. 892 to support his claim to 3/4 of his father’s estate. Art. 892
merely fixes the legitimeof the surviving spouse and Art. 888 thereof, the legitime of children in testate succession.While it may indicate the intent of
the law with respect to the ideal shares that a child and a spouse should get when they concur with each other, it does not fix the amount of shares that
such child and spouse are entitled to when intestacy occurs.Because if the latter happens, the pertinent provision on intestate succession shall apply,
i.e., Art. 996.
Some commentators of our New Civil Code seem to support Claro’s contention; at least, his objection to fifty-fifty sharing. But others confirm the
half and half idea of the Pangasinan court.
This is, remember, intestate proceedings. In the New Civil Code’s chapter on legal or intestate succession, the only article applicable is Art. 996.
Our colleague, Mr. Justice J.B.L. Reyes, professor of Civil Law, is quoted as having expressed the opinion that under this article, when the widow
survives with only one legitimate child, they share the estate in equal parts.1Senator Tolentino in his commentaries writes as follows:
“One child Surviving.—If there is only one legitimate child surviving with the spouse, since they share equally, onehalf of the estate goes to the child and the other
half goes to the surviving spouse. Although the law refers to ‘children or descendants,’ the rule in statutory construction that the plural can be understood to include
the singular is applicable in this case.” (Tolentino, Civil Code of the Philippines, Vol. III, p. 436.)
The theory of those holding otherwise seems to be premised on these propositions: (a) Art. 996 speaks of “children,” therefore, it does not apply when
there is only one “child”; consequently Art. 892 (and Art. 888) should be applied, thru a process of judicial construction and analogy; (b) Art. 996 is
unjust or unfair because, whereas in testate succession, the widow is assigned one-fourth only (Art. 892), she would get 1/2 in intestate.
A. Children.—It is a maxim of statutory construction that words in plural include the singular.2 So Art. 996 could or should be read (and so applied):
“If the widow or widower and a legitimate child are left, the surviving spouse has the same share as that of the child.”Indeed, if we refuse to apply the
article to this case on the ground that “child” is not included in “children,” the consequences would be tremendous, because “children” will not
include “child” in the following articles:ART. 887.—The following are compulsory heirs: (1) legitimate children and descendants xxx.
ART. 888.—The legitime of legitimate children and descendants consists of one-half of the hereditary estate xxx.
ART. 896.—Illegitimate childrenwho may survive xxx are entitled to one-fourth of the hereditary estate xxx. (See also Art. 901).

In fact, those who say “children” in Art. 996 does not include “child” seem to be inconsistent when they argue from the premise that “in testate
succession the only legitimate child gets one-half and the widow, one-fourth.” The inconsistency is clear, because the only legitimate child gets one-
half under Art. 888, which speaks of “children,” not “child.” So if “children” in Art. 888 includes “child,” the same meaning should be given to Art.
996.
B. Unfairness of Art. 996.—Such position, more clearly stated, is this: In testate succession, where there is only one child of the marriage, the child
gets one-half, and the widow or widower one-fourth. But in intestate, if Art. 996 is applied now, the child gets one-half, and the widow or widower
one-half. Unfair or inequitable, they insist.
On this point, it is not correct to assume that in testate succession the widow or widower “gets only one-fourth.”She or he may get one-half—if the
testator so wishes. So, the law virtually leaves it to each of the spouses to decide (by testament, whether his or her only child shall get more than his or
her survivor).
Our conclusion (equal shares) seems a logical inference from the circumstance that whereas Article 834 of the Spanish Civil Code, from which Art.
996 was taken, contained two paragraphs governing two contingencies, the first, where the widow or widower survives with legitimate children
(general rule), and the second, where the widow or widower survives with only one child (exception), Art. 996 omitted to provide for the second
situation, thereby indicating the legislator’s desire to promulgate just one general rule applicable to both situations.
The resultant division may be unfair as some writers explain—and this we are not called upon to discuss—but it is the clear mandate of the statute,
which we are bound to enforce.
The appealed decision is affirmed. No costs in this instance.
Concepcion, Reyes, J.B.L., Paredes, Dizon, Regala, Makalintal, Bengzon, J.P., and Zaldivar, JJ., concur.
Bautista Angelo, J., took no part.
Barrera, J., is on leave.
Decision affirmed.