CivPro Case Set 2

7/29/2019 CivPro Case Set 2

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Civil Procedure Case Set 2

New Era University College of Law

PERRAL

Republic of the PhilippinesSUPREME COURTManilaFIRST DIVISION

G.R. No . L-58028 Apr il 18, 1989CHIANG KAI SHEK SCHOOL, petitioner,vs.COURT OF APPEALS and FAUSTINA FRANCO OH,respondents.

CRUZ, J.:

An unpleasant surprise awaited Fausta F. Oh when she reportedfor work at the Chiang Kai Shek School in Sorsogon on the firstweek of July, 1968. She was told she had no assignment for thenext semester. Oh was shocked. She had been teaching in theschool since 1932 for a continuous period of almost 33 years.And now, out of the blue, and for no apparent or given reason,this abrupt dismissal.

Oh sued. She demanded separation pay, social security benefits,salary differentials, maternity benefits and moral and exemplarydamages. 1 The original defendant was the Chiang Kai ShekSchool but when it filed a motion to dismiss on the ground that itcould not be sued, the complaint was amended. 2 Certain officialsof the school were also impleaded to make them solidarily liablewith the school.

The Court of First Instance of Sorsogon dismissed the complaint.3 On appeal, its decision was set aside by the respondent court,which held the school suable and liable while absolving the otherdefendants. 4 The motion for reconsideration having beendenied, 5 the school then came to this Court in this petition forreview on certiorari.

The issues raised in the petition are:

1. Whether or not a school that has not been incorporated maybe sued by reason alone of its long continued existence andrecognition by the government,

2. Whether or not a complaint filed against persons associatedunder a common name will justify a judgment against theassociation itself and not its individual members.

3. Whether or not the collection of tuition fees and book rentalswill make a school profit-making and not charitable.

4. Whether or not the Termination Pay Law then in force wasavailable to the private respondent who was employed on a year-to-year basis.

5. Whether or not the awards made by the respondent courtwere warranted.

We hold against the petitioner on the first question. It is true thatRule 3, Section 1, of the Rules of Court clearly provides that "onlynatural or juridical persons may be parties in a civil action." It isalso not denied that the school has not been incorporated.

However, this omission should not prejudice the privaterespondent in the assertion of her claims against the school.

As a school, the petitioner was governed by Act No. 2706 asamended by C.A. No. 180, which provided as follows:

Unless exempted for special reasons by the Secretary of PublicInstruction, any private school or college recognized by thegovernment shall be incorporated under the provisions of Act No.1459 known as the Corporation Law, within 90 days after thedate of recognition, and shall file with the Secretary of PublicInstruction a copy of its incorporation papers and by-laws.

Having been recognized by the government, it was underobligation to incorporate under the Corporation Law within 90days from such recognition. It appears that it had not done so at

the time the complaint was filed notwithstanding that it had beenin existence even earlier than 1932. The petitioner cannot nowinvoke its own non-compliance with the law to immunize it fromthe private respondent's complaint.

There should also be no question that having contracted with theprivate respondent every year for thirty two years and thusrepresented itself as possessed of juridical personality to do so,the petitioner is now estopped from denying such personality todefeat her claim against it. According to Article 1431 of the CivilCode, "through estoppel an admission or representation isrendered conclusive upon the person making it and cannot bedenied or disproved as against the person relying on it."

As the school itself may be sued in its own name, there is noneed to apply Rule 3, Section 15, under which the persons joinedin an association without any juridical personality may be suedwith such association. Besides, it has been shown that theindividual members of the board of trustees are not liable, havingbeen appointed only after the private respondent's dismissal. 6

It is clear now that a charitable institution is covered by the laborlaws 7 although the question was still unsettled when this casearose in 1968. At any rate, there was no law even thenexempting such institutions from the operation of the labor laws(although they were exempted by the Constitution from advalorem taxes). Hence, even assuming that the petitioner was acharitable institution as it claims, the private respondent wasnonetheless still entitled to the protection of the Termination PayLaw, which was then in force.

While it may be that the petitioner was engaged in charitableworks, it would not necessarily follow that those in its employ

were as generously motivated. Obviously, most of them would

not have the means for such charity. The private respondentherself was only a humble school teacher receiving a meagersalary of Pl80. 00 per month.

At that, it has not been established that the petitioner is acharitable institution, considering especially that it charges tuitionfees and collects book rentals from its students. 8 While this

alone may not indicate that it is profit-making, it does weaken itsclaim that it is a non-profit entity.

The petitioner says the private respondent had not been illegallydismissed because her teaching contract was on a yearly basisand the school was not required to rehire her in 1968. Theargument is that her services were terminable at the end of eachyear at the discretion of the school. Significantly, no explanationwas given by the petitioner, and no advance notice either, of herrelief after teaching year in and year out for all of thirty-twoyears, the private respondent was simply told she could not teachany more.

The Court holds, after considering the particular circumstance ofOh's employment, that she had become a permanent employeeof the school and entitled to security of tenure at the time of her

dismissal. Since no cause was shown and established at anappropriate hearing, and the notice then required by law had notbeen given, such dismissal was invalid.

The private respondent's position is no different from that of therank-and-file employees involved in Gregorio Araneta UniversityFoundation v. NLRC, 9 of whom the Court had the following tosay:

Undoubtedly, the private respondents' positions as deans anddepartment heads of the petitioner university are necessary in itsusual business. Moreover, all the private respondents have beenserving the university from 18 to 28 years. All of them rose fromthe ranks starting as instructors until they became deans anddepartment heads of the university. A person who has served theUniversity for 28 years and who occupies a high administrativeposition in addition to teaching duties could not possibly be atemporary employee or a casual.

The applicable law is the Termination Pay Law, which provided:

SECTION 1. In c ases o f employment, w ithout adefinite period, in a commercial, industrial, or agriculturalestablishment or enterprise, the employer or the employee mayterminate at any time the employment with just cause; orwithout just cause in the case of an employee by serving writtennotice on the employer at least one month in advance, or in thecase of an employer, by serving such notice to the employee atleast one month in advance or one-half month for every year ofservice of the employee, whichever, is longer, a fraction of atleast six months being considered as one whole year.

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The employer, upon whom no such notice was served in case oftermination of employment without just cause may hold theemployee liable for damages.

The employee, upon whom no such notice was served in case oftermination of employment without just cause shall be entitled tocompensation from the date of termination of his employment in

an I amount equivalent to his salaries or wages correspond to therequired period of notice. ... .

The respondent court erred, however, in awarding her one monthpay instead of only one-half month salary for every year ofservice. The law is quite clear on this matter. Accordingly, theseparation pay should be computed at P90.00 times 32 months,for a total of P 2,880.00.

Parenthetically, R.A. No. 4670, otherwise known as the MagnaCarta for Public School Teachers, confers security of tenure onthe teacher upon appointment as long as he possesses therequired qualification. 10 And under the present policy of theDepartment of Education, Culture and Sports, a teacher becomespermanent and automatically acquires security of tenure uponcompletion of three years in the service. 11

While admittedly not applicable to the case at bar, these I rulesnevertheless reflect the attitude of the government on theprotection of the worker's security of tenure, which is nowguaranteed by no less than the Constitution itself. 12

We find that the private respondent was arbitrarily treated by thepetitioner, which has shown no cause for her removal nor had itgiven her the notice required by the Termination Pay Law. As therespondent court said, the contention that she could not reportone week before the start of classes is a flimsy justification forreplacing her. 13 She had been in its employ for all of thirty-twoyears. Her record was apparently unblemished. There is noshowing of any previous strained relations between her and thepetitioner. Oh had every reason to assume, as she had done inprevious years, that she would continue teaching as usual.

It is easy to imagine the astonishment and hurt she felt when shewas flatly and without warning told she was dismissed. Therewas not even the amenity of a formal notice of her replacement,with perhaps a graceful expression of thanks for her pastservices. She was simply informed she was no longer in theteaching staff. To put it bluntly, she was fired.

For the wrongful act of the petitioner, the private respondent isentitled to moral damages. 14 As a proximate result of her illegaldismissal, she suffered mental anguish, serious anxiety, woundedfeelings and even besmirched reputation as an experiencedteacher for more than three decades. We also find that therespondent court did not err in awarding her exemplary damagesbecause the petitioner acted in a wanton and oppressive mannerwhen it dismissed her. 15

The Court takes this opportunity to pay a sincere tribute to thegrade school teachers, who are always at the forefront in thebattle against illiteracy and ignorance. If only because it is theywho open the minds of their pupils to an unexplored world awashwith the magic of letters and numbers, which is an extraordinaryfeat indeed, these humble mentors deserve all our respect andappreciation.

WHEREFORE, the petition is DENIED. The appealed decision isAFFIRMED except for the award of separation pay, which isreduced to P2,880.00. All the other awards are approved. Costsagainst the petitioner.

This decision is immediately executory.

SO ORDERED.

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Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISION

G.R. No . L-31061 Augus t 17 , 1976SULO NG BAYAN INC., plaintiff-appellant,vs.GREGORIO ARANETA, INC., PARADISE FARMS, INC.,NATIONAL WATERWORKS & SEWERAGE AUTHORITY,HACIENDA CARETAS, INC, and REGISTER OF DEEDS OFBULACAN, defendants-appellees.

Hill & Associates Law Offices for appellant.

Araneta, Mendoza & Papa for appellee Gregorio Araneta, Inc.

Carlos, Madarang, Carballo & Valdez for Paradise Farms, Inc.

Leopoldo M. Abellera, Arsenio J. Magpale & Raul G. Bernardo,Office of the Government Corporate Counsel for appellee National

Waterworks & Sewerage Authority.

Candido G. del Rosario for appellee Hacienda Caretas, Inc.

ANTONIO, J.:

The issue posed in this appeal is whether or not plaintiffcorporation (non- stock may institute an action in behalf of itsindividual members for the recovery of certain parcels of landallegedly owned by said members; for the nullification of thetransfer certificates of title issued in favor of defendantsappellees covering the aforesaid parcels of land; for a declarationof "plaintiff's members as absolute owners of the property" andthe issuance of the corresponding certificate of title; and fordamages.

On April 26, 1966, plaintiff-appellant Sulo ng Bayan, Inc. filed anaccion de revindicacion with the Court of First Instance ofBulacan, Fifth Judicial District, Valenzuela, Bulacan, againstdefendants-appellees to recover the ownership and possession ofa large tract of land in San Jose del Monte, Bulacan, containingan area of 27,982,250 square meters, more or less, registeredunder the Torrens System in the name of defendants-appellees'predecessors-in-interest. 1 The complaint, as amended on June13, 1966, specifically alleged that plaintiff is a corporationorganized and existing under the laws of the Philippines, with itsprincipal office and place of business at San Jose del Monte,Bulacan; that its membership is composed of natural personsresiding at San Jose del Monte, Bulacan; that the members of theplaintiff corporation, through themselves and their predecessors-in-interest, had pioneered in the clearing of the fore-mentioned

tract of land, cultivated the same since the Spanish regime and

continuously possessed the said property openly and public underconcept of ownership adverse against the whole world; thatdefendant-appellee Gregorio Araneta, Inc., sometime in the year1958, through force and intimidation, ejected the members of theplaintiff corporation fro their possession of the aforementionedvast tract of land; that upon investigation conducted by themembers and officers of plaintiff corporation, they found out for

the first time in the year 1961 that the land in question "hadbeen either fraudelently or erroneously included, by direct orconstructive fraud, in Original Certificate of Title No. 466 of theLand of Records of the province of Bulacan", issued on May 11,1916, which title is fictitious, non-existent and devoid of legalefficacy due to the fact that "no original survey nor planwhatsoever" appears to have been submitted as a basis thereofand that the Court of First Instance of Bulacan which issued thedecree of registration did not acquire jurisdiction over the landregistration case because no notice of such proceeding was givento the members of the plaintiff corporation who were then inactual possession of said properties; that as a consequence of thenullity of the original title, all subsequent titles derived therefrom,such as Transfer Certificate of Title No. 4903 issued in favor ofGregorio Araneta and Carmen Zaragoza, which was subsequentlycancelled by Transfer Certificate of Title No. 7573 in the name of

Gregorio Araneta, Inc., Transfer Certificate of Title No. 4988issued in the name of, the National Waterworks & SewerageAuthority (NWSA), Transfer Certificate of Title No. 4986 issued inthe name of Hacienda Caretas, Inc., and another transfercertificate of title in the name of Paradise Farms, Inc., aretherefore void. Plaintiff-appellant consequently prayed (1) thatOriginal Certificate of Title No. 466, as well as all transfercertificates of title issued and derived therefrom, be nullified; (2)that "plaintiff's members" be declared as absolute owners incommon of said property and that the corresponding certificateof title be issued to plaintiff; and (3) that defendant-appelleeGregorio Araneta, Inc. be ordered to pay to plaintiff the damagestherein specified.

On September 2, 1966, defendant-appellee Gregorio Araneta,Inc. filed a motion to dismiss the amended complaint on thegrounds that (1) the complaint states no cause of action; and (2)

the cause of action, if any, is barred by prescription and laches.Paradise Farms, Inc. and Hacienda Caretas, Inc. filed motions todismiss based on the same grounds. Appellee NationalWaterworks & Sewerage Authority did not file any motion todismiss. However, it pleaded in its answer as special andaffirmative defenses lack of cause of action by the plaintiff-appellant and the barring of such action by prescription andlaches.

During the pendency of the motion to dismiss, plaintiff-appellantfiled a motion, dated October 7, 1966, praying that the case betransferred to another branch of the Court of First Instancesitting at Malolos, Bulacan, According to defendants-appellees,they were not furnished a copy of said motion, hence, on October14, 1966, the lower court issued an Order requiring plaintiff-appellant to furnish the appellees copy of said motion, hence, on

October 14, 1966, defendant-appellant's motion dated October 7,

1966 and, consequently, prayed that the said motion be deniedfor lack of notice and for failure of the plaintiff-appellant tocomply with the Order of October 14, 1966. Similarly, defendant-appellee paradise Farms, Inc. filed, on December 2, 1966, amanifestation information the court that it also did not receive acopy of the afore-mentioned of appellant. On January 24, 1967,the trial court issued an Order dismissing the amended complaint.

On February 14, 1967, appellant filed a motion to reconsider theOrder of dismissal on the grounds that the court had nojurisdiction to issue the Order of dismissal, because its requestfor the transfer of the case from the Valenzuela Branch of theCourt of First Instance to the Malolos Branch of the said court hasbeen approved by the Department of Justice; that the complaintstates a sufficient cause of action because the subject matter ofthe controversy in one of common interest to the members of thecorporation who are so numerous that the present complaintshould be treated as a class suit; and that the action is notbarred by the statute of limitations because (a) an action for thereconveyance of property registered through fraud does notprescribe, and (b) an action to impugn a void judgment may bebrought any time. This motion was denied by the trial court in itsOrder dated February 22, 1967. From the afore-mentioned Order

of dismissal and the Order denying its motion for reconsideration,plaintiff-appellant appealed to the Court of Appeals.

On September 3, 1969, the Court of Appeals, upon finding thatno question of fact was involved in the appeal but only questionsof law and jurisdiction, certified this case to this Court forresolution of the legal issues involved in the controversy.

I

Appellant contends, a s a first assignment of error, that the trialcourt acted without authority and jurisdiction in dismissing theamended complaint when the Secretary of Justice had alreadyapproved the transfer of the case to any one of the two branchesof the Court of First Instance of Malolos, Bulacan.

Appellant confuses the jurisdiction of a court and the venue of

cases with the assignment of cases in the different branches ofthe same Court of First Instance. Jurisdiction implies the power ofthe court to decide a case, while venue the place of action. Thereis no question that respondent court has jurisdiction over thecase. The venue of actions in the Court of First Instance isprescribed in Section 2, Rule 4 of the Revised Rules of Court. Thelaying of venue is not left to the caprice of plaintiff, but must bein accordance with the aforesaid provision of the rules. 2 Themere fact that a request for the transfer of a case to anotherbranch of the same court has been approved by the Secretary ofJustice does not divest the court originally taking cognizancethereof of its jurisdiction, much less does it change the venue ofthe action. As correctly observed by the trial court, theindorsement of the Undersecretary of Justice did not order thetransfer of the case to the Malolos Branch of the Bulacan Court ofFirst Instance, but only "authorized" it for the reason given by

plaintiff's counsel that the transfer would be convenient for the

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parties. The trial court is not without power to either grant ordeny the motion, especially in the light of a strong oppositionthereto filed by the defendant. We hold that the court a quoacted within its authority in denying the motion for the transferthe case to Malolos notwithstanding the authorization" of thesame by the Secretary of Justice.

II

Let us now consider the substantive aspect of the Order ofdismissal.

In dismissing the amended complaint, the court a quo said:

The issue of lack of cause of action raised in the motions todismiss refer to the lack of personality of plaintiff to file theinstant action. Essentially, the term 'cause of action' is composedof two elements: (1) the right of the plaintiff and (2) the violationof such right by the defendant. (Moran, Vol. 1, p. 111). For thesereasons, the rules require that every action must be prosecutedand defended in the name of the real party in interest and that allpersons having an interest in the subject of the action and inobtaining the relief demanded shall be joined as plaintiffs (Sec. 2,

Rule 3). In the amended complaint, the people whose rights werealleged to have been violated by being deprived anddispossessed of their land are the members of the corporationand not the corporation itself. The corporation has a separate.and distinct personality from its members, and this is not a meretechnicality but a matter of substantive law. There is noallegation that the members have assigned their rights to thecorporation or any showing that the corporation has in any wayor manner succeeded to such rights. The corporation evidentlydid not have any rights violated by the defendants for which itcould seek redress. Even if the Court should find against thedefendants, therefore, the plaintiff corporation would not beentitled to the reliefs prayed for, which are recoveries ofownership and possession of the land, issuance of thecorresponding title in its name, and payment of damages. Neithercan such reliefs be awarded to the members allegedly deprived oftheir land, since they are not parties to the suit. It appearing

clearly that the action has not been filed in the names of the realparties in interest, the complaint must be dismissed on theground of lack of cause of action. 3

Viewed in the light of existing law and jurisprudence, We findthat the trial court correctly dismissed the amended complaint.

It is a doctrine well-established and obtains both at law and inequity that a corporation is a distinct legal entity to be consideredas separate and apart from the individual stockholders ormembers who compose it, and is not affected by the personalrights, obligations and transactions of its stockholders ormembers. 4 The property of the corporation is its property andnot that of the stockholders, as owners, although they haveequities in it. Properties registered in the name of the corporationare owned by it as an entity separate and distinct from its

members. 5 Conversely, a corporation ordinarily has no interest

in the individual property of its stockholders unless transferred tothe corporation, "even in the case of a one-man corporation. 6The mere fact that one is president of a corporation does notrender the property which he owns or possesses the property ofthe corporation, since the president, as individual, and thecorporation are separate similarities. 7 Similarly, stockholders in acorporation engaged in buying and dealing in real estate whose

certificates of stock entitled the holder thereof to an allotment inthe distribution of the land of the corporation upon surrender oftheir stock certificates were considered not to have such legal orequitable title or interest in the land, as would support a suit fortitle, especially against parties other than the corporation. 8

It must be noted, however, that the juridical personality of thecorporation, as separate and distinct from the persons composingit, is but a legal fiction introduced for the purpose of convenienceand to subserve the ends of justice. 9 This separate personalityof the corporation may be disregarded, or the veil of corporatefiction pierced, in cases where it is used as a cloak or cover forfraud or illegality, or to work -an injustice, or where necessary toachieve equity. 10

Thus, when "the notion of legal entity is used to defeat public

convenience, justify wrong, protect fraud, or defend crime, ... thelaw will regard the corporation as an association of persons, or inthe case of two corporations, merge them into one, the onebeing merely regarded as part or instrumentality of the other. 11The same is true where a corporation is a dummy and serves nobusiness purpose and is intended only as a blind, or an alter egoor business conduit for the sole benefit of the stockholders. 12This doctrine of disregarding the distinct personality of thecorporation has been applied by the courts in those cases whenthe corporate entity is used for the evasion of taxes 13 or whenthe veil of corporate fiction is used to confuse legitimate issue ofemployer-employee relationship, 14 or when necessary for theprotection of creditors, in which case the veil of corporate fictionmay be pierced and the funds of the corporation may begarnished to satisfy the debts of a principal stockholder. 15 Theaforecited principle is resorted to by the courts as a measureprotection for third parties to prevent fraud, illegality or injustice.

16

It has not been claimed that the members have assigned ortransferred whatever rights they may have on the land inquestion to the plaintiff corporation. Absent any showing ofinterest, therefore, a corporation, like plaintiff-appellant herein,has no personality to bring an action for and in behalf of itsstockholders or members for the purpose of recovering propertywhich belongs to said stockholders or members in their personalcapacities.

It is fundamental that there cannot be a cause of action 'withoutan antecedent primary legal right conferred' by law upon aperson. 17 Evidently, there can be no wrong without acorresponding right, and no breach of duty by one personwithout a corresponding right belonging to some other person.

18 Thus, the essential elements of a cause of action are legal

right of the plaintiff, correlative obligation of the defendant, anact or omission of the defendant in violation of the aforesaid legalright. 19 Clearly, no right of action exists in favor of plaintiffcorporation, for as shown heretofore it does not have any interestin the subject matter of the case which is material and, direct soas to entitle it to file the suit as a real party in interest.

III

Appellant maintains, however, that t he amended compl aint maybe treated as a class suit, pursuant to Section 12 of Rule 3 of theRevised Rules of Court.

In order that a class suit may prosper, the following requisitesmust be present: (1) that the subject matter of the controversy isone of common or general interest to many persons; and (2) thatthe parties are so numerous that it is impracticable to bring themall before the court. 20

Under the first requisite, the person who sues must have aninterest in the controversy, common with those for whom hesues, and there must be that unity of interest between him andall such other persons which would entitle them to maintain the

action if suit was brought by them jointly. 21

As to what constitutes common interest in the subject matter ofthe controversy, it has been explained in Scott v. Donald 22 thus:

The interest that will allow parties to join in a bill of complaint, orthat will enable the court to dispense with the presence of all theparties, when numerous, except a determinate number, is notonly an interest in the question, but one in common in thesubject Matter of the suit; ... a community of interest growing outof the nature and condition of the right in dispute; for, althoughthere may not be any privity between the numerous parties,there is a common title out of which the question arises, andwhich lies at the foundation of the proceedings ... [here] the onlymatter in common among the plaintiffs, or between them and thedefendants, is an interest in the Question involved which alonecannot lay a foundation for the joinder of parties. There is

scarcely a suit at law, or in equity which settles a Principle orapplies a principle to a given state of facts, or in which a generalstatute is interpreted, that does not involved a Question in whichother parties are interested. ... (Emphasis supplied )

Here, there is only one party plaintiff, and the plaintiffcorporation does not even have an interest in the subject matterof the controversy, and cannot, therefore, represent its membersor stockholders who claim to own in their individual capacitiesownership of the said property. Moreover, as correctly stated bythe appellees, a class suit does not lie in actions for the recoveryof property where several persons claim Partnership of theirrespective portions of the property, as each one could allegedand prove his respective right in a different way for each portionof the land, so that they cannot all be held to have Identical titlethrough acquisition prescription. 23

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Having shown that no cause of action in favor of the plaintiffexists and that the action in the lower court cannot be consideredas a class suit, it would be unnecessary and an Idle exercise forthis Court to resolve the remaining issue of whether or not theplaintiffs action for reconveyance of real property based uponconstructive or implied trust had already prescribed.

ACCORDINGLY, the instant appeal is hereby DISMISSED withcosts against the plaintiff-appellant.

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Republic of the PhilippinesSUPREME COURTManilaEN BANC

G.R. No. L -63559 May 30, 1986NEWSWEEK, INC., petitioner,vs.THE INTERMEDIATE APPELLATE COURT, and NATIONALFEDERATION OF SUGARCANE PLANTERS INC.,BINALBAGAN-ISABELA PLANTERS ASSOCIATION, INC.,ASOCIACION DE AGRICULTORES DE LA CARLOTA, LACASTELLANA y PONTEVEDRA, INC., DONEDCO PLANTERSASSOCIATION INC., ARMANDO GUSTILO, ENRIQUE ROJAS,ALFREDO MONTELIBANO, JR., PABLO SOLA, JOSEMONTALVO, VICENTE GUSTILO, JOSEPH MARANON,ROBERTO CUENCA, JOSE SICANGCO, FLORENCIO ALONSO,MIGUEL GATUSLAO, PEDRO YULO, MARINO RUBIN andBENJAMIN BAUTISTA, respondents.

San Juan, Africa, Gonzales & San Agustin Law Offices for private

respondents.

FERIA, J.:

Petitioner, Newsweek, Inc., a foreign corporation licensed to dobusiness in the Philippines, in this special action for certiorari,prohibition with preliminary injunction, seeks to annul thedecision of the Intermediate Appellate Court dated December 17,1982 sustaining the Order of the then Court of First Instance ofBacolod City which denied petitioner's Motion to Dismiss thecomplaint for libel filed by private respondents (Civil Case No.15812), and the Resolution dated March 10, 1983 which deniedits Motion for Reconsideration.

It appears that on March 5, 1981, private respondents,

incorporated associations of sugarcane planters in NegrosOccidental claiming to have 8,500 members and severalindividual sugar planters, filed Civil Case No. 15812 in their ownbehalf and/or as a class suit in behalf of all sugarcane planters inthe province of Negros Occidental, against petitioner and two ofpetitioners' non-resident correspondents/reporters Fred Bruningand Barry Came. The complaint alleged that petitioner and theother defendants committed libel against them by the publicationof the article "An Island of Fear" in the February 23, 1981 issueof petitioner's weekly news magazine Newsweek. The articlesupposedly portrayed the island province of Negros Occidental asa place dominated by big landowners or sugarcane planters whonot only exploited the impoverished and underpaid sugarcaneworkers/laborers, but also brutalized and killed them withimprunity. Complainants therein alleged that said article, taken asa whole, showed a deliberate and malicious use of falsehood,

slanted presentation and/or misrepresentation of facts intended

to put them (sugarcane planters) in bad light, expose them topublic ridicule, discredit and humiliation here in the Philippinesand abroad, and make them objects of hatred, contempt andhostility of their agricultural workers and of the public in general.They prayed that defendants be ordered to pay them PlM asactual and compensatory damages, and such amounts for moral,exemplary and corrective damages as the court may determine,

plus expenses of litigation, attorney's fees and costs of suit. Aphoto copy of the article was attached to the complaint.

On November 5, 1981, petitioner filed a motion to dismiss on thegrounds that (1) the printed article sued upon is not actionable infact and in law; and (2) the complaint is bereft of allegations thatstate, much less support a cause of action. It pointed out thenon-libelous nature of the article and, consequently, the failure ofthe complaint to state a cause of action. Private respondents filedan Opposition to the motion to dismiss and petitioner filed areply.

On March 17, 1982, the trial court denied the motion to dismiss,stating that the grounds on which the motion to dismiss arepredicated are not indubitable as the complaint on its face statesa valid cause of action; and the question as to whether the

printed article sued upon its actionable or not is a matter ofevidence. Petitioner's motion for reconsideration was denied onMay 28, 1982.

On June 18, 1982, petitioner filed a petition for certiorari withrespondent Court (CA-G. R. No. 14406) seeking the annulment ofthe aforecited trial court's Orders for having been issued withsuch a grave abuse of discretion as amounting to lack ofjurisdiction and praying for the dismissal of the complaint forfailure to state a cause of action.

As earlier stated, respondent Court affirmed the trial court'sOrders in a Decision dated December 17, 1982 and ordered thecase to be tried on the merits on the grounds that -(1) thecomplaint contains allegations of fact which called for thepresentation of evidence; and (2) certiorari under Rule 65 cannotbe made to substitute for an appeal where an appeal would lie at

a proper time. Subsequently, on March 10, 1983, the respondentCourt denied petitioner's Motion for Reconsideration of theaforesaid decision, hence this petition.

The proper remedy which petitioner should have taken from thedecision of respondent Court is an appeal by certiorari under Rule45 of the Rules of Court and not the special civil action ofcertiorari and prohibition under Rule 65 of said Rules. However,since the petition was filed on time within fifteen days fromnotice of the Resolution denying the motion for reconsideration,we shall treat the same as a petition for review on certiorari. Thetwo (2) issues raised in the petition are: (1) whether or not theprivate respondents' complaint failed to state a cause of action;and (2) whether or not the petition for certiorari and prohibitionis proper to question the denial of a motion to dismiss for failureto state a cause of action.

First, petitioner argues that private respondents' complaint failedto state a cause of action because the complaint made noallegation that anything contained in the article complained ofregarding sugarcane planters referred specifically to any one ofthe private respondents; that libel can be committed only againstindividual reputation; and that in cases where libel is claimed tohave been directed at a group, there is actionable defamation

only if the libel can be said to reach beyond the mere collectivityto do damage to a specific, individual group member's reputation.

We agree with petitioner.

In the case of Corpus vs. Cuaderno, Sr. (16 SCRA 807) this Courtruled that "in order to maintain a libel suit, it is essential that thevictim be identifiable (People vs. Monton, L-16772, November 30,1962), although it is not necessary that he be named (19 A.L.R.116)." In an earlier case, this Court declared that" ... defamatorymatter which does not reveal the Identity of the person uponwhom the imputation is cast, affords no ground of action unless itbe shown that the readers of the libel could have Identified thepersonality of the individual defamed." (Kunkle vs. Cablenews-American and Lyons 42 Phil. 760).

This principle has been recognized to be of vital importance,especially where a group or class of persons, as in the case atbar, claim to have been defamed, for it is evident that the largerthe collectivity, the more difficult it is for the individual memberto prove that the defamatory remarks apply to him. (Cf. 70 ALR2d. 1384).

In the case of Uy Tioco vs. Yang Shu Wen , 32 Phil. 624, thisCourt held as follows:

Defamatory remarks directed at a class or group of persons ingeneral language only, are not actionable by individualscomposing the class or group unless the statements aresweeping; and it is very probable that even then no action wouldlie where the body is composed of so large a number of personsthat common sense would tell those to whom the publication wasmade that there was room for persons connected with the body

to pursue an upright and law abiding course and that it would beunreasonable and absurd to condemn all because of the actionsof a part. (supra p. 628).

It is evident from the above ruling that where the defamation isalleged to have been directed at a group or class, it is essentialthat the statement must be so sweeping or all-embracing as toapply to every individual in that group or class, or sufficientlyspecific so that each individual in the class or group can provethat the defamatory statement specifically pointed to him, so thathe can bring the action separately, if need be.

We note that private respondents filed a "class suit" inrepresentation of all the 8,500 sugarcane planters of NegrosOccidental. Petitioner disagrees and argues that the absence ofany actionable basis in the complaint cannot be cured by the

filing of a class suit on behalf of the aforesaid sugar planters.

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We find petitioner's contention meritorious.

The case at bar is not a class suit. It is not a case where one ormore may sue for the benefit of all (Mathay vs. ConsolidatedBank and Trust Company, 58 SCRA 559) or where therepresentation of class interest affected by the judgment or

decree is indispensable to make each member of the class anactual party (Borlaza vs. Polistico, 47 Phil. 348). We have here acase where each of the plaintiffs has a separate and distinctreputation in the community. They do not have a common orgeneral interest in the subject matter of the controversy.

The disputed portion of the article which refers to plaintiff Solaand which was claimed to be libelous never singled out plaintiffSola as a sugar planter. The news report merely stated that thevictim had been arrested by members of a special police unitbrought into the area by Pablo Sola, the mayor of Kabankalan.Hence, the report, referring as it does to an official act performedby an elective public official, is within the realm of privilege andprotected by the constitutional guarantees of free speech andpress.

The article further stated that Sola and the commander of thespecial police unit were arrested. The Court takes judicial noticeof this fact. (People vs. Sola, 103 SCRA 393.)

The second issue to be resolved here is whether or not thespecial civil action of certiorari or prohibition is available topetitioner whose motion to dismiss the complaint and subsequentmotion for reconsideration were denied.

As a general ru le, an order d enying a motion to dismiss is merelyinterlocutory and cannot be subject of appeal until final judgmentor order is rendered. (Sec. 2 of Rule 4 1). The ordinary procedureto be followed in such a case is to file an answer, go to trial andif the decision is adverse, reiterate the issue on appeal from thefinal judgment. The same rule applies to an order denying amotion to quash, except that instead of filing an answer a plea isentered and no appeal lies from a judgment of acquittal.

This general rule is subject to certain exceptions. If the court, indenying the motion to dismiss or motion to quash, acts withoutor in excess of jurisdiction or with grave abuse of discretion, thencertiorari or prohibition lies. The reason is that it would be unfairto require the defendant or accused to undergo the ordeal andexpense of a trial if the court has no jurisdiction over the subjectmatter or offense, or is not the court of proper venue, or if thedenial of the motion to dismiss or motion to quash is made withgrave abuse of discretion or a whimsical and capricious exerciseof judgment. In such cases, the ordinary remedy of appealcannot be plain and adequate. The following are a few examplesof the exceptions to the general rule.

In De Jesus vs. Garcia (19 SCRA 554), upon the denial of amotion to dismiss based on lack of jurisdiction over the subject

matter, this Court granted the petition for certiorari and

prohibition against the City Court of Manila and directed therespondent court to dismiss the case.

In Lopez vs. City Judge (18 SCRA 616), upon the denial of amotion to quash based on lack of jurisdiction over the offense,this Court granted the petition for prohibition and enjoined therespondent court from further proceeding in the case.

In Enriquez vs. Macadaeg (84 Phil. 674), upon the denial of amotion to dismiss based on improper venue, this Court grantedthe petition for prohibition and enjoined the respondent judgefrom taking cognizance of the case except to dismiss the same.

In Manalo vs. Mariano (69 SCRA 80), upon the denial of a motionto dismiss based on bar by prior judgment, this Court granted thepetition for certiorari and directed the respondent judge todismiss the case.

In Yuviengco vs. Dacuycuy (105 SCRA 668), upon the denial of amotion to dismiss based on the Statute of Frauds, this Courtgranted the petition for certiorari and dismissed the amendedcomplaint.

In Tacas vs. Cariaso (72 SCRA 527), this Court granted thepetition for certiorari after the motion to quash based on doublejeopardy was denied by respondent judge and ordered him todesist from further action in the criminal case except to dismissthe same.

In People vs. Ramos (83 SCRA 11), the order denying the motionto quash based on prescription was set aside on certiorari andthe criminal case was dismissed by this Court.

Respondent Court correctly stated the general rule and itsexceptions. However, it ruled that none of the exceptions ispresent in the case at bar and that the case appears complex andcomplicated, necessitating a full-blown trial to get to the bottomof the controversy.

Petitioner's motion to dismiss is based on the ground that the

complaint states no cause of action against it by pointing out thenon-libelous nature of the article sued upon. There is no need ofa trial in view of the conclusion of this Court that the article inquestion is not libelous. The specific allegation in the complaint,to the effect that the article attributed to the sugarcane plantersthe deaths and brutalization of sugarcane workers, is not borneout by a perusal of the actual text.

The complaint contains a recital of the favorable workingconditions of the agricultural workers in the sugar industry andthe various foundations and programs supported by planters'associations for the benefit of their workers. Undoubtedly, thestatements in the article in question are sweeping andexaggerated; but, paraphrasing the ruling in the Uy Tioco caseabove quoted, it would be unreasonable and absurd to condemnthe majority of the sugarcane planters, who have at heart the

welfare of their workers, because of the actions of a part.

Nonetheless, articles such as the one in question may also serveto prick the consciences of those who have but are not doinganything or enough for those who do not have.

On the other hand, petitioner would do well to heed theadmonition of the President to media that they should check thesources of their information to ensure the publication of the truth.

Freedom of the press, like all freedoms, should be exercised withresponsibility.

WHEREFORE, the decision of the Intermediate Appellate Court isreversed and the complaint in Civil Case No. 15812 of the Courtof First Instance of Negros Occidental is dismissed, withoutpronouncement as to costs.

SO ORDERED.

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Republic of the PhilippinesSUPREME COURTManilaEN BANC

G.R. No. L-23326 December 18, 1965PHILIPPINE CONSTITUTION ASSOCIATION, INC., JOSE E.ROMERO, SALVADOR ARANETA, GUILLERMO B. GUEVARA,PIO PEDROSA, CONRADO BENITEZ, JOSE M. ARUEGO,SOTERO H. LAUREL, FELIXBERTO M. SERRANO, and ROMANOZAETA, petitioners,vs.PEDRO M. GIMENEZ, JOSE VELASCO, ELADIO SALITA andJOSE AVILES, respondents.

Roman Ozaeta, Guillermo B. Guevara, Jose M. Aruego, Sotero H.Laurel and Felixberto M. Serrano for themselves and for otherpetitioners.Office of the Solicitor General for respondents.

REGALA, J.:

We are called upon in this case to decide the grave andfundamental problem of the constitutionality of Republic Act No.3836 "insofar as the same allows retirement gratuity andcommutation of vacation and sick leave to Senators andRepresentatives, and to the elective officials of both houses (ofCongress)." The suit was instituted by the Philippine ConstitutionAssociation, Inc. (Philconsa, for short), a non-profit civicorganization, duly incorporated under Philippine laws, by way of apetition for prohibition with preliminary injunction to restrain theAuditor General of t he Philippines and the disbursing officers ofboth Houses of Congress from "passing in audit the vouchers,and from countersigning the checks or treasury warrants for thepayment to any former Senator or former Member of the Houseof Representatives of retirement and vacation gratuities pursuantto Republic Act No. 3836; and likewise restraining the respondentdisbursing officers of the House and Senate, respectively, and

their successors in office from paying the said retirement andvacation gratuities."

It is argued that the above-numbered Republic Act, at least tothe end that it provided for the retirement of the members ofCongress in the manner and terms that it did, is unconstitutionaland void. The challenge to the constitutionality of the law iscentered on the following propositions:

1. The provision for the retirement of the members and certainofficers of Congress is not expressed in the title of the bill, inviolation of section 21 (1) of Article VI of the Constitution.

2. The provision on retirement gratuity is an attempt tocircumvent the Constitutional ban on increase of salaries of themembers of Congress during their term of office, contrary to the

provisions of Article VI, Section 14 of the Constitution.

3. The same provision constitutes "selfish class legislation"because it allows members and officers of Congress to retire aftertwelve (12) years of service and gives them a gratuity equivalentto one year salary for every four years of service, which is notrefundable in case of reinstatement or re-election of the retiree,while all other officers and employees of the government can

retire only after at least twenty (20) years of service and aregiven a gratuity which is only equivalent to one month salary forevery year of service, which, in any case, cannot exceed 24months.

4. The provision on vacation and sick leave, commutable at thehighest rate received, insofar as members of Congress areconcerned, is another attempt of the legislators to furtherincrease their compensation in violation of the Constitution.

The text of Republic Act No. 3836

The text of Republic Act No. 3836 reads:

AN ACT AMENDING SUBSECTION (c), SECTION TWELVE OFCOMMONWEALTH ACT NUMBERED ONE HUNDRED EIGHTY-SIX,

AS AMENDED BY REPUBLIC ACT NUMBERED THIRTY HUNDREDNINETY-SIX:

Be it enacted by the Senate and House of Representatives of thePhilippines in Congress assembled:

SECTION 1. Subsection (c), Section twelve of Commonwealth ActNumbered One Hundred eighty-six, as amended by Republic ActNumbered Thirty hundred ninety-six, is further amended to readas follows:

"(c) Retirement is likewise allowed to a member, regardless ofage, who has rendered at least twenty years of service. Thebenefit shall, in addition to the return of his personalcontributions plus interest and the payment of the correspondingemployer's premiums described in subsection (a) of Section fivehereof, without interest, be only a gratuity equivalent to one

month's salary for every year of service, based on the highestrate received, but not to exceed twenty-four months: Provided,That the retiring officer or employee has been in the service ofthe said employer or office for at least four years immediatelypreceding his retirement.

"Retirement is also allowed to a senator or a member of theHouse of Representatives and to an elective officer of eitherHouse of the Congress, regardless of age, provided that in thecase of a Senator or Member, he must have served at leasttwelve years as a Senator and/or as a member of the House ofRepresentatives, and, in the case of an elective officer of eitherHouse, he must have served the government for at least twelveyears, not less than four years of which must have been renderedas such elective officer: Provided, That the gratuity payable to aretiring senator, member of the House of Representatives, or

elective officer, of either House, shall be equivalent to one year's

salary for every four years of service in the government and thesame shall be exempt from any tax whatsoever and shall beneither liable to attachment or execution nor refundable in caseof reinstatement or re-election of the retiree.

"This gratuity is payable by the employer or office concernedwhich is hereby authorized to provide the necessary appropriation

or pay the same from any unexpended items of appropriations orsavings in its appropriations or saving in its appropriations.

"Elective or appointive officials and employees paid gratuity underthis subsection shall be entitled to the commutation of theunused vacation and sick leave, based on the highest ratereceived, which they may have to their credit at the time ofretirement."

SECTION 2. This Act shall take effect upon its approval.

Approved, June 22, 1963.

The Solicitor General's Office, in representation of therespondent, filed its answer on September 8, 1964, andcontends, by way of special and affirmative defenses that:

1. The grant of retirement or pension benefits under Republic ActNo. 3836 to the officers objected to by the petitioner does notconstitute "forbidden compensation" within the meaning ofSection 14 of Article VI of the Philippine Constitution.

2. The title of the law in question sufficiently complies with theprovisions of Section 21, Article VI, of the Constitution that "nobill which may be enacted into law shall embrace more than onesubject which shall be expressed in the title of the bill.

3. The law in question does not constitute legislation.

4. Certain indispensable parties, specifically the elected officers ofCongress who are authorized to approve vouchers for paymentsfor funds under the law in question, and the claimants to the

vouchers to be presented for payment under said items, were notincluded in the petition.

5. The petitioner has no standing to institute this suit.

6. The payment of commutable vacation and sick leave benefitsunder the said Act is merely "in the nature of a basis forcomputing the gratuity due each retiring member" and, therefore,is not an indirect scheme to increase their salary.

A brief historical background of Republic Act No. 3836

Republic Act No. 3836 was originally House Bill No. 6051, whichwas introduced by Congressmen Marcial R. Pimentel ofCamarines Norte and Marcelino R. Veloso of the Third District ofLeyte, on May 6, 1963. On the same date, it was referred to the

Committee on Civil Service. which on the following May 8,

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submitted its REPORT No. 3129, recommending approval of thebill with amendments, among others, that the word "TWENTY" inthe bill as filed representing the number of years that asenator or member must serve in Congress to entitle him toretirement under the bill must be reduced to "TWELVE" years,and that the following words were inserted, namely, "AND THESAME (referring to gratuity) SHALL BE EXEMPT FROM ANY TAX

WHATSOEVER AND SHALL NOT BE LIABLE FROM ATTACHMENTOR EXECUTION NOR REFUNDABLE IN CASE OF REINSTATEMENTOR REELECTION OF THE RETIREE." On May 8, 1963, the bill withthe proposed amendments was approved on second reading. Itwas passed on third reading on May 13, 1963, and on the sameday was sent to the Senate, which, in turn, on May 23, 1963,passed it without amendment. The bill was finally approved onJune 22, 1963. As explained in the EXPLANATORY NOTE attachedto the bill, among others

The inclusion of members of Congress in subsection (c), Section12 of C.A. 186, as amended, will enable them to retirevoluntarily, regardless of age, after serving a minimum of twentyyears as a Member of Congress. This gratuity will insure thesecurity of the family of the retiring member of Congress with thelatter engaging in other activities which may detract from his

exalted position and usefulness as lawmaker. It is expected thatwith this assurance of security for his loved ones, deserving andwell-intentioned but poor men will be attracted to serve theirpeople in Congress.

As finally approved, the law (Subsection [c], paragraph 2, Section1, R.A. 3836) allows a Senator or a Member of the House ofRepresentatives and an elective officer of either House ofCongress to retire regardless of age. To be eligible for retirement,he must have served for at least twelve years as such Senatorand/or as member of the House of Representatives. For anelective officer of either House, he must have served thegovernment for at least twelve years, of which not less than fouryears must have been rendered as such elective officer. Thegratuity payable by the employer or office concerned isequivalent to one year's salary for every four years of service inthe government. Said gratuity is exempt from taxation, not liable

to attachment or execution, and not refundable in case ofreinstatement or re-election of the retiree.

First legal point personality of the Petitioner to bring suit.

The first point to be considered is whether petitioner Philconsahas a standing to institute this action. This Court has nothesitated to examine past decisions involving this matter. ThisCourt has repeatedly held that when the petitioner, like in thiscase, is composed of substantial taxpayers, and the outcome willaffect their vital interests, they are allowed to bring this suit.(Pascual v. Secretary, G.R. No. L-10405, December 29, 1960; andGonzales v. Hechanova, 60 Off. Gaz. 802 [1963]).

The petitioner, Philconsa, is precisely a non-profit, civicorganization composed of several leaders from all walks of life

whose main objective is to uphold the principles of theConstitution.

In rejecting the motion to dismiss in the case of Pascual v.Secretary, supra, this Court stated, among other things, that"there are many decisions nullifying, at the instance of thetaxpayers, laws providing the disbursement of public funds, upon

the theory that the expenditure of public funds by an officer ofthe State for the purpose of administering an unconstitutional actconstitutes a misappropriation of such funds, which may beenjoined at the request of the taxpayers."1 This legislation(Republic Act 3836) involves the disbursement of public funds.

We are not, however, unmindful of the ruling laid down by theSupreme Court of the United States in the case of Massachusettsv. Mellon, 262 U.S. 447, holding that:

... the relation of a taxpayer of the United States to the FederalGovernment is very different. His interest in the moneys of theTreasury partly realized from taxation and partly from othersources is shared with millions of others; is comparativelyminute and indeterminable; and the effect upon future taxationof any payment out of the funds, so remote, fluctuating and

uncertain, that no basis is afforded for an appeal to thepreventive powers of equity.

The general view in the United States, which is followed here, isstated in the American Jurisprudence, thus

In the determination of the degree of interest essential to givethe requisite standing to attack the constitutionality of a statutethe general rule is that not only persons individually affected, butalso taxpayers have sufficient interest in preventing the illegalexpenditure of moneys raised by taxation and may thereforequestion the constitutionality of statutes requiring expenditure ofpublic moneys. (11 Am. Jur. 761; emphasis supplied.)

As far as the first point is concerned, We hold, therefore, that thecontention of the Solicitor General is untenable.

Second legal point Whether or not Republic Act No. 3836 fallswithin the prohibition embodied in Art. VI, section 14 of theConstitution.

The first constitutional question is whether Republic Act 3836violates Section 14, Article VI, of the Constitution, which reads asfollows:

The senators and the Members of the House of Representativesshall, unless otherwise provided by law, receive an annualcompensation of seven thousand two hundred pesos each,including per diems and other emoluments or allowances, andexclusive only of travelling expenses to and from their respectivedistricts in the case of Members of the House of Representativeand to and from their places of residence in the case of Senators,when attending sessions of the Congress. No increase in said

compensation shall take effect until after the expiration of the full

term of all the Members of the Senate and of the House ofRepresentatives approving such increase. Until otherwiseprovided by law, the President of the Senate and the Speaker ofthe House of Representatives shall each receive an annualcompensation of sixteen thousand pesos (emphasis supplied)

Before discussing this point, it is worthy to note that the

Constitution embodies some limitations and prohibitions upon themembers of Congress, to wit:

1. They may not hold any other office or employment in theGovernment without forfeiting their respective seats;

2. They shall not be appointed, during the time for which theyare elected, to any civil office which may have been created orthe emoluments whereof shall have been increased while theywere members of Congress; (Section 16, Article VI, Constitution)

3. They cannot be financially interested in any franchise;

4. They cannot appear in any civil case wherein the Governmentis an adverse party;

5. They cannot appear as counsel before any Electoral Tribunal;and

6. They cannot appear as counsel in any criminal case where anofficer or employee of the Government is accused. (Section 17,Article VI, Constitution)

In addition to the above prohibitions, the Anti-Graft Law(Republic Act 3019) also prohibits members of Congress to haveany special interest in any specific business which will directly orindirectly be favored by any law or resolution authored by themduring their term of office.

It is thus clear that the Constitutional Convention wiselysurrounded the Constitution with these limitations andprohibitions upon Members of Congress. This is a practicaldemonstration or application of the principle of the and balances

which is one of the peculiar characteristics of our Constitution. Inthe light of this background, can We conclude that Congress canvalidly enact Republic Act 3836, providing retirement benefits toits members, without violating the provisions in theaforementioned Article VI, Section 14, of the Constitution,regarding increase of the compensation act including otheremoluments?

It is worthy to note that the original salary for the members ofthe National Assembly (unicameral body) was fixed at P5,000.00per annum each. This was raised to P7,200 per annum by theenactment of the 1940 Constitutional amendment, when theunicameral body, the National Assembly, was changed toCongress, composed of two bodies, the Senate and the House ofRepresentatives. Again, in 1964, by the enactment of RepublicAct 4143, the salary for the Members of Congress was raised to

P32,000.00 per annum for each of them; and for the President of

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the Senate and the Speaker of the House of Representatives, toP40,000.00 per annum each.

Likewise, it is significant that, as stated above, when theConstitutional Convention first determined the compensation forthe Members of Congress, the amount fixed by it was onlyP5,000.00 per annum, but it embodies a special proviso which

reads as follows: "No increase in said compensation shall takeeffect until after the expiration of the full term of all the membersof the National Assembly elected subsequent to approval of suchincrease." In other words, under the original constitutionalprovision regarding the power of the National Assembly toincrease the salaries of its members, no increase would takeeffect until after the expiration of the full term of the members ofthe Assembly elected subsequent to the approval of suchincrease. (See Aruego, The Framing of the Constitution, Vol. 1,pp. 296-300; Sinco, Philippine Government and Political Law, 4thed., p. 187)

This goes to show how zealous were the members of theConstitutional Convention in guarding against the temptation formembers of Congress to increase their salaries. However, theoriginal strict prohibition was modified by the subsequent

provision when the Constitutional amendments were approved in19402

The Constitutional provision in the aforementioned Section 14,Article VI, includes in the term compensation "otheremoluments." This is the pivotal point on this fundamentalquestion as to whether the retirement benefits as provided for inRepublic Act 3836 fall within the purview of the term "otheremoluments."

Most of the authorities and decided cases have regarded"emolument" as "the profit arising from office or employment;that which is received as compensation for services or which isannexed to the possession of an office, as salary, fees andperquisites.3

In another set of cases, "emolument" has been defined as "theprofit arising from office or employment; that which is receivedas compensation for services, or which is annexed to thepossession of office, as salary, fees and perquisites; advantage,gain, public or private." The gain, profit or advantage which iscontemplated in the definition or significance of the word"emolument" as applied to public officers, clearly comprehends,We think, a gain, profit, or advantage which is pecuniary incharacter. (citing Taxpayers' League of Cargon County v.McPherson, 54 P. 2d. 897, 90l.: 49 Wy. 26; 106 A.L.R. 767)

In Schieffelin v. Berry, 216 N.Y.S. (citing Wright v. Craig, 202App. Div. 684, 195 N.Y.S. 391, affirmed 234 N.Y. 548, 138 N.E.441), it has been established that pensions and retirementallowances are part of compensation of public officials; otherwisetheir payment would be unconstitutional.

In another case, State v. Schmahl, 145 N.W. 795, 125 Minn. 104,it is stated that "as used in Article 4, section 9, of the Constitutionof Minnesota, providing that no Senator or Representative shallhold any office, the emoluments of which have been increasedduring the session of the Legislature of which he was a member,until after the expiration of his term of office in the Legislature,the word "emoluments" does not refer to the fixed salary alone,

but includes fees and compensation as the incumbent of theoffice is by law entitled to receive because he holds such officeand performed some service required of the occupant thereof."

From the decisions of these cases, it is evident that retirementbenefit is a form or another species of emolument, because it is apart of compensation for services of one possessing any office.

Republic Act No. 3836 provides for an increase in theemoluments of Senators and Members of the House ofRepresentatives, to take effect upon the approval of said Act,which was on June 22, 1963. Retirement benefits wereimmediately available thereunder, without awaiting the expirationof the full term of all the Members of the Senate and the Houseof Representatives approving such increase. Such provisionclearly runs counter to the prohibition in Article VI, Section 14 of

the Constitution.

Third Legal Point Whether or not the law in question violatesthe equal protection clause of the Constitution.

Another reason in support of the conclusion reached herein isthat the features of said Republic Act 3836 are patentlydiscriminatory, and therefore violate the equal protection clauseof the Constitution. (Art. III, Sec. 1, part. 1.)

In the first place, while the said law grants retirement benefits toSenators and Members of the House of Representatives who areelective officials, it does not include other elective officials suchas the governors of provinces and the members of the provincialboards, and the elective officials of the municipalities andchartered cities.

The principle of equal protection of law embodied in ourConstitution has been fully explained by Us in the case of Peoplev. Vera, 65 Phil. 56, 126, where We stated that the classificationto be reasonable must be based upon substantial distinctionswhich make real differences and must be germane to thepurposes of the law.

As well stated by Willoughby on the Constitution of the UnitedStates (second edition), p. 1937, the principle of the requirementof equal protection of law applies to all persons similarly situated.Why limit the application of the benefits of Republic Act 3836 tothe elected members of Congress? We feel that the classificationhere is not reasonable. (See also Sinco, Philippine Political Law,11th ed. [1962]; Selected Essays on Constitutional Law [1938-62], p. 789; The Equal Protection of the Laws, 37 Cal. Law Rev.341.)

Secondly, all members of Congress under Republic Act 3836 aregiven retirement benefits after serving twelve years, notnecessarily continuous, whereas, most government officers andemployees are given retirement benefits after serving for at leasttwenty years. In fact, the original bill of Act 3836 provided fortwenty years of service.

In the third place, all government officers and employees aregiven only one retirement benefit irrespective of their length ofservice in the government, whereas, under Republic Act 3836,because of no age limitation, a Senator or Member of the Houseof Representatives upon being elected for 24 years will beentitled to two retirement benefits or equivalent to six years'salary.

Also, while the payment of retirement benefits (annuity) to anemployee who had been retired and reappointed is suspendedduring his new employment (under Commonwealth Act 186, asamended), this is not so under Republic Act 3836.

Lastly, it is peculiar that Republic Act 3836 grants retirementbenefits to officials who are not members of the GovernmentService Insurance System. Most grantees of retirement benefits

under the various retirement laws have to be members or mustat least contribute a portion of their monthly salaries to theSystem.4

The arguments advanced against the discriminatory features ofRepublic Act 3836, as far as Members of Congress are concerned,apply with equal force to the elected officers of each House, suchas the Secretaries and the Sergeants-at-arms. Under Republic Act3836, the Secretaries and Sergeants-at-arms of each House aregiven the benefits of retirement without having served for twentyyears as required with other officers and employees of theGovernment.

Fourth Legal Point Whether or not the title of Republic Act No.3836 is germane to the subject matter expressed in the act.

Another Constitutional point to determ ine is whether the tit le of

Republic Act 3836 complies with the requirement of paragraph 1,section 21, Article VI of the Constitution, which reads as follows:

No bill which may be enacted into law shall embrace more thanone subject which shall be expressed in the title of the bill.

We are not unmindful of the fact that there has been a generaldisposition in all courts to construe the constitutional provisionwith reference to the subject and title of the Act, liberally.

It is the contention of petitioner that the said title of Republic Act3836 gives no inkling or notice whatsoever to the publicregarding the retirement gratuities and commutable vacation andsick leave privileges to members of Congress. It is claimed thatpetitioner learned of this law for the first time only when JoseVelasco, disbursing officer of the House, testified on January 30,

1964, before Justice Labrador, in connection with the hearing of

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the case, and he revealed that in 1963, Congress enacted theretirement law for its members. In fact the Appropriation Act forthe fiscal year 1964-65, Republic Act No. 4164, provides:

13. For payment of retirement gratuities of members of theSenate pursuant to the provisions of Republic Act No. 3836:PROVIDED, That no portion of this Appropriation shall be

transferred to any other item until all approved claims shall havebeen paid P210,000.00.

In the appropriations for the House of Representatives thefollowing items appear:

7. For government share of premiums on life insurance andretirement of Members and employees of the House ofRepresentatives, as provided for under Republic Act No. 1616 P300,000.00

8. For payment of the cash commutation of the accumulatedvacation and sick leaves as provided for under Republic Act No.611, and retirement gratuities of Members and employees of theHouse of Representatives under Republic Act No. 1616 P1,300,000.00.

In the Appropriations Act of 1965-1966 (Republic Act No. 4642),the following item appears in the appropriations for the Senate:

13. For payment of retirement gratuities of Senate personnelpursuant to the provisions of Republic Act No. 1616: PROVIDED,That no portion of this appropriation shall be transferred to anyother item until all approved claims shall have been paid P100,000.00.

It is thus clear that in the Appropriations Act for 1965-1966, theitem in the Senate for P210,000.00 to implement Republic Act3836 was eliminated.

In the appropriations for the House (1965-1966), the followingitems appear:

7. For government share of premiums on life insurance andretirement of Members and employees of the House OfRepresentatives as provided for under Republic Act No. 1616 P1,200,000.00.

8. For payment of the cash commutation of the accumulatedvacation and sick leaves as provided for under Republic Act No.611, and retirement gratuities of Members and employees of theHouse of Representatives under Republic Act No. 1616 P1,700,000.00.

It is to be observed that under Republic Act 3836, amending thefirst paragraph of section 12, subsection (c) of CommonwealthAct 186, as amended by Republic Acts Nos. 660 and. 3096, theretirement benefits are granted to members of the GovernmentService Insurance System, who have rendered at least twenty

years of service regardless of age. This paragraph is related andgermane to the subject of Commonwealth Act No. 186.

On the other hand, the succeeding paragraph of Republic Act3836 refers to members of Congress and to elective officersthereof who are not members of the Government ServiceInsurance System. To provide retirement benefits, therefore, for

these officials, would relate to subject matter which is notgermane to Commonwealth Act No. 186. In other words, thisportion of the amendment (re retirement benefits for Members ofCongress and elected officers, such as the Secretary andSergeants-at-arms for each House) is not related in any mannerto the subject of Commonwealth Act 186 establishing theGovernment Service Insurance System and which provides forboth retirement and insurance benefits to its members.

Parenthetically, it may be added that the purpose of therequirement that the subject of an Act should be expressed in itstitle is fully explained by Cooley, thus: (1) to prevent surprise orfraud upon the Legislature; and (2) to fairly apprise the people,through such publication of legislation that are being considered,in order that they may have the opportunity of being heardthereon by petition or otherwise, if they shall so desire (Cooley,

Constitutional Limitations, 8th ed., Vol. 1, p. 162; See also Martin,Political Law Reviewer, Book One [1965], p. 119)

With respect to sufficiency of title this Court has ruled in twocases:

The Constitutional requirement with respect to titles of statutesas sufficient to reflect their contents is satisfied if all parts of alaw relate to the subject expressed in its title, and it is notnecessary that the title be a complete index of the content.(People v. Carlos, 78 Phil. 535)

The Constitutional requirement that the subject of an act shall beexpressed in its title should be reasonably construed so as not tointerfere unduly with the enactment of necessary legislation. Itshould be given a practical, rather than technical, construction. Itshould be a sufficient compliance with such requirement if the

title expresses the general subject and all the provisions of thestatute are germane to that general subject. (Sumulong v. TheCommission on Elections, 73 Phil. 288, 291)

The requirement that the subject of an act shall be expressed inits title is wholly illustrated and explained in Central Capiz v.Ramirez, 40 Phil. 883. In this case, the question raised waswhether Commonwealth Act 2784, known as the Public Land Act,was limited in its application to lands of the public domain orwhether its provisions also extended to agricultural lands held inprivate ownership. The Court held that the act was limited tolands of the public domain as indicated in its title, and did notinclude private agricultural lands. The Court further stated thatthis provision of the Constitution expressing the subject matter ofan Act in its title is not a mere rule of legislative procedure,directory to Congress, but it is mandatory. It is the duty of the

Court to declare void any statute not conforming to this

constitutional provision. (See Walker v. State, 49 Alabama 329;Cooley, Constitutional Limitations, pp. 162-164;5 See alsoAgcaoili v. Suguitan, 48 Phil. 676; Sutherland on StatutoryConstruction, Sec. 111.)

In the light of the history and analysis of Republic Act 3836, Weconclude that the title of said Republic Act 3836 is void as it is

not germane to the subject matter and is a violation of theaforementioned paragraph 1, section 21, Article VI of theConstitution.

In short, Republic Act 3836 violates three constitutionalprovisions, namely: first, the prohibition regarding increase in thesalaries of Members of Congress; second, the equal protectionclause; and third, the prohibition that the title of a bill shall notembrace more than one subject.

IN VIEW OF THE FOREGOING CONSIDERATIONS, Republic ActNo. 3836 is hereby declared null and void, in so far as it refers tothe retirement of Members of Congress and the elected officialsthereof, as being unconstitutional. The restraining order issued inour resolution on December 6, 1965 is hereby made permanent.No costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon,Makalintal, Bengzon, J.P. and Zaldivar, JJ., concur.

Barrera, J., took no part.

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Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISION

G.R. No. L-45809 December 12, 1986SOCORRO SEPULVEDA LAWAS, petitioner,vs.COURT OF APPEALS, HON. BERNARDO LL. SALAS, [asJudge, CFI, Cebu, Branch VIII], and PACIFICO PELAEZ,respondents.

Jesus Yray for petitioner.

Teodoro Almase for respondents.

FERIA, J.:

This is an appeal by certiorari under Rule 45 of the Revised Rulesof Court from the decision of the Court of Appeals which

dismissed the petition for certiorari under, Rule 65 of said Rulesagainst respondent Judge Bernardo L. Salas of the Court of FirstInstance of Cebu. The antecedent facts are briefly as follows:

Private respondent Pacifico Pelaez filed a Complaint on December6, 1972 against petitioner's father, Pedro Sepulveda, forownership and partition of certain parcels of land. DefendantPedro Sepulveda filed his Answer dated December 31, 1972resisting the claim and raising the special defenses of laches,prescription and failure to ventilate in a previous specialproceeding. During the presentation of evidence for the plaintiff,the defendant died on March 25, 1975. On May 21, 1975,counsels for the deceased defendant filed a notice of deathwherein were enumerated the thirteen children and survivingspouse of the deceased.

On May 5, 1975, petitioner filed a petition for letters of

administration and she was appointed judicial administratrix ofthe estate of her late father in July, 1976.

At the hearing of the case on November 27, 1975, Attys.Domingo Antigua and Serafin Branzuela, former counsels for thedeceased defendant, manifested in open court that with thedeath of their client, their contract with him was also terminatedand none of the thirteen children nor the surviving spouse hadrenewed the contract, but instead they had engaged the servicesof other lawyers in the intestate proceedings.

Notwithstanding the manifestation of the former counsels of thedeceased defendant, the respondent trial judge set the case forhearing on January 13, 1976 and sent the notice of hearing tosaid counsels.

On January 13, 1976, the respondent trial judge issued threeorders. The first order substituted the heirs of the deceaseddefendant, namely, his thirteen children and surviving spouse, asdefendants; the second order authorized Atty. Teodoro Almase,counsel for the plaintiff, to present his evidence in the absence ofAttys. Antigua and B ranzuela and the thi rd order treated the casesubmitted for decision, after the plaintiff had presented his

evidence and rested his case, and directed that said counsels andthe fourteen heirs of the deceased defendant be furnished copiesthereof.

On January 28, 1976, the respondent trial judge rendered adecision against the heirs of the deceased defendant.

On February 19, 1976, ten of the children of the deceaseddefendant, who apparently did not know that a decision hadalready been rendered, filed an Answer in-substitution of thedeceased defendant through their counsel Atty. Jesus Yray. Thiswas denied admission by the respondent trial judge for beingalready moot and academic because of the earlier decision.

On March 9, 1976, the widow and two other children of thedeceased defendant, through their counsel Atty. Delfin Quijano,

filed a motion for substitution and for reconsideration of thedecision dated January 28, 1976. On April 7, 1976, therespondent trial judge issued an order setting aside his decisionand setting the case in the calendar for cross-examination of theplaintiff, Pacifico Pelaez, with a proviso that said order wasapplicable only to the three heirs who had filed the motion. OnJuly 14, 1976, the respondent trial judge lifted the order settingaside his decision, despite the verbal petition for postponementof the hearing made by one of the three heirs on the ground ofthe absence of their counsel.

On July 9, 1976, petitioner, who had been appointed judicialadministratrix of the estate of the deceased defendant and whowas one of the heirs who had filed an Answer on February 19,1976, filed a motion to intervene and/or substitute the deceaseddefendant. On August 25, 1976, the respondent trial judgedenied the motion for the reason that the decision had already

become final.

Petitioner then filed a special civil action of certiorari with theCourt of Appeals to annul the proceedings in the respondent trialcourt. However, the Court of Appeals dismissed the petition forcertiorari. Hence, the present appeal.

The appeal is meritorious.

Section 16 of Rule 3 provides as follows:

Duty of attorney upon death, incapacity, or incompetency ofparty. Whenever a party to a pending case dies, becomesincapacitated or incompetent, it shall be the duty of his attorneyto inform the court promptly of such death, incapacity orincompetency, and to give the name and residence of his

executor, administrator, guardian or other legal representative.

The former counsels for the deceased defendant, PedroSepulveda, complied with this rule by filing a notice of death onMay 21, 1975. They also correctly manifested in open court atthe hearing of the case on November 27, 1975, that with thedeath of their client their contract with him was also terminatedand none of the heirs of the deceased had renewed the contract,

and the heirs had instead engaged the services of other lawyersin the intestate proceedings.

Both the respondent trial judge and the Court of Appeals erred inconsidering the former counsels of the deceased defendant ascounsels for the heirs of the deceased. The statement in thedecision of the Court of Appeals that "the appearance of thelawyers of their deceased father in court on January 13, 1976(Annex K) carries the presumption that they were authorized bythe heirs of the deceased defendant" is erroneous. As this Courtheld in People vs. Florendo (77 Phil. 16), "the attorneys for theoffended party ceased to be the attorneys for the deceased uponthe death of the latter, the principal. " Moreover, such apresumption was not warranted in view of the manifestation ofsaid lawyers in open court on November 27, 1975 that they werenot representing the heirs of the deceased defendant.

Consequently, when on the same date, November 27, 1975, therespondent trial judge issued an order setting the continuation ofthe trial of the case on January 13, 1976, with notices sent toAtty. Almase for the plaintiff and Attys. Antigua and Branzuela forthe deceased defendant, he acted with grave abuse of discretionamounting to excess of jurisdiction.

It was only at the hearing on January 13, 1976 that therespondent trial judge issued an order substituting the deceaseddefendant with his fourteen heirs. This was followed with anorder authorizing counsel for the plaintiff to present his evidencein the absence of Attys. Antigua and Branzuela, and lastly, anorder treating the case as submitted for decision.

In the order of the respondent trial judge dated November 10,1976, denying petitioner's motion for reconsideration of the order

denying her motion for intervention (Annex 1 of the Comment),mention was made of the delayed arrival of Attys. Antigua andBranzuela at the hearing on January 13, 1976 and of their beingallowed to cross-examine the plaintiff himself.

The refusal of said former counsels of the deceased defendant tocross-examine the plaintiff was justified

... in view of the intervening event of appellant's death and theinterposition of the equally established principle that therelationship of attorney and client is terminated by the death ofthe client, as acknowledged by respondent court itself as well asrespondents. In the absence of a retainer from the heirs orauthorized representatives of his deceased defendant theattorney would have no further power or authority to appear ortake any further action in the case, save to inform the court of

the client's death and take the necessary steps to safeguard the

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decedent's rights in the case. (Vda. de Haberer vs. Court ofAppeals, May 26, 1981, 104 SCRA 534, 540)

Moreover, as above stated, petitioner had as early as May 5,1975 filed a petition for letters of administration, and the samewas granted in July, 1975.

Section 17 of Rule 3 provides as follows:

Death of party. After a party dies and the claim is not therebyextinguished, the court shag order, upon proper notice, the legalrepresentative of the deceased to appear and to be substitutedfor the deceased, within a period of thirty (30) days, or withinsuch time as may be granted. If the legal representative fails toappear within said time, the court may order the opposing partyto procure the appointment of a legal representative of thedeceased within a time to be specified by the court, and therepresentative shall immediately appear for and on behalf of theinterest of the deceased. The court charges involved in procuringsuch appointment, if defrayed by the opposing party, may berecovered as costs. The heirs of the de ceased may be allowed tobe substituted for the deceased, without requiring theappointment of an executor or administrator and the court may

appoint guardian ad litem for the minor heirs.

As this Court has held:

... Under the Rule, it is the court that is called upon, after noticeof a party's death and the claim is not thereby extinguished, toorder upon proper notice the legal representative of the deceasedto appear within a period of 30 days or such time as it may grant.Since no administrator of the estate of the deceased appellanthad yet been appointed as the same was still pendingdetermination in the Court of First Instance of Quezon City, themotion of the deceased's counsel for the suspension of therunning of the period within which to file appellant's brief waswell-taken. More, under the Rule, it should have set a period forthe substitution of the deceased party with her legalrepresentative or heirs, failing which, the court is called upon toorder the opposing party to procure the appointment of a legal

representative of the deceased at the cost of the deceased'sestate, and such representative shall then 'immediately appearfor and on behalf of the interest of the deceased.

Respondent court gravely erred in not following the Rule andrequiring the appearance of the legal representative of thedeceased and instead dismissing the appeal of the deceased whoyet had to be substituted in the pending appeal Thus, it has beenheld that when a party dies in an action that survives, and noorder is issued by the court for the appearance of the legalrepresentative or of the heirs of the deceased in substitution ofthe deceased, and as a matter of fact no such substitution hasever been effected, the trial held by the court without such legalrepresentatives or heirs and the judgment rendered after suchtrial are null and void because the court acquired no jurisdictionover the persons of the legal representatives or of the heirs upon

whom the trial and the judgment would be binding. (Ordoveza

vs. Raymundo, 63 Phil 275 [1936]; Obut vs. Court of Appeals, etal., 70 SCRA 546) (Vda. de Haberer vs. Court of Appeals, supra,p. 541.

Under the said Rule, priority is given to the legal representativeof the deceased, that is, the executor or administrator of

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