ATENEO DE DAVAO UNIVERSITY

College Of Law

STATUTORY CONSTRUCTION OUTLINE

Atty. Resci Angelli R. Rizada

I. GENERAL PRINCIPLES
a) Statutory Construction
i. Definition à The art or process of discovering and expounding the meaning and intention of the authors of the
law with respect to its application to a given case, where the intention is rendered doubtful, among
others, because the given case is not explicitly provided by law. (Caltex V. Palomar)
à Art of seeking the intention of the legislature in enacting a statute and applying it to a given set of facts.
(Justice Martin)

ii. Importance à Definition: The intent of the statute is ascertained from it taken as a whole. And this purpose (intent)
controls its construction – how each word and phrase may be given meaning.
à Construction and Interpretation come only after it has been demonstrated that application is impossible
or inadequate without them (National Federation of Labor V. Eisma) & (People V. Mapa)
à When language is clear; it does not admit of doubt. No process of interpretation or construction need
be resorted to. (Luzon Surety Co. V. De Gracia)
à Statute or Act may be said to be vague when it lacks comprehensible standards that men “of common
intelligence must necessarily guess at its meaning and differ as to its application”. It is repugnant to the
Constitution when:
§ Violates due process for failure to accord persons especially the parties targeted by
it;
§ Leaves law enforcers unbridled discretion in carrying out its provision and becomes
arbitrary flexing of the Government muscle. (People V. Nazario)
à Statues must be read in such a way as to give effect to the purpose projected in the statue. They should
be construed in the light of the object to be achieved and the evil or mischief to the suppressed, and
they should be given such construction as will advance the object, suppress the mischief, and secure
the benefits intended. (Paat V. CA)
à The spirit rather than the law determines its construction; hence a statute must be read according to
its spirit and intent. (Paras V. COMELEC)

b) Construction V. Interpretation Construction Interpretation

Drawing of conclusions that are beyond the direct Discovering the true meaning of the language used.
* The situs of construction and interpretation is the forte of the expression of the text, from the elements known and
judicial department
given

c) When Construction is necessary Condition sine qua non: Before the court may use its power to construe, there must be ambiguity in the
language of the statute. For where there is no ambiguity, there is no room for construction, only for
application.
§ Ambiguity
Condition of admitting two or more meanings, of being understood in more than one way, or of
referring to two or more things at the same time.
*susceptibility to more than one interpretation

§ More application, less construction

- The first and fundamental duty of the court is to apply the law.
- Construction comes only after there has been a showing of ambiguity, hence, application is
impossible

§ Verba legis (Plain meaning rule)

- Where the statute is clear, plain and free from ambiguity, it must be given its literal meaning
and applied without interpretation.
- Where the law speaks in clear and categorical language, there is no room for interpretation.
There is only room for application.
- Law cannot be changed under the guise of interpretation.
- Presumption: The words employed by the legislature in a statute correctly express its intention
or will and preclude the court from construing it differently.

MAXIM: index animi sermo est (speech is the index of intention)

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 i. Purpose of à Cardinal Rule: Ascertain, and give effect to the true intent of the legislature. (Agpalo, 2009)
Construction à Legislative Intent, generally: The vital part, the essence of the law. Intent is the spirit which gives life
to legislative enactment.
§ 2 concepts of “intent”
1) Legislative Purpose: The reason why a particular statute was enacted by
the legislature.
2) Legislative Meaning: Is what the law, by its language means.

CASE: Federation of Farmers V. CA

RA No. 809 Sec. 1 – “In absence of a written milling agreements between the majority of the planters and
the millers, the unrefined sugar as well as all by-products shall be divided between them”
RA 809 Sec. 9 – “The proceeds of any increase in participation granted by the planters under this act and
above their present share shall be divided between the planter and his laborer in the proportion of 60%
laborer and 40% planter”
To give literal import in interpreting the two section will defeat the purpose of the Act
The purpose:
§ Continuous production of sugar
§ To grant the laborers a share in the increased participation of planters in the sugar produce
§ The legislative intent is, thus to make the act operative irrespective of whether there exists a
milling agreement between central and the sugar planters.

ii. Effect when the text of à The Court may look beyond the statue such as:
the statue utterly fails § Legislative Intent: What was in the legislative mine at the circumstances the statue was enacted;
to express the what the circumstances were; what evil/ mischief was to be suppressed.
legislative intent § Purpose of the Statute: The reason or cause which induced the enactment of the law, the
mischief to be suppressed, and the policy which dictated its passage.
§ When these fails, look into the effect of the law. If this is used first, it will be judicial legislation.

d) Determine Legislative intent from à The intent or meaning of it should be ascertained from the statute taken as a whole and not from
the text of the law itself, within isolated parts of it.
the context of the whole à A statue should be construed with reference to every other part and every work and phrase in
connection with its context,

MAXIM: optima statuti interpretatix est ipsum statutum (the best interpreter of a statute is the statute
itself)

CASE: Aisporna V. CA
Mapalad Aisporna was charged with a violation of the Insurance Act for selling insurance policies without
license. She claimed that she was just helping her husband, the registered insurance agent.

Held: The statute must be construed as a whole. Sec. 189(1), though prohibiting the any person to act as
agent without authorization from the Insurance Commissioner, Sec. 189(2) defined who an agent is selling
policies for compensation. This definition should be applied in relation to other paragraphs. Hence, without
proof of compensation, Aisporna may not be held liable

e) Power to construe: Judicial à Construction is a Judicial Function:

Function - The duty and power to interpret or construe a statute or the Constitution belongs to the judiciary
(Sec. 4 Par. 2, Art. VIII).
§ It is the court that has the final word as to what the law means.
i. Separation of Powers à Legislature cannot overrule Judicial Construction:
- It cannot prevent the courts from giving the statute different interpretation.
§ Legislative – enact laws
§ Executive – to execute laws
§ Judicial – interpretation and application
§ If the legislature may declare what a law means – it will cause confusion. It will be violative of
the fundamental principles of the constitution of separation powers.
§ Legislative construction is called resolution or declaratory act.
ii. Interrelationship / § Executive and Legislative Powers
Overlap of Powers a) Executive rule-making power (delegated legislative power)
§ (e.g. Eminent Domain subject to Just Compensation)
b) Administrative supervision of its own departments by each House of Congress
§ Executive and Judicial Powers
a) Executive Agencies with Quasi-Judicial Functions
§ COMELEC
§ BIR
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 b) Executive Contemporaneous Construction of Statutes
c) SC admin supervision of all courts and personnel
§ Judicial and Legislative Powers
a) Judicial Legislation: No judge or court shall decline to render judgment by reason of
the silence, obscurity or insufficiency of the laws (Art. 9 of New Civil Code)
A. Limitation on Judicial Power to Construe
- The Court can only construe an applicable law in controversies which are
ripe for judicial resolution. Neither moot nor academic (purpose has
become stale or where no practical relief can be granted or which can
have no practical effect).

CASE: Floresca V. Philex Mining

Several workers of respondent died when the mine collapsed. The petitioners asked for compensation
which was given. After learning that there was negligence on the part of the company, petitioners sued and
asked for damages under the Civil Code.

Held: There was no judicial legislation when the Supreme Court held that petitioners can still claim damages
in civil courts even if the Workmen’s Compensation Act expressed that its Commission shall have exclusive
original jurisdiction. It just merely gives life to the law.
*The court should interpret the law as a whole

b) Legislative interpretation thru interpretative clause prescribing rules of construction

iii. Power of Judicial REQUISITES: (ALCoNe)
Review: 1. Existence of appropriate case (Actual case or controversy)
§ There must be a justiciable controversy (can be decided on grounds recognized by
the law) Exceptions: Political questions- issues dependent upon wisdom not the
legality of the law.
*Exception: Political Question
2. Locus Standi (legal standing)
§ Legal standing to sue. The person has substantial interest in the case such that the
party has sustained or will sustain direct injury
3. Constitutional question raised at earliest opportunity
§ Question must be raised in the pleading, complaint, information or petition by the
plaintiff or petitioner or in the answer by defendant or respondent.
4. Necessity of deciding the constitutional question
§ The Court may not pass upon the validity of a statute if it can decide the case on some
other grounds.
§ If the only issue is the a constitutional question which is unavoidable, the Court should
confront the question and decide the case on the merits
iv. Declaration of à Where the part of the statute is void as repugnant to the Constitution, while another part is valid,
unconstitutionality of the valid portion, if separable from the invalid, may stand and be enforced (separability clause)
statutes
1. Effect
a) It confers no rights;
b) Imposes no duties;
c) Affords no protection; and
d) Creates no office
e) In general, inoperative as if it had never been passed
2. Partial Constitutionality (separable provisions/ with separability clause)
a) General rule: Where the part of the statute is void as repugnant to the Constitution,
while another part is valid, the valid portion, if separable from the invalid, may stand
and be enforced (separability clause).
*Exception: When the parts of the statute are so mutually dependent and connected, as conditions,
considerations, inducements, or compensations for each other, as to warrant a belief that the legislature
intended them as a whole, the nullity of one part will vitiate the rest.

CASE: Lidasan V. COMELEC

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 RA No. 4790 entitled “An Act Creating the Municipality of Dianaton in the province of Lanao del Sur ‘, was
signed into law and came to light later that barrios mentioned in the body of that statue are within the
municipalities of the Province of Cotabato and not of Lanao del Sur only. Prompted by the coming elections,
COMELEC adopted its resolutions for the purposes of establishments of precincts, registration of voters and
for other election purposes. The Office of the President recommended the COMELEC that the operation of
the statute be suspended until “ clarified by correcting legislation”. COMELEC stood by its own interpretion,
hence this motion by Bara Lidasan as a resident, taxpayer and a qualified voter of Parang Cotabato.
Held: The title of RA No. 4790 projects the impression that solely the province of Lanao del Sur is affected
by the creation of Dianaton. Not the slightest intimation is there that communities in the adjacent Province
of Cotabato are incorporated in this new Lanao del Sur town. Such title did not inform the people in towns
in Cotabato and the province itself that part of their territory is being taken away and added to the adjacent
province of Lanao del Sur. Transfer of sizable territory from one province to another is as important as the
creation of a municipality, yet, the title did not reflect this fact. The legislative purpose is not expressed in
the title, hence RA No. 4790 is null void.

3. Doctrine of Relative Constitutionality:

- The constitutionality of a statute cannot, in every instance, be determined by a mere
comparison of its provisions with applicable provisions of the Constitution, since the statute may
be constitutionally valid as applied to one set of facts and invalid in its application to another.
- A statute valid at one time may become void at another time because of altered circumstances.
Thus, if a statute in its practical operation becomes arbitrary or confiscatory, its validity, even
though affirmed by a former adjudication, is open to inquiry and investigation in the light
of changed conditions. (Central Bank Employees Assoc’ V. BSP)
4. Test of Constitutionality:
1) Must not contravene the Constitution or any statute.
2) Must be general and consistent with public policy.
3) Must not be unfair or oppressive.
4) Must not be partial or discriminatory.
5) Must not be unreasonable 6. Must not prohibit but may regulate trade.
5. Grounds for nullification:
1) Not within the legislative power to enact.
2) When it allows something to be done which the fundamental law condemns or
prohibits.
3) Vagueness- lacking comprehensible standards that men of common intelligence must
necessarily guess at its meaning and differ in its application
§ Basis: Violates due process for failure to accord the people fair notice of what conduct
to avoid. Leaves law enforcers unbridled discretion in carrying out its provisions and
becomes an arbitrary flexing of the government muscle

CASE: Central Bank Employees Ass’n., Inc. V. BSP

Held: The proviso is unconstitutional as it operates on the salary grade or the officer employee status, it
distinguishes between economic class and status with the higher salary grade recipients are of greater
benefit above the law than those of mandated by the Salary Standardization Act. Officers of the BSP receive
higher wages that those of rank-and-file employees because the former are not covered by the salary
standardization act as provided by the proviso.

v. Reversal of Judicial Principle of Law by Supreme Court: Article VIII, Sec. 4(3)
Construction § Only Court En Banc can modify or reverse any doctrine laid down by the Court either En Banc or
in Division.
§ A Division of court cannot modify or reverse a doctrine or principle of law enunciated by another
division thereof.
*Exception: If the Court has stated in a decision not a principle of law but a mere obiter dictum (a
thing said in passing), a division may validly reject or disregard it.. (Agpalo p.146)

§ The interpretation of a statute remains to be part of the legal system until the Supreme Court
overrules it and the new doctrine overruling the old is applied prospectively in favor of parties
who relied on it in good faith.

vi. Promulgation: à Art 2 CC - “xxx laws to be effective must be published either in the Official Gazette or in a
Operative Act for the newspaper of general circulation in the country”
Effectivity of a § The effectivity provision refers to all statutes, including those local and private, unless there are
Decision special laws providing a different effectivity mechanism for particular statutes.

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 vii. Rulings of the SC (in 1. Part of Legal System (Art. 8 NCC)
construing a statute) Judicial decisions applying or interpreting the laws or the Constitution shall form part of the legal
system of the Philippines.

MAXIM: legis interpretato legis vim obtinet (the authoritative interpretation of a statute acquires the force
of the law by becoming a part thereof)

MAXIM: stare decisis et non quieta movere (to stand by decisions and not disturb the undisturbed)
§ When the Supreme Court has once laid down a principle of law as applicable to a certain state
of facts, it will adhere to that principle and apply to all future cases where the facts are
substantially the same
§ Assures certainty and stability in the legal system

2. Generally, no retroactive effect

§ Judicial ruling cannot be given retroactive effect if to do so will impair vested rights and the
parties relied on it in good faith.
3. NEW: Cannot be undone by Congress by re-enacting a provision previously declared
unconstitutional

CASE: Sameer Overseas Placement Agency, Inc., V. Cabiles

§ A statute or provision which was declared unconstitutional is not a law. It "confers no rights; it
imposes no duties; it affords no protection; it creates no office; it is inoperative as if it has not
been passed at all."
§ In the hierarchy of laws, the Constitution is supreme. No branch or office of the government
may exercise its powers in any manner inconsistent with the Constitution, regardless of the
existence of any law that supports such exercise. The Constitution cannot be trumped by any
other law. All laws must be read in light of the Constitution. Any law that is inconsistent with it
is a nullity.
§ Thus, when a law or a provision of law is null because it is inconsistent with the Constitution,
the nullity cannot be cured by reincorporation or reenactment of the same or a similar law or
provision. A law or provision of law that was already declared unconstitutional remains as such
unless circumstances have so changed as to warrant a reverse conclusion.

f) Subjects of Construction
i. Constitution
ii. Statutes
1. Basic Rules of a) Political Laws
Construing/ i. Election Laws
Interpreting § Reasonable and liberally construed to achieve the purpose- to safeguard the
Specific Statutes will of the electorate in choosing their representatives
§ It has 3 parts
1. Provisions for the conduct of elections which election officials are
required to follow.
2. Provisions which candidates for office are required to perform.
3. Procedural rules which are designed to ascertain, in case of dispute, the
actual winner in the elections

CASE: Villanueva V. COMELEC

Held: Whether the informal withdrawal of Mendoza invalidates the election of Villanueva as vice mayor.
Section 28 of the 1978 Election Code provides for such substitute candidates in case of death, withdrawal
or disqualification up to mid-day of the very day of the elections. Mendoza’s withdrawal was filed on the
last hour of the last day for regular filing of candidacies, which he had filed earlier that same day. Further,
the will of the electorate should be respected, it should not be defeated through the invocation of formal
or technical defects. The will of the people cannot be frustrated by a technicality that the certificate of
candidacy had not been properly sworn to.

CASE: Rulloda V. COMELEC

Held: There being no specific provision governing substitution of candidates in barangay elections, a
prohibition against said substitution cannot be said to exist.

Petitioner’s letter-request was considered a certificate of candidacy when COMELEC issued its resolution
denying the same. In the contested election, it was petitioner who obtained the plurality of votes.
Technicalities and procedural niceties in election cases should not be made to stand in the way of the true
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 will of the electorate. Laws governing election contests must be liberally construed to the end that the will
of the people in the choice of public officials may not be defeated by mere technical objections.

ii. Local Government Code/ Grant of Power to LGU

§ The trend is from a limited self-government to full autonomy.
A. General welfare clauses - Has two branches:
1. The first branch relates to the municipal authority to create ordinances and
regulations as may be necessary to carry into effect the powers and duties
conferred upon the local legislative bodies by law.
2. The second branch authorizes such ordinances necessary to provide for the
general welfare (healthy, safety, peace and order, promote prosperity and
improve the morals).
§ Construed liberally in favor of the local governments because the general welfare clauses
are elastic and must be responsive to various social conditions
B. Statutes granting taxing power to local governments: The local governments are
now empowered to create their own sources of revenues, hence, statutes limiting
the taxing power of local
iii. Administrative Code
§ These are statutes enacted to implement the social justice and protection-to-labor
provisions of the Constitution, and are construed liberally.
§ The doubt should be resolved in favor of the persons whom the law intended to benefit.
§ For it is only by liberal construction that the constitutional mandate may be realized

CASE: Bermudez V. Executive Secretary

Issue: Whether or not the absence of a recommendation of the Secretary of Justice to the President can
be held fatal to the appointment of Quiaoit?
Held: The power to appoint is, in essence, discretionary. The appointing authority has the right of choice
which he may exercise freely according to his judgment, deciding for himself who is best qualified among
those who have the necessary qualifications and eligibilities.
When the Constitution or the law clothes the Pres. with the power to appoint a subordinate officer, such
conferment must be understood as necessarily carrying with it an ample discretion of whom to appoint.
The Pres. has the power to assume directly the functions of an executive department, bureau and office.
It can therefore be inferred that the Pres. can interfere in the exercise of discretion of officials under him
or altogether ignore their recommendations.
The recommendation is here nothing really more than advisory in nature. The Pres., being the head of the
Executive Department, could very well disregard or do away with the action of the departments, bureaus
or offices even in the exercise of discretionary authority, and in so opting, he cannot be said as having
acted beyond the scope of his authority.

iv. Expropriation Laws

§ Based on the power of eminent domain which is legislative in nature. Power is delegable,
subject to just compensation, to the President, LGUs, or a public utility company.
§ Strictly construed against the expropriating authority and liberally in favor of the property
owners.
§ Basis: The “exercise of the right to eminent domain, whether by State, or by its authorized
agents, is necessarily in derogation of private rights, and rule in that case is that the
authority must be strictly construed.

CASE: City Of Manila V. Chinese Community

Held: Whether the Chinese cemetery may be validly expropriated by the City of Manila. he exercise of the
right of eminent domain, whether directly by the State, or by its authorized agents, is necessarily in
derogation of private rights, and the rule in that case is that the authority must be strictly construed. No
species of property is held by individuals with greater tenacity, and none is guarded by the constitution
and laws more sedulously, than the right to the freehold of inhabitants. When the legislature interferes
with that right, and, for greater public purposes, appropriates the land of an individual without his consent,
the plain meaning of the law should not be enlarged by doubtly interpretation. The right of expropriation
is not an inherent power in a municipal corporation, and before it can exercise the right some law must
exist conferring the power upon it.

v. Agrarian Reform Laws

§ Rule on the construction of Agrarian Reform Laws

CASE: Guerrero V. CA
Held: Whether Benitez is a tenant within the meaning of the tenancy law to warrant reinstatement to the
plantation. Longstanding possession is an essential distinction between a mere agricultural laborer and a
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 real tenant within the meaning of the tenancy law, a tenant being one who has the temporary use and
occupation of land or tenements belonging to another for the purpose of production. A hired laborer who
built his own house at his expense at the risk of losing the same upon his dismissal or termination any time,
is more consistent with that of an agricultural tenant who enjoys security of tenure under the law. The
Supreme Court dismissed the petition for lack of merit, and affirmed the CA decision.

vi. Naturalization Laws

§ Strictly construed against the applicant for citizenship and should be rigidly enforced
and followed.
§ Basis: The right of an alien to become a citizen is a statutory and not a natural one. It
does not become vested until he files a petition and establishes by competent and
satisfactory evidence that he has all the qualifications and none of the disqualifications
specified by law.

CASE: Co V. Republic
Held: Whether petitioner failed to comply with the requirements prescribed by law in order to qualify him
to become a Filipino citizen. Philippine law requires that an alien to conduct himself in a proper and
irreproachable manner during the entire period of his residence in the Philippines in his relation with the
constituted government as well as with the community in which he is living. In the present case, in so
stating that he believes merely in our laws, he did not necessarily refer to those principles embodied in our
constitution which are referred to in the law; the belief in democracy or in a democratic form of
government is not sufficient to comply with the requirement of the law that one must believe in the
principles underlying our constitution. Further, petitioner failed to show that he has complied with his
obligation to register his wife and child with the Bureau of Immigration as required by the Alien
Registration Act; and further failed to file his income tax return.

CASE: Lee Cho V. Republic

Held: Whether petitioner was able to comply with the requirements for naturalization. The provisions of
the Naturalization Law should be strictly construed in order that its laudable and nationalistic purpose may
be fully fulfilled. In the present case, the petitioner has not filed any declaration of intention to become a
Filipino citizen because, as he claims, he has resided continuously in the Philippines for a period of more
than 30 years and has given primary and secondary education to all his children in private schools
recognized by the government. This circumstance betrays the sincerity of petitioner to become a Filipino
citizen for if his motive were proper he should not have tolerated such deviation from the educational
requirement of the law. The petitioner, thus, has failed to qualify to become a Filipino citizen.

b) Labor and Social Legislation

§ Rule on the construction of labor laws

CASE: Manahan V. ECC

Held: This Court applied the provisions of the Workmen’s Compensation Act, as amended, on passing upon
petitioner’s claim. The illness that claimed the life of the deceased may have its onset before 10 December
1974, thus, his action accrued before 10 December 1974. Still, in any case, and in case of doubt, the same
should be resolved in favor of the worker, and that social legislations — like the Workmen’s Compensation
Act and the Labor Code — should be liberally construed to attain their laudable objective, i.e., to give relief
to the workman and/or his dependents in the event that the former should die or sustain an injury.
Pursuant to such doctrine and applying now the provisions of the Workmen’s Compensation Act in this
case, the presumption of compensability subsists in favor of the claimant.

CASE: Villavert v. ECC

Held: From the foregoing facts of record, it is clear that Marcelino N. Villavert died of acute hemorrhagic
pancreatitis which was directly caused or at least aggravated by the duties he performed as code verifier,
computer operator and clerk typist of the Philippine Constabulary. Further, Article 4 of the Labor Code of
the Philippines, as amended, provides that “all doubts in the implementation and interpretation of this
Code, including its implementing rules and regulations shall be resolved in favor of labor.”

CASE: Del Rosario & Sons v. NLRC

Held: Articles 106 of the Labor Code provides that “in the event that the contractor or subcontractor fails
to pay the wages of his employees in accordance with this Code, the employer shall be jointly and severally
liable with his contractor or subcontractor to such employees to the extent of the work performed under
the contract, in the same manner and extent that he is liable to employees directly employed by him,” and
Article 107 provides that “the provisions of the immediately preceding Article shall likewise apply to any
person, partnership, association or corporation which, not being an employer, contracts with an
independent contractor for the performance of any work, task, job or project.” The Supreme Court

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 affirmed the judgment under review, without prejudice to petitioner’s right to seek reimbursement from
Calmar Security Agency for such amounts as petitioner may have to pay to complainants.

c) Penal Statutes
§ Those which define crimes, treat of their nature, and provide for their punishment.
§ Strictly construed against the State and liberally in favour of the accused.
§ Basis: The law is tender in favour of rights of an individual; the object is to establish a
certain rule by conformity to which mankind would be safe, and the discretion of the
court limited.
It is not to enable a guilty person to escape punishment through a technicality but to
provide a precise definition of forbidden acts

Maxim: actus non facit reum nisi mens sit rea (the act itself does not make a man guilty unless his intention
were so)

actus me invite factus non est meus actus (an act done by me against my will is not my act)

Limitations to construction in favour of the accused:

§ Not to be construed as to defeat the obvious purpose of the legislature.
§ Only when the law is ambiguous and there is doubt in its meaning

CASE: Centeno V. Villalon-Pornillos

Held: Petitioners, officers of the Samahang Katandaan ng Nayon ng Tikay, were charged with violation of
PD 1564 or the Solicitation Permit Law by Judge Angeles. They were asking for money to renovate their
chapel.
Held: The court distinguished religious and charitable purposes and held that solicitations for religious
purposes are not covered by said law. Although 147 People v. Purisima solicitations for religious purpose
are considered charitable also, not all charitable actions are religious in nature. Hence, penal laws should
be construed in favour of the accused.

d) Corporate Law
§ Rule in the interpretation corporate law provisions

CASE: Home Insurance vs. Eastern Shipping Lines

Held: Whether a foreign corporation doing business in the Philippines initially without a license can claim
indemnity through Philippine Courts. The objective of the law was to subject the foreign corporation to
the jurisdiction of our courts. The Corporation Law must be given a reasonable, not an unduly harsh,
interpretation which does not hamper the development of trade relations and which fosters friendly
commercial intercourse among countries. The Supreme Court consolidated and granted the petitions,
reversed and set aside the CFI decisions. In L-34382 (Civil Case 71923), Eastern Shipping Lines and Angel
Jose Transportation Inc. are ordered to pay the Home Insurance Company.

e) Tax Laws
i. Those imposing taxes and customs duties
§ The responsibility of the legislature which imposes the tax on the constituency
who are to pay it.
§ A tax cannot be imposed without clear and express words for that purpose
§ Construed strictly against the government and liberally in favor of tax payer.
§ Basis: Burdens are not to be imposed nor presumed to be imposed beyond what
statues expressly and clearly import.
ii. Those granting exemptions
§ Laws granting tax emptions are thus construed strictissimi juris against the
taxpayer and liberally in favor of the taxing authority.
§ Who claims an exception must justify his claim by showing that the legislature
intended to exempt him by words too plain to be mistaken.
§ The law frowns against exemption from taxation. Thus, tax exemptions are to be
construed strictly against the taxpayer and liberally in favor of the taking authority,
§ Basis: To minimize the different treatment and foster impartiality, fairness, and
equality of treatment among taxpayers.
iii. How are tax refunds construed?

CASE: La Carlota Sugar Central v. Jimenez

Held: When the issue is whether or not the exemption from a tax imposed by law is applicable, the rule is
that the exempting provision is to be construed liberally in favor of the taxing authority and strictly against
exemption from tax liability, the result being that statutory provisions for the refund of taxes are strictly
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 construed in favor of the State and against the taxpayer. Exempting from the 17% tax all fertilizers
imported by planters or farmers through any agent other than their cooperatives, this would be rendering
useless the only exception expressly established in the case of fertilizers imported by planters or farmers
through their cooperatives.

iv. Who has the burden of proof in tax cases?

CASE: CIR v. CA
Held: The Commissioner erred in applying the principles of tax exemption without first applying the well-
settled doctrine of strict interpretation in the imposition of taxes. he Court ruled that the private
respondent is not a contractor selling its services for a fee but an academic institution conducting these
researches pursuant to its commitments to education and, ultimately, to public service. For the institute
to have tenaciously continued operating for so long despite its accumulation of significant losses, we can
only agree with both the Court of Tax Appeals and the Court of Appeals that “education and not profit is
motive for undertaking the research projects.

CASE: Mactan Cebu v. Marcos

Held: Mactan Cebu International Airport Authority (MCIAA) is a “taxable person” under its Charter (RA
6958), and was only exempted from the payment of real property taxes. The grant of the privilege only in
respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject to all
taxes, except real property tax. Therefore, MCIAA has to pay the assessed realty tax of its properties
effective after January 1, 1992 until the present.

v. Tax sales construed

CASE: Serefino v. CA
Held: The Court assailed decision of the appellate court declares that the prescribed procedure in auction
sales of property for tax delinquency being in derogation of property rights should be followed
punctiliously. Strict adherence to the statutes governing tax sales is imperative not only for the protection
of the tax payers, but also to allay any possible suspicion of collusion between the buyer and the public
officials called upon to enforce such laws. Notice of sale to the delinquent land owners and to the public
in general is an essential and indispensable requirement of law, the non-fulfillment of which vitiates the
sale. The inability of the Register of Deeds to notify the actual owner or Lopez Sugar Central of the
scheduled public auction sale was partly due to the failure of Lopez Sugar Central to declare the land in its
name for a number of years and to pay the complete taxes thereon.

f) Civil Law
i. Family Law
ii. Wills and Successions
§ Statutes prescribing the formalities to be observed in the execution of wills are
strictly construed.
§ A will must be executed in accordance with the statutory requirements, otherwise
is entirely void.
§ Basis: The court is seeking to ascertain and apply the intent of the legislators and
not that of the estator, and the latter’s intention is frequently defeated by the non-
observance of what the statute requires.

CASE: In RE: Tampoy

Held: Whether the absence of the testator’s thumbmark in the first page is fatal to render the will void.
Statutes prescribing the formalities to be observed in the execution of wills are very strictly construed. A
will must be executed in accordance with the statutory requirements; otherwise it is entirely void. Since
the will suffers the fatal defect, as it does not bear the thumbmark of the testatrix on its first page even if
it bears the signature of the three instrumental witnesses, the same fails to comply with the law and
therefore cannot be admitted to probate.

iii. Obligations and Contract (Arts. 1370-1379)

Art. 1370. If the terms of a contract are clear and leave no doubt upon the intention
of the contracting parties, the literal meaning of its stipulations shall control.
If the words appear to be contrary to the evident intention of the parties, the latter
shall prevail over the former. (1281)

Art. 1371. In order to judge the intention of the contracting parties, their
contemporaneous and subsequent acts shall be principally considered. (1282)

Art. 1372. However general the terms of a contract may be, they shall not be

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 understood to comprehend things that are distinct and cases that are different from
those upon which the parties intended to agree. (1283)

Art. 1373. If some stipulation of any contract should admit of several meanings, it
shall be understood as bearing that import which is most adequate to render it
effectual. (1284)

Art. 1374. The various stipulations of a contract shall be interpreted together,

attributing to the doubtful ones that sense which may result from all of them taken
jointly. (1285)

Art. 1375. Words which may have different significations shall be understood in that
which is most in keeping with the nature and object of the contract. (1286)

Art. 1376. The usage or custom of the place shall be borne in mind in the
interpretation of the ambiguities of a contract, and shall fill the omission of
stipulations which are ordinarily established. (1287)

Art. 1377. The interpretation of obscure words or stipulations in a contract shall not
favor the party who caused the obscurity. (1288)

Art. 1378. When it is absolutely impossible to settle doubts by the rules established
in the preceding articles, and the doubts refer to incidental circumstances of a
gratuitous contract, the least transmission of rights and interests shall prevail. If the
contract is onerous, the doubt shall be settled in favor of the greatest reciprocity of
interests.
If the doubts are cast upon the principal object of the contract in such a way that it
cannot be known what may have been the intention or will of the parties, the
contract shall be null and void. (1289)

Art. 1379. The principles of interpretation stated in Rule 123 of the Rules of Court
shall likewise be observed in the construction of contracts. (n)
iv. Insurance
§ Rule in the interpretation of insurance provisions

CASE: Ty v. First National Surety

Held: Whether Diosdado Ty is entitled to indemnity under the insurance policy for the disability of his left
hand. While the Court sympathizes with the plaintiff or his employer, for whose benefit the policies were
issued, it can not go beyond the clear and express conditions of the insurance policies, all of which define
partial disability as loss of either hand by an amputation through the bones of the wrist.” There was no
such amputation in the case at bar.

CASE: De la Cruz v. Capital Insurance

Held: Eduardo de la Cruz was the holder of an accident insurance policy. Eduardo slipped and was hit by
his opponent on the left part of the back of the head, causing Eduardo to fall and death in a non-pro boxing
bout. Whether the death of the insured is covered by the policy. The terms “accident” and “accidental”
have not acquired any technical meaning, and are construed by the courts in their ordinary and common
acceptation. In the present case, while the participation of the insured in the boxing contest is voluntary,
if without the unintentional slipping of the deceased, perhaps he could not have received that blow in the
head and would not have died.

§ Ambiguous provision interpreted against insurer

CASE: Qua Chee Gan v. Law Union Insurer

Held: Whether gasoline may be construed as oil to warrant the forfeiture of claims under the insurance
policy. By reason of the exclusive control of the insurance company over the terms and phraseology of the
contract, the ambiguity must be held strictly against the insurer and liberally in favor of the insured,
especially to avoid forfeiture. There is no reason why the prohibition of keeping gasoline in the premises
could not be expressed clearly and unmistakably, in the language and terms that the general public can
readily understand, without resort to obscure esoteric expression.

iii. Ordinances
iv. Rules of Court à Liberally construed because of being procedural in nature.
à It should not be interpreted to sacrifice substantial rights of the litigant at the altar of
technicalities to the consequent impairment of the principles of justice.

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 CASE: Bello v. CA
Held: Whether the formal impleading of the Court of First Instance is indispensable and the procedural
infirmity of misdirecting the appeal to Court of First Instance are fatal to the appellees’ cause. The
construction of statutes is always cautioned against narrowly interpreting a statute as to defeat the
purpose of the legislator and it is of the essence of judicial duty to construe statutes so as to avoid such a
deplorable result (of injustice or absurdity” and therefore a literal interpretation is to be rejected if it would
be unjust or lead to absurd results. Thus, in the construction of its own Rules of Court, the Court is all the
more so bound to liberally construe them to avoid injustice, discrimination and unfairness and to supply
the void by holding that Courts of First Instance are equally bound as the higher courts not to dismiss
misdirected appeals timely made but to certify them to the proper appellate court.

LAW INTERPRETATION
Labor Code Resolved in favor of labor and social legislation
Local Government Liberally interpreted in its favor; resolved in favor of its devolution of powers and of the lower local
government
Tax Laws Strict: against local government unit enacting it Liberal: for the taxpayer
Tax Exemptions Strict: against taxpayer claiming it / *Strictissimi Juris against Taxpayer
Civil Procedure Liberally construed to promote the objective of a just, speedy and inexpensive deposition of actions and
proceedings
COMELEC Procedure Liberally construed to promote effective & efficient implementation of free, orderly and honest
elections; just, speedy and inexpensive determination of actions and proceedings *Will of the People not
defeated by technicalities
Penal Statutes Strict vs. State / Liberal in favor of the accused
Naturalization Laws Strict vs. Applicant
Insurance Laws Liberally in favor of the insured / Strict =Insurer
Social Legislation Liberally construed to afford relief to the workers in the society
Social Security Liberally construed to favor beneficiaries
Retirement Laws Liberally in favor of retiree for sustenance and comfort

II. STATUTES
a. Definition à Law: a rule of conduct formulated and made obligatory by legitimate power of the state.
à Statute: An act of the legislature, as an organized body, expressed in the form, and passed according to
the procedure required to constitute it as part of the law of the land.
b. Distinguished from
i. Constitution
ii. Ordinances
§ An ordinance should not contravene a statute: Local councils exercise only
delegated legislative powers conferred on them by Congress as the national law
making body. The delegate cannot be superior to the principal.
iii. Administrative Orders
c. Classification
i. According to duration: permanent vs temporary
§ Permanent Statute: is one whose operation is not limited in duration but continues
until repealed. It does not terminate by the lapse of a fixed period or by the
occurrence of an event.
§ Temporary Statute: is one whose duration is for a limited period of time fixed in the
statute itself or whose life ceases upon the happening of a new event,
ii. According to time of applicability: prospective vs retroactive
§ Prospective Statute: applicable only to cases which shall arise after its enactment.
§ Retroactive/ Retrospective Statute: looks backward or contemplates the past; one
which is made to affect acts or facts occurring, or rights occurring, before it came
into force.
iii. According to operation: declaratory vs curative
§ Curative Statute: a form of retrospective legislation which reaches back into the past
to operate upon past events, acts or transactions in order to correct errors and
irregularities and to render valid and effective many attempted acts which would
otherwise be ineffective for the purpose intended.
iv. According to compliance requirement: mandatory vs directory
§ Mandatory Statute: Generic term describing statutes which require and not merely
permit a course of action.
v. According to WON rights are given: substantive vs non-substantive (remedial)
§ Non-Substantive Statute: providing means or method whereby causes of action may
be effectuated, wrongs redressed and relief obtained

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 vi. According to form: affirmative vs negative
vii. According to WON there is a penal provision: penal vs non-penal
§ Penal Statute: Defines criminal offenses specify corresponding fines and
punishments
d. Enactment (How a bill becomes
a law)
i. Legislative Power: vested on Congress (Sec. 1, Art VI, Constitution)
§ Generally:
à Power to make, alter and repeal laws
à Vested in congress – 1987 Constitution
à President – 1973 & Freedom (PD and EO respectively)
à Sangguniang barangay, bayan, panglungsod, panlalawigan – only within
respective jurisdiction – ordinances
à Administrative or executive officer
à Delegated power
à Issue rules and regulations to implement a specific law
ii. Passage of Bill/ Procedure (Secs. 24, 25, 26, 27, Art VI of the Constitution)
§ Proposed legislative measure introduced by a member of congress for enactment
into law
§ Shall embrace only one subject which shall be expressed in the title
§ Signed by authors
§ File with the Secretary of the House
§ Bills may originate from either lower or upper House
§ Exclusive to lower house
à Appropriation
à Revenue/ tariff bills
à Bills authorizing increase of public debt
à Bills of local application
à Private bills
§ After 3 readings, approval of either house (see Art 6 Sec 26 (1)) • Secretary reports
the bill for first reading
§ First reading – reading the number and title, referral to the appropriate committee
for study and recommendation
à Committee – hold public hearings and submits report and
recommendation for calendar for second reading
§ Second reading – bill is read in full (with amendments proposed by the committee)
– unless copies are distributed and such reading is dispensed with
à Bill will be subject to debates, motions and amendments
à Bill will be voted on
à A bill approved shall be included in the calendar of bills for 3rd reading
§ Third reading – bill approved on 2nd reading will be submitted for final vote by
yeas and nays,
§ Bill approved on the 3rd reading will be transmitted to the “Other House” for
concurrence (same process as the first passage)
à If the “Other House” approves without amendment it is passed to the
President
à If the “Other House” introduces amendments, and disagreement arises,
differences will be settled by the Conference Committees of both
houses
à Report and recommendation of the 2 Conference Committees will have
to be approved by both houses in order to be considered pass
§ President
à Approves and signs
à Vetoes (within 30 days after receipt)
à Inaction
§ If the President vetoes – send back to the House where it originated with
recommendation
à 2/3 of all members approves, it will be sent to the other house for
approval
à 2/3 of the other house approves – it shall become a law
à If president did not act on the bill with in 30 days after receipt, bill
becomes a law
§ Summary : 3 ways of how a bill becomes a law.
à President signs
à inaction of president with in 30 days after receipt

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 à vetoed bill is repassed by congress by 2/3 votes of all its members, each
house voting separately
iii. Authentication of bill
§ Before passed to the President
§ Indispensable
§ By signing of Speaker and Senate President
e. Evidence of Due Enactment of
the statute
i. Enrolled Bill Doctrine Theory
§ Bills passed by congress authenticated by the Speaker and the Senate President and
approved by the President
§ Importing absolute verity and is binding on the courts
à It carries on its face a solemn assurance that it was passed by the assembly
by the legislative and executive departments.
§ Courts cannot go behind the enrolled act to discover what really happened
à If only for respect to the legislative and executive departments
§ Thus, if there has been any mistake in the printing of the bill before it was certified
by the officer of the assembly and approved by the Chief Executive, the remedy is by
amendment by enacting a curative legislation not by judicial decree.
§ Enrolled bill and legislative journals - Conclusive upon the courts
§ If there is discrepancy between enrolled bill and journal, enrolled bill prevails.
ii. Journal Entry Rule
§ Journal of proceedings
§ Conclusive with respect to other matters that are required by the Constitution
§ Disputable with respect to all other matters
§ By reason of public policy, authenticity of laws should rest upon public memorials of
the most permanent character
§ Should be public
f. Parts of Law
i. Title
1. One subject, one bill rule
a. Rationale
à to apprise the legislators of the object, nature, and scope of the provision
of the bill and to prevent the enactment into law of matters which have
not received the notice, action and study of the legislators.
à Mandatory law: Every bill passed by Congress shall embrace only one
subject which shall be expressed in the title thereof (Art 6, Sec 26 (1) 1987
Constitution)
b. Effect of non-compliance
à Statute is null and void
à Where, the subject matter of a statute is not sufficiently expressed in its
title, only so much of the subject matter as is not expressed therein is void,
leaving the rest in force, unless the invalid provisions are inseparable from
the others, in which case the nullity the former vitiates the latter
ii. Enacting Clause
§ Written immediately after the title
§ States the authority by which the act is enacted

à #1 - Phil Commission – “ By authority of the President of the US, be it enacted by the

US Philippine Commission”
à #2 - Philippine Legislature- “ by authority of the US, be it enacted by the Philippine
Legislature”
à #3 - When #2 became bicameral: “Be it enacted by the Senate and House of
Representatives of the Philippines in legislature assembled and by authority of the
same”
à #4 - Commonwealth- “Be it enacted by the National Assembly of the Philippines
à #5 – when #4 became bicameral: “be it enacted by the Senate and House of
Representatives in congress assembled” – same 1946-1972/1987-present.
à #6 – Batasang Pambansa: “Be it enacted by the Batasang Pambansa in session
assembled”
à #7 – PD “ NOW THEREFORE, I ______ President of the Philippines, by the powers
vested in me by the Constitution do hereby decree as follows”
à #8 – EO “Now, therefore, I, ____ hereby order”

iii. Preamble (seldom included)

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 § Defined – prefatory statement or explanation or a finding of facts, reciting the
purpose, reason, or occasion for making the law to which it is prefixed”
§ Found after enacting clause and before the body of the law.
§ Usually not used by legislations because content of the preamble is written in the
explanatory note.
§ But PDs and EOs have preambles.
iv. Body (purview) of the State
§ that part which tells what the law is about
§ body of statute should embrace only one subject should only one subject matter,
even there provisions should be allied and germane to the subject and purpose of
the bill.
§ Statue is usually divided into section. w/c contains a single proposition.
Parts:
à short title
à policy section
à definition section
à administrative section
à sections prescribing standards of conduct
à sections imposing sanctions for violation of its provisions
à transitory provision
à separability clause
à effectivity clause
v. Separability Clause
§ it states that if any provision of the act is declared invalid, the remainder shall not
be affected thereby
§ It is not controlling and the courts may invalidate the whole statute where what is
left, after the void part, is not complete and workable
§ Presumption – statute is effective as a whole
§ its effect: to create in the place of such presumption the opposite of separability.
g. Effectivity (Art. 2, Civil Code)
i. When STATUTE becomes effective – Civil Code, Article 2; EO 200 as incorporated in EO 292
Section 18 requirement

§ Art 2 CC - “xxx laws to be effective must be published either in the Official Gazette
or in a newspaper of general circulation in the country”
à The effectivity provision refers to all statutes, including those local and
private, unless there are special laws providing a different effectivity
mechanism for particular statutes
§ Sec 18 Chapter 5 Book 1 of Administrative Code
§ Effectivity of laws
à default rule – 15-day period
à must be published either in the OG or newspaper of general circulation
in the country; publication must be full
§ The clause “unless it is otherwise provided” – solely refers to the 15-day period and
not to the requirement of publication

ii. When Ordinance takes effect RA 7160, Sections 5-9

§ Unless otherwise stated, the same shall take effect 10 days from the date a copy is
posted in a bulletin board at the entrance of the provincial capitol or city,
municipality or barangay hall, AND in at least 2 other conspicuous places in the
local government unit concerned
§ The secretary to the Sangguinian concerned shall cause the posting not later than
5 days after approval; text will be disseminated in English or Tagalog; the secretary
to the Sangguinian concerned shall record such fact in a book kept for that
purpose, stating the dates of approval and posting
§ Gist of ordinance with penal sanctions shall be published in a newspaper of
general circulation within the respective province concerned; if NO newspaper of
general circulation in the province, POSTING shall be made in all municipalities and
cities of the province where the Sanggunian of origin is situated
§ For highly urbanized and independent component cities, main features of the
ordinance, in addition to the posting requirement shall be published once in a
local newspaper. In the absence of local newspaper, in any newspaper of general
circulation
§ Highly urbanized city – minimum population of 200,000 and with latest
annual income of at least 50M Php
iii. Prospective operations of laws (Art.4, Civil Code)

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 § Constitution. Article III, Section 22
§ Section 22. No ex post facto law or bill of attainder shall be enacted. Civil Code, Article 4
§ Article 4. Laws shall have no retroactive effect, unless the contrary is provided.
§ EO No. 292, Section 19. Prospectivity. – Laws shall have prospective effect unless the
contrary is expressly provided.
§ RPC Art 22. Retroactive effect of Penal Laws. – Penal laws shall have a retroactive effect
insofar as they favor the person guilty of a felony, who is not a habitual criminal.

1. No effect on pending actions

2. Exception to prospectivity
a. Procedural Laws
b. Express provision on retroactive application (Art. 4, supra)
c. Penal Laws favorable to accused (Art. 22, RPC)
i. If already convicted
ii. If detention prisoner (case is still pending)
h. Language of the Statute Shall
prevail § 1987 Constitution, Article XIV, Sections6-8
à Section 6. The national language of the Philippines is Filipino. As it evolves, it shall
be further developed and enriched on the basis of existing Philippine and other
languages.
Subject to provisions of law and as the Congress may deem appropriate, the
Government shall take steps to initiate and sustain the use of Filipino as a medium
of official communication and as language of instruction in the educational system.
à Section 7. For purposes of communication and instruction, the official languages of
the Philippines are Filipino and, until otherwise provided by law, English.
The regional languages are the auxiliary official languages in the regions and shall
serve as auxiliary media of instruction therein.
Spanish and Arabic shall be promoted on a voluntary and optional basis.
à Section 8. This Constitution shall be promulgated in Filipino and English and shall be
translated into major regional languages, Arabic, and Spanish.
i. Manner of Computing Time Civil
Code à Art 13,, Civil Code:
When the laws speak of years, months, days or nights, it shall be understood that
years are of three hundred sixty-five days each; months, of thirty days; days, of
twenty-four hours; and nights from sunset to sunrise.
If months are designated by their name, they shall be computed by the number of
days which they respectively have.
In computing a period, the first day shall be excluded, and the last day included.
j. Territorial Extent of Operation
1987, Article 1
§ ARTICLE 1 NATIONAL TERRITORY
à The national territory comprises the Philippine archipelago, with all the islands and
waters embraced therein, and all other territories over which the Philippines has
sovereignty or jurisdiction, consisting of its terrestrial, fluvial and aerial domains,
including its territorial sea, the seabed, the subsoil, the insular shelves, and other
submarine areas. The waters around, between, and connecting the islands of the
archipelago, regardless of their breadth and dimensions, form part of the internal
waters of the Philippines.
§ Civil Code, Article 14&15
à Art. 14. Penal laws and those of public security and safety shall be obligatory upon
all who live or sojourn in the Philippine territory, subject to the principles of public
international law and to treaty stipulations.

à Art. 15. Laws relating to family rights and duties, or to the status, condition and
legal capacity of persons are binding upon citizens of the Philippines, even though
living abroad.
§ RPC, Article 2
à Application of its provisions. — Except as provided in the treaties and laws of
preferential application, the provisions of this Code shall be enforced not only within
the Philippine Archipelago, including its atmosphere, its interior waters and
maritime zone, but also outside of its jurisdiction, against those who:
1. Should commit an offense while on a Philippine ship or airship
2. Should forge or counterfeit any coin or currency note of the Philippine
Islands or obligations and securities issued by the Government of the
Philippine Islands;
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 3. Should be liable for acts connected with the introduction into these
islands of the obligations and securities mentioned in the presiding
number;
4. While being public officers or employees, should commit an offense in
the exercise of their functions; or
5. Should commit any of the crimes against national security and the law of
nations, defined in Title One of Book Two of this Code.

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