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Republic of the PhilippinesSUPREME COURT

ManilaEN BANC

G.R. No. L-8238 May 25, 1955CESAR M. CARANDANG,petitioner,

vs.VICENTE SANTIAGO, in his capacity as Judge of the Court of First Instance of Manila and

TOMAS VALENTON, Sr. and TOMAS VALENTON, Jr.,respondents.S. Mejia-Panganiban for petitioner.

Evangelista and Valenton for respondents.LABRADOR, J .:This is a petition forcertiorari against Honorable Vicente Santiago, Judge of the Court of FirstInstance of Manila, to annul his order in Civil Case No. 21173, entitled Cesar M.Carandangvs. Tomas Valenton, Sr. et al., suspending the trial of said civil case to await theresult of the criminal Case No. 534, Court of First Instance of Batangas. In this criminal case,Tomas Valenton, Jr. was found guilty of the crime of frustrated homicide committed against theperson of Cesar Carandang, petitioner herein. Tomas Valenton, Jr. appealed the decision to theCourt of Appeals where the case is now pending.The decision of the Court of First Instance of Batangas in the criminal case was rendered onSeptember 1, 1953 and petitioner herein filed a complaint in the Court of First Instance of Manilato recover from the defendant Tomas Valenton, Jr. and his parents, damages, both actual andmoral, for the bodily injuries received by him on occasion of the commission of the crime offrustrated homicide by said accused Tomas Valenton Jr. After the defendants submitted theiranswer, they presented a motion to suspend the trial of the civil case, pending the termination ofthe criminal case against Tomas Valenton, Jr. in the Court of Appeals. The judge ruled that the

trial of the civil action must await the result of the criminal case on appeal. A motion forreconsideration was submitted, but the court denied the same; hence this petition forcertiorari.Petitioner invokes Article 33 of the new Civil Code, which is as follows:

In cases of defamation, fraud and physical injuries, a civil action for damages, entirelyseparate and distinct from the criminal action, may be brought by the injured party.Such civil action shall proceed independently of the criminal prosecution, and shallrequire only a preponderance of evidence.

The Code Commission itself states that the civil action allowed (under Article 33) is similar to theaction in tort for libel or slander and assault and battery under American law (Reports of theCode Commission, pp. 46-47). But respondents argue that the term "physical injuries" is used todesignate a specific crime defined in the Revised Penal Code, and therefore said term should beunderstood in its peculiar and technical sense, in accordance with the rules statutoryconstruction (Sec. 578, 59 C. J. 979).In the case at bar, the accused was charged with and convicted of the crime of frustratedhomicide, and while it was found in the criminal case that a wound was inflicted by the defendant

on the body of the petitioner herein Cesar Carandang, which wound is bodily injury, the crimecommitted is not physical injuries but frustrated homicide, for the reason that the infliction of thewound is attended by the intent to kill. So the question arises whether the term "physical injuries"used in Article 33 means physical injuries in the Revised Penal Code only, or any physical injuryor bodily injury, whether inflicted with intent to kill or not.The Article in question uses the words "defamation", "fraud" and "physical injuries." Defamationand fraud are used in their ordinary sense because there are no specific provisions in theRevised Penal Code using these terms as means of offenses defined therein, so that these twoterms defamation and fraud must have been used not to impart to them any technical meaningin the laws of the Philippines, but in their generic sense. With this apparent circumstance inmind, it is evident that the term "physical injuries" could not have been used in its specific senseas a crime defined in the Revised Penal Code, for it is difficult to believe that the CodeCommission would have used terms in the same article some in their general and another inits technical sense. In other words, the term "physical injuries" should be understood to meanbodily injury, not the crime of physical injuries, because the terms used with the latter are

general terms. In any case the Code Commission recommended that the civil for assault andbattery in American Law, and this recommendation must have been accepted by the Legislature

when it approved the article intact as recommended. If the intent has been to establish a civilaction for the bodily harm received by the complainant similar to the civil action for assault andbattery, as the Code Commission states, the civil action should lie whether the offensecommitted is that of physical injuries, or frustrated homicide, or attempted homicide, or evendeath.

A parallel case arose in that of Bixbyvs Sioux City, 164 N. W. 641, 643. In that case, theappellant sought to take his case from the scope of the statute by pointing out that inasmuch asnotice is required where the cause of action is foundedon injury to the person, it has noapplication when the damages sought are for the death of the person.The court ruled that aclaim to recover for death resulting from personal injury is as certainly "founded on injury to theperson" as would be a claim to recover damages for a non-fatal injury resulting in a crippledbody.For the foregoing considerations, we find that the respondent judge committed an error insuspending the trial of the civil case, and his order to that affect is hereby revoked, and he ishereby ordered to proceed with the trial of said civil case without awaiting the result of thepending criminal case. With costs against the defendant-appellees.

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Republic of the Philippines

SUPREME COURTManila

EN BANCG.R. No. L-5 September 17, 1945

CO KIM CHAM (alias CO KIM CHAM),petitioner,vs.

EUSEBIO VALDEZ TAN KEH and ARSENIO P. DIZON, Judge of First Instance ofManila, respondents.1

Marcelino Lontok for petitioner.

P. A. Revilla for respondent Valdez Tan Keh.Respondent Judge Dizon in his own behalf.

FERIA, J .:This petition for mandamusin which petitioner prays that the respondent judge of the lower courtbe ordered to continue the proceedings in civil case No. 3012 of said court , which were initiatedunder the regime of the so-called Republic of the Philippines established during the Japanesemilitary occupation of these Islands.The respondent judge refused to take cognizance of and continue the proceedings in said caseon the ground that the proclamation issued on October 23, 1944, by General Douglas MacArthurhad the effect of invalidating and nullifying all judicial proceedings and judgements of the court ofthe Philippines under the Philippine Executive Commission and the Republic of the Philippinesestablished during the Japanese military occupation, and that, furthermore, the lower courtshave no jurisdiction to take cognizance of and continue judicial proceedings pending in thecourts of the defunct Republic of the Philippines in the absence of an enabling law granting suchauthority. And the same respondent, in his answer and memorandum filed in this Court,

contends that the government established in the Philippines during the Japanese occupationwere no de factogovernments.On January 2, 1942, the Imperial Japanese Forces occupied the City of Manila, and on the nextday their Commander in Chief proclaimed "the Military Administration under law over the districtsoccupied by the Army." In said proclamation, it was also provided that "so far as the Military

Administration permits, all the laws now in force in the Commonwealth, as well as executive andjudicial institutions, shall continue to be effective for the time being as in the past," and "all publicofficials shall remain in their present posts and carry on faithfully their duties as before."

A civil government or central administration organization under the name of "PhilippineExecutive Commission was organized by Order No. 1 issued on January 23, 1942, by theCommander in Chief of the Japanese Forces in the Philippines, and Jorge B. Vargas, who wasappointed Chairman thereof, was instructed to proceed to the immediate coordination of theexisting central administrative organs and judicial courts, based upon what had existedtherefore, with approval of the said Commander in Chief, who was to exercise jurisdiction over

judicial courts.

The Chairman of the Executive Commission, as head of the central administrative organization,issued Executive Orders Nos. 1 and 4, dated January 30 and February 5, 1942, respectively, inwhich the Supreme Court, Court of Appeals, Courts of First Instance, and the justices of thepeace and municipal courts under the Commonwealth were continued with the same jurisdiction,in conformity with the instructions given to the said Chairman of the Executive Commission bythe Commander in Chief of Japanese Forces in the Philippines in the latter's Order No. 3 ofFebruary 20, 1942, concerning basic principles to be observed by the Philippine ExecutiveCommission in exercising legislative, executive and judicial powers. Section 1 of said Orderprovided that "activities of the administration organs and judicial courts in the Philippines shall bebased upon the existing statutes, orders, ordinances and customs. . . ."On October 14, 1943, the so-called Republic of the Philippines was inaugurated, but nosubstantial change was effected thereby in the organization and jurisdiction of the differentcourts that functioned during the Philippine Executive Commission, and in the laws theyadministered and enforced.On October 23, 1944, a few days after the historic landing in Leyte, General Douglas MacArthur

issued a proclamation to the People of the Philippines which declared:

1. That the Government of the Commonwealth of the Philippines is, subject to thesupreme authority of the Government of the United States, the sole and onlygovernment having legal and valid jurisdiction over the people in areas of thePhilippines free of enemy occupation and control;2. That the laws now existing on the statute books of the Commonwealth of thePhilippines and the regulations promulgated pursuant thereto are in full force andeffect and legally binding upon the people in areas of the Philippines free of enemyoccupation and control; and3. That all laws, regulations and processes of any other government in the Philippinesthan that of the said Commonwealth are null and void and without legal effect in areasof the Philippines free of enemy occupation and control.

On February 3, 1945, the City of Manila was partially liberated and on February 27, 1945,General MacArthur, on behalf of the Government of the United States, solemnly declared "thefull powers and responsibilities under the Constitution restored to the Commonwealth whoseseat is here established as provided by law."In the light of these facts and events of contemporary history, the principal questions to beresolved in the present case may be reduced to the following:(1) Whether the judicial acts andproceedings of the court existing in the Philippines under the Philippine Executive Commissionand the Republic of the Philippines were good and valid and remained so even after theliberation or reoccupation of the Philippines by the United States and Filipino forces; (2)Whetherthe proclamation issued on October 23, 1944, by General Douglas MacArthur, Commander inChief of the United States Army, in which he declared "that all laws, regulations and processesof any of the government in the Philippines than that of the said Commonwealth are null andvoid and without legal effect in areas of the Philippines free of enemy occupation and control,"has invalidated all judgements and judicial acts and proceedings of the said courts; and (3) If thesaid judicial acts and proceedings have not been invalidated by said proclamation, whether the

present courts of the Commonwealth, which were the same court existing prior to, and continuedduring, the Japanese military occupation of the Philippines, may continue those proceedingspending in said courts at the time the Philippines were reoccupied and liberated by the UnitedStates and Filipino forces, and the Commonwealth of the Philippines were reestablished in theIslands.We shall now proceed to consider the first question, that is, whether or not under the rules ofinternational law the judicial acts and proceedings of the courts established in the Philippinesunder the Philippine Executive Commission and the Republic of the Philippines were good andvalid and remained good and valid even after the liberation or reoccupation of the Philippines bythe United States and Filipino forces.1. It is a legal truism in political and international law that all acts and proceedings of thelegislative, executive, and judicial departments of a de factogovernment are good and valid. Thequestion to be determined is whether or not the governments established in these Islands underthe names of the Philippine Executive Commission and Republic of the Philippines during theJapanese military occupation or regime were de factogovernments. If they were, the judicial

acts and proceedings of those governments remain good and valid even after the liberation orreoccupation of the Philippines by the American and Filipino forces.There are several kinds of de factogovernments. The first, or government de facto in a properlegal sense, is that government that gets possession and control of, or usurps, by force or by thevoice of the majority, the rightful legal governments and maintains itself against the will of thelatter, such as the government of England under the Commonwealth, first by Parliament andlater by Cromwell as Protector. The second is that which is established and maintained bymilitary forces who invade and occupy a territory of the enemy in the course of war, and which isdenominated a government of paramount force, as the cases of Castine, in Maine, which wasreduced to British possession in the war of 1812, and Tampico, Mexico, occupied during the warwith Mexico, by the troops of the United States. And the third is that established as anindependent government by the inhabitants of a country who rise in insurrection against theparent state of such as the government of the Southern Confederacy in revolt not concerned inthe present case with the first kind, but only with the second and third kinds of defactogovernments.

Speaking of government "de facto" of the second kind, the Supreme Court of the United States,in the case of Thorington vs.Smith (8 Wall., 1), said: "But there is another description of

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government, called also by publicists a government de facto, but which might, perhaps, be moreaptly denominated a government of paramount force. Its distinguishing characteristics are (1),that its existence is maintained by active military power with the territories, and against therightful authority of an established and lawful government; and (2), that while it exists itnecessarily be obeyed in civil matters by private citizens who, by acts of obedience rendered insubmission to such force, do not become responsible, or wrongdoers, for those acts, though notwarranted by the laws of the rightful government. Actual governments of this sort are establishedover districts differing greatly in extent and conditions. They are usually administered directly bymilitary authority, but they may be administered, also, civil authority, supported more or lessdirectly by military force. . . . One example of this sort of government is found in the case ofCastine, in Mine, reduced to British possession in the war of 1812 . . . U. S. vs.Rice (4 Wheaton,253). A like example is found in the case of Tampico, occupied during the war with Mexico, bythe troops of the United States . . . Fleming vs.Page (9 Howard, 614). These were cases oftemporary possessions of territory by lawfull and regular governments at war with the country ofwhich the territory so possessed was part."The powers and duties of de factogovernments of this description are regulated in Section III ofthe Hague Conventions of 1907, which is a revision of the provisions of the Hague Conventionsof 1899 on the same subject of said Section III provides "the authority of the legislative powerhaving actually passed into the hands of the occupant, the latter shall take steps in his power toreestablish and insure, as far as possible, public order and safety, while respecting, unlessabsolutely prevented, the laws in force in the country."

According to the precepts of the Hague Conventions, as the belligerent occupant has the rightand is burdened with the duty to insure public order and safety during his military occupation, hepossesses all the powers of a de factogovernment, and he can suspended the old laws andpromulgate new ones and make such changes in the old as he may see fit, but he is enjoined torespect, unless absolutely prevented by the circumstances prevailing in the occupied territory,

the municipal laws in force in the country, that is, those laws which enforce public order andregulate social and commercial life of the country. On the other hand, laws of a political nature oraffecting political relations, such as, among others, the right of assembly, the right to bear arms,the freedom of the press, and the right to travel freely in the territory occupied, are considered assuspended or in abeyance during the military occupation. Although the local and civiladministration of justice is suspended as a matter of course as soon as a country is militarilyoccupied, it is not usual for the invader to take the whole administration into his own hands. Inpractice, the local ordinary tribunals are authorized to continue administering justice; and judgesand other judicial officers are kept in their posts if they accept the authority of the belligerentoccupant or are required to continue in their positions under the supervision of the military or civilauthorities appointed, by the Commander in Chief of the occupant. These principles and practicehave the sanction of all publicists who have considered the subject, and have been asserted bythe Supreme Court and applied by the President of the United States.The doctrine upon this subject is thus summed up by Halleck, in his work on International Law(Vol. 2, p. 444): "The right of one belligerent to occupy and govern the territory of the enemy

while in its military possession, is one of the incidents of war, and flows directly from the right toconquer. We, therefore, do not look to the Constitution or political institutions of the conqueror,for authority to establish a government for the territory of the enemy in his possession, during itsmilitary occupation, nor for the rules by which the powers of such government are regulated andlimited. Such authority and such rules are derived directly from the laws war, as established bythe usage of the of the world, and confirmed by the writings of publicists and decisions of courtsin fine, from the law of nations. . . . The municipal laws of a conquered territory, or the lawswhich regulate private rights, continue in force during military occupation, excepts so far as theyare suspended or changed by the acts of conqueror. . . . He, nevertheless, has all the powers ofa de factogovernment, and can at his pleasure either change the existing laws or make newones."

And applying the principles for the exercise of m ilitary authority in an occupied t erritory, whichwere later embodied in the said Hague Conventions, President McKinley, in his executive orderto the Secretary of War of May 19,1898, relating to the occupation of the Philippines by UnitedStates forces, said in part: "Though the powers of the military occupant are absolute and

supreme, and immediately operate upon the political condition of the inhabitants, the municipallaws of the conquered territory, such as affect private rights of person and property and provide

for the punishment of crime, are considered as continuing in force, so far as they are compatiblewith the new order of things, until they are suspended or superseded by the occupyingbelligerent; and in practice they are not usually abrogated, but are allowed to remain in force andto be administered by the ordinary tribunals, substantially as they were before the occupation.This enlightened practice is, so far as possible, to be adhered to on the present occasion. The

judges and the other officials connected with the administration of justice may, if they accept theauthority of the United States, continue to administer the ordinary law of the land as betweenman and man under the supervision of the American Commander in Chief." (Richardson'sMessages and Papers of President, X, p. 209.)

As to "de facto" government of the third kind, the Supreme Court of the United States, in thesame case of Thorington vs.Smith, supra, recognized the government set up by theConfederate States as a de factogovernment. In that case, it was held that "the centralgovernment established for the insurgent States differed from the temporary governments atCastine and Tampico in the circumstance that its authority did no originate in lawful acts ofregular war; but it was not, on the account, less actual or less supreme. And we think that it mustbe classed among the governments of which these are examples. . . .In the case of William vs.Bruffy (96 U. S. 176, 192), the Supreme Court of the United States,discussing the validity of the acts of the Confederate States, said: "The same general form ofgovernment, the same general laws for the administration of justice and protection of privaterights, which had existed in the States prior to the rebellion, remained during its continuance andafterwards. As far as the Acts of the States do not impair or tend to impair the supremacy of thenational authority, or the just rights of citizens under the Constitution, they are, in general, to betreated as valid and binding. As we said in Horn vs.Lockhart (17 Wall., 570; 21 Law. ed., 657):"The existence of a state of insurrection and war did not loosen the bonds of society, or do awaywith civil government or the regular administration of the laws. Order was to be preserved, policeregulations maintained, crime prosecuted, property protected, contracts enforced, marriages

celebrated, estates settled, and the transfer and descent of property regulated, precisely as inthe time of peace. No one, that we are aware of, seriously questions the validity of judicial orlegislative Acts in the insurrectionary States touching these and kindered subjects, where theywere not hostile in their purpose or mode of enforcement to the authority of the NationalGovernment, and did not impair the rights of citizens under the Constitution'. The same doctrinehas been asserted in numerous other cases."

And the same court, in the case of Baldy vs.Hunter (171 U. S., 388, 400), held: "That whatoccured or was done in respect of such matters under the authority of the laws of these local defactogovernments should not be disregarded or held to be invalid merely because thosegovernments were organized in hostility to the Union established by the national Constitution;this, because the existence of war between the United States and the Confederate States didnot relieve those who are within the insurrectionary lines from the necessity of civil obedience,nor destroy the bonds of society nor do away with civil government or the regular administrationof the laws, and because transactions in the ordinary course of civil society as organized withinthe enemy's territory although they may have indirectly or remotely promoted the ends of the de

factoor unlawful government organized to effect a dissolution of the Union, were without blame'except when proved to have been entered into with actualintent to further invasion orinsurrection:'" and "That judicial and legislative acts in the respective states composing the so-called Confederate States should be respected by the courts if they were not hostile in theirpurpose or mode of enforcement to the authority of the National Government, and did not impairthe rights of citizens under the Constitution."In view of the foregoing, it is evident that the Philippine Executive Commission, which wasorganized by Order No. 1, issued on January 23, 1942, by the Commander of the Japaneseforces, was a civil government established by the military forces of occupation and thereforea de factogovernment of the second kind. It was not different from the government establishedby the British in Castine, Maine, or by the United States in Tampico, Mexico. As Halleck says,"The government established over an enemy's territory during the military occupation mayexercise all the powers given by the laws of war to the conqueror over the conquered, and issubject to all restrictions which that code imposes. It is of little consequence whether suchgovernment be called a military or civil government. Its character is the same and the source of

its authority the same. In either case it is a government imposed by the laws of war, and so far itconcerns the inhabitants of such territory or the rest of the world, those laws alone determine the

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legality or illegality of its acts." (Vol. 2, p. 466.) The fact that the Philippine ExecutiveCommission was a civil and not a military government and was run by Filipinos and not byJapanese nationals, is of no consequence. In 1806, when Napoleon occupied the greater part ofPrussia, he retained the existing administration under the general direction of a french official(Langfrey History of Napoleon, 1, IV, 25); and, in the same way, the Duke of Willington, oninvading France, authorized the local authorities to continue the exercise of their functions,apparently without appointing an English superior. (Wellington Despatches, XI, 307.). TheGermans, on the other hand, when they invaded France in 1870, appointed their own officials, atleast in Alsace and Lorraine, in every department of administration and of every rank. (Calvo,pars. 2186-93; Hall, International Law, 7th ed., p. 505, note 2.)The so-called Republic of the Philippines, apparently established and organized as a sovereign

state independent from any other government by the Filipino people, was, in truth and reality, agovernment established by the belligerent occupant or the Japanese forces of occupation. It wasof the same character as the Philippine Executive Commission, and the ultimate source of itsauthority was the same the Japanese military authority and government. As GeneralMacArthur stated in his proclamation of October 23, 1944, a portion of which has been alreadyquoted, "under enemy duress, a so-called government styled as the 'Republic of the Philippines'was established on October 14, 1943, based upon neither the free expression of the people'swill nor the sanction of the Government of the United States." Japan had no legal power to grantindependence to the Philippines or transfer the sovereignty of the United States to, or recognizethe latent sovereignty of, the Filipino people, before its military occupation and possession of theIslands had matured into an absolute and permanent dominion or sovereignty by a treaty ofpeace or other means recognized in the law of nations. For it is a well-established doctrine inInternational Law, recognized in Article 45 of the Hauge Conventions of 1907 (which prohibitscompulsion of the population of the occupied territory to swear allegiance to the hostile power),the belligerent occupation, being essentially provisional, does not serve to transfer sovereignty

over the territory controlled although thede juregovernment is during the period of occupancydeprived of the power to exercise its rights as such. (Thirty Hogshead of Sugar vs.Boyle, 9Cranch, 191; United States vs.Rice, 4 Wheat., 246; Fleming vs.Page, 9 Howard, 603;Downes vs.Bidwell, 182 U. S., 345.) The formation of the Republic of the Philippines was ascheme contrived by Japan to delude the Filipino people into believing in the apparentmagnanimity of the Japanese gesture of transferring or turning over the rights of governmentinto the hands of Filipinos. It was established under the mistaken belief that by doing so, Japanwould secure the cooperation or at least the neutrality of the Filipino people in her war againstthe United States and other allied nations.Indeed, even if the Republic of the Philippines had been established by the free will of theFilipino who, taking advantage of the withdrawal of the American forces from the Islands, andthe occupation thereof by the Japanese forces of invasion, had organized an independentgovernment under the name with the support and backing of Japan, such government wouldhave been considered as one established by the Filipinos in insurrection or rebellion against theparent state or the Unite States. And as such, it would have been a de factogovernment similar

to that organized by the confederate states during the war of secession and recognized as suchby the by the Supreme Court of the United States in numerous cases, notably those ofThorington vs.Smith, Williams vs.Bruffy, and Badlyvs.Hunter, above quoted; and similar to theshort-lived government established by the Filipino insurgents in the Island of Cebu during theSpanish-American war, recognized as a de facto government by the Supreme Court of theUnited States in the case of McCleod vs.United States (299 U. S., 416). According to the factsin the last-named case, the Spanish forces evacuated the Island of Cebu on December 25,1898, having first appointed a provisional government, and shortly afterwards, the Filipinos,formerly in insurrection against Spain, took possession of the Islands and established a republic,governing the Islands until possession thereof was surrendered to the United States on February22, 1898. And the said Supreme Court held in that case that "such government was of the classof de factogovernments described in I Moore's International Law Digest, S 20, . . . 'called alsoby publicists a government de facto, but which might, perhaps, be more aptly denominated agovernment of paramount force . . '." That is to say, that the government of a country inpossession of belligerent forces in insurrection or rebellion against the parent state, rests upon

the same principles as that of a territory occupied by the hostile army of an enemy at regular warwith the legitimate power.

The governments by the Philippine Executive Commission and the Republic of the Philippinesduring the Japanese military occupation being de factogovernments, it necessarily follows thatthe judicial acts and proceedings of the courts of justice of those governments, which are not ofa political complexion, were good and valid, and, by virtue of the well-known principle ofpostliminy (postliminium) in international law, remained good and valid after the liberation orreoccupation of the Philippines by the American and Filipino forces under the leadership ofGeneral Douglas MacArthur. According to that well-known principle in international law, the factthat a territory which has been occupied by an enemy comes again into the power of itslegitimate government of sovereignty, "does not, except in a very few cases, wipe out the effectsof acts done by an invader, which for one reason or another it is within his competence to do.Thus judicial acts done under his control, when they are not of a political complexion,

administrative acts so done, to the extent that they take effect during the continuance of hiscontrol, and the various acts done during the same time by private persons under the sanction ofmunicipal law, remain good. Were it otherwise, the whole social life of a community would beparalyzed by an invasion; and as between the state and the individuals the evil would bescarcely less, it would be hard for example that payment of taxes made under duress shouldbe ignored, and it would be contrary to the general interest that the sentences passed uponcriminals should be annulled by the disappearance of the intrusive government ." (Hall,International Law, 7th ed., p. 518.) And when the occupation and the abandonment have beeneach an incident of the same war as in the present case, postliminy applies, even though theoccupant has acted as conqueror and for the time substituted his own sovereignty as theJapanese intended to do apparently in granting independence to the Philippines andestablishing the so-called Republic of the Philippines. (Taylor, International Law, p. 615.)That not only judicial but also legislative acts of de factogovernments, which are not of a politicalcomplexion, are and remain valid after reoccupation of a territory occupied by a belligerentoccupant, is confirmed by the Proclamation issued by General Douglas MacArthur on October

23, 1944, which declares null and void all laws, regulations and processes of the governmentsestablished in the Philippines during the Japanese occupation, for it would not have beennecessary for said proclamation to abrogate them if they were invalid ab initio.2. The second question hinges upon the interpretation of the phrase "processes of any othergovernment" as used in the above-quoted proclamation of General Douglas MacArthur ofOctober 23, 1944 that is, whether it was the intention of the Commander in Chief of the

American Forces to annul and void thereby all judgments and judicial proceedings of the courtsestablished in the Philippines during the Japanese military occupation.The phrase "processes of any other government" is broad and may refer not only to the judicialprocesses, but also to administrative or legislative, as well as constitutional, processes of theRepublic of the Philippines or other governmental agencies established in the Islands during theJapanese occupation. Taking into consideration the fact that, as above indicated, according tothe well-known principles of international law all judgements and judicial proceedings, which arenot of a political complexion, of the de factogovernments during the Japanese militaryoccupation were good and valid before and remained so after the occupied territory had come

again into the power of the titular sovereign, it should be presumed that it was not, and could nothave been, the intention of General Douglas MacArthur, in using the phrase "processes of anyother government" in said proclamation, to refer to judicial processes, in violation of saidprinciples of international law. The only reasonable construction of the said phrase is that itrefers to governmental processes other than judicial processes of court proceedings, foraccording to a well-known rule of statutory construction, set forth in 25 R. C. L., p. 1028, "astatute ought never to be construed to violate the law of nations if any other possibleconstruction remains."It is true that the commanding general of a belligerent army of occupation, as an agent of hisgovernment, may not unlawfully suspend existing laws and promulgate new ones in theoccupied territory, if and when the exigencies of the military occupation demand such action. Buteven assuming that, under the law of nations, the legislative power of a commander in chief ofmilitary forces who liberates or reoccupies his own territory which has been occupied by anenemy, during the military and before the restoration of the civil regime, is as broad as that of thecommander in chief of the military forces of invasion and occupation (although the exigencies of

military reoccupation are evidently less than those of occupation), it is to be presumed thatGeneral Douglas MacArthur, who was acting as an agent or a representative of the Government

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and the President of the United States, constitutional commander in chief of the United StatesArmy, did not intend to act against the principles of the law of nations asserted by the SupremeCourt of the United States from the early period of its existence, applied by the Presidents of theUnited States, and later embodied in the Hague Conventions of 1907, as above indicated. It isnot to be presumed that General Douglas MacArthur, who enjoined in the same proclamation ofOctober 23, 1944, "upon the loyal citizens of the Philippines full respect and obedience to theConstitution of the Commonwealth of the Philippines," should not only reverse the internationalpolicy and practice of his own government, but also disregard in the same breath the provisionsof section 3, Article II, of our Constitution, which provides that "The Philippines renounces war asan instrument of national policy, and adopts the generally accepted principles of international lawas part of the law of the Nation."

Moreover, from a contrary construction great inconvenience and public hardship would result,and great public interests would be endangered and sacrificed, for disputes or suits alreadyadjudged would have to be again settled accrued or vested rights nullified, sentences passed oncriminals set aside, and criminals might easily become immune for evidence against them mayhave already disappeared or be no longer available, especially now that almost all court recordsin the Philippines have been destroyed by fire as a consequence of the war. And it is anotherwell-established rule of statutory construction that where great inconvenience will result from aparticular construction, or great public interests would be endangered or sacrificed, or greatmischief done, such construction is to be avoided, or the court ought to presume that suchconstruction was not intended by the makers of the law, unless required by clear andunequivocal words. (25 R. C. L., pp. 1025, 1027.)The mere conception or thought of possibility that the titular sovereign or his representativeswho reoccupies a territory occupied by an enemy, may set aside or annul all the judicial acts orproceedings of the tribunals which the belligerent occupant had the right and duty to establish inorder to insure public order and safety during military occupation, would be sufficient to paralyze

the social life of the country or occupied territory, for it would have to be expected that litigantswould not willingly submit their litigation to courts whose judgements or decisions mayafterwards be annulled, and criminals would not be deterred from committing crimes or offensesin the expectancy that they may escaped the penalty if judgments rendered against them maybe afterwards set aside.That the proclamation has not invalidated all the judgements and proceedings of the courts of

justice during the Japanese regime, is impliedly confirmed by Executive Order No. 37, which hasthe force of law, issued by the President of the Philippines on March 10, 1945, by virtue of theemergency legislative power vested in him by the Constitution and the laws of theCommonwealth of the Philippines. Said Executive order abolished the Court of Appeals, andprovided "that all case which have heretofore been duly appealed to the Court of Appeals shallbe transmitted to the Supreme Court final decision." This provision impliedly recognizes that the

judgments and proceedings of the courts during the Japanese military occupation have not beeninvalidated by the proclamation of General MacArthur of October 23, because the said Orderdoes not say or refer to cases which have been duly appealed to said court prior to the

Japanese occupation, but to cases which had therefore, that is, up to March 10, 1945, been dulyappealed to the Court of Appeals; and it is to be presumed that almost all, if not all, appealedcases pending in the Court of Appeals prior to the Japanese military occupation of Manila onJanuary 2, 1942, had been disposed of by the latter before the restoration of the CommonwealthGovernment in 1945; while almost all, if not all, appealed cases pending on March 10, 1945, inthe Court of Appeals were from judgments rendered by the Court of First Instance during theJapanese regime.The respondent judge quotes a portion of Wheaton's International Law which say: "Moreoverwhen it is said that an occupier's acts are valid and under international law should not beabrogated by the subsequent conqueror, it must be remembered that no crucial instances existto show that if his acts should be reversed, any international wrong would be committed. Whatdoes happen is that most matters are allowed to stand by the restored government, but thematter can hardly be put further than this." (Wheaton, International Law, War, 7th English editionof 1944, p. 245.) And from this quotion the respondent judge "draws the conclusion that whetherthe acts of the occupant should be considered valid or not, is a question that is up to the

restored government to decide; that there is no rule of international law that denies to therestored government to decide; that there is no rule of international law that denies to the

restored government the right of exercise its discretion on the matter, imposing upon it in itsstead the obligation of recognizing and enforcing the acts of the overthrown government."There is doubt that the subsequent conqueror has the right to abrogate most of the acts of theoccupier, such as the laws, regulations and processes other than judicial of the governmentestablished by the belligerent occupant. But in view of the fact that the proclamation uses thewords "processes of any other government" and not "judicial processes" prisely, it is notnecessary to determine whether or not General Douglas MacArthur had power to annul and setaside all judgments and proceedings of the courts during the Japanese occupation. Thequestion to be determined is whether or not it was his intention, as representative of thePresident of the United States, to avoid or nullify them. If the proclamation had, expressly or bynecessary implication, declared null and void the judicial processes of any other government, it

would be necessary for this court to decide in the present case whether or not General DouglasMacArthur had authority to declare them null and void. But the proclamation did not so provide,undoubtedly because the author thereof was fully aware of the limitations of his powers asCommander in Chief of Military Forces of liberation or subsequent conqueror.Not only the Hague Regulations, but also the principles of international law, as they result fromthe usages established between civilized nations, the laws of humanity and the requirements ofthe public of conscience, constitute or from the law of nations. (Preamble of the HagueConventions; Westlake, International Law, 2d ed., Part II, p. 61.) Article 43, section III, of theHague Regulations or Conventions which we have already quoted in discussing the firstquestion, imposes upon the occupant the obligation to establish courts; and Article 23 (h),section II, of the same Conventions, which prohibits the belligerent occupant "to declare . . .suspended . . . in a Court of Law the rights and action of the nationals of the hostile party,"forbids him to make any declaration preventing the inhabitants from using their courts to assertor enforce their civil rights. (Decision of the Court of Appeals of England in the case ofPorter vs.Fruedenburg, L.R. [1915], 1 K.B., 857.) If a belligerent occupant is required to

establish courts of justice in the territory occupied, and forbidden to prevent the nationals thereoffrom asserting or enforcing therein their civil rights, by necessary implication, the militarycommander of the forces of liberation or the restored government is restrained from nullifying orsetting aside the judgments rendered by said courts in their litigation during the period ofoccupation. Otherwise, the purpose of these precepts of the Hague Conventions would bethwarted, for to declare them null and void would be tantamount to suspending in said courts theright and action of the nationals of the territory during the military occupation thereof by theenemy. It goes without saying that a law that enjoins a person to do something will not at thesame time empower another to undo the same. Although the question whether the President orcommanding officer of the United States Army has violated restraints imposed by theconstitution and laws of his country is obviously of a domestic nature, yet, in construing andapplying limitations imposed on the executive authority, the Supreme Court of the United States,in the case of Ochoa, vs.Hernandez (230 U.S., 139), has declared that they "arise from generalrules of international law and from fundamental principles known wherever the American flagflies."

In the case of Raymond vs. Thomas (91 U.S., 712), a special order issued by the officer incommand of the forces of the United States in South Carolina after the end of the Civil War,wholly annulling a decree rendered by a court of chancery in that state in a case within its

jurisdiction, was declared void, and not warranted by the acts approved respectively March 2,1867 (14 Stat., 428), and July 19 of the same year (15 id., 14), which defined the powers andduties of military officers in command of the several states then lately in rebellion. In the courseof its decision the court said; "We have looked carefully through the acts of March 2, 1867 andJuly 19, 1867. They give very large governmental powers to the military commandersdesignated, within the States committed respectively to their jurisdiction; but we have foundnothing to warrant the order here in question. . . . The clearest language would be necessary tosatisfy us that Congress intended that the power given by these acts should be so exercised. . . .It was an arbitrary stretch of authority, needful to no good end that can be imagined. WhetherCongress could have conferred the power to do such an act is a question we are not called uponto consider. It is an unbending rule of law that the exercise of military power, where the rights ofthe citizen are concerned, shall never be pushed beyond what the exigency requires.

(Mithell vs.Harmony, 13 How., 115; Warden vs.Bailey, 4 Taunt., 67; Fabrigas vs.Moysten, 1

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Cowp., 161; s.c., 1 Smith's L.C., pt. 2, p. 934.) Viewing the subject before us from the standpointindicated, we hold that the order was void."It is, therefore, evident that the proclamation of General MacArthur of October 23, 1944, whichdeclared that "all laws, regulations and processes of any other government in the Philippinesthan that of the said Commonwealth are null and void without legal effect in areas of thePhilippines free of enemy occupation and control," has not invalidated the judicial acts andproceedings, which are not a political complexion, of the courts of justice in the Philippines thatwere continued by the Philippine Executive Commission and the Republic of the Philippinesduring the Japanese military occupation, and that said judicial acts and proceedings were goodand valid before and now good and valid after the reoccupation of liberation of the Philippines bythe American and Filipino forces.

3. The third and last question is whether or not the courts of the Commonwealth, which are thesame as those existing prior to, and continued during, the Japanese military occupation by thePhilippine Executive Commission and by the so-called Republic of the Philippines, have

jurisdiction to continue now the proceedings in actions pending in said courts at the time thePhilippine Islands were reoccupied or liberated by the American and Filipino forces, and theCommonwealth Government was restored.

Although in theory the authority the authority of the local civil and judicial administration issuspended as a matter of course as soon as military occupation takes place, in practice theinvader does not usually take the administration of justice into his own hands, but continues theordinary courts or tribunals to administer the laws of the country which he is enjoined, unlessabsolutely prevented, to respect. As stated in the above-quoted Executive Order of PresidentMcKinley to the Secretary of War on May 19, 1898, "in practice, they (the municipal laws) arenot usually abrogated but are allowed to remain in force and to be administered by the ordinarytribunals substantially as they were before the occupation. This enlightened practice is, so far aspossible, to be adhered to on the present occasion." And Taylor in this connection says: "From a

theoretical point of view it may be said that the conqueror is armed with the right to substitute hisarbitrary will for all preexisting forms of government, legislative, executive and judicial. From thestand-point of actual practice such arbitrary will is restrained by the provision of the law ofnations which compels the conqueror to continue local laws and institution so far as militarynecessity will permit." (Taylor, International Public Law, p.596.) Undoubtedly, this practice hasbeen adopted in order that the ordinary pursuits and business of society may not beunnecessarily deranged, inasmuch as belligerent occupation is essentially provisional, and thegovernment established by the occupant of transient character.Following these practice and precepts of the law of nations, Commander in Chief of theJapanese Forces proclaimed on January 3, 1942, when Manila was occupied, the militaryadministration under martial law over the territory occupied by the army, and ordered that "all thelaws now in force in the Commonwealth, as well as executive and judicial institutions, shallcontinue to be affective for the time being as in the past," and "all public officials shall remain intheir present post and carry on faithfully their duties as before." When the Philippine ExecutiveCommission was organized by Order No. 1 of the Japanese Commander in Chief, on January

23, 1942, the Chairman of the Executive Commission, by Executive Orders Nos. 1 and 4 ofJanuary 30 and February 5, respectively, continued the Supreme Court, Court of Appeals, Courtof First Instance, and justices of the peace of courts, with the same jurisdiction in conformity withthe instructions given by the Commander in Chief of the Imperial Japanese Army in Order No. 3of February 20, 1942. And on October 14, 1943 when the so-called Republic of the Philippineswas inaugurated, the same courts were continued with no substantial change in organizationand jurisdiction thereof.If the proceedings pending in the different courts of the Islands prior to the Japanese militaryoccupation had been continued during the Japanese military administration, the PhilippineExecutive Commission, and the so-called Republic of the Philippines, it stands to reason that thesame courts, which had become reestablished and conceived of as having in continuedexistenceupon the reoccupation and liberation of the Philippines by virtue of the principle ofpostliminy (Hall, International Law, 7th ed., p. 516), may continue the proceedings in cases thenpending in said courts, without necessity of enacting a law conferring jurisdiction upon them tocontinue said proceedings. As Taylor graphically points out in speaking of said principles "a

state or other governmental entity, upon the removal of a foreign military force, resumes its oldplace with its right and duties substantially unimpaired. . . . Such political resurrection is the

result of a law analogous to that which enables elastic bodies to regain their original shape uponremoval of the external force, and subject to the same exception in case of absolute crushingof the whole fibre and content." (Taylor, International Public Law, p. 615.)The argument advanced by the respondent judge in his resolution in support in his conclusionthat the Court of First Instance of Manila presided over by him "has no authority to takecognizance of, and continue said proceedings (of this case) to final judgment until and unlessthe Government of the Commonwealth of the Philippines . . . shall have provided for the transferof the jurisdiction of the courts of the now defunct Republic of the Philippines, and the casescommenced and the left pending therein," is "that said courts were a government alien to theCommonwealth Government. The laws they enforced were, true enough, laws of theCommonwealth prior to Japanese occupation, but they had become the laws and the courts

had become the institutions of Japan by adoption (U.S. vs.Reiter. 27 F. Cases, No. 16146),as they became later on the laws and institutions of the Philippine Executive Commission andthe Republic of the Philippines."The court in the said case of U.S. vs. Reiter did not and could not say that the laws andinstitutions of the country occupied if continued by the conqueror or occupant, become the lawsand the courts, by adoption, of the sovereign nation that is militarily occupying the territory.Because, as already shown, belligerent or military occupation is essentially provisional and doesnot serve to transfer the sovereignty over the occupied territory to the occupant. What the courtsaid was that, if such laws and institutions are continued in use by the occupant, they becomehis and derive their force from him, in the sense that he may continue or set them aside. Thelaws and institution or courts so continued remain the laws and institutions or courts of theoccupied territory. The laws and the courts of the Philippines, therefore, did not become, bybeing continued as required by the law of nations, laws and courts of Japan. The provision of

Article 45, section III, of the Hague Conventions of 1907 which prohibits any compulsion of thepopulation of occupied territory to swear allegiance to the hostile power, "extends to prohibit

everything which would assert or imply a change made by the invader in the legitimatesovereignty. This duty is neither to innovate in the political life of the occupied districts, norneedlessly to break the continuity of their legal life. Hence, so far as the courts of justice areallowed to continue administering the territorial laws, they must be allowed to give theirsentences in the name of the legitimate sovereign " (Westlake, Int. Law, Part II, second ed., p.102). According to Wheaton, however, the victor need not allow the use of that of the legitimategovernment. When in 1870, the Germans in France attempted to violate that rule by ordering,after the fall of the Emperor Napoleon, the courts of Nancy to administer justice in the name ofthe "High German Powers occupying Alsace and Lorraine," upon the ground that the exercise oftheir powers in the name of French people and government was at least an implied recognitionof the Republic, the courts refused to obey and suspended their sitting. Germany originallyordered the use of the name of "High German Powers occupying Alsace and Lorraine," but lateroffered to allow use of the name of the Emperor or a compromise. (Wheaton, International Law,War, 7th English ed. 1944, p. 244.)Furthermore, it is a legal maxim, that excepting that of a political nature, "Law once established

continues until changed by the some competent legislative power. It is not change merely bychange of sovereignty." (Joseph H. Beale, Cases on Conflict of Laws, III, Summary Section 9,citing Commonwealth vs.Chapman, 13 Met., 68.) As the same author says, in his Treatise onthe Conflict on Laws (Cambridge, 1916, Section 131): "There can no break or interregnum inlaw. From the time the law comes into existence with the first-felt corporateness of a primitivepeople it must last until the final disappearance of human society. Once created, it persists untila change take place, and when changed it continues in such changed condition until the nextchange, and so forever. Conquest or colonization is impotent to bring law to an end; in spite ofchange of constitution, the law continues unchanged until the new sovereign by legislative actscreates a change."

As courts are creatures of statutes and their existence defends upon that of the laws whichcreate and confer upon them their jurisdiction, it is evident that such laws, not being a politicalnature, are not abrogated by a change of sovereignty, and continue in force "ex proprio vigore"unless and until repealed by legislative acts. A proclamation that said laws and courts areexpressly continued is not necessary in order that they may continue in force. Such

proclamation, if made, is but a declaration of the intention of respecting and not repealing thoselaws. Therefore, even assuming that Japan had legally acquired sovereignty over these Islands,

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which she had afterwards transferred to the so-called Republic of the Philippines, and that thelaws and the courts of these Islands had become the courts of Japan, as the said courts of thelaws creating and conferring jurisdiction upon them have continued in force until now, itnecessarily follows that the same courts may continue exercising the same jurisdiction overcases pending therein before the restoration of the Commonwealth Government, unless anduntil they are abolished or the laws creating and conferring jurisdiction upon them are repealedby the said government. As a consequence, enabling laws or acts providing that proceedingspending in one court be continued by or transferred to another court, are not required by themere change of government or sovereignty. They are necessary only in case the former courtsare abolished or their jurisdiction so change that they can no longer continue taking cognizanceof the cases and proceedings commenced therein, in order that the new courts or the courts

having jurisdiction over said cases may continue the proceedings. When the Spanishsovereignty in the Philippine Islands ceased and the Islands came into the possession of theUnited States, the "Audiencia" or Supreme Court was continued and did not cease to exist, andproceeded to take cognizance of the actions pending therein upon the cessation of the Spanishsovereignty until the said "Audiencia" or Supreme Court was abolished, and the Supreme Courtcreated in Chapter II of Act No. 136 was substituted in lieu thereof. And the Courts of FirstInstance of the Islands during the Spanish regime continued taking cognizance of cases pendingtherein upon the change of sovereignty, until section 65 of the same Act No. 136 abolished themand created in its Chapter IV the present Courts of First Instance in substitution of the former.Similarly, no enabling acts were enacted during the Japanese occupation, but a mereproclamation or order that the courts in the Island were continued.On the other hand, during the American regime, when section 78 of Act No. 136 was enactedabolishing the civil jurisdiction of the provost courts created by the military government ofoccupation in the Philippines during the Spanish-American War of 1898, the same section 78provided for the transfer of all civil actions then pending in the provost courts to the proper

tribunals, that is, to the justices of the peace courts, Court of First Instance, or Supreme Courthaving jurisdiction over them according to law. And later on, when the criminal jurisdiction ofprovost courts in the City of Manila was abolished by section 3 of Act No. 186, the same sectionprovided that criminal cases pending therein within the jurisdiction of the municipal court c reatedby Act No. 183 were transferred to the latter.That the present courts as the same courts which had been functioning during the Japaneseregime and, therefore, can continue the proceedings in cases pending therein prior to therestoration of the Commonwealth of the Philippines, is confirmed by Executive Order No. 37which we have already quoted in support of our conclusion in connection with the secondquestion. Said Executive Order provides"(1) that the Court of Appeals created and establishedunder Commonwealth Act No. 3 as amended, be abolished, as it is hereby abolished," and "(2)that all cases which have heretofore been duly appealed to the Court of Appeals shall betransmitted to the Supreme Court for final decision. . . ." In so providing, the said Orderconsiders that the Court of Appeals abolished was the same that existed prior to, and continuedafter, the restoration of the Commonwealth Government; for, as we have stated in discussing the

previous question, almost all, if not all, of the cases pending therein, or which had theretofore(that is, up to March 10, 1945) been duly appealed to said court, must have been cases comingfrom the Courts of First Instance during the so-called Republic of the Philippines. If the Court of

Appeals abolished by the said Executive Order was not the same one which had beenfunctioning during the Republic, but that which had existed up to the time of the Japaneseoccupation, it would have provided that all the cases which had, prior to and up to thatoccupation on January 2, 1942, been dully appealed to the said Court of Appeals shall betransmitted to the Supreme Court for final decision.It is, therefore, obvious that the present courts have jurisdiction to continue, to final judgment,the proceedings in cases, not of political complexion, pending therein at the time of therestoration of the Commonwealth Government.Having arrived at the above conclusions, it follows that the Court of First Instance of Manila has

jurisdiction to continue to final judgment the proceedings in civil case No. 3012, which involvescivil rights of the parties under the laws of the Commonwealth Government, pending in saidcourt at the time of the restoration of the said Government; and that the respondent judge of the

court, having refused to act and continue him does a duty resulting from his office as presidingjudge of that court, mandamusis the speedy and adequate remedy in the ordinary course of law,

especially taking into consideration the fact that the question of jurisdiction herein involved doesaffect not only this particular case, but many other cases now pending in all the courts of theseIslands.In view of all the foregoing it is adjudged and decreed that a writ of mandamusissue, directed tothe respondent judge of the Court of First Instance of Manila, ordering him to take cognizance ofand continue to final judgment the proceedings in civil case No. 3012 of said court. Nopronouncement as to costs. So ordered.

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G.R. No. L-19650 September 29, 1966CALTEX (PHILIPPINES), INC.,petitioner-appellee,

vs.ENRICO PALOMAR, in his capacity as THE POSTMASTER GENERAL,respondent-

appellant.Office of the Solicitor General for respondent and appellant.

Ross, Selph and Carrascoso for petitioner and appellee.

CASTRO, J .:In the year 1960 the Caltex (Philippines) Inc. (hereinafter referred to as Caltex) conceived andlaid the groundwork for a promotional scheme calculated to drum up patronage for its oilproducts. Denominated "Caltex Hooded Pump Contest", it calls for participants therein to

estimate the actual number of liters a hooded gas pump at each Caltex station will dispenseduring a specified period. Employees of the Caltex (Philippines) Inc., its dealers and itsadvertising agency, and their immediate families excepted, participation is to be openindiscriminately to all "motor vehicle owners and/or licensed drivers". For the privilege toparticipate, no fee or consideration is required to be paid, no purchase of Caltex productsrequired to be made. Entry forms are to be made available upon request at each Caltex stationwhere a sealed can will be provided for the deposit of accomplished entry stubs.

A three-staged winner selection system is envisioned. At the station level, called "DealerContest", the contestant whose estimate is closest to the actual number of liters dispensed bythe hooded pump thereat is to be awarded the first prize; the next closest, the second; and thenext, the third. Prizes at this level consist of a 3-burner kerosene stove for first; a thermos bottleand a Ray-O-Vac hunter lantern for second; and an Everready Magnet-lite flashlight withbatteries and a screwdriver set for third. The first-prize winner in each station will then bequalified to join in the "Regional Contest" in seven different regions. The winning stubs of thequalified contestants in each region will be deposited in a sealed can from which the first-prize,

second-prize and third-prize winners of that region will be drawn. The regional first-prize winnerswill be entitled to make a three-day all-expenses-paid round trip to Manila, accompanied by theirrespective Caltex dealers, in order to take part in the "National Contest". The regional second-prize and third-prize winners will receive cash prizes of P500 and P300, respectively. At thenational level, the stubs of the seven regional first-prize winners will be placed inside a sealedcan from which the drawing for the final first-prize, second-prize and third-prize winners will bemade. Cash prizes in store for winners at this final stage are: P3,000 for first; P2,000 for second;Pl,500 for third; and P650 as consolation prize for each of the remaining four participants.Foreseeing the extensive use of the mails not only as amongst the media for publicizing thecontest but also for the transmission of communications relative thereto, representations weremade by Caltex with the postal authorities for the contest to be cleared in advance for mailing,having in view sections 1954(a), 1982 and 1983 of the Revised Administrative Code, thepertinent provisions of which read as follows:

SECTION 1954.Absolutely non-mailable matter. No matter belonging to any of thefollowing classes, whether sealed as first-class matter or not, shall be imported into

the Philippines through the mails, or to be deposited in or carried by the mails of the

Philippines, or be delivered to its addressee by any officer or employee of the Bureauof Posts:Written or printed matter in any form advertising, describing, or in any mannerpertaining to, or conveying or purporting to convey any information concerning anylottery, gift enterprise, or similar scheme depending in whole or in part upon lot orchance, or any scheme, device, or enterprise for obtaining any money or property ofany kind by means of false or fraudulent pretenses, representations, or promises."SECTION 1982. Fraud orders.Upon satisfactory evidence that any person orcompany is engaged in conducting any lottery, gift enterprise, or scheme for thedistribution of money, or of any real or personal property by lot, chance, or drawing ofany kind, or that any person or company is conducting any scheme, device, or

enterprise for obtaining money or property of any kind through the mails by means offalse or fraudulent pretenses, representations, or promises, the Director of Posts mayinstruct any postmaster or other officer or employee of the Bureau to return to theperson, depositing the same in the mails, with the word "fraudulent" plainly written orstamped upon the outside cover thereof, any mail matter of whatever class mailed byor addressed to such person or company or the representative or agent of suchperson or company.SECTION 1983. Deprivation of use of money order system and telegraphic transferservice.The Director of Posts may, upon evidence satisfactory to him that anyperson or company is engaged in conducting any lottery, gift enterprise or scheme forthe distribution of money, or of any real or personal property by lot, chance, or drawingof any kind, or that any person or company is conducting any scheme, device, orenterprise for obtaining money or property of any kind through the mails by means offalse or fraudulent pretenses, representations, or promise, forbid the issue or paymentby any postmaster of any postal money order or telegraphic transfer to said person or

company or to the agent of any such person or company, whether such agent is actingas an individual or as a firm, bank, corporation, or association of any kind, and mayprovide by regulation for the return to the remitters of the sums named in moneyorders or telegraphic transfers drawn in favor of such person or company or its agent.

The overtures were later formalized in a letter to the Postmaster General, dated October 31,1960, in which the Caltex, thru counsel, enclosed a copy of the contest rules and endeavored to

justify its position that the contest does not violate the anti-lottery provisions of the Postal Law.Unimpressed, the then Acting Postmaster General opined that the scheme falls within thepurview of the provisions aforesaid and declined to grant the requested clearance. In itscounsel's letter of December 7, 1960, Caltex sought a reconsideration of the foregoing stand,stressing that there being involved no consideration in the part of any contestant, the contestwas not, under controlling authorities, condemnable as a lottery. Relying, however, on anopinion rendered by the Secretary of Justice on an unrelated case seven years before (Opinion217, Series of 1953), the Postmaster General maintained his view that the contest involvesconsideration, or that, if it does not, it is nevertheless a "gift enterprise" which is equally banned

by the Postal Law, and in his letter of December 10, 1960 not only denied the use of the mailsfor purposes of the proposed contest but as well threatened that if the contest was conducted, "afraud order will have to be issued against it (Caltex) and all its representatives".Caltex thereupon invoked judicial intervention by filing the present petition for declaratory reliefagainst Postmaster General Enrico Palomar, praying "that judgment be rendered declaring its'Caltex Hooded Pump Contest' not to be violative of the Postal Law, and ordering respondent toallow petitioner the use of the mails to bring the contest to the attention of the public". Afterissues were joined and upon the respective memoranda of the parties, the trial court rendered

judgment as follows:In view of the foregoing considerations, the Court holds that the proposed 'CaltexHooded Pump Contest' announced to be conducted by the petitioner under the rulesmarked as Annex B of the petitioner does not violate the Postal Law and therespondent has no right to bar the public distribution of said rules by the mails.

The respondent appealed.The parties are now before us, arrayed against each other upon two basic issues: first, whether

the petition states a sufficient cause of action for declaratory relief; and second, whether the

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proposed "Caltex Hooded Pump Contest" violates the Postal Law. We shall take these up inseriatim.1. By express mandate of section 1 of Rule 66 of the old Rules of Court, which was theapplicable legal basis for the remedy at the time it was invoked, declaratory relief is available toany person "whose rights are affected by a statute . . . to determine any question of constructionor validity arising under the . . . statute and for a declaration of his rights thereunder" (nowsection 1, Rule 64, Revised Rules of Court). In amplification, this Court, conformably toestablished jurisprudence on the matter, laid down certain conditions sine qua non therefor, towit: (1) there must be a justiciable controversy; (2) the controversy must be between personswhose interests are adverse; (3) the party seeking declaratory relief must have a legal interest inthe controversy; and (4) the issue involved must be ripe for judicial determination (Tolentino vs.

The Board of Accountancy, et al., G.R. No. L-3062, September 28, 1951; Delumen, et al. vs.Republic of the Philippines, 50 O.G., No. 2, pp. 576, 578-579; Edades vs. Edades, et al., G.R.No. L-8964, July 31, 1956). The gravamen of the appellant's stand being that the petition hereinstates no sufficient cause of action for declaratory relief, our duty is to assay the factual basesthereof upon the foregoing crucible.

As we look in retrospect at the incidents that generated the present controversy, a number ofsignificant points stand out in bold relief. The appellee (Caltex), as a business enterprise ofsome consequence, concededly has the unquestioned right to exploit every legitimate means,and to avail of all appropriate media to advertise and stimulate increased patronage for itsproducts. In contrast, the appellant, as the authority charged with the enforcement of the PostalLaw, admittedly has the power and the duty to suppress transgressions thereof particularlythru the issuance of fraud orders, under Sections 1982 and 1983 of the Revised AdministrativeCode, against legally non-mailable schemes. Obviously pursuing its right aforesaid, the appelleelaid out plans for the sales promotion scheme hereinbefore detailed. To forestall possibledifficulties in the dissemination of information thereon thru the mails, amongst other media, it

was found expedient to request the appellant for an advance clearance therefor. However,likewise by virtue of his jurisdiction in the premises and construing the pertinent provisions of thePostal Law, the appellant saw a violation thereof in the proposed scheme and accordinglydeclined the request. A point of difference as to the correct construction to be given to theapplicable statute was thus reached. Communications in which the parties expounded on theirrespective theories were exchanged. The confidence with which the appellee insisted upon itsposition was matched only by the obstinacy with which the appellant stood his ground. And thisimpasse was climaxed by the appellant's open warning to the appellee that if the proposedcontest was "conducted, a fraud order will have to be issued against it and all itsrepresentatives."

Against this backdrop, the stage was indeed set for the remedy prayed for. The appellee'sinsistent assertion of its claim to the use of the mails for its proposed contest, and the challengethereto and consequent denial by the appellant of the privilege demanded, undoubtedlyspawned a live controversy. The justiciability of the dispute cannot be gainsaid. There is anactive antagonistic assertion of a legal right on one side and a denial thereof on the other,

concerning a real not a mere theoretical question or issue. The contenders are as real astheir interests are substantial. To the appellee, the uncertainty occasioned by the divergence ofviews on the issue of construction hampers or disturbs its freedom to enhance its business. Tothe appellant, the suppression of the appellee's proposed contest believed to transgress a lawhe has sworn to uphold and enforce is an unavoidable duty. With the appellee's bent to hold thecontest and the appellant's threat to issue a fraud order therefor if carried out, the contendersare confronted by the ominous shadow of an imminent and inevitable litigation unless theirdifferences are settled and stabilized by a tranquilizing declaration (Pablo y Sen, et al. vs.Republic of the Philippines, G.R. No. L-6868, April 30, 1955). And, contrary to the insinuation ofthe appellant, the time is long past when it can rightly be said that merely the appellee's "desiresare thwarted by its own doubts, or by the fears of others" which admittedly does not confer acause of action. Doubt, if any there was, has ripened into a justiciable controversy when, as inthe case at bar, it was translated into a positive claim of right which is actually contested (IIIMoran, Comments on the Rules of Court, 1963 ed., pp. 132-133, citing: Woodward vs. Fox WestCoast Theaters, 36 Ariz., 251, 284 Pac. 350).

We cannot hospitably entertain the appellant's pretense that there is here no question ofconstruction because the said appellant "simply applied the clear provisions of the law to a given

set of facts as embodied in the rules of the contest", hence, there is no room for declaratoryrelief. The infirmity of this pose lies in the fact that it proceeds from the assumption that, if thecircumstances here presented, the construction of the legal provisions can be divorced from thematter of their application to the appellee's contest. This is not feasible. Construction, verily, isthe art or process of discovering and expounding the meaning and intention of the authors of thelaw with respect to its application to a given case, where that intention is rendered doubtful,amongst others, by reason of the fact that the given case is not explicitly provided for in thelaw (Black, Interpretation of Laws, p. 1). This is precisely the case here. Whether or not thescheme proposed by the appellee is within the coverage of the prohibitive provisions of thePostal Law inescapably requires an inquiry into the intended meaning of the words used therein.To our mind, this is as much a question of construction or interpretation as any other.

Nor is it accurate to say, as the appellant intimates, that a pronouncement on the matter at handcan amount to nothing more than an advisory opinion the handing down of which is anathema toa declaratory relief action. Of course, no breach of the Postal Law has as yet been committed.Yet, the disagreement over the construction thereof is no longer nebulous or contingent. It hastaken a fixed and final shape, presenting clearly defined legal issues susceptible of immediateresolution. With the battle lines drawn, in a manner of speaking, the propriety nay, thenecessity of setting the dispute at rest before it accumulates the asperity distemper,animosity, passion and violence of a full-blown battle which looms ahead (III Moran, Commentson the Rules of Court, 1963 ed., p. 132 and cases cited), cannot but be conceded. Paraphrasingthe language in Zeitlin vs. Arnebergh 59 Cal., 2d., 901, 31 Cal. Rptr., 800, 383 P. 2d., 152, citedin 22 Am. Jur., 2d., p. 869, to deny declaratory relief to the appellee in the situation into which ithas been cast, would be to force it to choose between undesirable alternatives. If it cannotobtain a final and definitive pronouncement as to whether the anti-lottery provisions of the PostalLaw apply to its proposed contest, it would be faced with these choices: If it launches the contestand uses the mails for purposes thereof, it not only incurs the risk, but is also actually threatened

with the certain imposition, of a fraud order with its concomitant stigma which may attach even ifthe appellee will eventually be vindicated; if it abandons the contest, it becomes a self-appointedcensor, or permits the appellant to put into effect a virtual fiat of previous censorship which isconstitutionally unwarranted. As we weigh these considerations in one equation and in the spiritof liberality with which the Rules of Court are to be interpreted in order to promote their object(section 1, Rule 1, Revised Rules of Court) which, in the instant case, is to settle, and affordrelief from uncertainty and insecurity with respect to, rights and duties under a law we can seein the present case any imposition upon our jurisdiction or any futility or prematurity in ourintervention.The appellant, we apprehend, underrates the force and binding effect of the ruling we handdown in this case if he believes that it will not have the final and pacifying function that adeclaratory judgment is calculated to subserve. At the very least, the appellant will be bound. Butmore than this, he obviously overlooks that in this jurisdiction, "Judicial decisions applying orinterpreting the law shall form a part of the legal system" (Article 8, Civil Code of the Philippines).In effect, judicial decisions assume the same authority as the statute itself and, until

authoritatively abandoned, necessarily become, to the extent that they are applicable, the criteriawhich must control the actuations not only of those called upon to abide thereby but also ofthose in duty bound to enforce obedience thereto. Accordingly, we entertain no misgivings thatour resolution of this case will terminate the controversy at hand.It is not amiss to point out at this juncture that the conclusion we have herein just reached is notwithout precedent. In Liberty Calendar Co. vs. Cohen, 19 N.J., 399, 117 A. 2d., 487, where acorporation engaged in promotional advertising was advised by the county prosecutor that itsproposed sales promotion plan had the characteristics of a lottery, and that if such salespromotion were conducted, the corporation would be subject to criminal prosecution, it was heldthat the corporation was entitled to maintain a declaratory relief action against the countyprosecutor to determine the legality of its sales promotion plan. In pari materia, see also: Bunisvs. Conway, 17 App. Div. 2d., 207, 234 N.Y.S. 2d., 435; Zeitlin vs. Arnebergh, supra; Thrillo, Inc.vs. Scott, 15 N.J. Super. 124, 82 A. 2d., 903.In fine, we hold that the appellee has made out a case for declaratory relief.2. The Postal Law, chapter 52 of the Revised Administrative Code, using almost identical

terminology in sections 1954(a), 1982 and 1983 thereof, supra, condemns as absolutely non-mailable, and empowers the Postmaster General to issue fraud orders against, or otherwise

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deny the use of the facilities of the postal service to, any information concerning "any lottery, giftenterprise, or scheme for the distribution of money, or of any real or personal property by lot,chance, or drawing of any kind". Upon these words hinges the resolution of the second issueposed in this appeal.Happily, this is not an altogether untrodden judicial path. As early as in 1922, in "El Debate", Inc.vs. Topacio, 44 Phil., 278, 283-284, which significantly dwelt on the power of the postalauthorities under the abovementioned provisions of the Postal Law, this Court declared that

While countless definitions of lottery have been attempted, the authoritative one forthis jurisdiction is that of the United States Supreme Court, in analogous cases havingto do with the power of the United States Postmaster General, viz.: The term "lottery"extends to all schemes for the distribution of prizes by chance, such as policy playing,

gift exhibitions, prize concerts, raffles at fairs, etc., and various forms of gambling. Thethree essential elements of a lottery are: First, consideration; second, prize; and third,chance. (Horner vs. States [1892], 147 U.S. 449; Public Clearing House vs. Coyne[1903], 194 U.S., 497; U.S. vs. Filart and Singson [1915], 30 Phil., 80; U.S. vs. Olsenand Marker [1917], 36 Phil., 395; U.S. vs. Baguio [1919], 39 Phil., 962; Valhalla HotelConstruction Company vs. Carmona, p. 233, ante.)

Unanimity there is in all quarters, and we agree, that the elements of prize and chance are tooobvious in the disputed scheme to be the subject of contention. Consequently as the appellanthimself concedes, the field of inquiry is narrowed down to the existence of the element ofconsideration therein. Respecting this matter, our task is considerably lightened inasmuch as inthe same case just cited, this Court has laid down a definitive yard-stick in the following terms

In respect to the last element of consideration, the law does not condemn thegratuitous distribution of property by chance, if no consideration is derived directly orindirectly from the party receiving the chance, but does condemn as c riminal schemesin which a valuable consideration of some kind is paid directly or indirectly for the

chance to draw a prize.Reverting to the rules of the proposed contest, we are struck by the clarity of the language inwhich the invitation to participate therein is couched. Thus

No puzzles, no rhymes? You don't need wrappers, labels or boxtops? You don't haveto buy anything? Simply estimate the actual number of liter the Caltex gas pump withthe hood at your favorite Caltex dealer will dispense from to , and win valuableprizes . . . ." .

Nowhere in the said rules is any requirement that any fee be paid, any merchandise be bought,any service be rendered, or any value whatsoever be given for the privilege to participate. Aprospective contestant has but to go to a Caltex station, request for the entry form which isavailable on demand, and accomplish and submit the same for the drawing of the winner.Viewed from all angles or turned inside out, the contest fails to exhibit any discernibleconsideration which would brand it as a lottery. Indeed, even as we head the stern injunction,"look beyond the fair exterior, to the substance, in order to unmask the real element andpernicious tendencies which the law is seeking to prevent" ("El Debate", Inc. vs. Topacio, supra,

p. 291), we find none. In our appraisal, the scheme does not only appear to be, but actually is, agratuitous distribution of property by chance.There is no point to the appellant's insistence that non-Caltex customers who may buy Caltexproducts simply to win a prize would actually be indirectly paying a consideration for the privilegeto join the contest. Perhaps this would be tenable if the purchase of any Caltex product or theuse of any Caltex service were a pre-requisite to participation. But it is not. A contestant, it hardlyneeds reiterating, does not have to buy anything or to give anything of value.1awphl.ntOff-tangent, too, is the suggestion that the scheme, being admittedly for sales promotion, wouldnaturally benefit the sponsor in the way of increased patronage by those who will be encouragedto prefer Caltex products "if only to get the chance to draw a prize by securing entry blanks". Therequired element of consideration does not consist of the benefit derived by the proponent of thecontest. The true test, as laid down in People vs. Cardas, 28 P. 2d., 99, 137 Cal. App. (Supp.)788, is whether the participant pays a valuable consideration for the chance, and not whetherthose conducting the enterprise receive something of value in return for the distribution of theprize. Perspective properly oriented, the standpoint of the contestant is all that matters, not that

of the sponsor. The following, culled from Corpus Juris Secundum, should set the matter at rest:

The fact that the holder of the drawing expects thereby to receive, or in fact doesreceive, some benefit in the way of patronage or otherwise, as a result of the drawing;does not supply the element of consideration.Griffith Amusement Co. vs. Morgan, Tex.Civ. App., 98 S.W., 2d., 844" (54 C.J.S., p. 849).

Thus enlightened, we join the trial court in declaring that the "Caltex Hooded Pump Contest"proposed by the appellee is not a lottery that may be administratively and adversely dealt withunder the Postal Law.But it may be asked: Is it not at least a "gift enterprise, or scheme for the distribution of money,or of any real or personal property by lot, chance, or drawing of any kind", which is equallyprescribed? Incidentally, while the appellant's brief appears to have concentrated on the issue ofconsideration, this aspect of the case cannot be avoided if the remedy here invoked is to

achieve its tranquilizing effect as an instrument of both curative and preventive justice. Recallingthat the appellant's action was predicated, amongst other bases, upon Opinion 217, Series1953, of the Secretary of Justice, which opined in effect that a scheme, though not a lottery forwant of consideration, may nevertheless be a gift enterprise in which that element is notessential, the determination of whether or not the proposed contest wanting in considerationas we have found it to be is a prohibited gift enterprise, cannot be passed over sub silencio.While an all-embracing concept of the term "gift enterprise" is yet to be spelled out in explicitwords, there appears to be a consensus among lexicographers and standard authorities that theterm is commonly applied to a sporting artifice of under which goods are sold for their marketvalue but by way of inducement each purchaser is given a chance to win a prize (54 C.J.S., 850;34 Am. Jur., 654; Black, Law Dictionary, 4th ed., p. 817; Ballantine, Law Dictionary withPronunciations, 2nd ed., p. 55; Retail Section of Chamber of Commerce of Plattsmouth vs.Kieck, 257 N.W., 493, 128 Neb. 13; Barker vs. State, 193 S.E., 605, 56 Ga. App., 705; Bell vs.State, 37 Tenn. 507, 509, 5 Sneed, 507, 509). As thus conceived, the term clearly cannotembrace the scheme at bar. As already noted, there is no sale of anything to which the chance

offered is attached as an inducement to the purchaser. The contest is open to all qualifiedcontestants irrespective of whether or not they buy the appellee's products.Going a step farther, however, and assuming that the appellee's contest can be encompassedwithin the broadest sweep that the term "gift enterprise" is capable of being extended, we thinkthat the appellant's pose will gain no added comfort. As stated in the opinion relied upon, rulingsthere are indeed holding that a gift enterprise involving an award by chance, even in default ofthe element of consideration necessary to constitute a lottery, is prohibited (E.g.: Crimes vs.States, 235 Ala 192, 178 So. 73; Russell vs. Equitable Loan & Sec. Co., 129 Ga. 154, 58 S.E.,88; State ex