California Manufacturing Company v Las Pinas

California Manufacturing Company v. City of Las Pinas Facts:This is a case about a joint petition to withdraw a petition for review for certiorari. On June 21, 2007, petitioner filed a Petition for Review on Certiorari questioning the assessments issued by the City of Las Piñas through the City Treasurer for local and real property taxes in the amount ofP73Million After filing of the required Comment and Reply, SC gave due course to the Petition and directed both parties to submit their respective memoranda. During the pendency of this case, petitioner offered to compromise the case by paying fifty percent (50%) of the amount assessed. Since petitioner’s factory in Las Piñas had already ceased operations and in order to facilitate the issuance of the clearance for the cessation of its business, the decision to enter into a compromise was adopted by the respondents. Through City Resolution No. 2385-08 , the City Council of Las Piñas approved the compromise offer. Petitioner has already settled and paid the amount of P36,522,817.24 7 in accordance with the compromised 50% of the assessed amount.

Issue: Does a compromise have a force and effect of a judgment? YES

Ratio: Article 1306 of the Civil Code of the Philippines provides that contracting parties may establish such stipulations,

clauses, terms, and conditions, as they may deem convenient, provided that they are not contrary to law, morals, good customs, public order, or public policy. A compromise agreement is a contract whereby the parties make reciprocal concessions, avoid litigation, or put an end to one already commenced. 8 It is an accepted, even desirable and encouraged, practice in courts of law and administrative tribunals.9 A compromise agreement intended to resolve a matter already under litigation is a judicial compromise. Having judicial mandate and entered as its determination of the controversy, it has the force and effect of a judgment. It transcends its identity as a mere contract between the parties as it becomes a judgment that is subject to execution in accordance with the Rules of Court. Thus, a compromise agreement that has been made and duly approved by the court attains the effect and authority of res judicata, although no execution may be issued unless the agreement receives the approval of the court where the litigation is pending and compliance with the terms of the agreement is decreed. Finding City Resolution No. 2385-08, Series of 2008 of the Sangguniang Panlungsod of Las Piñas to be validly executed and not contrary to law, morals, good customs, public order or public policy, SC approved it. Dispositive: WHEREFORE, the Joint Petition [Motion] to Withdraw Petition for Review on Certiorari dated February 5, 2008 is GRANTED

April 7, 2009 PHILIPPINE NATIONAL BANK, Petitioner, vs. MARCELINO BANATAO et al PlaintiffsRespondents, and MARCIANO CARAG et al Defendants-Respondents. BRION, J.: What is the effect of a compromise agreement entered into by some, but not all, of the parties to a litigation? Effect on the non-participating litigants? Facts:

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On November 16, 1962, Banatao, et al. (plaintiffs-respondents) initiated an action against Marciano Carag before the RTC Branch 4 Tuguegarao for the recovery of real

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property in Cagayan -- an accretion to Lot 3192 of the Iguig Cadastre from the Cagayan River Banatao et al claimed the accretion as owners of the adjoining Lot 3192 while Carag et al were the occupants of Lot 3192. Pending the case, some of the defendants-respondents (namely, Eugenio Soriano, Maria Cauilan, Pedro Soriano, Paz Tagacay, Benjamin Tagacay, Fausta Agustin, and Milagros B. Carag) were able to secure homestead patents. OCTs in their name were issued in 1965 and 1966, with the proviso that the lots must not be alienated nor encumbered for five (5) years from the date of patent issuance. Armed with their OCTs, the defendants-respondents separately applied for loans with the PNB secured by REMs over their titled portions of the disputed property. The bank approved the mortgages, relying solely on the OCTs which, at the time, did not contain any notice of lis pendens or any annotation of liens and encumbrances. The mortgages in favor of PNB were however annotated on the OCTs. On February 22, 1968, TC ruled in favor of Banataos, and ordered Carag et al to return the disputed property. Carag appealed to CA. While the appeal was pending, CA discovered the homestead patents of Carag, et al. so it remanded the case to the TC. It also ordered the inclusion of indispensable parties to the complaint (the people who acquired OCTs and the PNB) Banataos’ amended complaint included the new parties and added up 2 more COAs aside from (1) recovery of real property: (2) cancellation of the OCTs and (3) annulment of real estate mortgage. While the case was pending before TC, bank extrajudicially foreclosed the property issued to the spouses Soriano (two of the defendant-respondents/Carag et al). The Bank consolidated title and got TCT over the lot. On February 28, 1991, the Banataos and Carag et al entered into a compromise agreement whereby ownership of virtually the northern half of the disputed property was ceded to Banataos, while the southern half was given to Carag et al. Also on the agreement Carag et al acknowledged their indebtedness to petitioner PNB and bound themselves to pay their respective obligations. PNB, however, was not a party to this. On March 15, 1991, the TC approved and adopted the compromise agreement. PNB filed an MR and prayed for the setting aside of the agreement which was denied. So PNB went to CA, which was also dismissed on the ground that PNB was not an indispensable party to the compromise agreement. The agreement only settles the actions for: (1) recovery of property; and (2) cancellation of OCTs. As to the third COA (annulment of mortgage) PNB was deemed only a necessary party. CA also declared the REMs as void because the mortgagors not being the absolute owners could not mortgage them in the first place. MR denied, hence this petition for review on certiorari.

WON the Compromise Agreement entered into between the herein plaintiffs-respondents and defendants-respondents and approved by the trial court legally binds PNB which is not a party thereto. NO Held/Ratio: PNB argues that it is an indispensable, not merely a necessary, party to all three causes of action, namely, for (1) recovery of real property; (2) cancellation of the OCTs; and (3) annulment of mortgages. Since the compromise was entered into precisely to put an end to the case, the PNB submits that its consent to the compromise agreement is necessary to

secure a final and complete determination of the case. The court also could not simply declare the mortgages void as they were in GOOD FAITH as there were no notices of lis pendens or any annotation of liens or encumbrances on the OCTs. Court dismissed PNB’s petition. According to the CA: o The compromise agreement disposed of the first two causes of action: (1) recovery of real property; and (2) cancellation of the OCTs, hence settling the question of ownership between them. The moment ownership of the disputed real property was clearly proven to be that of the Banataos, the question of the validity of the mortgages could easily be determined. o The [defendants-respondents], not being the absolute owners and not having been authorized to mortgage the subject real property, could not validly mortgage the said real property with [petitioner PNB]. The liability of the defendant-respondents could anyway be dealt with in a separate and distinct action. The bank who was not a party to the agreement was therefore affected as a mortgagee of a part of the disputed property, who foreclosed on a portion of the disputed property. It is basic in law that a court judgment made solely on the basis of a compromise agreement binds only the parties to the compromise, and cannot bind a party litigant who did not take part in the compromise agreement. In the case of Castañeda v. Heirs of Maramba:

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Judgment based on a compromise affects only participating litigants. This decision never becomes final with respect to the parties who did not take part in the settlement confirmed by the partial decision aforesaid.

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Following Castañeda, the judgment by the TC and CA is final with respect only to the plaintiffs-respondents and defendants-respondents, but not with respect to the PNB. Hence, the trial court's judgment on compromise which settles the issue of ownership over the properties in question is but a partial decision that does not completely decide the case and cannot bind the PNB. the CA was incorrect in declaring that the mortgagors, not being the absolute owners of the mortgaged properties as agreed upon in the compromise agreement, do not have the right to constitute the mortgage as it ruled without hearing the side of the PNB as mortgagee and co-owner of the disputed property. The compromise agreement cannot bind the bank, a non-party to the agreement; necessarily, the ownership issue which was settled by the compromise agreement cannot be made applicable to the bank without hearing it. HOWEVER, the proviso against alienation or encumbrance of lands granted by homestead patent makes the REMs void ab initio regardless of the compromise agreement.

Philippine National Bank vs. Manila Oil Refining & By-Products Company, Inc. [GR L-18103, 8 June 1922] First Division, Malcolm (J): 6 concur

Facts:  On 8 May 1920, the manager and the treasurer of the Manila Oil Refining & ByProducts Company, Inc,. executed and delivered to the Philippine National Bank (PNB), a written instrument reading as follows: "RENEWAL. P61,000.00 MANILA, P.I., May 8, 1920. On demand after date we promise to pay to the order of the Philippine National Bank sixty-one thousand only pesos at Philippine National Bank, Manila, P.I. Without defalcation, value received; and do hereby authorize any attorney in the Philippine Islands, in case this note be not paid at maturity, to appear in my name and confess judgment for the above sum with interest, cost of suit and attorney's fees of ten (10) per cent for collection, a release of all errors and waiver of all rights to inquisition and appeal, and to the benefit of all laws exempting property, real or personal, from levy or sale. Value received. No. —— Due —— MANILA OIL REFINING & BY-PRODUCTS CO., INC., (Sgd.) VICENTE SOTELO, Manager. MANILA OIL REFINING & BY-PRODUCTS CO., INC., (Sgd.) RAFAEL LOPEZ. Treasurer."

 The Manila Oil Refining & By-Products Company, Inc. failed to pay the promissory note on demand. PNB brought action in the Court of First Instance of Manila, to recover P61,000, the amount of the note, together with interest and costs. Mr. Elias N. Recto, an attorney associated with PNB, entered his appearance in representation of Manila Oil, and filed a motion confessing judgment. Manila Oil, however, in a sworn declaration, objected strongly to the unsolicited representation of attorney Recto.

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Later, attorney Antonio Gonzalez appeared for Manila Oil and filed a demurrer, and when this was overruled, presented an answer.

 The trial judge rendered judgment on the motion of attorney Recto in the terms of the complaint.

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In the Supreme Court, the question of first impression raised in the case concerns the validity in this jurisdiction of a provision in a promissory note whereby in case the same is not paid at maturity, the maker authorizes any attorney to appear and confess judgment thereon for the principal amount, with interest, costs, and attorney's fees, and waives all errors, rights to inquisition, and appeal, and all property exemptions.

Issue [1]: Whether the Negotiable Instruments Law (Act No. 2031) expressly recognized judgment notes, enforceable under the regular procedure.

Held [1]: The Negotiable Instruments Law, in section 5, provides that "The negotiable character of an instrument otherwise negotiable is not affected by a provision which (b) Authorizes confession of judgment if the instrument be not paid at maturity"; but this provision of law cannot be taken to sanction judgments by confession, because it is a portion of a uniform law which merely provides that, in jurisdictions where judgments notes are recognized, such clauses shall not affect the negotiable character of the instrument. Moreover, the same section of the Negotiable Instruments Law concludes with these words: "But nothing in this section shall validate any provision or stipulation otherwise illegal." Issue [2]: Whether provisions in notes authorizing attorneys to appear and confess judgments against makers should not be recognized in Philippine jurisdiction by implication. Held [2]: Judgments by confession as appeared at common law were considered an amicable, easy, and cheap way to settle and secure debts. They are quick remedy serve to save the court's time. Time also save time and money of the litigants and the government the expenses that a long litigation entails. In one sense, instruments of this character may be considered as special agreements, with power to enter up judgments on them, binding the parties to the result as they themselves viewed it. On the other hand, are disadvantages to the commercial world which outweigh the considerations just mentioned. Such warrants of attorney are void as against public policy, because they enlarge the field for fraud, because under these instruments the promissor bargains away his right to a day in court, and because the effect of the instrument is to strike down the right of appeal accorded by statute. The recognition of such form of obligation would bring about a complete reorganization of commercial customs and practices, with reference to short-term obligations. It can readily be seen that judgment notes, instead of resulting to the advantage of commercial life the Philippines might be the source of abuse and oppression, and make the courts involuntary parties thereto. If the bank has a meritorious case, the judgment is ultimately certain in the courts. The Court is of the opinion thus that warrants of attorney to confess judgment are not authorized nor contemplated by Philippine law; and that provisions in notes authorizing attorneys to appear and confess judgments against makers should not be recognized in this jurisdiction by implication and should only be considered as valid when given express legislative sanction.
LICHAUCO V TAN PHO [G.R. No. L-19512 (November 21, 1923)] Nature: Ponente: Romualdez Facts: • 3 consolidated cases revolving around a contract of lease.

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1. Lichauco v Tan Pho – appeal from a judgment finding the contract of lease valid. 2. Tan Pho v Jose – initiated in the original proceedings of the guardianship of the incapacitated Zacarias, wherein Tan Pho petitioned the court to issue a nunc pro tunc order as of December 1913, approving the contract of lease which is the bone of contention in Lichauco v Tan Pho. Amparo N. Jose, as guardian of Zacarias, objected to said petition and moved that the case be considered together with the one of the nullity of the lease. This petition for a nunc pro tunc order was impliedly granted in the

same decision rendered in the case which now is Lichauco v Tan Pho. And Amparo N. Jose appealed to this court from that judgment

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Tan Pho v Jose – same as above but with regard to Luis and Julita (minors)

At the time the contract of lease was executed, the owners the land were: Galo Lichauco, of one-third pro indiviso; Zacarias Lichauco, at that time incapacitated, of another one-third pro indiviso; and Luis Lichauco then a minor and Julita Lichauco also at that time and still a minor coowners of the remaining one-third part pro indiviso. • Galo Lichauco and the respective guardians of the incapacitated person and minors executed a Deed of Lease in favor of Tan Pho subject to conditions (important: terms of 20 years) Issue: WON the contract of lease is valid Held: NO. Ratio: The validity relies on the following issues: 1. WON guardians could had capacity to enter into contract  No. They needed, and still need, special power to execute leases for more than six years1 2. WON the CFI could authorize/approve contract of lease  Yes. It is true that the family council that could grant such special power had already been abolished when the present contract of lease was entered into. But the court in Enriquez v AS Watson & Co. recognized CFI’s power to authorize and approve leases of land So... did the court really approve the contract? NO. • Zacarias, according to his July 1913 letter (he was still capacitated) showed his acquiescence in a lease under identical conditions.

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This letter seems to indicate that what his guardian later did had already been consented to by him. But it is certain that it was not Zacarias Lichauco who executed the contract, for he had already been declared incapacitated for such a transaction, but his guardian, and the latter needed judicial authorization to execute it. It cannot be said that in making the lease, his guardian did so by such authorization from his ward. His guardian needed another more legitimate authorization — a judicial one — to render the lease valid so far as its duration exceeded six years. At all events, the question with regard to his sons, the minors Luis and Julita, would have remained, for even if their guardian had been Zacarias Lichauco himself, he likewise should have needed the court's approval just as much. That there was no written judicial order approving the contract of lease in the records of the case, is a fact both proved and admitted by the parties. The question is whether such a judicial approval was given even verbally, and if so, if such fact constitutes a sufficient ground for a nunc pro tunc order. Facts and premises upon which the judgment impliedly granted the nunc pro tunc motion filed by Tan Pho. (What is being assailed as erroneous!)

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After the contract of lease had been executed, Geronimo Jose, as guardian of Zacarias, on the following day, presented to the court in Tan Pho v Jose(2 nd case) a motion praying that he be authorized to employ an attorney and to approve said contract of lease. It appears the only the petition to employ an attorney was granted. No written order, either favourable or unfavourable was issued regarding the approval.

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It is stipulated that Crossfield, the presiding judge therein would, if permitted over the objection of counsel for plaintiff, testify that while he does not remember positively when he endorsed his approval on the said lessee's duplicate of said lease, to the best of his recollection the said Geronimo Jose requested and obtained it from him for the purpose of registering the lease, but that he is unable to recall the great lapse of time; but counsel for the plaintiff objects to
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No lease for a term of more than six years shall be made by the husband with respect to the property of his wife, by the father with respect to that of his children, by the guardian with respect to that of his ward, or by a manager in default of special power with respect to the property entrusted to him for management.

the consideration of said testimony as to the date of said endorsement for the reason that said endorsement was not a judicial act and both it and its alleged date are wholly inadmissible, irrelevant and incompetent to bind the estate of the prodigal. • No such endorsement was placed upon the lessor's copies of said lease nor upon the copies retained by the notaries public before whom it was acknowledged, and the guardian of said minors had no notice or knowledge of such endorsement. No order of approval of said lease was entered in the guardianship proceedings, the only record thereof being the endorsement set forth above.

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The copy of the lease, at the bottom of which appears said approval signed by Judge Crossfield, was not attached to the court records of the case, nor did it ever form a part thereof. As evidence of record that the lease was judicially approved are cited:

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Motion presented by Zacarias which says: “"It having been decided by this court that the land be leased to the administration of the testamentary estate of Chua Piengco," etc.  not proof of judicial approval.

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Guardian’s accounts from 1913 to 1919, approved by the court, wherein appear the payments of rents stipulated in the contract  their approval doesn’t in any way indicate that the court likewise approved the lease for more than 6 years. We have no positive statute governing nunc pro tunc orders.

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What is established in our laws and jurisprudence is, that our CFI, being courts of record, the orders and judgments rendered by them must appear in writing in the records of the court. In the present case it does not appear that there was any written order in the records of the Court of First Instance approving the lease in question. As we have pointed out, neither is there any entry in the records of these cases that might serve as a basis for the conclusion that the court in due time approved such a contract. • Jurisprudence:

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The office of a judgment nunc pro tunc is to record some act of the court done at a former time which was not then carried into the record, and the power of a court to make such entries is restricted to placing upon the record evidence of judicial action which has been actually taken. It may be used to make the record speak the truth, but not to make it speak what it didn’t speak but ought to have spoken. If the court has not rendered a judgment that it might or should have rendered, or if it has rendered an imperfect or improper judgment, it has no power to remedy these errors or omissions by ordering the entry nunc pro tunc of a proper judgment. In all cases the exercise of the power to enter judgments nunc pro tunc presupposes the actual rendition of a judgment, and a mere right to a judgment will not furnish the basis for such an entry. If the court has omitted to make an order, which it might or ought to have made, it cannot, at a subsequent term, be made nunc pro tunc. According to some authorities, in all cases in which an entry nunc pro tuncis made, the record should show the facts which authorize the entry, but other courts hold that in entering an order nunc pro tunc the court is not confined to an examination of the judge's minutes, or written evidence, but may proceed on any satisfactory evidence, including parol testimony. In the absence of a statute or rule of court requiring it, the failure of the judge to sign the journal entries or the record does not effect the force of the order granted. The phrase nunc pro tunc signifies "now for then," or that a thing is done now that shall have the same legal force and effect as if one at the time it ought to have been done. A court may order an act done nunc pro tunc when it, or some one of its immediate ministerial officers, has done some act which for some reason has not been entered of record or otherwise noted at the time the order or judgment was made or

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should have been made to appear on the papers or proceedings by the ministerial officer.

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The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment which the court ought to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment may have been. The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment which the court ought to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment may have been. Except as to the rights of third parties a judgment nunc pro tunc is retrospective, and has the same force and effect, to all intents and purposes, as if it had been entered at the time when the judgment was originally rendered. It is competent for the court to make an entry nunc pro tunc after the term at which the transaction occurred, even though the rights of third persons may be affected. But entries nunc pro tunc will not be ordered except where this can be done without injustice to either party, and as a nunc pro tunc order is to supply on the record something which had actually occurred, it cannot supply omitted action by the court. Record entries nunc pro tunc can properly be made only when based on some writing in a cause which directly or by fair inference indicates the purpose of the entry so sought to be made, or on the personal knowledge and recollection of the court; but in a case where a statement of facts was filed after adjourment of the court for the term, but within the time allowed by an order not entered in the minutes on an oral motion made therefore at the trial, the court at a subsequent term was held to have jurisdiction to permit the filing of such order nunc pro nunc on the recollection of the judge and other parol testimony that the order had been applied for and granted during the previous term, without any memorandum or other written evidence thereof. A nunc pro tunc entry will be treated as a verity where not appealed from.

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WON a nunc pro tunc order may be entered when nothing appears from the files forming a part of the record, upon which such an order may be beased.

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For the entry of a nunc pro tunc order, it is required that the record present some visible data of the order which it is sought to be supplied by said nunc pro tunc order, whether it is the data referring to the whole of the order or merely limited to such portion thereof, that the part lacking from the record constitutes a necessary part, an inevitable and ordinary consequence of the portion appearing in the record. The conclusion we have arrived at is that, although the lease in question could be approved by the court, nevertheless, such approval was neither obtained in due time, nor subsequently, inasmuch as the approbatory nunc pro tunc order impliedly entered in the judgment appealed from, is invalid on account of having been entered without a sufficient legal basis therefor.

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3. WON Tan Pho had authority to enter into contract  Yes. We find that Tan Pho’s authority as Tan-U’s attorney in fact has been sufficiently proven. Summarizing our conclusions with respect to the fundamental question touching the validity of the lease, we find that the lease in question must be held null in so far as it exceeds six years and effects the plaintiffs, for the reason that it lacked judicial approval.

ISSUE 2: WON the invalidity was cured by its registration in the certificate of title

HELD: NO RATIO: If the registered real right arising from the lease in question is, as it should be, declared invalid and without effect in so far as it effects the plaintiffs being in excess of six years counted from the execution of said contract, such a declaration of nullity extinguishes said real right, as to the plaintiffs, which, without it, should have continued legally to exists, since such a contract is not void per se, but only voidable. The instant petition for annulment, in effect, involves the petition that the right arising from the lease and registered in the registry, be declared extinguished with respect to the petitioners, which extinction is the inevitable effect of the declaration of nullity. This petition, therefore, enters the domain of Act No. 496, whereunder it has the effect of a petition for amending a certificate of title by virtue of the partial extinguishment of a right which occurred after its registration. And the amendment of the certificate of title that may now be affected by virtue of the partial extinguishment of the registered right, will not constitutes a revision of the original decree inasmuch as the amendment is based upon the extinguishment of a right, subsequent to its registration. lawphil.net It must not be lost sight of that the contract of lease in question, as we have pointed out, is not void ab initio nor with respect to all the lessors, but only voidable, and only with respect to the plaintiffs. It is not void ab initio because, in regard to the plaintiffs it contains the indispensable requisites for its existence. And it is voidable as to them because it lacks judicial approval, which defect invalidates it according to the law. The effect of this declaration of partial nullity is that with respect to the plaintiffs, the stipulation contained in the contract with regard to the period of twenty years agreed upon, is void and without effect, as is that which provides that, upon the termination of said period, all the improvements or buildings errected on the land shall become the property of the owners of the land. Nevetheless, these stipulations, as well as the others contained in the contract, shall remain valid with respect to Galo Lichauco.

Dispositive: Reversed.
LUISA BRIONES-VASQUEZ, petitioner, v. CA and HEIRS OF MARIA MENDOZA VDA. DE OCAMPO, respondents (2005) Facts: 1. Under a pacto de retro sale, De Ocampo acquired a parcel of land from Briones who reserved the right to repurchase the parcel of land up to Dec. 31, 1970. 2. De Ocampo died on May 27, 1979. 3. June 14, 1990 - Hipolita and Eusebio (De Ocampo’s Heirs) filed a petition for consolidation of ownership, alleging that the seller was not able to exercise her privilege to redeem the property. 4. Jan. 30, 1992 – RTC: true pacto de retro sale; seller can still redeem w/in 30 days from the finality of judgment, subject to NCC 16162 5. June 29, 1995 – CA: RTC set aside; 1970 sale with right of repurchase is an equitable mortgage; denied MFR on Dec. 15. 6. CA decision became final and executory and entry of judgment was made on July 17, 1996. 7. At the RTC, both parties filed their respective Motions for a Writ of Execution. 8. RTC issued a writ of execution but was returned unserved per sheriff’s return 9. Briones filed a Motion for an Alias Writ of Execution RTC granted. 10. Sheriff was unable to effect the satisfaction of the alias writ as stated in the sheriff’s report: Plaintiffs personally received but refused to sign Alias Writ of Execution and Letter of Advise (to withdraw deposit of Briones in the Clerk
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NCC1616. The vendor cannot avail himself of the right of repurchase without returning to the vendee the price of the sale, and in addition: (1) The expenses of the contract, and any other legitimate payments made by reason of the sale; (2) The necessary and useful expenses made on the thing sold. (1518)

of Court to cancel/release mortgage.) 11. Unable to effect the execution of the CA decision, Briones filed with the RTC an omnibus motion, dated May 25, 1999, praying for an order declaring equitable mortgage and issuance of a Writ of Possession vs. the plaintiffs for the delivery of possession of the land to the defendant – RTC denied and MFR, CA decision has become final and executory 12. Briones filed a Motion for Clarificatory Judgment with CA – denied and MFR: only issue that reached CA through an appeal was W the 1970 Sale with Right of Repurchase was actually an equitable mortgage so nothing to clarify. The remedy to W the prevailing party should be entitled to a right to repossess the property is with the RTC. Issue/Held: W/N what petitioner seeks through the Motion for Clarificatory judgment is nunc pro tunc – No. Ratio: 1. CA decision had already become final and executory at the time that the motion for clarificatory judgment was filed. When a final judgment becomes executory, it thereby becomes immutable and unalterable. The judgment may no longer be modified in any respect, even if the modification is meant to correct what is perceived to be an erroneous conclusion of fact or law, and regardless of whether the modification is attempted to be made by the Court rendering it or by the highest Court of the land. The only recognized exceptions are the correction of clerical errors or the making of so-called nunc pro tunc entries which cause no prejudice to any party, and, where the judgment is void. 2. GR: final and executory judgments are immutable and unalterable Exceptions: a) clerical errors; b) nunc pro tunc entries which cause no prejudice to any party; and c) void judgments. 3. The office of a judgment nunc pro tunc is to record some act of the court done at a former time which was not then carried into the record, and the power of a court to make such entries is restricted to placing upon the record evidence of judicial action which has been actually taken. It may be used to make the record speak the truth, but not to make it speak what it did not speak but ought to have spoken. If the court has not rendered a judgment that it might or should have rendered, or if it has rendered an imperfect or improper judgment, it has no power to remedy these errors or omissions by ordering the entry nunc pro tunc of a proper judgment. Hence a court in entering a judgment nunc pro tunc has no power to construe what the judgment means, but only to enter of record such judgment as had been formerly rendered, but which had not been entered of record as rendered. In all cases the exercise of the power to enter judgments nunc pro tunc presupposes the actual rendition of a judgment, and a mere right to a judgment will not furnish the basis for such an entry. … The object of a judgment nunc pro tunc is not the rendering of a new judgment and the ascertainment and determination of new rights, but is one placing in proper form on the record, the judgment that had been previously rendered, to make it speak the truth, so as to make it show what the judicial action really was, not to correct judicial errors, such as to render a judgment which the court ought to have rendered, in place of the one it did erroneously render, nor to supply nonaction by the court, however erroneous the judgment may have been. A nunc pro tunc entry in practice is an entry made now of something which was actually previously done, to have effect as of the former date. Its office is not to supply omitted action by the court, but to supply an omission in the record of action really had, but omitted through inadvertence or mistake. … It is competent for the court to make an entry nunc pro tunc after the term at which the transaction occurred, even though the rights of third persons may be affected. But entries nunc pro tunc will not be ordered except where this can be done without injustice to either party, and as a nunc pro tunc order is to supply on the record something which has actually occurred, it cannot supply omitted action by the court . . . A nunc pro tunc judgment cannot correct judicial error nor supply nonaction by the court. Dispositive: Petition for certiorari dismissed; parties directed to proceed upon the basis of the CA final decision; equitable mortgage

G.R. No. L-27247 April 20, 1983 IN THE MATTER OF THE PETITION FOR DECLARATORY JUDGMENT REGARDING THE VALIDITY OF ORDINANCE NO. 386 OF THE CITY OF BAGUIO, BAGUIO CITIZENS ACTION

INC., and JUNIOR CHAMBER OF BAGUIO CITY, INC. vs. THE CITY COUNCIL AND CITY MAYOR OF THE CITY OF BAGUIO DE CASTRO, J: In this petition for declaratory relief originally filed in the Court of First Instance of Baguio, Branch II, what is involved is the validity of Ordinance 386 passed by the City Council of Baguio City which took effect on February 23, 1967, quoted together with the explanatory note, as follows: ORDINANCE 386 AN ORDINANCE CONSIDERING ALL SQUATTERS OF PUBLIC LAND, OTHER THAN THOSE EARMARKED FOR PUBLIC USE IN THE CITY OF BAGUIO WHO ARE DULY REGISTERED AS SUCH AT THE TIME OF THE PROMULGATION OF THIS ORDINANCE AS BONAFIDE OCCUPANTS OF THEIR RESPECTIVE LOTS AND WHICH SHALL HEREAFTER BE EMBRACED AS A CITY GOVERNMENT HOUSING PROJECT AND PROVIDING FOR OTHER PURPOSES. Upon strong recommendation of the Vice-Mayor and Presiding Officer, on Motion of all the Councilors, seconded by the same, be it ordained by the City Council assembled: Section l.—All public lands within Baguio townsite which are occupied by squatters who are duly registered as such at the time of the promulgation of this Ordinance such public lands not designated by city and national authorities for public use, shall be considered as embraced and comprising a City Government Housing Project; PROVIDED, HOWEVER, That areas covered by Executive Orders or Presidential Proclamations but the city had made official representation for the lifting of such orders or proclamation shall be deemed to be part of the Baguio Townsite for the purposes of this ordinance; Section 2.—Building permits shall have been deemed issued to all squatters as contemplated by this Ordinance, giving such squatters five years from the approval of this Ordinance to satisfactorily comply with city building specifications and payment of the corresponding city building permit fees; Section 3.—All cases pending in court against squatters be dropped without prejudice to the full prosecution of all subsequent violations in relation to the provisions of existing city ordinances and/or resolutions; Section 4.—All squatters be given all the necessary and needed protection of the City Government against the stringent provisions of the Public Land Act, particularly on public bidding, in that the lots occupied by said squatters be awarded to them by direct sale through Presidential Proclamation; Section 5.—The City Government shall not be interested in making financial profit out of the project and that the appraisal and evaluation of the said lots shall be made at minimum cost per square meters, the total cost of the lots made payable within the period of ten years; Section 6.—The minimum lot area requirements shall be disregarded in cases where it could not be implemented due to existing congestion of houses, and that, if necessary, areas applied for under this ordinance shall be reduced to that which is practical under the circumstances; PROVIDED, HOWEVER, That squatters in congested areas shall be given preference in the transfer to resettlement areas or government housing projects earmarked as such under the provisions of this ordinance, if and when it becomes necessary to ease congestion or when their lots shall be traversed by the laying of roads or are needed for public use; Section 7.—The amount of P20,000.00 or so much as is necessary, for the lot survey of each squatter's lot be appropriated, such survey of which shall be conducted by licensed private

surveyors through public biddings; PROVIDED, That, said expenses for survey shall be included in the overall cost of each lot; Section 8.—The three-man control committed for the Quirino-Magsaysay housing project which was previously created under City Ordinance No. 344, shall exercise administration and supervision of the city government housing projects created under this Ordinance shall, furthermore, be entrusted with the duty of: (1) Consolidating a list of all city squatters who shall be benefitted in contemplation and under the provisions of this Ordinance; (2) To assist and help the squatters in the preparation of all the necessary and required paper work and relative items in connection with their application over their respective lots; (3) To seek and locate other areas within the Baguio Townsite conveniently situated and which will be earmarked as subsequently housing projects of the city for landless bonafide city residents; and (4) To carry out and implement the provisions of this Ordinance without the least possible delay. EXPLANATORY NOTE This ordinance is primarily designed to extend a helping hand to the numerous landless city residents and the called 'Squatters' within the Baguio Townsite in their desire to acquire residential lots which they may rightly call their own. The reported people who have violated the City's building ordinances were not so guarded by any criminal perversity, but where given to it more by circumstances of necessity and that they are, therefore, entitled to a more human treatment, more of understanding and more of pity rather than be herded before the courts, likened to hardened criminals and deliberate violators of our laws and ordinances. PRESENT AND VOTING: Hon. Norberto de Guzman — Vice Mayor Presiding Officer Hon. Gaudencio Floresca — Councilor Hon. Jose S. Florendo — Councilor Hon. Francisco G. Mayo — Councilor Hon. Braulio D. Yaranon — Councilor Hon. Sinforoso Fañgonil — Councilor The petition for declaratory relief filed with the Court of First Instance of Baguio, Branch II, prays for a judgment declaring the Ordinance as invalid and illegal ab initio. The respondents-appellees, the City Council and the City Mayor, filed motions to dismiss the petition which were denied. Nonetheless, in the decision thereafter rendered, the petition was dismissed on the grounds that: 1) another court, the Court of First Instance of Baguio, Branch I, had declared the Ordinance valid in a criminal case filed against the squatters for illegal construction, and the Branch II of the same court cannot, in a declaratory proceeding, review and determine the validity of said judgment pursuant to the policy of judicial respect and stability; 2) those who come within the protection of the ordinance have not been made parties to the suit in accordance with Section 2 of Rule 64 and it has been held that the nonjoinder of such parties is a jurisdictional defect; and 3) the court is clothed with discretion to refuse to make any declaration where the declaration is not necessary and proper at the time under all circumstances, e.g. where the declaration would be of no practical help in ending the controversy or would not stabilize the disputed legal relation, citing Section 5 of Rule 64; ICJS 1033-1034; 16 AM. JUR 287-289; Hoskyns vs. National City Bank of New York, 85 Phil. 201. Hence, the instant appeal which was perfected in accordance with the provisions of Rule 42, before the approval of Republic Act No. 5440 on September 9, 1968. 1. The case before the Court of First Instance of Baguio, Branch 1, dealt with the criminal liability of the accused for constructing their houses without obtaining building permits, contrary to Section 47 in relation to Section 52 of the Revised Ordinances of Baguio, which act the said court considered as pardoned by Section 2 of Ordinance 386. The court in said case upheld the power of the Municipal Council to legalize the acts punished by the aforesaid provisions of the Revised Ordinances of Baguio, stating that the Municipal Council is the policy determining body of Baguio City and therefore it can amend, repeal, alter or modify its own laws as it did when it enacted Ordinance 386. In deciding the case, the first branch of the court a quo did not declare the whole Ordinance valid. This is clear when it

stated that "had the issue been the legalization of illegal occupation of public land, covered by Republic Act No. 947, ... the Ordinance in question should have beenultra vires and unconstitutional." 1 Said court merely confined itself to Sections 2 and 3 of Ordinance 386. It did not make any definite pronouncement whether or not the City Council has the power to legalize the illegal occupation of public land which is the issue in the instant case. It is noteworthy that the court, in passing upon the validity of the aforesaid sections, was apparently guided by the rule that where part of a statute is void as repugnant to the organic law, while another part is valid, the valid portion, if separable from the invalid may stand and be enforced. Contrary to what was said in the decision under review, the second branch of the courta quo was not called upon to determine the validity of the judgment of the first branch. 2. The non-inclusion of the squatters mentioned in the Ordinance in question as party defendants in this case cannot defeat the jurisdiction of the Court of First Instance of Baguio. There is nothing in Section 2 of Rule 64 of the Rules of Court which says that the non-joinder of persons who have or claim any interest which would be affected by the declaration is a jurisdictional defect. Said section merely states that "All persons shall be made parties who have or claim any interest which would be affected by the declaration; and no declaration shall, except or otherwise provided in these rules, prejudice the rights of persons not parties to the action." This section contemplates a situation where there are other persons who would be affected by the declaration, but were not impleaded as necessary parties, in which case the declaration shall not prejudice them. If at all, the case may be dismissed not on the ground of lack of jurisdiction but for the reason stated in Section 5 of the same Rule stating that "the Court may refuse to exercise the power to declare rights and to construe instruments in any case where a decision would not terminate the uncertainty or controversy which gave rise to the action, or any case where the declaration or construction is not necessary and proper at the time under all circumstances." It must be noted that the reason for the law requiring the joinder of all necessary parties is that failure to do so would deprive the declaration of the final and pacifying function the action for declaratory relief is calculated to subserve, as they would not be bound by the declaration and may raise the Identical issue. 2 In the case at bar, although it is true that any declaration by the court would affect the squatters, the latter are not necessary parties because the question involved is the power of the Municipal Council to enact the Ordinances in question. Whether or not they are impleaded, any determination of the controversy would be binding upon the squatters. A different situation obtains in the case of Degala v. Reyes 3 cited in the decision under review. The Degala case involves the validity of the trust created in the will of the testator. In the said case, the Roman Catholic Church which was a necessary party, being the one which would be most vitally affected by the declaration of the nullity of the will was not brought in as party. The Court therefore, refused to make any declaratory judgment on ground of jurisdictional defect, for there can be no final judgment that could be rendered and the Roman Catholic not being bound by such judgment might raise the Identical issue, making therefore the declaration a mere exercise in futility. This is not true in the instant case. A declaration on the nullity of the ordinance, would give the squatters no right which they are entitled to protect. The party most interested to sustain and defend the legality of the Ordinance is the body that passed it, the City Council, and together with the City Mayor, is already a party in these proceedings. 3. The Ordinance in question is a patent nullity. It considered all squatters of public land in the City of Baguio as bona-fide occupants of their respective lots. As we have stated in City of Manila v. Garcia, 4 et al.: Squatting is unlawful and no amount of acquiescence on the part of the city officials will elevate it into a lawful act. In principle, a compound of illegal entry and official permit to stay is obnoxious to our concept of proper official norm of conduct. Because, such permit does not serve social justice; it fosters moral decadence. It does not promote public welfare; it abets disrespect for the law. It has its roots in vice; so it is an infected bargain. Official approval of squatting should not, therefore, be permitted to obtain in this country where there is an orderly form of government. In the same case, squatting was characterized as a widespread vice and a blight Thus:

Since the last global war, squatting on another's property in this country has become a widespread vice. It was and is a blight Squatter's areas pose problems of health, sanitation. They are breeding places for crime. They constitute proof that respect for the law and the rights of others, even those of the government are being flouted. Knowingly, squatters have embarked on the pernicious act of occupying property whenever and wherever convenient to their interests without as much as leave, and even against the will, of the owner. They are emboldened seemingly because of their belief that they could violate the law with impunity. The pugnaciousness of some of them has tied up the hands of legitimate owners. The latter are thus prevented from recovering possession by peaceful means. Government lands have not been spared by them. They know, of course, that instrusion into property, government or private, is wrong. But, then the wheels of justice grind slow, mainly because of lawyers who, by means, fair or foul, are quite often successful in procuring delay of the day of reckoning. Rampancy of forcible entry into government lands particularly, is abetted by the apathy of some public officials to enforce the government's rights. Obstinacy of these squatters is difficult to explain unless it is spawned by official tolerance, if not outright encouragement or protection. Said squatters have become insensible to the difference between right and wrong. To them, violation of law means nothing. With the result that squatters still exists, much to the detriment of public interest. It is high time that, in this aspect, sanity and the rule of law be restored. It is in this environment that we look into the validity of the permits granted defendants herein. In the above cited case, the land occupied by the squatters belongs to the City of Manila. In the instant case, the land occupied by the squatters are portions of water sheds, reservations, scattered portions of the public domain within the Baguio townsite. Certainly, there is more reason then to void the actions taken by the City of Baguio through the questioned ordinance. Being unquestionably a public land, no disposition thereof could be made by the City of Baguio without prior legislative authority. It is the fundamental principle that the state possesses plenary power in law to determine who shall be favored recipients of public domain, as well as under what terms such privilege may be granted not excluding the placing of obstacles in the way of exercising what otherwise would be ordinary acts of ownership. And the law has laid in the Director of Lands the power of exclusive control, administrations, disposition and alienation of public land that includes the survey, classification, lease, sale or any other form of concessions or disposition and management of the lands of public domains. 5 Nor could the enactment of Ordinance 386 be justified by stating that "this Ordinance is primarily designed to extend a helping hand to the numerous landless city residents and the so called squatters within the Baguio townsite in their desire to acquire residential lots which they may rightly call their own and that the reported people who have violated the City's building ordinances were not so guided by any criminal perversity, but were given to it more by circumstances of necessity and that they are, therefore, entitled to a more human treatment, more understanding and more of pity rather than be herded before the courts, likened to hardened criminals and deliberate violators of our laws and ordinances." 6 Our pronouncement in Astudillo vs. Board of Directors of PHHC
7

is relevant to this case. Thus—

In carrying out its social re-adjustment policies, the government could not simply lay aside moral standards, and aim to favor usurpers, squatters, and intruders, unmindful of the lawful and unlawful origin and character of their occupancy. Such a policy would perpetuate conflicts instead of attaining their just solution. (Bernardo vs. Bernardo, 96 Phil. 202, 206.) Indeed, the government has enunciated a militant policy against squatters. Thus, Letter of Instruction No. 19 dated October 2, 1972 orders city and district engineers 'to remove all illegal constructions including buildings ... and those built without permits on public or private property' and providing for the relocation of squatters (68 O.G. 7962. See Letter of Instruction No. 19-A). As noted by Justice Sanchez, since the last global war, squatting on another's property in this country has become a widespread vice. (City of Manila vs.. Garcia, L-26053, Feb. 21, 1967, 19 SCRA 413, 418).

WHEREFORE, in view of the foregoing, Ordinance 386 is hereby rendered nullified and without force and effect. SO ORDERED.

G.R. No. L-28138 August 13, 1986 MATALIN COCONUT CO., INC. vs. THE MUNICIPAL COUNCIL OF MALABANG, LANAO DEL SUR, AMIR M. BALINDONG and HADJI PANGILAMUN MANALOCON, MUNICIPAL MAYOR and MUNICIPAL TREASURER OF MALABANG, LANAO DEL SUR, PURAKAN PLANTATION COMPANY YAP, J.: On August 24, 1966, the Municipal Council of Malabang, Lanao del Sur, invoking the authority of Section 2 of Republic Act No. 2264, otherwise known as the Local Autonomy Act, enacted Municipal Ordinance No. 45-46, entitled "AN ORDINANCE IMPOSING A POLICE INSPECTION FEE OF P.30 PER SACK OF CASSAVA STARCH PRODUCED AND SHIPPED OUT OF THE MUNICIPALITY OF MALABANG AND IMPOSING PENALTIES FOR VIOLATIONS THEREOF." The ordinance made it unlawful for any person, company or group of persons "to ship out of the Municipality of Malabang, cassava starch or flour without paying to the Municipal Treasurer or his authorized representatives the corresponding fee fixed by (the) ordinance." It imposed a "police inspection fee" of P.30 per sack of cassava starch or flour, which shall be paid by the shipper before the same is transported or shipped outside the municipality. Any person or company or group of individuals violating the ordinance "is liable to a fine of not less than P100.00, but not more than P1,000.00, and to pay Pl.00 for every sack of flour being illegally shipped outside the municipality, or to suffer imprisonment of 20 days, or both, in the discretion of the court. The validity of the ordinance was challenged by the Matalin Coconut, Inc. in a petition for declaratory relief filed with the then Court of First Instance of Lanao del Sur against the Municipal Council, the Municipal Mayor and the Municipal Treasurer of Malabang, Lanao del Sur. Alleging among others that the ordinance is not only ultra vires, being violative of Republic Act No. 2264, but also unreasonable, oppressive and confiscatory, the petitioner prayed that the ordinance be declared null and void ab initio, and that the respondent Municipal Treasurer be ordered to refund the amounts paid by petitioner under the ordinance. The petitioner also prayed that during the pendency of the action, a preliminary injunction be issued enjoining the respondents from enforcing the ordinance. The application for preliminary injunction, however, was denied by the trial court; instead respondent Municipal Treasurer was ordered to allow payment of the taxes imposed by the ordinance under protest. Claiming that it was also adversely affected by the ordinance, Purakan Plantation Company was granted leave to intervene in the action. The intervenor alleged that while its cassava flour factory was situated in another municipality, i.e., Balabagan, Lanao del Sur, it had to transport the cassava starch and flour it produced to the seashore through the Municipality of Malabang for loading in coastwise vessels; that the effect of the enactment of Ordinance No. 45-46, is that intervenor had to refrain from transporting its products through the Municipality of Malabang in order to ship them by sea to other places. After trial, the Court a quo rendered a decision declaring the municipal ordinance in question null and void; ordering the respondent Municipal Treasurer to refund to the petitioner the payments it made under the said ordinance from September 27, 1966 to May 2, 1967, amounting to P 25,500.00, as well as all payments made subsequently thereafter; and enjoining and prohibiting the respondents, their agents or deputies, from collecting the tax of P.30 per bag on the cassava flour or starch belonging to intervenor, Purakan Plantation Company, manufactured or milled in the Municipality of Balabagan, but shipped out through the Municipality of Malabang. After the promulgation of the decision, the Trial Court issued a writ of preliminary mandatory injunction, upon motion of petitioner, requiring the respondent Municipal Treasurer to deposit with the Philippine National Bank, Iligan Branch, in the name of the Municipality of Malabang, whatever amounts the petitioner had already paid or shall pay pursuant to the ordinance in question up to and until final termination of the case; the deposit was not to be withdrawn from the said bank without any order from the court. On motion for reconsideration by respondents, the writ was subsequently modified on July 20, 1967, to require the deposit only of amounts paid from the effectivity of the writ up to and until the final termination of the suit.

From the decision of the trial court, the respondents appealed to this Court. A motion to dismiss appeal filed by petitioner-appellee, was denied by this court in its resolution of October 31, 1967. Subsequently, respondents-appellants filed a motion to dissolve the writ of preliminary mandatory injunction issued by the trial court on July 20, 1967. This motion was also denied by this Court on January 10, 1968. Of the assignments of error raised by the appellants in their Brief, only the following need be discussed: (1) that the trial court erred in adjudicating the money claim of the petitioner in an action for declaratory relief; and (2) that the trial court erred in declaring the municipal ordinance in question null and void. The respondents-appellants maintain that it was error for the trial court, in an action for declaratory relief, to order the refund to petitioner-appellee of the amounts paid by the latter under the municipal ordinance in question. It is the contention of respondents-appellants that in an action for declaratory relief, all the court can do is to construe the validity of the ordinance in question and declare the rights of those affected thereby. The court cannot declare the ordinance illegal and at the same time order the refund to petitioner of the amounts paid under the ordinance, without requiring petitioner to file an ordinary action to claim the refund after the declaratory relief judgment has become final. Respondents maintain that under Rule 64 of the Rules of Court, the court may advise the parties to file the proper pleadings and convert the hearing into an ordinary action, which was not done in this case. We find no merit in such contention. Under Sec. 6 of Rule 64, the action for declaratory relief may be converted into an ordinary action and the parties allowed to file such pleadings as may be necessary or proper, if before the final termination of the case "a breach or violation of an...ordinance, should take place." In the present case, no breach or violation of the ordinance occurred. The petitioner decided to pay "under protest" the fees imposed by the ordinance. Such payment did not affect the case; the declaratory relief action was still proper because the applicability of the ordinance to future transactions still remained to be resolved, although the matter could also be threshed out in an ordinary suit for the recovery of taxes paid (Shell Co. of the Philippines, Ltd. vs. Municipality of Sipocot, L-12680, March 20, 1959). In its petition for declaratory relief, petitioner-appellee alleged that by reason of the enforcement of the municipal ordinance by respondents it was forced to pay under protest the fees imposed pursuant to the said ordinance, and accordingly, one of the reliefs prayed for by the petitioner was that the respondents be ordered to refund all the amounts it paid to respondent Municipal Treasurer during the pendency of the case. The inclusion of said allegation and prayer in the petition was not objected to by the respondents in their answer. During the trial, evidence of the payments made by the petitioner was introduced. Respondents were thus fully aware of the petitioner's claim for refund and of what would happen if the ordinance were to be declared invalid by the court. Respondents' contention, if sustained, would in effect require a separate suit for the recovery of the fees paid by petitioner under protest. Multiplicity of suits should not be allowed or encouraged and, in the context of the present case, is clearly uncalled for and unnecessary. The main issue to be resolve in this case whether not Ordinance No. 45-66 enacted by respondent Municipal Council of Malabang, Lanao del Sur, is valid. The respondents-appellants contend that the municipality has the power and authority to approve the ordinance in question pursuant to Section 2 of the Local Autonomy Act (Republic Act No. 2264). Since the enactment of the Local Autonomy Act, a liberal rule has been followed by this Court in construing municipal ordinances enacted pursuant to the taxing power granted under Section 2 of said law. This Court has construed the grant of power to tax under the above-mentioned provision as sufficiently plenary to cover "everything, excepting those which are mentioned" therein, subject only to the limitation that the tax so levied isfor public purposes, just and uniform (Nin Bay Mining Company vs. Municipality of Roxas, Province of Palawan, 14 SCRA 661; C.N. Hodges vs. Municipal Board, Iloilo City, et al., 19 SCRA 28). We agree with the finding of the trial court that the amount collected under the ordinance in question partakes of the nature of a tax, although denominated as "police inspection fee" since its undeniable

purpose is to raise revenue. However, we cannot agree with the trial court's finding that the tax imposed by the ordinance is a percentage tax on sales which is beyond the scope of the municipality's authority to levy under Section 2 of the Local Autonomy Act. Under the said provision, municipalities and municipal districts are prohibited from imposing" any percentage tax on sales or other taxes in any form based thereon. " The tax imposed under the ordinance in question is not a percentage tax on sales or any other form of tax based on sales. It is a fixed tax of P.30 per bag of cassava starch or flour "shipped out" of the municipality. It is not based on sales. However, the tax imposed under the ordinance can be stricken down on another ground. According to Section 2 of the abovementioned Act, the tax levied must be "for public purposes, just and uniform" (Emphasis supplied.) As correctly held by the trial court, the so-called "police inspection fee" levied by the ordinance is "unjust and unreasonable." Said the court a quo: ... It has been proven that the only service rendered by the Municipality of Malabang, by way of inspection, is for the policeman to verify from the driver of the trucks of the petitioner passing by at the police checkpoint the number of bags loaded per trip which are to be shipped out of the municipality based on the trip tickets for the purpose of computing the total amount of tax to be collect (sic) and for no other purpose. The pretention of respondents that the police, aside from counting the number of bags shipped out, is also inspecting the cassava flour starch contained in the bags to find out if the said cassava flour starch is fit for human consumption could not be given credence by the Court because, aside from the fact that said purpose is not so stated in the ordinance in question, the policemen of said municipality are not competent to determine if the cassava flour starch are fit for human consumption. The further pretention of respondents that the trucks of the petitioner hauling the bags of cassava flour starch from the mill to the bodega at the beach of Malabang are escorted by a policeman from the police checkpoint to the beach for the purpose of protecting the truck and its cargoes from molestation by undesirable elements could not also be given credence by the Court because it has been shown, beyond doubt, that the petitioner has not asked for the said police protection because there has been no occasion where its trucks have been molested, even for once, by bad elements from the police checkpoint to the bodega at the beach, it is solely for the purpose of verifying the correct number of bags of cassava flour starch loaded on the trucks of the petitioner as stated in the trip tickets, when unloaded at its bodega at the beach. The imposition, therefore, of a police inspection fee of P.30 per bag, imposed by said ordinance is unjust and unreasonable. The Court finally finds the inspection fee of P0.30 per bag, imposed by the ordinance in question to be excessive and confiscatory. It has been shown by the petitioner, Matalin Coconut Company, Inc., that it is merely realizing a marginal average profit of P0.40, per bag, of cassava flour starch shipped out from the Municipality of Malabang because the average production is P15.60 per bag, including transportation costs, while the prevailing market price is P16.00 per bag. The further imposition, therefore, of the tax of P0.30 per bag, by the ordinance in question would force the petitioner to close or stop its cassava flour starch milling business considering that it is maintaining a big labor force in its operation, including a force of security guards to guard its properties. The ordinance, therefore, has an adverse effect on the economic growth of the Municipality of Malabang, in particular, and of the nation, in general, and is contrary to the economic policy of the government. Having found the ordinance in question to be invalid, we find it unnecessary to rule on the other errors assigned by the appellants. WHEREFORE, petition is dismissed. The decision of the court a quo is hereby affirmed. No costs. SO ORDERED.