Via: McFarlin Law

SECTION 1. Declaration of Policy. — It is hereby declared to be the policy of the government to stimulate, expedite, encourage and promote foreign commerce as a means of making the Philippines a vital center of international trade, of strengthening our foreign exchange position, of hastening industrialization, of overcoming domestic unemployment, of accelerating the development of the country and of insuring the economic security of all the people as provided in the Constitution.

SECTION 2. Mariveles Port: establishment of foreign trade zone therein: admission of foreign and domestic merchandise. — To attain the above policy, Mariveles, Province of Bataan, is hereby made a principal port of entry by further amending section seven hundred one of Republic Act Numbered Nineteen hundred thirty-seven, otherwise known as the Tariff and Customs Code of the Philippines, as amended, to read as follows:

“701. Collection Districts and Ports of Entry therefor. — For administrative purposes, the Philippines shall be divided into as many collection districts as there are at present existing, the respective limits of which may be changed from time to time by the Commissioner of the Bureau of Customs, upon approval of the department head. The principal ports of entry for the respective collection districts shall be Manila, Sual, Tabaco, Cebu, Pulupandan, Sia-in, Iloilo, Davao, Legaspi, Zamboanga, Jolo, Aparri, Jose Panganiban, Cagayan, Tacloban, San Fernando, Hinigaran, Dumaguete City, San Jose, Maasin, Maao, Iligan City, Batangas, Bulatay, Supang, Virac, Cabugao, Gaang, Dagupan City, Bislig, Catbalogan, Surigao and Mariveles.”

There is hereby established in the Mariveles Port a foreign trade zone herein referred to as the Zone. Foreign and domestic merchandise of every description, except such as is prohibited by law, may, without being subject to the customs and internal revenue laws and regulations of the Philippines, except as otherwise provided in this Act, be brought into and Zone and may be stored, sold, exhibited, broken up, repacked, assembled, distributed, sorted, graded, cleaned, mixed with foreign or domestic merchandise, or otherwise manipulated, or be manufactured except as otherwise provided in this Act, and be exported, destroyed or sent into customs territory of the Philippines therefrom, in the original package or otherwise, under the following terms and conditions:

(1) When foreign merchandise is sent from the Zone into the customs territory of the Philippines, it shall be subject to the laws and regulations of the Philippines affecting imported merchandise;

(2) Whenever the privilege shall be requested and there has been no manipulation or manufacture effecting a change in tariff classification, the Commissioner of Customs, shall take under supervision any lot or part of a lot of foreign merchandise in the Zone, cause it to be appraised and taxes determined and duties liquidated thereon. Merchandise so taken under supervision may be stored, manipulated, or manufactured under the supervision and regulation prescribed by the Secretary of Finance, and whether mixed or manufactured with domestic merchandise or not may, under regulation prescribed by the Secretary of Finance, be exported or destroyed, or may be sent in customs territory upon the payment of such liquidated duties and determined taxes thereon. If merchandise so taken under supervision has been manipulated or manufactured, such duties and taxes shall be payable on the quantity of such foreign merchandise used in the manipulation, or manufacture of the entered article. Allowance shall be made for recoverable and irrevocable waste; and if recoverable waste is sent into customs territory, it shall be dutiable and taxable in its condition and quantity and at its weight at the time of entry. Where two or more products result from the manipulation or manufacture of merchandise in the Zone; the liquidated duties and determined taxes shall be distributed to several products in accordance with their relative value at the time of separation with the due allowances for waste as provided for above;

(3) Subject to such regulations respecting identity and the safeguarding of the revenue as the Secretary of Finance may deem necessary, articles, the growth, product, or manufacture of the Philippines, on which all internal revenue taxes have been paid, if subject thereto, and articles previously imported on which duty and/or tax has been paid, or which have been admitted free of duty and tax, may be taken into the Zone from the customs territory of the Philippines, placed under the supervision of the Commissioner, and whether or not they have been combined with or made part, while in said Zone, of other articles, may be brought back thereto free of quotas, duty, or tax;

(4) If in the opinion of the Secretary of Finance their identity has been lost, such articles not be entitled to free entry by reason of non-compliance with the requirements made hereunder by the Secretary of Finance shall be treated when they re-enter customs territory of the Philippines as foreign merchandise under the provisions of the customs, tariff and internal revenue laws in force at the time;

(5) Under the rules and regulations of the Secretary of Finance, articles which have been taken into the Zone from customs territory for the sole purpose of exportation, destruction (except destruction of distilled spirits, wines and fermented liquors), or storage shall be construed to be exported for the purpose of —

“(a) the draw-back warehousing and bonding, or any other provisions of the Customs and Tariff Code of the Philippines, as amended, and the regulations thereunder; and

“(b) the statutes and bonds exacted for the payment of drawback, refund, or exception from liability for internal revenue taxes and for purpose of the internal revenue laws generally and the regulations thereunder. Such a transfer may also be considered an exportation for the purpose of other laws and regulations in so far as offices or agencies charged with the enforcement of those laws deem it advisable. Such articles may not be returned to customs territory for domestic consumption except where such return is in the public interest.

(6) Articles produced or manufactured in the Zone and exported therefrom shall on subsequent importation into the customs territory of the Philippines be subject to the import laws applicable to like articles manufactured in a foreign country except that articles produced or manufactured in the Zone exclusively with the use of domestic merchandise, the identity of which has been maintained in accordance with the second condition of this section, may, on such importation, be entered as Filipino goods returned.

SECTION 3. Creation of a Foreign Trade Zone Authority. — A Foreign Trade Zone Authority, hereafter referred to as Authority is hereby created to be composed of a Chairman and four members who shall be appointed for a term of six years by the President, with the consent of the Commission on Appointments: Provided, That the terms of office of the first appointees shall be fixed as follows: the Chairman shall be for six years, two members shall be for four years, and the last two members shall be for two years: Provided, further, That upon the expiration of his term, a member shall serve as such until his successor shall have been appointed and qualified: Provided, finally, That no vacancy shall be filled except for the unexpired portion of any term. The Authority shall hold its office in Mariveles.

No person shall be appointed as Chairman or member of the Foreign Trade Zone Authority unless he is a citizen of the Philippines, of good moral character and of unquestionable integrity and responsibility, and of recognized competence in customs administration, taxation, economics, commerce, and industry.

The Chairman shall receive a salary of twenty-four thousand pesos per annum, and each member shall receive a salary of twenty thousand pesos per annum.

SECTION 4. Powers and Duties. — The Foreign Trade Zone Authority shall have the following powers and duties:

(a) To fix and delimit the site of the Zone which shall at all times remain to be owned by the Government, and which shall have a contiguous and adequate area with well defined and policed boundaries, with adequate enclosures to segregate the Zone from the customs territory for protection of revenues, together with suitable provisions for ingress and egress of persons, conveyance, vessels and merchandise sufficient for the purpose of this Act;

(b) To determine and regulate the enterprises to be established within the port in order not to adversely affect the operations of existing domestic industries outside the Zone, and to operate the Zone as a public utility wherein all the rates and charges for all services or privileges within the Zone shall be fair and reasonable, and the Authority shall afford all who may apply for the use of the Zone and its facilities and appurtenances uniform treatment under like conditions subject to such treaties or commercial conventions as are not enforced or may hereafter be made by the Philippines with any foreign government from time to time;

(c) To direct the management, operation and maintenance of the Zone and to provide necessary facilities and appurtenances thereof;

(d) Upon application to grant, under uniform and reasonable rates and regulations made thereunder, permit to persons, firms, corporations or associations the use of the Zone and its facilities, the privilege to erect such buildings and other structures within the Zone as will meet their particular requirements: Provided, That such permission shall not constitute a vested right as against the government, nor interfere with the regulation of the Authority, nor interfere with the complicate the revocation of the grant: Provided, further, That such permits shall not be granted on terms that conflict with the public use of the Zone as set forth in this Act;

(e) To authorize expenditures out of its net operating income but not in excess of two hundred fifty thousand pesos, in addition to its annual appropriations;

(f) To issue such rules and regulations not inconsistent with the provisions of this Act or the rules and regulations of the Secretary of Finance made hereunder and as may be necessary to carry out the provisions of this Act;

(g) To appoint, fix remunerations, and remove for cause all officers and employees; and

(h) To exercise all the powers necessary to attain the purpose for which it is organized and for which this Act is enacted.

SECTION 5. Assignment of customs officers and guards. — The Secretary of Finance shall assign to the Zone the necessary customs officers and guards to protect the revenue and provide for the admission of foreign merchandise into customs territory.

SECTION 6. Vessels subject to Philippine laws. — Vessels entering or leaving the Zone shall be subject to the operation of all laws of the Philippines, except as otherwise provided in this Act, and vessels leaving the Zone and arriving in customs territory of the Philippines shall be subject to such regulations to protect the revenue as may be prescribed by the Secretary of Finance.

SECTION 7. Annual Report. — The Authority shall submit, within ten days from the opening of the regular session of Congress, an annual report to the Presiding Officers of both Houses, containing the details of the operation and fiscal condition of the Zone and transmit copies of said report to all members of Congress.

SECTION 8. Promulgation of rules and regulations by the Secretary of Finance. — The Secretary of Finance shall prescribe within six months from the effectivity of this Act such rules and regulations as may be necessary to carry out this Act.

SECTION 9. Penalties. — Any person violating any provision of this Act or any of the rules and regulations promulgated under Section four hereof, shall suffer the penalty of imprisonment of not less than five years nor more than ten years and fine of not less than five thousand pesos nor more than ten thousand pesos and, in addition, such violation shall ipso facto constitute a valid ground for the revocation of all privileges, permits and authorization granted to such person under this Act: Provided, however, That if the offender is a corporation, firm, partnership or association, the penalty shall be imposed upon the guilty officer or officers as the case may be of the corporation, firm or association, and if such guilty officer or officers be alien or aliens, in addition to the penalties herein prescribed, he or they shall be deported without further proceedings on the part of the Deportation Board.

Any officer or employee of the Government who by himself or through his agent, acting under his discretion and authority, shall connive, abet, or tolerate the violation of the provisions of this Act or any rules and regulations promulgated under Section four hereof or who fails to report within thirty days any violation thereof to the fiscal or chief of police in the place where the Zone is located shall suffer the penalties prescribed in the preceding paragraph including perpetual disqualification to hold public office.

The foregoing penalties shall be without prejudice to the assessment and collection of such taxes and duties as may be due on the foreign-made articles or merchandise which have been landed in the Zone and have not been re-shipped to a foreign port at the time of the revocation of the authority of the offender to operate within the Zone. In the event such taxes and duties shall not for any reason be paid upon demand by the Collector of Customs of the port within whose collection district the Zone is located, the foreign-made articles or merchandise of the offender remaining within such Zone at the time of revocation of its authority to operate therein, including its physical plants, machinery and equipment therein, shall, after due notice and hearing, be forfeited in favor of the Government and may be disposed of by the Government in the manner and for such purpose as it may so desire.

SECTION 10. Appropriations. — To carry out the purposes of this Act, there is hereby authorized to be appropriated, out of any funds in the National Treasury not otherwise appropriated, the sum of two hundred fifty thousand pesos for the fiscal year nineteen hundred sixty-nine.

SECTION 11. Effectivity. — This Act shall take effect upon its approval.

Approved: June 21, 1969

WHEREAS, pending before Congress prior to the promulgation of Proclamation No. 1081, dated September 21, 1972, was House No. 4317, entitled “An Act to Revise the Charter of the Foreign Trade Zone Authority Created Under Republic Act Numbered Five Thousand Four Hundred and Ninety and For Other Purposes”, which I have certified as one of the urgent measures necessitating immediate enactment;

WHEREAS, it is imperative that this measure be immediately made part of the law of the land in order to assure the accelerated development and efficient operations of the export processing zone in Mariveles, Bataan, and such other zones as may be established in the country, and thereby hastening the realization of the objectives of the Government to create a new social and economic order for the national benefit;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution as Commander-in-Chief of all the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1, dated September 22, 1972, as amended, do hereby order and decree the following to the Revised Charter of the Foreign Trade Zone Authority Created Under Republic Act No. 5490 and as part of the law of the land:

Section 1. Declaration of Policy. — It is hereby declared to be the policy of the Government to encourage and promote foreign commerce as a means of making the Philippines a center of international trade, of strengthening our export trade and foreign exchange position, of hastening industrialization, of reducing domestic unemployment, and of accelerating the development of the country, by establishing export processing zones in strategic locations in the Philippines.

Section 2. Creation of an Export Processing Zone Authority. — To carry out the above policy, there is hereby created a body corporate to be known as the Export Processing Zone Authority, hereinafter referred to as Authority, which shall be under the direct supervision of the Office of the President. The functions of the Authority are hereby declared governmental.

Section 3. Principal Office. — The Authority shall maintain its principal office in the Greater Manila area but it may establish branches and agencies within the Philippines as may be necessary for the proper conduct of its business.

Section 4. Purposes and Specific Powers. — The purposes and specific powers of the Authority are as follows:

(a) To operate, administer and manage the export processing zone established in the Port of Mariveles, Bataan, and such other export processing zones as may be established under this Decree; to construct, acquire, own, lease, operate and maintain infrastructure facilities, factory building, warehouses, dams, reservoir, water distribution, electric light and power system, telecommunications and transportation, or such other facilities and services necessary or useful in the conduct of commerce or in the attainment of the purposes and objectives of this Decree;

(b) To take water from any public stream, river, creek, lake, spring or waterfall in the Philippines as may be necessary for the attainment of the purposes of this Decree; to alter, straighten, obstruct or increase the flow of water in streams or in water channels intersecting or connecting therewith or contiguous to its works or any part thereof; and to undertake land reclamation;

(c) To acquire and hold agricultural lands in excess of the areas permitted to private corporations or associations by the Constitution;

(d) To determine and regulate the enterprises to be established within an export processing zone in order not to adversely affect the operations of existing domestic industries outside said Zone; to operate such Zone as a public utility wherein all the rates and charges for all services or privileges therein shall be fair and reasonable as determined solely by the Authority, and the Authority shall afford all who may apply for the use of the Zone and its facilities and appurtenances uniform treatment under like conditions subject to such treaties or commercial conventions as are now enforced or may hereafter be made by the Philippines with any foreign government from time to time;

(e) To grant the use or to rent, lease or let, for a consideration and under such terms, arrangements and conditions it may deem reasonable and proper, any and all port facilities, including stevedoring and port terminal services, or any concession properly incident thereto or in connection with the receipt, delivery, shipment and transfer in transit, weighing, marking, tagging fumigating, refrigerating, icing, storing, and handling of goods, wares and merchandise: Provided, however, That where the port terminal facilities are owned and operated by private persons, the fees and charges to be levied shall not exceed that being collected by the Government for similar services;

(f) Upon application, to grant such franchise to operate and maintain exclusively within the Zone electric light, heat or power system, transportation, communication, warehousing, ice plant or cold storage; and, under uniform and reasonable rates and regulations made thereunder, permit to persons, firms, corporations or associations the use of the Zone and its facilities, or the privilege to erect such buildings and other structures within the Zone as will meet their particular requirements: Provided, That such franchise or permission shall not constitute a vested right as against the Government, nor interfere with or complicate the revocation of the grant: Provided, further, That such franchise or permit shall not be granted on terms that conflict with the public use of the Zone, as set forth in this Decree;

(g) To fix, assess and collect storage charges and fees, including rentals for the lease, use or occupancy of lands, buildings, structure, warehouses, facilities and other properties owned and administered by the Authority; and to fix and collect the fees and charges for the issuance of permits, licenses and the rendering of services not enumerated herein, the provisions of law to the contrary notwithstanding;

(h) For the due and effective exercise of the powers conferred by law and to the extend requisite therefor, to exercise exclusive jurisdiction and sole police authority over all areas owned or administered by the Authority. For this purpose, the Authority shall have supervision and control over the bringing in or taking out of the Zone, including the movement therein, of all cargoes, wares, articles, machineries, equipment, supplies or merchandise of every type and description;

(i) When essential to the proper administration of its corporate affairs or when necessary for the proper transaction of its business or for carrying out the purposes of this Decree, to contract indebtedness and issue bonds, subject to the conditions set forth in Section 19 hereof;

(j) To create and operate and/or contract to operate such agencies, functional units, offices and departments of the Authority as it may deem necessary or useful for the furtherance of any of the purposes of this Decree;

(k) To adopt, alter and use a corporate seal which shall be judicially noticed; make contracts, lease, own or otherwise dispose of personal and real property; sue and be sued; and otherwise do and perform any and all things that may be necessary or proper to carry out the purposes of the Authority.

Section 5. Capitalization. — The capital of the Authority shall consist of (1) its existing assets and such other properties as may be contributed to the Authority by the Government to form part of capital, (2) all capitalized surplus, and (3) cash contribution by the Government in the amount of two hundred million pesos, which is hereby appropriated out of any fund in the National Treasury not otherwise appropriated, be they collection from any or all taxes accruing to the general fund or proceeds from loans the issue of bonds, treasury bills or notes, or derived from any other sources of income, by or of the National Government, which amount shall be programmed and released by the Budget Commission in accordance with the schedule of development and expenditures to be prepared and submitted by the Authority: Provided, however, That any budgetary outlay allocated and released in favor of the Export Processing Zone Authority and/or Foreign Trade Zone Authority shall be correspondingly credited to the authorized capitalization herein provided.

Section 6. Board of Commissioners. — The corporate powers of the Authority shall be vested in and exercised by the Board of Commissioners, hereinafter referred to as the Board, to be composed of seven members to wit: the Deputy Governor of the Central Bank of the Philippines, the vice-Chairman of the Board of Investments, the Undersecretary of Finance and the Undersecretary of the Department of Trade and Tourism, who shall be ex-officio members, and the remaining members shall be appointed by the President with the consent of the Commission on Appointments. The President shall designate from among the members of the Board its Chairman, who shall at the same time be the Administrator of the Authority.

Section 7. Qualifications and Disqualifications of Commissioners. — No person shall be appointed as a member of the Board unless he is a citizen of the Philippines, of good moral character and unquestionable integrity and responsibility and of recognized competence in any of the fields of finance, economics, law, taxation, commerce, industry, engineering, management or the like.

No member of the Board shall directly or indirectly engage in partisan political activities or practice any profession or business dealing with or related to the exercise of the Authority’s functions and powers; and be financially interested, directly or indirectly, in any contract entered into by the Authority.

Section 8. Tenure of Office. — Except for the ex-officio members, the tenure of office of the other members shall be six years; Provided, That the term of office of the first appointees shall be fixed as follows: the Chairman shall be for six years; one member shall be for four years, and the last member shall be for two years: Provided, finally, That no vacancy shall be filled except for the unexpired portion of any term.

The Chairman and the members of the Board may be suspended or removed for cause by the President of the Philippines.

Section 9. Meetings and Quorum. — The Board shall meet regularly once a month and as often as the exigencies of the service demand. The presence of at least four members shall constitute a quorum, and the vote of four members shall be necessary for the adoption of any rule, resolution or decision or any other act of the Board.

Section 10. Compensation of Chairman and Members of the Board. — The Chairman, who is also the Administrator of the Authority, shall receive an annual salary of fifty thousand pesos and a monthly commutable allowance of one thousand pesos. The members of the Board shall receive a per diem of not to exceed two hundred pesos for each board meeting actually attended by them: Provided, That such per diems shall not exceed one thousand pesos during any month for each member: Provided, further, That no other allowances or any form of compensation shall be paid them, except actual expenses in traveling to and from their residences to attend board meetings.

Section 11. Powers and Duties of the Board. — The Board shall have the following powers and duties:

(a) To promulgate policies and to prescribe such rules and regulations as may be necessary to implement the intent and provisions of this Decree, which rules and regulations shall take effect thirty (30) days following their publication in two (2) newspapers of general circulation in the Philippines;

(b) To recommend the establishment of other export processing zones as it may deem advisable, and to recommend to the President the issuance of a proclamation to fix and delimit the site of the Zone or Zones, which shall at all times remain to be owned by the Authority. The site of the Zone or Zones, as proclaimed by the President, shall be surveyed by the Bureau of Lands and conveyed thereafter in absolute ownership to the Authority by the President of the Philippines for the nominal sum of one peso for each parcel of land. Upon receipt of said deed of conveyance, the proper Register of Deeds shall register the same and issue the corresponding original certificate of title to the Authority;

(c) To approve the annual budget and such supplemental budgets which may be submitted to it by the Chairman;

(d) Upon the recommendation of the Administrator, to organize, reorganize and determine the Authority’s staffing pattern; to fix their salaries and to define their powers and duties;

(e) Notwithstanding the provisions of law, rules and regulations to the contrary, to enter by itself into any contract or agreement as may be necessary for the proper, efficient and stable administration of the Authority and for the attainment of the purposes and objectives of this Decree;

(f) To recommend to the President the application of compulsory arbitration in the settlement of any labor dispute affecting any industry or business located inside the Zone. If in the opinion of the President the labor dispute would seriously impair Zone operation, he shall forthwith certify said labor dispute to the National Labor Relation Commission or the Court of Industrial Relations for immediate compulsory arbitration;

(g) To recommend to the Commissioner of Immigration that entry into the Philippines of foreign nationals for employment as authorized under Section 16 of this Decree;

(h) To render annual reports to the President and such special reports as may be requested; and

(i) Generally, to exercise all the powers necessary or incidental to attain the purposes of this Decree.

Section 12. Administrator and Deputy Administrators; Powers and Duties. — The Chairman, who is also the Administrator of the Authority, shall be assisted by two Deputy Administrators to be chosen and may be removed by the Board upon recommendation of the Chairman. The Administrator and the Deputy Administrators shall be required to work full time in the Authority. Such deputies shall perform the duties, functions and responsibilities as may be assigned to them by the Administrator. The annual salary of each deputy shall be thirty thousand pesos with a monthly commutable allowance of five hundred pesos.

The Chairman-Administrator shall have the following powers and duties:

(a) To direct and manage the affairs of the Authority in accordance with the policies of the Board;

(b) To assist registered Zone enterprises and prospective investors to have their papers processed with dispatch by all Government offices, agencies, instrumentalities and financial and banking institutions;

(c) To prepare the agenda for the meeting of the Board and submit for its consideration and approval the policies and measures which he deems necessary and proper to carry out the provisions of this Decree;

(d) To submit within thirty (30) days after the close of each fiscal year an annual report to the Board and such other reports as may be required;

(e) To submit an annual budget and necessary supplemental budgets to the Board for its approval;

(f) To establish the internal organization of the Authority under such conditions that the Board may prescribe: Provided, That any major reorganization shall be subject to the approval of the Board; and

(g) To perform such other duties as may be assigned to him by the Board.

Section 13. Non-applicability of the Civil Service Law, and the Regulation of the Wage and Position Classification Office. — All officials and employees of the Authority shall be selected and appointed on the basis of merit and fitness based on a comprehensive and progressive merit system to be established by the Authority immediately upon its organization and consistent with Civil Service rules and regulations. The recruitment, transfer, promotion, and dismissal of all personnel of the Authority, including temporary workers, shall be governed by such merit system.

Likewise, all personnel of the Authority shall be exempt from the regulations of the Wage and Position Classification Office.

Section 14. Appointment by Board. — Department heads and similar rank shall be appointed by the Board, upon the recommendation of the Administrator.

Section 15. Appointment by Administrator. — Employees and officials below the rank of department heads shall be appointed to positions in the approved budget by the Administrator upon written recommendation of the department head concerned using as guide the standards set forth in the Authority’s merit system: Provided, That the Administrator shall submit a quarterly report to the Board regarding personnel recruitment, placement and training.

Section 16. Foreign Enterprises. — The provisions of law to the contrary notwithstanding, the Authority may authorize an alien or an association, partnership, corporation or any other form of business organization formed, organized, charactered or existing under any law other than those of the Philippines, or which is not a Philippine national, or the working capital of which is fully owned or controlled by aliens to do business or engage in an industry inside the zone.

Subject to the provisions of Section twenty-nine of Commonwealth Act Numbered Six hundred thirteen, as amended, a zone enterprise whether domestic or foreign may within five years from registration, employ foreign nationals in supervisory, technical or advisory positions not in excess of five per centum of its total personnel in each such category: Provided, That in no case shall each employment exceed five years. The employment of foreign nationals after five years from registration, or within such five years but in excess of the proportion herein provided, shall be governed by Section twenty of Commonwealth Act Numbered Six hundred thirteen, as amended: Provided, furthermore, That when the majority of the capital stock of the enterprise is owned by foreign investors, the positions of president, treasurer and general manager, or their equivalents, may be retained by foreign nationals. In exceptional cases, the Board may allow employment of foreign national in other positions that cannot be filled by Philippine nationals, but subject to the limitations as herein provided.

Foreign national under employment contract within the purview of this Decree, their spouses and unmarried children under twenty-one years of age, who are not excluded by Section twenty-nine of Commonwealth Act Numbered Six hundred thirteen, shall be permitted to enter in the Philippines during the period of employment of such foreign nationals.

Section 17. Tax Treatment of Merchandise in the Zone. — (1) Except as otherwise provided in this Decree, foreign and domestic merchandise, raw materials, supplies, articles, equipment, machineries, spare parts and wares of every description, except those prohibited by law, brought into the Zone to be sold, stored, broken up, repacked, assembled, installed, sorted, cleaned, graded, or otherwise processed, manipulated, manufactured, mixed with foreign or domestic merchandise or used whether directly or indirectly in such activity, shall not be subject to Customs and internal revenue laws and regulations nor to local tax ordinances, the provisions of law to the contrary notwithstanding.

(2) Merchandise purchased by a registered zone enterprise from the customs territory, if paid for in the United States dollar or in any convertible foreign currency and subsequently brought into the zone, shall be considered as exported, and the exporter thereof shall be entitled to the benefits allowed by law for such transaction.

(3) Domestic merchandise sent from the zone to the customs territory shall, whether or not combined with or made part of other articles likewise the growth, product or manufacture of the Philippines while in the zone, be subject to internal revenue laws of the Philippines as domestic goods sold, transferred or disposed of for local consumption.

(4) Merchandise sent from the zone to the customs territory shall, whether or not combined with or made part of other articles while in the zone, be subject to laws and regulations governing imported merchandise. The duties and taxes shall be assessed on the value of imported materials (except when the final product is exempt) and the internal revenue taxes on the value added.

(5) Domestic merchandise on which all internal revenue taxes have been paid, if subject thereto, and foreign merchandise previously imported on which duty or tax has been paid, or which have been admitted free of duty and tax, may be taken into the zone from the customs territory of the Philippines and be brought back thereto free of quotas, duty or tax.

(6) Subject to such regulations respecting identity and the safeguarding of the revenue as the Authority may deem necessary when the identity of an article entered into the zone has been lost, such article when removed from the zone and taken to the customs territory shall be treated as foreign merchandise entering the country for the first time, under the provisions of the Tariff and Customs Code.

(7) Articles produced or manufactured in the zone and exported therefrom shall, on subsequent importation into the customs territory, be subject to the import laws applicable to like articles manufactured in a foreign country.

(8) Unless the contrary is shown, merchandise taken out of the zone shall be considered for tax purposes to have been sent to customs territory.

Section 18. Additional Incentives. — A zone registered enterprise shall also enjoy the following incentives benefits;

(a) Net-Operating Loss Carry Over. — A net-operating loss incurred in any of the first five years of operation inside the zone may be carried over as a deduction from taxable income derived in such zone during the five years immediately following the year of such loss. The entire amount of the loss and any portion of such loss which exceeds the taxable income of such first year shall be deducted in like manner from the taxable income of the next remaining four years. The net-operating loss shall be computed in accordance with the provisions of the National Internal Revenue Code, any provision of this Decree to the contrary notwithstanding, except that income not taxable either in whole or in part under this Decree or other laws shall be included in gross income.

(b) Accelerated Depreciation. — Fixed assets may be (1) depreciated to the extent of not more than twice the normal rate of depreciation or depreciated at the normal rate of depreciation if the expected life is ten years or less; or (2) depreciated over any number of years between five years and expected life if the latter is more than ten years; and the depreciation thereon allowed as a deduction from taxable income: Provided, That the taxpayer notifies the Bureau of Internal Revenue at the beginning of the depreciation period which depreciation rate allowed by this subsection will be used by it.

(c) Exemption from Export Tax. — The provisions of law to the contrary notwithstanding, foreign merchandise transshipped through the zone or any article which has been processed, manufactured or manipulated in said zone and exported therefrom, shall be exempt from any export tax, imposts or fee, including the stabilization tax imposed by Republic Act Numbered Sixty-one hundred twenty-five.

(d) Foreign Exchange Assistance. — The Central Bank of the Philippines or any of its authorized agent banks shall extend to zone registered enterprises, priority in the allocation of foreign exchange and in the availment of the assistance and resources of the Central Bank in a manner that would encourage and accelerate investment in the zone.

(e) Financial Assistance. — Notwithstanding any provisions of law to the contrary, zone registered enterprises shall be entitled to at least the same privileges accorded to enterprises approved by and registered with the Board of Investments under Republic Act Numbered Four thousand eight hundred sixty, as amended by Republic Act Numbered Six thousand one hundred forty-two, or under any existing law, executive order, rule or regulation or which may hereafter be enacted or promulgated, insofar as obtaining financial assistance by way of loans, credits, guarantees or other forms of financial accommodations from government financial institutions, whether directly or indirectly through the medium of private banking or non-banking financial institutions: Provided, That the proceeds derived from or through such financial assistance shall be used in undertaking projects approved by the Authority: Provided, further, That in order to facilitate the payment of the foreign loans, credits and indebtedness contracted by zone registered enterprises for such projects approved by the Authority, the Central Bank shall, under such rules and regulations as it may promulgate upon recommendation of the Authority, allow the deduction of such portion of the foreign exchange earnings of said enterprises sufficient to meet the foreign exchange requirements for servicing foreign indebtedness incurred by them.

(f) Exemption from Local Taxes and Licenses. — Notwithstanding the provisions of law to the contrary, any business enterprise engaged in the production, processing, packaging, or manipulation of export products shall, to the extent of their construction, operation or production inside the zone, be exempt from the payment of any and all local government imposts, fees, licenses or taxes, except real estate taxes imposed under Commonwealth Act Numbered Four Hundred seventy and Republic Act Numbered Fifty-four hundred forty-seven: Provided, That said business enterprise shall pay in the municipality where the zone is located real estate taxes on all its real properties located therein.

Section 19. Power to Issue Bonds or Incur Indebtedness. — Whenever the Board may deem it advisable and necessary for the Authority to contract loans, credits and other indebtedness, or to issue bonds, notes debentures, securities and other instruments of indebtedness for the development and/or operation of the Zone, it shall by resolution so manifest and declare stating the purpose for which the indebtedness is to be applied and citing the project study devised for the purpose. In order for such resolution to be valid, it shall be passed by the affirmative vote of at least four members of such Board and approved by the President of the Philippines upon the recommendation of the Secretary of Finance, after consultation with the National Economic Development Authority and the Monetary Board of the Central Bank.

The total principal domestic indebtedness of the Authority payable in the Philippine currency shall not at any one time exceed three hundred million pesos, while the total principal indebtedness of the Authority payable in foreign currency shall not at any one time exceed one hundred million United States dollars or the equivalent thereof in other foreign currencies qualified to form part of the international reserves of the Central Bank: Provided, That such foreign indebtedness may be contracted from foreign governments or any public or private international banking and financial institution or fund sources. The bonds and other instruments of indebtedness which the authority is authorized to issue under this section and any income derived therefrom shall, except those contracted with private international banking and financial institution, be exempt from the payment of all taxes of whatever kind and nature including withholding taxes imposed by the Republic of the Philippines, its agencies, instrumentalities or political subdivisions, which fact may be expressed on the face thereof, and shall be eligible as collateral in any transaction with the national or any local government, its agencies and instrumentalities, including government-owned or controlled corporations and government banking and financial institutions, in which collateral is required. Any or all loans or instruments of indebtedness which the Authority is authorized to contract or issue under this section shall be unconditionally guaranteed both as to principal and interest by the Government of the Republic of the Philippines whenever the President of the Philippines, by himself or through his duly authorized representative, may deem such guarantee by the Government of the Republic of the Philippines to be advisable and necessary, in which case, the President of the Philippines or his duly authorized representative is hereby authorized to execute and deliver said guarantee of the Government of the Republic of the Philippines.

The Central Bank of the Philippines or any of its authorized agent banks shall extend to the Authority priority in the allocation of foreign exchange and in the availment of the assistance and resources of the Central Bank in a manner that shall facilitate the contracting or issuance by the Authority of the loans or instruments of indebtedness which the Authority is authorized to contract or issue under this section or the repayment thereof. In any case, where the Authority is required to surrender or sell to the Central Bank foreign currencies qualified to form part of its international reserves, the Authority is hereby given the right to repurchase any or all of said foreign currencies as is necessary to meet all items of debt service arising out of any and all loans and instruments of indebtedness payable in foreign currency contracted or issued by it pursuant to this section at the same rate or rates at which said foreign currencies were respectively sold to the latter, subject to the payment of foreign exchange premium or fees as the Central Bank may deem reasonable.

In the negotiation, contracting and issuance of any loan, credit and evidence of indebtedness under this section, the President of the Philippines may, if deemed by him upon recommendation of the Authority, to be necessary or justified and when made a condition by the foreign creditor to the issuance of such loans, credits, or instruments or indebtedness, agree to waive the application of any law granting preference or imposing restrictions on international competitive bidding, such as, but not limited to, Act Numbered Forty-two hundred thirty-nine, Commonwealth Act Numbered One hundred thirty-eight, Commonwealth Act Numbered Five hundred forty-one, Republic Act Numbered Nine hundred twelve, Republic Act Numbered Fifty-one hundred eighty-three: Provided, however, That in every case where competitive bidding is agreed upon in the purchase of machineries, equipment, materials and supplies financed out of proceeds of such loans, credits and instruments of indebtedness, preference may be granted in favor of such machineries, equipment, materials and supplies produced, processed or manufactured in the Philippines at such rate and in such manner as may be agreed upon from time to time with the entity or institution providing financing for the project.

Section 20. Sinking Fund. — The Authority is hereby authorized to pay out of its appropriations, operating income, proceeds from its borrowings or issuance of bonds and other instruments of indebtedness, and from all other sources of funds, the amounts necessary to meet its maturing obligations on the loans, credits or indebtedness contracted by the Authority or on the bonds, notes, or other instruments of indebtedness issued by it. For this purpose, a sinking fund may be established out of said sources of funds of the Authority in the Central Bank of the Philippines in such manner that the total thereof at each due date of the bonds and other instruments of indebtedness and the loans, credits or indebtedness contracted by the Authority shall be equal to the aggregate maturing obligations or amortization as of that date. Said fund shall be under the custody of the Central Bank of the Philippines under a special account, which shall invest the same in such manner as the Monetary Board may approve, charging all expenses of such investments to said sinking fund and crediting the same with interest on investments and other income belonging to it. A standing appropriation is hereby made out of any general fund in the National Treasury not otherwise appropriated, of such sum as may be necessary to meet all obligations of the Government of the Republic of the Philippines under all guarantees which may be executed by it pursuant to this Decree, in case such sinking fund shall be insufficient to fully pay the indebtedness of the Authority guaranteed by the Government of the Republic of the Philippines or the Authority to fully pay the same by some other means.

Section 21. Non-profit Character of the Authority; Exemption from Taxes. — The Authority shall be non-profit and shall devote and use all its returns from its capital investment, as well as excess revenues from its operations, for the development, improvement and maintenance and other related expenditures of the Authority to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section 1 of this Decree. In consonance therewith, the Authority is hereby declared exempt:

(a) From the payment of all taxes, duties, fees, imports, charges, costs and service fees in any court or administrative proceedings in which it may be a party, to the Republic of the Philippines, its provinces, cities, municipalities and other government agencies and instrumentalities;

(b) From all income taxes, franchise taxes, realty taxes and all other kinds of taxes and licenses to be paid to the National Government, its provinces, cities, municipalities and other government agencies and instrumentalities; and

(c) From all tariff and customs duties, and advance sales tax, on import of capital goods required for its operations.

The foregoing exemptions may however be entirely or partially lifted by the President of the Philippines upon recommendation of the Secretary of Finance, not earlier than five years from the approval of this Decree, if the President shall find the Authority to be self-sustaining and financially capable by then to pay such taxes, customs duties, fees and other charges, after providing for debt service requirements of the Authority and its projected capital and operating expenditures.

Section 22. Road Networks in the Zone. — The road network within the export processing zone are hereby declared to be national roads and shall be eligible for allocation of monies coming from the highway special fund to be used in the construction, repair or maintenance of such roads therein, the provisions of law, executive orders, rules and regulations to the contrary notwithstanding.

Section 23. Eminent Domain. — For the acquisition of rights of way, or of any property for the establishment of export processing zones, or of low-cost housing projects for the employees working in such zones, or for the protection of watershed areas, or for the construction of dams, reservoirs, wharves, piers, docks, quays, warehouses and other terminal facilities, structures and approaches thereto, the Authority shall have the right and power to acquire the same by purchase, by negotiation, or by condemnation proceedings. Should the authority elect to exercise the right of eminent domain, condemnation proceedings shall be maintained by and in the name of the Authority and if may proceed in the manner provided for by law.

Section 24. Title to Real Property. — The public lands fixed and delimited as the site of the foreign trade zone under Proclamation No. 629, series of 1969, Proclamation Nos. 899 and 939, both series of 1971, of the President of the Philippines shall be surveyed by the Bureau of Lands and conveyed thereafter in absolute ownership to the Authority by the President of the Philippines for the nominal sum of one peso for each parcel of land being conveyed under this section. Upon receipt of said deed of conveyance the proper Register of Deeds shall register the same and issue the corresponding original certificate of title to the Authority. Likewise, the public land fixed and delimited as the site of a low cost housing project for workers in the Zone under Proclamation No. 740, series of 1970, as amended by Proclamation No. 900, series of 1971, of the President of the Philippines, shall be surveyed by the Bureau of Lands and conveyed in absolute ownership by the President of the Philippines to the Authority, the Government Service Insurance System and/or Social Security System and in the manner hereinafter provided. Upon receipt of the deed of conveyance, the proper Register of Deeds shall forthwith register the same and issue the corresponding original certificate of title thereof.

The public land mentioned herein shall be disposed of as follows: sixty hectares to the Authority upon payment to the Government the nominal sum of one peso, and the balance to the Government Service Insurance System and/or Social Security System, in consideration for the development of a portion thereof by the GSIS and/or SSS as may be necessary to accommodate the construction of standard housing unit, and/or condominium houses, which the GSIS and/or SSS shall sell and convey, together with the title or interest over the land as it may appear upon conveyance thereof to the bona fide residents of Barrio Nassco and Barrio Camaya, both in the Municipality of Mariveles, Bataan, as certified by the Authority: Provided, That the price at which said housing units may be sold to the aforementioned bona fide residents of Barrio Nassco and Barrio Camaya shall not include the site development cost thereof: Provided, further, That the GSIS and/or SSS shall undertake the complete development of the residual area, including the area allotted to the Authority, into modern communities, always taking into account the policy of low-cost housing as herein enunciated: Provided, furthermore, That the land and/or housing units constructed therein shall be sold to the regular workers in the Zone who shall have worked therein continuously for a period of at least five years, as certified by the Authority: Provided, moreover, That where there are no persons qualified to own said land and/or housing units, the GSIS and/or SSS may hold on the said properties for as long as they are not sold or disposed of, notwithstanding the provisions of law to the contrary: Provided, finally, That the Authority shall, in coordination with the GSIS and/or SSS, administer, manage and operate the housing project, and shall issue such rules and regulations as may be necessary for the proper management and operation thereof, including the utilization and disposition of the land and/or housing units.

Section 25. Relocation of Residents of Barrio Nassco in the Municipality of Mariveles. — The residents of Barrio Nassco and Barrio Camaya in the Municipality of Mariveles, which is within the export processing zone, shall be relocated in the low-cost housing area mentioned in Section twenty-four hereof: Provided, That only those residential houses and buildings located within the Barrio Nassco, which are constructed as of April 15, 1972, shall be entitled to compensation based on their fair market value at such time, less recoverable value, if any.

Section 26. Supplies and Services other than Personal. — All purchases of supplies or contracts for services, except for personnel services, entered into by the Authority, shall be done through competitive public bidding: Provided, That bidding shall not be required when (1) an emergency, as certified by the Chairman, requires immediate delivery of the supplies or performance of the services, and (2) the aggregate amount involved in any one purchase of supplies or procurement of services does not exceed ten thousand pesos, in which case, such purchase or procurement may be made in the usual course of business: Provided, further, That the Authority’s emergency purchase of supplies and services shall not exceed the amount of fifty thousand pesos for any one month: Provided, finally, That in comparing bids and in making awards, the Authority shall consider such factors as the cost and relative quality and adaptability of supplies or services: the bidder’s financial responsibility, skill, experience, integrity, and ability to furnish repairs and maintenance services; the time of delivery or performance offered; and the bidder’s compliance with the specifications desired.

Section 27. Auditing. — The Auditor General shall be ex officio in charge of the auditing office of the Authority. He shall appoint a representative who shall be the auditor thereof. The Auditor General shall, upon recommendation of the Authority, appoint or remove personnel of said auditing office in accordance with law. The operating expenses of this office and the salaries and travelling expenses of the officials and employees thereof shall be fixed by the Board and paid by the Authority. Such representative shall render a semestral report on the financial condition and operations of the Authority to the Auditor General and the Board. The Auditor General shall submit to the President and the Congress an annual report covering the financial condition and operations of the Authority.

These auditing report shall contain a statement of the resources and liabilities including earnings and expenses, reserves and profits, as well as losses, bad debts and such other facts which, under the auditing rules and regulations, are considered necessary to accurately describe the financial condition and operations of the Authority: Provided, That before such reports are made, the Authority shall be given reasonable opportunity to examine the reports and make exceptions to any criticisms of the Auditor of the Authority or the Auditor General as the case may be, to point out, explain or answer any inaccuracies therein, if any, and to file a statement which shall be appended by the Auditor of the Authority and the Auditor General in their respective reports.

Section 28. Penalties. — Any person violating any provision of this Decree or any of the rules and regulations promulgated under Sections four and eleven hereof, shall suffer the penalty of imprisonment of not less than five years nor more than ten years and a fine of not less than five thousand pesos nor more than ten thousand pesos and in addition, such violations shall ipso facto constitute a valid ground for the revocation of all privileges, permits and authorization granted to such person under this Decree: Provided, however, That if the offender is a corporation, firm, partnership or association, the penalty shall be imposed upon the guilty officer or officers, as the case may be, of the corporation, firm or association, and if such guilty officer or officers be an alien or aliens, in addition to the penalties herein prescribed, he or they shall be deported without further proceedings on the part of the Deportation Board.

Any officer or employee of the Government who, by himself or through his agent, acting under his discretion and authority, shall connive, abet, or tolerate the violation of the provisions of this Decree or any rules and regulations promulgated under Sections four and eleven hereof or who fails to report within thirty days any violation thereof to the Authority shall suffer the penalties prescribed in the preceding paragraph including perpetual disqualification to hold public office.

The foregoing penalties shall be without prejudice to the assessment and collection of such taxes and duties as may be due on the foreign-made articles or merchandise which have been landed in the Zone and have not been reshipped to a foreign port at the time of the revocation of the authority of the offender to operate within the Zone. In the event such taxes and duties shall not, for any reason, be paid upon demand by the collector of the district wherein the Zone is located, the foreign-made articles or merchandise of the offender remaining within such Zone at the time of revocation of its authority to operate therein, including its physical plants, machinery and equipment therein, shall, after due notice and hearing, be forfeited in favor of the Government and may be disposed of by the Government in the manner and for such purposes as it may so desire.

Section 29. Transitory Provisions. — The properties, monies, assets, rights, chooses in action, obligations, liabilities, records and contracts of the Foreign Trade Zone Authority under Republic Act Numbered fifty-four hundred ninety shall continue to be vested in and assumed by the Export Processing Zone Authority, as a government corporation, pursuant to this Decree.

Likewise, all personnel of the Foreign Trade Zone Authority who are occupying permanent positions shall be absorbed by Export Processing Zone Authority and shall remain in their respective positions without demotion in rank or reduction in salary: Provided, That employee who shall be separated from the service shall be given by the Authority at least one month gratuity for every year of service but in no case more than twenty-four months salary, in addition to all benefits to which they may be entitled under existing laws and regulations.

Section 30. Repealing Clause. — The provisions of Republic Act Numbered Fifty-four hundred ninety and all other acts, executive orders, proclamations, administrative orders, rules and regulations or parts thereof which are inconsistent with provisions of this Decree are either repealed or modified accordingly.

Section 31. Separability Clause. — The provisions of this Decree are hereby declared to be separable, and in the event any one or more of such provisions are held unconstitutional, the validity of other provisions shall not be affected.

Section 32. Effectivity. — This Decree shall take effect upon its approval.

Done in the City of Manila, this 20th day of November, in the year of Our Lord, nineteen hundred and seventy-two.

Section 1. A population census of the Philippines and such other related data as may be decided upon by the President of the Philippines shall be taken not later than January 1, 1947. The President shall, by executive order, proclaim any day selected for census-taking as Census Day, and from that time on the enumeration shall proceed on consecutive days from daylight to darkness including Sundays and Holidays, until completed: Provided, That the census of population shall be completed, proclaimed and published within one year after January 1, 1947.

Sec. 2. All data prescribed to be gathered by this Act or by regulations issued under this Act shall be as of twelve o’clock of the night preceding Census Day: Provided, That if it shall be deemed necessary to require that the enumeration of any part or parts of the Philippines should begin before Census Day, the President shall, by proclamation, fix the time when enumeration shall begin.

Sec. 3. The direct execution of the provisions of this Act shall be entrusted to the Office of the President through the Bureau of the Census and Statistics, with the cooperation of the Department of the Interior.

Sec. 4. The persons to be enumerated shall comprise all those persons who spent the night preceding Census Day within the jurisdiction of the Philippines, including all those who have subsequently died or departed therefrom, and all persons who spent the said night on any ship within the jurisdiction of the Philippines: Provided, That persons belonging to the armed forces of the United States in the Philippines shall be separately recorded and except in the case of the citizens of the Philippines, shall not be included in any official statement of the population of the Philippines when such population is given as a part of the total population of the United States: And provided, further, That no enumeration of the persons belonging to such armed forces of the United States in the Philippines shall be undertaken without the consent of the officers commanding the military and naval forces, respectively.

Sec. 5. The supervisors, enumerators and other subordinate personnel for this census work shall be drafted mostly from the personnel of the Government, including provincial, city and municipal officials and employees, school teachers, field forces of the different bureaus and offices, city and municipal police forces, and members of the Philippine Army: Provided, however, That such officers and employees of the Government as may be designated Census Officers may be given a recess from their ordinary duties by the President of the Philippines.

Sec. 6. Every officer or employee of the national or of any provincial or municipal government who may be designated by the President of the Philippines to perform any duties in connection with census operation is hereby required to accept such designation and to perform such duties, and it shall be the duty of every head or chief of department, bureau, office, division, or service, or of the chief executive of any provincial or municipal government, to authorize any necessary detail and to relieve any officer or employee from his regular duties for such period, if any, as may be required for the purposes of this Sec.: Provided, That during the designation of such persons they shall continue to receive their salaries in full but not from Census funds, and they shall not be entitled to any additional compensation except such per dimes and traveling expenses as are authorized by this Act.

Sec. 7. No head or chief of department, bureau, office, division or service shall order the transfer of any officer or employee under him, who may have been detailed to the Census in any locality to another locality until the work of such person in connection therewith is completed, or without advising the Office of the President of such proposed transfer at least fifteen days before such proposed transfer is to become effective.

Sec. 8. The duties of all persons appointed or designated under this Act shall begin at such times as shall be fixed by the President of the Philippines and shall continue until such persons are relieved of such duties: Provided, however, That subsequent to such relief persons so appointed or designated may be required to perform such further services as may be necessary for the carrying out of the purposes of this Act.

Sec. 9. Every officer and employee whose services are engaged for the census work shall take and subscribe an oath or affirmation to do and perform accurately and to the best of his ability such duties as may be required of him. An oath or affirmation prescribed by this Act to be taken by any officer or employee of the Office of the President or of the Department of the Interior in connection with his duties thereunder may be taken and subscribed to before superior officers of such departments who are hereby authorized to administer oaths for the purposes of this Act, or before any national, provincial, or municipal official authorized to administer oaths, and all such officials are hereby required to administer such oaths or request: Provided, That no such person shall receive any fee or compensation for the administration of such oaths: And provided, further, That such oath of office should be exempt from documentary stamp tax.

Sec. 10. There shall be Provincial, City and Municipal Census Boards which shall direct the enumeration work within their respective jurisdictions and which shall assume full responsibility for assembling and consolidating census returns and forwarding them through channels as herein provided to the Department of Interior. The Provincial Census Boards shall be composed of the members of the provincial board, and the City or Municipal Census Boards, of the members of the city of municipal councils, as the case may be.

Sec. 11. Census returns shall be prepared in duplicate, the original of which shall be forwarded to the Department of the Interior and the duplicate kept in the city or town of origin as part of the permanent record therein. City census returns shall be forwarded direct to the Department of the Interior, while the returns from each municipality or municipal district shall be coursed through the Provincial Census Board which shall review and consolidate therein contained for the purpose of preparing a census report for the province.

Sec. 12. There shall be in each representative district a District Census Supervisor and in each municipality or municipal district a Municipal Census Supervisor who shall act as technical advisers to the census boards and who shall supervise the work of the census enumerators to facilitate filling of census schedules in accordance with rules and regulations issued by higher census authorities and within the time prescribed for census-taking. Their compensations shall be determined by the President of the Philippines, but in no case shall a District Census Supervisor draw more than two hundred pesos a month, and a Municipal Census Supervisor more than one hundred pesos a month: Provided, That during their term of employment they shall be entitled to reimbursement for actual and necessary expenses.

Sec. 13. Each enumerator or other employee detailed to service as an enumerator shall be charged with the collection in his subdivision of the facts as the Office of the President may direct him to do, which may include the fingerprints of both hands of all persons to be enumerated. It shall be his duty to visit personally each dwelling house in his subdivision, and each family therein, and each individual living out of a family in any place of abode, and by inquiry made of the head of each family, or of the member thereof deemed most competent and trustworthy, or of such individual living out of a family, to obtain each and every item of information and all particulars required for the census; and in case no person shall be found at the usual place of abode of such family, or individual living out of a family competent to answer the inquiries, then it shall be lawful for the census employee to obtain the required information as nearly as may be practicable from the family or families or person or persons living nearest to such place of abode who may be competent to answer such inquiries. Each enumerator is required to prepare the returns and forward the same to the supervisor of his district, within thirty days unless by some unavoidable causes he is prevented from submitting the same within the period mentioned in which case an extension of time not exceeding fifteen days may be authorized by the Director.

Sec. 14. The President of the Philippines is hereby authorized to do and to require to be done any and all acts or things necessary to carry out the purposes of this Act, and to delegate any and all authority in him vested in this Act to any official in charge of census work.

Sec. 15. Partial or complete returns, reports, and other information may be published from time to time by order of the President of the Philippines and the returns shall be so prepared as to show the population and other statistics by provinces, sub-provinces, districts, municipalities barrios, and other subdivisions.

Sec. 16. If, in the judgment of the President of the Philippines, it shall appear that a more complete, accurate, and economical census of the inhabitants of any of the areas, institutions, or establishments enumerated in the next following Sec. of this Act, can be secured by the owners, occupants, or persons in charge thereof than by the regular enumerators, he may direct that the census of such areas, institutions or establishments shall be made by such owners, occupants, or persons in charge, who shall thereupon take the oath prescribed for enumerators, or a modified form thereof, in the discretion of the President of the Philippines, and shall be subject to the penalties provided in this Act for the non-performance or improper performance of the duties required of enumerators, and shall have the powers conferred upon enumerators. Said owners, occupants, or persons in charge shall be required to complete such enumeration in a satisfactory manner and in accordance with the instruction given them, and to deliver the schedules within the time prescribed; and for such service as enumerators, they shall not receive any compensation: Provided, That when such areas, institutions, or establishments are the property of, or when the persons in charge of them are the employees of, the Government of the United States or of the Philippines, such service shall not be required, except with the prior approval of the head or chief of the department, bureau, office, division or service concerned, of the Commanding General of the Army or the Commandants of naval stations, or of such other persons who have power to authorize such service: And provided, further, That if any officer or employee making enumeration is charged with the collection of such schedules, he shall revise them and require the correction of all errors, and cause all data and information omitted to be supplied; and if there is reasonable ground to believe that such enumeration is incomplete or inaccurate, he may, if specifically authorized by his superior officer, re enumerate the residents of such area, institution or establishment; and he also may, if such proceeding would facilitate the work of re enumeration, and if he is specifically authorized by his superior officer, demand that the residents of the premises be assembled for the verification of such enumeration.

Sec. 17. The special areas, institutions, and establishments, which the owner, occupant, or other person in charge may be required to enumerate without compensation under the provision of the next preceding Sec. of this Act, may include any or all of the following, together with the premises attached to them; private dwelling houses occupied by literate persons who for any reason can be more efficiently enumerated in such manner, to be enumerated by the householder, landlord, or other person in charge; military and naval reservations, to be enumerated by persons detailed by the commanding officers; public and private hospitals, asylums, and charitable institutions to be enumerated by the persons in charge; prisons, jails, lockups, reform schools, and other penal institutions, to be enumerated by the warden or other person in charge; army and any other police barracks or quarters to be enumerated by persons detailed for such service by the commanding officer; agricultural experiment stations, seed farms, stock farms, breeding stations, and public works in operation or under construction, to be enumerated by the persons in charge; convents and religious schools and seminaries, to be enumerated by persons selected by the ecclesiastical authorities; boarding or other schools, to be enumerated by the persons in charge; hotels, boarding houses, lodging houses, cooperative messes and clubs having members residing on the premises, or other such places or establishments, to be enumerated by the proprietor, landlord, manager, managing director, or person in charge; public civil reservations, to be enumerated by the person in charge; ships in harbor and other boats, vessels, or craft to be enumerated by the master or other person in charge; landed estates, forest concessions, private workshops and construction works, to be enumerated by the person in charge; and any other area, institution or establishment of whatsoever character, to be enumerated by the person in charge: Provided, however, That any person required in this Sec. to perform any of the duties indicated may delegate such duties to another, but shall himself subscribe, take oath or otherwise certify to the correctness of the enumeration made and shall be responsible for such errors and omissions as may appear therein, and shall be subject to the penalties imposed by this Act.

Sec. 18. If, in the judgment of the President of the Philippines, it shall appear practicable and desirable to collect in addition to any prescribed facts and statistics relating to the population as individuals, further information relating to general statistics including corporate bodies, partnerships, associations, groups of persons having joint or common interest, social and economic institutions, industrial and commercial enterprises, and agricultural and other forms of property of whatsoever class, kind or character, he may direct that such information shall be collected and it shall be obligatory on all proprietors, officers, partners, associates, directors, administrators, managers and legal representatives of such corporations, partnerships, associations, groups of persons, institutions, enterprises, and properties, to furnish such information in the manner and within the time which may be prescribed by regulation. The collection of the information may be secured by mailing or delivering the necessary forms and explanatory matter to the persons best qualified to furnish it, in which cases such proprietors, officers, partners, associates, directors, administrators, managers or legal representatives shall be required to complete the schedules or forms themselves or cause them to be completed, on their own responsibility, by their delegates, as provided in the next preceding Sec.. The persons required to complete such schedules may also be required to mail or deliver them on completion, and within such time as may be prescribed to a designated Census officer.

Sec. 19. No information obtained during the taking of this Census from any person or corporation, association, partnership, institution, business enterprise, or group of persons having a joint or common interest, however established or constituted, shall be used in any court or in any public office, either as evidence for or against the person, corporation, association, partnership, institution, enterprise, or group, from which such information emanates, or for the purpose of basing thereon any assessment or collection of taxes or public contributions; nor shall any such information be divulged to any person, except to authorized Census officers acting in the performance of their duties; and no Census officer or employee of the Government shall make known to any other person not properly authorized any information contemplated in this Sec., which may have been secured during the Census operations; nor shall any report or publication issued under the provisions of this Act contain any information indicated in this Sec. which would serve to identify the person, corporation, association, partnership, institution, enterprise, group, or property, from which it was secured, without the special consent in writing of the proprietor, officer, director, administrator, manager or legal representative of such person, corporation, association, partnership, institution, enterprise, group, or property. The receipt by any officer, partner, associate, member, or stockholder of any corporation, association, partnership, institution, business enterprise, or group, of any schedule or form contemplated in this Sec. shall constitute delivery to the corporation, association, partnership, business enterprise or group, and the fact that such officer, partner, associate, member, or stockholder is not the person who would ordinarily complete such schedule or form shall not relieve him of responsibility for the redelivery of such schedule or form to the proper person, nor shall it relieve such proper person from the responsibility for the completion thereof.

Sec. 20. Whenever it shall appear to the President of the Philippines that any portion of the enumeration and Census provided for in this Act is incomplete or erroneous, he may cause such incomplete and unsatisfactory enumeration and Census to be amended or retaken under such methods as may, in his discretion, be practicable.

Sec. 21. All residents of the Philippines shall give any required assistance in executing the provisions of this Act by giving all information requested by Census enumerators.

Sec. 22. The authority to lease, rent, hire, remodel, furnish, and pay all necessary expenses of such buildings, offices, or other quarters in the Philippines as may be required for Census purposes is hereby conferred upon the Chief of the Executive Office.

Sec. 23. No information secured by any Census form shall be divulged to any person other than an officer or employee of the Census acting in the discharge of his duty; nor shall it be published, except in the form of tabulations or summaries having no reference to individuals; and all such forms shall be destroyed when, in the judgment of the President of the Philippines they have served their administrative purpose. No entry in any form, register or record made by a Census officer or by any other person in the discharge of his duty under this Act shall be admissible as evidence in any civil or criminal proceeding, except for the purposes of a prosecution instituted under this Act.

Sec. 24. Upon conviction hereof, a fine of not more than one hundred pesos, or imprisonment for not more than thirty days, or both, in the discretion of the court shall be imposed upon:

(1) Any person who refused to supply any prescribed information, or refuses to answer any proper question necessary to secure such information, when asked by an officer or employee of the Census, in regard to himself or any other person of whom he has knowledge: Provided, That no such information need be supplied and no such question answered unless the questioner, on request made at the time of inquiry, exhibits his formal appointment, or other clear evidence of appointment, as a Census officer or employee; or

(2) Any person who, being a passenger, guest, boarder, or lodger, inmate, patient, or other resident in any special area, institution, or establishment set apart to be enumerated by the owner, occupant, or person in charge, under the provisions of Sec.s fourteen and fifteen of this Act, refuses or neglects properly to complete and sign any Census schedule or form delivered to him by the owner, occupant, proprietor, or person in charge of such special area, institution or establishment, for himself or for his family and dependents; or who, if unable to read and write English or Spanish, refused to supply the required information to the persons responsible for the proper completion thereof; or

(3) Any person who refuses to allow any Census officer or employee to fix on any portion of any dwelling or other property in his possession, in a conspicuous place, any authorized mark, sign, notice, letter or number necessary to the prosecution of the Census work; or who removes such mark, sign, notice, letter or number before the expiration of one month from the Census Day, unless sooner authorized; or who removes any mark, sign, notice, letter or number placed or reserved to indicate the boundary of an area set apart for Census purposes; or

(4) Any person who, on the completion of the Census operations in the locality in which he resides, has not been enumerated or knows that any other person or persons have not been enumerated and neglects to notify the nearest officer or employee of the Census without delay of such facts; or

(5) Any person who neglects to notify the nearest officer or employee of the Census of his knowledge that he himself, or any other person or persons, have been enumerated twice; or who has once been enumerated, or knows that any other person or persons have once been enumerated, and neglects to inform of the fact of such prior enumeration, any enumerator or other authorized person who is on the point of enumerating a second time either himself or any other such person or persons; or who fails to present to such enumerator or other authorized person any pass, ticket, certificate, or other document which may bear evidence to the fact of such prior enumeration; or

(6) Any person who, having received from any Census officer any pass, ticket, certificate, or other document showing that he is, his family or dependents, any area, institution or establishment of which he is the owner, occupant or person in charge, or the inhabitants thereof, have been enumerated by such Census officer, fails to preserve such pass, ticket, certificate, or other document in an unmutilated and legible condition for two months from the receipt thereof; or

(7) Any person who refuses compliance with the provisions of this Act or with any regulations issued under it and necessary for its execution, when such refusal is not otherwise penalized herein.

Sec. 25. Upon conviction hereof, a fine of not more than six hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the court shall be imposed upon:

(1) Any person, who being the owner, occupant, or person in charge of any special area, institution, or establishment set apart to be enumerated under the provisions of Sec.s fourteen and fifteen of this Act, or an officer, director, partner, associate, manager or local representative of any corporation, partnership, association, institution, industrial or commercial establishment or enterprise, group of persons having a joint or common interest, or other property, in regard to which the collection of statistics is prescribed under the provisions of Sec. fifteen of this Act, refuses or neglects properly to complete any Census from mailed or delivered to him to subscribe the same; or

(2) Any person who, being a resident of such area, institution, or establishment, or an officer, director, manager, associate, partner, or employee or any such corporation, partnership, association, institution, industrial or commercial establishment, group of persons having a joint or common interest, or any other property, refuses or neglects, in the absence of the owner, occupant, or person in charge, or of an officer, director, manager, or legal representative to receive such form and make delivery thereof to owner, occupant, person in charge, officer, director, manager, or local representative; or

(3) Any person who, being the owner, occupant, or person in charge of such special area, institution, or establishment, refuses or neglects to distribute the necessary schedules or forms to the passengers, guests, boarders, lodgers, inmates, patients, or other residents of the premises entitled thereto, and to report to the nearest office or employee of the Census the names of those who refuses to receive or complete them; or

(4) Any person who refuses or neglects to deliver or transmit to the addresses any Census form mailed or delivered to him, in the manner and within the time prescribed; or

(5) Any person who refuses any Census officer or employee, acting in the discharge of his duty, entrance to any premises under his control, except portions of a private dwelling other than the room in which such officer or employee would naturally be received: Provided, That such entrance be not demanded to an extent beyond that necessary to secure the prescribed facts and statistics or to verify them after they have been entered upon the schedules by other persons; or

(6) Any person who obstruct any Census officer or employee in the discharge of his duty, or refuses or neglects to render him reasonable assistance, when called upon to do so; or

(7) Any person who misrepresents or attempts in any way to misrepresent the objects of the Census or to arouse hostility against it; or

(8) Any person who, being the owner of any animal, vehicle, ship or vessel of any kind, and such animal, vehicle, ship or vessel being needed, in the absence of any other satisfactory facility, for the transportation of any Census officer or employee or the transportation of any form, correspondence, or supplies, shall refuse without adequate reason to permit the use of such animal, vehicle, ship or vessel, on the request of the officer or employee of the Census responsible for such transportation or for the transmission of such forms, correspondence, or supplies, to the extent necessary for such transmission; or shall refuse to render such reasonable personal services as may be necessary in connection with the use of such animal, vehicle, ship or vessel; or shall demand an unusual or extortionate price or sum for the use of such means of transportation or for any service in connection therewith; or

(9) Any person who knowingly gives oral or written answers to any question upon a Census form or to any proper question asked by a Census officer or employee in the discharge of his duty, which shall prove to be materially untrue in any particular; or who alters or falsifies any Census form or declaration before or after it has been completed; or who signs any Census form or declaration after it has been completed in the knowledge that it is materially untrue in any particular; or who pays, compels, advises, or induces any other person to make or sign any such untrue statement or form; or who forges any Census form, completed or uncompleted.

Sec. 26. Upon conviction hereof, a fine not exceeding two thousand pesos, or imprisonment for not more than two years, or both, in the discretion of the court shall be imposed upon:

(1) Any person who impersonates a Census officer or employee; or

(2) Any person who offers a reward, fee, or gratuity to any Census officer or employee for the purpose of inducing such officer or employee to alter or omit any portion of the census record or returns; or

(3) Any person who commits any fraud, makes any false statement, or compels, pays, requests, or induces any other person to commit such fraud or make such false statement with the object of enabling him to secure a position in the employ of the Census.

Sec. 27. Upon conviction hereof, a fine not exceeding six hundred pesos, or imprisonment for not more than six months, or both, in the discretion of the court shall be imposed upon:

(1) Any person who, having accepted any position in the employ of the Census and taken oath thereof, and not having been duly released, refuses to perform the duties of such position, or neglects to use due diligence in bringing such Census work as is entrusted to him to a satisfactory termination or disregards proper and necessary orders and instructions coming from his superior; or

(2) Any officer or employee of the Census who, whether during, or after the termination of his service divulges or communicates the contents of any Census form, record, return or document, to any person not authorized by the President of the Philippines to receive the same; or

(3) Any officer or employee of the Census who solicits or receives any reward, fee, or gratuity from any person, other than his usual salary and his regular compensation from Census funds, whether or not conditioned upon the altering or committing by him of any portion of the Census return; or

(4) Any officer or employee of the Census who attends to secure any information not prescribed by the President of the Philippines or who asks offensive or improper questions in the process of securing any information, authorized or unauthorized; or who willfully and maliciously attempts to enter any portion of any private dwelling except the room in which he would naturally be received, or any portion of any other premises an inspection of which is not essential to the performance of his duties.

Sec. 28. Any executive official or employee of the Government who refuses to accept a position in the employ of the Census when tendered him by an authorized officer of the Census, with the sanction of his superiors in office, shall be punished by such disciplinary measures as may be imposed by the proper department head.

Sec. 29. Any person who, being the owner, occupant, or person in charge of any special area, institution, or establishment set apart to be enumerated under the provisions of Sec.s fourteen and fifteen of this Act, shall perform the enumeration required thereby in a manner so incomplete or erroneous as to necessitate its being done anew by an officer or employee of the Census, shall be punished upon conviction, in addition to any other penalties herein elsewhere provided, by a fine of one and one-half centavos for every person enumerated as resident within such area institution, or establishment, when such persons are enumerated anew.

Sec. 30. Concurrent jurisdiction is hereby conferred upon Courts of First Instance over all offenses punishable under this Act, which but for this provision would be exclusively recognizable by justice of the peace.

Sec. 31. The Chief of the Executive Office shall prepare the budget of expenses incident to the enforcement of the provisions of this Act and he shall submit said budget to the President for approval.

Sec. 32. Whenever it shall appear that any person appointed, detailed, or designated to a position in connection with the Census is performing or has performed his duties in an inefficient or dilatory manner, or at an unnecessary cost to Census funds, or whenever any such person shall contravene any of the provisions of this Act or of any regulations or instructions issued thereunder, the President of the Philippines may in his discretion authorize the imposition of a fine; and the amount of such fine shall be deducted from the compensation due such person on the termination of census operations.

Sec. 33. All fines, whether administrative or judicial, which may be imposed on any person for offenses against the provisions of this Act, or of regulations issued thereunder, and all funds accruing from the sale of any property purchased from Census funds, or of any salable document issued in connection with Census, shall be covered into the general funds of the Philippine Treasury.

Sec. 34. Whenever the Office of the President shall terminate the appointment, detail or designation of any person to a position in connection with the Census for cause, he may in his discretion authorize the payment to such person of such compensation at the rate of payment agreed upon at the time of his designation, as he may deem to constitute a fair remuneration for the service rendered.

Sec. 35. The allowance of per dimes and traveling expenses to officers and employees used for census-taking shall be governed by existing laws: Provided, That the President of the Philippines may by general regulations determine in what cases or classes of cases such per dimes and expenses may be allowed; and may fix a maximum less than that allowed by existing law: And provided, further, That in the case of officers or employees detailed for Census work from another department, bureau, office, division or service and continuing to receive their usual salaries therefrom, the amount of their per dimes may be paid from Census funds.

Sec. 36. No surcharge shall be imposed, nor shall any charge be made by any department, bureau, office, division, or service of the Government for any services rendered or supplies furnished or purchased in connection with the Census, over and above the actual cost of such services or supplies.

Sec. 37. The sum of four hundred eighty thousand pesos or so much thereof as may be necessary, is hereby appropriated out of any funds in the Philippine Treasury not otherwise appropriated to carry out the provisions of this Act: Provided, That no amount shall be set up on the books of the Auditor until it has been allotted by the President of the Philippines.

Sec. 38. After the publication of the Census which shall include a segregated report on war damages in the Philippines, all records, documents used in the preparation, taking and publication of such Census, shall be kept or disposed of by the Bureau of Census and Statistics according to law.

Sec. 39. This Act shall take effect upon its approval.

Approved: September 30, 1946

PART I
GENERAL PROVISIONS

Section 1. Title. — This Act shall be known as the “Agricultural Tenancy Act of the Philippines.”

Section 2. Purposes. — It is the purpose of this Act to establish agricultural tenancy relations between landholders and tenants upon the principle of school justice; to afford adequate protection to the rights of both tenants and landholders; to insure an equitable division of the produce and income derived from the land; to provide tenant- farmers with incentives to greater and more efficient agricultural production; to bolster their economic position and to encourage their participation in the development of peaceful, vigorous and democratic rural communities.

Section 3. Agricultural Tenancy Defined. — Agricultural tenancy is the physical possession by a person of land devoted to agriculture belonging to, or legally possessed by, another for the purpose of production through the labor of the former and of the members of his immediate farm household, in consideration of which the former agrees to share the harvest with the latter, or to pay a price certain or ascertainable, either in produce or in money, or in both.

Section 4. Systems of Agricultural Tenancy; Their Definitions. — Agricultural tenancy is classified into leasehold tenancy and share tenancy.

Share tenancy exists whenever two persons agree on a joint undertaking for agricultural production wherein one party furnishes the land and the other his labor, with either or both contributing any one or several of the items of production, the tenant cultivating the land personally with thed of labor available from members of his immediate farm household, and the produce thereof to be divided between the landholder and the tenant in proportion to their respective contributions.

Leasehold tenancy exists when a person who, either personally or with thed of labor available from members of his immediate farm household, undertakes to cultivate a piece of agricultural land susceptible of cultivation by a single person together with members of his immediate farm household, belonging to or legally possessed by, another in consideration of a price certain or ascertainable to be paid by the person cultivating the land either in percentage of the production or in a fixed amount in money, or in both.

Section 5. Definitions of Terms. — As used in this Act:

(a) A tenant shall mean a person who, himself and with thed available from within his immediate farm household, cultivates the land belonging to, or possessed by, another, with the latter’s consent for purposes of production, sharing the produce with the landholder under the share tenancy system, or paying to the landholder a price certain or ascertainable in produce or in money or both, under the leasehold tenancy system.

(b) A landholder shall mean a person, natural or juridical, who, either as owner, lessee, usufructuary, or legal possessor, lets or grants to another the use or cultivation of his land for a consideration either in shares under the share tenancy system, or a price certain or ascertainable under the leasehold tenancy system.

(c) Agricultural year is the period of time necessary for the raising of seasonal agricultural products, including the preparation of the land, and the sowing, planting and harvesting of the crop: Provided, however, That in the case of coconuts, citrus, coffee, ramie, and other crops where more than one harvest is obtained from one planting, the words “agricultural year” shall mean the period of time from the preparation of land to the first harvest and thereafter from harvest to harvest. In both cases, the period of time may be shorter or longer than a calendar year.

(d) Farm implements include hand tools or machines ordinarily employed in a farm enterprise.

(e) Work animals include animals ordinarily employed in a farm enterprise. The words include carabaos, horses, bullocks, etc.

(f) Pulling of the seedlings is a phase of farm work in which seedlings are uprooted from the seed beds immediately before transplanting.

(g) Final harrowing in the last stage in pulverizing the soil into fine particles in readying the field for the transplanting of the seedlings.

(h) Reaping is the cutting of rice stalks.

(i) Harvesting shall mean the gathering of the fruits or produce of a crop other than rice.

(j) Piling into small stacks used as a term in rice share tenancy shall mean the piling into several small stacks within the tenant’s holdings of reaped and bundled stalks containing the grain, preparatory to their transportation to the place designated for their threshing.

(k) Piling into big stacks used as a term in rice share tenancy shall mean the piling into one huge stack of the several small stacks of reaped and bundled stalks containing grain, which constitute the entire harvest of the tenant from his holdings, preparatory to threshing.

(l) Proven farm practices include those sound farming practices which have attained general acceptance through usage or are officially recommended by the Department of Agriculture and Natural Resources.

(m) Fair rental value is an amount of money not in excess of allowable depreciation plus six per cent interest per annum on the investment computed at its market value: Provided, however, That the fair rental value for the work animal or animals and farm implements required to produce the crop shall not exceed five per cent of the gross harvest for the animal or animals and five per cent for implements: And, provided, further, That whenever a tractor or power and the necessary implements are utilized interchangeably with work animals in the same holding during the same agricultural year the rental shall not exceed ten per cent for the combined services.

(n) Immediately after as used in this Act shall be inclusive of the last day of harvesting, threshing or processing and the next five days thereafter.

(o) Immediate farm household includes the members of the family of the tenant, and such other person or persons, whether related to the tenant or not, who are independent upon him for support and who usually help him operate the farm enterprise.

(p) Incapacity means any cause or circumstances which prevents the tenant from fulfilling his contractual obligations and those imposed by this Act.

(q) Inspect means to examine and observe. However, such examinations and observations shall not include any acts of intimidation or coercion.

(r) Auxiliary crop is any product raised other than the crop to which the cultivation of the land is principally devoted; and excluding the produce of the lot referred to in Section twenty-six.

Section 6. Tenancy Relationship; Its Definition. — Tenancy relationship is a juridical tie which arises between a landholder and a tenant once they agree, expressly or impliedly, to undertake jointly the cultivation of land belonging to the former, either under the share tenancy or leasehold tenancy system, as a result of which relationship the tenant acquires the right to continue working on and cultivating the land, until and unless he is dispossessed of his holdings for any of the just causes enumerated in Section fifty or the relationship is terminated in accordance with Section nine.

Section 7. Tenancy Relationship; How established; Security of Tenure. — Tenancy relationship may be established either verbally or in writing, expressly or impliedly. Once such relationship is established, the tenant shall be entitled to security of tenure as hereinafter provided.

Section 8. Limitations of Relation. — The relation of landholder and tenant shall be limited to the person who furnishes land, either as owner, lessee, usufructuary, or legal possessor, and to the person who actually works the land himself with thed of labor available from within his immediate farm household.

Section 9. Severance of Relationship. — The tenancy relationship is extinguished by the voluntary surrender of the land by, or the death or incapacity of, the tenant, but his heirs or the members of his immediate farm household may continue to work the land until the close of the agricultural year. The expiration of the period of the contract as fixed by the parties, and the sale or alienation of the land do not of themselves extinguish the relationship. In the latter case, the purchaser or transferee shall assume the rights and obligations of the former landholder in relation to the tenant. In case of death of the landholder, his heir or heirs shall likewise assume his rights and obligations.

Section 10. Contracts; Nature and Continuity of Conditions. — The terms and conditions of tenancy contracts, as stipulated by the parties or as provided by law, shall be understood to continue until modified by the parties. Modifications of the terms and conditions of contracts shall not prejudice the right of the tenant to the security of his tenure on the land as determined in Section six, seven, and forty-nine.

Section 11. Freedom to Contract in General. — The landholder and the tenant shall be free to enter into any or all kinds of tenancy contract, as long as they are not contrary to law, morals or public policy. Except in case of fraud, error, force, intimidation or undue influence, when such contract is reduced to writing and registered as hereinafter provided, the latter shall be conclusive evidence of what has been agreed upon between the contracting parties, if not denounced or impugned within thirty days after its registration.

Said contract shall be contrary to law, morals and public policy;

A. In Share Tenancy

(a) If the tenant is to receive less than the corresponding share for the different contributions be made to the production of the farm as hereinafter provided.

(b) If it is stipulated that the tenant or any member or his immediate farm household shall without compensation perform any work or render any service not connected with the tenant’s duties and obligations provided under this Act.

B. In Leasehold Tenancy

(a) If the tenant-lessee is to pay to the landholder, lessor, as a consideration for the use of the land, an amount in excess of that hereinafter provided for the kind and class of land involved.

(b) If the tenant-lessee is to pay the landholder-lessor a consideration in excess of the amount prescribed as fair rental value, as determined pursuant to the provisions of this Act, for the use of work animals, services and/or farm implements belonging to the landholder-lessor, in case it is agreed between the parties that the latter shall furnish any or all of these items of production.

(c) If it is stipulated that, as a condition precedent to the commencement or continuance of the lease, the tenant-lessee shall rent work animals, services or farm implements, or shall make use of any store or services operated by the landholder-lessor or any other person, or that the landholder-lessor may impose fines, deductions and/or assessments, or that the tenant-lessee shall, without compensation, perform any work or render any service not connected with the tenant’s duties and obligations provided under this Act.

Section 12. Form and Registration of Contract. — A contract of tenancy in writing, in order to be conclusive as evidence, shall be drawn in quadruplicate in the language or dialect known to all the parties thereto and signed or thumb-marked both by the landholder or his authorized representative, and the tenant himself, before two witnesses, one to be chosen by each party. If any of the parties does not know to read, one of the witnesses, to be chosen by him, shall read the contents of the document to him. Each of the contracting parties shall retain a copy of the contract and the third and fourth copies shall be delivered to the municipal treasurer of the municipality where the land which is the subject-matter of the contract is located, who shall file and register the third copy in his office and forward the fourth copy to the court: Provided, That in order that a tenancy contract may be registered, it shall be the duty of the municipal treasurer and tenant, respectively, and to place an annotation on each copy of the fact of registration in his office, stating the date, time and place of registration as well as the entry or registration number.

The form of contract shall be uniform and shall be prepared and furnished by the court. The contracting parties shall acknowledge the execution of the contracting before the municipal treasurer or justice of the peace or the mayor of the municipality where the land is situated. No fees or stamps of any kind shall be paid or required.

When one of the parties is unable to read, in case of doubt the burden of proof to show that he understood the terms of the contract shall rest upon the other party who is able to read.

Section 13. Registry of Tenancy Contracts. — For the purposes of this Act, the municipal treasurer of the municipality wherein the land which is the subject-matter of a tenancy contract is situated shall keep a record of all such contracts entered into within his jurisdiction, to be known as “Registry of Tenancy Contracts.” He shall keep this registry together with a copy of each contract entered therein, and make annotations on said registry of all subsequent acts relative to each contract, such as its renewal, novation, cancellation, etc.: Provided, That the municipal treasurer shall not charge any fee for the registration of said contracts or of any subsequent acts relative thereto, none of which shall be subject to the documentary stamp tax.

Section 14. Change of System. — The tenant shall have the right to change the tenancy contract from one of share tenancy to the leasehold tenancy and vice versa and from one crop-sharing arrangement to another of the share tenancy. If the share tenancy contract is in writing and is duly registered, the right may be exercised at the expiration of the period of the contract. In the absence of any written contract, the right may be exercised at the end of the agricultural year. In both cases the changed to the leasehold system shall be effective one agricultural year after the tenant has served notice of his intention to change upon the landholder.

Section 15. Interest on Loans or Advances. — On all loans or advances obtained by the tenant from the landholder in connection with the cultivation, planting, harvesting and other incidental expenses for the improvement of the crop planted, as well as loans or advances for the subsistence of the tenant and his family, the interest which may be stipulated shall not exceed eight per centum per calendar year: Provided, That on all loans or advances other than money, such as grain or other agricultural products, made computed on the basis of the current price of the produce at the time it was loaned. Violation of the provisions of this section shall be punished in accordance with the Usury Law.

Section 16. Memorandum of Loans or Advances. — Any obligation referring to any amount either in money or in kind, including the payment of interest, which the tenant may have received from time to time as loan or advance from the landholder, shall be void unless the same, or some note or memorandum thereof, be in writing in a language or dialect known to the party charged, and subscribed by said party, or by his authorized agent.

Section 17. Form of Final Accounting. — The final accounting between landholder and tenant at the end of each agricultural year shall be effected within ten days after the threshing in case of rice and within the same period of time after the harvest or gathering of the fruits in the case of crops. In case of crops which have to be said in processed form, the final accounting shall be within five days after the sale is consummated and the sales receipt shall be exhibited to the tenant.

The accounting shall be made to appear in a not or memorandum written in a language or dialect known to the tenant and signed by both parties in the presence of two witnesses who shall be selected by each party. Each of the contracting parties shall be furnished with a copy of said note or memorandum and such final accounting, once duly signed by both parties and two witnesses, shall be deemed conclusive evidence of its contents, except in case of fraud, error, force, intimidation or undue influence. When one of the parties is unable to read, the burden of proof, in case of doubt, to show that he understood the accounting, shall rest upon the other party who is able to read.

In the absence of a written accounting in accordance with the preceding paragraph, the tenant may, within three years from the date of the threshing of the crop in question, petition the Court to compel the landholder to render an accounting of the same in accordance with this section.

Section 18. Settlement of Debts. — Once the accounting is made, any amount of money which the landholder may have advanced to the tenant for expenses of cultivation, harvesting or gathering of the crop or for his own private use, as well as any amount of grain or agricultural products advanced for his subsistence and that of his family, shall be paid by the tenant out of his share either in grain or in money, at the option of the latter; Provided, That such grain or agricultural products shall be appraised in money according to their current market value at the place where the land is located at the time of their delivery to the tenant: Provided, further, That in case his share is not sufficient, his outstanding debt shall be reduced to money and shall bear an interest of not more than ten per cent per annum: And provided, finally, That the remaining debts of the tenant once converted into money shall not again be converted into kind. Said outstanding debt money may, however, be paid in money or in agricultural products appraised at the local current market price at the time of payment.

Section 19. Exemption from Lien and/or Attachment. — Twenty-five per centum of the tenant’s share of the produce of the land in share tenancy, or of the entire produce in leasehold tenancy, one work animal and one of each kind of farm implement belonging to the tenant, provided that the value of such work animal and implements do not exceed five hundred pesos, shall be exempt from lien and attachment.

Section 20. Use of Official Weights and Measures. — In all transactions entered into between the landholder and the tenant concerning agricultural products the official weights and measures of the Government shall be used.

Section 21. Ejectment: Violation; Jurisdiction. — All cases involving the dispossession of a tenant by the landholder or by a third party and/or the settlement and disposition of disputes arising from the relationship of landholder and tenant, as well as the violation of any of the provisions of this Act, shall be under the original and exclusive jurisdiction of such court as may now or hereafter be authorized by law to take cognizance of tenancy relations and disputes.

PART II
THE SHARE SYSTEM

CHAPTER I
Common Provisions

Section 22. Rights of the Tenant. —

(1) The tenant shall be free to work elsewhere whenever the nature of his farm obligation warrants his temporary absence from his holdings.

(2) The tenant shall, aside from his labor, have the right to provide any of the contributions for production whenever he can do so adequately and on time.

(3) The tenant’s dwelling shall not, without his consent, be removed from the lot assigned to him by the landholder, unless there is a severance of the tenancy relationship between them as provided under Section nine, or unless the tenant is ejected for cause, and only after the expiration of forty-five days following such severance of relationship or dismissal for cause.

If the tenant is dismissed without just cause and he is constrained to work elsewhere, he may choose either to remove his dwelling at the landholder’s cost or demand the value of the same from the landholder at the time of the unjust dismissal.

(4) The tenant shall have the right to be indemnified for his labor and expenses in the cultivation, planting, or harvesting and other incidental expenses for the improvement of the crop raised in case he is dispossessed of his holdings, whether such dismissal is for a just cause and not, provided the crop still exists at the time of the dispossession.

Section 23. Obligations for the tenant. — It shall be the obligation of the tenant:

(1) To cultivate and take care of the farm, the growing crop and other improvements entrusted to him as a good father of a family, by doing all the work necessary in accordance with proven farming practices.

(2) To inform the landholder at once of any trespass committed by a third person upon the farm.

(3) To take reasonable care of the work animals and farm implements used in the point undertaking. He shall not use the work animals and farm implements entrusted to him by the landholder for purposes other than those intended, or allowed their use by other persons without the knowledge and consent of the landholder.

The tenant shall not abandon or surrender his holdings and leave the farm and growing crop and other improvements unattended during the watch season, except for just and reasonable cause. In case of such unjustified abandonment or surrender, any or all of his expected share in the crop may, in the discretion of the court, be forfeited in favor of the landholder to the extent of the damage caused thereby.

Any of the following shall be considered just and reasonable cause for the tenant to terminate the tenancy relationship;

(a) Cruel, inhuman or offensive treatment on the part of the landholder of his representative toward the tenant or any member of his immediate farm household.

(b) Non-compliance on the part of the landholder with any of the obligations imposed upon him by the provisions of this Act or by the contract.

(c) If the landholder or his representative compels the tenant or any member of his immediate farm household to do any work or render any service not in any way connected with his farm work, or even without compulsion if no compensation is paid.

(d) Commission of a crime by the landholder or his representative against the tenant or any member of his immediate farm household.

Section 24. Prohibitions to Tenant: —

(1) It shall be unlawful for the tenant, whenever the area of his holdings is five hectares or more, or is sufficient size to make him and the members of his immediate farm household fully occupied in its cultivation, to contract to work at the same time on two or more separate holdings belonging to different landholders under any system of tenancy, without the knowledge and consent of the land-holder with whom he first entered into tenancy relationship.

(2) It shall be unlawful for a share-tenant to employ a sub-tenant to furnish labor or any phase of the work required of him under this Act, except in cases of illness or any temporary incapacity on his part, in which eventuality the tenant or any member of his immediate farm household is under obligation to report such illness or incapacity to the landholder. Payment to the sub-tenant, in whatever form, for services rendered on the land under this circumstance, shall be for the account of the tenant.

(3) Subject to provisions of the next preceding paragraph, land entrusted for cultivation to a leasehold tenant shall not be sub-let nor shall the lease be assigned by the tenant to another person, except with the written consent of the lessor.

Section 25. Rights of the Landholder: —

(1) The landholder shall have the right to choose the kind of crop and the seeds with the tenant shall plant in his holdings: Provided, however, That if the tenant should subject, the court shall settle the conflict, according to the best interest of both parties.

(2) The landholder shall have the right to require the use of fertilizer of the kind or kinds shown by proven farm practices to be adapted to the requirements of the land.

(3) The landholder shall have the right to inspect and observe the extent of compliance on the part of the tenant with the terms and conditions of their contract and the provisions of this Act.

(4) In cases where the crop has to be sold in processed form before division and the tenant has no representative, the landholder, shall have the right to deal with millers or processors in representation of the tenant.

Section 26. Obligations of the Landholder:

(a) The landholder shall furnish the tenant an area of not less than one thousand square meters where the latter may construct his dwelling, raise vegetables, poultry, pigs, and other animals and engage in minor industries, the products of which shall accrue to the tenant exclusively.

(b) The landholder shall keep the tenant in the peaceful possession and cultivation of his landholdings which are the subject matter of the contract.

Section 27. Prohibitions to the Landholder:

(1) The landholder shall not dispossess the tenant of his holdings except for any of the causes enumerated in Section fifty, and without the cause having been proved before, and the dispossession authorized by, the court; otherwise, he shall, aside from the penalty of fine and/or imprisonment provided for any violation of this Act, be liable to the tenant for damages to the extent of the landholder’s right under Section twenty-two of this Act.

(2) The landholder shall be responsible for the payment of taxes levied by the Government upon the land which is the subject-matter of the contract and it shall be unlawful to make the tenant bear in part of all of the same, either directly or indirectly.

(3) The landholder shall not require the tenant to bear, directly or indirectly, any part of the rent, “canon” or other consideration which he, the former, may be under obligation to pay to a third person for the use of the land.

Section 28. Expenses for Seeds; Fertilizer; Pest and Weed Control Expenses.

(1) The same amount of seeds or seedlings used in the production of any crop shall be deducted from the gross harvest and returned to the party who furnished the same.

(2) The cost of fertilizer and expenses for pest and weed control as evidenced by sales invoices shall be paid out of the gross harvest and returned to the party who advanced the cost and expenses.

Section 29. Irrigation System. — The cost of the construction of an irrigation system, including the distributory canals, shall be borne exclusively by the landholder. The cost of maintenance and operation of the system shall, however, be borne by the landholder and the tenant in proportion to their respective shares in the harvest.

Section 30. Auxiliary Crop. — In case the land is planted to an auxiliary crop, the tenant shall receive eighty per centum and the landholder twenty per centum of the net produce, provided all expenses of production are borne by the tenant.

Auxiliary crops shall, not, however, be construed to include the crops or products raised from the garden, poultry and other industries carried on the lot specifically provided for the tenant under Section 26(a) hereof.

Section 31. Cost of Fertilizer, etc.; when to be Advanced by the landholder. — Whenever the use of fertilizer or the application of insect, disease and rodent control measures is directed by the landholder, he shall advance their cost, which shall be deducted from the gross produce.

CHAPTER II
Rice Share Tenancy

Section 32. Share Basis. — The parties shall, on ricelands which produces a normal average of more than forty cavanes per hectare for the three agricultural years next preceding the current harvest, receive as shares in the gross produce, after setting aside the same amount of palay used as seed, and after deducting the cost of fertilizer, pest and weed control, reaping and threshing, the amount corresponding to the total equivalent of their individual contributions, computed as follows;

Contribution Participation

1. Land 30%

2. Labor 30%

3. Farm implements 5%

4. Work Animals 5%

5. Final harrowing of the field
immediately before transplanting 5%

6. Transplanting 25%

Section 33. Share basis on Second Class Land. — On ricelands, which produce a normal average of forty cavans or less per hectare for the three agricultural years next preceding the current harvest, the participation for the contribution of the land shall be twenty-five per centum and that of labor, thirty-five per centum.

Section 34. Reimbursement Not Allowed. — Contributions or shares in the contribution to the production of the crop in the form of cash, grain or services, once shouldered or rendered alone by one party may not be reimbursed by the other party after the phase or phases of work required in the joint undertaking shall have been completed.

Section 35. Sharing of Expenses. — In case the landholder and the tenant agree to share equally in the expenses of final harrowing of field and transplanting, the latter may engage the services of persons or helpers to perform these phases of farm work, provided the rates for each shall have been previously determined and agreed upon between the landholder and the tenant. In case of disagreement upon said rates, the party who undertakes to the corresponding share in the harvest, after deducting the expenses of reaping.

Section 36. Further Rights of the Tenant. — In addition to the provision of Section twenty-two, the tenant shall have the right to:

1. Determine when to scatter the seeds, to transplant the seedlings, and to reap the harvest, provided they shall be in accordance with proven farm practices and after due notice to the landholder.

2. Choose the thresher which shall thresh the harvest whenever it is the best available in the locality and the best suited to the landholder’s and tenant’s needs and provided the rate charged is equal to or lower than the rate charged by the owner of other threshers under similar circumstances: Provided, further, That in cases where there are more than tenant the selection of the majority of the tenants shall prevail: Provided, finally, That if the landholder is the owner of a thresher and is ready and willing to grant equal or lower rates under the same conditions, the use of the landholder’s thresher shall be given preference.

3. Apply appropriate pest, insect, disease and rodent control measures whenever in his judgment such action is necessary: Provided, however, That if a tenant fails to apply any of the above control measures after the landholder has made a request in writing for such action, he shall be liable for any loss resulting from such failure.

4. Apply fertilizer of the kind or kinds shown by proven farm practices to be adapted to the requirements of the land, provided the landholder has not exercised his right under Section twenty-five to require the use of such fertilizer.

Section 37. Further Rights of the Landholder. — In addition to the provisions of Section twenty-five, the landholder, by himself or through his representative, may determined:

1. The proper height of pilapils or dikes according to the local practices.

2. The location and size of irrigation canals.

3. The site for the stacking of the harvest, provided it shall not be farther than one kilometer from the center of the area cultivated by a majority of the tenants.

4. The date of threshing.

Provided, however, That in case of disagreement by the tenant in any of the foregoing instances, the court shall determine whatever may be in the interest or both parties.

Section 38. Labor; What It Constitutes. — The tenant shall perform the following as the labor contributed by him under Section thirty-two;

1. The preparation of the seedbed which shall include plowing, harrowing, and watering of the seedbed, the scattering of the seeds, and the care of the seedlings.

2. The plowing, harrowing, and watering of the area he is cultivating, except final harrowing of the field as an item of contribution specified in Section thirty-two of this Act.

3. The maintenance, repair and weeding of dikes, paddies, and irrigation canals in his holdings.

4. The pulling and bundling of the seedlings preparatory to their transplanting.

5. Care of the growing plants.

6. Gathering and bundling of the reaped harvest.

7. The piling of the bundles into small stacks.

8. The preparation of the place where the harvest is to be stacked.

9. Gathering of the small stacks and their transportation to the place where they are to be stacked.

10. Piling into a big stack preparatory to threshing.

Section 39. Prohibition on Pre-Threshing. — It shall be unlawful for either the tenant or the landholder, without mutual consent, to reap or thresh a portion of the crop at any time previous to the date set for its threshing. Any violation by either party shall be treated and penalized in accordance with this Act and/or under the general provisions of law applicable to the act committed.

Section 40. Place of Crop Division. — The division of the crop shall be made in the same place where the harvest has been threshed and each party shall transport his share to his warehouse or barn, unless the contrary is stipulated by the parties.

CHAPTER III
Share Tenancy on Crops other than Rice

Section 41. Basis of Shares in Crops other than Rice. — The landholder and the tenant on lands which produce crops either than rice shall be free to enter into any contract stipulating the ratio of crop division. In the absence of a stipulation, the customs of the place shall govern: Provided, That whether the basis of division of the crop is the contract between the parties or the customs of the place, the share of the tenant for his labor in the production shall not less than thirty per cent of the harvest or produce, after deducting the expenses for harvesting and/or initial processing: Provided, further, That in cases where the share of the tenant is, according to local practices or customs prevailing at the time of the approval of this Act, more than the minimum herein set, the tenant’s share thus established by local practices or customs shall prevail and be considered the minimum.

PART III
THE LEASEHOLD TENANCY

Section 42. Landholder-Lessor and Tenant-Lessee, Defined. Any person, natural or juridical, either as owner, lessee, usufructuary or legal possessor or agricultural land, who lets, leases or rents to another said property for purposes of agricultural production and for a price certain or ascertainable either in an amount of money or produce, shall be known as the landholder-lessor; and any person who, with the consent of the former, tills, cultivates or operates said land, susceptible of cultivation by one individual, personally or with thed of labor available from among his own immediate farm household, is a tenant-lessee.

Section 43. Rights and Obligations of Tenant-Lessee. — With the creation of the tenancy relationship arising out of the contract between the landholder-lessor and tenant-lessee, the latter shall have the right to enter the premises of the land, and to the adequate and peaceful enjoyment thereof. He shall have the right to work the land according to his best judgment, provided this manner and method of cultivation and harvest are in accordance with proven farm practices. Upon termination of the relationship, he shall be entitled to one half of the value of the improvements made by him, provided they are reasonable and adequate to the purposes of the lease.

The tenant-lessee shall pay the consideration stipulated in the lease contract provided it shall not exceed the limit fixed in Section forty-six. In the absence of stipulation, the consideration shall be that established in said Section forty-six. He shall make proper use of the land and the improvements thereon and shall be under obligation to cultivate it as a good father of a family, by doing all the work considered reasonable and necessary in accordance with proven farm practices. He is likewise obliged to take reasonable care of the work animals and farm implements that may be delivered to him by the land-holder, in case it is agreed between the parties that the landholder-lessor shall furnish any or all of them.

Section 44. Rights of Landholder-lessor. — The landholder-lessor or his duly authorized representatives shall have the right to inspect the premises of the land which is the subject of the lease for the purpose of ascertaining the tenant’s compliance with the provisions of the contract and of this Act, but in no case shall he exercise any coercion, intimidation or violence in word or deed.

Section 45. Manner of Rental Payment. — Payment of the consideration for the use of land may be made either in an amount certain or ascertainable in money or in produce, or both.

Section 46. Consideration for the Use of Land. —

(a) The consideration for the use of ricelands, shall not be more than thirty per centum of the gross produce for first class lands and not more than twenty-five per centum for second class lands. Classification of ricelands shall be determined by productivity: first class lands being those which yield more than forty cavanes per hectare and second class lands being those which yield forty cavanes or less, the same to be computed upon the normal average harvest of the three preceding years.

(b) The consideration for agricultural land where exist fruit trees and other useful trees and plants, from which the whole or any portion of the produce of the said land is taken, shall not be more than what have been specified in the preceding section: Provided, however, That additional considerations for the employment of said trees and useful plants, if the principal product is rice or other crops, shall be decided and specified by negotiation between the landholder-lessor and the tenant-lessee; Provided, further, That where the tenant-lessee, during the period of the lease and/or in consideration thereof, plants and/or takes care of said trees and plants, with the consent of the landholder-lessor, the tenant-lessee shall be compensated by the latter in the manner agreed between them.

(c) The consideration for the use of sugar lands, fishponds, saltbeds and of lands devoted to the raising of livestock shall be governed by stipulation between the parties.

Section 47. Rental of Work Animals, etc., and Applicability of Schedules. — Upon agreement of the parties, the tenant- lessee may make use of such work animals, farm implements or services belonging to the landholder-lessor as are available for hire, the consideration of which shall be based on their fair rental value.

The rates on the fair rental value for the use of work animals, farm implements and services, belonging to the landholder-lessor shall be those provided in Schedules “A”, “B”, and “C”, which shall apply upon approval of this Act and shall remain in force, unless the Secretary of Agricultural and Natural Resources revises the same in accordance with Section fifty-two.

Section 48. Loans and Interests. — Loans, either in money or in kind, obtained by a tenant-lessee from the landholder lessor shall be payable at the time stipulated: Provided, however, That this shall not be construed as prejudicing the right of the borrower to repay his obligation before the date of maturity. The loan, unless it is otherwise stipulated, shall be payable in money at not more than eight per cent interest per annum, computed from the date of the indebtedness was contracted up to and including the date of payment. A note or memorandum to evidence such indebtedness shall be executed in accordance with the provisions of Section sixteen.

PART IV
SECURITY OF TENURE

Section 49. Ejectment of Tenant. — Notwithstanding any agreement or provision of law as to the period, in all cases where land devoted to any agricultural purpose is held under any system of tenancy, the tenant shall not be dispossessed of his holdings except for any of the causes hereinafter enumerated and only after the same has been proved before, and the dispossession is authorized by, the court.

Section 50. Causes for the Dispossession of a Tenant. — Any of the following shall be a sufficient cause for the dispossession of a tenant from his holdings:

(a) The bona fide intention of the landholder to cultivate the land himself personally or through the employment of farm machinery and implements: Provided, however, That should the landholder not cultivate the land himself or should fail to employ mechanical farm implements for a period of one year after the dispossession of the tenant, it shall be presumed that he acted in bad faith and the land and damages for any loss incurred by him because of said dispossession: Provided, further, That the land-holder shall, at least one year but not more than two years prior to the date of his petition to dispossess the tenant under this subsection, file notice with the court and shall inform the tenant in wiring in a language or dialect known to the latter of his intention to cultivate the land himself, either personally or through the employment of mechanical implements, together with a certification of the Secretary of Agriculture and Natural Resources that the land is suited for mechanization: Provided, further, That the dispossessed tenant and the members of his immediate household shall be preferred in the employment of necessary laborers under the new set-up.

(b) When the current tenant violates or fails to comply with any of the terms and conditions of the contract or any of the provisions of this Act: Provided, however, That this subsection shall not apply when the tenant has substantially complied with the contract or with the provisions of this Act.

(c) The tenant’s failure to pay the agreed rental or to deliver the landholder’s share: Provided, however, That this shall not apply when the tenant’s failure is caused by a fortuitous event or force majeure.

(d) When the tenant uses the land for a purpose other than that specified by agreement of the parties.
(e) When a share-tenant fails to follow those proven farm practices which will contribute towards the proper care of the land and increased agricultural production.

(f) When the tenant through negligence permits serious injury to the land which will impair its productive capacity.

(g) Conviction by a competent court of a tenant or any member of his immediate family or farm household of a crime against the landholder or a member of his immediate family.

Section 51. Burden of Proof . — The burden of proof to show the existence of a lawful cause for the ejectment of a tenant shall rest upon the landholder.

PART V
SPECIAL PROVISIONS

Section 52. Duties of the Secretary of Agriculture and Natural Resources. — It shall be the duty of the Secretary of Agriculture and Natural Resources to:

1. Conduct such educational programs as circumstances may require adequately to acquaint tenants and landholders with their rights and responsibilities under this Act.

2. Revise the rental rates provided for in Schedules “A”, and “B”, whenever such revision is made necessary by changes in values and prices, so that the rental rates shall conform to the standard of fair rental value as defined in Section 5(m).

3. Facilities the preparation and registration of land- holder-tenant contracts through the distribution of appropriate printed forms and instructions to guide the interested parties in drafting and executing rental agreements. The forms of contracts must bear the approval of the court.

4. Conduct surveys and researches to determine the extent of compliance, adaptability to different crops and areas and the fairness of this Act to all parties affected by its implementation.

5. Submit an annual report to the President containing an analysis showing the progress made toward attaining the objectives enumerated in Section two of this Act and recommendations concerning methods of improving the implementation and general effectiveness of this Act. Copies of this report shall be provided to members of the Congress.

Section 53. Duties of Secretary of Justice. — The Secretary of Justice, through the Executive Judge of the Court, shall be responsible for formulating a national enforcement program, among other things, through the assignment of judges and personnel, which will insure the full enforcement of the provisions of this Act.

Section 54. Representation by Counsel. — In all cases wherein a tenant cannot afford to the represented by counsel, it shall be the duty of the Public Defender of the Department of Labor to represent him, upon proper notification by the party concerned, or the court of competent jurisdiction shall assign or appoint counsel de oficio for the indigent tenant.

Section 55. Applicability of General Laws. — The provisions of existing laws which are not inconsistent herewith shall apply to the contracts governed by this Act as well as to acts or omissions by either party against each other during, and in connection with, their relationship.

Section 56. Doubts to Be Solved in Favor of the Tenant. — In the interpretation and enforcement of this Act and other laws as well as of the stipulations between the landholder and the tenant, the courts and administrative officials shall solve all grave doubts in favor of the tenant.

Section 57. Penal Provision. — Violation of any of the provisions of this Act shall be punished with a fine not exceeding two thousand pesos or imprisonment not exceeding one year, or both in the discretion of the Court.

Section 58. Separability of Provisions. — If for any reason, any section or provision of this Act shall be questioned in any court, and shall be held to be unconstitutional or invalid, no other section or provision of this Act shall be effected thereby.

Section 59. Repealing Provisions. — Public Act Numbered Four thousand fifty-four, as amended by Republic Act Numbered Thirty-four, Commonwealth Act Numbered Fifty-three, Commonwealth Act Numbered Four hundred sixty-one as amended by Republic Act Numbered Forty- four, and all laws, rules and regulations inconsistent herewith are hereby repealed.

Section 60. Effective Date. — This Act shall take effect upon its approval.

Approved: August 30, 1954

SCHEDULE “A”
The rental value of work animals and farm implements other than machinery, shall not exceed the allowable depreciation charges plus six per cent (6%) interest per annum computed on the market value of the said work animals and farm implements not fixed in this Schedule shall be those prevailing in the locality where the said animals and implements are rented.

Item Market Period of Allowable Allowable Fair Rental
Value depreciation depreciation interest at value per
in years charge 6 per cent annum

Carabao P300.00 10 P30.00 P18.00 P48.00
Bullock 600.00 7 85.91 36.00 121.00
Horse, native 150.00 8 18.75 9.00 27.75
Cattle 200.00 7 28.57 12.00 40.57
Plow, iron 40.00 5 8.00 2.40 10.40
Plow wooden 25.00 2 12.50 1.50 14.00
Harrow iron 18.00 5 3.60 1.00 4.68
Carreton (native cart) 400.00 10 40.00 24.00 64.00

SCHEDULE “B”
The rental value for farm machineries inclusive of tractors, tractor equipment, engines, motors, and pumps shall not exceed the allowable depreciation equal to one-tenth (1/10) of the current market value plus interest at six per cent (6% per annum.

SCHEDULE “C”
The amounts to be charged by the landholder when he performs services in the operation of the farm enterprise shall not current the rates in the locality where such services are rendered.

Section 1. Land Registration Commission. — In order to have a more efficient execution of the existing laws relative to the registration of lands, there is created a commission to be known as the Land Registration Commission, under the executive supervision of the Secretary of Justice. Said Commission shall have supervision and control over all Registers of Deeds, as well as the clerical and archival system of the Courts of First Instance throughout the Philippines in the exercise of the duties and functions conferred upon them with the reference to the registration of lands, and shall constitute a central repository of original records in matters connected with land titles and the registration thereof.”

Section 2. Chief and Assistant Chief of the Commission. — The Land Registration Commission shall have a chief and an assistant chief, to be known, respectively, as the Commissioner and the Assistant Commissioner of Land Registration who shall be appointed by the President with the consent of the Commission on Appointments. The Commissioner shall be a duly qualified member of the Philippine Bar with at least five years of practice in the legal profession, and shall be entitled to the same compensation, emoluments and privileges as those of a Judge of the Court of First Instance. The Assistant Commissioner, who shall possess the same qualifications as those required of the Commissioner, shall receive compensation at the rate of seven thousand two hundred pesos per annum. He shall act as Commissioner of Land Registration during the absence or disability of the Commissioner, and when there is a vacancy in the position until another person shall have been designated or appointed in accordance with law. The Assistant Commissioner shall also perform such other functions as the Commissioner may assign to him.

Section 3. General functions of the Commission. — The Commissioner of land Registration shall take over all the powers and functions as are now conferred upon the Chief of the General Land Registration Office, which positions is hereby abolished, as well as the powers and functions of the Judge of the Fourth Branch of the Court of First Instance of Manila, in all matters heretofore submitted to it for resolution under section two hundred of the Administrative Code. The Commissioner shall likewise exercise executive supervision over all the personnel of the Courts of First Instance throughout the Philippines with respect to the discharge of duties and functions conferred by law upon such personnel in relation to registration of lands, and all clerks of said courts acting with respect to the same shall be deemed to be under the Commissioner. It shall be the duty of said clerks of court to attend, either in person or by deputy, all sessions of their respective courts wherein proceedings relative to registration of lands are held, to keep minutes of such proceedings, and to perform with reference thereto all the duties and functions of clerks of court. The Commissioner of Land Registration shall designate an officer under him to act as clerk of the fourth branch of the Court of First Instance of Manila in matters relating to the registration of land and perform in connection therewith all the duties and functions of clerk of court.

The Commissioner of Land Registration shall see to it shall all orders, decisions, and decrees promulgated relative to the registration of lands are properly attended to and given due course, for which purpose he shall issue all needful rules and regulations, subject to the approval of the Secretary of Justice.

Section 4. Reference of doubtful matters to Commissioner of Land Registration. — When the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage, or other instrument presented to him for registration, or where any party in interest does not agree with the Register of Deeds with reference to any such matter, the question shall be submitted to the Commissioner of Land Registration either upon the certification of the Register of Deeds, stating the question upon which he is in doubt, or upon the suggestion in writing by the party in interest; and thereupon the Commissioner, after consideration of the matter shown by the records certified to him, and in case of registered lands, after notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to be made. His decision in such cases shall be conclusive and binding upon all Registers of Deeds: Provided, however, That when a party in interest disagrees with the ruling or resolution of the Commissioner and the issue involves a question of law, said decision may be appealed to the Supreme Court within thirty days from and after receipt of the notice thereof.

Section 5. Transfer of functions, records, personnel, appropriation and properties. — All the functions, records, personnel, equipment, unexpended appropriations and other properties of the General Land Registration Office are hereby transferred to the Land Registration Commission.

Section 6. Repealing Clause. — All existing laws or parts thereof as may be inconsistent with the provisions of this Act are hereby repealed.

Section 7. The sum of two million pesos, or so much thereof as may be necessary, is hereby authorized and appropriated, out of any funds in the National Treasury not otherwise appropriated, to carry out the purposes of this Act, for the fiscal year ending June thirty, nineteen hundred and fifty-five, broken down as follows:

Salaries and Wages P1,542,040.00

Sundry expenses 226,960.00

Furniture and equipment 231,000.00

The same sum or so much thereof as may be necessary shall be included yearly in the appropriation acts for subsequent fiscal years.

Section 8. This Act shall take effect upon its approval.

Approved: June 17, 1954

CHAPTER I
General Provisions

Section 1. Title of Act. — This Act shall be known as the Judiciary Act of 1948.

Section 2. Supreme Court, Court of Appeals and other courts. — The courts referred to in this Act are the Supreme Court, the Court of Appeals, the Courts of First Instance, the Municipal Courts and the Justice of the Peace Courts.

Section 3. Special provision in oath of judges. — The oath of office of judges, including justices of the peace and judges of municipal courts, shall contain, in addition to the matters prescribed in section twenty-three of the Revised Administrative Code, a declaration to the effect that the affiant will administer justice without respect to person and do equal right to the poor and the rich.

The oath of office of the justice of the peace and judge of a municipal court shall be the same in substance as that prescribed for a judge of first instance. Said oath shall be filed with the clerk of Court of First Instance in the province or city, as the case may be, and shall be there preserved.

Section 4. Preservation of oath of office of judge. — The oath of office of a judge shall be filed with the clerk of the court to which the affiant pertains and shall be entered upon its records. Where a judge is authorized by law to exercise his functions in more than one court, it shall suffice if his oath is recorded in the court where he has his official station.

Section 5. Judge’s certificate as to work completed. — District judges, judges-at-large, cadastral judges, judges of municipal courts, and justices of the peace shall certify on their applications for leave, and upon salary vouchers presented by them for payment, or upon the pay rolls upon which their salaries are paid, that all special proceedings, applications, petitions, motions, and all civil and criminal cases which have been under submission for decision or determination for a period of ninety days or more have been determined and decided on or before the date of making the certificate, and no leave shall be granted and no salary shall be paid without such certificate.

In case any special proceeding, application, petition, motion, civil or criminal case is resubmitted upon the voluntary application or consent in writing of all the parties to the case, cause, or proceeding, and not otherwise, the ninety days herein prescribed within which a decision should be made shall begin to run from the date of such resubmission.

Section 6. Disposition of moneys paid into court. — All moneys accruing to the Government in the Supreme Court, in the Court of Appeals, and in the Courts of First Instance, including fees, fines, forfeitures, costs, or other miscellaneous receipts, and all trust or depository funds paid into such courts shall be received by the corresponding clerk of court, and, in the absence of special provision, shall be paid by him into the National Treasury to the credit of the proper account or fund and under such regulations as shall be prescribed by the Auditor General.

A clerk shall not receive money belonging to private parties except where the same is paid to him or into court by authority of law.

Section 7. Disbursement of funds for judiciary establishment. — Except as otherwise specially provided, national funds available for the judiciary establishment shall be disbursed by the disbursing officer of the Bureau of Justice.

Section 8. Annual report of clerks of courts. — The clerk of the Supreme Court, the clerk of the Court of Appeals, and all clerks of Courts of First Instance shall make annual reports to the Solicitor General, of such scope and in such form as shall be by the latter prescribed, concerning the business done in their respective courts during the year.

CHAPTER II
Supreme Court

Section 9. The Supreme Court; quorum of the Court; designation of Justices of the Court of Appeals and District Judges to sit in the Supreme Court; number of Justices necessary to reach a decision. — The Supreme Court of the Philippines shall consist of a Chief Justice and ten Associate Justices, which shall sit in banc in the hearing and determination of all cases within its jurisdiction. The presence of six Justices shall be necessary to constitute a quorum except when the judgment of the lower court imposes the death penalty, in which case the presence of eight Justices shall be necessary to constitute a quorum. In the absence of a quorum, the Court shall stand ipso facto adjourned until such time as the requisite number shall be present, and a memorandum showing this fact shall be inserted by the clerk in the minutes of the court.

If on account of illness, absence, or incapacity upon any of the grounds mentioned in Section one, Rule One hundred and twenty-six of the Rules of Court, of any of the Justices of the Supreme Court, or whenever, by reason of temporary disability of any Justice thereof or vacancies occurring therein, the requisite number of Justices necessary to constitute a quorum or to render a judgment in any given case, as heretofore provided, is not present, the President of the Philippines, upon the recommendation of the Chief Justice, may designate such number of Justices of the Court of Appeals or District Judges as may be necessary, to sit temporarily as Justices of the Supreme Court, in order to form a quorum, or until a judgment in said case is reached: Provided, however, That no Justice of the Court of Appeals or District Judge may be designated to act in any case in the decision of which he has taken part.

The concurrence of at least six Justices of the Court shall be necessary for the pronouncement of a judgment. However, for the purpose of declaring a law or a treaty unconstitutional, at least eight Justices must concur. When the necessary majority, as herein provided, to declare a law or a treaty unconstitutional cannot be had, the Court shall so declare, and in such case the validity or constitutionality of the Act or treaty involved shall be deemed upheld.

Whenever the judgment of the lower court imposes the death penalty, the case shall be determined by eight Justices of the Court. When eight Justices fail to reach a decision as herein provided, the penalty next lower in degree than the death shall be imposed.

Section 10. Place of holding sessions. — The Supreme Court shall hold its sessions in the City of Manila. Whenever the public interest so requires, it may hold its sessions in any other place within the Philippines.

Section 11. Appointment of Justices of the Supreme Court. — The Chief Justice and the Associate Justice of the Supreme Court shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments. The Chief Justice of the Supreme Court shall be so designated in his commission; and the Associate Justice shall have precedence according to the dates of their respective commissions, or, when the commissions of two or more of them bear the same date, according to the order in which their commissions may have been issued by the President of the Philippines: Provided, however, That any member of the Supreme Court who has been reappointed to that Court after rendering service in any other branch of the Government shall retain the precedence to which he is entitled under his original appointment and his service in the Court shall, to all intents and purposes, be considered as continuous and uninterrupted.

Section 12. Vacancy in office of Chief Justice. — In case of a vacancy in the office of Chief Justice of the Supreme Court or of his inability to perform the duties and powers of his office, they shall devolve upon the Associate Justice who is first in precedence, until such disability is removed, or another Chief Justice is appointed and duly qualified. This provision shall apply to every Associate Justice who succeeds to the office of Chief Justice.

Section 13. Authority of Supreme Court over administration of its own affairs. — The Supreme Court shall have exclusive administrative control of all matters affecting the internal operations of the Court.

Section 14. Status of subordinates. — Except as regards the appointment and compensation of the Reporter, Clerk, and such private secretaries to the individual Justices as the Court may authorize, all subordinates and employees of the Supreme Court shall be governed by the provisions of the Civil Service Law; but the Court may, by resolution, remove any of them for cause.

Section 15. Clerk of the Supreme Court; his appointment; his compensation; his bond. — The Supreme Court of the Philippines shall appoint a Clerk of Court who shall exercise powers and perform duties in regard to all matters within its jurisdiction, as are heretofore exercised and performed by the Clerk of the Supreme Court of the Philippines; and in the exercise of those powers and in the performance of those duties the Clerk shall be under the direction of the Court. No person may be appointed Clerk of the Supreme Court unless he has been engaged for five years or more in the practice of law, or has been clerk or deputy clerk of a court of record for the same period of time.

The clerk shall have the rank of a bureau director and shall receive an annual compensation of seven thousand and two hundred pesos. Before entering upon the discharge of the duties of his office, he shall file a bond in the amount of six thousand pesos, such bond to be approved by the Treasurer of the Philippines. The bond shall be kept in the Office of the Treasurer of the Philippines and entered in his books, the same being subject to inspection by interested parties.

The Clerk of Court may require any of his deputies or assistants to give an adequate bond as security against loss by reason of any wrongdoings or gross negligence on the part of such deputies or assistants.

Section 16. Vacation period. — The regular sessions of the Supreme Court may, in the discretion of the Court, be suspended for the period beginning with the first of April and closing with the fifteenth of June of each year, which, in case of such suspension, shall be known as the Supreme Court vacation.

During vacation at least one of the Justices, to be designated in such manner as the Court by resolution shall direct, shall remain on duty.

Section 17. Jurisdiction of the Supreme Court. — The Supreme Court shall have original jurisdiction over cases affecting ambassadors, other public ministers, and consuls; and original and exclusive jurisdiction in petitions for the issuance of writs of certiorari, prohibition and mandamus against the Court of Appeals.

In the following cases, the Supreme Court shall exercise original and concurrent jurisdiction with Court of First Instance:

1. In petitions for the issuance of writs of certiorari, prohibition, mandamus, quo warranto, and habeas corpus;

2. In actions between the Roman Catholic Church and the municipalities or towns, or the Filipino Independent Church for controversy as to title to, or ownership, administration or possession of hospitals, convents, cemeteries or other properties used in connection therewith;

3. In actions brought by the Government of the Philippines against the Roman Catholic Church or vice versa for the title to, or ownership of, hospitals, asylums, charitable institutions, or any other kind of property; and

4. In actions brought to prevent and restrain violations of law concerning monopolies and combinations in restraint of trade.

The Supreme Court shall have exclusive jurisdiction to review, revise, reverse, modify or affirm on appeal, certiorari or writ of error, as the law or rules of court may provide, final judgment and decrees of inferior courts as herein provided, in —

(1) All cases in which the constitutionality or validity of any treaty, law, ordinance, or executive order or regulation is in question;

(2) All cases involving the legality of any tax, impost, assessment or toll, or any penalty imposed in relation thereto;

(3) All cases in which the jurisdiction of any inferior court is in issue;

(4) All criminal cases involving offenses for which the penalty imposed is death or life imprisonment; and those involving other offenses which, although not so punished, arose out of the same occurrence or which may have been committed by the accused on the same occasion, as that giving rise to the more serious offense, regardless of whether the accused are charged as principals, accomplices, or accessories, or whether they have been tried jointly or separately;

(5) All civil cases in which the value in controversy exceeds fifty thousand pesos, exclusive of interests and costs, or in which the title or possession of real estate exceeding in value the sum of fifty thousand pesos to be ascertained by the oath of a party to the cause or by other competent evidence, is involved or brought in question. The Supreme Court shall likewise have exclusive jurisdiction over all appeals in civil cases, even though the value in controversy, exclusive of interests and costs, is fifty thousand pesos or less, when the evidence involved in said cases is the same as the evidence submitted in an appealed civil case within the exclusive jurisdiction of the Supreme Court as provided herein;

(6) All other cases in which only errors or questions of law are involved.

Section 18. Regular terms of Supreme Court. — The Supreme Court shall hold at Manila two regular terms for the hearing of cases, the first commencing on the second Monday of January and the second on the last Monday of June. Each regular term shall continue to and include the day before the opening of the next regular term. The Office of the Clerk of the Supreme Court shall always be open for the transaction of business, except upon lawful holidays, and the Court shall always be open for the transaction of such interlocutory business as may be done by a single member thereof.

The sessions of the Court for the hearing of cases shall be held on such days in the week, and for such length of time, as the Court by its rules may order.

Section 19. Preservation of order in Supreme Court. — The sheriff of the City of Manila or of the province where the Supreme Court may be in session shall, in person or by deputy, attend the sessions of the Supreme Court, enforce proper decorum in the court room, and preserve good order in its precincts. To this end he shall carry into effect the rules or orders of the Court made in this behalf, or of any judge thereof, and shall arrest any person there disturbing the court or violating the peace.

Section 20. Service of process of Supreme Court. — Writs, processes, and orders of the Supreme Court, or of any justice thereof, shall be served or executed by the sheriff of the City of Manila or of the province where the Supreme Court may be in session, or by any officer having authority to execute the writs, processes, or orders of a Court of First Instance.

Section 21. Form of decisions — When opinion to be reported. — When a decision is rendered by the Supreme Court, a written opinion or memorandum exemplifying the ground and scope of the judgment of the court shall be filed with the Clerk of the Court and shall be by him recorded in an opinion book. When the Court shall deem a decision to be of sufficient importance to require publication, the Clerk shall furnish a certified copy thereof to the Reporter. Dissenting opinions shall be published when the justices writing such opinions shall so direct.

Section 22. Preparation of opinions for publication. — The Reporter shall prepare and publish with each reported decision a concise synopsis of the facts necessary to a clear understanding of the case and shall state the names of counsel, and concisely the material and controverted points made, and the authority therein cited by them, and shall prefix to each case a syllabus, which shall be confined, as near as may be, to points of law decided by the Court on the facts of the case, without a recital therein of the facts.

Section 23. General make-up of volumes. — Each volume of the decisions of the Supreme Court shall contain a table of the cases reported and of the cases cited in the opinions and a full and alphabetical index of the subject matters of the volume prepared by the Reporter, shall contain not less than seven hundred and fifty pages of printed matter, shall be well printed, upon good paper, and well bound in the best law sheep substantially in the manner of the reports of the decisions of the Supreme Court of the United States, and shall be styled “Philippine Reports,” and numbered consecutively, in the order of the volumes published.

CHAPTER III
Court of Appeals

Section 24. The Court of Appeals. — The Court of Appeals of the Philippines shall consist of a Presiding Justice and fourteen Associate Justices who shall be appointed by the President of the Philippines, with the consent of the Commission on Appointments of the Congress. The Presiding Justice of the Court of Appeals shall be so designated in his commission, and the other Justices of the Court shall have precedence according to the dates of their respective commissions, or when the commissions of two or more of them shall bear the same date, according to the order in which their commissions have been issued by the President of the Philippines.

The Presiding Justice and the Associate Justices of the Court of Appeals shall not be removed from office except on impeachment upon the grounds and in the manner provided for in Article IX of the Constitution.

The Court of Appeals, shall, as a body, sit in banc, but it may sit in five divisions of three Justices each. The five divisions may sit at the same time.

Section 25. Presiding Justice to preside sessions of Court. — If the Presiding Justice is present in any session of the Court, whether in banc or in division, he shall preside. In his absence, the Associate Justice attending who is first in precedence in accordance with the preceding section of this Act, shall preside.

Section 26. Vacancy in Office of Presiding Justice. — In case of a vacancy in the Office of Presiding Justice of the Court of Appeals, or in the event of his inability to perform the duties and powers of his office, they shall devolve upon the Associate Justice of the Court who is first in precedence, until such disability is removed, or another Presiding Justice is appointed and has qualified. This provision and the provision of the preceding section shall apply to every Associate Justice who succeeds to the office of the Presiding Justice.

Section 27. Designation of District Judges to sit in the Court of Appeals. — In case of vacancy in the office of any one of the Associate Justices of the Court of Appeals, or in the event that any one of said Associate Justices is absent, or disabled, or incapacitated for any reason, to perform the duties and powers of his office, the President of the Philippines, upon the recommendation of the Presiding Justice of the Court of Appeals, may designate a District Judge to sit temporarily in the Court of Appeals, until such disability is removed or the vacancy is permanently filled. However, no District Judge so appointed shall act in the Court of Appeals in any case in which his ruling or decision is the subject of review.

Section 28. Qualifications and compensation of Justices of Court of Appeals. — The Justices of the Court of Appeals shall have the same qualifications as those provided in the Constitution for members of the Supreme Court. The Presiding Justice of the Court of Appeals shall receive an annual compensation of thirteen thousand pesos, and each Associate Justice, an annual compensation of twelve thousand pesos.

Section 29. Jurisdiction of the Court of Appeals. — The Court of Appeals shall have exclusive appellate jurisdiction over all cases, actions, and proceedings not enumerated in section seventeen of this Act, properly brought to it from Courts of First Instance. The decision of the Court of Appeals in such cases shall be final: Provided, however, That the Supreme Court in its discretion may, in any case involving a question of law, upon petition of the party aggrieved by the decision and under rules and conditions that it may prescribe, require by certiorari that the said case be certified to it for review and determination, as if the case had been brought before it on appeal.

Section 30. Original jurisdiction of the Court of Appeals. — The Court of Appeals shall have original jurisdiction to issue writs of mandamus, prohibition, injunction, certiorari, habeas corpus, and all other auxiliary writs and process ind of its appellate jurisdiction.

Section 31. Transfer of cases from Supreme Court and Court of Appeals to proper court. — All cases which may be erroneously brought to the Supreme Court or to the Court of Appeals shall be sent to the proper court, which shall hear the same, as if it had originally been brought before it.

Section 32. Place of holding sessions. — The Court of Appeals shall have its permanent office in the City of Manila. Upon the recommendation of the Secretary of Justice, with the certification of the Presiding Justice of the Court of Appeals and when public interest demands, the President of the Philippines may authorize any division or divisions of the Court to hold sessions periodically at such time and place outside the City of Manila as the President may determine, for the purpose of hearing and deciding cases originating from a specified group of judicial districts.

Section 33. Quorum of the Court. — Nine Justices of the Court of Appeals shall constitute a quorum for its sessions in banc; and three Justices shall constitute a quorum for the sessions of a division. In the absence of a quorum, the Court or the division shall stand ipso facto adjourned until such time as the requisite number shall be present, and a memorandum showing this fact shall be inserted by the clerk in the minutes of the Court. The affirmative vote of eight Justices is necessary to pass a resolution of the Court in banc. The unanimous vote of the three Justices of a division shall be necessary for the pronouncement of a judgment. In the event that the three Justices do not reach a unanimous vote, the Presiding Justice shall designate two Justices from among the other members of the Court to sit temporarily with them, forming a division of five Justices, and the concurrence of a majority of such division shall be necessary for the pronouncement of a judgment.

Every decision of the Court of Appeals shall continue complete findings of fact on all issues properly raised before it.

All cases submitted to a division of the Court of Appeals for decision shall be decided or terminated therein within the term in which they were heard and submitted for decision: Provided, however, That when a case is complicated or otherwise attended with special circumstances which demand additional time for its study or consideration, the Court of Appeals, sitting in banc, may, upon petition of the division concerned, grant an additional period not exceeding three months for its disposition or termination.

Section 34. Distribution of cases between divisions. — All the cases of the Court of Appeals shall be allotted between the different divisions thereof for trial and decision. Whenever in any criminal case submitted to a division the said division should be of the opinion that the penalty of death or life imprisonment should be imposed, the said Court shall refrain from entering judgment thereon and shall forthwith certify the case to the Supreme Court for final determination, as if the case had been brought before it on appeal.

Section 35. Power of the Court to adopt rules. — The Court of Appeals, sitting in banc, shall make proper orders or rules to govern the allotment of cases between the different divisions, the constitution of such divisions, the regular rotation of Justices between them, the filing of vacancies occurring therein, and other matters relating to the business of the Court; and these rules shall continue in force until repealed or altered by it or by the Supreme Court.

Section 36. Clerk of the Court of Appeals; his appointment; his compensation; his bond. — The Court of Appeals shall appoint a clerk of court, who shall exercise the same powers and perform the same duties in regard to all matters within its jurisdiction, as are exercised and performed by the clerk of the Supreme Court of the Philippines, insofar as the same may be applicable; and in the exercise of those powers and in the performance of those duties, the clerk shall be under the direction of the Court. No person may be appointed clerk of the Court of Appeals unless he has been engaged for five years or more in the practice of law, or has been clerk or deputy clerk of a court of record for the same period of time.

The clerk shall have the rank of a Bureau Director and shall receive an annual compensation of seven thousand two hundred pesos. Before entering upon the discharge of the duties of his office, he shall file a bond in the amount of six thousand pesos in the same manner and form as required of the clerk of the Supreme Court, such bond to be approved by the Treasurer of the Philippines. The bond shall be kept in the office of the Treasurer of the Philippines and entered in his books, the same being subject to inspection by interested parties.

The clerk of court may require any of his deputies or assistants to give an adequate bond as security against loss by reason of any wrongdoing or gross negligence on the part of such deputy or assistant.

Section 37. Appointment by Court of Appeals of deputy clerks of Court and other officers. — The Court may appoint five deputy clerks of court, who shall have the same qualifications as those of the clerk of Court of Appeals, with an annual compensation of four thousand five hundred pesos for the first deputy, and three thousand nine hundred pesos and sixty for the other deputy clerks each, and other officers in such number and with such compensation as may be hereafter authorized.

Section 38. Applicability of certain provisions of the Revised Administrative Code to Court of Appeals. — The provisions of sections ten, thirteen, fourteen, fifteen, seventeen, eighteen, nineteen, twenty-one, twenty-two, and sixty-six of this Act, and eighty-nine of the Revised Administrative Code, shall be applicable to the Court of Appeals, in so far as they may be of possible application.

CHAPTER IV
Courts of First Instance

Section 39. Courts of First Instance. — Courts of general original jurisdiction, known as Courts of First Instance, are organized and established throughout the Philippines in conformity with the provisions of this chapter.

Section 40. Judges of First Instance. — The judicial function in Courts of First Instance shall be vested in District Judges, Judges-at-Large and Cadastral Judges, to be appointed and commissioned as hereinafter provided.

Section 41. Limitation upon tenure of office. — District Judges, Judges-at-Large and Cadastral Judges shall be appointed to serve during good behavior, until they reach the age of seventy years, or become incapacitated to discharge the duties of their office, unless sooner removed in accordance with law.

Section 42. Qualification and salary. — No person shall be appointed District Judge, Judge-at-Large and Cadastral Judge unless he has been five years a citizen of the Philippines and has practised law in the Philippines for a period of not less than five years or has held during a like period, within the Philippines, an office requiring admission to the practice of law in the Philippines as an indispensable requisite.

The District Judge shall receive a compensation at the rate of ten thousand pesos per annum, Judge-at-Large, at the rate of nine thousand pesos per annum, and Cadastral Judge, at the rate of eight thousand four hundred pesos per annum.

Section 43. Jurisdiction of Courts of First Instance. — The jurisdiction of the Courts of First Instance shall be of two kinds:

(a) Original, and

(b) Appellate.

Section 44. Original jurisdiction. — Courts of First Instance shall have original jurisdiction:

(a) In all civil actions in which the subject of the litigation is not capable of pecuniary estimation;

(b) In all civil actions which involve the title to or possession of real property, or any interest therein, or the legality of any tax, impost or assessment, except actions of forcible entry into and detainer of lands or buildings, original jurisdiction of which is conferred by this Act upon justice of the peace courts and municipal courts;

(c) In all cases in which the demand, exclusive of interest, or the value of the property in controversy, amounts to more than two thousand pesos;

(d) In all actions in admiralty and maritime jurisdiction, irrespective of the value of the property in controversy or the amount of the demand;

(e) In all matters of probate, both of testate and intestate estates, appointment of guardians, trustees and receivers, and in all actions for annulment of marriage, and in all such special cases and proceedings as are not otherwise provided for;

(f) In all criminal cases in which the penalty provided by law is imprisonment for more than six months, or a fine of more than two hundred pesos;

(g) Over all crimes and offenses committed on the high seas or beyond the jurisdiction of any country, or within any of the navigable waters of the Philippines, on board a ship or water craft of any kind registered or licensed in the Philippines in accordance with the laws thereof. The jurisdiction herein conferred may be exercised by the Court of First Instance in any province into which the ship or water craft upon which the crime or offense was committed shall come after the commission thereof: Provided, That the court first lawfully taking cognizance thereof shall have jurisdiction of the same to the exclusion of all other courts in the Philippines; and

(h) Said courts and their judges, or any of them, shall have the power to issue writs of injunction, mandamus, certiorari, prohibition, quo warranto and habeas corpus in their respective provinces and districts, in the manner provided in the Rules of Court.

Section 45. Appellate jurisdiction. — Courts of First Instance shall have appellate jurisdiction over all cases arising in municipal and justice of the peace courts, in their respective provinces.

Section 46. Clerks and other subordinate employees of Courts of First Instance. — Clerks, deputy clerks, assistants, and other subordinate employees of Courts of First Instance shall, for administrative purposes, belong to the Department of Justice; but in the performance of their duties they shall be subject to the supervision of the Judges of the courts to which they respectively pertain.

The clerks of Courts of First Instance shall be appointed by the President of the Philippines with the consent of the Commission on Appointments. No person shall be appointed clerk of court unless he is duly authorized to practice law in the Philippines: Provided, however, That this requirement shall not affect persons who, at the date of the approval of this Act, are holding the position of clerk of court, nor those who have previously qualified in the Civil Service examination for said position;

The clerk of a Court of First Instance may, by special written deputization approved by the judge, authorize any suitable person to act as his special deputy and in such capacity to perform such functions as may be specified in the authority granted.

Section 47. Permanent station of clerk of court. — The permanent station of a clerk of court shall be at the provincial capital or at the permanent residence of the District Judge presiding in the court.

Section 48. Provincial officer as ex-officio clerk of court. — When the Secretary of Justice shall deem such action advisable, he may direct that the duties of the clerk of court shall be performed by a provincial officer or employee as ex-officio clerk of court, in which case the salary of said employee or officer as clerk of court, ex-officio, shall be fixed by the provincial board and shall be equitably distributed by said board with the approval of the Secretary of Justice between the national government and the provincial government.

Section 49. Judicial districts. — Judicial districts for Courts of First Instance in the Philippines are constituted as follows:

The First Judicial District shall consist of the Provinces of Cagayan, Batanes, Isabela, and Nueva Vizcaya, and the Subprovince of Ifugao;

The Second Judicial District, of the Provinces of Ilocos Norte, Ilocos Sur, Abra, City of Baguio, Mountain Province except the Subprovince of Ifugao, and La Union;

The Third Judicial District, of the Provinces of Pangasinan and Zambales, and the City of Dagupan;

The Fourth Judicial District, of the Provinces of Nueva Ecija and Tarlac;

The Fifth Judicial District, of the Provinces of Pampanga, Bataan, and Bulacan;

The Sixth Judicial District, of the City of Manila;

The Seventh Judicial District, of the Province of Rizal, Quezon City and Rizal City, the Province of Cavite, City of Cavite, the City of Tagaytay, and the Province of Palawan;

The Eighth Judicial District, of the Province of Laguna, the City of San Pablo, the Province of Batangas, the City of Lipa, and the Provinces of Mindoro and Marinduque;

The Ninth Judicial District, of the Provinces of Quezon and Camarines Norte;

The Tenth Judicial District, of the Provinces of Camarines Sur, Albay, Catanduanes, Sorsogon, Masbate, and Romblon;

The Eleventh Judicial District, of the Provinces of Capiz and Iloilo, the City of Iloilo and the Province of Antique;

The Twelfth Judicial District, of the Province of Occidental Negros, the City of Bacolod, the Province of Oriental Negros, and the Subprovince of Siquijor;

The Thirteenth Judicial District, of the Provinces of Samar and Leyte, and the City of Ormoc;

The Fourteenth Judicial District, of the Province of Cebu, the City of Cebu and the Province of Bohol;

The Fifteenth Judicial District, of the Provinces of Surigao, Agusan, Oriental Misamis, Bukidnon, and Lanao; and

The Sixteenth Judicial District, of the Province of Davao, the City of Davao, the Provinces of Cotabato and Occidental Misamis, the Province of Zamboanga and Zamboanga City, and the Province of Sulu.

Section 50. Judges of First Instance for Judicial Districts. — Four judges shall be commissioned for the First Judicial District. Two judges shall preside over the Courts of First Instance of Cagayan and Batanes, and shall be known as judges of the first and second branches thereof, respectively, the judge of the second branch to preside also over the Court of First Instance of Batanes; one judge shall preside over the Court of First Instance of Isabela; and one judge shall preside over the Court of First Instance of Nueva Vizcaya and the Subprovince of Ifugao.

Four judges shall be commissioned for the Second Judicial District. One judge shall preside over the Court of First Instance of Ilocos Norte; one judge shall preside over the Courts of First Instance of Ilocos Sur and Abra; one judge shall preside over the Courts of First Instance of the City of Baguio and Mountain Province except the Subprovince of Ifugao; and another judge shall preside over the Court of First Instance of La Union.

Four judges shall be commissioned for the Third Judicial District. They shall preside over the Court of First Instance of Pangasinan and shall be known as judges of the first, second, third and fourth branches thereof, respectively; one judge shall preside over the Court of First Instance of Lingayen to be known as the judge of the first branch; one judge shall preside over the Court of First Instance of the City of Dagupan and shall be known as the judge of the second branch; one judge shall preside over the Court of First Instance of Tayug and shall be known as the judge of the third branch; and one judge shall preside over the Court of First Instance of Lingayen to be known as the judge of the fourth branch who shall also preside over the Court of First Instance of Zambales, the judge of the fourth branch to preside also over the Court of First Instance of Zambales.

Three judges shall be commissioned for the Fourth Judicial District. Two judges shall preside over the Court of First Instance of Nueva Ecija and shall be known as judges of the first and second branches thereof, respectively; and one judge shall preside over the Court of First Instance of Tarlac.

Four judges shall be commissioned for the Fifth Judicial District. Two judges shall preside over the Court of First Instance of Pampanga and shall be known as judges of the first and second branches thereof, respectively, the judge of the second branch to preside also over the Court of First Instance of Bataan; and two judges shall preside over the Court of First Instance of Bulacan and shall be known as judges of the first and second branches thereof, respectively.

Ten judges shall be commissioned for the Sixth Judicial District. They shall preside over the Courts of First Instance of Manila and shall be known as judges of the first, second, third, fourth, fifth, sixth, seventh, eighth, ninth and tenth branches, respectively.

Five judges shall be commissioned for the Seventh Judicial District. Three judges shall preside over the Court of First Instance of the Province of Rizal, Quezon City and Rizal City and shall be known as judges of the first, second, and third branches thereof, respectively; and two judges shall preside over the Court of First Instance of the Province of Cavite and the Cities of Cavite and Tagaytay, and shall be known as judges of the first and second branches thereof, respectively, the judge of the second branch to preside also over the Court of First Instance of Palawan.

Five judges shall be commissioned for the Eighth Judicial District. Two judges shall preside over the Court of First Instance of Laguna and the City of San Pablo, and shall be known as judges of the first and second branches thereof, respectively; two judges shall preside over the Court of First Instance of Batangas and the City of Lipa, and shall be known as judges of the first and second branches thereof, respectively; and one judge shall preside over the Courts of First Instance of Mindoro and Marinduque.

Three judges shall be commissioned for the Ninth Judicial District. They shall preside over the Court of First Instance of Quezon and shall be known as judges of the first, second and third branches thereof, respectively, the judge of the third branch to preside also over the Court of First Instance of Camarines Norte.

Six judges shall be commissioned for the Tenth Judicial District. Two judges shall preside over the Court of First Instance of Camarines Sur and shall be known as judges of the first and second branches thereof, respectively; two judges shall preside over the Courts of First Instance of Albay and Catanduanes and shall be known as judges of the first and second branches thereof; one judge shall preside over the Court of First Instance of the Province of Sorsogon; and one judge shall preside over the Courts of First Instance of Masbate and Romblon.

Five judges shall be commissioned for the Eleventh Judicial District. Two judges shall preside over the Court of First Instance of Capiz and shall be known as judges of the first and second branches; and three judges shall preside over the Court of First Instance of the Province of Iloilo and the City of Iloilo, and shall be known as judges of the first, second and third branches thereof, respectively, the judge of the third branch to preside also over the Court of First Instance of Antique.

Four judges shall be commissioned for the Twelfth Judicial District. Three judges shall preside over the Court of First Instance of Occidental Negros and the City of Bacolod, and shall be known as judges of the first, second and third branches thereof, respectively; and one judge shall preside over the Courts of First Instance of Oriental Negros and the Subprovince of Siquijor.

Six judges shall be commissioned for the Thirteenth Judicial District. Three judges shall preside over the Court of First Instance of Samar and shall be known as judges of the first, second and third branches thereof, respectively; and three judges shall preside over the Court of First Instance of Leyte and the City of Ormoc, and shall be known as judges of the first, second and third branches thereof, respectively.

Four judges shall be commissioned for the Fourteenth Judicial District. Three judges shall preside over the Court of First Instance of the Province of Cebu and the City of Cebu, and shall be known as judges of the first, second and third branches thereof, respectively; and one judge shall preside over the Court of First Instance of Bohol.

Three judges shall be commissioned for the Fifteenth Judicial District. One judge shall preside over the Courts of First Instance of Surigao and Agusan; one judge shall preside over the Courts of First Instance of Oriental Misamis and Bukidnon; and one judge shall preside over the Court of First Instance of Lanao.

Four judges shall be commissioned for the Sixteenth Judicial District. One judge shall preside over the Court of First Instance of Davao; one judge shall preside over the Court of First Instance of Cotabato; one judge shall preside over the Courts of First Instance of Occidental Misamis and Zamboanga Province; and one judge shall preside over the Court of First Instance of Zamboanga City and Sulu.

Section 51. Detail of judge to another district or province. — Whenever a judge stationed in any province or branch of a court in a province should certify to the Secretary of Justice that the condition of the docket in his court is such as to require the assistance of an additional judge, or when there is any vacancy in any court or branch of a court in a province, and there is no judge-at-large available to be assigned to said court, the Secretary of Justice may, in the interest of justice, and for a period of not more than three months, assign any judge of any other court or province within the same judicial district, whose docket permits his temporary absence from said court, to hold sessions in the court needing such assistance, or where such vacancy exists. No district judge shall be assigned to hold sessions in a province other than that to which he is appointed without the approval of the Supreme Court being first had and obtained.

Section 52. Permanent stations of District Judges. — The permanent station of judges of the Sixth Judicial District shall be in the City of Manila.

In other judicial districts, the permanent stations of the Judges shall be as follows:

For the First Judicial District, the judge of the first branch of the Court of First Instance of Cagayan shall be stationed in the municipality of Tuguegarao, same province; the judge of the second branch, in the municipality of Aparri, same province; one judge shall be stationed in the municipality of Ilagan, Province of Isabela; and another judge, in the municipality of Bayombong, Province of Nueva Vizcaya.

For the Second Judicial District, one judge shall be stationed in the municipality of Laoag, Province of Ilocos Norte; one judge, in the municipality of Vigan, Province of Ilocos Sur; one judge, in the City of Baguio, Mountain Province; and one judge, in the municipality of San Fernando, Province of La Union.

For the Third Judicial District, one judge shall be stationed in the municipality of Lingayen, Province of Pangasinan; one judge shall be stationed in the City of Dagupan, same province; one judge, in the municipality of Iba, Province of Zambales, and one judge, in the municipality of Tayug, Province of Pangasinan.

For the Fourth Judicial District, two judges shall be stationed in the municipality of Cabanatuan, Province of Nueva Ecija, and one judge, in the municipality of Tarlac, Province of Tarlac.

For the Fifth Judicial District, two judges shall be stationed in the municipality of San Fernando, Province of Pampanga; and two judges, in the municipality of Malolos, Province of Bulacan.

For the Seventh Judicial District, the judge of the first branch of the Court of First Instance of Rizal shall be stationed in the municipality of Pasig, same province; that of the second branch, in Rizal City; and that of the third branch, in Quezon City; and two judges, in the City of Cavite, Province of Cavite.

For the Eighth Judicial District, two judges shall be stationed in the municipality of Santa Cruz, Province of Laguna; the judge of the first branch of the Court of First Instance of Batangas shall be stationed in the municipality of Batangas, and that of the second branch in the City of Lipa, same province; and one judge, in the municipality of Calapan, Province of Mindoro.

For the Ninth Judicial District, the three judges shall be stationed in the municipality of Lucena, Province of Quezon.

For the Tenth Judicial District, two judges shall be stationed in the municipality of Naga, Province of Camarines Sur; one judge, in the municipality of Legaspi, Province of Albay; one judge, in the municipality of Sorsogon, Province of Sorsogon; and one judge, in the municipality of Masbate, Province of Masbate.

For the Eleventh Judicial District, one judge shall be stationed in the municipality of Capiz, one in the municipality of Calivo, Province of Capiz; and three judges, in the City of Iloilo, Province of Iloilo.

For the Twelfth Judicial District, three judges shall be stationed in the City of Bacolod, Province of Occidental Negros; one judge, in the municipality of Dumaguete, Province of Oriental Negros.

For the Thirteen Judicial District, the judge of the first branch of the Court of First Instance of Samar shall be stationed in the municipality of Catbalogan, Province of Samar; the judge of the second branch, in the municipality of Borongan, same province; and the judge of the third branch, in the municipality of Laoang, same province; the judge of the first Branch of the Court of First Instance of Leyte shall be stationed in the municipality of Tacloban. Province of Leyte; the judge of the second branch, in the municipality of Maasin and the City of Ormoc, same province; and the judge of the third branch, in the municipality of Baybay, same province.

For the Fourteenth Judicial District, three judges shall be stationed in the City of Cebu, Province of Cebu; and one judge, in the municipality of Tagbilaran, Province of Bohol.

For the Fifteenth Judicial District, one judge shall be stationed in the municipality of Surigao, Province of Surigao; one judge, in the municipality of Cagayan, Province of Oriental Misamis; and one judge, in the municipality of Dansalan, Province of Lanao.

For the Sixteenth Judicial District, one judge shall be stationed in the City of Davao, Province of Davao; one judge, in the municipality of Cotabato, Province of Cotabato; one judge, in the municipality of Oroquieta, Province of Occidental Misamis; and one judge, in the City of Zamboanga.

Section 53. Judges-at-Large and Cadastral Judges. — In addition to the District Judges mentioned in section forty-nine hereof there shall also be appointed eighteen Judges-at-large and fifteen Cadastral Judges who shall not be assigned permanently to any judicial district and who shall render duty in such district of province as may, from time to time, be designated by the Department Head.

Section 54. Places and time of holding court. — For the Sixth Judicial District, court shall be held in the City of Manila. In other districts court shall be held at the capitals or places in which the respective judges are permanently stationed, except as hereinafter provided. Sessions of court shall be convened on all working days when there are cases ready for trial or other court business to be dispatched.

In the following districts, court shall also be held at the places and times hereinbelow specified:

First Judicial District: At Santo Domingo de Basco, Province of Batanes, on the first Tuesday of March of each year. A special term of court shall also be held once a year, in the municipalities of Ballesteros and Tuao, both of the Province of Cagayan, and at Kiangan, Subprovince of Ifugao, in the discretion of the district judge.

Second Judicial District: At Bangued, Province of Abra, on the first Tuesday of January, March, June, and October of each year; at Bontoc, Mountain Province, on the first Tuesday of March, June, and November of each year; and, whenever the interest of justice so require, a special term of court shall be held at Lubuagan, Subprovince of Kalinga.

Seventh Judicial District: At Coron, Province of Palawan, on the first Monday of March and August of each year; at Cuyo, same province, on the second Thursday of March and August of each year; and at Puerto Princesa, same province, on the fourth Wednesday of March and August of each year.

Eighth Judicial District: The judge shall hold special term at the municipalities of Lubang, Mambunao and San Jose, Province of Mindoro, once every year, as may be determined by him; at Boac, Province of Marinduque, on the first Tuesday of March, July, September and December of each year.

Ninth Judicial District: At Infanta, Province of Quezon, for the municipalities of Infanta, Casiguran, Baler and Polillo, on the first Tuesday of June of each year; at Daet, Camarines Norte, terms of court shall be held at least six times a year on the dates to be fixed by the district judge.

Tenth Judicial District: At Virac, Province of Catanduanes, on the first Tuesday of March and September of each year; at Romblon, Province of Romblon, on the first Tuesday of January, June, and October of each year; and at Badajos, same province, on the third Tuesday of January, June, and October of each year.

Eleventh Judicial District: At San Jose, Province of Antique, on the first Tuesday of February, June and October of each year; and at Culasi, same province, on the first Tuesday of December of each year.

Twelfth Judicial District: At Larena, Subprovince of Siquijor, on the first Tuesday of August of each year.

Thirteenth Judicial District: The first branch, at Calbayog, Province of Samar, on the first Tuesday of September of each year; and Basey, same province, on the first Tuesday of January of each year; and the second branch, at Oras, same province, on the first Tuesday of July of each year, and the first Tuesday of October of each year in Guiwan; on the third branch, at Catarman, same province, on the first Tuesday of October of each year.

Fifteenth Judicial District: At Cantilan, Province of Surigao, on the first Tuesday of August of each year; at Butuan, Province of Agusan, on the first Tuesday of March and October of each year; a special term of court shall also be held once a year in either the municipality of Tandag or the municipality of Hinatuan, Province of Surigao, in the discretion of the district judge; at Mambajao, Province of Oriental Misamis, on the first Tuesday of March of each year. A special term of court shall, likewise, be held, once a year, either in the municipality of Talisayan or in the municipality of Gingoog, Province of Oriental Misamis, in the discretion of the district judge; at Iligan, Province of Lanao, on the first Tuesday of March and October of each year.

Sixteenth Judicial District: At Dipolog, Province of Zamboanga, terms of court shall be held at least three times a year on dates to be fixed by the district judge; at Pagadian, same province, for the municipalities of Pagadian, Margosatubig and Kabasalan, at least once a year; at Jolo, Province of Sulu, terms of court shall be held at least four times a year on dates to be fixed by the district judge; at Banganga and Mati, Province of Davao; and at Glan, Province of Cotabato, terms of court shall be held at least once a year on the dates to be fixed by the district judge.

Notwithstanding the provisions of this section, whenever weather conditions, the condition of the roads or means of transportation, the number of cases or the interest of the administration of justice require it, the Secretary of Justice may advance or postpone the term of court or transfer the place of holding the same to another municipality within the same judicial district; and, in the land registration cases, to any other place more convenient to the parties.

Section 55. Duty of Judges to hold court at permanent station. — Judges shall hold court at the place of their permanent station, in the case of District Judges, and at the place wherein they may be detailed, in the case of Judges-at- Large and Cadastral Judges, not only during the period hereinabove fixed but also at any other time when there are cases ready for trial or other court business to be dispatched, if they are not engaged elsewhere.

Section 56. Special terms of court. — When so directed by the Department Head, District Judges, Judges-at-Large and Cadastral Judges shall hold special terms of court at any time or in any municipality in their respective districts for the transactions of any judicial business.

Section 57. Authority of District Judge to define territory appurtenant to courts. — When court is appointed to be held at more than one place in a district, the District Judge may, with the approval of the Department Head, define the territory over which the court held at a particular place shall exercise its authority, and cases arising in the territory thus defined shall be triable at such court accordingly. The power herein granted shall be exercised with a view to making the courts readily accessible to the people of the different parts of the districts and with a view to making the attendance of litigants and witnesses as inexpensive as possible.

Section 58. Hours of daily sessions of the courts. — The hours for the daily session of Courts of First Instance shall be from nine to twelve in the morning, and from three to five in the afternoon, except on Saturdays, when a morning session only shall be required; but the judge may extend the hours of session whenever in his judgment it is proper to do so. The judge holding any court may also, in his discretion, order that but one session per day shall be held instead of two, at such hours as may be deem expedient for the convenience both of the court and the public; but the number of hours that the court shall be in session per day shall be not less than five.

Section 59. Clerk’s duty to attend session and keep office hours. — Clerks of court shall be in attendance during the hours of session; and when not so in attendance upon the court they shall keep the same office hours as are prescribed for other Government employees.

Section 60. Division of business among branches of court of Sixth District. — In the Court of First Instance of the Sixth District all business shall be equitably distributed among the judges of the ten branches in such manner as shall be agreed upon by the judges themselves.

The District Judge of the Sixth Judicial District who acts as executive judge thereof shall have supervision over the General Land Registration Office.

Nothing contained in this section and in section sixty-two shall be construed to prevent the temporary designation of judges to act in this district in accordance with section fifty.

Section 61. Authority of Court of First Instance of the Sixth Judicial District over administration of its own affairs. — The Court of First Instance of the Sixth Judicial District shall have the administrative control of all matters affecting the internal operations of the court. This administrative control shall be exercised by the court itself through the clerk of the court. In the administrative matters, the clerk of the court shall be under the direction of the court itself. The personnel of the office of the clerk of the Court of First Instance of the Sixth Judicial District shall consist of such officers and employees as may be provided by law. The subordinate employees of said office shall be appointed by the Secretary of Justice upon recommendation of the Chief of the office, the clerk of the court. The said clerk of the court shall receive an annual salary of five thousand one hundred pesos, and with all the employees of his office shall belong, for all purposes, to the Court of First Instance of the Sixth Judicial District.

Section 62. Appointment and qualifications of clerks. — The clerk and deputy clerk of the Sixth Judicial District shall be appointed by the President of the Philippines upon the recommendation of the Secretary of Justice, with the consent of the Commission on Appointments. No person shall be eligible for appointment to either of these positions unless he is duly authorized to practice law in the Philippines.

Section 63. Interchange of judges. — The judges of the several branches of the Court of First Instance for the Sixth District may, for their own convenience or the more expeditious accomplishments of business, sit, by interchange, by mutual agreement or by order of the Department Head, in other branches than those to which they severally pertain; and any action or proceeding in one branch may be sent to another branch for trial or determination.

Section 64. Convocation of Judges for assistance of Judge hearing land registration matters. — In matters of special difficulty connected with the registration of land, any judge of the Sixth District concerned may, when he deems such course advisable or necessary, convoke the other nine judges of said court for the purpose of obtaining their advice and assistance. In such case the issue or issues to be decided shall be framed in writing by the said judge and shall be propounded for determination in joint session, with not fewer than three judges present. In case of a tie upon any issue, that view shall prevail which is maintained by the judge hearing the matter.

Section 65. Vacation of Courts of First Instance. — The yearly vacation of Courts of First Instance shall begin with the first of April and close with the first of June of each year.

Section 66. Assignment of Judges to vacation duty. — During the month of January of each year, the Department Head shall issue an order naming the judges who are to remain on duty during the court vacation of that year; and consistently with the requirements of the judicial service, the assignments shall be so made that no judge shall be assigned to vacation duty, unless upon his own request, with greater frequency than once in three years.

Such order shall specify, in the case of each judge assigned to vacation duty, the territory over which in addition to his own district his authority as vacation judge shall extend, and the assignments shall be so arranged that provisions will be made for the exercise of interlocutory jurisdiction, during vacation, in all parts of the Islands.

At least one judge shall always be assigned for vacation duty in the Sixth Judicial District.

The Department Head may from time to time modify his order assigning the judges to vacation duty as newly arising conditions or emergencies may require.

A judge assigned to vacation duty shall not ordinarily be required to hold court during such vacation; but the Department Head may, when in his judgment the emergency shall require, direct any judge assigned to vacation duty to hold during the vacation a special term of court in any district.

Section 67. Proceedings for removal of Judges. — No District Judge, Judge-at-Large or Cadastral Judge shall be separated or removed from office by the President of the Philippines unless sufficient cause shall exist, in the judgment of the Supreme Court, involving serious misconduct or inefficiency, for the removal of said judge from office after the proper proceedings. The Supreme Court of the Philippines is authorized, upon its own motion, or upon information of the Secretary of Justice, to conduct an inquiry into the official or personal conduct of any judge appointed under the provisions of this law, and to adopt such rules of procedure in that regard as it may deem proper; and, after such judge shall have been heard in his own defense, the Supreme Court may recommend his removal to the President of the Philippines, who, if he deems that the public interests will be subserved thereby, shall thereupon make the appropriate order for such removal.

The President of the Philippines, upon recommendation of the Supreme Court, may temporarily suspend a judge pending proceedings under this section. In case the judge suspended is acquitted of the cause or causes that gave rise to the investigation, the President of the Philippines shall order the payment to him of the salary, or part thereof, which he did not receive during his suspension, from any available funds for expenses of the judiciary.

The cost and expenses incident to such investigations shall be paid from the funds appropriated for contingent expenses of the judiciary, upon vouchers approved by the Chief Justice of the Supreme Court.

CHAPTER V
Justices of the Peace and Judges of Municipal Courts

Section 68. Appointment and distribution of justices of the peace. — There shall be one justice of the peace and one auxiliary justice of the peace in each municipality and municipal district, and if the public interest shall so require, in any minor political division or unorganized territory in the Philippines, and such Judges of Municipal Courts in each chartered city as their respective charters provide.

Upon recommendation of the Department Head, the territorial jurisdiction of any justice and auxiliary justice of the peace may be made to extend over any number of municipalities, municipal districts, or other minor political division or places not included in the jurisdiction of a justice of the peace already appointed. As vacancies occur, if the proper administration of justice so demands and the Department Head so recommends, the President of the Philippines may group municipalities and municipal districts into circuit courts, and may appoint to each circuit court one justice of the peace and one auxiliary justice of the peace: Provided, however, That the capital of a province shall not be grouped with any other municipality except in fourth-or fifth-class provinces, or the Mountain Province and the specially organized provinces: Provided, further, That the Secretary of Justice may, upon the recommendation of the district judge concerned, designate the justice of the peace of the capital of a province or subprovince as clerk of court ex-officio of said province or subprovince. The justice of the peace of the capital of a province or subprovince so designated shall receive, in addition to his salary, fifty per centum of the salary fixed for the said clerk of court of the said province or subprovince.

Section 69. Jurisdiction of justice of the peace so affected by territorial changes. — When a new political division affecting the territorial jurisdiction of the justice of the peace is formed or the boundaries limiting the same are changed, the President of the Philippines may, in the absence of special provision, designate which of the justices and auxiliary justices within the territory affected by the change shall continue in office; and the powers of any others therein shall cease.

Section 70. Tenure of office — Transfer from one municipality to another. — Justices of the peace having the requisite legal qualifications shall hold office during good behavior, until they reach the age of seventy years, or become incapacitated to discharge the duties of their office, unless sooner removed in accordance with law or unless his office be lawfully abolished or merged in the jurisdiction of another justice of the peace: Provided, That in case the public interest requires it, a justice of the peace of one municipality may be transferred to another.

Section 71. Qualifications for the office of Justice of the Peace. — No person shall be eligible to appointment as justice of the peace or auxiliary justice of the peace unless he is (1) at least twenty-three years of age; (2) a citizen of the Philippines; (3) of good moral character and has not been convicted of any felony; and (4) has been admitted by the Supreme Court to the practice of law.

No person shall be appointed judge of the municipal court of any chartered city or justice of the peace of any provincial capital unless he shall have practiced law in the Philippines for a period of five years, or has held during a like period within the Philippines an office requiring admission to the practice of law in the Philippines as an indispensable requisite.

Section 72. Filling of vacancy in office of justice of the peace. — When a vacancy occurs in the office of any justice of the peace, except in provincial capitals and first-class municipalities, the district judge shall forward to the President of the Philippines a list of the names of persons qualified to fill said vacancy, accompanied by all the applications presented by persons desirous of appointment. The President of the Philippines, with the consent of the Commission on Appointments, shall make the respective appointments from said list: Provided, however, That he may also appoint to the position any qualified person not included in the list and not applicant for the place, without preferences of any kind, when he deems such course to be in the public interest.

Section 73. Auxiliary justice — Qualifications and duties. — The auxiliary justice of the peace shall have the same qualifications and be subject to the same restrictions as the regular justice, and shall perform the duties of said office during any vacancy therein or in case of the absence of the regular justice from the municipality, or of his disability or disqualification, or in case of his death or resignation until the appointment and qualification of his successor, or in any cause whose immediate trial the regular justice shall certify to be specially urgent and which is unable to try by reason of actual engagement in another trial.

In case there is no auxiliary justice of the peace to perform the duties of the regular justice in the case above mentioned, the district judge shall designate the nearest justice of the peace of the province to act as justice of the peace in such municipality, town, or place.

Section 74. Courtroom and supplies. — The municipalities and municipal districts to which a justice of the peace pertains shall provide him with a room in the tribunal, or elsewhere in the center of population, suitable for holding court and shall supply the necessary furniture, lights, and janitor service therefor, and shall also provide him with such of the printed laws in force in the Philippines as may be required for his official use. The similar expenses of maintaining the office of a justice of the peace appointed in unorganized territory shall be borne by the province.

Legal blanks and the dockets required by law, as well as the notarial seal to be used by the justice as ex-officio, notary public, shall be furnished by the Bureau of Justice.

Section 75. Clerks and employees of justice of the peace courts. — The municipal or justice of the peace courts of the several chartered cities and of the provincial capitals and first-class municipalities shall have such clerks of court and other employees as may be necessary at the expense of the said cities and municipalities.

In other municipalities, the municipal councils may allow the justices of the peace one clerk each, at the expense of the respective municipalities, with a salary not to exceed seven hundred and twenty pesos per annum.

With the exception of the clerks and employees of the Municipal Court of the City of Manila, all employees mentioned in this section shall be appointed by the respective justices of the peace.

Section 76. Miscellaneous powers of justice of the peace. — A justice of the peace shall have power anywhere within his territorial jurisdiction to solemnize marriages, authenticate merchant’s books, administer oaths and take depositions and acknowledgment, and, in his capacity as ex-officio notary public, may perform any act within the competency of a notary public.

Section 77. Attendance at court — Permission for justice to pursue other vocation. — A justice of the peace or auxiliary justice when acting as justice of the peace shall be present at least four hours on each business day in his office or at the place where his court is held; but he may, after office hours, with the permission of the district judge concerned, pursue any other vocation or hold other office or position.

No justice or auxiliary justice may act as the attorney for any party to a cause commenced in his court or elsewhere except by special permission of the District Judge.

Section 78. Hearing of cause at place other than office of justice of the peace. — Upon written request of both parties to a cause, a justice of the peace may hear the same at any suitable place in his jurisdiction; and in such case his necessary travel expense from his official station to the place of trial, and upon return therefrom, not exceeding two and one-half pesos per day in all, may be taxed as costs, but if the trial of more than one of such cases is requested in a particular locality, he shall arrange to try them as nearly as possible at the same time and place and shall divide the travel expense among them proportionately to the time consumed in the trial of each case.

Section 79. Service of process of justice of the peace. — The sheriff of the province shall serve or execute, or cause to be served and executed, all civil writs, processes, and orders issued by any justice of the peace in the province; and civil process, other than executions, may be served by any persons designated by the justice for the purpose. Criminal process issued by a justice of the peace shall be served or executed by the mayor of the municipality or other local political division, by means of the local police, or in the City of Manila by the members of its police department; but such process may also be served or executed with equal effect by the sheriff.

Criminal process may be issued by a justice of the peace, to be served outside his province, when the district judge, or in his absence the provincial fiscal, shall certify that in his opinion the interest of justice requires such service.

Section 80. Seal of justice acting as notary public. — The use of a seal of office shall not be necessary to the authentication of any paper, document, or record signed by a justice of the peace or emanating from his office except when he acts as notary public ex-officio.

Section 81. Appointment of Government officers as justices of the peace ex-officio. — When in the opinion of the President of the Philippines the public interest shall so require, he may appoint any qualified person in the government service to act in the capacity of justice of the peace ex-officio, without additional compensation, in any specially organized province. Such appointee shall have all the powers of a justice of the peace proper, with such territorial jurisdiction as shall be stated in the commission issued to the appointee, but such jurisdiction shall not extend to, or be hereafter exercised at any place within the jurisdiction of any appointed justice of the peace or auxiliary justice of the peace.

A person exercising the function of justice of the peace ex-officio in any municipal district may, in his discretion, transfer any case within his jurisdiction to the justice of the peace of the nearest organized municipality in the province.

The President of the Philippines may, in his discretion, authorize a municipal district mayor who is an attorney-at- law to act as justice of the peace to try cases for violation of municipal ordinances within his district.

Section 82. Salaries of justices of the peace. — Except as provided in the next succeeding section, justices of the peace shall receive the following salaries per annum:

(a) Of circuit courts, from two thousand forty to two thousand six hundred forty pesos each;

(b) In municipalities of the first-class, from one thousand eight hundred to one thousand nine hundred twenty pesos each;

(c) In municipalities of the second-class, from one thousand four hundred forty to one thousand six hundred eighty pesos each;

(d) In municipalities of the third class, fourth class, and fifth class and municipal districts and other places not specially provided for by law, from one thousand two hundred to one thousand three hundred twenty pesos each.

Provided, That the Secretary of Justice shall, with the approval of the President, fix the salary of each justice of the peace within the above limitations, taking into consideration, among other things, the number of cases docketed in his court and the accessibility and means of transportation available between the different municipalities under his jurisdiction: Provided, further, That when a justice of the peace is designated to act temporarily in one or more municipalities or districts in addition to his own municipality or district, he shall be entitled to the salary of his municipality or district, plus seventy-five per centum of the salary for each municipality or district in which he is temporarily designated to act; but in no case shall he be entitled to an aggregate salary of more than two thousand six hundred forty pesos per annum.

Section 83. Salaries of the judges of the municipal courts of chartered cities and of the justices of the peace in provincial capitals. — The annual salary of each of the judges of the municipal courts of the following chartered cities shall be:

(a) Of the City of Manila, six thousand pesos;

(b) Of Quezon City, and the Cities of Baguio, Cebu, Rizal and Iloilo, five thousand four hundred pesos;

(c) Of the Cities of Bacolod and San Pablo, four thousand pesos;

(d) Of the Cities of Cavite, Davao, Ormoc, Dagupan, Lipa and Zamboanga, and of other cities, three thousand six hundred pesos.

The annual salaries of the justices of the peace of the capitals of the provinces shall be as follows:

Of the justices of the peace of the capitals of the Provinces of Nueva Ecija, Pangasinan, and Rizal, four thousand pesos each; of the justices of the peace of the capitals of the Provinces of Bulacan, Laguna, La Union, Pampanga, Quezon, and Tarlac, three thousand six hundred pesos each; of the justices of the peace of the capitals of the Provinces of Albay, Bataan, Batangas, Camarines Sur, Capiz, Cotabato, Ilocos Norte, Ilocos Sur, Isabela, Leyte, Negros Oriental, and Nueva Vizcaya, three thousand pesos each; of the justices of the peace of the capitals of the other provinces organized under the Provincial Law, the capitals of the Provinces of Agusan, Batanes, Bukidnon, Cotabato, Lanao, Palawan, Mountain Province, and Sulu, two thousand four hundred pesos each; Provided, however, That for judicial purposes the municipality of Aparri, Province of Cagayan, and the municipality of Cervantes, Province of Ilocos Sur, shall be considered as provincial capitals and the respective justices of the peace thereof shall have the same qualifications required of, and shall have the jurisdiction as, under the law, may be exercised by the justices of the peace of provincial capitals and shall be paid an annual salary of two thousand four hundred pesos each: Provided, further, That the judge of the municipal court of a city which is at the same time the capital of a province shall be considered as the judge of the peace of the capital of such province.

Section 84. Payment of salaries of justices of the peace. — In order to facilitate the payment of the salaries of justices of the peace in the provinces, the treasurer of the respective political division concerned shall advance the same monthly out of any proper available funds in his possession and such advances will be reimbursed monthly from the national appropriation.

Section 85. Compensation of auxiliary justices. — An auxiliary justice of the peace, when performing all the duties of a justice of the peace, shall receive the full compensation which would accrue to the office of justice. In cases where the justice of the peace, without ceasing to act as justice, shall certify any cause to the auxiliary justice for trial, the latter shall receive compensation in an amount equivalent to the fees accruing in such cause, which amount shall be deducted from the salary of the regular justice.

When the auxiliary justice acts as substitute for the regular justice while the latter is absent on official business, the compensation of the auxiliary justice shall not be deducted from the salary of the justice.

Section 86. Jurisdiction of justices of the peace and judges of municipal courts of chartered cities. — The jurisdiction of justices of the peace and judges of municipal courts of chartered cities shall consist of:

(a) Original jurisdiction to try criminal cases in which the offense charged has been committed within their respective territorial jurisdictions; and

(b) Original jurisdiction in civil actions arising in their respective municipalities and cities, and not exclusively cognizable by the Courts of First Instance.

Section 87. Original jurisdiction to try criminal cases. — Justices of the peace and judges of municipal courts of chartered cities shall have original jurisdiction over:

(a) All violations of municipal or city ordinances committed within their respective territorial jurisdictions;

(b) All offenses in which the penalty provided by law is imprisonment for not more than six months, or a fine of not more than two hundred pesos, or both such fine and imprisonment;

(c) All criminal cases arising under the laws relating to:

(1) Gambling and management or operation of lotteries;

(2) Assaults where the intent to kill is not charged or evident upon the trial;

(3) Larceny, embezzlement and estafa where the amount of money or property stolen, embezzled, or otherwise involved, does not exceed the sum or value of two hundred pesos;

(4) Sale of intoxicating liquors;

(5) Falsely impersonating an officer;

(6) Malicious mischief;

(7) Trespass on Government or private property; and

(8) Threatening to take human life.

Said justices of the peace and judges of municipal courts may also conduct preliminary investigations for any offense alleged to have been committed within their respective municipalities and cities, without regard to the limits of punishment, and may release, or commit and bind over any person charged with such offense to secure his appearance before the proper court.

Justices of the peace in the capitals of provinces may, by assignment of the respective district judge in each case, have like jurisdiction as the Court of First Instance to try parties charged with an offense committed within the province in which the penalty provided by law does not exceed imprisonment for two years and four months, or a fine of two thousand pesos, or both such imprisonment and fine, and, in the absence of the district judge, shall have like jurisdiction within the province as the Court of First Instance to hear applications for bail.

Section 88. Original jurisdiction in civil cases. — In all civil actions, including those mentioned in Rule 59 and 62 of the Rules of Court, arising in his municipality or city, and not exclusively cognizable by the Court of First Instance, the justice of the peace and the judge of a municipal court shall have exclusive original jurisdiction where the value of the subject-matter or amount of the demand does not exceed two thousand pesos, exclusive of interest and costs. In forcible entry and detainer proceedings, the justice of the peace or judge of the municipal court shall have original jurisdiction, but the said justice or judge may receive evidence upon the question of title therein, whatever may be the value of the property, solely for the purpose of determining the character and extent of possession and damages for detention. In forcible entry proceedings, he may grant preliminary injunctions, in accordance with the provisions of the Rules of Court, to prevent the defendant from committing further acts of dispossession against the plaintiff.

The jurisdiction of a justice of the peace and judge of a municipal court shall not extend to civil actions in which the subject of litigation is not capable of pecuniary estimation, except in forcible entry and detainer cases; nor to those which involve the legality of any tax, impost, to assessment; nor to actions involving admiralty or maritime jurisdiction; nor to matters of probate, the appointment of guardians, trustees or receivers; nor to actions for annulment of marriages: Provided, however, That justices of the peace who are duly qualified members of the bar may, with the approval of the Secretary of Justice, be assigned by the respective district judge in each case to hear and determine cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots the value of which does not exceed two thousand pesos, such value to be ascertained by the affidavit of the claimant or by agreement of the respective claimants, if there are more than one, or from the corresponding declaration of real property.

Justices of the peace in the capitals of provinces and subprovinces in the absence of the District Judge, Judge-at-Large or Cadastral Judge from the province may exercise within the province like interlocutory jurisdiction as the Court of First Instance, which shall be held to include the hearing of all motions for the appointment of a receiver, for temporary injunctions, and for all other orders of the court which are not final in their character and do not involve a decision of the case of its merits, and the hearing of petitions for a writ of habeas corpus.

Section 89. Traveling expenses of justices of the peace assigned to hear civil, cadastral and criminal cases. — Whenever a justice of the peace, upon assignment by the district judge, either hears and determines cadastral or land registration cases or exercises like jurisdiction as the Court of First Instance to try parties charged with an offense committed within the province in which the penalty provided by law does not exceed imprisonment for two years and four months, or a fine of two thousand pesos, or both such imprisonment and fine, he shall receive, in addition to his salary, during the time that he is acting by virtue of such assignment, a per diem not to exceed five pesos: Provided, however, That if said justice of the peace hears and determines cadastral or land registration cases elsewhere than in the municipality in which he exercises jurisdiction, upon the authority of the Secretary of Justice, he shall be paid, in addition to his necessary traveling expenses, a per diem not to exceed fifteen pesos to be fixed by the Secretary of Justice.

Section 90. Jurisdiction to appoint guardians. — Justices of the peace and judges of municipal courts of chartered cities are empowered to appoint guardians or guardians ad litem for litigants in their courts who are incapacitated by being of minor age or mentally incapable.

Section 91. Incidental powers of justices of the peace and municipal courts. — The justice of the peace and municipal courts shall have power to administer oaths and to give certificates thereof; to issue summonses, writs, warrants, executions, and all other processes necessary to enforce their orders and judgments; to compel the attendance of witnesses; to punish contempts of court by fine or imprisonment, or both, within the limitation imposed by Rules of Court, and to require of any person arrested a bond for good behavior or to keep the peace, or for the further appearance of such person before a court of competent jurisdiction. But no such bond shall be accepted unless it be executed by the person in whose behalf it is made, with sufficient surety or sureties, to be approved by said court.

Section 92. Fees collectible by justices of the peace. — No fees, compensation, or reward of any sort, except such as is expressly prescribed and allowed by law, shall be collected or received for any service rendered by a justice of the peace or by any officer or employee of his court.

Section 93. Moneys paid into courts of justices of the peace — By whom to be received. — All moneys accruing to the Government in courts of justices of the peace, including fees, fines, forfeitures, costs, or other miscellaneous receipts, and all trust or depository funds paid into such courts shall be received by the deputy provincial treasurer, or in the City of Manila by the Collector of Internal Revenue, for disposition according to law.

Section 94. Disposition of Government moneys derived from courts of justices of the peace. — Such of these moneys as accrue to the Government shall be turned over to the Collector of Internal Revenue, who shall have the administrative jurisdiction over such collections and shall pay the same into the National Treasury to the credit of the general funds of the National Government.

Section 95. Monthly report of justice of the peace. — On the first of the month each justice of the peace shall submit to the receiving officer, upon forms prescribed by the General Auditing Office, a detailed report of all official business transacted by him or in his court during the preceding month, such as marriages solemnized, actions begun, terminated, or pending in the court, together with an itemized statement of all fees and costs collected and for what service.

Section 96. Supervision of District Judges over justices of the peace — Annual report of justice. — The District Judge shall at all times exercise a supervision over the justices of the peace within his district, and shall keep himself informed of the manner in which they perform their duties, by personal inspection whenever possible, from reports which he may require from them, from cases appealed to his court, and from all other available sources. In proper cases he shall advise and instruct them whenever requested, or when occasion arises, and such justices of the peace shall apply to him and not to the Secretary of Justice for advice and instruction, and any such inquiries received by the Secretary of Justice shall be referred by him to the district judge of the proper district.

The justice of the peace shall, during the first five days of the year, forward to the District Judge a report concerning the business done in his court for the previous year, upon forms to be prescribed by the Secretary of Justice.

Such report shall be filed in the office of the clerk of the Court of First Instance, and said District Judge of the district shall, with the assistance of said clerk, embody a summary of such reports for each province of his district together with other matters of interest and importance relative to the administration of justice therein, particularly with reference to justice of the peace courts, in a brief report, which he shall forward as soon as possible after the close of the fiscal year to the Department Head.

Section 97. Suspension and removal. — If at any time the District Judge has reason to believe that a justice of the peace is not performing his duties properly or if complaints are made which, if true, would indicate that the justice is unfit for the office, he shall make such investigation of the same as the circumstances may seem to him to warrant, and may, for good cause, reprimand the justice, or may recommend to the President of the Philippines his removal from office, or his removal and disqualification from holding office, and may suspend him from office pending action by the President of the Philippines. The President of the Philippines may, upon such recommendation or on his own motion, remove from office any justice of the peace or auxiliary justice of the peace.

Section 98. Final disposition of dockets. — When a justice of the peace shall die or resign or shall be removed from office or shall remove from the jurisdiction to which he was appointed, or when his office shall in any way become vacant, such justice of the peace, or his legal representative in case of his death, shall, within ten days thereafter, deliver his docket, process, papers, books, and all records relating to his office to the justice appointed to fill the vacancy or to the auxiliary justice of the same locality.

Where the documents and records aforesaid are delivered into the custody of the auxiliary justice of the peace, it shall be his duty, during the time he shall perform the duties of the office, safely to keep the same and to certify copies thereof whenever lawfully demanded; and upon the appointment and qualification of a justice of the peace to fill the vacancy, the said auxiliary justice shall deliver all the documents and records pertaining to the office in question to the new justice of the peace.

When any violation of this section comes to the knowledge of the District Judge having supervision over the office in question, it shall be his duty to issue a summary order for the delivery of the documents and records aforesaid, under penalty of contempt.

CHAPTER VI
Transitory and Final Provisions

Section 99. Repeal of laws. — All laws and rules inconsistent with the provisions of this Act are hereby repealed.

Section 100. Appropriation. — There is hereby appropriated from the general funds, not otherwise appropriated, the sum of three hundred five thousand five hundred thirteen pesos and thirty-three centavos to pay the salaries of the eleven district judges that are created in this Act together with their corresponding personnel and sundry expenses for the period from June first, nineteen hundred forty-eight to June thirtieth, nineteen hundred forty-nine.

Section 101. Date in which to take effect. — This Act shall take effect upon its approval.

Approved: June 17, 1948

CHAPTER I
Powers, Duties and Functions of Patent Office

Section 1. Transfer of powers from Bureau of Commerce to Patent Office. — The powers, duties and functions vested in, or performed and exercised by, the Bureau of Commerce in connection with the registration of trade-marks, trade-names and other marks are hereby transferred to the Patent Office. The administration of this Act shall devolve upon the Patent Office.

All books, records, documents and files of the Bureau of Commerce relating to trade-marks, trade-names and other marks, and such personnel of the said Bureau as is now discharging the functions or performing the duties of the Bureau of Commerce in connection with the registration of trade-marks, trade-names and other marks together with the corresponding appropriation, are transferred to the Patent Office, and the Budget Commissioner shall make immediate provision for such transfer.

CHAPTER II
Registration of Marks and Trade-Names

Section 2. What are registrable. — Trade-marks, trade-names and service-marks may be registered in accordance with the provisions of this Act.

Section 3. Application by non-residents. — Any person filing an application for the registration of a mark or trade-name, who is not a resident of the Philippines, must appoint an agent or representative in the Philippines upon whom notice or process relating to the application or registration of the mark or trade-name may be served. In the event of death, absence or inability of the agent or representative, a new agent or representative must be appointed, and notice thereof must be filed in the Patent Office. Upon failure to maintain an agent or representative of record in the Patent Office, service on the Director shall be deemed sufficient.

Section 4. Registration of trade-marks, trade-names and service-marks. — The owner of a trade-mark, trade-name or service-mark used to distinguish his goods, business or services from the goods, business or services of others shall have the right to register the same, unless it:

(a) Consists of or comprises immoral, deceptive or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute;

(b) Consists of or comprises the flag or coat of arms or other insignia of the Philippines or any of its political subdivisions, or of any foreign nation, or any simulation thereof;

(c) Consists of or comprises a name, portrait, or signature identifying a particular living individual except by his written consent, or the name, signature, or portrait of a deceased President of the Philippines, during the life of his widow, if any, except by the written consent of the widow;

(d) Consists of or comprises a mark or trade-name which so resembles a mark or trade-name registered in the Philippines or a mark or trade-name previously used in the Philippines by another and not abandoned, as to be likely, when applied to or used in connection with the goods, business or services of the applicant, to cause confusion or mistake or to deceive purchases; or

(e) Consists of a mark or trade-name which, when applied to or used in connection with the goods, business or services of the applicant is merely descriptive or deceptively misdescriptive of them, or when applied to or used in connection with the goods, business or services of the applicant is primarily geographically descriptive or deceptively misdescriptive of them, or is primarily merely a surname.

(f) Except as expressly excluded in paragraphs (a), (b), (c) and (d) of this section, nothing herein shall prevent the registration of a mark or trade-name used by the applicant which has become distinctive of the applicant’s goods, business or services. The Director may accept as prima facie evidence that the mark or trade-name has become distinctive, as applied to or used in connection with the applicant’s goods, business or services, proof of substantially exclusive and continuous use thereof as a mark or trade-name by the applicant in connection with the sale of goods, business or services for the five years next preceding the date of the filing of the application for its registration.

Section 5. Requirements of the application. — The application for the registration of a mark or trade-name shall be in English or Spanish, or in the national language, with its corresponding English translation, and signed by the applicant, and shall include:

(a) Sworn statement of the applicant’s domicile and citizenship, the date of the applicant’s first use of the mark or trade-name, the date of the applicant’s first use of the mark or trade-name in commerce or business, the goods, business or services in connection with which the mark or trade-name is used and the mode or manner in which the mark is used in connection with such goods, business or services, and that the person making the application believes himself, or the firm, corporation or association on whose behalf he makes the verification, to be the owner of the mark or trade-name sought to be registered, that the mark or trade-name is in use in commerce or business, and that to the best of his knowledge no person, firm, corporation or association has the right to use such mark or trade-name in commerce or business either in the identical form thereof or in such near resemblance thereto as might be calculated to deceive;

(b) Such number of specimens or facsimiles of the mark or trade-name as actually used as may be required by the Director;

(c) Power of attorney, if the filing is through attorney;

(d) The appointment of an agent or representative, if the applicant is not domiciled in the Philippines; and

(e) The required fee.

Section 6. Classification of goods and services. — The Director shall establish a classification of goods and services, for the convenience of the Patent Office administration, but not to limit or extent the applicant’s rights. The applicant may register his mark or trade-name in one application for any of all the goods or services included in one class, upon or in connection with which he is actually using the mark or trade-name. The Director may issue a single certificate for one mark or trade-name registered in a plurality of classes upon payment of a fee equaling the sum of the fees for each registration in each class.

Section 7. Examination and publication. — Upon the filing of an application for registration and the payment of the required fee, the Director shall cause an examination of the application to be made, and, if on such examination it shall appear that the applicant is entitled to registration, the Director, upon payment of the required fee, shall cause the mark or trade-name to be published in the Official Gazette.

If the applicant is found not entitled to registration, the Director shall advise the applicant thereof and of the reasons therefor. The applicant shall have a period of three months in which to reply or amend his application, which shall then be re-examined. This procedure may be repeated until the Director finally refuses registration or the applicant fails within the required period to reply or amend or appeal, whereupon the application shall be deemed to have been abandoned, unless it can be shown to the satisfaction of the Director that the delay in responding was unavoidable, in which event such time may be extended in the discretion of the Director. An abandoned application may be revived as a pending application within three months from the date of abandonment, upon good cause shown and the payment of the required fee.

Section 8. Opposition. — Any person who believes that he would be damaged by the registration of a mark or trade-name may, upon payment of the required fee and within thirty days after the publication under the first paragraph of section seven hereof, file with the Director as opposition to the application. Such opposition shall be in writing and verified by the oppositor, or by any person on his behalf who knows the facts, and shall specify the grounds on which it is based and include a statement of the facts relied upon. Copies of certificates of registration of marks or trade-names registered in other countries or other supporting documents mentioned in the opposition shall be filed therewith, together with the translation thereof into English, if not in the English language. For good cause shown and upon payment of the required surcharge, the time for filing an opposition may be extended for an additional thirty days by the Director, who shall notify the applicant of such extension.

Section 9. Notice and hearing. — Upon the filing of an opposition, the Director shall forthwith serve notice of the filing on the applicant, and of the date of the hearing thereof upon the applicant and the oppositor and all other persons having any right, title or interest in the mark or trade-name covered by the application, as appear of record in the Patent Office.

Section 10. Issuance and publication of certificates. — When the period for filing the opposition has expired, or when the Director shall have denied the opposition, the Director, upon payment of the required fee, shall issue the certificate of registration. Upon issuance of a certificate of registration, notice thereof making reference to the publication of the application shall be published in the Official Gazette.

Section 11. Issuance and contents of the certificate. — Certificates of registration shall be issued in the name of the Republic of the Philippines under the seal of the Patent Office, and shall be signed by the Director, and a record thereof together with a copy of the specimen or facsimile and the statement of the applicant, shall be kept in books for that purpose. The certificate shall reproduce the specimen or facsimile of the mark or trade-name, contain the statement of the applicant and state that the mark or trade-name is registered under this Act, the date of the first use, the date of the first use in commerce or business, the particular goods or services for which it is registered, the number and date of the registration, the term thereof, the date on which the application for registration was received in the Patent Office, a statement of the requirement that in order to maintain the registration, periodical affidavits of use within the specified times hereinafter in section twelve provided, shall be filed, and such other data as the rules and regulations may from time to time prescribe.

Section 12. Duration. — Each certificate of registration shall remain in force for twenty years: Provided, That registrations under the provisions of this Act shall be cancelled by the Director, unless within one year following the fifth, tenth and fifteenth anniversaries of the date of issue of the certificate of registration, the registrant shall file in the Patent Office an affidavit showing that the mark or trade-name is still in use or showing that its non-use is due to special circumstances which excuse such non-use and is not due to any intention to abandon the same, and pay the required fee.

The Director shall notify the registrant who files the above-prescribed affidavits of his acceptance or refusal thereof and, if a refusal, the reasons therefor.

Section 13. Disclaimers before issue. — The Director shall require unregistrable matter to be disclaimed, but such disclaimer shall not prejudice or affect the applicant’s or owner’s rights then existing or thereafter arising in the disclaimed matter, nor shall such disclaimer prejudice or affect the applicant’s or owner’s rights of registration on another application of later date if the disclaimed matter has become distinctive of the applicant’s or owner’s goods, business or services.

Section 14. Voluntary surrender, cancellation, amendment and disclaimer after registration. — At any time, upon application of the registrant and payment of the required fee, the Director may permit any registration to be surrendered, cancelled, or for good cause shown to be amended, he may permit any registered mark or trade-name to be disclaimed in whole or in part: Provided, That the registration when so amended shall still contain registrable matter and the mark or trade-name as amended shall still be registrable as a whole, and that such amendment or disclaimer does not involve such changes in the registration as to alter materially the character of the mark or trade-name. The Director shall make appropriate entry upon the records of the Patent Office and upon the certificate of registration or, if said certificate is lost or destroyed, upon a certified copy thereof. The Director in his discretion and upon payment of the required fee, may issue a substitute certificate limited to the term of the original certificate and incorporating such amendment or correction.

CHAPTER III
Renewals of Certificate of Registration

Section 15. Renewal. — Each certificate of registration may be renewed for periods of twenty years from the end of the expiring period upon the filing of an application therefor and the payment of the required fee. Such application for renewal shall include a sworn statement of the applicant’s domicile and citizenship, the specific goods, business or services in connection with which the mark or trade-name is still in use, the period of any nonuse in reference to the specific goods, business or services covered by original or renewed certificates of registration and any rights granted third parties for the use of the mark or trade-name, any additional goods, business or services to which the mark or trade-name has been extended during the period of the original or renewed certificates of registration, and any material variation in the manner of display of the mark or trade-name from that shown in the original or renewed certificate of registration. The applicant shall file the application within six months before the expiration of the period for which the certificate of registration was issued or renewed, or it may be made within three months after such expiration for good cause shown and upon payment of the required surcharge.

In the event the applicant for renewal be not domiciled in the Philippines, he shall be subject to and comply with the provisions of paragraph (d), section five, Chapter II hereof.

Section 16. Effect of failure to renew registration. — Mere failure to renew any registration shall not affect the right of the registrant to apply for and obtain a new registration under the provisions of this Act, nor shall such failure entitle any other person to register a mark or trade-name unless he is entitled thereto in accordance with the provisions of this Act.

CHAPTER IV
Cancellation of Registration

Section 17. Grounds for cancellation. — Any person, who believes that he is or will be damaged by the registration of a mark or trade-name, may, upon the payment of the prescribed fee, apply to cancel said registration upon any of the following grounds:
(a) That the registered mark or trade-name becomes the common descriptive name of an article or substance on which the patent has expired;

(b) That it has been abandoned;

(c) That the registration was obtained fraudulently or contrary to the provisions of section four, Chapter II hereof;

(d) That the registered mark or trade-name has been assigned, and is being used by, or with the permission of, the assignee so as to misrepresent the source of the goods, business or services in connection with which the mark or trade-name is used; or

(e) That cancellation is authorized by other provisions of this Act.

Section 18. Requirements of petition; notice and hearing. — Insofar as applicable, the petition herein shall be in the same form as that provided in section eight, Chapter II hereof, and notice and hearing shall be as provided in section nine, Chapter II hereof.

Section 19. Cancellation of registration. — If the Director finds that a case for cancellation has been made out he shall order the cancellation of the registration. The order shall not become effective until the period for appeal has elapsed, or if appeal is taken, until the judgment on appeal becomes final. When the order or judgment becomes final, any right conferred by such registration upon the registrant or any person in interest of record shall terminate. Notice of cancellation shall be published in the Official Gazette.

CHAPTER V
Rights and Remedies

Section 20. Certificate of registration prima facie evidence of validity. — A certificate of registration of a mark or trade-name shall be prima facie evidence of the validity of the registration, the registrant’s ownership of the mark or trade-name, and of the registrant’s exclusive right to use the same in connection with the goods, business or services specified in the certificate, subject to any conditions and limitations stated therein.

Section 21. Requirements of notice of registration of trade-mark. — The registrant of a trade-mark, heretofore registered or registered under the provisions of this Act, shall give notice that his mark is registered by displaying with the same as used the words “Registered in the Philippines Patent Office” or “Reg. Phil. Pat. Off.”; and in any suit for infringement under this Act by a registrant failing so to mark the goods bearing the registered trade-mark, no damages shall be recovered under the provisions of this Act unless the defendant has actual notice of the registration.

Section 22. Infringement, what constitutes. — Any person who shall use, without the consent of the registrant, any reproduction, counterfeit, copy or colorable imitation of any registered mark or trade-name in connection with the sale, offering for sale, or advertising of any goods, business or services on or in connection with which such use is likely to cause confusion or mistake or to deceive purchasers or others as to the source or origin of such goods or services, or identity of such business; or reproduce, counterfeit, copy or colorably imitate any such mark or trade-name and apply such reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, wrappers, receptacles or advertisements intended to be used upon or in connection with such goods, business or services, shall be liable to a civil action by the registrant for any or all of the remedies herein provided.

Section 23. Actions, and damages and injunction for infringement. — Any person entitled to the exclusive use of a registered mark or trade-name may recover damages in a civil action from any person who infringes his rights, and the measure of the damages suffered shall be either the reasonable profit which the complaining party would have made, had the defendant not infringed his said rights, or the profit which the defendant actually made out of the infringement, or in the event such measure of damages cannot be readily ascertained with reasonable certainty, then the court may award as damages a reasonable percentage based upon the amount of gross sales of the defendant of the value of the services in connection with which the mark or trade-name was used in the infringement of the rights of the complaining party. In cases where actual intent to mislead the public or to defraud the complaining party shall be shown, in the discretion of the court, the damages may be doubled.

The complaining party, upon proper showing, may also be granted injunction.

Section 24. Power of court to order infringing material destroyed. — In any action arising under this Act, in which a violation of any right of the registrant shall have been established, the court may order that all labels, sign, prints, packages, wrappers, receptacles and advertisements in the possession of the defendant, bearing the registered mark or trade-name or any reproduction, counterfeit, copy or colorable imitation thereof, and all plates, molds, matrices and other means of making the same, shall be delivered up and destroyed.

Section 25. Authority to determine right to registration. — In any action involving a registered mark or trade-name the court may determine the right to registration, order the cancellation of registrations, in whole or in part, restore cancelled registration, and otherwise rectify the register with respect to the registration of any party to the action. Judgments and orders shall be certified by the court to the Director, who shall make appropriate entry upon the records of the Patent Office, and shall be controlled thereby.

Section 26. Action for false or fraudulent declaration. — Any person who shall procure registration in the Patent Office of a mark or trade-name by a false or fraudulent declaration or representation, oral or in writing, or by any false means, shall be liable in a civil action by any person injured thereby for any damages sustained in consequence thereof.

Section 27. Jurisdiction of Court of First Instance. — All actions under this Chapter and Chapters VI and VII hereof shall be brought before the proper Court of First Instance.

Section 28. Appeal. — Appeal may be taken from any judgment or final order of the Court of First Instance in the same manner as in other actions.

CHAPTER VI
Unfair Competition

Section 29. Unfair competition, rights and remedies. — A person who has identified in the mind of the public the goods he manufactures or deals in, his business or services from those of others, whether or not a mark or trade-name is employed, has a property right in the goodwill of the said goods, business or services so identified, which will be protected in the same manner as other property rights. Such a person shall have the remedies provided in section twenty-three, Chapter V hereof.

Any person who shall employ deception or any other means contrary to good faith by which he shall pass off the goods manufactured by him or in which he deals, or his business, or services for those of the one having established such goodwill, or who shall commit any acts calculated to produce said result, shall be guilty of unfair competition, and shall be subject to an action therefor.

In particular, and without in any way limiting the scope of unfair competition, the following shall be deemed guilty of unfair competition:

(a) Any person, who in selling his goods shall give them the general appearance of goods of another manufacturer or dealer, either as to the goods themselves or in the wrapping of the packages in which they are contained, or the devices or words thereon, or in any other feature of their appearance, which would be likely to influence purchasers to believe that the goods offered are those of a manufacturer or dealer other than the actual manufacturer or dealer, or who otherwise clothes the goods with such appearance as shall deceive the public and defraud another of his legitimate trade, or any subsequent vendor of such goods or any agent of any vendor engaged in selling such goods with a like purpose;

(b) Any person who by any artifice, or device, or who employs any other means calculated to induce the false belief that such person is offering the services of another who has identified such services in the mind of the public;

(c) Any person who shall make any false statement in the course of trade or who shall commit any other act contrary to good faith of a nature calculated to discredit the goods, business or services of another.

CHAPTER VII
False Designation of Origin and False Description

Section 30. False designation of origin and false description forbidden. — Any person who shall affix, apply, annex or use in connection with any goods or services, or any container or containers for goods, a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same, and shall cause such goods or services to enter into commerce, and any person who shall with knowledge of the falsity of such designation of origin or description or representation cause or procure the same to enter into commerce, shall be liable to a civil action for damages and injunction provided in section twenty-three, Chapter V hereof, by any person doing business in the locality falsely indicated as that of origin or in the region in which said locality is situated, or by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.

CHAPTER VIII
Assignment and Transmission of Rights

Section 31. Rights assignable and form of assignment. — A registered mark or trade-name, or one for which application to register has been filed shall be assignable with the goodwill of the business in which the mark or trade-name is used, or with that part of the goodwill of the business connected with the use of and symbolized by the mark or trade-name, and in any such assignment it shall not be necessary to include the goodwill of the business connected with the use of and symbolized by any other mark or trade-name used in the business or by the name or style under which the business is conducted. Upon payment of the required fee, the Director shall record assignments in due form in books kept for that purpose.

The assignment must be in writing, acknowledged before a notary public or other officer authorized to administer oaths or perform other notarial acts and certified under the hand and official seal of the notary or other officer.

An assignment shall be void as against any subsequent purchaser for a valuable consideration without notice, unless it is recorded in the Patent Office within three months after the date thereof or prior to such subsequent purchase.

Section 32. Issuance of certificate of registration to assignee. — A certificate of registration of a mark or trade-name may be issued to the assignee of the applicant, but the assignment must first be recorded in the Patent Office. In case of change of ownership the Director shall, at the request of the owner and upon proper showing and payment of the required fee, issue to such assignee a new certificate of registration of the said mark or trade-name in the name of such assignee, and for the unexpired part of the original period.

CHAPTER IX
Review of Orders or Decisions of Director

Section 33. Appeal from action of Director. — Any party who has been denied registration of a mark or trade-name, or to the renewal of the registration, or to any cancellation proceeding in the Patent Office, may appeal to the Supreme Court from the final order or decision of the Director.

Section 34. Procedure on appeal. — Sections sixty-three to seventy-three, inclusive, Chapter VIII, of Republic Act No. _____ entitled “An Act creating a Patent Office, prescribing its powers and duties, regulating the issuance of patents, and appropriating funds therefor,” shall be applicable to the appeals herein provided.

CHAPTER X
Importations Prohibited

Section 35. Goods bearing infringing marks or trade-names. — No article of imported merchandise which shall copy or simulate the name of any domestic product, or manufacturer, or dealer, or of any manufacturer or dealer located in any foreign country which, by treaty, convention or law affords similar privileges to citizens of the Philippines, or which shall copy or simulate a mark or trade-name registered in accordance with the provisions of this Act, or shall bear a mark or trade-name calculated to induce the public to believe that the article is manufactured in the Philippines, or that it is manufactured in any foreign country or locality other than the country or locality where it is in fact manufactured, shall be admitted to entry at any customhouse of the Philippines. In order to aid the officers of the customs service in enforcing this prohibition, any person who is entitled to the benefits of this Act, may require his name and residence, and the name of the locality in which his goods are manufactured, a copy of the certificate of registration of his mark or trade-name to be recorded in books which shall be kept for this purpose in the Bureau of Customs, under such regulations as the Collector of Customs with the approval of the Secretary of Finance shall prescribe, and may furnish to the said Bureau facsimiles of his name, the name of the locality in which his goods are manufactured, or of his registered mark or trade-name, and thereupon the Collector of Customs shall cause one or more copies of the same to be transmitted to each collector or other proper officer of the Bureau of Customs.

Sec. 36. Goods with false designation of origin and false description. — Any goods marked or labeled in contravention of the provisions of section thirty, Chapter VII hereof, shall not be imported into the Philippines or admitted to entry at any customhouse in the Philippines.

CHAPTER XI
Provisions in Reference to Foreign Industrial Property

Section 37. Rights of foreign registrants. — Persons who are nationals of, domiciled in, or have a bona fide or effective business or commercial establishment in any foreign country, which is a party to any international convention or treaty relating to marks or trade-names, or the repression of unfair competition to which the Philippines may be a party, shall be entitled to the benefits and subject to the provisions of this Act to the extent and under the conditions essential to give effect to any such convention and treaties so long as the Philippines shall continue to be a party thereto, except as provided in the following paragraphs of this section.

No registration of a mark or trade-name in the Philippines by a person described in the preceding paragraph of this section shall be granted until such mark or trade-name has been registered in the country of origin of the applicant, unless the applicant alleges use in commerce.

For the purposes of this section, the country of origin of the applicant is the country in which he has bona fide and effective industrial or commercial establishment, or if he has not such an establishment in the country in which he is domiciled, or if he has not a domicile in any of the countries described in the first paragraph of this section, the country of which he is a national.

An application for registration of a mark or trade-name under the provisions of this Act filed by a person described in the first paragraph of this section who has previously duly filed an application for registration of the same mark or trade-name in one of the countries described in said paragraph shall be accorded the same force and effect as would be accorded to the same application if filed in the Philippines on the same date on which the application was first filed in such foreign country: Provided, That —

(a) The application in the Philippines is filed within six months from the date on which the applicant was first filed in the foreign country; and within three months from the date of filing or within such time as the Director shall in his discretion grant, the applicant shall furnish a certified copy of the application for or registration in the country of origin of the applicant, together with a translation thereof into English, if not in the English language;

(b) The application conforms as nearly as practicable to the requirements of this Act, but use in commerce need not be alleged;

(c) The rights acquired by third parties before the date of the filing of the first application in the foreign country shall in no way be affected by a registration obtained on an application filed under this paragraph; and

(d) Nothing in this paragraph shall entitle the owner of a registration granted under this section to sue for acts committed prior to the date on which his mark or trade-name was registered in this country unless the registration is based on use in commerce.

The registration of a mark under the provisions of this section shall be independent of the registration in the country of origin and the duration, validity or transfer in the Philippines of such registration shall be governed by the provisions of this Act.

Trade-names of persons described in the first paragraph of this section shall be protected without the obligation of filing or registration whether or not they form parts of marks.

Any person designated in the first paragraph of this section as entitled to the benefits and subject to the provisions of this Act shall be entitled to effective protection against unfair competition, and the remedies provided herein for infringement of marks and trade-names shall be available so far as they may be appropriate in repressing acts of unfair competition.

Citizens or residents of the Philippines shall have the same benefits as are granted by this section to persons described in the first paragraph hereof.

CHAPTER XII
Construction and Definitions

Section 38. Words and terms defined and construed. — In the construction of this Act, unless the contrary is plainly apparent from the context —

The term “trade-name” includes individual names and surnames, firm names, trade-names, devices or words used by manufacturers, industrialists, merchants, agriculturists, and others to identify their business, vocations or occupations; the names or titles lawfully adopted and used by natural or juridical persons, unions, and any manufacturing, industrial, commercial, agricultural or other organizations engaged in trade or commerce.

The term “trade-mark” includes any word, name, symbol, emblem, sign or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured, sold or dealt in by others.

The term “service-mark” means a mark used in the sale or advertising of services to identify the services of one person and distinguish them from the services of others and includes without limitation the marks, names, symbols, titles, designations, slogans, character names, and distinctive features of radio or other advertising.

The word “business” includes vocations or occupations.

The term “mark” includes any trade-mark or service-mark entitled to registration under this Act whether registered or not.

The word “registrant” includes the owner of a registered mark or trade-name.

CHAPTER XIII
Fees

Section 39. Fees. — The following fees shall be paid:

For filing application for registration for each class included in the application, fifty pesos;

For filing application for revival of abandoned application for registration, twenty-five pesos;

For publication in the Official Gazette of allowance of application, fifty pesos;

For filing of opposition, fifty pesos;

For issuance and publication of certificate of registration, twenty-five pesos;

For filing each affidavit required by section twelve, Chapter II hereof, twenty-five pesos;

For filing disclaimer, amendment, surrender or cancellation after registration, twenty pesos;

For issuance of a substitute certificate of registration following correction of a registrant’s mistake, twenty-five pesos;

For issuance of a new certificate of registration following change of ownership of mark, twenty-five pesos;

For filing petition for renewal of certificate of registration for each class, fifty pesos;

For filing petition for cancellation, fifty pesos;

For surcharge for any delayed payment or any delayed action of an applicant or registrant, twenty-five pesos;

For notice of appeal from orders or decisions of Commissioner, twenty-five pesos;

For recording assignments for each mark or trade-name, ten pesos;

For issuance of a certificate regarding the registration or non-registration of each mark or trade-name, ten pesos;

For issuance of an affirmative or negative certificate regarding the registration of any document in connection, with a mark or trade-name, ten pesos;

For filing any other documents in connection with marks or trade-names not required by law to be filed, ten pesos;

For certifying a copy to be a true and exact copy, one peso;

For copies of records, two pesos per photostat sheet; one peso per one hundred words of typewritten copy; and

For services not otherwise specified, the Director shall, by regulation, provide the fees therefor.

Section 40. Collective marks and collective trade-names. — Collective marks and collective trade-names belonging to cooperatives, associations or other collective groups or organization may also be registered under the provisions of this Act, even though the said collectivities may not possess an industrial, commercial or agricultural establishment. Foreign collectivities may not, however, procure such registration if the existence of such collectivities is contrary to the laws of the country of origin.

Such collective marks and collective trade-names, when registered, shall be entitled to the protection provided herein in the case of marks and trade-names, except when used so as to represent falsely that the owner or a user makes or sells the goods on which the mark or trade-name is used, or so as to represent falsely the origin of the goods or services.

The other provisions of this Act relating to marks and trade-names shall apply to collective marks and collective trade-names, except that the part of paragraph (e), section four, Chapter II hereof, relating to geographically descriptive marks or trade-names shall not be applicable in appropriate cases.

A “collective mark” or collective trade-name” is a mark or trade-name used by the members of a cooperative, an association or other collective group or organization.

CHAPTER XIV
Miscellaneous Provisions

Section 41. Reservation in favor of prior registration. — Owners of marks or trade-names registered under the provisions of the laws in force prior hereto, the registrations of which are still subsisting under the said laws are hereby granted the right:

(a) Within one year after the taking effect of this Act to surrender their certificates of registration and procure the issuance of new certificates, in which event they shall be entitled to the benefits and subject to the provisions of this Act; or

(b) Within one year before the expiration of the period for which the certificates of registration was issued or renewed, the registrant may renew the registration upon filing an application therefor, as provided in section fifteen, Chapter III hereof. If said application is granted a renewal certificate shall be issued by the Director in accordance with the provisions of this Act.

Section 42. Renewal of registrations which expired during the war. — The provisions of this Act to the contrary notwithstanding, registrations under prior laws which expired after the eighth day of December, nineteen hundred forty-one, and which the owners were not able to renew for causes arising out of the war, may be renewed within one year after this Act takes effect, and non-use of the mark or trade-name may be shown to be due to special circumstances. If the application for renewal is granted, a renewal certificate to commence from the date of the expiration of the prior registration shall be issued by the Director in accordance with the provisions of this Act.

Section 43. Pending applications. — All applications for registration pending on the effective date of this Act may be amended, if practicable, to bring them under the provisions of this Act, without the payment of any additional fee. The prosecution of such applications whether amended or not and the grant of registrations thereon shall conform to the provisions of this Act.

Section 44. Repealing clause. — Act Numbered Six hundred and sixty-six of the Philippine Commission, approved March six, nineteen hundred and three, and all laws amendatory thereto; Act Numbered Thirty hundred and seventy of the Philippine Legislature, approved March sixteen, nineteen hundred and twenty-three; Act Numbered Thirty-two hundred and two, approved December three, nineteen hundred and twenty-four, and all other acts, or parts of acts inconsistent herewith, are hereby repealed.

Section 45. Effective date. — This Act shall take effect on its approval.

Approved: June 20, 1947

WHEREAS, there were pending before Congress prior to the promulgation of Proclamation No. 1081, dated September 21, 1972, certain bills proposing amendments to Republic Act No. 3779, entitled “Savings and Loan Association Act”;

WHEREAS, the recommendation resulting from an extensive survey and study of the financial system undertaken for the purposes of assessing its adequacy in Philippine economic growth, and of facilitating the savings-investment process in development have been accepted, with modifications by monetary authorities;

WHEREAS, savings and loan associations have proved to be very effective instrument in encouraging the thrift-savings habit especially of small savers and in providing additional credit assistance to small scale entrepreneurs, home builders and consumers;

NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers in me vested by the Constitution as Commander-in-Chief of the Armed Forces of the Philippines, and pursuant to Proclamation No. 1081, dated September 21, 1972, and General Order No. 1, dated September 22, 1972, as amended, and in order to effect the desired changes and reforms in the social, economic, and political structure of our society, do hereby order and decree the amendment of Republic Act No. 3779, as amended, as follows:

Section 1. Section three (a) of Republic Act Numbered Three thousand seven hundred seventy-nine, as amended, is hereby amended, to read as follows:

“Sec. 3(a). “Savings and loan association” hereinafter called the association shall include any corporation engaged in the business of accumulating the savings of its members or stockholders, and using such accumulations, together with its capital in the case of stock corporation, for loans and/or for investment in securities of productive enterprises or in securities of the Government, or any of its political subdivisions, instrumentalities or corporations: Provided, That they shall be primarily engaged in servicing the needs of households by providing personal finance and long-term financing for home building and development;”

Section 2. Section four (b) of the same Act is hereby amended to read as follows:

“Sec. 4(b). The Monetary Board shall fix the minimum paid-up capital of a savings and loan association organized as a stock corporation in such amount as said Board may consider necessary for the safe and sound operation of such association: Provided, however, That in no case shall such paid-up capital be less than one hundred thousand pesos: Provided, further, That at least seventy per centum of the voting stock of a savings and loan association which may be established after the approval of this Act shall be owned by citizens of the Philippines, except where a new association is established as a result of the consolidation of existing associations in which there are foreign- owned voting stocks at the time of consolidation: Provided, furthermore, That the percentage of foreign-owned voting stocks in stock savings and loan associations existing upon the effectivity of this Act, if such percentage is in excess of thirty per cent (30%) of the voting stock of the savings and loan association, shall not be increased, but may be reduced, and, once reduced, shall not be increased thereafter beyond thirty per cent (30%) of the voting stock of the savings and loan association. The percentage of foreign-owned stocks in an association shall be determined by the citizenship of the individual stockholders in that association. In the case of corporations owning shares in the association, the citizenship of each stockholder in that corporation shall be the basis of computing the percentage. Such association is authorized to receive deposits from, and extend loans to, the general public.”

Section 3. Section five of the same Act is hereby amended to read as follows:

“Sec. 5. Powers of savings and loan associations. — A savings and loan association shall be incorporated under the Corporation Law, and in addition to the powers therein granted whenever applicable, it shall exercise the following:

(a) To grant loans of not exceeding the amount deposited by the borrower plus his four months’ salary or regular income in the case of a permanent employee or wage earner, or seventy per cent of the fair market value of any property acceptable as collateral on first mortgage that he may put up by way of security: Provided, That no loan shall have a maturity date of more than three years, except loans on the security of unencumbered real estate for the purpose of home building and home development which may be granted with maturities not exceeding twenty years subject to regulations prescribed by the Monetary Board: Provided, further, That in the case of a borrower who is a permanent employee or wage earner, the treasurer, cashier or paymaster of the office employing him is authorized. The provisions of any existing law, rule and regulation to the contrary notwithstanding, to make deductions from his salary wage, or income pursuant to the terms of his loan, to remit deductions to the savings and loan association, and to collect such reasonable fee for his services as may be authorized by rules promulgated by the Monetary Board.

“(b) To charge interest within the limits allowed by law, and collect such necessary fees incidental to the grant of loans as may, by regulation, be authorized by the Monetary Board;

“(c) Subject to such rules as the Monetary Board may approve, to discount with reasonable commercial papers and accounts receivables;

“(d) To invest its funds in any sound non-speculative enterprise, as well as in bonds, securities, and other obligations issued by the Government of the Philippines, or any of its political subdivisions, instrumentalities or corporations including government-owned or controlled corporations subject to the rules and regulations of the Monetary Board: Provided, That stock savings and loan associations may invest in equities only of such allied undertakings as may be approved by the Central Bank for banks of their category as provided for in Section 6-A of Republic Act No. 337, as amended: Provided, further, That (a) the total investment in equities shall not exceed twenty-five per cent (25%) of the net worth of the association; (b) the equity investment in any single enterprise shall be limited to fifteen per cent (15%) of the net worth of the association; (c) the total equity investment of the association in any single enterprise shall remain a minority holding in that enterprise, except where the enterprise is not a financial intermediary; and (d) the equity investment in other banks, if allowed by the Monetary Board, shall be subject to the same limitations imposed on similar investments of commercial banks and shall be deducted from the investing stock savings and loan association’s net worth for purposes of computing the prescribed ratio of net worth to risk assets. Equity investments shall not be permitted in non-related activities. Where the allied undertaking is a wholly or majority-owned subsidiary of the investing association, it may be subject to examination by the Central Bank.

“(e) To allow member-depositors to participate in the profits of the savings and loan association on the basis of their deposits on the date dividends are declared; and

“( f ) To borrow money or incur such obligations not exceeding twenty per centum of the total assets of the association, from any public lending institutions, such as the Development Bank of the Philippines, thru Philippine National Bank, the Government Service Insurance System, the Social Security System, and from such private lending institutions as may be approved by the Monetary Board, including other stock savings and loan associations. The Monetary Board may, in meritorious cases, raise the ceiling on the borrowing capacity of a savings and loan association to an amount not exceeding thirty per centum of its total assets: Provided, That in the case of a non-stock savings and loan association organized by employees of an entity or a corporation, such association may borrow funds from said entity or corporation but not vice versa.

“( f-1) To maintain deposits with banks and other stock savings and loan associations: Provided, That the amount of such deposits shall be subject to the loan limit to a single borrower as prescribed herein or by other special laws or regulations.

“A savings and loan association may, subject to such rules as the Monetary Board may promulgate, also borrow from, or rediscount notes, bills of exchange and other commercial papers with the Central Bank. The rate of interest on such obligations or borrowings to be charged such associations shall not be more than that charged rural banks.”

Section 4. Subsection (b) of section six of the same Act is hereby amended to read as follows:

“Sec. 6(b). No non-stock savings and loan associations shall advertise or represent itself to the public as a bank. A stock savings and loan association may be use the word “bank” in connection with its business name only upon compliance with such requirements as may be imposed by, and prior approval of, the Monetary Board.”

Section 5. Section fourteen of the same Act is hereby amended to read as follows:

“Sec. 14. Qualifications for directors. — No person shall be eligible as director of an association unless he is a member, in case of non-stock associations, or an owner in his own right of stocks in the association with an aggregate par value of at least five thousand pesos, in case of stock associations: Provided, That at least two-thirds of the members of the board of directors of any stock savings and loan association which may be established after the approval of this Act shall be citizens of the Philippines: Provided, however, That no full-time appointive or elective public official shall at the same time serve as officer, director, legal counsel or consultant of any stock savings and loan association, except in cases where such service is incident to financial assistance provided by the government or a government-owned or controlled corporation to such association: Provided, further, That in the case of a merger or consolidation of savings and loan associations duly approved by the Monetary Board, the limitation on the maximum number of directors in a corporation, as provided for in Section 28 of the Corporation Law (Act No. 1459), shall not be applied so that membership in the new board may include up to the total number of directors provided for in the respective articles of incorporation of the merging or consolidating savings and loan associations.”

Section 6. Section eighteen of the same Act is hereby amended to read as follows:

“Sec. 18. Limitations on lending authority. — (a) An association shall not commit itself to make any loans for amounts in excess of the total of the following amounts:

(1) amount of cash available for loan purposes;

(2) amount of cash which can be readily realized upon the sale or redemption of permissible investments made by the association:

(3) amount of credit available for loan purposes from government or private financing institutions.

“(b) No association shall directly or indirectly make any loans to any director, or officer of such association, either for himself or as agent or as partner of another, except with the written approval of the majority of the directors of the association, excluding the director concerned: Provided, That in the case of a non-stock association, the aggregate loans, direct or indirect, granted at any one time to such directors and officers shall not exceed twenty per centum of the total paid-up capital of the association: Provided, further, That in the case of a stock association, the Monetary Board may regulate the amount of credit that the association may extend, directly or indirectly, to its directors, officers or stockholders. In any case, however, the outstanding credit accommodations which a stock association may extend to each of its stockholders owning two per cent (2%) or more of the subscribed capital stock, its directors or its officers, shall be limited to an amount equivalent to the respective outstanding deposits and book value of the paid-in capital contribution in the association. In all cases of credit accommodations granted to directors and officers under this subsection, the written approval of the majority of the directors of the association, excluding the director concerned, shall be entered upon the records of the association and a copy of such entry shall be transmitted forthwith to the appropriate supervising department of the Central Bank.

“The office of any director or officer of an association who violates the provisions of this subsection shall immediately become vacant and the director or officer shall be punished by imprisonment of not less than one year nor more than ten years and by a fine of not less than one thousand nor more than ten thousand pesos.

“(c) No association shall make any loan to any corporation of which a majority of the stock is owned or controlled directly or indirectly, by any one or more of the directors or officers of such association collectively except with the written approval of the majority of the directors of the association excluding the director or directors concerned. Any such approval shall be entered upon the records of the association and a copy of such entry shall be transmitted forthwith to the appropriate supervising department of the Central Bank.

“The Monetary Board may regulate the amount of credit that an association may extend to a corporation referred to in this subsection in the same manner as it may regulate credit accommodations to directors and officers of the association under the preceding subsection.

“(d) No association shall loan any of its funds upon the security of its own stock.”

Section 7. Section twenty-one of the same Act is hereby amended to read as follows:

“Sec. 21. Limitations on investment. — (a) No association at any one time shall have invested in bonds and securities an aggregate amount in excess of ten per centum of the total assets of such association;

“(b) No non-stock savings and loan association at any one time shall have invested in real property an aggregate amount in excess of five per centum of the total assets of such association;

“(c) No non-stock savings and loan association at any one time shall invest in furniture, fixture, furnishings and equipment and leasehold improvements for its offices, more than ten per centum of its aggregate paid-up capital;

“(d) No stock savings and loan association, at any one time, shall have an investment in real estate and improvements thereon, including equipment, in an aggregate amount in excess of fifty per cent of its net worth: Provided, That real estate used for the stock savings and loan association’s purposes owned by another corporation in which that associations owns equity shall be considered as part of the association’s total investment in real estate.”

Section 8. Section 29 of the same Act is hereby amended by adding the following subsections after subsection (c) thereof, which read as follows:

“Sec. 29(c-1). Whenever any officer, employee, or agent of a savings and loan association makes false entries in any association report or statement thereby affecting the financial interest of, or causing damage to the association or any person; or without order of a court of competent jurisdiction, discloses to any unauthorized person any information relative to the funds or properties in the custody of the association belonging to private individuals, corporations, or any other entity: Provided, That with respect to bank deposits, Section 4(a) of this Act shall prevail; or accept gifts, fees or commissions or any other form of remuneration in connection with the approval of a loan from said association; or overvalues or in overvaluing any security for the purpose of influencing in any way the action of the association on any loan, such officer, employee or agent shall be punished by a fine of not more than two thousand pesos or imprisonment for not more than one year, or both, at the discretion of the court;

“(c-2). Whenever any applicant for a loan from, or borrower of, a savings and loan association fraudulently overvalues property offered as security for a loan from the said association; or furnishes false, or makes willful misrepresentation of material facts for the purpose of obtaining, renewing, or increasing a loan or extending the period thereof; or attempts to defraud the said association in the event of a court action to recover a loan; or offers any officer, employee or agent of a savings and loan association any gift, fee, commission, or other form of compensation in order to influence such association personnel into approving a loan application, such applicant or borrower shall be punished by a fine of not more than two thousand pesos or imprisonment for not more than one year, or both, at the discretion of the court;

“(c-3). Whenever any examiner, officer or employee of the Central Bank of the Philippines, who is assigned to examine, supervise, assist or render technical service to a savings and loan association, commits any of the acts enumerated in subsection c-1 of this section or connives or in the commission of the same, he shall be punished by a fine of not more than two thousand pesos or imprisonment of not more than one year or both, at the discretion of the court.”

Section 9. The same Act is hereby further amended by adding the following section immediately after section twenty-nine thereof, which reads as follows:

“Sec. 29-A. The provisions of Republic Acts Numbered Two hundred and sixty-five, as amended, and Three hundred thirty-seven, as amended, insofar as they are applicable and not in conflict with any provision of this Act, shall apply to savings and loan associations organized hereunder.

Section 10. All Acts and parts of Acts inconsistent with the provisions of this Act are hereby repealed.

Section 11. This Decree shall take effect immediately.

Done in the City of Manila, this 29th day of January, in the year of Our Lord, nineteen hundred and seventy-three.