G.R. No. L-6791; March 29, 1954
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. QUE PO LAY, defendant-appellant.

FACTS

Que Po Lay was convicted by the Court of First Instance of Manila for violating Central Bank Circular No. 20 in relation to Section 34 of Republic Act No. 265. The charge was that he failed to sell foreign exchange (U.S. dollars, checks, and money orders totaling about $7,000) to the Central Bank through its agents within one day after receipt, as required by the circular. He was sentenced to six months imprisonment, a fine of P1,000 with subsidiary imprisonment in case of insolvency, and costs. On appeal, Que Po Lay contended that Circular No. 20 had no force and effect because it was not published in the Official Gazette prior to the alleged violation, as required by Commonwealth Act No. 638 and Act No. 2930 for orders or notices of general applicability. The Solicitor General argued that these laws did not require such publication for the circular to be binding.

ISSUE

Whether Central Bank Circular No. 20, which prescribes a penalty for its violation, must be published in the Official Gazette before it can have legal effect and bind the public.

RULING

The Supreme Court reversed the decision and acquitted Que Po Lay. The Court held that while Commonwealth Act No. 638 and Act No. 2930 merely enumerate what should be published in the Official Gazette without expressly requiring it for circulars, Section 11 of the Revised Administrative Code and Article 2 of the new Civil Code provide that laws take effect after fifteen days following their publication in the Official Gazette, unless otherwise provided. Although Circular No. 20 is not a statute, it was issued to implement a law and thus has the force and effect of law. As a rule, circulars and regulations, especially those with penal provisions like Circular No. 20, must be published before becoming effective to officially inform the public of their contents and penalties. Citing Manresa’s commentary on the Spanish Civil Code, the Court noted that the term “laws” includes regulations, circulars, and orders issued in accordance with them. In this case, Circular No. 20 was issued in 1949 but was only published in the Official Gazette in November 1951, approximately three months after the appellant’s conviction. Therefore, at the time of the alleged violation, the circular was not legally binding. The Court further ruled that the question of non-publication, being fundamental and decisive to the existence of the offense and the trial court’s jurisdiction, could be raised for the first time on appeal. Consequently, Que Po Lay could not be held liable for violating a circular that had no legal effect at the time.