This resolves the 16,500 Workers' Solicitous Motion for Reconsideration^[1] filed by respondents National Power Corporation Employees Consolidated Union (NECU) and the National Power Corporation Employees and Workers Union (NEWU) of this Court's February 7, 2017 Decision.^[2] This Decision vacated and set aside the November 28, 2008 Decision,^[3] March 20, 2009 Joint Order,^[4] and March 23, 2009 Writ of Execution^[5] of Branch 84, Regional Trial Court, Quezon City in Civil Case No. Q-07-61728.

To recall, a Petition for Mandamus^[6] was filed by NECU and NEWU with Branch 84, Regional Trial Court, Quezon City, praying that the National Power Corporation (NAPOCOR) be ordered to release the Cost of Living Allowance (COLA) and Amelioration (AA) allegedly withheld from them from July 1, 1989 to March 19, 1999.^[7] NECU and NEWU pointed to this Court's pronouncements in De Jesus v. Commission on Audit,^[8] Philippine Ports Authority Employees Hired After July 1, 1998 v. Commission on Audit,^[9] and Metropolitan Waterworks and Sewerage System v. Bautista, et al.^[10] They believed that they were among the government employees whose COLA and AA were not factually integrated into their basic salary upon the implementation of Republic Act No. 6758.^[11]

The trial court's Decision dated November 28, 2008 and Joint Order dated March 20, 2009 granted their Petition and awarded a total of P6,496,055,339.98 as alleged back COLA and AA with P704,777,508.60 as legal interest.^[12] A Writ of Execution was issued on March 23, 2009, ordering its immediate release and payment.^[13]

The Office of the Solicitor General, acting as the People's Tribune, and then Secretary of Budget and Management Rolando G. Andaya separately filed Petitions for Certiorari^[14] with this Court, seeking to nullify the trial court's issuances. The Office of the Solicitor General, in particular, prayed for the issuance of a Temporary Restraining Order and/or a Writ of Preliminary Injunction to enjoin the implementation of the Writ of Execution dated March 23, 2009,^[15] which this Court granted in the Resolution^[16] dated April 15, 2009.

On February 7, 2017, this Court rendered a Decision^[17] granting the Petitions for Certiorari. This Court held, among others, that respondents NECU's and NEWU's COLA and AA for the period July 1, 1989 to March 19, 1999 were already factually integrated into their basic salaries, by virtue of Section 12 of Republic Act No. 6758^[18] and Memorandum Order No. 198, series of 1994.^[19] The dispositive portion of the Decision read:

WHEREFORE, the Petitions for Certiorari and Prohibition in G.R. Nos. 187257 and 187776 are GRANTED. The Decision dated November 28, 2008, Joint Order dated March 20, 2009, and Writ of Execution dated March 23, 2009 of the Regional Trial Court of Quezon City, Branch 84 in Civil Case No. Q-07-61728 are VACATED and SET ASIDE. The Temporary Restraining Order dated April 15, 2009 is made PERMANENT.^[20] (Emphasis in the original)

In their 16,500 Workers' Solicitous Motion for Reconsideration,^[21] respondents NECU and NEWU insist that law, jurisprudence, and evidence support their contention that their COLA and AA were deducted from their salaries from July 1, 1989 to March 19, 1999.^[22] In particular, they distinguish NAPOCOR workers into three (3) categories. The first category includes workers already employed when Republic Act No. 6758 took effect and whose COLA and AA were integrated into their basic salaries only up to 1993. The second category covers those hired after Republic Act No. 6758 took effect and whose COLA and AA were allegedly deducted from 1989 to 1999. The third category consists of employees hired after the effectivity of Republic Act No. 7648 and whose COLA and AA were allegedly deducted from 1994 to 1999.^[23] They present "Exhibit C,"^[24] insisting that this is factual evidence that their basic pay for the disputed period did not include their COLA and AA.^[25]

On the other hand, the Office of the Solicitor General counters that the issues raised by respondents NECU and NEWU have already been "amply and exhaustively addressed"^[26] in this Court's February 7, 2017 Decision, and thus, would merit its immediate denial.^[27]

Respondents NECU and NEWU attempt to sway this Court by-insisting that those hired after Republic Act No. 6758 took effect have never received their COLA and AA and that these allowances were deducted from their basic pay. This issue, however, has already been discussed and passed upon in this Court's February 7, 2017 Decision:

Thus, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 clarified that those who were already receiving COLA and AA as of July 1, 1989, but whose receipt was discontinued due to the issuance of DBM-CCC No. 10, were entitled to receive such allowances during the period of the Circular's ineffectivity, or from July 1,1989 to March 16,1999. The same factual premise was present in Metropolitan Waterworks and Sewerage System, wherein this Court reiterated that those already receiving COLA as of July 1, 1989 were entitled to its payment from 1989 to 1999.

In neither of these cases did this Court suggest that the compensation of the employees after the promulgation of Republic Act No. 6758 would be increased with the addition of the COLA and AA. If the total compensation package were the same, then clearly the COLA or AA, or both were factually integrated.

....

Republic Act No. 6758 remained effective during the period of ineffectivity of DBM-CCC No. 10. Thus, the COLA and AA of NAPOCOR officers and employees were integrated into the standardized salaries effective July 1, 1989 pursuant to Section 12 of Republic Act No. 6758, which provides:

Section 12. Consolidation of Allowances and Compensation. - All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.

Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government.

Unlike in Philippine Ports Authority (PPA) Employees Hired After July 1, 1989, there would be no basis to distinguish between those hired before July 1, 1989 and those hired after July 1, 1989. Both sets of NAPOCOR employees were continuously receiving their COLA and AA since these allowances were already factually integrated into the standardized salaries pursuant to Section 12 of Republic Act No. 6758.

In order to settle any confusion, we abandon any other interpretation of our ruling in Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 with regard to the entitlement of the NAPOCOR officers and employees to the back payment of COLA and AA during the period of legal limbo. To grant any back payment of COLA and AA despite their factual integration into the standardized salary would cause salary distortions in the Civil Service. It would also provide unequal protection to those employees whose COLA and AA were proven to have been factually discontinued from the period of Republic Act No. 6758's effectivity.

Generally, abandoned doctrines of this Court are given only prospective effect. However, a strict interpretation of this doctrine, when it causes a breach of a fundamental constitutional right, cannot be countenanced. In this case, it will result in a violation of the equal protection clause of the Constitution.

Furthermore, Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 only applies if the compensation package of those hired before the effectivity of Republic Act No. 6758 actually decreased; or in the case of those hired after, if they received a lesser compensation package as a result of the deduction of COLA or AA. Neither situation applies in this case.^[28] (Emphasis and underscoring in the original, citations omitted)

Those who were hired after the implementation of Republic Act No. 6758, or after July 1, 1989, did not receive a lesser compensation package than those who were hired before July 1, 1989. To emphasize, respondents NECU's and NEWU's COLA and AA were integrated into their basic salary by virtue of Section 12 of Republic Act No. 6758, which provides:

Section 12. Consolidation of Allowances and Compensation. - All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.

Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government.

Section 12 has never been ineffective or rendered unconstitutional. Thus, all allowances not covered by the exceptions to Section 12 are presumed to have been integrated into the basic standardized pay. The receipt of a transition allowance is not proof that only those who were hired before July 1, 1989 received their COLA and AA. As this Court explained in its February 7, 2017 Decision, the transition allowance was given only to comply with the non-diminution clause of the law. It was never meant as an additional compensation to the standardized pay:

Prior to Republic Act No. 6758, or on June 30, 1989, Mr. Camagong was receiving a total salary of P8,506.30. Upon the effectivity of the law, or on July 1, 1989, all allowances, except those specifically excluded, were deemed integrated into his basic salary. To stress, all allowances previously granted were already deemed integrated into the standardized salary rates by July 1, 1989.

As shown above, Mr. Camagong's adjusted salary of P4,386.00 already included all allowances previously received. This amount is obviously less than his previous total compensation of P8,506.30. The law, however, provided a remedy in the form of a transition allowance. NAPOCOR Employees Consolidated Union (NECU) explains:

When Rep. Act No. 6758 became effective on July 1, 1989, the new position title of Camagong was Plant Equipment Operator B with a salary grade of 14 and with a monthly salary of P4,386.00.

Admittedly, in the case of Camagong, his monthly gross income of P8,506.30 prior to the effectivity of Rep. Act No. 6758, was thereafter reduced to only P4,386.00. The situation, however, is duly addressed by the law itself. For, while Rep. Act No. 6758 aims at standardizing the salary rates of government employees, yet the legislature has adhered to the policy of non-diminution of pay when it enacted said law. So it is that Section 17 thereof precisely provides for a "transition allowance," as follows:

Section 17. Salaries of Incumbents. — Incumbents of positions presently receiving salaries and additional compensation/fringe benefits including those absorbed from local government units and other emoluments, the aggregate of which exceeds the standardized salary rate as herein prescribed, shall continue to receive such excess compensation, which shall be referred to as transition allowance. The transition allowance shall be reduced by the amount of salary adjustment that the incumbent shall receive in the future.

The transition allowance referred to herein shall be treated as part of the basic salary for purposes of computing retirement pay, year-end bonus and other similar benefits.

As basis for computation of the first across-the-board salary adjustment of incumbents with transition allowance, no incumbent who is receiving compensation exceeding the standardized salary rate at the time of the effectivity of this Act, shall be assigned a salary lower than ninety percent (90%) of his present compensation or the standardized salary rate, whichever is higher. Subsequent increases shall be based on the resultant adjusted salary.

Evidently, the transition allowance under the aforequoted provision was purposely meant to bridge the difference in pay between the pre-R.A. 6758 salary of government employees and their standardized pay rates thereafter, and because non-diminution of pay is the governing principle in Rep. Act No. 6758, Camagong, pursuant to Section 17 of that law was given a transition allowance of P4,120.30. This explains why, in the case of Camagong, his gross monthly income remained at P8,506.30, as can be seen in his NPASA, clearly showing that the allowances he used to receive prior to the effectivity of Rep. Act No. 6758, were integrated into his standardized salary rate.^[29] (Emphasis in the original, citations omitted)

This Court likewise clarified that upon the implementation of Republic Act No. 7648,^[30] NAPOCOR workers were covered by a new compensation plan. All prior questions on the non-publication of Department of Budget and Management Corporate Compensation Circular No. 10 would no longer apply to the determination of whether COLA and AA were withheld. Furthermore, the new compensation plan under Republic Act No. 7648 already incorporated all benefits previously integrated, including the COLA and AA:

The enactment of Republic Act No. 7648, or the Electric Power Crisis Act of 1993 authorized the President of the Philippines to reorganize NAPOCOR and to upgrade its compensation plan. From this period, NAPOCOR ceased to be covered by the standardized salary rates of Republic Act No. 6758.

Pursuant to Republic Act No. 7648, then President Fidel V. Ramos issued Memorandum Order No. 198, providing for a different position classification and compensation plan for NAPOCOR employees to take effect on January 1, 1994. The compensation plan states:

SEC. 2. COMPENSATION PLAN. The NPC Compensation Plan consists of the following:

2.1 Total monthly compensation structure as shown in Annex "A" which shall include:

2.1.1 Monthly basic salary schedule as shown in Annex "B"; and

2.1.2 Schedule of monthly allowances as provided in Annex "C" which include existing government mandated allowances such as PERA and Additional Compensation, and Rice Subsidy, and Reimbursable Allowances, i.e., RRA, RTA and RDA, provided however, that the NP Board is hereby authorized to further rationalize and/or revise the rates for such allowances as may be necessary; and

2.2 "Pay for Performance". Pay for  Performance is a variable component of the total annual cash compensation consisting of bonuses and incentives but excluding the 13th month pay, earned on the basis of corporate and/or group performance or productivity, following a Productivity Enhancement Program (PEP), and step-increases given in recognition of superior individual performance using a performance rating system, duly approved by the NP Board. The corporate or group productivity or incentive bonus shall range from zero (0) to four (4) months basic salary, to be given in lump-sum for each year covered by the PEP. The in-step increases on the other hand, once granted, shall form part of the monthly basic salary.

....

Memorandum Order No. 198, series of 1994 only includes the basic salary and the following allowances: Personal Economic Relief Allowance (PERA) and Additional Compensation, Rice Subsidy, and Reimbursable Allowances. Republic Act No. 7648 also provides that only the President of the Philippines can upgrade the compensation of NAPOCOR personnel:

SECTION 5. Reorganization of the National Power Corporation. — The President is hereby empowered to reorganize the NAPOCOR, to make it more effective, innovative, and responsive to the power crisis. For this purpose, the President may abolish or create offices; split, group, or merge positions; transfer functions, equipment, properties, records and personnel; institute drastic cost-cutting measures and take such other related actions necessary to carry out the purpose herein declared. Nothing in this Section shall result in the diminution of the present salaries and benefits of the personnel of the NAPOCOR: Provided, That any official or employee of the NAPOCOR who may be phased out by reason of the reorganization authorized herein shall be entitled to such benefits as may be determined by the Board of Directors of the NAPOCOR, with the approval of the President.

The President may upgrade the compensation of the personnel of the NAPOCOR at rates comparable to those prevailing in privately-owned power utilities to take effect upon approval by Congress of the NAPOCOR's budget for 1994.

In issuing Memorandum No. 198, series of 1994, the President determined that the New Compensation Plan for the NAPOCOR personnel shall include the basic salary, PERA and Additional Compensation, Rice Subsidy, and Reimbursable Allowances. The discretion of the President to specify the new salary rates, however, is qualified by the statement: "Nothing in this Section shall result in the diminution of the present salaries and benefits of the personnel of the NAPOCOR." This qualification is repeated in Section 7 of the Memorandum:

SEC. 7. NON-DIMINUTION IN PAY. Nothing in this Order shall result in the reduction of the compensation and benefits entitlements of NPC personnel prior to the effectivity of this Order.

The Board of Directors is authorized to rationalize or revise only the rates for PERA and Additional Compensation, Rice Subsidy, and Reimbursable Allowances:

2.1.2 Schedule of monthly allowances as provided in Annex "C" which include existing government[-]mandated allowances such as PERA and Additional Compensation, and Rice Subsidy, and Reimbursable Allowances, i.e., RRA, RTA and RDA, provided however, that the NP Board is hereby authorized to further rationalize and/or revise the rates for such allowances as may be necessary[.]

As previously discussed, COLA and AA were already deemed integrated into the basic standardized salary from July 1, 1989 to December 31, 1993. These allowances need not be separately granted. All basic salaries by December 31, 1993 already included the COLA and AA.^[31] (Emphasis in the original, citations omitted)

The alleged "Exhibit C" presented by respondents NECU and NEWU as evidence to prove that the COLA and AA were factually deducted from their basic pay is unmeritorious. It appears to be a collection list submitted before the Regional Trial Court in compliance with the Writ of Execution dated March 23, 2009. The list specifies names of employees, a computation of their alleged entitlements to their COLA and AA, and deductions for attorney's fees and docket fees.^[32] However, these computations were made only after the trial court had ruled in their favor. This Court has already ruled that the trial court gravely abused its discretion in granting the judgment award. Thus, these computations do not prove conclusively that respondents NECU's and NEWU's COLA and AA were withheld from July 1, 1989 to March 19, 1999.

Respondents NECU and NEWU, all 16,500 of them, were in a position to submit to this Court any pay slip or Notice of Position Allocation and Salary Adjustment showing an actual deduction of the COLA and AA from July 1, 1989 to March 19, 1999. They have failed to do so. As it stands, respondents NECU and NEWU have failed to prove that their COLA and AA were factually deducted from their basic pay.

Interestingly, while the 16,500 Workers' Solicitous Motion for Reconsideration was pending, two (2) motions were filed by the law firm of Angara Abella Concepcion Regala & Cruz (ACCRA), formally entering its appearance as lead counsel on behalf of respondents NECU and NEWU.^[33] These motions were an Entry of Appearance with Omnibus Motion for Leave of Court and Time to File Supplemental Motion for Reconsideration^[34] and a Motion for Leave to File and Admit Attached Supplemental Motion for Reconsideration.^[35]

The ACCRA pleadings do not contain a conforme from respondents NECU and NEWU or a withdrawal of appearance from their counsel, Atty. Napoleon Uy Galit (Atty. Galit). It also appears from ACCRA'S affidavits of service that there were no copies furnished to Atty. Galit or to respondents NECU and NEWU. While motions for reconsideration are not among the pleadings required to be verified,^[36] this circumstance is highly unusual, especially considering that the grant of a motion for reconsideration in this case may result in a more than P7 billion judgment award.

Nonetheless, in view of the denial of the 16,500 Workers' Solicitous Motion for Reconsideration, this Court finds that it is no longer necessary to pass upon ACCRA'S pleadings.

WHEREFORE, the 16,500 Workers' Solicitous Motion for Reconsideration is DENIED with FINALITY as the basic issues have already been passed upon in this Court's February 7, 2017 Decision. No further pleadings or motions shall be entertained in this case. Let entry of final judgment be issued immediately.

The Entry of Appearance with Omnibus Motion for Leave of Court and Time to File Supplemental Motion for Reconsideration and the Motion for Leave to File and Admit Attached Supplemental Motion for Reconsideration are NOTED WITHOUT ACTION in view of the denial of the 16,500 Workers' Solicitous Motion for Reconsideration.

SO ORDERED.

Sereno, C. J., Carpio, Velasco, Jr., Leonardo-De Castro, Bersamin, Del Castillo, Perlas-Bernabe, Caguioa, Martires, Tijam, and Reyes, Jr., JJ., concur.
Peralta, Mendoza, and Jardeleza, JJ., no part.

---

Sirs/Mesdames:

Please take notice that on August 8, 2017 a Decision/Resolution, copy attached herewith, was rendered by the Supreme Court in the above-entitled cases, the original of which was received by this Office on September 15, 2017 at 2:26 p.m.

	Very truly yours,
	(SGD)
	FELIPA G. BORLONGAN-ANAMA
	Clerk of Court

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^[1] Rollo (G.R. No. 187257), pp. 2997-3037.

^[2] Republic v. Hon. Cortez, et al., G.R. Nos. 187257 and 187776, February 7, 2017, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2017/february2017/187257.pdf> [Per J. Leonen, En Banc].

^[3] Rollo (G.R. No. 187257), pp. 1530-1553. The Decision was penned by Presiding Judge Luisito G. Cortez.

^[4] Id. at 1515-1529. The Joint Order was penned by Presiding Judge Luisito G. Cortez.

^[5] Id. at 1554-1557.

^[6] Id. at 1531.

^[7] Id. at 1531. July 1, 1989 is the date of effectivity of Republic Act No. 6758 while March 19, 1999 is the date of publication of DBM Corporate Compensation Circular No. 10.

^[8] 355 Phil. 584 (1998) [Per J. Purisima, En Banc].

^[9] 506 Phil. 382 (2005) [Per Acting CJ. Panganiban, En Banc].

^[10] 572 Phil. 383 (2008) [Per J. R.T. Reyes, Third Division].

^[11] The Compensation and Position Classification Act of 1989.

^[12] Rollo (G.R. No. 187257), pp. 1552-1553.

^[13] Id. at 1554-1557.

^[14] Id. at 7-68 and rollo (G.R. No. 187776), pp. 2-43.

^[15] Id. at 576-579.

^[16] Id. at 581-582.

^[17] Republic v. Hon. Cortez, et al., G.R. Nos. 187257 and 187776, February 7, 2017, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2017/february2017/187257.pdf> [Per J. Leonen, En Banc].

^[18] Rep. Act No. 6758, sec. 12 provides:

Section 12. Consolidation of Allowances and Compensation. - All allowances, except for representation and transportation allowances; clothing and laundry allowances; subsistence allowance of marine officers and crew on board government vessels and hospital personnel; hazard pay; allowances of foreign service personnel stationed abroad; and such other additional compensation not otherwise specified herein as may be determined by the DBM, shall be deemed included in the standardized salary rates herein prescribed. Such other additional compensation, whether in cash or in kind, being received by incumbents only as of July 1, 1989 not integrated into the standardized salary rates shall continue to be authorized.

Existing additional compensation of any national government official or employee paid from local funds of a local government unit shall be absorbed into the basic salary of said official or employee and shall be paid by the National Government.

^[19] Directing and Authorizing the Upgrading of Compensation of Personnel of the National Power Corporation at Rates Comparable with those Prevailing in Privately-Owned Power Utilities and for Other Purposes (1994).

^[20] Republic v. Hon. Cortez, et al., G.R. Nos. 187257 and 187776, February 7, 2017 <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2017/february2017/187257.pdf> 43 [Per J. Leonen, En Banc].

^[21] Rollo (G.R. No. 187257), pp. 2997-3037. A Motion for Reconsideration was also submitted by the Power Generation Employees Association-NPC (rollo (G.R. No. 187257), pp. 3483-3496) but this was noted without action considering that it is no longer a party to this case.

^[22] Id. at 3003-3005.

^[23] Id. at 3016-3023.

^[24] Id. at 3039-3421

^[25] Id. at 3029-3031.

^[26] Id. at 3706.

^[27] Id. at 3706-3707.

^[28] Republic v. Hon. Cortez, et al., G.R. Nos. 187257 and 187776, February 7, 2017, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2017/february2017/187257.pdf> 25-28 [Per J. Leonen, En Banc], citing Philippine Ports Authority (PPA) Employees Hired After July 1, 1989 v. Commission on Audit, 506 Phil. 382, 385 (2005) [Per Acting C.J. Panganiban, En Banc]; Metropolitan Waterworks and Sewerage System v. Bautista, et al., 572 Phil. 383, 403-407 (2008) [Per J. R. T. Reyes, Third Division]; NAPOCOR Employees Consolidated Union (NECU) v. National Power Corporation (NPC), 519 Phil. 372, 382 (2006) [Per J. Garcia, En Banc]; and Carpio Morales v. Court of Appeals (Sixth Division), G.R. Nos. 217126-27, November 10, 2015, 774 SCRA 431 [Per J. Perlas-Bernabe, En Banc].

^[29] Republic v. Hon. Cortez, et al., G.R. Nos. 187257 and 187776, February 7, 2017, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2017/february2017/187257.pdf> 32-34 [Per J. Leonen, En Banc], citing NAPOCOR Employees Consolidated Union (NECU) v. National Power Corporation (NPC), 519 Phil. 372, 385-386 (2006) [Per J. Garcia, En Banc] and Philippine Ports Authority v. Commission on Audit, 289 Phil. 266, 274 (1992) [Per J. Gutierrez, Jr., En Banc].

^[30] The Electric Power Crisis Act of 1993.

^[31] Republic v. Hon. Cortez, et al., G.R. Nos. 187257 and 187776, February 7, 2017, <http://sc.judiciary.gov.ph/pdf/web/viewer.html?file=/jurisprudence/2017/february2017/187257.pdf> 35-38 [Per J. Leonen, En Banc].

^[32] See rollo (G.R. No. 187257), pp. 3099.

^[33] Rollo, p. 3500.

^[34] Id. at 3499-3507.

^[35] Id. at 3514-3517.

^[36] See RULES OF COURT, Rule 37, sec. 2 in relation to Rule 7, sec. 4.